GRC INTERNATIONAL, INC.
OFFICERS STOCK OPTION PLAN
1. PURPOSE
The purpose of the Officers Stock Option Plan is to enable the Company
to attract and retain the most qualified officers possible, by enabling them to
acquire a proprietary interest (or increase their proprietary interest) in the
Company in accordance with the terms and conditions of this Plan.
2. DEFINITIONS
2.1. "Board " means the Board of Directors of the Company.
2.2. "Cause", in the context of termination of employment, shall be
defined in the context of executive employment and shall include, but not be
limited to, any material violation by an Optionee of any written employment
agreement, any act of dishonesty with respect to the Company or a Related
Corporation thereof, or the commission of any act reflecting unfavorably on the
Company or a Related Corporation thereof.
2.3. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.4. "Committee" means the Committee of the Board appointed pursuant
to Section 4.3 hereof, except as otherwise provided in Section 4.1 hereof.
2.5. "Company" means GRC International, Inc., a Delaware corporation,
or any successor thereto by merger, consolidation or otherwise.
2.6. "Director" means a director of the Company.
2.7. "Disability" means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve months, as
determined by the Committee.
2.8. "Effective Date" means August 15, 1996.
2.9. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
2.10. "Fair Market Value" means the average of the high and low sale
prices of the Stock quoted on the New York Stock Exchange Composite Transaction
Reporting System (or on the exchange or system where the Stock is principally
traded) on the date for which Fair Market Value is to be determined (or if
unavailable on such date, on the next preceding trading date). If the Fair
Market Value is not available on such date, the Committee shall determine the
Fair Market Value.
2.11. "Grant Date" means the date as of which an Option is granted by
the Committee pursuant to the Plan.
2.12. "Officer" means any officer of the Company or a Related
Corporation (as defined in the bylaws of the applicable corporation). The term
"Officer" shall include the present Chairman of the Board or any future Chairman
of the Board ("Chairman") and the present Vice Chairman of the Board and any
future Vice Chairman of the Board ("Vice Chairman"), but shall exclude other
non-employee Directors.
2.13. "Option" means any stock option granted pursuant to the terms of
the Plan.
2.14. "Option Agreement" means the agreement executed between the
Company and the Optionee relating to the Option.
2.15. "Option Price" means the purchase price of shares of Stock
subject to an Option.
2.16. "Option Term" means the period beginning on the Grant Date and
ending on the day an Option expires under the terms of the Option Agreement or
the Plan.
2.17. "Optionee" means any Officer who is granted an Option pursuant
to the Plan.
2.18. "Plan" means the GRC International, Inc. Officers Stock Option
Plan.
2.19. "Related Corporation" means any parent or subsidiary
corporation, as defined in Section 424 of the Code.
2.20. "Section 16 Optionee" means an Optionee who is a director,
officer or ten percent beneficial owner of the Company, as those terms are used
in Section 16 of the Exchange Act.
2.21. "Stock" means shares of the Company's $0.10 par value common
stock.
3. STOCK SUBJECT TO PLAN
The aggregate number of shares which may be issued under Options under
this Plan shall not exceed 300,000 shares of Stock, unless such number of shares
is adjusted as provided in Section 10. The Stock subject to Options to be
granted under the Plan shall be shares of Stock reacquired by the Company and
held as treasury stock, provided, however, that the Stock subject to Options to
be granted under the Plan may be shares of the Company's authorized but unissued
Stock where permissible without shareholder approval under the rules of the New
York Stock Exchange (or on such other exchange or system where the Stock is
principally traded). In the event that any outstanding Option under the Plan
expires or terminates for any reason without having been exercised in full, the
shares of Stock allocable to the unexercised portion of such Option shall become
available for other Options under the Plan. In the event that the exercise price
of an Option or any taxes in connection therewith are paid by (i) shares of
previously owned Stock, or (ii) the Company's retention of shares of Stock
otherwise issuable to the Optionee upon exercise, then only the net amount of
shares of Stock actually issued to the Optionee shall be counted against the
aggregate number of shares which
may be issued under the Plan, and any shares of Stock which are not actually
issued to the Optionee shall become available for other Options under the Plan.
4. ADMINISTRATION OF PLAN
4.1. Administration by Committee. The Plan shall be administered by
the Committee which shall be appointed pursuant to Section 4.3 hereof; provided,
however, that the Board may perform any function of the Committee under the
Plan, including without limitation for the purpose of ensuring that transactions
under the Plan by any Section 16 Optionee are exempt under Rule 16b-3. In any
case in which the Board is performing a function of the Committee under the
Plan, each reference to the Committee herein shall be deemed to refer to the
Board.
