Exhibit 10.1
AHC I ACQUISITION CORP.
1998 STOCK OPTION PLAN
A. PURPOSES
AHC I ACQUISITION CORP., a Delaware corporation (the "Company"),
desires to afford certain of its key employees and directors, and the key
employees and directors of any parent corporation or subsidiary 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
an increased interest in and a greater concern for the welfare of the Company
and its subsidiaries.
The Company, by means of this 1998 Stock Option Plan (the "Plan"),
seeks to retain the services of persons now holding key positions and to secure
the services of persons capable of filling such positions.
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.
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 of Incentive Options ("Non-Qualified Options"). The
Company makes no warranty, however, as to the qualification of any Option as an
Incentive Option.
2. NUMBER OF SHARES SUBJECT TO THE PLAN
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, 80,000 shares of the authorized common
stock, par value $.01 per share, of the Company (the "Shares"); provided, that
the maximum number of Shares which may be purchased or acquired pursuant to the
exercise of Options granted to one key employee or director under the Plan is
32,500.
Shares available for issuance 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 covered by such expired or terminated Options may again
be subject to an Option under the Plan.
Except as provided in Article 18 and subject to Article 3, the Company
may, from time to time during the period beginning on June 17, 1998 (the
"Effective Date"), the date of approval by the board of directors of the
Company (the "Board of Director's"), and ending on June 16, 2008, (the
"Termination Date"), grant Incentive Options and Non-Qualified Options to
certain key
employees of the Company or any subsidiary corporation of the Company under the
terms hereinafter set forth.
As used in the Plan, the terms "parent corporation" and "subsidiary
corporation" shall mean a corporation within the definitions of such terms
contained in Sections 424(e) and 424(f) of the Code, respectively.
3. ADMINISTRATION
The Board of Directors shall administer the Plan, provided that the
Board of Directors may, from time to time, designate from any of its members a
Compensation Committee, which shall be the Compensation Committee of the Board
of Directors (the "Committee"), to administer the Plan. 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. If
the Board of Directors administers the Plan, then reference herein, or in any
option agreement granting Options pursuant to the Plan, to the Committee shall
mean the Committee or the Board of Directors, as appropriate.
Subject to the express provisions of the Plan, the Committee shall
have authority, in its discretion, to determine the key employees to whom
Options shall be granted (the "Optionholders"), the time when such Options
shall be granted, the number of Shares which shall be subject to each Option,
the purchase price or 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).
Subject to the express provisions of the Plan, the Committee also
shall have authority to construe the Plan and the Options granted thereunder,
to amend the Plan and the Options granted 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 Committee may establish performance standards for determining the
periods during which Options shall be exercisable, including without limitation
standards based on the earnings of the Company and its subsidiaries for various
fiscal periods. The Committee shall define such performance criteria and, from
time to time, the Committee in its sole discretion and in administering the
Plan may make adjustments to such performance criteria for any fiscal period so
that extraordinary or unusual charges or credits, acquisitions, mergers,
consolidations, and other corporate transactions and other elements of or
factors influencing the calculations of earnings or any other performance
standard do not distort or affect the operation of the Plan in a manner
inconsistent with the achievement of its purpose.
The determination of the Committee on matters referred to in this
Article 3 shall be conclusive.
The Committee 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 Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company. No member or former member of
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.
4. ELIGIBILITY
Options may be granted only to key employees or directors of the
Company or any parent or subsidiary corporation of the Company.
The Plan does not create a right in any employee or director to
participate in the Plan, nor does it create a right in any employee or director
to have any Options granted to him or her.
5. OPTION PRICE AND PAYMENT
The price for each Share purchasable under any Option granted
hereunder shall be such amount as the Committee shall determine in good faith
to be the fair market value (as defined below) per Share at the date the Option
is granted; provided, however, that the exercise price shall not be less than
$1.00 per share; and provided further, that in the case of an Incentive Option
granted to a key employee who, at the time such Incentive Option is granted,
owns stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any subsidiary corporation or
parent corporation of the Company, the purchase price for each Share shall not
be less than one hundred ten percent (110%) of the fair market value per Share
at the date the Incentive Option is granted. In determining the stock ownership
of a key employee for any purpose under the Plan, the rules of Section 424(d)
of the Code shall be applied, and the Committee may rely on representations of
fact made to it by the key employee and believed by it to be true.
