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EXHIBIT 10.24
AMENDED AND RESTATED NONQUALIFIED STOCK OPTION PLAN
(Amendment and Restatement of Nonqualified Stock Option Plan)
The Amended and Restated Nonqualified Stock Option Plan of MLC
Holdings, Inc. is intended to reward certain MLC Holdings, Inc. employees and
key non-employee consultants for their contributions to the Company's continued
success by awarding those individuals with non-compensatory stock options.
These stock options do not qualify as incentive stock options under Section 422
of the Internal Revenue Code of 1986, as amended.
RECITALS
WHEREAS, the Company has previously established the 1996
Nonqualified 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 Nonqualified Stock Option Plan is a component
Plan of the 1996 Stock Incentive Plan;
WHEREAS, the Company's Board had adopted, and recomended 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 Nonqualified 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 Nonqualified Stock Option Plan to increase the number of shares for which
options may be granted under the Plan, and to this end hereby amends,
restates and renames the 1996 Nonqualified Stock Option Plan as the Amended
and Restated Nonqualified 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 MLC Holdings, Inc. Nonqualified 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., a Delaware corporation.
1:02 "Committee" means the stock incentive committee appointed
by the Board to administer the Amended and Restated 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 this Amended and Restated MLC Holdings,
Inc. Nonqualified 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 or non-employee consultants 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 member
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. The Committee shall
have the flexibility to grant options under such reasonable terms and
conditions as the Committee determines in its sole discretion and may be. 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 directors,
full-time officers and employees, non-employees and consultants of the Company
as the case may be who, from time to time, shall be recommended by the Board
and/or designated by the Committee in accordance with Section 3.03.
ARTICLE 5
STOCK SUBJECT TO PLAN
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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 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"). 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.
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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 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 80% of
the fair market value of a share of the Common Stock on the date on which the
Option is granted. The Common Stock is not currently listed upon an established
stock exchange or traded in the over-the-counter market. Accordingly, until
such time as the Common Stock is 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. When and if
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.
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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.
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 of becoming 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.
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 mast 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 l6b-3, as amended effective August 15, 1996.
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
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Committee member shall in writing offer the Corporation the opportunity, at its
own expense, to handle and defend the same.
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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