MULTI-LINK HOLDINGS, INC.
STOCK OPTION PLAN
1. Purpose.
This Multi-Link Holdings, Inc. Stock Option Plan ("Plan"), provides for the
grant of Stock Options, Reload Options and Stock Appreciation Rights to Key
Employees of Multi-Link Holdings, Inc. (the "Company"), and such of its
subsidiaries (as defined in Section 424(f) of the Code) as the Board of
Directors of the Company (the "Board") shall from time to time designate
("Participating Subsidiaries"), in order to advance the interests of the Company
and its Participating Subsidiaries, if any, through the motivation, attraction
and retention of their respective Key Employees.
2. Incentive Stock Options and Non-Incentive Stock Options.
The Stock Options granted under this Plan may be either (a) Incentive Stock
Options ("ISOs") which are intended to be "Incentive Stock Options" as that term
is defined in Section 422 of the Code; or (b) Nonstatutory Stock Options
("NSOs") which are intended to be options that do not qualify as "Incentive
Stock Options" under Section 422 of the Code. All Stock Options shall be ISOs
unless the Option Agreement clearly designates the Stock Options granted
thereunder, or a specified portion thereof, as NSOs. Subject to the other
provisions of this Plan, a Participant may receive ISOs and NSOs at the same
time, provided that the ISOs and NSOs are clearly designated as such.
3. Administration.
3.1 Committee. With respect to grants of Stock Options, Reload Options
and Stock Appreciation Rights to Key Employees other than officers and
directors of the Company, this Plan shall be administered by a committee
composed of at least two members of the Board, unless the Board is
comprised of only one director, in which case this Plan will be
administered by the Board (the "Committee"). With respect to grants of
Stock Options, Reload Options and Stock Appreciation Rights to Key
Employees who are officers or directors of the Company, this Plan shall be
administered by the Board, if each director is a Disinterested Person, or
by a special committee of two or more Disinterested Persons. Such special
committee may be the Committee if all of the members thereof are
Disinterested Persons, or a separate committee appointed by the Board
composed of at least two Disinterested Persons. The Committee or the Board,
as the case may be, shall have full authority to administer this Plan,
including, but not limited to, authority to interpret and construe any
provision of this Plan and any Stock Option, Reload Option or Stock
Appreciation Right granted hereunder, to adopt such rules and regulations
for administering this Plan as it may deem necessary in order to comply
with the requirements of this Plan or the Code or in order that Stock
Options that are intended to be ISOs will be classified as incentive stock
options under the Code, or in order to conform to any regulation or to any
change in any law or regulations applicable thereto and to take the actions
permitted hereunder. The Committee or the Board may delegate any of its
responsibilities under this Plan, other than its responsibility to make
grants of Stock Options, Reload Options and Stock Appreciation Rights, to
determine whether the Stock Appreciation Rights, if any, payable to a
Partic3.1ab to interpret and construe this Plan. If the Board is composed
entirely of or Disinterested Persons, the Board may reserve to itself any
of the authority granted to the Committee as set forth herein, and it may
perform and discharge all of the functions and responsibilities of the
Committee at any time that a duly constituted Committee is not appointed
and serving. All references in this Plan to the "Committee" shall be deemed
to refer to the Board whenever the Board is discharging the powers and
responsibilities of the Committee, and to any special committee appointed
by the Board to administer particular aspects of this Plan.
3.2 Actions of Committee. All actions taken and all interpretations
and determinations made by the Committee in good faith (including
determinations of Fair Market Value) shall be final and binding upon all
Participants, the Company and all other interested persons. No member of
the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Plan, and all
members of the Committee shall, in addition to their rights as directors,
be fully indemnified by the Company with respect to any such action,
determination or interpretation.
4. Definitions.
4.1 "Code." The Code is the Internal Revenue Code of 1986, as amended.
4.2 "Common Stock." A share of Common Stock means a share of no par
value common stock of the Company.
