Exhibit 10.1
APPLIED CELLULAR TECHNOLOGY, INC.
1996 NON-QUALIFIED STOCK OPTION PLAN
(As amended through June 13, 1998)
APPLIED CELLULAR TECHNOLOGY, INC.
1996 NON-QUALIFIED STOCK OPTION PLAN
(As amended through June 13, 1998)
TABLE OF CONTENTS
Page
ARTICLE I - Name and Purpose. 1
1.1. Name...........................................................1
1.2. Purpose........................................................1
ARTICLE II - Definitions of Terms and Rules of Construction. 1
2.1. General Definitions............................................1
(a) Affiliate..............................................1
(b) Agreement..............................................1
(c) Board..................................................1
(d) Change of Control......................................2
(e) Company................................................2
(f) Committee..............................................2
(g) Common Stock...........................................2
(h) Director...............................................2
(i) Effective Date.........................................2
(j) Employee...............................................2
(k) Employer...............................................2
(l) Fair Market Value......................................2
(m) NQSO 2
(n) Option.................................................2
(o) Parent.................................................2
(p) Participant............................................3
(q) Plan 3
(r) Share..................................................3
(s) Subsidiary.............................................3
2.2. Other Definitions..............................................3
2.3. Conflicts in Plan..............................................3
ARTICLE III - Common Stock. 3
3.1. Number of Shares...............................................3
3.2. Reusage........................................................3
3.3. Adjustments....................................................4
ARTICLE IV - Eligibility. 4
4.1. Determined By Committee........................................4
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ARTICLE V - Administration. 4
5.1. Committee......................................................4
5.2. Authority......................................................5
5.3. Adjudication of Claims.........................................5
5.4. Options for Directors..........................................6
ARTICLE VI - Amendment, Termination, and Change of Control. 6
6.1. Power of Board.................................................6
6.2. Limitation.....................................................6
6.3. Term...........................................................6
6.4. Termination....................................................6
6.5. Effect of Amendment or Termination.............................6
6.6. Committee's Right..............................................7
6.7. Change of Control..............................................7
ARTICLE VII - Agreements 8
7.1. Grant Evidenced by Agreement...................................8
7.2. Provisions of Agreement........................................8
ARTICLE VIII - Payment, Dividends, and Withholdings. 8
8.1. Payment........................................................8
8.2. Dividend Equivalents...........................................9
8.3. Withholding....................................................9
ARTICLE IX - Options. 9
9.1. Type of Options................................................9
9.2. Terms of NQSOs.................................................9
9.3. Determination by Committee....................................10
ARTICLE X - Miscellaneous Provisions. 10
10.1. Underscored References.......................................10
10.2. Number and Gender............................................10
10.3. Governing Law................................................10
10.4. Purchase for Investment......................................10
10.5. No Employment Contract.......................................10
10.6. No Effect on Other Benefits..................................11
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APPLIED CELLULAR TECHNOLOGY, INC.
1996 NON-QUALIFIED STOCK OPTION PLAN
(As amended through June 13, 1998)
ARTICLE I
NAME AND PURPOSE
1. Name and Purpose.
1.1 Name.
The name of this Plan is the "Applied Cellular Technology, Inc. 1996
Non-Qualified Stock Option Plan."
1.2. Purpose
The Company has established this Plan to attract, retain, motivate and
reward Employees and Directors and to encourage ownership of the Company's
Common Stock by them.
ARTICLE II
DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
2. Definitions of Terms and Rules of Construction.
2.1. General Definitions.
The following words and phrases, when used in the Plan, unless otherwise
specifically defined or unless the context clearly otherwise requires, shall
have the following respective meanings:
(a) Affiliate. A Parent or Subsidiary of the Company.
(b) Agreement. The document which evidences the grant of an Option
under the Plan and which sets forth the terms, conditions and provisions
of, and restrictions relating to, such Option.
(c) Board. The Board of Directors of the Company.
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(d) Change of Control. The acquisition, without the approval of the
Board, by any person or entity, other than the Company or a Related Entity,
of more than 20% of the outstanding shares of the Company's voting common
stock through a tender offer, exchange offer or otherwise; the liquidation
or dissolution of the Company following a sale or other disposition of all
or substantially all of its assets; a merger or consolidation involving the
Company which results in the Company not being the surviving parent
corporation; or any time during any two-year period in which individuals
who constituted the Board at the start of such period (or whose election
was approved by at least two-thirds of the then members of the Board who
were members at the start of the two-year period) do not constitute at
least 50% of the Board for any reason. A Related Entity is the Parent, a
Subsidiary or any employee benefit plan (including a trust forming a part
of such a plan) maintained by the Parent, the Company or a Subsidiary.
