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EXHIBIT 10.16
ORBITAL COMMUNICATIONS CORPORATION
1992 STOCK OPTION PLAN
(Amended and Restated Effective September 12, 1995)
ARTICLE I
PURPOSE OF PLAN
The purpose of this 1992 Stock Option Plan is to promote the
growth and profitability of Orbital Communications Corporation by providing,
through the ownership of Shares, incentives to attract and retain highly
talented persons to provide managerial and administrative services to the
Company or other entities in which the Company has a significant interest and
to motivate such persons to use their best effort on behalf of the Company.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, the following terms shall have
the meanings set forth in this Article II:
2.01 Accrued Installment. The term "Accrued Installment" shall
mean any vested installment of an Option.
2.02 Board. The term "Board" shall mean the Board of Directors
of the Company.
2.03 Committee. The term "Committee" shall mean a committee
appointed by the Board pursuant to Section 3.04 and constituting two (2)
members of the Board, who shall be entitled to take any action permitted to be
taken by the Committee only after consultation with two (2) individuals
designated by the partners of ORBCOMM Global, other than ORBCOMM, which shall
be by Teleglobe Mobile, as long as Teleglobe Mobile holds at least forty
percent (40%) of the Participating Percentage in ORBCOMM Global, L.P. (as
defined in the Agreement of Limited Partnership of ORBCOMM Global, L.P.)*.
2.04 Company. The term "Company" shall mean Orbital
Communications Corporation, a Delaware corporation, or any successor thereof.
2.05 Director. The term "Director" shall mean a member of the
Board, or a member of the board of directors of any Participating Company.
2.06 Disinterested Person. The term "Disinterested Person" shall
mean any person defined as a disinterested person under Rule 16b-3 of the
Securities and Exchange Commission as promulgated under the Exchange Act.
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*Amended on November 11, 1997.
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2.07 Effective Date. The term "Effective Date" shall mean
September 29, 1992.
2.08 Eligible Person. The term "Eligible Person" shall mean any
employee or officer of any Participating Company, but shall not include any
Director of any Participating Company who is not also an employee or officer of
a Participating Company.
2.09 Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended from time to time.
2.10 Fair Market Value. The term "Fair Market Value" shall mean
the closing sale price of a Share on the national securities exchange on which
Shares are then principally traded or, if that measure of price is not
available, on a composite index of such exchanges or, if that measure of price
is not available, in a national market system for securities on the date in
question. In the event that there are no sales of Shares on any such exchange
or market on such date, the fair market value of a Share shall be deemed to be
the closing sales price on the next preceding day on which Shares were sold on
any such exchange or market. In the event that such Shares are not listed on
any such market or exchange on such date, a reasonable valuation of the fair
market value of a Share shall be made by the Committee. Any determination of
fair market value made in good faith by the Committee shall be conclusive and
binding on the Company and all Optionees and/or holders of Shares.
2.11 I.R.C. The term "I.R.C." shall mean the Internal Revenue
Code of 1986, as amended from time to time.
2.12 Incentive Stock Option. The term "Incentive Stock Option"
shall mean any Option intended to satisfy the requirements under I.R.C. Section
422(b) as an incentive stock option.
2.13 Nonstatutory Stock Option. The term "Nonstatutory Stock
Option" shall mean any Option granted under the Plan that does not qualify as
an Incentive Stock Option.
2.14 Option. The term "Option" shall mean an option to acquire
Shares granted under the Plan.
2.15 Optionee. The term "Optionee" shall mean an Eligible Person
who has been granted Options.
2.16 ORBCOMM Partnerships. The term "ORBCOMM Partnerships" shall
mean ORBCOMM Global, L.P., ORBCOMM USA, L.P., ORBCOMM International Partners,
L.P. and any successor partnerships thereto; provided, however, that the term
"ORBCOMM Partnership" shall not include any such partnership at any time when
the Company holds, directly or indirectly, a Participation Percentage (as
defined in the applicable partnership agreement) in such partnership
aggregating less than 20%.
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2.17 Parent Corporation. The term "Parent Corporation" shall
mean a corporation as defined in I.R.C. Section 424(e).
2.18 Participating Company. The term "Participating Company"
shall mean the Company, any Parent Corporation of the Company, any Subsidiary
Corporation of the Company or its Parent Corporation and any ORBCOMM
Partnership.
