1995 Long Term Incentive Plan

ADVANCED MEDIA, INC.


1995 Long-Term Incentive Plan


1. PURPOSE.


The purpose of the 1995 Long-Term Incentive Plan (the "Plan") is to advance the interests of Advanced Media, Inc. a Delaware corporation (the "Company"), and its shareholders by providing incentives to certain key employees of the Company and its affiliates and to certain other key individuals who perform services for these entities, including those who contribute significantly to the strategic and long-term performance objectives and growth of the Company and its affiliates.


2. ADMINISTRATION.


(a) The Plan shall be determined solely by the Long-Term Incentive Plan Administrative Committee (the "Committee") of the Board of Directors (the "Board") of the Company, as such Committee is from time to time constituted, or any successor committee the Board may designate to administer the Plan; provided that if at any time Rule 16b-3 or any successor rule ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), so permits without adversely affecting the ability of the Plan to comply with the conditions for exemption from Section 16 of the Exchange Act (or any successor provision) provided by Rule 16b-3, the Committee may delegate the administration of the Plan in whole or in part, on such terms and conditions, and to such person or persons as it may determine in its discretion, as it relates to persons not subject to Section 16 of the Exchange Act (or any successor provision). The membership of the Committee or such successor committee shall be constituted so as to comply at all times with the applicable requirements of Rule 16b-3. No member of the Committee shall be eligible or have been eligible within one year prior to his appointment to receive awards under the Plan ("Awards") or to receive awards under any other plan, program or arrangement of the Company or any of its affiliates if such eligibility would cause such member to cease to be a "disinterested person" under Rule 16b-3; provided that if at any time Rule 16b-3 so permits without adversely affecting the ability of the Plan to comply with the conditions for exemption from Section 16 of the Exchange Act (or any successor provision) provided by Rule 16b-3, one or more members of the Committee may cease to be "disinterested persons."


(b) The Committee has all the powers vested in it by the terms of the Plan set forth herein, such powers to include exclusive authority (except as may be delegated as permitted herein) to select the key employees and other key individuals to be granted Awards under the Plan, to determine the type, size and terms of the Award to be made to each individual selected, to modify the terms of any Award that has been granted, to determine the time when awards will be granted, to establish performance objectives, to make any adjustments necessary or desirable as a result of the granting of Awards to eligible individuals located outside the United States and to prescribe the form of the instruments


embodying Awards made under the Plan. The Committee is authorized to interpret the Plan and the Awards granted under the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determination, which it deems necessary or desirable for the administration of the Plan. The Committee (or its delegate as permitted herein) may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to carry it into effect. any decision of the Committee (or its delegate as permitted herein) in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. The Committee may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their members or any officer of the Company to execute and deliver documents or to take any other ministerial action on behalf of the Committee with respect to Awards made or to be made to Plan participants. No member of the Committee and no officer of the Company shall be liable for anything done or omitted to be done by him, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the Plan, except for his own willful misconduct or as expressly provided by statute. Determinations to be made by the Committee under the Plan may be made by its delegates.


3. PARTICIPATION.


(a) Affiliates. If an Affiliate (as hereinafter defined) of the Company wishes to participate in the Plan and its participation shall have been approved by the Board upon the recommendation of the Committee, the board of directors or other governing body of the Affiliate shall adopt a resolution in form and substance satisfactory to the Committee authorizing participation by the Affiliate in the Plan with respect to its key employees or other key individuals performing services for it. As used herein, the term "Affiliate" means any entity in which the Company has a substantial direct or indirect equity interest or which has a substantial direct or indirect equity interest in the Company, as determined by the Committee in its discretion.


An Affiliate participating in the Plan may cease to be a participating company at any time by action of the Board or by action of the board of directors or other governing body of such Affiliate, which latter action shall be effective not earlier than the date of delivery to the Secretary of the Company of a certified copy of a resolution of the Affiliate's board of directors or other governing body taking such action. If the participation in the Plan of an Affiliate shall terminate, such termination shall not relieve it of any obligations theretofore incurred by it, except as may be approved by the Committee in its discretion.


(b) Participants. Consistent with the purposes of the Plan, the Committee shall have exclusive power (except as may be delegated as permitted herein) to select the key employees and other key individuals performing services for the Company, including consultants or independent contractors and others who perform services for the Company and its Affiliates who may participate in the Plan and be granted Awards under the Plan. Eligible individuals may be selected individually or by groups or categories, as determined by the Committee in its discretion. No director of the Company, unless he is an employee or consultant of the Company or is an officer, director or consultant of an Affiliate, shall


be eligible to receive an Award under the Plan. In no event may a corporation be eligible to receive an Award of incentive stock options under the Plan.


