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EXHIBIT 10.1
THE KEITH COMPANIES, INC.
AMENDED AND RESTATED 1994 STOCK INCENTIVE PLAN
ARTICLE 1
PURPOSES OF THE PLAN
The purposes of the Plan are (a) to enhance the Company's ability to
attract and retain the services of qualified employees, officers and directors
(including non-employee officers and directors), and consultants and other
service providers upon whose judgment, initiative and efforts the successful
conduct and development of the Company's business largely depends, and (b) to
provide additional incentives to such persons to devote their utmost effort and
skill to the advancement and betterment of the Company, by providing them an
opportunity to participate in the ownership of the Company and thereby have an
interest in the success and increased value of the Company.
ARTICLE 2
DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings
indicated:
2.1 ADMINISTRATOR. "Administrator" means the Board or, if the Board
delegates responsibility for any matter to the Committee, the term Administrator
shall mean the Committee.
2.2 AFFILIATED COMPANY. "Affiliated Company" means any "parent
corporation" or "subsidiary corporation" of the Company, whether now existing or
hereafter created or acquired, as those terms are defined in Sections 424(e) and
424(f) of the Code, respectively.
2.3 BOARD. "Board" means the Board of Directors of the Company.
2.4 CODE. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
2.5 COMMITTEE. "Committee" means a committee of two or more members of
the Board appointed to administer the Plan, as set forth in Section 7.1 hereof.
2.6 COMMON STOCK. "Common Stock" means the Common Stock, $.001 par value
per share, of the Company, subject to adjustment pursuant to Section 4.2 hereof.
2.7 DISABILITY. "Disability" means permanent and total disability as
defined in Section 22(e)(3) of the Code. The Administrator's determination of
Disability or the absence thereof shall be conclusive and binding on all
interested parties.
2.8 EFFECTIVE DATE. "Effective Date" means the date on which the Plan is
adopted by the Board, as set forth on the first page hereof.
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2.9 EXERCISE PRICE. "Exercise Price" means the purchase price per share
of Common Stock payable upon exercise of an Option.
2.10 FAIR MARKET VALUE. "Fair Market Value" on any given date means the
value of one share of Common Stock, determined as follows:
(a) If the Common Stock is then listed or admitted to trading on
the Nasdaq National Market or a stock exchange which reports closing
sale prices, the Fair Market Value shall be the closing sale price on
the date of valuation on the Nasdaq National Market or principal stock
exchange on which the Common Stock is then listed or admitted to
trading, or, if no closing sale price is quoted or no sale takes place
on such day, then the Fair Market Value shall be the closing price of
the Common Stock on the Nasdaq National Market or such exchange on the
next preceding day on which a sale occurred.
(b) If the Common Stock is not then listed or admitted to
trading on the Nasdaq National Market or a stock exchange which reports
closing sale prices, the Fair Market Value shall be the average of the
closing bid and asked prices of the Common Stock in the over-the-counter
market on the date of valuation.
(c) If neither (a) nor (b) is applicable as of the date of
valuation, then the Fair Market Value shall be determined by the
Administrator in good faith using any reasonable method of valuation,
which determination shall be conclusive and binding on all interested
parties.
2.11 INCENTIVE OPTION. "Incentive Option" means any Option designated
and qualified as an "incentive stock option" as defined in Section 422 of the
Code.
2.12 INCENTIVE OPTION AGREEMENT. "Incentive Option Agreement" means an
Option Agreement with respect to an Incentive Option.
2.13 NASD DEALER. "NASD Dealer" means a broker-dealer that is a member
of the National Association of Securities Dealers, Inc.
2.14 NONQUALIFIED OPTION. "Nonqualified Option" means any Option that is
not an Incentive Option. To the extent that any Option designated as an
Incentive Option fails in whole or in part to qualify as an Incentive Option, it
shall to that extent constitute a Nonqualified Option.
2.15 NONQUALIFIED OPTION AGREEMENT. "Nonqualified Option Agreement"
means an Option Agreement with respect to a Nonqualified Option.
2.16 OFFEREE. "Offeree" means a Participant who has received a Right to
Purchase or who has acquired Restricted Stock under the Plan.
2.17 OPTION. "Option" means any option to purchase Common Stock granted
pursuant to the Plan.
