Exhibit 10.1
GLOBALOPTIONS GROUP, INC.
2006 LONG-TERM INCENTIVE PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
GlobalOptions Group, Inc., a Delaware corporation (the "COMPANY" or
"GLOBALOPTIONS"), hereby establishes the GlobalOptions Group, Inc. 2006
Long-Term Incentive Plan (the "PLAN"). The general purposes of the Plan are to
promote the long-term financial interest of GlobalOptions, including growth in
the value of GlobalOptions' equity and enhancement of long-term stockholder
return, by: (i) attracting and retaining persons eligible to participate in the
Plan; (ii) motivating Plan participants, by means of appropriate incentives, to
achieve long-range goals; (iii) providing incentive compensation opportunities
that are competitive with those of other similar companies; and (iv) further
aligning Plan participants' interests with those of other stockholders of
GlobalOptions through compensation that is based on GlobalOptions' Common Stock,
as defined below.
2. DEFINITIONS
Under the Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "AFFILIATE" means any entity, whether now or hereafter existing,
which controls, is controlled by, or is under common control with, the Company
(including, but not limited to, subsidiaries, joint ventures, limited liability
companies, and partnerships), as determined by the Committee.
(b) "AWARD" means any stock option, stock appreciation right, stock
award, performance award, or other stock-based award relating to the Common
Stock or other securities of the Company granted pursuant to the provisions of
the Plan.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CHANGE IN CONTROL" shall be deemed to have occurred if: (1) a
tender offer (or series of related offers) shall be made and consummated for the
ownership of 50% or more of the outstanding voting securities of the Company,
unless as a result of such tender offer more than 50% of the outstanding voting
securities of the surviving or resulting corporation shall be owned in the
aggregate by the stockholders of the Company (as of the time immediately prior
to the commencement of such offer), any employee benefit plan of the Company or
its Affiliates; (2) the Company shall be merged or consolidated with another
corporation, unless as a result of such merger or consolidation more than 50% of
the outstanding voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the stockholders of the Company (as of the
time immediately prior to such transaction), any employee benefit plan of the
Company or its Affiliates; (3) the Company shall sell substantially all of its
assets to another corporation that is not wholly owned by the Company, unless as
a result of such sale more than 50% of such assets shall be owned in the
aggregate by the stockholders of the Company (as of the time immediately prior
to such transaction), any employee benefit plan of the Company or its
Affiliates; or (4) a Person (as defined below) shall acquire 50% or more of the
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outstanding voting securities of the Company (whether directly, indirectly,
beneficially or of record), unless as a result of such acquisition more than 50%
of the outstanding voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the stockholders of the Company (as of the
time immediately prior to the first acquisition of such securities by such
Person), any employee benefit plan of the Company or its Affiliates.
For purposes of this definition of "CHANGE IN CONTROL", ownership of
voting securities shall take into account and shall include ownership as
determined by applying the provisions of Rule 13d-3(d)(I)(i) (as in effect on
the date hereof) under the Exchange Act. In addition, for such purposes,
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof; however, a Person shall
not include (A) the Company or any of its Affiliates; (B) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
any of its Affiliates; (C) an underwriter temporarily holding securities
pursuant to an offering of such securities; or (D) a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportion as their ownership of stock of the Company.
(e) "CODE" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder. A reference to any provision of the Code
shall include reference to any successor provision of the Code.
(f) "COMMITTEE" means the Compensation Committee of the Board, which
shall consist of three or more directors who are "Non-Employee Directors" (as
such term is defined in Rule 16b-3) and "Outside Directors" (as such term is
defined in Section 162(m) of the Code) serving at the pleasure of the Board.
(g) "COMMON STOCK" means shares of common stock, par value of $0.001 per
share, of the Company.
(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any successor thereto.
(i) "FAIR MARKET VALUE" means, the closing price of publicly traded
shares of Common Stock on the principal securities exchange on which shares of
Common Stock are listed (if the shares of Common Stock are so listed), on the
business day immediately prior to the grant, exercise or the determination of
certain withholding tax obligations, as the case may be, if not so listed or
regularly quoted, the mean between the closing bid and asked prices of publicly
traded shares of Common Stock in the over-the-counter market, on the business
day immediately prior to the grant, exercise or the determination of certain
withholding tax obligations, as the case may be, or, if such bid and asked
prices shall not be available, as reported by any nationally recognized
quotation service selected by the Company, on the business day immediately prior
to the grant, exercise or the determination of certain withholding tax
obligations, as the case may be, or as determined by the Committee in a manner
consistent with the provisions of the Code.
(j) "GRANT AGREEMENT" means a written or electronic document
memorializing the terms and conditions of an Award granted pursuant to the
provisions of the Plan.
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3. ADMINISTRATION
(a) ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee.
(b) POWERS OF THE COMMITTEE. The Committee shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in its
sole and absolute discretion, to grant Awards under the Plan, prescribe Grant
Agreements evidencing such Awards and establish programs for granting Awards.
