Document:

Exhibit 10.5

 

TANGOE, INC.

 

AMENDED AND RESTATED
 EXECUTIVE STOCK OPTION/STOCK ISSUANCE PLAN

 

1.                                      Purposes of the Plan. The purposes of this Amended and Restated Executive Stock Option/Stock Issuance Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to key Employees and to select Directors and Consultants and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an option and subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder. Stock purchase rights may also be granted under the Plan.

 

2.                                      Definitions. As used herein, the following definitions shall apply:

 

(a)                                  “Administrator” means the Board or its Committee appointed pursuant to Section 4 of the Plan.

 

(b)                                 “Affiliate” means an entity other than a Subsidiary (as defined below) which, together with the Company, is under common control of a third person or entity.

 

(c)                                  “Applicable Laws” means the legal requirements relating to the administration of stock option and restricted stock purchase plans under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, the Code, any Stock Exchange rules or regulations and the applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time.

 

(d)                                 “Board” means the Board of Directors of the Company.

 

(e)                                  “Cause” for termination of a Participant’s Continuous Service Status will exist if the Participant is terminated for any of the following reasons: (i) Participant’s willful failure substantially to perform his or her duties and responsibilities to the Company or deliberate violation of a Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s willful breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as to whether a Participant is being terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time as provided in Section 5(d) below, and the term “Company” will be interpreted to include any Subsidiary, Parent, Affiliate or successor thereto, if appropriate.

 

 

(f)                                    “Change of Control” means (i) a sale of all or substantially all of the Company’s assets, (ii) any merger or consolidation of the Company with or into another corporation other than a merger or consolidation in which the holders of more than 50% of the shares of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by their being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction, or (iii) any person or group (as such terms are used in and under Section 13(d) of the Exchange Act), other than a person or group that is a stockholder of the Company as of December 10, 2004, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the total voting power represented by the then outstanding voting securities of the Company.

 

(g)                                 “Code” means the Internal Revenue Code of 1986, as amended.

 

(h)                                 “Committee” means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 below.

 

(i)                                     “Common Stock” means the Common Stock of the Company,

 

(j)                                     “Company” means Tangoe, Inc., a Delaware corporation.

 

(k)                                  “Consultant” means any person, including an advisor, who is engaged by the Company or any Parent, Subsidiary or Affiliate to render services and is compensated for such services.

 

(1)                                  “Continuous Service Status” means the absence of any interruption or termination of service as an Employee, Director or Consultant. Continuous Service Status shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than ninety (90) days, unless reemployment or reengagement upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; (iv) in the case of transfers between locations of the Company or between the Company, its Parents, Subsidiaries, Affiliates or their respective successors; or (v) changes in status between service as an Employee, Director or Consultant, provided, however, that the amendments to this definition adopted on December 10, 2004 shall not apply to Options granted prior to December 10, 2004.

 

(m)                               “Corporate Transaction” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation and includes a Change of Control.

 

(n)                                 “Director” means a member of the Board.

 

(o)                                 “Employee” means any person employed by the Company or any Parent, Subsidiary or Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Administrator in its discretion, subject to any

 

 

requirements of the Code or the Applicable Laws. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

 

(p)                                 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(q)                                 “Fair Market Value” means, as of any date, the fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to Participants. Whenever possible, the determination of Fair Market Value shall be based upon the closing price for the Shares as reported in the Wall Street Journal for the applicable date.

 

(r)                                    “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Option Agreement.

 

(s)                                  “Involuntary Termination” means termination of a Participant’s Continuous Service Status under the following circumstances: (i) termination without Cause by the Company or a Subsidiary, Parent, Affiliate or successor thereto, as appropriate; or (ii) voluntary termination by the Participant within 60 days following (A) a material reduction in the Participant’s job responsibilities, provided that neither a mere change in title alone nor reassignment following a Change of Control to a position that is substantially similar to the position held prior to the Change of Control shall constitute a material reduction in job responsibilities; (B) relocation by the Company or a Subsidiary, Parent, Affiliate or successor thereto, as appropriate, of the Participant’s work site to a facility or location more than 50 miles from the Participant’s principal work site for the Company at the time of the Change of Control; or (C) a reduction in Participant’s then-current total compensation by at least 15%, provided that an across-the-board reduction in the compensation of all other Employees or Consultants in positions similar to the Participant’s by the same percentage amount as part of a general salary level reduction shall not constitute such a salary reduction.

 

(t)                                    “Listed Security” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.

 

(u)                                 “Named Executive” means any individual who, on the last day of the Company’s fiscal year, is the chief executive officer of the Company (or is acting in such capacity) or among the four most highly compensated officers of the Company (other than the chief executive officer). Such officer status shall be determined pursuant to the executive compensation disclosure rules under the Exchange Act.

 

(v)                                 “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Option Agreement.

 

(w)                               “Option” means a stock option granted pursuant to the Plan.

 

 

(x)                                   “Option Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.

 

(y)                                 “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options are exchanged for Options with a lower exercise price or are amended to decrease the exercise price as a result of a decline in the Fair Market Value of the Common Stock.

 

(z)                                   “Optioned Stock” means the Common Stock subject to an Option.

 

(aa)                            “Optionee” means an Employee, Consultant or Director who receives an Option.

 

(bb)                          “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision.

 

(cc)                            “Participant” means any holder of one or more Options or Stock Purchase Rights, or the Shares issuable or issued upon exercise of such awards, under the Plan.

 

(dd)                          “Plan” means this Tangoe, Inc. Amended and Restated Executive Stock Option/Stock Issuance Plan.

 

(ee)                            “Reporting Person” means an officer, Director, or greater than ten percent stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.

 

(ff)                                “Restricted Stock” means Shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right under Section 11 below.

 

(gg)                          “Restricted Stock Purchase Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Stock Purchase Right granted under the Plan and includes any documents attached to such agreement.

 

(hh)                          “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

 

(ii)                                  “Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan.

 

(jj)                                  “Stock Exchange” means any national securities exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.

 

 

(kk)                            “Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 11 below.

 

(ll)                                  “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, or any successor provision.

 

(mm)                      “Ten Percent Holder” means a person who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary.

 

3.                                       Stock Subject to the Plan. Subject to the provisions of Section 14 of the Plan, the maximum aggregate number of Shares that may be sold under the Plan is 4,650,000. The Shares may be authorized, but unissued, or reacquired Shares. If an award should expire or become unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. In addition, any Shares which are retained by the Company upon exercise of an award in order to satisfy any withholding taxes due with respect to such exercise or purchase shall be treated as not issued and shall continue to be available under the Plan. Shares issued under the Plan and later repurchased by the Company pursuant to any repurchase right which the Company may have shall not be available for future grant under the Plan.

 

4.                                       Administration of the Plan.

 

(a)                                  General. The Plan shall be administered by the Board or a Committee, or a combination thereof, as determined by the Board. The Plan may be administered by different administrative bodies with respect to different classes of Participants and, if permitted by the Applicable Laws, the Board may authorize one or more officers to make awards under the Plan.

 

(b)                                 Committee Composition. If a Committee has been appointed pursuant to this Section 4, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and remove all members of a Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws and, in the case of a Committee administering the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted or required by such provisions.

 

(c)                                  Powers of the Administrator. Subject to the provisions of the Plan and in the case of a Committee, the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:

 

(i)  to determine the Fair Market Value of the Common Stock, in accordance with Section 2(q) of the Plan, provided that such determination shall be applied consistently with respect to Participants under the Plan;

 

 

(ii)                                  to select the Employees, Directors and Consultants to whom Options and Stock Purchase Rights may from time to time be granted;

 

(iii)                               to determine whether and to what extent Options and Stock Purchase Rights are granted;

 

(iv)                              to determine the number of Shares of Common Stock to be covered by each award granted;

 

(v)                                 to approve the form(s) of agreement(s) used under the Plan;

 

(vi)                              to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder, which terms and conditions include but are not limited to the exercise or purchase price, the time or times when awards may be exercised (which may be based on performance criteria), any vesting, acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option, Optioned Stock, Stock Purchase Right or Restricted Stock, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

 

(vii)                           to determine whether and under what circumstances an Option may be settled in cash under Section 10(c) instead of Common Stock;

 

(viii)                        to implement an Option Exchange Program on such terms and conditions as the Administrator in its discretion deems appropriate, provided that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Optionee shall be made without the prior written consent of the Optionee;

 

(ix)                                to adjust the vesting of an Option held by an Employee, Director or Consultant as a result of a change in the terms or conditions under which such person is providing services to the Company;

 

(x)                                   to construe and interpret the terms of the Plan and awards granted under the Plan, which constructions, interpretations and decisions shall be final and binding on all Participants; and

 

(xi)                                in order to fulfill the purposes of the Plan and without amending the Plan, to modify grants of Options or Stock Purchase Rights to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs.

 

5.                                       Eligibility.

 

(a)                                  Recipients of Grants. Nonstatutory Stock Options and Stock Purchase Rights may be granted to any Employee, Director or Consultant. Incentive Stock Options may be granted only to Employees, provided that Employees of Affiliates shall not be eligible to receive Incentive Stock Options.

 

 

(b)                                 Type of Option. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

 

(c)                                  ISO $100,000 Limitation. Notwithstanding any designation under Section 5(b), to the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(c), Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of the date of the grant of such Option.

 

(d)                                 No Employment Rights. The Plan shall not confer upon any Participant any right with respect to continuation of an employment or consulting relationship with the Company, nor shall it interfere in any way with such Participant’s right or the Company’s right to terminate his or her employment or consulting relationship at any time, with or without Cause.

 

6.                                       Term of Plan. The Plan shall become effective upon its adoption by the Board of Directors. It shall continue in effect for a term often (10) years unless sooner terminated under Section 16 of the Plan.

 

7.                                       Term of Option. The term of each Option shall be the term stated in the Option Agreement; provided that the term shall be no more than ten years from the date of grant thereof or such shorter term as may be provided in the Option Agreement and provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent Holder, the term of the Option shall be five years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

 

8.                                       [Reserved]

 

9.                                       Option Exercise Price and Consideration.

 

(a)                                  (Exercise Price. The per Share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

 

(i)                                     In the case of an Incentive Stock Option

 

(A)                              granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant; or

 

(B)                                granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(ii)                                  In the case of a Nonstatutory Stock Option

 

 

(A)                              granted prior to the date, if any, on which the Common Stock becomes a Listed Security to a person who is at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant if required by the Applicable Laws and, if not so required, shall be such price as is determined by the Administrator;

 

(B)                                granted prior to the date, if any, on which the Common Stock becomes a Listed Security to any other eligible person, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant if required by the Applicable Laws and, if not so required, shall be such price as is determined by the Administrator; or

 

(C)                                granted on or after the date, if any, on which the Common Stock becomes a Listed Security to any eligible person, the per share Exercise Price shall be such price as determined by the Administrator provided that if such eligible person is, at the time of the grant of such Option, a Named Executive of the Company, the per share Exercise Price shall be no less than 100% of the Fair Market Value on the date of grant if such Option is intended to qualify as performance-based compensation under Section 162(m) of the Code.

 

(iii)                               Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other Corporate Transaction.

 

(iv)                              In the event an Option is granted with an Exercise Price that is below the Fair Market Value per Share on the date of grant, and subject to Section 12(g) below, the Option shall be subject to any terms and conditions that the Administrator may in his discretion determine to be necessary to avoid the income tax penalties set forth under Section 409A of the Code.

 

(b)                                 Permissible Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check; (3) delivery of Optionee’s promissory note with such recourse, interest, security and redemption provisions as the Administrator determines to be appropriate (subject to the provisions of Section 153 of the Delaware General Corporation Law); (4) cancellation of indebtedness; (5) other Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is exercised, provided that in the case of Shares acquired, directly or indirectly, from the Company, such Shares must have been owned by the Optionee for more than six months on the date of surrender (or such other period as may be required to avoid the Company’s incurring an adverse accounting charge); (6) delivery of a properly executed exercise notice together with such other documentation as the Administrator and a securities broker approved by the Company shall require to effect exercise of the Option and prompt delivery to the Company of the sale or loan proceeds required to pay the exercise price and any applicable withholding taxes; or (7) any combination of the foregoing methods of payment. In making its

 

 

determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept a particular form of consideration at the time of any Option exercise.

 

10.                                 Exercise of Option.

 

(a)                                  General.

 

(i)                                     Exercisability. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, consistent with the term of the Plan and reflected in the Option Agreement, including vesting requirements and/or performance criteria with respect to the Company and/or the Optionee; provided however that, if required by the Applicable Laws, any Option granted prior to the date, if any, upon which the Common Stock becomes a Listed Security shall become exercisable at the rate of at least 20% per year over five years from the date the Option is granted. In the event that any of the Shares issued upon exercise of an Option granted prior to the date, if any, upon which the Common Stock becomes a Listed Security should be subject to a right of repurchase in the Company’s favor, (A) such repurchase right shall, if required by the Applicable Laws, lapse at the rate of at least 20% per year over five years from the date the Option is granted, (B) the purchase price for the shares repurchased shall be the original purchase price paid by the purchaser and may be paid in cash or by cancellation of any indebtedness of the purchaser to the Company and (C) the right to repurchase shall only be exercisable within 90 days of termination of Continuous Service Status (or in the case of securities issued upon the exercise of Options, within 90 days after the date of exercise). Notwithstanding the above, in the case of an Option granted to an officer, Director or Consultant of the Company or any Parent, Subsidiary or Affiliate of the Company, the Option may become fully exercisable, or a repurchase right, if any, in favor of the Company shall lapse, at any time or during any period established by the Administrator. The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any such leave.

 

(ii)                                  Minimum Exercise Requirements. An Option may not be exercised for a fraction of a Share. The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.

 

(iii)                               Procedures for and Results of Exercise. An Option shall be deemed exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised. Full payment may, as authorized by the Administrator, consist of any consideration and method of payment allowable under Section 9(b) of the

 

 

Plan, provided that the Administrator may, in its sole discretion, refuse to accept any form of consideration at the time of any Option exercise.

 

Exercise of an Option in any manner shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

 

(iv)                              Rights as Stockholder. Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 14 of the Plan.

 

(b)                                 Termination of Continuous Service Status. Except as otherwise set forth in this Section 10(b), the Administrator shall establish and set forth in the applicable Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all, following termination of an Optionee’s Continuous Service Status, which provisions may be waived or modified by the Administrator at any time. To the extent that the Optionee is not entitled to exercise an Option at the date of his or her termination of Continuous Service Status, or if the Optionee (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Option Agreement or below (as applicable), the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan. In no event may any Option be exercised after the expiration of the Option term as set forth in the Option Agreement (and subject to Section 7).

 

The following provisions (1) shall apply to the extent an Option Agreement does not specify the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s Continuous Service Status, and (2) establish the minimum post-termination exercise periods that may be set forth in an Option Agreement:

 

(i)                                     Termination other than Upon Disability or Death or for Cause. In the event of termination of an Optionee’s Continuous Service Status (other than as a result of Optionee’s death or disability or as a result of termination by the Company of the Optionee’s Continuous Service Status for Cause), such Optionee may exercise an Option for 30 days following such termination to the extent the Optionee was entitled to exercise such Option at the date of such termination.

