Exhibit 99.2
STV GROUP, INCORPORATED
1995 EMPLOYEE STOCK OPTION PLAN
1. Purpose of Plan
The purpose of the 1995 Employee Stock Option Plan (the
"Plan") is to provide additional incentive to officers and other key employees
of STV Group, Incorporated (the "Company") and each present or future parent or
subsidiary corporation by encouraging them to invest in shares of Common Stock,
par value $1.00 per share ("Common Stock"), of the Company and thereby acquire a
proprietary interest in the Company and an increased personal interest in the
Company's success and progress, to the mutual benefit of officers, employees and
shareholders.
2. Aggregate Number of Shares
500,000 shares of the Company's Common Stock shall be the
aggregate number of shares which may be issued under this Plan. Notwithstanding
the foregoing, in the event of any change in the outstanding shares of the
Common Stock of the Company by reason of a stock dividend, stock split,
combination of shares, recapitalization, merger, consolidation, transfer of
assets, reorganization, conversion or what the Compensation Committee (defined
in Section 4(a)), deems in its sole discretion to be similar circumstances, the
aggregate number and kind of shares which may be issued under this Plan shall be
appropriately adjusted in a manner determined in the sole discretion of the
Compensation Committee. Reacquired shares of the Company's Common Stock, as well
as unissued shares, may be used for the purpose of this Plan. Shares of the
Company's Common Stock subject to options which have terminated unexercised,
either in whole or in part, shall be available for future options granted under
this Plan.
3. Class of Persons Eligible to Receive Options
(a) All officers and key employees of the Company and of any
present or future parent or subsidiary corporation of the Company are eligible
to receive an option or options under this Plan. The individuals who shall, in
fact, receive an option or options shall be selected by the Compensation
Committee, in its sole discretion, except as otherwise specified in Section 4
hereof.
(b) The maximum number of shares of Common Stock for which
options may be granted under this Plan to any participant during any fiscal year
of the Company is 100,000 shares (as adjusted for any change in the outstanding
shares of the Common Stock of the Company by reason of a stock dividend, stock
split, combination of shares, recapitalization, merger, consolidation, transfer
of assets, reorganization, conversion or what the Compensation Committee deems
in its sole discretion to be similar circumstances).
4. Administration of Plan
(a) This Plan shall be administered by the Compensation
Committee of the Board of Directors (the "Compensation Committee"). The
Compensation Committee shall be composed of a
minimum of three members of the Board of Directors as the Board shall determine,
each of whom shall be a "disinterested person" within the meaning of Rule
16b-3(c)(2)(i) under the Securities Exchange Act of 1934, as amended, of the
Securities and Exchange Commission (the "SEC") or any future corresponding rule.
(b) The Compensation Committee shall, in addition to its other
authority and subject to the provisions of this Plan, determine which
individuals shall in fact be granted an option or options, whether the option
shall be an Incentive Stock Option or a Non-Qualified Stock Option (as such
terms are defined in Section 5(a)), the number of shares to be subject to each
of the options, the time or times at which the options shall be granted, the
rate of option exercisability, and, subject to Section 5 hereof, the price at
which each of the options is exercisable and the duration of the option.
(c) The Compensation Committee shall adopt such rules for the
conduct of its business and administration of this Plan as it considers
desirable. A majority of the members of the Compensation Committee shall
constitute a quorum for all purposes. The vote or written consent of a majority
of the members of the Compensation Committee on a particular matter shall
constitute the act of the Compensation Committee on such matter. The
Compensation Committee shall have the right to construe the Plan and the options
issued pursuant to it, to correct defects and omissions and to reconcile
inconsistencies to the extent necessary to effectuate the Plan and the options
issued pursuant to it, and such action shall be final, binding and conclusive
upon all parties concerned. No member of the Compensation Committee or the Board
of Directors shall be liable for any act or omission (whether or not negligent)
taken or omitted in good faith, or for the exercise of any authority or
discretion granted in connection with the Plan to the Compensation Committee or
the Board of Directors, or for the acts or omissions of any other members of the
Compensation Committee or the Board of Directors. Subject to the numerical
limitations on Compensation Committee membership set forth in Section 4(a)
hereof, the Board of Directors may at any time appoint additional members of the
Compensation Committee and may at any time remove any member of the Compensation
Committee with or without cause. Vacancies in the Compensation Committee,
however caused, may be filled by the Board of Directors, if it so desires.
