Exhibit 10.2
GLOBALOPTIONS GROUP, INC.
2006 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE. The GlobalOptions Group, Inc. 2006 Employee Stock
Purchase Plan (the "Plan") is intended to provide an incentive for employees of
GlobalOptions Group, Inc. (the "Company") and its participating subsidiaries.
The Plan permits such employees to acquire or increase their proprietary
interests in the Company through the purchase of shares of Common Stock of the
Company, thereby creating a greater community of interest between the Company's
stockholders and its employees. The Plan is intended to qualify as an "Employee
Stock Purchase Plan" under Sections 421 and 423 of the Internal Revenue Code of
1986, as amended (the "Code"). The provisions of the Plan will be construed in a
manner consistent with the requirements of such sections of the Code and the
regulations issued thereunder.
2. DEFINITIONS. As used in this Plan,
(a) "Account" means each separate account maintained for a
Participant under the Plan, collectively or individually as the context
requires, to which the amount of the Participant's payroll deductions authorized
under Section 6 and purchases of Common Stock under Section 8 shall be credited,
and any distributions of shares of Common Stock under Section 9 and withdrawals
under Section 10 shall be charged.
(b) "Base Pay" means the base salary paid to an employee,
including commissions, payments for overtime and shift differentials, bonuses,
vacation pay and holiday pay. Base Pay shall exclude incentive compensation, and
other special payments, fees, fringes, allowances or extraordinary compensation
not specifically listed in the preceding sentence.
(c) "Benefits Representative" means the employee benefits
department of the Company or any such other person, regardless of whether
employed by an Employer, who has been formally, or by operation or practice,
designated by the Committee to assist the Committee with the day-to-day
administration of the Plan.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, or any
successor thereto, as amended and in effect from time to time. Reference in the
Plan to any Section of the Code shall be deemed to include any amendments or
successor provisions to any Section and any treasury regulations thereunder.
(f) "Committee" means the Compensation Committee of the Board. The
Board shall have the power to fill vacancies on the Committee arising by
resignation, death, removal or otherwise. The Board, in its sole discretion, may
bifurcate the powers and duties of the Committee among one or more separate
Committees, or retain all powers and duties of the Committee in a single
Committee. The members of the Committee shall serve at the discretion of the
Board.
(g) "Common Stock" or "Stock" means the common stock, $.001 par
value per share, of the Company.
(h) "Company" means GlobalOptions Group, Inc., a Delaware
corporation, and any successor thereto.
(i) "Disability" means any complete and permanent disability as
defined in Section 22(e)(3) of the Code.
(j) "Effective Date" means October 17, 2006, the inception date of
the Plan.
(k) "Employee" means any employee who is currently in Employment
with an Employer.
(l) "Employer" means the Company, its successors, any future
parent (as defined in Section 424(e) of the Code) and each current or future
Subsidiary which has been designated by the Board or the Committee as a
participating employer in the Plan.
(m) "Employment" means employment as an employee or officer by the
Company or a Subsidiary as designated in such entity's payroll records, or by
any corporation issuing or assuming rights or obligations under the Plan in any
transaction described in Section 424(a) of the Code or by a parent corporation
or a subsidiary corporation of such corporation. In this regard, neither the
transfer of a Participant from Employment by the Company to Employment by a
Subsidiary, nor the transfer of a Participant from Employment by a Subsidiary to
Employment by the Company, shall be deemed to be a termination of Employment of
the Participant. Moreover, the Employment of a Participant shall not be deemed
to have been terminated because of absence from active Employment on account of
temporary illness or during authorized vacation, temporary leaves of absence
from active Employment granted by theCompany or a Subsidiary for reasons of
professional advancement, education, health, or government service, or during
military leave for any period if the Participant returns to active Employment
within 90 days after the termination of military leave, or during any period
required to be treated as a leave of absence which, by virtue of any valid law
or agreement, does not result in a termination of Employment.
Any worker treated as an independent contractor by the Employer who is
later re-classified as a common-law employee shall not be in Employment during
any period in which such worker was treated by the Employer as an independent
contractor. Any "leased employee," as described in Section 414(n) of the Code,
shall not be deemed an Employee hereunder.
(n) "Entry Date" means the first day of each Calendar month.