4.3 "Disinterested Person." A Disinterested Person is a director of
the Company who, during the shorter of (a) the one-year period prior to
service as an administrator of this Plan, or (b) the period between the
date on which capital stock of the Company is registered pursuant to
Section 12 of the Securities and Exchange Act of 1934, as amended (the
"1934 Act") and the director's service as an administrator of this Plan,
has not been granted or awarded equity securities pursuant to this Plan or
any other plan of the Company or any of its affiliates except as may be
permitted by Rule 16b-3(c)(2) promulgated under the 1934 Act or any
successor to such rule.
4.4 "Fair Market Value." If the Common Stock is not traded publicly,
the Fair Market Value of a share of Common Stock on any date shall be
determined, in good faith, by the Committee after such consultation with
outside legal, accounting or other experts as the Committee may deem
advisable, and the Committee shall maintain a written record of its method
of determining such value. If the Common Stock is traded publicly, the Fair
Market Value of a share of Common Stock on any date shall be the average of
the representative closing bid and asked prices, as quoted by the National
Association of Securities Dealers through NASDAQ (its automated system for
reporting quotes), for the date in question or, if the Common Stock is
listed on the NASDAQ National Market System or is listed on a national
stock exchange, the official quoted closing price on NASDAQ or such
exchange, as the case may be, on the date in question.
4.5 "Key Employee." A Key Employee is an employee of the Company or a
Participating Subsidiary, if any, whose judgment, initiative and continued
efforts are expected to contribute to the successful conduct of the
business of the Company, as determined by the Committee, in its sole
discretion.
4.6 "Option Agreement." An Option Agreement is a written agreement
evidencing a Stock Option.
4.7 "Option Price." An Option Price is the price which the Committee
designates for the exercise of a Stock Option.
4.8 "Participant." A Participant is a Key Employee to whom a Stock
Option, Reload Option and/or Stock Appreciation Right is granted.
4.9 "Redemption Value." The Redemption Value of shares of Common Stock
purchasable under a Stock Option shall be the amount, if any, by which the
Fair Market Value of one share of Common Stock on the date on which the
Stock Option is exercised exceeds the Option Price for such share.
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4.10 "Reload Option." A Reload Option is a Stock Option granted under
and subject to the terms of Section 8 of this Plan.
4.11 "Stock Appreciation Right." A Stock Appreciation Right is the
right to receive payment, in shares of Common Stock, cash or a combination
of shares of Common Stock and cash, of the Redemption Value of a specified
number of shares of Common Stock then purchasable under the Stock Option.
4.12 "Stock Option." A Stock Option is the right granted under this
Plan to a Key Employee to purchase, at such time or times and at such
Option Price as are determined by the Committee and specified in the Option
Agreement, the number of shares of Common Stock determined by the Committee
and specified in the Option Agreement.
5. Eligibility and Participation.
Grants of Stock Options, Reload Options and Stock Appreciation Rights may
be made to Key Employees of the Company or any Participating Subsidiary, if any.
Any director of the Company or of a Participating Subsidiary who is also a Key
Employee shall also be eligible to receive Stock Options, Reload Options and
Stock Appreciation Rights, provided, however, members of the Committee and
directors who are not Key Employees shall not be eligible to receive Stock
Options, Reload Options or Stock Appreciation Rights under this Plan. The
Committee shall from time to time determine the Key Employees to whom Stock
Options shall be granted, the number of shares of Common Stock subject to the
Stock Options to be granted to each such Key Employee, the Option Price of such
Stock Options, and the terms and provisions of such Stock Options, all as
provided in this Plan. The Option Price of any ISO shall be not less than the
Fair Market Value of a share of Common Stock on the date on which the Stock
Option is granted, but the Option Price of an NSO may be less than the Fair
Market Value on the date the NSO is granted if the Committee so determines. If
an ISO is granted to a Key Employee who then owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or any
subsidiary corporation of the Company, the Option Price of such ISO shall be at
least 110% of the Fair Market Value of the Common Stock subject to the ISO at
the time such ISO is granted, and such ISO shall not be exercisable after five
years after the date on which it was granted. Each Stock Option shall be
evidenced by an Option Agreement containing such terms and provisions as the
Committee may determine, subject to the provisions of this Plan.
