EXHIBIT 10.1
SUNTRON CORPORATION
AMENDED AND RESTATED
2002 STOCK OPTION PLAN
Suntron Corporation, a Delaware corporation, has adopted the Suntron
Corporation Amended and Restated 2002 Stock Option Plan (the "Plan"), effective
as of April 24, 2002, for the benefit of its eligible employees, consultants and
directors.
The purposes of the Plan are as follows:
(1) To provide an additional incentive for Directors, key
Employees and Consultants (as each such term is defined below) to further the
growth, development, and financial success of the Company by personally
benefiting through the ownership of Company stock and/or rights which recognize
such growth, development, and financial success.
(2) To enable the Company to obtain and retain the services of
directors, key Employees, and Consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development, and financial
success of the Company.
ARTICLE I.
DEFINITIONS
1.1 General. Wherever the following terms are used in the Plan
they shall have the meanings specified below, unless the context clearly
indicates otherwise.
1.2 Administrator. "Administrator" shall mean the entity that
conducts the general administration of the Plan as provided in Article VII. With
reference to the administration of the Plan with respect to Options granted to
Independent Directors, the term "Administrator" shall refer to the Board. With
reference to the administration of the Plan with respect to any other Option,
the term "Administrator" shall refer to the Committee unless the Board has
assumed the authority for administration of the Plan generally as provided in
Section 7.2.
1.3 Award Limit. "Award Limit" shall mean 2,000,000 shares of
Common Stock, as adjusted pursuant to Section 8.3 of the Plan.
1.4 Board. "Board" shall mean the Board of Directors of the
Company.
1.5 Code. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.6 Committee. "Committee" shall mean the Compensation Committee
of the Board, or another committee or subcommittee of the Board, appointed as
provided in Section 7.1.
1.7 Common Stock. "Common Stock" shall mean the common stock of
the Company, par value $.01 per share.
1.8 Company. "Company" shall mean Suntron Corporation, a Delaware
corporation.
1.9 Consultant. "Consultant" shall mean any consultant or adviser
if:
(a) The consultant or adviser renders bona fide services
to the Company;
(b) The services rendered by the consultant or adviser
are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for
the Company's securities; and
(c) The consultant or adviser is a natural person.
1.10 Director. "Director" shall mean a member of the Board.
1.11 Employee. "Employee" shall mean any officer or other employee
(as defined in accordance with Section 3401(c) of the Code) of the Company, or
of any corporation which is a Subsidiary.
1.12 Exchange Act. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
1.13 "Fair Market Value" of a share of Common Stock on any date of
reference shall mean the fair market value of a share of Common Stock on that
date, as determined by the Committee acting in good faith. If the Company's
Common Stock is publicly held, then Fair Market Value shall mean the "Closing
Price" (as defined below) of the Common Stock on the business day immediately
preceding the date of reference, unless the Committee in its sole discretion
shall determine otherwise acting in good faith. For the purpose of determining
Fair Market Value, the "Closing Price" of the Common Stock on any business day
shall be (i) if the Common Stock is listed or admitted for trading on any United
States national securities exchange, or if actual transactions are otherwise
reported on a consolidated transaction reporting system, the last reported sale
price of Common Stock on such exchange or reporting system, as reported in any
newspaper of general circulation, (ii) if the Common Stock is quoted on the
National Association of Securities Dealers Automated Quotations System
("Nasdaq"), or any similar system of automated dissemination of quotations of
securities prices in common use, the last reported sale price of Common Stock on
such system or, if sales prices are not reported, the mean between the closing
high bid and low asked quotations for such day of Common Stock on such system,
as reported in any newspaper of general circulation, or (iii) if neither clause
(i) or (ii) is applicable, the mean between the high bid and low asked
quotations for the Common Stock as reported by the National Quotation Bureau,
Incorporated if at least two securities dealers have inserted both bid and asked
quotations for Common Stock on at least five of the ten preceding days.
1.14 Incentive Stock Option. "Incentive Stock Option" shall mean an
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Committee.
1.15 Independent Director. "Independent Director" shall mean a
member of the Board who is not an Employee of the Company.
1.16 Non-Qualified Stock Option. "Non-Qualified Stock Option" shall
mean an Option which is not an Incentive Stock Option.
