EXHIBIT 10.6
AHI HOLDING CORP.
1996 STOCK OPTION PLAN
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1. PURPOSE. The purpose of this 1996 Stock Option Plan (the "Plan") is to
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encourage employees of AHI Holding Corp. (the "Company") and of any present or
future parent or subsidiary of the Company (collectively, "Related
Corporations"), and other individuals who render services to the Company or a
Related Corporation, by providing opportunities to purchase stock in the Company
pursuant to options granted hereunder ("Non-Qualified Options"). Non-Qualified
Options are referred to hereafter individually as an "Option" and collectively
as "Options." As used herein, the terms "parent" and "subsidiary" mean "parent
corporation" and "subsidiary corporation," respectively, as those terms are
defined in Section 424 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. ADMINISTRATION OF THE PLAN.
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A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be administered
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by the Board of Directors of the Company (the "Board") or, by a committee
appointed by the Board (the "Committee"). Hereinafter, all references in
this Plan to the "Committee" shall mean the Board if no Committee has been
appointed. Subject to ratification of the grant or authorization of each
Option by the Board (if so required by applicable state law), and subject to
the terms of the Plan, the Committee shall have the authority to (i)
determine to whom Options may be granted; (ii) determine the time or times at
which Options shall be granted; (iii) determine the exercise price of shares
subject to each Option, which price shall not be less than the minimum price
specified in paragraph 6; (iv) determine (subject to paragraph 7) the time or
times when each Option shall become exercisable and the duration of the
exercise period; (v) extend the period during which outstanding Options may
be exercised; (vi) determine whether restrictions such as repurchase options
are to be imposed on shares subject to Options and the nature of such
restrictions, if any; and (vii) interpret the Plan and prescribe and rescind
rules and regulations relating to it. The Committee shall take whatever
actions it deems necessary, under Section 422 of the Code and the regulations
promulgated thereunder, to ensure that Options granted hereunder are not
treated as "incentive stock options" ("ISOs"). The interpretation and
construction by the Committee of any provisions of the Plan or of any Option
granted under it shall be final unless otherwise determined by the Board.
The Committee may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem advisable. No member of the Board or
the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Option granted under it.
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B. COMMITTEE ACTIONS. The Committee may select one of its members as
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its chairman, and shall hold meetings at such time and places as it may
determine. A majority of the Committee shall constitute a quorum and acts by
a majority of the members of the Committee at a meeting at which a quorum is
present, or acts reduced to or approved in writing by a majority of the
members of the Committee (if consistent with applicable state law), shall
constitute the valid acts of the Committee. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies however caused, or remove all members
of the Committee and thereafter directly administer the Plan.
C. GRANT OF OPTIONS TO BOARD MEMBERS. All grants of Options to members
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of the Board shall in all respects be made in accordance with the provisions
of this Plan applicable to other eligible persons. Consistent with the
provisions of the first sentence of paragraph 2(A) above, members of the
Board who either (i) are eligible to receive grants of Options pursuant to
the Plan or (ii) have been granted Options may vote on any matters affecting
the administration of the Plan or the grant of any Options pursuant to the
Plan, except that no such member shall act upon the granting to himself or
herself of Options, but any such member may be counted in determining the
existence of a quorum at any meeting of the Board during which action is
taken with respect to the granting to such member of Options.
