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Business Telecom, Inc.

This is an actual contract by BTI Telecom.

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Sectors: Telecommunications
Governing Law: North Carolina, View North Carolina State Laws
Effective Date: January 01, 1994
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BUSINESS TELECOM, INC.


1994 STOCK PLAN


1. Purpose. This 1994 Stock Plan (the "Plan") is intended to provide incentives:


(a) to employees of Business Telecom, Inc. (the "Company"), or its parent (if any) or any of its present or future subsidiaries (collectively, "Related Corporations"), by providing them with opportunities to purchase Common Stock (as defined below) of the Company pursuant to options granted hereunder that qualify as "incentive stock options" ("ISOs") under Section 422 of the Internal Revenue Code of 1986, as amended, or any successor statute (the "Code");


(b) to directors, employees and consultants of the Company and Related Corporations by providing them with opportunities to purchase Common Stock (as defined below) of the Company pursuant to options granted hereunder that do not qualify as ISOs (nonstatutory options, or "NSOs");


(c) to directors, employees and consultants of the Company and Related Corporations by providing them with bonus awards of Common Stock (as defined below) of the Company ("Stock Bonuses"); and


(d) to directors, employees and consultants of the Company and Related Corporations by providing them with opportunities to make direct purchases of Common Stock (as defined below) of the Company ("Purchase Rights").


Both ISOs and NSOs are referred to hereafter individually as "Options," and Options, Stock Bonuses and Purchase Rights are referred to hereafter collectively as "Stock Rights." As used herein, the terms "parent" and "subsidiary" mean "parent corporation" and "subsidiary corporation," respectively, as those terms are defined in Section 424 of the Code.


2. Administration of the Plan.


(a) The Plan shall be administered by the Board of Directors of the Company (the "Board"); provided, however, in the event the Company (or any successor thereto that maintains this Plan) registers equity securities under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Plan shall thereafter be administered by the Board only if each member of the Board is a "disinterested person" as defined below. Notwithstanding the preceding sentence, the Board may appoint a committee (the "Committee") of two or more of its members to administer this Plan, provided, however, in the event the Company (or any successor thereto that maintains this Plan) registers equity securities under Section 12 of the Exchange Act, then each member of the Committee shall be a "disinterested person" as


defined below. A "disinterested person" is a director who has not received, during the one year period (or such shorter period of time that the Company's equity securities have been registered under Section 12 of the Exchange Act) prior to service as an administrator of the Plan, any benefits pursuant to the Plan, or any other stock award, stock purchase, stock option or stock appreciation rights under any other plan sponsored by the Company or any of the Related Corporations entitling participants to acquire stock, stock options, stock appreciation rights or other equity securities of the Company or any of its Related Corporations. Notwithstanding the preceding sentence, a director shall not be disqualified from status as a "disinterested person" solely by reason of (i) his or her participation in a formula plan satisfying the requirements of Rule 16b-3(c)(2)(ii) promulgated under the Exchange Act, (ii) his or her participation in an on-going securities acquisition plan meeting the conditions of Rule 16b-3(d)(2)(i) promulgated under the Exchange Act, or (iii) his or her election to receive any annual director's fee in either cash or an equivalent amount of the Company's securities, or partly in both.


(c) Subject to ratification of the grant or authorization of each Stock Right by the Board (if so required by applicable law), and subject to the terms of the Plan, the Committee, if so appointed, shall have the authority to:


(i) determine the employees of the Company and Related Corporations (from among the class of employees eligible under Section 3 to receive ISOs) to whom ISOs may be granted, and to determine (from among the class of individuals and entities eligible under Section 3 to receive NSOs, Stock Bonuses and Purchase Rights) to whom NSOs, Stock Bonuses and Purchase Rights may be granted;


(ii) determine the time or times at which Options, Stock Bonuses or Purchase Rights may be granted;


(iii) determine the option price of shares subject to each Option, which price shall not be less than the minimum price specified in Section 6, and the purchase price of shares subject to each Purchase Right;


(iv) determine whether each Option granted shall be an ISO or NSO;


(v) determine (subject to Section 7) the time or times when each Option shall become exercisable and the duration of the exercise period;


(vi) determine whether restrictions such as repurchase options are to be imposed on shares subject to Options, Stock Bonuses and Purchase Rights and the nature of such restrictions, if any; and


(vii) interpret the Plan and prescribe and rescind


rules and regulations relating to it.


