EXHIBIT 10.27
ARMOR HOLDINGS, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
I. PURPOSE
ARMOR HOLDINGS, INC. (the "Company") desires to afford
certain of its key employees and consultants and the key employees and
consultants of any subsidiary corporation or parent corporation of the Company
now existing or hereafter formed or acquired who are responsible for the
continued growth of the Company an opportunity to acquire a proprietary
interest in the Company, and thus to create in such key employees and
consultants an increased interest in and a greater concern for the welfare of
the Company and its subsidiaries.
The Company, by means of this Amended and Restated 1996 Stock
Option Plan (the "Plan"), seeks to retain the services of key employees and
consultants and to enable the Company to attract and retain persons of
competence.
The stock options ("Options") offered pursuant to the Plan
are a matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any key employee or consultant.
The Options granted under the Plan are intended to be either
incentive stock options ("Incentive Options") within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or options that
do not meet the requirements for Incentive Options ("Non-Qualified Options"),
but the Company makes no warranty as to the qualification of any Option as an
Incentive Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
AND OTHER LIMITATIONS
(a) The total number of shares of common stock of the Company
which may be purchased or acquired pursuant to the exercise of Options granted
under the Plan shall not exceed, in the aggregate, 1,750,000 shares of the
authorized common stock, $.01 par value per share (the "Common Stock"), of the
Company (the "Shares"), such number subject to adjustment as provided in
Article XI hereof. Shares of Common Stock that are the subject of Options shall
be counted only once in determining whether the maximum number of Shares of
Common Stock that may be purchased or awarded under the Plan has been exceeded.
(b) Shares of Common Stock acquired under the Plan may be
either authorized but unissued Shares or Shares of issued stock held in the
Company's treasury, or both, at the
discretion of the Company. If and to the extent that Options granted under the
Plan expire or terminate without having been exercised, the Shares of Common
Stock covered by such expired or terminated Options shall again become
available for award under the Plan.
Except as provided in Articles XVIII and XXI, the Company
may, from time to time during the period beginning on the date of the adoption
of the Plan by the Company (the "Effective Date") and ending on the date which
is ten (10) years from the Effective Date (the "Termination Date"), grant to
Participants (as defined in Article IV), Incentive Options and/or Non-Qualified
Options under the terms hereinafter set forth.
As used in the Plan, the terms "subsidiary corporation" and
"parent corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 424(f) and 424(e) of the Code.
III. ADMINISTRATION
The board of directors of the Company (the "Board of
Directors") shall designate from among its members an option committee (the
"Committee") to administer the Plan. The Committee shall consist of not less
than two (2) members of the Board who meet the definition of "outside director"
under the provisions of Section 162(m) of the Code and the definition of
"non-employee director" under the provisions of Rule 16b-3 (or any successor
rule or regulation ("Rule 16b-3") promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). No member of the Committee shall have
been within one year prior to appointment to, or while serving on, the
Committee granted or awarded equity securities of the Company pursuant to this
or any other plan of the Company except to the extent that participation in any
such plan or receipt of any such grant or award would not adversely affect the
Committee member's status as a "non-employee director" or as an "outside
director." A majority of the members of the Committee shall constitute a
quorum, and the act of a majority of the members of the Committee shall be the
act of the Committee. Any member of the Committee may be removed at any time,
either with or without cause, by resolution adopted by the Board of Directors,
and any vacancy on the Committee at any time may be filled by resolution
adopted by the Board of Directors.
Any or all powers and functions of the Committee may be
exercised at any time and from time to time by the Board of Directors.
Subject to the express provisions of the Plan, the Board of
Directors or the Committee, as the case may be, shall have authority, in its
discretion, to determine the Participants (as defined in Article IV) to whom
Options shall be granted, the time when such Options shall be granted, the
number of Shares of Common Stock which shall be subject to each Option, the
exercise price of each Option, the period(s) during which such Options shall be
exercisable (whether in whole or in part) and the other terms and provisions
thereof (which need not be identical).
