PURCHASE PRO INTERNATIONAL, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
1. Purpose of Plan.
The purpose of this Purchase Pro International, Inc. 1998 Stock Option and
Incentive Plan (the "Plan") is to advance the interests of the Company through
providing Employees of the Company and of any Affiliate of the Company with the
opportunity to acquire Shares. By encouraging such stock ownership, the Company
seeks to attract, retain and motivate the best available personnel for positions
of substantial responsibility and to provide additional incentive to Employees
of the Company or any Affiliate to promote the success of the business.
2. Definitions.
As used herein, the following definitions shall apply.
(a) "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are defined in
Section 424(e) and (f), respectively, of the Code.
(b) "Agreement" shall mean a written agreement entered into in
accordance with Paragraph 5(c) hereof.
(c) "Award" shall mean Options, unless the context clearly
indicates a different meaning.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Cause" shall mean (i) the unauthorized use or disclosure of
the confidential information or trade secrets of the Company, which
use or disclosure causes material harm to the Company, (ii) conviction
of, or a plea of "guilty" or "no contest" to, a felony under the laws
of the United States or any state thereof, (iii) gross negligence or
(iv) continued failure to perform assigned duties after receiving
written notification from the Board of Directors. The foregoing,
however, shall not be deemed an exclusive list of all acts or
omissions that the Company (or an Affiliate) may consider as grounds
for the discharge of a Participant.
(f) "Change in Control" shall mean any one of the following
events: (i) an event or series of events which have the effect of any
person becoming the "beneficial owner" (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended), directly or
indirectly of securities representing more than fifty percent (50%) of
the voting power of the Company's then outstanding stock; (ii) the
acquisition of the ability to control the election of a majority of
the Company's directors; (iii) the acquisition of a controlling
influence over the
management or policies of the Company by any person or by persons
acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934); (iv) the disposition of the business
of the Company pursuant to a complete or partial liquidation, sale of
assets or otherwise; or (v) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Board (the "Continuing Directors") cease for any reason to constitute
at least a majority thereof, provided, that any individual whose
election or nomination for election as a member of the Board was
approved by a vote of at least a majority of the Continuing Directors
then in office shall be considered a Continuing Director. For purposes
of this subparagraph only, the term "person" refers to an individual
or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or
any other form of entity not specifically listed herein. Subject to
the foregoing, the decision of the Committee as to whether a Change in
Control has occurred shall be conclusive and binding.
(g) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(h) "Committee" shall mean (i) the Stock Option Committee
appointed by the Board in accordance with Paragraph 5(a) hereof or
(ii) in the alternative, in all cases other than in the first two
sentences of Paragraph 5(a) and in Paragraph 14 hereof, the Board.
(i) "Common Stock" shall mean the common stock, $.001 par value
per share, of the Company.
(j) "Company" shall mean Purchase Pro International, Inc.
(k) "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee of the Company
or an Affiliate. Continuous Service shall not be considered
interrupted in the case of a leave of absence of a temporary nature
approved by the Company for a specific period of time, or in the case
of transfers between payroll locations of the Company or between the
Company, an Affiliate or a successor.
(l) "Director" shall mean any member of the Board.
(m) "Disability" means a permanent and total disability as
defined in section 22(e)(3) of the Code. The determination of the
Committee on any question involving Disability shall be conclusive and
binding.
(n) "Effective Date" shall mean the date specified in Paragraph
13 hereof.
(o) "Employee" shall mean any person employed by the Company or
an Affiliate.
(p) "Exercise Price" shall mean the price per Optioned Share at
which an Option may be exercised.
(q) "Involuntary Termination" shall mean the termination of the
Participant's Continuous Service by reason of the involuntary
discharge of the Participant by the Company (or the Affiliate
employing him or her) for reasons other than Cause, or the voluntary
resignation of the Participant following (i) a change in his or her
position with the Company (or Affiliate) that materially reduces his
or her level of authority or responsibility, (ii) a reduction in his
or her compensation (including base salary, fringe benefits and
participation in bonus or incentive programs based on corporate
performance) by more than 10%, or (iii) a relocation of more than 100
miles from his or her present employment location.
(r) "ISO" means an option to purchase Common Stock which meets
the requirements set forth in the Plan, and which is intended to be
and is identified as an "incentive stock option" within the meaning of
Section 422 of the Code.
(s) "Market Value" shall mean the fair market value of the
Common Stock, as determined under Paragraph 7(b) hereof.
(t) "Non-ISO" means an option to purchase Common Stock which
meets the requirements set forth in the Plan but which is not intended
to be and is not identified as an ISO.
(u) "Option" means an ISO and/or a Non-ISO.
(v) "Optioned Shares" shall mean Shares subject to an Award
granted pursuant to this Plan.
(w) "Participant" shall mean any person who receives an Award
pursuant to the Plan.
(x) "Plan" shall mean this Purchase Pro International, Inc.
Stock Option and Incentive Plan.
(y) "Rule 16b-3" shall mean Rule 16b-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.
(z) "Share" shall mean one share of Common Stock.
(aa) "Year of Service" shall mean a full twelve-month period,
measured from the date of an Award and each annual anniversary of that
date, during which a Participant has performed Continuous Service as
an Employee of the Company or an Affiliate.
3. Term of the Plan and Awards.
(a) Term of the Plan. The Plan shall continue in effect for a
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term of ten years from the Effective Date, unless sooner terminated
pursuant to Paragraph 15 hereof. No Award shall be granted under the
Plan after ten years from the Effective Date.
(b) Term of Awards. The term of each Award granted under the
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Plan shall be established by the Committee, but shall not be less than
one year nor exceed ten years; provided however, that in the case of
an Employee who owns Shares representing 10% of the outstanding Common
Stock at the time an ISO is granted, such ISO shall not be exercisable
after the date five years from the date such ISO is granted. This
Paragraph 3(b) shall not be construed to cause the acceleration of the
vesting of Awards.
4. Shares Subject to the Plan.
Except as otherwise required by the provisions of Paragraph 10 hereof, the
aggregate number of Shares deliverable pursuant to Awards shall be 1,000,000
Shares. Such Shares may either be authorized but unissued Shares or Shares held
in treasury. If any Awards should expire, become unexercisable, or be forfeited
for any reason without having been exercised, the Shares no longer subject to
such Awards shall, unless the Plan shall have been terminated, be available for
the grant of additional Awards under the Plan. No Employee may receive Options
to purchase more than 25% of the aggregate number of Shares deliverable pursuant
to Awards.
5. Administration of the Plan.
(a) Administration. The Plan shall be administered by a
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Committee. The Committee shall be composed of not fewer than two
Directors appointed by the Board and the members of the Board also may
act collectively as the Committee. Subject to the express provisions
of the Plan, the Committee may interpret the Plan, prescribe, amend
and rescind rules and regulations relating to it, determine the terms
and provisions of Awards to Employees under the Plan (which need not
be identical), and make such other determinations as it deems
necessary and
advisable for the administration of the Plan. The Committee may
delegate decisions with respect to Awards to Employees who are not
elected officers or directors of the Company or its Affiliates to such
elected officer or officers of the Company as the Committee
determines. The decisions of the Committee under the Plan shall be
conclusive and binding. No member of the Board or the Committee shall
be liable for any action taken or determination made hereunder in good
faith. Service on the Committee shall constitute service as a director
of the Company so that the members of the Committee shall be entitled
to indemnification and reimbursement as directors of the Company
pursuant to its by-laws.
(b) Powers. Within the limits of the express provisions of the
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Plan, the Committee shall determine: (i) the Employees to whom Awards
hereunder shall be granted, (ii) the time or times at which such
Awards shall be granted, (iii) the form and amount of the Awards, and
(iv) the limitations, restrictions and conditions applicable to any
such Award. In making such determinations, the Committee may take into
account the nature of the services rendered by such Employees, or
classes of Employees, their present and potential contributions to the
Company's success and such other factors as the Committee in its
discretion shall deem relevant.
(c) Agreement. Each Award shall be evidenced by a written
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agreement containing such provisions as may be approved by the
Committee. Each such Agreement shall constitute a binding contract
between the Company and the Participant, and every Participant, upon
acceptance of such Agreement, shall be bound by the terms and
restrictions of the Plan and of such Agreement. The terms of each such
Agreement shall be in accordance with the Plan, but each Agreement may
include such additional provisions and restrictions determined by the
Committee, in its discretion, provided that such additional provisions
and restrictions are not inconsistent with the terms of the Plan. In
particular, the Committee shall set forth in each Agreement (i) the
Exercise Price of an Option, (ii) the number of Shares subject to, and
the expiration date of, the Award, (iii) the manner, time and rate
(cumulative or otherwise) of exercise or vesting of such Award, and
(iv) the restrictions, if any, to be placed upon such Award, or upon
Shares which may be issued upon exercise of such Award. The Chairman
of the Committee and such other Directors and officers as shall be
designated by the Committee are hereby authorized to execute
Agreements on behalf of the Company and to cause them to be delivered
to the recipients of Awards. An Employee who receives an Award under
the Plan shall not, with respect to the Award, be deemed to have been
a Participant, or to have any rights with respect to the Award, unless
and until the Employee has executed an Agreement respecting such Award
and shall have delivered such an executed copy thereof to the Company,
and has otherwise complied with the applicable terms and conditions of
the Award.
