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Exhibit 10.1.6
AIRONET WIRELESS COMMUNICATIONS, INC.
1999 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1 PURPOSE OF THE PLAN. The purpose of this Plan is to promote the
best interests of the Company and its stockholders by enabling the Company to
attract and retain the services of experienced and knowledgeable independent
directors by providing such directors the opportunity, pursuant to Options
granted under the Plan, to acquire a proprietary interest in the Company and
thereby enhance their understanding of the interests of the Company's
shareholders and encourage them to put forth their maximum efforts for the
continued success and growth of the Company.
2 DEFINITIONS. In addition to such other capitalized terms as are
defined elsewhere in this Plan, the following terms shall when used in this Plan
have the respective meanings set forth below:
"Act" means the Securities Exchange Act of 1934, as amended from time
to time.
"Authorized Shares" means the maximum aggregate number of shares of
Common Stock specified in Section 4.1 as being authorized for issuance and sale
under Options granted pursuant to the Plan, subject to adjustment thereof in
accordance with Section 12.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commission" means the United States Securities and Exchange
Commission.
"Committee" means the Committee appointed by the Board in accordance
with Section 5.1, if a Committee is appointed. The members of such Committee
shall be members of the Board. If no Committee has been appointed, any reference
to the "Committee" shall be deemed a reference to the Board. Any function of the
Committee may be exercised by the Board at any time.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company.
"Company" means Aironet Wireless Communications, Inc., a Delaware
corporation.
"Director" means any person elected or duly appointed in accordance
with the certificate of incorporation or by-laws of the Company, or applicable
law, to serve on the Board.
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"Employee" means any person, including officers and Directors who are
also officers, employed by the Company or any Subsidiary. The payment of
director's fees by the Company shall not be sufficient to constitute a person as
an Employee.
"Family Member" means (i) the spouse or any sibling of an Optionee or
any lineal descendant (including, but not limited to, adopted and step children)
of any of the foregoing, (ii) a trust for the exclusive benefit of the Optionee
and/or person(s) described in clause (i) herein, or the trustee of such a trust
in his, her or its capacity as such, (iii) a partnership, corporation, limited
liability company or similar entity the partners, stockholders or other owners
of which include only the Optionee and/or person(s) described herein.
"Non-Employee Director" means any person who, as of any given date, has
been elected or duly appointed in accordance with the certificate of
incorporation or by-laws of the Company, or applicable law, to serve on the
Board and is not an officer or Employee of the Company or any of its
subsidiaries.
"Non-Profit Organization" means any organization which is exempt from
United States income taxes under Section 501(c)(3), (4), (5), (6), (7), (8) or
(10) of the Code.
"Option" means a right granted to a Non-Employee Director pursuant to
the Plan to purchase a specified number of shares of Common Stock at a specified
price during a specified period and on such other terms and conditions as may be
specified pursuant to the Plan. Options may be granted as Tax Qualified Options
or as Options which do not qualify as Tax Qualified Options.
"Option Agreement" means the written agreement evidencing an Option by
and between the Company and the Optionee described in Section 14.
"Optioned Stock" means the Common Stock subject to an Option.
"Optionee" means a Non-Employee Director who receives an Option.
"Plan" means this Aironet Wireless Communications, Inc. 1999 Stock
Option Plan for Non-Employee Directors.
"Rule 16b-3" means Rule 16b-3 promulgated by the Commission under the
Act or any similar successor regulation exempting certain transactions involving
stock-based compensation arrangements from the liability provisions of Section
16 of the Act, as adopted and amended from time to time and as interpreted by
formal or informal opinions of, and releases published or other interpretive
advice provided by, the Staff of the Commission.
"Securities Law Requirements" means the Securities Act of 1933, as
amended from time to time, and the Act and the rules and regulations promulgated
by the Commission
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under such laws, as such rules and regulations are adopted and amended from time
to time, including but not limited to Rule 16b-3, and as all such laws, rules
and regulations are interpreted by formal or informal opinions of, and releases
published or other interpretive advice provided by, the Staff of the Commission,
and the requirements of any stock exchange, automated inter-dealer quotation
system or other recognized securities market on which the Common Stock is listed
or traded or in which the Common Stock is included, as adopted and amended from
time to time and as interpreted by formal or informal opinions of, and other
interpretive advice provided by, the representatives of such stock exchange,
quotation system or other securities market.