5. Incentive Stock Options and Non-Qualified Stock Options
(a) Options issued pursuant to this Plan may be either
Incentive Stock Options granted pursuant to Section 5(b) hereof or Non-Qualified
Stock Options granted pursuant to Section 5(c) hereof, as determined by the
Compensation Committee. An "Incentive Stock Option" is an option which satisfies
all of the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") and the regulations thereunder, and a "Non-Qualified Stock
Option" is an option which either does not satisfy all of those requirements or
the terms of the option provide that it will not be treated as an Incentive
Stock Option. The Compensation Committee may grant both an Incentive Stock
Option and a Non-Qualified Stock Option to the same person, or more than one of
each type of option to the same person. The option price for Incentive Stock
Options issued under this Plan shall be equal at least to the fair market value
(as defined below) of the Company's Common Stock on the date of the grant of the
option as determined by the Compensation Committee in accordance with its
interpretation of the requirements of Section 422 of the Code and the
regulations thereunder. The option price for Non-Qualified Stock Options issued
under this Plan may, in the sole discretion of the Compensation Committee, be
less than the fair market value of the Common Stock on the date of the grant of
the option. If an Incentive Stock Option is granted to an individual who, at the
time the option is granted, owns stock possessing more than 10% of the total
combined voting power of all shares of stock of the Company or any parent or
subsidiary corporation of the Company (a "10% Shareholder"), the option
price shall not be less than 110% of the fair market value of the Company's
Common Stock on the date of grant of the option. The fair market value of the
Company's Common Stock on any particular date shall mean the last reported sale
price of a share of the Company's Common Stock on any stock exchange on which
such stock is then listed or admitted to trading, or on the Nasdaq Stock Market,
on such date, or if no sale took place on such day, the last such date on which
a sale took place, or if the Common Stock is not then quoted on the Nasdaq Stock
Market, or listed or admitted to trading on any stock exchange, the average of
the bid and asked prices in the over-the-counter market on such date, or if none
of the foregoing, a price determined by the Compensation Committee.
(b) Subject to the authority of the Compensation Committee set
forth in Section 4(b) hereof, Incentive Stock Options issued pursuant to this
Plan shall be issued substantially in the form set forth in Appendix I hereof,
which form is hereby incorporated by reference and made a part hereof, and shall
contain substantially the terms and conditions set forth therein. Incentive
Stock Options shall not be exercisable after the expiration of ten years (five
years in the case of 10% Shareholders) from the date such options are granted,
unless terminated earlier under the terms of the option. At the time of the
grant of an Incentive Stock Option hereunder, the Compensation Committee may, in
its discretion, modify or amend any of the option terms contained in Appendix I
for any particular optionee, provided that the option as modified or amended
satisfies the requirements of Section 422 of the Code and the regulations
thereunder. Each of the options granted pursuant to this Section 5(b) is
intended, if possible, to be an "Incentive Stock Option" as that term is defined
in Section 422 of the Code and the regulations thereunder. In the event this
Plan or any option granted pursuant to this Section 5(b) is in any way
inconsistent with the applicable legal requirements of the Code or the
regulations thereunder for an Incentive Stock Option, this Plan and such option
shall be deemed automatically amended as of the date hereof to conform to such
legal requirements, if such conformity may be achieved by amendment.
(c) Subject to the authority of the Compensation Committee set
forth in Section 4(b) hereof, Non-Qualified Stock Options issued pursuant to
this Plan shall be issued substantially in the form set forth in Appendix II
hereof, which form is hereby incorporated by reference and made a part hereof,
and shall contain substantially the terms and conditions set forth therein.
Non-Qualified Stock Options shall expire ten years after the date they are
granted, unless terminated earlier under the option terms. At the time of
granting a Non-Qualified Stock Option hereunder, the Compensation Committee may,
in its discretion, modify or amend any of the option terms contained in Appendix
II for any particular optionee.
(d) Neither the Company nor any of its current or future
parent, subsidiaries or affiliates, nor their officers, directors, shareholders,
stock option plan committees, employees or agents shall have any liability to
any optionee in the event: (i) an option granted pursuant to Section 5(b) hereof
does not qualify as an "Incentive Stock Option" as that term is used in Section
422 of the Code and the regulations thereunder; (ii) any optionee does not
obtain the tax treatment pertaining to an Incentive Stock Option; or (iii) any
option granted pursuant to Section 5(c) hereof is an "Incentive Stock Option."