4.2. Powers of Committee. The Committee has full and final authority
in its sole discretion to:
(i) grant Options from time to time to Officers;
(ii) determine the duration, terms and provisions of the Options
and of Option Agreements, including but not limited to, any vesting provisions;
(iii) condition the exercise of any Options granted hereunder on
the attainment of certain specified goals by the Officer or by the Company or a
Related Corporation thereof;
(iv) restrict the sale or otherwise provide for the repurchase of
shares acquired pursuant to the terms of an Option;
(vi) determine the time or times at which Options shall be
granted;
(vii) determine the number of shares to be covered by each
Option;
(viii) determine the Fair Market Value and the Option Price;
(ix) interpret the Plan;
(x) prescribe, amend and rescind rules and regulations relating
to the Plan; and
(xi) make all other determinations, orders and decisions
necessary or advisable for the administration of the Plan. All such
determinations and actions shall be conclusive and binding for all purposes and
upon all persons.
4.3. Committee.
4.3.1. The Plan shall be administered by a Committee appointed
or designated by the Board.
4.3.2. The Board may from time to time remove members from, or
add members to, the Committee. Vacancies on the Committee, however caused, shall
be filled by the Board.
4.3.3 The interpretation and construction by the Committee of
any provision of the Plan, or of any Option granted under it, shall be final.
5. EXERCISE OF OPTIONS
5.1. Time of Exercise. Each Option shall be exercisable in accordance
with the terms of the applicable Option Agreement, except that Options shall
become immediately exercisable in full, notwithstanding any delayed
exercisability provisions in the Option Agreement, upon the death or Disability
of the Optionee.
5.2. Manner of Exercise. To exercise an Option in whole or in part, an
Optionee shall give written notice of exercise to the Committee specifying the
number of shares as to which the Option is being exercised, accompanied by
payment in full of the Option Price for such shares either in cash or in such
other consideration as approved by the Committee in its sole discretion
including, but not limited to, (i) shares of previously owned Stock (held by the
Optionee for at least 6 months if acquired by exercise of option), or (ii) in
the event of hardship and with the advance approval of the Committee, the
Company's retention of shares of Stock otherwise issuable to the Optionee upon
exercise. Shares of Stock used to make payments under (i) and (ii) shall be
valued at Fair Market Value on the date such notice is received by the Company's
Stock Option Administrator (or if unavailable on such date, on the next
preceding trading date), and the number of shares to be required for payments
under (i) or (ii) shall be rounded to the nearest whole share so that no cash
payment shall be required by reason of any fractional amount. Not less than 10
shares may be purchased at any one time unless the number purchased is the total
number purchasable under the Option. The exercise of each Option shall also be
subject to any other restrictions, terms or conditions contained in the rules
and regulations of the Committee or in the Option Agreement.
5.3. No Rights of Stockholder. The holder of an Option shall not have
any of the rights of a stockholder with respect to the shares covered by his
Option until the Option is duly exercised.
5.4. Additional Restrictions on Exercise. Notwithstanding any other
provision in this Plan to the contrary, no Option may be exercised at a time or
in a manner which could result in the loss of any tax deduction for the Company
under Section 162(m) of the Code, provided, however, that if an Option expires
within 12 months after an Optionee has properly completed and delivered an
exercise notice to the Company with respect to such Option and such exercise has
been rejected by the Company pursuant to this provision, then the expiration
date of such Option shall be extended until July 31 of the Company's first
fiscal year thereafter in which such exercise no longer could result in the loss
of any tax deduction to the Company under Section 162(m).
6. OPTION AGREEMENT
Promptly after the grant of an Option under the Plan, and before the
exercise of any part thereof, the Company and the Optionee shall execute an
Option Agreement incorporating the
terms of this Plan and specifying the Option Price, the number of shares of
Stock subject to the Option, the terms and conditions of the Option, and such
other matters, as the Committee in its sole discretion may determine. The Option
Agreement may also contain any other provision restricting exercise or otherwise
as the Committee shall deem appropriate.
7. TERMINATION OF EMPLOYMENT
7.1. Termination For Any Reason Other Than Death, Disability or Cause.
7.1.1. If an Optionee's employment ceases for any reason other
than death or Disability or termination for Cause, his or her Option(s) shall
remain in effect until the earlier of the end of the Option Term or the
expiration of 3 months after the Optionee's termination.
7.1.1. If any Related Corporation or division of the Company is
sold or any other transaction occurs as a result of which an Optionee is no
longer an employee of the Company or an employee of an entity which is then a
Related Corporation thereof, such Optionee's Option(s) shall remain in effect
until the earlier of the end of the Option Term or the expiration of 3 months
after such sale or other transaction.
7.2. Termination For Cause. If an Optionee's employment is terminated
for Cause, his or her Options shall lapse forthwith.
7.3. Disability. If an Optionee's employment ceases by reason of such
Optionee's Disability, his or her Options shall remain in effect until the
earlier of the end of the Option Term or the expiration of 1 year after the
Optionee's termination.