1.17 Option. "Option" shall mean a stock option granted under
Article IV of the Plan. An Option granted under the Plan shall, as determined by
the Committee, be either a Non-Qualified Stock Option or an Incentive Stock
Option; provided, however, that any Options granted to Independent Directors and
Consultants shall be Non-Qualified Stock Options.
1.18 Option Agreement. "Option Agreement" shall mean a written
agreement executed by an authorized officer of the Company and the Optionee
which shall contain such terms and conditions with respect to an Option as the
Administrator shall determine, consistent with the Plan.
1.19 Optionee. "Optionee" shall mean an Employee, Consultant, or
Independent Director granted an Option under the Plan.
2
1.20 Plan. "Plan" shall mean The Suntron Corporation 2002 Stock
Option Plan, as may be amended from time to time.
1.21 QDRO. "QDRO" shall mean a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder.
1.22 Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3
under the Exchange Act, as such Rule may be amended from time to time.
1.23 Section 162(m) Participant. "Section 162(m) Participant" shall
mean any Employee designated by the Committee as a Employee whose compensation
for the fiscal year in which the Employee is so designated or a future fiscal
year could reasonably be expected to be subject to the limit on deductible
compensation imposed by Section 162(m) of the Code.
1.24 Securities Act. "Securities Act" shall mean the Securities Act
of 1933, as amended.
1.25 Subsidiary. "Subsidiary" shall mean any corporation in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
1.26 Substitute Award. "Substitute Award" shall mean an Option
granted under this Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by a company or other entity in
connection with a corporate transaction, such as a recapitalization, merger,
combination, consolidation or acquisition of property or stock; provided,
however, that in no event shall the term "Substitute Award" be construed to
refer to an award made in connection with the cancellation and repricing of an
Option.
1.27 Termination of Consultancy. "Termination of Consultancy" shall
mean the time when the engagement of an Optionee as a Consultant to the Company
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, by resignation, discharge, death or retirement;
but excluding terminations where there is a simultaneous commencement of
employment with the Company or any Subsidiary. The Committee, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the
question of whether a Termination of Consultancy resulted from a discharge for
good cause, and all questions of whether a particular leave of absence
constitutes a Terminations of Consultancy. Notwithstanding any other provision
of the Plan, the Company or any Subsidiary has an absolute and unrestricted
right to terminate a Consultant's service at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in
writing.
1.28 Termination of Directorship. "Termination of Directorship"
shall mean the time when an Optionee who is an Independent Director ceases to be
a Director for any reason, including, but not by way of limitation, a
termination by resignation, failure to be elected, death or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Directorship with respect to
Independent Directors.
1.29 Termination of Employment. "Termination of Employment" shall
mean the time when the employee-employer relationship between an Optionee and
the Company or any Subsidiary is terminated for any reason, with or without
cause, including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (a) terminations where
there is a simultaneous reemployment or continuing employment of an Optionee by
the Company or any Subsidiary, (b) at the discretion of the Committee,
terminations which result in a temporary severance of the employee-employer
relationship, and (c) at the discretion of the Committee, terminations which are
followed by the simultaneous establishment of a consulting relationship by the
Company or a Subsidiary with the former employee. The Committee, in its absolute
discretion, shall determine the effect of all matters and
3
questions relating to Termination of Employment, including, but not by way of
limitation, the question of whether a Termination of Employment resulted from a
discharge for cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment; provided, however, that, with respect
to Incentive Stock Options, unless otherwise determined by the Committee in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section. Notwithstanding any other provision of
the Plan, the Company, or any Subsidiary has an absolute and unrestricted right
to terminate an Employee's employment at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in
writing.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1 Shares Subject to Plan.
(a) The shares of stock subject to Options shall be
Common Stock, initially shares of the Company's Common Stock, par value $.01 per
share. The aggregate number of such shares that may be issued upon exercise of
such Options under the Plan shall not exceed 5,000,000. The shares of Common
Stock issuable upon exercise of such Options may be either previously authorized
but unissued shares or treasury shares.
(b) The maximum number of shares which may be subject to
Options granted under the Plan to any individual in any calendar year shall not
exceed the Award Limit. To the extent required by Section 162(m) of the Code,
and provided the Options otherwise comply with the requirements of Section
162(m), shares subject to Options that are canceled continue to be counted
against the Award Limit and if, after grant of an Option, the price of shares
subject to such Option is reduced, the transaction is treated as a cancellation
of the Option and a grant of a new Option and both the Option deemed to be
canceled and the Option deemed to be granted are counted against the Award
Limit.