(e) Company. Applied Cellular Technology, Inc.
(f) Committee. The Committee described in Section 5.1.
(g) Common Stock. The Company's common stock which presently has a par
value of $.001 per Share.
(h) Director. A member of the Board or a member of the Board of
Directors of any Affiliate.
(i) Effective Date. The date that the Plan is approved by the
shareholders of the Company which was August 2, 1996.
(j) Employee. Any person employed by the Employer.
(k) Employer. The Company and all Affiliates.
(l) Fair Market Value. The closing price of the Shares on the NASDAQ
on a given date, or, in the absence of sales on a given date, the closing
price on the NASDAQ on the last day on which a sale occurred prior to such
date.
(m) NQSO. A non-qualified stock option, which is an Option that does
not qualify as an Incentive Stock Option under Section 422 of the Internal
Revenue Code of 1986, as amended.
(n) Option. An option to purchase Shares granted under the Plan.
(o) Parent. Any corporation (other than the Company or a Subsidiary)
in an unbroken chain of corporations ending with the Company, if, at the
time of the grant of an Option, each of the corporations (other than the
Company or a Subsidiary) owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
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(p) Participant. An individual who is granted an Option under the
Plan. Options may be granted only to Employees and Directors.
(q) Plan. The Applied Cellular Technology, Inc. 1996 Non-Qualified
Stock Option Plan and all amendments and supplements to it.
(r) Share. A share of Common Stock.
(s) Subsidiary. Any corporation, other than the Company, in an
unbroken chain of corporations beginning with the Company if, at the time
of grant of an Option, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
2.2. Other Definitions.
In addition to the above definitions, certain words and phrases used in the
Plan and any Agreement may be defined in other portions of the Plan or in such
Agreement.
2.3. Conflicts in Plan.
In the case of any conflict in the terms of the Plan relating to an Option,
the provisions in the ARTICLE of the Plan which specifically grants such Option
shall control those in a different ARTICLE.
ARTICLE III
COMMON STOCK
3. Common Stock.
3.1. Number of Shares.
The number of Shares for which Options may be granted under the Plan shall
be 10,000,000 Shares. Such Shares may be authorized but unissued Shares, Shares
held in the treasury, or both.
3.2. Reusage.
If an Option expires or is terminated, surrendered, forfeited, or cancelled
without having been fully exercised, the Shares with respect to which such
Option has not been exercised at the time of termination, surrender, forfeiture,
or cancellation shall again be available for use under the Plan. In addition,
Shares delivered to the Company as payment of the exercise price of an Option
shall again be available for use under the Plan.
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3.3. Adjustments.
If there is any change in the Common Stock of the Company by reason of any
stock dividend, spin-off, split-up, spin-out, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares, number and
class of shares available for Options and the number of Shares subject to
outstanding Options, and the price thereof, as applicable, shall be
appropriately adjusted by the Committee.
ARTICLE IV
ELIGIBILITY
4. Eligibility.
4.1. Determined By Committee.
The Participants and the Options they receive under the Plan shall be
determined solely by the Committee. In making its determinations, the Committee
shall consider past, present and expected future contributions of Participants
and potential Participants to the Employer, including, without limitation, the
performance of, or the refraining from the performance of, services.
ARTICLE V
ADMINISTRATION
5. Administration.
5.1. Committee.
The Plan shall be administered by the Committee. The Committee shall
consist of the Board, unless the Board appoints a Committee of two or more but
less than all of the Board. If the Committee does not include the entire Board,
it shall serve at the pleasure of the Board, which may from time to time appoint
members in substitution for members previously appointed and fill vacancies,
however caused, in the Committee. The Committee may select one of its members as
its Chairman and shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members. Any
decision or determination reduced to writing and signed by a majority of the
members shall be fully as effective as if it had been made by a majority vote at
a meeting duly called and held.
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5.2. Authority.
