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EXHIBIT 10.22
AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN
(Amendment and Restatement of 1996 Incentive Stock Option Plan)
The Amended and Restated Incentive Stock Option Plan of MLC Holdings,
Inc. is intended to reward certain MLC Holdings, Inc. employees, using stock
options, for their contribution to the success of the Company. Stock options
granted under the Plan are intended to qualify as incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986 as
amended.
RECITALS
WHEREAS, the Company has previously established the 1996 Incentive
Stock Option Plan, a stock incentive program to provide an opportunity for all
employees of the Company to participate in ownership of the Company;
WHEREAS, the 1996 Incentive Stock Option Plan is a component Plan of
the 1996 Stock Incentive Plan;
WHEREAS, the Company's Board had adopted, and recommended to the
shareholders for ratification, certain amendments to the 1996 Stock Incentive
Plan (amended, restated and renamed as the MLC "Master Stock Incentive Plan")
and its component plans, including the 1996 Incentive Stock Option Plan;
WHEREAS, the amendments increase the aggregate number of shares
allocated to the Master Stock Incentive Plan and its component plans, and to
add an employee stock purchase program as a component plan,
WHEREAS, the Company desires to make coordinating amendments to the
1996 Incentive Stock Option Plan to increase the number of shares for which
options may be granted under the Plan, subject, however, to a specified
aggregate maximum number, and to this end hereby amends, restates and renames
the 1996 Incentive Stock Option Plan as the Amended and Restated Incentive
Stock Option Plan.
ARTICLE 1
DEFINITIONS
The following words and terms, unless the context clearly indicates
otherwise, have the following meanings. Where appropriate in the context of
this Amended and Restated Incentive Stock Option Plan, the singular shall
include the plural, the masculine gender shall include the feminine, and vice
versa:
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1:01 "Board" means the Board of Directors of MLC Holdings, Inc.
1:02 "Committee" means the stock incentive committee appointed by the
Board to administer the MLC Master Stock Incentive Plan of the Company, and the
plans adopted thereunder, including without limitation, this Plan.
1:03 "Common Stock" means the common stock of MLC Holdings, Inc.
1:04 "Company" means MLC Holdings, Inc. and any subsidiary thereof.
1:05 "Option" means the options granted pursuant to this Plan.
1:06 "Option Agreement" means an agreement provided for in Section
6:01.
1:07 "Participant" means an individual designated pursuant to Section
3:03 who has executed an Option Agreement.
1:08 "Permanent Disability" means the inability of an individual to
engage in any substantial gainful activity by reason of any medically-
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period
of not less than 12 months.
1:09 "Plan" means this MLC Holdings, Inc. Amended and Restated
Incentive Stock Option Plan.
1:10 "Plan Administrator" means the Committee.
1:11 "SEC" means the United States Securities and Exchange
Commission.
1:12 "Vesting" means 20% per year for each year.
ARTICLE 2
EFFECTIVE DATE OF THE PLAN
2:01 The effective date of the Plan was September 1, 1996, and the
effective date of this Amendment and Restatement shall be May 14, 1997, the
date on which the Board adopted this Plan, subject to approval by the
Shareholders. No Options granted prior to Shareholder approval of the Plan
shall be exercisable unless and until the Shareholders of the Company approve
this Plan.
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ARTICLE 3
ADMINISTRATION
3:01 The Plan shall be administered by the Committee.
3:02 The Committee shall establish from time to time, subject to the
limitations of the Plan as hereinafter set forth, such rules and regulations,
and amendments thereof, as it deems necessary to comply with applicable law and
regulation and for the proper administration of the Plan. Every decision and
action of the Committee shall be valid if approved by (i) a majority of the
Committee members then in office at a meeting, or (ii) all of the Committee
members then in office by unanimous written consent in lieu of meeting.
3:03 The Board, or any designee of the Board, may recommend employees
for participation in the Plan to the Committee. Based on such recommendations,
the Committee shall determine the persons (including officers) who shall
receive options, the time or times at which options shall be granted, the
number of shares for which options are to be granted to each participant, and
the term and price of each option. No members of the Board or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Option.
3:04 Options shall be granted only after prior designation by the
Committee and the execution of an Option Agreement. Vesting shall be at 20%
per year. The Committee shall report to the Secretary of the Company the names
of persons granted Options, the number of Options granted, and the terms and
conditions of each Option.
