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Exhibit 10.25
FERROFLUIDICS CORPORATION
AMENDED AND RESTATED
1995 NON-QUALIFIED STOCK OPTION PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
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The name of the plan is the Ferrofluidics Corporation Amended and Restated
1995 Non-Qualified Stock Option Plan (the "Plan"). The purpose of the Plan is to
encourage and enable employees and other key persons of Ferrofluidics
Corporation (the "Company") and its Subsidiaries upon whose judgment, initiative
and efforts the Company largely depends for the successful conduct of its
business to acquire a proprietary interest in the Company. It is anticipated
that providing such persons with a direct stake in the Company's welfare will
assure a closer identification of their interests with those of the Company,
thereby stimulating their efforts on the Company's behalf and strengthening
their desire to remain with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Administrator" means the Board or the Committee.
"Board" means the Board of Directors of the Company.
"Cause" as such term relates to the termination of any person means the
occurrence of one or more of the following: (i) such person is convicted of,
pleads guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement which has an immediate and materially adverse
effect on the Company or any Subsidiary, as determined by the Board in good
faith in its sole discretion, (ii) such person engages in a fraudulent act to
the material damage or prejudice of the Company or any Subsidiary or in conduct
or activities materially damaging to the property, business or reputation of the
Company or any Subsidiary, all as determined by the Board in good faith in its
sole discretion, (iii) any material act or omission by such person involving
malfeasance or negligence in the performance of such person's duties to the
Company or any Subsidiary to the material detriment of the Company or any
Subsidiary, as determined by the Board in good faith in its sole discretion,
which has not been corrected by such person within 30 days after written notice
from the Company of any such act or omission, (iv) failure by such person to
comply in any material respect with the terms of his employment agreement, if
any, or any written policies or directives of the Board as determined by the
Board in good faith in its sole discretion, which has not been corrected by such
person within 30 days after written notice from the Company of such failure, or
(v) material breach by such person of his noncompetition agreement with the
Company, if any, as determined by the Board in good faith in its sole
discretion.
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"Change of Control" is defined in Section 10.
"Committee" means a committee of two or more Non-Employee Directors
appointed by the Board to administer the Plan.
"Disability" means an individual's inability to perform his normal required
services for the Company and its Subsidiaries for a period of six consecutive
months by reason of the individual's mental or physical disability, as
determined by the Administrator in good faith in its sole discretion.
"Effective Date" means the date on which the Plan is approved by the Board
as set forth herein.
"Fair Market Value" on any given date means the last reported sale price at
which Stock is traded on such date or, if no Stock is traded on such date, the
next preceding date on which Stock was traded, as reflected on the principal
stock exchange or, if applicable, any other national stock exchange on which the
Stock is traded or admitted to trading.
"Non-Employee Director" means a member of the Board who is a "Non-Employee
Director" within the meaning of Rule 16b-3(b)(3)(i) promulgated under the Act,
or any successor definition under said rule.
"Option" means any option to purchase shares of Stock granted pursuant to
Section 5.
"Retirement" means an individual's termination of employment (or other
business relationship) with the Company and its Subsidiaries after attainment of
age 65 or attainment of age 55 and completion of 10 years of service.
"Stock" means the Common Stock, par value $.004 per share, of the Company,
subject to adjustments pursuant to Section 3.
"Subsidiary" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities, beginning with the
Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
SECTION 2. ADMINISTRATION OF PLAN; AUTHORITY TO SELECT PARTICIPANTS AND
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DETERMINE AWARDS
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(a) POWERS OF ADMINISTRATOR. The Administrator shall have the power and
authority to grant Options consistent with the terms of the Plan, including the
power and authority:
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(i) to select the employees and key persons of the Company and its
Subsidiaries to whom Options may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if any,
of Options granted to any one or more participants;
(iii) to determine the number of shares of Stock to be covered by any
Option;
(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the
Plan, of any Option, which terms and conditions may differ among individual
Options and participants, and to approve the form of written instruments
evidencing the Options;
(v) to accelerate at any time the exercisability or vesting of all or
any portion of any Option;
(vi) to extend at any time the period in which Options may be
exercised; and
(vii) at any time to adopt, alter and repeal such rules, guidelines
and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Option (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection
with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on
all persons, including the Company and Plan participants.
