Exhibit 10.9
As Amended Through
January 29, 1988
ELECTROMAGNETIC SCIENCES, INC.
1986 DIRECTORS' STOCK OPTION PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the meanings
hereinafter set forth unless the context clearly indicates to the
contrary:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Company" shall mean Electromagnetic Sciences,
Inc.
(c) "Date of Grant" shall mean each date after the
effective date of the Plan on which the stockholders of the
Company shall elect directors at an Annual Meeting of such
stockholders or any adjournment thereof.
(d) "Fair Market Value" shall mean the closing sales
price, or the mean between the closing high "bid" and low "asked"
prices, as the case may be, of the Stock in the over-the-counter
market on the day on which such value is to be determined, as
reported by the National Association of Securities Dealers
Automated Quotation System or successor national quotation
service. If the Stock is listed on a national securities
exchange, "Fair Market Value" shall mean the closing price of the
Stock on such national securities exchange on the day on which
such value is to be determined, as reported in the composite
quotations for securities traded on such exchange provided by the
National Association of Securities Dealers or successor national
quotation service. In the event no such quotations are available
for the day in question, "Fair Market Value" shall be determined
by reference to the appropriate prices on the next preceding day
for which such prices are reported.
(e) "Option" shall mean a Directors' Stock Option to
purchase Stock granted pursuant to the provisions of Article V
hereof.
(f) "Optionee" shall mean a person to whom an Option
has been granted hereunder.
(g) "Option Price" shall mean the price at which an
Optionee may purchase a share of stock under a Stock Option
Agreement.
(h) "Plan" shall mean the Electromagnetic Sciences,
Inc. 1986 Directors' Stock Option Plan, the terms of which are
set forth herein.
(i) "Stock" shall mean the $.10 par value common stock
of the Company or, in the event that the outstanding shares of
Stock are hereafter changed into or exchanged for different stock
or securities of the Company or some other corporation, such
other stock or securities.
(j) "Stock Option Agreement" shall mean an agreement
between the Company and the Optionee under which the Optionee may
purchase Stock in accordance with the Plan.
ARTICLE II
THE PLAN
2.1 Name. This plan shall be known as the "Electromagnetic
Sciences, Inc. 1986 Directors' Stock Option Plan."
2.2 Purpose. The purpose of the Plan is to advance the
interests of the Company and its stockholders by affording
elected directors of the Company an opportunity to acquire or
increase their proprietary interests in the Company, and thereby
to encourage their continued service as directors and to provide
them additional incentive to achieve the Company's growth
objectives.
2.3 Effective Date. The effective date of the Plan is
January 31, 1986, which is the date of its adoption (subject to
certain stated conditions) by the Board.
2.4 Termination Date. The Plan shall terminate and no
further Options shall be granted hereunder upon the tenth
anniversary of its effective date.
ARTICLE III
PARTICIPANTS
Each member of the Board, including each director who is an
employee of the Company or its subsidiaries, shall participate in
the Plan, provided that he is elected to a regular term as such a
member at an Annual Meeting of stockholders, or any adjournment
thereof.
ARTICLE IV
SHARES OF STOCK SUBJECT TO PLAN
4.1 Limitations. Subject to any antidilution adjustment
pursuant to the provisions of Section 4.2 hereof, the maximum
number of shares of Stock which may be issued and sold hereunder
shall not exceed 45,000 shares. Shares subject to an Option may
be either authorized and unissued shares or shares issued and
later acquired by the Company; provided, however, the shares of
Stock with respect to which an Option has been exercised shall
not again be available for option hereunder. If outstanding
Options granted hereunder shall terminate or expire for any
reason without being wholly exercised prior to the end of the
period during which Options may be granted hereunder, new Options
may be granted hereunder covering such unexercised shares.
4.2 Antidilution. In the event that the outstanding shares
of Stock are changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another
corporation by reason of merger, consolidation, reorganization,
recapitalization, reclassification, combination of shares, stock
splitup or stock dividend:
(a) The aggregate number and kind of shares of Stock
for which Options may be granted hereunder shall be adjusted
appropriately;
(b) The rights under outstanding Options granted
hereunder, both as to the number of subject shares and the Option
Price, shall be adjusted appropriately; and
(c) Where dissolution or liquidation of the Company or
any merger or combination in which the Company is not a surviving
corporation is involved, each outstanding Option granted
hereunder shall terminate, but the Optionee shall have the right,
immediately prior to such dissolution, liquidation, merger or
combination, to exercise his Option, in whole or in part, to the
extent that it shall not have been exercised, without regard to
the date on which such Option would otherwise have become
exercisable pursuant to Sections 5.4 and 5.6.
The foregoing adjustments and the manner of application
thereof shall be determined solely by the Board, and any such
adjustment may provide for the elimination of fractional share
interests. The adjustments required under this Article shall
apply to any successor or successors of the Company and shall be
made regardless of the number or type of successive events
requiring adjustments hereunder.
ARTICLE V
OPTIONS
5.1 Option Grant, Number of Shares and Agreement. On each
Date of Grant, each person elected to a regular term as a
director at the respective Annual Meeting of stockholders (or any
adjournment thereof) shall automatically be granted an Option to
purchase the maximum number of shares having an aggregate fair
market value on the Date of Grant not exceeding the aggregate
compensation payable to such person for services as a director
during the forthcoming year, based solely on assumed attendance
at four regular Board Meetings and on rates of compensation in
effect on the March 1 immediately preceding the Date of Grant,
without reference to any additional compensation for committee
membership or meetings. Each Option so granted shall be
evidenced by a written Stock Option Agreement, dated as of the
Date of Grant and executed by the Company and the Optionee,
stating the Option's duration, times of exercise, and exercise
price. The terms and conditions of the Option shall be
consistent with the Plan.
