EXHIBIT 10.35
DTI HOLDINGS, INC.
2001 STOCK OPTION PLAN
SECTION 1
INTRODUCTION
1.1 ESTABLISHMENT. DTI Holdings, Inc., a corporation organized
and existing under the laws of the state of Missouri (the
"Company") established the DTI Holdings, Inc. 2001 Stock Option
Plan (the "Plan"), effective March 30, 2001 for certain eligible
employees and non-employee directors of the Company and its
majority-owned subsidiaries. The Plan was subsequently amended
and restated effective April 1, 2001.
1.2 PURPOSE. The purpose of this Plan is to encourage employees
and non-employee directors of the Company and its affiliates and
subsidiaries to acquire a proprietary and vested interest in the
growth and performance of the Company. The Plan is also designed
to assist the Company in attracting and retaining employees and
non-employee directors by providing them with the opportunity to
participate in the success and profitability of the Company.
SECTION 2
DEFINITIONS
2.1 The following terms shall have the meanings set forth below.
(a) "1933 ACT" means the Securities Act of 1933, as amended.
Reference to a specific section of the 1933 Act or regulation
thereunder shall include such section or regulation, any valid
regulation promulgated under such section, and any comparable
provision of any future legislation or regulation amending,
supplementing, or superseding such section or regulation.
(b) "1934 ACT" means the Securities Exchange Act of 1934, as
amended. Reference to a specific section of the 1934 Act or
regulation thereunder shall include such section or regulation,
any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation
amending, supplementing, or superseding such section or
regulation.
(c) "BENEFICIARY" means the person, persons, trust or trusts
which have been designated by an Option Holder in his or her most
recent written beneficiary designation filed with the Company to
receive the benefits specified under this Plan upon the death of
the Option Holder, or, if there is no designated Beneficiary or
surviving designated Beneficiary, then the person, persons, trust
or trusts entitled by will or the laws of descent and
distribution to receive such benefits.
(d) "BOARD" means the Board of Directors of the Company.
(e) "CHANGE IN CONTROL" means the first to occur of the
following events:
(i) Any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the 1934 Act) is or
becomes the Beneficial Owner (within the meaning
set forth in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of the
Company (not including in the securities
beneficially
owned by such Person any securities acquired
directly from the Company or its Affiliates)
representing 50% or more of the combined voting
power of the Company's then outstanding
securities, excluding any person who becomes such
a Beneficial Owner in connection with a
transaction described in clause (x) of paragraph
(iii) of this Section 2.1(e); or
(ii) The following individuals cease for any reason to
constitute a majority of the number of directors
then serving: individuals who, on the date the
Plan is adopted by the Company's shareholders,
constitute the Board of Directors of the Company
and any new director (other than a director whose
initial assumption of office is in connection with
an actual or threatened election contest,
including but not limited to a consent
solicitation, relating to the election of
directors of the Company) whose appointment or
election by the Board of Directors or nomination
for election by the Company's shareholders was
approved by a vote of at least two-thirds of the
directors then still in office who either were
directors on the date hereof or whose appointment,
election or nomination for election was previously
so approved or recommended; or
(iii) There is consummated a merger or
consolidation of the Company or any Subsidiary
with any other corporation, OTHER THAN (x) a
merger or consolidation which would result in the
voting securities of the Company outstanding
immediately prior to such merger or consolidation
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving entity or any parent
thereof), in combination with the ownership of any
trustee or other fiduciary holding securities
under an employee benefit plan of the Company or
any Subsidiary at least 50% of the combined voting
power of the securities of the Company or such
surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or
(y) a merger or consolidation effected to
implement a recapitalization of the Company (or
similar transaction) in which no Person is or
becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not
including in the securities beneficially owned by
such Person any securities acquired directly from
the Company or its Affiliates other than in
connection with the acquisition by the Company or
its Affiliates of a business) representing 50% or
more of the combined voting power of the Company's
then outstanding securities; or
(iv) The shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company
or there is consummated an agreement for the sale
or disposition by the Company of all or
substantially all of the Company's assets, other
than a sale or disposition by the Company of all
or substantially all of the Company's assets to an
entity, at least 50% of the combined voting power
of the voting securities of which are owned by
shareholders of the Company in substantially the
same proportions as their ownership of the Company
immediately prior to such sale.
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Notwithstanding the foregoing, a "Change in Control"
shall not be deemed to have occurred by virtue of the
consummation of any transaction or series of integrated
transactions immediately following which the record
holders of the Company's common stock immediately prior
to such transaction or series of transactions continue
to have substantially the same proportionate ownership
in an entity which owns all or substantially all of the
Company's assets immediately following such transaction
or series of transactions.
(f) "CODE" means the Internal Revenue Code of 1986, as it may be
amended from time to time, and the rules and regulations
promulgated thereunder.
(g) "COMMITTEE" means (i) the Board, or (ii) the Compensation
Committee to whom the Board has delegated all or part of its
authority under this Plan.
(h) "COMPANY" means DTI Holdings, Inc., a Missouri corporation,
and its subsidiaries (within the meaning of Section 424(f) of the
Code) or any successor corporation.
(i) "COVERED EMPLOYEE" means an individual that meets the
definition of covered employee under Section 162(m) of the Code,
or any successor provision thereto.
