Exhibit 10.6
Incentive Stock Option Plan
NATIONWIDE ELECTRIC, INC.
INCENTIVE STOCK OPTION PLAN
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NATIONWIDE ELECTRIC, INC., a corporation organized and existing under
the laws of the State of Delaware (the "Company"), hereby formulates and adopts,
having been approved by the holders of a majority of the issued and outstanding
shares of common stock of the Company ("NEI Common Stock") voting by unanimous
consent, an incentive stock option plan for key employees of the Company and its
subsidiaries as follows:
1. Purpose of Plan. The purpose of this Incentive Stock Option Plan (the
"Plan") is to encourage the key employees of the Company and its subsidiaries to
participate in the ownership of the Company, and to provide additional incentive
for such employees to promote the success of its business through sharing in the
future growth of such business.
2. Effectiveness of Plan. The provisions of this Plan shall become effective
on the date the Plan is adopted by the Board of Directors of the Company (the
"Board of Directors").
3. Administration. This Plan shall be administered by a compensation committee
("Compensation Committee") which shall be selected by the Board of Directors and
which shall be composed of not less than two nor more than five members of the
Board of Directors who are non-employee directors within the meaning of
Securities and Exchange Commission Rule 16b-3. The Compensation Committee shall
have full power and authority to construe, interpret and administer the Plan,
and may from time to time adopt such rules and regulations for carrying out this
Plan as it may deem proper and in the best interests of the Company. Subject to
the terms, provisions and conditions of the Plan, the Compensation Committee
shall have exclusive authority (i) to select key employees to whom options shall
be granted, (ii) to determine the number of shares subject to each option, (iii)
to determine the time or times when options will be granted, (iv) to determine
the option price of the shares subject to each option, (v) to determine the time
when each option may be exercised, (vi) to fix such other provisions of each
option agreement as the Compensation Committee may deem necessary or desirable,
consistent with the terms of this Plan, and (vii) to determine all other
questions relating to the administration of this Plan. The interpretation and
construction of this Plan by the Compensation Committee shall be final,
conclusive and binding upon all persons.
4. Eligibility.
(a) Key employees--Options to purchase shares of NEI Common Stock shall be
granted under this Plan only to key employees of the Company or of any of its
subsidiary corporations, as the term "subsidiary corporations" is defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended (the "Code").
Key employees to whom options may be granted under this Plan will be those
employees selected by the Compensation Committee from time to time who, in the
sole discretion of the Compensation Committee, have made material contributions
in the past, or who are expected to make material contributions in the future,
to the successful performance of the Company. However, in no event shall an
employee who owns more than 5 percent of the total combined voting power of all
classes of stock of the Company or of any of its subsidiary corporations be
eligible to receive an option under this Plan.
5. Shares Subject to the Plan. Options granted under this Plan shall be
granted solely with respect to shares of NEI Common Stock. Subject to any
adjustments made pursuant to the provisions of Section 13, the aggregate number
of shares of NEI Common Stock which may be issued upon exercise of the options
which will be granted under this Plan shall not exceed 500,000.
If any option granted under this Plan shall expire or terminate for any
reason without having been exercised in full, the unpurchased shares subject to
such option shall be added to the number of shares otherwise available for
options which may be granted in accordance with the terms of this Plan.
The shares to be delivered upon exercise of the options granted under this
Plan shall be made available, at the discretion of the Board of Directors, from
either the authorized but unissued shares of NEI Common Stock or any treasury
shares of NEI Common Stock held by the Company.
6. Option Agreement. Each option granted under this Plan shall be evidenced by
an incentive stock option agreement, which shall be signed by an officer of the
Company and by the employee to whom the option is granted (the "optionee"). The
terms of such incentive stock option agreement shall be in accordance with the
provisions of this Plan, but it may include such other provisions as may be
approved by the Compensation Committee. The granting of an option under this
Plan shall be deemed to occur on the date on which the incentive stock option
agreement evidencing such option is executed by the Company and the optionee.
Each incentive stock option agreement shall constitute a binding contract
between the Company and the optionee, and every optionee, upon the execution of
an incentive stock option agreement, shall be bound by the terms and
restrictions of this Plan and such incentive stock option agreement.
7. Option Price. The price at which shares of NEI Common Stock may be
purchased under an option granted pursuant to this Plan shall be determined by
the Compensation Committee, but
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in no event shall the price be less than the greater of (a) the par value
thereof, or (b) 100 percent of the fair market value of such shares on the date
that the option is granted. The fair market value of shares of NEI Common Stock
for purposes of this Plan shall be determined by using the closing price on the
New York Stock Exchange or other exchange on the latest date prior to option
grant. In the absence of finding such a closing price, the fair market value
shall be determined by the Compensation Committee, in its sole discretion, and
the Compensation Committee may adopt such formulas as in its opinion shall
reflect the true fair market value of such stock from time to time, and may rely
on such independent advice with respect to such fair market value as the
Compensation Committee shall deem appropriate.
