Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 146 767K
2: EX-3.1 Restated Certificate of Incorporation 29 135K
3: EX-3.3 By-Laws of the Registrant 16 79K
4: EX-10.1 1997 Stock Option Plan 13 55K
13: EX-10.10 Form of Option Stockholders Agreement 9 48K
14: EX-10.11 Stock Purchase Agreement Dated March 9, 1998 39 183K
15: EX-10.12 Stock Purchase Agreement Dated September 9, 1998 24 114K
16: EX-10.13 Stock and Warrant Purchase Agreement 31 143K
17: EX-10.14 Stock Purchase Agreement Dated May 17, 2000 22 118K
18: EX-10.15 Stock Purchase Agreement Dated May 17, 2000 29 161K
19: EX-10.16 Form of Warrant Delivered to the Purchasers 18 80K
20: EX-10.17 Shareholder Agreement 27 65K
21: EX-10.18 Amendment to Shareholders Agreement 4 30K
22: EX-10.19 Amended and Restated Shareholders Agreement 13 69K
5: EX-10.2 1999 Stock Option Plan 12 55K
23: EX-10.20 Walker and Jaeckle Shareholder Agreement 15 43K
24: EX-10.21 Stock Option Agreement 5 38K
25: EX-10.22 Amended and Restated Stockholders Agreement 46 188K
26: EX-10.23 Amend. #1 to Amended & Restated Stockholders Agmt 5 27K
27: EX-10.24 Amend #2 Waiver of Amended & Restated Stockholders 5 28K
28: EX-10.25 2nd Amended & Restated Stockholders Agmt 43 211K
29: EX-10.26 Amended & Restated Registration Rights Agmt 38 137K
30: EX-10.27 Amend #1 to Amended & Restated Registration Rights 4 28K
31: EX-10.28 2nd Amended & Restated Registration Rights 29 130K
32: EX-10.29 Indemnification Agreement 11 43K
6: EX-10.3 2000 Stock Incentive Plan 7 45K
33: EX-10.31 Guarantee Signed by Time, Inc. 1 17K
34: EX-10.32 Letter Agreement 3 24K
35: EX-10.33 Consulting Agreement 9 45K
36: EX-10.34 Employment Agreement 4 27K
37: EX-10.35 Letter Agreement 3 25K
38: EX-10.36 Employment Agreement 2 23K
39: EX-10.37 Subordinated Promissory Note 3 25K
40: EX-10.38 Subordinated Promissory Note 3 25K
41: EX-10.39 Subordinated Promissory Note 3 25K
7: EX-10.4 Form of Non-Qualified Stock Option Agreement 3 26K
42: EX-10.40 Subordinated Promissory Note 3 25K
43: EX-10.41 Promissory Note 2 20K
44: EX-10.42 Promissory Note 2 20K
45: EX-10.43 Promissory Note 2 20K
46: EX-10.44 Promissory Note 2 20K
47: EX-10.45 Promissory Note 2 20K
48: EX-10.46 Promissory Note 2 20K
49: EX-10.47 Loan Exchange Agreement 5 28K
50: EX-10.48 Revolving Promissory Note 3 25K
51: EX-10.49 Credit Agreement 47 170K
8: EX-10.5 Form of Option Shareholders Agreement 15 46K
52: EX-10.50 Promissory Note 3 21K
53: EX-10.51 Promissory Note 3 22K
54: EX-10.52 Lease 80 323K
55: EX-10.53 Lease 64 277K
56: EX-10.54 Settlement Agreement 8 51K
57: EX-10.55 Sales Representative Agreement 18 59K
58: EX-10.56 Limited Liability Company Agreement 25 102K
59: EX-10.59 Letter Agreement 2 20K
9: EX-10.6 Form of Non-Qualified Stock Option Agreement 3 26K
60: EX-10.60 Master Agreement 13 69K
61: EX-10.61 Revolving Promissory Note 4 25K
10: EX-10.7 Form of Option Shareholders Agreement 10 43K
11: EX-10.8 Form of Nonstatutory Stock Option Agreement 6 35K
12: EX-10.9 Form of Incentive Stock Option Agreement 6 35K
62: EX-16.1 Letter Regarding Change in Certifying Accountant 1 16K
63: EX-21.1 Subsidiaries of the Registrant 1 15K
64: EX-23.1 Consent of Arthur Andersen LLP 1 15K
65: EX-27.1 Financial Data Schedule 2 18K
EX-10.1 — 1997 Stock Option Plan
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Exhibit 10.1
NEWSUB SERVICES, INC.