2.2 Add-back of Options. If any Option terminates, expires or is
canceled without having been fully exercised, the number of shares subject to
such Option but as to which such Option was not exercised prior to its
termination, expiration, or cancellation may again be awarded hereunder, subject
to the limitations of Section 2.1. Furthermore, any shares subject to Options
that are adjusted pursuant to Section 8.3 and become exercisable with respect to
shares of stock of another corporation shall be considered cancelled and may
again be optioned, granted, or awarded hereunder, subject to the limitations of
Section 2.1. Shares of Common Stock that are withheld by the Company upon the
exercise of any Option under the Plan, in payment of the exercise price thereof
or tax withholding thereon, may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1. Notwithstanding the provisions of
this Section 2.2, no shares of Common Stock may again be awarded if such action
would cause an Incentive Stock Option to fail to qualify as an incentive stock
option under Section 422 of the Code.
ARTICLE III.
GRANTING OF OPTIONS
3.1 Option Agreement. Each Option shall be evidenced by an Option
Agreement. Option Agreements evidencing Options intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code (other than with respect to
the composition of the Committee). Option Agreements evidencing Incentive Stock
Options shall contain such terms and conditions (other than with respect to the
composition of the Committee) as may be necessary to meet the applicable
provisions of Section 422 of the Code.
4
3.2 Provisions Applicable to Section 162(m) Participants. The
Committee, in its discretion, may determine whether an Option is to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code.
3.3 Consideration. In consideration of the granting of an Option
under the Plan, the Optionee shall agree, in the Option Agreement, to remain in
the employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year (or
such shorter period as may be fixed in the Option Agreement or by action of the
Administrator following grant of the Option) after the Option is granted (or, in
the case of an Independent Director, until the next annual meeting of
stockholders of the Company).
3.4 At-Will Employment. Nothing in the Plan or in any Option
Agreement hereunder shall confer upon any Optionee any right to continue in the
employ of, or as a Consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in a written employment
agreement between the Optionee and the Company and any Subsidiary.
ARTICLE IV.
ELIGIBILITY AND OPTION GRANTS
4.1 Eligibility. Any Employee or Consultant selected by the
Committee pursuant to Section 4.4(a)(i) shall be eligible to be granted an
Option. Each Independent Director of the Company shall be eligible to be granted
Options at the times and in the manner set forth in Section 4.5.
4.2 Disqualification for Stock Ownership. No person may be granted
an Incentive Stock Option under the Plan if such person, at the time the
Incentive Stock 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 then existing Subsidiary or parent corporation (within the meaning of
Section 422 of the Code), unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.
4.3 Qualification of Incentive Stock Options. No Incentive Stock
Option shall be granted to any person who is not an Employee.
4.4 Granting of Options to Employees and Consultants.
(a) The Committee shall from time to time, in its
absolute discretion, and subject to applicable limitations of the Plan:
(i) Determine which Employees are key Employees
and select from among the key Employees or Consultants (including Employees or
Consultants who have previously received Options under the Plan) such of them as
in its opinion should be granted Options;
(ii) Subject to the Award Limit, determine the
number of shares to be subject to such Options granted to the selected key
Employees or Consultants;
(iii) Subject to Section 4.3, determine whether
such Options are to be Incentive Stock Options or Non-Qualified Stock Options
and whether such Options are to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such
Options, consistent with the Plan; provided, however, that the terms and
conditions of Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall include, but not be limited
to,
5
such terms and conditions as may be necessary to meet the applicable provisions
of Section 162(m) of the Code.
(b) Upon the selection of a key Employee or Consultant to
be granted an Option, the Committee shall instruct the Secretary of the Company
to issue the Option and may impose such conditions on the grant of the Option as
it deems appropriate. Without limiting the generality of the preceding sentence,
the Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or Consultant
that the Employee or Consultant surrender for cancellation some or all of the
unexercised Options that have been previously granted to him under the Plan or
otherwise. An Option, the grant of that is conditioned upon such surrender, may
have an Option price lower (or higher) than the exercise price of such
surrendered Option or other award, may cover the same (or a lesser or greater)
number of shares as such surrendered Option or other award, may contain such
other terms as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of shares, price,
exercise period or any other term or condition of such surrendered Option or
other award.
(c) Any Incentive Stock Option granted under the Plan may
be modified by the Committee, with the consent of the Optionee, to disqualify
such Option from treatment as an "incentive stock option" under Section 422 of
the Code.
