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EXHIBIT 10.6
CASCO INTERNATIONAL, INC.
1997 EMPLOYEE STOCK OPTION PLAN
SECTION 1 - PURPOSE:
1.1 The purpose of this Employee Stock Option Plan ("Plan") is to further
the success of CASCO International, Inc., a Delaware corporation
("Company") by making available Common Stock of the Company for
purchase by certain officers and employees of the Company and its
affiliates, and thus to provide an additional incentive to such
individuals to continue in the service of the Company or its affiliates
and to give them a greater interest as Stockholders in the success of
the Company. Subject to compliance with the provisions of the Plan and
the Internal Revenue Code of 1986, as amended, Incentive Stock Options
as authorized by Section 422 of the Code and stock options which do not
qualify under Section 422 of the Code are authorized and may be granted
under the Plan.
SECTION 2 - DEFINITIONS:
2.1 As used in this Plan, the following terms shall have the meanings
indicated as follows:
2.1.1 "Board" means the Board of Directors of the Company.
2.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
2.1.3 "Committee" means the Committee administering the Plan
described in Section 3 hereof.
2.1.4 "Common Stock" means the Company's Common Stock, par value
$.01 per share.
2.1.5 "Date of Grant" means the date on which an option is granted
under a written option agreement executed by the Company and a
Participant pursuant to the Plan.
2.1.6 "Effective Date" means the effective date of this Plan
specified in Paragraph 13 hereof.
2.1.7 "Exchange Act" means the Securities Exchange Act of 1934, as
it may be amended from time to time.
2.1.8 "Incentive Stock Option" means an option qualifying under
Section 422 of the Code.
2.1.9 "Non-Employee Director" means a person who meets the
definition of a "non-Employee Director" as defined in Rule
16b-3 promulgated under the Exchange Act or any successor
provision.
2.1.10 "Parent" means a parent corporation of the Company as defined
in Section 424(e) of the Code.
2.1.11 "Participants" means the employees and officers of the
Company, its Subsidiaries and
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its Parents, and those directors of the Company who are also
employees of the Company, its subsidiaries or its Parents.
2.1.12 "Subsidiary" means a subsidiary corporation of the Company as
defined in Section 424(f) of the Code.
SECTION 3 - ADMINISTRATION OF THE PLAN:
3.1 The Board of Directors of the Company shall appoint a committee
("Committee") comprised of two (2) or more directors to administer the
Plan. Only directors who are Non-Employee Directors shall be eligible
to serve as members of the Committee. The Committee shall report all
action taken by it to the Board which shall review and ratify or
approve those actions that are, by law, required to be so reviewed and
ratified or approved by the Board. The Committee shall have full and
final authority in its discretion, subject to the provisions of the
Plan, to determine the Participants to whom, and the time or times at
which options shall be granted and the number of shares and purchase
price of Common Stock covered by each option; to construe and interpret
the Plan and any agreements made pursuant to the Plan; to determine the
terms and provisions (which need not be identical or consistent with
respect to each Participant) of the respective option agreements and
any agreement ancillary thereto including, but without limitation,
terms covering the payment of the option price; and to make all other
determinations and to take all other actions deemed necessary or
advisable for the proper administration of the Plan. All such actions
and determinations shall be conclusively binding for all purposes and
upon all persons.
SECTION 4 - OPTIONS AUTHORIZED:
4.1 The options granted under this Plan may be Incentive Stock Options or
stock options that do not qualify as Incentive Stock Options (sometimes
referred to as "non-qualified options" or "non-qualified stock
options"). The Committee shall have the full power and authority to
determine which options shall be non-qualified stock options and which
shall be Incentive Stock Options; to grant only Incentive Stock Options
or, alternatively, only non-qualified stock options; and to, in its
sole discretion, grant to the holder of an outstanding option in
exchange for the surrender and cancellation of such option, a new
option having purchase price lower than that provided in the option so
surrendered and cancelled and containing such other terms and
conditions as the Committee may prescribe in accordance with the
provisions of the Plan. No options may be granted under the Plan prior
to the Effective Date. In addition to any other limitations set forth
herein, the aggregate fair market value, determined in accordance with
Paragraph 7(A) of the Plan as of the time the option is granted, of the
stock with respect to which Incentive Stock Options are exercisable for
the first time by a Participant in any calendar year (under all plans
of the Company and of any Parent or Subsidiary) shall not exceed
$100,000.