8. Period and Exercise of Option.
(a) Period--Subject to the provisions of Sections 10 and 11 hereof with
respect to the death or termination of employment of an optionee, the period
during which each option granted under this Plan may be exercised shall be fixed
by the Compensation Committee at the time such option is granted, provided that
such period shall expire no later than seven years from the date on which the
option is granted. In the event the Company shall not be the surviving
corporation in any merger, consolidation or reorganization, or in the event of
acquisition by another corporation of all or substantially all of the assets or
common stock of the Company, every option outstanding hereunder may be assumed
(with appropriate changes) by the surviving, continuing, successor or purchasing
corporation, as the case may be, subject to any applicable provisions of the
Code or replaced with new options of comparable value (in accordance with
Section 424(a) of the Code). In the event (i) that such surviving, continuing,
successor or purchasing corporation, as the case may be, does not assume or
replace the outstanding options hereunder, or (ii) of liquidation or dissolution
of the Company, the Compensation Committee may provide that each optionee shall
have the right, within a period commencing not more than 30 days immediately
prior to and ending on the day immediately prior to such merger, consolidation,
reorganization or acquisition by another corporation of all or substantially all
of the assets or common stock of the Company or the liquidation or dissolution
of the Company, to exercise the optionee's outstanding options to the extent of
all or any part of the aggregate number of shares subject to such option(s). The
Compensation Committee may provide in any option granted under this Plan that
the time at which such options may be exercised by the optionee shall be
accelerated to the date in which a "Change of Control" (as defined below) takes
place. For purposes of this paragraph (a), "Change of Control" shall mean a
change in control of a nature that would be required to be reported in response
to item 6(e) of Schedule 14A of Regulation 14A (as in effect on the date hereof)
promulgated under the Securities Exchange Act of 1934, as in effect on the date
hereof (the "Exchange Act"); provided, however, that, without limitation, such a
change of control shall be deemed to have occurred if (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act; other than any
underwriter or member of an underwriting syndicate or group with respect to a
public offering of securities of the Company registered under the Securities Act
of 1933, the Company or any "person" who on the date hereof is a director or
officer of the Company or whose shares of NEI Common Stock are treated as
"beneficially owned" (as defined in Rule 13d-3 under the Exchange Act, as in
effect on the date hereof) by any such director or
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officer) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power
of the Company's then-outstanding securities, (ii) less than a majority of the
members of the Board of Directors of the Company are persons who were either
nominated for election by the Board of Directors or selected by the Board of
Directors of the Company, (iii) the stockholders of the Company approve a merger
or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the Voting Securities (as defined below)
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 80 percent of the total voting power represented
by the Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all the
Company's assets. As used in this paragraph (a), "Voting Securities" shall mean
any securities of the Company which vote generally in the election of directors.
(b) Exercise--Any option granted under this Plan may be exercised by the
optionee (or by the purchaser acting under Section 11 below) only by (i)
delivering to the Company written notice of the number of shares with respect to
which the optionee is exercising his or her option right, (ii) paying in full
the option price of the purchased shares, and (iii) if the shares to be
purchased have not been registered under the applicable securities laws and if
necessary, in the opinion of counsel for the Company to secure an exemption from
such registration, furnishing to the Company such representation or agreement in
writing signed by the optionee (or purchaser) as shall be necessary in the
opinion of such counsel to secure such exemption. Subject to the limitations of
this Plan and the terms and conditions of the respective incentive stock option
agreement, each option granted under this Plan shall be exercisable in whole or
in part at such time or times as the Compensation Committee may specify in such
incentive stock option agreement.
(c) Payment for shares--Payment for shares of NEI Common Stock purchased
pursuant to an option granted under this Plan may be made either in cash or in
other shares of NEI Common Stock. If NEI Common Stock is used for payment, the
value of such Common Stock shall be the fair market value of such shares on the
latest date prior to payment. The fair market value of such shares shall be
determined in the manner set forth in Section 7 of this Plan.