"Shares" means the Common Stock as adjusted in accordance with Section
12.
"Subsidiary" means a corporation of which not less than fifty percent
(50%) of the voting shares are owned by the Company or a Subsidiary, whether or
not such corporation now exists or is hereafter organized or acquired by the
Company or a Subsidiary.
"Successor" means the estate of an Optionee or a person who succeeds by
will or the laws of descent and distribution to an Optionee's right to exercise
an Option.
"Tax Qualified Option" means an Option which is intended at the time of
grant to qualify for special tax treatment under Section 422A or other
particular provisions of the Code and the regulations, rulings and procedures
promulgated, published or otherwise provided thereunder, as adopted and amended
from time to time.
3 QUALIFICATION OF PLAN. The Plan is intended to qualify for an
exemption from the operation of Section 16(b) of the Act, pursuant to Rule
16b-3. Insofar as transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3, to the extent that any provision of the
Plan or action by the Board or the Committee fails to so comply, such provision
or action shall be deemed null and void to the extent permitted by law and
deemed advisable by the Board or, but only with respect to actions taken by it,
the Committee.
4 STOCK SUBJECT TO THE PLAN.
4.1 Number of Shares Issuable. Subject to adjustment in accordance with
the provisions of Section 12, the maximum aggregate number of Authorized Shares
which may be issued and sold under Options granted pursuant to the Plan is
200,000 shares of Common Stock. The Shares issued and sold upon the exercise of
Options may be treasury Shares, Shares of original issue or a combination
thereof.
4.2 Computation of Shares Available for Grant. For purposes of
computing the number of Authorized Shares available from time to time under the
Plan for the grant of Options, the number of Shares subject to each Option
granted pursuant to the Plan shall be provisionally counted against the
Authorized Shares from and after the grant of such Option but only for so long
as and to the extent that such Option shall remain outstanding
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and unexercised. Upon the exercise, in whole or in part, of an Option, the
number of Shares issued upon such exercise shall be permanently deducted from
the Authorized Shares, provided that no such permanent deduction shall be made,
and the provisional deduction against the Authorized Shares shall be reversed to
the extent that the exercise price and/or the withholding taxes with respect to
such exercise are paid through (i) the delivery to the Company by the person
exercising the option of Shares already owned by such person and/or (ii) the
withholding by the Company of Shares from the total number of Shares with
respect to which the Option is exercised. The provisional deduction against the
Authorized Shares shall likewise be reversed to the extent of the unexercised
portion of an Option upon the expiration, lapse, cancellation, surrender,
forfeiture or other termination of such Option or portion thereof. The Shares
covered by any such reversal of a provisional deduction against the Authorized
Shares shall immediately become available for the granting of new Options under
the Plan with respect thereto.
5 ADMINISTRATION OF THE PLAN.
5.1 Procedure. The Plan shall be administered by the Board or the Board
may, in its discretion, appoint a Committee to administer the Plan, subject to
such terms and conditions as the Board may prescribe, which Committee, once
appointed, shall continue to serve until otherwise directed by the Board;
provided that the granting of Options under Section 6.3 and any action under the
Plan affecting the number of Shares covered thereby, the exercise price payable
thereunder or the times at which the same may be exercised (including, but not
limited to, the acceleration of the vesting thereof or any extension of the
period, subject to the maximum term fixed by Section 7.1, during which such an
Option may be exercised) shall not be taken by the Committee but shall lie
solely within the authority of the Board, subject to the abstention of the
Optionee from any decision regarding any Option held by such Optionee. Subject
to the provisions of the Plan, the Committee has authority to manage and control
the operation of the Plan, interpret the provisions of the Plan, and prescribe,
amend and rescind rules and regulations relating to the Plan. From time to time
the Board may increase or decrease the size of the Committee and may appoint
additional members thereof, remove members (with or without cause), fill
vacancies however caused and remove all members of the Committee and thereafter
directly administer the Plan.