2
Subject to the express provisions of the Plan, the Board of
Directors or the Committee, as the case may be, also shall have authority to
construe the Plan and the Options granted thereunder, to amend the Plan and the
Options thereunder, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the Options
(which need not be identical) granted thereunder and to make all other
determinations necessary or advisable for administering the Plan. The Board of
Directors or the Committee, as the case may be, also shall have the authority
to require, in its discretion, as a condition of the granting of any such
Option, that the Participants (as defined in Article IV) agree (i) not to sell
or otherwise dispose of Shares of Common Stock acquired pursuant to the
exercise of such Option for a period of six (6) months following the date of
the acquisition of such Option and (ii) that in the event of termination of
employment of such employee or the engagement of such consultant, as the case
may be, other than as a result of dismissal without cause, such Participant (as
defined in Article IV) will not, for a period to be fixed at the time of the
grant of the Option, enter into any other employment or consulting arrangement
or participate directly or indirectly in any other business or enterprise which
is competitive with the business of the Company or any subsidiary corporation
or parent corporation of the Company, or enter into any employment in which
such employee or consultant, as the case may be, will be called upon to utilize
special knowledge obtained through employment with or retention by the Company
or any subsidiary corporation or parent corporation thereof. In no event will a
Participant (as defined in Article IV) who is subject to the reporting
requirements of Section 16(a) of the Exchange Act be entitled to sell or
otherwise dispose of any Shares of Common Stock acquired pursuant to exercise
of any such Options for a period of six (6) months from the date of the
acquisition of such Options.
The determination of the Board of Directors or the Committee,
as the case may be, on matters referred to in this Article III shall be
conclusive.
The Board of Directors or the Committee, as the case may be,
may employ such legal counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or computation
received from any such legal counsel, consultant or agent. Expenses incurred by
the Board of Directors or the Committee, as the case may be, in the engagement
of such counsel, consultant or agent shall be paid by the Company. No member or
former member of the Board of Directors or the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
award of Options granted hereunder.
IV. ELIGIBILITY
Options may be granted only to persons employed and
consultants engaged by the Company or of any subsidiary corporation or parent
corporation of the Company (such employees and consultants hereinafter at times
collectively referred to as the "Participants"), except as hereinafter
provided, and shall not be granted to any director who is not also an employee
of the Company.
Incentive Options shall not be granted to consultants.
3
The Plan does not create a right in any employee or
consultant to participate in the Plan, to become or remain an employee of the
Company, nor does it create a right in any Participant to have any Options
granted to him or her.
V. OPTION PRICE AND PAYMENT
The exercise price for each Share of Common Stock purchasable
under any NonQualified Option granted hereunder shall be such amount as the
Board of Directors or the Committee, as the case may be, shall deem
appropriate, but in no event less than the par value of a Share of Common
Stock.
The price for each Share of Common Stock purchasable under
any Incentive Option granted hereunder shall be such amount as the Board of
Directors or the Committee, as the case may be, shall, in its best judgment,
determine to be not less than one hundred per cent (100%) of the fair market
value per Share at the date the Option is granted; provided, however, that in
the case of an Incentive Option granted to a person who, at the time such
Option is granted, owns shares of the Company or any subsidiary corporation or
parent corporation of the Company which possess more than ten percent (10%) of
the total combined voting power of all classes of shares of the Company or of
any subsidiary corporation or parent corporation of the Company, the purchase
price for each Share of Common Stock shall be such amount as the Board of
Directors or the Committee, as the case may be, in its best judgment, shall
determine to be not less than one hundred ten percent (110%) of the fair market
value per Share at the date the Option is granted. In determining stock
ownership of a Participant for any purposes under the Plan, the rules of
Section 424(d) of the Code shall be applied, and the Board of Directors or the
Committee, as the case may be, may rely on representations of fact made to it
by the Participant and believed by it to be true.
If the Common Stock is listed on a national securities
exchange in the United States on any date on which the fair market value per
Share is to be determined, the fair market value per Share shall be deemed to
be the average of the high and low quotations at which such Shares are sold on
such national securities exchange on the date such Option is granted. If the
Common Stock is listed on a national securities exchange in the United States
on such date, but is not traded on such date, or such national securities
exchange is not open for business on such date, the fair market value per Share
shall be determined as of the closest preceding date on which such exchange
shall have been open for business and the Common Stock was traded. If the
Common Stock is listed on more than one national securities exchange in the
United States on the date on which the fair market value per Share is to be
determined, the Board of Directors or the Committee, as the case may be, shall
determine which national securities exchange shall be used for the purpose of
determining the fair market value per Share.
For purposes of this Plan, the determination by the Board of
Directors or the Committee, as the case may be, of the fair market value of a
Share shall be conclusive.