SECTION 5 - COMMON STOCK SUBJECT TO OPTIONS:
5.1 The aggregate number of shares of the Company's Common Stock which may
be issued upon the exercise of options shall not exceed one hundred
fifty thousand (150,000), subject to adjustment under the provisions of
Paragraph 8. The shares of Common Stock to be issued upon the exercise
of options may be authorized but unissued shares, or shares issued
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and reacquired by the Company. In the event any option shall, for any
reason, terminate or expire or be surrendered without having been
exercised in full, the shares subject to such option shall again be
available for options to be granted under the Plan, except that shares
for which relinquished options (or portions thereof) are exercisable
shall not again be available for options under the Plan.
SECTION 6 - PARTICIPANTS:
6.1 Except as hereinafter provided, options may be granted under the Plan
to any Participant. In determining the Participants to whom options
shall be granted and the number of shares to be covered by such option,
the Committee may take into account the nature of the services rendered
by the respective Participants, their present and potential
contributions to the Company's success, and such other factors as the
Committee, in its discretion, shall deem relevant. A participant who
has been granted an option under the Plan may be granted an additional
option(s) under the Plan, in the Committee's discretion.
SECTION 7 - TERMS AND CONDITIONS OF OPTIONS:
7.1 The grant of an option under the Plan shall be evidenced by a written
agreement executed by the Company and the applicable participant and
shall contain such terms and be in such form as the Committee may, from
time to time, approve, subject to the following limitations and
conditions:
7.1.1 OPTION PRICE: The option price per share with respect to each
option shall be determined by the Committee, but shall in no
instance be less than the par value of the shares subject to
the option. In addition, the option price per share with
respect to Incentive Stock Options granted hereunder shall in
no instance be less than the fair market value of the shares
of Common Stock subject to the option as determined by the
Committee. The Committee shall, in good faith, determine the
fair market value of the shares of Common Stock (without
regard to any restrictions other than a restriction which, by
its terms, will never lapse) based upon a reasonable method of
valuation adopted by the Committee, or such other method as
may be permitted by the Code, or regulations or rulings
promulgated thereunder. The Committee may permit the option
purchase price to be payable by any of the following means or
any combination thereof: (i) cash; (ii) certified or cashier's
check payable to the Company; (iii) the delivery of whole
shares of Common Stock owned by the Option holder; or (iv) by
requesting that the Company withhold whole shares of Common
Stock then issuable upon exercise of the Option (for purposes
of such a transaction the value of the shares of Common Stock
shall be deemed to be equal to the fair market value, as
determined by the Committee in good faith, of the shares on
the date of the exercise of the Option) in which case the
Option with respect to the shares withheld shall be deemed to
be surrendered and cancelled.
7.1.2 PERIOD OF OPTION: The expiration date of each option shall be
fixed by the Committee but, notwithstanding any provision of
the Plan to the contrary, such expiration date shall not be
more than five (5) years after the Date of Grant.
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7.1.3 VESTING OF STOCKHOLDER RIGHTS: Neither the optionee nor
his/her successor in interest shall have any of the rights
of a Stockholder of the Company until the shares relating to
the option hereunder are issued by the Company and are
properly delivered to such optionee or successor.
7.1.4 EXERCISE OF OPTION: Each option shall be exercisable from
time to time, but not less than six (6) months after the
Date of Grant, over such period and upon such terms and
conditions as the Committee shall determine, but not at any
time as to less than twenty-five (25) shares unless the
remaining shares which have become so purchasable are less
than twenty-five (25) shares. After the death of the
optionee, an option may be exercised as provided in
Paragraph 15 hereof.
7.1.5 NON-TRANSFERABILITY OF OPTION: No option shall be
transferable or assignable by an optionee, other than by
will or the laws of descent and distribution or pursuant to
a qualified domestic relations order and each option shall
be exercisable, during the optionee's lifetime, only by
him/her or, during periods of legal disability, by his/her
legal representative. No option shall be subject to
execution, attachment, or similar process.
