Exhibit 10.07
MID-POWER SERVICE CORPORATION
2002 STOCK OPTION AND PURCHASE RIGHTS PLAN
Mid-Power Service Corporation, a Nevada corporation (the "Company"),
hereby adopts this "2002 Stock Option and Purchase Rights Plan" (the "Plan").
1. Purposes of the Plan. The Board has adopted this Plan with the
intent, and directs that it be administered as necessary, to attract and retain
the best available personnel for positions of substantial responsibility;
provide additional incentive to Employees, Directors and Consultants; and
promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees
as shall be administering the Plan, in accordance with section 4 of the
Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under the corporate laws of the
state in which the Company is incorporated, federal and state
securities laws, the Code, the regulations and policies of any stock
exchange or quotation system on which the Common Stock is listed or
quoted, and the Applicable Laws of any foreign country or jurisdiction
where Options or Stock Purchase Rights are or will be granted under the
Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means a committee of Directors appointed by
the Board in accordance with section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means Mid-Power Service Corporation, a Nevada
corporation.
(h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to
such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider shall not cease to be an Employee in the
case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. For purposes of Incentive
Stock Options, no such leave may exceed 90 days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, then three months following the 91st day
of such leave, any Incentive Stock Option held by the Optionee shall
cease to be treated as an Incentive Stock Option and shall be treated
for tax purposes as a Nonstatutory Stock Option. Neither service as a
Director nor payment of a Director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) if the Common Stock is listed on any established
stock exchange or a national market system, including without
limitation the Nasdaq National Market or the Nasdaq SmallCap
Market of the Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid,
if no sales were reported) as quoted on such exchange or
system on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable;
(ii) if the Common Stock is regularly quoted by a
recognized securities dealer, but selling prices are not
reported, the Fair Market Value of a Share of Common Stock
shall be the mean between the high bid and low asked prices
for the Common Stock on the day of determination, as reported
in The Wall Street Journal or such other source as the
Administrator deems reliable; or
(iii) in the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in
good faith by the Administrator.
(n) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.
(o) "Inside Director" means a Director who is an Employee.
(p) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
(q) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or
Stock Purchase Right grant. The Notice of Grant is part of the Option
Agreement.
(r) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the
Plan.
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(t) "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(u) "Option Exchange Program" means a program whereby
outstanding Options are surrendered in exchange for Options with a
lower exercise price.
(v) "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.
(w) "Optionee" means the holder of an outstanding Option or
Stock Purchase Right granted under the Plan.
(x) "Outside Director" means a Director who is not an Employee
(as defined in Rule 16b-3 of the Exchange Act and Section 162(m) of the
Code).
(y) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(z) "Plan" means this 2002 Stock Option and Purchase Rights
Plan, as amended and restated.
(aa) "Restricted Stock" means Shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under section 11 of the
Plan.
(bb) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right.
The Restricted Stock Purchase Agreement is subject to the terms and
conditions of the Plan and the Notice of Grant.
(cc) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.
(dd) "Section 16(b)" means Section 16(b) of the Exchange Act.
(ee) "Service Provider" means an Employee, Director or
Consultant.
(ff) "Share" means a share of the Common Stock, as adjusted in
accordance with section 15 of the Plan.
(gg) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to section 11 of the Plan, as evidenced by a Notice of
Grant.
(hh) "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of section 15
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 500,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
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If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares that were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) The Board may designate different Committees to
administer the Plan with respect to different groups of
Service Providers.
(ii) To the extent that the Administrator determines
it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section
162(m) of the Code, the Plan shall be administered by a
Committee of two or more "Outside Directors" within the
meaning of Section 162(m) of the Code.
(iii) To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.
(iv) Other than as provided above, the Plan shall be
administered by the Board or a Committee, which Committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator
shall have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options
and Stock Purchase Rights may be granted hereunder;
(iii) to determine the number of Shares of Common
Stock to be covered by each Option and Stock Purchase Right
granted hereunder;
(iv) to approve forms of agreement for use under the
Plan;
(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or
Stock Purchase Right granted hereunder. Such terms and
conditions include, but are not limited to, the exercise
price, the time or times when Options or Stock Purchase Rights
may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions,
and any restriction or limitation regarding any Option or
Stock Purchase Right or the Shares of Common Stock relating
thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
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(vi) to reduce the exercise price of any Option or
Stock Purchase Right to the then-current Fair Market Value if
the Fair Market Value of the Common Stock covered by such
Option or Stock Purchase Right shall have declined since the
date the Option or Stock Purchase Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan;
(ix) to establish, amend and rescind rules and
regulations relating to the Plan, including rules and
regulations relating to subplans established for the purpose
of satisfying applicable foreign laws;
(x) to modify or amend each Option or Stock Purchase
Right (subject to section 17(c) of the Plan), including the
discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise
provided for in the Plan;
(xi) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an
Option or Stock Purchase Right previously granted by the
Administrator;
(xii) to correct any defect, supply any omission, or
reconcile any inconsistency in the Plan or in any Option
Agreement, in a manner and to the extent it shall deem
necessary, all of which determinations and interpretations
made by the Administrator shall be conclusive and binding on
all Optionees, any other holders of Options, and on their
legal representatives and beneficiaries;
(xiii) except to the extent prohibited by or
impermissible in order to obtain treatment desired by the
Administrator under applicable law or rule, to allocate or
delegate all or any portion of its powers and responsibilities
to any one or more of its members or to any person(s) selected
by it, subject to revocation or modification by the
Administrator of such allocation or delegation; and
(xiv) to make all other determinations deemed
necessary or advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options or Stock
Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights
may be granted to Service Providers. Incentive Stock Options may be granted only
to Employees.