Upon the exercise of an Option granted hereunder, the Company
shall cause the purchased Shares of Common Stock to be issued only when it
shall have received the full purchase price for the Shares in cash or by
certified check or such other arrangement for the
4
satisfaction of the full purchase price as the Committee may determine to the
extent permitted by applicable law, including but not limited to, by delivering
to the Company shares of Common Stock of the Company (in proper form for
transfer and accompanied by all requisite stock transfer tax stamps or cash in
lieu thereof) owned by such holder free and clear of all liens and encumbrances
having a fair market value equal to the exercise price applicable to that
portion of the Option being exercised by the delivery of such Shares. The fair
market value of the stock so delivered shall be determined by the Committee, in
its sole discretion, as of the date immediately preceding the date on which the
Option is exercised, or as may be required in order to comply with or to
conform to the requirements of any applicable laws or regulations.
VI. USE OF PROCEEDS
The cash proceeds of the sale of Shares of Common Stock
pursuant to the Plan are to be added to the general funds of the Company and
used for its general corporate purposes as the Board of Directors shall
determine.
VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Any Option shall be exercisable at such times, in such
amounts and during such period or periods as the Board of Directors or the
Committee, as the case may be, shall determine at the date of the grant of such
Option; provided, however, that an Incentive Option shall not be exercisable
after the expiration of ten (10) years from the date such Option is granted;
and provided further that, in the case of an Incentive Option granted to a
person who, at the time such Option is granted, owns stock of the Company or
any subsidiary corporation or parent corporation of the Company possessing more
than ten per cent (10%) of the total combined voting power of all classes of
stock of the Company or of any subsidiary corporation or parent corporation of
the Company, such Option shall not be exercisable after the expiration of five
(5) years from the date such Option is granted.
Except to the extent otherwise provided under the Code, to
the extent that the aggregate fair market value of Common Stock for which
Incentive Options are exercisable for the first time by a Participant during
any calendar year (under all stock option plans of the Company or of any parent
corporation or subsidiary corporation of the Company) exceeds one hundred
thousand dollars ($100,000), such Options shall be treated as Non-Qualified
Options. For purposes of this limitation, (i) the fair market value of Common
Stock is determined as of the time the Option is granted, and (ii) the
limitation will be applied by taking into account Options in the order in which
they were granted.
Subject to the provisions of Article XVII, the Board of
Directors or the Committee, as the case may be, shall have the right to
accelerate, in whole or in part, from time to time, conditionally or
unconditionally, rights to exercise any Option granted hereunder.
To the extent that an Option is not exercised within the
period of exercisability specified therein, it shall expire as to the then
unexercised part.
5
In no event shall an Option granted hereunder be exercised
for a fraction of a Share.
The Committee may at any time on behalf of the Company offer
to buy out an Option previously granted, based on such terms and conditions as
the Committee shall establish and communicate to the Participant at the time
that such offer is made.
VIII. EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the
optionee as to all or part of the Shares covered thereby by the giving of
written notice of the exercise thereof to the Corporate Secretary of the
Company at the principal business office of the Company, specifying the number
of shares to be purchased and specifying a business day not more than fifteen
(15) days from the date such notice is given for the payment of the purchase
price against delivery of the Shares of Common Stock being purchased. Subject
to the terms of Articles XIII, XV, and XVI, the Company shall cause
certificates for the Shares of Common Stock so purchased to be delivered to the
optionee at the principal business office of the Company, against payment of
the full purchase price, on the date specified in the notice of exercise.
IX. NON-TRANSFERABILITY OF OPTIONS
No option granted hereunder shall be transferable otherwise
than by will or by the laws of descent and distribution, and such option shall
be exercisable, during the Participant's lifetime, only by the Participant.
Notwithstanding the foregoing, the Committee may set forth in a stock option
agreement at the time of grant or thereafter, that the options (other than
Incentive Options) may be transferred to members of the Participant's immediate
family, to trusts solely for the benefit of such immediate family members and
to partnerships in which such family members and/or trusts are the only
partners. For this purpose, immediate family means the Participant's spouse,
parents, children, stepchildren, grandchildren and legal dependents. Any
transfer of options made under this provision will not be effective until
notice of such transfer is delivered to the Company.
