EXHIBIT 10.11
INSITUFORM TECHNOLOGIES, INC.
1992 EMPLOYEE STOCK OPTION PLAN
(as amended February 17, 2000)
1. Purposes of Plan. The purposes of this Plan, which
shall be known as the Insituform Technologies, Inc. 1992 Employee
Stock Option Plan, and is hereinafter referred to as the "Plan",
are (i) to provide incentives for key employees of Insituform
Technologies, Inc. (the "Company") and any parent and subsidiary
corporations (within the respective meanings of Sections 424(e) and
424(f) of the Internal Revenue Code of 1986, as amended (the
"Code"), and referred to herein as "Parent" and "Subsidiary,"
respectively), and to consultants and other individuals providing
services to such companies, by encouraging their ownership of the
class A common stock, $.01 par value (the "Common Stock"), of the
Company, and (ii) to aid the Company in retaining such key
employees and other persons, upon whose efforts the Company's
success and future growth depends, and attracting other such
employees and other persons.
2. Administration. The Plan shall be administered by
the Board of Directors of the Company or, as determined by the
Board of Directors in its sole discretion, by a committee from time
to time appointed by the Board of Directors and consisting of not
less than two of its members (the Board of Directors, or such
committee, for purposes of this Plan hereinafter referred to as the
"Committee"), as hereinafter provided. Subject to the terms of the
Plan, the Committee shall have plenary authority to determine the
key employees, consultants and other individuals to whom options
are to be granted under the Plan, the number of shares to be
subject to each such option, the terms and conditions upon which
the options are granted and are exercisable and whether such
options will be incentive stock options or non-qualified stock
options. For purposes of administration, the Committee, subject to
the terms of the Plan, shall have plenary authority to establish
such rules and regulations, make such determinations and
interpretations and take such other administrative actions as it
deems necessary or advisable. All determinations and
interpretations made by the Committee shall be final, conclusive
and binding on all persons, including Optionees (as hereinafter
defined) and their legal representatives and beneficiaries.
The Board of Directors shall designate one of the members
of the Committee as its Chairman. The Committee shall hold its
meetings at such times and at such places as it may determine. A
majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and
signed by all members shall be as effective as if it had been made
by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary (who need not be a member of the
Committee). No member of the Committee shall be liable for any act
or omission with respect to his service on the Committee if he acts
in good faith and in a manner he reasonably believes to be in or
not opposed to the best interests of the Company. Service on the
Committee shall constitute service as a director of the Company for
all purposes.
The Committee may, in its sole discretion, authorize the
Non-Insider Stock Option Committee (the "Non-Insider Committee") of
the Board of Directors to determine the key employees, consultants
and other individuals to whom options otherwise authorized by the
Committee are to be granted, in each case subject to the terms of
the Plan and such authorization by the Committee and insofar as
such optionees do not constitute "officers", for purposes of
Section 16 of the Securities and Exchange Act of 1934; and, in the
event the Non-Insider Committee does not determine such
individuals, shares of Common Stock otherwise covered by options
authorized by the Committee and submitted to the Non-Insider Stock
Option Committee shall be available for further options hereunder.
The Non-Insider Committee shall be appointed from time to
time by the Board of Directors and shall consist of one or more of
its members, who need not be members of the Committee. The Non-
Insider Committee shall hold its meetings at such times and at such
places as it may determine. A majority of its members shall
constitute a quorum. All determinations made by the Non-Insider
Committee shall be made by a majority of its members. Any decision
or determination reduced to writing and signed by all members shall
be effective as if it had been made by a majority vote at a meeting
duly called and held. The Non-Insider Committee may appoint a
Secretary (who need not be a member of the Committee). No member of
the Non-Insider Committee shall be liable for any act or omission
with respect to his service on the Committee if he acts in good
faith and in a manner he reasonably believes to be in or not
opposed to the best interests of the Company. Service on the Non-
Insider Committee shall constitute service as a director of the
Company for all purposes.