(o) "Market Price" means, subject to the next paragraph, the
market value of a share of Stock on any date, which shall be determined as (i)
the closing sales price on the immediately preceding business day of a share of
Stock as reported on the New York Stock Exchange or other principal securities
exchange on which shares of Stock are then listed or admitted to trading or (ii)
if not so reported, the average of the highest and lowest sales prices for a
share of Stock on the immediately preceding business day as quoted on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
or any successor system then in use, or (iii) if not quoted on NASDAQ, the
average of the closing bid and asked prices for a share of Stock as quoted by
the Pink Sheets, LLC's "Pink Sheets" or the National Association of Securities
Dealers' OTC Bulletin Board System. If the price of a share of Stock shall not
be so reported pursuant to the previous sentence, the fair market value of a
share of Stock shall be determined by the Committee in its discretion provided
that such method is appropriate for purposes of an employee stock purchase plan
under Section 423 of the Code.
Notwithstanding the previous paragraph of this definition, the Market
Price of a share of Stock solely for purposes of determining the option price on
the first or last day of the Calendar month in accordance with Section 7(b)
shall be based on the Market Price on the first or last day of the Calendar
month, as applicable, and not on the immediately preceding business day. For
example, if the Stock is traded on the New York Stock Exchange, when determining
the option price under Section 7(b) at which shares of Stock are purchased, the
Market Price for determining this option price shall be based on the lower of
(i) the closing sales price of a share of Stock on the first business day of the
Calendar month or (ii) the closing sales price of a share of Stock on the last
business day of the Calendar month.
(p) "Participant" means any Employee who meets the eligibility
requirements of Section 3 and who has elected to and is participating in the
Plan.
(q) "Plan" means the GlobalOptions Group, Inc. 2006 Employee Stock
Purchase Plan, as set forth herein, and all amendments hereto.
(r) "Stock" means the Common Stock (as defined above).
(s) "Subsidiary" means any domestic or foreign corporation (other
than the Company) (i) which, pursuant to Section 424(f) of the Code, is included
in an unbroken chain of corporations beginning with the Company if, at the time
of the granting of the option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of capital stock in one
of the other corporations in such chain and (ii) which has been designated by
the Board or the Committee as a corporation whose Employees are eligible to
participate in the Plan.
3. ELIGIBILITY.
(a) ELIGIBILITY REQUIREMENTS. Participation in the Plan is
voluntary. Each Employee who has completed at least six (6) consecutive months
of continuous Employment with an Employer (calculated from his last date of hire
to the termination of his Employment for any reason) shall be eligible to
participate in the Plan on the first day of the payroll period commencing on or
after the Effective Date or, if later, the Entry Date on which the Employee
satisfies the aforementioned eligibility requirements. Each Employee whose
Employment terminates and who is rehired by an Employer shall be treated as a
new Employee for eligibility purposes under the Plan, provided, however, that if
an Employee is rehired by an Employer prior to the expiration of three months
following his or her termination, such Employee shall not be a new Employee for
eligibility purposes under the Plan.
(b) LIMITATIONS ON ELIGIBILITY. Any provision of the Plan to the
contrary notwithstanding, no Employee shall be granted an option under the Plan:
(i) if, immediately after the grant, the Employee would own
stock, and/or hold outstanding options to purchase stock, possessing five
percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any Subsidiary;
(ii) which permits the Employee's rights to purchase stock
under this Plan and all other employee stock purchase plans (within the
meaning of Section 423 of the Code) of the Company and its Subsidiaries to
accrue at a rate which exceeds $25,000 of the fair market value of the
stock (determined at the time such option is granted) for each fiscal year
in which such option is outstanding at any time, all as determined in
accordance with Section 423(b)(8) of the Code;
(iii) if the Employee's customary Employment is 20 hours or
less per week; or
(iv) if the Employee is employed for less than 5 months in
a calendar year.
For purposes of Section 3(b)(i) above, pursuant to Section 424(d) of the Code,
(i) the Employee with respect to whom such limitation is being determined shall
be considered as owning the stock owned, directly or indirectly, by or for his
brothers and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; and (ii) stock owned, directly or indirectly, by or for
a corporation, partnership, estate, or trust, shall be considered as being owned
proportionately by or for its shareholders, partners, or beneficiaries. In
addition, for purposes of Section 3(b)(ii) above, pursuant to Section 423(b)(8)
of the Code, (i) the right to purchase stock under an option accrues when the
option (or any portion thereof) first becomes exercisable during the calendar
year, (ii) the right to purchase stock under an option accrues at the rate
provided in the option but in no case may such rate exceed $25,000 of fair
market value of such stock (determined at the time such option is granted) for
any one calendar year, and (iii) a right to purchase stock which has accrued
under one option granted pursuant to the Plan may not be carried over to any
other option.