D. PERFORMANCE-BASED COMPENSATION. The Board, in its discretion, may
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take such action as may be necessary to ensure that Options granted under the
Plan qualify as "qualified performance-based compensation" within the meaning
of Section 162(m) of the Code and applicable regulations promulgated
thereunder ("Performance-Based Compensation"). Such action may include, in
the Board's discretion, some or all of the following (i) if the Board
determines that Options granted under the Plan generally shall constitute
Performance-Based Compensation, the Plan shall be administered, to the extent
required for such Options to constitute Performance-Based Compensation, by a
Committee consisting solely of two or more "outside directors" (as defined in
applicable regulations promulgated under Section 162(m) of the Code), (ii) if
any Options with an exercise price less than the fair market value per share
of Common Stock are granted under the Plan and the Board determines that such
Options should constitute Performance-Based Compensation, such options shall
be made exercisable only upon the attainment of a pre-established, objective
performance goal established by the Committee, and such grant shall be
submitted for, and shall be contingent upon shareholder approval and (iii)
Options granted under the Plan may be subject to such other terms and
conditions as are necessary for compensation recognized in connection with
the exercise or disposition of such stock option or the disposition of Common
Stock acquired pursuant to such stock option, to constitute Performance-Based
Compensation.
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3. ELIGIBLE EMPLOYEES AND OTHERS. Options may be granted to any employee,
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officer or director (whether or not also an employee) or consultant of the
Company or any Related Corporation. The granting of any Option to any individual
or entity shall neither entitle that individual or entity to, nor disqualify
such individual or entity from, participation in any other grant of Options.
4. STOCK. The stock subject to Options shall be authorized but unissued
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shares of Common Stock of the Company, par value $ 0.01 per share (the "Common
Stock"), or shares of Common Stock reacquired by the Company in any manner. The
aggregate number of shares which may be issued pursuant to the Plan is 7,452
(without giving effect to the 100-for-1 split of the Common Stock contemplated
for the first half of 1997), subject to adjustment as provided in paragraph 13.
If any Option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part or shall be repurchased by the Company, the
shares subject to such Option shall again be available for grants of Options
under the Plan.
5. GRANTING OF OPTIONS. Options may be granted under the Plan at any
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time on or after November 15, 1996 and prior to November 15, 2006. The date of
grant of an Option under the Plan will be the date specified by the Committee at
the time it grants the Option; provided, however, that such date shall not be
prior to the date on which the Committee acts to approve the grant.
6. MINIMUM OPTION PRICE.
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A. PRICE FOR OPTIONS. Subject to Paragraph 2(D) (relating to
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compliance with Section 162(m) of the Code), the exercise price per share
of each Option granted under the Plan shall be the fair market value of the
Common Stock of the Company on the date of grant, unless otherwise
specified in the agreement relating to the grant of such Option; provided
that in no event shall such exercise price be less than the minimum legal
consideration required therefor under the laws of any jurisdiction in which
the Company or its successors in interest may be organized.
B. RESERVED.
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C. RESERVED.
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D. DETERMINATION OF FAIR MARKET VALUE. If, at the time an Option is
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granted under the Plan, the Company's Common Stock is publicly traded,
"fair market value" shall be determined as of the date of grant or, if the
prices or quotes discussed in this sentence are unavailable for such date,
the last business day for which such prices or quotes are available prior
to the date of grant and shall mean (i) the average (on that date) of the
high and low prices of the Common Stock on the principal national
securities exchange on which the Common Stock is traded, if the Common
Stock is then
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traded on a national securities exchange; or (ii) the last reported sale
price (on that date) of the Common Stock on the Nasdaq National Market, if
the Common Stock is not then traded on a national securities exchange; or
(iii) the closing bid price (or average of bid prices) last quoted (on that
date) by an established quotation service for over-the-counter securities, if
the Common Stock is not reported on the Nasdaq National Market. If the Common
Stock is not publicly traded at the time an Option is granted under the Plan,
"fair market value" shall be deemed to be the fair value of the Common Stock
as determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale and
offer prices of the Common Stock in private transactions negotiated at arm's
length.
7. OPTION DURATION. Subject to earlier termination as provided in
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paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than ten years
from the date of grant.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9 through
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12, each Option granted under the Plan shall be exercisable as follows:
A. VESTING. The Option shall either be fully exercisable on the date
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of grant or shall become exercisable thereafter in such installments as the
Committee may specify.
B. FULL VESTING OF INSTALLMENTS. Once an installment becomes
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exercisable it shall remain exercisable until expiration or termination of
the Option, unless otherwise specified by the Committee.