3. Stock Available for Options. There shall be
available for options under the Plan a total of 2,850,000 shares of
Common Stock, subject to any adjustments which may be made
pursuant to Section 5(f) hereof.* Shares of Common Stock used for
purposes of the Plan may be either authorized and unissued shares,
or previously issued shares held in the treasury of the Company, or
both. Shares of Common Stock covered by options which have
terminated or expired prior to exercise shall be available for
further options hereunder.
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* subject to shareholder approval
4. Eligibility. Options under the Plan may be granted
to key employees of the Company or any Parent or Subsidiary
thereof, including officers of the Company or any Parent or
Subsidiary thereof, and to consultants and other individuals
providing services to the Company or any Parent or Subsidiary.
Options may not be granted under the Plan to any member of the
Board of Directors of the Company (whether or not a key employee
of, or a consultant or other individual providing services to, the
Company or any Parent or Subsidiary). Options may be granted to
eligible individuals whether or not they hold or have held options
previously granted under the Plan or otherwise granted or assumed
by the Company. In selecting individuals for options, the
Committee (with reference to any action of the Non-Insider
Committee, if and to the extent authorized pursuant to Section 2)
may take into consideration any factors it may deem relevant,
including its estimate of the individual's present and potential
contributions to the success of the Company and/or any Parent or
Subsidiary thereof. Service as a consultant of or to the Company
or any Parent or Subsidiary shall be considered employment for
purposes of the Plan (and the period of such service shall be
considered the period of employment for purposes of Section 5(d) of
the Plan); provided, however, that incentive stock options may be
granted under the Plan only to an individual who is an "employee"
(as such term is used in Section 422 of the Code) of the Company or
any Subsidiary or Parent.
5. Terms and Conditions of Options. The Committee
(with reference to any action of the Non-Insider Committee, if and
to the extent authorized pursuant to Section 2) shall, in its
discretion, prescribe the terms and conditions of the options to be
granted hereunder which terms and conditions need not be the same
in each case, subject to the following:
(a) Option Price. The price at which each share
of Common Stock covered by an option granted under the Plan may be
purchased shall be determined by the Committee (with reference to
any action of the Non-Insider Committee, if and to the extent
authorized pursuant to Section 2) and shall not be less than the
lesser of (i) the tangible book value per share of Common Stock,
determined in accordance with generally accepted accounting
principles, as of the end of the fiscal quarter of the Company
immediately preceding the fiscal quarter in which the option is
granted, or (ii) the market value per share of Common Stock on the
date of grant of an option as determined pursuant to Section 5(c).
The date of the grant of an option shall be the date specified by
the Committee (with reference to any action of the Non-Insider
Committee, if and to the extent authorized pursuant to Section 2)
in its grant of the option.
(b) Option Period. The period for exercise of an
option shall in no event be more than ten years from the date of
grant. Options may, in the discretion of the Committee, be made
exercisable in installments during the option period. Any shares
not purchased on any applicable installment date may be purchased
thereafter at any time before the expiration of the option period.
(c) Exercise of Options. In order to exercise an
option, the holder thereof (the "Optionee") shall deliver to the
Company written notice specifying the number of shares of Common
Stock to be purchased, together with cash or a certified or bank
cashier's check payable to the order of the Company in the full
amount of the purchase price therefor; provided that, for the
purpose of assisting an Optionee to exercise an option, the Company
may make loans to the Optionee or guarantee loans made by third
parties to the Optionee, on such terms and conditions as the Board
of Directors may authorize and approve; and provided further that
such purchase price may be paid in shares of Common Stock owned by
the Optionee having a market value on the date of exercise equal to
the aggregate purchase price, or in a combination of cash and
Common Stock. For purposes of the Plan, the market value per share
of Common Stock shall be the last sale price regular way on the
date of reference, or, in case no sale takes place on such day, the
average of the closing bid and asked prices regular way, in either
case on the principal national securities exchange on which the
Common Stock is listed or admitted to trading, or if the Common
Stock is not listed or admitted to trading on any national
securities exchange, the last sale price of the Common Stock as
reported on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") National Market System on such date,
or if the Common Stock is not so reported, the average of the
closing high bid and low asked prices of the Common Stock in the
over-the-counter market on such date, as reported on the NASDAQ
system, or if there are no such prices reported on the NASDAQ
system on such date, as furnished to the Committee by a New York
Stock Exchange member selected from time to time by the Committee
for such purpose. If there is no bid or asked price reported on
any such date, the market value shall be determined by the
Committee in accordance with the regulations promulgated under
Section 2031 of the Code, or by any other appropriate method
selected by the Committee. An Optionee shall have none of the
rights of a stockholder until the shares of Common Stock are issued
to him. An option may not be exercised for less than ten shares of
Common Stock, or the number of shares of Common Stock remaining
subject to such option, whichever is smaller.