6. Modification, Amendment, Suspension and Termination
Options shall not be granted pursuant to this Plan after the
expiration of ten years from the date the Plan is adopted by the Board of
Directors of the Company. The Board of Directors reserves the right at any time,
and from time to time, to modify or amend this Plan in any way, or to suspend or
terminate it, effective as of such date, which date may be either before or
after the taking of such action, as may be specified by the Board of Directors;
provided, however, that such action shall not affect options granted under the
Plan prior to the actual date on which such action occurred. If a modification
or amendment of this Plan is required by the Code or the regulations thereunder
to be approved by the shareholders of the Company in order to permit the
granting of "Incentive Stock Options" (as that term is defined in Section 422 of
the Code and regulations thereunder) pursuant to the modified or amended Plan,
such modification or amendment shall also be approved by the shareholders of the
Company in such manner as is prescribed by the Code and the regulations
thereunder. If the Board of Directors voluntarily submits a proposed
modification, amendment, suspension or termination for shareholder approval,
such submission shall not require any future modifications, amendments,
suspensions or terminations (whether or not relating to the same provision or
subject matter) to be similarly submitted for shareholder approval.
7. Effectiveness of Plan
This Plan shall become effective on the date of its adoption
by the Company's Board of Directors, subject however to approval by the holders
of the Company's Common Stock in the manner as prescribed in the Code and the
regulations thereunder. Options may be granted under this Plan prior to
obtaining shareholder approval, provided such options shall not be exercisable
before such shareholder approval is obtained.
8. General Conditions
(a) Nothing contained in this Plan or any option granted
pursuant to this Plan shall confer upon any employee the right to continue in
the employ of the Company or any present or future parent, affiliated or
subsidiary corporation or interfere in any way with the rights of the Company or
any present or future parent, affiliated or subsidiary corporation to terminate
his employment in any way.
(b) Corporate action constituting an offer of stock for sale
to any employee under the terms of the options to be granted hereunder shall be
deemed complete as of the date when the Compensation Committee authorizes the
grant of the option to the employee, regardless of when the option is actually
delivered to the employee or acknowledged or agreed to by him.
(c) The terms "parent corporation" and "subsidiary
corporation" as used throughout this Plan, and the options granted pursuant to
this Plan, shall (except as otherwise provided in the option form) have the
respective meanings ascribed to such terms when contained in Section 422(b) of
the Code and the regulations thereunder, and the Company shall be deemed to be
the grantor corporation for purposes of applying such meanings.
(d) References in this Plan to the Code shall be deemed to
also refer to the corresponding provisions of any future United States revenue
law.
(e) The use of the masculine pronoun shall include the
feminine gender whenever appropriate.
APPENDIX I
INCENTIVE STOCK OPTION
To: Name
----------------------------------------------------------------------------
Address
----------------------------------------------------------------------------
Date of Grant: ______________________
You are hereby granted an option, effective as of the date hereof, to
purchase ______ shares of Common Stock, par value $1.00 per share ("Common
Stock"), of STV Group, Incorporated (the "Company") at a price of _____ per
share pursuant to the Company's 1995 Employee Stock Option Plan (the "Plan")
adopted by the Company's Board of Directors effective October 11, 1995. Your
option price is intended to equal at least the fair market value of the
Company's Common Stock as of the date hereof; provided, however, that if, at the
time this option is granted, you own stock possessing more than 10% of the total
combined voting power of all shares of stock of the Company or any parent or
subsidiary corporation of the Company (a "10% Shareholder"), your option price
is intended to be at least 110% of the fair market value of the Company's Common
Stock as of the date hereof.
Your option may first be exercised on and after , but not before that time. [On
and after and prior to the Termination Date (as hereinafter defined), your
option may be exercised for up to % of the total number of shares subject to the
option minus the number of shares previously purchased by exercise of the option
(as adjusted for any change in the outstanding shares of the Common Stock of the
Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Compensation Committee deems in its sole discretion to be
similar circumstances). Each succeeding year thereafter and prior to the
Termination Date, your option may be exercised for up to an additional % of the
total number of shares subject to the option minus the number of shares
previously purchased by exercise of the option (as adjusted for any change in
the outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Compensation Committee deems in its sole discretion to be similar
circumstances).]1 No fractional shares shall be issued or delivered.
This option shall terminate and is not exercisable after the expiration
of ten years from the date of its grant (five years from the date of grant if,
at the time of the grant, you are a 10% Shareholder) (the "Scheduled Termination
Date"), except if terminated earlier as hereinafter provided (the "Termination
Date").
