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EXHIBIT 10.7
INFORMATION HOLDINGS INC.
1998 STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF MARCH 26, 2002)
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ARTICLE I
PURPOSE
This 1998 Stock Option Plan (the "Plan") is intended to encourage
stock ownership in Information Holdings Inc. (the "Company") by employees and
directors of the Company and its subsidiaries in order to increase their
proprietary interest in the Company's success and to encourage such employees
and directors to remain in the service of the Company and its subsidiaries.
ARTICLE II
CERTAIN DEFINITIONS
(a) "AFFILIATE" of an entity shall mean any person or entity
controlling, controlled by or under common control with, such entity, where
"control" means the power to exercise a controlling influence over the
management or policies of such person or entity.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CHANGE OF CONTROL" shall have the meaning set forth in
Article XI.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(e) "COMMITTEE" shall mean (i) the Stock Option Committee of the Board
which, if and to the extent practicable, shall be comprised of at least two
persons who qualify as "non-employee directors" under Rule 16b-3 promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of
1934, and as "outside directors" under Section 162(m) of the Code or (ii) if a
Stock Option Committee has not been designated by the Board, the Board.
(f) "COMMON STOCK" shall mean the voting common stock of the Company,
par value $0.01 per share.
(g) "ELIGIBLE EMPLOYEE" shall mean any person employed on a full-time
basis by the Company or any of its subsidiaries, or any director of the Company.
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(h) "EXERCISE PRICE" shall have the meaning assigned to such term in
Article VI hereof.
(i) "ISO" shall mean an "incentive stock option" within the meaning of
Section 422 of the Code.
(j) "NON-QUALIFIED OPTION" shall mean an Option which is not an ISO.
(k) "OPTION" shall mean any option granted under the Plan.
(l) "OPTIONEE" shall mean any holder of an Option.
(m) "OPTION AGREEMENT" shall mean the agreement between an Optionee
and the Company governing Options granted under the Plan, the forms of which
shall be consistent with the terms of the Plan but need not be identical.
(n) "WP VENTURES" shall mean Warburg, Pincus Ventures, L.P., any
Affiliate thereof, or any successor thereto.
ARTICLE III
STOCK
(a) The stock to be issued upon the exercise of Options shall be
shares of authorized but unissued Common Stock or previously issued shares of
Common Stock reacquired by the Company. The aggregate number of shares of Common
Stock as to which Options may be granted under the Plan at any time shall not
exceed 2,466,886, subject to adjustment from time to time in accordance with the
provisions of Article X hereof. No more than 350,000 shares of Common Stock may
be issued to any one individual pursuant to awards of Options hereunder during
any calendar year.
(b) The number of shares of Common Stock available for grant of
Options at any time under the Plan shall be decreased by the sum of (i) the
number of shares with respect to which Options have been issued and have not
lapsed or been canceled, in each case, prior to such time and (ii) the number of
shares issued prior to such time upon exercise of Options. In the event that any
outstanding Option under the Plan lapses in accordance with Articles VII or VIII
hereof, prior to the end of the period during which Options may be granted, the
shares of Common Stock subject to the unexercised portion of such Option shall
again be available for the granting of Options under the Plan.
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ARTICLE IV
PARTICIPATION
Optionees shall be limited to Eligible Employees who have received
written notice of their selection to participate in the Plan and who have
entered into an Option Agreement. Each Option Agreement shall state the total
number of shares of Common Stock which are subject to the Option granted. No
Eligible Employee shall at any time have a right to be selected as a
participant.
ARTICLE V
ADMINISTRATION
The Plan shall be administered by the Committee which shall have sole
authority, in its absolute discretion: (a) to select which Eligible Employees
shall be granted Options; (b) to determine the number of Options to be granted
to such Eligible Employees and whether such Options shall be ISOs or
Non-Qualified Options; (c) to prescribe the form or forms of the Option
Agreements under the Plan; (d) to adopt, amend or rescind such rules and
regulations as, in its opinion, may be advisable for the administration of the
Plan; and (e) to construe and interpret the Plan, and all such rules and
regulations, and to make all other determinations deemed necessary or advisable
for the administration of the Plan. All decisions, determinations and
interpretations of the Committee made in good faith shall be final and binding
on all participants. Neither the Committee nor any member of the Committee shall
be liable for any act, omission, interpretation, construction or determination
made in connection with the Plan in good faith, and the members of the Committee
shall be entitled to indemnification and reimbursement by the Company in respect
of any claim, loss, damage or expense (including, without limitation, counsel
fees) arising therefrom to the full extent permitted by Delaware law and under
any directors' and officers' liability insurance coverage which may be in effect
from time to time.
