DIGITAL RADIO COMMUNICATIONS CORPORATION
OMNIBUS STOCK OPTION PLAN -1996
ARTICLE 1
Purpose
The purpose of this Omnibus Stock Option Plan (the "Plan") is to enable
Digital Radio Communications Corporation (the "Company") to offer key employees
and directors of the Company as well as non-employee advisors and consultants
equity interests in the Company, thereby attracting, retaining and rewarding
such persons, and strengthening the mutuality of interests between such persons
and the Company's shareholders.
ARTICLE II
Definitions
For the purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Award" shall mean an award under this Plan of any Stock Option or
Restricted Stock.
2.2 "Board" shall mean the Board of Directors of the Company.
2.3 "Change of Control" shall mean the occurrence of any one of the
following, other than in a transaction that has been approved by the Board: (i)
the Company enters into an agreement of reorganization, merger or consolidation
pursuant to which the Company is not the surviving corporation, (ii) the company
sells substantially all its assets, or (iii) in excess of 50% of the outstanding
shares of stock of the Company are acquired, in one transaction or a series of
transactions, by a single purchaser or group of related purchasers.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.5 "Committee" shall mean the Committee of the Board, consisting of two or
more Directors, charged with the supervision of the Plan. If the Board has not
established a Committee, the Committee shall consist of the Board.
2.6 "Common Stock" shall mean the Common Shares, $.01 par value per share,
of the Company.
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2.7 "Company" shall mean Digital Radio Communications Corporation, a
Utah Corporation.
2.8 "Disability" shall mean a mental or physical impairment that results in
the inability of an employee to perform his or her material duties for a period
of one hundred eighty (l80) days or, in the reasonable judgment of a qualified
medical professional, the substantial likelihood that an employee will be unable
to perform his or her material duties for a period of one hundred eighty (180)
days or more due to a mental or physical impairment.
2.9 "Fair Market Value" for purposes of this Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, (it if the shares of the Company are
publicly traded, the weighted average of the published prices of a share of
Common Stock for the 30-day period ending at the close of trading on the
preceding trading day, or (ii) if the shares of the Company are not publicly
traded or if such information is not otherwise available, the fair market value
as reasonably determined by the Board, in good faith, which determination shall
be conclusive.
2.10 "Incentive Stock Option" shall mean any Stock Option awarded under
this Plan intended to be and designated as an "Incentive Stock Option" within
the meaning of Section 422 of the Code or any successor section.
2.11 "Non-Qualified Stock Option" shall mean any Stock Option awarded
under this Plan that is not an Incentive Stock Option.
2.12 "Participant" shall mean a person to whom an Award has been made
pursuant to this Plan.
2. l3 "Restricted Stock" shall mean an Award of shares of Common Stock
under this Plan that is subject to restrictions under Article VII.
2.14 "Restriction Period" shall have the meaning set forth in Section
7.3(a).
2.15 "Stock Option" or "Option" shall mean any option to purchase shares of
Common Stock granted pursuant to Article VI.
2.16 "Termination of Employment" shall mean a termination of employment
with the Company for reasons other than a military or personal leave of absence
granted by the Company. In the case of a Director who is not an employee of the
Company, "Termination of Employment" shall mean termination of service as a
director of the Company.
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ARTICLE III
Administration
3.1 The Committee. The Plan shall be administered and interpreted by the
Committee.
3.2 Awards. The Committee shall have full authority to grant Stock Options
and Restricted Stock, pursuant to the terms of this Plan, to persons eligible
under Article V. In particular, the Committee shall have the authority:
(a) to select the persons to whom Stock Options and Restricted Stock
may from time to time be granted hereunder;
(b) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options and Restricted Stock, or any combination thereof,
are to be granted hereunder to one or more persons eligible to receive Awards
under Article V;
(c) to determine the number of shares of Common Stock to be covered
by each such Award granted hereunder; and
(d) to determine the terms and conditions, not inconsistent with the
terms of this Plan, of any Award granted hereunder (including, but not limited
to, the option price, the term of the option, any restriction or limitation
affecting the exercisability or delivery thereof, any vesting schedule or
acceleration thereof, or any forfeiture restrictions or waiver thereof,
regarding any Award and the shares of Common Stock relating thereto).