5.2 Powers of the Committee. Subject to the provisions of this Plan,
the Committee shall have the authority, in its sole discretion:
5.2.1 To determine, upon review of relevant information in
accordance with Section 8.2 of the Plan, the "Fair Market Value" (as
defined in Section 8.2) of the Shares;
5.2.2 To determine the terms and provisions of each Option;
5.2.3 To amend any outstanding Option;
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5.2.4 To authorize any person to prepare and execute on behalf
of the Company any instrument deemed by the Committee to be necessary
or advisable to evidence or effectuate the Plan, any Option granted
thereunder or any amendment to the Plan or any Option;
5.2.5 To interpret the Plan;
5.2.6 To prescribe, amend and rescind, if the Committee deems
it necessary or appropriate, any rules and regulations relating to the
Plan, to the extent not inconsistent with the Plan;
5.2.7 To make all other determinations the Committee may deem
necessary or advisable in connection with the administration of the
Plan; and
5.2.8 To accelerate the time when any Option shall vest and
may be exercised by the Optionee; provided, however, that no Optionee
shall participate in any decision regarding acceleration of vesting of
any Option held by such Optionee.
5.3 Effect of Board and Committee Decisions. All decisions,
determinations and actions of the Board and the Committee in connection with the
construction, interpretation, administration, application, operation and
implementation of the Plan shall be final, conclusive and binding on the
Company, its stockholders and Subsidiaries, all Directors and Optionees, their
respective legal representatives, heirs, successors and assigns, and all other
persons claiming under or through any of them.
5.4 Exculpation and Indemnification. No member of the Board or the
Committee, and no Employee or other agent acting on behalf of the Board or the
Committee, shall be personally liable for any decision, determination or action
made or taken, or failed to be made or taken, with respect to this Plan or any
Option granted hereunder, and the Company shall fully protect each such person
in respect of any such decision, determination or action and shall indemnify
each such person against any and all claims, losses, damages, expenses and
liabilities arising from or in connection with any such decision, determination
or action.
6 ELIGIBILITY; FORMULA GRANTS.
6.1 Eligibility. Each Director who is not an Employee shall be eligible
to receive grants of Options under the Plan.
6.2 Formula Grants.
6.2.1 Initial Grants. Each Non-Employee Director who is
sitting on the Board on the first day that the Company's Common Stock
commences trading on the Nasdaq Stock Market's National Market System
following the Company's initial
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public offering (the "First Trading Day") and those who are newly
elected or appointed to the Board after the First Trading Day shall
automatically be granted an Option (the "Initial Grant") to purchase
25,000 Shares of Common Stock (subject to adjustment as provided in
Section 12) on the First Trading Day or the day he or she joins the
Board, as applicable.
6.2.2 Continuing Grants. Each Non-Employee Director shall
automatically be granted an Option (the "Continuing Grant") to purchase
5,000 Shares of Common Stock (subject to adjustment as provided in
Section 12) on each anniversary of his or her election or last
re-election to the Board so long as such Non-Employee Director is
continuing to serve on the Board on the date of such anniversary.
6.3 Discretionary Grants. In its sole discretion, the Board may at any
time and from time to time while the Plan is in effect grant to any one or more
of the Non-Employee Directors additional Options to purchase Shares on such
terms and subject to such provisions as the Board may determine (which terms and
provisions need not be identical to other Options granted under this Section 6),
including but not limited to, (i) the number of Shares subject to the Option,
(ii) the exercise price per Share (subject to the provisions of Section 8), and
(iii) whether the Option shall become exercisable over a period of time and when
it shall be fully exercisable. Any Options granted under this Section 6.3 shall
be in addition to those automatically granted under Section 6.2, and there shall
be no limit on the number of Options which may be granted to any eligible
Director or on the aggregate number of Shares subject to purchase thereunder,
subject to the limitation in Section 4.1.
7 TERM OF OPTIONS; VESTING.
7.1 Term of Options. Subject to the provisions of Section 6.3 as to
Options described therein, the term of each Option shall be ten (10) years from
the date of grant thereof provided that the Committee, if it intends that a
particular Option qualify as a Tax-Qualified Option, shall observe such
restrictions on the term of such Option as may be imposed by applicable tax laws
in order for such Option to so qualify. Each Option shall continue in effect in
accordance with its terms notwithstanding that the Plan may, thereafter be
terminated prior to the expiration of the term of such Option.
7.2 Vesting.
7.2.1 Initial Grants. Each Option constituting an Initial
Grant shall be exercisable (a) as to one-third of the Shares subject to
the Option, after the first anniversary of the grant date, (b) as to
two-thirds of the Shares subject to the Option, after the second
anniversary of the grant date, and (c) as to all or any part of the
Shares subject to the Option, after the third anniversary of the grant
date.