6. Shares of Common Stock Subject to this Plan.
6.1 Maximum Number. The maximum aggregate number of shares of Common
Stock that may be made subject to Stock Options granted under this Plan
shall be 400,000 authorized but unissued shares. The aggregate Fair Market
Value (determined as of the time the ISO is granted) of the Common Stock
subject to ISOs granted to a Participant which may first become exercisable
in a particular calendar year may not exceed $100,000. If any shares of
Common Stock subject to Stock Options are not purchased or otherwise paid
for before such Stock Options expire, such shares may again be made subject
to Stock Options.
6.2 Capital Changes. Except as otherwise provided by and subject to
Section 13 hereof, in the event any changes are made to the shares of
Common Stock (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination of shares,
exchange of shares, change in corporate structure or otherwise),
proportionate adjustments shall be made in: (i) the number of shares of
Common Stock theretofore made subject to Stock Options; (ii) the purchase
price of shares of Common Stock theretofore made subject to Stock Options;
and (iii) the aggregate number of shares of Common Stock which may be made
subject to Stock Options. If any of the foregoing adjustments shall result
in a fractional share, the fraction shall be disregarded, and the Company
shall have no obligation to make any cash or other payment with respect to
such fractional share.
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7. Exercise of Stock Options.
7.1 Time of Exercise. Subject to the provisions of this Plan, the
Committee, in its discretion, shall determine the time when a Stock Option,
or a portion of a Stock Option, shall become exercisable, and the time when
a Stock Option, or a portion of a Stock Option, shall expire. Such time or
times shall be set forth in the Option Agreement evidencing such Stock
Option. A Stock Option shall expire, to the extent not exercised, no later
than the tenth anniversary of the date on which it was granted. The
Committee may accelerate the vesting of any Participant's Stock Option by
giving written notice to the Participant. Upon receipt of such notice, the
Participant and the Company shall amend the Option Agreement to reflect the
new vesting schedule, if, however, the Option Agreement is not amended, the
notice given by the Committee shall be deemed to amend the Option Agreement
with respect to the vesting schedule. The acceleration of the exercise
period of a Stock Option shall not affect the expiration date of that Stock
Option. Any shares of Common Stock not purchased at the time a Stock Option
first becomes exercisable shall remain purchasable at any time until the
Stock Option expires.
7.2 Exchange of Outstanding Stock. The Committee, in its sole
discretion, may permit a Participant to surrender to the Company shares of
Common Stock previously acquired by the Participant as part or full payment
for the exercise of a Stock Option. Such surrendered shares of Common Stock
shall be valued at their Fair Market Value on the date of exercise. A
Participant may not surrender shares of Common Stock having a Fair Market
Value in excess of the aggregate purchase price of the shares of Common
Stock purchased upon exercise of a Stock Option. Shares of Common Stock
surrendered to the Company under this Section 7.2 shall not thereafter be
included in the shares of Common Stock available under Section 6.1.
7.3 Termination of Employment Before Exercise. If a Participant's
employment with the Company or a Participating Subsidiary, if any, shall
terminate by reason of the Participant's death or disability within the
meaning of Section 22(e)(3) of the Code, any Stock Options then held by the
Participant, to the extent then exercisable under the applicable Option
Agreement(s), shall remain exercisable after the termination of his
employment for a period of twelve months (but in no event beyond ten years
from the date of grant of the Stock Option). If a Participant's employment
with the Company or a Participating Subsidiary, if any, shall terminate for
any reason other than the Participant's death or disability, any Stock
Options then held by the Participant, to the extent then exercisable under
the applicable Option Agreement(s), shall remain exercisable after the
termination of his or her employment for a period of three months. If the
Stock Option is not exercised during the applicable period, it shall be
deemed to have been forfeited and of no further force or effect.
7.4 Disposition of Forfeited Stock Options. Any shares of Common Stock
subject to Stock Options forfeited by a Participant under this Plan shall
not thereafter be eligible for purchase by the Participant, but may be made
subject to Stock Options granted to other Participants.