C. PARTIAL EXERCISE. Each Option or installment may be exercised at
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any time or from time to time, in whole or in part, for up to the total
number of shares with respect to which it is then exercisable.
D. ACCELERATION OF VESTING. The Committee shall have the right to
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accelerate the date on which any installment of any Option becomes
exercisable.
9. TERMINATION OF EMPLOYMENT. The termination of employment of an optionee
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shall cause such optionee's Options to terminate immediately unless otherwise
specified in the agreement relating to the grant of such Options. Nothing in
the Plan shall be deemed to give any optionee the right to be retained in
employment or other service by the Company or any Related Corporation for any
period of time. For purposes of this paragraph 9, employment shall be considered
as continuing uninterrupted during any bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute or
by contract. A bona fide leave of absence with the written approval of the
Committee shall not be considered an interruption of employment under this
paragraph 9,
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provided that such written approval contractually obligates the Company or any
Related Corporation to continue the employment of the optionee after the
approved period of absence.
10. DEATH; DISABILITY.
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A. DEATH. If an optionee ceases to be employed by the Company and
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all Related Corporations by reason of his or her death, any Option owned by
such optionee may be exercised, to the extent otherwise exercisable on the
date of death, by the estate, personal representative or beneficiary who
has acquired the Option by will or by the laws of descent and distribution,
until the earlier of (i) the specified expiration date of the Option or
(ii) 365 days from the date of the optionee's death.
B. DISABILITY. If an optionee ceases to be employed by the Company
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and all Related Corporations by reason of his or her disability, such
optionee shall have the right to exercise any Option held by him or her on
the date of termination of employment, to the extent of the number of
shares with respect to which he or she could have exercised it on that
date, until the earlier of (i) the specified expiration date of such Option
or (ii) 365 days from the date of the termination of the optionee's
employment. For the purposes of the Plan, the term "disability" shall mean
"permanent and total disability" as defined in Section 22(e)(3) of the Code
or any successor statute.
11. ASSIGNABILITY. Options shall not be transferable except to the extent
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set forth in the agreement relating thereto.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
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instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including termination and cancellation provisions and
restrictions applicable to shares of Common Stock issuable upon exercise of
Options. The Committee may from time to time confer authority and responsibility
on one or more of its own members and/or one or more officers of the Company to
execute and deliver such instruments. The proper officers of the Company are
authorized and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such instruments.
13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
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optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common
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Stock shall be subdivided or combined into a greater or smaller number of
shares
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(including the 100-for-1 split of the Common Stock contemplated for the first
half of 1997) or if the Company shall issue any shares of Common Stock as a
stock dividend on its outstanding Common Stock, the number of shares of
Common Stock deliverable upon the exercise of Options shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision, combination
or stock dividend.
B. CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated
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with or acquired by another entity in a merger or other reorganization in
which the holders of the outstanding voting stock of the Company immediately
preceding the consummation of such event, shall, immediately following such
event, hold, as a group, less than a majority of the voting securities of the
surviving or successor entity, or in the event of a sale of all or
substantially all of the Company's assets or otherwise (each, an
"Acquisition"), the Committee or, if in the absence of action by the
Committee, the board of directors of any entity assuming the obligations of
the Company hereunder (the "Successor Board"), shall, as to outstanding
Options, either (i) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the shares then subject to
such Options either (a) the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Acquisition, (b)
shares of stock of the surviving or successor corporation or (c) such other
securities as the Successor Board deems appropriate, the fair market value of
which shall not materially exceed the fair market value of the shares of
Common Stock subject to such Options immediately preceding the Acquisition;
or (ii) upon written notice to the optionees, provide that all Options must
be exercised, to the extent then exercisable or to be exercisable as a result
of the Acquisition, within a specified number of days of the date of such
notice, at the end of which period the Options shall terminate; or (iii)
terminate all Options in exchange for a cash payment equal to the excess of
the fair market value of the shares subject to such Options (to the extent
then exercisable or to be exercisable as a result of the Acquisition) over
the exercise price thereof.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a
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recapitalization or reorganization of the Company (other than a transaction
described in subparagraph B above) pursuant to which securities of the
Company or of another corporation are issued with respect to the outstanding
shares of Common Stock, an optionee upon exercising an Option shall be
entitled to receive for the purchase price paid upon such exercise the
securities he or she would have received if he or she had exercised such
Option prior to such recapitalization or reorganization.