In the event of a "change of control" (as hereafter defined) of the
Company, your option may, from and after the date of the change of control, and
notwithstanding the second paragraph of this option,
_____________________________
1 The bracketed portion of this paragraph should be included if the number
of shares which may be acquired upon exercise of the option will increase over
time.
be exercised for up to 100% of the total number of shares then subject to the
option minus the number of shares previously purchased upon exercise of the
option (as adjusted for any changes in the outstanding Common Stock by reason of
a stock dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Compensation Committee deems in its sole discretion to be similar
circumstances).
A "change of control" shall be deemed to have occurred upon the
happening of any of the following events:
1. A change within a twelve-month period in a majority of the members
of the board of directors of the Company;
2. A change within a twelve-month period in the holders of more than
50% of the outstanding voting stock of the Company; or
3. Any other event deemed to constitute a "change in control" by the
Compensation Committee.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check; (b) certificates
representing shares of Common Stock of the Company, which will be valued by the
Secretary of the Company at the fair market value per share of the Company's
Common Stock (as determined in accordance with the Plan) on the last trading day
immediately preceding the date of delivery of such certificates to the Company,
accompanied by an assignment of the stock to the Company; or (c) any combination
of cash and Common Stock of the Company valued as provided in clause (b). Any
assignment of stock shall be in a form and substance satisfactory to the
Secretary of the Company, including guarantees of signature(s) and payment of
all transfer taxes if the Secretary deems such guarantees necessary or desirable
or determines that such taxes are due and payable.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by the Company or
a parent or subsidiary corporation of the Company is terminated, whether such
termination is voluntary or not, other than by reason of disability as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder, or death, in which case your option
will terminate one year from the date of termination of employment due to
disability or death (but in no event later than the Scheduled Termination Date).
After the date your employment is terminated, as aforesaid, you may exercise
this option only for the number of shares which you had a right to purchase and
did not purchase on the date your employment terminated. If you are employed by
a subsidiary corporation of the Company, your employment shall be deemed to have
terminated on the date your employer ceases to be a subsidiary corporation of
the Company, unless you are on that date transferred to the Company or another
subsidiary corporation of the Company. Your employment shall not be deemed to
have terminated if you are transferred from the Company to a subsidiary
corporation, or vice versa, or from one subsidiary corporation to another
subsidiary corporation.
Anything in this option to the contrary notwithstanding, your option
will terminate immediately if your employment is terminated for cause (as
determined by the Company in its sole and absolute discretion). Your employment
shall be deemed to have been terminated for cause if you are terminated
due to, among other reasons, (i) your willful misconduct or gross negligence,
(ii) your material breach of any agreement with the Company or (iii) your
failure to render satisfactory services to the Company.
If you die while employed by the Company or a parent or subsidiary
corporation of the Company, your legatee(s), distributee(s), executor(s) or
administrator(s), as the case may be, may, at any time within one year after the
date of your death (but in no event later than the Scheduled Termination Date),
exercise the option as to any shares which you had a right to purchase and did
not purchase during your lifetime. If your employment with the Company or a
parent or subsidiary corporation is terminated by reason of your becoming
disabled (within the meaning of Section 22(e)(3) of the Code and the regulations
thereunder), you or your legal guardian or custodian may at any time within one
year after the date of such termination (but in no event later than the
Scheduled Termination Date), exercise the option as to any shares which you had
a right to purchase and did not purchase prior to such termination. Your
legatee, distributee, executor, administrator, guardian or custodian must
present proof of his authority satisfactory to the Company prior to being
allowed to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Compensation Committee deems in its sole
discretion to be similar circumstances, the number and kind of shares subject to
this option and the option price of such shares shall be appropriately adjusted
in a manner to be determined in the sole discretion of the Compensation
Committee.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a shareholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the shareholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may cause the Company to be
legally obligated to issue or sell more shares than the Company is legally
entitled to issue or sell.