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7.2.2 Continuing Grants. Each Option constituting a Continuing
Grant shall be exercisable as to all or any part of the Shares subject
to the Option after the third anniversary of the grant date.
7.3 Discretionary Grants. Each Option granted pursuant to Section 6.3
shall be exercisable at such times and as to all or any part of the Shares
subject to such Option as determined by the Board at the time of grant and
reflected in the Option Agreement evidencing the same.
8 EXERCISE PRICE.
8.1 Minimum Price Required. The per Share exercise price for the Shares
subject to an Option shall be (i) with respect to Options granted under Section
6.2, the Fair Market Value per Share as of the day prior to the date of grant of
such Option, and (ii) with respect to Options granted under Section 6.3, such
price per Share as the Board may determine at the time of grant and reflected in
the Option Agreement evidencing the same, but in no event less than the Fair
Market Value per Share as of the day prior to the date of grant.
8.2 Definition of "Fair Market Value". For all purposes under the Plan,
"Fair Market Value" per Share shall be determined by the Committee in its sole
discretion; provided that if the Shares are included in the Nasdaq Stock
Market's National Market System or listed on a stock exchange on the date as of
which the same is to be determined, the Fair Market Value per Share shall be the
closing price on such quotation system or exchange which is the principal
trading market for the Shares on the date of determination or, if no sale price
was reported for the Shares on the date of determination, the closing price on
such principal trading market for the last trading day prior to the date of
determination for which a sale price was reported; provided further, however,
that if the foregoing method of determining Fair Market Value is inconsistent
with the then existing tax law requirements with respect to any Option which the
Committee intends to qualify as a Tax Qualified Option, then the Fair Market
Value per Share shall be determined by the Committee in such manner as is
required for such Tax Qualified Option to qualify as such.
9 FORM OF PAYMENT.
9.1 Acceptable Forms of Consideration. Except as may otherwise be
specified by the Committee in its sole discretion at the time of grant thereof
and reflected in the Option Agreement evidencing such Option, the following
forms of consideration will be accepted in payment of the exercise price for the
Shares to be issued upon exercise of an Option: (i) cash, (ii) personal check,
(iii) bank cashier's check, (iv) already owned Shares (duly endorsed for
transfer with signature guaranteed), (v) Shares withheld from the Shares to be
issued upon such exercise, (vi) subject to compliance with applicable law, a
commitment for the delivery to the Company of proceeds from the sale, pursuant
to a brokerage or similar arrangement, of Shares to be issued upon exercise of
the Option, or (vii) any combination of the foregoing. The person entitled to
exercise the Option shall
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be entitled to elect from the foregoing forms of consideration the form(s) to be
used in effecting payment with respect to a particular exercise; provided that
any election by an Optionee to use already owned Shares or have Shares withheld
from those issuable upon such exercise shall be effective only if made in
accordance with the applicable requirements of Rule 16b-3; and provided further
that a commitment for the delivery to the Company of proceeds from the sale,
pursuant to a brokerage or similar arrangement, of Shares to be issued upon
exercise of an Option will not be accepted from an Optionee if, under Securities
Law Requirements, such a sale would be matched with such exercise to result in
"short-swing" profit liability under Section 16(b) of the Act on the part of
such Optionee with respect to such transaction.
9.2 Valuation of Shares Delivered or Withheld. Where already owned
Shares, or Shares withheld from those issuable upon such exercise, are used in
payment of the exercise price, such Shares shall be valued at Fair Market Value
as of the day immediately preceding the date of exercise.
9.3 Delivery of Already Owned Shares. The Company shall not be
obligated to accept from an Optionee Shares he or she already owns as full or
partial payment of the exercise price of an Option unless payment by such shares
is not in violation of Section 16(b) of the Act, and the Company can require
that the tender be accompanied by a written statement of the Optionee certifying
that either (i) the Shares tendered in payment were acquired other than through
the exercise of a stock option granted by the Company, (ii) the Shares tendered
in payment were acquired through the exercise, on such date(s) as shall be
recited in such statement (any such Shares acquired through such an exercise
occurring less than six (6) months prior to the date of exercise of the Option
in respect of which such already owned Shares are tendered are ineligible for
use as payment toward such Option exercise), of stock option(s) granted by the
Company or (iii) that the Shares were acquired and the use thereof is in
accordance the provisions of Rule 16b-3. The Committee may, in its sole
discretion, accept, in lieu of physical delivery of the stock certificates
evidencing such Shares, such constructive delivery of such Shares as may be
satisfactory to the Committee.
