1
EXHIBIT 10.2
LaBARGE, INC.
1987 INCENTIVE STOCK OPTION PLAN
I.
Purpose of the 1987 Incentive Stock Option Plan
The purpose of the 1987 Incentive Stock Option Plan (the "Plan") is to
promote the interests of LaBarge, Inc. ("Company") and its stockholders by
providing a method whereby Company employees may be encouraged to invest in the
Company's Common Stock, thereby increasing their proprietary interest in its
business, providing them with additional incentive to remain in the employ of
the Company and increasing their personal interest in its continued success
and progress. These employees will be granted options ("Options") to purchase
shares of the Common Stock, $.01 par value, of the Company ("Common Stock").
It is intended that Options issued hereunder will constitute Incentive Stock
Options within the meaning of Section 422A of the Internal Revenue Code of
1986, as amended from time to time (the "Code").
II.
Administration of the 1987 Plan
A. The Committee. The Plan shall be administered by the Human Resources
Committee of the Board of Directors of the Company or such other committee as
shall be designated by the Board of Directors (the "Committee"). The Committee
shall consist of not less than four Directors of the Company, and shall be
appointed by the Board of Directors. A majority of the members of the
Committee shall constitute a quorum. Any decision or determination reduced to
writing and signed by all the members of the Committee shall be fully as
effective as if it had been made by a majority vote at a meeting duly called
and held. The Com-
2
mittee may appoint a chairman from among the members and a secretary (who need
not be a member) and make such rules and regulations for the conduct of its
business as it shall be deemed advisable. No member of the Committee shall be
liable in the absence of bad faith, for any act or omission with respect to his
or her service on the Committee. Service on the Committee shall constitute
service as a a Director of the Company so that members of the Committee shall
be entitled to idemnification and reimbursement as Directors of the Company.
B. Authority of the Committee. Subject to the expressed provisions of the
Plan, the Committee shall have plenary authority to determine, in its
discretion, the employees to whom options are granted, and the time or times
within which (during the term of the Option) all or a portion of such Options
may be exercised. In making such determination, the Committee may take into
account the nature of the services rendered or expected to be rendered by the
respective employees, their present and potential contributions to the
Company's success, the anticipated number of years of effective service
remaining and such other factors as the Committee in its discretion shall deem
relevant. Subject to the express provisions of the Plan, Section 422A of the
Code and any regulations or rulings thereunder, the Committee shall also have
plenary authority to interpret the Plan, to prescribe, amend and recind rules
and regulations relating to it, to determine the terms and conditions of the
respective Options (which terms and conditions need not be the same in each
case), to impose restrictions on any shares issued upon the exercise of an
Option and to determine the manner in which such restrictions may be removed,
and to make all other determinations deemed necessary or advisable in
administering the Plan. The Committee may specify in the original terms of any
Option or, if not so specified, shall determine whether any authorized leave of
absence or absence of military or
-2-
3
governmental service or for any other reason shall constitute a termination of
employment for purposes of the Plan. Subject to the provisions of Article X,
the determination of the Committee on the matters referred to in the Plan shall
be conclusive; provided that it shall be the Board of Directors of the Company
which shall determine whether unissued or treasury shares shall be issued upon
the exercise of any Option.
C. Each option shall be evidenced by an option agreement which
shall contain such terms and conditions as may be approved by the Committee,
and the said agreement shall be signed by an officer of the Company and the
employee.
III.
Shares Subject to the 1987 Plan
An aggregate of 200,000 shares of Common Stock shall be subject to the
Plan, subject to adjustment in accordance with Section VIII hereof. Such
shares may be either authorized but unissued shares or shares now or hereafter
held in the treasury of the Company.
In the event that any Option under the Plan expires unexercised or is
terminated, surrendered or cancelled, the shares theretofore subject to such
Option, or the unexercised portion thereof, shall again become available for
Option under the Plan, including to the former holder of such Option, upon such
terms as the Committee shall determine in accordance with the Plan and which
terms may be more or less favorable than those applicable to such former
Option.
IV.
Granting Date
The action of the Committee with respect to the granting of an Option shall
take place on such date as a majority of the members of the Committee at a
meet-
-3-
4
ing shall make a determination with respect to the granting of an Option or, in
the absence of a meeting, on such date as of which written designation covering
such Option shall have been executed by all members of the Committee. The
effective date of the grant of an Option (the "Granting Date") shall be the
date specified by the Committee in its determination or designation relating to
the award of such Option or, in the absence of such a Specification, the date
on which the action of the Committee relating to the award of such Option took
place.
V.