 

(ii)                                  Termination Upon Disability of Optionee. In the event of termination of an Optionee’s Continuous Service Status as a result of his or her disability (including a disability within the meaning of Section 22(e)(3) of the Code), such Optionee may exercise an Option at any time within six months following such termination to the extent the Optionee was entitled to exercise such Option at the date of such termination.

 

 

(iii)                               Termination Upon Death of Optionee. In the event of the death of an Optionee during the period of Continuous Service Status or within thirty days following termination of Optionee’s Continuous Service Status (other than in the case of termination for Cause), the Option may be exercised by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance at any time within twelve months following the date of death, but only to the extent of the right to exercise that had accrued at the date of death or, if earlier, the date the Optionee’s Continuous Service Status terminated.

 

(iv)                              Termination for Cause. In the event of termination of an Optionee’s Continuous Service Status by the Company for Cause, all Options held by such Optionee shall terminate immediately upon such termination for Cause, provided, however, that the provisions of this Section 10(b)(iv) shall not apply to Options granted prior to December 10, 2004.

 

(c)                                  Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.

 

11.                                 Stock Purchase Rights.

 

(a)                                  Rights to Purchase. When the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer. In the case of a Stock Purchase Right granted prior to the date, if any, on which the Common Stock becomes a Listed Security and if required by the Applicable Laws at that time, the purchase price of Shares subject to such Stock Purchase Rights shall not be less than 85% of the Fair Market Value of the Shares as of the date of the offer, or, in the case of a Ten Percent Holder, the price shall not be less than 100% of the Fair Market Value of the Shares as of the date of the offer. If the Applicable Laws do not impose the requirements set forth in the preceding sentence and with respect to any Stock Purchase Rights granted after the date, if any, on which the Common Stock becomes a Listed Security, the purchase price of Shares subject to Stock Purchase Rights shall be as determined by the Administrator. The offer to purchase Shares subject to Stock Purchase Rights shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

 

(b)                                 Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s Continuous Service Status for any reason (including death or disability). The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original purchase price paid by the purchaser and may be paid in cash or by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator may determine, provided that with respect to a Stock Purchase Right granted prior to the date, if any, on which the Common Stock becomes a Listed Security to a purchaser who is not an 

 

 

officer, Director or Consultant of the Company or of any Parent or Subsidiary of the Company, it shall lapse at a minimum rate of 20% per year over five years if required by the Applicable Laws. The right to repurchase shall only be exercisable within 90 days of termination of Continuous Service Status.

 

(c)                                  Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each purchaser.

 

(d)                                 Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 14 of the Plan.

 

12.                                 Taxes.

 

(a)                                  As a condition of the exercise of an Option or Stock Purchase Right granted under the Plan, the Participant (or in the case of the Participant’s death, the person exercising the Option or Stock Purchase Right) shall make such arrangements as the Administrator may require for the satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with the exercise of the Option or Stock Purchase Right and the issuance of Shares. The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied. If the Administrator allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations under this Section 12 (whether pursuant to Section 12(c), (d) or (e), or otherwise), the Administrator shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.

 

(b)                                 In the case of an Employee and in the absence of any other arrangement, the Employee shall be deemed to have directed the Company to withhold or collect from his or her compensation an amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable after the date of an exercise of the Option or Stock Purchase Right.

 

(c)                                  This Section 12(c) shall apply only after the date, if any, upon which the Common Stock becomes a Listed Security. In the case of Participant other than an Employee (or in the case of an Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with respect to any remaining tax obligations), in the absence of any other arrangement and to the extent permitted under the Applicable Laws, the Participant shall be deemed to have elected to have the Company withhold from the Shares to be issued upon exercise of the Option or Stock Purchase Right that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as defined below) equal to the amount required to be withheld. For purposes of this Section 12, the Fair Market Value of the Shares to be 

 

 

withheld shall be determined on the date that the amount of tax to be withheld is to be determined under the Applicable Laws (the “Tax Date”).

 

(d)                                 If permitted by the Administrator, in its discretion, a Participant may satisfy his or her tax withholding obligations upon exercise of an Option or Stock Purchase Right by surrendering to the Company Shares that have a Fair Market Value determined as of the applicable Tax Date equal to the amount required to be withheld. In the case of Shares previously acquired from the Company that are surrendered under this Section 12(d), such Shares must have been owned by the Participant for more than six (6) months on the date of surrender (or such other period of time as is required for the Company to avoid adverse accounting charges).

 

(e)                                  Any election or deemed election by a Participant to have Shares withheld to satisfy tax withholding obligations under Section 12(c) or (d) above shall be irrevocable as to the particular Shares as to which the election is made and shall be subject to the consent or disapproval of the Administrator. Any election by a Participant under Section 12(d) above must be made on or prior to the applicable Tax Date.

 

(f)                                    In the event an election to have Shares withheld is made by a Participant and the Tax Date is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to which the Option or Stock Purchase Right is exercised but such Participant shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date.

 

(g)                                 Neither the Company nor the Administrator shall, however, have any obligation whatsoever to grant or modify any Option or Stock Purchase Right in a manner that avoids penalties that may arise under Section 409A of the Code.

 

13.                                 Non-Transferability of Options and Stock Purchase Rights.

 

(a)                                  General. Except as set forth in this Section 13, Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution. The designation of a beneficiary by an Optionee will not constitute a transfer. An Option or Stock Purchase Right may be exercised, during the lifetime of the holder of an Option or Stock Purchase Right, only by such holder or a transferee permitted by this Section 13.

 

(b)                                 Limited Transferability Rights. Notwithstanding anything else in this Section 13, prior to the date, if any, on which the Common Stock becomes a Listed Security, the Administrator may in its discretion grant Nonstatutory Stock Options that may be transferred by instrument to an inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift to “Immediate Family” (as defined below), on such terms and conditions as the Administrator deems appropriate. Following the date, if any, on which the Common Stock becomes a Listed Security, the Administrator may in its discretion grant transferable Nonstatutory Stock Options pursuant to Option Agreements specifying the manner in which such Nonstatutory Stock Options are transferable. “Immediate 

 

 

Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.

 

14.                                 Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

 

(a)                                  Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of Shares of Common Stock covered by each outstanding Option or Stock Purchase Right, and the number of Shares of Common Stock that have been authorized for issuance under the Plan but as to which no Options or Stock Purchase Rights have yet been granted or that have been returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right, as well as the price per Share of Common Stock covered by each such outstanding Option or Stock Purchase Right, shall be proportionately adjusted for any increase or decrease in the number of issued Shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or any other increase or decrease in the number of issued Shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Option or Stock Purchase Right.

 

(b)                                 Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company, each Option and Stock Purchase Right will terminate immediately prior to the consummation of such action, unless otherwise determined by the Administrator.

 

(c)                                  Corporate Transaction; Change of Control. In the event of a Corporate Transaction, each outstanding Option or Stock Purchase Right shall be assumed or an equivalent option or right shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”), unless the Successor Corporation does not agree to assume the award or to substitute an equivalent option or right, in which case such Option or Stock Purchase Right shall terminate upon the consummation of the transaction; provided however that, in the case of a Change of Control in which outstanding awards are neither being assumed nor replaced with equivalent awards by the Successor Corporation, the vesting of such awards shall accelerate in full as of immediately prior to the consummation of the Change of Control so that Options shall vest and become exercisable as to all of the Shares that otherwise would have been unvested as of immediately prior to such consummation and any repurchase right of the Company with respect to Shares issued upon exercise of an Option or Stock Purchase Right shall lapse as to all of the Shares subject to such repurchase right as of immediately prior to such consummation. To the extent that an Option or Stock Purchase Right is not exercised prior to consummation of a transaction in which the Option or Stock Purchase Right is not being assumed or substituted, such Option or Stock Purchase Right shall terminate upon such consummation.

 

 

Notwithstanding the above, in the event a Participant holding an Option or Stock Purchase Right assumed or substituted by the Successor Corporation in a Change of Control, or holding Restricted Stock issued upon exercise of an Option or Stock Purchase Right with respect to which the Successor Corporation has succeeded to a repurchase right as a result of a Change of Control, is Involuntarily Terminated by the Successor Corporation in connection with, or within 12 months following consummation of, the transaction, then any assumed or substituted Option or Stock Purchase Right held by the terminated Participant at the time of termination shall accelerate and become exercisable in full, and any repurchase right applicable to any Shares shall lapse in full. The acceleration of vesting and lapse of repurchase rights provided for in the previous sentence shall occur immediately prior to the effective date of the Participant’s termination.

 

For purposes of this Section 14(c), an Option or a Stock Purchase Right shall be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction or a Change of Control, as the case may be, each holder of an Option or Stock Purchase Right would be entitled to receive upon exercise of the award the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of Shares of Common Stock covered by the award at such time (after giving effect to any adjustments in the number of Shares covered by the Option or Stock Purchase Right as provided for in this Section 14); provided that if such consideration received in the transaction is not solely common stock of the Successor Corporation, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon exercise of the award to be solely common stock of the Successor Corporation equal to the Fair Market Value of the per Share consideration received by holders of Common Stock in the transaction.

 

(d)                                 Limitation on Payments. In the event that the vesting, acceleration or lapse of a repurchase right provided for in Section 14(c) above (x) constitutes “parachute payments” within the meaning of Section 280G of the Code, and (y) but for this Section 14(d) would be subject to the excise tax imposed by Section 4999 of the Code (or any corresponding provisions of state income tax law), then such vesting, acceleration or lapse of a repurchase right shall be either

 

(i)                                     delivered in full, or

 

(ii)                                  delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under Code Section 4999,

 

whichever amount, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Code Section 4999, results in the receipt by the Participant on an after-tax basis of the greater amount of acceleration or lapse of repurchase rights benefits, notwithstanding that all or some portion of such benefits may be taxable under Code Section 4999. Any determination required under this Section 14(d) shall be made in writing by the Company’s independent accountants, whose determination shall be conclusive and binding for all purposes on the Company and any affected Participant. In the event that (i) above applies, then the Participant shall be responsible for any excise taxes imposed with respect to such 

 

 

benefits. In the event that (ii) above applies, then each benefit provided hereunder shall be proportionately reduced to the extent necessary to avoid imposition of such excise taxes.

 

(e)                                  Certain Distributions. In the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Administrator may, in its discretion, appropriately adjust the price per Share covered by each outstanding Option or Stock Purchase Right to reflect the effect of such distribution.

 

15.                                 Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by the Administrator, provided that in the case of any Incentive Stock Option, the grant date shall be the later of the date on which the Administrator makes the determination granting such Incentive Stock Option or the date of commencement of the Optionee’s employment relationship with the Company. Notice of the determination shall be given to each Employee or Consultant to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

 

16.                                 Amendment and Termination of the Plan.

 

(a)                                  Authority to Amend or Terminate. The Board may at any time amend, alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation (other than an adjustment pursuant to Section 14 above) shall be made that would materially and adversely affect the rights of any Optionee or holder of Stock Purchase Rights under any outstanding grant, without his or her consent. In addition, to the extent necessary and desirable to comply with the Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

 

(b)                                 Effect of Amendment or Termination. No amendment or termination of the Plan shall materially and adversely affect Options or Stock Purchase Rights already granted, unless mutually agreed otherwise between the Optionee or holder of the Stock Purchase Rights and the Administrator, which agreement must be in writing and signed by the Optionee or holder and the Company.

 

17.                                 Conditions Upon Issuance of Shares. Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. As a condition to the exercise of an Option or Stock Purchase Right, the Company may require the person exercising the award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by law.

 

 

18.                                 Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

19.                                 Agreements. Options and Stock Purchase Rights shall be evidenced by Option Agreements and Restricted Stock Purchase Agreements, respectively, in such form(s) as the Administrator shall from time to time approve.

 

20.                                 Stockholder Approval. If required by the Applicable Laws, continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and to the degree required under the Applicable Laws.

 

21.                                 Information and Documents to Optionees and Purchasers. Prior to the date, if any, upon which the Common Stock becomes a Listed Security and if required by the Applicable Laws, the Company shall provide financial statements at least annually to each Optionee and to each individual who acquired Shares pursuant to the Plan, during the period such Optionee or purchaser has one or more Options or Stock Purchase Rights outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such individual owns such Shares. The Company shall not be required to provide such information if the issuance of Options or Stock Purchase Rights under the Plan is limited to key employees whose duties in connection with the Company assure their access to equivalent information.

 

 

OMNIBUS AMENDMENT TO
 TRAQ WIRELESS, INC. AMENDED AND RESTATED 1999 STOCK PLAN,
 TANGOE, INC. 2000 EXECUTIVE STOCK OPTION/STOCK ISSUANCE PLAN,
 TANGOE, INC. 2000 EMPLOYEE STOCK OPTION/STOCK ISSUANCE PLAN
 AND
 TANGOE, INC. 2005 STOCK INCENTIVE PLAN

 

THIS OMNIBUS AMENDMENT (this “Amendment”) amends that certain (i) Traq Wireless, Inc. Amended and Restated 1999 Stock Plan (the “Traq Plan”), (ii) Tangoe, Inc. 2000 Executive Stock Option/Stock Issuance Plan (the “Tangoe 2000 Executive Plan”) (iii) Tangoe, Inc. 2000 Employee Stock Option/Stock Issuance Plan (the “Tangoe 2000 Employee Plan” and together with the Tangoe 2000 Executive Plan, the “Tangoe 2000 Plans”) and (iv) Tangoe, Inc. 2005 Incentive Stock Option Plan (the “Tangoe 2005 Plan” and together with the Traq Plan and the Tangoe 2000 Plans, the “Plans”).

 

WHEREAS, Tangoe, Inc., a Delaware corporation (“Tangoe”), Traq Acquisition Corp., a wholly owned subsidiary of Tangoe and a Delaware corporation and Traq Wireless, Inc., a Delaware corporation have entered into that certain Agreement and Plan of Merger dated as of March 1, 2007 (the “Merger Agreement”) pursuant to which Merger Sub was merged with and into Traq and the surviving entity thereof is a wholly owned subsidiary of Tangoe; and

 

WHEREAS, pursuant to Section 2.8 of the Merger Agreement, Tangoe has assumed the Traq Plan and all outstanding options under the Traq Plan; and

 

WHEREAS, the Board of Directors of Tangoe wishes to amend the Plans to (1) limit the number of shares allocated and reserved to the Traq Plan and the Tangoe 2000 Plans (collectively, the “Capped Plans”) to the number of shares of Common Stock that were originally issued pursuant to the Capped Plans or pursuant to the exercise of options originally issued under the Capped Plans and that are outstanding as of the Effective Time, plus the number of shares of Common Stock covered by options outstanding under the Capped Plans as of the Effective Time, plus the number of shares of Common Stock covered by options outstanding under the Capped Plans as of the Effective Time, (ii) increase the shares of Common Stock that are allocated and reserved to the Tangoe 2005 Plan, and (iii) provide that any shares of stock that are unexercised or that are reacquired by Tangoe under the Capped Plans after the Effective Date become available and reserved under and allocated to the Tangoe 2005 Plan.