10 METHOD OF EXERCISE.
10.1 Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as are determined by the Committee and as are permitted under the Plan. An
Option may not be exercised for a fraction of a Share. In order to exercise an
Option, the person or persons entitled to exercise it shall deliver to the
Company written notice of the number of Shares with respect to which the Option
is being exercised, accompanied by payment in full of the aggregate price for
the Shares so to be acquired. To constitute an effective exercise of an Option,
such notice and payment shall be addressed to the attention of the Treasurer of
the Company and must be received at the principal executive office of the
Company by 5:00 p.m., local time, on the date of expiration or termination of
the Option. Until the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly
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authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends nor any other rights as a
stockholder shall exist with respect to the Optioned Stock notwithstanding the
exercise of the Option. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 12.
Exercise of an Option shall result in a decrease in the number of
Shares which thereafter shall be available for sale under such Option by the
number of Shares as to which the Option is exercised, including any Shares
withheld to cover the exercise price.
10.2 Termination of Service. Except as may otherwise be specified by
the Committee in its sole discretion at the time of grant thereof and reflected
in the Option Agreement evidencing such Option, in the event that an Optionee
shall cease to be a Director (other than by reason of the Optionee's death or
disability), such Optionee may exercise his Option (to the extent that he was
entitled to exercise it at the time he ceased to be a Director) until the
earlier of (i) the date twelve (12) months after the date Optionee ceased to be
a Director or (ii) the expiration date of such Option, and the Option shall
terminate on the earlier of such dates.
10.3 Death of Optionee. Except as may otherwise be specified by the
Committee in its sole discretion at the time of grant thereof and reflected in
the Option Agreement evidencing such Option, upon the death of an Optionee:
10.3.1 who is at the time of his or her death a Director of
the Company, the Option may be exercised (to the extent the Optionee
would have been entitled to do so had Optionee continued living and
terminated Optionee's directorship six (6) months after the date of
death) by Optionee's Successor until the earlier of (A) the date six
(6) months following the date of the Optionee's death (or, if the
Committee intends that a particular Option qualify as a Tax Qualified
Option, such lesser period of time within which the applicable tax laws
may require that the Option be exercised in order for such Option so to
qualify), or (B) the expiration date of such Option, and the Option
shall terminate on the earlier of such dates; or
10.3.2 within thirty (30) days after the termination of
Optionee's directorship (other than termination due to disability), the
Option may be exercised (to the extent the Optionee was entitled to do
so at the date of termination of his directorship) by his Successor
until the earlier of (A) the date six (6) months following the date of
the Optionee's death (or, if the Committee intends that a particular
Option qualify as a Tax Qualified Option, such lesser period of time
within which the applicable tax laws may require that the Option be
exercised in order for such Option so to qualify), or (B) the
expiration date of such Option, and the Option shall terminate on the
earlier of such dates.
10.4 Disability of Optionee. Except as may otherwise be specified by
the Committee in its sole discretion at the time of grant thereof and reflected
in the Option
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Agreement evidencing such Option, if an Optionee's directorship terminates due
to Optionee becoming permanently and totally disabled within the meaning of
Section 23(e)(3) of the Code ("Disability"), the Option may be exercised (to the
extent the Optionee was entitled to do so as of the effective date of the
termination of Optionee's directorship by reason of such Disability) until the
earlier of (i) the date one (1) year after the effective date of such
termination or (ii) the expiration date of such Option, and the Option shall
terminate on the earlier of such dates.
