Exhibit 10.1
1973 NON-QUALIFIED STOCK OPTION PLAN
OF
NATIONAL PATENT DEVELOPMENT CORPORATION
AS AMENDED
The purpose of the Plan is to aid National Patent Development
Corporation (the "Corporation") and its subsidiaries in attracting, retaining
and motivating key employees, directors and consultants
1. Administration
The Plan shall be administered by a Stock Option Committee (the
"Committee"), consisting of not less than two directors of the Corporation who
shall be appointed by, and serve at the pleasure of, the Board of Directors.
Subject to the provisions of the Plan, the Committee shall have full authority
to interpret the Plan, to establish an amend the rules and regulations relating
to it, and to make all other determinations necessary or advisable for its
administration.
2. Maximum Number of Shares; Source of Shares
Subject to the provisions of Section 6 hereof, the maximum number
of shares of the Corporation's $.01 par value Common Stock ("Common Stock")
which may be purchased pursuant to options granted under the Plan shall be Three
Million Three Hundred and Ninety Six Thousand, Two Hundred and Fifty
(3,396,250). Such shares may be authorized and unissued shares, or issued shares
held in the Treasury of the Corporation, including issued shares reacquired by
the Corporation.
3. Participants; Grant of Options
(a) Participants and Grants. From time to time the Committee
shall, in its sole discretion, select the key employees of the Corporation or
its subsidiaries who shall be granted options under the Plan. The term
"employee," when used herein shall include, without limitation, officers,
directors and consultants. Upon making such selection, the Committee shall grant
to each such participant an option to purchase such number of shares of Common
Stock as may be determined by the Committee. In the absence of any specific
agreements to the contrary, no grant hereunder to a participant shall affect the
right of the Corporation or its subsidiaries to terminate the participant's
employment at any time, if the employee is an employee of the Corporation or a
subsidiary.
(b) Stock Option Agreement
(l) The grant of options by the Committee to any participant
shall be effective as of the date on which the Committee shall authorize the
option for such participant, but prior to the exercise thereof, such participant
shall be required to execute and deliver a Stock Option Agreement (the
"Agreement"), which shall contain such terms and conditions consistent with the
Plan as the Committee shall determine.
(2) The Committee may, in its sole discretion, require that
any employee receiving options hereunder (the "Optionee") shall, upon the
granting of options, agree that as a condition to his acquiring shares
thereunder he will remain in the employ of the Corporation and render to the
Corporation or its Subsidiaries his services for a period not to exceed one
year. Such agreement may require that the period of required services be
measures from the date of grant of the options, from the date such options are
exercised, or may require services during periods, each not to exceed one year,
measured from both the date of grant and the date of exercise of the options
granted hereunder.
(3) In any case in which required services are to be rendered
after the date of exercise of any options granted hereunder, the Corporation,
subject to the terms of this Plan, will promptly issue a certificate or
certificates for purchased shares out of either: (i) authorized but unissued
shares; or (ii) shares of its Common Stock held in the Treasury of the
Corporation, provided, however, that the Optionee shall agree to the deposit of
such shares with an escrow agent acceptable to the Corporation for the period
during which he is required, pursuant to this Plan, to render additional
services. The employee shall have all the rights of a shareholder with respect
to such shares from the time they are issued. The escrow agreement shall require
the payment to the Corporation of such amount as the Corporation shall determine
is required to be deposited, or otherwise paid over, to satisfy any withholding
liability which may be imposed upon the Corporation, including any withholding
liability which may arise by reason of the failure of the Corporation to
exercise any right it may have pursuant to Paragraph 4 of this Section 3(b).
(4) In the event that the Optionee fails to satisfy any
required period of service which he has agreed to perform, the Corporation shall
have the right to reacquire the shares deposited in escrow, pursuant to
sub-paragraph 3 of this Section 3(b), by notifying the escrow agent of such
intention and tendering, in cash or certified check, an amount equal to: (i) the
number of shares the Corporation desires to reacquire; multiplied by (ii) the
option price per share set forth in the Agreement. Such payment is to be made
within 90 days of the delivery of the notice described herein.
(5) In granting non-qualified options under the Plan to
eligible persons who hold outstanding stock options, issued by the Corporation
of any of its subsidiaries, the Committee, in its sole discretion, may condition
the grant of such non-qualified options under the Optionee's consent to the
cancellation of all or a portion of such other outstanding options.
4. Option
(a) Option Price. The option price per share of each option
granted pursuant to the Plan shall be specified in the Agreement relating to
such option, and shall be not less than 85% of the market value of Common Stock
on the date the option is granted, provided, however, in no event shall the
option price per share be less than the par value thereof.
(b) Option Period. The period during which an option may be
exercised shall not exceed fifteen years from the date such option is granted
and, subject to the foregoing, the Committee may provide that any stock option
may be exercised at such time or times as the Committee may, in its discretion,
determine.