5.2 Option Price. The Option Price of the Stock subject to
each Option shall be the Fair Market Value of the Stock on its
Date of Grant.
5.3 Exercise Period. The period for the exercise of each
Option shall expire on the sixth anniversary of the Date of
Grant.
5.4 Option Exercise.
(a) Subject to the effects of prior termination as
director as provided in Section 5.6, an Option shall become
exercisable in full on the first anniversary of the Date of
Grant, and shall remain exercisable thereafter at all times prior
to expiration of the Option, regardless of whether the Optionee
thereafter continues to serve as a member of the Board.
(b) An Option may be exercised at any time or from
time to time during the term of the Option as to any or all full
shares which have become exercisable in accordance with this
Section, but not as to less than 25 shares unless the remaining
shares that are so exercisable are less than 25 shares. The
Option Price is to be paid in full in cash upon the exercise of
the Option; provided, however, that in lieu of cash all or any
portion of the Option Price may be paid by tendering to the
Company shares of Stock duly endorsed for transfer and owned by
the Optionee, to be credited against the Option Price at their
Fair Market Value at the time of exercise. The holder of an
Option shall not have any of the rights of a stockholder with
respect to the shares of Stock subject to the Option until such
shares have been issued or transferred to him upon the exercise
of his Option.
(c) An Option shall be exercised by written notice of
exercise of the Option, with respect to a specified number of
shares of Stock, delivered to the Company at its principal
office, and by payment to the Company in accordance with the
preceding paragraph at said office of the full amount of the
Option Price for such number of shares. In addition to and at
the time of payment of the Option Price, the Optionee shall pay
to the Company in cash the full amount of any federal and state
withholding or other employment taxes applicable to the taxable
income of such Optionee resulting from such exercise; provided,
however, that all or any portion of such tax obligations,
together with additional taxes not exceeding the actual
additional taxes to be owed by the Optionee as a result of such
exercise, may, upon the irrevocable election of the Optionee, be
paid by tendering to the Company shares of Stock duly endorsed
for transfer and owned by the Optionee, or by authorization to
the Company to withhold shares of Stock otherwise issuable upon
exercise of the Option, in either case in that number of shares
having a Fair Market Value at the time of exercise equal to the
amount of such taxes thereby being paid, and subject, in the case
of any Optionee who is required to file reports under Section
16(a) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), to such restrictions as to the approval and timing
of any such election as the Company may from time to time
determine to be necessary or appropriate to satisfy the
conditions of the exemption set forth in Rule 16b-3 under the
1934 Act.
5.5 Nontransferability of Option. Options may not be
transferred by an Optionee otherwise than by will or the laws of
descent and distribution. During the lifetime of an Optionee,
his Option may be exercised only by him (or by his guardian or
legal representative, should one be appointed). In the event of
the death of an Optionee, any Option held by him may be exercised
by his legatee(s) or other distributee(s) or by his personal
representative.
5.6 Termination as a Director. In the event of an
Optionee's termination as a member of the Board (other than a
termination that is due either to death or disability) prior to
the earlier of the first anniversary of the Date of Grant or the
first Annual Meeting (or adjournment thereof), occurring after
the Date of Grant of an Option, at which the stockholders shall
elect directors, such Option shall not thereafter become
exercisable in whole or in part, and shall thereupon terminate.
ARTICLE VI
STOCK CERTIFICATES
The Company shall not be required to issue or deliver any
certificate for shares of Stock purchased upon the exercise of
any Option granted hereunder or any portion thereof, prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed;
(b) The completion of any registration or other
qualification of such shares under any federal or state law or
under the rules or regulations of the Securities and Exchange
Commission or any other governmental regulatory body, which the
Company upon the advice of counsel shall determine to be
necessary or advisable;
(c) The obtaining of any approval or other clearance from
any federal or state governmental agency which the Company upon
the advice of counsel shall determine to be necessary or
advisable; and
(d) The lapse of such reasonable period of time following
the exercise of the Option as may be appropriate for reasons of
administrative convenience.
ARTICLE VII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time terminate the Plan, and may at any
time and from time to time and in any respect amend or modify the
Plan; provided, however, that if the Plan is approved by the
stockholders of the Company, the Board may not thereafter,
without further stockholder approval, amend the Plan:
(a) To materially increase the total number of shares
of Stock subject to the Plan, except as contemplated in Section
4.2 hereof;
(b) To materially modify the requirements as to
eligibility for participation in the Plan; or
(c) To otherwise materially increase the benefits
accruing to participants under the Plan.
No amendment of the Plan shall alter or impair any of the
rights or obligations under any Option theretofore granted under
the Plan without the consent of the Optionee.
ARTICLE VIII
RELATIONSHIP TO OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock
option, incentive or other compensation plans in effect for the
Company or any of its subsidiaries, nor shall the adoption of the
Plan preclude the Company from establishing any other forms of
incentive or other compensation plan for directors of the
Company.
ARTICLE IX
MISCELLANEOUS
9.1 Plan Binding on Successors. The Plan shall be binding
upon the successors and assigns of the Company.
9.2 Singular, Plural; Gender. Whenever used herein, nouns
in the singular shall include the plural, and the masculine
pronoun shall include the feminine gender.
9.3 Headings, etc., No Part of Plan. Headings of articles
and paragraphs hereof are inserted for convenience and reference,
and do not constitute a part of the Plan.