Document:

Exhibit 10.3

 

2005
TIER ONE VARIABLE COMPENSATION PLAN

 

Objectives

 

It is the objective of the Company to provide a significant portion of
senior executive compensation contingent upon performance.  The plan provides
a direct and specific link between compensation and business performance.

 

General
Concept

 

Participants

 

Upon approval from the Board of Directors the 2005 plan applies to the
CEO, COO, CFO. Upon approval from the CEO, the 2005 plan applies to the CTO,
SVP- OD and SVP - General Counsel.

 

Minimum Performance

 

A bonus will be paid only after reaching a revenue target, an operating
income target as well as a free cash flow target.

 

Allocation of Payment

 

The bonus is allocated 33.4% for revenue, 33.3% for operating income
and 33.3% for achieving free cash flow targets. 
If one target is reached and not the other two, then the bonus will be
paid on the target that was met.  For
example if the revenue but not the operating income goal or free cash flow
objective is met, then the participant would receive 33.4% of the possible
bonus.  All values are computed and paid
based on quarterly results.

 

Payment Timeline

 

The bonus will be paid quarterly on the payroll run immediately
subsequent to the public release of the financial results; provided, however,
the bonus due and payable for the fourth quarter will be paid no later than 2 1⁄2
months following the end of the fiscal year.

 

Big Picture

 

While inspiring the executive management team to meet and exceed
quarterly performance goals, overachievement for the year is a significant
objective and is rewarded by paying overachievement awards.  The base quarterly variable compensation is
payable upon making or exceeding the targets of the given quarter. No
over-achievement eligiblity or accelerators are payable in any given
quarter.  Catch-up for missed quarterly
payable is possible if the year-to-date performance (by category) is positive.

 

Over-achievement payables are earned if the full year exceeds targets
in any of the individual categories (revenue, operating income, or free cash
flow).  The year-end overachievement will
be interpolated such that each percentage overachievement realized, the payout
will be 10%.  For example, 110% overachievement
equals 200% payout of the target bonus opportunity (10 base point
overachievement multiplied by 10x).  In
all instances, the maximum percentage payout to target earned is capped (by
category) at 250%.

 

Participation

 

Subject
to the terms of an employment agreement, if any a plan participant must be
employed on the last day of the bonus period to receive a bonus for that
quarter.

 

Participants
who are new to the plan due to promotion or hire, will receive a prorated bonus
for the number of days their position is held during the quarter.

 

A ten-day grace period for unpaid leave will be provided during each
quarter for purposes of calculating the bonus. 
If however a plan participant is out more than ten days on unpaid leave,
the total number of days in the bonus period will be divided by the number of
days absent and the bonus will be adjusted. 
For example: if there were 100 days in a bonus period and a  participant missed 25 days, the bonus amount
to be paid would be 75% of the total eligible bonus amount.

 

 

2005
Exec Performance Targets

 

[The financial thresholds for each performance measure (i.e., the exact
amount of each performance goal) have not been disclosed as they involve
confidential business information.]Exhibit 10.4

 

2005
Intrado Board of Directors Compensation

 

This document describes
the compensation plan for Intrado’s non-employee, independent Board of
Directors as approved by the Compensation Committee and authorized by the
Board.

 

Initial Service Grant

 

At the discretion of the
Compensation Committee, newly appointed Board members may be granted an equity compensation
award on the date the individual joins the board, provided the individual has
not been previously employed by Intrado. 
This award shall be in such form and such amount as determined from time
to time by resolution of the Compensation Committee.  This equity-based compensation is granted
pursuant to the Discretionary Option Grant Program, which is part of the 1998
Stock Incentive Plan.  This Initial Grant
is paid in addition to the applicable annual fees for board and committee
meetings.

 

Long-Term
Incentive Compensation

 

Board
members will be entitled to participate in the Company’s Long Term Incentive
Program.

 

Annual
Fee for Service on the Board of Directors

 

Each Board member shall receive
an annual service fee of $26,000 payable in four equal installments on the last
business day of each quarter ($6,500 per quarter).

 

Annual Fee for Service on the Audit Committee

 

Each Audit Committee member
shall receive an annual service fee of $8,000 payable in four equal
installments on the last business day of each quarter ($2,000 per
quarter).  The Committee Chair will
receive an annual Chair Fee of $10,000, also payable quarterly ($2,500 per quarter),
in addition to the annual Committee payment.