 

NOW THEREFORE, the Plans are hereby amended as follows:

 

1.             Amendments to Traq Plan.

 

(a)           The first sentence of Section 4(a) of the Traq Plan is hereby deleted and replaced with the following:

 

“Shares offered under the Plan may be authorized but unissued shares or treasury Shares.  The aggregate number of Shares that may be issued under the Plan (upon exercise of Options or other rights to acquire Shares) shall not exceed 5,981,816, subject to adjustment pursuant to Sections 4(b) and 8 (the “Number of Plan Shares”).”

 

 

(b)           Section 4(b) of the Traq Plan is hereby deleted in its entirety and replaced with the following:

 

“Reduction of Number of Plan Shares.  From and after March 9, 2007, the Number of Plan Shares shall be reduced by the number of (1) Shares issued under the Plan that the Company reacquires for any reason including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) Shares that are subject to Options that expire, are forfeited, cancelled or become unexercisable, and (3) Shares that the Company retains from otherwise delivering pursuant to any awards originally made under the Plan either (i) as payment of the Purchase Price or Exercise Price of an award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of any award.”

 

2.             Amendments to the Tangoe 2000 Plans.

 

(a)           Section 3 of each of the Tangoe 2000 Executive Plan is hereby deleted and replaced with the following:

 

“3.           Stock Subject to the Plan.  Subject to the provisions of this Section 3 and Section 14 of the Plan, the maximum number of Shares that may be sold under the Plan shall be 4,401,684 (the “Number of Plan Shares”).  From and after March 9, 2007, the Number of Plan Shares shall be reduced by the number of (1) Shares issued under the Plan that the Company reacquires for any reason including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) Shares that are subject to Options that expire, are forfeited, cancelled or become unexercisable, and (3) Shares that the Company retains from otherwise delivering pursuant to any awards originally made under the Plan either (i) as payment of the purchase Price or exercise Price of an Option or other award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of any Option or other award.”

 

(b)           Section 3 of each of the Tangoe 2000 Employee Plan is hereby deleted and replaced with the following:

 

“3.           Stock Subject to the Plan.  Subject to the provisions of this Section 3 and Section 14 of the Plan, the maximum number of Shares that may be sold under the Plan shall be 943,775 (the “Number of Plan Shares”).  From and after March 9, 2007, the Number of Plan Shares shall be reduced by the number of (1) Shares issued under the Plan that the Company reacquires for any reason including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) Shares that are subject to Options that expire, are forfeited, cancelled or become unexercisable, and (3) Shares that the Company retains from otherwise delivering pursuant to any awards originally made under the Plan either (i) as payment of the purchase Price or exercise Price of an Option or other award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of any Option or other award.”

 

 

3.             Amendments to the Tangoe 2005 Plan.

 

(a)           Section 3 of the Tangoe 2005 Plan is hereby deleted in its entirety and replaced with the following:

 

“3.           Shares Subject to the Plan.

 

(a)           Number of Plan Shares.  Subject to the provisions of this Section 3 and Section 13 of the Plan, the maximum number of Shares that the Company may issue for all Awards is 6,016,944 Shares (the “Number of Plan Shares”).  For all Awards, the Shares issued pursuant to the Plan may be authorized but unissued Shares, or Shares that the Company has reacquired or otherwise holds in treasury.

 

(b)           Shares Reacquired under Certain Other Plans.  Except to the extent prohibited by Applicable Law, the Number of Plan Shares shall be automatically increased by, and there shall be made available for subsequent Awards under the Plan, (1) any shares of Common Stock that the Company reacquires for any reason under the Traq Plan or either of the Tangoe 2000 Plans, including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) shares that are subject to options issued under the Traq Plan or either of the Tangoe 2000 Plans that expire, are forfeited, cancelled or become unexercisable, and (3) shares that the Company retains from otherwise delivering pursuant to any awards originally made under the Traq Plan or either of the Tangoe 2000 Plans either (i) as payment of the exercise price of an award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of any award.

 

(c)           Shares Reacquired under the Plan.  Except to the extent prohibited by Applicable Law, the Number of Plan Shares shall be automatically increased by, and there shall be made available for subsequent Awards under the Plan, (1) any shares of Common Stock that the Company reacquires for any reason under the Plan, including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) shares that are subject to an Award that for any reason expires, is forfeited, is cancelled or becomes unexercisable, and Shares that are for any other reason not paid or delivered under the Plan, and (3) shares that the Company retains from otherwise delivering pursuant to any Award either (i) as payment of the exercise price of the Award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of the Award.

 

(d)           ISO Awards.  Notwithstanding the other provisions of this Section 3, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for all ISO Awards made under the Plan shall in no event exceed 6,016,944 plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 17,344,219 Shares.

 

 

(b)           Appendix A to the Tangoe 2005 Plan is hereby amended by inserting the following definitions in the appropriate alphabetical order:

 

“Tangoe 2000 Plans” shall mean, collectively (i) that certain Tangoe, Inc. 2000 Executive Stock Option/Stock Issuance Plan and (ii) that certain Tangoe, Inc. 2000 Employee Stock Option/Stock Issuance Plan.”

 

“Traq Plan” means that certain Traq Wireless, Inc. Amended and Restated 1999 Stock Plan which was assumed by the Company in connection with the Company’s acquisition of Traq Wireless, Inc.”

 

 

OMNIBUS AMENDMENT TO

TRAQ WIRELESS, INC. AMENDED AND RESTATED 1999 STOCK PLAN,

TANGOE, INC. 2000 EXECUTIVE STOCK OPTION/STOCK ISSUANCE PLAN,

TANGOE, INC. 2000 EMPLOYEE STOCK OPTION/STOCK ISSUANCE PLAN

AND

TANGOE, INC. 2005 STOCK INCENTIVE PLAN

 

Adopted by the Board of Directors of Tangoe, Inc on January 28, 2011

 

THIS OMNIBUS AMENDMENT (this “Amendment”) amends that certain (i) Traq Wireless, Inc. Amended and Restated 1999 Stock Plan (the “Traq Plan”), (ii) Tangoe, Inc. 2000 Executive Stock Option/Stock Issuance Plan (the “Tangoe 2000 Executive Plan”) (iii)  Tangoe, Inc. 2000 Employee Stock Option/Stock Issuance Plan (the “Tangoe 2000 Employee Plan” and together with the Tangoe 2000 Executive Plan, the “Tangoe 2000 Plans”) and (iv) Tangoe, Inc. 2005 Incentive Stock Option Plan (the “Tangoe 2005 Plan” and together with the Traq Plan and the Tangoe 2000 Plans, the “Plans”).

 

WHEREAS, Tangoe, Inc., a Delaware corporation (“Tangoe”) maintains the Plans (in the case of the Traq Plan, as successor to Traq Wireless, Inc.);

 

WHEREAS, the Plans grant to the Board of Directors the power to amend the Plans, and/or to impose transfer restrictions when required in connection with Tangoe’s compliance with securities laws; and

 

WHEREAS, Tangoe wishes to adopt certain amendments to the Plans and/or impose certain transfer restrictions in order to make available to Tangoe the exemption from the registration requirements of the Securities Exchange Act of 1934, as amended (the “Act”) set forth in Section 12h-1(f)(i) of Rule 12f-1 adopted under the Act (“Rule 12h-1”).

 

NOW THEREFORE, the Plans are hereby amended as follows:

 

1.             Information Reporting.

 

The following paragraph is added as Section 22 of each of the Tangoe 2000 Plans, as Section 25 of the Tangoe 2005 Plan and as Section 13(f) of the Traq Plan:

 

“Rule 12h-1 Information Reporting.  The Company agrees to provide to all holders of options issued under the Plan, during the Reporting Period (as defined below), the information described in Section 12h-1(f)(1)(vi) of Rule 12h-1 (“Rule 12h-1”) adopted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at such times and in such manner as is required by such 

 

 

Section.  The Company may request that an optionholder agree to keep such information confidential and if the optionholder does not agree to keep the information confidential then the Company shall not be required to provide such information to the optionholder.  “Reporting Period” shall mean the period that begins when the Company first relies on the exemption from the registration requirements set forth in Rule 12h-1, and that ends on the Termination Date (as defined below).  “Termination Date” shall means the date when the Company is either no longer relying on such exemption or becomes subject to the reporting requirements of section 13 or 15(d) of the Exchange Act.”

 

2.             Transfers.

 

The following paragraph is added as Section 13(c) of each of the Tangoe 2000 Plans, as Section 12 (c) of the Tangoe 2005 Plan and as additional text at the end of Section 6(h) of the Traq Plan:

 

“Unless the Board of Directors of the Company otherwise determines and notwithstanding any provision of the Plan or any option agreement to the contrary, options issued pursuant to the Plan on or after January 28, 2011 (and prior to exercise of an option, the shares to be issued on exercise of such option), may be transferred only to family members (as defined in Rule 701(c)(3) under the Securities Act of 1933, as amended) through gifts or domestic relations orders, or to an executor or guardian upon the death or disability of the holder of the option.  The restrictions set forth in this Section shall terminate on the Termination Date, provided that any additional restrictions set forth in the Plan shall not be impaired by virtue of the termination of the restrictions set forth in this Section.”Exhibit 10.7

 

TANGOE, INC.

 

2005 STOCK INCENTIVE PLAN

 

1.             Establishment, Purpose, and Types of Awards

 

Tangoe, Inc., a Delaware corporation (the “Company”), hereby establishes this equity-based incentive compensation plan to be known as the “Tangoe, Inc. 2005 Stock incentive Plan” (hereinafter referred to as the “Plan”), in order to provide incentives and awards to select employees, directors and consultants of the Company and its Affiliates.

 

The Plan permits the granting of the following types of awards (“Awards”), according to the Sections of the Plan listed here:

 

	
Section 6
    	
Options
    
	
Section 7
    	
Share   Appreciation Rights
    
	
Section 8
    	
Restricted   and Unrestricted Share Awards
    
	
Section 9
    	
Deferred   Share Units
    
	
Section 10
    	
Performance   Awards
    

 

The Plan is not intended to affect and shall not affect any stock options, equity-based compensation, or other benefits that the Company or its Affiliates may have provided, or may separately provide in the future pursuant to any agreement, plan, or program that is independent of this Plan.

 

2.             Defined Terms

 

Terms in the Plan that begin with an initial capital letter have the defined meaning set forth in Appendix A, unless defined elsewhere in this Plan or the context of their use clearly indicates a different meaning.

 

3.             Shares Subject to the Plan

 

Subject to the provisions of Section 13 of the Plan, the maximum number of Shares that the Company may issue for all Awards is 1,500,000 Shares.  For all Awards, the Shares issued pursuant to the Plan may be authorized but unissued Shares, or Shares that the Company has reacquired or otherwise holds in treasury.

 

Shares that are subject to an Award that for any reason expires, is forfeited, is cancelled, or becomes unexercisable, and Shares that are for any other reason not paid or delivered under the Plan shall again, except to the extent prohibited by Applicable Law, be available for subsequent Awards under the Plan.  In addition, the Committee may make future Awards with respect to Shares that the Company retains from otherwise delivering pursuant to an Award either (i) as payment of the exercise price of an Award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of an Award.  Notwithstanding the foregoing, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for ISO Awards shall be determined, to the extent required under applicable tax laws, by reducing the number of Shares designated in the preceding

 

 

paragraph by the number of Shares granted pursuant to Awards (whether or not Shares are issued pursuant to such Awards); provided that any Shares that are either purchased under the Plan and forfeited back to the Plan, or surrendered in payment of the Exercise Price for an Award shall be available for issuance pursuant to ISO Awards.

 

4.             Administration

 

(a)           General.  The Committee shall administer the Plan in accordance with its terms, provided that the Board may act in lieu of the Committee on any matter.  The Committee shall hold meetings at such times and places as it may determine and shall make such rules and regulations for the conduct of its business as it deems advisable.  In the absence of a duly appointed Committee or if the Board otherwise chooses to act in lieu of the Committee, the Board shall function as the Committee for all purposes of the Plan.

 

(b)           Committee Composition.  The Board shall appoint the members of the Committee.  If and to the extent permitted by Applicable Law, the Committee may authorize one or more Reporting Persons (or other officers) to make Awards to Eligible Persons who are not Reporting Persons (or other officers whom the Committee has specifically authorized to make Awards).  The Board may at any time appoint additional members to the Committee, remove and replace members of the Committee with or without Cause, and fill vacancies on the Committee however caused.

 

(c)           Powers of the Committee.  Subject to the provisions of the Plan, the Committee shall have the authority, in its sole discretion:

 

(i)            to determine Eligible Persons to whom Awards shall be granted from time to time and the number of Shares, units, or SARs to be covered by each Award;

 

(ii)           to determine, from time to time, the Fair Market Value of Shares;

 

(iii)          to determine, and to set forth in Award Agreements, the terms and conditions of all Awards, including any applicable exercise or purchase price, the installments and conditions under which an Award shall become vested (which may be based on performance), terminated, expired, cancelled, or replaced, and the circumstances for vesting acceleration or waiver of forfeiture restrictions, and other restrictions and limitations;

 

(iv)          to approve the forms of Award Agreements and all other documents, notices and certificates in connection therewith which need not be identical either as to type of Award or among Participants;

 

(v)           to construe and interpret the terms of the Plan and any Award Agreement, to determine the meaning of their terms, and to prescribe, amend, and rescind rules and procedures relating to the Plan and its administration; and

 

(vi)          in order to fulfill the purposes of the Plan and without amending the Plan, modify, cancel, or waive the Company’s rights with respect to any Awards, to adjust or to 

 

 

modify Award Agreements for changes in Applicable Law, and to recognize differences in foreign law, tax policies, or customs; and

 

(vii)         to make all other interpretations and to take all other actions that the Committee may consider necessary or advisable to administer the Plan or to effectuate its purposes.

 

Subject to Applicable Law and the restrictions set forth in the Plan, the Committee may delegate administrative functions to individuals who are Reporting Persons, officers, or Employees of the Company or its Affiliates.

 

(d)           Deference to Committee Determinations.  The Committee shall have the discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms in any fashion it deems to be appropriate in its sale discretion, and to make any findings of fact needed in the administration of the Plan or Award Agreements.  The Committee’s prior exercise of its discretionary authority shall not obligate it to exercise its authority in a like fashion thereafter.  The Committee’s interpretation and construction of any provision of the Plan, or of any Award or Award Agreement, shall be final, binding, and conclusive.  The validity of any such interpretation, construction, decision or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly arbitrary or capricious.