1997 STOCK OPTION PLAN
1. Establishment and Purpose.
There is hereby adopted the NewSub Services, Inc. 1997 Stock Option Plan
(the "Plan"). This Plan is intended to promote the interests of the Company (as
defined below) and the stockholders of NewSub Services, Inc. ("NSS") by
providing officers and other employees of the Company with appropriate
incentives and rewards to encourage them to enter into and continue in the
employ of the Company and to acquire a proprietary interest in the long-term
success of the Company; and to reward the performance of individual officers,
other employees, consultants and directors in fulfilling their responsibilities
for long-range achievements.
2. Definitions.
As used in the Plan, the following definitions apply to the terms indicated
below:
(a) "Agreement" shall mean the written agreement between NSS and a
Participant evidencing an Incentive Award.
(b) "Board of Directors" shall mean the Board of Directors of NSS.
(c) "Cause" shall mean (1) the willful and continued failure by the
Participant substantially to perform his or her duties and obligations
to the Company (other than any such failure resulting from his or her
incapacity due to physical or mental illness); (2) the willful
engaging by the Participant in misconduct which is materially
injurious to the Company; (3) the commission by the Participant of a
felony; or (4) the commission by the Participant of a crime against
the Company which is materially injurious to the Company. For
purposes of this Section 2(c), no act, or failure to act, on a
Participant's part shall be considered "willful" unless done, or
omitted to be done, by the Participant in bad faith and without
reasonable belief that his or her action or omission was in the best
interest of the Company. Determination of Cause shall be made by the
Committee in its sole discretion.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any regulations promulgated thereunder.
(e) "Committee" shall mean the Stock Option Committee of the Board of
Directors, or, if no such Committee has been constituted by the Board
of Directors, then the Board of Directors of NSS.
(f) "Company" shall mean, collectively, NSS and each of its Subsidiaries
now held or hereafter acquired.
(g) "Company Stock" shall mean the Class B common stock of NSS.
(h) "Disability" shall mean: (1) any physical or mental condition that
would qualify a Participant for a disability benefit under the long-
term disability plan maintained by the Company and applicable to him
or her; (2) when used in connection with the exercise of an Incentive
Stock Option following termination of employment, disability within
the meaning of Section 22(e)(3) of the Code; or (3) such other
condition as may be determined in the sole discretion of the Committee
to constitute Disability.
(i) "Effective Date" shall mean the date upon which this Plan is adopted
by the Board of Directors.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(k) "Executive Officer" shall have the meaning set forth in Rule 3b-7
promulgated under the Exchange Act.
(l) The "Fair Market Value" of a share of Company Stock, as of a date of
determination, shall mean (1) the closing sales price per share of
Company Stock on the national securities exchange on which such stock
is principally traded for the last preceding date on which there was a
sale of such stock on such exchange, or (2) if the shares of Company
Stock are not listed or admitted to trading on any such exchange, the
closing price as reported by the NASDAQ Stock Market for the last
preceding date on which there was a sale of such stock on such
exchange, or (3) if the shares of Company Stock are not then listed on
the NASDAQ Stock Market, the average of the highest reported bid and
lowest reported asked prices for the shares of Company Stock as
reported by the National Association of Securities Dealers, Inc.
Automated Quotations System for the last preceding date on which there
was a sale of such stock in such market, or (4) if the shares of
Company Stock are not then listed on a national securities exchange or
traded in an over-the-counter market or the value of such shares is
not otherwise determinable, such value as determined by the Committee
in good faith.
(m) "Incentive Award" shall mean any Option or Other Award granted
pursuant to the terms of the Plan.
(n) "Incentive Stock Option" shall mean an Option that is an "incentive
stock option" within the meaning of Section 422 of the Code, or any
successor provision, and that is designated by the Committee as an
Incentive Stock Option.