4. AWARDS UNDER THE PLAN.


(a) Types of Awards. Awards under the Plan may include, but need not be limited to, one or more of the following types, either alone or in any combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights," (iii) "Restricted Stock," (iv) "Performance Grants" and (v) any other type of Award deemed by the Committee in its discretion to be consistent with the purposes of the Plan (including but not limited to, Awards of or options or similar rights granted with respect to unbundled stock units or components thereof, and Awards to be made to participants who are foreign nationals or are employed or performing services outside the United States). Stock Options, which include "Non-Qualified Stock Options" and "Incentive Stock Options" or combinations thereof, are rights to purchase common shares of the Company and stock of any other class into which such shares may thereafter be changed (the "Common Shares"). Non-Qualified Stock Options and Incentive Stock Options are subject to the terms, conditions and restrictions specified in Paragraph 5. Stock Appreciation Rights are rights to receive (without payment to the Company) cash, Common Shares, other Company securities (which may include, but need not be limited to, unbundled stock units or components thereof, debentures, preferred stock, warrants, securities convertible into Common Shares or other property, and other types of securities including, but not limited to, those of the Company or an Affiliate, or any combination thereof ("Other Company Securities") or property, or other forms of payment, or any combination thereof, as determined by the Committee, based on the increase in the value of the number of Common Shares specified in the Stock Appreciation Right. Stock Appreciation Rights are subject to the terms, conditions and restrictions specified in Paragraph 6. Shares of Restricted Stock are Common Shares which are issued subject to certain restrictions pursuant to Paragraph 7. Performance Grants are contingent awards subject to the terms, conditions and restrictions described in Paragraph 8, pursuant to which the participant may become entitled to receive cash, Common Shares, Other Company Securities or property, or other forms of payment, or any combination thereof, as determined by the Committee.


(b) Maximum Number of Shares that May Be Issued. There may be issued under the Plan (as Restricted Stock, in payment of Performance Grants, pursuant to the exercise of Stock Options or Stock Appreciation Rights, or in payment of or pursuant to the exercise of such other Awards as the Committee, in its discretion, may determine) an aggregate of not more than 10,000,000 Common Shares, subject to adjustment as provided in Paragraph 15. Common Shares issued pursuant to the Plan may be either authorized but unissued shares, treasury shares, reacquired shares, or any combination thereof. If any Common Shares issued as Restricted Stock or otherwise subject to repurchase or forfeiture rights are reacquired by the Company pursuant to such rights, or if any Award is cancelled, terminates or expires unexercised, any Common Shares that would otherwise have been issuable pursuant thereto will be available for issuance under new Awards.


(C) Rights with Respect to
Common Shares and Other Securities.


(i) Unless otherwise determined by the Committee in its
discretion, a participant to whom an Award of Restricted Stock has been
made (and any person succeeding to such a participant's rights pursuant
to the Plan) shall have, after issuance of a certificate or copy
thereof for the number of Common Shares awarded and prior to the
expiration of the Restricted Period or the earlier repurchase of such
Common Shares as herein provided, ownership of such Common Shares,
including the right to vote the same and to receive dividends or other
distributions made or paid with respect to such Common Shares (provided
that such Common Shares, and any new, additional or different shares,
or Other Company Securities or property, or other forms of
consideration which the participant may be entitled to receive with
respect to such Common Shares as a result of a stock split, stock
dividend or any other change in the corporate or capital structure of
the Company, shall be subject to the restrictions hereinafter described
as determined by the Committee in its discretion), subject, however, to
the options, restrictions and limitations imposed thereon pursuant to
the Plan. Notwithstanding the foregoing, unless otherwise determined by
the Committee in its discretion, a participant with whom an Award
agreement is made to issue Common Shares in the future shall have no
rights as a shareholder with respect to Common Shares related to such
agreement until issuance of a certificate to him.


(ii) Unless otherwise determined by the Committee in its
discretion, a participant to whom a grant of Stock Options, Stock
Appreciation Rights, Performance Grants or any other Award is made (and
any person succeeding to such a participant's rights pursuant to the
Plan) shall have no rights as a stockholder with respect to any Common
Shares or as a holder with respect to other securities, if any,
issuable pursuant to any such Award until the date of the issuance of a
stock certificate to him for such Common Shares or other instrument of
ownership, if any. Except as provided in Paragraph 15, no adjustment
shall be made for dividends, distributions or other rights (whether
ordinary or extraordinary, and whether in cash, securities, other
property or other forms of consideration, or any combination thereof)
for which the record date is prior to the date such stock certificate
or other instrument of ownership, if any, is issued.


