EXHIBIT 4.1
EDUCATIONAL VIDEO CONFERENCING
2001 NON-QUALIFIED STOCK OPTION PLAN
ARTICLE I.
DEFINITIONS
Section 1.1 Administrator means the Board and any delegate of the
Board that is appointed in accordance with Article III.
Section 1.2 Agreement means a written agreement (including any
amendment or supplement thereto) between the Company and a Participant
specifying the terms and conditions of an Option granted to such Participant.
Section 1.3 Board means the Board of Directors of the Company.
Section 1.4 Change in Control means an event or series of events that
would be required to be described as a change in control of the Company in a
proxy or information statement distributed by the Company pursuant to Section 14
of the Exchange Act in response to Item 6(e) of Schedule 14A promulgated
thereunder or otherwise adopted. The determination whether and when a change in
control has occurred or is about to occur shall be made by the Board in office
immediately prior to the occurrence of the event or series of events
constituting such change in control.
Section 1.5 Code means the Internal Revenue Code of 1986, and any
amendments thereto.
Section 1.6 Common Stock means the common stock of the Company.
Section 1.7 Company means Educational Video Conferencing, Inc.
Section 1.8 Control Change Date means the occurrence of the event or
series of events constituting a Change in Control as determined by the Board.
Section 1.9 Exchange Act means the Securities Exchange Act of 1934, as
amended and as in effect on the date of this Agreement.
Section 1.10 Fair Market Value means, on any given date, the closing
price (or, if there is none, the average of the closing bid and asked price) of
the Common Stock on such quotation system or principal securities exchange on
which the Common Stock is traded on such day, or, if the Common Stock is not so
traded on such day, then on the next preceding day that the Common Stock was
traded, all as reported by such source as the Administrator may select.
Section 1.11 Forfeitable Shares shall have the meaning set forth in
Section 9.04.
Section 1.12 Option means a stock option that entitles the holder to
purchase from the Company a stated number of shares of Common Stock at the price
set forth in an Agreement.
Section 1.13 Participant means an employee of, or consultant to, the
Company or a Related Entity who satisfies the requirements of Article IV and is
selected by the Administrator to receive an Option.
Section 1.14 Plan means the Company's 2001 Non-Qualified Stock Option
Plan.
Section 1.15 Related Entity means any entity that directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Company.
Section 1.16 Stockholders means the stockholders of the Company.
ARTICLE II.
PURPOSES
This Plan is intended to assist the Company and Related Entities in
recruiting and retaining employees, directors, officers, consultants and
advisors, and in compensating such individuals by enabling such individuals to
participate in the future success of the Company and the Related Entities and to
associate their interests with those of the Company and its Stockholders. This
Plan is intended to permit the grant of Options that do not the qualify as
incentive stock options under Section 422 of the Code. The proceeds received by
the Company from the sale of Common Stock pursuant to this Plan shall be used
for general corporate purposes.
ARTICLE III.
ADMINISTRATION
Section 3.1 Administrator's Power and Authority. This Plan shall be
administered by the Administrator. The Administrator shall have authority to
grant Options upon such terms (not inconsistent with the provisions of this
Plan) as the Administrator may consider appropriate. Such terms may include
conditions (in addition to those contained in this Plan) on the exercisability
of all or any part of an Option, including by way of example and not limitation,
conditions on which Participants may defer receipt of benefits under this Plan,
requirements that the Participant complete a specified period of employment with
or service to the Company or a Related Entity, that the Company achieve a
specified level of financial performance or that the Company achieve a specified
level of financial return. Notwithstanding any such conditions, the
Administrator may, in its discretion, accelerate the time at which any Option
may be exercised. In addition, the Administrator shall have complete authority
to interpret all provisions of this Plan, to prescribe the form of Agreements,
to adopt, amend, and rescind rules and regulations pertaining to the
administration of this Plan and to make all other determinations necessary or
advisable for the administration of this Plan. The express grant in this Plan of
any specific power to the Administrator shall not
be construed as limiting any power or authority of the Administrator. Any
decision made, or action taken, by the Administrator or in connection with the
administration of this Plan shall be final and conclusive. Neither the
Administrator nor any member of the Board shall be liable for any act done in
good faith with respect to this Plan or any Agreement or Option. All expenses
of administering this Plan shall be borne by the Company.
Section 3.2 Appointment of Administrator. The Board, in its
discretion, may appoint a committee of the Board and delegate to such committee
all or part of the Board's authority and duties with respect to this Plan. The
Board may revoke or amend the terms of a delegation at any time but such action
shall not invalidate any prior actions of the Board's delegate or delegates that
were consistent with the terms of this Plan. Until the Board determines
otherwise, the Administrator shall be the compensation committee of the Board.