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(o) "Non-Qualified Stock Option" shall mean an Option other than an
Incentive Stock Option.
(p) "Option" shall mean an option to purchase shares of Company Stock
granted pursuant to Section 7.
(q) "Other Award" shall mean an award granted pursuant to Section 8
hereof.
(r) "Partial Exercise" shall mean an exercise of an Incentive Award for
less than the full extent permitted at the time of such exercise.
(s) "Participant" shall mean (1) an employee or consultant of the Company
to whom an Incentive Award is granted pursuant to the Plan and (2)
upon the death of an individual described in (1), his or her
successors, heirs, executors and administrators, as the case may be.
(t) "Reload Option" shall mean a Non-Qualified Stock Option granted
pursuant to Section 7(c)(5).
(u) "Rule 16b-3" shall mean the Rule 16b-3 promulgated under the Exchange
Act, as amended from time to time.
(v) "Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
(w) "Subsidiary" shall mean a "subsidiary corporation" within the meaning
of Section 424(f) of the Code.
3. Stock Subject to the Plan
(a) Shares Available for Awards
The maximum number of shares of Company Stock reserved for issuance
under the Plan shall be 708 shares (subject to adjustment as provided
herein). Such shares may be authorized but unissued Company Stock or
authorized and issued Company Stock held in NSS's treasury.
The present authorized capitalization of the Company consists of 7,500
shares of Class A voting Common Stock having no par value and 7,500
shares of Class B non-voting Common Stock having no par value. There
are currently 2,000 shares of Class A Common Stock and 6,792 shares of
Class B Common Stock outstanding, or a total of 8,792 shares of Common
Stock outstanding. Incentive Awards granted pursuant to this Plan
shall be issued on the assumption that the Company has (i) amended its
Certificate of Incorporation to increase its
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authorized capital stock to 7,500 shares of Class A voting Common
Stock having no par value and 35,000,000 shares of Class B non-voting
Common Stock having no par value and (ii) distributed 3,684 shares of
Class B non-voting Common Stock for each outstanding share of Class A
and Class B Common Stock of the Company as of the date of adoption of
this Plan (the "Recapitalization"). The Company does not intend to
effect the Recapitalization currently but may, in its sole discretion,
do so at any time in the future. Accordingly, in the event that the
Recapitalization is not effected, the maximum number of shares of
---
Company stock reserved for issuance under the Plan shall be equal to
the 708 shares recited in the immediately preceding paragraph. In the
event that the Recapitalization is effected, then the maximum number
of shares of Company stock reserved for issuance under the Plan shall
be equal to 708 multiplied by 3,684, or 2,608,272. Since Incentive
Awards granted pursuant to this Plan shall be issued on the assumption
that the Recapitalization has been effected, if the Recapitalization
is not effected, then the number of shares of Company stock subject to
---
an Incentive Award shall be divided by 3,684 and the exercise price
per share shall be multiplied by 3,684.
The Committee may direct that any stock certificate evidencing shares
issued pursuant to the Plan shall bear a legend setting forth such
restrictions on transferability as may apply to such shares pursuant
to the Plan.
(b) Adjustment for Change in Capitalization.
In the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Company Stock, or
other property), recapitalization, Company Stock split, reverse
Company Stock split, reorganization, merger, consolidation, spin-off,
combination, repurchase, or share exchange, or other similar corporate
transaction or event, affects the Company Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement
of the rights of Participants under the Plan, then the Committee shall
make such equitable changes or adjustments as it deems necessary or
appropriate to any or all of (1) the number and kind of shares of
Company Stock which may thereafter be issued in connection with
Incentive Awards, (2) the number and kind of shares of Company Stock
issued or issuable in respect of outstanding Incentive Awards, (3) the
exercise price, grant price or purchase price relating to any
Incentive Award, and (4) the maximum number of shares subject to
Incentive Awards which may be awarded to any employee during any tax
year of the Company; provided that, with respect to Incentive Stock
Options, such adjustment shall be made in accordance with Section 424
of the Code. Notwithstanding anything contained herein, the Committee
shall not make any such changes or adjustments with respect to the
Recapitalization defined in 3(a) above as Incentive Awards shall be
issued on the assumption that the Recapitalization has been effected.
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(c) Re-use of Shares.