 

Annual Fee for Service on the Compensation Committee

 

Each Compensation Committee
member shall receive an annual service fee of $4,000 payable in four equal
installments on the last business day of each quarter ($1,000 per
quarter).  The Committee Chair will
receive an annual Chair Fee of $8,000, also payable quarterly ($2,000 per
quarter), in addition to the annual Committee payment.

 

Annual Fee for Service on the Corporate Governance Committee

 

Each Corporate Governance
Committee member shall receive an annual service fee of $4,000 payable in four
equal installments on the last business day of each quarter ($1,000 per
quarter).  The Committee Chair will
receive an annual Chair Fee of $8,000, also payable quarterly ($2,000 per
quarter), in addition to the annual Committee payment.

 

Annual Fee for Service as Lead Director

 

The Lead Director shall receive
an annual service fee of $5,000.  This fee
is payable in four equal installments on the last business day of each quarter
($1,250 per quarter).

 

Special Committees and Assignments

 

For participation on
special committees, members will not receive compensation.  The Compensation Committee has ongoing
authority to grant additional compensation for special assignments completed by
Directors.

 

 

Pro Rata Payment

 

If a Director only serves
on the Board for a portion of a quarter, the retainer fee will be paid on a pro rata basis according to the number of
days served.  For example, if a Director
serves on the Board from April 1, 2005 through May 14, 2005, the
Director will receive a $3,142.86 fee for Board service (44/91 of $6,500),
payable on the last business day in June.

 

Likewise, if a Director
moves from one committee to another mid-quarter, the fee for service on each
committee will be pro rated according to the number of days served on the
respective committee.  For example, if a
Director moves from the Audit Committee to the Corporate Governance Committee
on May 1, 2005, the retainer fee for the Audit Committee service will be $681.32
(31/91 of $2,000), and the fee for the Corporate Governance Committee service
will be $670.33 (61/91 of $1,000), totaling $1,351.65 payable the last business
day in June.

 

Method of Payment

 

Compensation for all Annual Fees payable herein
will be paid in the form of stock grants.

 

Valuation Methods

 

The
number of shares to be issued as compensation for service is determined by
dividing the dollar amount of compensation payable for the given quarter by the
last sale price of Intrado’s stock on the last trading day of the quarter. The
resulting amount shall be rounded down to the nearest whole share.

 

Deferred
Compensation

 

Under
Intrado’s Nonqualified Deferred Compensation Plan, Directors may choose to
defer all or part of their annual compensation. 
Participants may opt in or out of the deferred compensation plan at the
beginning of each calendar year or as may otherwise be provided by law or
regulation.

 

Reimbursement
of Director Expenses

 

Directors are also
reimbursed for all reasonable and necessary travel and other incidental
expenses incurred in connection with their attendance at meetings of the Board
and Committees of the Board.Exhibit 10.5

 

INTRADO INC.

EMPLOYEE STOCK PURCHASE PLAN

(as amended and restated effective as of July 1,
2005)

 

WHEREAS,
in April 1998, the stockholders of Intrado Inc., then known as SCC
Communications Corporation, approved and adopted the Employee Stock Purchase
Plan (the “Plan”); and

 

WHEREAS,
the Plan formerly allowed employees of Intrado Inc. and its subsidiaries to
purchase common stock at a discounted purchase price equal to the lower of: (1) 85%
of the market price of the common stock on the Offering Commencement Date or
the next earliest NASDAQ trading date; or (2) 85% of the market price of
the common stock on the Offering Termination Date or the next earliest NASDAQ
trading date (collectively, the “85% Discount Provision”) and

 

WHEREAS,
as a result of a accounting rule proposed by the Financial Accounting
Standards Board (“FASB”) that would require Intrado Inc. to realize compensation
expense based on the number shares issued under the Plan under the 85% Discount
Provision, the Compensation Committee of the Company’s Board of Directors
indefinitely suspended the Plan effective as of January 1, 2005; and

 

WHEREAS,
the Compensation Committee of the Board of Directors now desires to amend and
restate the Plan to limit the discounted purchase price to 95% of the market
price of the common stock  on the
Offering Termination Date (a discount rate that would not result in adverse
accounting treatment under FASB’s proposed accounting rules).