 

(e)           No Liability; Indemnification.  Neither the Board nor any Committee member, nor any Person acting at the direction of the Board or the Committee, shall be liable for any act, omission, interpretation, construction or determination made in good faith with respect to the Plan, any Award or any Award Agreement.  The Company and its Affiliates shall pay or reimburse any member of the Committee, as well as any Director, Employee, or Consultant who takes action in connection with the Plan, for all expenses incurred with respect to the Plan, and to the full extent allowable under Applicable Law shall indemnify each and every one of them for any claims, liabilities, and costs (including reasonable attorney’s fees) arising out of their good faith performance of duties under the Plan.  The Company and its Affiliates may obtain liability insurance for this purpose.

 

5.             Eligibility

 

(a)           General Rule.  The Committee may grant ISOs only to Employees (including officers who are Employees) of the Company or an Affiliate that is a “parent corporation” or “subsidiary corporation” within the meaning of Section 424 of the Code, and may grant all other Awards to any Eligible Person.  A Participant who has been granted an Award may be granted an additional Award or Awards if the Committee shall so determine, if such person is otherwise an Eligible Person and if otherwise in accordance with the terms of the Plan.

 

(b)           Grant of Awards.  Subject to the express provisions of the Plan, the Committee shall determine from the class of Eligible Persons those individuals to whom Awards under the Plan may be granted, the number of Shares subject to each Award, the price (if any) to be paid for the Shares or the Award and, in the case of Performance Awards, in addition to the matters addressed in Section 10 below, the specific objectives, goals and performance criteria that further 

 

 

define the Performance Award.  Each Award shall be evidenced by an Award Agreement signed by the Company and, if required by the Committee, by the Participant.  The Award Agreement shall set forth the material terms and conditions of the Award established by the Committee.

 

(c)           Limits on Awards.  During the term of the Plan, no Participant may receive Options and SARs that relate to more than 1,500,000 Shares.  The Committee will adjust these limitations pursuant to Section 13 below.

 

(d)           Replacement Awards.  Subject to Applicable Laws (including any associated Shareholder approval requirements), the Committee may, in its sole discretion and upon such terms as it deems appropriate, require as a condition of the grant of an Award to a Participant that the Participant surrender for cancellation some or all of the Awards that have previously been granted to the Participant under this Plan or otherwise.  An Award that is conditioned upon such surrender may or may not be the same type of Award, may cover the same (or a lesser or greater) number of Shares as such surrendered Award, may have other terms that are determined without regard to the terms or conditions of such surrendered Award, and may contain any other terms that the Committee deems appropriate.  In the case of Options, these other terms may not involve an Exercise Price that is lower than the Exercise Price of the surrendered Option unless the Company’s shareholders approve the grant itself or the program under which the grant is made pursuant to the Plan.

 

6.             Option Awards

 

(a)           Types; Documentation.  The Committee may in its discretion grant ISOs to any Employee and Non-ISOs to any Eligible Person, and shall evidence any such grants in an Award Agreement that is delivered to the Participant.  Each Option shall be designated in the Award Agreement as an ISO or a Non-ISO, and the same Award Agreement may grant both types of Options.  At the sole discretion of the Committee, any Option may be exercisable, in whole or in part, immediately upon the grant thereof, or only after the occurrence of a specified event, or only in installments, which installments may vary.  Options granted under the Plan may contain such terms and provisions not inconsistent with the Plan that the Committee shall deem advisable in its sole and absolute discretion.

 

(b)           ISO $100,000 Limitation.  To the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as ISOs first become exercisable by a Participant in any calendar year (under this Plan and any other plan of the Company or any Affiliate) exceeds $100,000, such excess Options shall be treated as Non-ISOs.  For purposes of determining whether the $100,000 limit is exceeded, the Fair Market Value of the Shares subject to an ISO shall be determined as of the Grant Date.  In reducing the number of Options treated as ISOs to meet the $100,000 limit, the most recently granted Options shall be reduced first.  In the event that Section 422 of the Code is amended to alter the limitation set forth therein, the limitation of this Section 6(b) shall be automatically adjusted accordingly.

 

(c)           Term Options.  Each Award Agreement shall specify a term at the end of which the Option automatically expires, subject to earlier termination provisions contained in Section 6(h) hereof; provided, that, the term of any Option may not exceed ten years from the 

 

 

Grant Date.  In the case of an ISO granted to an Employee who is a Ten Percent Holder on the Grant Date, the term of the ISO shall not exceed five years from the Grant Date.

 

(d)           Exercise Price.  The exercise price of an Option shall be determined by the Committee in its discretion and shall be set forth in the Award Agreement, subject to the following special rules:

 

(i)            ISOs.  If an ISO is granted to an Employee who on the Grant Date is a Ten Percent Holder, the per Share exercise price shall not be less than 110% of the Fair Market Value per Share on such Grant Date.  If an ISO is granted to any other Employee, the per Share exercise price shall not be less than 100% of the Fair Market Value per Share on the Grant Date.

 

(ii)           Non-ISOs.  The per Share exercise price for the Shares to be issued pursuant to the exercise of a Non-ISO shall not be less than 50% of the Fair Market Value per Share on the Grant Date, and shall be subject to any payment or other restrictions that the Committee may at any time impose in order to conform with Section 409A of the Code.

 

(iii)          Named Executives.  The per Share exercise price shall not be less than 100% of the Fair Market Value per Share on the Grant Date of an Option if (A) on such Grant Date, the Participant is subject to the limitations set forth in Section 162(m) of the Code, and (B) the grant is intended to qualify as performance-based compensation under Section 162(m) of the Code.

 

(iv)          Repricing.  The Committee may at any time unilaterally reduce the exercise price for any Option, but shall promptly provide a written notice to any Participant affected by the reduction.

 

(e)           Exercise of Option.  The Committee shall in its sole discretion determine the times, circumstances, and conditions under which an Option shall be exercisable, and shall set them forth in the Award Agreement.  The Committee shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any such leave approved by the Company.

 

(f)            Minimum Exercise Requirements.  An Option may not be exercised for a fraction of a Share.  The Committee may require in an Award Agreement that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent a Participant from purchasing the full number of Shares as to which the Option is then exercisable.

 

(g)           Methods of Exercise.  Prior to its expiration pursuant to the terms of the applicable Award Agreement, each Option may be exercised, in whole or in part (provided that the Company shall not be required to issue fractional shares), by delivery of written notice of exercise to the secretary of the Company accompanied by the full exercise price of the Shares being purchased.  In the case of an ISO, the Committee shall determine the acceptable methods of payment on the Grant Date and it shall be included in the applicable Award Agreement.  The 

 

 

methods of payment that the Committee may in its discretion accept or commit to accept in an Award Agreement include:

 

(i)            cash or check payable to the Company (in U.S. dollars);

 

(ii)           other Shares that (A) are owned by the Participant who is purchasing Shares pursuant to an Option, (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is being exercised, (C) were not acquired by such Participant pursuant to the exercise of an Option, unless such Shares have been owned by such Participant for at least six months or such other period as the Committee may determine, (D) are all, at the time of such surrender, free and clear of any and all claims, pledges, liens and encumbrances, or any restrictions which would in any manner restrict the transfer of such shares to or by the Company (other than such restrictions as may have existed prior to an issuance of such Shares by the Company to such Participant), and (E) are duly endorsed for transfer to the Company;

 

(iii)          a cashless exercise program that the Committee may approve, from time to time in its discretion, pursuant to which a Participant may concurrently provide irrevocable instructions (A) to such Participant’s broker or dealer to effect the immediate sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the exercise price of the Option plus all applicable taxes required to be withheld by the Company by reason of such exercise, and (B) to the Company to deliver the certificates for the purchased Shares directly to such broker or dealer in order to complete the sale; or

 

(iv)          any combination of the foregoing methods of payment.

 

The Company shall not be required to deliver Shares pursuant to the exercise of an Option until payment of the full exercise price therefore is received by the Company.

 

(h)           Termination of Continuous Service.  The Committee may establish and set forth in the applicable Award Agreement the terms and conditions on which an Option shall remain exercisable, if at all, following termination of a Participants Continuous Service.  The Committee may waive or modify these provisions at any time.  To the extent that a Participant is not entitled to exercise an Option at the date of his or her termination of Continuous Service, or if the Participant (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Award Agreement or below (as applicable), the Option shall terminate and the Shares underlying the unexercised portion of the Option shall revert to the Plan and become available for future Awards.  In no event may any Option be exercised after the expiration of the Option term as set forth in the Award Agreement.

 

The following provisions shall apply to the extent an Award Agreement does not specify the terms and conditions upon which an Option shall terminate when there is a termination of a Participant’s Continuous Service:

 

(i)            Termination other than Upon Disability or Death or for Cause.  In the event of termination of a Participants Continuous Service (other than as a result of 

 

 

Participant’s death, disability or termination for Cause), the Participant shall have the right to exercise an Option at any time within thirty days following such termination to the extent the Participant was entitled to exercise such Option at the date of such termination.

 

(ii)           Disability.  In the event of termination of a Participant’s Continuous Service as a result of his or her being Disabled, the Participant shall have the right to exercise an Option at any time within six months following such termination to the extent the Participant was entitled to exercise such Option at the date of such termination.

 

(iii)          Death.  In the event of the death of a Participant during the period of Continuous Service since the Grant Date of an Option, or within thirty days following termination of the Participant’s Continuous Service, the Option may be exercised, at any time within one year following the date of the Participant’s death, by the Participant’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent the right to exercise the Option had vested at the date of death or, if earlier, the date the Participant’s Continuous Service terminated.

 

(iv)          Cause.  If the Committee determines that a Participant’s Continuous Service terminated due to Cause, the Participant shall immediately forfeit the right to exercise any Option, and it shall be considered immediately null and void.

 

(i)            Reverse Vesting.  The Committee in its sole and absolute discretion may allow a Participant to exercise unvested Options, in which case the Shares then issued shall be Restricted Shares having analogous vesting restrictions to the unvested Options.

 

(j)            Buyout Provisions.  The Committee may at any time offer to buyout an Option, in exchange for a payment in cash or Shares, based on such terms and conditions as the Committee shall establish and communicate to the Participant at the time that such offer is made.  In addition, if the Fair Market Value for Shares subject to an Option is more than 33% below their exercise price for more than 30 consecutive business days, the Committee may unilaterally terminate and cancel the Option either (i) by paying the Participant, in cash or Shares, an amount not less than the Black-Scholes value of the vested portion of the Option, or by irrevocably committing to grant a new Option, on a designated date more than six months after such termination and cancellation of such Option (but only if the Participant’s Continuous Service has not terminated prior to such designated date), on substantially the same terms as the cancelled Option, provided that the per Share exercise price for the new Option shall equal the per Share Fair Market Value of a Share on the date the new grant occurs.

 

7.             Share Appreciate Rights (SARs)

 

(a)           Grants.  The Committee may in its discretion grant Share Appreciation Rights to any Eligible Person, in any of the following forms:

 

(i)            SARs related to Options.  The Committee may grant SARs either concurrently with the grant of an Option or with respect to an outstanding Option, in which case the SAR shall extend to all or a portion of the Shares covered by the related Option.  An SAR shall entitle the Participant who holds the related Option, upon exercise 

 

 

of the SAR and surrender of the related Option, or portion thereof, to the extent the SAR and related Option each were previously unexercised, to receive payment of an amount determined pursuant to Section 7(e) below.  Any SAR granted in connection with an ISO will contain such terms as may be required to comply with the provisions of Section 422 of the Code and the regulations promulgated thereunder.

 

(ii)           SARs Independent of Options.  The Committee may grant SARs which are independent of any Option subject to such conditions as the Committee may in its discretion determine, which conditions will be set forth in the applicable Award Agreement.

 

(iii)          Limited SARs.  The Committee may grant SARs exercisable only upon or in respect of a Change in Control or any other specified event, and such limited SARs may relate to or operate in tandem or combination with or substitution for Options or other SARs, or on a stand-alone basis, and may be payable in cash or Shares based on the spread between the exercise price of the SAR, and (A) a price based upon or equal to the Fair Market Value of the Shares during a specified period, at a specified time within a specified period before, after or including the date of such event, or (B) a price related to consideration payable to Company’s shareholders generally in connection with the event.

 

(b)           Exercise Price.  The per Share exercise price of an SAR shall be determined in the sole discretion of the Committee, shall be set forth in the applicable Award Agreement, and shall be no less than 85% of the Fair Market Value of one Share.  The exercise price of an SAR related to an Option shall be the same as the exercise price of the related Option.  The exercise price of an SAR shall be subject to the special rules on pricing contained in Sections 6(d) and 6(j) hereof.

 

(c)           Exercise of SARs.  Unless the Award Agreement otherwise provides, an SAR related to an Option will be exercisable at such time or times, and to the extent, that the related Option will be exercisable.  An SAR may not have a term exceeding ten years from its Grant Date.  An SAR granted independently of any other Award will be exercisable pursuant to the terms of the Award Agreement.  Whether an SAR is related to an Option or is granted independently, the SAR may only be exercised when the Fair Market Value of the Shares underlying the SAR exceeds the exercise price of the SAR.

 

(d)           Effect on Available Shares.  To the extent that an SAR is exercised, only the actual number of delivered Shares (if any) will be charged against the maximum number of Shares that may be delivered pursuant to Awards under this Plan.  The number of Shares subject to the SAR and the related Option of the Participant will, however, be reduced by the number of underlying Shares as to which the exercise relates, unless the Award Agreement otherwise provides.

 

(e)           Payment.  Upon exercise of an SAR related to an Option and the attendant surrender of an exercisable portion of any related Award, the Participant will be entitled to receive payment of an amount determined by multiplying —

 

 

(i)            the excess of the Fair Market Value of a Share on the date of exercise of the SAR over the exercise price per Share of the SAR, by

 

(ii)           the number of Shares with respect to which the SAR has been exercised.

 

Notwithstanding the foregoing, an SAR granted independently of an Option (i) may limit the amount payable to the Participant to a percentage, specified in the Award Agreement but not exceeding one-hundred percent (100%), of the amount determined pursuant to the preceding sentence, and (ii) shall be subject to any payment or other restrictions that the Committee may at any time impose in its discretion, including restrictions intended to conform the SARs with Section 409A of the Code.

 

(f)            Form and Terms of Payment.  Subject to Applicable Law, the Committee may, in its sole discretion, settle the amount determined under Section 7(e) above solely in cash, solely in Shares (valued at their Fair Market Value on the date of exercise of the SAR), or partly in cash and partly in Shares.  In any event, cash shall be paid in lieu of fractional Shares.  Absent a contrary determination by the Committee, all SARs shall be settled in cash as soon as practicable after exercise.

 

Notwithstanding the foregoing, the Committee may, in an Award Agreement, determine the maximum amount of cash or Shares or combination thereof that may be delivered upon exercise of an SAR.

 

(g)           Termination of Employment or Consulting Relationship.  The Committee shall establish and set forth in the applicable Award Agreement the terms and conditions on which an SAR shall remain exercisable, if at all, following termination of a Participant’s Continuous Service.  The provisions of Section 6(h) above shall apply to the extent an Award Agreement does not specify the terms and conditions upon which an SAR shall terminate when there is a termination of a Participant’s Continuous Service.