(j) "DATE OF GRANT" means, with respect to any Option, the date
as of which such Option is granted under the Plan.
(k) "DISABILITY" OR "DISABLED" means an individual treated as
permanently and totally disabled within the meaning of Section
22(e) of the Code, except that, with respect to Nonqualified
Stock Options, Disability or Disabled may, subject to the
discretion of the Committee, mean qualifying for and receiving
payments under a disability pay plan of the Company.
(l) "EFFECTIVE DATE" means March 30, 2001.
(m) "ELIGIBLE EMPLOYEES" means full-time key employees
(including, without limitations, officers and directors who are
also employees) of the Company, or of the Company's majority-
owned subsidiaries, upon whose judgment, initiative and efforts
the Company is, or will be, important to the successful conduct
of its business.
(n) "FAIR MARKET VALUE" means, as of any date, the value of the
Stock determined in good faith, from time to time, by the
Committee in its sole discretion and the Committee may adopt such
formulas as in its opinion shall reflect the true fair market
value of such stock from time to time and may rely on such
independent advice with respect to such fair market value as the
Committee shall deem appropriate. In the event that the Shares
of the Company are traded on a national securities exchange and,
unless otherwise determined by the Committee in good faith, the
Fair Market Value of Stock as of any given date shall mean the
per share value of Stock as determined using the mean between the
high and low selling prices of such Stock on the immediately
preceding date (or, if such stock market was not open on that
day, the next preceding day that such market is open for trading
and the Stock is traded) as reported for such date in The Wall
Street Journal.
(o) "INCENTIVE STOCK OPTION" means any Option designated as such
and granted in accordance with the requirements of Section 422 of
the Code or any successor provisions thereto.
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(p) "NONQUALIFIED STOCK OPTION" means any Option to purchase
Shares that is not an Incentive Stock Option.
(q) "OPTION" means a right to purchase Stock at a specified or
determinable price for a specified period of time. Such
definition includes both Nonqualified Stock Options and Incentive
Stock Options.
(r) "OPTION AGREEMENT" means a written agreement or instrument
between the Company and an Option Holder evidencing an Option.
(s) "OPTION HOLDER" means a Participant or a Beneficiary who is
in possession of an Option Agreement representing an Option that
has been granted to such individual and has not expired, been
canceled or terminated.
(t) "OPTION PRICE" means the price at which Shares subject to an
Option may be purchased, determined in accordance with Section
6.2(b).
(u) "PARTICIPANT" means (i) with respect to an Incentive Stock
Option, an employee of the Company designated by the Committee
from time to time during the term of the Plan to receive one or
more Options under the Plan; and (ii) with respect to a
Nonqualified Stock Option, an employee or non-employee director
of the Company designated by the Committee from time to time
during the term of the Plan to receive one or more Options under
the Plan.
(v) "PLAN" means the DTI Holdings, Inc. 2001 Stock Option Plan,
as set forth in this instrument and as hereafter amended from
time to time.
(w) "PLAN YEAR" means each 12-month period beginning January 1
and ending the following December 31, except that for the first
year of the Plan it shall begin on the Effective Date and extend
to December 31 of that year.
(x) "RULE 16B-3" means Rule 16b-3 promulgated under the 1934
Act, and any future regulation amending, supplementing, or
superseding such regulation.
(y) "SECTION 16 PERSON" means a person who, with respect to the
Shares, is subject to Section 16 of the 1934 Act.
(z) "SHARE" means a share of Stock.
(aa) "STOCK" means authorized and issued or unissued common stock
of the Company, at such par value as may be established from time
to time.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the
context, the masculine gender shall also include the feminine
gender, and the definition of any term herein in the singular
shall also include the plural.
SECTION 3
PLAN ADMINISTRATION
3.1 AUTHORITY OF COMMITTEE. The Plan shall be administered by
the Committee. Subject to the terms of the Plan and applicable
law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) select the employees and non-
employee directors to whom Options may from time to time be
granted hereunder; (ii) determine the type or types of Options to
be granted to eligible employees and non-employee directors;
(iii) determine the number of Shares to be covered by, or with
respect to which payments, rights, or other matters are to be
calculated in connection with, Options; (iv) determine the terms
and conditions of any Option; (v) determine whether, and to what
extent, and under what circumstances Options may be settled or
exercised in cash, Shares, other securities, or
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other property, (vi) determine whether, and to what extent,
and under what circumstance Options may be canceled,
forfeited, or suspended and the method or methods by which
Options may be settled, exercised, canceled, forfeited, or
suspended; (vii) determine whether, to what extent, and
under what circumstances cash, Shares, other securities,
other property, and other amounts payable with respect to an
Option shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (viii)
correct any defect, supply an omission, reconcile any
inconsistency and otherwise interpret and administer the
Plan and any instrument or Option Agreement relating to the
Plan or any Option hereunder; (ix) modify and amend the
Plan, establish, amend, suspend, or waive such rules,
regulations and procedures of the Plan, and appoint such
agents as it shall deem appropriate for the proper
administration of the Plan; and (x) make any other
determination and take any other action that the Committee
deems necessary or desirable for the administration of the
Plan. A majority of the members of the Committee may
determine its actions and fix the time and place of its
meetings.