The Committee shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to: (1) determine the eligible persons to
whom, and the time or times at which Awards shall be granted; (2) determine the
types of Awards to be granted, including determining which Options under the
Plan shall be incentive options and which shall be non-qualified options; (3)
determine the number of shares of Common Stock to be covered by or used for
reference purposes for each Award; (4) impose such terms, limitations,
restrictions and conditions upon any such Award as the Committee shall deem
appropriate; (5) subject to the limitations of Sections 6(a)(2) and 6(b)(2),
modify, amend, extend or renew outstanding Awards, or accept the surrender of
outstanding Awards and substitute new Awards (provided however, that, except as
otherwise specifically provided under the Plan, any modification that would
materially adversely affect any outstanding Award shall not be made without the
consent of the holder); (6) accelerate or otherwise change the time in which an
Award may be exercised or becomes payable and to waive or accelerate the lapse,
in whole or in part, of any restriction or condition with respect to such Award,
including, but not limited to, any restriction or condition with respect to the
vesting or exercisability of an Award following termination of any grantee's
employment or other relationship with the Company; provided, however, that no
such waiver or acceleration of lapse restrictions shall (i) be allowed with
regard to a "deferral of compensation" within the meaning of Code Section 409A,
except as otherwise permitted under such Code section, or (ii) be made with
respect to a performance-based stock Award granted to an executive officer of
the Company if such waiver or acceleration is inconsistent with Code Section
162(m); (7) permit the withholding by the Company of shares of Common Stock from
shares of Common Stock otherwise to be received by a participant in connection
with the exercise of options and/or the withholding of taxes by such
participant; and (8) establish objectives and conditions, if any, for earning
Awards, including without limitation, the office or position held by the
participant or the participant's relationship to the Company, the participant's
degree of responsibility for and contribution to the growth and success of the
Company or any Affiliate, the participant's length of service, promotions and
potential and determining whether Awards will be paid after the end of a
performance period.
The Committee shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan, Grant Agreements and
all other documents relevant to the Plan and Awards issued hereunder, and to
adopt and interpret such rules, regulations, agreements, guidelines and
instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable. Without limiting the
foregoing, the Committee may delegate administrative and ministerial duties to
officers or employees of the Company as the Committee deems necessary or
advisable in its sole and absolute discretion. The Committee may appoint
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accountants, actuaries, counsel, advisors and other persons that it deems
necessary or desirable in connection with the administration of the Plan.
In the event that for any reason the Committee is unable to act or if the
Committee at the time of any grant, award or other acquisition under the Plan
does not consist of two or more non-employee directors, or if there shall be no
such Committee, then the Plan shall be administered by the Board, and references
herein to the Committee (except in the proviso to this sentence) shall be deemed
to be references to the Board, and any such grant, award or other acquisition
may be approved or ratified in any other manner contemplated by subparagraph (d)
of Rule 16b-3; provided, however, that options granted to the Company's Chief
Executive Officer or to any of the Company's other four most highly compensated
officers that are intended to qualify as performance-based compensation under
Section 162(m) of the Code may only be granted by the Committee.
(c) NON-UNIFORM DETERMINATIONS. The Committee's determinations under the
Plan (including, without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the Grant Agreements evidencing such Awards) need not be uniform
and may be made by the Committee selectively among persons who receive, or are
eligible to receive, Awards under the Plan, whether or not such persons are
similarly situated.
(d) LIMITED LIABILITY. To the maximum extent permitted by law, no member
of the Committee shall be liable for any action taken or decision made in good
faith relating to the Plan or any Award hereunder.
(e) INDEMNIFICATION. To the maximum extent permitted by law and by the
Company's charter and by-laws, the members of the Committee shall be indemnified
by the Company in respect of all their activities under the Plan.
(f) EFFECT OF COMMITTEE'S DECISION. All actions taken and decisions and
determinations made by the Committee on all matters relating to the Plan and
Awards issued hereunder pursuant to the powers vested in it hereunder shall be
in the Committee's sole and absolute discretion and shall be conclusive and
binding on all parties concerned, including the Company, its stockholders, any
participants in the Plan and any other employee, consultant, or director of the
Company, and their respective successors in interest.
4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS
Subject to adjustments as provided in Section 7(c) of the Plan, the shares
of Common Stock that may be issued with respect to Awards granted under the Plan
shall not exceed an aggregate of 12,000,000 shares of Common Stock. Stock
appreciation rights to be settled in shares of Common Stock shall be counted in
full against the number of shares available for Award under the Plan, regardless
of the number of shares issued upon settlement of the stock appreciation right.
The Company shall reserve such number of shares for Awards under the Plan,
subject to adjustments as provided in Section 7(c) of the Plan. The shares of
Common Stock issued pursuant to the Plan may come from authorized and unissued
shares, treasury shares or shares purchased by the Company in the open market.