8. Reload Options.
8.1 Authorization of Reload Options. Concurrently with the award of
Stock Options to any Participant, the Committee may authorize Reload
Options to purchase, for cash or shares of Common Stock, a number of shares
of Common Stock. The number of Reload Options shall equal:
(a) the number of shares of Common Stock used to exercise the
underlying Stock Options; and
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(b) to the extent authorized by the Committee, the number of
shares of Common Stock used to satisfy any tax withholding requirement
incident to the exercise of the underlying Stock Options. The grant of
a Reload Option will become effective upon the exercise of underlying
Stock Options or Reload Options through the use of shares of Common
Stock held by the Participant for at least twelve months.
Notwithstanding the fact that the underlying Stock Option may be an
Incentive Stock Option, a Reload Option is not intended to qualify as
an "incentive stock option" under Section 422 of the Code.
8.2 Reload Option Amendment. Each Option Agreement shall state whether
the Committee has authorized Reload Options with respect to the underlying
Stock Options. Upon the exercise of an underlying Stock Option or other
Reload Option, the Reload Option will be evidenced by an amendment to the
underlying Option Agreement.
8.3 Reload Option Price. The Option Price per share of Common Stock
deliverable upon the exercise of a Reload Option shall be the Fair Market
Value of a share of Common Stock on the date the grant of the Reload Option
becomes effective.
8.4 Term and Exercise. Each Reload Option shall be fully exercisable
six months from the date the grant of the Reload Option becomes effective.
The term of each Reload Option shall be equal to the remaining option term
of the underlying Stock Option.
8.5 Termination of Employment. No additional Reload Options shall be
granted to Participants when Stock Options and/or Reload Options are
exercised pursuant to the terms of this Plan following termination of the
Participant's employment with the Company or a Participating Subsidiary.
8.6 Applicability of Stock Option Sections. Section 7 of this Plan
shall apply equally to Reload Options. Section 7 of this Plan is
incorporated by reference in this Section 8 as though fully set forth
herein.
9. Stock Appreciation Rights.
9.1 Grant of Stock Appreciation Rights. The Committee may, from time
to time, grant Stock Appreciation Rights to a Participant with respect to
not more than the number of shares of Common Stock which are, or may
become, purchasable under the Stock Options held by the Participant. The
Committee may, in its sole discretion, specify the terms and conditions of
such rights, including without limitation the time period or time periods
during which such rights may be exercised and the date or dates upon which
such rights shall expire and become void and unexercisable; provided,
however, that in no event shall such rights expire and become void and
unexercisable later than the time when the related Stock Option is
exercised, expires or terminates. Each Option Agreement shall state whether
the Committee has granted Stock Appreciation Rights and shall specify the
terms and conditions of such rights, which shall be subject to all the
provisions of this Plan.
9.2 Exercise of Stock Appreciation Rights. Subject to Section 9.3, and
in lieu of purchasing shares of Common Stock upon the exercise of a Stock
Option held by him, a Participant may elect to exercise the Stock
Appreciation Rights, if any, he has been granted and receive payment of the
Redemption Value of all, or any portion, of the number of shares of Common
Stock subject to such Stock Option with respect to which he has been
granted Stock Appreciation Rights; provided, however, that the Stock
Appreciation Rights may be exercised only when the Fair Market Value of the
shares of Common Stock subject to such Stock Option exceeds the exercise
price of the Stock Option. A Participant shall exercise Stock Appreciation
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Rights by delivering a written notice to the Committee specifying the
number of shares of Common Stock with respect to which he exercises Stock
Appreciation Rights and agreeing to surrender the right to purchase an
equivalent number of shares of Common Stock subject to his Stock Option. If
a Participant exercises Stock Appreciation Rights, payment of his Stock
Appreciation Rights shall be made in accordance with Section 9.3 on or
before the 90th day after the date of exercise of the Stock Appreciation
Rights.