7.4. Death. If an Optionee's employment ceases by reason of Optionee's
death, his or her Options shall remain in effect until the earlier of the end of
the Option Term or the expiration of 1 year after the Optionee's death, and may
be exercised by the person to whom the Option has been transferred by will or
the laws of the descent and distribution.
7.5. Committee's Discretion. Notwithstanding the foregoing provisions
of this Section 7, the Committee may, in its sole discretion, extend the
privilege to exercise all or any part of the Option in accordance with its terms
for any period of time within the Option Term. In the event the Optionee is a
Chairman or Vice Chairman, the Committee may make appropriate provisions in the
applicable Option Agreement.
8. NO GUARANTEE OF EMPLOYMENT
Nothing in the Plan or in any Option Agreement, and no grant of an
Option pursuant to the Plan shall be construed as a contract of employment
between the Company or a Related Corporation and the Optionee, or as a
contractual right to continue in the employ of the Company or a Related
Corporation or as a limitation of the right of the Company or a Related
Corporation to discharge the Optionee at any time.
9. NON-TRANSFERABILITY OF OPTIONS
Except as may be expressly permitted by the Committee, Options shall
not be transferable otherwise than by will or the laws of descent and
distribution and, during the lifetime of the Optionee, an Option may be
exercised only by him or her.
10. STOCK ADJUSTMENT
10.1. Changes in Capital Structure. In the event that the outstanding
shares of Stock of the Company are hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities
of the Company or of another corporation or otherwise substantially affected by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, forward or reverse stock split, combination of shares,
dividend payable in capital stock or other special, large and non-recurring
dividend, appropriate adjustment shall be made by the Committee in the number
and kind of shares for the purchase of which Options may be granted under the
Plan. In addition, the Committee shall make appropriate adjustment in the number
and kind of shares as to which outstanding Options, or portions thereof then
unexercised, shall be exercisable, and in other Option terms, to the end that
the Optionee's proportionate interest and value shall be maintained as before
the occurrence of the event. Any adjustment made by the Committee shall be
conclusive.
10.2. Liquidation or Dissolution. If the Company dissolves and
liquidates, then notwithstanding any restrictions on exercise set forth in this
Plan or any Option, each Optionee shall have the right to exercise his Option at
any time on or before the tenth day prior to the effective date of such
liquidation and dissolution. The Committee may establish a different period for
exercise by notice to the Optionee, and it may establish limitations on exercise
to avoid subjecting the Optionee to liability under Section 16(b) of the
Exchange Act. Any Option not so exercised shall terminate on the last day for
exercise prior to such effective date.
10.3. Limitation on Rights of Optionee. Except as expressly provided in
Section 10.1 or 10.2 hereof, an Optionee shall have no rights by reason of the
issuance of (i) shares of Stock of the Company pursuant to this Plan, (ii)
additional shares of Stock, (iii) any other security or debenture convertible
into Stock, (iv) or any other equity security, including issuance pursuant to a
plan of merger, consolidation or statutory share exchange, and no adjustment by
reason thereof shall be made with respect to the number of shares of Stock
subject to an Option or the Option Price.
10.4. Rights of the Company. The grant of an Option pursuant to the
Plan shall not affect in any way the right or power of the Company to engage in
corporate transactions, including but not limited to issuing additional shares
of stock; making adjustments, reclassifications, reorganizations or changes in
its capital or business structure; participating in mergers, consolidations or
share exchanges with one or more other corporations or entities; or dissolving,
liquidating or selling or transferring all or any part of its business or
assets.
11. LEGAL RESTRICTIONS
The Company will not be obligated to issue or deliver shares of Stock
upon exercise of an Option if counsel to the Company determines that such
issuance would violate any law or regulation of any governmental authority or
any agreement between the Company and any
securities exchange or system upon which the Stock is then listed or quoted. In
connection with any stock issuance or delivery, the person acquiring the shares
shall, if requested by the Company, give assurances satisfactory to counsel by
the Company regarding such matters as the Company may deem desirable, and other
restrictions may apply to the shares, to assure compliance with all legal
requirements. The Company shall in no event be obligated to take any action in
order to cause the exercise of any Option.
12. TERM OF PLAN
Options may be granted pursuant to the Plan from time to time at any
time after the Effective Date.
13. AMENDMENT OF THE PLAN
The Board may at any time terminate, suspend or amend the Plan,
provided that no such amendment shall be made without shareholder approval if
such shareholder approval is required by any federal or state law or regulation
or the rules of any stock exchange or system on which the Stock may then be
listed or quoted, and provided, further, that no such amendment shall materially
adversely affect the rights of an Optionee without the express written consent
of the Optionee (or the person otherwise entitled to exercise the Option) unless
permitted by the terms of the Option Agreement.
14. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
Subject to the terms and conditions of the Plan and any Option
Agreement, the Committee may modify, extend or renew outstanding Options granted
under the Plan, or accept the surrender of outstanding Options, to the extent
not previously exercised, and authorize the granting of new Options in
substitution therefor. The Committee may not change the terms or conditions of
any outstanding Option in a manner that would materially adversely affect the
rights of the Optionee without the express written consent of the Optionee (or
the person otherwise entitled to exercise the Option) unless permitted by the
terms of the Option Agreement.
15. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Stock pursuant to
the exercise of the Option shall be used for its general corporate purposes.
16. WITHHOLDING TAXES
16.1. Elections to Pay Withholding Taxes. Any Optionee may pay the
amount of any federal, state or local taxes required by law to be withheld in
connection with the exercise of an Option, as well as any additional taxes on
the exercise up to Optionee's marginal rate, either in cash or in such other
consideration as approved by the Committee in its sole discretion including, but
not limited to (i) shares of previously owned Stock (held by the Optionee for at
least 6 months if acquired by exercise of option) (valued at Fair Market Value),
or (ii) the Company's retention of shares of Stock otherwise issuable to the
Optionee upon exercise (valued at Fair Market Value). Shares of Stock used to
make payments under (i) and (ii) shall be valued as of the exercise date, and
the number of shares to be required for payments under
(i) or (ii) shall be rounded to the nearest whole share so that no cash payment
shall be required by reason of any fractional amount.
16.2. Compulsory Payment of Tax Withholding Obligations. In the event
an Optionee does not satisfy his tax withholding obligations pursuant to Section
16.1, the Company or a Related Corporation shall have the right to deduct from
any compensation or any other payment of any kind due Optionee the amount of any
federal, state or local taxes required by law to be withheld as the result of
the exercise of an Option. In lieu of such deduction, the Company may require
the Optionee to make a cash payment to the Company or a Related Corporation
thereof equal to the amount required to be withheld. In the event the Optionee
does not make such payment when requested, the Company may refuse to issue any
stock certificate pursuant to the exercise of any Option until arrangements
satisfactory to the Committee for such payment have been made.
17. RULE 16b-3 COMPLIANCE
17.1. Six-Month Holding Period. Unless an Optionee could otherwise
dispose of equity securities, including derivative securities, acquired under
the Plan without incurring liability under Section 16(b) of the Exchange Act,
equity securities acquired under the Plan must be held for a period of six
months following the date of such acquisition, provided that this condition
shall be satisfied with respect to a derivative security 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 upon exercise or conversion)
or its underlying equity security.
17.2. Other Compliance Provisions. With respect to a Section 16
Optionee, the Committee shall implement transactions under the Plan and
administer the Plan in a manner that will ensure that each transaction by such
Optionee is exempt from liability under Rule 16b-3, except that such Optionee
may be permitted to engage in a non-exempt transaction under the Plan if written
notice has been given to the Optionee regarding the non-exempt nature of the
transaction. The Committee may authorize the Company to repurchase any Option or
shares of Stock acquired under the Plan in order to prevent a Section 16
Optionee from incurring liability under Section 16(b). Unless otherwise
specified by the Optionee, equity securities, including derivative securities,
acquired under the Plan which are disposed of by an Optionee shall be deemed to
be disposed of in the order acquired by the Optionee.
18. MISCELLANEOUS
18.1. Exclusion from Retirement and Fringe Benefit Computation. The
award and exercise of Options pursuant to the Plan shall not be taken into
account as "wages," "salary" or "compensation" in determining eligibility,
benefits or otherwise under (i) any pension, retirement, profit-sharing or other
qualified or non-qualified plan or deferred compensation plan; (ii) any employee
welfare or fringe benefit plan including, but not limited to, group life or
disability insurance; or (iii) any form of extraordinary pay including, but not
limited to, bonuses, sick pay and vacation pay.
18.2. Gender. As used herein the masculine gender shall include the
feminine as the identity of an Optionee may require.
18.3. Governing Law. The validity, interpretation and administration
of the Plan and of any rules, regulations, determinations or decisions made
thereunder, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined exclusively in accordance
with the laws of the State of Delaware, without regard to principles of
conflicts of law, and applicable federal law. Without limiting the generality of
the foregoing, the period within which any action in connection with the Plan
must be commenced shall be governed by the laws of the State of Delaware without
regard to the place where the act or omission complained of took place, the
residence of any party to such action or the place where the action may be
brought.
18.4. Headings. The headings in this Plan are for reference purposes
only and shall not affect the meaning or interpretation of the Plan.
18.5. Notices. All notice and other communications made or given
pursuant to this Plan shall be in writing and shall be sufficiently made or
given if hand delivered or mailed by certified mail, addressed to the Optionee
at the address contained in the records of the Company, or to the Company at its
principal office. </TEXT> </DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>4
<DESCRIPTION>1998 OPTION PLAN
<TEXT>
GRC INTERNATIONAL, INC.