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2.18 OPTION AGREEMENT. "Option Agreement" means the written agreement
entered into between the Company and the Optionee with respect to an Option
granted under the Plan.
2.19 OPTIONEE. "Optionee" means a Participant who holds an Option.
2.20 PARTICIPANT. "Participant" means an individual who holds an Option,
a Right to Purchase or Restricted Stock under the Plan.
2.21 PURCHASE PRICE. "Purchase Price" means the price per share of
Restricted Stock purchased pursuant to the Right to Purchase.
2.22 RESTRICTED STOCK. "Restricted Stock" means shares of Common Stock
issued subject to such restrictions and conditions as are established pursuant
to Article 6 hereof.
2.23 RIGHT TO PURCHASE. "Right to Purchase" means a right to purchase
Restricted Stock granted to an Offeree pursuant to Article 6 hereof.
2.24 SERVICE PROVIDER. "Service Provider" means a consultant or other
person who provides services to the Company or an Affiliated Company who the
Administrator authorizes to become a Participant in the Plan. 2.25 STOCK
PURCHASE AGREEMENT. "Stock Purchase Agreement" means the written agreement
entered into between the Company and the Offeree with respect to a Right to
Purchase offered under the Plan.
2.26 10% SHAREHOLDER. "10% Shareholder" means a person who, as of a
relevant date, owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of an
Affiliated Company.
ARTICLE 3
ELIGIBILITY
3.1 INCENTIVE OPTIONS. Officers and other key employees of the Company
or of an Affiliated Company (including members of the Board if they are
employees of the Company or of an Affiliated Company) are eligible to receive
Incentive Options under the Plan.
3.2 NONQUALIFIED OPTIONS AND RIGHTS TO PURCHASE. Officers and other key
employees of the Company or of an Affiliated Company, members of the Board
(whether or not employed by the Company or an Affiliated Company), and Service
Providers are eligible to receive Nonqualified Options or Rights to Purchase
under the Plan.
ARTICLE 4
PLAN SHARES
4.1 SHARES SUBJECT TO THE PLAN. A total of 1,600,000 shares of Common
Stock may be issued under the Plan, including shares issued under the similar
1994 Stock Incentive Plan adopted by Keith Engineering, Inc. (formerly an
Affiliate of the Company), as previously
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amended and restated on April 26, 1999, all subject to future adjustment as to
the number and type of shares pursuant to Section 4.2 hereof. For purposes of
this limitation, in the event that (a) all or any portion of any Option or Right
to Purchase granted or offered under the Plan can no longer under any
circumstances be exercised, or (b) any shares of Restricted Stock are reacquired
by the Company under the Plan, the shares of Common Stock allocable to the
unexercised portion of such Option or such Right to Purchase, or the shares so
reacquired, shall again be available for grant or issuance under the Plan.
4.2 CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding
shares of Common Stock are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of a recapitalization, stock split, combination of shares,
reclassification, stock dividend, or other change in the capital structure of
the Company, then appropriate adjustments shall be made by the Administrator to
the aggregate number and kind of shares subject to this Plan, and the number and
kind of shares and the price per share subject to outstanding Options, Rights to
Purchase and Stock Purchase Agreements in order to preserve as nearly as
practicable, but not to increase, the benefits of Participants.
ARTICLE 5
OPTIONS
5.1 OPTION AGREEMENT. Each Option granted pursuant to this Plan shall be
evidenced by an Option Agreement which shall specify the number of shares
subject thereto, the Exercise Price per share, and whether the Option is an
Incentive Option or Nonqualified Option. As soon as is practical following the
grant of an Option, an Option Agreement shall be duly executed and delivered by
or on behalf of the Company to the Optionee to whom such Option was granted.
Each Option Agreement shall be in such form and contain such additional terms
and conditions, not inconsistent with the provisions of this Plan, as the
Administrator shall, from time to time, deem desirable.
5.2 EXERCISE PRICE. The Exercise Price per share of Common Stock covered
by each Option shall be determined by the Administrator, subject to the
following: (a) the Exercise Price of an Incentive Option shall not be less than
100% of Fair Market Value on the date the Incentive Option is granted, (b) the
Exercise Price of a Nonqualified Option shall not be less than 85% of Fair
Market Value on the date the Nonqualified Option is granted, and (c) if the
person to whom an Incentive Option is granted is a 10% Shareholder on the date
of grant, the Exercise Price shall not be less than 110% of Fair Market Value on
the date the Option is granted.
