EXHIBIT 4(a)
INFODATA SYSTEMS INC.
1995 STOCK OPTION PLAN
1. Purpose
Infodata Systems Inc. (the "Company"), by means of this 1995 Stock Option
Plan (the "Plan"), desires to afford certain of its directors, officers and
certain selected employees, consultants and the officers and certain selected
employees of any subsidiary thereof now existing or hereafter formed or
acquired, an opportunity to acquire a proprietary interest in the Company, and
thus to create in such persons an increased interest in and a greater concern
for the welfare of the Company and any subsidiary. The Plan is the successor to
the Company's Incentive Stock Option Plan and Non-Qualified Stock Option Plan
that were approved by the Company's shareholders in 1991 and 1992, respectively
(the "Prior Plans"). As used in the Plan, the term "subsidiary" shall mean any
entity in which the Company, directly or indirectly, owns a controlling
interest.
The stock options described in Sections 6 and 7 hereof (the "Options"), and
the shares of common stock, par value $.03 per share, of the Company (the
"Common Stock") acquired pursuant to the exercise of such Options are a matter
of separate inducement and are not in lieu of any salary or other compensation
for services.
The Options granted under Section 6 hereof are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or options that
do not meet the requirements for Incentive Options ("Non-Qualified Options"),
but the Company makes no warranty as to the qualification of any Option as an
Incentive Option.
2. Administration
The Plan shall be administered by the Compensation Committee, or any
successor thereto, of the Board of Directors of the Company or by such other
committee as determined by the Board (the "Committee"). The Committee shall
consist of not less than two members of the Board of Directors of the Company,
each of whom shall qualify as a "disinterested person" to administer the Plan
within the meaning of Rule 16b-3, as amended, or other applicable rules under
Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Committee shall administer the Plan so as to conform at all times
with the provisions of Rule 16b-3 promulgated under the Exchange Act. A majority
of the Committee shall constitute a quorum, and subject to the provisions
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of Section 5 hereof, the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved unanimously in writing by
the Committee, shall be the acts of the Committee.
The Committee may delegate to one or more of its members, or to one or more
agents, such administrative duties as it may deem advisable, and the Committee
or any person to whom it has delegated duties as aforesaid may employ one or
more persons to render advice with respect to any responsibility the Committee
or such person may have under the Plan. The Committee may employ attorneys,
consultants, accountants, or other persons and the Committee, the Company and
its officers and directors shall be entitled to rely upon the advice, opinions
or valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all persons who have received grants under the Plan, the Company and all
other interested persons. No member or agent of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan and all members and agents of the Committee shall
be fully protected by the Company in respect of any such action, determination
or interpretation.
3. Shares Available
Subject to the adjustments provided in Section 9 hereof, the maximum
aggregate number of shares of Common Stock which may be purchased pursuant to
the exercise of Options granted under the Plan shall not exceed 433,333. Such
amount includes the 333,333 shares (giving effect to the one-for-three reverse
split of the Common Stock effected April 27, 1994) previously authorized for
possible issuance under the Prior Plans. If, for any reason, any shares as to
which Options have been granted cease to be subject to purchase thereunder,
including without limitation the expiration of such Options, the termination of
such Options prior to exercise or the forfeiture of such Options, such shares
thereafter shall be available for grants to such individual or other individuals
under the Plan. Options granted under the Plan may be fulfilled in accordance
with the terms of the Plan with either authorized and unissued shares of Common
Stock or issued shares of such Common Stock held in the Company's treasury or
both, at the discretion of the Company.
4. Eligibility and Bases of Participation
Grants under the Plan (i) may be made, pursuant to Section 6 hereof, to
certain selected employees and officers (but not to any director who is not also
an employee) of the Company or any subsidiary thereof who are regularly employed
on a salaried basis and who are so employed on the date of such grant (the
"Officer and Certain Selected Employee Participants"); (ii) may be made,
pursuant to Section 6 hereof, to directors of the Company, other
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than Committee Participants (as defined below), who are not employees and who
are retained by the Company in such capacity on the date of such grant (the
"Director Participants"); (iii) may be made, pursuant to Section 6 hereof, to
consultants or advisors, provided that the services rendered by such consultants
or advisors shall not be in connection with the offer or sale of securities in a
capital-raising transaction (the "Consultant Participants") (the Officer and
Certain Selected Employee Participants, Director
Participants and Consultant Participants are hereinafter collectively referred
to as the "Grant Participants"); and (iv) may be made, pursuant to Section 7
hereof, to individuals who serve on the Committee or have been named to serve on
the Committee in the future (the "Committee Participants").