2.19 Plan. The term "Plan" shall refer to the Stock Option Plan
of the Company set forth herein that provides for the granting of Incentive
Stock Options and Nonstatutory Stock Options.
2.20 Restricted Shareholder. The term "Restricted Shareholder"
shall mean an Optionee granted an Incentive Stock Option who, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company, with stock ownership determined in accordance with the attribution
rules of I.R.C. Section 424(d).
2.21 Shares. The term "Shares" shall mean shares of the
Company's authorized Common Stock, $0.01 par value, and may be unissued shares
or treasury shares or shares purchased for purposes of the Plan.
2.22 Subsidiary Corporation. The term "Subsidiary Corporation"
shall mean a corporation as defined in I.R.C. Section 424(f).
2.23 Teleglobe Mobile. The term "Teleglobe Mobile" shall mean
Teleglobe Mobile Partners, a Delaware general partnership.
2.24 Terminating Transaction. The term "Terminating Transaction"
shall mean any of the following events: (a) the dissolution or liquidation of
the Company; (b) a reorganization, merger or consolidation of the Company with
one or more other corporations as a result of which the Company goes out of
existence or becomes a subsidiary of a corporation other than a corporation
that was a Participating Company immediately prior to such event (which shall
be deemed to have occurred only if such a corporation shall own, directly or
indirectly, eighty percent (80%) or more of the aggregate voting power of all
outstanding equity securities of the Company); (c) a sale of all or
substantially all of the Company's assets to a person or persons other than a
corporation that was a Participating Company immediately prior to such event;
or (d) a sale to one person (or two or more persons acting in concert), other
than to a corporation that was a Participating Company immediately prior to
such event, of equity securities of the Company representing eighty percent
(80%) or more of the aggregate voting power of all outstanding equity
securities of the Company. As used herein or elsewhere in this Plan, the word
"person" shall mean an individual, corporation, partnership, association or
other person or entity, or any group of two or more of the foregoing that have
agreed to act together.
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2.25 Termination Date. The term "Termination Date" shall mean
September 29, 2002.
2.26 Total Disability. The term "Total Disability" shall mean a
permanent and total disability as that term is defined in I.R.C. Section
22(e)(3).
ARTICLE III
ADMINISTRATION OF PLAN
3.01 Administration by Board. The Plan shall be administered by
the Board. The Board shall have full and absolute power and authority in its
sole discretion to (a) determine which Eligible Persons shall receive Options;
(b) determine the time when Options shall be granted; (c) determine the terms
and conditions, not inconsistent with the provisions of this Plan, of any
Option granted hereunder, including whether such Option is an Incentive Stock
Option or a Nonstatutory Stock Option (except that Incentive Stock Options may
not be granted to any Eligible Person that is not an employee or officer of the
Company, any Parent Corporation of the Company or any Subsidiary Corporation of
the Company or its Parent Corporation); (d) determine the number of Shares
which may be issued upon exercise of the Options; and (e) interpret the
provisions of this Plan and of any Option granted under this Plan.
3.02 Rules and Regulations. The Board may adopt such rules and
regulations as the Board may deem necessary or appropriate to carry out the
purposes of the Plan and shall have authority to do everything necessary or
appropriate to administer the Plan.
3.03 Binding Authority. All decisions, determinations,
interpretations or other actions by the Board shall be final, conclusive and
binding on all Eligible Persons, Optionees, Participating Companies and any
successors-in-interest to such parties.
3.04 Administration by Committee.
(a) The Board shall appoint a Committee to administer the
Plan and exercise all of the powers, authority and discretion of the Board
under the Plan, other than the power and authority to amend and terminate the
Plan under Section 7.01.
(b) At any time the Company has a class of equity
securities registered under the Exchange Act, each member of the Committee must
be a Disinterested Person, and the Board may, but is not required to, take such
other actions as are deemed necessary or advisable to conform the Plan to the
requirements of Rule 16b-3 as promulgated under the Exchange Act.
(c) The Committee shall report to the Board the names of
Eligible Persons granted Options, the number of Shares covered by each Option,
and the terms and conditions of each such Option.
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(d) Prior to the time that it appoints a Committee to
administer the Plan, the Board shall consult with, and obtain the concurrence
of, the Human Resources Committee of the Board of Directors of Orbital Sciences
Corporation in administering the Plan.
