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Exhibit 10.2
NETWORK PLUS CORP.
1998 DIRECTOR STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1998 Director Stock Option Plan (the "Plan") of
Network Plus Corp. (the "Company") is to encourage ownership in the Company by
outside directors of the Company whose continued services are considered
essential to the Company's future progress and to provide them with a further
incentive to remain as directors of the Company.
2. ADMINISTRATION
The Board of Directors (the "Board") shall supervise and administer the
Plan. Grants of stock options under the Plan and the amount and nature of the
awards to be granted shall be automatic in accordance with Section 5. However,
all questions of interpretation of the Plan or of any options issued under it
shall be determined by the Board and such determination shall be final and
binding upon all persons having an interest in the Plan.
3. PARTICIPATION IN THE PLAN
Directors of the Company who are not employees of the Company or any
subsidiary of the Company shall be eligible to participate in the Plan.
4. STOCK SUBJECT TO THE PLAN
(a) The maximum number of shares which may be issued under the
Plan shall be 100,000 shares of the Company's Common Stock, $.01 par value per
share ("Common Stock"), subject to adjustment as provided in Section 9 of the
Plan.
(b) If any outstanding option under the Plan for any reason
expires or is terminated without having been exercised in full, the shares
allocable to the unexercised portion of such option shall again become available
for grant pursuant to the Plan.
(c) All options granted under the Plan shall be nonqualified
options not entitled to special tax treatment under Section 422 of the Internal
Revenue Code of 1986, as amended to date and as it may be amended from time to
time (the "Code").
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5. TERMS, CONDITIONS AND FORM OF OPTIONS
Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board shall from time to time approve, which
agreements shall comply with and be subject to the following terms and
conditions:
(a) OPTION GRANTS.
(1) Upon the approval of the Plan by the stockholders of
the Company, the Company shall grant to each eligible director an option for
5,000 shares of Common Stock.
(2) Upon the initial election of any eligible director as
a director of the Company following the approval of the Plan by the stockholders
of the Company, the Company shall grant to such director an option for 5,000
shares of Common Stock. No person serving as a director upon the approval of
this Plan by the stockholders of the Company shall receive such an option.
(3) On the date of each annual meeting of stockholders of
the Company following the approval of the Plan by the stockholders of the
Company, the Company shall grant to each eligible director who continues to
serve as a director immediately following such annual meeting an option for
2,500 shares of Common Stock. If in any calendar year no annual meeting of
stockholders is held prior to August 1, then in lieu of receiving such an option
grant on the date of the annual meeting of stockholders for such year, each
eligible director shall receive an option grant for 2,500 shares on August 1 of
such year. Notwithstanding the foregoing no director shall receive an option
under this Section 5(a)(3) if he or she received an option under Section 5(a)(1)
or (2) above within six (6) months prior to the date of grant under this Section
5(a)(3).
(b) OPTION EXERCISE PRICE. The option exercise price per share for
each option granted under the Plan shall equal (i) the last reported sales price
per share of the Company's Common Stock on the Nasdaq National Market (or, if
the Company is traded on a nationally recognized securities exchange on the date
of grant, the reported closing sales price per share of the Company's Common
Stock by such exchange) on the date of grant (or if no such price is reported on
such date such price as reported on the nearest preceding day) or (ii) if the
Common Stock is not traded on the Nasdaq National Market or such an exchange,
the fair market value per share on the date of grant as most recently determined
by the Board.
(c) OPTIONS NON-TRANSFERABLE. Except as otherwise provided in the
agreement evidencing the option grant, each option granted under the Plan by its
terms shall not be transferable by the optionee other than by will, or by the
laws of descent and distribution, and shall be exercised during the lifetime of
the optionee
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only by the optionee. Except as otherwise provided in the agreement evidencing
the option grant, no option or interest therein may be transferred, assigned,
pledged or hypothecated by the optionee during the optionee's lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.
(d) EXERCISE PERIOD. Each option shall become exercisable on a
cumulative basis as to 25% of the shares subject to the option on each of the
first, second, third and fourth anniversaries of the date of grant of such
option. Except as otherwise provided in the option agreements, in the event an
optionee ceases to serve as a director, each such option may be exercised by the
optionee (or, in the event of her death, by her administrator, executor or
heirs), at any time within 12 months after the optionee ceases to serve as a
director, to the extent such option was exercisable at the time of such
cessation of service. Notwithstanding the foregoing, no option shall be
exercisable after the expiration of 10 years from the date of grant.
(e) EXERCISE PROCEDURE. Options may be exercised only by written
notice to the Company at its principal office accompanied by (i) payment in cash
of the full consideration for the shares as to which they are exercised or (ii)
an irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price or delivery of irrevocable
instructions to a broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price.
6. ASSIGNMENTS
The rights and benefits of participants under the Plan may not be
assigned, whether voluntarily or by operation of law, except as provided in
Section 5(c).
7. EFFECTIVE DATE
The Plan shall become effective immediately upon its approval by the
stockholders of the Company.
8. LIMITATION OF RIGHTS
(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan, nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a director for any period of time.
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(b) NO STOCKHOLDERS' RIGHTS FOR OPTIONS. An optionee shall have no
rights as a stockholder with respect to the shares covered by such optionee's
options until the date of the issuance to such optionee of a stock certificate
therefor, and no adjustment will be made for dividends or other rights (except
as provided in Section 9) for which the record date is prior to the date such
certificate is issued.