5. Authority of Committee
Subject to and not inconsistent with the express provisions of the Plan and
the Code, the Committee shall have plenary authority, in its sole discretion,
to:
a. other than with respect to Committee Participants, determine the
persons to whom Options shall be granted, the time when such Options
shall be granted, the number of shares of Common Stock underlying each
Option, the purchase price or exercise price of each Option, the
restrictions to be applicable to Options and the other terms and
provisions thereof (which need not be identical);
b. provide an arrangement through registered broker-dealers whereby
temporary financing may be made available to an optionee by the
broker-dealer for the purpose of assisting the optionee in the
exercise of an Option;
c. establish procedures for an optionee to pay the exercise price of an
Option in whole or in part by delivering that number of shares of
Common Stock owned by such optionee; or for the collection of any
taxes required by any government to be withheld or otherwise deducted
and paid by the Company or any subsidiary in respect of the issuance
or disposition of Common Stock acquired pursuant to the exercise of an
Option granted hereunder, which procedures may include payment in
whole or in part through the delivery of shares of Common Stock owned
by the optionee valued on the basis of the Fair Market Value (as
defined in Section 11 hereof) on the date preceding such exercise;
d. prescribe, amend, modify and rescind rules and regulations relating to
the Plan;
e. make all determinations specified in or permitted by the
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Plan or deemed necessary or desirable for its administration or for
the conduct of the Committee's business; and
f. establish any procedures determined to be appropriate in discharging
its responsibilities under the Plan.
6. Stock Options for Grant Participants
The Committee shall have the authority, in its sole discretion to grant
Incentive Options or Non-Qualified Options or both Incentive Options and
Non-Qualified Options to Grant Participants (any such Options are hereinafter
collectively referred to as the "Participant Options") during the period
beginning on the date on which the Plan is approved by the holders of a majority
of the Company's outstanding shares of Common Stock and Preferred Stock, voting
as a class (the "Effective Date") and ending on the tenth anniversary of the
Effective Date (the "Termination Date"). Notwithstanding anything contained
herein to the contrary, Incentive Options may be granted only to Officer and
Certain Selected Employee Participants. As a condition to the granting of any
Option, the Committee shall require that the person receiving such Option agree
not to sell or otherwise dispose of any Common Stock acquired pursuant to such
Option for a period of six months following the date of the grant of such
Option. The terms and conditions of the Participant Options shall be determined
from time to time by the Committee; provided, however, that the Participant
Options granted under the Plan shall be subject to the following:
a. Exercise Price. The exercise price for each share of Common Stock
purchasable under any Participant Option granted hereunder shall be
such amount as the Committee, in its best judgment, shall determine to
be not less than 100% of the Fair Market Value (as defined in Section
11 hereof) per share on the date the Participant Option is granted;
provided, however, that in the case of an Incentive Option granted to
a person who, at the time such Incentive Option is granted, owns
shares of capital stock of the Company, or of any subsidiary of the
Company, having more than 10% of the total combined voting power of
all classes of shares of capital stock of the Company or of such
subsidiary, the exercise price for each share shall be not less than
110% of the Fair Market Value (as defined in Section 11 hereof) per
share on the date the Incentive Option is granted. In determining the
stock ownership of a person for purposes of this Section 6, the rules
of Section 424(d) of the Code shall be applied and the Committee may
rely on representations of fact made to it by such person and believed
by it to be true. The exercise price of the Participant Options will
be subject to adjustment in accordance with the provisions of Section
9 hereof.