If any Award, or portion of an Award, under the Plan expires or terminates
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unexercised, becomes unexercisable, is settled in cash without delivery of
shares of Common Stock, or is forfeited or otherwise terminated as to any
shares, or if any shares of Common Stock are repurchased by the Company in
connection with any Award, the shares subject to such Award and the repurchased
shares shall thereafter be available for further Awards under the Plan except
where such reissuance is inconsistent with the provisions of 162(m) of the Code.
Subject to adjustments as provided in Section 7(c) of the Plan, the
maximum number of shares of Common Stock subject to Awards of any combination
that may be granted during any calendar year to any one individual under this
Plan shall be limited to 2,500,000 shares (subject to adjustment pursuant to
Section 7(c) hereof) and the method of counting such shares shall conform to
performance based compensation under Section 162(m) of the Code.
5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers and
directors of, and consultants and advisors to, the Company or any Affiliate of
the Company, as may be selected by the Committee from time to time, subject to
any restrictions imposed by applicable law. The Committee may also grant Awards
to individuals in connection with hiring, retention or otherwise, prior to the
date the individual first performs services for the Company or an Affiliate,
provided that such Awards shall not become vested or exercisable prior to the
date the individual first commences performance of such services.
6. AWARDS
The Committee, in its sole discretion, establishes the terms of all Awards
granted under the Plan. Awards may be granted individually or in tandem with
other types of Awards. All Awards are subject to the terms and conditions
provided in the Grant Agreement. Subject to any applicable requirements of Code
Section 409A, the Committee may permit or require a recipient of an Award to
defer such individual's receipt of the payment of cash or the delivery of Common
Stock that would otherwise be due to such individual by virtue of the exercise
of, payment of, or lapse or waiver of restrictions respecting, any Award. If any
such payment deferral is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals. The
maximum term for any Award shall not exceed ten years from the date of the grant
of such Award, provided, however, in the case of an incentive stock option
granted to an eligible participant who, at the time such incentive stock option
is granted, owns (within the meaning of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company or
of any Affiliate, no such incentive stock option shall be exercisable more than
five years after the date such incentive stock option is granted.
(a) STOCK OPTIONS.
(1) IN GENERAL. The Committee may from time to time grant to eligible
participants Awards of incentive stock options or nonstatutory stock
options; provided, however, that Awards of incentive stock options
shall be limited to employees of the Company or of any current or
hereafter existing "parent corporation" or "subsidiary corporation,"
as defined in Sections 424(e) and (f) of the Code, respectively, of
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the Company and any other individuals who are eligible to receive
incentive stock options under the provisions of Section 422 of the
Code. All stock options must have an exercise price at least equal
to Fair Market Value as of the date of grant, provided, however,
that with respect to an eligible participant who, at the time an
incentive stock option is granted, owns (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or of any
subsidiary, the exercise price shall be at least 110% of the Fair
Market Value per share of Common Stock on the date of grant. The
exercise price of each Option shall be subject to adjustment as
provided in Section 7(c) below. An Option to the extent then
exercisable may be exercised in whole or in part at any time during
the option period, by giving written notice to the Company
specifying the number of shares of Common Stock to be purchased,
accompanied by payment in full of the exercise price, in cash, by
check or such other instrument as may be acceptable to the
Committee. As determined by the Committee, in its sole discretion,
at or after grant, payment in full or in part may be made at the
election of the participant (i) in the form of Common Stock owned by
the participant (based on the Fair Market Value of the Common Stock
on the Option exercise date) that is not the subject of any pledge
or security interest, (ii) in the form of Common Stock withheld by
the Company from the shares of Common Stock otherwise to be
received, with such withheld shares of Common Stock having a Fair
Market Value on the Option exercise date equal to the exercise price
of the Option, or (iii) by a combination of the foregoing, provided
that the combined value of all cash and cash equivalents and the
Fair Market Value of any shares surrendered to the Company is at
least equal to such exercise price and except with respect to (ii)
above, such method of payment will not cause a disqualifying
disposition of all or a portion of the Common Stock received upon
exercise of an incentive option. A participant shall have the right
to dividends and other rights of a stockholder with respect to
shares of Common Stock purchased upon exercise of an Option after
(i) the participant has given written notice of exercise and has
paid in full for such shares, (ii) becomes a stockholder of record
with respect thereto, and (iii) the participant has satisfied such
conditions that may be imposed by the Company with respect to the
withholding of taxes.
(2) INCENTIVE STOCK OPTION. No stock option shall be an incentive stock
option unless so designated by the Committee at the time of grant or
in the Grant Agreement evidencing such stock option, and which
otherwise meets the requirements of Section 422 of the Code. The
aggregate Fair Market Value, determined as of the date the incentive
option is granted, of Common Stock for which incentive options are
exercisable for the first time by any eligible participant during
any calendar year under the Plan (and/or any other stock option
plans of the Company or any Affiliate) shall not exceed $100,000. A
grant of an incentive option under this Plan shall provide that if
the participant makes a disposition, within the meaning of Section
424(c) of the Code, of any share or shares of Common Stock issued to
him upon exercise of an incentive option granted within the two-year
period commencing on the day after the date of the grant of such
incentive option or within a one-year period commencing on the day
after the date of transfer of the share or shares to him pursuant to
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the exercise of such incentive option, he shall, within 10 days
after such disposition, notify the Company thereof.