6. Limitations.
(a) Designation. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designation, to the extent that
the aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by the
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Optionee during any calendar year (under all Plans of the Company and
any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For purposes of this section
6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall
be determined as of the time the Option with respect to such Shares is
granted.
(b) No Right of Continuing Service or Employment. Neither the
Plan nor any Option or Stock Purchase Right shall confer upon an
Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right
to terminate such relationship at any time, with or without cause.
(c) Limitations on Grants of Options. The following
limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any
fiscal year of the Company, Options to purchase more than
50,000 Shares.
(ii) In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an
additional 50,000 Shares, which shall not count against the
limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's
capitalization as described in section 15.
(iv) If an Option is cancelled in the same fiscal
year of the Company in which it was granted (other than in
connection with a transaction described in section 15), the
cancelled Option will be counted against the limits set forth
in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will
be treated as a cancellation of the Option and the grant of a
new Option.
7. Term of Plan. Subject to section 21 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of 10 years unless terminated earlier under section 17 of the Plan.
8. Term of Option. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be 10
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five years from the date of grant or such shorter term as
may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be
determined by the Administrator, subject to the following:
(i) In the case of an Incentive Stock Option:
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(1) granted to an Employee who, at the time
the Incentive Stock Option is granted, owns stock
representing more than 10% of the voting power of all
classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on
the date of grant.
(2) granted to any Employee other than an
Employee described in subsection 9(a)(i)(1)
immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the
Administrator. In the case of a Nonstatutory Stock Option
intended to qualify as "performance-based compensation" within
the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of
the Fair Market Value per Share on the date of grant pursuant
to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator shall fix the period within which the
Option may be exercised and shall determine any conditions that must be
satisfied before the Option may be exercised.
(c) Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock
Option, the Administrator shall determine the acceptable form of
consideration at the time of grant. Such consideration may consist
entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares, provided Shares acquired from the
Company have been owned by the Optionee for more than six
months on the date of surrender and have a Fair Market Value
on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised;
(v) consideration received by the Company under a
cashless exercise program implemented by the Company in
connection with the Plan;
(vi) a reduction in the amount of any Company
liability to the Optionee, including any liability
attributable to the Optionee's participation in any
Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of
payment; or
(viii) such other consideration and method of payment
for the issuance of Shares to the extent permitted by
Applicable Laws.
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10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any
Option granted hereunder shall be exercisable according to the terms of
the Plan and at such times and under such conditions as determined by
the Administrator and set forth in the Option Agreement. Unless the
Administrator provides otherwise, vesting of Options granted hereunder
shall be tolled during any unpaid leave of absence. An Option may not
be exercised for a fraction of a Share. An Option shall be deemed
exercised when the Company receives: (i) written or electronic notice
of exercise (in accordance with the Option Agreement) from the person
entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist
of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the name of
the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse or in the name of a family trust of
which the Optionee is a trustee. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such Shares
promptly after the Option is exercised; provided that if the Company
shall be advised by counsel that certain requirements under the
federal, state or foreign securities laws must be met before Shares may
be issued under this Plan, the Company shall notify all persons who
have been issued Options, and the Company shall have no liability for
failure to issue Shares under any exercise of Options because of delay
while such requirements are being met or the inability of the Company
to comply with such requirements. No adjustment will be made for a
dividend or other right for which the record date is prior to the date
the Shares are issued, except as provided in section 15 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the
Optionee's death or Disability, the Optionee may exercise his or her
Option within such period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option shall remain
exercisable for three months following the Optionee's termination. If,
on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee
may exercise his or her Option within such period of time as is
specified in the Option Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the
absence of a specified time in the Option Agreement, the Option shall
remain exercisable for 12 months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee
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does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the
expiration of the term of such Option as set forth in the Notice of
Grant), by the Optionee's estate or by a person who acquires the right
to exercise the Option by bequest or inheritance, but only to the
extent that the Option is vested on the date of death. In the absence
of a specified time in the Option Agreement, the Option shall remain
exercisable for 12 months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the
person(s) entitled to exercise the Option under the Optionee's will or
the laws of descent or distribution. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under
the Plan, it shall advise the offeree in writing or electronically, by
means of a Notice of Grant, of the terms, conditions and restrictions
related to the offer, including the number of Shares that the offeree
shall be entitled to purchase, the price to be paid, and the time
within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase Option exercisable upon the voluntary or
involuntary termination of the purchaser's service with the Company for
any reason (including death or Disability). The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement
shall be the original price paid by the purchaser, plus interest at the
rate of ten percent (10%) per year from the date of the original
purchase, and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase Option shall lapse at a rate
determined by the Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in
its sole discretion.