(d) Nonuniform Determinations. The Committee's determinations
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under the Plan, including without limitation, determinations as to the
persons to receive Awards, the terms and provisions of such Awards and
the Agreements evidencing the same, need not be uniform and may be
made by it selectively among persons who receive or are eligible to
receive Awards under the Plan, whether or not such persons are
similarly situated.
6. Grant of Options.
(a) General Rule. Only Employees shall be eligible to receive
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grants of Options pursuant to the Plan. Any Award of an Option to an
Employee,grants of whether as an automatic grant as described in
Paragraph 6(b) below or as a discretionary grant, shall be pursuant to
an Agreement as described in Paragraph 5(c) above, and shall be
subject to the general rule set forth in Paragraph 8(c) hereof with
respect to the effect of an Optionee's termination of Continuous
Service on the Optionee's right to exercise his Options.
(b) Automatic Grants to Employees. On the Effective Date, each
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of the Employees identified in Exhibit A attached hereto shall be
granted an Option (in the form of an ISO, to the extent permissible)
to purchase the number of Shares set forth in Exhibit A, at an
Exercise Price per Share equal to the Market Value of a Share on the
Effective Date; provided that such grant shall not be made to an
Employee whose Continuous Service terminates on or before the
Effective Date, and provided further that the Exercise Price for any
Employee who is a 10% shareholder of the Company (see Paragraph 7(a)
below) shall be 110% of the Market Value.
(c) Special Rules for ISOs. The aggregate Market Value, as of
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the date the Option is granted, of the Shares with respect to which
ISOs are exercisable for the first time by an Employee during any
calender year (under all incentive stock option plans, as defined in
Section 422 of the Code, of the Company or any present or future
Affiliate of the Company) shall not exceed $100,000. Notwithstanding
the foregoing, the Committee may grant Options in excess of the
foregoing limitations, in which case such Options granted in excess of
such limitation shall be Options which are Non-ISOs.
7. Exercise Price for Options.
(a) Limits on Committee Discretion. The Exercise Price as to any
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particular Option shall not be less than 100% of the Market Value of
the Optioned Share on the date of grant. In the case of an Employee
who owns Shares
representing more than 10% of the Company's outstanding Shares of
Common Stock at the time an ISO is granted, the Exercise Price shall
not be less than 110% of the Market Value of the Optioned Shares at
the time the ISO is granted.
(b) Standards for Determining Market Value. If the Common
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Stock is listed on a national securities exchange (including the
Nasdaq National Market System) on the date in question, then the
Market Value per Share shall be the average of the highest and lowest
selling prices on such exchange on such date, or if no trade was
reported on such date, then the Exercise Price shall be the mean
between the bid and asked prices on such date. If the Common Stock is
traded otherwise than on a national securities exchange on the date in
question, then the Market Value per Share shall be the mean between
the bid and asked prices on such date, or, if there are no bid and
asked prices on such date, then on the next prior business day on
which there were bid and asked prices. If no such bid and asked prices
are available, then the Market Value per Share shall be its fair
market value as determined in good faith by the Committee, in its sole
and absolute discretion. Notwithstanding any provision of the Plan to
the contrary, no determination made with respect to the Market Value
of Common Stock subject to an ISO shall be inconsistent with section
422 of the Code or regulations thereunder.
8. Exercise of Options.
(a) General. Each Option shall become exercisable as provided
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in the Agreement between the Company and the Participant, the terms of
which shall be consistent with the provisions of this Plan. Provided,
that with respect to the Options granted pursuant to Paragraph 6(b) of
this Plan, (i) each Option granted to a Participant classified as a
Class A Employee shall become exercisable with respect to 50% of the
Optioned Shares upon the Participant's completion of each of two Years
of Service, (ii) each Option granted to a Participant classified as a
Class B Employee shall become exercisable with respect to 33 % of the
Optioned Shares upon the Participant's completion of each of three
Years of Service, and (iii) each Option granted to a Participant
classified as a Class C Employee shall become exercisable with respect
to 25% of the Optioned Shares upon the Participant's completion of
each of four Years of Service; provided, that an Option shall become
fully (100%) exercisable immediately upon a Change in Control and
Involuntary Termination, as provided in Paragraph 9 hereof. An Option
may not be exercised for a fractional Share.
(b) Procedure for Exercise. A Participant may exercise an
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Option,in the subject to provisions relative to its termination and
limitations on its exercise, only by (i) written notice of intent to
exercise the Option with respect to a specified number
of Shares and the date of exercise thereof, and (ii) payment to the
Company (on or prior to the date of exercise) in cash or, if the
Committee in its discretion agrees to accept, in Common Stock or a
combination of cash and Common Stock, of the amount of the Exercise
Price for the number of Shares with respect to which the Option is
then being exercised plus, in the case of Non-ISOs, any required
withholding tax as provided in Paragraph 18 hereof. Each such notice
(and payment where required) shall be delivered, or mailed by prepaid
registered or certified mail, addressed to the Chief Financial Officer
of the Company at the Company's executive offices. Common Stock
utilized in full or partial payment of the Exercise Price for Options
shall be valued at its Market Value at the date of exercise. As soon
as reasonably possible following such exercise, a certificate
representing shares of Company Stock purchased, registered in the name
of the Participant, shall be delivered to the Participant.
(c) Period of Exercisability.
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(i) Each Option shall, unless sooner expired
pursuant to paragraphs (ii) and (iii) immediately below, expire
on the first to occur of the tenth anniversary of the date of
grant thereof and the expiration date set forth in the applicable
Agreement.
(ii) An Option shall expire on the first to occur
of the applicable date set forth in paragraph (i) next above and
the date that the employment of the Participant with the Company
terminates for any reason other than death or Disability.
Notwithstanding the preceding provisions of this paragraph, the
Committee, in its sole discretion, may, by written notice given
to an ex-Employee, permit the ex-Employee to exercise Options
during a period following his or her termination of employment,
which period shall not exceed three months. In no event, however,
may the Committee permit an ex-Employee to exercise an Option
after the expiration date contained in the Agreement evidencing
such Option.
(iii) If the employment of an Employee with the
Company terminates by reason of Disability as determined by the
Committee or by reason of death, his or her Options, if any,
shall expire on the first to occur of the date set forth in
paragraph (i) above and the six-month anniversary of such
termination of employment.
(d) Effect of the Committee's Decisions. The Committee's
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determination whether a Participant's Continuous Service has ceased,
and the effective date thereof, shall be final and conclusive on all
persons affected thereby.
9. Change in Control and Involuntary Termination.
Notwithstanding the provisions of any Award which provides for its exercise
or vesting in installments, but only for a period of 90 days beginning on the
date of an Involuntary Termination following a Change in Control, all Options
shall be immediately exercisable and fully vested, provided (a) the Change in
Control occurs before the Participant's Continuous Service terminates and (b)
the Participant is subject to an Involuntary Termination within 12 months
following such Change in Control. At the time of such qualifying Involuntary
Termination, the Participant shall, at the sole discretion of the Committee, be
entitled to receive cash in an amount equal to the excess of the Market Value of
the Common Stock subject to such Option over the Exercise Price of such Shares,
in exchange for the cancellation of such Options by the Participant.
10. Adjustment of Shares.
(a) General. In the event of a subdivision of the outstanding
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Stock, adeclaration of a dividend payable in Shares, a declaration of
an extraordinary dividend payable in a form other than Shares in an
amount that has a material effect on the Market Value of the Stock, a
combination or consolidation of the outstanding Stock into a lesser
number of Shares, a recapitalization, a spin-off, a reclassification
or a similar occurrence, the Board shall make appropriate adjustments
in one or more of (i) the number of Shares available for future grants
under Paragraph 4 hereof, (ii) the number of Shares covered by each
outstanding Option or (iii) the Exercise Price under each outstanding
Option.
(b) Mergers and Consolidations. In the event that the Company
--------------------------
is a party to a merger or consolidation, outstanding Options shall be
subject to the agreement of merger or consolidation. Such agreement,
without the Participants' consent, may provide for:
(i) The continuation of such outstanding Options
by the Company (if the Company is the surviving corporation);
(ii) The assumption of the Plan and such
outstanding Options by the surviving corporation or its parent;
(iii) The substitution by the surviving
corporation or its parent of options with substantially the same
terms for such outstanding Options; or
(iv) The cancellation of each outstanding Option
after payment to the Participant of an amount in cash or cash
equivalents equal to (A) the Market Value of the Shares subject
to such Option at the time of the merger or consolidation minus
(B) the Exercise Price of the Shares subject to such Option.