4.5 Granting of Options to Independent Directors. The Board shall
from time to time, in its discretion, and subject to applicable limitations of
the Plan select from among the Independent Directors (including Independent
Directors who have previously received Options under the Plan) such of them as
in its opinion should be granted Non-Qualified Stock Options, determine the
number of shares to be subject to such Non-Qualified Stock Options granted to
the selected Independent Directors and determine the terms and conditions of
such Non-Qualified Stock Options, consistent with the terms of the Plan.
4.6 Options in Lieu of Cash Compensation. Options may be granted
under the Plan to Employees and Consultants in lieu of cash bonuses that would
otherwise be payable to such Employees and Consultants and to Independent
Directors in lieu of directors' fees that would otherwise be payable to such
Independent Directors, pursuant to such policies that may be adopted by the
Administrator or the Board from time to time.
ARTICLE V.
TERMS OF OPTIONS
5.1 Option Price. The price per share of the shares subject to
each Option granted to Employees and Consultants shall be set by the Committee;
provided, however, that such price shall be no less than the par value of a
share of Common Stock, unless otherwise permitted by applicable state law, and
(a) in the case of Options intended to qualify as performance-based compensation
as described in Section 162(m)(4)(C) of the Code, such price shall not be less
than 100% of the Fair Market Value of a share of Common Stock on the date the
Option is granted; (b) in the case of Incentive Stock Options, such price shall
not be less than 100% of the Fair Market Value of a share of Common Stock on the
date the Option is granted (or the date the Option is modified, extended, or
renewed for purposes of Section 424(h) of the Code); (c) in the case of
Incentive Stock Options granted to an individual then owning (within the meaning
of Section 424(d) of the Code) more than 10% of the total combined voting power
of all classes of stock of the Company or any Subsidiary or parent corporation
thereof (within the meaning of Section 422 of the Code), such price shall not be
less than 110% of the Fair Market Value of a share of Common Stock on the date
the Option is granted (or the date the Option is modified, extended, or renewed
for purposes of Section 424(h) of the Code).
5.2 Option Term. The term of an Option granted to an Employee or
Consultant shall be set by the Committee in its discretion; provided, however,
that, in the case of Incentive Stock Options, the term shall not be more than
ten (10) years from the date the Incentive Stock Option is granted, or five (5)
years from such date if the Incentive Stock Option is granted to an individual
then owning (within the
6
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or any Subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code). Except as
limited by requirements of Section 422 of the Code and regulations and rulings
thereunder applicable to Incentive Stock Options, the Committee may extend the
term of any outstanding Option in connection with any Termination of Employment
or Termination of Consultancy of the Optionee, or amend any other term or
condition of such Option relating to such a termination.
5.3 Option Vesting.
(a) The period during which the right to exercise, in
whole or in part, an Option granted to an Employee or a Consultant vests in the
Optionee shall be set by the Committee and the Committee may determine that an
Option may not be exercised in whole or in part for a specified period after it
is granted; provided, however, that, unless the Committee otherwise provides in
the terms of the Option Agreement or otherwise, no Option shall be exercisable
by any Optionee who is then subject to Section 16 of the Exchange Act within the
period ending six months and one day after the date the Option is granted. At
any time after grant of an Option, the Committee may, in its sole and absolute
discretion and subject to whatever terms and conditions it selects, accelerate
the period during which an Option granted to an Employee or Consultant vests.
(b) No portion of an Option granted to an Employee or
Consultant that is unexercisable at Termination of Employment or Termination of
Consultancy, as applicable, shall thereafter become exercisable, except as may
be otherwise provided by the Committee either in the Option Agreement or by
action of the Committee following the grant of the Option.
(c) To the extent that the aggregate Fair Market Value of
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the Company and any
parent or subsidiary corporation (within the meaning of Section 422 of the Code)
of the Company) exceeds $100,000, such Options shall be treated as Non-Qualified
Options to the extent required by Section 422 of the Code. The rule set forth in
the preceding sentence shall be applied by taking Options into account in the
order in which they were granted. For purposes of this Section 5.3(c), the Fair
Market Value of stock shall be determined as of the time the Option with respect
to such stock is granted.
5.4 Terms of Options Granted to Independent Directors. The Board
shall determine the terms and conditions of each Non-Qualified Stock Option
granted to an Independent Director, consistent with the terms of the Plan.