(3) PROHIBITION ON OPTION REPRICING & CANCELLATION. Notwithstanding any
other provision of the Plan, neither the Board nor the Committee may
reprice, replace or regrant any Option granted under the Plan, (i)
through cancellation and replacement or regrant with lower priced
options, (ii) through exchange, replacement, or buyouts of awarded
options with cash, or (iii) by lowering the option exercise price of
a previously granted Option, without the prior approval of
GlobalOptions' stockholders.
(b) STOCK APPRECIATION RIGHTS.
(1) IN GENERAL. The Committee may from time to time grant to eligible
participants Awards of Stock Appreciation Rights ("SAR"). An SAR
entitles the grantee to receive, subject to the provisions of the
Plan and the Grant Agreement, a payment having an aggregate value
equal to the product of (1) the excess of (A) the Fair Market Value
on the exercise date of one share of Common Stock over (B) the base
price per share specified in the Grant Agreement, times (2) the
number of shares specified by the SAR, or portion thereof, which is
exercised. The base price per share specified in the Grant Agreement
shall not be less than the Fair Market Value of the Common Stock on
the grant date. Payment by the Company of the amount receivable upon
any exercise of an SAR may be made by the delivery of Common Stock
or cash, or any combination of Common Stock and cash, as determined
in the sole discretion of the Committee. If upon settlement of the
exercise of an SAR a grantee is to receive a portion of such payment
in shares of Common Stock, the number of shares shall be determined
by dividing such portion by the Fair Market Value of a share of
Common Stock on the exercise date. No fractional shares shall be
used for such payment and the Committee shall determine whether cash
shall be given in lieu of such fractional shares or whether such
fractional shares shall be eliminated.
(2) PROHIBITION ON SAR REPRICING & CANCELLATION. Notwithstanding any
other provision of the Plan, neither the Board nor the Committee may
reprice, replace or regrant any SAR granted under the Plan, (i)
through cancellation and replacement or regrant with lower priced
SARs, (ii) through exchange, replacement, or buyouts of awarded SARs
with cash, or (iii) by lowering the SAR base price of a previously
granted SAR, without the prior approval of GlobalOptions'
stockholders.
(c) STOCK AWARDS.
(1) IN GENERAL. The Committee may from time to time grant restricted or
unrestricted stock awards to eligible participants in such amounts,
on such terms and conditions, and for such consideration, including
no consideration or such minimum consideration as may be required by
law, as it shall determine.
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(2) RESTRICTED STOCK TERMS. An eligible participant shall have no rights
to an award of restricted stock unless and until the eligible
participant accepts the award within the period prescribed by the
Committee and, if the Committee shall deem desirable, makes payment
to the Company in cash, or by check or such other instrument as may
be acceptable to the Committee. After acceptance and issuance of a
certificate or certificates, as provided for below, the eligible
participant shall have the rights of a stockholder with respect to
restricted stock subject to the non-transferability and forfeiture
restrictions described below. The Company shall issue in the
eligible participant's name a certificate or certificates for the
shares of Common Stock associated with the award promptly after the
eligible participant accepts such award. Unless otherwise provided,
any certificate or certificates issued evidencing shares of
restricted stock shall not be delivered to the eligible participant
until such shares are free of any restrictions specified by the
Committee at the time of grant. Shares of restricted stock are
forfeitable until the terms of the restricted stock grant have been
satisfied. Shares of restricted stock are not transferable until the
date on which the Committee has specified such restrictions has
lapsed. Unless otherwise provided, distributions in the form of
dividends or otherwise of additional shares or property in respect
of shares of restricted stock shall be subject to the same
restrictions as such shares of restricted stock.
(d) PERFORMANCE AWARDS. The Committee may, in its discretion, grant
performance awards which become vested or payable on account of attainment of
one or more performance goals during a specified period as established by the
Committee. Performance awards may be in the form of Common Stock or cash, or any
combination of Common Stock and cash, as determined in the sole discretion of
the Committee. The Committee shall establish in writing, on a timely basis, (i)
the performance goals that must be met, (ii) the threshold, target and maximum
amounts that may be paid, or in the case of an award of Common Stock, the number
of shares that will vest, if the performance goals are met, and (iii) any other
conditions that the Committee deems appropriate and, in the case of executive
officers where the Award is intended to be "performance based" within the
meaning of Code Section 162(m), consistent with Section 162(m) of the Code.