(b) DELEGATION OF AUTHORITY TO GRANT OPTIONS. The Administrator, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Administrator's authority and duties with respect to Options,
including the grant thereof, to individuals who are not subject to the reporting
and other provisions of Section 16 of the Act. The Administrator may revoke or
amend the terms of a delegation at any time but such action shall not invalidate
any prior actions of the Administrator's delegate or delegates that were
consistent with the terms of the Plan.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
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(a) STOCK ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 100,000 shares. For purposes of
this limitation, the shares of Stock underlying any Options which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. The
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shares available for issuance under the Plan may be authorized but unissued
shares of Stock or shares of Stock reacquired by the Company.
(b) RECAPITALIZATIONS. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, the outstanding shares of
Stock are increased or decreased or are exchanged for a different number or kind
of shares or other securities of the Company, or additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Stock or other securities, the
Administrator shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, (ii) the number
and kind of shares or other securities subject to any then outstanding Options
under the Plan, and (iii) the price for each share subject to any then
outstanding Options under the Plan, without changing the aggregate exercise
price (i.e., the exercise price multiplied by the number of Options) as to which
such Options remain exercisable. The adjustment by the Administrator shall be
final, binding and conclusive. No fractional shares of Stock shall be issued
under the Plan resulting from any such adjustment, but the Administrator in its
discretion may make a cash payment in lieu of fractional shares.
(c) MERGERS. Upon consummation of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a liquidation of the Company,
the Board, or the board of directors of any corporation assuming the obligations
of the Company, may, in its discretion, take any one or more of the following
actions, as to outstanding Options: (i) provide that such Options shall be
assumed or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), (ii) upon written notice to
the optionees, provide that all unexercised Options will terminate immediately
prior to the consummation of such transaction unless exercised by the optionee
within a specified period following the date of such notice, and/or (iii) in the
event of a business combination under the terms of which holders of the Stock of
the Company will receive upon consummation thereof a cash payment for each share
surrendered in the business combination, make or provide for a cash payment to
the optionees equal to the difference between (A) the value (as determined by
the Administrator) of the consideration payable per share of Stock pursuant to
the business combination (the "Merger Price") times the number of shares of
Stock subject to such outstanding Options (to the extent then exercisable at
prices not in excess of the Merger Price) and (B) the aggregate exercise price
of all such outstanding Options in exchange for the termination of such Options.
(d) SUBSTITUTE OPTIONS. The Administrator may grant Options under the Plan
in substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The
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Administrator may direct that the substitute Options be granted on such terms
and conditions as the Administrator considers appropriate in the circumstances.
SECTION 4. ELIGIBILITY
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Participants in the Plan will be such full or part-time employees and key
persons of the Company and its Subsidiaries who are responsible for or
contribute to the management, growth or profitability of the Company and its
Subsidiaries as are selected from time to time by the Administrator, in its sole
discretion.
SECTION 5. OPTIONS
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Any Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.
Options granted under the Plan may not be options which are designated or
qualified as "incentive stock options" as defined under Section 422 of the
Internal Revenue Code of 1986, as amended.
(a) OPTIONS GRANTED TO EMPLOYEES AND KEY PERSONS. The Administrator in its
discretion may grant Options to eligible employees and key persons of the
Company or any Subsidiary. Options granted to employees and key persons pursuant
to this Section 5(a) shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the
terms of the Plan, as the Administrator shall deem desirable:
(i) EXERCISE PRICE. The exercise price per share for the Stock covered
by an Option shall be determined by the Administrator.
(ii) OPTION TERM. The term of each Option shall be fixed by the
Administrator.
(iii) EXERCISABILITY; RIGHTS OF A STOCKHOLDER. Options shall become
vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Administrator at or after the
grant date. The Administrator may at any time accelerate the exercisability
of all or any portion of any Option. An optionee shall have the rights of a
stockholder only as to shares acquired upon the exercise of an Option and
not as to unexercised Options.
