ICT GROUP, INC.
1996 NON-EMPLOYEE DIRECTORS PLAN
The purpose of the ICT Group, Inc. 1996 Non-Employee Directors Plan
(the "Plan") is to provide non-employee members of the Board of Directors
("Non-employee Directors") of ICT Group, Inc. (the "Company") and its
subsidiaries (within the meaning of section 424(f) of the Code), with the
opportunity to receive grants of nonqualified stock options ("Options"). The
Company believes that the Plan will cause the participants to contribute
materially to the growth of the Company, thereby benefitting the Company's
shareholders, and will align the economic interests of the participants with
those of the shareholders.
1. Administration. The provisions of this Plan are intended to operate
automatically and not require administration. To the extent that any
administrative determinations are required, any determinations with respect to
the provisions of this Plan shall be made by the members of the Board who are
not eligible to receive options under this Plan (the "Committee"), but in no
event shall such determinations affect the eligibility of Optionees, the
determination of the Exercise Price, the timing of the Options or the number of
shares subject to Options granted hereunder. If at any time there are not
sufficient shares available under the Plan to permit an automatic grant as
described in this Plan, the Option shall be reduced pro rata (to zero, if
necessary) so as not to exceed the number of shares then available under the
Plan.
2. Shares Subject to the Plan
(a) Subject to the adjustment specified below, the aggregate number of
shares of common stock of the Company ("Company Stock") that may be issued under
the Plan is 30,000 shares. The shares may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company on the open market for purposes of the Plan. If and to the extent
Options granted under the Plan terminate, expire, or are cancelled, forfeited,
exchanged or surrendered without having been exercised, the shares subject to
such Options shall again be available for purposes of the Plan.
(b) If there is any change in the number or kind of shares of Company
Stock outstanding (i) by reason of a stock dividend, spin off, recapitalization,
stock split, or combination or exchange of shares, (ii) by reason of a merger,
reorganization or consolidation in which the Company is the surviving
corporation, (iii) by reason of a reclassification or change in par value, or
(iv) by reason of any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the
Company's receipt of consideration, or if the value of outstanding shares of
Company Stock is substantially reduced as a result of a spinoff or the
Company's payment of an extraordinary dividend or distribution, the maximum
number of shares of Company Stock available for Options, the number of shares
covered by outstanding Options, the kind of shares issued under the Plan, and
the price per share or the applicable market value of such Options shall be
proportionately adjusted to reflect any increase or decrease in the number or
kind of issued shares of Company Stock to preclude the enlargement or dilution
of rights and benefits under such Options; provided, however, that any
fractional shares resulting from such adjustment shall be eliminated.
3. Eligibility for Participation
(a) All Non-Employee Directors shall participate in the
Plan. Non-Employee Directors who have received options under
this plan are hereinafter referred to as "Optionees."
4. Formula Option Grants to Non-Employee Directors
(a) A Non-Employee Director shall be entitled to receive options which
are not intended to qualify as incentive stock options within the meaning of
section 422 of the Code ("Nonqualified Stock Options") in accordance with this
Section 4.
(b) Initial Grant. Each Non-Employee Director who first becomes a
member of the Board after the effective date of this Plan (as specified in
Section 19) shall receive a grant of a Nonqualified Stock Option to purchase
1,000 shares of Company Stock on the date as of which he or she first becomes a
member of the Board. Options granted pursuant to this Subsection (a) shall be
fully exercisable as of the date of grant.
(c) Annual Grants. On each date that the Company holds its annual
meeting of shareholders, commencing with the annual meeting next following the
effective date of this Plan, each Non- Employee Director who is in office
immediately after the annual election of directors (other than a director who is
first elected to the Board at such meeting) shall receive a grant of a
Nonqualified Stock Option to purchase 1,000 shares of Company Stock. The date of
grant of each such annual Grant shall be the date of the annual meeting of the
Company's shareholders. Options granted pursuant to this Subsection (b) shall be
fully exercisable as of the first anniversary of the date of grant.
(d) Exercise Price. The Exercise Price per share of Company Stock
subject to an Option granted under this Section 4 shall be equal to the Fair
Market Value of a share of Company Stock on the date of grant.