Performance goals established by the Committee shall be based on objectively
determinable performance goals selected by the Committee that apply to an
individual or group of individuals, a business unit, or the Company or an
Affiliate as a whole, over such performance period as the Committee may
designate. The target Awards for each individual will be based on a number of
factors, including: (i) market competitiveness of the position, (ii) job level,
(iii) base salary level, (iv) past individual performance, and (v) expected
contribution to GlobalOptions' future performance and business impact. For those
Awards intended to be "performance-based" within the meaning of Code Section
162(m), the Committee shall also establish for each participant who is an
executive officer a maximum Award that may be paid for the calendar year, which
will remain fixed for the entire year. The maximum performance award that any
participant may be granted in any calendar year under the Plan is $4,000,000,
comprised of the cash portion of the Award and the Fair Market Value of the
Common Stock as of the date of the grant of the Award. For Awards intended to be
"performance-based compensation," the grant of the performance awards and the
establishment of the performance measures shall be made during the period
required under Code Section 162(m).
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The performance goals shall be based on one or more of the following
criteria: EBITDA, stock price, earnings per share, net earnings, operating or
other earnings, profits, revenues, net cash flow, financial return ratios,
return on assets, stockholder return, return on equity, growth in assets, market
share or strategic business criteria consisting of one or more objectives based
on meeting specified revenue goals, market penetration goals, geographic
business expansion goals or goals relating to acquisitions or strategic
partnerships. "EBITDA" means earnings before interest, taxes, depreciation and
amortization. At any time prior to the final determination of the performance
awards, the Committee may adjust the performance goals and awards for
participants who are not executive officers, to reflect changes in corporate
capitalization, changes in corporate transactions, the occurrence of any
extraordinary event, any change in accounting rules or principles, any change in
GlobalOptions' method of accounting, any change in applicable law, or any other
change of similar nature. With respect to executive officers where the award is
intended to be "performance based" within the meaning of Code Section 162(m),
such adjustments may be made to the extent the Committee deems appropriate
considering the requirements of Code Section 162(m). Upon completion of a
performance period, the Committee shall determine whether the performance goals
have been met prior to paying or vesting any award for any year, the Committee
must certify in writing (to the extent required by any IRS regulation) that the
performance goals were satisfied. Approved minutes of the Committee will be
treated as the required written certification. All cash amounts payable will be
paid as soon as practicable after certification by the Committee, but not later
than March 15th of the year following the calendar year within which the award
is earned unless payment by such date is administratively impracticable.
(e) OTHER STOCK-BASED AWARDS. The Committee may from time to time grant
other stock-based awards to eligible participants in such amounts, on such terms
and conditions, and for such consideration, including no consideration or such
minimum consideration as may be required by law, as it shall determine. Other
stock-based awards may be denominated in cash, in Common Stock or other
securities, in stock-equivalent units, in stock appreciation units, in
securities or debentures convertible into Common Stock, or in any combination of
the foregoing and may be paid in Common Stock or other securities, in cash, or
in a combination of Common Stock or other securities and cash, all as determined
in the sole discretion of the Committee.
7. MISCELLANEOUS
(a) WITHHOLDING OF TAXES. Grantees and holders of Awards shall pay to
the Company or any of its Affiliates, or make provision satisfactory to the
Committee for payment of, any taxes to be withheld in respect of Awards under
the Plan no later than the date of the event creating the tax liability. The
Company or any of its Affiliates may, to the extent permitted by law, deduct any
such tax obligations from any payment of any kind otherwise due to the grantee
or holder of an Award. In the event that payment to the Company or any of its
Affiliates of such tax obligations is made in shares of Common Stock, such
shares shall be valued at Fair Market Value on the applicable date for such
purposes.
(b) TRANSFERABILITY. Unless otherwise permitted by the Committee or as
otherwise may be required by law, no Award granted under the Plan shall be
transferable by a grantee otherwise than by will or the laws of descent and
distribution. Unless otherwise determined by the Committee in accord with the
provisions of the immediately preceding sentence, an Award may be exercised
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during the lifetime of the grantee, only by the grantee or, during the period
the grantee is under a legal disability, by the grantee's guardian or legal
representative. Any attempt to transfer, assign, pledge or otherwise dispose of,
or to subject to execution, attachment or similar process, any Award contrary to
the provisions hereof shall be void and ineffective and shall give no right to
the purported transferee.
(c) ADJUSTMENTS FOR CORPORATE TRANSACTIONS AND OTHER EVENTS.
(1) STOCK DIVIDEND, STOCK SPLIT AND REVERSE STOCK SPLIT. In the event of
a stock dividend of, or stock split or reverse stock split
affecting, the Common Stock, (A) the maximum number of shares of
such Common Stock as to which Awards may be granted under this Plan,
in the aggregate and with respect to any type of Award, and the
maximum number of shares with respect to which Awards may be granted
during any one calendar year to any individual, as provided in
Section 4 of the Plan and (B) the number of shares covered by and
the exercise price and other terms of outstanding Awards, shall,
without further action of the Board, be adjusted to reflect such
event unless the Board, in its sole discretion, determines, at the
time it approves such stock dividend, stock split or reverse stock
split, that no such adjustment shall be made with respect to any or
all particular Awards. The Committee may make adjustments, in its
discretion, to address the treatment of fractional shares and
fractional cents that arise with respect to outstanding Awards as a
result of the stock dividend, stock split or reverse stock split.