5.5 Substitute Awards. Notwithstanding the foregoing provisions of
this Article V to the contrary, in the case of an Option that is a Substitute
Award, the price per share of the shares subject to such Option may be less than
the Fair Market Value per share on the date of grant, provided, that the excess
of:
(a) The aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the Substitute Award; over
(b) The aggregate exercise price thereof;
does not exceed the excess of:
(c) The aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the Substitute Award, such
fair market value to be determined by the Committee) of the shares of the
predecessor entity that were subject to the grant assumed or substituted for by
the Company; over
7
(d) The aggregate exercise price of such shares.
ARTICLE VI.
EXERCISE OF OPTIONS
6.1 Partial Exercise. An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Administrator may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.
6.2 Manner of Exercise. All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his office:
(a) A written notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion thereof,
is exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion of the Option;
(b) Such representations and documents as the
Administrator, in its absolute discretion, deems necessary or advisable to
effect compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations. The Administrator may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and
registrars;
(c) In the event that the Option shall be exercised
pursuant to Section 8.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the Option;
and
(d) Full cash payment to the Secretary of the Company for
the shares with respect to which the Option, or portion thereof, is exercised.
However, the Administrator, may in its sole discretion (i) allow a delay in
payment up to thirty (30) days from the date the Option, or portion thereof, is
exercised; (ii) allow payment, in whole or in part, through the delivery of
shares of Common Stock which have been owned by the Optionee for at least six
months, duly endorsed for transfer to the Company with a Fair Market Value on
the date of delivery equal to the aggregate exercise price of the Option or
exercised portion thereof; (iii) allow payment, in whole or in part, through the
surrender of shares of Common Stock then issuable upon exercise of the Option
having a Fair Market Value on the date of Option exercise equal to the aggregate
exercise price of the Option or exercised portion thereof; (iv) allow payment,
in whole or in part, through the delivery of property of any kind that
constitutes good and valuable consideration; (v) allow payment, in whole or in
part, through the delivery of a full recourse promissory note bearing interest
(at no less than such rate as shall then preclude the imputation of interest
under the Code) and payable upon such terms as may be prescribed by the
Committee or the Board; (vi) allow payment, in whole or in part, through the
delivery of a notice that the Optionee has placed a market sell order with a
broker with respect to shares of Common Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option exercise
price; or (vii) allow payment through any combination of the consideration
provided in the foregoing subparagraphs (ii), (iii), (iv), (v), and (vi). In the
case of a promissory note, the Administrator may also prescribe the form of such
note and the security to be given for such note. The Option may not be
exercised, however, by delivery of a promissory note or by a loan from the
Company when or where such loan or other extension of credit is prohibited by
law.
6.3 Conditions to Issuance of Stock Certificates. The Company
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
8
(b) The completion of any registration or other
qualification of such shares under any state or federal law, or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body that the Administrator shall, in its absolute
discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from
any state or federal governmental agency that the Administrator shall, in its
absolute discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following
the exercise of the Option as the Committee (or Board, in the case of Options
granted to Independent Directors) may establish from time to time for reasons of
administrative convenience; and
(e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax, which in the
discretion of the Committee or the Board may be in the form of consideration
used by the Optionee to pay for such shares under Section 6.2(d).
6.4 Rights as Stockholders. Optionees shall not be, nor have any
of the rights or privileges of, stockholders of the Company in respect of any
shares purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
Optionees.
6.5 Ownership and Transfer Restrictions. The Administrator, in its
absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
Option Agreement and may be referred to on the certificates evidencing such
shares. The Committee may require the Employee to give the Company prompt notice
of any disposition of shares of Common Stock acquired by exercise of an
Incentive Stock Option within (i) two years from the date of granting (including
the date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code) such Option to such Employee or (ii) one year after the
transfer of such shares to such Employee. The Committee may direct that the
certificates evidencing shares acquired by exercise of any such Option refer to
such requirement to give prompt notice of disposition.
6.6 Additional Limitations on Exercise of Options. Optionees may
be required to comply with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period limitation, as
may be imposed in the discretion of the Administrator.
ARTICLE VII.
ADMINISTRATION
7.1 Compensation Committee. Except as may otherwise be determined
by the Board in its sole discretion, the Compensation Committee (or another
committee or a subcommittee of the Board assuming the functions of the Committee
under the Plan) shall have at least two Directors appointed by and holding
office at the pleasure of the Board.