11 LIMITED TRANSFERABILITY OF OPTIONS.
11.1 Options granted under the Plan and any rights and privileges
appertaining thereto (i) may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner by the Optionee other than (1) by will
or the laws of descent and distribution, (2) pursuant to a "qualified domestic
relations order" as defined in Code Section 414(p)(1)(B) and satisfying the
requirements of Code Section 414(p)(1)(A), or (3) without the payment of any
cash or other economic consideration by the transferee to the transferor, to (A)
a Family Member, (B) a Non-Profit Organization, or (C) a charitable trust, and
(ii) shall not be subject to execution, attachment or similar process. A
transfer of an Option pursuant to clause (i) may relate to all or any part of
the Shares (but must be for whole Shares) which then continue to be subject to
such Option. Written evidence of any such transfer, accompanied by the
transferring Optionee's original copy of the Grant Agreement evidencing the
transferred Option, shall be promptly provided to the Company, in the case of
clauses (i)(1) and/or (2) upon the entry of the court order , or other judicial
authorization or direction effecting such transfer or, in the case of clause
(i)(3), upon the transferor's making of such transfer, which transfer must in
all cases comply with the requirements of Section 15 and otherwise be in form
and substance reasonably acceptable to the Company before the Company shall be
obligated to recognize such transfer. Upon its receipt of the foregoing, the
Company shall cancel the original Option Agreement and issue a replacement
Option Agreement to the transferee for the Option or portion thereof so
transferred and to the transferring Optionee for any balance of the Option he or
she retains after such transfer.
11.2 Upon the transfer of an Option in accordance with Section 11.1,
the transferee shall succeed to, and be entitled to exercise, all of the rights
and privileges of the transferring Optionee, provided that the Option in the
hands of the transferee shall continue to be subject to all of the terms,
conditions and restrictions under the Plan and the Option Agreement with respect
to such Option which would be applicable to the Option were it still held by the
Optionee to whom it was originally granted, including, without limitation, any
requirement for the continued exercisability or other effectiveness of the
Option based upon the life, employment or other status of the original Optionee.
11.3 The restrictions on transferability in Section 11.1 shall not be
construed to limit the ability of an Optionee to elect to pay all or any portion
of the exercise price using the form of consideration described in Section
9.1(iv).
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12 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
12.1 Adjustments, in general. Subject to both the provisions of Section
12.2 and any required action by the stockholders of the Company, both the number
of Shares covered by each outstanding Option and the number of Shares which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which due to the expiration, lapse, cancellation, surrender,
forfeiture or other termination of an Option under this Plan are again available
for grant, as well as the price per Share covered by each such outstanding
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued and outstanding Shares resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of Shares or any
other increase or decrease in the aggregate number of issued and outstanding
Shares effected without receipt of consideration by the Company; provided,
however, that the issuance of Shares pursuant to the conversion or exchange of
any securities of the Company convertible into or exchangeable for Shares shall
not be deemed to have been "effected without receipt of consideration." Any
fractional Shares which would otherwise result from any such adjustments shall
be eliminated, either by deleting all fractional Shares or by appropriate
rounding to the next higher (fractions of one-half or more) or lower (fractions
of less than one-half) whole Share. All such adjustments shall be made by the
Board in its sole discretion. Except as expressly provided herein, no issuance
by the Company of shares of stock of any class, or securities convertible into
or exchangeable for shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made to, the number of or exercise price
for Shares subject to an Option.
In the event of the proposed dissolution or liquidation of the Company,
all outstanding Options will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board. The Board may, in
the exercise of its sole discretion in such instances, declare that any Option
shall terminate as of a date fixed by the Board and give each Optionee the right
to exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise then be exercisable.
Subject to the provisions of Section 12.2, in the event of a sale of
all or substantially all of the assets of the Company or the merger or
consolidation of the Company with or into another corporation, each outstanding
Option shall be assumed (or an equivalent option shall be substituted) by such
successor corporation or a parent or subsidiary of such successor corporation
unless the Board, in the exercise of its sole discretion, determines that, in
lieu of such assumption or substitution, the Optionee shall have the right to
exercise the Option as to all or any part of the Optioned Stock, including
Shares as to which the Option would not otherwise then be exercisable. If, in
the event of a merger, consolidation or sale of assets, the Board makes an
Option fully exercisable in lieu of assumption or substitution, the Company
shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
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12.2 Special Adjustments upon Change in Control. In the event of a
"Change in Control" of the Company (as defined in Section 12.3), unless
otherwise determined by the Board in its sole discretion prior to the occurrence
of such Change in Control, the following acceleration and valuation provisions
shall apply:
12.2.1 Any Options outstanding as of the date of such Change
in Control that are not yet fully vested on such date shall become
fully vested; and
12.2.2 The value of all outstanding Options, measured by the
excess of the "Change in Control Price" (as defined in Section 12.4)
over the exercise price, shall be cashed out. The cash out proceeds
shall be paid to the Optionee or, in the event of death of an Optionee
prior to payment, to his Successor.