3.3 Guidelines. Subject to Article VIII hereof, the Committee shall have
the authority to adopt, alter and repeal such administrative rules, Sidelines
and practices governing this Plan as it shall, from time to time, deem
advisable; to interpret the terms and provisions of this Plan and any Award
issued under this Plan (and any agreements relating thereto); and to otherwise
supervise the administration of this Plan. The committee may correct
any defect, supply any omission or reconcile any inconsistency in this Plan or
in any Award granted in the manner and to the extent it shall deem necessary to
carry this Plan into effect. Notwithstanding the foregoing, no action of the
Committee under this Section 3.3 shall impair the rights of any Participant
without the Participant's consent.
3.4 Decisions Final. Any decision, interpretation or other action made or
taken in good faith by the Committee arising out of or in connection with the
Plan shall be final, binding and conclusive on the Company, all employees and
Participants and their respective heirs, executors, administrators, successors
and assigns.
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ARTICLE IV
Share Limitation
4.1 Shares. The maximum aggregate number of shares of Common Stock which
may be issued under this Plan shall be Two Hundred Thousand (200,000) (adjusted
as of August 30, 1996 for a 2 to 1 stock split) (subject to any increase or
decrease pursuant to Section 4.2), which may be either authorized and unissued
Common Stock or issued Common Stock reacquired by the Company. If any Option
granted under this Plan shall expire, terminate or be canceled for any reason
without having been exercised in full, the number of unpurchased shares shall
again be available for the purposes of the Plan.
4.2 Changes. In the event of any merger, reorganization, consolidation,
recapitalization, dividend (other than a dividend or its equivalent which is
credited to a Plan Participant or a regular cash dividend), stock split, or
other change in corporate structure affecting the Common Stock, such
substitution or adjustment shall be made in the maximum aggregate number of
shares which may be issued under this Plan, in the number and option price of
shares subject to outstanding Options granted under this Plan, and in the number
of shares subject to other outstanding Awards granted under this Plan, as may be
determined to be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any Award shall always be a whole number.
ARTICLE V
Eligibility
5.1 Employees. Officers and other key employees of the Company (including
Directors of the Company who are also employees of the Company) are eligible to
be granted Awards under this Plan.
5.2 Directors, Consultants and Advisors. Directors of the Company,
consultants, advisors or any other person who is performing services of special
importance to the management, operation or development of the Company are
eligible to be granted Non-Qualified Stock Options and Restricted Stock under
this Plan, but may not be granted Incentive Stock Options.
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ARTICLE VI
Stock Options
6.l Options. Each Stock Option granted under this Plan shall be either
an Incentive Stock Option or a Non-Qualified Stock Option.
6.2 Grants. The Committee shall have the authority to grant to any person
eligible under Article V one or more Incentive Stock Options, Non-Qualified
Stock Options, or both types of Stock Options. To the extent that any Stock
Option does not qualify as an Incentive Stock Option (whether because of its
provisions or the time or manner of its exercise or otherwise), such Stock
Option or the portion thereof which does not qualify as an Incentive Stock
Option shall constitute a separate Non-Qualified ed Stock Option.
6.3 Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan, under Section
422 of the Code, or, without the consent of the Participants affected, to
disqualify any Incentive Stock Option under such Section 422.
6.4 Terms of Options. Options granted under this Plan shalt be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee shall
deem desirable:
(a) Stock Option Contract. Each Stock Option shall be evidenced by,
and subject to the terms of, a Stock Option Contract executed by the Company and
the Participant. The Stock Option Contract shall specify whether the Option is
an Incentive Stock Option or a Non-Qualified Stock Option, the number of shares
of Common Stock subject to the Stock Option, the option price, the option term,
and the other terms and conditions applicable to the Stock Option.
(b) Options Price. Subject to section (k) below, the option price per
share of Common Stock purchasable upon exercise of a Stock Option shall be
determined by the Committee at the time of grant but shall be not less than 100%
of the Fair Market Value of the Common Stock on the date of grant if the Stock
Option is intended to be an Incentive Stock Option.
(c) Option Term. Subject to section (k) below, the term of each Stock
Option shall be fixed by the Committee, but no Stock Option shall be exercisable
more than five years after the date it is granted.
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(d) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at the time of grant; provided, however, that the Committee may waive
any installment exercise or waiting period provisions, in whole or in part, at
any time after the date of grant, based on such factors as the Committee shall
deem appropriate in its sole discretion.
(e) Assignability. Except by will or the laws of descent and
distribution, no right or interest in any Stock Option granted under the Plan
shall be assignable or transferable, and no right or interest of any Optionee
shall be liable for, or subject to, any lien, obligation or liability of the
Participant. Stock Options shall be exercisable during the Optionee's lifetime
only by the Optionee or the duly appointed legal representative of an
incompetent Optionee.