If the Committee determines to issue a NSO, it shall take whatever actions it deems necessary, under Section 422 of the Code and the regulations promulgated thereunder, to ensure that such Option is not treated as an ISO. The interpretation and construction by the Committee of any provisions of the Plan or of any Stock Right granted under it shall be final unless otherwise determined by the Board. The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Stock Right granted under it.


(c) The Committee may select one of its members as its chairman, and shall hold meetings at such time and places as it may determine. Acts by a majority of the Committee, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be the valid acts of the Committee. All references in this Plan to the Committee shall mean the Board if no Committee has been appointed. From time to time the Board may increase the size of the Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members thereof and thereafter directly administer the Plan.


3. Eligible Employees and Others. ISOs may be granted to any employee of the Company or any Related Corporation. Those officers of the Company who are not employees may not be granted ISOs under the Plan. NSOs, Stock Bonuses and Purchase Rights may be granted to any director, employee or consultant of the Company or any Related Corporation; provided, however, that no director of the Company who is not also an employee of the Company shall be eligible to receive any Stock Right under the Plan after the time when the Company shall have registered its equity securities under Section 12 of the Exchange Act. Granting of any Stock Right to any individual or entity shall neither entitle that individual or entity to, nor disqualify him or her from, participation in any other grant of Stock Rights.


4. Stock. The stock subject to Stock Rights shall be authorized but unissued shares of Common Stock of the Company, par value $1.00 per share, or such shares of the Company's capital stock into which such class of shares may be converted pursuant to any reorganization, recapitalization, merger, consolidation or the like (the "Common Stock"), or shares of Common Stock reacquired by the Company in any manner. The aggregate number of shares that may be issued pursuant to the Plan is 1,833 shares, subject to adjustment as provided herein. Any such shares may be issued as ISOs, NSOs or Stock Bonuses, or to persons or entities making purchases pursuant to Purchase Rights, so long as the number of shares so issued does not exceed such aggregate number, as adjusted. If any Option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part,


or if the Company shall reacquire any shares issued pursuant to Stock Rights, the unpurchased shares subject to such Options and any shares so reacquired by the Company shall again be available for grants of Stock Rights under the Plan.


5. Granting of Stock Rights. Stock Rights may be granted under the Plan at any time after the Effective Date, as set forth in Section 16, and prior to 10 years thereafter. The date of grant of a Stock Right under the Plan will be the date specified by the Committee at the time it grants the Stock Right; provided, however, that such date shall not be prior to the date on which the Committee acts. The Committee shall have the right, with the consent of the optionee, to convert an ISO granted under the Plan to a NSO pursuant to Section 17.


6. Minimum Price; ISO Limitations.


(a) The price per share specified in the agreement relating to each NSO, Stock Bonus or Purchase Right granted under the Plan shall be established by the Committee, taking into account any noncash consideration to be received by the Company from the recipient of Stock Rights.


(b) The price per share specified in the agreement relating to each ISO granted under the Plan shall not be less than the fair market value per share of Common Stock on the date of such grant. In the case of an ISO to be granted to an employee owning stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Related Corporation, the price per share specified in the agreement relating to such ISO shall not be less than 110% of the fair market value per share of Common Stock on the date of the grant.


(c) In no event shall the aggregate fair market value (determined at the time an ISO is granted) of Common Stock for which ISOs granted to any employee are exercisable for the first time by such employee during any calendar year (under all stock option plans of the Company and any Related Corporation) exceed $100,000; provided that this Section shall have no force or effect to the extent that its inclusion in the Plan is not necessary for Options issued as ISOs to qualify as ISOs pursuant to Section 422 of the Code.


(d) If, at the time an Option is granted under the Plan, the Company's Common Stock is publicly traded, "fair market value" shall be determined as of the last business day for which the prices or quotes discussed in this sentence are available prior to the time such Option is granted and shall mean:


(i) the average as of the close of business on that date of the high and low prices of the Common Stock on the principal national securities exchange on which the Common Stock is traded, if the Common Stock is then traded on a national securities exchange;


(ii) the last reported sale price as of the close of business on that date of the Common Stock on the Nasdaq National Market System (the "NASDAQ/NMS"), if the Common Stock is not then traded on a national securities exchange but is then traded on the NASDAQ/NMS; or


(iii) the closing bid price or average of bid prices last quoted on that date by an established quotation service, if the Common Stock is not reported on the NASDAQ/NMS.


However, if the Common Stock is not publicly traded at the time an Option is granted under the Plan, "fair market value" shall be deemed to be the fair value of the Common Stock as determined by the Committee after taking into consideration
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