The following shares of Company Stock shall again become available for
Incentive Awards: except as provided below, any shares subject to an
Incentive Award that remain unissued upon the cancellation, surrender,
exchange or termination of such award for any reason whatsoever.
Notwithstanding the foregoing, upon the exercise of any Incentive
Award granted in tandem with any other Incentive Awards, such related
Awards shall be cancelled to the extent of the number of shares of
Company Stock as to which the Incentive Award is exercised and such
number of shares shall no longer be available for Incentive Awards
under the Plan.
4. Administration of the Plan.
The Plan shall be administered by the Committee. The Committee shall have
the authority in its sole discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Incentive Awards; to determine the persons to
whom and the time or times at which Incentive Awards shall be granted; to
determine the type and number of Incentive Awards to be granted, the number of
shares of Stock to which an Award may relate and the terms, conditions,
restrictions and performance criteria relating to any Incentive Award; to
determine whether, to what extent, and under what circumstances an Incentive
Award may be settled, cancelled, forfeited, exchanged, or surrendered; to make
adjustments in the performance goals in recognition of unusual or non-recurring
events affecting the Company or the financial statements of the Company (to the
extent not inconsistent with Section 162(m) of the Code, if applicable), or in
response to changes in applicable laws, regulations, or accounting principles;
to construe and interpret the Plan and any Incentive Award; to prescribe, amend
and rescind rules and regulations relating to the Plan; to determine the terms
and provisions of Agreements; and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
The Committee may, in its absolute discretion, without amendment to the
Plan, (a) accelerate the date on which any Option granted under the Plan becomes
exercisable, waive or amend the operation of Plan provisions respecting exercise
after termination of employment or otherwise adjust any of the terms of such
Option, and (b) waive any condition imposed hereunder with respect to any
Incentive Award or otherwise adjust any of the terms applicable to any such
Incentive Award.
No member of the Committee shall be liable for any action, omission or
determination relating to the Plan, and the Company shall indemnify (to the
extent permitted under Connecticut law and the bylaws of the Company) and hold
harmless each member of the Committee and each other director or employee of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the
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approval of the Committee) arising out of any action, omission or determination
relating to the Plan, unless, in either case, such action, omission or
determination was taken or made by such member, director or employee in bad
faith and without reasonable belief that it was in the best interests of the
Company.
5. Eligibility.
The persons who shall be eligible to receive Incentive Awards pursuant to
the Plan shall be such employees of the Company (including officers of the
Company), consultants and directors of the Company as the Committee shall select
from time to time.
6. Awards Under the Plan; Agreement.
The Committee may grant Options and Other Awards in such amounts and with
such terms and conditions as the Committee shall determine, subject to the
provisions of the Plan.
Each Incentive Award granted under the Plan shall be evidenced by an
Agreement which shall contain such provisions as the Committee may in its sole
discretion deem necessary or desirable. By accepting an Incentive Award, a
Participant thereby agrees that the award shall be subject to all of the terms
and provisions of the Plan and the applicable Agreement.
7. Options.
(a) Identification of Options.
Each Option shall be clearly identified in the applicable Agreement as
either an Incentive Stock Option or a Non-Qualified Stock Option.
(b) Exercise Price.
Each Agreement with respect to an Option shall set forth the amount
(the "option exercise price") payable by the grantee to the Company
upon exercise of the Option. The option exercise price per share
shall be determined by the Committee; provided, however, that in the
case of an Incentive Stock Option, the option exercise price shall in
no event be less than the Fair Market Value of a share of Company
Stock on the date the Option is granted.
(c) Term and Exercise of Options.
(1) Unless the applicable Agreement provides otherwise, an Option
shall become exercisable as to one hundred (100%) percent of the
shares covered thereby on the fourth anniversary of the date of
grant. The Committee shall determine the expiration date of each
Option; provided, however, that no Incentive Stock Option shall
be exercisable more than 10 years after the date of grant. Unless
the applicable Agreement provides
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otherwise, no Option shall be exercisable prior to the first
anniversary of the date of grant.
(2) An Option may be exercised for all or any portion of the shares
as to which it is exercisable, provided that no Partial Exercise
of an Option shall be for an aggregate exercise price of less
than $1,000. The Partial Exercise of an Option shall not cause
the expiration, termination or cancellation of the remaining
portion thereof.