The following two paragraphs shall be applicable if, on the
date of exercise of this option, the Common Stock to be purchased pursuant to
such exercise has not been registered under the Securities Act of 1933, as
amended, and under applicable state securities laws, and shall continue to be
applicable for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of 1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company to the effect that the
proposed transaction will be exempt from such registration. The optionee shall
execute such instruments, representations, acknowledgments and agreements as the
Company may, in its sole discretion, deem advisable to avoid any violation of
federal, state, local or securities exchange rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under
the Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Company that
said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall, if
possible, be an "Incentive Stock Option" as that term is used in Section 422 of
the Code and the regulations thereunder. In the event this option is in any way
inconsistent with the legal requirements of the Code or the regulations
thereunder for an "Incentive Stock Option," this option shall be deemed
automatically amended as of the date hereof to conform to such legal
requirements, if such conformity may be achieved by amendment.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, modification or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing and signed by the
President of the Company. This option and the performances of the parties
hereunder shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania.
Please sign the copy of this option and return it to the Company's Secretary,
thereby indicating your understanding of and agreement with its terms and
conditions.
STV GROUP, INCORPORATED
By: ____________________________________
I hereby acknowledge receipt of a copy of the foregoing stock option
and, having read it, hereby signify my understanding of, and my agreement with,
its terms and conditions.
______________________________ ___________________________________
(Signature) (Date)
APPENDIX II
NON-QUALIFIED STOCK OPTION
To: Name
----------------------------------------------------------------------------
Address
----------------------------------------------------------------------------
Date of Grant: ______________________
You are hereby granted an option, effective as of the date hereof, to
purchase ______ shares of Common Stock, par value $1.00 per share ("Common
Stock"), of STV Group, Incorporated (the "Company") at a price of _____ per
share pursuant to the Company's 1995 Employee Stock Option Plan (the "Plan")
adopted by the Company's Board of Directors effective October 11, 1995. [Your
option price is intended to equal at least the fair market value of the
Company's Common Stock as of the date hereof.]
Your option may first be exercised on and after , but not before that time.
[On and after and prior to the Termination Date (as hereinafter defined), your
option may be exercised for up to % of the total number of shares subject to the
option minus the number of shares previously purchased by exercise of the option
(as adjusted for any change in the outstanding shares of the Common Stock of the
Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Compensation Committee deems in its sole discretion to be
similar circumstances). Each succeeding year thereafter and prior to the
Termination Date, your option may be exercised for up to an additional % of the
total number of shares subject to the option minus the number of shares
previously purchased by exercise of the option (as adjusted for any change in
the outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets, reorganization, conversion or what the
Compensation Committee deems in its sole discretion to be similar
circumstances).]2 No fractional shares shall be issued or delivered.
This option shall terminate and is not exercisable after the expiration
of ten years from the date of its grant (the "Scheduled Termination Date"),
except if terminated earlier as hereinafter provided (the "Termination Date").
In the event of a "change of control" (as hereafter defined) of the
Company, your option may, from and after the date of the change of control, and
notwithstanding the second paragraph of this option, be exercised for up to 100%
of the total number of shares then subject to the option minus the number of
shares previously purchased upon exercise of the option (as adjusted for any
changes in the outstanding Common Stock by reason of a stock dividend, stock
split, combination of shares, recapitalization, merger, consolidation, transfer
of assets, reorganization, conversion or what the Compensation Committee deems
in its sole discretion to be similar circumstances).
___________________
2 The bracketed portion of this paragraph should be included if the number
of shares which may be acquired upon exercise of the option will increase over
time.
A "change of control" shall be deemed to have occurred upon the
happening of any of the following events:
1. A change within a twelve-month period in a majority of the members
of the board of directors of the Company;
2. A change within a twelve-month period in the holders of more than
50% of the outstanding voting stock of the Company; or
3. Any other event deemed to constitute a "change in control" by the
Compensation Committee.
You may exercise your option by giving written notice to the Secretary
of the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check; (b) certificates
representing shares of Common Stock of the Company, which will be valued by the
Secretary of the Company at the fair market value per share of the Company's
Common Stock (as determined in accordance with the Plan) on the last trading day
immediately preceding the date of delivery of such certificates to the Company,
accompanied by an assignment of the stock to the Company; or (c) any combination
of cash and Common Stock of the Company valued as provided in clause (b). Any
assignment of stock shall be in a form and substance satisfactory to the
Secretary of the Company, including guarantees of signature(s) and payment of
all transfer taxes if the Secretary deems such guarantees necessary or desirable
or determines that such taxes are due and payable.
Your option will, to the extent not previously exercised by you,
terminate three months after the date on which your employment by the Company or
a parent or subsidiary corporation of the Company is terminated, whether such
termination is voluntary or not, other than by reason of disability as defined
in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder, or death, in which case your option
will terminate one year from the date of termination of employment due to
disability or death (but in no event later than the Scheduled Termination Date).
