Exhibit 10.5
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 amends and restates
the Nationwide Electric, Inc. Incentive Stock Option Plan (the "Plan"),
originally adopted June 15, 1998, 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 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 the Board of
Directors or by a compensation committee which shall be selected by the Board of
Directors (collectively, the "Compensation Committee"). 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. 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 (the "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 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 Agreement evidencing
such option is executed by the Company and the Optionee. Each Agreement shall
constitute a binding contract between the Company and the Optionee, and every
Optionee, upon the execution of an Agreement, shall be bound by the terms and
restrictions of this Plan and such 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 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.
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8. Period and Exercise of Option.
(a) Period--Subject to the provisions of Sections 10, 11 and 14
hereof with respect to the death or termination of employment of an
Optionee and the change in control of the Company, 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.
(b) Exercise--Any option granted under this Plan may be exercised
by the Optionee (or by a 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 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 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
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
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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,
11 and 14 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 Agreement. Nothing in this Plan or in any 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
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. Change in Control of the Company. In the event of any Change in
Control of the Company, as hereinafter defined, the Compensation Committee or
any successor to such Compensation Committee, may, in its sole discretion, as to
any option, either at the time an option is made hereunder or any time
thereafter, take any one or more of the following actions: (i) provide for the
acceleration of any time periods relating to the exercise or realization of any
such option so that such option may be exercised or realized in full on or
before a date fixed by the Compensation Committee or its successor; (ii) require
the mandatory surrender to the Company by any Optionee of some or all of the
outstanding options held by such Optionee (irrespective of whether such options
are then exercisable under the provisions of this Plan) as of a date (before or
after such Change in Control) specified by the Compensation Committee or its
successor, in which event the Compensation Committee or its successor shall
thereupon cancel such options and pay to each Optionee an amount of cash per
share equal to the amount that could have been attained upon the exercise of
such option or realization of the Optionee's rights had such option been
currently exercisable or payable; (iii) make such adjustment to any such option
then outstanding as the Compensation Committee or its successor deems
appropriate to reflect such Change in Control; or (iv) cause any such option
then outstanding to be assumed, or new rights substituted therefor, by the
acquiring or surviving corporation after such Change in Control. The
Compensation Committee or its successor may, in its discretion, include such
further provisions and limitations in any agreement documenting such options as
it may deem equitable and in the best interests of the Company.
For purposes of this Plan a "Change in Control" shall be deemed to
have occurred if (i) any Person other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, and other than the
Company or a corporation owned, directly or indirectly, by the shareholders of
the Company in substantially the same proportions as their ownership of stock of
the Company, is or becomes the "beneficial owner"
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(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company's then outstanding securities; or (ii) during any period of two
consecutive years, individuals who are at the beginning of such period
constitute the Board and any new Director (other than Director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in (i) above) whose election by the Board or nomination
for election by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who either were Directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof.
15. Amendment and Termination of Plan. No option shall be granted
pursuant to this Plan after October 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.
16. 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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