(3) An Option shall be exercised by delivering notice to NSS's
principal office, to the attention of its Secretary. Such notice
shall be accompanied by the applicable Agreement, shall specify
the number of shares of Company Stock with respect to which the
Option is being exercised and the effective date of the proposed
exercise and shall be signed by the Participant or other person
then having the right to exercise the Option. Payment for shares
of Company Stock purchased upon the exercise of an Option shall
be made on the effective date of such exercise in cash or by
certified check, bank cashier's check or wire transfer.
(4) Certificates for shares of Company Stock purchased upon the
exercise of an Option shall be issued in the name of the
Participant or other person entitled to receive such shares, and
delivered to the Participant or such other person as soon as
practicable following the effective date on which the Option is
exercised.
(5) The Committee shall have the authority to specify, at the time of
grant or, with respect to Non-Qualified Stock Options, at or
after the time of grant, that a Participant shall be granted a
new Non-Qualified Stock Option (a "Reload Option") for a number
of shares equal to the number of shares surrendered by the
Participant upon exercise of all or a part of an Option in the
manner described in Section 7(c)(3) above, subject to the
availability of shares of Company Stock under the Plan at the
time of such exercise. Reload Options shall be subject to such
conditions as may be specified by the Committee in its
discretion, subject to the terms of the Plan.
(d) Limitations on Incentive Stock Options.
(1) To the extent that the aggregate Fair Market Value of shares of
Company Stock with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any
calendar year under the Plan and any other stock option plan of
the Company (or any Subsidiary) shall exceed $100,000, such
Options shall be treated as Non-Qualified Stock Options. Such
Fair Market Value shall be determined as of the date on which
each such Incentive Stock Option is granted.
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(2) No Incentive Stock Option may be granted to an individual if, at
the time of the proposed grant, such individual owns (or is
attributed to own by virtue of the Code) stock possessing more
than ten percent of the total combined voting power of all
classes of stock of the Company or any Subsidiary unless (i) the
exercise price of such Incentive Stock Option is at least 110
percent of the Fair Market Value of a share of Company Stock at
the time such Incentive Stock Option is granted and (ii) such
Incentive Stock Option is not exercisable after the expiration of
five years from the date such Incentive Stock Option is granted.
(e) Effect of Termination of Employment.
(1) Unless the applicable Agreement provides otherwise, in the event
that the employment of a Participant with the Company shall
terminate for any reason other than Cause, Disability or death,
(i) Options granted to such Participant, to the extent that they
are exercisable at the time of such termination, shall remain
exercisable until the date that is three months after such
termination, on which date they shall expire, and (ii) Options
granted to such Participant, to the extent that they were not
exercisable at the time of such termination, shall expire at the
close of business on the date of such termination. The three-
month period described in this Section 7(e)(1) shall be extended
to one year from the date of such termination in the event of the
Participant's death during such three-month period.
Notwithstanding the foregoing, no Option shall be exercisable
after the expiration of its term.
(2) Unless the applicable Agreement provides otherwise, in the event
that the employment of a Participant with the Company shall
terminate on account of the Disability or death of the
Participant, (i) Options granted to such Participant, to the
extent that they were exercisable at the time of such
termination, shall remain exercisable until the first anniversary
of such termination, on which date they shall expire, and (ii)
Options granted to such Participant, to the extent that they were
not exercisable at the time of such termination, shall expire at
the close of business on the date of such termination; provided,
however, that no Option shall be exercisable after the expiration
of its term.
(3) In the event of the termination of a Participant's employment for
Cause, all outstanding Options granted to such Participant shall
expire at the commencement of business on the date of such
termination.
8. Other Awards.
Other forms of Incentive Awards ("Other Awards") valued in whole or in part
by
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reference to, or otherwise based on, Company Stock may be granted either alone
or in addition to other Incentive Awards under the Plan. Subject to the
provisions of the Plan, the Committee shall have sole and complete authority to
determine the persons to whom and the time or times at which such Other Awards
shall be granted, the number of shares of Company Stock to be granted pursuant
to such Other Awards and all other conditions of such Other Awards.