ARTICLE IV
NUMBER OF SHARES AVAILABLE FOR GRANT
Subject to the following provisions of this Article IV, the
maximum aggregate number of Shares which may be optioned and sold under the
Plan is 1,100,000*. In the event that Options granted under the Plan shall,
for any reason, terminate, lapse, be forfeited or expire without being
exercised, the Shares subject to such unexercised Options shall again be
available for the granting of Options under the Plan. In the event that Shares
that were previously issued by the Company, upon exercise of an Option, are
reacquired by the Company as part of the consideration received (in accordance
with Section 6.05(b) hereof) upon the subsequent exercise of an Option or
pursuant to Section 6.06 hereof, such reacquired Shares shall again be
available for the granting of Options hereunder.**
ARTICLE V
TERM OF PLAN
The Plan shall be effective as of the Effective Date and
shall terminate on the Termination Date. No Option may be granted hereunder
after the Termination Date.
ARTICLE VI
OPTION TERMS
6.01 Form of Option Agreement. Any Option granted under the Plan
shall be evidenced by an agreement ("Option Agreement") in such form as the
Board, in its discretion, may, from time to time, approve. Any Option
Agreement shall contain such terms and conditions as the Board may deem
necessary or appropriate and which are not inconsistent with the provisions of
the Plan.
6.02 Option Exercise Price. The option exercise price for Shares
to be issued under this Plan shall be determined by the Board in its sole
discretion, but in no event shall the option exercise price be less than the
Fair Market Value of the Shares in the case of an Incentive Stock Option (or
one hundred and ten percent (110%) of such Fair Market Value in the case of an
Incentive Stock Option granted to a Restricted Shareholder), or less than
eighty-five percent (85%) of the Fair Market Value in the case of a
Nonstatutory Stock Option.
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*Amended on February 6, 1998 to increase number from 900,000 to 1,100,000.
**Amended on December 1, 1997.
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6.03 Vesting and Exercise of Options. Subject to the limitations
set forth herein and/or in any applicable Option Agreement entered into
hereunder, Options granted under the Plan shall vest and be exercisable in
accordance with the rules set forth in this Section 6.03:
(a) General. Subject to the other provisions of this
Section 6.03, Options shall vest and become exercisable at such time and in
such installments as the Board shall provide in each individual Option
Agreement. Notwithstanding the foregoing, the Board may, in its sole
discretion, accelerate the time at which an Option or installment thereof may
be exercised. Unless otherwise provided in this Section 6.03, in Section
6.04(a) or in the Option Agreement pursuant to which an Option is granted, an
Option may be exercised when Accrued Installments accrue as provided in such
Option Agreement and at any time thereafter until, and including, the day
before the Option Termination Date.
(b) Termination of Options. All installments of an
Option shall expire and terminate on such date as the Board shall determine
("Option Termination Date"), which in no event shall be later than ten (10)
years from the date such Option was granted (five (5) years in the case of an
Incentive Stock Option granted to a Restricted Shareholder).
(c) Termination of Employment other than by Death,
Retirement or Total Disability. In the event that the employment of an
Optionee with a Participating Company is terminated for any reason (other than
death or Total Disability or retirement on or after reaching age 60), any
installments under an Option held by such Optionee that have not accrued as of
the employment termination date shall expire and become unexercisable as of the
employment termination date. All Accrued Installments as of the employment
termination date shall expire and become unexercisable as of the earlier of (i)
three (3) months following the employment termination date; or (ii) the
original Option Termination Date. For purposes of the Plan, an Optionee who is
an employee or officer of any Participating Company shall not be deemed to have
incurred a termination of his employment so long as such Optionee is an
employee or officer of any Participating Company.
(d) Leave of Absence. An approved leave of absence shall
not constitute a termination of employment under the Plan. An approved leave
of absence shall mean an absence approved pursuant to the policy of a
Participating Company for military leave, sick leave, or other bona fide leave,
not to exceed ninety (90) days or, if longer, as long as the employee's right
to re-employment is guaranteed by contract, statute or the policy of a
Participating Company. Notwithstanding the foregoing, in no event shall an
approved leave of absence operate to make an Option exercisable after the
original Option Termination Date.
(e) Death, Retirement or Total Disability of Optionee.
