MANAGEMENT GRAPHICS, INC.
NONQUALIFIED STOCK OPTION PLAN
FOR KEY EMPLOYEES
1. Purpose. The purpose of this Nonqualified Stock Option Plan
(the "Plan") is to promote the interests of Management Graphics, Inc. (the
"Corporation"), and its shareholders by providing a method to encourage key
employees of the Corporation and its subsidiaries (if any) to invest in the
Corporation's common stock on reasonable terms and thereby increase their
proprietary interest in the Corporation's business, to encourage such key
employees to remain in the employment of the Corporation and to increase their
personal interest in its continued success and progress.
2. Administration.
(a) The Plan shall be administered by the Board of Directors
who may from time to time issue orders or adopt
resolutions, not inconsistent with the provisions of the
Plan, to interpret the provisions and supervise the
administration of the Plan. All determinations shall be
made by the Board of Directors in accordance with the
Minnesota Business Corporation Act (the "Act"). A
majority of the Directors acting on any matter involving
the interpretation or administration of the Plan shall
not be eligible to participate in the Plan. Subject to
the foregoing, the Corporation's Bylaws and any
applicable provisions of the Act, all decisions made by
the directors in selecting optionees, establishing the
number of shares and terms applicable to each option, and
in construing the provisions of the Plan shall be final,
conclusive and binding on all persons, including the
Corporation, shareholders, employees and optionees.
(b) The Board of Directors may from time to time appoint a
Stock Option Plan Committee (the "Committee"), consisting
of not less than three (3) directors, none of whom shall
be eligible to participate in the Plan while a member of
the Committee. The Board of Directors may delegate to the
Committee power to select the particular employees who
are to receive options and to determine the number of
shares to be optioned to each such employee.
(c) Each option shall be evidenced by an option agreement
substantially in the form of the option agreement which
is attached to the Plan as an Exhibit. The day on which
the Board of Directors or the Committee approves the
granting of an option shall be considered the date on
which such option is granted.
(d) If the laws relating to nonqualified stock options
are changed during the term of the Plan, the Board
of Directors shall have the power to alter the Plan
in accordance with section 13 hereof, to conform to
such changes in the law.
3. Eligibility. Options shall be granted only to key
employees, in the judgement of the Board of Directors (or the Committee) who, at
the time of the grant, are employees of the Corporation or any subsidiary. The
term "employees" means employees of the Corporation, or any subsidiary,
including salaried officers of the Corporation.
4. Shares Subject to Plan. The Board of Directors (or the
Committee) may from time to time provide for the option and sale in the
aggregate of up to 350,000 shares of the Corporation's Class A common stock,
$0.01 par value, under the Plan subject to adjustments required by section 10 of
the Plan. Shares may be authorized unissued or reacquired shares of common
stock. The Corporation shall not be required, upon the exercise of any option,
to issue or deliver any shares of stock prior to the completion of such
registration or other qualification of such shares under any state or federal
law, rule or regulation as the Corporation shall determine to be necessary or
desirable.
5. Price. The purchase price of the stock under each option
shall be determined by the Board of Directors. The purchase price of each share
on the exercise of any option shall be paid in full in cash at the time of
exercise or, at the discretion of the Board of Directors or the Committee, by
the surrender of other shares of stock of the Corporation having a fair market
value equal to the purchase price, and a certificate representing shares so
purchased shall be delivered to the person entitled thereto.
6. Duration of Option. The option period shall not be more
than fifteen (15) years from the date the option is granted.
7. Exercise of Option. The Board of Directors shall have
full and complete authority to determine, at the time of granting of any option,
whether the option will be exercisable in full at any time or from time to time
during the term of the option, or to provide for the exercise thereof in such
installments and at such times during the term of the option, or upon the
satisfaction of such conditions, as the Board of Directors may determine.
8. Nontransferability of Option. Each option granted under
the Plan shall by its terms be nontransferable by the optionee other than by
will or the laws of descent and distribution and shall be exercisable during his
lifetime only by the optionee.
9. Other Terms and Conditions. The Board of Directors shall
have power, subject to the limitations contained herein, to fix any terms and
conditions for the granting or exercise of any option under the Plan. Nothing
contained in the Plan, or in any option granted pursuant to the Plan, shall
confer upon any optionee any right to continued employment by the Corporation,
nor limit in any way the right of the Corporation to terminate the optionee's
employment at any time.
10. Adjustment of Shares Subject to Option. In the event
there is any change in the common stock of the Corporation through the
declaration of stock dividends, or through recapitalization resulting in stock
split-ups, or combinations or exchanges of shares, or otherwise, the number of
shares available for option and the shares subject to any option and exercise
price thereof shall be appropriately adjusted. The Corporation shall give notice
of such adjustment to each holder of an option under the Plan, and such
adjustment shall be effective and binding on the optionee. In the event of the
proposed dissolution or liquidation of the Corporation, or in the event of a
proposed sale of substantially all of the assets of the Corporation, the Board
of Directors may declare that each option granted under the Plan shall terminate
as of a date to be fixed by the Board of Directors; provided that not less than
thirty (30) days' written notice of the date so fixed shall be given to each
optionee, and each optionee shall have the right, during the period of thirty
(30) days preceding such termination, to exercise any options owned by such
optionee as to all or any part of the shares covered thereby, including shares
as to which such option would not otherwise be exercisable.
11. Death of Optionee. If an optionee dies while an
employee of the Corporation or of any subsidiary or within ninety (90) days
after the termination of such employment, any option may be exercised without
regard to the restrictions on exercise set forth in section 7 within twelve (12)
months after the optionee's death by the optionee's personal representative or
the person or persons to whom the optionee's rights under the option shall pass
by the optionee's will or by the applicable laws of descent and distribution;
provided, however, that no such option may be exercised after the expiration
date specified therein.
12. Termination of Employment; Retirement and Disability.
If an optionee shall cease to be employed by the Corporation for any reason
(including retirement and disability and, with respect to an optionee under an
option, death) after the optionee has continuously been so employed for one (1)
year from the date of granting of the option, the optionee, or the oprionee's
personal representative or legatees, as the case may be, may, but only within
the three (3) month
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period immediately following such termination of employment and in no event
later than the expiration date specified in the option, exercise the optionee's
option to the extent the optionee was entitled to exercise it at the date of
such termination.
13. Modification of Plan. The Board of Directors may amend,
suspend or discontinue the Plan, at any time, by the act of the Board of
Directors. No such action may prejudice the right of any employee who has prior
thereto been granted an option or options of the Plan.
14. Termination of Plan. The Plan shall terminate on
December 31, 1990. Options may be granted under the Plan at any time and from
time to time prior to its termination. Any option outstanding under the Plan, at
the time of its termination, shall remain in effect until the option shall have
been exercised or shall have expired.
14. Effective Date of Plan. The effective date of the Plan
is November 26, 1985, the date on which the Plan was adopted by the Board of
Directors of the Corporation.
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