ARTICLE 4
PARTICIPATION IN THE PLAN
4:01 Participation in the Plan shall be limited to full-time officers
and full and part-time employees of the Company who, from time to time, shall
be recommended by the Board or its designee(s) and designated by the Committee
in accordance with Section 3:03, provided however, that no shareholder who owns
directly or by attribution more then 10% of the common stock on a fully diluted
basis shall be eligible to be a participant in the Incentive Stock Option Plan
unless their grant price is 110% of the fair market value of the MLC shares
granted under this Plan.
ARTICLE 5
STOCK SUBJECT TO PLAN
5:01 There are reserved for the granting of Options under the Plan,
together with shares that may be issued under all other component plans of the
Company's Master Stock Incentive Plan, a number of shares of the common stock
of MLC Holdings, Inc. equal to twenty percent (20%) of the
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total number of shares of Common Stock outstanding from time to time, as
determined immediately after giving pro forma effect to the assumed exercise of
all option or purchase rights under all of the component plans of the Master
Stock Incentive Plan ("Reserved Shares"). Provided, that notwithstanding the
foregoing or any other provision of this Plan or the Master Stock Incentive
Plan, the aggregate number of shares which may be issued pursuant to options
granted under this Plan shall not exceed 4,000,000. If for any reason shares
for which an Option has been granted cease to be subject to purchase
thereunder, those shares shall be available for the granting of Options.
5:02 Proceeds of the purchase of optioned shares shall be used for
the general business purposes of the Company.
5:03 In the event of reorganization, recapitalization, stock split,
stock dividend, stock combination, merger, consolidation, acquisition of
property or stock, any change in the capital structure of the Company, or
similar changes in the Company's Common Stock, the Committee shall make such
adjustments as may be appropriate in the number and kind of shares reserved for
purchase and in the number, kind and price of shares covered by Options granted
but not then exercised; provided, however, that any Options to purchase
fractional shares resulting from any such adjustment shall be eliminated.
5:04 If the Company shall at any time merge or consolidate with or
into another corporation and (i) the Company is not the surviving entity, or
(ii) the Company is the surviving entity and the shareholders of the Company
are required to exchange their shares of Common Stock for property and/or
securities, the holder of each Option will thereafter receive, upon the
exercise thereof, the securities and/or property to which a holder of the
number of shares of Common Stock then deliverable upon the exercise of such
Option would have been entitled upon such merger or consolidation, and the
Company shall take such steps in connection with such merger or consolidation
as may be necessary to assure that the provisions of this Plan shall thereafter
be applicable, as nearly as reasonably may be, in relation to any securities or
property thereafter deliverable upon the exercise of such Option, provided,
however, that under no circumstance shall any Option exercise date be
accelerated in contemplation of such action. A sale of all or substantially
all the assets of the Company for consideration (apart from the assumption of
obligations) consisting primarily of securities shall be deemed a merger or
consolidation for the foregoing purposes. Notwithstanding the foregoing, the
provisions of this Section 5:04 shall be subject to Section 6:04.
The surviving entity following any reorganization may at any
time, in its sole discretion, tender substitute options as it may deem
appropriate. However, in no event may the substitute options entitle the
Participant to any fewer shares (or at any greater aggregate price) or any less
other property than the Participant would be entitled to under the immediately
preceding paragraph upon an exercise of the Options held prior to the
substitution of the new option.
5:05 In the event of the proposed dissolution or liquidation of the
Company, the Options granted hereunder shall terminate as of a date to be fixed
by the Committee, provided that not less
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than thirty (30) days prior written notice of the date so fixed shall be given
to the Participant, and the Participant shall have the right, during the period
of thirty (30) days preceding such termination, to exercise his Options.
Notwithstanding the foregoing, the provisions of this Section shall be subject
to Section 6:04.
ARTICLE 6
TERMS AND CONDITIONS OF OPTIONS
6:01 Each Option shall be evidenced by an Option Agreement specifying
the number of shares of Common Stock covered thereby in such form as the
Committee from time to time may determine, provided that no provision of the
Option Agreement shall be inconsistent with this Plan and such Option Agreement
may incorporate all or any of the terms of this Plan by reference.
