Exhibit 10.2
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GRC INTERNATIONAL, INC.
1994 EMPLOYEE STOCK OPTION PLAN
1. PURPOSE
The purpose of the 1994 Employee Option Plan is to enable the Company to
attract and retain key employees who are expected to materially contribute to
the prosperity of the Company and its affiliates, by enabling such employees to
acquire a proprietary interest (or increase their proprietary interest) in the
Company in accordance with the terms and conditions of this Plan. It is intended
that certain options granted under the Plan shall constitute incentive stock
options in accordance with the provisions of Section 422 of the Internal Revenue
Code of 1986.
2. DEFINITIONS
2.1. "Board" means the Board of Directors of the Company.
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2.2. "Cause", in the context of termination of employment, shall be
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defined in the context of executive employment and shall include, but not be
limited to, any material violation by an Optionee of any written employment
agreement, any act of dishonesty with respect to the Company or a Related
Corporation thereof, or the commission of any act reflecting unfavorably on the
Company or a Related Corporation thereof.
2.3. "Code" means the Internal Revenue Code of 1986, as amended from
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time to time.
2.4. "Committee" means the Committee of the Board appointed pursuant to
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Section 4.3 hereof.
2.5. "Company" means GRC International, Inc., a Delaware corporation,
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or any successor thereto by merger, consolidation or otherwise which may agree
to continue this Plan.
2.6. "Director" means director of the Company.
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2.7. "Disability" means the inability to engage in any substantial
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gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve months.
2.8. "Effective Date" means November 4, 1994.
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2.9. "Exchange Act" means the Securities Exchange Act of 1934, as
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amended from time to time.
2.10. "Fair Market Value" means the average of the high and low sale
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prices of the Stock quoted on the New York Stock Exchange Composite Transaction
Reporting System (or on the exchange or system where the Stock is principally
traded) on the date for which Fair Market Value is to be determined (or if
unavailable on such date, on the next preceding trading
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date). If the Fair Market Value is not available on such date, the Committee
shall determine the Fair Market Value; provided, however, in the case of
Incentive Stock Options such determination shall conform to the Treasury
Regulations under Section 422 of the Code.
2.11. "Grant Date" means the date as of which an Option is granted by
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the Committee pursuant to the Plan.
2.12. "Incentive Stock Option" means an option that qualifies as an
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incentive stock option under Section 422 of the Code.
2.13. "Key Employee" means any employee of the Company or a Related
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Corporation who has or is expected to materially contribute to its prosperity
of the Company and or a Subsidiary. The term "Key Employee" shall include
officers but exclude non-employee directors.
2.14. "Nonqualified Stock Option" shall mean any Option granted under
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this Plan which is not an Incentive Stock Option.
2.15. "Officer" means any person serving as an officer (as defined in
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the Company's bylaws).
2.16. "Option" shall mean an Incentive Stock Option or Nonqualified Stock
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Option granted pursuant to the terms of the Plan without distinction as to the
type.
2.17. "Option Agreement" means the agreement executed between the
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Company and the Optionee pursuant to Section 9 hereof.
2.18. "Option Price" means the purchase price of shares of Stock
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subject to an Option.
2.19. "Option Term" means the period beginning on the Grant Date and
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ending on the day an Option expires under the terms of the Option Agreement or
the Plan.
2.20. "Optionee" shall mean any Key Employee who is granted an Option
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pursuant to the Plan.
2.21. "Parent" has the meaning set forth in Section 424(e) of the Code.
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2.22. "Plan" means the GRC International, Inc. 1994 Employee Option Plan.
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2.23. "Related Corporation" means any Parent or Subsidiary.
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2.24. "Section 16 Optionee" means an Optionee who is a director,
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officer or ten percent beneficial owner of the Company, as those terms are used
under Section 16 of the Exchange Act.
2.25. "Stock" means shares of the Company's $0.10 par value common stock.
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2.26. "Subsidiary" has the meaning set forth in Section 424(f) of the
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Code.
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2.27. "Substantial Stockholder" shall mean any Key Employee who,
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immediately before an Incentive Stock Option is granted, owns (within the
meaning of Section 422(b)(6) of the Code, after the application of the
attribution rules contained in Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock either of the Company or any
Related Corporation thereof.