5.3 PAYMENT OF EXERCISE PRICE. Subject to any legal restrictions,
payment of the Exercise Price upon exercise of an Option may be made, in the
discretion of the Administrator, by: (a) cash; (b) check; (c) the surrender of
shares of Common Stock owned by the Optionee that have been held by the Optionee
for at least six (6) months, which surrendered shares shall be valued at Fair
Market Value as of the date of such exercise; (d) the Optionee's promissory note
in a form and on terms acceptable to the Administrator; (e) the cancellation of
indebtedness of the Company to the Optionee; (f) the waiver of compensation due
or accrued to the Optionee for services rendered; (g) provided that a public
market for the Common Stock exists, a "same day sale" commitment from the
Optionee and an NASD Dealer whereby the Optionee irrevocably
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elects to exercise the Option and to sell a portion of the shares so purchased
to pay for the Exercise Price and whereby the NASD Dealer irrevocably commits
upon receipt of such shares to forward the Exercise Price directly to the
Company; (h) provided that a public market for the Common Stock exists, a
"margin" commitment from the Optionee and an NASD Dealer whereby the Optionee
irrevocably elects to exercise the Option and to pledge the shares so purchased
to the NASD Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such shares to forward the Exercise Price
directly to the Company; or (i) any combination of the foregoing methods of
payment or any other consideration or method of payment as shall be permitted by
applicable corporate law.
5.4 TERM OF OPTIONS. The term of each Option shall be fixed by the
Administrator at the time of grant, but no Incentive Option may be exercisable
more than ten (10) years after the date it is granted. An Incentive Option
granted to a person who is a 10% Shareholder on the date of grant shall not be
exercisable more than five (5) years after the date it is granted.
5.5 VESTING OF OPTIONS. Each Option shall vest and be exercisable in one
or more installments at such time or times and subject to such conditions,
including without limitation the achievement of specified performance goals or
objectives, as shall be determined by the Administrator.
5.6 ANNUAL LIMIT ON INCENTIVE OPTIONS. To the extent required for
"incentive stock option" treatment under Section 422 of the Code, if the
aggregate Fair Market Value (determined as of the time of grant) of the Common
Stock with respect to which Incentive Options granted under this Plan and any
other plan of the Company or any Affiliated Company become exercisable for the
first time by an Optionee during any calendar year exceeds $100,000, such
Incentive Option shall be treated as a Nonqualified Option with respect to such
excess.
5.7 NONTRANSFERABILITY OF OPTIONS. No Option shall be assignable or
transferable except by will or the laws of decent and distribution, and during
the life of the Optionee, shall be exercisable only by such Optionee; provided,
however, that a Nonqualified Option may, in the discretion of the Administrator,
be transferred pursuant to a "qualified domestic relations order" (as defined in
the Code).
5.8 RIGHTS AS SHAREHOLDER. An Optionee or permitted transferee of an
Option shall have no rights or privileges as a shareholder with respect to any
shares covered by an Option until such Option has been duly exercised and
certificates representing shares purchased upon such exercise have been issued
to such person.
ARTICLE 6
RIGHTS TO PURCHASE
6.1 NATURE OF RIGHT TO PURCHASE. A Right to Purchase granted to an
Offeree entitles the Offeree to purchase, for a Purchase Price determined by the
Administrator, shares of Common Stock subject to such restrictions and
conditions as the Administrator may determine at the time of grant ("Restricted
Stock"). Such conditions may include, but are not limited to, continued
employment or the achievement of specified performance goals or objectives.
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6.2 ACCEPTANCE OF RIGHT TO PURCHASE. An Offeree shall have no rights
with respect to the Restricted Stock subject to a Right to Purchase unless the
Offeree shall have accepted, or exercised, the Right to Purchase within thirty
(30) days (or such shorter period as the Administrator may specify) following
the grant of the Right to Purchase by making payment of the full Purchase Price
to the Company in the manner set forth in Section 6.3 hereof and by executing
and delivering to the Company a Stock Purchase Agreement. Each Stock Purchase
Agreement shall be in such form, and shall set forth the Purchase Price and such
other terms, conditions and restrictions of the Restricted Stock, not
inconsistent with the provisions of this Plan, as the Administrator shall, from
time to time, deem desirable.