3.2 DETERMINATION UNDER THE PLAN. Unless otherwise expressly
provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the
Plan or any Option shall be within the sole discretion of the
Committee, may be made at any time and shall be final,
conclusive, and binding upon all persons, including the Company,
any Participant, any Option Holder, and any shareholder. No
member of the Committee shall be liable for any action,
determination or interpretation made in good faith, and all
members of the Committee shall, in addition to their rights as
directors, be fully protected by the Company with respect to any
such action, determination or interpretation.
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in
Section 4.3, no more than six million (6,000,000) Shares are
authorized for issuance under the Plan in accordance with the
provisions of the Plan and subject to such restrictions or other
provisions as the Committee may from time to time deem necessary.
Any Shares issued hereunder may consist, in whole or in part, of
authorized and unissued shares or treasury shares. The Shares
may be divided among the grants for Incentive Stock Options and
Nonqualified Stock Options as the Committee shall determine.
Shares that are subject to an underlying Option or that are
issued pursuant to the exercise of an Option shall be applied to
reduce the maximum number of Shares remaining available for use
under the Plan. The Company shall at all times during the term
of the Plan and while any Options are outstanding retain as
authorized and unissued Stock, or as treasury Stock, at least the
number of Shares from time to time required under the provisions
of the Plan, or otherwise assure itself of its ability to perform
its obligations hereunder.
4.2 UNUSED AND FORFEITED STOCK. Any Shares that are subject to
an Option under this Plan that are not used because the terms and
conditions of the Option are not met, including any Shares that
are subject to an Option that expires or is terminated for any
reason, any Shares that are used for full or partial payment of
the purchase price of Shares with respect to which an Option is
exercised and any Shares retained by the Company pursuant to
Section 12.2 shall automatically become available for use under
the Plan.
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Notwithstanding the foregoing, any Shares used for full or
partial payment of the purchase price of the Shares with
respect to which an Option is exercised and any Shares
retained by the Company pursuant to Section 12.2 that were
originally Incentive Stock Option Shares must still be
considered as having been granted for purposes of
determining whether the Share limitation provided for in
Section 4.1 has been reached for purposes of Incentive Stock
Option grants.
4.3 ADJUSTMENTS FOR STOCK SPLIT, STOCK DIVIDEND, ETC. If the
Company shall at any time increase or decrease the number of its
outstanding Shares or change in any way the rights and privileges
of such Shares by means of the payment of a stock dividend or any
other distribution upon such Shares payable in Stock, or through
a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in
relation to the Stock that is affected by one or more of the
above events, the numbers, rights and privileges of (i) the
Shares as to which Options may be granted under the Plan, and
(ii) the Shares then included in each outstanding Option granted
hereunder, shall be increased, decreased or changed in like
manner as if they had been issued and outstanding, fully paid and
non assessable at the time of such occurrence.
4.4 GENERAL ADJUSTMENT RULES. If any adjustment or substitution
provided for in this Section 4 shall result in the creation of a
fractional Share under any Option, such fractional Share shall be
rounded to the nearest whole Share and fractional Shares shall
not be issued. In the case of any such substitution or
adjustment affecting an Option, the total Option Price for the
shares of Stock then subject to an Option shall remain unchanged
but the Option Price per Share under each such Option shall be
equitably adjusted by the Committee to reflect the greater or
lesser number of Shares or other securities into which the Stock
subject to the Option may have been changed.
4.5 DETERMINATION BY COMMITTEE, ETC. Adjustments under this
Section 4 shall be made by the Committee, whose determinations
with regard thereto shall be final and binding upon all persons.
SECTION 5
PARTICIPATION
5.1 Participants in the Plan shall be those key employees and
non-employee directors, who, in the judgment of the Committee,
are performing, or during the term of their incentive arrangement
will perform, important services in the management, operation and
development of the Company, and significantly contribute, or are
expected to significantly contribute, to the achievement of long-
term corporate economic objectives. Participants may be granted
from time to time one or more Options; provided, however, that
the grant of each such Option shall be separately approved by the
Committee, and receipt of one such Option shall not result in the
automatic receipt of any other Option, and written notice shall
be given to such person, specifying the terms, conditions, right
and duties related thereto. Each Participant shall enter into an
Option Agreement(s) with the Company, in such form as the
Committee shall determine and which is consistent with the
provisions of the Plan, specifying such terms, conditions, rights
and duties. Unless otherwise explicitly stated in the Option
Agreement, Options shall be deemed to be granted as of the date
specified in the grant resolution of the Committee, which date
shall be the date of any related agreement(s) with the
Participant. Unless explicitly
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provided for in a particular Option Agreement that the terms
of the Plan are being superseded, in the event of any
inconsistency between the provisions of the Plan and any
such Option Agreement(s) entered into hereunder, the
provisions of the Plan shall govern.
SECTION 6
STOCK OPTIONS
6.1 GRANT OF OPTIONS. A Participant may be granted one or more
Options. The Committee in its sole discretion shall designate
whether an Option is to be considered an Incentive Stock Option
or a Nonqualified Stock Option; provided, however, that, subject
in all cases to Section 4.5 of this Plan, the number of Shares
that shall be available for issuance under Incentive Stock
Options granted under the Plan to any individual in a calendar
year is limited to 75,000 Shares. The Committee may grant both
an Incentive Stock Option and a Nonqualified Stock Option to the
same Participant at the same time or at different times.