Subject to the terms of the Plan, the Committee shall have discretionary
authority to:
(a) determine the individuals to whom Options are granted, the amounts
of Options to be granted and the time of all such grants;
(b) determine the terms, conditions and provisions of, and
restrictions relating to, each Option granted;
(c) interpret and construe the Plan and all Agreements;
(d) prescribe, amend and rescind rules and regulations relating
to the Plan;
(e) determine the content and form of all Agreements;
(f) determine all questions relating to Options under the Plan;
(g) maintain accounts, records and ledgers relating to Options;
(h) maintain records concerning its decisions and proceedings;
(i) employ agents, attorneys, accountants or other persons for such
purposes as the Committee considers necessary or desirable;
(j) take, at anytime, any action permitted by Section 6.7 irrespective
of whether any Change of Control has occurred or is imminent; and
(k) do and perform all acts which it may deem necessary or appropriate
for the administration of the Plan and carry out the purposes of the Plan.
5.3. Adjudication of Claims.
The Committee shall have discretionary authority to make all determinations
as to the right to benefits under the Plan. In the event that a Participant
believes he has not received the benefits to which he is entitled under the
Plan, a claim shall be made in writing to the Committee. The claim shall be
reviewed by the Committee. If the claim is approved or denied, in full or in
part, the Committee shall provide a written notice of approval or denial within
90 days with, in the case of a denial, the specific reasons for the denial and
specific reference to the provisions of the Plan and/or Agreement upon which the
denial is based. A claim shall be deemed denied if the Committee does not take
any action within the aforesaid 90 day period. If a claim is denied or deemed
denied and a review is desired, the Participant shall notify the Committee in
writing within 60 days of the receipt of notice of denial or the date on which
the claim is deemed to be denied, as the case may be. In requesting a review,
the Participant may review the Plan or any document relating to it and submit
any written issues and comments he may deem appropriate. The Committee shall
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then review the claim and provide a written decision within 60 days. This
decision, if adverse to the Participant, shall state the specific reasons for
the decision and shall include reference to specific provisions of the Plan
and/or Agreement on which the decision is based. The Committee's decision on
review shall be final.
5.4. Options for Directors.
Notwithstanding any other provision of the Plan, all determinations
relating to whether or not a member of the Board shall receive an Option, the
terms and conditions relating to any Option granted to such member, and all
matters relating to such Option after it is granted shall be made by the Board,
and the Board shall have all of the powers and authorities granted in the Plan
to the Committee for such purposes.
ARTICLE VI
AMENDMENT, TERMINATION, AND CHANGE OF CONTROL
6. Amendment, Termination, and Change of Control.
6.1. Power of Board.
Except as hereinafter provided, the Board shall have the sole right and
power to amend the Plan
at any time and from time to time.
6.2. Limitation.
The Board may not amend the Plan, without approval of the shareholders of
the Company, in a manner which would violate applicable law.
6.3. Term.
The Plan shall commence as of the Effective Date and, subject to the terms
of the Plan, shall continue in full force and effect until the earlier of March
15, 2006 or the termination of the Plan by the Board.
6.4. Termination.
The Plan may be terminated at any time by the Board.
6.5. Effect of Amendment or Termination.
Subject to the provisions of Section 6.6, the amendment or termination of
the Plan shall not adversely affect a Participant's right to any Option granted
prior to such amendment or termination.
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6.6. Committee's Right.
Any Option granted may be converted, modified, forfeited or cancelled, in
whole or in part, by the Committee if and to the extent permitted in the Plan or
applicable Agreement or with the consent of the Participant to whom such Option
was granted.
6.7. Change of Control.
In order to maintain a Participant's rights in the event of a Change in
Control, the Committee, in its sole discretion, may, in any Agreement evidencing
an Option, or at any time prior to, or simultaneously with or after a Change in
Control, provide such protection as it may deem necessary. Without, in any way,
limiting the generality of the foregoing sentence or requiring any specific
protection, the Committee may:
(a) provide for the acceleration of any time periods relating to the
exercise of such Option so that such Option may be exercised in full on or
before a date fixed by the Committee;
(b) provide for the purchase of such Option, upon the Participant's
request, for an amount of cash equal to the amount which could have been
attained upon the exercise of such Option had such Option been currently
exercisable;
(c) make such adjustment to the Option then outstanding as the
Committee deems appropriate to reflect such transaction or change; and/or
(d) cause the Options then outstanding to be assumed, or new Options
substituted therefor, by the surviving corporation in such change.