ARTICLE IV.
ELIGIBILITY
Section 4.1 General. Any employee (who is not an executive officer of
the Company) of, or a consultant to, the Company or a Related Entity (including
a corporation that becomes a Related Entity after the adoption of this Plan) is
eligible to participate in this Plan if the Administrator, in its sole
discretion, determines that such person has contributed significantly or can be
expected to contribute significantly to the Company or a Related Entity.
Directors of the Company who are eligible employees of, or consultants to, the
Company or a Related Entity may be selected to participate in this Plan.
Section 4.2 Grants. The Administrator will designate individuals to
whom Stock Options are to be granted and will specify the number of shares of
Common Stock subject to each grant. All Options granted under this Plan shall be
evidenced by Agreements which shall be subject to the applicable provisions of
this Plan and to such other provisions as the Administrator may adopt.
ARTICLE V.
STOCK SUBJECT TO PLAN
Section 5.1 Share Formula. Unless the Administrator determines that a
different formula is merited, the number of shares issuable to employees of the
Company accepting salary reductions for at least a three month period will be
eligible for an Option to purchase the number of shares of Common Stock as
equals twice the total amount of the salary reduction during the measuring
period.
Section 5.2 Shares Issued. Upon the exercise of any Option, the
Company may deliver to the Participant (or the Participant's broker if the
Participant so directs), shares of Common Stock from its authorized but unissued
Common Stock.
Section 5.3 Aggregate Limit. The maximum aggregate number of shares of
Common Stock that may be issued under this Plan shall not exceed 250,000 shares.
3
Section 5.4 Reallocation of Shares. If an Option is terminated, in
whole or in part, for any reason other than its exercise, the number of shares
of Common Stock allocated to the Option or portion thereof may be reallocated to
other Options to be granted under this Plan.
ARTICLE VI.
OPTION EXERCISE PRICE
Unless the Administrator determines that a different formula is
merited, the price per share for Common Stock purchased on the exercise of an
Option shall be the average closing price of the Common Stock on Nasdaq for the
five trading days prior to the grant of the Option.
ARTICLE VII.
EXERCISE OF OPTIONS
Section 7.1 Vesting. Options shall vest and become fully exercisable
90 days after the date of grant, unless the Administrator determines otherwise,
provided in each instance, the Participant is then an eligible employee of, or
consultant to, the Company or a Related Entity.
Section 7.2 Maximum Option Period. The maximum period in which an
Option may be exercised shall be one year from the date of grant unless the
Administrator determines that a later expiration date is merited.
Section 7.3 Nontransferability. Any Option granted under this Plan
shall be nontransferable except by will or by the laws of descent and
distribution. In the event of any such transfer, the Option must be transferred
to the same person or person(s). During the lifetime of the Participant to whom
the Option is granted, the Option may be exercised only by the Participant. No
right or interest of a Participant in any Option shall be liable for, or subject
to, any lien, obligation, or liability of such Participant.
Section 7.4 Change in Control. Section 7.1 to the contrary
notwithstanding, after a Control Change Date each Option shall be fully
exercisable thereafter in accordance with the terms of the applicable Agreement.
If not sooner exercisable under the terms of the applicable Agreement, a
Participant's Option shall be fully exercisable (i) as of his termination of
employment if his employment terminates after a Control Change Date and he is
terminated without cause or following his refusal to move to another location or
(ii) as of the date that there is a material reduction in the Participant's
compensation or duties if such reduction occurs after a Control Change Date. For
purposes of the preceding sentence the term "cause" means a willful neglect of
responsibilities to the Company or a Related Entity.
ARTICLE VIII.
METHOD OF EXERCISE
Section 8.1 Exercise. Subject to the provisions of Articles VII and X,
an Option may be exercised in whole at any time or in part from time to time at
such times and in compliance with such requirements as the Administrator shall
4
determine. An Option granted under this Plan may be exercised with respect to
any number of whole shares less than the full number for which the Option could
be exercised. A partial exercise of an Option shall not affect the right to
exercise the Option from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the Option.