Additionally, the Committee will, to the extent feasible, make other
appropriate adjustments in order to ensure that Awards will not be
deemed modified within the meaning of Section 424(h) of the Code.
The adjustments described above will be made in a manner consistent
with Section 162(m) and Section 409A of the Code.
(2) NON-CHANGE IN CONTROL TRANSACTIONS. Except with respect to the
transactions set forth in Section 7(c)(1), and subject to the
limitations of Sections 6(a)(2) and 6(b)(2), in the event of any
change affecting the Common Stock, the Company or its
capitalization, by reason of a spin-off, split-up, dividend,
recapitalization, merger, consolidation or share exchange, other
than any such change that is part of a transaction resulting in a
Change in Control of the Company, the Committee, in its discretion
and without the consent of the holders of the Awards, may make (A)
appropriate adjustments to the maximum number and kind of shares
reserved for issuance or with respect to which Awards may be granted
under the Plan, in the aggregate, with respect to any type of Award,
and with respect to any individual during any one calendar year, as
provided in Section 4 of the Plan; and (B) any adjustments in
outstanding Awards, including but not limited to modifying the
number, kind and price of securities subject to Awards. Each
participant's proportionate interest will be maintained as it was
immediately before the occurrence of the abovementioned event.
Additionally, the Committee will, to the extent feasible, make other
appropriate adjustments in order to ensure that Awards will not be
deemed modified within the meaning of Section 424(h) of the Code.
The adjustments described above will be made in a manner consistent
with Section 162(m) and Section 409A of the Code.
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(3) CHANGE IN CONTROL TRANSACTIONS. Upon the occurrence of a Change in
Control, the Committee may accelerate the vesting and exercisability
of outstanding Awards, in whole or in part, as determined by the
Committee in its sole discretion. In its sole discretion, the
Committee may also determine that, upon the occurrence of a Change
in Control, each outstanding Award shall terminate within a
specified number of days after notice to the participant thereunder,
and in the case of an Option and other Awards that are payable in or
convertible into Common Stock, each such participant shall receive,
with respect to each share of Common Stock subject to such Option or
other Awards that are payable in or convertible into Common Stock,
an amount equal to the excess of the Fair Market Value of such
shares immediately prior to such Change in Control over the exercise
price per share of such Option or other Awards that are payable in
or convertible into Common Stock; such amount shall be payable in
cash, in one or more kinds of property (including the property, if
any, payable in the transaction) or a combination thereof, as the
Committee shall determine in its sole discretion.
(4) UNUSUAL OR NONRECURRING EVENTS. The Committee is authorized to make,
in its discretion and without the consent of holders of Awards, and
subject to the limitations of Sections 6(a)(2) and 6(b)(2),
adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events
affecting the Company, or the financial statements of the Company or
any Affiliate, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan.
(d) SUBSTITUTION OF AWARDS IN MERGERS AND ACQUISITIONS. Awards may be
granted under the Plan from time to time in substitution for awards held by
employees, officers, consultants or directors of entities who become or are
about to become employees, officers, consultants or directors of the Company or
any of its Affiliates as the result of a merger or consolidation of the
employing entity with the Company or any of its Affiliates, or the acquisition
by the Company or any of its Affiliates of the assets or stock of the employing
entity. The terms and conditions of any substitute Awards so granted may vary
from the terms and conditions set forth herein to the extent that the Committee
deems appropriate at the time of grant to conform the substitute Awards to the
provisions of the awards for which they are substituted.
(e) TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN. The Board may
amend, suspend, or terminate the Plan, except that no amendment shall be made
that would impair the rights of any participant under any Award theretofore
granted without the participant's consent, and except that no amendment shall be
made which, without the approval of the stockholders of the Company, would:
(1) materially increase the number of shares that may be issued under
the Plan, except as is provided in Section 7(c);
(2) materially increase the benefits accruing to the participants under
the Plan;
11
(3) materially modify the requirements as to eligibility for
participation in the Plan;
(4) decrease the exercise price of an option to less than 100% of the
Fair Market Value per share of Common Stock on the date of grant
thereof; or
(5) extend the term of any option beyond that provided for in Section 6.
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any participant without the participant's consent.
It is the intention of the Board that the Plan comply strictly with
the provisions of Code Section 409A to the extent feasible and the Committee
shall exercise its discretion in granting Awards hereunder (and the terms of
such Award grants), accordingly. The Plan and any grant of an Award hereunder
may be amended from time to time without the consent of the participant as may
be necessary or appropriate to comply with the Code Section 409A.
(f) NON-GUARANTEE OF EMPLOYMENT OR SERVICE. Nothing in the Plan or in
any Grant Agreement thereunder shall confer any right on an individual to
continue in the service of the Company or shall interfere in any way with the
right of the Company to terminate such service at any time with or without cause
or notice and whether or not such termination results in (1) the failure of any
Award to vest; (2) the forfeiture of any unvested or vested portion of any
Award; and/or (3) any other adverse effect on the individual's interests under
the Plan.