In the event that the employment of an Optionee with a Participating Company is
terminated by reason of death, Total Disability, or retirement on or after
reaching age sixty (60), any unexercised Accrued Installments of Options
granted hereunder to such Optionee shall expire and become unexercisable as of
the earlier of:
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(i) The applicable Option Termination Date; or
(ii) The first anniversary of the date of
termination of employment of such Optionee by reason of the Optionee's
death, Total Disability or retirement.
Any such Accrued Installments of a deceased Optionee may be
exercised prior to their expiration only by the person or persons to whom the
Optionee's Option rights pass by will or the laws of descent and distribution.
Any Option installments under such a deceased, disabled or retired Optionee's
Option that have not accrued as of the date of the employee's termination of
employment due to death, Total Disability or retirement shall expire and become
unexercisable as of the employment termination date.
(f) Termination of Affiliation of Participating Company.
Notwithstanding the foregoing provisions of this Section 6.03, (i) in the case
of an Optionee who is an employee or officer of a Participating Company other
than the Company, upon an Affiliation Termination (as defined herein) of such
Participating Company or an ORBCOMM Partnership, such Optionee shall be deemed
(for all purposes of the Plan) to have incurred a termination of his employment
for reasons other than death, retirement on or after age 60 or Total
Disability, with such termination to be deemed effective as of the effective
date of said Affiliation Termination and (ii) in the case of an Optionee who is
an employee or officer of a Participating Company that is an ORBCOMM
Partnership, upon an Affiliation Termination of such Participating Company, all
unaccrued installments of any Option held by such Optionee shall vest and
become Accrued Installments immediately prior to the effectiveness of such
Affiliation Termination and thereafter each such Option shall expire and become
unexercisable as of the earlier of (A) the applicable Option Termination Date,
(B) the first anniversary of the Optionee's death, Total Disability or
retirement on or after reaching age 60 or (C) three (3) months following the
date the Optionee's ceases to be employed by any Participating Company or any
ORBCOMM Partnership. As used herein, the term "Affiliation Termination" shall
mean, with respect to a Participating Company, the termination of such
Participating Company's status as an ORBCOMM Partnership or as a Parent or
Subsidiary Corporation of the Company or of Orbital Sciences Corporation.
6.04 Exercise of Options.
(a) Subject to Section 6.09(b), no Options may be
exercised by any Optionee until the Board has determined that the value of
Orbital Sciences Corporation's share of the Company is equal to at least one
hundred twenty-five percent (125%) of the amount of Orbital Sciences
Corporation's investment in the Company, or until September 1, 2001, whichever
is earlier. For purposes of this Section 6.04(a), (i) the "value of Orbital
Sciences Corporation's share of the Company" shall mean the sum of the
percentage of the Company's Common Stock owned by Orbital Sciences Corporation
multiplied by the then Fair Market Value of the Common Stock of the Company as
determined by the Board, plus the principal amount of net intercompany
indebtedness owed by the Company to Orbital Sciences Corporation; and (ii)
"Orbital Sciences Corporation's investment in the Company" shall mean Orbital
Sciences Corporation's investment in, and to the extent not reflected in the
computation of such investment, the cumulative total of all unreimbursed
expenses incurred, and expenditures made by Orbital Sciences Corporation on
behalf
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of, the Company, net of expenditures that are charged to Independent Research
and Development or directly reimbursed by customers. Any such determination of
the value of Orbital Sciences Corporation's share of the Company, or of Orbital
Sciences Corporation's investment in the Company, made in good faith by the
Board shall be conclusive and binding on the Company and all Optionees.
(b) Subject to the restrictions in Section 6.04(a), an
Option may be exercised in accordance with this Section 6.04 as to all or any
portion of the Shares covered by an Accrued Installment of the Option, from
time to time during the applicable option period, except that an Option shall
not be exercisable with respect to fractions of a Share. Options may be
exercised, in whole or in part, by giving written notice of exercise to the
Company, which notice shall specify the number of Shares to be purchased and
shall be accompanied by payment in full of the purchase price in accordance
with Section 6.05. An Option shall be deemed exercised when such written
notice of exercise has been received by the Company. No Shares shall be issued
until full payment has been made and the Optionee has satisfied such other
conditions as may be required by this Plan, as may be required by applicable
laws, rules or regulations, or as may be adopted or imposed by the Board.
Until the issuance of stock certificates, no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to Shares subject
to an Option notwithstanding the exercise of the Option. No adjustment will be
made for a dividend or other rights for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 6.09(a).