 

(h)           Repricing and Buy-out.  The Committee has the same discretion to reprice and to buyout SARs as it has to take such actions pursuant to Section (j) above with respect to Options.

 

8.             Restricted Shares and Restricted Share Units

 

(a)           Grants.  The Committee may in its discretion grant restricted shares (“Restricted Shares”) to any Eligible Person and shall evidence such grant in an Award Agreement that is delivered to the Participant which sets forth the number of Restricted Shares, the purchase price for such Restricted Shares (if any) and the terms upon which the Restricted Shares may become vested.  In addition, the Company may in its discretion grant the right to receive Shares after certain vesting requirements are met (“Restricted Share Units”) to any Eligible Person and shall evidence such grant in an Award Agreement that is delivered to the Participant which sets forth the number of Shares (or formula, that may be based on future performance or conditions, for determining the number of Shares) that the Participant shall be entitled to receive upon vesting and the terms upon which the Shares subject to a Restricted Share Unit may become vested.  The Committee may condition any Award of Restricted Shares or Restricted Share Units to a Participant on receiving from the Participant such further assurances and documents as the Committee may require to enforce the restrictions.  In addition, the Committee may grant 

 

 

Awards hereunder in the form of unrestricted Shares (“Unrestricted Shares’’), which shall vest in full upon the date of grant or such other date as the Committee may determine and which the Committee may issue pursuant to any program under which one or more Eligible Persons (selected by the Committee in its discretion) elect to receive Unrestricted Shares in lieu of cash bonuses that would otherwise be paid.

 

(b)           Vesting and Forfeiture.  The Committee shall set forth in an Award Agreement granting Restricted Shares or Restricted Share Units, the terms and conditions under which the Participant’s interest in the Restricted Shares or the Shares subject to Restricted Share Units will become vested and non-forfeitable.  Except as set forth in the applicable Award Agreement or the Committee otherwise determines, upon termination of a Participant’s Continuous Service for any other reason, the Participant shall forfeit his or her Restricted Shares and Restricted Share Units; provided that if a Participant purchases the Restricted Shares and forfeits them for any reason, the Company shall return the purchase price to the Participant only if and to the extent set forth in an Award Agreement.

 

(c)           Issuance of Restricted Shares Prior to Vesting.  The Company shall issue stock certificates that evidence Restricted Shares pending the lapse of applicable restrictions, and that bear a legend making appropriate reference to such restrictions.  Except as set forth in the applicable Award Agreement or the Committee otherwise determines, the Company or a third party that the Company designates shall hold such Restricted Shares and any dividends that accrue with respect to Restricted Shares pursuant to Section 8(e) below.

 

(d)           Issuance of Shares upon Vesting.  As soon as practicable after vesting of a Participant’s Restricted Shares (or Shares underlying Restricted Share Units) and the Participant’s satisfaction of applicable tax withholding requirements, the Company shall release to the Participant, free from the vesting restrictions, one Share for each vested Restricted Share (or issue one Share free of the vesting restriction for each vested Restricted Share Unit), unless an Award Agreement provides otherwise.  No fractional shares shall be distributed, and cash shall be paid in lieu thereof.

 

(e)           Dividends Payable on Vesting.  Whenever Shares are released to a Participant under Section 8(d) above pursuant to the vesting of Restricted Shares or the Shares underlying Restricted Share Units are issued to a Participant pursuant to Section 8(d) above, such Participant may receive, in the sole discretion of the Committee, with respect to each Share released or issued, an amount equal to any cash dividends (plus, in the discretion of the Committee, simple interest at a rate as the Committee may determine) and a number of Shares equal to any stock dividends, which were declared and paid to the holders of Shares between the Grant Date and the date such Share is released or issued.

 

(f)            Section 83(h) Elections.  A Participant may make an election under Section 83(b) of the Code (the “Section 83(b) Election”) with respect to Restricted Shares.  If a Participant who has received Restricted Share Units provides the Committee with written notice of his or her intention to make Section 83(b) Election with respect to the Shares subject to such Restricted Share Units, the Committee may in its discretion convert the Participant’s Restricted Share Units into Restricted Shares, on a one-for-one basis, in full satisfaction of the Participant’s Restricted Share Unit Award.  The Participant may then make a Section 83(b) Election with respect to those 

 

 

Restricted Shares.  Shares with respect to which a Participant makes a Section 83(b) Election shall not be eligible for deferral pursuant to Section 9 below.

 

(g)           Deferral Elections.  At any time within the thirty-day period (or other shorter or longer period that the Committee selects) in which a Participant who is a member of a select group of management or highly compensated employees (within the meaning of the Code) receives an Award of either Restricted Shares or Restricted Share Units, the Committee may permit the Participant to irrevocably elect, on a form provided by and acceptable to the Committee, to defer the receipt of all or a percentage of the Shares that would otherwise be transferred to the Participant upon the vesting of such Award.  If the Participant makes this election, the Shares subject to the election, and any associated dividends and interest, shall be credited to an account established pursuant to Section 9 hereof on the date such Shares would otherwise have been released or issued to the Participant pursuant to Section 8(d) above.

 

9.             Deferred Share Units

 

(a)           Elections to Defer.  The Committee may permit any Eligible Person who is a Director, Consultant or member of a select group of management or highly compensated employees (within the meaning of the Code) to irrevocably elect, on a form provided by and acceptable to the Committee (the “Election Form”), to forego the receipt of cash or other compensation (including the Shares deliverable pursuant to any Award other than Restricted Shares for which a Section 83(b) Election has been made), and in lieu thereof to have the Company credit to an internal Plan account (the “Account”) a number of deferred share units (“Deferred Share Units”) having a Fair Market Value equal to the Shares and other compensation deferred.  These credits will be made at the end of each calendar month during which compensation is deferred.  Each Election Form shall take effect on the first day of the next calendar year (or on the first day of the next calendar month in the case of an initial election by a Participant who is first eligible to defer hereunder) after its delivery to the Company, subject to Section 8(g) regarding deferral of Restricted Shares and Restricted Share Units and to Section 10(e) regarding deferral of Performance Awards, unless the Company sends the Participant a written notice explaining why the Election Form is invalid within five business days after the Company receives it.  Notwithstanding the foregoing sentence: (i) Election Forms shall be ineffective with respect to any compensation that a Participant earns before the date on which the Company receives the Election Form and (ii) the Committee may unilaterally make awards in the form of Deferred Share Units, regardless of whether or not the Participant foregoes other compensation.

 

(b)           Vesting.  Unless an Award Agreement expressly provides otherwise, each Participant shall be 100% vested at all times in any Shares subject to Deferred Share Units.

 

(c)           Issuances of Shares.  The Company shall provide a Participant with one Share for each Deferred Share Unit in five substantially equal annual installments that are issued before the last day of each of the five calendar years that end after the date on which the Participant’s Continuous Service terminates, unless —

 

(i)            the Participant has properly elected a different form of distribution, on a form approved by the Committee, that permits the Participant to select any combination 

 

 

of a lump sum and annual installments that are completed within ten years following termination of the Participant’s Continuous Service, and

 

(ii)           the Company received the Participant’s distribution election form at the time·the Participant elects to defer the receipt of cash or other compensation pursuant to Section 9(a), provided that such election may be changed through any subsequent election that (i) is delivered to the Administrator at least one year before the date on which distributions are otherwise scheduled to commence pursuant to the Participant’s election, and (ii) defers the commencement of distributions by at least five years from the originally scheduled· commencement date.

 

Fractional shares shall not be issued, and instead shall be paid out in cash.

 

(d)           Crediting of Dividends.  Whenever Shares are issued to a Participant pursuant to Section 9(c) above, such Participant shall also be entitled to receive, with respect to each Share issued, a cash amount equal to any cash dividends (plus simple interest at a rate of five percent per annum, or such other reasonable rate as the Committee may determine), and a number of Shares equal to any stock dividends which were declared and paid to the holders of Shares between the Grant Date and the date such Share is issued.

 

(e)           Emergency Withdrawals.  In the event a Participant suffers an unforeseeable emergency within the contemplation of this Section and Section 409A of the Code, the Participant may apply to the Company for all immediate distribution of all or a portion of the Participant’s Deferred Share Units.  The unforeseeable emergency must result from a sudden and unexpected illness or accident of the Participant, the Participant’s spouse, or a dependent (within the meaning of Section 152(a) of the Code) of the Participant, casualty loss of the Participant’s property, or other similar extraordinary and unforeseeable conditions beyond the control of the Participant.  Examples of purposes which are not considered unforeseeable emergencies include post-secondary school expenses or the desire to purchase a residence.  In no event will a distribution be made to the extent the unforeseeable emergency could be relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of the Participant’s nonessential assets to the extent such liquidation would not itself cause a severe financial hardship.  The amount of any distribution hereunder shall be limited to the amount necessary to relieve the Participant’s unforeseeable emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution.  The Committee shall determine whether a Participant has a qualifying unforeseeable emergency and the amount which qualifies for distribution, if any.  The Committee may require evidence of the purpose and amount of the need, and may establish such application or other procedures as it deems appropriate.

 

(f)            Unsecured Rights to Deferred Compensation.  A Participant’s right to Deferred Share Units shall at all times constitute an unsecured promise of the Company to pay benefits as they come due.  The right of the Participant or the Participant’s duly-authorized transferee to receive benefits hereunder shall be solely an unsecured claim against the general assets of the Company.  Neither the Participant not the Participant’s duly-authorized transferee shall have any claim against or rights in any specific assets, shares, or other funds of the Company.

 

 

10.           Performance Awards

 

(a)           Performance Units.  Subject to the limitations set forth in paragraph (c) hereof, the Committee may in its discretion grant Performance Units to any Eligible Person and shall evidence such grant in an Award Agreement that is delivered to the Participant which sets forth the terms and conditions of the Award.

 

(b)           Performance Compensation Awards.  Subject to the limitations set forth in paragraph (c) hereof, the Committee may, at the time of grant of a Performance Unit, designate such Award as a “Performance Compensation Award” in order that such Award constitutes “qualified performance-based compensation” under Code Section 162(m), in which event the Committee shall have the power to grant such Performance Compensation Award upon terms and conditions that qualify it as “qualified performance-based compensation” within the meaning of Code Section 162(m).  With respect to each such Performance Compensation Award, the Committee shall establish, in writing within the time required under Code Section 162(m), a “Performance Period,” “Performance Measure(s)”, and “Performance Formula(e)” (each such term being hereinafter defined).

 

A Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that the Performance Measure(s) for such Award is achieved and the Performance Formula(e) as applied against such Performance Measure(s) determines that all or some portion of such Participant’s Award has been earned for the Performance Period.  As soon as practicable after the close of each Performance Period, the Committee shall review and certify in writing whether, and to what extent, the Performance Measure(s) for the Performance Period have been achieved and, if so, determine and certify in writing the amount of the Performance Compensation Award to be paid to the Participant and, in so doing, may use negative discretion to decrease, but not increase, the amount of the Award otherwise payable to the Participant based upon such performance.

 

(c)           Limitations on Awards.  The maximum Performance Unit Award and the maximum Performance Compensation Award that any one Participant may receive for any one Performance Period shall not together exceed 500,000 Shares and $500,000 in cash.  The Committee shall have the discretion to provide in any Award Agreement that any amounts earned in excess of these limitations will either be credited as Deferred Share Units, or as deferred cash compensation under a separate plan of the Company (provided in the latter case that such deferred compensation either bears a reasonable rate of interest or has a value based on one or more predetermined actual investments).  Any amounts for which payment to the Participant is deferred pursuant to the preceding sentence shall be paid to the Participant in a future year or years not earlier than, and only to the extent that, the Participant is either not receiving compensation in excess of these limits for a Performance Period, or is not subject to the restrictions set forth under Section 162(b) of the Code.

 

(d)           Definitions.

 

(i)            “Performance Formula” means, for a Performance Period, one or more objective formulas or standards established by the Committee for purposes of determining whether or the extent to which an Award has been earned based on the level 

 

 

of performance attained or to be attained with respect to one or more Performance Measure(s).  Performance Formulae may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

 

(ii)           “Performance Measure” means one or more of the following selected by the Committee to measure Company, Affiliate, and/or business unit performance for a Performance Period, whether in absolute or relative terms (including, without limitation, terms relative to a peer group or index):  basic, diluted, or adjusted earnings per share; sales or revenue; earnings before interest, taxes, and other adjustments (in total or on a per share basis); basic or adjusted net income; returns on equity, assets, capital, revenue or similar measure; economic value added; working capital; total shareholder return; and product development, product market share, research, licensing, litigation, human resources, information services, mergers, acquisitions, sales of assets of Affiliates or business units.  Each such measure shall be, to the extent applicable, determined in accordance with generally accepted accounting principles as consistently applied by the Company (or such other standard applied by the Committee) and, if so determined by the Committee, and in the case of a Performance Compensation Award to the extent permitted under Code Section 162(m), adjusted to omit the effects of extraordinary items, gain or loss on the disposal of a business segment, unusual or infrequently occurring events and transactions and cumulative effects of changes in accounting principles.  Performance Measures may vary from Performance Period to Performance Period and from Participant to Participant, and may be established on a stand-alone basis, in tandem or in the alternative.

 

(iii)          “Performance Period” means one or more periods of time (of not less than one fiscal year of the Company), as the Committee may designate, over which the attainment of one or more Performance Measure(s) will be measured for the purpose of determining a Participant’s rights in respect of an Award.

 

(e)           Deferral Elections.  At any time prior to the date that is at least six months before the close of a Performance Period (or shorter or longer period that the Committee selects) with respect to an Award of either Performance Units or Performance Compensation, the Committee may permit a Participant who is a member of a select group of management or highly compensated employees (within the meaning of the Code) to irrevocably elect, on a form provided by and acceptable to the Committee, to defer the receipt of all or a percentage of the cash or Shares that would otherwise be transferred to the Participant upon the vesting of such Award if the Participant makes this election, the cash or Shares subject to the election, and any associated interest and dividends, shall be credited to an account established pursuant to Section 9 hereof on the date such cash ox Shares would otherwise have been released or issued to the Participant pursuant to Section 10(a) or Section 10(b) above.

 

11.           Taxes

 

(a)           General.  As a condition to the issuance or distribution of Shares pursuant to the Plan, the Participant (or in the case of the Participant’s death, the person who succeeds to the Participant’s rights) shall make such arrangements as the Company may require for the 

 

 

satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with the Award and the issuance of Shares.  The Company shall not be required to issue any Shares until such obligations are satisfied.  If the Committee allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations, the Committee shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.

 

(b)           Default Rule for Employees.  In the absence of any other arrangement, an Employee shall be deemed to have directed the Company to withhold or collect from his or her cash compensation an amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable after the date of the exercise of an Award.