Section 8.2 Payment. Unless otherwise provided by the Agreement,
payment of the Option exercise price shall be made in cash. If the Agreement
provides, or in the discretion of the Board, payment of all or part of the
Option price may be made by surrendering shares of Common Stock to the Company,
including by allowing the Company to deduct from the number of shares of Common
Stock deliverable upon exercise of the Option, a number of such shares which has
an aggregate Fair Market Value, net of the applicable exercise price therefor,
determined as of the day preceding the date of exercise of the Option, equal to
the aggregate Option exercise price. If Common Stock is used to pay all or part
of the Option price, the shares surrendered must have a Fair Market Value
(determined as of the day preceding the date of exercise) that is not less than
such price or part thereof.
Section 8.3 Installment Payment. If the Agreement provides, and if the
Participant is employed by the Company on the date the Option is exercised,
payment of all or part of the Option price may be made in installments. In that
event the Company may, if so determined by the Administrator, lend the
Participant an amount equal to not more than 90% of the Option price of the
shares acquired by the exercise of the Option. This amount shall be evidenced by
the Participant's promissory note and shall be payable in not more than five
equal annual installments, unless the amount of the loan exceeds the maximum
loan value for the shares purchased, which value shall be established from time
to time by regulations of the Board of Governors of the Federal Reserve System.
In that event, the note shall be payable in equal quarterly installments over a
period of time not to exceed five years.
The Participant shall pay interest on the unpaid balance at the
minimum rate necessary to avoid imputed interest or original issue discount
under the Code. All shares acquired with cash borrowed from the Company shall be
pledged to the Company as security for the repayment thereof. In the discretion
of the Administrator, shares of stock may be released from such pledge
proportionately as payments on the note (together with interest) are made,
provided the release of such shares complies with the regulations of the Federal
Reserve System relating to securities credit transactions then applicable. While
shares are so pledged, and so long as there has been no default in the
installment payments, such shares shall remain registered in the name of the
Participant, and he or she shall have the right to vote such shares and to
receive all dividends thereon.
Section 8.4 Shareholder Rights. No Participant shall have any rights
as a stockholder with respect to shares subject to an Option until the date of
exercise of such Option.
ARTICLE IX.
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Section 9.1 Adjustment. The terms of outstanding Options shall be
adjusted, as the Board shall determine to be equitably required in the event
that (a) the Company effects one or more stock dividends, stock split-ups,
5
subdivisions or consolidations of shares or (b) there occurs any other event
which, in the judgment of the Board necessitates such action. Any determination
made under this Article IX by the Board shall be final and conclusive.
Section 9.2 No Adjustment. The issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
for cash or property, or for labor or services, either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, outstanding Options.
ARTICLE X.
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES
No Option shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements), any listing agreement to which the Company is a party, and the
rules of all domestic stock exchanges on which the Company's shares may be
listed. The Company shall have the right to rely on an opinion of its counsel as
to such compliance. Any share certificate issued to evidence Common Stock for
which an Option is exercised may bear such legends and statements as the
Administrator may deem advisable to assure compliance with federal and state
laws and regulations. No Common Stock shall be issued, no certificate for shares
shall be delivered and no payment shall be made under this Plan until the
Company has obtained such consent or approval as the Administrator may deem
advisable from regulatory bodies having jurisdiction over such matters.
ARTICLE XI.
GENERAL PROVISIONS
Section 11.1 Effect on Employment. Neither the adoption of this Plan,
its operation, nor any documents describing or referring to this Plan (or any
part thereof) shall confer upon any individual any right to continue in the
employ or service of the Company or a Related Entity or in any way affect any
right and power of the Company or a Related Entity to terminate the employment
or service of any individual at any time with or without assigning a reason
therefor.
Section 11.2 Rules of Construction. Headings are given to the articles
and sections of this Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.
Section 11.3 Employee Status. In the event that the terms of any grant
of any Option provide that it shall vest and become exercisable only after
completion of a specified period of
6
employment, the Administrator may decide in each case to what extent leaves of
absence for governmental or military service, illness, temporary disability, or
other reasons shall not be deemed interruptions of continuous employment.
Section 11.4 Limitation on Grants. Notwithstanding any other provision
of this Plan, if any grant under this Plan, either alone or together with
payments that a Participant has the right to receive from the Company or a
Related Entity, would constitute a "parachute payment" (as defined in section
280G of the Code), all such payments shall be reduced to the largest amount that
will result in no portion being subject to the excise tax imposed by section
4999 of the Code.
ARTICLE XII.
AMENDMENT
The Board may amend or terminate this Plan from time to time;
provided, however, that no amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any Option outstanding at
the time such amendment is made.
ARTICLE XIII.
DURATION OF PLAN
Options may be granted under this Plan during the period commencing
May 16, 2001 and ending 5:00 p.m. New York City time on May 15, 2003.
7