(f) Method of Exercise. Subject to such installment exercise and
waiting period provisions as may be imposed by the Committee, Stock Options may
be exercised in whole or in part at any time during the option term, by giving
written notice of exercise to the Company specifying the number of shares of
Common Stock to be purchased and the option price therefor. The notice of
exercise shall be accompanied by payment in full of the option price in cash
and, unless waived by the committee, by the representation described in Section
10.2. The Committee may, in its sole discretion at or after the grant, determine
that payment in full or in part may be made in the form of Common Stock duly
owned by the Participant (and for which the Participant has good title free and
clear of any liens and encumbrances), based on the Fair Market Value of the
Common Stock on the last trading date preceding payment. Upon payment in full of
the option price, as provided herein, a stock certificate or stock certificates
representing the number of shares of Common Stock to which the Participant is
entitled shall be issued and delivered to the Participant. A Participant shall
not be deemed to be the holder of Common Stock, or to have the rights of a
holder of Common Stock, with respect to shares subject to the Option' unless and
until a stock certificate or stock certificates representing such shares of
Common Stock are issued to such Participant.
(g) Death. Except for Incentive Stock Options subject to subsection
(i) below, if a Participant's employment by the Company terminates by reason of
death or if a Participant possessing a Non-Qualified Stock Option dies, any
Stock Option held by such Participant which was exercisable at the date of death
may be exercised by the legal representative of the Participant's estate at any
time or times during the period beginning on the date of death and ending ninety
(90) days after the date of death or until the expiration of the stated term of
such Stock Option, whichever period is the shorter. Nothing in this paragraph is
intended to affect the rights of the Company under any separate agreement
between the Company and a participant.
(h) Disability. Except for Incentive Stock Options subject to
subsection (i) below, if a Participant's employment by the Company terminates by
reason of Disability, any Incentive Stock Option held by such Participant which
was exercisable on
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the date of such termination of employment may thereafter be exercised by the
Participant at any time or times during the period beginning on the date of such
termination and ending ninety (90) days after the date of such termination or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter. If an Incentive Stock Option is exercised after the expiration
of the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Non-Qualified Stock Option. Nothing
in this paragraph is intended to affect the rights of a Participant possessing a
Non-Qualified Stock Option or to affect the rights of the Company under any
separate agreement between the Company and a participant.
(i) Termination of Employment. If a Participant's employment by the
Company terminates for any reason other than Death or Disability, any Incentive
Stock Option held by such Participant on the date of such termination of
employment will terminate thirty (30) days after such date of termination, or on
the expiration of the stated term of such Incentive Stock Option if earlier, and
may not be exercised thereafter. Nothing in this paragraph shall affect the
rights of a Participant possessing a NonQualified Stock Option or the rights of
the Company under any separate agreement between the Company and a Participant.
(j) Change of Control. In the event of a Change of Control, all
outstanding Stock Options shall immediately become fully exercisable, and upon
payment by the Participant of the option price (and, unless waived, delivery of
the representation described in Section 10.2), a stock certificate or
certificates representing the Common Stock covered thereby shall be issued and
delivered to the Participant.
(k) Incentive Stock Option Limitations. To the extent that the
aggregate Fair Market Value (determined as of the date of grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year under the Plan and/or any
other stock option plan of the Company or any subsidiary or parent corporation
(within the meaning of Section 424 of the Code) exceeds $100,000, such Options
shall be treated as Options which are not Incentive Stock Options.
Should the foregoing provisions not be necessary in order for the
Stock Options to qualify as Incentive Stock Options, or should an additional
provisions be required, the Board may amend this Plan accordingly, without the
necessity of obtaining the approval of the shareholders of the Company.
(l) Ten-Percent Shareholder Rule. Notwithstanding any other provision
of this Plan to the contrary, no Incentive Stock Option shall be granted to any
person who, immediately prior to the grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company, unless the option price is at least 1 10% of the Fair Market Value of
the Common Stock on the date of grant and the Option, by its terms, expires no
later than five years after the date of grant.
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ARTICLE VII
Restricted Stock
7.1 Awards of Restricted Stock. The Committee shall determine the
eligible person to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares to be awarded, the time or times within
which such Restricted Stock may be subject to forfeiture, the vesting schedule
and rights to acceleration thereof, and the other terms and conditions of the
Awards in addition to those set forth in Section 7.2 and 7.3.
