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EXHIBIT 10.4
SPR INC.
COMBINED INCENTIVE AND
NON-STATUTORY STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of the Plan is to provide additional incentive to certain
Employees and Directors who are making and continue to make substantial
contributions to the success of the Company and its subsidiaries by providing
them with an opportunity to acquire a proprietary or ownership interest in the
Company through the grant and exercise of options to purchase shares of the
Common Stock of the Company. It is the judgment of the Board of Directors of
the Company that the acquisition of a proprietary or ownership interest in the
Company by certain Employees will increase their personal interest in its
growth and progress, thereby promoting the interests of the Company and all its
stockholders. The Company intends that the options granted pursuant to the
Plan may either qualify as "incentive stock options" within the meaning of
Section 422 of the Code, or may not qualify as incentive stock options, to the
extent provided in Sections 4.2(h) and 7.8 hereof.
ARTICLE II
DEFINITIONS
The following words and terms used herein shall have that meaning set
forth in this Article, unless a different meaning is clearly required by the
context. Whenever appropriate, words used in the singular shall be deemed to
include the plural and vice versa, and the masculine gender shall be deemed to
include the feminine gender.
2.1 BOARD shall mean the Board of Directors of the Company.
2.2 CODE shall mean the Internal Revenue Code of 1986, as now in
effect or as hereafter amended.
2.3 COMMITTEE shall mean the Compensation Committee, if any,
appointed by the Board in accordance with the provisions of Article IV to
administer the Plan.
2.4 COMMON STOCK shall mean the common stock, $0.01 par value, of
the Company, and any other securities of the Company to the extent provided in
Article X.
2.5 COMPANY shall mean SPR INC., a Delaware corporation and any
successor to it.
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2.6 DIRECTOR shall mean a member of the Board of Directors of the
Company.
2.7 EMPLOYEE shall mean any individual employed by and receiving
compensation from the Company or any Subsidiary.
2.8 FAIR MARKET VALUE OF COMMON STOCK shall mean an amount equal
to the fair market value of the Common Stock as determined by the Board in its
judgment, or, if there is at sometime hereafter a public market for the Common
Stock, the mean of the closing bid and asked quotations for a share of Common
Stock in the over-the-counter market as of the date for which such value is
being determined, as reported by the National Association of Securities
Dealers, Inc. or, in the event that the Common Stock is listed on The Nasdaq
National Market or any exchange, the closing price on such exchange on that
date or, if there were no sales on that date, the mean of the bid and asked
prices for Common Stock on that exchange at the close of business on that date.
2.9 GRANTEE shall mean an Employee who is granted an Option by the
Board under the Plan.
2.10 INCENTIVE STOCK OPTION shall mean an option to purchase a
specific number of shares of the Common Stock granted by the Board pursuant to
Section 4.2(h) of the Plan.
2.11 NON-EMPLOYEE DIRECTOR shall mean a "Non-Employee Director" as
that term is defined in Rule 16b-3 under Section 16 of the Securities Exchange
Act of 1934, as now in effect or as hereafter amended.
2.12 NON-STATUTORY STOCK OPTION shall mean an option to purchase a
specific number of shares of the Common Stock granted by the Board pursuant to
Section 4.2(h) of the Plan.
2.13 OPTION shall mean both an Incentive Stock Option and a
Non-Statutory Stock Option.
2.14 OPTION AGREEMENT shall mean a written agreement evidencing the
right to purchase Common Stock pursuant to the terms of this Plan and the
right, if any, to receive Stock Appreciation Rights, which agreement shall be
in the form described in Article VII.
2.15 PLAN shall mean the SPR Inc. Combined Incentive and
Non-Statutory Stock Option Plan, as set forth herein, as amended from time to
time.
2.16 REFERENCE OPTION shall mean an Option with respect to which
the Company has granted a Stock Appreciation Right.