6:02 The Option price per share shall not be less than 100% of the
fair market value of a share of the Common Stock on the date on which the
Option is granted. In the event the Common Stock is not listed upon an
established stock exchange or traded in the over-the-counter market, the fair
market value of shares of the Common Stock shall be determined in good faith by
the Committee. For so long as the Common Stock is listed upon an established
stock exchange or exchanges such fair market value shall be deemed to be the
highest closing price of the Common Stock on such stock exchange or exchanges
on the day the option is granted or if no sale of the Common Stock shall have
been made on any stock exchange on that day, on the next preceding day on which
there was a sale of such stock. When and if shares of the Common Stock are
traded in the over-the-counter market but not on an established exchange or
exchanges, the fair market value per share shall be the mean between dealer
"bid" and "asked" prices of the Common Stock as reported by the National
Association of Securities Dealers, Inc., on the day the option is granted.
Subject to the foregoing, the Committee in fixing the Option price shall have
full authority and discretion and be fully protected in doing so.
6:03 No Option may be granted under this Plan after September 1,
2006.
6:04 The term of any Option granted under this Plan shall be up to
ten (10) years from the date on which it was granted. The Committee shall have
the right to set the time or times within which an Option shall be exercised,
and to accelerate the time or times of exercise; provided, however, that no
Option shall be exercisable until after the Shareholders of the Company approve
the Plan.
6:05 Each Option by its terms shall be non-transferable and
non-assignable except that valid Option rights may be transferred by
testamentary instrument (will), by the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined in the Internal
Revenue Code or Title I of the Employee Retirement Income Security Act or the
rules thereunder. Otherwise, an Option is exercisable only by such
Participant.
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6:06 Each Option granted under the Plan shall terminate and may no
longer be exercised if the Participant ceases to be an employee of the Company,
except that (i) if the Participant dies while in the employ of the Company, or
within two (2) months after the termination of such employment, or within six
(6) months if determined to be permanently disabled, such Option may be
exercised on his behalf as set forth in 6:07 below; and (ii) if the
Participant's employment shall have been terminated for any reason other than
his death, or permanent disability, he may at any time within a period of two
(2) months after such termination exercise such Option to the extent that the
Option was exercisable pursuant to Section 6:04 above by him on the date of the
termination of his employment; provided, however, that in the case of
termination for cause by the Company of the employment of the Participant or if
a Participant shall terminate his employment in violation of any employment
agreement with the Company, then his Option shall terminate and expire
concurrently with the termination of his employment and shall not thereafter be
exercisable to any extent. The definition of "cause" shall be as set forth in
the Option Agreement with each Participant.
6:07 If the Participant dies during the term of his Option while in
the employ of the Company, or within the two (2) month period after the
termination of employment, or within six (6) months if determined to be
permanently disabled without having fully exercised his Option, the executor or
administrator of his estate or the person who inherits the right to exercise
the Option by bequest or inheritance shall have the right within twelve (12)
months after the Participant's death to purchase the number of shares which the
deceased Participant was entitled to purchase at the date of his death, after
which time the Option shall lapse.
6:08 A Participant may, at any time, elect in writing to abandon an
Option or any part thereof.
6:09 No person to whom options are granted hereunder shall receive
options, first exercisable during any single calendar year, for shares, the
fair market value of which (determined at the time of grant of the options)
exceeds $100,000. Accordingly, no optionee shall be entitled to exercise
options in any single calendar year, except to the extent first exercisable in
previous calendar years, for shares of common stock, the value of which
(determined at the time of grant of the options) exceeds $100,000.
ARTICLE 7
METHODS OF EXERCISE OF OPTION
7:01 The Participant (or other person acting under Section 6:07)
desiring to exercise an Option as to all or part of the shares of Common Stock
subject to that option shall notify the Secretary of the Company in writing at
its principal office to that effect, specifying the number of shares to be
purchased. The Committee shall have the right to set the time or times within
which each Option shall be exercisable, and to accelerate the time or times of
exercise. Unless the Option Agreement executed by a Participant expressly
otherwise provides, the Option shall be exercisable
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at any time or from time to time after the expiration of one year from the date
of grant and prior to termination of the Option. Options must be exercised in
multiples of 100 shares, unless all Options theretofore granted are exercised
at that time. An Option may not be exercised to any extent, either by the
Participant to whom it was granted, or by any person after the Participant's
death, unless the Participant to whom the Option was granted has remained in
the continuous employ of the Company, and/or of a subsidiary, for not less than
twelve (12) months from the date the Option was granted.