Incentive Stock Options and Nonqualified Stock Options, whether
granted at the same or different times, shall be deemed to have
been awarded in separate grants, shall be clearly identified, and
in no event shall the exercise of one Option affect the right to
exercise any other Option or affect the number of Shares for
which any other Option may be exercised.
6.2 OPTION AGREEMENTS. Each Option granted under the Plan shall
be evidenced by a written Option Agreement which shall be entered
into by the Company and the Option Holder to whom the Option is
granted, and which shall contain the following terms and
conditions, as well as such other terms and conditions not
inconsistent therewith, as the Committee may consider appropriate
in each case.
(a) NUMBER OF SHARES. Each Option Agreement shall state that it
covers a specified number of Shares, as determined by the
Committee. To the extent that the aggregate Fair Market Value of
Shares with respect to which Options designated as Incentive
Stock Options are exercisable for the first time by any Option
Holder during any year exceeds $100,000 or, if different, the
maximum limitation in effect at the time of grant under Section
422(d) of the Code, or any successor provision, such Options
shall be treated as not being Incentive Stock Options. The
foregoing shall be applied by taking Options into account in the
order in which they were granted. For the purposes of the
foregoing, the Fair Market Value of any Share shall be determined
as of the time the Option with respect to such Share is granted.
In the event the foregoing results in a portion of an Option
designated as an Incentive Stock Option exceeding the $100,000
limitation, only such excess shall be treated as not being an
Incentive Stock Option.
(b) PRICE. The price at which each Share covered by an Option
may be purchased shall be determined in each case by the
Committee and set forth in the Option Agreement, but in no event
shall the Option Price for each Share covered by an Incentive
Stock Option be less than the Fair Market Value of the Stock on
the date the Option is granted, as determined by the Committee;
provided, however, that the Option Price for each Share covered
by a Nonqualified Stock Option may be granted at any price less
than Fair Market Value, in the sole discretion of the Committee;
and provided further that the Option Price for each Share covered
by an Incentive Stock Option granted to an Eligible Employee who
then owns stock
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possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any
parent or subsidiary corporation of the Company must be
at least 110% of the Fair Market Value of the Stock
subject to the Incentive Stock Option on the date the
Option is granted.
(c) DURATION OF OPTIONS. Each Option Agreement shall state the
period of time, determined by the Committee, within which the
Option may be exercised by the Option Holder (the "Option
Period"). The Option Period must expire, in all cases, not more
than ten years from the date an Option is granted; provided,
however, that the Option Period of an Incentive Stock Option
granted to an Eligible Employee who then owns stock possessing
more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary corporation
of the Company must expire not more than five years from the date
such an Option is granted. Each Option Agreement shall also
state the periods of time, if any, as determined by the
Committee, when incremental portions of each Option shall vest.
If any Option is not exercised during its Option Period, it shall
be deemed to have been forfeited and or no further force or
effect.
(d) TERMINATION OF SERVICE, DEATH, DISABILITY, ETC. Except as
otherwise determined by the Committee, or unless provided
otherwise in the Option Agreement, the following rules shall
govern with respect to the exercise of the Option upon an Option
Holder ceasing to be an employee or a non-employee director or on
the death or Disability of the Option Holder. In each of the
following scenarios, to the extent the Option Holder or the
Option Holder's Beneficiaries desire to obtain the tax favorable
benefits associated with Incentive Stock Options, if any, held by
such individual(s), the Option must be exercised within three
months from ceasing to be an employee in the case of retirement,
or within twelve months from ceasing to be an employee in the
case of Disability:
(i) If the Option Holder ceases to be an employee or is removed from
the Board within the Option Period for cause, as determined
by the Company, or because of the Option Holder's voluntary
termination of employment with the Company or voluntary
resignation from the Board, the Option shall thereafter be void
for all purposes upon such Option Holder's cessation from
employment or removal/resignation as a director. As used in
this Section 6.2(d), "cause" shall mean a gross violation, as
determined by the Company, of the Company's established policies
and procedures. The effect of this Section 6.2(d)(i) shall be
limited to determining the conditions under which an option may
be rendered null and void, and nothing in this Section 6.2(d)(i)
shall restrict or otherwise interfere with the Company's
discretion with respect to the termination of any employee's or
director's relationship with the Company.
(ii) If the Option Holder ceases to be an employee or a director in a
manner determined by the Committee or Board, in its sole
discretion, to constitute retirement, the Option may be exercised
by the Option Holder, or in the case of the Option Holder's
death, by the Beneficiaries specified in clause (iii) of this
Section 6.2(d), within twelve months following the Option
Holder's retirement (provided in each case that such exercise
must occur
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within the Option Period), but not thereafter. In
any such case, the Option may be exercised only as
to the Shares as to which the Option had become
exercisable on or before the date the Option
Holder ceases to be an employee or a director.
(iii) If the Option Holder dies (A) while he or she is an
employee or a director, (B) within the three-month period
referred to in clause (v) below, or (C) within the twelve-month
period referred to in clause (ii) above, the Option may be
exercised by those Beneficiaries entitled to do so within twelve
months following the Option Holder's death (provided that such
exercise must occur within the Option Period), but not
thereafter. In any such case, the Option may be exercised only
as to the Shares as to which the Option had become exercisable on
or before the date of the Option Holder's death or at such time
as the Option Holder ceased to be an employee or a director,
whichever is earlier.