2.17 STOCK APPRECIATION RIGHT shall mean the right granted by the
Board pursuant to Article VII of the Plan as a part of the Reference Option
which right shall permit a Grantee to elect to receive cash, in lieu of the
shares subject to the Reference Option, from the Company
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in an amount equal to the excess, if any, of the Fair Market Value per share of
the Common Stock, determined on the date the Stock Appreciation Right is
exercised, over the exercise price per share of such Reference Option.
2.18 SUBSIDIARY shall mean any corporation that at the time
qualifies as a subsidiary of the Company under the definition of "subsidiary
corporation" contained in Section 424(f) of the Code, as that section may be
amended from time to time.
ARTICLE III
SHARES SUBJECT TO PLAN
3.1 SHARES AVAILABLE: The total number of shares of Common Stock
which are available for granting Options hereunder shall be Eight Hundred
Thousand (800,000) (subject to adjustment as provided below in Section 3.3
and Article X).
3.2 SOURCE OF SHARES: The shares of Common Stock issued upon the
exercise of an Option shall be made available, in the discretion of the Board,
either from authorized but unissued Common Stock or from any issued but not
outstanding Common Stock which has been reacquired by the Company.
3.3 EFFECT OF TERMINATION: Except as provided in Section 8.2, in
the event that any Option terminates for any reason, other than the exercise of
a Stock Appreciation Right by the Grantee (whether such Option is vested or
non-vested at the time of termination), without having been exercised in full,
the unpurchased shares of Common Stock subject to that Option shall once again
become available for the granting of Options.
ARTICLE IV
ADMINISTRATION
4.1 ADMINISTRATION: The Board may, in its sole discretion, either
retain the exclusive control and management of the operation and administration
of the Plan or may delegate such control and management to a Committee
consisting solely of two or more Non-Employee Directors of the Board. In the
event that the Board does delegate such authority to a Committee, it may also
at any time terminate that authority and resume the exclusive control and
management of the Plan. For so long as the Board retains the control and
management over the Plan, members of the Board shall not be eligible to
participate in or be granted Options or Stock Appreciation Rights either under
the Plan or any other plan maintained by the Company.
In the event that the Board appoints a Committee, (a) the Committee
must consist solely of Non-Employee Directors, (b) all vacancies occurring on
the Committee shall be filled by
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appointment of the Board, (c) the members of the Committee shall serve at the
pleasure of the Board, (d) the Committee shall maintain written minutes of its
proceedings, and (e) a majority of the Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a quorum
is present or acts approved in writing by all the members shall be the acts of
the Committee.
In the event that and for so long as this Plan is controlled and
managed by a Committee, the terms and provisions of this Plan, other than the
two immediately preceding paragraphs of this Article IV and Sections 2.1 and
2.3, shall be applied by substituting the term "Committee" for "Board."
4.2 GRANT: Subject to the provisions of this Plan, the Board
shall determine (a) the Grantees, (b) the number of shares of Common Stock
subject to an Option, (c) the dates upon which Options and/or Stock
Appreciation Rights are granted, (d) the date or dates upon which an Option
and/or a Stock Appreciation Right may be exercised, (e) the manner in which an
Option and/or Stock Appreciation Right may be exercised, (f) such other terms
to which an Option and/or Stock Appreciation Right is subject (including the
manner in which it vests), (g) the form of any Option Agreements, (h) whether
the Option is an Incentive Stock Option or a Non-Statutory Stock Option, and
(i) whether the Grantee shall receive a Stock Appreciation Right.
4.3 INTERPRETATION: The Board shall interpret the Plan and from
time to time may adopt such rules and regulations for carrying out the terms
and purposes of the Plan and may take such other actions in the administration
of the Plan as it deems advisable. The interpretation and construction by the
Board of any provisions of the Plan or any Option Agreement and the
determination of any question arising under the Plan, any such rule or
regulation, or any Option Agreement shall be final and binding.
4.4 EXCULPATION: No member of the Board shall be liable for any
action or determination made in good faith with respect to the Plan.