 

NOW,
THEREFORE, the Plan is hereby amended and restated, effective as of July 1,
2005, as follows:

 

ARTICLE I – PURPOSE

 

1.1.  PURPOSE.  The Intrado Inc. Employee Stock Purchase Plan
is intended to provide a method whereby employees of Intrado Inc. (formerly
known as SCC Communications Corporation) and its subsidiary corporations
(hereinafter referred to, unless the context otherwise requires, as the “Company”)
will have an opportunity to acquire a proprietary interest in the Company
through the purchase of shares of the Common Stock of the Company. It is the
intention of the Company to have the Plan qualify as an “employee stock
purchase plan” under Section 423 of the Internal Revenue Code of 1986, as
amended (the “Code”). The provisions of the Plan shall be construed so as to
extend and limit participation in a manner consistent with the requirements of
that section of the Code.

 

ARTICLE II – DEFINITIONS

 

2.1.  BASE PAY.  “Base Pay” shall mean regular straight-time earnings, including shift premiums, but excluding payments for overtime, bonuses and other special payments, commissions and other marketing incentive payments.
 
2.2.  COMMITTEE.  “Committee” shall mean the individuals described in Article XI.
 
2.3.  EMPLOYEE.  “Employee” means any person who is customarily employed on a regular full-time or part-time basis by the Company and is regularly scheduled to work more than 20 hours per week.
 
2.4.  SUBSIDIARY CORPORATION.  “Subsidiary Corporation” shall mean any present or future corporation which (i) would be a “subsidiary corporation” of Intrado Inc. as that term is defined in Section 424 of the Code and (ii) is designated as a participant in the Plan by the Committee.

 

 

ARTICLE III – ELIGIBILITY AND PARTICIPATION
 
3.1.  INITIAL ELIGIBILITY.  Any employee who is employed by the Company on the Offering Commencement Date (as defined below) shall be eligible to participate in such Offering.
 
3.2.  LEAVE OF ABSENCE.  For purposes of participation in the Plan, a person on leave of absence shall be deemed to be an employee for the first 90 days of such leave of absence and such employee’s employment shall be deemed to have terminated (for purposes of this Plan only) at the close of business on the 90th day of such leave of absence unless such employee shall have returned to regular full-time or part-time employment (as the case may be) prior to the close of business on such 90th day. Termination by the Company of any employee’s leave of absence, other than termination of such leave of absence on return to full-time or part-time employment, shall terminate an employee’s employment for all purposes of the Plan and shall terminate such employee’s participation in the Plan and right to exercise any option.
 
3.3.  RESTRICTIONS ON PARTICIPATION.  Notwithstanding any provisions of the Plan to the contrary, no employee shall be granted an option to participate in the Plan:
 
(a)  If, immediately after the grant, such employee would own stock, and/or hold outstanding options to purchase stock, possessing 5% or more of the total combined voting power or value of all classes of stock of the Company (for purposes of this paragraph, the rules of Section 424(d) of the Code shall apply in determining stock ownership of any employee); or
 
(b)  Which permits his rights to purchase stock under all employee stock purchase plans of the Company to accrue at a rate which exceeds $25,000 in fair market value of the Common Stock (determined at the time such option is granted) for each calendar year in which such option is outstanding.
 
3.4.  COMMENCEMENT OF PARTICIPATION.  An eligible employee may become a participant by completing an authorization for a payroll deduction on the form provided by the Company and filing it with the office of the Treasurer of the Company on or before the date set therefor by the Committee, which date shall be prior to the Offering Commencement Date for the Offering (as such terms are defined below). Payroll deductions for a participant shall commence on the applicable Offering Commencement Date when his authorization for a payroll deduction becomes effective and shall end on the Offering Termination Date of the Offering to which such authorization is applicable unless sooner terminated by the participant as provided in Article VIII.
 
ARTICLE IV – OFFERINGS
 
4.1.  ANNUAL OFFERINGS.  The Plan will be implemented by semiannual offerings of the Company’s Common Stock (the “Offerings”) beginning on the 1st day of January and the 1st day of July in each year, and terminating on June 30 and December 31 of the same year, respectively.
 