 

(c)           Special Rules.  In the case of a Participant other than an Employee (or in the case of an Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with respect to any remaining tax obligations), in the absence of any other arrangement and to the extent permitted under Applicable Law, the Participant shall be deemed to have elected to have the Company withhold from the Shares or cash to be issued pursuant to an Award that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as defined below) or cash equal to the amount required to be withheld.  For purposes of this Section 11, the Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined under the Applicable Law (the “Tax Date”).

 

(d)           Surrender of Shares.  If permitted by the Committee, in its discretion, a Participant may satisfy the minimum applicable tax withholding and employment tax obligations associated with an Award by surrendering Shares to the Company (including Shares that would otherwise be issued pursuant to the Award) that have a Fair Market Value determined as of the applicable Tax Date equal to the amount required to be withheld.  In the case of Shares previously acquired from the Company that are surrendered under this Section 11, such Shares must have been owned by the Participant for more than six months on the date of surrender (or such longer period of time the Company may in its discretion require).

 

(e)           Income Taxes and Deferred Compensation.  Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards (including any taxes arising under Section 409A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold any Participant harmless from any or all of such taxes.  The Administrator shall have the discretion to organize any deferral program, to require deferral election forms, and to grant or to unilaterally modify any Award in a manner that (i) conforms with the requirements of Section 409A of the Code with respect to compensation that is deferred and that vests after December 31, 2004, (ii) that voids any Participant election to the extent it would violate Section 409A of the Code, and (iii) for any distribution election that would violate Section 409A of the Code, to make distributions pursuant to the Award at the earliest to occur of a distribution event that is allowable under Section 409A of the Code or any distribution event that is both allowable under Section 409A of the Code and is elected by the Participant, subject to any valid second election to defer, provided that the Administrator permits second elections to defer in accordance with Section 409A(a)(4)(C).  The Administrator shall 

 

 

have the sole discretion to interpret the requirements of the Code, including Section 409A, for purposes of the Plan and all Awards.

 

12.           Non-Transferability of Awards

 

(a)           General.  Except as set forth in this Section 12, or as otherwise approved by the Committee for a select group of management or highly compensated Employees, Awards may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution.  The designation of a beneficiary by a Participant will not constitute a transfer.  An Award may be exercised, during the lifetime of the holder of an Award, only by such holder, the duly-authorized legal representative of a Participant who is Disabled, or a transferee permitted by this Section 12.

 

(b)           Limited Transferable Rights.  Notwithstanding anything else in this Section 12, the Committee may in its discretion provide that an Award other than an ISO may be transferred, on such terms and conditions as the Committee deems appropriate, either (i) by instrument to the Participant’s “Immediate Family” (as defined below), (ii) by instrument to an inter vivos or testamentary trust (or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries, or (iii) by gift to charitable institutions.  Any transferee of the Participant’s rights shall succeed and be subject to all of the terms of this Award Agreement and the Plan.  “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive relationships.

 

13.           Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions

 

(a)           Changes in Capitalization.  The Committee shall equitably adjust the number of Shares covered by each outstanding Award, and the number of Shares that have been authorized for issuance under the Plan but as to which no Awards have yet been granted or that have been returned to the Plan upon cancellation, forfeiture, or expiration of an Award, as well as the price per Share covered by each such outstanding Award, to reflect any increase or decrease in the number of issued Shares resulting from a stock-split, reverse stock-split, stock dividend, combination, recapitalization or reclassification of the Shares, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company.  In the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding Options under the Plan such alternative consideration (including securities of any surviving entity) as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all Options so replaced. In any case, such substitution of securities shall not require the consent of any person who is granted Options pursuant to the Plan.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be required to be made with respect to, the number or price of Shares subject to any Award.

 

(b)           Dissolution or Liquidation.  In the event of the dissolution or liquidation of the Company, each Award will terminate immediately prior to the consummation of such action, 

 

 

subject to the ability of the Committee to exercise any discretion authorized in the case of a Change in Control.

 

(c)           Change in Control.  In the event of a Change in Control the Committee may in its sole and absolute discretion and authority, without obtaining the approval or consent of the Company’s shareholders or any Participant with respect to his or her outstanding Awards, take one or more of the following actions:

 

(i)            arrange for or otherwise provide that each outstanding Award shall be assumed or a substantially similar award shall be substituted by a successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”);

 

(ii)           accelerate the vesting of Awards so that Awards shall vest (and, to the extent applicable, become exercisable) as to the Shares that otherwise would have been unvested and provide that repurchase rights of the Company, with respect to Shares issued upon exercise of an Award shall lapse as to the Shares subject to such repurchase right;

 

(iii)          arrange or otherwise provide for the payment of cash or other consideration to Participants in exchange for the satisfaction and cancellation of outstanding Awards; or

 

(iv)          make such other modifications, adjustments or amendments to outstanding Awards or this Plan as the Committee deems necessary or appropriate, subject however to the terms of Section 15(a) below.

 

Notwithstanding the above, in the event a Participant holding an Award assumed or substituted by the Successor Corporation in a Change in Control is Involuntarily Terminated by the Successor Corporation in connection with, or within 12 months following consummation of, the Change in Control, then any assumed or substituted Award held by the terminated Participant at the time of termination shall accelerate and become fully vested (and exercisable in full in the case of Options and SARs), and any repurchase right applicable to any Shares shall lapse in full, unless an Award Agreement provides for a more restrictive acceleration or vesting schedule or more restrictive limitations on the lapse of repurchase rights or otherwise places additional restrictions, limitations and conditions on an Award.  The acceleration of vesting and lapse of repurchase rights provided for in the previous sentence shall occur immediately prior to the effective date of the Participant’s termination, unless an Award Agreement provides otherwise.

 

(d)           Certain Distributions.  In the event of any distribution to the Company’s shareholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Committee may, in its discretion, appropriately adjust the price per Share covered by each outstanding Award to reflect the effect of such distribution.

 

14.           Time of Granting Awards.

 

The date of grant (“Grant Date”) of an Award shall be the date on which the Committee makes the determination granting such Award or such other date as is determined by the 

 

 

Committee, provided that in the case of an ISO, the Grant Date shall be the later of the date on which the Committee makes the determination granting such ISO or the date of commencement of the Participant’s employment relationship with the Company.

 

15.           Modification of Awards and Substitution of Options.

 

(a)           Modification, Extension, and Renewal of Awards.  Within the limitations of the Plan, the Committee may modify an Award to accelerate the rate at which an Option or SAR may be exercised (including without limitation permitting an Option or SAR to be exercised in full without regard to the installment or vesting provisions of the applicable Award Agreement or whether the Option or SAR is at the time exercisable, to the extent it has not previously been exercised), to accelerate the vesting of any Award, to extend or renew outstanding Awards, or to accept the cancellation of outstanding Awards to the extent not previously exercised either for the granting of new Awards or for other consideration in substitution or replacement thereof.  Notwithstanding the foregoing provision, no modification of an outstanding Award shall materially and adversely affect such Participant’s rights thereunder, unless either the Participant provides written consent or there is an express Plan provision permitting the Committee to act unilaterally to make the modification.

 

(b)           Substitution of Options.  Notwithstanding any inconsistent provisions or limits under the Plan, in the event the Company or an Affiliate acquires (whether by purchase, merger or otherwise) all or substantially all of outstanding capital stock or assets of another corporation or in the event of any reorganization or other transaction qualifying under Section 424 of the Code, the Committee may, in accordance with the provisions of that Section, substitute Options for options under the plan of the acquired company provided (i) the excess of the aggregate fair market value of the shares subject to an option immediately after the substitution over the aggregate option price of such shares is not more than the similar excess immediately before such substitution and (ii) the new option does not give persons additional benefits, including any extension of the exercise period.

 

16.           Term of Plan.

 

The Plan shall continue in effect for a term of ten (10) years from its effective date as determined under Section 20 below, unless the Plan is sooner terminated under Section 17 below.

 

17.           Amendment and Termination of the Plan.

 

(a)           Authority to Amend or Terminate.  Subject to Applicable Laws, the Board may from time to time amend, alter, suspend, discontinue, or terminate the Plan.

 

(b)           Effect of Amendment or Termination.  No amendment, suspension, or termination of the Plan shall materially and adversely affect Awards already granted unless either it relates to an adjustment pursuant to Section 13 above, or it is otherwise mutually agreed between the Participant and the Committee, which agreement must be in writing and signed by the Participant and the Company.  Notwithstanding the foregoing, the Committee may amend the Plan to eliminate provisions which are no longer necessary as a result of changes in tax or securities laws or regulations, or in the interpretation thereof.

 

 

18.           Conditions Upon Issuance of Shares.

 

Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with Applicable Law, with such compliance determined by the Company in consultation with its legal counsel.

 

19.           Reservation of Shares.

 

The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

20.           Effective Date.

 

This Plan shall become effective on the date of its approval by the Board; provided that this Plan shall be submitted to the Company’s shareholders for approval and if not approved by the shareholders in accordance with Applicable Laws (as determined by the Committee in its discretion) within one year from the date of approval by the Board, this Plan and any Awards shall be null, void, and of no force and effect.  Awards granted under this Plan before approval of this Plan by the shareholders shall be granted subject to such approval, and no Shares shall be distributed before such approval.

 

21.           Controlling Law.

 

All disputes relating to or arising from the Plan shall be governed by the internal substantive laws (and not the laws of conflicts of laws) of the State of Delaware, to the extent not preempted by United States federal law.  If any provision of this Plan is held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions shall continue to be fully effective.

 

22.           Laws And Regulations.

 

(a)           U.S. Securities Laws.  This plan, the grant of Awards, and the exercise of Options and SARs under this Plan, and the obligation of the Company to sell or deliver any of its securities (including, without limitation, Options, Restricted Shares, Restricted Share Units, Deferred Share Units, and Shares) under this Plan shall be subject to all Applicable Law.  In the event that the Shares are not registered under the Securities Act of 1933, as amended (the “Act”), or any applicable state securities laws prior to the delivery of such Shares, the Company may require, as a condition to the issuance thereof, that the persons to whom Shares are to be issued represent and warrant in writing to the Company that such Shares are being acquired by him or her for investment for his or her own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in, any distribution of such Shares within the meaning of the Act, and a legend to that effect may be placed on the certificates representing the Shares.

 

(b)           Other Jurisdictions.  To facilitate the making of any grant of an Award under this Plan, the Committee may provide for such special terms for Awards to Participants who are 

 

 

foreign nationals or who are employed by the Company or any Affiliate outside of the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom.  The Company may adopt rules and procedures relating to the operation and administration of this Plan to accommodate the specific requirements of local laws and procedures of particular countries.  Without limiting the foregoing, the Company is specifically authorized to adopt rules and procedures regarding the conversion of local currency, taxes, withholding procedures and handling of stock certificates which vary with the customs and requirements of particular countries.  The Company may adopt sub-plans and establish escrow accounts and trusts as may be appropriate or applicable to particular locations and countries.

 

23.           No Shareholder Rights.  Neither a Participant nor any transferee of a Participant shall have any rights as a shareholder of the Company with respect to any Shares underlying any Award until the date of issuance of a share certificate to a Participant or a transferee of a Participant for such Shares in accordance with the Company’s governing instruments and Applicable Law.  Prior to the issuance of Shares pursuant to an Award, a Participant shall not have the right to vote or to receive dividends or any other rights as a shareholder with respect to the Shares underlying the Award, notwithstanding its exercise in the case of Options and SARs.  No adjustment will be made for a dividend or other right that is determined based on a record date prior to the date the stock certificate is issued, except as otherwise specifically provided for in this Plan.

 

24.           No Employment Rights.  The Plan shall not confer upon any Participant any right to continue an employment, service or consulting relationship with the Company, nor shall it affect in any way a Participant’s right or the Company’s right to terminate the Participant’s employment, service, or consulting relationship at any time, with or without Cause.

 

 

TANGOE, INC.

 

2005 Stock Incentive Plan

 

 

Appendix A: Definitions

 

As used in the Plan, the following definitions shall apply:

 

“Affiliate” means, with respect to any Person (as defined below), any other Person that directly or indirectly controls or is controlled by or under common control with such Person.  For the purposes of this definition, “control,” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person or the power to elect directors, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Applicable Law” means the legal requirements relating to the administration of options and share-based plans under applicable U.S. federal and state laws, the Code, any applicable stock exchange or automated quotation system rules or regulations, and the applicable laws of any other country or jurisdiction where Awards are granted, as such laws, rules, regulations and requirements shall be in place from time to time.

 

“Award” means any award made pursuant to the Plan, including awards made in the form of an Option, an SAR, a Restricted Share, a Restricted Share Unit, a Deferred Share Unit and a Performance Award, or any combination thereof, whether alternative or cumulative, authorized by and granted under this Plan.

 

“Award Agreement” means any written document setting forth the terms of an Award that has been authorized by the Committee.  The Committee shall determine the form or forms of documents to be used, and may change them from time to time for any reason.

 

“Board” means the Board of Directors of the Company.

 

“Cause” for termination of a Participant’s Continuous Service will exist if the Participant is terminated from employment or other service with the Company or an Affiliate for any of the following reasons:  (i) the Participant’s willful failure to substantially perform his or her duties and responsibilities to the Company or deliberate violation of a material Company policy; (ii) the Participant’s commission of any material act or acts of fraud, embezzlement, dishonesty, or other willful misconduct; (iii) the Participant’s material unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s willful and material breach of any of his or her obligations under any written agreement or covenant with the Company.

 

The Committee shall in its discretion determine whether or not a Participant is being terminated for Cause.  The Committee’s determination shall, unless arbitrary and capricious, be 

 

 

final and binding on the Participant, the Company, and all other affected persons.  The foregoing definition does not in any way limit the Company’s ability to terminate a Participants employment or consulting relationship at any time, and the term “Company” will be interpreted herein to include any Affiliate or successor thereto, if appropriate.

 

“Change in Control” means (i) a sale of all or substantially all of the Company’s assets, (ii) any merger or consolidation of the Company with or into another corporation other than a merger or consolidation in which the holders of the shares of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by their being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction, or (iii) any person or group (as such terms are used in and under Section 13(d) of the Exchange Act), other than a person or group that is a stockholder of the Company as of January 31, 2005, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the total voting power represented by the then outstanding voting securities of the Company.  Notwithstanding the foregoing, the Committee has the discretion to interpret this definition in a manner that conforms with the requirements of Section 409A of the Code and associated guidance.

 

“Code” means the U.S.  Internal Revenue Code of 1986, as amended.

 

“Committee” means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 above.  With respect to any decision involving an Award intended to satisfy the requirements of Section 162(m) of the Code; the Committee shall consist of two or more Directors of the Company who are “outside directors” within the meaning of Section 162(m) of the Code.  With respect to any decision relating to a Reporting Person, the Committee shall consist of two or more Directors who are disinterested within the meaning of Rule 16b-3.

 

“Company” means Tangoe, Inc., a Delaware corporation; provided, however, that in the event the Company reincorporates to another jurisdiction, all references to the term “Company” shall refer to the Company in such new jurisdiction.

 

“Consultant” means any person, including an advisor, who is engaged by the Company or any Affiliate to render services and is compensated for such services.