(iv) If the Option Holder becomes Disabled while an employee or a
director or within the twelve month period following his or her
retirement as provided in clause (ii) above, Stock Options held
by the Option Holder may be exercised by the Option Holder within
twelve months following the date of the Option Holder's
Disability (provided that such exercise must occur within the
Option Period), but not thereafter. In any such case, the Option
may be exercised only as to the Shares as to which the Option had
become exercisable on or before the date the Option Holder ceased
to be an employee or a director.
(v) If the Option Holder ceases to be an employee or is removed
from the Board within the Option Period for any reason other than
cause, voluntary resignation, retirement as provided in clause
(ii) above, Disability as provided in clause (iv) above or the
Option Holder's death, the Option may be exercised by the Option
Holder within three months following the date of such cessation
or removal (provided that such exercise must occur within the
Option Period), but not thereafter. In any such case, the Option
may be exercised only as to the Shares as to which the Option had
become exercisable on or before the date that the Option Holder
ceases to be an employee or is removed from the Board.
(e) TRANSFERABILITY. Except as otherwise determined by the
Committee, Options shall not be transferable by the Option Holder
except by will or pursuant to the laws of descent and
distribution; each Option shall be exercisable during the Option
Holder's lifetime only by him or her, or in the event of
Disability or incapacity, by his or her guardian or legal
representative; and Shares issuable pursuant to any Option shall
be delivered only to or for the account of the Option Holder, or
in the event of Disability or incapacity, by his or her guardian
or legal representative.
(f) EXERCISE, PAYMENTS, ETC.
(i) Each Option Agreement shall provide that the method for
exercising the Option granted therein shall be by delivery to the
Corporate Secretary of the Company of written notice specifying
the number of Shares with respect to which such Option is
exercised (which must be in a minimum
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amount of Ten (10) Shares) and payment of the
Option Price. Such notice shall be in a form
satisfactory to the Committee and shall specify
the particular Option (or portion thereof) that is
being exercised and the number of Shares with
respect to which the Option is being exercised.
The exercise of the Option shall be deemed
effective upon receipt of such notice by the
Corporate Secretary and payment to the Company.
The purchase of such Stock shall take place at the
principal offices of the Company upon delivery of
such notice, at which time the purchase price of
the Stock shall be paid in full by any of the
methods or any combination of the methods set
forth in (ii) below. A properly executed
certificate or certificates representing the Stock
shall be issued by the Company and delivered to
the Option Holder. If certificates representing
the Stock are used to pay all or part of the
Option Price, separate certificates for the same
number of shares of Stock shall be issued by the
Company and delivered to the Option Holder
representing each certificate used to pay the
Option Price, and an additional certificate shall
be issued by the Company and delivered to the
Option Holder representing the additional shares,
in excess of the Option Price, to which the Option
Holder is entitled as a result of the exercise of
the Option.
(ii) The exercise price shall be paid by any of the following
methods:
A. Cash or Certified bank check; or
B. With the consent of the Committee, a promissory note
(recourse only) bearing interest at such rate and payable
upon such terms as may be prescribed by the Committee,
secured by the Shares to be acquired upon exercise of the
Option. No Option may, however, be exercised by delivery
of a promissory note or by a loan from the Company when or
where such loan or other extension of credit is prohibited
by law; or
C. By delivery to the Company of certificates representing the
number of Shares then owned by the Option Holder, the Fair
Market Value of which equals the purchase price of the
Stock purchased pursuant to the Option, properly endorsed
for transfer to the Company; provided however, that Shares
used for this purpose must have been held by the Option
Holder for such minimum period of time as may be
established from time to time by the Committee; and
provided further that the Fair Market Value of any Shares
delivered in payment of the purchase price upon exercise
of the Options shall be the Fair Market Value as of the
exercise date, which shall be the date of delivery of
the certificates for the Stock used as payment of the
Option Price.
In lieu of actually surrendering to the
Company the stock certificates representing
the number of Shares then owned by the Option
Holder, the Committee may, in its discretion
permit the Option Holder to submit to the
Company a statement affirming ownership by
the Option Holder of such number of Shares
and
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request that such Shares, although not
actually surrendered, be deemed to have been
surrendered by the Option Holder as payment
of the exercise price; or
D. Any combination of the consideration provided in the
foregoing subsections (A), (B) and (C).
(iii) In the discretion of the Committee, the Company may
guaranty a third-party loan obtained by the Option Holder
to pay part or all of the Option Price of the Shares
provided that such loan or the Company's guaranty is
secured by the Shares.
(g) DATE OF GRANT. Unless otherwise specifically specified in
the Option Agreement, an option shall be considered as having
been granted on the date specified in the grant resolution of the
Committee.
(h) WITHHOLDING.
(A) NONQUALIFIED STOCK OPTIONS. Each Option Agreement covering
Nonqualified Stock Options shall provide that, upon exercise of
the Option, the Option Holder shall make appropriate arrangements
with the Company to provide for the minimum amount of additional
withholding required by applicable federal and state income tax
and payroll tax laws, including payment of such taxes through
delivery of Stock or by withholding Stock to be issued under the
Option, as provided in Section 12.
