Exhibit 10.44
CII TECHNOLOGIES, INC.
1997 STOCK OPTION PLAN
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ARTICLE I
Purpose of Plan
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This 1997 Stock Option Plan (the "Plan") of CII Technologies, Inc., a
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Delaware corporation (the ("Company"), adopted by the Board of Directors of the
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Company on September 18, 1997, for executive and other key employees of the
Company, is intended to advance the best interests of the Company by providing
those persons who have a substantial responsibility for its management and
growth with additional incentives by allowing them to acquire an ownership
interest in the Company and thereby encouraging them to contribute to the
success of the Company and to remain in its employ. The availability and
offering of stock options under the Plan also increases the Company's ability to
attract and retain individuals of exceptional managerial talent upon whom, in
large measure, the sustained progress, growth and profitability of the Company
depends.
ARTICLE II
Definitions
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For purposes of the Plan, except where the context clearly indicates
otherwise, the following terms shall have the meanings set forth below:
"Board" shall mean the Board of Directors of the Company.
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"Cause" shall mean (i) the commission of a felony or a crime involving
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moral turpitude or the commission of any other act or omission involving
dishonesty, disloyalty or fraud with respect to the Company or any of its
Subsidiaries or any of their customers or suppliers, (ii) conduct tending to
bring the Company or any of its Subsidiaries into substantial public disgrace or
disrepute, or (iii) gross negligence or willful misconduct with respect to the
Company or any of its Subsidiaries.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and any
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successor statute.
"Committee" shall mean the committee of the Board which may be designated
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by the Board to administer the Plan. The Committee shall be composed of two or
more directors as appointed from time to time to serve by the Board.
"Common Stock" shall mean the Company's Common Stock, par value $.01 per
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share, or if the outstanding Common Stock is hereafter changed into or exchanged
for different stock or securities of the Company, such other stock or
securities.
"Disability" shall mean the inability, due to illness, accident, injury,
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physical or mental incapacity or other disability, of any Participant to carry
out effectively his duties and obligations to the Company or to participate
effectively and actively in the management of the Company for a period of at
least 180 consecutive days or for shorter periods aggregating at least 180 days
(whether or not consecutive) during any twelve-month period, as determined in
the reasonable judgment of the Board.
"Expiration Date" shall have the meaning set forth in Section 6.6(a).
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"Good Reason" shall be defined to mean (i) the assignment to the
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Participant of duties that represent a substantial adverse alteration in the
nature or status of the Participant's responsibilities, or (ii) any reduction in
the Participant's annual base salary.
"Independent Third Party" means any Person who, immediately prior to the
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contemplated transaction, does not own in excess of 15% of the Company's equity
securities on a fully-diluted basis (a "15% Owner"), who is not an affiliate of
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any such 15% Owner and who is not the spouse or descendent (by birth or
adoption) of any such 15% Owner or a trust for the benefit of any such 15% Owner
and/or such other Persons.
"Options" shall have the meaning set forth in Article IV.
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"Participant" shall mean any executive or other key employee of the Company
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who has been selected to participate in the Plan by the Committee or the Board.
"Person" shall mean an individual, a partnership, a corporation, a limited
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liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Sale of the Company" shall mean any transaction or series of transactions
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pursuant to which anyone or more Independent Third Parties acquire (i) capital
stock of the Company possessing the voting power (other than voting rights
accruing only in the event of a default, breach or event of noncompliance) to
elect a majority of the Board (whether by merger, consolidation, reorganization,
combination, sale or transfer of the Company's capital stock, shareholder or
voting agreement, proxy, power of attorney or otherwise) or (ii) all or
substantially all of the Company's assets determined on a consolidated basis.
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ARTICLE III
Administration
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The Plan shall be administered by the Committee; provided that if for any reason
the Committee shall not have been appointed by the Board, all authority and
duties of the Committee under the Plan shall be vested in and exercised by the
Board. Subject to the limitations of the Plan, the Committee shall have the sole
and complete authority, acting in good faith, to: (i) select Participants, (ii)
grant Options (as defined in Article IV below) to Participants in such forms and
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amounts as it shall determine, (iii) impose such limitations, restrictions and
conditions upon such Options as it shall deem appropriate, (iv) interpret the
Plan and adopt, amend and rescind administrative guidelines and other rules and
regulations relating to the Plan, (v) correct any defect or omission or
reconcile any inconsistency in the Plan or in any Option granted hereunder, and
(vi) make all other determinations and take all other actions necessary or
advisable for the implementation and administration of the Plan. The Committee's
determinations on matters within its authority shall be conclusive and binding
upon the Participants, the Company and all other Persons; provided that the
Committee or its delegates shall at all times administer this Plan only in a
manner consistent with this Plan. All expenses associated with the
administration of the Plan shall be borne by the Company. The Committee may, as
approved by the Board and to the extent permissible by law, delegate any of its
authority hereunder to such Persons as it deems appropriate.