12.3 Definition of "Change in Control". For purposes of this Section
12, a "Change in Control" means the happening of any of the following:
12.3.1 When any "person," as such term is used in Sections
13(d) and 14(d) of the Act (other than the Company, a Subsidiary or a
Company or Subsidiary employee benefit plan, including any trustee of
such a plan acting as trustee) becomes the "beneficial owner" (as
defined in Rule 13d-3 promulgated by the Commission under the Act, as
adopted and amended from time to time and as interpreted by formal or
informal opinions of, and releases published or other interpretive
advice provided by, the Staff of the Commission), directly or
indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company's then
outstanding securities; or
12.3.2 The consummation of a transaction requiring stockholder
approval and involving the sale of all or substantially all of the
assets of the Company or the merger or consolidation of the Company
with or into another corporation.
12.4 Definition of "Change in Control Price". For purposes of this
Section 12, "Change in Control Price" shall be, as determined by the Board,
either (i) the highest closing sale price of a Share, as reported by the NASDAQ
National Market, any stock exchange on which the Shares are listed or any other
recognized securities market on which the Shares are traded, at any time within
the sixty (60) day period immediately preceding the date of the Change in
Control (the "Sixty-Day Period"), or (ii) the highest price paid or offered, as
determined by members of the Board other than the Optionees, in any bona fide
transaction or bona fide offer related to the Change in Control, at any time
within the Sixty-Day Period.
13 TIME OF GRANTING OPTIONS. The grant date of an Option shall, for
all purposes, be (i) with respect to Options granted under Section 6.2, the
dates for automatic granting as specified in said Section 6.2, and (ii) with
respect to Options granted under Section 6.3, the date on which the Board makes
the determination to grant such Options.
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14 OPTION AGREEMENTS. As a condition to the effectiveness of each
grant of an Option under this Plan, the Optionee shall enter into a written
Option Agreement in such form as may be authorized by the Committee from time to
time. Subject to the provisions of Section 19.1, each such Option Agreement
shall contain such provisions as are required by the terms of this Plan and may
contain such additional provisions not inconsistent with the terms of this Plan
as the Committee in its sole discretion may from time to time require. Each
Option Agreement shall also provide for such minimum waiting period from the
date of grant before the Option may be exercised, and such minimum holding
period from the date of the acquisition of Shares upon exercise of an Option for
which such Shares must be held before making any disposition of such Shares, as
may be required by Rule 16b-3.
15 CONDITIONS UPON ISSUANCE OF SHARES AND TRANSFERS OF OPTIONS.
Notwithstanding anything express or implied to the contrary in either the Plan
or any Option Agreement made hereunder:
15.1 No transfer of an Option pursuant to Section 11 shall be
effective, and no Shares shall be issued with respect to an Option unless in
each such case, as applicable, the transfer or exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
applicable Securities Law Requirements and all other applicable provisions of
law, including without limitation any applicable state "blue sky" laws and
foreign (national and provincial) securities laws and the rules and regulations
promulgated under any of such laws, and such actions shall further be subject to
the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option or the issuance of Shares
upon exercise of an Option, or to the transfer of an Option under Section 11,
the Company may require the person exercising such Option, or the transferee
with respect to any Section 11 transfers, to make such representations and
warranties to the Company as may be required, in the opinion of counsel for the
Company, by any of the aforementioned Securities Law Requirements and other
laws, which may include, without limitation, representations and warranties that
the Shares which are being or may be purchased thereunder are being or will be
acquired only for investment and without any present intention to sell or
distribute such Shares.
15.2 The Company shall not have any liability to any Optionee in
respect of any delay in the sale or issuance of Shares, or the transfer of an
Option, hereunder until the Company is able to obtain authority from any
governmental authority (domestic or foreign) or self-regulatory organization
having jurisdiction there over, which authority is deemed by the Company's
counsel to be necessary to the lawful sale, issuance or transfer of such Shares
or Option, as the case may be, or any failure to sell or issue such Shares, or
to effect any such Option transfer, as to which the Company is unable to obtain
such requisite authority.