(g) SPECIAL RULES FOR OPTIONS AND STOCK APPRECIATION RIGHTS.
(1) TERMINATION BY DEATH. Unless otherwise determined by the Committee,
if any participant's employment with or service to the Company or
any Affiliate terminates by reason of death, any Option or SAR held
by such participant may thereafter be exercised, to the extent then
exercisable (or on such accelerated basis as the Committee shall
determine at or after grant), by the legal representative of the
estate or by the legatee of the participant under the will of the
participant, for a period of one year after the date of such death
or until the expiration of the stated term of such Option or SAR as
provided under the Plan, whichever period is shorter.
(2) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined by
the Committee, if any participant's employment with or service to
the Company or any Affiliate terminates by reason of total and
permanent disability (the failure to perform such person's duties to
the Company for at least ninety (90) days, whether or not
consecutive, within any twelve (12) consecutive months as a result
of any incapacity due to physical or mental illness, a
"Disability"), any Option or SAR held by such participant may
thereafter be exercised, to the extent it was exercisable at the
time of termination due to Disability (or on such accelerated basis
as the Committee shall determine at or after grant), but may not be
exercised after 90 days after the date of such termination of
employment or service or the expiration of the stated term of such
Option or SAR, whichever period is shorter; PROVIDED, HOWEVER, that,
if the participant dies within such 90-day period, any unexercised
Option or SAR held by such participant shall thereafter be
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exercisable to the extent to which it was exercisable at the time of
death for a period of one year after the date of such death or for
the stated term of such Option or SAR, whichever period is shorter.
(3) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined by
the Committee, if any participant's employment with or service to
the Company or any Affiliate terminates by reason of Normal or Early
Retirement (as such terms are defined below), any Option or SAR held
by such participant may thereafter be exercised to the extent it was
exercisable at the time of such Normal or Early Retirement (or on
such accelerated basis as the Committee shall determine at or after
grant), for a period of 90 days after the date of such termination
of employment or service or until the expiration of the stated term
of such Award, whichever period is shorter; provided, however, that,
if the participant dies within such 90-day period, any unexercised
Option or SAR held by such participant shall thereafter be
exercisable, to the extent to which it was exercisable at the time
of death, for a period of one year after the date of such death or
for the stated term of such Option or SAR, whichever period is
shorter.
For purposes of this paragraph (i), "Normal Retirement" shall mean
retirement from active employment with the Company or any Affiliate
on or after the normal retirement date specified in the applicable
Company or Affiliate pension plan or if no such pension plan exists
or applies, age 65, and "Early Retirement" shall mean retirement
from active employment with the Company or any Affiliate under the
early retirement provisions of the applicable Company or Affiliate
pension plan or if no such pension plan exists or applies, age 55.
(h) OTHER TERMINATION. Unless otherwise determined by the Committee,
should any Participant's employment with or service to the Company or any
Affiliate terminate for any reason other than death, Disability or Normal or
Early Retirement, the Award shall thereupon terminate, except that the portion
of any Award that was exercisable on the date of such termination of employment
or service may be exercised for the lesser of 90 days after the date of
termination or the balance of such Award's term if the Participant's employment
or service with the Company or any Affiliate is terminated by the Company or
such Affiliate without cause (the determination as to whether termination was
for cause to be made by the Committee). The transfer of a Participant from the
employ of or service to the Company to the employ of or service to an Affiliate,
or vice versa, or from one Affiliate to another, shall not be deemed to
constitute a termination of employment or service for purposes of the Plan.
(i) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a grantee or any other person. To
the extent that any grantee or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company.
(j) PUBLIC OFFERING. As a condition of participation in this Plan, each
participant shall be obligated to cooperate with the Company and the
underwriters in connection with any public offering of the Company's securities
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and any transaction s relating to a public offering, and shall execute and
deliver any agreements and documents, including without limitation, a lock-up
agreement, that may be requested by the Company or the underwriters. The
participant's obligations under this Section 7(j) shall apply to any Common
Stock issued under the Plan as well as to any and all other securities of the
Company or its successor for which Common Stock may be exchanged or into which
Common Stock may be converted.
(k) GOVERNING LAW. The validity, construction and effect of the Plan, of
Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Committee relating to the
Plan or such Grant Agreements, and the rights of any and all persons having or
claiming to have any interest herein or hereunder, shall be determined
exclusively in accordance with applicable federal laws and the laws of the State
of New York, without regard to its conflict of laws principles.
(l) EFFECTIVE DATE; TERMINATION DATE. The Plan was adopted by the Board
on October 17, 2006, subject to approval by the GlobalOptions stockholders
within twelve (12) months. The Plan shall be effective as of the date of
approval of GlobalOptions' stockholders (the "EFFECTIVE DATE"). No Award shall
be granted under the Plan after the tenth anniversary of the Effective Date.
Subject to other applicable provisions of the Plan, all Awards made under the
Plan prior to such termination of the Plan shall remain in effect until such
Awards have been satisfied or terminated in accordance with the Plan and the
terms of such Awards.
