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EXHIBIT 4.5
DIRECTOR INCENTIVE STOCK OPTION BONUS PROGRAM
SOURCE SERVICES CORPORATION
MARCH 3, 1994
1. PURPOSE.
(a) This Director Incentive Stock Option Program (the "Program") for
SOURCE SERVICES CORPORATION ("Company") is intended to advance the interests of
the Company by providing outside Directors with additional incentive for them
to promote the success of the Company, to increase their proprietary interest
in the success of the Company, and to encourage them to remain as Directors of
the Company. The above aims will be effectuated through the granting of Stock
Options ("Options") as defined below.
(b) The Options issued under the Program shall be Nonstatutory Stock
Options granted pursuant to Section 6 hereof. All Options shall be separately
designated Nonstatutory Stock Options at the time of grant, and in such form as
issued pursuant to Section 6, and a separate certificate or certificates will
be issued for shares purchased on exercise of each option.
2. DEFINITIONS.
(a) "BOARD" means the Board of Directors of the Company.
(b) "CODE" means the Internal Revenue Code of 1986, as amended.
(c) "COMPANY" means Source Services Corporation, a Delaware
corporation.
(d) "CONTINUOUS STATUS AS A DIRECTOR" means the director relationship
is not interrupted or terminated. The Board, in its sole discretion, may
determine whether Continuous Status as a Director, shall be considered
interrupted in the case of: (i) any leave of absence approved by the Board,
including sick leave, military leave, or any other personal leave; provided,
however, that for purposes of options any such leave may not exceed ninety (90)
days, unless reestablishment of a Director relationship upon the expiration of
such leave is guaranteed by contract (including certain Company policies) or
statute; or (ii) transfers between the Company and any successor.
(e) "DIRECTOR" means a member of the Board.
(f) "PROGRAM" means this Director Incentive Stock Option Bonus
Program.
(g) "DISABILITY" means permanent and total disability as defined in
Section 22(e)(3) of the Code.
(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(i) "FAIR MARKET VALUE" means $4.85 per share of the common stock of
the Company.
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(j) "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(k) "OPTION" means a Nonstatutory Stock Option granted pursuant to
the Program entitling the Optionee to acquire shares of Stock issued by the
Company pursuant to the valid exercise of the Nonstatutory Stock Option.
(l) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the
Program.
(m) "OPTIONEE" means an Outside Director who holds an outstanding
Option.
(n) "OUTSIDE DIRECTOR/S" means Adrian Alter, Paul Bass, Jr., Wayne D.
Emigh, John Sifonis and Robert P. Stevens.
(o) "STOCK" means authorized but unissued common stock of the
Company.
3. ADMINISTRATION.
(a) The Program shall be administered by the Board.
(b) The Board shall have the power, subject to and within the
limitations of the express provisions of the Program to construe and interpret
the Program and Options granted under it, and to establish, amend and revoke
rules and regulations for its administration. The Board, in the exercise of
this power, may correct any defect, omission or inconsistency in the Program or
in any Option Agreement, in a manner and to the extent it shall deem necessary
or expedient to make the Program fully effective.
4. SHARES SUBJECT TO THE PROGRAM.
(a) Subject to the provisions of Section 10 relating to adjustments
upon changes in stock, the Stock that may be issued pursuant to this Program
shall not exceed in the aggregate Twenty-five Thousand (25,000) shares of the
Company's common stock. If any Option shall for any reason expire or otherwise
terminate without having been exercised in full, such stock shall not be
available to the Program for distribution in any manner to any other Outside
Director but rather shall revert to the Company.
(b) The Stock subject to the Program may be unissued shares or
reacquired shares, bought on the market or otherwise held or acquired.
5. ELIGIBILITY.
Each Outside Director and only such Outside Directors shall be granted
on the Grant Date as defined below Options in the amount of Five Thousand
(5,000) shares of Stock.
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6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions consistent with this Program as the Board shall deem appropriate.
The provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:
(a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the Grant Date.