As used in the Plan, “Offering Commencement Date” means the January 1 or July 1 date, as the case may be, on which the particular Offering begins and “Offering Termination Date” means the June 30 or December 31 date, as the case may be, on which the particular Offering terminates. If an Offering period begins or terminates on a Saturday, Sunday or legal holiday, then the first or last day of the Offering, as applicable, shall be the first business day after that date (for Offering period commencements) or the last business day prior to that date (for Offering period terminations).
 
ARTICLE V – PAYROLL DEDUCTIONS
 
5.1.  AMOUNT OF DEDUCTION.  At the time a participant files his authorization for payroll deduction, he shall elect to have deductions made from his pay on each payday during the time he is a participant in an Offering at the rate of 1, 2, 3, 4, 5, 6, 7, 8, 9 or 10% of his base pay in effect at the Offering Commencement Date of such Offering. In the case of a part-time hourly employee, such employee’s Base Pay during an Offering shall be

 

2

 

determined by multiplying such employee’s hourly rate of pay in effect on the Offering Commencement Date by the number of regularly scheduled hours of work for such employee during such Offering.
 
5.2.  PARTICIPANT’S ACCOUNT.  All payroll deductions made for a participant shall be credited to his account under the Plan. A participant may not make any separate cash payment into such account until the next payday or when on leave of absence (and then only as provided in Section 5.4, below).
 
5.3.  CHANGES IN PAYROLL DEDUCTIONS.  A participant may discontinue his participation in the Plan as provided in Article VIII, but no other change can be made during an Offering, except that a participant may decrease the amount of his payroll deductions for that Offering one (1) time during any Offering.
 
5.4.  LEAVE OF ABSENCE.  If a participant goes on a leave of absence, such participant shall have the right to elect: (a) to withdraw the balance in his account pursuant to Section 7.2, (b) to discontinue contributions to the Plan but remain a participant in the Plan, or (c) remain a participant in the Plan during such leave of absence, authorizing deductions to be made from payments by the Company to the participant during such leave of absence and undertaking to make cash payments to the Plan at the end of each payroll period to the extent that amounts payable by the Company to such participant are insufficient to meet such participant’s authorized Plan deductions.
 
ARTICLE VI – GRANTING OF OPTION
 
6.1.  NUMBER OF OPTION SHARES.  On each Offering Commencement Date, a participating employee shall be deemed to have been granted an option to purchase a maximum number of shares of the Common Stock of the Company equal to an amount determined as follows: an amount equal to (i) that percentage of the employee’s Base Pay which he has elected to have withheld (but not in any case in excess of 10%) multiplied by (ii) the employee’s Base Pay on the Offering Commencement Date divided by (iii) 95% of the market value of the Common Stock of the Company on the Offering Termination Date (as determined pursuant to Section 6.2, below). The market value of the Company’s stock shall be determined as provided in paragraphs (a) and (b) of Section 6.2 below. An employee’s Base Pay during the period of an offering shall be determined by multiplying his normal monthly rate of pay (as in effect on the Offering Commencement Date) by 6, or the hourly rate by 1040, as the case may be, provided that, in the case of a part time hourly employee, the employee’s Base Pay during the period of an Offering shall be determined by multiplying such employee’s hourly rate by the number of regularly scheduled hours of work for such employee during such Offering.
 
6.2.  OPTION PRICE.  The option price of Common Stock purchased with payroll deductions made during an Offering for a participant therein shall be 95% of the closing price of the Common Stock on the Offering Termination Date or the nearest prior business day on which trading occurred on the NASDAQ National Market System. If the Common Stock of the Company is not admitted to trading on any of the aforesaid dates for which closing prices of the Common Stock are to be determined, then reference shall be made to the fair market value of the Common Stock on that date, as determined on such basis as shall be established or specified for the purpose by the Committee.

 

ARTICLE VII – EXERCISE OF OPTION

 

7.1.  AUTOMATIC EXERCISE.  Unless a participant gives written notice to the Company as hereinafter provided, his option for the purchase of Common Stock with payroll deductions made during any Offering will be deemed to have been exercised automatically on the Offering Termination Date applicable to such Offering, for the purchase of the number of full shares of Common Stock which the accumulated payroll deductions in his account at that time will purchase at the applicable option price (but not in excess of the number of shares for which options have been granted to the employee pursuant to Section 6.1), and any excess in his account at that time will be returned to him.
 