9.3 Form of Payment. If a Participant elects to exercise Stock
Appreciation Rights as provided in Section 9.2, the Committee may, in its
absolute discretion, elect to pay any part or all of the Redemption Value
of the shares with respect to which the Participant has exercised Stock
Appreciation Rights in: (i) cash; (ii) shares of Common Stock; or (iii) any
combination of cash and shares of Common Stock. The Committee's election
pursuant to this Section 9.3 shall be made by giving written notice to the
Participant within 90 days after the date of exercise of the Stock
Appreciation Rights, which notice shall specify the portion which the
Committee elects to pay in cash, shares of Common Stock or a combination
thereof. In the event any portion is to be paid in shares of Common Stock,
the number of shares of Common Stock to be delivered shall be determined by
dividing the amount which the Committee elects to pay in shares of Common
Stock by the Fair Market Value of one share of Common Stock on the date of
exercise of the Stock Appreciation Rights. Any fractional share resulting
from any such calculation shall be disregarded. The shares of Common Stock,
together with any cash payable to the Participant, shall be delivered
within the 90-day period required above.
10. No Contract of Employment.
Nothing in this Plan shall confer upon the Participant the right to
continue in the employ of the Company, or any Participating Subsidiary, if any,
nor shall it interfere in any way with the right of the Company, or any
Participating Subsidiary, if any, to discharge the Participant at any time for
any reason whatsoever, with or without cause. Nothing in this Section 10 shall
affect any rights or obligations of the Company or any Participant under any
written contract of employment.
11. No Rights as a Shareholder.
A Participant shall have no rights as a shareholder with respect to any
shares of Common Stock subject to a Stock Option granted under this Plan. Except
as provided in Section 6.2, no adjustments shall be made in the number of shares
of Common Stock issued to a Participant, or in any other rights of the
Participant upon exercise of a Stock Option, by reason of any dividend,
distribution or other right granted to shareholders for which the record date is
prior to the date of exercise of the Participant's Stock Option.
12. Assignability.
No Stock Option, Reload Option or Stock Appreciation Right awarded under
this Plan, nor any other rights acquired by a Participant under this Plan, shall
be assignable or transferable by a Participant, other than by will or applicable
laws of intestate succession. During a Participant's lifetime, Stock Options may
be exercised only by such Participant or the guardian or legal representative of
the Participant. Notwithstanding the foregoing, the Committee may, in its sole
discretion, permit the assignment or transfer of an NSO by a Participant, other
than an officer or director, and the exercise thereof by a person other than
such Participant, on such terms and conditions as the Committee in its sole
discretion, may determine. Any such terms shall be determined at the time the
NSO is granted, and shall be set forth in the Option Agreement. In the event of
a Participant's death, the Stock Option or any Reload Option or Stock
Appreciation Right may be exercised by the personal representative of the
Participant's estate or, if no personal representative has been appointed, by
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the successor or successors in interest determined under the Participant's will
or under the applicable laws of intestate succession.
13. Termination of Plan.
In the event of dissolution or liquidation of the Company, or upon any
reorganization, merger or consolidation of the Company with one or more
corporations where the Company is the surviving corporation and the shareholders
of the Company immediately prior to such transaction do not own at least fifty
percent (50%) of the issued and outstanding Common Stock immediately after such
transaction, or upon any reorganization, merger or consolidation of the Company
with one or more corporations where the Company is not the surviving
corporation, or upon a sale of substantially all of the assets of the Company to
another corporation or entity or upon the sale of Common Stock to another person
or entity in one or a series of transactions with the result that such person or
entity owns more than fifty percent (50%) of the issued and outstanding Common
Stock immediately after such sale(s), the Plan and all Stock Options and Reload
Options and Stock Appreciation Rights, if any, outstanding under the Plan shall
terminate on the effective date of the transaction (or, in the event of a tender
offer resulting in the sale of fifty percent (50%) or more of the then
outstanding Common Stock (a "Tender Offer"), 30 days after the final expiration
of the Tender Offer) unless prior to the effective date of the transaction the
Board elects, in its sole discretion, to continue the Plan. In the event the
Board does not elect to continue the Plan, however, any Stock Options, Reload
Options and Stock Appreciation Rights, theretofore granted and outstanding under
the Plan shall become immediately exercisable in full at such time as the
approval of the transaction by the Board, or the final expiration of any Tender
Offer (notwithstanding any performance, vesting or other criteria contained
therein), and shall remain exercisable until the effective date of such
transaction or 30 days after the final expiration of the Tender Offer, whichever
is applicable (unless the Stock Option, Rel oad Option or Stock Appreciation
Right would otherwise expire by its own terms on an earlier date). The Company
shall give each optionee written notice at least 30 days prior to the effective
date of any termination of the Plan as a result of a transaction described above
in order to permit the optionee to exercise his Stock Options and/or Reload
Options and Stock Appreciation Rights, if any, prior to the effective date of
termination. Unless the Board has elected to continue the Plan, any option not
exercised by the effective date of a transaction described above shall terminate
on such date.