4.5 NO GUARANTEE OF EMPLOYMENT: The grant of an Option or Stock
Appreciation Right under the Plan shall not be deemed or construed to
constitute a contract of employment between the Company (or any subsidiary) and
the Employee and shall not affect the right of the Company to terminate the
employment of the Employee.
ARTICLE V
ELIGIBILITY
Each Employee who is considered to be an administrative, managerial or
executive Employee, as determined in the sole discretion of the Board, shall be
eligible to be granted an Option and/or Stock Appreciation Right under the
Plan. Each Director, as determined in the sole
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discretion of the Board, shall be eligible to be granted a Non-Statutory Stock
Option and/or Stock Appreciation right under the Plan. Anything to the
contrary notwithstanding, no Incentive Stock Option shall be granted to any
Director who is not an Employee, and no Incentive Stock Option shall be granted
to any Employee who, at the time the Incentive Stock Option is granted owns, or
is deemed to own pursuant to the provisions of Code Section 424(d), shares of
Common Stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of any Subsidiary, unless the purchase price
per share is at least 110% of the Fair Market Value of Common Stock on the day
such Option is granted and such Option by its terms is not exercisable after
the date which is five years from the date such Option is granted.
ARTICLE VI
ANNUAL LIMITATION ON VALUE OF INCENTIVE STOCK OPTIONS GRANTED
For all Incentive Stock Options granted under this Plan, the aggregate
Fair Market Value of the Common Stock (determined at the time the Incentive
Stock Option is granted) with respect to which Incentive Stock Options are
exercisable for the first time in any calendar year (together with options
granted under all other incentive stock option plans of the Company and any
parent corporation (as defined in Code Section 424(e)) or Subsidiary) shall not
exceed One Hundred Thousand Dollars ($100,000) for any one Grantee. No such
annual limitation shall apply to the grant of Non-Statutory Stock Options
hereunder.
ARTICLE VII
TERMS AND CONDITIONS OF OPTIONS AND STOCK APPRECIATION RIGHTS
All Options and Stock Appreciation Rights granted under the Plan shall
be evidenced by an Option Agreement which shall be in such form as the Board
may from time to time approve and shall be executed on behalf of the Company by
one or more of the officers of the Company. Each such Option Agreement shall
be subject to the terms and conditions of the Plan as well as such other terms
and conditions as the Board may deem desirable and shall provide in substance
as follows:
7.1 NUMBER OF SHARES AND OPTION PRICE: Each Option Agreement
shall specify the number of shares of Common Stock covered by such Option and
the purchase price per share. The purchase price per share of Common Stock
subject to a Non-Statutory Stock Option and the base value of a Stock
Appreciation Right shall not be less than 85% of the Fair Market Value of a
share of Common Stock on the date such Non- Statutory Stock Option or Stock
Appreciation Right is granted. The purchase price per share of Common Stock
subject to an Incentive Stock Option shall not be less than the Fair Market
Value of a share of Common Stock on the date
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such Incentive Stock Option is granted. The number shares and the purchase
price per share shall be subject to adjustment as provided in Article X.
7.2 NON-TRANSFERABILITY OF OPTIONS: Each Option Agreement shall
provide that the Option and Stock Appreciation Rights, if any, granted therein
shall be non-transferable and non-assignable by the Grantee other than upon
death as provided in Section 7.5 below and that during the lifetime of the
Grantee such Option and Stock Appreciation Rights may be exercised only by the
Grantee or such Grantee's legal representative.
7.3 EXERCISE OF OPTIONS: Each Option Agreement shall set forth
the period during which it may be exercised; provided, however, subject to
Article V, Incentive Stock Options granted pursuant to this Plan shall expire
not more than 10 years from the date that the Incentive Stock Option is
granted.