ARTICLE IV
Limitation on Aggregate Shares
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The number of shares of Common Stock with respect to which options may be
granted under the Plan (the "Options") and which may be issued upon the exercise
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thereof shall not exceed, in the aggregate, 53,163 shares; provided that the
type and the aggregate number of shares which may be subject to Options shall be
subject to adjustment in accordance with the provisions of Section 6.8 below,
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and further provided that to the extent any Options expire unexercised or are
canceled, terminated or forfeited in any manner without the issuance of Common
Stock thereunder, or if any Options are exercised and the shares of Common Stock
issued thereunder are repurchased by the Company, such shares shall again be
available under the Plan. The shares of Common Stock available under the Plan
may be either authorized and unissued shares, treasury shares or a combination
thereof, as the Committee shall determine.
ARTICLE V
Awards
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5.1 Options. The Committee may grant Options to Participants in
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accordance with this Article V.
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5.2 Form of Option. Options granted under this Plan shall be nonqualified
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stock options and are not intended to be "incentive stock options" within the
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meaning of Section 422 of the Code or any successor provision.
5.3 Exercise Price. The option exercise price per share of Common Stock
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shall be fixed by the Committee on the date of grant.
5.4 Exercisability. Options shall be exercisable at such time or times
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as the Committee shall determine at or subsequent to grant.
5.5 Payment of Exercise Price. Options shall be exercised in whole or in
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part by written notice to the Company (to the attention of the Company's
Secretary) accompanied by payment in full of the option exercise price. Payment
of the option exercise price shall be made in cash (including check, bank draft
or money order) or, in the discretion of the Committee, by delivery of a
promissory note (if in accordance with policies approved by the Board).
5.6 Terms of Options. The Committee shall determine the term of each
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Option, which term shall in no event exceed ten years from the date of grant.
ARTICLE VI
General Provisions
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6.1 Conditions and Limitations on Exercise. Options may be made
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exercisable in one or more installments, upon the happening of certain events,
upon the passage of a specified period of time, upon the fulfillment of certain
conditions or upon the achievement by the Company of certain performance goals,
as the Committee shall decide in each case when the Options are granted.
6.2 Sale of the Company. In the event of a Sale of the Company, the
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Committee may provide, in its discretion, that the Options shall become
immediately exercisable by any Participants who are employed by the Company at
the time of the Sale of the Company and that such Options shall terminate if not
exercised as of the date of the Sale of the Company or other prescribed period
of time.
6.3 Written Agreement. Each Option granted hereunder to a Participant
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shall be embodied in a written agreement (an "Option Agreement") which shall be
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signed by the Participant and by the Chairman or the President of the Company
for and in the name and on behalf of the Company and shall be subject to the
terms and conditions of the Plan prescribed in the Agreement (including, but not
limited to, (i) the right of the Company and such other Persons as the Committee
shall designate ("Designees") to repurchase from each Participant, and such
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Participant's transferees, all shares of Common Stock issued or issuable to such
Participant on the exercise of an Option in the event of such Participant's
termination of employment, (ii) rights of first refusal granted to the Company
and Designees, (iii) holdback and other registration right restrictions in the
event of a public registration of any equity securities of the Company, and (iv)
any other terms and conditions which the Committee shall deem necessary and
desirable).
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6.4 Listing. Registration and Compliance with Laws and Regulations.
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Options shall be subject to the requirement that if at any time the Committee
shall determine, in its discretion, that the listing, registration or
qualification of the shares subject to the Options upon any securities exchange
or under any state or federal securities or other law or regulation, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition to or in connection with the granting of the Options or
the issuance or purchase of shares thereunder, no Options may be granted or
exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. The holders of such Options
shall supply the Company with such certificates, representations and information
as the Company shall request and shall otherwise cooperate with the Company in
obtaining such listing, registration, qualification, consent or approval. In the
case of officers and other Persons subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended, the Committee may at any time impose any
limitations upon the exercise of an Option that, in the Committee's discretion,
are necessary or desirable in order to comply with such Section 16(b) and the
rules and regulations thereunder. If the Company, as part of an offering of
securities or otherwise, finds it desirable because of federal or state
regulatory requirements to reduce the period during which any Options may be
exercised, the Committee, may, in its discretion and without the Participant's
consent, so reduce such period on not less than 15 days written notice to the
holders thereof.