7.2.  WITHDRAWAL OF ACCOUNT.  By written notice to the Plan Administrator, at any time prior to the Offering Termination Date applicable to any Offering, a participant may elect to withdraw all the accumulated payroll deductions in his account at such time.

 

3

 

7.3.  FRACTIONAL SHARES.  Fractional shares will not be issued under the Plan and any accumulated payroll deductions which would have been used to purchase fractional shares will be returned to any employee promptly following the termination of an Offering, without interest.
 
7.4.  TRANSFERABILITY OF OPTION.  During a participant’s lifetime, options held by such participant shall be exercisable only by that participant.
 
7.5.  DELIVERY OF STOCK.  As promptly as practicable after the Offering Termination Date of each Offering, the Company will deliver to each participant, as appropriate, a certificate representing the shares of Common Stock purchased upon exercise of his option.
 
ARTICLE VIII – WITHDRAWAL
 
8.1.  IN GENERAL.  As indicated in Section 7.2, a participant may withdraw payroll deductions credited to his account under the Plan at any time by giving written notice to the Plan Administrator. All of the participant’s payroll deductions credited to his account will be paid to him promptly after receipt of his notice of withdrawal, and no further payroll deductions will be made from his pay during such Offering. The Company may, at its option, treat any attempt to borrow by an employee on the security of his accumulated payroll deductions as an election, under Section 3.2, to withdraw such deductions.
 
8.2.  EFFECT ON SUBSEQUENT PARTICIPATION.  A participant’s withdrawal from any Offering will not have any effect upon his eligibility to participate in any succeeding Offering or in any similar plan which may hereafter be adopted by the Company.
 
8.3.  TERMINATION OF EMPLOYMENT.  Upon termination of the participant’s employment for any reason (but excluding retirement or death while in the employ of the Company or during continuation of a leave of absence for a period beyond 90 days), the payroll deductions credited to his account will be returned to him, or, in the case of his death subsequent to the termination of his employment, to the person or persons entitled thereto under Section 12.1.
 
8.4.  TERMINATION OF EMPLOYMENT DUE TO DEATH.  Upon termination of the participant’s employment because of his death, his beneficiary (as defined in Section 12.1) shall have the right to elect, by written notice given to the Plan Administrator prior to the earlier of the Offering Termination Date or the expiration of a period of sixty (60) days commencing with the date of the death of the participant, either:
 
(a)  To withdraw all of the payroll deductions credited to the participant’s account under the Plan, or

 

(b)  To exercise the participant’s option for the purchase of stock on the Offering Termination Date next following the date of the participant’s death for the purchase of the number of full shares of stock which the accumulated payroll deductions in the participant’s account at the date of the participant’s death will purchase at the applicable option price, and any excess in such account will be returned to said beneficiary, without interest.
 
In the event that no such written notice of election shall be duly received by the Plan Administrator, the beneficiary shall automatically be deemed to have elected, pursuant to paragraph (b), to exercise the participant’s option.
 
8.5.  TERMINATION OF EMPLOYMENT DUE TO RETIREMENT.  Upon termination of the participant’s employment because of his retirement, the participant shall have the right to elect, by written notice given to the Plan Administrator prior to the earlier of the Offering Termination Date or the expiration of a period of sixty (60) days commencing with the date of the retirement of the participant, either:
 
(a)  To withdraw all of the payroll deductions credited to the participant’s account under the Plan, or

 

4

 

(b)  To exercise the participant’s option for the purchase of stock on the Offering Termination Date next following the date of the participant’s retirement for the purchase of the number of full shares of stock which the accumulated payroll deductions in the participant’s account at the date of the participant’s retirement will purchase at the applicable option price, and any excess in such account will be returned to the participant, without interest.
 
In the event that no such written notice of election shall be duly received by the Plan Administrator, the participant shall automatically be deemed to have elected to withdraw all payroll deductions pursuant to paragraph (a), above.
 
8.6.  LEAVE OF ABSENCE.  A participant on leave of absence shall, subject to the election made by such participant pursuant to Section 5.4, continue to be a participant in the Plan so long as such participant is on continuous leave of absence. A participant who has been on leave of absence for more than 90 days and who therefore is not an employee for the purpose of the Plan shall not be entitled to participate in any offering commencing after the 90th day of such leave of absence. Notwithstanding any other provisions of the Plan, unless a participant on leave of absence returns to regular full time or part time employment with the Company at the earlier of: (a) the termination of such leave of absence, or (b) three months from the 90th day of such leave of absence, such participant’s participation in the Plan shall terminate on whichever of such dates first occurs.
 