2.28. "Treasury Regulations" means (i) any proposed or final regulations
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issued by the Internal Revenue Service with respect to incentive stock options
and any supplement or modification thereof, and (ii) any rulings, procedures,
releases or other position statements published by the Internal Revenue Service
with respect to incentive stock options.
3. STOCK SUBJECT TO PLAN
The Stock subject to Options to be granted under the Plan may be shares
of the Company's authorized but unissued Stock, or shares of Stock reacquired by
the Company and held as treasury stock. The aggregate number of shares which may
be issued under Options under this Plan shall not exceed 750,000 shares of
Stock, of which up to 550,000 may be issued to Officers of the Company, unless
such number of shares are adjusted as provided in Section 13. In the event that
any outstanding Option under the Plan expires or terminates for any reason
without having been exercised in full, the shares of Stock allocable to the
unexercised portion of such Option shall become available for other Options
under the Plan.
4. ADMINISTRATION OF PLAN
4.1. Administration by Committee. The Plan shall be administered by the
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Committee which shall be appointed pursuant to Section 4.3 hereof.
4.2. Powers of Committee. The Committee has full and final authority
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in its discretion to:
(i) determine Key Employees, taking into account the nature of the
services rendered by the particular employee to the Company or a Subsidiary, the
employee's potential contribution to the long-term success of the Company or a
Subsidiary and such other factors as the Committee in its discretion shall deem
relevant;
(ii) grant Options from time to time to such Key Employees;
(iii) determine the duration, terms and provisions of the Options
and of Option Agreements, including but not limited to, any vesting provisions;
(iv) condition the exercise of any Options granted hereunder on the
attainment of certain specified goals by the Key Employee or by the Company or a
Related Corporation thereof;
(v) restrict the sale or otherwise provide for the repurchase of
shares acquired pursuant to the terms of an Option;
(vi) determine the time or times at which Options shall be granted;
(vii) determine the number of shares to be covered by each Option;
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(viii) determine the Fair Market Value and the Option Price;
(ix) interpret the Plan;
(x) prescribe, amend and rescind rules and regulations relating to
the Plan; and
(xi) make all other determinations, orders and decisions necessary
or advisable for the administration of the Plan. All such determinations and
actions shall be conclusive and binding for all purposes and upon all persons.
4.3. Committee.
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4.3.1. The Plan shall be administered by a Committee appointed or
designated by the Board. The Committee shall at all times contain at least two
members, each of which is a Director. Members of the Committee shall not be
eligible to receive Options and shall be "disinterested persons" as defined in
Rule 16b-3 of the Exchange Act.
4.3.2. The Board of Directors may from time to time remove members
from, or add members to, the Committee. Vacancies on the Committee, however
caused, shall be filled by the Board.
4.3.3. The interpretation and construction by the Committee of any
provision of the Plan, or of any Option granted under it, shall be final.
5. GRANTING OF OPTIONS
5.1. Granting of Options to Key Employees.
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5.1.1. The Committee may grant Options under the Plan to Key
Employees for such number of shares as the Committee may determine, except that
no Key Employee may be granted in any fiscal year Options to purchase more than
100,000 shares of Stock.
5.1.2. The Committee shall designate any Option granted as either an
"Incentive Stock Option" or "Nonqualified Stock Option" or the Committee may
designate a portion of a grant as an "Incentive Stock Option" and the remaining
portion as a "Nonqualified Stock Option". Any portion of a grant shall be a
"Nonqualified Stock Option" if it (i) is not designated as an "Incentive Stock
Option" or (ii) even if designated as an "Incentive Stock Option" shall fail to
meet the applicable requirements of Code Section 422. More than one Option may
be granted to a Key Employee subject to the terms and restrictions set forth
herein.
5.1.3. An Option shall not be granted prior to the Effective Date or
on or after the tenth anniversary of the Effective Date.
5.2. Limitation on Grant of Incentive Stock Options. Incentive Stock
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Options shall comply with the requirements of Code Section 422.
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6. OPTION PRICE
6.1 Committee to Determine Option Price. The Committee shall determine
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the Option Price of shares of Common Stock for which Options are granted under
the Plan. The Option Price per share of Common Stock shall be at least equal to
the Fair Market Value of a share of Common Stock on the Grant Date.
6.2 Incentive Stock Option Price Where Optionee is Substantial
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Stockholder. If any Optionee is a Substantial Stockholder, the Option Price
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determined by the Committee for an Incentive Stock Option shall not be less than
110% of the Fair Market Value of the Common Stock on the Grant Date.