5. STOCK OPTIONS.


The Committee may grant Stock Options either alone, or in conjunction with Stock Appreciation Rights, Performance Grants or other Awards, either at the time of grant or by amendment thereafter, provided that an Incentive Stock Option may be granted only to an eligible employee of the Company or its parent or subsidiary corporation. Each Stock Option (referred to herein as an "Option") granted under the Plan shall be evidenced by an instrument in such form as the Committee shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions, and with such other terms and conditions, including, but not limited to, restrictions upon the Option or the Common Shares issuable upon exercise thereof, as the Committee, in its discretion, shall establish:


(a) The option price may be less than, equal to, or greater than, the fair market value of the Common Shares subject to such Option at the time the Option is granted, as determined by the Committee, but in no event will such option price be less than 85% of the fair market value of the underlying Common Shares


at the time the Option is granted; provided, however, that in the case of an Incentive Stock Option granted to such an employee, the option price shall not be less than the fair market value of the Common Shares subject to such Option at the time the Option is granted, or if granted to such an employee who owns stock representing more than ten percent of the voting power of all classes of stock of the Company or of its parent or subsidiary (a "Ten Percent Employee"), such option price shall be not less than 110% of such fair market value at the time the Option is granted; provided, further that in no event will such option price be less than the par value of such Common Shares.


(b) The Committee shall determine the number of Common Shares to be subject to each option. The number of Common Shares subject to an outstanding Option may be reduced on a share-for-share or other appropriate basis, as determined by the Committee, to the extent that Common Shares under such Option are used to calculate the cash, Common Shares, Other Company Securities or property, or other forms of payment, or any combination thereof, received pursuant to exercise of a Stock Appreciation Right attached to such Option, or to the extent that any other Award granted in conjunction with such Option is paid.


(c) The Option may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, and shall be exercisable during the grantee's lifetime only by him. Unless the Committee determines otherwise, the Option shall not be exercisable for at least six months after the date of grant, unless the grantee ceases employment or performance of services before the expiration of such six-month period by reason of his disability as defined in Paragraph 12 or his death.


(d) The Option shall not be exercisable:


(i) in the case of any Incentive Stock Option granted to a
Ten Percent Employee, after the expiration of five years from the date
it is granted, and, in the case of any other Option, after the
expiration of ten years from the date it is granted. Any Option may be
exercised during such period only at such time or times and in such
installments as the Committee may establish;


(ii) unless payment in full is made for the shares being
acquired thereunder at the time of exercise, such payment shall be made
in such form (including, but not limited to, cash, Common Shares, or
the surrender of another outstanding Award under the Plan, or any
combination thereof) as the Committee may determine in its discretion;
and


(iii) unless the person exercising the Option has been, at
all times during the period beginning with the date of the grant of the
Option and ending on the date of such exercise, employed by or
otherwise performing services for the Company or an Affiliate, or a
corporation, or a parent or subsidiary of a corporation, substituting
or assuming the Option in a transaction to which Section 424(a) of the
Internal Revenue Code of 1986, as amended, or any successor statutory
provisions thereto (the "Code"), is applicable, except that:


(A) in the case of any Non-Qualified Stock Option, if such
person shall cease to be employed by or otherwise performing
services for the Company or an Affiliate solely by reason of a
period of related Employment as defined in Paragraph 14, he may,
during such period of Related Employment, exercise the
Non-Qualified Stock Option as if he continued such employment or
performance of service; or


(B) if such person shall cease such employment or
performance of services by reason of his disability as defined in
Paragraph 12 or early, normal or deferred retirement under an
approved retirement program of the Company or an Affiliate (or
such other plan or arrangement as may be approved by the
Committee; in its discretion, for this purpose) while holding an
option which has not expired and has not been fully exercised,
such person, at any time within three months (or such other
period determined by the Committee) after the date he ceased
such employment or performance of services (but in no event
after the Option has expired), may exercise the Option with
respect to any shares as to which he could have exercised the
Option on the date he ceased such employment or performance of
services, or with respect to such greater number of shares as
determined by the Committee; or


(C) if such person shall cease such employment or
performance of services for reasons other than Related Employment
disability, early, normal or deferred retirement or death (as
provided elsewhere) while holding an Option which has not expired
and has not been fully exercised, such person may exercise the
Option at any time within three months (or such other period
determined by the Committee) after the date he ceased such
employment or performance of services (but in no event after the
Option has expired), but only to the extent such Option is
exercisable on the date of such termination, or with respect to
such greater number of shares as determined by the Committee; or


(D) if any person to whom an Option has been granted shall
die holding an Option which has not expired and has not been
fully exercised, his executors, administrators, heirs or
distributees, as the case may be, may, at any time within one
year (or such other period determined by the Committee) after
the date of death (but in no event after the Option has expired),
exercise the Option with respect to any shares as to which the
decedent could have exercised the Option at the time of his
death, or with respect to such greater number of shares as
determined by the Committee.


(E) In the case of an Incentive Stock Option, the
amount of aggregate fair market value of Common Shares
(determined at the time of grant of the Option pursuant to
subparagraph 5(a) of the Plan) with respect to which incentive
stock options are exercisable for the first time by an employee
during any calendar year (under all such plans of his employer
corporation any calendar year (under all such plans of his
employer corporation and its parent and its parent and
subsidiary corporations) shall not exceed $100,000.


(F) It is the intent of the Company that Non-Qualified
...