A sale of all or substantially all of the assets of the Company for
consideration (apart from the assumption of obligations) consisting
primarily of securities shall be deemed a merger or consolidation for the
foregoing purposes.
(c) Special Rule for ISOs. Any adjustment made pursuant to
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subparagraphs (a) or (b) hereof shall be made in such a manner as not
to constitute a modification, within the meaning of section 424(h) of
the Code, of outstanding ISOs.
(d) Conditions and Restrictions on New, Additional, or
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Different Shares or Securities. If, by reason of any adjustment made
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pursuant to this Paragraph, a Participant becomes entitled to new,
additional, or different shares of stock or securities, such new,
additional, or different shares of stock or securities shall thereupon
be subject to all of the conditions and restrictions which were
applicable to the Shares pursuant to the Award before the adjustment
was made.
(e) Other Issuances. Except as expressly provided in this
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Paragraph, the issuance by the Company or an Affiliate of shares of
stock of any class, or of securities convertible into Shares or stock
of another 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, shall not affect, and no adjustment shall be made
with respect to, the number, class, or Exercise Price of Shares then
subject to Awards or reserved for issuance under the Plan.
(f) Reservation of Rights. The grant of an Option pursuant to
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the Plan shall not affect in any way the right or power of the Company
to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business
or assets.
11. Non-Transferability of Awards.
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 and
distribution, and no Award shall be subject to execution, attachment or similar
process. Any attempted sale, pledge, assignment, hypothecation, transfer or
other disposition of an Award, or levy of attachment or similar process
upon the Award not specifically permitted herein shall be null and void and
without effect. An Award may be exercised only by a Participant during his or
her lifetime or, pursuant to Paragraph 8(c)(iii) hereof, by his or her estate or
by the person who by bequest or inheritance acquires the right to exercise such
Award upon the Participant's death.
12. Time of Granting Awards.
The date of grant of an Award shall, for all purposes, be the later of the
date on which the Committee makes the determination of granting such Award, and
the Effective Date. Notice of the determination shall be given to each
Participant to whom an Award is so granted within a reasonable time after the
date of such grant.
13. Effective Date.
The Plan shall become effective on the date of its approval by a favorable
vote of stockholders owning at least a majority of the Shares present or
represented, and entitled to vote, at a meeting duly held in accordance with
applicable laws; provided, that the adoption of the Plan is subject to such
shareholder approval within twelve months before or after the date of adoption
of the Plan by the Board. The Plan shall be null and void if the foregoing
condition is not fulfilled, and in such event each Option granted hereunder
shall, notwithstanding any of the preceding Plan provisions, be null and void
and of no effect.
14. Modification of Awards.
At any time, and from time to time, the Board may authorize the Committee
to direct execution of an instrument providing for the modification of any
outstanding Award, provided no such modification shall confer on the holder of
said Award any right or benefit which could not be conferred on him by the grant
of a new Award at such time, or impair the Award without the consent of the
holder of the Award.
15. Amendment and Termination of the Plan.
The Board, without further action on the part of the shareholders of the
Company, may from time to time alter, amend or suspend the Plan or any Option
granted thereunder or may at any time terminate the Plan, except that it may
not, without the approval of the shareholders of the Company (except to the
extent provided in Paragraph 10 hereof):
(a) Materially increase the total number of shares of Common
Stock available for grant under the Plan;
(b) Materially modify the class of eligible Employees under the
Plan; or
(c) Effect a change relating to ISOs granted hereunder which is
inconsistent with section 422 of the Code or regulations thereunder.
No action taken by the Board under this Paragraph, either with or without
the approval of the shareholders of the Company, may materially and
adversely affect any outstanding Option without the consent of the holder
thereof.
16. Conditions Upon Issuance of Shares.
(a) Compliance with Securities Laws. Shares of Common Stock
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shall not be issued with respect to any Award unless the issuance and
delivery of such Shares shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as
amended, the rules and regulations promulgated thereunder, any
applicable state securities law, and the requirements of any stock
exchange upon which the Shares may then be listed. Certificates of
Shares of Common Stock issued hereunder may be legended as the Board
shall deem appropriate. The Plan is intended to comply with Rule 16b-3
if and to the extent applicable, and any provision of the Plan which
the Committee determines in its sole and absolute discretion to be
inconsistent with said Rule shall, to the extent of such
inconsistency, be inoperative and null and void, and shall not affect
the validity of the remaining provisions of the Plan.
(b) Special Circumstances. The inability of the Company to
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obtain approval from any regulatory body or authority deemed by the
Company's counsel to be necessary to the lawful issuance and sale of
any Shares hereunder shall relieve the Company of any liability in
respect of the non-issuance or sale of such Shares. As a condition to
the exercise of an Option, the Company may require the person
exercising the Option to make such representations and warranties as
may be necessary to assure the availability of an exemption from the
registration requirements of federal or state securities law.
(c) Committee Discretion. The Committee shall have the discretionary
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authority to impose in Agreements such restrictions on Shares as it may deem
appropriate or desirable, including but not limited to the authority to impose a
right of first refusal or to establish repurchase rights, and to require the
Participant to consent to the terms of any form of stockholders' agreement with
respect to the Shares, including but not limited to the stockholders' agreement
entered into June 1, 1998 by and among the Company and shareholders of the
Company identified therein.
17. Reservation of Shares.
The Company, during the term of the Plan, will reserve and keep available a
number of Shares sufficient to satisfy the requirements of the Plan.
18. Withholding Tax.
The Company's obligation to deliver Shares upon exercise of Options shall
be subject to the Participant's satisfaction of any and all applicable federal,
state and local income and employment tax withholding obligations. The
Committee, in its sole discretion, may permit the Participant to satisfy the
obligation, in whole or in part, by irrevocably electing to have the Company
withhold Shares, or to deliver to the Company Shares that he already owns,
having a value equal to the amount required to be withheld. The value of Shares
to be withheld, or delivered to the Company, shall be based on the Market Value
of the Shares on the date the amount of tax to be withheld is to be determined.
As an alternative, the Company may retain, or sell without notice, a number of
such Shares sufficient to cover the amount required to be withheld. In the event
that the Participant disposes of any Common Stock acquired by the exercise of an
ISO within the two-year period following grant, or within the one-year period
following exercise, of the ISO, the Company shall have the right to require the
Participant to remit to the Company an amount sufficient to satisfy all federal,
state and local withholding tax requirements as a condition to the registration
of the transfer of such Common Stock on its books. Whenever under the Plan
payments are to be made by the Company in cash or by check, such payments shall
be net of any amounts sufficient to satisfy all federal, state and local
withholding tax requirements.
19. No Employment or Other Rights.
In no event shall an Employee's eligibility to participate or participation
in the Plan create or be deemed to create any legal or equitable right of the
Employee to continue service with the Company or any Affiliate, or affect any
right which the Company or an Affiliate may have to terminate the employment of
such Employee. Except to the extent provided in Paragraph 6(b) hereof, no
Employee shall have a right to be granted an Award or, having received an Award,
the right to again be granted an Award. However, an Employee who has been
granted an Award may, if otherwise eligible, be granted an additional Award or
Awards.
20. Governing Law.
The Plan shall be governed by and construed in accordance with the laws of
the State of Nevada, except to the extent that federal law shall be deemed to
apply.
Purchase Pro International, Inc. Stock Option and Incentive Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: __________________, 1998
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by Purchase Pro International, Inc., a Nevada corporation
("PPI"), to ________________________________________________ (the "Grantee"),
who is an employee of PPI.
WHEREAS, the Board of Directors of PPI (the "Board") on August 6, 1998
adopted, with subsequent stockholder approval, the Purchase Pro
International, Inc. Stock Option and Incentive Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock options to
employees of PPI or any affiliate of PPI to purchase shares of the Common
Stock of PPI, par value $.001 per share (the "Stock"), in accordance with
the terms and provisions thereof; and
WHEREAS, the Grantee is eligible for a grant of incentive stock options
under the Plan.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, PPI,
with the approval and at the direction of the Board hereby grants to
the Grantee, as of the Date of Grant, an option to purchase up to
__________ shares of Stock at a price of $___________ per share, the
fair market value. Such option is hereinafter referred to as the
"Option" and the shares of stock purchasable upon exercise of the
Option are hereinafter sometimes referred to as the "Option Shares."
The Option is intended by the parties hereto to be, and shall be
treated as, an incentive stock option (as such term is defined under
section 422 of the Internal Revenue Code of 1986).