7. TERM OF OPTIONS
7.1 In General. The term of each Option granted under this Plan shall
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be for such period as the Committee shall determine, not to exceed 10 years, and
shall be subject to earlier termination as hereinafter provided. An Option
shall not be exercisable after the expiration of the Option Term.
7.2 Term of Incentive Stock Option Where Optionee is Substantial
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Stockholder. Notwithstanding Section 7.1, if any Optionee is a Substantial
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Stockholder, the term of an Incentive Stock Option shall not exceed 5 years from
the Grant Date.
8. EXERCISE OF OPTIONS
8.1 Time of Exercise. Each Option shall be exercisable in accordance
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with the terms of the applicable Option Agreement, except that Options shall
become immediately exercisable in full, notwithstanding any delayed
exercisability provisions in the Option Agreement, upon the death or Disability
of the Optionee.
8.2 Manner of Exercise. To exercise an Option in whole or in part, an
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Optionee shall give written notice of exercise to the Committee specifying the
number of shares as to which the Option is being exercised, accompanied by
payment in full of the Option Price for such shares either in cash or in such
other consideration as approved by the Committee in its sole discretion
including, but not limited to, (i) shares of previously owned Common Stock held
by the Optionee for at least six (6) months, or (ii) in the event of hardship
and with the advance approval of the Committee, the Company's retention of
shares of Common Stock otherwise issuable to the Optionee upon exercise. Shares
of Common Stock used to make payments under (i) and (ii) shall be valued at Fair
Market Value on the date such notice is received by the Company's Stock Option
Administrator (or if unavailable on such date, on the next preceding trading
date), and the number of shares to be required for payments under (I) or (ii)
shall be rounded to the nearest whole share so that no cash payment shall be
required by reason of any fractional amount. Not less than 10 shares may be
purchased at any one time unless the number purchased is the total number
purchasable under the Option.
8.3 No Rights of Stockholder. The holder of an Option shall not have
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any of the rights of a stockholder with respect to the shares covered by his
Option until the Option is duly exercised.
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8.4 Additional Restrictions on Exercise. The exercise of each Option
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shall also be subject to any restrictions, terms or conditions contained in the
rules and regulations of the Committee or in the Option Agreement.
9. OPTION AGREEMENT
Promptly after the grant of an Option under the Plan, and before the
exercise of any part thereof, the Company and the Optionee shall execute an
Option Agreement incorporating the terms of this Plan and specifying the Option
Price, the number of shares of Common Stock subject to the Option, the terms and
conditions of the Option, and such other matters, as the Committee in its sole
discretion may determine. In the case of an Incentive Stock Option the Option
Agreement shall contain (i) such provisions as are required of incentive stock
options under the Code and applicable Treasury Regulations, and (ii) a provision
that the Option is not transferable by the Optionee other than by will or the
laws of descent and distribution, and is exercisable, during his lifetime, only
by him. The Option Agreement may also contain any other provision restricting
exercise or otherwise as the Committee shall deem appropriate; provided that in
the case of an Incentive Stock Option such provision is not inconsistent with
Section 422 of the Code.
10. TERMINATION OF EMPLOYMENT
10.1 Termination For Any Reason Other Than Death Or Disability.
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10.1.1 If an Optionee's employment ceases for any reason other
than death or Disability or termination for Cause, his or her Option(s) shall
remain in effect until the earlier of the end of the Option Term or the
expiration of 3 months after the Optionee's termination.
10.1.2 Any change in corporate ownership or structure which renders
the employees of any Related Corporation ineligible for further grants of
Incentive Stock Options by the Company under Section 422 of the Code shall be
considered a termination for reasons other than death or Disibility. Options
held by such employees (whether Incentive Stock Options or Non-Qualified Stock
Options) shall be governed by the provisions of Section 10.1.1.
10.2. Termination For Cause. If an Optionee's employment is terminated
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for Cause, his or her Options shall lapse forthwith.
10.3. Disability. If an Optionee's employment ceases by reason of such
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Optionee's Disability, his or her Options shall remain in effect until the
earlier of the end of the Option Term or the expiration of 1 year after the
Optionee's termination.