(m) COMPLIANCE WITH SECURITIES LAWS; LISTING AND REGISTRATION. If at any
time the Committee determines that the delivery of Common Stock under the Plan
is or may be unlawful under the laws of any applicable jurisdiction, or federal,
state or foreign securities laws, the right to exercise an Award or receive
shares of Common Stock pursuant to an Award shall be suspended until the
Committee determines that such delivery is lawful. The Company shall have no
obligation to effect any registration or qualification of the Common Stock under
federal, state or foreign laws. Awards under the Plan are intended to satisfy
the requirements of Rule 16b-3 under the Exchange Act. If any provision of this
Plan or any grant of an Award would otherwise conflict with this intent, that
provision will be interpreted and deemed amended so as to avoid conflict. Unless
the Company has registered the Common Stock covered by the Plan under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), or the Company has
determined that registering the Common Stock covered by the Plan under the
Securities Act is unnecessary, the Company may require that each Participant
represent in writing that he is acquiring the shares of Common Stock covered by
the Plan for his own account and investment purposes, and not with a view to, or
for sale in connection with, the distribution of the shares of Common Stock
covered by the Plan. No Participant will be entitled to a grant, exercise,
transfer or payment of any Award if the grant, exercise, transfer or payment
would violate the provisions of the Sarbanes-Oxley Act of 2002 or any other
applicable law.
(n) NO LIEN OR SECURITY INTEREST. No Award and no right under any such
Award, may be pledged, attached or otherwise encumbered other than in favor of
GlobalOptions, and any purported pledge, attachment, or encumbrance thereof
other than in favor of GlobalOptions shall be void and unenforceable against
GlobalOptions or any Affiliate.
14
(o) SEVERABILITY. If any provision of the Plan or any Award is
determined to be invalid, illegal or unenforceable, or as to any Person or
Award, or would disqualify the Plan or any Award, such provision shall be
construed or deemed amended to conform to applicable laws, or, if it cannot be
so construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such Person or Award, and the remainder of the Plan and any such
Award shall remain in full force and effect.
(p) FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities or other property shall be paid or
transferred in lieu of any fractional shares, or whether such fractional shares
or any rights thereto shall be canceled, terminated or otherwise eliminated.
(q) SHARE CERTIFICATES. All certificates for shares of Common Stock
delivered under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange upon which such
shares are then listed, and any applicable Federal or state securities laws, and
the Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions. To the extent that the
Committee provides for the issuance of Common Stock or restricted stock awards,
the issuance may be affected on a non-certificated basis, subject to applicable
law or the applicable rules of any applicable stock exchange.
(r) TREATMENT FOR OTHER COMPENSATION PURPOSES. Payments and other
benefits received by a participant pursuant to an Award shall not be deemed part
of a participant's regular, recurring compensation for purposes of any
termination, indemnity or severance pay laws and shall not be included in, nor
have any effect on, the determination of benefits under any other employee
benefit plan, contract or similar arrangement provided by the Company, unless
expressly so provided by such other plan, contract or arrangement.
(s) CODE SECTION 83(B) ELECTIONS. The Company, its Affiliates and the
Committee have no responsibility for any participant's election, attempt to
elect or failure to elect to include the value of a restricted stock Award or
other Award subject to Section 83 in the participant's gross income for the year
of payment pursuant to Section 83(b) of the Code. Any participant who makes an
election pursuant to Section 83(b) will promptly provide the Committee with a
copy of the election form.
(t) NO OBLIGATION TO EXERCISE AWARDS; NO RIGHT TO NOTICE OF EXPIRATION
DATE. The grant of an Award of a stock option or SAR will impose no obligation
upon the participant to exercise the Award. The Company, its Affiliates and the
Committee have no obligation to inform a participant of the date on which any
Award lapses except in the Grant Agreement.
(u) RIGHT TO OFFSET. Notwithstanding any provisions of the Plan to the
contrary, the Company may offset any amounts to be paid to a participant (or, in
the event of the participant's death, to his beneficiary or estate) under the
15
Plan against any amounts that such participant may owe to the Company, to the
extent permitted by law.
(v) FURNISHING INFORMATION. A participant will cooperate with the
Committee by furnishing any and all information requested by the Committee and
take such other actions as may be requested in order to facilitate the
administration of the Plan and the payments of benefits hereunder, including but
not limited to taking such physical examinations as the Committee may deem
necessary.
(w) CONSTRUCTION. Except where otherwise indicated by the context, any
masculine term used herein will also include the feminine; the plural will
include the singular and the singular will include the plural.
(x) EFFECT ON OTHER PLANS. All awards granted under the Company's 2006
Stock Option Plan and the 2005 Stock Option Plan shall continue to be governed
under such plans. All remaining shares reserved, but unissued with respect to
any awards under the Company's 2006 Stock Option Plan and 2005 Stock Option Plan
are hereby unreserved and no new awards shall be issued pursuant to the
Company's 2006 Stock Option Plan or 2005 Stock Option Plan.
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