2. Installment Exercise.
Subject to such further limitations as are provided herein and to
the provisions concerning the occurrence of a Change in Control and an
Involuntary Termination (both as defined in the Plan), the Option
shall become exercisable in three (3) installments, the Grantee having
the right hereunder to purchase from
PPI the following number of Option Shares upon exercise of the Option,
on and after the following dates, in cumulative fashion:
(a) on and after the first anniversary of the Date of Grant, up to
one-third (ignoring fractional shares) of the total number of
Option Shares;
(b) on and after the second anniversary of the Date of
Grant, up to an additional one-third (ignoring fractional shares)
of the total number of Option Shares; and
(c) on and after the third anniversary of the Date of
Grant, the remaining Option Shares.
Notwithstanding the above installment provisions, but only for a
period of 90 days beginning on the date of an Involuntary Termination
following a Change in Control, the Option shall become immediately and
fully exercisable by the Grantee provided (i) the Change in Control
occurs before the Participant's Continuous Service terminates and (ii)
the Grantee is subject to an Involuntary Termination within 12 months
following such Change in Control. At the time of such qualifying
Involuntary Termination, the Grantee shall, at the sole discretion of
the Board, be entitled to receive cash in an amount equal to the
excess of the fair market value of the Stock subject to the Option
over the exercise price of such Stock, in exchange for the
cancellation of the Option by the Grantee.
3. Termination of Option.
(a) The option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised
or previously terminated pursuant to paragraph (b) immediately
below, shall terminate and become null and void after the
expiration of five years from the Date of Grant (the "Option
Term").
(b) Upon the occurrence of the Grantee's ceasing for
any reason to be employed by PPI (such occurrence being a
"termination of the Grantee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the
Grantee's employment is by reason of disability (within the
meaning of Section 22(e)(3) of the Code) or death. Upon a
termination of the Grantee's employment by reason of such
disability or death, the Option may be exercised during the six-
month period following the date of such disability or death, but
only to the extent that the Option was outstanding and
exercisable on any such date of disability or death. In addition,
the Board in its sole discretion, by written notice given to the
Grantee, may permit the Grantee to exercise the Option for a
period of up to three months following the date of termination of
the Grantee's employment. In no event, however, shall any such
period extend beyond the Option Term.
(c) In the event of the death of the Grantee, the Option may be
exercised by the Grantee's legal representative(s), but only to
the extent that the Option would otherwise have been exercisable
by the Grantee.
(d) A transfer of the Grantee's employment between PPI
and any affiliate of PPI, or between any affiliates of PPI, shall
not be deemed to be a termination of the Grantee's employment.
(e) Notwithstanding any other provisions set forth
herein or in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting PPI or any affiliate of PPI,
(ii) breach any covenant not to compete, or employment contract,
with PPI or any affiliate of PPI, or (iii) engage in conduct that
would warrant the Grantee's discharge for Cause (as defined in
the Plan), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect
to all or any part of the number of Option Shares then
exercisable hereunder by giving the Chief Financial Officer of
PPI written notice of intent to exercise. The notice of exercise
shall specify the number of Option Shares as to which the Option
is to be exercised and the date of exercise thereof, which date
shall be at least five days after the giving of such notice
unless an earlier time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of
the option price for the Option Shares purchased shall be made on
or before the exercise date specified in the notice of exercise
in cash, or, with the prior written consent of the Board, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date.
On the exercise date specified in the Grantee's notice
or as soon thereafter as is practicable, PPI shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as PPI may elect) upon full payment
for such Option Shares. The obligation of PPI to deliver Stock
shall, however, be subject to the condition that if at
any time the Board shall determine in its discretion that the
listing, registration or qualification of the Option or the
Option Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or
in connection with, the Option or the issuance or purchase of
Stock thereunder, the Option may not be exercised in whole or in
part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any
condition not acceptable to the Board. The Grantee also may be
required to consent to the terms of any form of stockholders'
agreement with respect to the Stock, including but not limited to
the stockholders' agreement entered into June 1, 1998 by and
among PPI and shareholders of PPI identified therein.
(c) If the Grantee fails to pay for any of the Option
Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may
be terminated by PPI. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of
the Option, provided that payment in full for the Option Shares
to be purchased upon such exercise shall have been received by
such date.
5. Adjustment of and Changes in Stock of PPI.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or shares of
capital stock of PPI, the Board shall make such adjustment as it deems
appropriate in the number and kind of shares of Stock subject to the
Option or in the option price; provided, however, that no such
adjustment shall give the Grantee any additional benefits under the
Option.
6. Fair Market Value.
If the Stock is listed on a national securities exchange
(including the Nasdaq National Market System) on the date in question,
then the fair market value per share shall be the average of the
highest and lowest selling prices on such exchange on such date, or if
no trade was reported on such date, then it shall be the mean between
the bid and asked prices on such date. If the Stock is traded
otherwise than on a national securities exchange on the date in
question, then the fair market value per share shall be the mean
between the bid and asked prices on such date, or, if there are no bid
and asked prices on such date, then on the next prior business day on
which there were bid and asked prices. If no such bid and asked prices
are available, then the fair market value per share shall be its fair
market value as determined in good faith by the Board, in its sole and
absolute discretion.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of PPI
with respect to any shares of Stock purchasable or issuable upon the
exercise of the Option, in whole or in part, prior to the date of
exercise of the Option.
8. Non-Transferability of Option.
During the Grantee's lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferrable except, in case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be subject
to attachment, execution or other similar process. In the event of (a)
any attempt by the Grantee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option, except as provided for herein, or (b)
the levy of any attachment, execution or similar process upon the
rights or interest hereby conferred, PPI may terminate the Option by
notice to the Grantee and it shall thereupon become null and void.
9. Employment Not Affected.
The granting of the Option or its exercise shall not be construed
as granting to the Grantee any right with respect to continuance of
employment with PPI. Except as may otherwise be limited by a written
agreement between PPI and the Grantee, the right of PPI to terminate
at will the Grantee's employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by PPI and acknowledged by the Grantee.
10. Amendment of Option.
The Option may be amended by the Board at any time (i) if the
Board determines, in its sole discretion, that amendment is necessary
or advisable in the light of any addition to or change in the Internal
Revenue Code of 1986 or in the regulations issued thereunder, or any
federal or state securities law or other law or regulation, which
change occurs after the Date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in clause
(i), with the consent of the Grantee.
11. Notice.
Any notice to PPI provided for in this instrument shall be
addressed to it in care of its Chief Financial Officer at is executive
offices at 6285 Industrial Boulevard, Suite A, Las Vegas, NV 89118,
and any notice to the Grantee shall be addressed to the Grantee at the
current address shown on the payroll records of PPI. Any notice shall
be deemed to be duly given if and when properly addressed and posted
by registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the Option
shall in all respects be interpreted in accordance with the Plan. The
Board shall interpret and construe the Plan and this instrument, and
its interpretations and determinations shall be conclusive and binding
on the parties hereto and any other person claiming an interest
hereunder, with respect to any issue arising hereunder or thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the law of the State of Nevada, except to the extent
preempted by federal law, which shall to the extent govern.
14. Confidentiality.
The Grantee agrees that, from the time of execution of this
instrument, the Grantee will keep the specific terms and conditions of
this Grant completely confidential and not disclose any such
information to anyone except his or her spouse or tax advisors. To the
extent Grantee shall disclose such matters to his or her spouse or tax
advisors, the Grantee shall advise such persons that they shall
consider themselves bound by the same terms. The parties agree that
the Grantee shall be permitted to release the fact of the grant of the
Option as set forth above as may be required on a financial statement,
tax return or other such business or legal document or as otherwise
may be required by law or a court of appropriate jurisdiction.
IN WITNESS WHEREOF, PPI has caused its duly authorized officer to execute
this Grant of Incentive Stock Option, and the Grantee has placed his or her
signature hereon, effective as of the Date of Grant.
PURCHASE PRO INTERNATIONAL, INC.
By: ____________________________________
Title: _________________________________
ACCEPTED AND AGREED TO:
By: ____________________________________
Grantee
GRANT OF STOCK OPTION (NON-EMPLOYEE)
-----------------------------------
Date of Grant: __________________, 1998
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by PURCHASE PRO INTERNATIONAL, INC., a Nevada corporation
("PPI"), to ________________________________________________ (the "Grantee").
WHEREAS, PPI desires to grant to Grantee an option to purchase certain
shares of common stock of PPI upon the terms and conditions stated herein;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Option. Subject to the terms and conditions hereinafter
---------------
set forth, PPI hereby grants to the Grantee, as of the Date of Grant, an
option to purchase up to __________ shares of PPI common stock (the
"Stock") at a price of Two and 50/100 Dollars ($2.50) per share. Such
option is hereinafter referred to as the "Option" and the shares of stock
purchasable upon exercise of the Option are hereinafter sometimes referred
to as the "Option Shares."