ARTICLE VI
EXERCISE PRICE
The Exercise Price per share of Common Stock covered by Options
granted under the Plan shall be established on or prior to the date of grant by
the Committee and shall be set forth in the Optionee's Option Agreement. Payment
shall be made in full upon exercise of the Option by delivering to the Company
at its principal executive offices cash or a certified check, bank draft or
money order payable to the order of the Company in the aggregate amount of the
Exercise Price, or in accordance with any cashless exercise procedures adopted
by the Committee from time to time.
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ARTICLE VII
VESTING OF OPTIONS
All Options granted under the Plan shall vest and become exercisable
in accordance with Article XI hereof and vesting schedules established by the
Committee at the time of grant.
ARTICLE VIII
TERMINATION OF EMPLOYMENT
Each Option will have a ten-year term from the date of grant, subject
to earlier termination upon termination of the Optionee's employment, as
determined by the Committee.
ARTICLE IX
TRANSFERABILITY
Options and any Optionee's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or transferred or
otherwise disposed of, mortgaged, pledged or encumbered except, in the event of
an Optionee's death, by will or the laws of descent and distribution; PROVIDED,
HOWEVER, the Committee may, in its sole discretion, allow for transfer of
Options other than ISOs to other persons or entities, subject to such conditions
or limitations as it may establish.
ARTICLE X
ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.
(a) The aggregate number of shares of Common Stock which may be
purchased pursuant to Options granted hereunder, the maximum number of shares of
Stock with respect to which Options may be granted to any single Optionee during
any calendar year, the number of shares of Common Stock covered by each
outstanding Option and the price per share thereof shall be appropriately
adjusted for any increase or decrease in the number of outstanding shares of
Common Stock resulting from a stock split or other subdivision or consolidation
of shares of Common Stock, or for other capital adjustments or payments of stock
dividends or distributions or other increases or decreases in the outstanding
shares of Common Stock effected without receipt of consideration by the Company.
(b) If the Company shall be sold, reorganized, consolidated, or merged
with another corporation, or if all or substantially all of the assets of the
Company shall be sold or exchanged (a "Corporate Event"), (i) each Optionee
shall, at the time of such Corporate Event, be entitled to receive upon the
exercise of his Option the same number and kind of shares of
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common stock or the same amount of property, cash or other securities as he
would have been entitled to receive upon the occurrence of such Corporate Event
as if he had been, immediately prior to such event or on the record date
relating to such event, the holder of the number of shares of Common Stock
covered by his Option, and (ii) if the Company is not the surviving corporation
in such Corporate Event, the Company shall require the successor corporation or
parent thereof to assume such outstanding Options; PROVIDED, HOWEVER, that the
Committee may, in its discretion and in lieu of requiring such assumption,
provide that all outstanding Options shall terminate as of the consummation of
such Corporate Event and accelerate the exercisability of all outstanding
Options to any date prior to the date of such Corporate Event.
(c) The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to an Option.
ARTICLE XI
CHANGE OF CONTROL
In the event of a Change of Control, each outstanding Option under the
Plan shall vest and become immediately exercisable in full as of the date
immediately preceding the date of such Change of Control, or such other date,
not later than the date of such Change of Control, as shall be established by
the Committee in its discretion. For purposes of the Plan, a "Change of Control"
shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (i) the then outstanding shares of Common Stock (the "Outstanding Company
Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company, (iv) any
acquisition by WP Ventures, or (v) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i), (ii), and (iii) of subsection
(c) of this Article XI;
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the effective date of the Plan whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be
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considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(c) Consummation of a Corporate Event, unless, following such
Corporate Event, (i) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company Stock
and Outstanding Company Voting Securities immediately prior to such Corporate
Event beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors of the corporation resulting from such Corporate Event (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) upon consummation of such Corporate Event in
substantially the same proportions as their ownership, immediately prior to such
Corporate Event, of the Outstanding Company Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person other than (1) WP Ventures, (2)
any corporation resulting from such Corporate Event, or (3) any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Corporate Event, beneficially owns, directly or indirectly, 50% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Corporate Event or the combined voting power of the then
outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Corporate Event, and (iii) at least a majority of
the members of the board of directors of the corporation resulting from such
Corporate Event were members of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the Board, providing for such
Corporate Event; or
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
ARTICLE XII
RIGHTS AS A STOCKHOLDER
An Optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares covered by his Option until he shall have
become the holder of record of such shares, and he shall not be entitled to any
dividends or distributions or other rights in respect of such shares for which
the record date is prior to the date on which he shall have become the holder of
record thereof.
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ARTICLE XIII
EMPLOYMENT RIGHTS
Nothing in the Plan or in any Option Agreement entered into hereunder
shall confer on any Optionee who is an employee of the Company or any of its
subsidiaries any right to continue in the employ of the Company or any of its
subsidiaries or to interfere in any way with the right of the Company or any of
its subsidiaries to terminate the Optionee's employment at any time.