After the date your employment is terminated, as aforesaid, you may exercise
this option only for the number of shares which you had a right to purchase and
did not purchase on the date your employment terminated. If you are employed by
a subsidiary corporation of the Company, your employment shall be deemed to have
terminated on the date your employer ceases to be a subsidiary corporation of
the Company, unless you are on that date transferred to the Company or another
subsidiary corporation of the Company. Your employment shall not be deemed to
have terminated if you are transferred from the Company to a subsidiary
corporation, or vice versa, or from one subsidiary corporation to another
subsidiary corporation.
Anything in this option to the contrary notwithstanding, your option
will terminate immediately if your employment is terminated for cause (as
determined by the Company in its sole and absolute discretion). Your employment
shall be deemed to have been terminated for cause if you are terminated due to,
among other reasons, (i) your willful misconduct or gross negligence, (ii) your
material breach of any agreement with the Company or (iii) your failure to
render satisfactory services to the Company.
If you die while employed by the Company or a parent or subsidiary
corporation of the Company, your legatee(s), distributee(s), executor(s) or
administrator(s), as the case may be, may, at any time within one year after the
date of your death (but in no event later than the Scheduled Termination
Date), exercise the option as to any shares which you had a right to purchase
and did not purchase during your lifetime. If your employment with the Company
or a parent or subsidiary corporation is terminated by reason of your becoming
disabled (within the meaning of Section 22(e)(3) of the Code and the regulations
thereunder), you or your legal guardian or custodian may at any time within one
year after the date of such termination (but in no event later than the
Scheduled Termination Date), exercise the option as to any shares which you had
a right to purchase and did not purchase prior to such termination. Your
legatee, distributee, executor, administrator, guardian or custodian must
present proof of his authority satisfactory to the Company prior to being
allowed to exercise this option.
In the event of any change in the outstanding shares of the Common
Stock of the Company by reason of a stock dividend, stock split, combination of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Compensation Committee deems in its sole
discretion to be similar circumstances, the number and kind of shares subject to
this option and the option price of such shares shall be appropriately adjusted
in a manner to be determined in the sole discretion of the Compensation
Committee.
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you,
including, for this purpose, your legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you, you do
not have any rights as a shareholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein, this option
is not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the shareholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may cause the Company to be
legally obligated to issue or sell more shares than the Company is legally
entitled to issue or sell.
The following two paragraphs shall be applicable if, on the
date of exercise of this option, the Common Stock to be purchased pursuant to
such exercise has not been registered under the Securities Act of 1933, as
amended, and under applicable state securities laws, and shall continue to be
applicable for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that
he will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration
statement under the Securities Act of 1933, as amended, and under any applicable
state securities laws or an opinion of counsel acceptable to the Company to the
effect that the proposed transaction will be exempt from such registration. The
optionee shall execute such instruments, representations, acknowledgments and
agreements as the Company may, in its sole discretion, deem advisable to avoid
any violation of federal, state, local or securities exchange rule, regulation
or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
applicable state securities laws. The shares have been acquired for
investment and may not be offered, sold, transferred, pledged or
otherwise disposed of without an effective registration statement under
the Securities Act of 1933, as amended, and under any applicable state
securities laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Securities Act of 1933, as amended, and under any applicable state
laws or upon receipt of any opinion of counsel acceptable to the Company that
said registration is no longer required.
The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Securities Act of 1933, as amended, and any applicable state
securities laws.
It is the intention of the Company and you that this option shall not
be an "Incentive Stock Option" as that term is used in Section 422 of the Code
and the regulations thereunder.
This option shall be subject to the terms of the Plan in effect on the
date this option is granted, which terms are hereby incorporated herein by
reference and made a part hereof. In the event of any conflict between the terms
of this option and the terms of the Plan in effect on the date of this option,
the terms of the Plan shall govern. This option constitutes the entire
understanding between the Company and you with respect to the subject matter
hereof and no amendment, modification or waiver of this option, in whole or in
part, shall be binding upon the Company unless in writing and signed by the
President of the Company. This option and the performances of the parties
hereunder shall be construed in accordance with and governed by the laws of the
Commonwealth of Pennsylvania.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
STV GROUP, INCORPORATED
By: ______________________________________
I hereby acknowledge receipt of a copy of the foregoing stock option and, having
read it, hereby signify my understanding of, and my agreement with, its terms
and conditions.
______________________________ ___________________________________
(Signature) (Date)