6.05 Payment of Option Exercise Price.
(a) Except as otherwise provided in Section 6.05(b), the
entire option exercise price shall be paid at the time the Option is exercised
by cashier's check or such other means as deemed acceptable by the Board.
(b) In the discretion of the Board (which, in the case of
an Incentive Stock Option, shall be exercised only at the time of grant), an
Optionee may elect to pay for all or some of the Optionee's Shares with Shares
the Optionee has held for at least six (6) months, subject to all restrictions
and limitations of applicable laws, rules and regulations and subject to the
satisfaction of any conditions the Board may impose, including, but not limited
to, the making of such representations and warranties and the providing of such
other assurances that the Board may require with respect to the Optionee's
title to the Shares used for payment of the exercise price. Such payment shall
be made by delivery of certificates representing Shares, duly endorsed or with
duly signed stock power attached, such Shares to be valued at the Fair Market
Value of such Shares on the day immediately preceding the day notice of
exercise is received by the Company.
6.06 Purchase by the Company of Shares Acquired Pursuant to
Exercise of Option.
(a) Valuation. Provided that there has not yet been a
public offering (within the meaning of the Securities Act of 1933, as amended,
and the rules and regulations thereunder) of the Company's Common Stock, all
Shares acquired pursuant to exercise of an Option that as of the applicable
Valuation Date (as hereinafter defined), have been held by an Optionee at least
six (6) months from the date of exercise of the Option (such Shares, in each
year, the "Payable Shares"),
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shall, at the election of the Optionee exercised in the manner set forth
herein, be purchased by the Company at a price per share equal to the Fair
Market Value of a share of Common Stock on September 1, 1995, September 1, 1996
and September 1, 1997 and in subsequent years on March 1 and September 1 of
each year (each such date is referred to as a "Valuation Date"); provided
further that on the Valuation Date in 1995 only, no more than fifty percent
(50%) of each Optionee's Payable Shares shall become subject to purchase by the
Company. Within thirty (30) days after each such Valuation Date after Options
are exercisable under Section 6.04(a), the Company shall cause the Fair Market
Value of the Shares to be determined in accordance with Section 6.06(b) and
shall notify each holder of Shares acquired pursuant to exercise of an Option
of such Fair Market Value. Within thirty (30) days after receipt of such
notice, each such holder of Shares may elect to have all or any portion of his
or her Payable Shares be purchased by the Company at a price per share equal to
such Fair Market Value by submitting to the Committee an irrevocable written
notice of such election. The rights of an Optionee under this Section 6.06 may
be exercised by the Optionee and any transferee specified in clause (ii) of
Section 6.08(a) (in which case all references herein to "Optionee" shall refer
to such transferee), but shall not be exercisable by any other holder of
Shares, whether or not such holder acquired such Shares in a transfer permitted
by Section 6.08(a).
(b) Method of Valuation. The value of a Share of Company
Common Stock on each Valuation Date shall be determined in good faith by the
Committee, and any such determination shall be conclusive and binding on the
Company and all Optionees and/or holders of Shares. In making any such
determination of Fair Market Value, the Committee may, but shall not be
required to, rely on a determination of Fair Market Value made by an
independent appraiser or other appropriate financial professional selected by
the Committee in its sole discretion and reasonably believed to be competent to
make such determination. No member of the Committee shall have any personal
liability to any Optionee and/or holder of Shares for any determination of Fair
Market Value under this Section 6.06, or any act or omission in connection
therewith, unless the Optionee and/or holder of Shares shall establish that
such determination, act or omission was not made in good faith.