(c) Payment for Stock. An option shall be exercised by written
notice of such exercise to either the Secretary or Treasurer of the Corporation
at its principal office. The notice shall specify the number of shares for which
the option is being exercised (which number shall be not less than twenty-five
shares at any one time) and shall be accompanied by payment in full of the
purchase price of such shares. No certificates for shares so purchased shall be
issued until full payment therefor has been made and a participant shall have
none of the rights of a stockholder with respect to such shares until such
certificates are in fact issued to such participant or to an escrow agent on
such participant's behalf. Payment of the purchase price may be made by cash,
check or in shares of Common Stock. The shares of Common Stock will be valued
based on their market value, as defined in Section 8 of this Plan.
5. Exercise and Cancellation of Options Upon Termination of
Employment or Death
If an Optionee shall voluntarily or involuntarily leave the employ
of the Company or its subsidiaries, unless authorized by the Committee, the
option of such Optionee shall terminate forthwith, except that the Optionee
shall have until the end of the ninetieth day, following the cessation of
employment, and not longer, to exercise any unexercised option which he could
have exercised on the day on which he left the employ of the Company or its
subsidiaries; provided, however, that such exercise must be accomplished within
the term of such option. Notwithstanding the foregoing, if the cessation of
employment or service is due to retirement on or after attaining the age of 65
or to disability (to an extent and in a manner as shall be determined in each
case by the Committee in its sole discretion) or to death, the Optionee or the
representatives of the estate of the Optionee shall have the privilege of
exercising any options which the Optionee could have exercised at the time of
such retirement, disability, or death; provided, however, that such exercise
must be accomplished within the terms of such option, and within six months of
the Optionee's retirement, disability or death.
Nothing contained herein or in the options shall be construed to
confer on any employee any right to be continued in the employ of the Company or
derogate from any right of the Company to retire, request the resignation of or
discharge an employee or to lay off or require a leave of absence of such
employee (with or without pay), at any time, with or without cause.
6. Adjustment in Number of Shares
In the event of any subdivision or combination of the outstanding
shares of the Corporation's Common Stock, by reclassification or otherwise, or
in the event of the payment of a stock dividend, a capital reorganization, a
reclassification of shares, a consolidation or merger, the Board of Directors
shall make appropriate adjustment in the aggregate number of shares for which
grants may be made under this Plan. The Committee shall determine the
appropriate adjustment of the kind and number of shares subject to each
outstanding option, or the option price, or both, in the event of any of the
aforementioned changes in the outstanding Common Stock of the Corporation,
provided, however, that no adjustment of the option prices shall permit a
reduction in the option price per share to less than the par value thereof.
7. Non-Assignability
No options granted under the Plan shall be transferable, other
than by will or by the laws of descent and distribution, and then only to the
extent permitted by this Plan. During a participant's lifetime, options shall be
exercisable only by such participant (or in the event of his disability, by his
legal representative). Except to the extent otherwise provided by law, no
benefits under the Plan shall be subject to any legal process to levy upon, or
attach, for payment of any claim against any participant or beneficiary.
8. Definitions
As used herein, the term "subsidiary" shall have the same meaning
as "subsidiary corporation" has under Section 425(f) of the Code, "retirement"
means retirement as that word is used in the Corporation's Employees' Retirement
Plan, and "market value" when used in reference to Common Stock shall mean the
average sale price (as determined by the Committee) of such Common Stock on the
exchange, if any, where the Common Stock is traded, or if there is no other such
exchange, the average between the low-bid and high-asked prices on the date of
grant. For all purposes of the Plan, an approved leave of absence shall not
constitute interruption or termination of employment.
9. General Restrictions
The exercise of each stock option granted under the Plan shall be
subject to the condition that if at any time the Corporation shall determine, in
its sole discretion, that the satisfaction of withholding tax or other
withholding liabilities, or that the listing, registration or qualification of
any shares otherwise deliverable upon such exercise upon any securities exchange
or under any State or Federal law, or the consent or approval of any regulatory
body, is necessary or desirable as a condition of, or in connection with, such
exercise or the delivery or purchase of shares thereunder, then in any such
event such exercise shall not be effective unless such withholding, listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Corporation.
10. Amendment and Discontinuance
The Board of Directors at any time may terminate the Plan, or make
such changes in, or additions to the Plan as the Board of Directors, in its
discretion, deems advisable, provided, however, that subject to the provisions
of Section 6 hereof the Board of Directors may not, without further approval by
the holders of shares of the capital stock of the Corporation possessing a
majority of the voting power of such capital stock represented in person or by
proxy at a meeting of shareholders of the Corporation duly called for such
purpose, grant options to any person other than those eligible under Section 3
hereof. No termination or amendment of the Plan may, without consent of the
holders of existing options, materially affect their rights under such options.
11. Duration
Unless this Plan is sooner terminated, options may be granted
hereunder until June 27, 2013.
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