7.4 EXERCISE OF OPTIONS UPON TERMINATION OF EMPLOYMENT: Except as
otherwise specifically determined by the Board, the Option Agreement shall
provide that when a Grantee ceases to be an Employee, any unexercised vested
Option or any non-vested Option granted to that Grantee shall terminate
immediately; provided, however, that (a) if the cessation of employment is due
to death, any unexercised vested Option (but not any non-vested Option) may be
exercised in the manner hereinafter described in Section 7.5 below or (b) if
the cessation of employment is for any reason other than death, any unexercised
vested Option (but not any non-vested Option) may be exercised until three
months after cessation (or 12 months if the Grantee is disabled within the
meaning of Section 105(d)(4) of the Code), but not later than the date that
such Option would otherwise terminate under the Plan.
In the event that the Grantee dies within such time period, any
unexercised vested Option which has not terminated prior to death may be
exercised in the manner hereinafter provided in Section 7.5 below.
A transfer of employment from the Company to a Subsidiary or vice
versa or between two such Subsidiaries shall not be deemed a termination of
employment.
7.5 EXERCISE OF OPTIONS UPON DEATH: Except as otherwise
determined by the Board, the Option Agreement shall provide that upon the death
of a Grantee while still an Employee, or within three months after the
cessation of employment for any reason other than death (or 12 months in the
case of a disabled Grantee), any unexercised vested Option (but not any
non-vested Option) may be exercised by the Grantee's estate, the person
designated in the Grantee's last will and testament or his or her heirs at law
before the date that such Option would otherwise terminate; provided, however,
that an Option may be exercised only if and to the extent that the Grantee was
entitled to exercise it as of the date of death.
7.6 METHOD OF EXERCISE OF OPTIONS: Each Option Agreement shall
provide that Options shall be exercised by delivering a written notice of
exercise to the Company. Each such notice shall state the number of shares of
Common Stock in respect of which the Option is being
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exercised and shall be signed by the person (or persons) exercising the Option
and, in the event the Option is being exercised by any person other than the
Grantee, shall be accompanied by proof, satisfactory to counsel for the
Company, of the right of such person to exercise the Option. A certified or
cashier's check in full payment of the purchase price for the number of shares
of Common Stock specified in the notice must accompany such notice. In
addition, except to the extent provided at Section 7.9(h) below, in the event
that the Option being exercised is a Non-Statutory Stock Option, the notice
must be accompanied by a certified or cashier's check in full payment of the
aggregate amount of any federal, state or local withholding taxes determined by
the Company (the "Withholding Taxes"), if any, attributable to the transfer of
stock pursuant to the exercise of the Option.
7.7 FORFEITURE: The Option Agreement may provide for such
conditions on the right of exercise as the Board, in its sole discretion, deems
appropriate, which conditions may, without limitation, include conditions based
upon completion of a further period of continued employment, or the performance
of the Company, a subsidiary, a division thereof, or the Grantee. Without
limiting the foregoing, an Option Agreement may provide that the Board, in its
sole discretion, may terminate in whole or in part any portion of the Option
which has not yet become vested if it determines that the Grantee is not
satisfactorily performing his or her duties as an Employee.
7.8 CHARACTER OF OPTION GRANTED: Each Option Agreement shall
specifically provide whether the Option granted thereby is an Incentive Stock
Option or a Non-Statutory Stock Option: provided, however, that an Option shall
be a Non-Statutory Stock Option only if it fails to qualify as an "incentive
stock option" as defined in Section 422(b) of the Code.
7.9 PROVISIONS RELATING TO STOCK APPRECIATION RIGHTS: In the
event that the Board grants Stock Appreciation Rights to the Grantee pursuant
to Section 4.2(i) hereof, then in addition to the provisions described above,
the Option Agreement shall include the following provisions:
(a) No Stock Appreciation Right shall be exercisable
during the first six months of its term, except in the event
that the physical disability of the holder thereof occurs
prior to the expiration of such six-month period.
(b) No Stock Appreciation Right shall at any time be
exercisable with respect to the Reference Option or any
portion thereof unless (i) such Option or such portion shall
itself be exercisable at that time, and (ii) such other
conditions, if any, imposed by the Board shall have been
satisfied.
(c) No Stock Appreciation Right granted to a Grantee
shall be transferable by him other than by will or the laws of
descent and distribution, and such right shall be exercisable,
during his lifetime, only by the Grantee or his legal
representative.