1998 OPTION PLAN
1. PURPOSE
The purpose of the 1998 Option Plan is to enable the Company to attract
and retain key employees who are expected to materially contribute to the
prosperity of the Company and its affiliates, by enabling such employees to
acquire a proprietary interest (or increase their proprietary interest) in the
Company in accordance with the terms and conditions of this Plan.
2. DEFINITIONS
2.1. "Board " means the Board of Directors of the Company.
2.2. "Cause", in the context of termination of employment, shall be
defined in the context of executive employment and shall include, but not be
limited to, any material violation by an Optionee of any written employment
agreement, any act of dishonesty with respect to the Company or a Related
Corporation thereof, or the commission of any act reflecting unfavorably on the
Company or a Related Corporation thereof.
2.3. "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
2.4. "Committee" means the Committee of the Board appointed pursuant
to Section 4.3 hereof, except as otherwise provided in Section 4.1 hereof.
2.5. "Company" means GRC International, Inc., a Delaware corporation,
or any successor thereto by merger, consolidation or otherwise.
2.6. "Director" means a director of the Company.
2.7. "Disability" means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve months, as
determined by the Committee.
2.8. "Effective Date" means July 23, 1998.
2.9. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
2.10. "Fair Market Value" means the average of the high and low sale
prices of the Stock quoted on the New York Stock Exchange Composite Transaction
Reporting System (or on the exchange or system where the Stock is principally
traded) on the date for which Fair Market Value is to be determined (or if
unavailable on such date, on the next preceding trading date). If the Fair
Market Value is not available on such date, the Committee shall determine the
Fair Market Value.
2.11. "Grant Date" means the date as of which an Option is granted by
the Committee pursuant to the Plan.
2.12. "Key Employee" means any employee of the Company or a Related
Corporation who has or is expected to materially contribute to the prosperity of
the Company. The term "Key Employee" shall also include officers (as defined in
the bylaws of the applicable corporation), including the present Chairman of the
Board or any future Chairman of the Board ("Chairman") and the present Vice
Chairman of the Board and any future Vice Chairman of the Board ("Vice
Chairman"), but shall exclude other non-employee Directors.
2.13. "Option" means any stock option granted pursuant to the terms of
the Plan.
2.14. "Option Agreement" means the agreement executed between the
Company and the Optionee relating to the Option.
2.15. "Option Price" means the purchase price of shares of Stock
subject to an Option.
2.16. "Option Term" means the period beginning on the Grant Date and
ending on the day an Option expires under the terms of the Option Agreement or
the Plan.
2.17. "Optionee" means any Key Employee who is granted an Option
pursuant to the Plan.
2.18. "Plan" means the GRC International, Inc. 1998 Option Plan.
2.19. "Related Corporation" means any parent or subsidiary
corporation, as defined in Section 424 of the Code.
2.20. "Section 16 Optionee" means an Optionee who is a director,
officer or ten percent beneficial owner of the Company, as those terms are used
in Section 16 of the Exchange Act.
2.21. "Stock" means shares of the Company's $0.10 par value common
stock.
3. STOCK SUBJECT TO PLAN
The Stock subject to Options to be granted under the Plan may be shares
of the Company's authorized but unissued Stock, or shares of Stock reacquired by
the Company and held as treasury stock. The aggregate number of shares which may
be issued under Options under this Plan shall not exceed 500,000 shares of
Stock, unless such number of shares is adjusted as provided in Section 10. In
the event that any outstanding Option under the Plan expires or terminates for
any reason without having been exercised in full, the shares of Stock allocable
to the unexercised portion of such Option shall become available for other
Options under the Plan. In the event that the exercise price of an Option or any
taxes in connection therewith are paid by (i) shares of previously owned Stock,
or (ii) the Company's retention of shares of Stock otherwise issuable to the
Optionee upon exercise, then only the net amount of shares of Stock actually
issued to the Optionee shall be counted against the aggregate number of shares
which may be issued under the Plan, and any shares of Stock which are not
actually issued to the Optionee shall become available for other Options under
the Plan.
4. ADMINISTRATION OF PLAN
4.1. Administration by Committee. The Plan shall be administered by
the Committee which shall be appointed pursuant to Section 4.3 hereof; provided,
however, that the Board may perform any function of the Committee under the
Plan, including without limitation for the purpose of ensuring that transactions
under the Plan by any Section 16 Optionee are exempt under Rule 16b-3. In any
case in which the Board is performing a function of the Committee under the
Plan, each reference to the Committee herein shall be deemed to refer to the
Board.