The provisions of Restricted Stock Awards need not be the same with
respect to each Participant, and such Awards to individual Participants need not
be the same in subsequent years.
7.2 Agreements and Certificates. Restricted Stock awarded pursuant to
this Article VII shall be subject to the following terms and conditions:
(a) Restricted Stock Agreement. Each Restricted Stock Award
shall be evidenced by, and subject to the terms of, a Restricted Stock Agreement
executed by the Company. The Restricted Stock Agreement shall specify the
number of shares of Common Stock subject to the Award, the time or times within
which such Restricted Stock is subject to forfeiture and the other terms,
conditions and restrictions applicable to such Award.
(b) Stock Certificate. When a Participant receives a
Restricted Stock Award, a stock certificate or stock certificates representing
the number of shares of Common Stock covered by such Award shall be issued and
registered in the name of the Participant. A Participant shall have all of
the rights of a holder of Common Stock with respect to such shares of Restricted
Stock, including the right to vote such shares and to receive dividends thereon,
except that the Participant shall not be permitted to sell, transfer, pledge or
assign such shares of Restricted Stock.
(c) Custody. All stock certificates representing shares of
Restricted Stock shall be held in custody by the Company until such Restricted
Stock is no longer subject to forfeiture. When the restrictions applicable to a
Restricted Stock Award, or any portion thereof, lapse, the stock certificate or
stock certificates representing such shares shall be released from custody and
delivered to the Participant.
(d) Distributions. In the event of a dividend or distribution
payable in stock or a reclassification, stock split or split-up, the shares
issued or declared on account of Restricted Stock shall be subject to the same
terms and conditions relating to forfeiture as the Restricted Stock to which
they relate.
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7.3 Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Plan shall be subject to the following restrictions and
conditions and such other terms and conditions, not inconsistent with the terms
of this Plan, as the committee shall deem desirable.
(a) Restriction Period. Subject to the provisions of this Plan and the
Restricted Stock Agreement, shares of Restricted Stock will be forfeited to the
Company if the Participant ceases to be an employee of the Company or a Director
of the Company during a period (not to exceed five years) set by the Committee
commencing with the date of such Award (the "Restriction Period"). Subject to
the provisions of this Plan, the Committee may provide for the lapse of such
restrictions in installments and may waive such restrictions, in whole or in
part, at any time after the date of grant, based on such factors as the
Committee shall deem appropriate in its sole discretion.
Change of Control. In the event of a Change of Control, all Restricted
Stock remaining subject to forfeiture shall immediately cease to be subject to
forfeiture and the stock certificate or certificates representing such shares of
Common Stock shall be released from custody and delivered to the Participant.
ARTICLE VIII
Termination or Amendment
8.1 Termination or Amendment of the Plan. The Board may at any time
amend, discontinue or terminate this Plan or any part thereof (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in Article X); provided, however, that,
unless otherwise required by law, the rights of a Participant with respect to
Awards granted prior to such amendment, discontinuance or termination, may not
be impaired without the consent of such Participant and, provided further,
without the approval of the Company's shareholders, no amendment may be made
that would (1) materially increase the aggregate number of shares of Common
Stock that may be issued under this Plan (except by operation of Section 4.2);
(ii) materially modify the requirements as to eligibility to participate in the
Plan; or (iii) materially increase the benefits accruing to Participants.
8.2 Amendment of Awards. The Committee may amend the terms of any Award
theretofore granted, prospectively or retroactively, but, subject to Article IV,
no such amendment or other action by the Committee shall impair the rights of
any holder without the holder's consent. The Committee may also substitute new
Stock Options for previously granted Stock Options having higher option prices.
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ARTICLE IX
Unfunded Plan
9.1 Unfunded Status of Plan. This Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payment not yet
made to a Participant by the Company, nothing contained herein shall give any
such Participant any rights that are greater than those of a general creditor of
the Company.
ARTICLE X
General Provisions
10.1 Nonassignment. Except as otherwise provided in this Plan, Awards
made hereunder and the rights and privileges conferred thereby shall not be
sold, transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of such Award, right or privilege contrary to
the provisions hereof, or upon the levy of any attachment or similar process
thereon, such Award and the rights and privileges conferred hereby shall
immediately terminate and the Award shall immediately be forfeited to the
Company.
10.2 Legend. The Committee may require each person acquiring shares
pursuant to an Award under this Plan to represent to the Company in writing that
the Participant is acquiring the shares without a view to distribution thereof.