1. Exercise and Termination. Subject to such further limitations as
------------------------
are provided herein, the Option shall become exercisable on _______________
and shall terminate and expire on _____________________, the Grantee having
the right hereunder to purchase from PPI all of the Option Shares upon
exercise of the Option only in accordance with the preceding schedule.
1. Termination by PPI.
------------------
a. In the event PPI's board of directors determines in good
faith at any time before the Option is exercised that the Grantee has
taken action that is detrimental to the interests of PPI, the Option,
to the extent not previously exercised, shall terminate and become
null and void immediately upon such determination.
a. In the event of the death of the Grantee, the Option may be
exercised by the Grantee's legal representative(s), but only to the
extent that the Option would otherwise have been exercisable by the
Grantee.
a. Notwithstanding any other provisions set forth herein, if
the Grantee shall (i) commit any act of malfeasance or wrongdoing
affecting PPI or any affiliate of PPI, or (ii) breach any covenant not
to compete, or employment contract, with PPI or any affiliate of PPI,
any unexercised portion of the Option shall immediately terminate and
be void.
b.
2. Conditions Upon Issuance of Shares.
----------------------------------
a. Compliance with Securities Laws. Option Shares shall
-------------------------------
not be issued with respect to this Option unless the issuance and
delivery of such Option Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities law, and the
requirements of any stock exchange upon which the Shares may then
be listed. Certificates of Option Shares issued hereunder may be
legended as the Board shall deem appropriate.
a. Special Circumstances. The inability of PPI to obtain
---------------------
approval from any regulatory body or authority deemed by PPI's
counsel to be necessary to the lawful issuance and sale of any
Shares hereunder shall relieve PPI of any liability in respect of
the non-issuance or sale of such Shares. As a condition to the
exercise of an Option, PPI may require the person exercising the
Option to make such representations and warranties as may be
necessary to assure the availability of an exemption from the
registration requirements of federal or state securities law.
a. PPI Discretion. PPI shall have the discretionary
--------------
authority to impose in Agreements such restrictions on Shares as
it may deem appropriate or desirable, including but not limited
to the authority to impose a right of first refusal or to
establish repurchase rights, and to require the Grantee to
consent to the terms of any form of stockholders' agreement with
respect to the Shares, including but not limited to the
stockholders' agreement entered into June 1, 1998 by and among
PPI and shareholders of PPI identified therein.
1. Exercise of Options.
-------------------
a. The Grantee may exercise the Option with respect to all
or any part of the number of Option Shares then exercisable
hereunder by giving the Chief Financial Officer of PPI written
notice of intent to exercise. The notice of exercise shall
specify the number of Option Shares as to which the Option is to
be exercised and the date of exercise thereof, which date shall
be at least five days after the giving of such notice unless an
earlier time shall have been mutually agreed upon.
a. Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash.
a. On the exercise date specified in the Grantee's notice
or as soon thereafter as is practicable, PPI shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as PPI may elect) upon full payment
for such Option Shares. The obligation of PPI to deliver Stock
shall, however, be subject to the condition that if at any time
PPI shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any condition not
acceptable to PPI. The Grantee also may be required to consent to
the terms of any form of stockholders' agreement with respect to
the Stock, including but not limited to the stockholders'
agreement entered into June 1, 1998 by and among PPI and
shareholders of PPI identified therein.
a. If the Grantee fails to pay for any of the Option
Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may
be terminated by PPI. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of
the Option, provided that payment in full for the Option Shares
to be purchased upon such exercise shall have been received by
such date.
1. Adjustment of and Changes in Stock of PPI. In the event of a
------------------------------------------
reorganization, recapitalization, change of shares, stock split, spin-
off, stock dividend, reclassification, subdivision or combination of
shares, merger, consolidation, rights offering, or any other change in
the corporate structure or shares of capital stock of PPI, PPI shall
make such adjustment as it deems appropriate in the number and kind of
shares of Stock subject to the Option or in the option price;
provided, however, that no such adjustment shall give the Grantee any
additional benefits under the Option. In the event that PPI is a party
to a merger or consolidation, outstanding Options shall be subject to
the agreement of merger or consolidation. Such agreement, without the
Grantee's consent, may provide for:
a. The continuation of such outstanding Options by PPI (if
PPI is the surviving corporation);
a. The assumption of the outstanding Options by the
surviving corporation or its parent;
a. The substitution by the surviving corporation or its
parent of options with substantially the same terms for such
outstanding Options; or
a. The cancellation of each outstanding Option after
payment to the Grantee of an amount in cash or cash equivalents
equal to (i) the Market Value of the Shares subject to such
Option at the time of the merger or consolidation minus (ii) the
exercise price of the shares subject to such Option.
A sale of all or substantially all of the assets of PPI for
consideration (apart from the assumption of obligations) consisting
primarily of securities shall be deemed a merger or consolidation for
the foregoing purposes. The issuance by PPI or an affiliate of shares
of stock of any class, or of securities convertible into shares or
stock of another 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, shall not affect, and no adjustment shall be made
with respect to, the number, class, or exercise price of shares then
subject to this Option. The grant of the Options pursuant to this
grant shall not affect in any way the right or power of PPI to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.
1. No Rights of Stockholders. Neither the Grantee nor any
-------------------------
personal representative shall be, or shall have any of the rights and
privileges of, a stockholder of PPI with respect to any shares of
Stock purchasable or issuable upon the exercise of the Option, in
whole or in part, prior to the date of exercise of the Option.
1. Non-Transferability of Option. During the Grantee's
-----------------------------
lifetime, the Option hereunder shall be exercisable only by the
Grantee or any guardian or legal representative of the Grantee, and
the Option shall not be transferrable except, in case of the death of
the Grantee, by will or the laws of descent and distribution, nor
shall the Option be subject to attachment, execution or other similar
process. In the event of (a) any attempt by the Grantee to alienate,
assign, pledge, hypothecate or otherwise dispose of the Option, except
as provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred, PPI
may terminate the Option by notice to the Grantee and it shall
thereupon become null and void.
1. Notice. Any notice to PPI provided for in this instrument
------
shall be addressed to it in care of its Chief Financial Officer at its
executive offices at 3291 N. Buffalo Drive, Las Vegas, NV 89129, and
any notice to the Grantee shall be addressed to the Grantee at the
current address shown on the records of
PPI. Any notice shall be deemed to be duly given if and when properly
addressed and posted by registered or certified mail, postage prepaid.
1. Governing Law. The validity, construction, interpretation and
-------------
effect of this instrument shall exclusively be governed by and determined
in accordance with the law of the State of Nevada, except to the extent
preempted by federal law, which shall to the extent govern.
Confidentiality. The Grantee agrees that, from the time of execution
---------------
of this instrument, the Grantee will keep the specific terms and conditions of
this Grant completely confidential and not disclose any such information to
anyone except his or her spouse or tax advisors. To the extent Grantee shall
disclose such matters to his or her spouse or tax advisors, the Grantee shall
advise such persons that they shall consider themselves bound by the same terms.
The parties agree that the Grantee shall be permitted to release the fact of the
grant of the Option as set forth above as may be required on a financial
statement, tax return or other such business or legal document or as otherwise
may be required by law or a court of appropriate jurisdiction.
IN WITNESS WHEREOF, PPI has caused its duly authorized officer to execute
this Grant of Stock Option, and the Grantee has placed his or her signature
hereon, effective as of the Date of Grant.
PURCHASE PRO INTERNATIONAL, INC.
By: ________________________________________
Title: _____________________________________
ACCEPTED AND AGREED TO:
By: ________________________________________
Purchase Pro International, Inc.
Stock Option and Incentive Plan
CLASS A
Employees
Purchase Pro International, Inc. Stock Option and Incentive Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: __________________, 1998
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by Purchase Pro International, Inc., a Nevada corporation
("PPI"), to ________________________________________________ (the "Grantee"),
who is an employee of PPI.
WHEREAS, the Board of Directors of PPI (the "Board") on August 6, 1998
adopted, with subsequent stockholder approval, the Purchase Pro
International, Inc. Stock Option and Incentive Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock options by a
committee to be appointed by the Board (the "Committee") to employees of
PPI or any affiliate of PPI to purchase shares of the Common Stock of PPI,
par value $.001 per share (the "Stock"), in accordance with the terms and
provisions thereof; and
WHEREAS, the Grantee is eligible for a grant of incentive stock options
under the Plan.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, PPI,
with the approval and at the direction of the Committee, hereby grants
to the Grantee, as of the Date of Grant, an option to purchase up to
__________ shares of Stock at a price of $___________ per share, the
fair market value. Such option is hereinafter referred to as the
"Option" and the shares of stock purchasable upon exercise of the
Option are hereinafter sometimes referred to as the "Option Shares."