(B) INCENTIVE STOCK OPTIONS. In the event that an Option Holder
makes a disposition (as defined in Section 424(c) of the Code) of
any Stock acquired pursuant to the exercise of an Incentive Stock
Option prior to the later of (i) the expiration of two years from
the date on which the Incentive Stock Option was granted or (ii)
the expiration of one year from the date on which the Option was
exercised, the Option Holder shall send written notice to the
Company at its principal office (Attention: Corporate Secretary)
of the date of such disposition, the number of shares disposed
of, the amount of proceeds received from such disposition, and
any other information relating to such disposition as the Company
may reasonably request. The Option Holder shall, in the event of
such a disposition, make appropriate arrangements with the
Company to provide for the minimum amount of additional
withholding, if any, required by applicable Federal and state
income tax and payroll tax laws.
(i) ADJUSTMENT OF OPTIONS. Subject to the limitations contained
in Sections 6 and 11, the Committee may make any adjustment in
the Option Price, the number of shares subject to, or the terms
of, an outstanding Option and a subsequent granting of an Option
by amendment or by substitution of an outstanding Option. Such
amendment, substitution, or re-grant may result in terms and
conditions (including Option Price, number of Shares covered,
vesting schedule or exercise period) that differ from the terms
and conditions of the original Option. The Committee may not,
however, adversely affect the rights of any Option Holder to
previously granted Options without the consent of such Option
Holder. If such action is
11
affected by the amendment, the effective date of such
amendment shall be the date of the original grant.
6.3 REQUIRED SETTLEMENT IN CASH. If in the event that the
issuance of Shares pursuant to the exercise of an Option (a)
would cause the Company to cease to be a member of the affiliated
group, within the meaning of 1504(a)(2) of the Code, which
includes KLT Telecom, Inc. (or its successor) ("KLT"), or (b)
would cause a Change in Control, as defined in clause (e)(i) of
such definition as contained in that certain Indenture dated as
of February 23, 1998 between the Company as issuer and The Bank
of New York as Trustee, as the same may be amended or
supplemented from time to time, then an Option Holder shall not
be allowed to exercise any such Option and no such issuance of
Shares shall be made. If the Option Holder is prohibited from
exercising such Option, the Company shall make a cash payment
equal to the excess of the fair market value (as determined by
the Committee) of the Shares to be issued upon exercise of the
Option over the exercise price for such Option Shares.
6.4 SHAREHOLDER PRIVILEGES. No Option Holder shall have any
rights as a shareholder with respect to any Shares covered by an
Option until the Option Holder becomes the holder of record of
such Stock, and no adjustments shall be made for dividends or
other distributions or other rights as to which there is a record
date preceding the date such Option Holder becomes the holder of
record of such Stock, except as provided in Section 4.
SECTION 7
REORGANIZATION, CHANGE IN CONTROL OR LIQUIDATION
7.1 GENERAL. Except as otherwise provided in any Option
Agreement or other agreement approved by the Committee to which
the Company and the Option Holder is a party, in the event that
the Company undergoes a Change in Control, each Option held by an
Option Holder shall without regard to any vesting schedule or
other restriction, automatically become fully exercisable as of
the date of such termination. In addition to the foregoing, in
the event the Company undergoes a Change in Control or in the
event of a corporate merger, consolidation, major acquisition of
property for stock, separation, reorganization or liquidation in
which the Company is a party to and in which a Change in Control
does not occur, the Committee, or the board of directors of any
corporation assuming the obligations of the Company, shall have
the full power and discretion to prescribe and amend the terms
and conditions for the exercise, or modification, of any
outstanding Options granted hereunder. The Committee may provide
that Options granted hereunder must be exercised in connection
with the closing of such transactions, and that if not so
exercised such Options will expire. Any such determinations by
the Committee may be made generally with respect to all
Participants, or may be made on a case-by-case basis with respect
to particular Participants. Notwithstanding the foregoing, any
transaction undertaken for the purpose of reincorporating the
Company under the laws of another jurisdiction, if such
transaction does not materially affect the beneficial ownership
of the Company's capital, shall not constitute a merger,
consolidation, major acquisition of property for stock,
separation, reorganization, liquidation, or Change in Control.
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7.2 STOCK OPTIONS. By way of illustration, and not by way of
limitation, in the event of a Change in Control or in the event
of a corporate merger, consolidation, major acquisition of
property for stock, separation, reorganization or liquidation in
which the Company is a party to and in which a Change in Control
does not occur, the Committee may, without obtaining shareholder
approval (A) provide for the complete or partial acceleration of
any time periods relating to the exercise of any outstanding
Option so that such Option may be exercised in full on or before
the date such Option would otherwise have been exercisable; (B)
in all such events other than a liquidation, cause any Option
then outstanding to be assumed by the surviving corporation in
such corporate transaction; (C) require the mandatory surrender
to the Company by any Option Holder of some (in all such events
other than a liquidation) or all of the outstanding Options held
by an Option Holder (irrespective of whether such Options are
then exercisable under the provisions of the Plan) as of a date
specified by the Company or the surviving corporation, in which
event the Company or the surviving corporation shall thereupon
cancel such Options and pay to each Option Holder an amount of
cash per share equal to the amount that could have been attained
upon the exercise of such Option or realization of the Option
Holder's rights had such Option been currently exercisable or
payable to the extent that such cash is available for
distribution to Option Holders after payment of all debt and
senior securities of the Company (including the payment of $1 for
any and all Options which are underwater); (D) in all such events
other than a liquidation, require the substitution of a new
Option for some or all of the outstanding Options held by an
Option Holder (irrespective of whether such Options are then
exercisable under the provisions of the Plan) provided that any
replacement or substituted Option shall be equivalent in economic
value to the Option Holder; or (E) in all such events other than
a liquidation, make such adjustment to any such Option then
outstanding as the Company deems appropriate to reflect such
merger, consolidation, major acquisition of property for stock,
separation, reorganization or liquidation.