10.4 Death. If an Optionee employment ceases by reason of Optionee's
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death, his or her Options shall remain in effect until the earlier of the end of
the Option Term or the expiration of 1 year after Optionee's death, and may be
exercised by the person to whom the Option has been transferred by will or the
laws of the descent and distribution.
10.5 Committee's Discretion. Notwithstanding the foregoing provisions of
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this Section 10, the Committee may, in its absolute discretion, extend the
privilege to exercise all or any part of the Option in accordance with its terms
for any period of time within the Option Term.
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11. NON-GUARANTEE OF EMPLOYMENT
Nothing in the Plan or in any Option granted pursuant to the Plan shall
be construed as a contract of employment between the Company or a Related
Corporation thereof and the Optionee, or as a contractual right to continue in
the employ of the Company or a Related Corporation thereof or as a limitation of
the right of the Company or a Related Corporation thereof to discharge the
Optionee at any time.
12. NON-TRANSFERABILITY OF OPTIONS
Except as may be expressly permitted by the Committee with respect to any
Nonqualified Stock Option, Options shall not be transferable otherwise than by
will or the laws of descent and distribution and during the lifetime of the
Optionee, an Option may be exercised only by him or her.
13. STOCK ADJUSTMENT
13.1 Changes in Capital Structure. In the event that the outstanding
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shares of Stock of the Company are hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares other than securities
of the Company or of another corporation by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, combination
of shares, or dividend payable in capital stock, appropriate adjustment shall be
made by the Committee in the number and kind of shares for the purchase of which
Options may be granted under the Plan. In addition, the Committee shall make
appropriate adjustment in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised, shall be exercisable to the end
that the Optionee's proportionate interest shall be maintained as before the
occurrence of the event. No outstanding Incentive Stock Option shall be adjusted
in a manner which would disqualify the Incentive Stock Option as an incentive
stock option under Section 422 of the Code. Any such adjustment made by the
Committee shall be conclusive.
13.2 Liquidation or Dissolution. If the Company dissolves and
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liquidates, then notwithstanding any restrictions on exercise set forth in this
Plan or any Option, each Optionee shall have the right to exercise his Option at
any time on or before the tenth day prior to the effective date of such
liquidation and dissolution. The Committee may establish a different period for
exercise by notice to the Optionee, and it may establish limitations on exercise
to avoid subjecting the Optionee to liability under Section 16(b) of the
Exchange Act. Any Option not so exercised shall terminate on the last day for
exercise prior to such effective date.
13.3 Limitation on Rights of Optionee. Except as expressly provided in
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Section 13.1 or 13.2 hereof, an Optionee shall have no rights by reason of the
issuance of (i) shares of Common Stock of the Company pursuant to this Plan,
(ii) additional shares of Common Stock, (iii) any other security or debenture
convertible into Stock, (iv) or any other equity security, including issuance
pursuant to a plan of merger, consolidation, or statutory share exchange, and no
adjustment by reason thereof shall be made with respect to the number of shares
of Stock subject to an Option or the Option Price.
13.4 Rights of the Company. The grant of an Option pursuant to the Plan
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shall not affect in any way the right or power of the Company to
engage in corporate transactions, including but not limited to issuing
additional shares of stock; making adjustments,
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reclassifications, reorganizations or changes in its capital or business
structure; participating in mergers, consolidations, or share exchanges with
one or more corporations or entities; or dissolving, liquidating, or selling
or transfering all or any part of its business or assets.
14. LEGAL RESTRICTIONS
The Company will not be obligated to issue or deliver shares of Stock
upon exercise of an Option if counsel to the Company determines that such
issuance would violate any law or regulation of any governmental authority or
any agreement between the Company and any securities exchange upon which the
Stock is then listed or quoted. In connection with any stock issuance or
delivery, the person acquiring the shares shall, if requested by the Company,
give assurances satisfactory to counsel by the Company regarding such matters as
the Company may deem desirable, and other restrictions may apply to the shares,
to assure compliance with all legal requirements. The Company shall in no event
be obliged to take any action in order to cause the exercise of any Option.
15. TERM OF PLAN
Options may be granted pursuant to the Plan from time to time at any time
after the Effective Date, except that Incentive Stock Options may not be granted
more than 10 years after the Effective Date.
16. AMENDMENT OF THE PLAN
The Board may at any time terminate, suspend or amend the Plan,
provided that no such amendment shall be made without shareholder approval
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if such shareholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or system on which the Stock
may then be listed or quoted.
17. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
Subject to the terms and conditions of the Plan and any Option Agreement,
the Committee may modify, extend or renew outstanding Options granted under the
Plan, or accept the surrender of outstanding Options, to the extent not
previously exercised, and authorize the granting of new Options in substitution
therefor. The Committee may not change the terms or conditions of any
outstanding Option in a manner that would adversely affect the rights of the
Optionee without the express written consent of the Optionee (or the person
entitled to exercise the Option if the Optionee is deceased) unless permitted by
the terms of the Option Agreement.
18. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Stock pursuant to
the exercise of the Optionee shall be used for its general corporate purposes.
19. WITHHOLDING TAXES
19.1 Elections to Pay Withholding Taxes. Any Optionee may pay the amount
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of any federal, state or local taxes required by law to be withheld in
connection with the exercise of an Option, as well as any additional taxes on
the exercise up to Optionee's marginal rate, either in
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cash or in such other consideration as approved by the Committee in its sole
discretion including, but not limited to (i) shares of previously owned Stock
held by the Optionee least six months (valued at Fair Market Value), or (ii) the
Company's retention of shares of Stock otherwise issuable to the Optionee upon
exercise (valued at Fair Market Value); provided that only the amount of taxes
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required to be withheld by law may be paid pursuant to (ii). Shares of Stock
used to make payments under (i) and (ii) shall be valued as of the exercise
date, and the number of shares to be required for payments under (i) or (ii)
shall be rounded to the nearest whole share so that no cash payment shall be
required by reason of any fractional amount.
19.2 Compulsory Payment of Tax Withholding Obligations. In the event an
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Optionee does not satisfy his tax withholding obligations pursuant to Section
19.1, the Company or a Related Corporation thereof shall have the right to
deduct from any compensation or any other payment of any kind due Optionee the
amount of any federal, state or local taxes required by law to be withheld as
the result of the exercise of an Option or the disposition (as that term is
defined in Section 424(c) of the Code) of shares acquired pursuant to the
exercise of an Incentive Stock Option. In lieu of such deduction, the Company
may require the Optionee to make a cash payment to the Company or a Related
Corporation thereof equal to the amount required to be withheld. In the event
the Optionee does not make such payment when requested, the Company may refuse
to issue any stock certificate pursuant to the exercise of any Option until
arrangements satisfactory to the Committee for such payment have been made.
20. MISCELLANEOUS
20.1 Exclusion from Retirement and Fringe Benefit Computation. The award
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and exercise of Options pursuant to the Plan shall not be taken into account as
"wages," "salary," or "compensation" in determining eligibility, benefits or
otherwise under (i) any pension, retirement, profit-sharing or other qualified
or non-qualified plan or deferred compensation; (ii) any employee welfare or
fringe benefit plan including, but not limited to, group life or disability
insurance; or (iii) any form of extraordinary pay including, but not limited to,
bonuses, sick pay and vacation pay.
20.2 Notice of Disqualifying Disposition. In the event an Optionee makes
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a disposition (as that term is defined in Section 424(c) of the Code) of any
shares of Stock acquired pursuant to the exercise of an Incentive Stock
Option within two years from the date the Incentive Stock Option is granted or
within one year after the shares are transferred to the Optionee, the Optionee
shall notify the Committee of such disposition in writing.
20.3 Gender. As used herein the masculine gender shall include the
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feminine as the identity of an Optionee may require.
20.4 Governing Law. The validity, interpretation and administration of
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the Plan and of any rules, regulations, determinations or decisions made
thereunder, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined exclusively in accordance
with the laws of the State of Delaware, and applicable federal law, without
reguard to principles of conflicts of law. Without limiting the generality of
the foregoing, the period within which any action in connection with the Plan
must be commenced shall be governed by the laws of the State of Delaware without
regard to the place where the
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act or omission complained of took place, the residence of any party to such
action or the place where the action may be brought.
20.5 Headings. The headings in this Plan are for reference purposes only
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and shall not affect the meaning or interpretation of the Plan.
20.6 Notices. All notice and other communications made or given pursuant
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to this Plan shall be in writing and shall be sufficiently made or given if hand
delivered or mailed by certified mail, addressed to the Optionee at the address
contained in the records of the Company, or to the Company at its principal
office.
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