(b) GRANT DATE. The date the Option shall be granted to each Outside
Director shall be March 3, 1994 ("Grant Date").
(c) PRICE. The exercise price of each option shall be Fair Market
Value.
(d) CONSIDERATION. The purchase price of Stock acquired pursuant to
an option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the option is exercised, or (ii) if
there has been an underwritten public offering of the Stock before the time of
exercise, by the delivery of cash by a broker-dealer to whom the Optionee has
submitted a notice of exercise (in accordance with Part 220, Chapter II, Title
12 of the Code of Federal Regulation, so-called "cashless" exercise, or (iii)
by delivery to the Company of other common stock of the Company.
(e) TRANSFERABILITY. An Option shall not be transferable except by
will or by the laws of descent and distribution, and shall be exercisable
during the lifetime of the person to whom the Option is granted only by such
person.
(f) VESTING. In the event the Optionee maintains a Continuous Status
as a Director from March 3, 1994 through December 31, 1994, then Fifty percent
(50%) of the options granted to the Optionee shall vest on January 1, 1995. In
the event the Optionee maintains a Continuous Status as a Director from
December 31, 1994 through December 31, 1995, then the remaining Fifty percent
(50%) of the Options granted to the Optionee shall vest on January 1, 1996.
The Options may be exercised with respect to some or all of the shares which
have become vested. The provisions of this subsection 6(f) are subject to any
option provisions governing the minimum number of shares as to which an Option
may be exercised.
(g) TERMINATION OF DIRECTOR STATUS. In the event an Optionee's
Continuous Status as an Director terminates (other than upon the Optionee's
death or Disability), the Optionee may exercise his or her Option, but only
within such period of time (in no event to exceed three (3) months from the
date of termination) as is determined by the Board, and only to the extent that
the Optionee was entitled to exercise it at the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the
Option Agreement). If, at the date of termination, the Optionee is not
entitled to exercise his or her entire option, the shares covered by the
unexercisable portion of the option shall revert to the Company. If, after
termination, the Optionee does not exercise his or her Option within the time
specified in the Option Agreement, the option shall terminate, and the shares
covered by such Option shall revert to the Company.
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(h) DISABILITY OF OPTIONEE. In the event an Optionee's Continuous
Status as an Director terminates as a result of the Optionee's Disability, the
Optionee may exercise his or her Option, but only within twelve (12) months
from the date of such termination (or such shorter period specified in the
Option Agreement), and only to the extent that the Optionee was entitled to
exercise it at the date of such termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement).
If, at the date of termination, the Optionee is not entitled to exercise his or
her entire option, the shares covered by the unexercisable portion of the
option shall revert to the Company. If, after termination, the Optionee does
not exercise his or her Option within the time specified herein, the Option
shall terminate, and the shares covered by such Option shall revert to the
Company.
(i) DEATH OF OPTIONEE. In the event of the death of an Optionee, the
Option may be exercised, at any time within eighteen (18) months following the
date of death (or such shorter period specified in the Option Agreement) (but
in no event later than the expiration of the term of such option as set forth
in the Option Agreement), by the Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent that Optionee was entitled to exercise the Option at the date of death.
If, at the time of death, the Optionee was not entitled to exercise his or her
entire Option, the shares covered by the unexercisable portion of the Option
shall revert to the Company. If, after death, the Optionee's estate or the
person who acquires the right to exercise the Option by bequest or inheritance
does not exercise the Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to the Company.
(j) WITHHOLDING. To the extent provided by the terms of an Option
Agreement, the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following
means or by a combination of such means: (1) tendering a cash payment; (2)
authorizing the Company to withhold shares from the shares of common stock
otherwise issuable to the participant as a result of the exercise of the
Option; or (3) delivering to the Company owned and unencumbered shares of the
common stock of the Company.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the Options, the Company shall keep available
at all times the number of shares of Stock required to satisfy such Options up
to the number of shares of stock authorized under the Program.