(c) Closing of Purchase of Shares. The closing for any
purchase of Shares pursuant to this Section 6.06 shall occur on such date
within sixty (60) days of the giving by the Company of the notification
required by Section 6.06(a) as the Company shall specify by five (5) business
days' notice to each selling Optionee, at the offices of the Company at 11:00
a.m. local time, or at such other time and place as the parties to such sale
may mutually agree. At the closing, the Optionee shall deliver to the Company
a certificate or certificates representing the Shares to be purchased by the
Company, duly endorsed for transfer, free and clear of any lien or encumbrance,
in exchange for payment of the purchase price (i) by check, (ii) by delivery of
certificates representing shares of Common Stock of Orbital Sciences
Corporation having a Fair Market Value (determined in the manner provided in
Section 2.10) as of the business day preceding the closing equal to the
purchase price of the Shares, (iii) by delivery of a subordinated promissory
note of the Company in the principal amount of the purchase price of the
Shares, bearing interest at a rate equal to the then applicable federal
short-term rate (determined pursuant to Section 1274(d) of the I.R.C.),
providing for quarterly payments of interest and payment of the full principal
amount on the first anniversary of the date of issuance, and containing
provisions as approved by the Board in its sole
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discretion providing for the subordination of such notes to such indebtedness,
whether then existing or thereafter created, of the Company as is specified by
the Board, including, without limitation, indebtedness for money borrowed or
similar indebtedness, or (iv) any combination of the foregoing; provided,
however, that no more than fifty percent (50%) of the purchase price for Shares
may be paid by subordinated promissory note. Any payment in the form of shares
of Orbital Sciences Corporation Common Stock shall be subject to all applicable
federal and state securities laws restrictions and all other restrictions.
(d) Limitations on Repurchase Obligations.
Notwithstanding any other provision of this Section 6.06, the Company shall not
be obligated to purchase Payable Shares (i) to the extent such purchase is not
permitted under applicable law or under the terms of any of (A) the Company's
then-existing debt instruments or agreements governing such debt instruments,
(B) the then-existing terms of any class of preferred stock of the Company, or
(C) a then-existing stockholders agreement to which the Company is a party; or
(ii) in the event there has been a public offering (within the meaning of the
Securities Act of 1933 as amended, and the rules and regulations thereunder) of
the Company's Common Stock.
6.07 Options Not Transferable. Options granted under this Plan
may not be sold, pledged, hypothecated, assigned, encumbered, gifted or
otherwise transferred or alienated in any manner, whether voluntarily, by
operation of law, pursuant to judicial process or otherwise, other than by will
or the laws of descent and distribution, and may be exercised during the
lifetime of an Optionee only by such Optionee.
6.08 Restrictions on Issuance or Transfer of Shares.
(a) Until such time as the Company shall have consummated
an underwritten public offering of Shares involving an aggregate public
offering price of at least Five Million Dollars ($5,000,000), or the Shares are
registered under the Exchange Act, no Shares issuable upon exercise of an
Option shall be sold, assigned, encumbered, pledged, hypothecated, given away
or in any other manner disposed of or transferred, whether voluntarily, by
operation of law, pursuant to judicial process or otherwise, except (i) to the
Company pursuant to Section 6.06 hereof, or (ii) upon the death of the holder
thereof, Shares may be transferred and distributed by will or other instrument
taking effect at death or by the laws of descent and distribution to such
holder's estate, executors, administrators and personal representatives, and
then to such holder's heirs, legatees or distributees, provided that no such
transfer shall be effective until the recipient has delivered to the Company a
written acknowledgment in form and substance reasonably satisfactory to the
Company that such Shares are subject to the restrictions on disposition or
transfer set forth in this Section 6.08(a). Any attempted transfer of Shares
not in accordance with this Section 6.08(a) shall be null and void, and the
Company shall not in any way give effect to any such disposition or transfer.
(b) No Shares shall be issued or delivered upon exercise
of an Option unless and until there shall have been compliance with all
applicable requirements of the Securities Act of 1933, as amended, all
applicable listing or quotation requirements of any national securities
exchange or market on which Shares are then listed or quoted, and any other
requirement of law or
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of any regulatory body having jurisdiction over such issuance and delivery.
The inability of the Company to obtain any required permits, authorizations or
approvals necessary for the lawful issuance and sale of any Shares hereunder on
terms deemed reasonable by the Board shall relieve the Company, the Board and
any Committee of any liability in respect of the non-issuance or sale of such
Shares as to which such requisite permits, authorizations or approvals shall
not have been obtained.
(c) As a condition to the granting or exercise of any
Option, the Board may require the person receiving or exercising such Option to
make any representation and/or warranty to the Company as may be required under
any applicable law or regulation, including, but not limited to, a
representation that the Option and/or Shares are being acquired only for
investment and without any present intention to sell or distribute such Option
and/or Shares, if such a representation is required under the Securities Act of
1933, as amended, or any other applicable law, rule or regulation.