7.1.6 DISQUALIFYING DISPOSITION: The option agreement evidencing
any Incentive Stock Options granted under this Plan shall
provide that if the optionee makes a disposition, within the
meaning of Section 424(c) of the Code and regulations
promulgated thereunder, of any share(s) of Common Stock
issued to him/her pursuant to exercise of the option within
the two (2) year period commencing on the day after the date
of issuance of the share(s) to him/her pursuant to the
exercise of such option, he/she shall, within ten (10) days
after such disposition date, notify the company of the sales
price or other value ascribed to or used to measure the
disposition of the share(s) thereof and immediately deliver
to the Company any amount of federal income tax withholding
required by law.
7.1.7 LIMITATION ON GRANTS TO CERTAIN STOCKHOLDERS: An Incentive
Stock Option may be granted to a participant only if such
Participant, at the time the option is granted, does not
own, after application of the attribution rules of Code
Section 424, stock possessing more than ten percent (10%) of
the total combined voting power of all classes of Common
Stock of the company or of its parent or Subsidiary. The
preceding restriction shall not apply if at the time the
option is granted, the option price is at least one hundred
ten percent (110%) of the fair market value, as defined in
Paragraph 7(A) above, of the common Stock subject to the
option and such option by its terms is not exercisable after
the expiration of five (5) years after the Date of Grant.
7.1.8 CONSISTENCY WITH CODE: Notwithstanding any other provision
in this Plan to the contrary, the provisions of all
agreements granting incentive stock options pursuant to the
Plan shall not violate the requirements of the Code
applicable to the Incentive Stock Options authorized
hereunder.
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SECTION 8 - ADJUSTMENTS:
8.1 The Committee, in its discretion, may make such adjustments in the
option price and the number of shares covered by outstanding options
that are required to prevent any dilution or enlargement of the rights
of the holders of such options that would otherwise result from any
reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, issuance of rights, or
any other change in the capital structure of the Company. The
Committee, in its discretion, may also make such adjustments in the
aggregate number of shares that may be the subject of options which are
appropriate to reflect any transaction or event described in the
preceding sentence.
SECTION 9 - RESTRICTION OF ISSUING SHARES:
9.1 The exercise of each option shall be subject to the condition that if
at any time the company shall determine, in its discretion, that the
satisfaction of withholding tax or other withholding liabilities, or
that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any securities exchange
or under any state or federal law, or that the consent or approval of
any regulatory body is necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or purchase of shares
pursuant thereto, then in any such event, such exercise shall not be
effective unless such withholding, listing, registration,
qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.
SECTION 10 - USE OF PROCEEDS:
10.1 The proceeds received by the Company from the sale of Common Stock
pursuant to the exercise of options granted under the Plan shall be
added to the Company's general funds and used for general corporate
purposes.
SECTION 11 - AMENDMENT, SUSPENSION, AND TERMINATION OF PLAN:
11.1 The Board may, at any time, suspend or terminate the Plan or may amend
it from time to time in such respects as the Board may deem advisable
in order that the options granted thereunder may conform to any changes
in the law or in any other respect that the Board may deem to be in the
best interests of the Company provided, however, that without approval
by the Stockholders of the Company voting the proper percentage of its
voting power, no such amendment shall make any change in the Plan for
which Stockholder approval is required of the Company in order to
comply with:
11.1.1 The Code or regulatory provisions dealing with Incentive Stock
Options;
11.1.2 Any rules for listed companies promulgated by any national
stock exchange on which the Company's stock is traded; or
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11.1.3 Any other applicable rule of law.
11.2 Unless sooner terminated hereunder, the Plan shall terminate ten (10)
years after the Effective Date. No option may be granted during any
suspension or after the termination of the Plan. Except as provided in
Paragraph 12, no amendment, suspension, or termination of the Plan
shall, without an optionee's consent, impair or negate any of the
rights or obligations under any option theretofore granted to such
optionee under the Plan.
SECTION 12 - TAX WITHHOLDING:
12.1 The Committee may, in its sole discretion:
12.1.1 Require an optionee to remit to the Company a cash amount
sufficient to satisfy, in whole or in part, any federal,
state, or local withholding tax requirements prior to the
delivery of any certificate for shares pursuant to the
exercise of an option hereunder; or,
12.1.2 Satisfy such withholding requirements through another lawful
method.