4. SHARES SUBJECT TO THE PLAN. The total number of shares of Common
Stock that will be issued upon the exercise of options granted under the Plan
will not exceed Two Million (2,000,000) shares (subject to adjustment as
provided in Section 17), and such shares may be originally issued shares,
treasury shares, reacquired shares, shares bought in the market, or any
combination of the foregoing. If any option which has been granted expires or
terminates for any reason without having been exercised in full, the unpurchased
shares will again become available for purposes of the Plan. Any shares which
are not subject to outstanding options upon the termination of the Plan shall
cease to be subject to the Plan.
5. PARTICIPATION.
(a) Payroll Deduction Authorization. An Employee shall be eligible
to participate in the Plan as of the first Entry Date following such Employee's
satisfaction of the eligibility requirements of Section 3, or, if later, the
first Entry Date following the date on which the Employee's Employer adopted the
Plan. At least 10 days (or such other period as may be prescribed by the
Committee or a Benefits Representative) prior to the first Entry Date as of
which an Employee is eligible to participate in the Plan, the Employee shall
execute and deliver to the Benefits Representative, on the form prescribed for
such purpose, an authorization for payroll deductions which specifies his chosen
rate of payroll deduction contributions pursuant to Section 6, and such other
information as is required to be provided by the Employee on such enrollment
form. The enrollment form shall authorize the Employer to reduce the Employee's
Base Pay by the amount of such authorized contributions. To the extent provided
by the Committee or a Benefits Representative, each Participant shall also be
required to open a stock brokerage account with a brokerage firm which has been
engaged to administer the purchase, holding and sale of Common Stock for
Accounts under the Plan and, as a condition of participation hereunder, the
Participant shall be required to execute any form required by the brokerage firm
to open and maintain such brokerage account.
(b) CONTINUING EFFECT OF PAYROLL DEDUCTION AUTHORIZATION. Payroll
deductions for a Participant will commence with the first payroll period
beginning after the Participant's authorization for payroll deductions becomes
effective, and will end with the payroll period that ends when terminated by the
Participant in accordance with Section 6(c) or due to his termination of
Employment in accordance with Section 11. Payroll deductions will also cease
when the Participant is suspended from participation due to a withdrawal of
payroll deductions in accordance with Section 10. When applicable with respect
to Employees who are paid on a hourly wage basis, the authorized payroll
deductions shall be withheld from wages when actually paid following the period
in which the compensatory services were rendered. Only payroll deductions that
are credited to the Participant's Account during the Calendar month shall be
used to purchase Common Stock pursuant to Section 8 regardless of when the work
was performed.
(c) EMPLOYMENT AND STOCKHOLDERS RIGHTS. Nothing in the Plan will
confer on a Participant the right to continue in the employ of the Employer or
will limit or restrict the right of the Employer to terminate the Employment of
a Participant at any time with or without cause. A Participant will have no
interest in any Common Stock to be purchased under the Plan or any rights as a
stockholder with respect to such Stock until the Stock has been purchased and
credited to the Participant's Account.
6. PAYROLL DEDUCTIONS.
(a) PARTICIPANT CONTRIBUTIONS BY PAYROLL DEDUCTIONS. At the time a
Participant files his payroll deduction authorization form, the Participant will
elect to have deductions made from the Participant's Base Pay for each payroll
period such authorization is in effect in whole percentages at the rate of not
less than 1% nor more than 15% of the Participant's Base Pay.
(b) NO OTHER PARTICIPANT CONTRIBUTIONS PERMITTED. All payroll
deductions made for a Participant shall be credited to the Participant's Account
under the Plan. A Participant may not make any separate cash payment into such
Account.
(c) CHANGES IN PARTICIPANT CONTRIBUTIONS. Subject to Sections 10
and 22, a Participant may increase, decrease, suspend, or resume payroll
deductions under the Plan by giving written notice to a designated Benefits
Representative at such time and in such form as the Committee or Benefits
Representative may prescribe from time to time. Such increase, decrease,
suspension or resumption shall be effective as of the first day of the payroll
period as soon as administratively practicable after receipt of the
Participant's written notice, but not earlier than the first day of the payroll
period of the Calendar month next following receipt and acceptance of such form.
Notwithstanding the previous sentence, a Participant may completely discontinue
contributions at any time during a Calendar month, effective as of the first day
of the payroll period as soon as administratively practicable following receipt
of a written discontinuance notice from the Participant on a form provided by a
designated Benefits Representative. Following a discontinuance of contributions,
a Participant cannot authorize any payroll contributions to his Account for the
remainder of the Calendar month in which the discontinuance is effective.
7. GRANTING OF OPTION TO PURCHASE STOCK.
(a) MONTHLY GRANT OF OPTIONS. For each calendar month, a
Participant shall be deemed to have been granted an option to purchase, on the
first day of the calendar month, as many whole and fractional shares as may be
purchased with the payroll deductions (and any cash dividends as provided in
Section 8) credited to the Participant's Account during the calendar month.