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If the Company Stock is traded in a public market, then the
Fair Market Value per share shall be determined as follows: (i) if the principal
trading market for the Company Stock is a national securities exchange or the
National Market segment of the Nasdaq Stock Market, the last reported sale price
thereof on the relevant date or (if there were no trades on that date) the
latest preceding date upon which a sale was reported, or (ii) if the Company
Stock is not principally traded on such exchange or market, the mean between the
last reported "bid" and "asked" prices of Company Stock on the relevant date, as
reported on Nasdaq or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable.
(e) Option Term and Exercisability. The term of each Option granted
pursuant to this Section 4 shall be ten years.
(f) Payment of Exercise Price.
(i) The Exercise Price for an Option granted under this Plan
shall be paid in cash. The Optionee shall pay the Exercise Price and the amount
of any withholding tax due at the time of exercise. Shares of Company Stock
shall not be issued upon exercise of an Option until the Exercise Price is fully
paid and any required withholding is made.
(ii) A Optionee may exercise an Option granted under this Plan
by delivering a notice of exercise as described below, with accompanying payment
of the Exercise Price in accordance with Subsection (i) above. The notice of
exercise may instruct the Company to deliver shares of Company Stock due upon
the exercise of the Option to the designated registered broker or dealer in lieu
of delivery to the Optionee. Such instructions shall designate the account into
which the shares are to be deposited.
5. Termination of Employment, Disability or Death.
(a) Except as provided below, an Option may only be exercised while the
Optionee is a Non-Employee Director. In the event that a Optionee ceases to be a
Non-Employee Director for any reason other than a "disability", death, or
"termination for cause", any Option which is otherwise exercisable by the
Optionee shall terminate unless exercised within 90 days of the date on which
the Optionee ceases to be a member of the Board, but in any event no later than
the date of expiration of the Option term. Any of the Optionee's Options that
are not otherwise exercisable as of the date on which the Optionee ceases to be
a Non-Employee Director shall terminate as of such date.
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(b) In the event the Optionee ceases to be a Non-Employee Director on
account of a "termination for cause" by the Company, any Option held by the
Optionee shall terminate as of the date the Optionee ceases to be a Non-Employee
Director.
(c) In the event the Optionee ceases to be a Non-Employee Director
because the Optionee is "disabled", any Option which is otherwise exercisable by
the Optionee shall terminate unless exercised within one year after the date on
which the Optionee ceases to be a Non-Employee Director, but in any event no
later than the date of expiration of the Option term. Any of the Optionee's
Options which are not otherwise exercisable as of the date on which the Optionee
ceases to be a Non-Employee Director shall terminate as of such date.
(d) If the Optionee dies while a Non-Employee Director or within 90
days after the date on which the Optionee ceases to be a Non-Employee Director
on account of a termination as specified in Section 5(a) above, any Option that
is otherwise exercisable by the Optionee shall terminate unless exercised within
one year after the date on which the Optionee ceases to be a Non-Employee
Director, but in any event no later than the date of expiration of the Option
term. Any of the Optionee's Options that are not otherwise exercisable as of the
date on which the Optionee ceases to be a Non-Employee Director shall terminate
as of such date.
(e) For purposes of this Section 5:
(A) The term "Company" shall mean the Company and its
subsidiaries within the meaning of section 424(f) of the Code.
(B) "Disability" shall mean a Optionee's becoming disabled
within the meaning of section 22(e)(3) of the Code.
(C) "Termination for cause" shall mean the date the Optionee's
directorship is terminated, if the directorship is terminated on
account of (a) a any act of fraud, intentional misrepresentation,
embezzlement or theft, (b) commission of a felony, or (c) disclosure of
trade secrets or confidential information of the Company. In the event
a Optionee's employment is terminated for cause, in addition to the
immediate termination of all Options, the Optionee shall automatically
forfeit all Option shares for any exercised portion of an Option for
which the Company has not yet delivered the share certificates, upon
refund by the Company of the Exercise Price paid by the Optionee for
such shares.
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6. Withholding of Taxes
(a) Required Withholding. All Options under the Plan shall be subject
to applicable federal (including FICA), state and local tax withholding
requirements. The Company shall have the right to deduct from all Options paid
in cash, or from other wages paid to the Optionee, any federal, state or local
taxes required by law to be withheld with respect to such Options. In the case
of Options and other Options paid in Company Stock, the Company may require the
Optionee or other person receiving such shares to pay to the Company the amount
of any such taxes that the Company is required to withhold with respect to such
Options, or the Company may deduct from other wages paid by the Company the
amount of any withholding taxes due with respect to such Options.