7:02 The notice shall be accompanied by payment to the Company of the
full purchase price or the Committee in its sole and absolute discretion may
accept an assignment of proceeds or funds or other similar documents from a
qualified brokerage company which trades on a national or regional exchange or
from a financial institution. With the prior consent of the Company the Option
may be exercised as to the number of shares specified in the notice by
tendering to the Company shares of Common Stock already owned by the
Participant which, together with any cash tendered therewith shall equal in
value the full purchase price. The value of the tendered shares for this
purpose shall be the fair market value (as determined in accordance with the
procedures set forth in Section 6:02) of such shares (valued as if unlegended
and freely transferable) on the date the Participant executes and dates the
notice provided in Section 7:01, and the Participant shall deliver only that
number of shares of Common Stock which, together with any cash delivered, has
an aggregate value of not less than the full purchase price for the Option.
7:03 A Participant shall have none of the rights of a Stockholder
until the shares of Common Stock covered by the Option are issued to him. If
the shares of Common Stock issuable pursuant to the exercise of an Option are
not registered under the Securities Act of 1933, as amended, the Company may
require that the Participant deliver an investment representation letter at the
time of exercise in form acceptable to the Company and its counsel, and the
Company may place appropriate legends restricting transfer under applicable
securities laws on the certificates for the shares of Common Stock to be
issued.
ARTICLE 8
AMENDMENTS AND DISCONTINUANCE OF THE PLAN
8:01 The Committee shall have the right at any time and from time to
time to amend, suspend, or terminate the Plan provided that, except as provided
in Section 5:03, no such amendment, suspension, or termination shall (i) revoke
or alter the terms of any valid Option previously granted in accordance with
this Plan; (ii) change the price determined pursuant to the provisions of
Section 6:02; (iii) change the class of eligible employees to whom Options may
be granted under this Plan; (iv) extend the term of the Plan beyond five (5)
years or provide for options exercisable more than two (2) years after the date
granted; (v) permit any member of the Committee to be eligible as a
Participant; or (vi) otherwise materially modify the Plan, except as provided
herein or as necessary to comply with applicable law, without Shareholder
approval.
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8:02 This Plan shall terminate at midnight on September 1, 2006.
Options outstanding at the termination of the Plan shall not be affected by
such termination.
8:03 The power to increase the number of shares is reserved under the
Plan to the Board of Directors. The increase in the reserved shares will
become effective based on a simple majority of the Board of Directors.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9:01 The Plan shall be construed, whenever possible, to be in
conformity with the requirements of all applicable federal law, including
without limitation the SEC's Rule 16b-3. To the extent not in conflict with
the preceding sentence, the Plan shall be construed, administered and governed
in all respect under and by the laws of the State of Delaware, except where
preempted by federal law.
9:02 If any provision of the Plan is held invalid or unenforceable,
the invalidity or unenforceability shall not affect any other provisions and
the Plan shall be construed and enforced as if those provisions had not been
included.
9:03 This Plan shall be binding upon heirs, executors,
administrators, successors and assigns of all parties hereto, present and
future.
9:04 The Plan shall not be deemed to constitute a contract between
any employee and the Company. Nothing in the Plan shall give any employee the
right to be retained in the employ of the Company, and all employees shall
remain subject to discharge, discipline or layoff to the same extent as if the
Plan had not been put into effect.
9:05 In addition to such other rights of indemnification as they
may have as directors or as members of the Committee, the members of the
Committee shall be indemnified by the Corporation against the reasonable
expenses, including attorney's fees actually and necessarily incurred in
connection with the defense of any action, suit, or proceeding, or in
connection with any appeal therein, to which they or any of them may be a 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 Corporation) or paid by them in satisfaction of a
judgment in any such action, suit, or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit, or proceeding that such
Committee member is liable for negligence or misconduct in performance of his
duties; provided that within 60 days after institution of any such action,
suit, or proceeding a Committee member shall in writing offer the Corporation
the opportunity, at its own expense, to handle and defend the same.
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9.06 The Option Agreement shall provide the employee shall upon each
exercise of a part or all of the option granted represent a warrant that his
purchase of stock pursuant to such option is for investment only, and not with
the view of distribution involving a public offering unless such shares are
provided for in such public offering or such shares are registered. At any
time the Board may waive the requirement of such provision and any option
agreement entered into under this Plan.
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