 

“Continuous Service” means the absence of any interruption or termination of service as an Employee, Director, or Consultant.  Continuous Service shall not be considered interrupted in the case of:  (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Committee, provided that such leave is for a period of not more than 90 days, unless reemployment or reengagement upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; (iv) changes in status from Director to advisory director or emeritus status; or (iv) in the case of transfers between locations of the Company or between the Company, its Affiliates or their respective successors.  Changes in status between service as an Employee, Director or a Consultant will not constitute an interruption of Continuous Service.

 

 

“Deferred Share Units” mean Awards pursuant to Section 9 of the Plan.

 

“Director” means a member of the Board, or a member of the board of directors of an Affiliate.

 

“Disabled” means a condition under which a Participant —

 

(a)           is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or

 

(b)           is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, received income replacement benefits for a period of not less than 3 months under an accident or health plan covering employees of the Company.

 

“Eligible Person” means any Consultant, Director or Employee and includes non-Employees to whom an offer of employment has been extended.

 

“Employee” means any person whom the Company or any Affiliate classifies as an employee (including an officer) for employment tax purposes.  The payment by the Company of a directors fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” means, as of any date (the “Determination Date’’) means: (i) the closing price of a Share on the New York Stock Exchange or the American Stock Exchange (collectively, the “Exchange”), on the Determination Date, or, if shares were not traded on the Determination Date, then on the nearest preceding trading day during which a sale occurred; or (ii) if such stock is not traded on the Exchange but is quoted on NASDAQ or a successor quotation system, (A) the last sales price (if the stock is then listed as a National Market Issue under The Nasdaq National Market System) or (B) the mean between the closing representative bid and asked prices (in-all other cases) for the stock on the Determination Date as reported by NASDAQ or such successor quotation system; or (iii) if such stock is not traded on the Exchange or quoted on NASDAQ but is otherwise traded in the over-the-counter, the mean between the representative bid and asked prices on the Determination Date; or (iv) if subsections (i)-(iii) do not apply, the fair market value established in good faith by the Board.

 

“Grant Date” has the meaning set forth in Section 14 of the Plan.

 

“Incentive Share Option or ISO” hereinafter means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Award Agreement.

 

“SAR” or “Share Appreciation Right” means Awards granted pursuant to Section 7 of the Plan.

 

 

“Share” means a share of common stock of the Company, as adjusted in accordance with Section 13 of the Plan.

 

“Ten Percent Holder” means a person who owns stock representing more than ten percent (10%) of the combined voting power of all classes of stock of the Company or any Affiliate.

 

“Unrestricted Shares” has the meaning set forth in Section 8 of the Plan.

 

 

TANGOE, INC.

 

AMENDMENT No. 1 To 2005 STOCK INCENTIVE PLAN

 

This Amendment No. 1 to the Tangoe, Inc. 2005 Stock Incentive Plan (this “Amendment”) has been approved by the Board of Directors on December 28, 2005 and by the stockholders on December 29, 2005.  All undefined capitalized terms used herein shall have the same meanings as set forth in the Tangoe, Inc. 2005 Stock Incentive Plan (the “Plan”).

 

1.             The Plan is hereby amended by deleting Section 3 of the Plan in its entirety and substituting the following new Section 3 in lieu thereof:

 

“3.           Shares Subject to the Plan

 

Subject to the provisions of Section 13 of the Plan, the maximum number of Shares that the Company may issue for all Awards is 2,000,000 Shares.  For all Awards, the Shares issued pursuant to the Plan may be authorized but unissued Shares, or Shares that the Company has reacquired or otherwise holds in treasury.

 

Shares that are subject to an Award that for any reason expires, is forfeited, is cancelled, or becomes unexercisable, and Shares that are for any other reason not paid or delivered under the Plan shall again, except to the extent prohibited by Applicable Law, be available for subsequent Awards under the Plan.  In addition, the Committee may make future Awards with respect to Shares that the Company retains from otherwise delivering pursuant to an Award either (i) as payment of the exercise price of an Award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of an Award.  Notwithstanding the foregoing, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for ISO Awards shall be determined, to the extent required under applicable tax laws, by reducing the number of Shares designated in the preceding paragraph by the number of Shares granted pursuant to Awards (whether or not Shares are issued pursuant to such Awards); provided that any Shares that are either purchased under the Plan and forfeited back to the Plan, or surrendered in payment of the Exercise Price for an Award shall be available for issuance pursuant to ISO Awards.”

 

2.             Except as expressly or by necessary implication amended by the terms of this Agreement, the terms and conditions of the Plan shall remain in full force and effect.

 

 

TANGOE, INC.

 

AMENDMENT No. 2 To 2005 STOCK INCENTIVE PLAN

 

This Amendment No. 2 to the Tangoe, Inc. 2005 Stock Incentive Plan (this “Amendment”) has been approved by the Board of Directors on August     , 2006 and by the stockholders on August     , 2006.  All undefined capitalized terms used herein shall have the same meanings as set forth in the Tangoe, Inc. 2005 Stock Incentive Plan (the “Plan”).

 

1.             The Plan is hereby amended by deleting Section 3 of the Plan in its entirety and substituting the following new Section 3 in lieu thereof:

 

“3.           Shares Subject to the Plan

 

Subject to the provisions of Section 13 of the Plan, the maximum number of Shares that the Company may issue for all Awards is 4,500,000 Shares.  For all Awards, the Shares issued pursuant to the Plan may be authorized but unissued Shares, or Shares that the Company has reacquired or otherwise holds in treasury.

 

Shares that are subject to an Award that for any reason expires, is forfeited, is cancelled, or becomes unexercisable, and Shares that are for any other reason not paid or delivered under the Plan shall again, except to the extent prohibited by Applicable Law, be available for subsequent Awards under the Plan.  In addition, the Committee may make future Awards with respect to Shares that the Company retains from otherwise delivering pursuant to an Award either (i) as payment of the exercise price of an Award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of an Award.  Notwithstanding the foregoing, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for ISO Awards shall be determined, to the extent required under applicable tax laws, by reducing the number of Shares designated in the preceding paragraph by the number of Shares granted pursuant to Awards (whether or not Shares are issued pursuant to such Awards); provided that any Shares that are either purchased under the Plan and forfeited back to the Plan, or surrendered in payment of the Exercise Price for an Award shall be available for issuance pursuant to ISO Awards.”

 

2.             The Plan is hereby amended by deleting Section 5 of the Plan in its entirety and substituting the following new Section 5 in lieu thereof:

 

“5.           Eligibility

 

(a)           General Rule.  The Committee may grant ISOs only to Employees (including officers who are Employees) of the Company or an Affiliate that is a “parent corporation” or “subsidiary corporation” within the meaning of Section 424 of the Code, and may grant all other Awards to any Eligible Person.  A Participant who has been granted an Award may be granted an additional Award or Awards if the Committee shall so determine, if such person is otherwise an Eligible Person and if otherwise in accordance with the terms of the Plan.

 

 

(b)           Grant of Awards.  Subject to the express provisions of the Plan, the Committee shall determine from the class of Eligible Persons those individuals to whom Awards under the Plan may be granted, the number of Shares subject to each Award, the price (if any) to be paid for the Shares or the Award and, in the case of Performance Awards, in addition to the matters addressed in Section 10 below, the specific objectives, goals and performance criteria that further define the Performance Award.  Each Award shall be evidenced by an Award Agreement signed by the Company and, if required by the Committee, by the Participant.  The Award Agreement shall set forth the material terms and conditions of the Award established by the Committee.

 

(c)           Limits on Awards.  During the term of the Plan, no Participant may receive Options and SARs that relate to more than 4,500,000 Shares.  The Committee will adjust these limitations pursuant to Section 13 below.

 

(d)           Replacement Awards.  Subject to Applicable Laws (including any associated Shareholder approval requirements), the Committee may, in its sole discretion and upon such terms as it deems appropriate, require as a condition of the grant of an Award to a Participant that the Participant surrender for cancellation some or all of the Awards that have previously been granted to the Participant under this Plan or otherwise.  An Award that is conditioned upon such surrender may or may not be the same type of Award, may cover the same (or a lesser or greater) number of Shares as such surrendered Award, may have other terms that are determined without regard to the terms or conditions of such surrendered Award, and may contain any other terms that the Committee deems appropriate.  In the case of Options, these other terms may not involve an Exercise Price that is lower than the Exercise Price of the surrendered Option unless the Company’s shareholders approve the grant itself or the program under which the grant is made pursuant to the Plan.”

 

3.             Except as expressly or by necessary implication amended by the terms of this Agreement, the terms and conditions of the Plan shall remain in full force and effect.

 

 

OMNIBUS AMENDMENT TO
 TRAQ WIRELESS, INC. AMENDED AND RESTATED 1999 STOCK PLAN,
 TANGOE, INC. 2000 EXECUTIVE STOCK OPTION/STOCK ISSUANCE PLAN,
 TANGOE, INC. 2000 EMPLOYEE STOCK OPTION/STOCK ISSUANCE PLAN
 AND
 TANGOE, INC. 2005 STOCK INCENTIVE PLAN

 

THIS OMNIBUS AMENDMENT (this “Amendment”) amends that certain (i) Traq Wireless, Inc. Amended and Restated 1999 Stock Plan (the “Traq Plan”), (ii) Tangoe, Inc. 2000 Executive Stock Option/Stock Issuance Plan (the “Tangoe 2000 Executive Plan”) (iii) Tangoe, Inc. 2000 Employee Stock Option/Stock Issuance Plan (the “Tangoe 2000 Employee Plan” and together with the Tangoe 2000 Executive Plan, the “Tangoe 2000 Plans”) and (iv) Tangoe, Inc. 2005 Incentive Stock Option Plan (the “Tangoe 2005 Plan” and together with the Traq Plan and the Tangoe 2000 Plans, the “Plans”).

 

WHEREAS, Tangoe, Inc., a Delaware corporation (“Tangoe”), Traq Acquisition Corp., a wholly owned subsidiary of Tangoe and a Delaware corporation and Traq Wireless, Inc., a Delaware corporation have entered into that certain Agreement and Plan of Merger dated as of March 1, 2007 (the “Merger Agreement”) pursuant to which Merger Sub was merged with and into Traq and the surviving entity thereof is a wholly owned subsidiary of Tangoe; and

 

WHEREAS, pursuant to Section 2.8 of the Merger Agreement, Tangoe has assumed the Traq Plan and all outstanding options under the Traq Plan; and

 

WHEREAS, the Board of Directors of Tangoe wishes to amend the Plans to (1) limit the number of shares allocated and reserved to the Traq Plan and the Tangoe 2000 Plans (collectively, the “Capped Plans”) to the number of shares of Common Stock that were originally issued pursuant to the Capped Plans or pursuant to the exercise of options originally issued under the Capped Plans and that are outstanding as of the Effective Time, plus the number of shares of Common Stock covered by options outstanding under the Capped Plans as of the Effective Time, plus the number of shares of Common Stock covered by options outstanding under the Capped Plans as of the Effective Time, (ii) increase the shares of Common Stock that are allocated and reserved to the Tangoe 2005 Plan, and (iii) provide that any shares of stock that are unexercised or that are reacquired by Tangoe under the Capped Plans after the Effective Date become available and reserved under and allocated to the Tangoe 2005 Plan.

 

NOW THEREFORE, the Plans are hereby amended as follows:

 

1.             Amendments to Traq Plan.

 

(a)           The first sentence of Section 4(a) of the Traq Plan is hereby deleted and replaced with the following:

 

“Shares offered under the Plan may be authorized but unissued shares or treasury Shares.  The aggregate number of Shares that may be issued under the Plan (upon exercise of Options or other rights to acquire Shares) shall not exceed 5,981,816, subject to adjustment pursuant to Sections 4(b) and 8 (the “Number of Plan Shares”).”

 

 

(b)           Section 4(b) of the Traq Plan is hereby deleted in its entirety and replaced with the following:

 

“Reduction of Number of Plan Shares.  From and after March 9, 2007, the Number of Plan Shares shall be reduced by the number of (1) Shares issued under the Plan that the Company reacquires for any reason including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) Shares that are subject to Options that expire, are forfeited, cancelled or become unexercisable, and (3) Shares that the Company retains from otherwise delivering pursuant to any awards originally made under the Plan either (i) as payment of the Purchase Price or Exercise Price of an award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of any award.”

 

2.             Amendments to the Tangoe 2000 Plans.

 

(a)           Section 3 of each of the Tangoe 2000 Executive Plan is hereby deleted and replaced with the following:

 

“3.           Stock Subject to the Plan.  Subject to the provisions of this Section 3 and Section 14 of the Plan, the maximum number of Shares that may be sold under the Plan shall be 4,401,684 (the “Number of Plan Shares”).  From and after March 9, 2007, the Number of Plan Shares shall be reduced by the number of (1) Shares issued under the Plan that the Company reacquires for any reason including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) Shares that are subject to Options that expire, are forfeited, cancelled or become unexercisable, and (3) Shares that the Company retains from otherwise delivering pursuant to any awards originally made under the Plan either (i) as payment of the purchase Price or exercise Price of an Option or other award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of any Option or other award.”

 

(b)           Section 3 of each of the Tangoe 2000 Employee Plan is hereby deleted and replaced with the following:

 

“3.           Stock Subject to the Plan.  Subject to the provisions of this Section 3 and Section 14 of the Plan, the maximum number of Shares that may be sold under the Plan shall be 943,775 (the “Number of Plan Shares”).  From and after March 9, 2007, the Number of Plan Shares shall be reduced by the number of (1) Shares issued under the Plan that the Company reacquires for any reason including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) Shares that are subject to Options that expire, are forfeited, cancelled or become unexercisable, and (3) Shares that the Company retains from otherwise delivering pursuant to any awards originally made under the Plan either (i) as payment of the purchase Price or exercise Price of an Option or other award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of any Option or other award.”

 

 

3.             Amendments to the Tangoe 2005 Plan.

 

(a)           Section 3 of the Tangoe 2005 Plan is hereby deleted in its entirety and replaced with the following:

 

“3.           Shares Subject to the Plan.

 

(a)           Number of Plan Shares.  Subject to the provisions of this Section 3 and Section 13 of the Plan, the maximum number of Shares that the Company may issue for all Awards is 6,016,944 Shares (the “Number of Plan Shares”).  For all Awards, the Shares issued pursuant to the Plan may be authorized but unissued Shares, or Shares that the Company has reacquired or otherwise holds in treasury.

 

(b)           Shares Reacquired under Certain Other Plans.  Except to the extent prohibited by Applicable Law, the Number of Plan Shares shall be automatically increased by, and there shall be made available for subsequent Awards under the Plan, (1) any shares of Common Stock that the Company reacquires for any reason under the Traq Plan or either of the Tangoe 2000 Plans, including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) shares that are subject to options issued under the Traq Plan or either of the Tangoe 2000 Plans that expire, are forfeited, cancelled or become unexercisable, and (3) shares that the Company retains from otherwise delivering pursuant to any awards originally made under the Traq Plan or either of the Tangoe 2000 Plans either (i) as payment of the exercise price of an award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of any award.