(b) To the extent required the Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Program such
authority as may be required to issue the shares of stock under the Options;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Program, any Option or any stock
issued or issuable pursuant to any such Option. If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Program, the Company shall be relieved
from any liability for failure to issue and sell stock under such Options
unless and until such authority is obtained.
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8. USE OF PROCEEDS FROM OPTIONS.
Proceeds from the exercise of the Options shall constitute general funds
of the Company.
9. MISCELLANEOUS.
(a) Neither an Optionee nor any person to whom an Option is
transferred under subsection 6(e) herein shall be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any shares subject to
such Option unless and until such person has satisfied all requirements for
exercise of the Option pursuant to its terms.
(b) Nothing in this Program or any instrument executed or Option
granted pursuant thereto shall confer upon any Director or other holder of an
Option any right to continue as a Director of the Company.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the Stock subject to the Program, or
subject to any Option (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or otherwise), the Program and outstanding Options will
be appropriately adjusted in the class(es) and maximum number of shares subject
to the Program and the class(es) and number of shares and price per share of
stock subject to outstanding Options.
(b) In the event of: (1) a dissolution or liquidation or sale of all
or substantially all of the assets of a Company; (2) a merger or consolidation
in which the Company is not the surviving corporation; (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise; or (4) a proxy fight resulting in a change in Board
membership, then at the sole discretion of the Board and to the extent
permitted by applicable law: (i) any surviving corporation shall assume any
Options outstanding under the Program or shall substitute similar options for
those outstanding under the Program, (ii) such Options shall continue in full
force and effect, or (iii) the time during which such Options become vested or
may be exercised shall be accelerated and any outstanding unexercised rights
under any Options terminated if not exercised prior to such event.
(c) In the event of any underwritten public offering of stock,
including an initial public offering of stock, made by the Company pursuant to
an effective registration statement filed under the Securities Act, the
Optionee shall not offer, sell, contract to sell, pledge, hypothecate, grant
any option to purchase or make any short sale of, or otherwise dispose of any
shares of stock of the Company or any rights to acquire stock of the Company
for such period of time from and after the effective date of such registration
statement as may be established by the underwriter for such public offering;
provided, however, that such period of time shall not exceed one hundred eighty
(180) days from the effective date of the registration statement to be filed in
connection with such public offering. The foregoing limitation shall not apply
to shares
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registered in the initial public offering under the Securities Act and shall
cease to apply once a registration statement is effective covering shares
issuable pursuant to options granted pursuant to the Program, whether or not
such registration statement applies to any of the shares issued or issuable
pursuant to the Option.
11. AMENDMENT OF THE PROGRAM.
(a) The Board at any time, and from time to time, may amend the
Program. However, except as provided in Section 10 relating to adjustments
upon changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:
(i) Increase the aggregate number of shares reserved for
Options or the number shares available to any outside Director under the
Program;
(ii) Modify the requirements as to eligibility for
participation in the Program; or
(iii) Modify the Program Plan in any other way if such
modification requires stockholder approval in order for the Program to comply
with the requirements of Rule 16b-3 promulgated under the Exchange Act.
(b) It is expressly contemplated that subject to this Section 11, the
Board may amend the Program in any respect the Board deems necessary or
advisable to provide Optionees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder or to bring the Program and/or options granted under it into
compliance therewith.
(c) Rights and obligation under any Options granted before amendment
of the Program shall not be altered or impaired by any amendment of the Program
unless (i) the Company requests the consent of the person to whom the Option
was granted and (ii) such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PROGRAM.
(a) The Board may suspend or terminate the Program at any time.
Unless sooner terminated, the Program shall terminate on March 3, 2004. No
options may be granted under the Program while the Program is suspended or
after it is terminated.
(b) Rights and obligations under any Option granted while the Program
is in effect shall not be altered or impaired by suspension or termination of
the Program, except with the consent of the Optionee.
13. EFFECTIVE DATE OF PROGRAM.
The Program shall become effective as of March 3, 1994.
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