The Option is intended by the parties hereto to be, and shall be
treated as, an incentive stock option (as such term is defined under
section 422 of the Internal Revenue Code of 1986).
2. Installment Exercise.
Subject to such further limitations as are provided herein and to
the provisions concerning the occurrence of a Change in Control and an
Involuntary Termination (both as defined in the Plan), the Option
shall become exercisable in two (2) installments, the Grantee having
the right hereunder to purchase from PPI the following number of
Option Shares upon exercise of the Option, on and after the following
dates, in cumulative fashion:
(a) on and after the first anniversary of the Date of Grant,
up to one-half (ignoring fractional shares) of the total number
of Option Shares; and
(b) on and after the second anniversary of the Date of
Grant, the remaining Option Shares.
Notwithstanding the above installment provisions, but only for a
period of 90 days beginning on the date of an Involuntary Termination
following a Change in Control, the Option shall become immediately and
fully exercisable by the Grantee provided (i) the Change in Control
occurs before the Participant's Continuous Service terminates and (ii)
the Grantee is subject to an Involuntary Termination within 12 months
following such Change in Control. At the time of such qualifying
Involuntary Termination, the Grantee shall, at the sole discretion of
the Committee, be entitled to receive cash in an amount equal to the
excess of the fair market value of the Stock subject to the Option
over the exercise price of such Stock, in exchange for the
cancellation of the Option by the Grantee.
3. Termination of Option.
(a) The option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised
or previously
terminated pursuant to paragraph (b) immediately below, shall
terminate and become null and void after the expiration of five
years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing for any
reason to be employed by PPI (such occurrence being a
"termination of the Grantee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the
Grantee's employment is by reason of disability (within the
meaning of Section 22(e)(3) of the Code) or death. Upon a
termination of the Grantee's employment by reason of such
disability or death, the Option may be exercised during the six-
month period following the date of such disability or death, but
only to the extent that the Option was outstanding and
exercisable on any such date of disability or death. In addition,
the Committee in its sole discretion, by written notice given to
the Grantee, may permit the Grantee to exercise the Option for a
period of up to three months following the date of termination of
the Grantee's employment. In no event, however, shall any such
period extend beyond the Option Term.
(c) In the event of the death of the Grantee, the Option may be
exercised by the Grantee's legal representative(s), but only to
the extent that the Option would otherwise have been exercisable
by the Grantee.
(d) A transfer of the Grantee's employment between PPI and
any affiliate of PPI, or between any affiliates of PPI, shall not
be deemed to be a termination of the Grantee's employment.
(e) Notwithstanding any other provisions set forth herein or
in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting PPI or any affiliate of PPI,
(ii) breach any covenant not to compete, or employment contract,
with PPI or any affiliate of PPI, or (iii) engage in conduct that
would warrant the Grantee's discharge for Cause (as defined in
the Plan), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all
or any part of the number of Option Shares then exercisable
hereunder by giving the Chief Financial Officer of PPI written
notice of intent to exercise. The notice of exercise shall
specify the number of Option Shares
as to which the Option is to be exercised and the date of
exercise thereof, which date shall be at least five days after
the giving of such notice unless an earlier time shall have been
mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date.
On the exercise date specified in the Grantee's notice or as
soon thereafter as is practicable, PPI shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as PPI may elect) upon full payment
for such Option Shares. The obligation of PPI to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any condition not
acceptable to the Committee. The Grantee also may be required to
consent to the terms of any form of stockholders' agreement with
respect to the Stock, including but not limited to the
stockholders' agreement entered into June 1, 1998 by and among
PPI and shareholders of PPI identified therein.
(c) If the Grantee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the
Grantee's right to purchase such Option Shares may be terminated
by PPI. The date specified in the Grantee's notice as the date of
exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date.
5. Adjustment of and Changes in Stock of PPI.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation, rights
offering, or any other change in the corporate
structure or shares of capital stock of PPI, the Committee shall make
such adjustment as it deems appropriate in the number and kind of
shares of Stock subject to the Option or in the option price;
provided, however, that no such adjustment shall give the Grantee any
additional benefits under the Option.
6. Fair Market Value.
If the Stock is listed on a national securities exchange
(including the Nasdaq National Market System) on the date in question,
then the fair market value per share shall be the average of the
highest and lowest selling prices on such exchange on such date, or if
no trade was reported on such date, then it shall be the mean between
the bid and asked prices on such date. If the Stock is traded
otherwise than on a national securities exchange on the date in
question, then the fair market value per share shall be the mean
between the bid and asked prices on such date, or, if there are no bid
and asked prices on such date, then on the next prior business day on
which there were bid and asked prices. If no such bid and asked prices
are available, then the fair market value per share shall be its fair
market value as determined in good faith by the Committee, in its sole
and absolute discretion.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of PPI
with respect to any shares of Stock purchasable or issuable upon the
exercise of the Option, in whole or in part, prior to the date of
exercise of the Option.
8. Non-Transferability of Option.
During the Grantee's lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferrable except, in case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be subject
to attachment, execution or other similar process. In the event of (a)
any attempt by the Grantee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option, except as provided for herein, or (b)
the levy of any attachment, execution or similar process upon the
rights or interest hereby conferred, PPI may terminate the Option by
notice to the Grantee and it shall thereupon become null and void.
9. Employment Not Affected.
The granting of the Option or its exercise shall not be construed
as granting to the Grantee any right with respect to continuance of
employment with PPI. Except as may otherwise be limited by a written
agreement between PPI and the Grantee, the right of PPI to terminate
at will the Grantee's employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by PPI and acknowledged by the Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at any
time (i) if the Board or the Committee determines, in its sole
discretion, that amendment is necessary or advisable in the light of
any addition to or change in the Internal Revenue Code of 1986 or in
the regulations issued thereunder, or any federal or state securities
law or other law or regulation, which change occurs after the Date of
Grant and by its terms applies to the Option; or (ii) other than in
the circumstances described in clause (i), with the consent of the
Grantee.
11. Notice.
Any notice to PPI provided for in this instrument shall be
addressed to it in care of its Chief Financial Officer at its
executive offices at 6285 Industrial Boulevard, Suite A, Las Vegas, NV
89118, and any notice to the Grantee shall be addressed to the Grantee
at the current address shown on the payroll records of PPI. Any notice
shall be deemed to be duly given if and when properly addressed and
posted by registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the Option
shall in all respects be interpreted in accordance with the Plan. The
Committee shall interpret and construe the Plan and this instrument,
and its interpretations and determinations shall be conclusive and
binding on the parties hereto and any other person claiming an
interest hereunder, with respect to any issue arising hereunder or
thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the law of the State of Nevada, except to the extent
preempted by federal law, which shall to the extent govern.
14. Confidentiality.
The Grantee agrees that, from the time of execution of this
instrument, the Grantee will keep the specific terms and conditions of
this Grant completely confidential and not disclose any such
information to anyone except his or her spouse or tax advisors. To the
extent Grantee shall disclose such matters to his or her spouse or tax
advisors, the Grantee shall advise such persons that they shall
consider themselves bound by the same terms. The parties agree that
the Grantee shall be permitted to release the fact of the grant of the
Option as set forth above as may be required on a financial statement,
tax return or other such business or legal document or as otherwise
may be required by law or a court of appropriate jurisdiction.
IN WITNESS WHEREOF, PPI has caused its duly authorized officer to execute
this Grant of Incentive Stock Option, and the Grantee has placed his or her
signature hereon, effective as of the Date of Grant.
PURCHASE PRO INTERNATIONAL, INC.
By: ________________________________________
Title: _______________________________________
ACCEPTED AND AGREED TO:
By: ________________________________________
Grantee
Purchase Pro International, Inc.
Stock Option and Incentive Plan
CLASS B
Employees
Purchase Pro International, Inc. Stock Option and Incentive Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: __________________, 1998
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by Purchase Pro International, Inc., a Nevada corporation
("PPI"), to ________________________________________________ (the "Grantee"),
who is an employee of PPI.
WHEREAS, the Board of Directors of PPI (the "Board") on August 6, 1998
adopted, with subsequent stockholder approval, the Purchase Pro
International, Inc. Stock Option and Incentive Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock options by a
committee to be appointed by the Board (the "Committee") to employees of
PPI or any affiliate of PPI to purchase shares of the Common Stock of PPI,
par value $.001 per share (the "Stock"), in accordance with the terms and
provisions thereof; and
WHEREAS, the Grantee is eligible for a grant of incentive stock options
under the Plan.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, PPI,
with the approval and at the direction of the Committee, hereby grants
to the Grantee, as of the Date of Grant, an option to purchase up to
__________ shares of Stock at a price of $___________ per share, the
fair market value. Such option is hereinafter referred to as the
"Option" and the shares of stock purchasable upon exercise of the
Option are hereinafter sometimes referred to as the "Option Shares."