SECTION 8
RIGHTS OF EMPLOYEES; PARTICIPANTS
8.1 EMPLOYMENT. Nothing contained in the Plan or in any Option
granted under the Plan shall confer upon any Participant any
right with respect to the continuation of his or her services as
an employee or interfere in any way with the right of the
Company, subject to the terms of any separate employment or
consulting agreement to the contrary, at any time to terminate
such services or to increase or decrease the compensation of the
Participant from the rate in existence at the time of the grant
of an Option. Whether an authorized leave of absence, or absence
in military or government service, shall constitute a termination
of Participant's services as an employee shall be determined by
the Committee at the time.
8.2 NONTRANSFERABILITY. No right or interest of any Option
Holder in an Option granted pursuant to the Plan shall be
assignable or transferable during the lifetime of the Option
Holder either voluntarily or involuntarily, or be subjected to
any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment,
pledge or bankruptcy. In the event of an Option Holder's death,
an Option Holder's rights and interests in all Options shall, to
the extent provided in Section 6, be
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transferable by testamentary will or the laws of descent and
distribution, and payment of any amounts due under the Plan
shall be made to, and exercise of any Options may be made
by, the Option Holder's legal representatives, heirs or
legatees. If, in the opinion of the Committee, a person
entitled to payments or to exercise rights with respect to
the Plan is disabled from caring for his or her affairs
because of a mental condition, physical condition or age,
payment due such person may be made to, and such rights
shall be exercised by, such person's guardian, conservator,
or other legal personal representative upon furnishing the
Committee with evidence satisfactory to the Committee of
such status. "Transfers" for purposes of this Section 8
shall not be deemed to include transfers to the Company or
"cashless exercise" procedures with third parties who
provide financing for the purpose of (or who otherwise
facilitate) the exercise of Options consistent with
applicable laws and the authorization of the Committee.
SECTION 9
GENERAL RESTRICTIONS
9.1 INVESTMENT REPRESENTATIONS. The Company may require any
person to whom an Option is granted, as a condition of exercising
such Option, to give written assurances in substance and form
satisfactory to the Company and its counsel to the effect that
such person is acquiring the Stock subject to the Option for his
or her own account for investment and not with any present
intention of selling or otherwise distributing the same, and to
such other effects as the Company deems necessary or appropriate
in order to comply with federal and applicable state securities
laws. Legends evidencing such restrictions may be placed on the
certificates evidencing the Stock.
9.2 COMPLIANCE WITH SECURITIES LAWS. Each Option shall be
subject to the requirement that, if at any time counsel to the
Company shall determine that the listing, registration or
qualification of the Shares subject to such Option upon any
securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, is
necessary as a condition of, or in connection with, the issuance
or purchase of Shares thereunder, such Option may not be accepted
or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee.
Nothing herein shall be deemed to require the Company to apply
for or to obtain such listing, registration or qualification.
9.3 STOCK RESTRICTION/SHAREHOLDER'S AGREEMENT. The Committee
may, in its sole and absolute discretion, provide that Shares
issuable upon the exercise of an Option, shall be subject to a
shareholder's agreement, or other such type of agreement, whereby
the Company has a right to subject such Shares to restrictions
including, but not limited to, a right of first refusal with
respect to such Shares or a right or obligation to repurchase all
or a portion of such Shares. The Committee may require that such
restrictions, if any, survive a Participant's cessation or
termination as an employee of the Company.
SECTION 10
OTHER EMPLOYEE BENEFITS
10.1 The amount of any compensation deemed to be received by a
Participant as a result of the exercise of an Option shall not
constitute "earnings" with respect to which any other
14
benefits of such Participant are determined, including
without limitation benefits under any pension, profit
sharing, life insurance, salary continuation plan or other
employee benefits.
SECTION 11
PLAN AMENDMENT, MODIFICATION AND TERMINATION
11.1 The Board may at any time terminate, and from time to time
may amend or modify, the Plan; provided, however, that no
amendment or modification may become effective without approval
of the amendment or modification by the shareholders if
shareholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the
Company, on the advice of counsel, determines that shareholder
approval is otherwise necessary or desirable.
No amendment, modification or termination of the Plan shall
in any manner adversely affect any Options theretofore
granted under the Plan, without the consent of the Option
Holder holding such Options.
SECTION 12
WITHHOLDING
12.1 WITHHOLDING REQUIREMENT. The Company's obligations to
deliver Shares upon the exercise of an Option shall be subject to
the Option Holder's satisfaction of all applicable federal, state
and local income and other tax withholding requirements.