Eligibility
Options may be granted only to those employees who are deemed appropriate
by the Committee.
VI.
Terms and Conditions of Options
A. Option Price. Subject to the provision of subparagraph VI.F. below,
the purchase price of the stock under each option shall be determined by the
Committee, but shall not be less than 100% of the fair market value of the
stock on the Granting Date for such Option; provided, however, that the option
price shall not be less that the par value of the stock subject to the Option,
The fair market value of the stock shall be, for purposes of the Plan,
determined under the regulations or rulings under Section 422A of the Code.
B. Term of Option. Subject to the provisions of subparagraph VI.F. below,
the term of each Option granted under the Plan shall be for a period not
exeeding ten years from the Granting Date. Each Option granted under the plan
may be exercised by the employee as stated in his individual option, but in no
event may any
-4-
5
option be exercised before two years of continued employment with the Company,
or a subsidiary, immediately following the Granting Date.
C. Restrictions on Transfer and Exercise.
(1) Except as hereinafter provided, no Option granted pursuant to
the plan may be exercised at any time unless the holder thereof is then an
employee of the Company. Options granted under the Plan shall not be affected
by any change of employment so long as the grantee continues to be an employee
of the Company.
(2) The Option of any optionee whose employment is terminated for any
reason, other than for death, disability (as defined in Section 105(d)(4) of
the Code) or discharge for cause, shall terminate on the earlier of three
months after termination of employm ent or the date that such Option expires in
accordance with its term.
(3) In the event of the death of an optionee (a) while an employee
of the Company or a subsidiary or (b) within three months after the termination
of employment of the optionee, or in the event of the termination of employment
by an optionee for permanent disability, the Option may be exercised as follows:
(a) In the event of the death of an optionee during
employment or within three months after the termination of
employment, each Option granted to such optionee shall be
exercisable or payable (at the option of the Company and, if
paid, at a price equal to the excess of the fair market value
over the option price) to the extent provided therein but not
later than one year after his or her death (but not beyond the
stated duration of the Option.) Any such exercise or payment
shall be made only: (1) by or to the executor or administrator
of the estate of the deceased optionee or
-5-
6
person or persons to whom the deceased optionee's rights under
the Option shall pass by will or the laws of descent and
distribution; and (2) to the extent, if any, that the deceased
optionee was entitled at the date of his or her death.
(b) In the case of an optionee who becomes disabled, the Option
shall terminate on the earlier of one year after termination
of employment or the date that such Option expires in
accordance with its terms. During such period, the Option
may be exercised by an optionee who becomes disabled with
respect to the same number of shares, in the same manner
and to the same extent as if the optionee had continued
employment during such period.
(4) The Option shall lapse immediately upon termination of
employment of the optionee through discharge for cause as determined by the
Committee in its sole discretion.
(5) Each Option granted under the Plan shall, by its terms, not be
transferable otherwise than by will or the laws of descent and distribution.
During the optionee's lifetime, an Option granted under the Plan can be
exercised only by him or her.
D. Manner of Exercise. An Option shall be exercised by giving a written
notice to the President of the Company stating the number of shares of stock
with respect to which the Option is being exercised and containing such other
information as the President may request and by tendering payment therefor
with a cashier's check or certified check.
E. Limitations on Issuance of Stock Option Shares. The Company shall not
be required, upon the exercise of any Option, to issue or deliver any shares
of stock prior to (a) the authorization of such shares for listing on any
stock ex-
-6-
7
change on which the Company's stock may then be listed, and (b) such
registration or other qualification of such shares under applicable securities
laws as the Company shall determine to be necessary or advisable. If shares
issuable on the exercise of Options have not been registered under the
Securities Act of 1933 ("the Act") or there is not available a current
Prospectus meeting the requirements of the Act with respect thereto, optionees
may be required to represent at the time of each exercise of Options that the
shares purchased are being acquired for investment and not with a view to
distribution; and the Company may place a legend on the stock certificate to
indicate that the stock may not be sold or otherwise disposed of except in
accordance with the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
F. Limitations on Options
(1) Notwithstanding the provision of paragraph VI.A and B above,
if any optionee, at the time an Option is granted, owns (as defined in Section
425(d) of the Code) Common Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, any subsidiary thereof or
of the Company's parent (if any) , the option price for such Option shall be
at least 110% of the fair market value of the stock subject to such Option, and
such Option by its terms shall not be exercisable after the expiration of 5
years from the date such Option is granted.
(2) The aggregate fair market value (determined as of the time the
Option is granted) of the stock with respect to which Incentive Stock Options
(as defined in Section 422A of the Code) are exercisable for the first time by
an employee during any calendar year (under this Plan or any other plan of the
Company and its parent and subsidiary corporations) shall not exceed $100,000.