(d) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder and shall be a stockholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in section 15 of the Plan.
12. Withholding. If the grant or exercise of an Option or a Stock
Purchase Right pursuant to this Plan, or any other event in connection with any
such grant or exercise, creates an obligation to withhold income and employment
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taxes pursuant to the Applicable Laws, such obligation may, at the discretion of
the Administrator at the time of the grant of the Option or Stock Purchase Right
and to the extent permitted by the terms of the Option or Stock Purchase Right
and the then-governing provisions of the Code and the Exchange Act, be satisfied
(a) by the holder of the Option or Stock Purchase Right delivering to the
Company an amount of cash equal to such withholding obligation; (b) by the
Company withholding from any compensation or other amount owing to the holder of
the Option or Stock Purchase Right the amount (in cash, stock, or other property
as the Company may determine) of the withholding obligation; (c) by the Company
withholding Shares of stock subject to the Option or Stock Purchase Right with a
Fair Market Value equal to such obligation; or (d) by the holder of the Option
or Stock Purchase Right either delivering Shares of stock that have been owned
by the holder for more than six months or canceling Options or other rights to
acquire stock from the Company that have been held for more than six months with
a Fair Market Value equal to such requirements. In all events, delivery of
Shares of stock issuable on exercise of the Option or on grant of the Stock
Purchase Right shall be conditioned upon and subject to the satisfaction or
making provision for the satisfaction of the withholding obligation of the
Company resulting from the grant or exercise of the Option, grant of the Stock
Purchase Right, or any other event. The Company shall be further authorized to
take such other action as may be necessary, in the opinion of the Company, to
satisfy all obligations for the payment of such taxes.
13. Nontransferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
14. Grants to Directors and Officers. To the extent the Company has a
class of securities registered under the Exchange Act, Options or Stock Purchase
Rights granted under the Plan to Directors and Officers (as used in Rule 16b-3
promulgated under the Exchange Act or any amendment or successor rule of like
tenor) intended to qualify for the exemption from Section 16(b) of the Exchange
Act provided in Rule 16b-3 shall, in addition to being subject to the other
restrictions and limitations set forth in this Plan, be made as follows:
(a) Requirements for Grant to Officer or Director. A
transaction whereby there is a grant of an Option or Stock Purchase
Right pursuant to this Plan must satisfy one of the following:
(i) The transaction must be approved by the Board or
duly authorized Committee composed solely of two or more
Outside Directors of the Company.
(ii) The transaction must be approved or ratified, in
compliance with Section 14 of the Exchange Act, by either: the
affirmative vote of the holders of a majority of the
securities of the Company present or represented and entitled
to vote at a meeting of the stockholders of the Company held
in accordance with the Applicable Laws of the state of
incorporation of the Company; or, if allowed by applicable
state law, the written consent of the holders of a majority,
or such greater percentage as may be required by Applicable
Laws of the state of incorporation of the Company, of the
securities of the Company entitled to vote. If the transaction
is ratified by the stockholders, such ratification must occur
no later than the date of the next annual meeting of
stockholders.
(iii) The stock acquired must be held by the Officer
or Director for a period of six months subsequent to the date
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of the grant; provided that if the transaction involves a
derivative security (as defined in Section 16 of the Exchange
Act), this condition shall be satisfied if at least six months
elapse from the date of acquisition of the derivative security
to the date of disposition of the derivative security (other
than on exercise or conversion) or its underlying equity
security.
(b) Approval Required for Disposition of Securities. Any
transaction involving the disposition by the Company of its securities
in connection with Options or Stock Purchase Rights granted pursuant to
this Plan shall:
(i) be approved by the Board or duly authorized
Committee composed solely of two or more Outside Directors; or
(ii) be approved or ratified, in compliance with
Section 14 of the Exchange Act, by either: the affirmative
vote of the holders of a majority of the securities of the
Company present or represented and entitled to vote at a
meeting duly held in accordance with the Applicable Laws of
the state of incorporation of the Company; or, if allowed by
applicable state law, the written consent of the holders of a
majority, or such greater percentage as may be required by
Applicable Laws of the state of incorporation of the Company,
of the securities of the Company entitled to vote; provided
that such ratification occurs no later than the date of the
next annual meeting of stockholders.