12.2 WITHHOLDING WITH STOCK. At the time the Committee grants an
Option, it may, in its sole discretion, grant the Option Holder
an election to pay all required amounts of tax withholding, or
any part thereof, by electing to transfer to the Company, or to
have the Company withhold from Shares otherwise issuable to the
Option Holder, Shares (which have been held by the Option Holder
for more than six (6) months in the case of a transfer of
currently owned shares) having a value equal to the minimum
amount required to be withheld under federal, state or local law
or such lesser amount as may be elected by the Option Holder.
All elections shall be subject to the approval or disapproval of
the Committee. The value of Shares to be withheld shall be based
on the Fair Market Value of the Stock on the date that the amount
of tax to be withheld is to be determined (the "Tax Date"), as
determined by the Committee. Any such elections by Option
Holders to have Shares withheld for this purpose will be subject
to the following restrictions:
(a) All elections must be made prior to the Tax Date;
(b) All elections shall be irrevocable; and
(c) If the Option Holder is an officer or director of the
Company within the meaning of Section 16 of the 1934 Act
("Section 16"), the Option Holder must satisfy the requirements
of such Section 16 and any applicable rules thereunder with
respect to the use of Stock to satisfy such tax withholding
obligation.
SECTION 13
SECTION 162(m) PROVISIONS
13.1 LIMITATIONS. Notwithstanding any other provision of this
Plan, if the Committee determines at the time any Option is
granted to a Option Holder that such Option Holder is, or is
likely to be at the time he or she recognizes income for federal
income tax
15
purposes in connection with such Option, a Covered Employee,
then the Committee may provide that this Section 13 is
applicable to such Option.
13.2 PERFORMANCE GOALS. If an Option is subject to this Section
13, then the lapsing of restrictions thereon and the distribution
of cash, Shares or other property pursuant thereto, as
applicable, shall be subject to the achievement of one or more
objective performance goals established by the Committee, which
may include, but is not limited to, the attainment of one or any
combination of the following: specified levels of earnings per
share from continuing operations, operating income, revenue
levels, gross margin, return on operating assets, return on
equity, economic value added, stock price appreciation, total
shareholder return (measured in terms of stock price appreciation
and dividend growth), or cost control, of the Company for or
within which the Participant is primarily employed. Such
performance goals shall be set by the Committee within the time
period prescribed by, and shall otherwise comply with the
requirements of, Section 162(m) of the Code and the regulations
thereunder.
13.3 ADJUSTMENTS. Notwithstanding any provision of the Plan
other than Section 8, with respect to any Option that is subject
to this Section 13, the Committee may not adjust upwards the
amount payable pursuant to such Option, nor may it waive the
achievement of the applicable performance goals except in the
case of the death or disability of the Option Holder.
13.4 OTHER RESTRICTIONS. The Committee shall have the power to
impose such other restrictions on Options subject to this Section
13 as it may deem necessary or appropriate to insure that such
Options satisfy all requirements for "performance-based
compensation" within the meaning of Section 162(m)(4)(B) of the
Code or any successor thereto.
SECTION 14
BROKERAGE ARRANGEMENTS
14.1 The Committee, in its discretion, may enter into
arrangements with one or more banks, brokers or other financial
institutions to facilitate the disposition of shares acquired
upon exercise of Options, including, without limitation,
arrangements for the simultaneous exercise of Options and sale of
the Shares acquired upon such exercise.
SECTION 15
NONEXCLUSIVITY OF THE PLAN
15.1 Neither the adoption of the Plan by the Board nor the
submission of the Plan to shareholders of the Company for
approval shall be construed as creating any limitations on the
power or authority of the Board to adopt such other or additional
incentive or other compensation arrangements of whatever nature
as the Board may deem necessary or desirable or preclude or limit
the continuation of any other plan, practice or arrangement for
the payment of compensation or fringe benefits to employees, non-
employee directors or consultants generally, or to any class or
group of employees or consultants, which the Company now has
lawfully put into effect, including, without limitation, any
retirement, pension, savings and stock purchase plan, insurance,
death and disability benefits and executive short-term inventive
plans.
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SECTION 16
REQUIREMENTS OF LAW
16.1 REQUIREMENTS OF LAW. The issuance of Stock and the payment
of cash pursuant to the Plan shall be subject to all applicable
laws, rules and regulations.
16.2 RULE 16B-3. Transactions under the Plan and to the extent
even applicable, within the scope of Rule 16b-3 are intended to
comply with all applicable conditions of Rule 16b-3. To the
extent any provision of the Plan or any action by the Committee
under the Plan fails to so comply, such provision or action
shall, without further action by any person, be deemed to be
automatically amended to the extent necessary to effect
compliance with Rule 16b-3; provided, however, that if such
provision or action cannot be amended to effect such compliance,
such provision or action shall be deemed null and void to the
extent permitted by law and deemed advisable by the Committee.
16.3 GOVERNING LAW. The Plan and all agreements hereunder shall
be construed in accordance with and governed by the laws of the
State of Missouri.
SECTION 17
DURATION OF THE PLAN
17.1 No Option shall be granted under the Plan after ten years
from the Effective Date; provided, however, that any Option
theretofore granted may, and the authority of the Board or the
Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Option or to waive any conditions or rights
under any such Option shall, extend beyond such date.
Dated: Originally adopted effective
March 30, 2001, and subsequently
amended and restated effective
April 1, 2001.
DTI HOLDINGS, INC.
By: /s/Gary W. Douglass