ARTICLE XIV
TRANSFER RESTRICTIONS
Appropriate legends shall be placed on the stock certificates
evidencing shares issued upon exercise of Options to reflect any relevant
transfer restrictions.
ARTICLE XV
AMENDMENT OR DISCONTINUANCE OF PLAN
The Board may from time to time, to the extent permitted by applicable
law, amend, suspend, or discontinue the Plan; provided, however, that the Board
may not take any action which would have a material adverse effect on
outstanding Options or any unexercised rights under outstanding Options without
the consent of the Optionee whose options would be adversely affected thereby.
ARTICLE XVI
CANCELLATION OF OPTIONS
The Committee, in its discretion, may, with the express written
consent of the Optionee to be affected, cancel any Option held by such
consenting Optionee hereunder.
ARTICLE XVII
MISCELLANEOUS
(a) Notwithstanding any other provision of the Plan, the Company or a
subsidiary, as appropriate, shall have the right to deduct from all Option
exercises Common Stock, valued at fair market value on the date of payment, in
an amount necessary to satisfy all Federal, state or local taxes as required by
law to be withheld with respect to such Options. In the alternative, in the sole
discretion of the Company, the Optionee or other person receiving such Common
Stock may be required to pay to the Company or a subsidiary, as appropriate,
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prior to delivery of such Common Stock, the amount of any such taxes which the
Company or subsidiary is required to withhold, if any, with respect to such
Common Stock. Subject in particular cases to the disapproval of the Committee,
the Company may accept shares of Stock of equivalent fair market value in
payment of such withholding tax obligations if the Optionee elects to make
payment in such manner.
(b) The obligation of the Company to make payment of Option exercises
in shares of Common Stock or otherwise shall be subject to all applicable laws,
rules, and regulations, and to such approvals by governmental agencies as may be
required. Notwithstanding any terms or conditions of any Option to the contrary,
the Company shall be under no obligation to offer to sell or to sell and shall
be prohibited from offering to sell or selling any shares of Common Stock
pursuant to an Option unless such shares have been properly registered for sale
pursuant to the Securities Act of 1933 with the Securities and Exchange
Commission or unless the Company has received advice of counsel, satisfactory to
the Company, that such shares may be offered or sold without such registration
pursuant to an available exemption therefrom and the terms and conditions of
such exemption have been fully complied with. The Company shall be under no
obligation to register for sale under the Securities Act of 1933 any of the
shares of Common Stock to be offered or sold under the Plan. If the shares of
Stock offered for sale or sold under the Plan are offered or sold pursuant to an
exemption from registration under the Securities Act of 1933, the Company may
restrict the transfer of such shares and may legend the Stock certificates
representing such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
(c) The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to the principles of conflicts
of law thereof.
(d) No provision of the Plan shall require the Company, for the
purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes.
(e) Except as otherwise specifically provided in the relevant plan
document, no payment under the Plan or other amount required to be reported as
income for Federal income tax purposes shall be taken into account in
determining any benefits under any pension, retirement, profit sharing, group
insurance or other benefit plan of the Company.
(f) The expenses of administering the Plan shall be borne by the
Company. The proceeds received by the Company from the exercise of any Options
pursuant to the Plan will be used for general corporate purposes.
(g) Masculine pronouns and other words of masculine gender shall refer
to both men and women.
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(h) The titles and headings of the sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.
(i) Except as otherwise specifically provided in the Plan, no person
shall be entitled to the privileges of ownership in respect of shares of Common
Stock which are subject to Options hereunder until such shares have been issued
to that person.
ARTICLE XVIII
SPECIAL PROVISIONS FOR ISOS
(a) ISOs must be granted within ten years from the date the Plan is
adopted, or the date the Plan is approved by the stockholders of the Company,
whichever is earlier.
(b) ISOs may not be exercised after the expiration of ten years from
the date such ISOs are granted.
(c) The Exercise Price of ISOs may not be less than the fair market
value of a share of Common Stock at the time such ISOs are granted, as
determined by the Committee. In such case, fair market value shall be determined
in a manner consistent with the rules and regulations under Section 422 of the
Code.
(d) ISOs may not be granted to a person who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any "subsidiary corporation" of the Company within the meaning of
Section 424(f) of the Code.
(e) To the extent the aggregate fair market value of the Common Stock
with respect to which ISOs are exercisable for the first time by any Optionee
during a calendar year (under all plans of the Company and all "subsidiary
corporations" of the Company within the meaning of Section 424(f) of the Code)
exceeds $100,000, such ISOs shall be treated as Non-Qualified Options. For
purposes of the preceding sentence, the fair market value of the Common Stock
shall be determined by the Committee at the time the ISO covering such stock is
granted.
(f) No ISOs may be granted under the Plan unless the Plan has been
approved by the stockholders of the Company within 12 months before or after the
date of the Plan's adoption by the Board.
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