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b. Payment. The exercise price per share of Common Stock with respect to
each Participant Option shall be payable at the time the Participant
Option is exercised. Such price shall be payable in cash, which may be
paid by wire transfer in immediately available funds, by check, by a
commitment by a broker-dealer to pay to the Company that portion of
any sale proceeds receivable by the optionee upon exercise of a
Participant Option or by any other instrument acceptable to the
Company or, in the discretion of the Committee, by delivery to the
Company of shares of Common Stock. Shares delivered to the Company in
payment of the exercise price shall be valued at the Fair Market Value
(as defined in Section 11 hereof) of the Common Stock on the business
day immediately preceding the date of the exercise of the Participant
Option.
c. Exercisability of Participant Options. Subject to this Section 6 and
Section 8 hereof, each Participant Option shall vest and become
exercisable on the dates and in the amounts set forth in the
particular stock option agreement between the Company and the
optionee; provided, however, that a Participant Option shall expire
not later than five years from the date such Option is granted. The
right to purchase shares shall be cumulative so that when the right to
purchase any shares has accrued, such shares or any part thereof may
be purchased at any time thereafter until the expiration or
termination of the Participant Option.
d. Death. In the event of the death of an optionee, all Participant
Options held by such optionee on the date of such death shall vest in
full and become immediately exercisable. Upon such death, the legal
representative of such optionee, or such person who acquired such
Participant Options by bequest or inheritance or by reason of the
death of the optionee, shall have the right for one year after the
date of death (but not after the expiration or termination of the
Participant Options), to exercise such optionee's Participant Options
with respect to all or any part of the shares of Common Stock subject
thereto.
e. Disability. If the employment of an optionee is terminated because of
Disability (as defined in Section 11 hereof), all Participant Options
held by such optionee on the date of such termination shall vest in
full and become immediately exercisable. Such optionee shall have the
right for one year after the date of such termination (but not after
the expiration or termination of the Participant Options), to exercise
such optionee's Participant Options with respect to all or any part of
the shares of Common Stock subject thereto.
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f. Retirement. In the event the employment of an Officer and Certain
Selected Employee Participant is terminated by reason of the
Retirement (as defined in Section 11 hereof) of the optionee, all
Participant Options held by such optionee on the date of such
termination shall vest in full and become immediately exercisable.
Such optionee shall have the right for three months after the date of
such termination (but not after the expiration or termination of the
Participant Options), to exercise such optionee's Participant Options
with respect to all or any part of the shares of Common Stock subject
thereto. The Committee, in its discretion, shall determine whether an
optionee's employment was terminated by reason of Retirement and
whether such optionee is entitled to the treatment afforded by this
subsection f.
g. Other Termination. If the employment of an Officer and Certain
Selected Employee Participant is terminated for any reason other than
those specified in subsections d, e, and f of this Section 6, such
optionee shall have the right for 30 days after the date of such
termination (but not after the expiration or termination of the
Participant Options), to exercise such optionee's Participant Options
with respect to all or any part of the shares of Common Stock which
such optionee was entitled to purchase immediately prior to the time
of such termination.
h. Cessation of Directorship. In the event a Director Participant shall
cease to be a director of the Company, such optionee shall have the
right for 90 days after the date of such cessation (but not after the
expiration or termination of the Participant Options), to exercise
such optionee's Participant Options with respect to all or any part of
the shares of Common Stock subject thereto.
i. Maximum Exercise. To the extent the aggregate Fair Market Value (as
defined in Section 11 hereof) of Common Stock (determined at the time
of the grant) with respect to which Incentive Options are exercisable
for the first time by an optionee during any calendar year under all
plans of the Company or any subsidiary, exceeds $100,000, or such
other amount as may be prescribed under Section 422 of the Code or
applicable regulations or rulings from time to time, the excess
thereof shall be treated as Non- Qualified Options and not as
Incentive Options.
7. Stock Option Grants to Committee Participants
During the term of the Plan, on the date that a director of the Company
commences service on the Committee (which in the case of the initial members of
the Committee shall be deemed to be the
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Effective Date), and on the date of any subsequent annual meeting of the holders
of the Common Stock at which a director is elected and appointed or reappointed
to serve on the Committee, such Committee Participant automatically shall be
granted a Non- Qualified Option to purchase 2,000 shares of Common Stock, which
Non-Qualified Option, except as otherwise provided in this Section 7 or Section
8 hereof, shall become fully exercisable immediately upon grant as to all of the
shares covered thereby. (A Non- Qualified Option granted to a Committee
Participant pursuant to this Section 7 is referred to as a "Committee Option".)