9. ADJUSTMENTS FOR CHANGES IN COMMON STOCK AND CERTAIN OTHER EVENTS
(a) CHANGES IN CAPITALIZATION. In the event of any stock split,
reverse stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the number and class of securities and exercise price per share subject to
each outstanding option and (iii) the number and class of securities subject to
options issuable under Section 5(a) of this Plan shall be appropriately adjusted
by the Company (or substituted options may be made, if applicable) to the extent
the Board shall determine in good faith, that such an adjustment (or
substitution) is necessary and appropriate. If this Section 9(a) applies and
Section 9(c) also applies to any event, Section 9(c) shall be applicable to such
event, and this Section 9(a) shall not be applicable.
(b) LIQUIDATION OR DISSOLUTION. In the event of a proposed
liquidation or dissolution of the Company, the Board shall upon written notice
to the optionees provide that all then unexercised options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date.
(c) ACQUISITION AND CHANGE IN CONTROL EVENTS
(1) DEFINITIONS
(A) An "Acquisition Event" shall mean:
(i) any merger or consolidation of the
Company with or into another entity as a result of which the Common Stock is
converted into or exchanged for the right to receive cash, securities or other
property; or
(ii) any exchange of shares of the
Company for cash, securities or other property pursuant to a statutory share
exchange transaction.
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(B) A "Change in Control Event" shall mean:
(i) the acquisition by an individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person")
of beneficial ownership of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) 50% or more of either (x) the
then-outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (y) the combined voting power of the then-outstanding
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); PROVIDED, HOWEVER, that
for purposes of this subsection (i), the following acquisitions shall not
constitute a Change in Control Event: (A) any acquisition directly from the
Company (excluding an acquisition pursuant to the exercise, conversion or
exchange of any security exercisable for, convertible into or exchangeable for
common stock or voting securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such security directly from the
Company or an underwriter or agent of the Company), (B) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, (C) any acquisition by any
corporation pursuant to a Business Combination (as defined below) which complies
with clauses (x) and (y) of subsection (ii) of this definition or (D) any
acquisition by Robert T. Hale, Robert T. Hale, Jr., or any member of their
immediate families, or any trust, partnership, corporation or other entity
controlled directly or indirectly by, or any trust for the benefit of, Robert T.
Hale, Robert T. Hale, Jr., or any member of their immediate families (each such
party is referred to herein as an "Exempt Person"); or
(ii) the consummation of a merger,
consolidation, reorganization or statutory share exchange involving the Company
or a sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns the
Company or substantially all of the Company's assets either directly or through
one or more subsidiaries) (such resulting or acquiring corporation is referred
to herein as the "Acquiring Corporation") in substantially the same proportions
as their ownership of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively, immediately prior to such
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Business Combination and (y) no Person (excluding any Exempt Person, the
Acquiring Corporation or any employee benefit plan or related trust maintained
or sponsored by the Company or by the Acquiring Corporation) beneficially owns,
directly or indirectly, 50% or more of the then-outstanding shares of common
stock of the Acquiring Corporation, or of the combined voting power of the
then-outstanding securities of such corporation entitled to vote generally in
the election of directors (except to the extent that such ownership existed
prior to the Business Combination).
(2) EFFECT ON OPTIONS
(A) ACQUISITION EVENT. Upon the occurrence of an
Acquisition Event (regardless of whether such event also constitutes a Change in
Control Event), or the execution by the Company of any agreement with respect to
an Acquisition Event (regardless of whether such event will result in a Change
in Control Event), the Board shall provide that all outstanding options shall be
assumed, or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof); PROVIDED THAT if such
Acquisition Event also constitutes a Change in Control Event, such assumed or
substituted options shall be immediately exercisable in full upon the occurrence
of such Acquisition Event.
For purposes hereof, an option shall be
considered to be assumed if, following consummation of the Acquisition Event,
the option confers the right to purchase, for each share of Common Stock subject
to the option immediately prior to the consummation of the Acquisition Event,
the consideration (whether cash, securities or other property) received as a
result of the Acquisition Event by holders of Common Stock for each share of
Common Stock held immediately prior to the consummation of the Acquisition Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the consideration received as a result
of the Acquisition Event is not solely common stock of the acquiring or
succeeding corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise of options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value to the per share consideration received
by holders of outstanding shares of Common Stock as a result of the Acquisition
Event.
Notwithstanding the foregoing, if the
acquiring or succeeding corporation (or an affiliate thereof) does not agree to
assume, or substitute for, such options, then the Board shall, upon written
notice to the optionees, provide that all then unexercised options will become
exercisable in full as of a specified time prior to the Acquisition Event and
will terminate immediately prior to the consummation of such Acquisition Event,
except to the extent exercised by the optionees before the consummation of such
Acquisition Event; provided, however, in
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the event of an Acquisition Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share of
Common Stock surrendered pursuant to such Acquisition Event (the "Acquisition
Price"), then the Board may instead provide that all outstanding options shall
terminate upon consummation of such Acquisition Event and that each optionee
shall receive, in exchange therefor, a cash payment equal to the amount (if any)
by which (i) the Acquisition Price multiplied by the number of shares of Common
Stock subject to such outstanding options (whether or not then exercisable),
exceeds (ii) the aggregate exercise price of such options.
(B) CHANGE IN CONTROL EVENT THAT IS NOT AN
ACQUISITION EVENT. Upon the occurrence of a Change in Control Event that does
not also constitute an Acquisition Event, all options then-outstanding shall
automatically become immediately exercisable in full.
10. AMENDMENT OF THE PLAN
The Board may at any time, and from time to time, suspend or
discontinue the Plan or modify or amend it in any respect whatsoever.
11. GOVERNING LAW
The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware.
Adopted by the Board of Directors on
July 15, 1998
Approved by the stockholders on
July 15, 1998
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