X. TERMINATION OF EMPLOYMENT
Upon termination of the employment of any Participant with
the Company and all subsidiary corporations and parent corporations of the
Company, an Option previously granted to the Participant, unless otherwise
specified by the Board of Directors or the Committee, as the case may be,
shall, to the extent not theretofore exercised, terminate and become null and
void, provided that:
(a) if the Participant shall die while in the employ of
such corporation or during either the three (3)
month or one (1) year period, whichever is
applicable, specified in clause (b) below and at a
time when such Participant was entitled to exercise
an Option as herein provided, the legal
representative of such Participant, or such person
who acquired such
6
Option by bequest or inheritance or by reason of the
death of the Participant, may, not later than one
(1) year from the date of death, but in no event
later than the expiration of the stated term of such
Option, exercise such Option, to the extent not
theretofore exercised, in respect of any or all of
such number of Shares of Common Stock as specified
by the Board of Directors or the Committee, as the
case may be, in such Option; and
(b) if the employment of any Participant to whom such
Option shall have been granted shall terminate by
reason of the Participant's retirement (at such age
or upon such conditions as shall be specified by the
Board of Directors), disability (as defined in
Section 22(e)(3) of the Code) or dismissal by the
employer other than for "cause" (as defined below),
and while such Participant is entitled to exercise
such Option as herein provided, such Participant
shall have the right to exercise such Option so
granted, to the extent not theretofore exercised, in
respect of any or all of such number of Shares of
Common Stock as specified by the Board of Directors
or the Committee, as the case may be, in such
Option, at any time up to and including (i) three
(3) months after the date of such termination of
employment in the case of termination by reason of
dismissal other than for cause, and (ii) one (1)
year after the date of termination of employment in
the case of termination by reason of retirement or
disability. Notwithstanding anything to the
foregoing to the contrary contained herein, upon the
termination without cause of any Participant who has
been granted Non-Qualified Options pursuant to the
Plan, the Board of Directors or the Committee, as
the case may be, shall have the right, in their sole
discretion (only with respect to Non-Qualified
Options granted pursuant to the Plan), to either (i)
accelerate the time period during which a
Participant may exercise all or a part of any such
Option previously granted and/or (ii) extend the
time period in which such Participant may exercise
such Option, to a period of up to one (1) year after
the date of such Participant's termination without
cause.
In no event, however, shall any person be entitled to
exercise any Option after the expiration of the period of exercisability of
such Option as specified therein.
If the Participant voluntarily terminates his or her
employment, other than by reason of his/her retirement, or is discharged for
cause, any Option granted hereunder shall, unless otherwise specified by the
Board of Directors or the Committee, as the case may be, forthwith terminate
with respect to any unexercised portion thereof.
If an Option granted hereunder shall be exercised by the
legal representative of a deceased or disabled Participant or former
Participant, or by a person who acquired an Option granted hereunder by bequest
or inheritance or by reason of death of any Participant or former Participant,
written notice of such exercise shall be accompanied by a certified copy of
letters
7
testamentary or equivalent proof of the right of such legal representative or
other person to exercise such Option.
For the purposes of the Plan, the term "for cause" shall mean
(i) with respect to a Participant who is party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company or
a subsidiary corporation or parent corporation of the Company, which agreement
or plan contains a definition of "for cause" or "cause" (or words of like
import) for purposes of termination of employment thereunder by the Company or
such subsidiary corporation or parent corporation of the Company, "for cause"
or "cause" as defined in the most recent of such agreements or plans, or (ii)
in all other cases, as determined by the Board of Directors or the Committee,
as the case may be, in its sole discretion, (a) the willful commission by a
Participant of a criminal or other act that causes or probably will cause
substantial economic damage to the Company or a subsidiary corporation or
parent corporation of the Company or substantial injury to the business
reputation of the Company or a subsidiary corporation or parent corporation of
the Company; (b) the commission by a Participant of an act of fraud in the
performance of such Participant's duties on behalf of the Company or a
subsidiary corporation or parent corporation of the Company; or (c) the
continuing willful failure of a Participant to perform the duties of such
Participant to the Company or a subsidiary corporation or parent corporation of
the Company (other than such failure resulting from the Participant's
incapacity due to physical or mental illness) after written notice thereof
(specifying the particulars thereof in reasonable detail) and a reasonable
opportunity to be heard and cure such failure are given to the Participant by
the Board of Directors. For purposes of the Plan, no act, or failure to act, on
the Participant's part shall be considered "willful" unless done or omitted to
be done by the Participant not in good faith and without reasonable belief that
the Participant's action or omission was in the best interest of the Company or
a subsidiary corporation or parent corporation of the Company.
For the purposes of the Plan, an employment relationship
shall be deemed to exist between an individual and a corporation if, at the
time of the determination, the individual was an "employee" of such corporation
for purposes of Section 422(a) of the Code. If an individual is on military,
sick leave or other bona fide leave of absence, such individual shall be
considered an "employee" for purposes of the exercise of an Option and shall be
entitled to exercise such Option during such leave if the period of such leave
does not exceed ninety (90) days, or, if longer, so long as the individual's
right to reemployment with the corporation granting the option (or a related
corporation) is guaranteed either by statute or by contract. If the period of
leave exceeds ninety (90) days, the employment relationship shall be deemed to
have terminated on the ninety-first (91st) day of such leave, unless the
individual's right to reemployment is guaranteed by statute or contract.