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(d) The Stock Appreciation Right shall be transferable
only when the Reference Option is transferable, and under the
same conditions.
(e) The Stock Appreciation Right shall expire no later
than the time at which the Reference Option expires.
(f) The Stock Appreciation Right may be exercised only at
such time as the market price of the stock subject to the
Reference Option exceeds the exercise price of such Reference
Option.
(g) Any exercise by an officer of the Company (as defined
for this purpose by the regulations of the Securities and
Exchange Commission) of a Stock Appreciation Right shall be
made during the period beginning in the third business day
following the date of release for publication of quarterly and
annual summary statements of sales and earnings of the Company
and its subsidiaries, and ending on the twelfth business day
following such date.
(h) Upon the exercise of a Stock Appreciation Right, the
Company shall withhold from the cash to be distributed to the
Grantee an amount equal to the aggregate amount of the
Withholding Taxes, if any, attributable to the exercise of
such Stock Appreciation Right and may, in its sole discretion,
also withhold an amount equal to the Withholding Taxes
attributable to the exercise of any Non-Statutory Stock Option
exercised by the Grantee at the same time of the exercise of
such Stock Appreciation Right, in which case such Grantee
shall not be required to tender payment of such Withholding
Taxes in order to exercise such Non-Statutory Stock Option.
7.10 ADDITIONAL TERMS: The Option Agreement may include such other
terms and conditions, not inconsistent with this Plan, as the Board in its sole
discretion shall determine.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 GRANT: The Board may grant Stock Appreciation Rights to any
Grantee at any time and from time to time during the term of the Option to
which it relates. Each Stock Appreciation Right shall be subject to terms and
conditions which are at least as restrictive as those which govern the Option
to which it relates and may, in the sole discretion of the Board, be subject to
additional restrictions.
8.2 SHARE REDUCTION: Upon the exercise of any Stock Appreciation
Right, the number of shares of Common Stock which were available for purchase
under the Reference Option shall be reduced by a corresponding number and the
Reference Option shall be cancelled
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to that extent. Notwithstanding anything contained in Section 3.3 hereof to
the contrary, for purposes of determining the number of shares of Common Stock
available for purchase under the Plan, in the event and to the extent that a
Reference Option is cancelled as a result of the exercise of a Stock
Appreciation Right, such Reference Option shall be deemed to have been
exercised and the shares which would have been issued had the Reference Option
been exercised shall not be available for future grants under the Plan.
8.3 USE: Stock Appreciation Rights shall be used solely as a
device for the measurement and determination of the amount to be paid to the
Grantee. Stock Appreciation Rights shall not constitute or be treated as
property or as a trust fund of any kind. All amounts which are at any time
attributable to the Stock Appreciation Rights shall be and remain the sole
property of the Company and the Grantee's rights hereunder are limited to the
right to receive cash as provided in this Plan.
ARTICLE IX
EXERCISE OF OPTIONS
For all purposes the date of exercise of the Option shall be the date
on which the notice specified in Section 7.6 shall have been delivered to the
Company, but the exercise of that Option shall not be effective until the
person (or persons) exercising the Option has complied with all the provisions
of the Option Agreement governing the exercise of the Option. The Company
shall promptly deliver certificates for the shares of the Common Stock subject
to the Option, provided that the Company shall not be required, upon the
exercise of any Option, to issue or deliver any shares of Common Stock prior to
the completion of such registration or other qualification of the Common Stock
under any state or federal law, rule or regulation as the Company shall
determine to be necessary and in such event the date of delivery shall be
extended for the period necessary and further provided, that in the event that
the amount of withholding taxes attributable to the transfer of the Common
Stock cannot be determined on the date on which the Option is exercised,
whether due to the fact that the Common Stock transferred upon such exercise is
"non-transferable" by him or her, "subject to a substantial risk of forfeiture"
(as those terms are defined in Section 83 of the Code) or otherwise, the
Company shall issue and transfer the shares to the person (or persons)
exercising such Option but may require such person (or persons) to pledge the
shares to the Company as security for the payment of the applicable withholding
taxes until such time as such payment is made. No one shall be or be deemed to
be the holders of any Common Stock subject to an Option unless and until
certificates for the shares of such Common Stock are issued to that person.