(b) OPTION PRICE. The option price of the Common Stock purchased
with the amount credited to the Participant's Account during each calendar month
shall be the lower of:
(i) 85% of the Market Price of a share of Stock on the first
day of the calendar month; or
(ii)85% of the Market Price of a share of Stock on the last
day of the calendar month.
Only the Market Price as of the first day of the Calendar month and the
last day of the Calendar month shall be considered for purposes of determining
the option purchase price; interim fluctuations during the Calendar month shall
not be considered.
8. EXERCISE OF OPTION.
(a) AUTOMATIC EXERCISE OF OPTIONS. Unless a Participant has
elected to withdraw payroll deductions in accordance with Section 10, the
Participant's option for the purchase of Common Stock shall be deemed to have
been exercised automatically as of the last day of the Calendar month for the
purchase of the number of whole and fractional shares of Common Stock which the
accumulated payroll deductions (and cash dividends on the Common Stock as
provided in Section 8(b)) in the Participant's Account at that time will
purchase at the applicable option price. Fractional shares may not be issued
under the Plan. As of the last day of each Calendar month, the balance of each
Participant's Account shall be applied to purchase the number of whole shares of
Stock as determined by dividing the balance of such Participant's Account as of
such date by the option price determined pursuant to Section 7(b). The
Participant's
Account shall be debited accordingly. Any balance in a Participant's stock
purchase account which was not applied to the purchase of Common Stock because
it was less than the purchase price of a full share shall remain in the
Participant's stock purchase account and be carried over to the succeeding
Calendar month.
(b) DIVIDENDS GENERALLY. Cash dividends paid on shares of Common
Stock which have not been delivered to the Participant pending the Participant's
request for delivery pursuant to Section 9(c), shall be combined with the
Participant's payroll deductions and applied to the purchase of Common Stock at
the end of the Calendar month in which the cash dividends are received, subject
to the Participant's withdrawal rights set forth in Section 10. Dividends paid
in the form of shares of Common Stock or other securities with respect to shares
that have been purchased under the Plan, but which have not been delivered to
the Participant, shall be credited to the shares that are credited to the
Participant's Account.
(c) PRO-RATA ALLOCATION OF AVAILABLE SHARES. If the total number
of shares to be purchased under options under the Plan by all Participants
exceeds the number of shares authorized under Section 4, a pro-rata allocation
of the available shares shall be made among all Participants authorizing such
payroll deductions based on the amount of their respective payroll deductions
through the last day of the Calendar month.
9. OWNERSHIP AND DELIVERY OF SHARES.
(a) BENEFICIAL OWNERSHIP. A Participant shall be the beneficial
owner of the shares of Common Stock purchased under the Plan upon the exercise
of his option and will have all rights of beneficial ownership in such shares.
Any dividends paid with respect to such shares shall be credited to the
Participant's Account and applied as provided in Section 8 until the shares are
delivered to the Participant.
(b) REGISTRATION OF STOCK. Stock to be delivered to a Participant
under the Plan shall be registered in the name of the Participant, or if the
Participant so directs by written notice to the designated Benefits
Representative or brokerage firm, if any, prior to the purchase of Stock
hereunder, in the names of the Participant and one such other person as may be
designated by the Participant, as joint tenants with rights of survivorship or
as tenants by the entirety, to the extent permitted by applicable law. Any such
designation shall not apply to shares purchased after a Participant's death by
the Participant's beneficiary or estate, as the case may be, pursuant to Section
11(b). If a brokerage firm is engaged by the Company to administer Accounts
under the Plan, such firm shall provide such account registration forms as are
necessary for each Participant to open and maintain a brokerage account with
such firm.
(c) DELIVERY OF STOCK CERTIFICATES. The Company, or a brokerage
firm or other entity selected by the Company, shall deliver to each Participant
a certificate for the number of shares of Common Stock purchased by the
Participant hereunder as soon as practicable after the close of each Calendar
month. Alternatively, in the discretion of the Committee, the stock certificate
may be delivered to a designated stock brokerage account maintained for the
Participant and held in "street name" in order to facilitate the subsequent sale
of the purchased shares.
(d) REGULATORY APPROVAL. In the event the Company is required to
obtain from any commission or agency the authority to issue any stock
certificate hereunder, the Company shall seek to obtain such authority. The
inability of the Company to obtain from any such commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
of any such certificate shall relieve the Company from liability to any
Participant, except to return to the Participant the amount of his Account
balance used to exercise the option to purchase the affected shares.