9. Rights as a Stockholder.
No person shall have any rights as a stockholder with respect to any shares
of Company Stock covered by or relating to any Incentive Award until the date of
issuance of a stock certificate with respect to such shares. Except as
otherwise expressly provided in Section 3(c), no adjustment to any Incentive
Award shall be made for dividends or other rights for which the record date
occurs prior to the date such stock certificate is issued.
10. No Special Employment Rights; No Right to Incentive Award.
Nothing contained in the Plan or any Agreement shall confer upon any
Participant any right with respect to the continuation of employment by the
Company or interfere in any way with the right of the Company, subject to the
terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the
Participant.
No person shall have any claim or right to receive an Incentive Award
hereunder. The Committee's granting of an Incentive Award to a participant at
any time shall neither require the Committee to grant any other Incentive Award
to such Participant or other person at any time or preclude the Committee from
making subsequent grants to such Participant or any other person.
11. Securities Matters.
(a) NSS shall be under no obligation to effect the registration pursuant
to the Securities Act of any interests in the Plan or any shares of
Company Stock to be issued hereunder or to effect similar compliance
under any state laws. Notwithstanding anything herein to the contrary,
NSS shall not be obligated to cause to be issued or delivered any
certificates evidencing shares of Company Stock pursuant to the Plan
unless and until NSS is advised by its counsel that the issuance and
delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authority and the requirements of
any securities exchange on which shares of Company Stock are traded.
The Committee may require, as a condition of the issuance and delivery
of certificates evidencing shares of Company Stock pursuant to the
terms hereof, that the recipient of such shares make such agreements
and representations, and that such certificates bear such legends, as
the Committee, in its sole discretion, deems necessary or desirable.
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(b) The transfer of any shares of Company Stock hereunder shall be
effective only at such time as counsel to NSS shall have determined
that the issuance and delivery of such shares is in compliance with
all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Company
Stock are traded. The Committee may, in its sole discretion, defer the
effectiveness of any transfer of shares of Company Stock hereunder in
order to allow the issuance of such shares to be made pursuant to
registration or an exemption from registration or other methods for
compliance available under federal or state securities laws. The
Committee shall inform the Participant in writing of its decision to
defer the effectiveness of a transfer. During the period of such
deferral in connection with the exercise of an Option, the Participant
may, by written notice, withdraw such exercise and obtain the refund
of any amount paid with respect thereto.
12. Withholding Taxes.
Whenever shares of Company Stock are to be delivered pursuant to an
Incentive Award, the Company shall have the right to require the Participant to
remit to the Company in cash an amount sufficient to satisfy any federal, state
and local withholding tax requirements related thereto. With the approval of
the Committee, a Participant may satisfy the foregoing requirement by electing
to have the Company withhold from delivery shares of Company Stock having a
value equal to the amount of tax to be withheld. Such shares shall be valued at
their Fair Market Value on the date on which the amount of tax to be withheld is
determined (the "Tax Date"). Fractional share amounts shall be settled in cash.
Such a withholding election may be made with respect to all or any portion of
the shares to be delivered pursuant to an Incentive Award.
13. Notification Upon Disqualifying Disposition Under Section 421(b) of the
Code.
Each Agreement with respect to an Incentive Stock Option shall require the
Participant to notify the Company of any disposition of shares of Company Stock
issued pursuant to the exercise of such Option under the circumstances described
in Section 421(b) of the Code (relating to certain disqualifying dispositions),
within 10 days of such disposition.
14. Amendment or Termination of the Plan.
The Board of Directors may, at any time, suspend or terminate the Plan or
revise or amend it in any respect whatsoever; provided, however, that
stockholder approval shall be required if and to the extent required by Rule
16b-3 or by any comparable or successor exemption under which the Board of
Directors believes it is appropriate for the Plan to qualify, or if and to the
extent the Board of Directors determines that such approval is appropriate for
purposes of satisfying Section 162(m) or 422 of the Code. Incentive Awards may
be granted under the Plan prior to the receipt of such stockholder approval but
each such grant shall be subject in its entirety to such approval and no award
may be exercised, vested or otherwise satisfied prior to the receipt of such
approval. Nothing herein shall restrict the Committee's ability to exercise its
discretionary authority pursuant to Section 4, which discretion may be
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exercised without amendment to the Plan. No action hereunder may, without the
consent of a Participant, reduce the Participant's rights under any outstanding
Incentive Award.