All of the foregoing restrictions and limitations are based on the governing
provisions of the Exchange Act and the rules and regulations promulgated
thereunder as of the date of adoption of this Plan. If, at any time, the
governing provisions are amended to permit an Option or Stock Purchase Right to
be granted or exercised pursuant to Rule 16b-3 or any amendment or successor
rule of like tenor without one or more of the foregoing restrictions or
limitations, or the terms of such restrictions or limitations are modified, the
Administrator may award Options or Stock Purchase Rights to Directors and
Officers and may modify outstanding Options or Stock Purchase Rights in
accordance with such changes, all to the extent that such action by the
Administrator does not disqualify the Options or Stock Purchase Rights from
exemption under the provisions of Rule 16b-3 or any amendment or successor rule
of similar tenor.
15. Adjustments upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of Shares of Common
Stock covered by each outstanding Option and Stock Purchase Right, the
number of Shares of Common Stock that have been authorized for issuance
under the Plan but as to which no Options or Stock Purchase Rights have
yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option or Stock Purchase Right, the
number of Shares that may be added annually to the Shares reserved
under the Plan by the Board (pursuant to section 3), the number of
Shares that may be granted pursuant to the automatic grant provisions
of section 14, as well as the price per Share of Common Stock covered
by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of
issued Shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of issued
Shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the
Company of Shares of stock of any class, or securities convertible into
Shares of stock of any class, shall affect, and no adjustment by reason
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thereof shall be made with respect to, the number or price of Shares of
Common Stock subject to an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date
of such proposed transaction. The Administrator in its discretion may
provide for an Optionee to have the right to exercise his or her Option
until ten days prior to such transaction as to all of the Optioned
Stock covered thereby, including Shares as to which the Option would
not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any Shares
purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To
the extent it has not been previously exercised, an Option or Stock
Purchase Right will terminate immediately prior to the consummation of
such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially
all of the assets of the Company, each outstanding Option and Stock
Purchase Right shall be assumed or an equivalent Option or right
substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation. With respect to Options granted to an
Outside Director pursuant to section 14 that are assumed or substituted
for, if following such assumption or substitution the Optionee's status
as a Director or a director of the successor corporation, as
applicable, is terminated other than upon a voluntary resignation by
the Optionee, then the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable.
In the event that the successor corporation refuses to assume
or substitute for the Option or Stock Purchase Right, the Optionee
shall fully vest in and have the right to exercise the Option or Stock
Purchase Right as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable. If an Option or
Stock Purchase Right becomes fully vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets,
the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully
vested and exercisable for a period of 15 days from the date of such
notice, and the Option or Stock Purchase Right shall terminate upon the
expiration of such period.
For the purposes of this subsection, the Option or Stock
Purchase Right shall be considered assumed if, following the merger or
sale of assets, the Option or right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right immediately prior to the merger or sale of assets,
the consideration (whether stock, cash or other securities or property)
received in the merger or sale of assets by holders of Common Stock for
each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the
merger or sale of assets is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received
upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be
solely common stock of the successor corporation or its Parent equal in
Fair Market Value to the per Share consideration received by holders of
Common Stock in the merger or sale of assets.
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16. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.
17. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to
comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the
rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and
signed by the Optionee and the Company. Termination of the Plan shall
not affect the Administrator's ability to exercise the powers granted
to it hereunder with respect to Options granted under the Plan prior to
the date of such termination.
18. Conditions upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option or Stock Purchase Right unless the exercise
of such Option or Stock Purchase Right and the issuance and delivery of
such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise
of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and
warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required.
19. Inability To Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
20. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
21. Stockholder Approval. The Plan shall be subject to approval by the
stockholders of the Company within 12 months after the date the Plan is adopted.
Such stockholder approval shall be obtained in the manner and to the degree
required under Applicable Laws. If such approval is not timely obtained, any
Options theretofore granted shall remain in full force and effect, except the
Options granted as Incentive Stock Options shall not be eligible for treatment
as such and shall be treated as Nonstatutory Stock Options.
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SECRETARY'S CERTIFICATE
The undersigned, the duly constituted and elected secretary of
Mid-Power Service Corporation hereby certifies that pursuant a majority written
consent of stockholders effective June 25, 2002, in accordance with the
requirements of law and the Company's certificate of incorporation and bylaws,
the foregoing Mid-Power Service Corporation 2002 Stock Option and Purchase
Rights Plan was approved by the affirmative vote of the holders of a majority of
the Shares of Common Stock.
DATED this 25 day of June, 2002.
/s/ Kenneth M. Emter
-----------------------------
Kenneth M. Emter, Secretary
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