(b) Election to Withhold Shares. A Optionee may elect to satisfy the
Company's income tax withholding obligation with respect to an Option, paid in
Company Stock by having shares withheld up to an amount that does not exceed the
Optionee's maximum marginal tax rate for federal (including FICA), state and
local tax liabilities.
7. Transferability of Options
(a) Only the Optionee or his or her authorized representative may
exercise rights under an Option. Such persons may not transfer those rights
except by will or by the laws of descent and distribution. When a Optionee dies,
the representative or other person entitled to succeed to the rights of the
Optionee ("Successor Optionee") may exercise such rights. A Successor Optionee
must furnish proof satisfactory to the Company of his or her right to receive
the Option under the Optionee's will or under the applicable laws of descent and
distribution.
8. Change of Control of the Company
As used herein, a "Change of Control" shall be deemed to have occurred
if:
(a) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the voting power of the then outstanding securities
of the Company;
(b) The shareholders of the Company approve (or, if shareholder
approval is not required, the Board approves) an agreement providing for (i) the
merger or consolidation of the
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Company with another corporation where the shareholders of the Company,
immediately prior to the merger or consolidation, will not beneficially own,
immediately after the merger or consolidation, shares entitling such
shareholders to 20% or more of all votes to which all shareholders of the
surviving corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote), or where the members of the Board, immediately prior to
the merger or consolidation, would not, immediately after the merger or
consolidation, constitute a majority of the board of directors of the
surviving corporation, (ii) the sale or other disposition of all or
substantially all of the assets of the Company, or (iii) a liquidation,
dissolution or statutory exchange of the Company;
(c) Any person has commenced a tender offer or exchange offer for 20%
or more of the voting power of the then outstanding shares of the Company; or
(d) At least a majority of the Board does not consist of individuals
who were elected, or nominated for election, by the directors in office at the
time of such election or nomination.
9. Consequences of a Change of Control
(a) Upon a Change of Control (i) the Company shall provide each
Optionee with outstanding Options written notice of such Change of Control, (ii)
all outstanding Options shall automatically accelerate and become fully
exercisable.
(b) In addition, upon a Change of Control described in Section 12(b)(i)
where the Company is not the surviving corporation (or survives only as a
subsidiary of another corporation), all outstanding Options shall be assumed by,
or replaced with comparable options or rights by, the surviving corporation.
10. Amendment and Termination of the Plan
(a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however,that notwithstanding any other provision of the Plan, if
necessary to comply with Rule 16b-3, this Plan may not be amended more
frequently than once every six months, except for amendments necessary to
conform the Plan to changes in the provisions of or the regulations relating to
applicable laws, including the Code.
11. Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date unless
terminated earlier by the Board or unless extended by the Board with the
approval of the shareholders.
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12. Termination and Amendment of Outstanding Options. A termination or
amendment of the Plan that occurs after a Option has been granted shall not
materially impair the rights of a Optionee unless the Optionee consents or
unless the amendment is made under Section 21(b).
13. Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
14. Funding of the Plan
This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Options under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Options.
15. Rights of Participants
Neither this Plan nor any action taken hereunder shall be construed
as giving any individual any rights to be retained as a director of the Company
or any other employment rights.
16. No Fractional Shares
No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Option.
17. Requirements for Issuance of Shares
No Company Stock shall be issued or transferred in connection with any
Option hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with. Certificates
representing shares of Company Stock issued under the Plan will be subject to
such stop-transfer orders and other restrictions as may be applicable under such
laws, regulations and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.
18. Headings
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
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19. Effective Date of the Plan.
Subject to the approval of the Company's shareholders, this Plan shall
be effective on ____________, 1996.
20. Miscellaneous
(a) Compliance with Law. The Plan, the exercise of Options and the
obligations of the Company to issue or transfer shares of Company Stock under
Options shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act.
(b) Ownership of Stock. A Optionee or Successor Optionee shall have no
rights as a shareholder with respect to any shares of Company Stock covered by
an Option until the shares are issued or transferred to the Optionee or
Successor Optionee on the stock transfer records of the Company.
(c) Governing Law. The validity, construction,
interpretation and effect of the Plan and Option grants issued
under the Plan shall exclusively be governed by and determined in
accordance with the law of the Commonwealth of Pennsylvania.
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