7.2 Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and the
agreements pursuant to which Options are granted or awarded, and to adopt such
rules for the administration, interpretation, and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules.
Notwithstanding the foregoing, the full Board, acting by a majority of its
members in office, shall conduct the general administration of the Plan with
respect to Options granted to Independent Directors. The terms of Options need
not be the same with respect to each Optionee. Any such interpretations and
rules with respect to Incentive Stock Options shall be consistent with the
provisions of Section 422 of the Code. In its absolute discretion, the Board may
at any time and from time to time exercise any and all rights and duties of the
Committee under the Plan.
9
7.3 Majority Rule; Unanimous Written Consent. The Committee shall
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
7.4 Compensation; Professional Assistance; Good Faith Actions.
Members of the Committee shall receive such compensation, if any, for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company, and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions, or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Optionees, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination, or interpretation made in good faith with
respect to the Plan or Options, and all members of the Committee and the Board
shall be fully protected by the Company in respect of any such action,
determination, or interpretation.
7.5 Delegation of Authority to Grant Options. The Committee may,
but need not, delegate from time to time some or all of its authority to grant
Options under the Plan to a committee consisting of one or more members of the
Committee or of one or more officers of the Company; provided, however, that the
Committee may not delegate its authority to grant Options to individuals (a) who
are subject on the date of the grant to the reporting rules under Section 16(a)
of the Exchange Act, (b) who are Section 162(m) Participants, or (c) who are
officers of the Company who are delegated authority by the Committee hereunder.
Any delegation hereunder shall be subject to the restrictions and limits that
the Committee specifies at the time of such delegation of authority and may be
rescinded at any time by the Committee. At all times, any committee appointed
under this Section 7.5 shall serve in such capacity at the pleasure of the
Committee.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
8.1 Transferability of Options.
(a) Except as otherwise provided in Section 8.1(b):
(i) Except as may otherwise be determined by the
Board in its sole discretion, no Option under the Plan may be sold, pledged,
assigned, or transferred in any manner other than by will or the laws of descent
and distribution or, subject to the consent of the Committee, pursuant to a
QDRO, unless and until such Option has been exercised, or the shares underlying
such Option have been issued, and all restrictions applicable to such shares
have lapsed;
(ii) No Option or interest or right therein shall
be liable for the debts, contracts, or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment, or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment, or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding subsection (i); and
(iii) During the lifetime of the Optionee, only he
may exercise an Option (or any portion thereof) granted to him under the Plan,
unless it has been disposed of pursuant to a QDRO; after the death of the
Optionee, any exercisable portion of an Option may, prior to the time when such
portion becomes unexercisable under the Plan or the applicable Option Agreement,
be exercised by his personal representative or by any person empowered to do so
under the deceased Optionee's will or under the then applicable laws of descent
and distribution.
10
(b) Notwithstanding Section 8.1(a), the Committee, in its
sole discretion, may determine to permit an Optionee to transfer a Non-Qualified
Stock Option to any one or more Permitted Transferees (as defined below),
subject to the following terms and conditions: (i) a Non-Qualified Stock Option
transferred to a Permitted Transferee shall not be assignable or transferable by
the Permitted Transferee other than by will or the laws of descent and
distribution; (ii) any Non-Qualified Stock Option which is transferred to a
Permitted Transferee shall continue to be subject to all the terms and
conditions of the Non-Qualified Stock Option as applicable to the original
Optionee (other than the ability to further transfer the Non-Qualified Stock
Option); and (iii) the Optionee and the Permitted Transferee shall execute any
and all documents requested by the Administrator, including, without limitation
documents to (A) confirm the status of the transferee as a Permitted Transferee,
(B) satisfy any requirements for an exemption for the transfer under applicable
federal and state securities laws and (C) evidence the transfer. For purposes of
this Section 8.1(b), "Permitted Transferee" shall mean, with respect to an
Optionee, any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Optionee's household (other than
a tenant or employee), a trust in which these persons have more than fifty
percent of the beneficial interest, a foundation in which these persons (or the
Optionee) control the management of assets, and any other entity in which these
persons (or the Optionee) own more than fifty percent of the voting interests,
or any other transferee specifically approved by the Administrator after taking
into account any state or federal tax or securities laws applicable to
transferable Non-Qualified Stock Options.