A termination of employment shall not be deemed to occur by
reason of (i) the transfer of a Participant from employment by the Company to
employment by a subsidiary corporation or a parent corporation of the Company,
or (ii) the transfer of a Participant from employment by a subsidiary
corporation or a parent corporation of the Company to employment by the Company
or by another subsidiary corporation or parent corporation of the Company.
8
In the event of the complete liquidation or dissolution of a
subsidiary corporation, or in the event that such corporation ceases to be a
subsidiary corporation, any unexercised Options theretofore granted to any
person employed by such subsidiary corporation will be deemed cancelled unless
such person is employed by the Company or by any parent corporation or another
subsidiary corporation after the occurrence of such event. In the event an
Option is to be cancelled pursuant to the provisions of the previous sentence,
notice of such cancellation will be given to each Participant holding
unexercised Options and such holder will have the right to exercise such
Options in full (without regard to any limitation set forth or imposed pursuant
to Article VII) during the thirty (30) day period following notice of such
cancellation.
XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
In the event of any change in the outstanding Shares of
Common Stock through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, split-up, split- off, spin-off, combination of
shares, exchange of shares, or other like change in capital structure of the
Company, the Board of Directors or the Committee, as the case may be, shall
make such adjustment to each outstanding Option that it, in its sole
discretion, deems appropriate. The term "Shares" after any such change shall
refer to the securities, cash and/or property then receivable upon exercise of
an Option. In addition, in the event of any such change, the Board of Directors
or the Committee, as the case may be, shall make any further adjustment as may
be appropriate to the maximum number of Shares which may be acquired under the
Plan pursuant to the exercise of Options, the maximum number of Shares which
may be so acquired by one Participant and the number of Shares and price per
Share subject to outstanding Options as shall be equitable to prevent dilution
or enlargement of rights under such Options, and the determination of the Board
of Directors as to these matters shall be conclusive. Notwithstanding the
foregoing, (i) each such adjustment with respect to an Incentive Option shall
comply with the rules of Section 424(a) of the Code, and (ii) in no event shall
any adjustment be made which would render any Incentive Option granted
hereunder to be other than an "incentive stock option" for purposes of Section
422 of the Code.
XII. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or on
any subsidiary corporation or parent corporation thereof to continue the
employment of any holder of Options and it shall not impose any obligation on
the part of any holder of Options to remain in the employ of the Company or of
any subsidiary corporation or parent corporation thereof.
XIII. PURCHASE FOR INVESTMENT
Except as hereinafter provided, the Board of Directors or the
Committee, as the case may be, may require a Participant, as a condition upon
exercise of any Option granted hereunder, to execute and deliver to the Company
(a) stock powers with respect to Shares underlying a particular Option and
required to be held by a custodian, and (b) a written statement, in form
satisfactory to the Board of Directors or the Committee, as the case may be, in
which the Participant represents and warrants that Shares are being acquired
for such person's
9
own account for investment only and not with a view to the resale or
distribution thereof. The Participant shall, at the request of the Board of
Directors or the Committee, as the case may be, be required to represent and
warrant in writing that any subsequent resale or distribution of Shares by the
Participant shall be made only pursuant to either (i) a Registration Statement
on an appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being sold, or (ii) a specific exemption from
the registration requirements of the Securities Act, but in claiming such
exemption the Participant shall, prior to any offer of sale or sale of such
Shares, obtain a prior favorable written opinion of counsel, in form and
substance satisfactory to counsel for the Company, as to the application of
such exemption thereto. The foregoing restriction shall not apply to (i)
issuances by the Company so long as the Shares being issued are registered
under the Securities Act and a prospectus in respect thereof is current, or
(ii) re-offerings of Shares by affiliates of the Company (as defined in Rule
405 or any successor rule or regulation promulgated under the Securities Act)
if the Shares being re-offered are registered under the Securities Act and a
prospectus in respect thereof is current.
XIV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES
Upon any exercise of an Option which may be granted hereunder
and, in the case of an Option, payment of the purchase price, a certificate or
certificates for the Shares shall be issued by the Company in the name of the
person exercising the Option and shall be delivered to or upon the order of
such person.