D. RESERVED.
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E. DISSOLUTION OR LIQUIDATION. In the event of the proposed
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dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such
other time and subject to such other conditions as shall be determined by the
Committee.
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F. ISSUANCES OF SECURITIES. Except as expressly provided herein, no
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issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company.
G. FRACTIONAL SHARES. No fractional shares shall be issued under the
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Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.
H. ADJUSTMENTS. Upon the happening of any of the events described in
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subparagraphs A, B or C above, the class and aggregate number of shares set
forth in paragraph 4 hereof that are subject to Options which previously have
been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments
to be made under this paragraph 13 and, subject to paragraph 2, its
determination shall be conclusive.
14. MEANS OF EXERCISING OPTIONS. An Option (or any part or installment
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thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify
the number of shares as to which such Option is being exercised, accompanied by
full payment of the purchase price therefor either (a) in United States dollars
in cash or by check, (b) at the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Option, (c) at the discretion of the
Committee and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise, or (d) at the
discretion of the Committee, by any combination of (a), (b) and (c) above. The
holder of an Option shall not have the rights of a shareholder with respect to
the shares covered by his Option until the date of issuance of a stock
certificate to such holder for such shares. Except as expressly provided above
in paragraph 13 with respect to changes in capitalization and stock dividends,
no adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board as of
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November 15, 1996. The Plan shall expire at the end of the day on November 15,
2006 (except as to Options outstanding on that date). Subject to the provisions
of paragraph 5 above, Options may be granted under the Plan prior to the date of
stockholder approval of the Plan. The Board may terminate or amend the Plan in
any respect at any time. Except
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as otherwise provided in this paragraph 15, in no event may action of the Board
alter or impair the rights of an optionee, without such optionee's consent,
under any Option previously granted to such optionee.
16. RESERVED.
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17. APPLICATION OF FUNDS. The proceeds received by the Company from the
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sale of shares pursuant to Options granted under the Plan shall be used for
general corporate purposes.
18. RESERVED.
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19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of an Option,
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the transfer of an Option pursuant to an arm's length transaction, the vesting
or transfer of restricted stock or securities acquired on the exercise of a
Option hereunder, or the making of a distribution or other payment with respect
to such stock or securities, the Company may withhold taxes in respect of
amounts that constitute compensation includible in gross income. The Committee
in its discretion may condition (i) the exercise of an Option (ii) the transfer
of an Option, or (iii) the vesting or transferability of restricted stock or
securities acquired by exercising an Option, on the optionee's making
satisfactory arrangement for such withholding. Such arrangement may include
payment by the optionee in cash or by check of the amount of the withholding
taxes or, at the discretion of the Committee, by the optionee's delivery of
previously held shares of Common Stock or the withholding from the shares of
Common Stock otherwise deliverable upon exercise of a Option shares having an
aggregate fair market value equal to the amount of such withholding taxes.
20. GOVERNMENTAL REGULATION. The Company's obligation to sell and deliver
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shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares. The Committee shall not grant Options under the Plan
unless the Company has complied with all applicable securities laws in
connection with such grant.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by optionees in connection with the Plan.
21. GOVERNING LAW. The validity and construction of the Plan and the
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instruments evidencing Options shall be governed by the laws of the State of
Delaware, or the laws of any jurisdiction in which the Company or its successors
in interest may be organized.