The Option is intended by the parties hereto to be, and shall be
treated as, an incentive stock option (as such term is defined under
section 422 of the Internal Revenue Code of 1986).
2. Installment Exercise.
Subject to such further limitations as are provided herein and to
the provisions concerning the occurrence of a Change in Control and an
Involuntary Termination (both as defined in the Plan), the Option
shall become exercisable in three (3) installments, the Grantee having
the right hereunder to purchase from PPI the following number of
Option Shares upon exercise of the Option, on and after the following
dates, in cumulative fashion:
(a) on and after the first anniversary of the Date of
Grant, up to one-third (ignoring fractional shares) of the total
number of Option Shares;
(b) on and after the second anniversary of the Date of
Grant, up to an additional one-third (ignoring fractional shares)
of the total number of Option Shares; and
(c) on and after the third anniversary of the Date of
Grant, the remaining Option Shares.
Notwithstanding the above installment provisions, but only for a
period of 90 days beginning on the date of an Involuntary Termination
following a Change in Control, the Option shall become immediately and
fully exercisable by the Grantee provided (i) the Change in Control
occurs before the Participant's Continuous Service terminates and (ii)
the Grantee is subject to an Involuntary Termination within 12 months
following such Change in Control. At the time of such qualifying
Involuntary Termination, the Grantee shall, at the sole discretion of
the Committee, be entitled to receive cash in an amount equal to the
excess of the fair market value of the Stock subject to the Option
over the exercise price of such Stock, in exchange for the
cancellation of the Option by the Grantee.
3. Termination of Option.
(a) The option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised
or previously terminated pursuant to paragraph (b) immediately
below, shall terminate and become null and void after the
expiration of five years from the Date of Grant (the "Option
Term").
(b) Upon the occurrence of the Grantee's ceasing for
any reason to be employed by PPI (such occurrence being a
"termination of the Grantee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the
Grantee's employment is by reason of disability (within the
meaning of Section 22(e)(3) of the Code) or death. Upon a
termination of the Grantee's employment by reason of such
disability or death, the Option may be exercised during the six-
month period following the date of such disability or death, but
only to the extent that the Option was outstanding and
exercisable on any such date of disability or death. In addition,
the Committee in its sole discretion, by written notice given to
the Grantee, may permit the Grantee to exercise the Option for a
period of up to three months following the date of termination of
the Grantee's employment. In no event, however, shall any such
period extend beyond the Option Term.
(c) In the event of the death of the Grantee, the
Option may be exercised by the Grantee's legal representative(s),
but only to the extent that the Option would otherwise have been
exercisable by the Grantee.
(d) A transfer of the Grantee's employment between PPI
and any affiliate of PPI, or between any affiliates of PPI, shall
not be deemed to be a termination of the Grantee's employment.
(e) Notwithstanding any other provisions set forth
herein or in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting PPI or any affiliate of PPI,
(ii) breach any covenant not to compete, or employment contract,
with PPI or any affiliate of PPI, or (iii) engage in conduct that
would warrant the Grantee's discharge for Cause (as defined in
the Plan), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect
to all or any part of the number of Option Shares then
exercisable hereunder by giving the Chief Financial Officer of
PPI written notice of intent to exercise. The notice of exercise
shall specify the number of Option Shares as to which the Option
is to be exercised and the date of exercise thereof, which date
shall be at least five days after the giving of such notice
unless an earlier time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of
the option price for the Option Shares purchased shall be made on
or before the exercise date specified in the notice of exercise
in cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date.
On the exercise date specified in the Grantee's notice
or as soon thereafter as is practicable, PPI shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as PPI may elect) upon full payment
for such Option Shares. The obligation of PPI to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any condition not
acceptable to the Committee. The Grantee also may be required to
consent to the terms of any form of stockholders' agreement with
respect to the Stock, including but not limited to the
stockholders' agreement entered into June 1, 1998 by and among
PPI and shareholders of PPI identified therein.
(c) If the Grantee fails to pay for any of the Option
Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may
be terminated by PPI. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of
the Option, provided that payment in full for the Option Shares
to be purchased upon such exercise shall have been received by
such date.
5. Adjustment of and Changes in Stock of PPI.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or shares of
capital stock of PPI, the Committee shall make such adjustment as it
deems appropriate in the number and kind of shares of Stock subject to
the Option or in the option price; provided, however, that no such
adjustment shall give the Grantee any additional benefits under the
Option.
6. Fair Market Value.
If the Stock is listed on a national securities exchange
(including the Nasdaq National Market System) on the date in question,
then the fair market value per share shall be the average of the
highest and lowest selling prices on such exchange on such date, or if
no trade was reported on such date, then it shall be the mean between
the bid and asked prices on such date. If the Stock is traded
otherwise than on a national securities exchange on the date in
question, then the fair market value per share shall be the mean
between the bid and asked prices on such date, or, if there are no bid
and asked prices on such date, then on the next prior business day on
which there were bid and asked prices. If no such bid and asked prices
are available, then the fair market value per share shall be its fair
market value as determined in good faith by the Committee, in its sole
and absolute discretion.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of PPI
with respect to any shares of Stock purchasable or issuable upon the
exercise of the Option, in whole or in part, prior to the date of
exercise of the Option.
8. Non-Transferability of Option.
During the Grantee's lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferrable except, in case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be subject
to attachment, execution or other similar process. In the event of (a)
any attempt by the Grantee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option, except as provided for herein, or (b)
the levy of any attachment, execution or similar process upon the
rights or interest hereby conferred, PPI may terminate the Option by
notice to the Grantee and it shall thereupon become null and void.
9. Employment Not Affected.
The granting of the Option or its exercise shall not be construed
as granting to the Grantee any right with respect to continuance of
employment with PPI. Except as may otherwise be limited by a written
agreement between PPI and the Grantee, the right of PPI to terminate
at will the Grantee's employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by PPI and acknowledged by the Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at any
time (i) if the Board or the Committee determines, in its sole
discretion, that amendment is necessary or advisable in the light of
any addition to or change in the Internal Revenue Code of 1986 or in
the regulations issued thereunder, or any federal or state securities
law or other law or regulation, which change occurs after the Date of
Grant and by its terms applies to the Option; or (ii) other than in
the circumstances described in clause (i), with the consent of the
Grantee.
11. Notice.
Any notice to PPI provided for in this instrument shall be
addressed to it in care of its Chief Financial Officer at its
executive offices at 6285 Industrial Boulevard, Suite A, Las Vegas, NV
89118, and any notice to the Grantee shall be addressed to the Grantee
at the current address shown on the payroll records of PPI. Any notice
shall be deemed to be duly given if and when properly addressed and
posted by registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the Option
shall in all respects be interpreted in accordance with the Plan. The
Committee shall interpret and construe the Plan and this instrument,
and its interpretations and determinations shall be conclusive and
binding on the parties hereto and any other person claiming an
interest hereunder, with respect to any issue arising hereunder or
thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the law of the State of Nevada, except to the extent
preempted by federal law, which shall to the extent govern.
14. Confidentiality.
The Grantee agrees that, from the time of execution of this
instrument, the Grantee will keep the specific terms and conditions of
this Grant completely confidential and not disclose any such
information to anyone except his or her spouse or tax advisors. To the
extent Grantee shall disclose such matters to his or her spouse or tax
advisors, the Grantee shall advise such persons that they shall
consider themselves bound by the same terms. The parties agree that
the Grantee shall be permitted to release the fact of the grant of the
Option as set forth above as may be required on a financial statement,
tax return or other such business or legal document or as otherwise
may be required by law or a court of appropriate jurisdiction.
IN WITNESS WHEREOF, PPI has caused its duly authorized officer to execute
this Grant of Incentive Stock Option, and the Grantee has placed his or her
signature hereon, effective as of the Date of Grant.
PURCHASE PRO INTERNATIONAL, INC.
By: ________________________________________
Title: _____________________________________
ACCEPTED AND AGREED TO:
By: ________________________________________
Grantee
Purchase Pro International, Inc.
Stock Option and Incentive Plan
CLASS C
Employees
Purchase Pro International, Inc. Stock Option and Incentive Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: __________________, 1998
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by Purchase Pro International, Inc., a Nevada corporation
("PPI"), to ________________________________________________ (the "Grantee"),
who is an employee of PPI.
WHEREAS, the Board of Directors of PPI (the "Board") on August 6, 1998
adopted, with subsequent stockholder approval, the Purchase Pro
International, Inc. Stock Option and Incentive Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock options by a
committee to be appointed by the Board (the "Committee") to employees of
PPI or any affiliate of PPI to purchase shares of the Common Stock of PPI,
par value $.001 per share (the "Stock"), in accordance with the terms and
provisions thereof; and
WHEREAS, the Grantee is eligible for a grant of incentive stock options
under the Plan.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, PPI,
with the approval and at the direction of the Committee, hereby grants
to the Grantee, as of the Date of Grant, an option to purchase up to
__________ shares of Stock at a price of $___________ per share, the
fair market value. Such option is hereinafter referred to as the
"Option" and the shares of stock purchasable upon exercise of the
Option are hereinafter sometimes referred to as the "Option Shares."