The stock certificates representing such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
All certificates representing shares of Common Stock delivered under
this Plan shall be subject to such stock transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange or
stock market upon which the Common Stock is then listed or traded, any
applicable Federal or state securities law, and any applicable corporate law,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
10.3 Other Plans. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
10.4 No Right to Employment. Neither this Plan nor the grant of any
Award hereunder shall give any Participant or other employee any right with
respect to
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continuance of employment by the Company nor shall there be a limitation in any
way on the right of the Company to terminate such Participant's employment at
any time. Neither this Plan nor the grant of any Award hereunder shall give any
Director any right with respect to continued service as a Director.
10.5 Withholding of Taxes. The Company shall have the right to (a)
require the Participant to remit to the Company an amount sufficient to satisfy
all Federal, state, and local tax requirements prior to the delivery of a stock
certificate representing the shares of Common Stock otherwise deliverable to the
Participant, (b) reduce the number of shares of Common Stock otherwise
deliverable to the Participant pursuant to this Plan by an amount that would
have a Fair Market Value equal to the amount of all Federal, state or local
taxes required to be withheld, or (c) to deduct the amount of such taxes from
any cash payment otherwise to be made to the Participant. In connection with
such withholding the Committee may make such arrangements as are consistent with
this Plan as it may deem appropriate.
10.6 Listing and Other Conditions.
(a) If the Common Stock is listed on a national securities
exchange, the issuance of any shares of Common Stock pursuant to an Award shall
be conditioned upon such shares being listed on such exchange. The company shall
have no obligation to issue such shares unless and until such shares are so
listed, and the right to exercise any Option or to receive shares pursuant to
any other Award shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the
Opinion that any sale or delivery of shares of Common Stock pursuant to an Award
is or may in the circumstances be unlawful or result in the imposition of excise
taxes under the statutes, rules or regulations of any applicable jurisdiction,
the Company shall have no obligation to make such sale or delivery, or to make
any application or to effect or to maintain any qualification or registration
under the Securities Act of 1933, as amended, or otherwise with respect to
shares of Common Stock or Awards, and the right to exercise any Option or to
receive shares pursuant to any other Award shall be suspended until, in the
opinion of such counsel, such sale of delivery shall be lawful or shall not
result in the imposition of excise taxes.
(c) Upon termination of any period of suspension under this
Section 10.6, any Award affect by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before
such suspension and as to shares which would otherwise have become available
during the period of such suspension, but no such suspension shall extend the
term of any Option.
10,7 Governing Law. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the State of
Utah.
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10.8 Construction. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
10.9 Liabilily of Committee. No member of the Board or the Committee
nor any employee of the Company shall be liable for any act or action hereunder,
whether of omission or commission, by any other member or employee or by any
agent to whom duties in connection with the administration of this Plan have
been delegated or, except in circumstances involving bad faith, gross negligence
or fraud, for anything done or omitted to be done by himself.
10.10 Other Benefits. No payment pursuant to an Award under this Plan
shall be deemed compensation for purposes of computing benefits under any
retirement plan nor affect any benefits under any other benefit plan now or
hereafter in effect under which the availability or amount of benefits is
related to the level of compensation.
10.11 Costs. The Company shall bear all expenses incurred in
administering this Plan, including expenses of issuing Common Stock pursuant to
Awards hereunder.
10.12 Severability. If any part of this Plan shall be determined to be
invalid or void in any respect, such determination shall not affect, impair,
invalidate or nullify the remaining provisions of this Plan which shall
continue in full force and effect.
10.13 Successors. This Plan shall be binding upon and inure to the
benefit of any successor or successors of the Company.
10.14 Headings. Article and section headings contained in this Plan
are included for convenience only and are not to be used in construing or
interpreting this Plan.
ARTICLE XI
Effective Date of Plan
11.1 The Plan shall be effective as of the earlier of (i) the date of
first issuance of any Award under the Plan and (ii) the date of its approval by
the Company's stockholders ("Stockholder Approval"); provided, that any
issuance of an Award prior to Stockholder Approval will be subject to
Stockholder Approval being obtained within one year of the date of the Plan was
approved by the Company's board of directors.
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ARTICLE XII
Term of Plan
12. No Stock Option or Restricted Stock shall be granted pursuant to
this Plan on or after the tenth anniversary of its approval by the Company's
shareholders, but Awards granted prior to such tenth anniversary may extend
beyond that date.
As adopted by the Board of Directors on May 17, 1996 and approved by
the shareholders on ___________________.
A True Copy
________________________________
Judy Sperry, Secretary
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