4.2. Powers of Committee. The Committee has full and final authority
in its sole discretion to:
(i) grant Options from time to time to Officers;
(ii) determine the duration, terms and provisions of the Options
and of Option Agreements, including but not limited to, any vesting provisions;
(iii) condition the exercise of any Options granted hereunder on
the attainment of certain specified goals by the Officer or by the Company or a
Related Corporation thereof;
(iv) restrict the sale or otherwise provide for the repurchase of
shares acquired pursuant to the terms of an Option;
(vi) determine the time or times at which Options shall be
granted;
(vii) determine the number of shares to be covered by each
Option;
(viii) determine the Fair Market Value and the Option Price;
(ix) interpret the Plan;
(x) prescribe, amend and rescind rules and regulations relating
to the Plan; and
(xi) make all other determinations, orders and decisions
necessary or advisable for the administration of the Plan. All such
determinations and actions shall be conclusive and binding for all purposes and
upon all persons.
4.3. Committee.
4.3.1. The Plan shall be administered by a Committee appointed
or designated by the Board.
4.3.2. The Board may from time to time remove members from, or
add members to, the Committee. Vacancies on the Committee, however caused, shall
be filled by the Board.
4.3.3 The interpretation and construction by the Committee of
any provision of the Plan, or of any Option granted under it, shall be final.
5. EXERCISE OF OPTIONS
5.1. Time of Exercise. Each Option shall be exercisable in accordance
with the terms of the applicable Option Agreement, except that Options shall
become immediately exercisable in full, notwithstanding any delayed
exercisability provisions in the Option Agreement, upon the death or Disability
of the Optionee.
5.2. Manner of Exercise. To exercise an Option in whole or in part, an
Optionee shall give written notice of exercise to the Committee specifying the
number of shares as to which the Option is being exercised, accompanied by
payment in full of the Option Price for such shares either in cash or in such
other consideration as approved by the Committee in its sole discretion
including, but not limited to, (i) shares of previously owned Stock (held by the
Optionee for at least 6 months if acquired by exercise of option), or (ii) in
the event of hardship and with the advance approval of the Committee, the
Company's retention of shares of Stock otherwise issuable to the Optionee upon
exercise. Shares of Stock used to make payments under (i) and (ii) shall be
valued at Fair Market Value on the date such notice is received by the Company's
Stock Option Administrator (or if unavailable on such date, on the next
preceding trading date), and the number of shares to be required for payments
under (i) or (ii) shall be rounded to the nearest whole share so that no cash
payment shall be required by reason of any fractional amount. Not less than 10
shares may be purchased at any one time unless the number purchased is the total
number purchasable under the Option. The exercise of each Option shall also be
subject to any other restrictions, terms or conditions contained in the rules
and regulations of the Committee or in the Option Agreement.
5.3. No Rights of Stockholder. The holder of an Option shall not have
any of the rights of a stockholder with respect to the shares covered by his
Option until the Option is duly exercised.
5.4. Additional Restrictions on Exercise. Notwithstanding any other
provision in this Plan to the contrary, no Option may be exercised at a time or
in a manner which could result in the loss of any tax deduction for the Company
under Section 162(m) of the Code, provided, however, that if an Option expires
within 12 months after an Optionee has properly completed and delivered an
exercise notice to the Company with respect to such Option and such exercise has
been rejected by the Company pursuant to this provision, then the expiration
date of such Option shall be extended until July 31 of the Company's first
fiscal year thereafter in which such exercise no longer could result in the loss
of any tax deduction to the Company under Section 162(m).
6. OPTION AGREEMENT
Promptly after the grant of an Option under the Plan, and before the
exercise of any part thereof, the Company and the Optionee shall execute an
Option Agreement incorporating the terms of this Plan and specifying the Option
Price, the number of shares of Stock subject to the Option, the terms and
conditions of the Option, and such other matters, as the Committee in its sole
discretion may determine. The Option Agreement may also contain any other
provision restricting exercise or otherwise as the Committee shall deem
appropriate.
7. TERMINATION OF EMPLOYMENT
7.1. Termination For Any Reason Other Than Death, Disability or Cause.
7.1.1. If an Optionee's employment ceases for any reason other
than death or Disability or termination for Cause, his or her Option(s) shall
remain in effect until the earlier of the end of the Option Term or the
expiration of 3 months after the Optionee's termination.
7.1.1. If any Related Corporation or division of the Company
is sold or any other transaction occurs as a result of which an Optionee is no
longer an employee of the Company or an employee of an entity which is then a
Related Corporation thereof, such Optionee's Option(s) shall remain in effect
until the earlier of the end of the Option Term or the expiration of 3 months
after such sale or other transaction.
7.2. Termination For Cause. If an Optionee's employment is terminated
for Cause, his or her Options shall lapse forthwith.
7.3. Disability. If an Optionee's employment ceases by reason of such
Optionee's Disability, his or her Options shall remain in effect until the
earlier of the end of the Option Term or the expiration of 1 year after the
Optionee's termination.