ARTICLE IX – INTEREST
 
9.1.  NO PAYMENT OF INTEREST.  No interest will be paid or allowed on any money paid into the Plan or credited to the account of any participant employee.
 
ARTICLE X – STOCK
 
10.1.  MAXIMUM SHARES.  The maximum number of shares which shall be issued under the Plan, subject to adjustment upon changes in capitalization of the Company as provided in Section 12.4 shall be 200,000 shares, plus an annual increase to be added on each anniversary date of the adoption of the Plan equal to the lesser of (i) the number of shares needed to restore the maximum aggregate number of shares available for sale under the Plan to 200,000, or (ii) a lesser amount determined by the Board. If the total number of shares for which options are exercised in any Offering Termination Date in accordance with Article VI exceeds the maximum number of shares for the Plan, the Company shall make a pro rata allocation of the shares available for delivery and distribution in as nearly a uniform manner as shall be practicable and as it shall determine to be equitable, and the balance of payroll deductions credited to the account of each participant under the Plan shall be returned to him as promptly as possible.
 
10.2.  PARTICIPANT’S INTEREST IN OPTION STOCK.  The participant will have no interest in the shares of Common Stock covered by his option until such option has been exercised.
 
10.3.  REGISTRATION OF STOCK.  Stock to be delivered to a participant under the Plan will be registered in the name of the participant, or, if the participant so directs by written notice to the Plan Administrator prior to the Offering Termination Date applicable thereto, in the names of the participant and one such other person as may be designated by the participant, as joint tenants with rights of survivorship or as tenants by the entireties, to the extent permitted by applicable law.
 
10.4.  RESTRICTIONS ON EXERCISE.  The Board of Directors may, in its discretion, require as conditions to the exercise of any option that the shares of Common Stock reserved for issuance upon the exercise of the option shall have been duly listed, upon official notice of issuance, upon a stock exchange, and that either:
 
(a)  A Registration Statement under the Securities Act of 1933, as amended, with respect to said shares shall be effective, or

 

5

 

(b)  The participant shall have represented at the time of purchase, in form and substance satisfactory to the Company, that it is his intention to purchase the shares for investment and not for resale or distribution.
 
ARTICLE XI – ADMINISTRATION
 
11.1.  APPOINTMENT OF COMMITTEE.  The Board of Directors shall appoint a committee (the “Committee”) to administer the Plan, which shall consist of no fewer than two members of the Board of Directors, none of whom are employees of the Company. No member of the Committee shall be eligible to purchase shares of Common Stock under the Plan. Each member of the Committee shall be a “disinterested person” as that term is defined in Rule 16b-3 of the Securities Exchange Act of 1934, as such rule may be amended from time to time.
 
11.2.  AUTHORITY OF COMMITTEE.  Subject to the express provisions of the Plan, the Committee shall have plenary authority in its discretion to interpret and construe any and all provisions of the Plan, to adopt rules and regulations for administering the Plan, and to make all other determinations deemed necessary or advisable for administering the Plan. The Committee’s determination on the foregoing matters shall be conclusive.
 
11.3.  RULES GOVERNING THE ADMINISTRATION OF THE COMMITTEE.  The Board of Directors may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, in the Committee. The Committee may select one of its members as its Chairman and shall hold its meetings at such times and places as it shall deem advisable and may hold telephonic meetings. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. The Committee may correct any defect or omission or reconcile any inconsistency in the Plan, in the manner and to the extent it shall deem desirable. Any decision or determination reduced to writing and signed by a majority of the members of the Committee shall be as fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary and shall make such rules and regulations for the conduct of its business as it shall deem advisable.
 
11.4.  ADMINISTRATION OF PLAN.  The day to day functions of the Plan shall be administered by a Plan Administrator who shall be appointed by the Committee. All notices and authorizations under the Plan shall be directed to the attention of the Plan Administrator.
 