-7-
8
VII.
Stockholder and Employment Rights
A holder of an Option shall have none of the rights of a stockholder with
respect to any of the shares subject to Option until such shares shall be
issued upon the exercise of the Option.
Nothing in the Plan or in any Option granted pursuant to the Plan shall,
in the absence of an express provision to the contrary, confer on any
individual any right to be or to continue in the employ of the Company or any
of its subsidiaries or shall interfere in any way with the right of the Company
or any of its subsidiaries to terminate the employment of any individual at any
time.
VIII.
Adjustments to Common Stock
The aggregate number of shares of Common Stock of the Company on which
Options may be granted hereunder, the number of shares thereof covered by each
outstanding Option and the price per share thereof in each such Option may all
be appropriately adjusted, as the Board of Directors may determine, for any
increase or decrease in the number of shares of stock of the Company resulting
from a subdivision or consolidation of shares whether through reorganization,
recapitalization, stock split or combination of shares, or the payment of a
stock dividend or other increase or decrease in such shares effected without
receipt of consideration by the Company. No fractional shares of stock shall
be issued upon exercise of an Option, and in case a fractional share shall
become subject to an Option by reason of a stock dividend or otherwise, the
optionee holding such Option shall not be entitled to exercise it with respect
to such fractional share.
Subject to any required action by the stockholders, if the Company shall
be the surviving corporation in any merger or consolidation, any Option granted
hereunder shall pertain to and apply to the securities to which a holder of the
number of
-8-
9
shares of stock subject to the Option would have been entitled. Upon a
dissolution of the Company, or a merger or consolidation in which the Company
is not the surviving corporation, every Option outstanding hereunder shall
terminate, provided, however, that in the case of such dissolution, merger or
consolidation, then during the period thirty days prior to the effective date
of such event, each holder of an Option granted pursuant to the Plan shall have
a right to exercise the Option, in whole or in part.
IX.
Effective Date and Termination Effective Date
A. Effective Date. The Plan shall become operative and in effect on the
date the plan is approved by a vote of a majority of all members of the Board
of Directors, provided, however, that the Plan shall be submitted to the
Stockholders of the Company for approval within twelve months of the date of
adoption of the Plan, and if such approval shall not be obtained by a vote of
the holders of a majority of the total outstanding capital stock of the Company
entitled to vote, voting as a single class, the Plan shall be null and void and
all Options, if any, granted thereunder shall automatically be cancelled.
B. Termination. The Plan shall remain in effect until and shall terminate
within 10 years from the date the Plan is adopted or the Plan was approved by
the shareholders, whichever is earlier, but it may be terminated at an earlier
date by action of the Board of Directors. Except as provided in subparagraph A
above, termination of this Plan shall not affect the rights of grantees under
Options theretofore granted to purchase stock under the Plan, and, all such
Options shall continue in force and in operation after termination of the
Plan, except as provided in subparagraph A above and except as may be
terminated through death or other termination of employment in accordance with
the terms of the Plan.
-9-
10
X.
Amendments
The Board of Directors shall have complete power and authority to amend
the Plan, provided, however, that except as expressly permitted in the Plan,
the Board of Directors shall not, without the affirmative vote of the holders
of a majority of the voting stock of the Company, make any amendment which
would (a) abolish the Committee without designating such other committee,
change the qualifications of its members, or withdraw the administration of
the 1987 Plan from its supervision, (b) increase the maximum number of shares
for which options may be granted under the Plan, (c) amend the formula for
determination of the purchase price of shares on which options may be granted,
(d) extend the term of the Plan or change the minimum option price, or (e)
amend the requirements as to the employees eligible to receive Options.
XI.
Government and Other Regulations
The obligation of the Company to sell or deliver shares under Options
granted pursuant to the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by and registrations with any governmental
agencies as may be required.
XII.
Loan Agreements
Each Option shall be subject to the condition that the Company shall not
be obliged to issue or transfer any of its stock to a holder of an Option, in
the exercise thereof, if at any time the Committee or the Board of Directors
shall de-
-10-
11
termine that the issuance or transfer of such stock would be in violation of
any covenant in any of the Company's loan agreements or other contracts.
The Company hereby agrees to the provisions of this Plan, and in witness
thereof, has caused this Agreement to be executed on this 20th day of July,
1987.
ATTEST: LaBARGE, INC.
Edward J. Lestar Jr. By Craig E. LaBarge
- ------------------------------- --------------------------------
Secretary President
-11-