14. Withholding Taxes.
The Company or Participating Subsidiary, if any, may take such steps as it
may deem necessary or appropriate for the withholding of any taxes which the
Company or the Participating Subsidiary, if any, is required by any law or
regulation or any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with any Stock Option, Reload
Option or Stock Appreciation Right, including, but not limited to, the
withholding of all or any portion of any payment or the withholding of issuance
of shares of Common Stock to be issued upon the exercise of any Stock Option,
Reload Option or Stock Appreciation Right, until the Participant reimburses the
Company or Participating Subsidiary, if any, for the amount the Company or
Participating Subsidiary, if any, is required to withhold with respect to such
taxes, or cancelling any portion of such award in an amount sufficient to
reimburse itself for the amount it is required to so withhold.
15. Amendment.
The Board may from time to time alter, amend, suspend or discontinue this
Plan, including, where applicable, any modifications or amendments as it shall
deem advisable in order that ISOs will be classified as incentive stock options
under the Code, or in order to conform to any regulation or to any change in any
law or regulations applicable thereto; provided, however, that no such action
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shall adversely affect the rights and obligations with respect to Stock Options
at any time outstanding under this Plan; and provided further that no such
action shall, without the approval of the shareholders of the Company, (i)
increase the maximum number of shares of the Common Stock that may be made
subject to Stock Options (unless necessary to effect the adjustments required by
Section 6.2), (ii) materially increase the benefits accruing to Participants
under this Plan, or (iii) materially modify the requirements as to eligibility
for participation in this Plan.
16. Application of Section 16.
With respect to persons subject to Section 16 of the 1934 Act, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the 1934 Act. To the extent any provision of this
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.
17. Registration of Optioned Shares.
The Stock Options shall not be exercisable unless the purchase of such
optioned shares is pursuant to an applicable effective registration statement
under the Securities Act of 1933, as amended (the "Act"), or unless, in the
opinion of counsel to the Company, the proposed purchase of such optioned shares
would be exempt from the registration requirements of the Act, and from the
registration or qualification requirements of applicable state securities laws.
The Company shall have no obligation to register any shares of Common Stock.
18. Stock Restrictions.
The Committee may provide that shares of Common Stock issuable upon the
exercise of a Stock Option, Reload Option or Stock Appreciation Right, be
subject to various restrictions, including restrictions which provide that the
Company has a right to prohibit sales of such shares of Common Stock, a right of
first refusal with respect to such shares of Common Stock or a right or
obligation to repurchase all or a portion of such shares of Common Stock, which
restrictions may survive a Participant's term of employment with the Company.
The acceleration of time or times at which the Stock Option becomes exercisable
may be conditioned upon the Participant's agreement to such restrictions.
19. Nonexclusivity of this Plan.
Neither the adoption of this Plan by the Board nor the submission of this
Plan to shareholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Participating Subsidiary, if any, has lawfully put into
effect, including, without limitation, any retirement, pension, savings and
stock purchase plan, insurance, death and disability benefits and executive
short-term incentive plans.
20. Effective Date.
This Plan was adopted by the Board and became effective on January 15,
1997, and was approved by the shareholders of the Company on January 15, 1997.
No ISOs shall be granted under this Plan subsequent to 10 years after its
original effective date, although NSOs may continue to be granted under this
Plan after such ten-year period. ISOs outstanding subsequent to ten years after
the original effective date of this Plan shall continue to be governed by the
provisions of this Plan.