The Company may endorse such legend or legends upon the
certificates for Shares issued pursuant to the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares as, in
its discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (ii) implement the provisions of the Plan and any agreement
between the Company and the optionee or grantee with respect to such Shares, or
(iii) permit the Company to determine the occurrence of a disqualifying
disposition, as described in Section 421(b) of the Code, of Shares transferred
upon exercise of an Incentive Option granted under the Plan.
The Company shall pay all issue or transfer taxes with
respect to the issuance or transfer of Shares, as well as all fees and expenses
necessarily incurred by the Company in connection with such issuance or
transfer, except fees and expenses which may be necessitated by the filing or
amending of a Registration Statement under the Securities Act, which fees and
expenses shall be borne by the recipient of the Shares, unless such
Registration Statement under the Securities Act has been filed by the Company
for its own corporate purposes (and the Company so states) in which event the
recipient of the Shares shall bear only such fees and expenses as are
attributable solely to the inclusion of the Shares he or she receives in the
Registration Statement.
All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.
10
XV. WITHHOLDING TAXES
The Company may require a Participant, if applicable,
exercising a Non-Qualified Option granted hereunder, or disposing of Shares
acquired pursuant to the exercise of an Incentive Option in a disqualifying
disposition (within the meaning of Section 421(b) of the Code), to reimburse
the corporation that employs such Participant for any taxes required by any
government to be withheld or otherwise deducted and paid by such corporation in
respect of the issuance or disposition of such Shares. In lieu thereof, the
corporation that employs such Participant shall have the right to withhold the
amount of such taxes from any other sums due or to become due from such
corporation to the Participant upon such terms and conditions as the Board of
Directors shall prescribe. The corporation that employs such Participant may,
in its discretion, hold the stock certificate to which such Participant is
entitled upon the exercise of an Option as security for the payment of such
withholding tax liability, until cash sufficient to pay that liability has been
accumulated. In addition, at any time that the Company becomes subject to a
withholding obligation under applicable law with respect to the exercise of a
NonQualified Option (the "Tax Date"), except as set forth below, a holder of a
Non-Qualified Option may elect to satisfy, in whole or in part, the holder's
related personal tax liabilities (an "Election") by (i) directing the Company
to withhold from Shares of Common Stock issuable in the related exercises
either a specified number of Shares or Shares having a specified value (in each
case not in excess of the related personal tax liabilities), (ii) tendering
Shares previously issued pursuant to the exercise of an Option or other Shares
of the Company's Common Stock owned by the holder, or (iii) combining any or
all of the foregoing options in any fashion. An Election shall be irrevocable.
The withheld Shares and other Shares tendered in payment shall be valued at
their fair market value (determined in accordance with the principles set forth
in Article V of the Plan) on the Tax Date. The Board of Directors or the
Committee, as the case may be, may disapprove of any Election, suspend or
terminate the right to make Elections or provide that the right to make
Elections shall not apply to particular Shares of Common Stock or exercises.
The Board of Directors or the Committee, as the case may be, may impose any
additional conditions or restrictions on the right to make an Election as it
shall deem appropriate.
XVI. LISTING OF SHARES AND RELATED MATTERS
The Board of Directors or the Committee, as the case may be,
may delay any award, issuance or delivery of Shares of Common Stock if it
determines that listing, registration or qualification of Shares of Common
Stock or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares under the Plan, until such listing, registration,
qualification, consent or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to the Board of
Directors or the Committee, as the case may be.
XVII. AMENDMENT OF THE PLAN
The Board of Directors or the Committee, as the case may be,
may, from time to time, amend the Plan, provided that no amendment shall be
made, without the approval of the stockholders of the Company, to the extent
required by Rule 16b-3 or for the exception for
11
performance-based compensation under Section 162(m) of the Code, that will (i)
increase the total number of Shares reserved for Options under the Plan (other
than an increase resulting from an adjustment provided for in Article XI), (ii)
reduce the exercise price of any Option granted hereunder, (iii) modify the
provisions of the Plan relating to eligibility, or (iv) materially increase the
benefits accruing to Participants under the Plan or extend the maximum option
period under Section VII. The Board of Directors or the Committee, as the case
may be, shall be authorized to amend the Plan and the Options granted hereunder
to permit the Incentive Options granted hereunder to qualify as incentive stock
options within the meaning of Section 422 of the Code. The rights and
obligations under any Option granted before amendment of the Plan or any
unexercised portion of such Option shall not be adversely affected by amendment
of the Plan or Option without the consent of the holder of such Option.