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ARTICLE X
EFFECT OF CERTAIN CHANGES
10.1 ADJUSTMENTS: If there is any change in the number of shares
of Common Stock through the declaration of stock dividends or through a
recapitalization which results in stock splits or reverse stock splits, the
number of shares of Common Stock available for Options as well as the number of
such shares covered by outstanding Options, and the price per share of such
Options, shall be proportionately adjusted by the Board to reflect any increase
or decrease in the number of issued shares of Common Stock; provided, however,
that any fractional shares resulting from such adjustment shall be eliminated.
10.2 PAR VALUE: In the event of a change in the Common Stock of
the Company, as presently constituted, which is limited to a change of all of
its authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any such
change shall be deemed to be the Common Stock within the meaning of the Plan.
10.3 MAJOR TRANSACTIONS: In the event of any future merger,
consolidation, liquidation, or other reorganization of the Company, or any
transaction which would cause the Common Stock, if at sometime hereafter it
shall be publicly traded, to cease to be publicly traded, the Board may provide
for all outstanding options to be either amended to apply to an appropriate
number of securities of the entity resulting from such transaction (and such
entity shall thereafter be considered the Company), or for all such Options to
be cancelled immediately prior to such transaction, on such terms as it deems
equitable: provided, however, no vested Option shall be cancelled unless the
Grantee is given an opportunity to exercise such Option during a period of not
fewer than 30 days prior to such transaction.
10.4 BOARD DETERMINATION: To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive.
10.5 EFFECT: Except as hereinbefore expressly provided in this
Article X, the Grantee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or
consolidation or spin-off of assets or stock of another corporation, and any
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall not affect, and no adjustment by
reason thereof shall be made with respect to the number or price of shares of
Common Stock subject to the Option. The grant of an Option shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structures or to merge or to consolidate or to dissolve, liquidate or sell or
transfer all or part of its business or assets.
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ARTICLE XI
AMENDMENT AND TERMINATION
The Board shall have the right to amend or suspend, or terminate the
Plan at any time, provided that, to the extent required by law, unless first
approved by the stockholders of the Company, no amendment shall be made to the
Plan (except to conform the Plan and the Option Agreements thereunder to
changes in the Code or governing law) which (a) materially modifies the
eligibility requirements of Article V, (b) increases the total number of shares
of Common Stock which may be issued under the Plan, (c) changes the option
price specified in Article VII, or (d) changes the term of the Plan as set
forth in Article XIV. No amendment to the Plan shall be made by the Board that
materially changes the terms of the Plan so as to impair or adversely alter the
rights of a Grantee or other Option holder without such person's consent.
ARTICLE XII
APPLICATION OF FUNDS
Any proceeds received by the Company as a result of the exercise of
Options granted under the Plan may be used for any valid corporate purpose.
ARTICLE XIII
NOTICE
Any notice to the Company required under this Plan shall be in writing
and shall either be delivered in person or sent by registered or certified
mail, return receipt requested, postage prepaid, to the Company at its
principal executive offices, Attention: Benefits Plan Administrator.
ARTICLE XIV
TERM OF PLAN
The Plan shall terminate 10 years from the date upon which it is
approved by the stockholders of the Company or on such earlier date as may be
determined by the Board. In any event, termination shall be deemed to be
effective as of the close of business on the day of termination. No Options
may be granted after such termination. Termination of the Plan, however, shall
not affect the rights of Grantees under Options previously granted to them, and
all unexpired Options shall continue in force and operation after termination
of the Plan until they lapse or terminate by their own terms and conditions.
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ARTICLE XV
EFFECTIVE DATE
This Plan shall be effective on the day upon which it is approved by
the stockholders of the Company.
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