10. WITHDRAWAL OF PAYROLL DEDUCTIONS. At any time during a
Calendar month, but in no event later than 15 days (or such shorter prescribed
by the Committee or a Benefits Representative) prior to the last day of the
Calendar month, a Participant may elect to abandon his election to purchase
Common Stock under the Plan. By written notice to the designated Benefits
Representative on a form provided for such purpose, the Participant may thus
elect to withdraw all of the accumulated balance in his Account being held for
the purchase of Common Stock in accordance with Section 8(b). Partial
withdrawals will not be permitted. All such amounts shall be paid to the
Participant as soon as administratively practical after receipt of his notice of
withdrawal. After receipt and acceptance of such withdrawal notice, no further
payroll deductions shall be made from the Participant's Base Pay beginning as of
the next payroll period during the Calendar month in which the withdrawal notice
is received. The Committee, in its discretion, may determine that amounts
otherwise withdrawable hereunder by Participants shall be offset by an amount
that the Committee, in its discretion, determines to be reasonable to help
defray the administrative costs of effecting the withdrawal, including, without
limitation, fees imposed by any brokerage firm which administers such
Participant's Account. After a withdrawal, an otherwise eligible Participant may
resume participation in the Plan as of the first day of the Calendar month next
following his delivery of a payroll deduction authorization pursuant to the
procedures prescribed in Section 5(a).
11. TERMINATION OF EMPLOYMENT.
(a) GENERAL RULE. Upon termination of a Participant's Employment
for any reason, his participation in the Plan will immediately terminate.
(b) TERMINATION DUE TO RETIREMENT, DEATH OR DISABILITY. If the
Participant's termination of Employment is due to (i) retirement from Employment
on or after his attainment of age 65, (ii) death, or (iii) Disability, the
Participant (or the Participant's personal representative or legal guardian in
the event of Disability, or the Participant's beneficiary (as defined in Section
14) or the administrator of his will or executor of his estate in the event of
death), will have the right to elect, either to:
(i) Withdraw all of the cash and shares of Common Stock
credited to the Participant's Account as of his termination date; or
(ii)Exercise the Participant's option for the purchase of
Common Stock on the last day of the Calendar month (in which termination
of Employment occurs) for the purchase of the number of shares of Common
Stock which the cash balance credited to the Participant's Account as of
the date of the Participant's termination of Employment will purchase at
the applicable option price.
The Participant (or, if applicable, such other person designated in the
first paragraph of this Section 11(b)) must make such election by giving written
notice to the Benefits Representative at such time and in such manner as
prescribed from time to time by the Committee or Benefits Representative. In the
event that no such written notice of election is received by the Benefits
Representative within 30 days of the Participant's termination of Employment
date, the Participant (or such other designated person) will automatically be
deemed to have elected to withdraw the balance in the Participant's Account as
of the date of the termination of his Employment. Thereafter, any accumulated
cash and shares of Common Stock credited to the Participant's Account as of his
termination of Employment date shall be delivered to or on behalf of the
Participant as soon as administratively practicable.
(c) TERMINATION OTHER THAN FOR RETIREMENT, DEATH OR DISABILITY.
Upon termination of a Participant's Employment for any reason other than
retirement, death, or Disability pursuant to Section 11(b), the participation of
the Participant in the Plan will immediately terminate. Thereafter, any
accumulated cash and shares of Common Stock credited to the Participant's
Account as of his termination of Employment date shall be delivered to the
Participant as soon as administratively practicable.
(d) REHIRED EMPLOYEES. Any Employee whose Employment terminates
and who is subsequently rehired by an Employer shall be treated as a new
Employee for purposes of eligibility to participate in the Plan, except as
stated in Section 3(a).
12. INTEREST. No interest shall be paid or allowed on any money
paid into the Plan or credited to the Account of any Participant.
13. ADMINISTRATION OF THE PLAN.
(a) NO PARTICIPATION IN PLAN BY COMMITTEE MEMBERS. No options may
be granted under the Plan to any member of the Committee during the term of his
membership on the Committee.
(b) AUTHORITY OF THE COMMITTEE. Subject to the provisions of the
Plan, the Committee shall have the plenary authority to (a) interpret the Plan
and all options granted under the Plan, (b) make such rules as it deems
necessary for the proper administration of the Plan, (c) make all other
determinations necessary or advisable for the administration of the Plan, and
(d) correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any option granted under the Plan in the manner and to the extent
that the Committee deems advisable. Any action taken or determination made by
the Committee pursuant to this and the other provisions of the Plan shall be
conclusive on all parties. The act or determination of a majority of the
Committee shall be deemed to be the act or determination of the Committee. By
express written direction, or by the day-to-day operation of Plan
administration, the Committee may delegate the authority and responsibility for
the day-to-day administrative or ministerial tasks of the Plan to a Benefits
Representative, including a brokerage firm or other third party engaged for such
purpose.