(d) Delivery of certificates--As soon as practicable after receipt by the
Company of the notice and representation described in subsection (b), and
payment in full of the option price for all of the shares being purchased
pursuant to an option granted under this Plan, a certificate or certificates
representing such shares of stock shall be registered in the name of the
optionee and shall be delivered to the optionee. No certificate for fractional
shares of stock shall be issued by the Company, but in lieu thereof the Company
shall distribute at such time to the optionee who otherwise would have been
entitled to receive a fractional share an amount in cash equal to the value of
such fractional share determined by multiplying the fraction either by (i) the
average of
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the high and low bid prices of NEI Common Stock on the date on which the Company
receives the notice and representation described in subsection (b), if NEI
Common Stock is then listed on the New York Stock Exchange or (ii) the fair
value of NEI Common Stock on the date on which the Company receives the notice
and representation described in subsection (b), if NEI Common Stock is not then
so listed. Neither any optionee, nor the legal representative, legatee or
distributee of any optionee, shall be deemed to be a holder of any shares of
stock subject to an option granted under this Plan unless and until the
certificate or certificates for such shares have been issued. All stock
certificates issued upon the exercise of any options granted pursuant to this
Plan may bear such legend as the Compensation Committee shall deem appropriate
regarding restrictions upon the transfer or sale of the shares evidenced
thereby.
(e) Limitations on exercise--Except as provided in Sections 10 and 11
hereof, no option granted under this Plan shall be exercised unless the optionee
is at the time of such exercise employed by the Company or one of its subsidiary
corporations and shall have been so employed by the Company or one of its
subsidiary corporations at all times since the date on which such option was
granted.
9. Limitation on Options Granted to Individual Employees. The aggregate fair
market value (determined at the time the options are granted) of stock with
respect to which incentive stock options are exercisable for the first time by
any individual during any calendar year under this Plan (and under any other
plan or plans of such individual's employer corporation and any parent or
subsidiary corporation or corporations) shall not exceed $100,000. The
limitation provided by the preceding sentence shall be applied by taking options
into account in the order in which they are granted.
10. Termination of Employment. If an optionee shall cease to be employed by the
Company or any of its subsidiary corporations for any reason other than death,
any option or unexercised portion thereof granted to him or her under this Plan
which is otherwise exercisable shall terminate unless it is exercised within
thirty days of the date on which such optionee ceases to be so employed, and in
any event no later than the expiration date of such option as specified in the
respective incentive stock option agreement. Nothing in this Plan or in any
incentive stock option agreement shall be construed as an obligation on the part
of the Company or any of its subsidiary corporations to continue the employment
of any employee.
11. Death of Optionee. In the event of the death of an optionee while he or she
is an employee of the Company or any of its subsidiary corporations (or within
ninety days of the date on which such optionee ceases to be so employed) any
option or unexercised portion thereof granted to him or her under this Plan
which is otherwise exercisable may be exercised by the person or persons to whom
such optionee's rights under the option pass by operation of the optionee's will
or the laws of descent and distribution, at any time within a period of ninety
days following the death of the optionee (but in no event later than the
expiration date of the option as specified in the respective incentive stock
option agreement).
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12. Nontransferability of Options. No option granted under this Plan shall be
transferable or assignable by the optionee other than by will or the laws of
descent and distribution, and during the lifetime of the optionee may be
exercised only by the optionee.
13. Adjustments upon Changes in Capitalization. In the event of any change in
the capital structure of the Company, including but not limited to a change
resulting from a stock dividend, stock split, reorganization, merger,
consolidation, liquidation or any combination or exchange of shares, the number
of shares of NEI Common Stock subject to this Plan and the number of such shares
subject to each option granted hereunder shall be correspondingly adjusted by
the Compensation Committee. The option price for which shares of NEI Common
Stock may be purchased pursuant to an option granted under this Plan shall also
be adjusted so that there will be no change in the aggregate purchase price
payable upon the exercise of any option.
14. Amendment and Termination of Plan. No option shall be granted pursuant to
this Plan after June 15, 2008, on which date this Plan will expire except as to
options then outstanding under the Plan, which options shall remain in effect
until they have been exercised or have expired. The Board of Directors may at
any time before such date amend, modify or terminate the Plan; provided,
however, that the Board of Directors may not, without further approval by the
holders of a majority of the issued and outstanding shares of NEI Common Stock
voting in person or by proxy at a duly constituted meeting of the stockholders
of the Company, (i) increase the maximum number of shares of NEI Common Stock as
to which options may be granted pursuant to this Plan, (ii) change the class of
employees eligible to be granted options pursuant to the Plan, (iii) extend the
period under this Plan during which options may be granted or exercised, or (iv)
change the provisions of Section 7 hereof with respect to the determination of
the option price, other than to change the manner of determining the fair market
value of shares of NEI Common Stock to conform with any then applicable
provisions of the Internal Revenue Code or the regulations issued thereunder. No
amendment, modification or termination of this Plan may adversely affect the
rights of any optionee under any then outstanding option granted hereunder
without the consent of such optionee.
15. Governing Law. This Plan and the rights of all persons claiming hereunder
shall be construed and determined in accordance with the laws of the State of
Delaware.
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