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ARTICLE VII
AGREEMENTS
7. Agreements
7.1. Grant Evidenced by Agreement.
The grant of any Option under the Plan shall be evidenced by an Agreement
which shall describe the Option granted and the terms and conditions of the
Option. The granting of any Option shall be subject to, and conditioned upon,
the recipient's execution of any Agreement required by the Committee. Except as
otherwise provided in an Agreement, all capitalized terms used in the Agreement
shall have the same meaning as in the Plan, and the Agreement shall be subject
to all of the terms of the Plan.
7.2. Provisions of Agreement.
Each Agreement will provide that the grantee shall not resign as an
Employee or Director until at least one year has elapsed. Subject to the
preceding sentence and the other terms of the Plan, each Agreement shall contain
such additional provisions that the Committee shall determine to be necessary,
desirable and appropriate for the Option granted.
ARTICLE VIII
PAYMENT, DIVIDENDS, AND WITHHOLDING
8. Payment, Dividends, and Withholdings.
8.1. Payment.
Upon the exercise of an Option, the amount due the Company shall be paid:
(a) in cash;
(b) by the tender or constructive tender to the Company of Shares
owned by the optionee and registered in his name having a Fair Market Value
equal to the amount due to the Company;
(c) in other property, rights and credits, including the Participant's
promissory note;
(d) in cash, but by means of a so-called "cashless exercise" of an
Option; and/or
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(e) by any combination of the payment methods specified in (a), (b),
(c) and (d) above.
Notwithstanding, the foregoing, any method of payment other than (a) may be used
only with the consent of the Committee or if and to the extent so provided in an
Agreement. The proceeds of the sale of Common Stock purchased pursuant to an
Option shall be added to the general funds of the Company or to the Shares held
in treasury, as the case may be, and used for the corporate purposes of the
Company as the Board shall determine.
8.2. Dividend Equivalents.
Grants of Options may include dividend equivalent payments or dividend
credit rights.
8.3. Withholding.
The Company may, at the time any Option is exercised, withhold from the
Shares issuable upon the exercise of an Option, any amount necessary to satisfy
federal, state and local income and/or other tax withholding requirements with
respect to the exercise of such Option. The Committee or the Company may require
a participant to tender to the Company cash in the amount necessary to comply
with any such withholding requirements.
ARTICLE IX
OPTIONS
9. Options.
9.1. Type of Options.
Only NQSOs may be granted by the Committee under the Plan.
9.2. Terms of NQSOs.
The terms of each NQSO shall provide that (a) such Option shall not be
treated as an Incentive Stock Option under Section 422 of the Internal Revenue
Code of 1986, as amended, (b) that the Option will not be exercisable (i) until
at least one year after the Option has been granted and (ii) unless the optionee
is a Director or an Employee at the time of exercise or has ceased to be such at
least one year after the Option is granted and after it is exercisable because
of death, total and permanent disability or termination by the Company without
cause, and (c) that such option shall not be exercisable more than ten years
after the date of grant. The purchase price for Shares under any NQSO shall be
not less than 85% of the Fair Market Value of the Shares at the time the Option
is granted.
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9.3. Determination by Committee.
Except as otherwise provided in Section 9.2, or otherwise in the Plan, the
terms of all Options shall be determined by the Committee.
ARTICLE X
MISCELLANEOUS PROVISIONS
10. Miscellaneous Provisions.
10.1. Underscored References.
The underscored references contained in the Plan are included only for
convenience, and they shall not be construed as a part of the Plan or in any
respect affecting or modifying its provisions.
10.2. Number and Gender.
The masculine and neuter, wherever used in the Plan, shall refer to either
the masculine, neuter or feminine; and, unless the context otherwise requires,
the singular shall include the plural and the plural the singular.
10.3. Governing Law.
This Plan shall be construed and administered in accordance with the laws
of the State of Missouri.
10.4. Purchase for Investment.
The Committee may require each person purchasing Shares pursuant to an
Option to represent to and agree with the Company in writing that such person is
acquiring the Shares for investment and without a view to distribution or
resale. The certificates for such Shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer. All
certificates for Shares delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem advisable
under all applicable laws, rules and regulations, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
references to such restrictions.
10.5. No Employment Contract.
The adoption of the Plan shall not confer upon any Employee any right to
continued employment nor shall it interfere in any way with the right of the
Employer to terminate the employment of any of its Employees at any time.
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10.6. No Effect on Other Benefits.
The grant of Options under the Plan shall have no effect on any benefits to
which a Participant may be entitled from the Employer, under another plan or
otherwise, or preclude a Participant from receiving any such benefits.
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