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15.3 The Company may, but shall be under no obligation to, effect or
obtain any registration or other qualification or approval of any Option granted
or transferred hereunder, or of any Shares issuable upon the exercise thereof,
under any applicable Securities Law Requirements or any other applicable
provisions of law, including without limitation any applicable state "blue sky"
laws and foreign (national and provincial) securities laws and the rules and
regulations promulgated under any of such laws, and in the event any such
registration, qualification or approval is not effected or obtained, such Option
or Shares, as the case may be, shall be subject to such transfer and/or other
restrictions (including, if so provided by such laws, rules and regulations, the
prohibition of a particular transaction) as may be imposed by such laws, rules
and regulations . By way of illustrating, but without limiting the generality
of, the foregoing provisions of this Section 15.3, Shares issuable upon the
exercise of an Option by a Director were covered by an effective registration
statement which the Company had prior to that date elected to file (consistent
with the discretion recognized in this Section 15.3) with the Commission on
Form S-8 and would be freely transferrable (subject to the filing of a Form 144
and the other applicable requirement of Rule 144 as then promulgated by the
Commission) by the Director, but unless the Company were to file (but in its
discretion, the Company has not elected to file) with the Commission a
registration statement with respect thereto on Form S-3 or other available Form,
Shares issuable to a transferee under Section 11 would not upon his or her
exercise thereof be freely transferable on the public securities markets for a
one year period as is further required by Rule 144 in the absence of an
applicable Form S-8 or other registration statement. In the event that any such
transfer and/or other restrictions shall apply, the Option Agreement evidencing
such Option or the Shares so issued, as the case may be, shall bear such legends
referencing such restrictions as the Company may reasonably require.
16 RESERVATION OF SHARES. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
17 EFFECTIVENESS OF PLAN. This Plan was adopted by the Board on, and
effective as of April 12, 1999; subject to the approval hereof by the vote of
the Company's stockholders required therefor by the Delaware General Corporation
Law and applicable Securities Law Requirements within one (1) year of such
adoption by the Board, which approval was obtained by Written Consent of such
stockholders on , 1999. The Plan shall continue in full force and effect
until (i) terminated by resolution of the Board or (ii) both (A) all Options
granted under the Plan have been exercised in full and (B) no Authorized Shares
remain available for the granting of additional Options. The termination of the
Plan shall not affect Options already granted, which Options shall remain in
full force and effect in accordance with their respective terms as if this Plan
had not been terminated.
18 AMENDMENT OF PLAN AND OUTSTANDING OPTIONS. The Board may, in its
sole discretion, amend the Plan from time to time, provided that any amendment
which Rule 16b-3 or any other Securities Law Requirement requires be approved by
the stockholders of the Company shall be made only with the approval of such
stockholders.
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Amendments to the Plan shall apply prospectively to all Options then outstanding
under the Plan, except in the case of any amendment which is adverse to an
Optionee, in which case the amendment shall apply with respect to the
outstanding Options held by the adversely affected Optionee only upon the
consent of such Optionee to such amendment. In exercising its authority under
Section 5.2.3 to amend outstanding Options, the Committee likewise may make an
amendment which adversely affects the Optionee only upon the consent of such
Optionee to such amendment. Notwithstanding the provisions of this Section 18,
the consent of the Optionee shall not be required with respect to an amendment
to the Plan or to any outstanding Option which is made in order to comply with
Securities Law Requirements or which causes a Tax Qualified Option no longer to
qualify as such.
19 GENERAL PROVISIONS.
19.1 Grants to Foreign Directors. Notwithstanding any other provision
of this Plan to the contrary, but subject to applicable Securities Law
Requirements and tax laws, to the extent deemed necessary or appropriate by the
Committee in its sole discretion in order to further the purposes of the Plan
with respect to Non-Employee Directors who are foreign nationals and/or employed
outside the United States of America, an Option granted to any such Non-Employee
Director may be on terms and conditions different from those specified in this
Plan in recognition of the differences in the laws, tax policies and customs
applicable to such Non-Employee Director, without the necessity of the Plan
being amended to provide for such different terms and conditions.
19.2 Determination of Deadlines. If any day on or before which action
under this Plan or any Option granted hereunder must be taken falls on a
Saturday, Sunday or Company-recognized holiday, such action may be taken on the
next succeeding day or preceding day, as applicable) which is not a Saturday,
Sunday or Company-recognized holiday.
19.3 Governing Law. To the extent that federal laws (such as the Act or
the Code) or the Delaware General Corporation Law do not otherwise control, this
Plan and all determinations made and actions taken pursuant hereto shall be
governed by the laws of the State of Ohio and construed accordingly.
19.4 Gender and Number. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
19.5 Captions. The captions contained in this Plan are for convenience
of reference only and do not affect the meaning of any term or provision hereof.
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