(c) MEETINGS. The Committee shall designate a chairman from among
its members to preside at its meetings, and may designate a secretary, without
regard to whether that person is a member of the Committee, who shall keep the
minutes of the proceedings. Meetings shall be held at such times and places as
shall be determined by the Committee, and the Committee may hold telephonic
meetings. The Committee may take any action otherwise proper under the Plan by
the affirmative vote of a majority of its members taken at a meeting, or by the
affirmative vote of all of its members taken without a meeting. The Committee
may authorize any one or more of their members or any officer of the Company to
execute and deliver documents on behalf of the Committee.
(d) DECISIONS BINDING. All determinations and decisions made by
the Committee shall be made in its discretion pursuant to the provisions of the
Plan, and shall be final, conclusive and binding on all persons including the
Company, Participants, and their estates and beneficiaries.
(e) EXPENSES OF COMMITTEE. The Committee may employ legal counsel,
including, without limitation, independent legal counsel and counsel regularly
employed by the Company, consultants and agents as the Committee may deem
appropriate for the administration of the Plan. The Committee may rely upon any
opinion or computation received from any such counsel, consultant or agent. All
expenses incurred by the Committee in interpreting and administering the Plan,
including, without limitation, meeting expenses and professional fees, shall be
paid by the Company.
(f) INDEMNIFICATION. Each person who is or was a member of the
Committee shall be indemnified by the Company against and from any damage, loss,
liability, cost and expense that may be imposed upon or reasonably incurred by
him in connection with or resulting from any claim, action, suit, or proceeding
to which he may be a party or in which he may be involved by reason of any
action taken or failure to act under the Plan, except for any such act or
omission constituting willful misconduct or gross negligence. Such person shall
be indemnified by the Company for all amounts paid by him in settlement thereof,
with the Company's approval, or paid by him in satisfaction of any judgment in
any such action, suit, or proceeding against him, provided he shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or By-Laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
14. DESIGNATION OF BENEFICIARY. At such time, in such manner, and
using such form as shall be prescribed from time to time by the Committee or a
Benefits Representative, a Participant may file a written designation of a
beneficiary who is to receive any Common Stock and/or cash credited to the
Participant's Account at the Participant's death. Such designation of
beneficiary may be changed by the Participant at any time by giving written
notice to the Benefits Representative at such time and in such form as
prescribed. Upon the death of a Participant, and receipt by the Benefits
Representative of proof of the identity at the Participant's death of a
beneficiary validly designated under the Plan, the Benefits Representative will
take appropriate action to ensure delivery of such Common Stock and/or cash to
such beneficiary. In the event of the death of a Participant and the absence of
a beneficiary validly designated under the Plan who is living at the time of
such Participant's death, the Benefits Representative will take appropriate
action to ensure delivery of such Common Stock and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Benefits
Representative), the Committee, in its discretion, may direct delivery of such
Common Stock and/or cash to the spouse or to any one or more dependents of the
Participant as the Committee may designate in its discretion. No beneficiary
will, prior to the death of the Participant, acquire any interest in any Common
Stock or cash credited to the Participant's Account.
15. TRANSFERABILITY. No amounts credited to a Participant's
Account, whether cash or Common Stock, nor any rights with regard to the
exercise of an option or to receive Common Stock under the Plan, may be
assigned, transferred, pledged, or otherwise disposed of in any way by the
Participant other than by will or the laws of descent and distribution. Any such
attempted assignment, transfer, pledge, or other disposition shall be void and
without effect.
Each option shall be exercisable, during the Participant's lifetime, only
by the Employee to whom the option was granted. The Company shall not recognize,
and shall be under no duty to recognize, any assignment or purported assignment
by an Employee of his option or of any rights under his option.
16. NO RIGHTS OF STOCKHOLDER UNTIL CERTIFICATE ISSUED. With
respect to shares of Stock subject to an option, an optionee shall not be deemed
to be a stockholder, and the optionee shall not have any of the rights or
privileges of a stockholder. An optionee shall have the rights and privileges of
a stockholder when, but not until, a certificate for shares has been issued to
the optionee following exercise of his option.
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The Board shall
make or provide for such adjustments in the maximum number of shares specified
in Section 4 and the number and option price of shares subject to options
outstanding under the Plan as the Board shall determine is appropriate to
prevent dilution or enlargement of the rights of Participants that otherwise
would result from any stock dividend, stock split, stock exchange, combination
of shares, recapitalization or other change in the capital structure of the
Company, merger, consolidation, spin-off of assets, reorganization, partial or
complete liquidation, issuance of rights or warrants to purchase securities, or
any other corporate transaction or event having an effect similar to any of the
foregoing.