(d) Effect of Termination of Employment. An
option may not be exercised after the Optionee has ceased to be in
the employ of the Company or any Parent or Subsidiary, except in
the following circumstances:
(i) if the Optionee's employment is
terminated at or after age 60 (unless the
employer shall have grounds to terminate the
Optionee's employment for "cause" [as
hereinafter defined]) or by action of the
Optionee's employer for reasons other than
cause, the option may be exercised by the
Optionee within 30 days after such
termination, but only as to any shares
exercisable on the date the Optionee's
employment so terminates;
(ii) if the Optionee's employment is
terminated by reason of the Optionee's total
and permanent disability (pursuant to the
terms of any employee disability benefit plan
maintained by the Company or any Parent or
Subsidiary thereof) while employed by the
Company or any Parent or Subsidiary thereof
(unless the employer shall have grounds to
terminate the Optionee's employment for
cause), the option shall thereupon become
exercisable in full by the Optionee within 30
days after such termination;
(iii) in the event of the death of the
Optionee during the 30-day period after
termination of employment covered by (i)
above, the Optionee's beneficiary or the
person or persons to whom his rights are
transferred by will or the laws of descent and
distribution shall have a period of one year
from the date of his death to exercise any
options which were exercisable by the Optionee
at the time of his death;
(iv) in the event of the death of the
Optionee while employed, the option shall
thereupon become exercisable in full, and the
person or persons to whom the Optionee's
rights are transferred by will or the laws of
descent and distribution shall have a period
of one year from the date of the Optionee's
death to exercise such option.
The provisions of the foregoing clauses (ii) and (iii) shall apply
to any outstanding options which are incentive stock options to the
extent permitted by Section 422(d) of the Code and such outstanding
options in excess thereof shall, immediately upon the occurrence of
the event described in the foregoing clauses (ii) and (iii), be
treated for all purposes of the Plan as nonstatutory stock options
and shall be immediately exercisable as such as provided in the
foregoing clauses (ii) and (iii).
For purposes of this Plan, the term "cause" shall be defined
to mean the Optionee's: (i) breach of any undertaking by the
Optionee not to compete with the Company or any Parent or
Subsidiary thereof; (ii) breach of any undertaking by the Optionee
to keep and maintain confidential information of the Company or any
Parent or Subsidiary thereof in strictest confidence, or (iii)
causing or inducing, or attempting to cause or induce, either
directly or indirectly, any employees, sales representatives,
consultants or other personnel of the Company or any Parent or
Subsidiary thereof to terminate their relationships or employment
or breach their agreements with the Company or any Parent or
Subsidiary thereof, or requesting or advising any of the customers,
suppliers, or other business contacts of the Company or any Parent
or Subsidiary thereof to withdraw, curtail or cancel their business
with the Company or any Parent or Subsidiary thereof.
In no event shall any option be exercisable more than ten
years from the date of grant thereof. Nothing in the Plan or in
any option granted pursuant to the Plan (in the absence of an
express provision to the contrary) shall confer on any individual
any right to continue in the employ of the Company or any Parent or
Subsidiary thereof or interfere in any way with the right of the
Company to terminate his employment at any time.
(e) Nontransferability of Options. During the
lifetime of an Optionee, options held by such Optionee shall be
exercisable only by him. No option shall be transferable other
than by will or by the laws of descent and distribution; provided,
however, that Options may, in the discretion of the Committee,
permit the Optionee to designate a beneficiary or beneficiaries, in
the event of the Optionee's death, to exercise the rights of the
Optionee and receive the Stock issued pursuant to the Option. Such
beneficiary designation shall be in such form as shall be
prescribed by the Committee, shall be effective upon delivery to
the Company, and when effective shall revoke all prior
designations. If an Optionee dies with no such beneficiary
designation in effect, the Option shall be transferred by will or
pursuant to the laws of descent and distribution.