8.2 Amendment, Suspension or Termination of the Plan. Except as
otherwise provided in this Section 8.2, the Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 8.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under the Plan. No amendment,
suspension or termination of the Plan shall, without the consent of the Optionee
alter or impair any rights or obligations under any Option theretofore granted
or awarded, unless the Option itself otherwise expressly so provides. No Options
may be granted or awarded during any period of suspension or after termination
of the Plan, and in no event may any Incentive Stock Option be granted under the
Plan after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is
adopted by the Board; or
(b) The expiration of ten years from the date the Plan is
approved by the Company's stockholders under Section 8.4.
8.3 Changes in Common Stock or Assets of the Company, Acquisition
or Liquidation of the Company, Change in Control and Other Corporate Events.
(a) Subject to Section 8.3(d), in the event that the
Administrator determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator's
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Option, then the Administrator shall, in
such manner as it may deem equitable, adjust any or all of:
(i) The number and kind of shares of Common
Stock (or other securities or property) with respect to which Options may be
granted or awarded (including, but not limited to,
11
adjustments of the limitations in Section 2.1 on the maximum number and kind of
shares which may be issued and adjustments of the Award Limit);
(ii) The number and kind of shares of Common
Stock (or other securities or property) subject to outstanding Options; and
(iii) The grant or exercise price with respect to
any Option.
(b) Subject to Section 8.3(d), in the event of any
transaction or event described in Section 8.3(a) or any unusual or nonrecurring
transactions or events affecting the Company, any affiliate of the Company, or
the financial statements of the Company or any affiliate, or of changes in
applicable laws, regulations, or accounting principles, the Administrator, in
its sole and absolute discretion, and on such terms and conditions as it deems
appropriate, either by the terms of the Option or by action taken prior to the
occurrence of such transaction or event and either automatically or upon the
Optionee's request, is hereby authorized to take any one or more of the
following actions whenever the Administrator determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any Option, to facilitate such transactions or events, or to give effect to
such changes in laws, regulations, or principles:
(i) To provide for either the purchase of any
such Option for an amount of cash equal to the amount that could have been
attained upon the exercise of such Option or realization of the Optionee's
rights had such Option been currently exercisable or payable or fully vested or
the replacement of such Option with other rights or property selected by the
Administrator in its sole discretion;
(ii) To provide that the Option cannot vest, be
exercised or become payable after such event;
(iii) To provide that such Option shall be
exercisable as to all shares covered thereby, notwithstanding anything to the
contrary in (i) Section 5.3 or 5.4 or (ii) the provisions of the applicable
Option Agreement;
(iv) To provide that such Option be assumed by
the successor or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar options, rights or awards covering the stock
of the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices; and
(v) To make adjustments in the number and type
of shares of Common Stock (or other securities or property) subject to
outstanding Options and/or in the terms and conditions of (including the
exercise price), and the criteria included in, outstanding Options or Options
which may be granted in the future.
(c) Subject to Section 8.3(d) and 8.8, the Administrator
may, in its discretion, include such further provisions and limitations in any
Option, agreement or certificate, as it may deem equitable and in the best
interests of the Company.
(d) With respect to Options that are granted to Section
162(m) Participants and are intended to qualify as performance-based
compensation under Section 162(m)(4)(C), no adjustment or action described in
this Section 8.3 or in any other provision of the Plan shall be authorized to
the extent that such adjustment or action would cause such Option to fail to so
qualify under Section 162(m)(4)(C), or any successor provisions thereto. No
adjustment or action described in this Section 8.3 or in any other provision of
the Plan shall be authorized to the extent that such adjustment or action would
cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such
adjustment or action shall be authorized to the extent such adjustment or action
would result in short-swing profits liability under Section 16 or violate the
exemptive conditions of Rule 16b-3 unless the Administrator determines that the
12
Option is not to comply with such exemptive conditions. The number of shares of
Common Stock subject to any Option shall always be rounded to the next whole
number.
(e) Notwithstanding the foregoing, in the event that the
Company becomes a party to a transaction that is intended to qualify for
"pooling of interest" accounting treatment and, but for one or more of the
provisions of this Plan or any Option Agreement would so qualify, then this Plan
and any Option Agreement shall be interpreted so as to preserve such accounting
treatment, and to the extent that any provision of the Plan or any Option
Agreement would disqualify the transaction from pooling of interests accounting
treatment (including, if applicable, an entire Option Agreement), then such
provision shall be null and void. All determinations to be made in connection
with the preceding sentence shall be made by the independent accounting firm
whose opinion with respect to "pooling of interests" treatment is required as a
condition to the Company's consummation of such transaction.