15. Transfers Upon Death; Nonassignability.
Upon the death of a Participant, outstanding Incentive Awards granted to
such Participant may be exercised only by the executor or administrator of the
Participant's estate or by a person who shall have acquired the right to such
exercise by will or by the laws of descent and distribution. No transfer of an
Incentive Award by will or the laws of descent and distribution shall be
effective to bind the Company unless the Committee shall have been furnished
with (a) written notice thereof and with a copy of the will and/or such evidence
as the Committee may deem necessary to establish the validity of the transfer
and (b) an agreement by the transferee to comply with all the terms and
conditions of the Incentive Award that are or would have been applicable to the
Participant and to be bound by the acknowledgments made by the Participant in
connection with the grant of the Incentive Award.
During a Participant's lifetime, the Committee may permit the transfer,
assignment or other encumbrance of an outstanding Option unless (y) such Option
is an Incentive Stock Option and the Committee and the Participant intend that
it shall retain such status, or (z) such Option is meant to qualify for the
exemptions available under Rule 16b-3, nontransferability is necessary under
Rule 16b-3 in order for the award to so qualify and the Committee and the
Participant intend that it shall continue to so qualify. Subject to any
conditions as the Committee may prescribe, a Participant may, upon providing
written notice to the Secretary of NSS, elect to transfer any or all Options
granted to such Participant pursuant to the Plan to members of his or her
immediate family, including, but not limited to, children, grandchildren and
spouse or to trusts for the benefit of such immediate family members or to
partnerships in which such family members are the only partners; provided,
however, that no such transfer by any Participant may be made in exchange for
consideration.
16. Expenses and Receipts.
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Incentive Award will be used for
general corporate purposes.
17. Failure to Comply.
In addition to the remedies of the Company elsewhere provided for herein,
failure by a Participant (or beneficiary) to comply with any of the terms and
conditions of the Plan or the applicable Agreement, unless such failure is
remedied by such Participant (or beneficiary) within ten days after notice of
such failure by the Committee, shall be grounds for the cancellation and
forfeiture of such Incentive Award, in whole or in part, as the Committee, in
its absolute discretion, may determine.
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18. Effective Date and Term of Plan.
The Plan became effective on the Effective Date, but the Plan (and any
grants of Incentive Awards made prior to stockholder approval of the Plan) shall
be subject to the requisite approval of the stockholders of NSS. In the absence
of such approval, such Incentive Awards shall be null and void. Unless earlier
terminated by the Board of Directors, the right to grant Incentive Awards under
the Plan will terminate on the tenth anniversary of the Effective Date.
Incentive Awards outstanding at Plan termination will remain in effect according
to their terms and the provisions of the Plan.
19. Applicable Law.
Except to the extent preempted by any applicable federal law, the Plan will
be construed and administered in accordance with the laws of the State of
Connecticut, without reference to its principles of conflicts of law.
20. Participant Rights.
No Participant shall have any claim to be granted any award under the Plan,
and there is no obligation for uniformity of treatment for Participants. Except
as provided specifically herein, a Participant or a transferee of an Incentive
Award shall have no rights as a stockholder with respect to any shares covered
by any award until the date of the issuance of a Company Stock certificate to
him or her for such shares.
21. Unfunded Status of Awards.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant pursuant to an Incentive Award, nothing contained in the Plan or any
Agreement shall give any such Participant any rights that are greater than those
of a general creditor of the Company.
22. Beneficiary.
A Participant may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Participant, the executor or administrator of the Participant's
estate shall be deemed to be the grantee's beneficiary.
23. Interpretation.
The Plan is designed and intended to comply with Rule 16b-3 and, to the
extent applicable, with Section 162(m) of the Code, and all provisions hereof
shall be construed in a manner to so comply.
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24. Severability.
If any provision of the Plan is held to be invalid or unenforceable, the
other provisions of the Plan shall not be affected but shall be applied as if
the invalid or unenforceable provision had not been included in the Plan.
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