XVIII. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors or the Committee, as the case may be,
may at any time suspend or terminate the Plan. The Plan, unless sooner
terminated under Article XXI or by action of the Board of Directors, shall
terminate at the close of business on the Termination Date. Options may not be
granted while the Plan is suspended or after it is terminated. Rights and
obligations under any Option granted while the Plan is in effect shall not be
altered or impaired by suspension or termination of the Plan, except upon the
consent of the person to whom the Option was granted. The power of the Board of
Directors to construe and administer any Options granted prior to the
termination or suspension of the Plan under Article III nevertheless shall
continue after such termination or during such suspension.
XIX. GOVERNING LAW
The Plan and such Options as may be granted thereunder and
all related matters shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware from time to time obtaining
or such other jurisdiction as the Company may become reincorporated under.
XX. PARTIAL INVALIDITY
The invalidity or illegibility of any provision hereof shall
not be deemed to affect the validity of any other provision.
XXI. EFFECTIVE DATE
The Plan shall become effective upon its approval by the
stockholders of the Company.
12
(NO.1) SCHEDULE (INLAND REVENUE APPROVED)
TO
ARMOR HOLDINGS, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
ALTERATION AND AMENDMENTS TO THE PLAN IN RESPECT OF ITS
OPERATION IN RELATION TO UNITED KINGDOM EMPLOYEES
1. In this Schedule, "Plan" refers to the Armor Holdings, Inc. Amended
and Restated 1996 Stock Option Plan and words and expressions defined
therein shall have the same meaning when used in this Schedule. The
provisions of the Plan shall apply to the provisions of this Schedule
except where expressly varied herein.
2. It is intended that Options granted by the Company pursuant to this
Schedule to persons ("UK Participants") employed by the Company and/or
its subsidiary corporations in the UK and subject to UK Income Tax of
such employment will be granted pursuant to an approved share option
scheme within the provisions of Section 185 of and Schedule 9 to the
United Kingdom Income and Corporation Taxes Act 1988 ("ICTA 1988").
3. Article II shall be amended in relation to Options granted pursuant to
this Schedule so that: (i) "Share" shall mean "an ordinary share in
the capital of the Company which complies with the conditions of
paragraphs 10-14 Schedule 9 ICTA 1988"; (ii) "subsidiary corporation"
shall mean "any company of which the Company has control", and (iii)
"parent corporation" shall mean "any company which has control of the
Company", in each case within the meaning of Section 416 of ICTA 1988.
4. Article III (apart from the third paragraph thereof) shall not apply
and the following clause shall be added to that paragraph: "Options
may be granted so that their exercise shall be subject to such
objective conditions (not inconsistent with the provisions of this
Schedule) as the Directors may, in their discretion, think fit. In
addition, the Board may designate any Option as a "Special Executive
Option" at the date of grant, in which case the proviso in Rule 8(b)
of this Schedule shall apply."
5. Options may only be granted pursuant to this Schedule to UK
Participants who are employees of the Company or any subsidiary
corporation and who are (i) not excluded by paragraph 8 of Schedule 9
ICTA 1988; and (ii) required to devote substantially the whole of
his/her working time to the affairs of the Company and/or any
subsidiary corporation, and the provisions of Article IV shall be
amended accordingly. No employee shall be eligible to participate in
the Plan pursuant to this Schedule unless required in that capacity to
work for the Company and/or any subsidiary corporation for
13
at least 20 hours per week excluding meal breaks (or, in the case of
directors, at least 25 hours per week excluding meal breaks).
No option may be granted pursuant to this Schedule to any UK
Participant to this Schedule which would result in the aggregate
purchase price of Shares comprised in outstanding Options granted to
him or her under the Plan together with the aggregate purchase price
of shares in subsisting options granted to him or her under any other
scheme, (not being a savings related share option scheme), approved
under Schedule 9 ICTA 1988 and established by the Company or any
associated company (within the meaning of Section 416 ICTA 1988)
exceeding the limit from time to time specified in paragraph 28(1) of
Schedule 9 ICTA 1988.
6. The first two paragraphs of Article V shall not apply in relation to
Options granted pursuant to this Schedule, but the following
provisions shall apply instead:
a) the price for each Share under Option shall be determined by
the Board of Directors or the Committee and be denominated in
dollars, but shall not be less than the greater of:
(i) while the Shares are listed on the
American Stock Exchange (or the New
York Stock Exchange), the average
of the high and low quotations at
which the Shares are sold on the
American Stock Exchange (or such
other stock exchange) on the date
of grant. If the Shares are not
traded on such date, the closest
preceding date on which Shares were
traded shall be taken;
(ii) if the Shares are not so listed,
the market value of a Share on the
date of the grant of the Option or
on the business day immediately
preceding that date determined in
accordance with Part VII of the
United Kingdom Taxation of
Chargeable Gains Act 1992 and
agreed in advance for the purpose
of the Plan with the United Kingdom
Inland Revenue Shares Valuation
Division; and
(iii) the nominal value of the Share.
b) the price for each Share purchasable under such Option shall
be payable in cash in full on the exercise of the Option.