As a condition to the granting of any Committee Option, the person receiving
such Committee Option shall agree not to sell or otherwise dispose of any Common
Stock acquired pursuant to such Option for a period of six months following the
date of the grant of such Option. The terms and conditions of the Committee
Options shall be as follows:
a. Option Price. The exercise price of each share of Common Stock
purchasable under any Committee Options shall be such amount as the
Committee, in its best judgment, shall determine to be 100% of the
Fair Market Value (as defined in Section 11 hereof) per share at the
date the Committee Option is granted.
b. Payment. The exercise price per share of Common Stock with respect to
each Committee Option and any withholding tax due in connection with
such exercise may be paid by any of the methods described under
Section 6b hereof.
c. Exercisability. Except as provided in subsection d of this Section 7,
no Committee Option shall be exercisable after the earlier of (i) the
expiration of five years from the date such Committee Option is
granted and (ii) 90 days after such Committee Participant ceases for
any reason to be a director of the Company.
d. Death. In the event of the death of any Committee Participant, the
estate of the Committee Participant shall have the right for one year
after the date of death (but not after the expiration or termination
of such Committee Options), to exercise such Committee Participant's
Committee Options with respect to all or any part of the shares of
Common Stock subject thereto.
e. Amendment. The provisions of this Section 7 shall not be amended more
than one time in any six-month period, other than to comport with any
amendments to the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations thereunder.
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8. Change of Control
Notwithstanding any provision herein to the contrary, upon the occurrence
of an event constituting a Change of Control (as defined in Section 11 hereof),
all Options granted under the Plan immediately shall become fully exercisable.
9. Adjustment of Shares
In the event the outstanding shares of Common Stock shall be increased or
decreased or changed into or exchanged for a different number of kind of shares
of stock or other securities of the Company or another corporation by reason of
any consolidation, merger, combination, liquidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares or other like change in capital
structure of the Company, the number or kind of shares or interests subject to
an Option and the per share price or value thereof shall be appropriately
adjusted by the Committee at the time of such event. Any fractional shares or
interests resulting from such adjustment shall be eliminated. Notwithstanding
the foregoing, (i) each such adjustment with respect to an Incentive Option
shall comply with the rules of Section 424(a) of the Code and (ii) in no event
shall any adjustment be made that would result in an Incentive Option failing to
be treated as an "incentive stock option" for purposes of Section 422 of the
Code. In addition, in such event the Board of Directors of the Company shall
appropriately adjust the number of shares of Common Stock for which Options may
be granted under the Plan.
10. Miscellaneous Provisions
a. Assignment or Transfer. No grant of any "derivative security" (as
defined by Rule 16a-1(c) under the Exchange Act) made under the Plan
or any rights or interests therein shall be assignable or transferable
by an optionee except by will or the laws of descent and distribution
or, except as to Incentive Options, pursuant to a qualified domestic
relations order as defined in the Code. During the lifetime of an
optionee, Options granted hereunder shall be exercisable only by the
optionee or the optionee's guardian or legal representative.
b. Investment Representation. If a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Common Stock issuable upon exercise of an Option is not
in effect at the time such Option is exercised, the Company may
require, for the sole purpose of complying with the Securities Act,
that prior to delivering such Common Stock to the exercising optionee
such optionee must
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deliver to the Secretary of the Company a written statement (i)
representing that such Common Stock is being acquired for investment
only and not with a view to the resale or distribution thereof, (ii)
acknowledging that such Common Stock may not be sold unless registered
for sale under the Securities Act or pursuant to an exemption from
such registration and (iii) agreeing that the certificates evidencing
such Common Stock shall bear a legend to the foregoing effect.
c. Costs and Expenses. The costs and expenses of administering the Plan
shall be borne by the Company and shall not be charged against any
Option nor to any person receiving an Option.
d. Funding of Plan. The Plan shall be unfunded. The Company shall not be
required to make any segregation of assets to assure the satisfaction
of any Option under the Plan.