The Option is intended by the parties hereto to be, and shall be
treated as, an incentive stock option (as such term is defined under
section 422 of the Internal Revenue Code of 1986).
2. Installment Exercise.
Subject to such further limitations as are provided herein and to
the provisions concerning the occurrence of a Change in Control and an
Involuntary Termination (both as defined in the Plan), the Option
shall become exercisable in four (4) installments, the Grantee having
the right hereunder to purchase from PPI the following number of
Option Shares upon exercise of the Option, on and after the following
dates, in cumulative fashion:
(a) on and after the first anniversary of the Date of Grant,
up to one-fourth (ignoring fractional shares) of the total number
of Option Shares;
(b) on and after the second anniversary of the Date of
Grant, up to an additional one-fourth (ignoring fractional
shares) of the total number of Option Shares;
(c) on or after the third anniversary of the Date of Grant,
up to an additional one-fourth (ignoring fractional shares) of
the total number of Option Shares; and
(d) on and after the fourth anniversary of the Date of
Grant, the remaining Option Shares.
Notwithstanding the above installment provisions, but only for a
period of 90 days beginning on the date of an Involuntary Termination
following a Change in Control, the Option shall become immediately and
fully exercisable by the Grantee provided (i) the Change in Control
occurs before the Participant's Continuous Service terminates and (ii)
the Grantee is subject to an Involuntary Termination within 12 months
following such Change in Control. At the time of such qualifying
Involuntary Termination, the Grantee shall, at the sole discretion
of the Committee, be entitled to receive cash in an amount equal to
the excess of the fair market value of the Stock subject to the Option
over the exercise price of such Stock, in exchange for the
cancellation of the Option by the Grantee.
3. Termination of Option.
(a) The option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised
or previously terminated pursuant to paragraph (b) immediately
below, shall terminate and become null and void after the
expiration of five years from the Date of Grant (the "Option
Term").
(b) Upon the occurrence of the Grantee's ceasing for any
reason to be employed by PPI (such occurrence being a
"termination of the Grantee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the
Grantee's employment is by reason of disability (within the
meaning of Section 22(e)(3) of the Code) or death. Upon a
termination of the Grantee's employment by reason of such
disability or death, the Option may be exercised during the six-
month period following the date of such disability or death, but
only to the extent that the Option was outstanding and
exercisable on any such date of disability or death. In addition,
the Committee in its sole discretion, by written notice given to
the Grantee, may permit the Grantee to exercise the Option for a
period of up to three months following the date of termination of
the Grantee's employment. In no event, however, shall any such
period extend beyond the Option Term.
(c) In the event of the death of the Grantee, the Option may
be exercised by the Grantee's legal representative(s), but only
to the extent that the Option would otherwise have been
exercisable by the Grantee.
(d) A transfer of the Grantee's employment between PPI and
any affiliate of PPI, or between any affiliates of PPI, shall not
be deemed to be a termination of the Grantee's employment.
(e) Notwithstanding any other provisions set forth herein or
in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting PPI or any affiliate of PPI,
(ii) breach any covenant not to compete, or employment contract,
with PPI or any affiliate of PPI, or (iii) engage in conduct that
would warrant the Grantee's discharge for
3
Cause (as defined in the Plan), any unexercised portion of the
Option shall immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all
or any part of the number of Option Shares then exercisable
hereunder by giving the Chief Financial Officer of PPI written
notice of intent to exercise. The notice of exercise shall
specify the number of Option Shares as to which the Option is to
be exercised and the date of exercise thereof, which date shall
be at least five days after the giving of such notice unless an
earlier time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date.
On the exercise date specified in the Grantee's notice or as
soon thereafter as is practicable, PPI shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as PPI may elect) upon full payment
for such Option Shares. The obligation of PPI to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any condition not
acceptable to the Committee. The Grantee also may be required to
consent to the terms of any form of stockholders' agreement with
respect to the Stock, including but not limited to the
stockholders' agreement entered into June 1, 1998 by and among
PPI and shareholders of PPI identified therein.
(c) If the Grantee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the
Grantee's right to purchase such Option Shares may be terminated
by PPI. The date specified in the Grantee's notice as the date of
exercise shall be deemed
the date of exercise of the Option, provided that payment in full
for the Option Shares to be purchased upon such exercise shall
have been received by such date.
5. Adjustment of and Changes in Stock of PPI.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or shares of
capital stock of PPI, the Committee shall make such adjustment as it
deems appropriate in the number and kind of shares of Stock subject to
the Option or in the option price; provided, however, that no such
adjustment shall give the Grantee any additional benefits under the
Option.
6. Fair Market Value.
If the Stock is listed on a national securities exchange
(including the Nasdaq National Market System) on the date in question,
then the fair market value per share shall be the average of the
highest and lowest selling prices on such exchange on such date, or if
no trade was reported on such date, then it shall be the mean between
the bid and asked prices on such date. If the Stock is traded
otherwise than on a national securities exchange on the date in
question, then the fair market value per share shall be the mean
between the bid and asked prices on such date, or, if there are no bid
and asked prices on such date, then on the next prior business day on
which there were bid and asked prices. If no such bid and asked prices
are available, then the fair market value per share shall be its fair
market value as determined in good faith by the Committee, in its sole
and absolute discretion.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of PPI
with respect to any shares of Stock purchasable or issuable upon the
exercise of the Option, in whole or in part, prior to the date of
exercise of the Option.
8. Non-Transferability of Option.
During the Grantee's lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferrable except, in case of the death of the Grantee, by will or
the laws of descent and distribution, nor shall the Option be subject
to attachment, execution or other similar process. In the event of (a)
any attempt by
the Grantee to alienate, assign, pledge, hypothecate or otherwise
dispose of the Option, except as provided for herein, or (b) the levy
of any attachment, execution or similar process upon the rights or
interest hereby conferred, PPI may terminate the Option by notice to
the Grantee and it shall thereupon become null and void.
9. Employment Not Affected.
The granting of the Option or its exercise shall not be construed
as granting to the Grantee any right with respect to continuance of
employment with PPI. Except as may otherwise be limited by a written
agreement between PPI and the Grantee, the right of PPI to terminate
at will the Grantee's employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by PPI and acknowledged by the Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at any
time (i) if the Board or the Committee determines, in its sole
discretion, that amendment is necessary or advisable in the light of
any addition to or change in the Internal Revenue Code of 1986 or in
the regulations issued thereunder, or any federal or state securities
law or other law or regulation, which change occurs after the Date of
Grant and by its terms applies to the Option; or (ii) other than in
the circumstances described in clause (i), with the consent of the
Grantee.
11. Notice.
Any notice to PPI provided for in this instrument shall be
addressed to it in care of its Chief Financial Officer at its
executive offices at 6285 Industrial Boulevard, Suite A, Las Vegas, NV
89118, and any notice to the Grantee shall be addressed to the Grantee
at the current address shown on the payroll records of PPI. Any notice
shall be deemed to be duly given if and when properly addressed and
posted by registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the Option
shall in all respects be interpreted in accordance with the Plan. The
Committee shall interpret and construe the Plan and this instrument,
and its interpretations and determinations shall be conclusive and
binding on the parties hereto and any other person
claiming an interest hereunder, with respect to any issue arising
hereunder or thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the law of the State of Nevada, except to the extent
preempted by federal law, which shall to the extent govern.
14. Confidentiality.
The Grantee agrees that, from the time of execution of this
instrument, the Grantee will keep the specific terms and conditions of
this Grant completely confidential and not disclose any such
information to anyone except his or her spouse or tax advisors. To the
extent Grantee shall disclose such matters to his or her spouse or tax
advisors, the Grantee shall advise such persons that they shall
consider themselves bound by the same terms. The parties agree that
the Grantee shall be permitted to release the fact of the grant of the
Option as set forth above as may be required on a financial statement,
tax return or other such business or legal document or as otherwise
may be required by law or a court of appropriate jurisdiction.
IN WITNESS WHEREOF, PPI has caused its duly authorized officer to execute
this Grant of Incentive Stock Option, and the Grantee has placed his or her
signature hereon, effective as of the Date of Grant.
PURCHASE PRO INTERNATIONAL, INC.
By: ________________________________________
Title: _____________________________________
ACCEPTED AND AGREED TO:
By: ________________________________________
Grantee
1998 Stock Option and Incentive Plan - Purchase Pro International Inc.
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