 

(c)           Shares Reacquired under the Plan.  Except to the extent prohibited by Applicable Law, the Number of Plan Shares shall be automatically increased by, and there shall be made available for subsequent Awards under the Plan, (1) any shares of Common Stock that the Company reacquires for any reason under the Plan, including, without limitation, pursuant to any forfeiture provision, right of repurchase, right of first refusal, cashless exercise procedure, option exchange program or otherwise, (2) shares that are subject to an Award that for any reason expires, is forfeited, is cancelled or becomes unexercisable, and Shares that are for any other reason not paid or delivered under the Plan, and (3) shares that the Company retains from otherwise delivering pursuant to any Award either (i) as payment of the exercise price of the Award, or (ii) in order to satisfy the withholding or employment taxes due upon the grant, exercise, vesting, or distribution of the Award.

 

(d)           ISO Awards.  Notwithstanding the other provisions of this Section 3, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for all ISO Awards made under the Plan shall in no event exceed 6,016,944 plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 17,344,219 Shares.

 

 

(b)           Appendix A to the Tangoe 2005 Plan is hereby amended by inserting the following definitions in the appropriate alphabetical order:

 

“Tangoe 2000 Plans” shall mean, collectively (i) that certain Tangoe, Inc. 2000 Executive Stock Option/Stock Issuance Plan and (ii) that certain Tangoe, Inc. 2000 Employee Stock Option/Stock Issuance Plan.”

 

“Traq Plan” means that certain Traq Wireless, Inc. Amended and Restated 1999 Stock Plan which was assumed by the Company in connection with the Company’s acquisition of Traq Wireless, Inc.”

 

 

TANGOE, INC.

 

AMENDMENT NO. 3 TO 2005 STOCK INCENTIVE PLAN

 

This Amendment No. 3 (this “Amendment”) to the Tangoe, Inc. 2005 Stock Incentive Plan (the “Plan”) has been approved by the Board of Directors of Tangoe, Inc. (the “Company”) on September 19, 2007 and shall be effective as of such date.  The Plan was previously amended by Amendment No. 1 and Amendment No. 2 and by Omnibus Amendment to the Plan and certain other stock or equity compensation plans of the Company.

 

1.             The Plan is hereby amended by re-designating Clause (iv) of Section 6(g) of the Plan as Clause (v) and inserting the following as a new Clause (iv) of such Section:

 

“(iv)        Participant’s promissory note with such recourse, interest, security, and redemption provisions as the Committee determines to be appropriate (subject to the provisions of Section 153 of the Delaware General Corporation Law); and”

 

2.             Except as expressly or by necessary implication amended by the terms of this Agreement, the terms and conditions of the Plan (as previously amended) remain in full force and effect.

 

 

TANGOE, INC.

 

AMENDMENT NO. 4 TO 2005 STOCK INCENTIVE PLAN

 

This Amendment No. 4 (this “Amendment”) to the Tangoe, Inc. 2005 Stock Incentive Plan (the “Plan”) has been approved by the Board of Directors of Tangoe, Inc. (the “Company”) on December 6, 2007 and shall be effective as of such date.  The Plan was previously amended by Amendment No. 1, Amendment No. 2, Omnibus Amendment to the Plan and certain other stock or equity compensation plans of the Company (the “Omnibus Amendment”) and Amendment No. 3.

 

1.             The Plan is hereby amended by changing the share number “6,016,944” as it appears in Sections 3(a) and (d) of the Plan (as such Sections were last amended and restated by the Omnibus Amendment) to “7,100,827.”

 

2.             Except as expressly or by necessary implication amended by the terms of this Agreement, the terms and conditions of the Plan (as previously amended) remain in full force and effect.

 

 

TANGOE, INC.

 

AMENDMENT NO. 5 TO 2005 STOCK INCENTIVE PLAN

 

This Amendment No. 5 (this “Amendment”) to the Tangoe, Inc. 2005 Stock Incentive Plan (the “Plan”) has been approved by the Board of Directors of Tangoe, Inc. (the “Company”) on July 1, 2008 and shall be effective as of such date.  The Plan was previously amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4 and by Omnibus Amendment to the Plan and certain other stock or equity compensation plans of the Company (the “Omnibus Amendment”).

 

1.             The Plan is hereby amended by increasing the Number of Plan Shares by 3,000,000 Shares as of the effective date of this Amendment, such that the Number of Plan Shares as of the effective date of this Amendment shall be 10,100,827 plus such additional Shares as have been added to the Number of Plan Shares by operation of Sections 3(b) and (c) of the Plan since the effective date of the Omnibus Amendment.  The Number of Plan Shares remains subject to further increase after the effective date of this Amendment by operation of Sections 3(b) and (c) of the Plan.

 

2.             Section 3(d) of the Plan is hereby amended and restated in its entirety to read as follows:

 

“(d)         ISO Awards.  Notwithstanding the other provisions of this Section 3, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for all ISO Awards made under the Plan shall in no event exceed 10,100,827 plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 21,428,102 Shares.”

 

3.             Section 5(c) of the Plan is hereby amended and restated in its entirety to read as follows:  “During the term of the Plan, no Participant may receive Options and SARs that relate to more than 10,100,827 Shares, plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 21,428,102 Shares.  The Committee will adjust these limitations pursuant to Section 13 below.”

 

4.             Except as expressly or by necessary implication amended by the terms of this Agreement, the terms and conditions of the Plan (as previously amended) remain in full force and effect.

 

 

TANGOE, INC.

 

AMENDMENT NO. 6 TO 2005 STOCK INCENTIVE PLAN

 

This Amendment No. 6 (this “Amendment”) to the Tangoe, Inc. 2005 Stock Incentive Plan (the “Plan”) has been approved by the Board of Directors of Tangoe, Inc. (the “Company”) on January 30, 2009 and shall be effective as of such date.  The Plan was previously amended by Amendment No. 1, Amendment No. 2, an Omnibus Amendment to the Plan, Amendment No. 3, Amendment No. 4, Amendment No. 5, and by and certain other stock or equity compensation plans of the Company (the “Omnibus Amendment”).

 

1.             The Plan is hereby amended by increasing the Number of Plan Shares by 2,000,000 Shares as of the effective date of this Amendment, such that the Number of Plan Shares as of the effective date of this Amendment shall be 12,100,827 plus such additional Shares as have been added to the Number of Plan Shares by operation of Sections 3(b) and (c) of the Plan since the effective date of the Omnibus Amendment.  The Number of Plan Shares remains subject to further increase after the effective date of this Amendment by operation of Sections 3(b) and (c) of the Plan.

 

2.             Section 3(d) of the Plan is hereby amended and restated in its entirety to read as follows:

 

“(d)         ISO Awards.  Notwithstanding the other provisions of this Section 3, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for all ISO Awards made under the Plan shall in no event exceed 12,100,827 plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 23,428,102 Shares.”

 

3.             Section 5(c) of the Plan is hereby amended and restated in its entirety to read as follows:  “During the term of the Plan, no Participant may receive Options and SARs that relate to more than 12,100,827 Shares, plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 23,428,102 Shares.  The Committee will adjust these limitations pursuant to Section 13 below.”

 

4.             Except as expressly or by necessary implication amended by the terms of this Agreement, the terms and conditions of the Plan (as previously amended) remain in full force and effect.

 

 

TANGOE, INC.

 

AMENDMENT NO. 7 TO 2005 STOCK INCENTIVE PLAN

 

This Amendment No. 7 (this “Amendment”) to the Tangoe, Inc. 2005 Stock Incentive Plan (the “Plan”) has been approved by the Board of Directors of Tangoe, Inc. (the “Company”) on April 16, 2010 and shall be effective as of such date.  The Plan was previously amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6 and by Omnibus Amendment to the Plan and certain other stock or equity compensation plans of the Company (the “Omnibus Amendment”).

 

1.                                       The Plan is hereby amended by increasing the Number of Plan Shares by 3,901,754 Shares as of the effective date of this Amendment, such that the Number of Plan Shares as of the effective date of this Amendment shall be 16,002,581 plus such additional Shares as have been added to the Number of Plan Shares by operation of Sections 3(b) and (c) of the Plan since the effective date of the Omnibus Amendment.  The Number of Plan Shares remains subject to further increase after the effective date of this Amendment by operation of Sections 3(b) and (c) of the Plan.

 

2.                                       Section 3(d) of the Plan is hereby amended and restated in its entirety to read as follows:

 

“(d)         ISO Awards.  Notwithstanding the other provisions of this Section 3, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for all ISO Awards made under the Plan shall in no event exceed 16,002,581 plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 27,329,856  Shares.”

 

3.                                       Section 5(c) of the Plan is hereby amended and restated in its entirety to read as follows:  “During the term of the Plan, no Participant may receive Options and SARs that relate to more than 16,002,581 Shares, plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 27,329,856  Shares.  The Committee will adjust these limitations pursuant to Section13 below.”

 

4.                                       Except as expressly or by necessary implication amended by the terms of this Agreement, the terms and conditions of the Plan (as previously amended) remain in full force and effect.

 

 

TANGOE, INC.

 

AMENDMENT NO. 8 TO 2005 STOCK INCENTIVE PLAN

 

This Amendment No. 8 (this “Amendment No. 8”) to the Tangoe, Inc. 2005 Stock Incentive Plan (the “Plan”) has been approved by the Board of Directors of Tangoe, Inc. (the “Company”) on January 28, 2011, and shall be effective as of such date.  The Plan was previously amended by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, and by Omnibus Amendment to the Plan and certain other stock or equity compensation plans of the Company (the “Omnibus Amendment”).

 

1.             The Plan is hereby amended by increasing the Number of Plan Shares by 7,000,000 Shares as of the effective date of this Amendment No. 8, such that the Number of Plan Shares as of the effective date of this Amendment No. 8 shall be 23,002,581 plus such additional Shares as have been added to the Number of Plan Shares by operation of Sections 3(b) and (c) of the Plan since the effective date of the Omnibus Amendment.  The Number of Plan Shares remains subject to further increase after the effective date of this Amendment No. 8 by operation of Sections 3(b) and (c) of the Plan.

 

2.             Section 3(d) of the Plan is hereby amended and restated in its entirety to read as follows:

 

“(d)         ISO Awards.  Notwithstanding the other provisions of this Section 3, but subject to adjustments pursuant to Section 13 below, the number of Shares that are available for all ISO Awards made under the Plan shall in no event exceed 23,002,581 plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 34,329,856 Shares.”

 

3.             Section 5(c) of the Plan is hereby amended and restated in its entirety to read as follows:  “During the term of the Plan, no Participant may receive Options and SARs that relate to more than 23,002,581 Shares, plus up to 11,327,275 Shares that may be added to the Plan by virtue of the operation of Sections 3.3(b) and (c), for an aggregate maximum of 34,329,856 Shares.  The Committee will adjust these limitations pursuant to Section13 below.”

 

4.             Except as expressly or by necessary implication amended by the terms of this Agreement, the terms and conditions of the Plan (as previously amended) remain in full force and effect.

 

 

OMNIBUS AMENDMENT TO

TRAQ WIRELESS, INC. AMENDED AND RESTATED 1999 STOCK PLAN,

TANGOE, INC. 2000 EXECUTIVE STOCK OPTION/STOCK ISSUANCE PLAN,

TANGOE, INC. 2000 EMPLOYEE STOCK OPTION/STOCK ISSUANCE PLAN

AND

TANGOE, INC. 2005 STOCK INCENTIVE PLAN

 

Adopted by the Board of Directors of Tangoe, Inc on January 28, 2011

 

THIS OMNIBUS AMENDMENT (this “Amendment”) amends that certain (i) Traq Wireless, Inc. Amended and Restated 1999 Stock Plan (the “Traq Plan”), (ii) Tangoe, Inc. 2000 Executive Stock Option/Stock Issuance Plan (the “Tangoe 2000 Executive Plan”) (iii)  Tangoe, Inc. 2000 Employee Stock Option/Stock Issuance Plan (the “Tangoe 2000 Employee Plan” and together with the Tangoe 2000 Executive Plan, the “Tangoe 2000 Plans”) and (iv) Tangoe, Inc. 2005 Incentive Stock Option Plan (the “Tangoe 2005 Plan” and together with the Traq Plan and the Tangoe 2000 Plans, the “Plans”).

 

WHEREAS, Tangoe, Inc., a Delaware corporation (“Tangoe”) maintains the Plans (in the case of the Traq Plan, as successor to Traq Wireless, Inc.);

 

WHEREAS, the Plans grant to the Board of Directors the power to amend the Plans, and/or to impose transfer restrictions when required in connection with Tangoe’s compliance with securities laws; and

 

WHEREAS, Tangoe wishes to adopt certain amendments to the Plans and/or impose certain transfer restrictions in order to make available to Tangoe the exemption from the registration requirements of the Securities Exchange Act of 1934, as amended (the “Act”) set forth in Section 12h-1(f)(i) of Rule 12f-1 adopted under the Act (“Rule 12h-1”).

 

NOW THEREFORE, the Plans are hereby amended as follows:

 

1.             Information Reporting.

 

The following paragraph is added as Section 22 of each of the Tangoe 2000 Plans, as Section 25 of the Tangoe 2005 Plan and as Section 13(f) of the Traq Plan:

 

“Rule 12h-1 Information Reporting.  The Company agrees to provide to all holders of options issued under the Plan, during the Reporting Period (as defined below), the information described in Section 12h-1(f)(1)(vi) of Rule 12h-1 (“Rule 12h-1”) adopted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at such times and in such manner as is required by such 

 

 

Section.  The Company may request that an optionholder agree to keep such information confidential and if the optionholder does not agree to keep the information confidential then the Company shall not be required to provide such information to the optionholder.  “Reporting Period” shall mean the period that begins when the Company first relies on the exemption from the registration requirements set forth in Rule 12h-1, and that ends on the Termination Date (as defined below).  “Termination Date” shall means the date when the Company is either no longer relying on such exemption or becomes subject to the reporting requirements of section 13 or 15(d) of the Exchange Act.”

 

2.             Transfers.

 

The following paragraph is added as Section 13(c) of each of the Tangoe 2000 Plans, as Section 12 (c) of the Tangoe 2005 Plan and as additional text at the end of Section 6(h) of the Traq Plan:

 

“Unless the Board of Directors of the Company otherwise determines and notwithstanding any provision of the Plan or any option agreement to the contrary, options issued pursuant to the Plan on or after January 28, 2011 (and prior to exercise of an option, the shares to be issued on exercise of such option), may be transferred only to family members (as defined in Rule 701(c)(3) under the Securities Act of 1933, as amended) through gifts or domestic relations orders, or to an executor or guardian upon the death or disability of the holder of the option.  The restrictions set forth in this Section shall terminate on the Termination Date, provided that any additional restrictions set forth in the Plan shall not be impaired by virtue of the termination of the restrictions set forth in this Section.”

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