e. Other Incentive Plans. The adoption of the Plan does not preclude the
adoption by appropriate means of any other incentive plan for
officers, directors or employees.
f. Effect on Employment. Nothing contained in the Plan or any agreement
related hereto or referred to herein shall affect, or be construed as
affecting, the terms of employment of any Grant Participants except to
the extent specifically provided herein or therein. Nothing contained
in the Plan or any agreement related hereto or referred to herein
shall impose, or be construed as imposing, an obligation on (i) the
Company or any subsidiary to continue the employment of any Grant
Participant or (ii) any Grant Participant to remain in the employ of
the Company or any subsidiary.
g. Termination or Suspension of the Plan. The Board of Directors may at
any time suspend or terminate the Plan. The Plan, unless sooner
terminated under Section 12 of the Plan or by action of the Board of
Directors, shall terminate at the close of business on the Termination
Date. Options may not be granted while the Plan is suspended or after
it is terminated. Rights and obligations under any Option granted
while the Plan is in effect shall not be altered or impaired by
suspension or termination of the Plan, except with the consent of the
person to whom the Option was granted. The power of the Committee to
construe and administer any Option granted prior to the termination or
suspension of the Plan nevertheless shall continue after such
termination or during such suspension.
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h. Savings Provision. With respect to persons subject to Section 16 of
the Exchange Act, the transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors
under the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails so to comply, it shall be deemed null
and void to the extent permitted by law.
i. Partial Invalidity. The invalidity or illegality of any provision
herein shall not be deemed to affect the validity of any other
provision.
11. Definitions
a. "Fair Market Value", as it relates to the Common Stock, shall mean the
average of the high and low sale prices of such Common Stock on the
date such determination is required herein, or if there were no sales
on such date, the average closing bid and asked prices, as reported on
the national securities exchange on which the Company's Common Stock
is listed or, in the absence of such listing, on the Nasdaq National
Market or Small Cap Market or, if such Common Stock is not at the time
listed on a national securities exchange or traded on the Nasdaq
National Market or Small Cap Market, the value of such Common Stock on
such date as determined in good faith by the Committee.
b. "Disability" shall have the meaning set forth in Section 22(e)(3) of
the Code.
c. "Change of Control" shall be deemed to have occurred if, subsequent to
the Effective Date of this Plan, any "person" (as such term is defined
in Section 13(d) of the Exchange Act) becomes the beneficial owner,
directly or indirectly, of either (x) a majority of the Common Stock
or (y) securities of the Company representing a majority of the
combined voting power of the Company's then outstanding voting
securities.
d. "Retirement" shall mean the date upon which a Grant Participant,
having attained an age as may be determined by the Committee in its
sole discretion, terminates his employment with the Company or any
subsidiary, provided that such Grant Participant has been employed by
the Company or any subsidiary.
12. Amendment of Plan
The Board of Directors of the Company shall have the right to amend,
modify, suspend or terminate the Plan at any time, provided
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that no amendment shall be made without shareholder approval which shall (i)
increase the total number of shares of the Common Stock of the Company which may
be issued and sold pursuant to Options granted under the Plan (except for
increases due to adjustments in accordance with Section 9 hereof), (ii)
materially increase the benefits accruing to participants under the Plan, (iii)
decrease the minimum exercise price in the case of an Incentive Option or (iv)
materially modify the provisions of the Plan relating to eligibility with
respect to Options. In no event may the Plan be amended in any way that would
retroactively impair the Committee's discretion. The Board of Directors shall be
authorized to amend the Plan and the Options granted thereunder (A) to qualify
such Options as "incentive stock options" within the meaning of Section 422 of
the Code or (B) to comply with Rule 16b-3 (or any successor rule) under the
Exchange Act. No amendment, modification, suspension or termination of the Plan,
without the consent of the holder thereof, shall adversely alter or impair any
Options previously granted under the Plan.
13. Effective Date
The Plan shall become effective on the Effective Date. Subject to the right
of the Board of Directors to terminate the Plan at any time pursuant to Section
12 hereof, the Plan shall remain in effect until the earlier of (i) the date
that Options covering all shares of Common Stock issuable under the Plan have
been granted or (ii) the Termination Date.
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