(iv) METHOD OF EXERCISE. Options may be exercised in whole or in part,
by giving written notice of exercise to the Company, specifying the number
of shares to be purchased. Payment of the purchase price may be made by one
or more of the following methods:
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(A) In cash, by certified or bank check or other instrument
acceptable to the Administrator;
(B) In the form of shares of Stock that are not then subject to
restrictions under any Company plan and that have been held by the
optionee for at least six months, if permitted by the Administrator in
its discretion. Such surrendered shares shall be valued at Fair Market
Value on the exercise date; or
(C) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the purchase price; provided that in the event
the optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter
into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment
procedure.
Payment instruments will be received subject to collection. The delivery of
certificates representing the shares of Stock to be purchased pursuant to
the exercise of an Option will be contingent upon receipt from the optionee
(or a purchaser acting in his stead in accordance with the provisions of
the Option) by the Company of the full purchase price for such shares and
the fulfillment of any other requirements contained in the Option or
applicable provisions of laws.
(v) TERMINATION BY REASON OF DEATH. Any Option held by an optionee
whose employment by (or other business relationship with) the Company and
its Subsidiaries is terminated by reason of death shall become fully
exercisable and may thereafter be exercised by the legal representative or
legatee of the optionee, for a period of 12 months (or such longer period
as the Administrator shall specify at any time) from the date of death, or
until the expiration of the stated term of the Option, if earlier.
(vi) Termination by Reason of Disability.
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(A) Any Option held by an optionee whose employment by (or other
business relationship with) the Company and its Subsidiaries is
terminated by reason of Disability shall become fully exercisable and
may thereafter be exercised, for a period of 12 months (or such longer
period as the Administrator shall specify at any time) from the date
of such termination of employment (or business relationship), or until
the expiration of the stated term of the Option, if earlier.
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(B) The Administrator shall have sole authority and discretion to
determine whether a participant's employment (or business
relationship) has been terminated by reason of Disability.
(C) Except as otherwise provided by the Administrator at any
time, the death of an optionee during the period provided in this
Section 5(a)(vi) for the exercise of an Option shall extend such
period for 12 months from the date of death, subject to termination on
the expiration of the stated term of the Option, if earlier.
(vii) Termination by Reason of Retirement.
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(A) Any Option held by an optionee whose employment by (or
business relationship with) the Company and its Subsidiaries is
terminated by reason of Retirement may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for a
period of 12 months (or such other period as the Administrator shall
specify at any time) from the date of such termination of employment
(or business relationship), or until the expiration of the stated term
of the Option, if earlier.
(B) Except as otherwise provided by the Administrator at any
time, the death of an optionee during a period provided in this
Section 5(a)(vii) for the exercise of an Option shall extend such
period for 12 months from the date of death, subject to termination on
the expiration of the stated term of the Option, if earlier.
(viii) TERMINATION FOR CAUSE. If any optionee's employment by (or
business relationship with) the Company and its Subsidiaries is terminated
for Cause, any Option held by such optionee, including any Option that is
immediately exercisable at the time of such termination, shall immediately
terminate and be of no further force and effect; provided, however, that
the Administrator may, in its sole discretion, provide that such Option can
be exercised for a period of up to 30 days from the date of termination of
employment (or business relationship) or until the expiration of the stated
term of the Option, if earlier.
(ix) OTHER TERMINATION. Unless otherwise determined by the
Administrator, if an optionee's employment by (or business relationship
with) the Company and its Subsidiaries terminates for any reason other than
death, Disability, Retirement, or for Cause, any Option held by such
optionee may thereafter be exercised, to the extent it was exercisable on
the date of termination of employment (or business relationship), for three
months (or such longer period as the Administrator shall specify at any
time) from the date of termination of employment (or business relationship)
or until the expiration of the stated term of the Option, if earlier.
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(b) NON-TRANSFERABILITY OF OPTIONS. No Option shall be transferable by the
optionee otherwise than by will or by the laws of descent and distribution and
all Options shall be exercisable, during the optionee's lifetime, only by the
optionee. Notwithstanding the foregoing, the Administrator may provide in an
option agreement that the optionee may transfer, without consideration for the
transfer, such Option to members of his immediate family, to trusts for the
benefit of such family members, to partnerships in which such family members are
the only partners, or to charitable organizations, provided that the transferee
agrees in writing with the Company to be bound by all of the terms and
conditions of the Plan and the applicable option agreement.