(d) The exercise of Options under the Plan is conditioned
on approval of the Plan by the vote or written consent of a majority of the
holders of outstanding Shares of the Company's Common Stock within twelve (12)
months of the adoption of the Plan. In the event such stockholder approval is
not obtained within such time period, any Options granted hereunder shall be
void.
6.09 Option Adjustments.
(a) If the outstanding Shares of Common Stock of the
Company are increased, decreased, changed into or exchanged for a different
number or kind of shares of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse
stock split or other similar transaction, the Board shall make a proportionate
adjustment in the number or kind of shares and the per-share option price
thereof, which may be issued in the aggregate and to individual Optionees upon
exercise of Options granted under the Plan; provided, however, that no such
adjustment need be made if, upon the advice of counsel, the Board determines
that such adjustment may result in the receipt of federally taxable income to
holders of Options granted hereunder or the holders of Common Stock or other
classes of the Company's securities.
(b) Upon the occurrence of a Terminating Transaction, as
of the effective date of such Terminating Transaction, the Plan and any then
outstanding Options (whether or not vested) shall terminate unless (i)
provision is made in writing in connection with such transaction for the
continuance of the Plan and for the assumption of such Options, or for the
substitution for such Options of new options covering the securities of any
successor or survivor corporation in the Terminating Transaction or an
affiliate thereof, with such adjustments as the Board deems appropriate with
respect to the number and kind of securities and the per-share exercise price
under such substituted options, in which event the Plan and such outstanding
Options shall continue or be replaced, as the case may be, in the manner and
under the terms so provided; or (ii) the Board otherwise shall provide in
writing for such adjustments as it deems appropriate in the terms and
conditions of the then outstanding Options (whether or not vested), including,
without limitation, (A) accelerating the vesting of outstanding Options; and/or
(B) providing for the cancellation of
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Options and their automatic conversion into the right to receive the securities
or other properties which a holder of Shares underlying such Options would have
been entitled to receive upon the consummation of such Terminating Transaction
had such Shares been issued and outstanding (net of the appropriate option
exercise prices). If, pursuant to the foregoing provisions of this paragraph
(b), the Plan and the Options shall terminate by reason of occurrence of a
Terminating Transaction without provision for any of the action(s) described in
clause (i) and/or (ii) hereof, then any Optionee holding outstanding Options
shall have the right, at such time immediately prior to the consummation of the
Terminating Transaction as the Board shall designate, to exercise their Options
to the full extent not theretofore exercised, including any installments which
have not yet become Accrued Installments.
(c) Except to the extent required in order to retain the
qualification of an Option as an Incentive Stock Option under I.R.C. Section
422, to the maximum extent possible, any adjustments authorized under this
Section 6.09 with respect to any outstanding Options shall be made by means of
appropriate adjustments to the number of Shares (or other securities) and the
option exercise price therefor under the unexercised portions of such
outstanding Options, but without changing the aggregate exercise price
applicable to said unexercised portions. In all cases, the nature and extent
of adjustments under this Section 6.09 shall be determined by the Board in its
sole discretion, and any such determination as to what adjustments shall be
made, and the extent thereof, shall be final and binding. No fractional shares
of stock shall be issued under the Plan pursuant to any such adjustment.
6.10 Taxes. The Board shall make such provisions and take such
steps as it deems necessary or appropriate for the withholding of any federal,
state, local and other tax required by law to be withheld with respect to the
grant or exercise of an Option under the Plan, or with respect to the
disposition of Shares acquired pursuant to the exercise of an Option pursuant
to the Plan, including, but without limitation, the deduction of the amount of
any such withholding tax from any compensation or other amounts payable to an
Optionee by any member of the Participating Companies, or requiring an Optionee
(or the Optionee's beneficiary or legal representative), as a condition of
granting or exercising an Option, to pay to any member of the Participating
Companies any amount required to be withheld, or to execute such other
documents as the Board deems necessary or desirable in connection with the
satisfaction of any applicable withholding obligation. Prior to June 30, 1998*,
the Board may permit, and after June 30, 1998*, the Board shall permit, either
at the time of the grant of an Option or the time of exercise, the Optionee
and/or holder of Shares to elect, at such time and in such manner as the Board
may prescribe, to satisfy such withholding obligation by (i) delivering to the
Company Shares owned by such individual having a Fair Market Value equal to
such withholding obligation, or (ii) requesting that the Company withhold from
the Shares to be delivered upon the exercise a number of Shares having a Fair
Market Value equal to such withholding obligation; provided that after June 30,
1998*, in the first year that any Optionee and/or holder of Shares elects to
satisfy his or her tax withholding obligation in a manner specified in this
Section 6.10(i) or (ii), such Optionee and/or holder of Shares shall not be
entitled to exercise more than 50% of his or her total vested Options in such
manner; and provided further that the Board shall amend this Plan to delay the
foregoing June 30, 1998* date in the event there are not a total of at least
eighteen (18) operational ORBCOMM satellites in orbit by June 30, 1998*.