ARTICLE XII – MISCELLANEOUS
 
12.1.  DESIGNATION OF BENEFICIARY.  A participant may file a written designation of a beneficiary who is to receive any shares of Common Stock and/or cash distributed under the Plan. Such designation of beneficiary may be changed by the participant at any time by written notice to the Plan Administrator. Upon the death of a participant and upon receipt by the Company of proof of identity and existence at the participant’s death of a beneficiary validly designated by him under the Plan, the Company shall deliver such shares of Common Stock and/or cash to such beneficiary. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the company shall deliver such stock and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such stock and/or cash to the spouse or to any one or more dependents of the participant as the Company may designate. No beneficiary shall, prior to the death of the participant by whom he has been designated, acquire any interest in the shares of Common Stock or cash credited to the participant under the Plan.
 
12.2.  TRANSFERABILITY.  Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the participant other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Section 7.2.

 

6

 

12.3.  USE OF FUNDS.  All payroll deductions received or held by the Company under this Plan may be used by the Company for any corporate purpose and the Company shall not be obligated to segregate such payroll deductions.
 
12.4.  ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
 
(a)  If, while any options are outstanding, the outstanding shares of Common Stock of the Company have increased, decreased, changed into, or been exchanged for a different number or kind of shares or securities of the Company through reorganization, recapitalization, reclassification, stock split, reverse stock split or similar transaction, appropriate and proportionate adjustments may be made by the Committee in the number and/or kind of shares which are subject to purchase under outstanding options and on the option exercise price or prices applicable to such outstanding options. In addition, in any such event, the number and/or kind of shares which may be offered in the Offerings described in Article IV hereof shall also be proportionately adjusted. No adjustments shall be made for stock dividends. For the purposes of this paragraph, any distribution of shares to shareholders in an amount aggregating 20% or more of the outstanding shares shall be deemed a stock split and any distributions of shares aggregating less than 20% of the outstanding shares shall be deemed a stock dividend.
 
(b)  Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the holders of the Corporation’s capital stock prior to such transaction hold less than 50% of the capital stock of the entity surviving such transaction, or upon a sale of all or substantially all of the property or stock of the Company to another corporation, the holder of each option then outstanding (and for which payroll deductions have been made) under the Plan will thereafter be entitled to receive at the next Offering Termination Date upon the exercise of such option for each share as to which such option shall be exercised, as nearly as reasonably may be determined, the cash, securities and/or property which a holder of one share of the Common Stock was entitled to receive upon and at the time of such transaction. The Board of Directors shall take such steps in connection with such transactions as the Board shall deem necessary to assure that the provisions of this Section 12.4 shall thereafter be applicable, as nearly as reasonably may be determined, in relation to the said cash, securities and/or property as to which such holder of such option might thereafter be entitled to receive.
 
12.5.  AMENDMENT AND TERMINATION.  The Board of Directors shall have complete power and authority to terminate or amend the Plan; provided, however, that the Board of Directors shall not, without the approval of the shareholders of the Corporation (i) increase the maximum number of shares which may be issued under any Offering (except pursuant to Section 12.4); (ii) amend the requirements as to the class of employees eligible to purchase stock under the Plan or (iii) permit the members of the Committee to purchase stock under the Plan. No termination, modification, or amendment of the Plan may, without the consent of an employee then having an option under the Plan to purchase stock, adversely affect the rights of such employee under such option; provided that the Plan may be terminated at any time by the Company’s Board of Directors. Upon any termination of the Plan, all payroll deductions not used to purchase shares of Common Stock shall be refunded.
 
12.6.  EFFECTIVE DATE.  The Plan shall become effective as of March 1, 1998, subject to approval by the holders of the majority of the Common Stock present and represented at a special or annual meeting of the shareholders or by consent held or executed on or before December 31, 1998. If the Plan is not so approved, the Plan shall not become effective.
 
12.7.  NO EMPLOYMENT RIGHTS.  The Plan does not, directly or indirectly, create any right for the benefit of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company, and it shall not be deemed to interfere in any way with the Company’s right to terminate, or otherwise modify, an employee’s employment at any time.
 
12.8.  EFFECT OF PLAN.  The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each employee participating in the Plan, including, without limitation, such employee’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such employee.

 

7

 

12.9.  GOVERNING LAW.  The law of the State of Colorado will govern all matters relating to this Plan except to the extent it is superseded by the laws of the United States.

 

8

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