For purposes of the Plan, "fair market value," with respect to any
date of determination, means:
(i) if the Shares are listed or admitted to trading on a
national securities exchange in the United States or reported through The
Nasdaq Stock Market ("Nasdaq") then the closing sale price on such exchange or
Nasdaq on such date or, if no trading occurred or quotations were available on
such date, then on the closest preceding date on which the Shares were traded
or quoted; or
(ii) if not so listed or reported but a regular, active
public market for the Shares exists (as determined in the sole discretion of
the Committee, whose decision shall be conclusive and binding), then the
average of the closing bid and ask quotations per Share in the over-the-counter
market for such Shares in the United States on such date or, if no such
quotations are available on such date, then on the closest date preceding such
date. For purposes of
the foregoing, a market in which trading is sporadic and the ask quotations
generally exceed the bid quotations by more than 15% shall not be deemed to be
a "regular, active public market."
If the Committee determines that a regular, active public market does
not exist for the Shares, the Committee shall determine the fair market value
of the Shares in its good faith judgment based on the total number of shares of
Common Stock then outstanding, taking into account all outstanding options,
warrants, rights or other securities exercisable or exchangeable for, or
convertible into, shares of Common Stock.
For purposes of this Plan, the determination by the Committee 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 to be issued only when it shall have received the
full purchase price for the Shares in cash or by certified check; provided,
however, that in lieu of cash, the holder of an Option may, if and to the
extent the terms of such Option so provide and to the extent permitted by
applicable law, exercise an Option in whole or in part, by delivering to the
Company (a) 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 having a fair market value equal to the exercise
price applicable to that portion of the Option being exercised or (b) such
other form of payment as the Committee shall permit in its sole discretion at
the time of grant of the Option.
6. USE OF PROCEEDS
The cash proceeds of the sale of Shares 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.
7. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
An Option shall be exercisable at such times, in such amounts and
during such period or periods as the Committee shall determine at the date of
the grant of such Option; provided, however, that an Option shall not be
exercisable after the expiration of ten (10) years from the date such Option is
granted; and provided, further, that an Incentive Option granted to a key
employee who, at the time such Incentive Option is granted, owns stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any subsidiary corporation or parent
corporation of the Company, shall not be exercisable after the expiration of
five (5) years from the date such Incentive Option is granted.
The Committee 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.
Except as otherwise provided under the Code, to the extent that the
aggregate fair market value of stock for which Incentive Options (under all
stock option plans of the Company and of any parent corporation or subsidiary
corporation of the Company) are exercisable for the first time by a key
employee during any calendar year exceeds one hundred thousand dollars
($100,000), such Options shall be treated as Non-Qualified Options. For
purposes of this limitation, (a) the fair market value of the stock is
determined as of the time the Option is granted, and (b) Options will be taken
into account in the order in which they were granted.
In no event shall an Option granted hereunder be exercised for a
fraction of a Share.
8. EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the Optionholder
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 being purchased. Subject to the terms of Articles 13,
14, 15 and 16, the Company shall cause certificates for the Shares so purchased
to be delivered to the Optionholder at the principal business office of the
Company, against payment of the full purchase price, on the date specified in
the notice of exercise.
9. NON-TRANSFERABILITY OF OPTIONS
No Option granted hereunder shall be transferable, whether by
operation of law or otherwise, other than by will or the laws of descent and
distribution and any Option granted hereunder shall be exercisable during the
lifetime of the Optionholder only by such Optionholder. Except to the extent
provided above, Options may not be assigned, transferred, pledged, hypothecated
or disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process, and any purported
assignment in contravention hereof shall be void and of no effect.
Notwithstanding the foregoing, at the discretion of the Committee, a
Non-Qualified Option may be transferred by a key employee solely to such key
employee's spouse, siblings, parents, children and grandchildren or trusts for
the benefit of such persons or partnerships, corporations, limited liability
companies or other entities owned solely by such persons, subject to any
restrictions included in the award of the Non-Qualified Option.