6.5 Nontransferability. Options may not be transferred other than by will
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or the laws of descent and distribution and, during the lifetime of the
Participant, may be exercised only by such Participant (or his legal guardian or
legal representative). In the event of the death of a Participant, exercise of
Options granted hereunder shall be made only:
(i) by the executor or administrator of the estate of the deceased
Participant or the Person or Persons to whom the deceased Participant's
rights under the Option shall pass by will or the laws of descent and
distribution; and
(ii) to the extent that the deceased Participant was entitled
thereto at the date of his death, unless otherwise provided by the
Committee in such Participant's Option Agreement.
6.6 Expiration of Options.
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(a) Normal Expiration. In no event shall any part of any Option be
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exercisable after the date of expiration thereof (the "Expiration Date"), as
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determined by the Committee pursuant to Section 5.6 above.
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(b) Early Expiration Upon Termination of Employment. Except as otherwise
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provided by the Committee in the Option Agreement, any portion of a
Participant's Option that was not vested and exercisable on the date of the
termination of such Participant's employment shall expire and be forfeited as of
such date, and any portion of a Participant's Option that was vested and
exercisable on the date of the termination of such Participant's employment
shall expire and be forfeited as of such date, except that: (i) if any
Participant dies or becomes subject to any Disability, such Participant's Option
shall expire 90 days after the date of his death or Disability, but in no event
after the Expiration Date, (ii) if any Participant retires with the approval of
the
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Board or resigns for Good Reason, his Option shall expire 30 days after the date
of his retirement, but in no event after the Expiration Date, and (iii) if any
Participant is discharged other than for Cause, such Participant's Option shall
expire 30 days after the date of his discharge, but in no event after the
Expiration Date.
6.7 Withholding of Taxes. The Company shall be entitled, if necessary or
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desirable, to withhold from any Participant from any amounts due and payable by
the Company to such Participant (or secure payment from such Participant in lieu
of withholding) the amount of any withholding or other tax due from the Company
with respect to any shares issuable under the Options, and the Company may defer
such issuance unless indemnified to its satisfaction.
6.8 Adjustments. In the event of a reorganization, recapitalization,
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stock dividend or stock split, or combination or other change in the shares of
Common Stock, the Board or the Committee may, in order to prevent the dilution
or enlargement of rights under outstanding Options, make such adjustments in the
number and type of shares authorized by the Plan, the number and type of shares
covered by outstanding Options and the exercise prices specified therein as may
be determined to be appropriate and equitable.
6.9 Rights of Participants. Nothing in this Plan nor any Participant's
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participation in the Plan shall interfere with or limit in any way the right of
the Company to terminate any Participant's employment at any time (with or
without Cause), nor confer upon any Participant any right to continue in the
employ of the Company for any period of time or to continue his present (or any
other) rate of compensation, and except as otherwise provided under this Plan or
by the Committee in the Option Agreement, in the event of any Participant's
termination of employment (including, but not limited to, the termination by the
Company without Cause) any portion of such Participant's Option that was not
previously vested and exercisable shall expire and be forfeited as of the date
of such termination. No employee shall have a right to be selected as a
Participant or, having been so selected, to be selected again as a Participant.
6.10 Amendment. Suspension and Termination of Plan. The Board or the
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Committee may suspend or terminate the Plan or any portion thereof at any time
and may amend it from time to time in such respects as the Board or the
Committee may deem advisable; provided that no such amendment shall be made
without stockholder approval to the extent such approval is required by law,
agreement or the rules of any exchange upon which the Common Stock is listed,
and no such amendment, suspension or termination shall impair the rights of
Participants under outstanding Options without the consent of the Participants
affected thereby. No Options shall be granted hereunder after the tenth
anniversary of the adoption of the Plan.
6.11 Amendment. Modification and Cancellation of Outstanding Options. The
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Committee may amend or modify any Option in any manner to the extent that the
Committee would have had the authority under the Plan initially to grant such
Option; provided that no such amendment or modification shall impair the rights
of any Participant under any Option without the consent of such Participant.
With the Participant's consent, the Committee may cancel any Option and issue a
new Option to such Participant.
6.12 Indemnification. In addition to such other rights of indemnification
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as they may
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have as members of the Board or the Committee, the members of the Committee
shall be indemnified by the Company against all costs and expenses reasonably
incurred by them in connection with any action, suit or proceeding to which they
or any of them may be party by reason of any action taken or failure to act
under or in connection with the Plan or any Option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding;
provided that any such Committee member shall be entitled to the indemnification
rights set forth in this Section 6.12 only if such member has acted in good
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faith and in a manner that such member reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that such conduct was
unlawful, and further provided that upon the institution of any such action,
suit or proceeding a Committee member shall give the Company written notice
thereof and an opportunity, at its own expense, to handle and defend the same
before such Committee member undertakes to handle and defend it on his own
behalf.
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