(f) Adjustments for Change in Stock Subject to
Plan and Other Events. In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering, or any other change
in the corporate structure or shares of the Company, the Committee
shall make such adjustments, if any, as it deems appropriate in the
number and kind of shares subject to the Plan, in the number and
kind of shares covered by outstanding options, or in the option
price per share.
(g) Registration, Listing and Qualification of
Shares of Stock. Each option shall be subject to the requirement
that if at any time the Board of Directors shall determine that the
registration, listing or qualification of the shares of Common
Stock covered thereby upon any securities exchange or under any
federal or state law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the granting of such option or
the purchase of shares of Common Stock thereunder, no such option
may be exercised unless and until such registration, listing,
qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board of
Directors. The Company may require that any person exercising an
option shall make such representations and agreements and furnish
such information as it deems appropriate to assure compliance with
the foregoing or any other applicable legal requirement.
(h) Other Terms and Conditions. The Committee
may impose such other terms and conditions, not inconsistent with
the terms hereof, on the grant or exercise of options, as it deems
advisable.
6. Provisions Applicable to Incentive Stock Options.
The Committee (with reference to any action of the Non-Insider
Committee, if and to the extent authorized pursuant to Section 2)
may, in its discretion, grant "incentive stock options" (within the
meaning of Section 422 of the Code) under the Plan to eligible
employees, provided, however, that: (a) no such incentive stock
option shall be granted at an option price which is less than the
market value per share of Common Stock on the date of the grant;
(b) no such incentive stock option shall be issued to any one
Optionee if the aggregate fair market value, determined at the time
of the grant of such incentive stock options, of the shares with
respect to which such incentive stock options are exercisable for
the first time by such Optionee during any calendar year, together
with all options under any other incentive stock option plan of the
Company exercisable during such year, exceeds $100,000; (c) no such
incentive stock option shall be granted to any Optionee who at the
time such option is granted owns more than 10 percent of the total
combined voting stock of the Company unless (i) the option price is
not less than 110 percent of the fair market value per share of
stock on the date of the grant, and (ii) the option is not
exercisable after five years from the date such option is granted;
and (d) Section 5(d)(iii) hereof shall not apply to any incentive
stock option.
7. Withholding Tax. Upon the disposition by any person
of shares of Common Stock acquired pursuant to the exercise of an
option granted pursuant to the Plan, the Company shall have the
right to require such person to pay the Company the amount of any
taxes which the Company may be required to withhold with respect to
such shares.
8. Amendment and Termination. Unless the Plan shall
theretofore have been terminated as hereinafter provided, the Plan
shall terminate on, and no option shall be granted thereunder after
March 31, 2002; provided, however, that the Board of Directors may
at any time prior to that date terminate the Plan. The Board of
Directors may at any time amend the Plan; provided, however, that,
except as contemplated in Section 5(f) hereof, the Board of
Directors shall not, without approval by a majority of the votes
cast by the stockholders of the Company at a meeting of stock-
holders at which a proposal to amend the Plan is voted upon: (i)
increase the maximum number of shares of Common Stock for which
options may be granted under the Plan, (ii) change the formula as
to minimum option prices, (iii) extend the period during which
options may be granted or exercised, or (iv) amend the requirements
as to the class of persons eligible to receive options. No
termination or amendment of the Plan may, without the consent of an
Optionee, adversely affect the rights of such Optionee under any
option held by such Optionee.
9. Effectiveness of Plan. The Plan will not be made
effective unless approved by a majority of the votes cast by the
stockholders of the Company at a meeting of stockholders within
twelve (12) months from the date the Plan is adopted by the Board
of Directors, duly called and held for such purpose, and no option
granted hereunder shall be exercisable prior to such approval.
10. Other Actions. Nothing contained in the Plan shall
be construed to limit the authority of the Company to exercise its
corporate rights and powers, including but not by way of
limitation, the right of the Company to grant or assume options for
proper corporate purposes other than under the Plan with respect to
any employee or other person, firm, corporation or association.