10. TERMINATION OF EMPLOYMENT
Upon termination of employment of any Optionholder with the Company
and all subsidiary corporations, an Option previously granted to the
Optionholder, unless otherwise specified by the Committee in the Option, shall,
to the extent not theretofore exercised, terminate and become null and void,
provided that:
(a) if the Optionholder shall die while in the employ of such
corporation or during either the six (6) month or thirty (30) day period,
whichever is applicable, specified in
clauses (b) and (c) below, and at a time when such Optionholder was entitled to
exercise an Option as herein provided, the legal representative of such
Optionholder, or such person who acquired such Option by bequest or inheritance
or by reason of the death of the Optionholder, 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 that such Optionholder is entitled to
purchase pursuant to such Option at the time of such Optionholder's death, at
any time up to and including one (1) year after the date of death;
(b) if the employment of any Optionholder to whom such Option
shall have been granted shall terminate by reason of the Optionholder's
disability (as defined below), and while such Optionholder is entitled to
exercise such Option as herein provided, such Optionholder 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 that such Optionholder is
entitled to purchase pursuant to such Option at the time of such termination,
at any time up to and including six (6) months after the date of termination of
employment; and
(c) if the employment of any Optionholder to whom such Option
shall have been granted shall terminate by reason of dismissal by the employer
other than for cause (as defined below), and while such Optionholder is
entitled to exercise such Option as herein provided, such Optionholder 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 that
such Optionholder is entitled to purchase pursuant to such Option at the time
of such termination, at any time up to and including thirty (30) days after the
date of termination of employment.
If an Optionholder (i) voluntarily terminates his or her employment,
or (ii) is discharged for cause, any Option granted hereunder shall, unless
otherwise specified by the Committee in the Option, 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 Optionholder, or by a person who
acquired an Option granted hereunder by bequest or inheritance or by reason of
death of any Optionholder, written notice of such exercise shall be accompanied
by a certified copy of letters testamentary or equivalent proof of the right of
such legal representative or other person to exercise such Option.
For all purposes of the Plan, the term "for cause" shall mean, (i)
with respect to an Optionholder who is a party to a written employment
agreement with the Company, which agreement contains a definition of "for
cause" or "cause" (or words of like import) for purposes of termination of
employment thereunder by the Company, "for cause" or "cause" as defined in the
most recent of such agreements, or (ii) in all other cases, as determined by
the Committee, in its sole discretion, that one or more of the following has
occurred: (A) any intentional or willful failure, or failure due to bad faith,
by such Optionholder to substantially perform his or her employment duties
which shall not have been corrected within 30 days following written notice
thereof, (B) any misconduct by such Optionholder which is significantly
injurious to the Company or any of its subsidiaries or affiliates, (C) any
breach by such Optionholder of any covenant contained in the instrument
pursuant to which an Option is granted, (D) such Optionholder's conviction of,
or entry of a plea of nolo contendere in respect of, any felony or a
misdemeanor which results in, or is reasonably expected to result in, economic
or reputational injury to the Company or any of its subsidiaries or affiliates.
For all purposes of the Plan, the term "disability" means (i) with
respect to an Optionholder who is a party to a written employment agreement
with the Company, which agreement contains a definition of "disability" or
"permanent disability" (or words of like import) for purposes of termination of
employment thereunder by the Company, "disability" or "permanent disability" as
defined in the most recent of such agreements, or (ii) in all other cases,
means such Optionholder's inability to perform substantially his or her duties
and responsibilities to the Company or any of its subsidiaries by reason of
physical or mental illness, injury, infirmity or condition: (A) for a
continuous period for 120 days or one or more periods aggregating 150 days in
any twelve-month period; (B) at such time as such Optionholder is eligible to
receive disability income payments under any long-term disability insurance
plan maintained by the Company or any of its subsidiaries; or (C) at such
earlier time as such Optionholder or the Company submits medical evidence, in
the form of a physician's certification, that such Optionholder has a physical
or mental illness, injury, infirmity or condition that will likely prevent such
Optionholder from substantially performing his duties and responsibilities for
120 days or longer.