7. Article VII shall not apply in relation to Options granted pursuant to
this Schedule and the following provisions shall apply instead:
14
"An Option shall be exercisable at such times, in such
amounts and during such periods as the Board of Directors or
the Committee, as the case may be, shall determine at the
date of the grant of such Option but shall not be exercisable
in any event after the expiration of ten years from the date
of grant;"
No Option may be exercised by any UK Participant at any time when he
or she is precluded by paragraph 8 of Schedule 9 ICTA 1988 from
participating in the Plan.
8. The following shall apply in place of Article X:
"On the occurrence of any of the circumstances described in
the following paragraphs and subject to the fulfillment of
any performance condition(s), an Option shall become, if it
is not already, exercisable and shall remain exercisable
until the expiry of the relevant period specified:-
(a) the death of the Participant
-12 months commencing on the date of the
Participant's death, not to exceed the
expiration of the period of exercisability
of such Option;
(b) the Participant ceasing to hold Employment by reason of:
(i) -disability, as defined in the Plan, or
injury
-12 months commencing on the date of the
occurrence of such disability or injury not
to exceed the expiration of the term of
such Option
(ii) -retirement of the Participant whether at
contractual retirement age or (with the
consent of the Board of Directors) at an
earlier age
-12 months commencing on the date of such
retirement, not to exceed the expiration of
the term of such Option
(iii) -redundancy
-three months commencing on the date of
such cessation, not to exceed the
expiration of the period of exercisability
of such Option
(iv) -any other circumstances which the Board of
Directors or the Committee may in its
discretion determine (such determination to
take place within two months of such
cessation) to fall within this Rule
15
12 months commencing on the date of such
cessation, not to exceed the expiration of
the period of exercisability of such Option
PROVIDED THAT in the case of an Option designated as
a "Special Executive Option", sub clauses (b)(ii)
and (iv) shall not apply.
An Option shall lapse and cease to be exercisable
upon the earliest to happen of the following:-
(i) the expiry of the period of exercisability
specified by the Board of Directors or the
Committee under Article VII;
(ii) the first anniversary of the date of death
of the Participant;
(iii) the date upon which the Participant ceases
to hold employment by reason of "cause" as
defined in the Plan;
(iv) the date upon which the Participant is
adjudicated bankrupt;
(v) any breach or purported breach of Article
IX by the Participant;
(vi) the expiry of any of the periods mentioned
in this Rule;
(vii) the date on which the Participant ceases to
hold Employment for any reason other than
any of the matters referred to in (b) and
the Board of Directors or the Committee
does not within two months determine that
his or her options may be exercised."
9. Article XI shall, in the case of any Option granted pursuant to this
Schedule, be amended to exclude references to "split-up, split-off and
spin-off" and any adjustment made under that Article shall be subject
to:
a) confirmation from the auditors of the Company that such
adjustment is fair and reasonable;
b) prior approval of the United Kingdom Inland Revenue ("Inland
Revenue");
c) the Shares continuing to satisfy the conditions specified in
paragraphs 10 to 14 inclusive of Schedule 9 of ICTA 1988.
10. Article XVII shall apply with the additional requirement that no
amendment shall have effect until approved by the Inland Revenue.
16
(NO. 2) SCHEDULE (UNAPPROVED)
TO
ARMOR HOLDINGS, INC.
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
In this Schedule 2 "Plan" refers to the Armor Holdings, Inc. Amended and
Restated 1996 Stock Option Plan together with the (No. 1) Schedule and words
and expressions defined therein shall have the same meaning when used in this
(No. 2) Schedule. The provisions of the Plan shall apply to the provisions of
this (No. 2) Schedule except where expressly varied herein.
1. Options may be granted by the Company pursuant to this (No. 2)
Schedule to UK Participants. It is intended that the (No. 2) Schedule
to the Plan will not be approved by the Inland Revenue pursuant to
Schedule 9 to ICTA 1988.
2. The limit on the aggregate exercise price of options that may be held
by an individual set out in clause 5 of the (No. 1) Schedule, shall
not apply to Options granted under this (No. 2) Schedule.
3. All requirements in the Plan for the approval, consent or agreement of
the Inland Revenue shall not apply.