8.4 Approval of Plan by Stockholders. The Plan will be submitted
for the approval of the Company's stockholders within twelve months after the
date of the Board's adoption of the Plan. Options may be granted or awarded
prior to such stockholder approval, provided that such Options shall not be
exercisable prior to the time when the Plan is approved by the stockholders.
8.5 Tax Withholding. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to each Optionee of
any sums required by federal, state, or local tax law to be withheld with
respect to the issuance, vesting, exercise, or payment of any Option. The
Administrator may in its discretion and in satisfaction of the foregoing
requirement allow such Optionee to elect to have the Company withhold shares of
Common Stock otherwise issuable under such Option (or allow the return of shares
of Common Stock) having a Fair Market Value equal to the sums required to be
withheld. Notwithstanding any other provision of the Plan, the number of shares
of Common Stock which may be withheld with respect to the issuance, vesting,
exercise, or payment of any Option in order to satisfy the Optionee's federal
and state income and payroll tax liabilities with respect to the issuance,
vesting, exercise, or payment of the Option shall be limited to the number of
shares which have a Fair Market Value on the date of withholding or repurchase
equal to the aggregate amount of such liabilities based on the minimum statutory
withholding rates for federal and state tax income and payroll tax purposes that
are applicable to such supplemental taxable income.
8.6 Loans. The Committee may, in its discretion, extend one or
more loans to key Employees in connection with the exercise or receipt of an
Option. The terms and conditions of any such loan shall be set by the Committee.
8.7 Forfeiture Provisions. Pursuant to its general authority to
determine the terms and conditions applicable to Options, the Administrator
shall have the right (to the extent consistent with the applicable exemptive
conditions of Rule 16b-3) to provide, in the terms of an Option Agreement, or to
require an Optionee to agree by separate written instrument, that (i) any
proceeds, gains, or other economic benefit actually or constructively received
by the Optionee upon any receipt or exercise of the Option, or upon the receipt
or resale of any Common Stock underlying the Option, must be paid to the
Company, and (ii) the Option shall terminate and any unexercised portion of the
Option (whether or not vested) shall be forfeited, if (a) a Termination of
Employment, Termination of Consultancy, or Termination of Directorship occurs
prior to a specified date, or within a specified time period following receipt
or exercise of the Option, or (b) the Optionee at any time, or during a
specified time period, engages in any activity in competition with the Company,
or which is inimical, contrary, or harmful to the interests of the Company, as
further defined by the Committee (or the Board, as applicable) or the Optionee
incurs a Termination of Employment, Termination of Consultancy, or Termination
of Directorship for cause.
8.8 Limitations Applicable to Section 16 Persons and
Performance-Based Compensation. Notwithstanding any other provision of the Plan,
the Plan, and any Option granted or awarded to any individual who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional
limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b3 of the Exchange Act) that are
requirements for the application of such exemptive rule. To the extent permitted
by applicable law, the Plan and Options granted or awarded
13
hereunder shall be deemed amended to the extent necessary to conform to such
applicable exemptive rule. Furthermore, notwithstanding any other provision of
the Plan or any Option that is granted to a Section 162(m) Participant and is
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the
extent necessary to conform to such requirements.
8.9 Effect of Plan Upon Options and Compensation Plans. The
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary. Nothing in the Plan shall be
construed to limit the right of the Company (i) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (ii) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose, including without limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation, or
otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm, or association.
8.10 Compliance with Laws. The Plan, the granting and vesting of
Options under the Plan, the issuance and delivery of shares of Common Stock, and
the payment of money under the Plan or under Options granted or awarded
hereunder are subject to compliance with all applicable federal and state laws,
rules, and regulations (including but not limited to state and federal
securities law and federal margin requirements) and to such approvals by any
listing, regulatory, or governmental authority as may, in the opinion of counsel
for the Company, be necessary or advisable in connection therewith. Any
securities delivered under the Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the Plan and Options
granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules, and regulations.
8.11 Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of the Plan.
8.12 Governing Law. The Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
14
* * * * *
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of Suntron Corporation as of April 24, 2002.
I hereby certify that the foregoing Plan was duly approved by the
stockholders of the Suntron Corporation on June ___, 2002.
Executed on ___________, 2002.
_________________________________
Secretary
15