A termination of employment shall not be deemed to occur by reason of
(i) the transfer of an Optionholder from employment by the Company to
employment by a subsidiary corporation of the Company or (ii) the transfer of
an Optionholder from employment by a subsidiary corporation of the Company to
employment by the Company or by another subsidiary corporation of the Company.
Notwithstanding anything to the contrary contained in this Article 10,
in no event shall any person be entitled to exercise any Option after the
expiration of the period of exercisability of such Option as specified therein.
11. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
In the event of any change in the outstanding Shares through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
reverse split, split-up, split-off, spin-off, combination of shares, exchange
of shares, or other like change in capital structure of the Company, the
Committee shall make such adjustments 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
Committee 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 for which Options may be
granted to any individual under the Plan, the minimum exercise price per Share
for Options to be granted under the Plan, and the number of Shares and prices
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 Committee as to these matters shall be conclusive.
12. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or on any
subsidiary corporation thereof to continue the employment of any Optionholder
and it shall not impose any obligation on the part of any Optionholder to
remain in the employ of the Company or of any subsidiary corporation thereof.
13. SECURITIES LAW MATTERS
Except as hereinafter provided, the Committee may require an
Optionholder, as a condition upon exercise of any Option granted hereunder, to
execute and deliver to the Company a written statement, in form satisfactory to
the Committee, in which the Optionholder represents and warrants that Shares
are being acquired for such Optionholder's own account for investment only and
not with a view to the resale or distribution thereof. The Optionholder shall,
at the request of the Committee, be required to represent and warrant in
writing that any subsequent resale or distribution of Shares by the
Optionholder 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 Optionholder 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.
14. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES
Subject to Articles 13, 15 and 16, upon any exercise of an Option
which may be granted hereunder and 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, if a transfer agent has been
engaged by the Company, 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, or (ii)
implement the provisions of the Plan and any agreement between the Company and
the Optionholder 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.
All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.
15. WITHHOLDING TAXES
The Company will require, as a condition to an Optionholder exercising
an Option granted hereunder, that the Optionholder reimburse the corporation
that employs such Optionholder 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 Optionholder 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
Optionholder upon such terms and conditions as the Committee shall prescribe.
The corporation that employs such Optionholder may, in its discretion, hold the
stock certificate to which such Optionholder 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.
16. LISTING OF SHARES AND RELATED MATTERS
The Committee may delay the issuance or delivery of Shares pursuant to
any Option granted hereunder if it determines that listing, registration or
qualification of Shares or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the grant of an Option under the Plan or the issuance of Shares
thereunder, 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 Committee.
17. AMENDMENT OF THE PLAN
The Committee may, from time to time, amend the Plan, provided that no
amendment shall be made, without the approval of the stockholders of the
Company, that will (i) increase the total number of Shares reserved for Options
under the Plan or the amount of Options that may be granted to any key employee
(in each case, other than an increase resulting from an adjustment provided for
in Article 11), (ii) reduce the exercise price of any Option granted hereunder
below the price required by Article 5, (iii) modify the provisions of the Plan
relating to eligibility, or (iv) materially increase the benefits accruing to
participants under the Plan. 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 such Option without
the consent of the holder of such Option.
18. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time suspend or terminate the Plan.
The Plan, unless sooner terminated 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
Committee to construe and administer any Options granted prior to the
termination or suspension of the Plan under Article 3 nevertheless shall
continue after such termination or during such suspension.
19. 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.
20. PARTIAL INVALIDITY
The invalidity or illegibility of any provision hereof shall not be
deemed to affect the validity of any other provision.
21. EFFECTIVE DATE
The Plan shall become effective at 9:00 a.m., New York City Time, on
the Effective Date, provided the Plan is approved by the stockholders of the
Company at an annual meeting or any special meeting of stockholders of the
Company within 12 months of the Effective Date, and such approval of
stockholders shall be a condition to the right of each eligible key employee to
receive any Options under the Plan. Any Options granted under the Plan prior to
such approval of stockholders shall be effective as of the date of the grant
(unless, with respect to any Option, the Committee specifies otherwise at the
time of the grant), but no such Option may be exercised prior to such
stockholder approval, and if stockholders fail to approve the Plan as specified
hereunder, any such Option shall be cancelled.