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*Amended on December 1, 1997.
6.11 Legends on Options and Stock Certificates. Each Option
Agreement and each certificate representing Shares acquired upon exercise of an
Option shall be endorsed with all legends, if any, required by applicable
federal and state securities laws to be placed on the Option Agreement and/or
the certificate, as well as legends setting forth the restrictions contained in
Section 6.08(a) hereof. The determination of which legends, if any, shall be
placed upon Stock Option Agreements and/or said Shares shall be made by the
Board in its sole discretion, and such decision shall be final and binding.
6.12 Employment Rights. Neither the adoption of the Plan nor the
grant of Options will confer upon any person any right to continued employment
with the Company or any subsidiary or affect in any way the right of the
Company or subsidiary to terminate an employment relationship at any time.
Except as specifically provided by the Board in any particular case, the loss
of existing or potential profit in connection with Options granted under the
Plan will not constitute an element of damages in the event of termination of
an employment relationship.
6.13 Non-Competition Provisions. In consideration for the grant
of Options, the Committee may require that Optionees enter into a
non-competition agreement with the Company.
ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
7.01 Board Authority. The Board may amend, alter and/or
terminate the Plan at any time; provided, however, that no change shall be
effective unless approved by the stockholders of the Company if such change
would cause the Option Plan to fail to meet the qualification requirements for
Incentive Stock Option Plans as set forth in the Internal Revenue Code or, if
the Company then has a class of equity security registered under the Exchange
Act, to comply with Rule 16b-3 of the Exchange Act or any successor rule under
such Act as in effect on the date of such amendment.
7.02 Limitation on Board Authority. The Board may amend the
terms of any Option previously granted, prospectively or retroactively, and may
amend the Plan in accordance with the provisions of Section 7.01; provided,
however, that unless required by applicable law, rule or regulation, no
amendment of the Plan or of any Option Agreement shall affect, in a material
and adverse manner, Options granted prior to the date of any such amendment
without the consent of any Optionee holding any such affected Options.
7.03 Substitution of Options. In the Board's discretion, the
Board may, with an Optionee's consent, substitute Nonstatutory Stock Options
for outstanding Incentive Stock Options, and any such substitution shall not
constitute a new Option grant for the purposes of the Plan, and shall not
require a revaluation of the Option exercise price for the substituted Option.
Any such substitution may be implemented by an amendment to the applicable
Option Agreement or in such other manner as the Board in its discretion may
determine.
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ARTICLE VIII
GENERAL PROVISIONS
8.01 Availability of the Plan. A copy of the Plan shall be
delivered to the Secretary of the Company and shall be shown by the Secretary
to any Eligible Person making reasonable inquiry concerning the Plan.
8.02 Notice. Any notice or other communication required or
permitted to be given pursuant to the Plan or under any Option Agreement must
be in writing and may be given by registered or certified mail and, if given by
registered or certified mail, shall be determined to have been given and
received when a registered or certified letter containing such notice, properly
addressed with postage prepaid, is deposited in the United States mails and, if
given otherwise than by registered or certified mail, shall be deemed to have
been given when delivered to and received by the party to whom addressed.
Notice shall be given to Eligible Persons at their most recent addresses shown
in the Company's records. Notice to the Company shall be addressed to the
Company at the address of the Company's principal executive offices, to the
attention of the Secretary of the Company.
8.03 Titles and Headings. Titles and headings of sections of the
Plan are for convenience of reference only and shall not affect the
construction of any provision of the Plan.
8.04 Governing Law. The Plan shall be governed by, interpreted
under and construed and enforced in accordance with the internal laws, and not
the laws pertaining to conflicts or choice of laws, of the State of Delaware,
applicable to agreements made and to be performed wholly within the State of
Delaware.
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