7.4. Death. If an Optionee's employment ceases by reason of Optionee's
death, his or her Options shall remain in effect until the earlier of the end of
the Option Term or the expiration of 1 year after the Optionee's death, and may
be exercised by the person to whom the Option has been transferred by will or
the laws of the descent and distribution.
7.5. Committee's Discretion. Notwithstanding the foregoing provisions
of this Section 7, the Committee may, in its sole discretion, extend the
privilege to exercise all or any part of the Option in accordance with its terms
for any period of time within the Option Term. In the event the Optionee is a
Chairman or Vice Chairman, the Committee may make appropriate provisions in the
applicable Option Agreement.
8. NO GUARANTEE OF EMPLOYMENT
Nothing in the Plan or in any Option Agreement, and no grant of an
Option pursuant to the Plan shall be construed as a contract of employment
between the Company or a Related Corporation and the Optionee, or as a
contractual right to continue in the employ of the Company or a Related
Corporation or as a limitation of the right of the Company or a Related
Corporation to discharge the Optionee at any time.
9. NON-TRANSFERABILITY OF OPTIONS
Except as may be expressly permitted by the Committee, Options shall
not be transferable otherwise than by will or the laws of descent and
distribution and, during the lifetime of the Optionee, an Option may be
exercised only by him or her.
10. STOCK ADJUSTMENT
10.1. Changes in Capital Structure. In the event that the outstanding
shares of Stock of the Company are hereafter increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities
of the Company or of another corporation or otherwise substantially affected by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, forward or reverse stock split, combination of shares,
dividend payable in capital stock or other special, large and non-recurring
dividend, appropriate adjustment shall be made by the Committee in the number
and kind of shares for the purchase of which Options may be granted under the
Plan. In addition, the Committee shall make appropriate adjustment in the number
and kind of shares as to which outstanding Options, or portions thereof then
unexercised, shall be exercisable, and in other Option terms, to the end that
the Optionee's proportionate interest and value shall be maintained as before
the occurrence of the event. Any adjustment made by the Committee shall be
conclusive.
10.2. Liquidation or Dissolution. If the Company dissolves and
liquidates, then notwithstanding any restrictions on exercise set forth in this
Plan or any Option, each Optionee shall have the right to exercise his Option at
any time on or before the tenth day prior to the effective date of such
liquidation and dissolution. The Committee may establish a different period for
exercise by notice to the Optionee, and it may establish limitations on exercise
to avoid subjecting the Optionee to liability under Section 16(b) of the
Exchange Act. Any Option not so exercised shall terminate on the last day for
exercise prior to such effective date.
10.3. Limitation on Rights of Optionee. Except as expressly provided in
Section 10.1 or 10.2 hereof, an Optionee shall have no rights by reason of the
issuance of (i) shares of Stock of the Company pursuant to this Plan, (ii)
additional shares of Stock, (iii) any other security or debenture convertible
into Stock, (iv) or any other equity security, including issuance pursuant to a
plan of merger, consolidation or statutory share exchange, and no adjustment by
reason thereof shall be made with respect to the number of shares of Stock
subject to an Option or the Option Price.
10.4. Rights of the Company. The grant of an Option pursuant to the
Plan shall not affect in any way the right or power of the Company to engage in
corporate transactions, including, but not limited to, issuing additional shares
of stock; making adjustments, reclassifications, reorganizations or changes in
its capital or business structure; participating in mergers, consolidations or
share exchanges with one or more other corporations or entities; or dissolving,
liquidating or selling or transferring all or any part of its business or
assets.
11. LEGAL RESTRICTIONS
The Company will not be obligated to issue or deliver shares of Stock
upon exercise of an Option if counsel to the Company determines that such
issuance would violate any law or regulation of any governmental authority or
any agreement between the Company and any securities exchange or system upon
which the Stock is then listed or quoted. In connection with any stock issuance
or delivery, the person acquiring the shares shall, if requested by the Company,
give assurances satisfactory to counsel by the Company regarding such matters as
the Company may deem desirable, and other restrictions may apply to the shares,
to assure compliance with all legal requirements. The Company shall in no event
be obligated to take any action in order to cause the exercise of any Option.
12. TERM OF PLAN
Options may be granted pursuant to the Plan from time to time at any
time after the Effective Date.
13. AMENDMENT OF THE PLAN
The Board may at any time terminate, suspend or amend the Plan,
provided that no such amendment shall be made without shareholder approval if
such shareholder approval is required by any federal or state law or regulation
or the rules of any stock exchange or system on which the Stock may then be
listed or quoted, and provided, further, that no such amendment shall materially
adversely affect the rights of an Optionee without the express written consent
of the Optionee (or the person otherwise entitled to exercise the Option) unless
permitted by the terms of the Option Agreement.
14. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
Subject to the terms and conditions of the Plan and any Option
Agreement, the Committee may modify, extend or renew outstanding Options granted
under the Plan, or accept the surrender of outstanding Options, to the extent
not previously exercised, and authorize the granting of new Options in
substitution therefor. The Committee may not change the terms or conditions of
any outstanding Option in a manner that would materially adversely affect the
rights of the Optionee without the express written consent of the Optionee (or
the person otherwise entitled to exercise the Option) unless permitted by the
terms of the Option Agreement.
15. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Stock pursuant to
the exercise of the Option shall be used for its general corporate purposes.
16. WITHHOLDING TAXES
16.1. Elections to Pay Withholding Taxes. Any Optionee may pay the
amount of any federal, state or local taxes required by law to be withheld in
connection with the exercise of an Option, as well as any additional taxes on
the exercise up to Optionee's marginal rate, either in cash or in such other
consideration as approved by the Committee in its sole discretion including, but
not limited to, (i) shares of previously owned Stock (held by the Optionee for
at least 6 months if acquired by exercise of option) (valued at Fair Market
Value), or (ii) the Company's retention of shares of Stock otherwise issuable to
the Optionee upon exercise (valued at Fair Market Value). Shares of Stock used
to make payments under (i) and (ii) shall be valued as of the exercise date, and
the number of shares to be required for payments under (i) or (ii) shall be
rounded to the nearest whole share so that no cash payment shall be required by
reason of any fractional amount.
16.2. Compulsory Payment of Tax Withholding Obligations. In the event
an Optionee does not satisfy his tax withholding obligations pursuant to Section
16.1, the Company or a Related Corporation shall have the right to deduct from
any compensation or any other
payment of any kind due Optionee the amount of any federal, state or local taxes
required by law to be withheld as the result of the exercise of an Option. In
lieu of such deduction, the Company may require the Optionee to make a cash
payment to the Company or a Related Corporation thereof equal to the amount
required to be withheld. In the event the Optionee does not make such payment
when requested, the Company may refuse to issue any stock certificate pursuant
to the exercise of any Option until arrangements satisfactory to the Committee
for such payment have been made.
17. RULE 16b-3 COMPLIANCE
17.1. Six-Month Holding Period. Unless an Optionee could otherwise
dispose of equity securities, including derivative securities, acquired under
the Plan without incurring liability under Section 16(b) of the Exchange Act,
equity securities acquired under the Plan must be held for a period of six
months following the date of such acquisition, provided that this condition
shall be satisfied with respect to a derivative security 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 upon exercise or conversion)
or its underlying equity security.
17.2. Other Compliance Provisions. With respect to a Section 16
Optionee, the Committee shall implement transactions under the Plan and
administer the Plan in a manner that will ensure that each transaction by such
Optionee is exempt from liability under Rule 16b-3, except that such Optionee
may be permitted to engage in a non-exempt transaction under the Plan if written
notice has been given to the Optionee regarding the non-exempt nature of the
transaction. The Committee may authorize the Company to repurchase any Option or
shares of Stock acquired under the Plan in order to prevent a Section 16
Optionee from incurring liability under Section 16(b). Unless otherwise
specified by the Optionee, equity securities, including derivative securities,
acquired under the Plan which are disposed of by an Optionee shall be deemed to
be disposed of in the order acquired by the Optionee.
18. MISCELLANEOUS
18.1. Exclusion from Retirement and Fringe Benefit Computation. The
award and exercise of Options pursuant to the Plan shall not be taken into
account as "wages," "salary" or "compensation" in determining eligibility,
benefits or otherwise under (i) any pension, retirement, profit-sharing or other
qualified or non-qualified plan or deferred compensation plan; (ii) any employee
welfare or fringe benefit plan including, but not limited to, group life or
disability insurance; or (iii) any form of extraordinary pay including, but not
limited to, bonuses, sick pay and vacation pay.
18.2. Gender. As used herein the masculine gender shall include the
feminine as the identity of an Optionee may require.
18.3. Governing Law. The validity, interpretation and administration of
the Plan and of any rules, regulations, determinations or decisions made
thereunder, and the rights of any and all persons having or claiming to have any
interest therein or thereunder, shall be determined exclusively in accordance
with the laws of the State of Delaware, without regard to principles of
conflicts of law, and applicable federal law. Without limiting the generality of
the foregoing, the period within which any action in connection with the Plan
must be commenced shall be governed by the laws of the State of Delaware without
regard to the place where the act or
omission complained of took place, the residence of any party to such action or
the place where the action may be brought.
18.4. Headings. The headings in this Plan are for reference purposes
only and shall not affect the meaning or interpretation of the Plan.
18.5. Notices. All notice and other communications made or given
pursuant to this Plan shall be in writing and shall be sufficiently made or
given if hand delivered or mailed by certified mail, addressed to the Optionee
at the address contained in the records of the Company, or to the Company at its
principal office.