(c) FORM OF SETTLEMENT. Shares of Stock issued upon exercise of an Option
shall be free of all restrictions under the Plan, except as otherwise provided
in the Plan.
SECTION 6. TAX WITHHOLDING
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(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date
as of which the value of any Stock first becomes includable in the gross income
of the participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such income. The Company and its Subsidiaries shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the participant.
(b) PAYMENT IN STOCK. Subject to approval by the Administrator, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Option a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.
SECTION 7. TRANSFER, LEAVE OF ABSENCE, ETC
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For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.
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SECTION 8. AMENDMENTS AND TERMINATION
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The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Option (or
provide substitute Options at the same or reduced exercise or purchase price or
with no exercise or purchase price in a manner not inconsistent with the terms
of the Plan), but such price, if any, must satisfy the requirements which would
apply to the substitute or amended Option if it were then initially granted
under this Plan) for the purpose of satisfying changes in law or for any other
lawful purpose, but no such action shall adversely affect rights under any
outstanding Option without the holder's consent.
SECTION 9. STATUS OF PLAN
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With respect to the portion of any Option which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Option or Options. In its sole discretion, the
Administrator may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
Options hereunder, provided that the existence of such trusts or other
arrangements is consistent with the foregoing sentence.
SECTION 10. CHANGE OF CONTROL PROVISIONS
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Upon the occurrence of a Change of Control as defined in this Section 10:
(a) Each outstanding Option shall automatically become fully exercisable
notwithstanding any provision to the contrary herein.
(b) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "person," as such term is used in Sections 13(d) and 14(d) of
the Act (other than the Company, any of its Subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Company or any of its Subsidiaries), together
with all "affiliates" and "associates" (as such terms are defined in Rule
12b-2 promulgated under the Act) of such person, shall become the
"beneficial owner" (as such term is defined in Rule 13d-3 promulgated under
the Act), directly or indirectly, of securities of the Company representing
15% or more of either (A) the combined voting power of the Company's then
outstanding securities having the right to vote in an election of the Board
("Voting Securities") or (B) the then outstanding shares of Stock of the
Company (in either such case other than as a result of an acquisition of
securities directly from the Company); or
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(ii) persons who, as of the Effective Date, constitute the Board (the
"Incumbent Directors") cease for any reason, including, without limitation,
as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board, provided that
any person becoming a director of the Company subsequent to the Effective
Date whose election or nomination for election was approved by a vote of at
least a majority of the Incumbent Directors shall, for purposes of this
Plan, be considered an Incumbent Director; or
(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
shareholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 promulgated under
the Act), directly or indirectly, shares representing in the aggregate 80%
or more of the voting shares of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent corporation, if
any), (B) any sale, lease, exchange or other transfer (in one transaction
or a series of transactions contemplated or arranged by any party as a
single plan) of all or substantially all of the assets of the Company or
(C) any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of Stock beneficially owned by any person to 15%
or more of the shares of Stock then outstanding or (y) the proportionate voting
power represented by the Voting Securities beneficially owned by any person to
15% or more of the combined voting power of all then outstanding Voting
Securities; PROVIDED, HOWEVER, that if any person referred to in clause (x) or
(y) of this sentence shall thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities (other than pursuant to a
stock split, stock dividend, or similar transaction), then a "Change of Control"
shall be deemed to have occurred for purposes of the foregoing clause (i).
SECTION 11. GENERAL PROVISIONS
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(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Administrator
may require each person acquiring Stock pursuant to an Option to represent to
and agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Option until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Administrator may require the placing of
such stop-orders and restrictive legends on certificates for Stock and Options
as it deems appropriate.
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(b) DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Options do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
SECTION 12. EFFECTIVE DATE OF PLAN
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This Plan shall become effective upon approval by the Board.
SECTION 13. GOVERNING LAW
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This Plan shall be governed by Massachusetts law except to the extent such
law is preempted by federal law.
DATE APPROVED BY BOARD OF DIRECTORS: June 13, 1995
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