SECTION 13 - EFFECTIVE DATE OF PLAN:
13.1 This Plan shall become effective (the "Effective Date") upon adoption
by the Board, and in the case of Incentive Stock Options, subject to
approval within twelve (12) months after such adoption by holders of a
majority of the shares of Common Stock present in person or by proxy
and entitled to vote at a duly held Stockholders meeting. Options,
including Incentive Stock Options, may be granted under the Plan prior
to the receipt of such approval.
SECTION 14 - TERMINATION OF EMPLOYMENT:
14.1 In the event of the retirement, with the written consent of the
Company, or other termination of the employment of an employee to whom
an option has been granted under the Plan other than:
14.1.1 A termination that is either (i) for cause or (ii) voluntary
on the part of the employee and without the written consent of
the Company; or,
14.1.2 A termination by reason of death.
14.2 The employee may, unless otherwise provided in his/her option
agreement, exercise his/her option at any time within three (3) months
after such retirement or other termination of employment (or within one
(1) year after termination of employment due to disability within the
meaning of Code Section 422(c)(6), or within such other time as the
Committee shall authorize, but in no event after five (5) years after
the date of granting thereof, or such lesser period as may be specified
in the stock option agreement), but only to the extent of the number of
shares of which his/her options were exercisable by him/her at the date
of the termination of his/her employment.
14.3 In the event of the termination of the employment of an employee to
whom an option has
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been granted under the Plan that is either for cause, or voluntary on
the part of the employee and without the written consent of the
company, any option held by him/her under the Plan, to the extent not
previously exercised, shall forthwith terminate on the date of such
termination of employment. Options granted under the Plan shall not be
affected by any change of employment so long as the holder continues to
be an employee of the Company, a Subsidiary, or Parent. The option
agreement may contain such provisions as the Committee shall approve
with respect to the effect of approved leaves of absence. Nothing in
the Plan, or in any option granted pursuant to the Plan, shall confer
on any individual any right to continue in the employ of the Company or
any of its Subsidiaries or Parents, or interfere in any way with the
right of the Company or any of its Subsidiaries or Parents to terminate
his employment at any time.
SECTION 15 - DEATH OF HOLDER OF OPTION:
15.1 In the event an employee to whom an option has been granted under the
Plan dies during or within three (3) months after the termination of
his/her employment by the Company or a subsidiary or Parent, such
option, unless it shall have been previously terminated pursuant to the
provision of the Plan, or unless otherwise provided in his/her option
agreement, may be exercised to the extent of the entire number of
shares covered by the option whether or not purchasable by the employee
at the date of his/her death, by the executor or administrator of the
optionee's estate or by the person(s) to whom the optionee shall have
transferred such option by will or by the laws of descent and
distribution, at any time within a period of one (1) year after this
death, but not after the exercise termination date set forth in the
relevant stock option agreement.
SECTION 16 - LOANS TO ASSIST IN EXERCISE OF OPTIONS:
16.1 If approved by the Board, the Company or any Parent or Subsidiary may
lend money or guarantee loans by third parties to an individual to
finance the exercise of any option granted under the Plan to carry
Common Stock thereby acquired. No such loans to finance the exercise of
an Incentive Stock Option shall have an interest rate or other terms
that would cause any part of the principal amount to be characterized
as interest for purpose of the Code.
SECTION 17 - RULE 16b-3 PLAN:
17.1 This Plan is intended and has been drafted to comply in all respects
with Rule 16b-3, as amended, under the Exchange Act. If any provision
of this Plan does not comply with Rule 16b-3, as amended, this Plan
shall be automatically amended to comply with Rule 16b-3, as amended.
SECTION 18 - INDEMNIFICATION:
18.1 The members of the Committee shall be indemnified by the Corporation
against the reasonable expenses incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal
thereof, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or
any Option, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by legal counsel selected by the
Corporation) or paid by them in
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satisfaction of a judgment in any such action, suit or proceeding. A
member of the Committee shall not be entitled to indemnification with
respect to any matter or claim arising out of gross negligence or
willful misconduct by such member in the performance of his duties. As
a condition of any indemnification, a Committee member shall in writing
offer the Corporation the opportunity, at its own expense, to handle
and defend any suit or claim against him/her.
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