In the event of a merger of one or more corporations into the Company, or
a consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, each Participant, at no additional cost,
shall be entitled, upon his payment for all or part of the Common Stock
purchasable by him under the Plan, to receive (subject to any required action by
shareholders) in lieu of the number of shares of Common Stock which he was
entitled to purchase, the number and class of shares of stock or other
securities to which such holder would have been entitled pursuant to the terms
of the agreement of merger or consolidation if, immediately prior to such merger
or consolidation, such holder had been the holder of record of the number of
shares of Common Stock equal to the number of shares purchasable by the
Participant under the Plan.
If the Company shall not be the surviving corporation in any
reorganization, merger or consolidation (or survives only as a subsidiary of an
entity other than a previously wholly-owned subsidiary of the Company), or if
the Company is to be dissolved or liquidated or the Company sells substantially
all of its assets or stock to another corporation or other entity, then, unless
a surviving corporation assumes or substitutes new options (within the meaning
of Section 424(a) of the Code) for all options then outstanding, (i) the date of
exercise for all options then outstanding shall be accelerated to dates fixed by
the Committee prior to the effective date of such corporate event, (ii) a
Participant may, at his election by written notice to the Company, either (x)
withdraw from the Plan pursuant to Section 10 and receive a refund from the
Company in the amount of the accumulated cash and Stock balance in the
Participant's Account, (y) exercise a portion of his outstanding options as of
such exercise date to purchase shares of Stock, at the option price, to the
extent of the balance in the Participant's Account, or (z) exercise in full his
outstanding options as of such exercise date to purchase shares of Stock, at the
option price, which exercise shall require such Participant to pay the related
option price, and (iii) after such effective date any unexercised option shall
expire. The date the Committee selects for the exercise date under the preceding
sentence shall be deemed to be the exercise date for purposes of computing the
option price per share of Stock. If the Participant elects to exercise all or
any portion of the options, the Company shall deliver to such Participant a
stock certificate issued pursuant to Section 9(c) for the number of shares of
Stock with respect to which such options were exercised and for which such
Participant has paid the option price. If the Participant fails to provide the
notice set forth above within three days after the exercise date selected by the
Committee under this Section 17, the Participant shall be conclusively presumed
to have requested to withdraw from the Plan and receive payment of the
accumulated balance of his Account. The Committee shall take such steps in
connection with such transactions as the Committee shall deem necessary or
appropriate to assure that the provisions of this Section 17 are effectuated for
the benefit of the Participants.
Except as expressly provided in this Section 17, the issue by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Stock then available
for purchase under the Plan.
18. PLAN EXPENSES; USE OF FUNDS; NO INTEREST PAID. The expenses of
the Plan shall be paid by the Company except as otherwise provided herein or
under the terms and conditions of any agreement entered into between the
Participant and any brokerage firm engaged to administer Accounts. All funds
received or held by the Company under the Plan shall be included in the general
funds of the Company free of any trust or other restriction, and may be used for
any corporate purpose. No interest shall be paid to any Participant or credited
to his Account under the Plan.
19. TERM OF THE PLAN. The Plan shall become effective as of
October 17, 2006, subject to approval by the holders of the majority of the
Common Stock present and represented at a special or annual meeting of the
Company's stockholders held on or before 12 months from October 17, 2006.
Except with respect to options then outstanding, if not terminated sooner
under the provisions of Section 20, no further options shall be granted under
the Plan at the earlier of (i) October 17, 2016, or (ii) the point in time when
no shares of Stock reserved for issuance under Section 4 are available.
20. AMENDMENT OR TERMINATION OF THE PLAN. The Board shall have the
plenary authority to terminate or amend the Plan; provided, however, that the
Board shall not, without the approval of the stockholders of the Company, (a)
increase the maximum number of shares which may be issued under the Plan
pursuant to Section 4, (b) amend the requirements as to the class of employees
eligible to purchase Stock under the Plan, or (c) permit the members of the
Committee to purchase Stock under the Plan. No termination, modification, or
amendment of the Plan shall adversely affect the rights of a Participant with
respect to an option previously granted to him without his written consent.
In addition, to the extent that the Committee determines that, in the
opinion of counsel, (a) the listing for qualification requirements of any
national securities exchange or quotation system on which the Company's Common
Stock is then listed or quoted, or (b) the Code or Treasury regulations issued
thereunder, require stockholder approval in order to maintain compliance with
such listing or qualification requirements or to maintain any favorable tax
advantages or qualifications, then the Plan shall not be amended by the Board in
such respect without first obtaining such required approval of the Company's
stockholders.
21. SECURITIES LAWS RESTRICTIONS ON EXERCISE. The Committee may,
in its discretion, require as conditions to the exercise of any option that the
shares of Common Stock reserved for issuance upon the exercise of the option
shall have been duly listed, upon official notice of issuance, upon a stock
exchange, and that either:
(a) a Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective; or
(b) the participant shall have represented at the time of
purchase, in form and substance satisfactory to the Company, that it is his
intention to purchase the Stock for investment and not for resale or
distribution.
22. SECTION 16 COMPLIANCE. The Plan, and transactions hereunder by
persons subject to Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), are intended to comply with all applicable conditions of
Rule 16b-3 or any successor exemption provision promulgated under the Exchange
Act. To the extent that any provision of the Plan or any action by the Committee
or the Board fails, or is deemed to fail, to so comply, such provision or action
shall be null and void but only to the extent permitted by law and deemed
advisable by the Committee in its discretion.
23. WITHHOLDING AND PAYROLL TAXES. Notwithstanding anything in
this Plan to the contrary, whenever an option is exercised pursuant to Section 8
or whenever shares of Stock that were received upon the exercise of an option
granted under the Plan are disposed of, the Company shall have the right to
require the Participant to remit to the Company in cash an amount sufficient to
satisfy federal, state and local withholding and payroll (employment) tax
requirements, if any, attributable to such exercise or disposition prior to
authorizing such exercise or disposition or permitting the delivery of any
certificate or certificates with respect thereto
24. NO RESTRICTION ON CORPORATE ACTION. Subject to Section 20,
nothing contained in the Plan shall be construed to prevent the Board or any
Employer from taking any corporate action which is deemed by the Employer to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any option granted under the Plan. No Employee,
beneficiary or other person shall have any claim against any Employer as a
result of any such action.
25. USE OF FUNDS. The Employers shall promptly transfer all
amounts withheld under Section 6 to the Company or to any brokerage firm engaged
to administer Accounts, as directed by the Company. All payroll deductions
received or held by the Company under the Plan may be used by the Company for
any corporate purpose, and the Company will not be obligated to segregate such
payroll deductions.
26. MISCELLANEOUS.
(a) OPTIONS CARRY SAME RIGHTS AND PRIVILEGES. To the extent
required to comply with the requirements of Section 423 of the Code, all
Employees granted options under the Plan to purchase Common Stock shall have the
same rights and privileges hereunder.
(b) HEADINGS. Any headings or subheadings in this Plan are
inserted for convenience of reference only and are to be ignored in the
construction or interpretation of any provisions hereof.
(c) GENDER AND TENSE. Any words herein used in the masculine shall
be read and construed in the feminine when appropriate. Words in the singular
shall be read and construed as though in the plural, and vice-versa, when
appropriate.
(d) GOVERNING LAW. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware to the extent not preempted by
federal law.
(e) REGULATORY APPROVALS AND COMPLIANCE. The Company's obligation
to sell and deliver Common Stock under the Plan is at all times subject to all
approvals of and compliance with the (i) regulations of any applicable stock
exchanges and (ii) any governmental authorities required in connection with the
authorization, issuance, sale or delivery of such Stock, as well as federal,
state and foreign securities laws.
(f) SEVERABILITY. In the event that any provision of this Plan
shall be held illegal, invalid, or unenforceable for any reason, such provision
shall be fully severable, but shall not affect the remaining provisions of the
Plan, and the Plan shall be construed and enforced as if the illegal, invalid,
or unenforceable provision had not been included herein.
(g) REFUND OF CONTRIBUTIONS ON NONCOMPLIANCE WITH TAX LAW. In the
event the Company should receive notice that this Plan fails to qualify as an
"employee stock purchase plan" under Section 423 of the Code, all then-existing
Account balances shall be paid to the Participants and the Plan shall
immediately terminate.
(h) NO GUARANTEE OF TAX CONSEQUENCES. The Board, Employer and the
Committee do not make any commitment or guarantee that any tax treatment will
apply or be available to any person participating or eligible to participate in
the Plan, including, without limitation, any tax imposed by the United States or
any state thereof, any estate tax, or any tax imposed by a foreign government.
(i) COMPANY AS AGENT FOR THE EMPLOYERS. Each Employer, by adopting
the Plan, appoints the Company and the Board as its agents to exercise on its
behalf all of the powers and authorities hereby conferred upon the Company and
the Board by the terms of the Plan, including, but not by way of limitation, the
power to amend and terminate the Plan.