6.3 PAYMENT OF PURCHASE PRICE. Subject to any legal restrictions,
payment of the Purchase Price upon exercise of a Right to Purchase Restricted
Stock may be made, in the discretion of the Administrator, by: (a) cash; (b)
check; (c) the surrender of shares of Common Stock owned by the Offeree that
have been held by the Offeree for at least six (6) months, which surrendered
shares shall be valued at Fair Market Value as of the date of such exercise; (d)
the Offeree's promissory note in a form and on terms acceptable to the
Administrator; (e) the cancellation of indebtedness of the Company to the
Offeree; (f) the waiver of compensation due or accrued to the Offeree for
services rendered; or (g) any combination of the foregoing methods of payment or
any other consideration or method of payment as shall be permitted by applicable
corporate law.
6.4 RIGHTS AS SHAREHOLDER. Upon complying with the provisions of Section
6.2 hereof, an Offeree shall have the rights of a shareholder with respect to
the Restricted Stock purchased pursuant to the Right to Purchase, including
voting and dividend rights, subject to nontransferability restrictions and
Company repurchase rights described in this Article 6 and subject to such other
conditions as are set forth in the Stock Purchase Agreement. Unless the
Administrator shall determine otherwise, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company until such shares
are vested as provided in Section 6.6 hereof.
6.5 RESTRICTIONS. Shares of Restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the Stock Purchase Agreement. In the event of
termination of a Participant's employment, service as a director of the Company
or Service Provider status for any reason whatsoever (including death or
Disability), the Company shall have the right, at the discretion of the
Administrator, to repurchase at the original Purchase Price any shares of
Restricted Stock which have not vested as of the date of termination.
6.6 VESTING OF RESTRICTED STOCK. The Stock Purchase Agreement shall
specify the date or dates, the performance goals or objectives which must be
achieved, and any other conditions on which the nontransferability of the
Restricted Stock and the Company's right of repurchase shall lapse. Subsequent
to such date or dates or the attainment of such specified performance goals or
objectives or other conditions, the shares as to which all restrictions have
lapsed shall no longer be Restricted Stock and shall be deemed "vested."
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6.7 DIVIDENDS. If payment for shares of Restricted Stock is made by
promissory note, any cash dividends paid with respect to the Restricted Stock
may be applied, in the discretion of the Administrator, to repayment of such
note.
6.8 NONASSIGNABILITY OF RIGHTS. No Right to Purchase shall be assignable
or transferable except by will or the laws of decent and distribution. During
the life of an Offeree, a Right to Purchase may be exercised only by the
Offeree.
ARTICLE 7
ADMINISTRATION OF THE PLAN
7.1 ADMINISTRATOR. Authority to control and manage the operation and
administration of the Plan shall be vested in the Board, which may delegate such
responsibilities in whole or in part to a committee consisting of two (2) or
more members of the Board (the "Committee"). To the extent such laws or
regulations are applicable, the Committee shall consist of individuals that
satisfy Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Section 162(m) of the Code. Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board.
The Committee may delegate all or any part of its authority under this Plan to
the Chief Executive Officer or other executive officer of the Company for
purposes of granting Options or Rights to Purchase to persons, except for (a)
the grant of Options or Rights to Purchase to persons who are then subject to
the reporting requirements of Section 16 of the Exchange Act, and (b) the grant
of Options or Rights to Purchase intended to satisfy Section 162(m) of the Code.
As used herein, the term "Administrator" means the Board or, with respect to any
matter as to which responsibility has been delegated to the Committee, the term
Administrator shall mean the Committee. Notwithstanding anything herein to the
contrary, any action which may be taken by the Committee may also be taken by
the Board.
7.2 POWERS OF THE ADMINISTRATOR. In addition to any other powers or
authority conferred upon the Administrator elsewhere in the Plan or by law, the
Administrator shall have full power and authority: (a) to determine the persons
to whom, and the time or times at which, Incentive Options or Nonqualified
Options shall be granted and Rights to Purchase shall be offered, the number of
shares to be represented by each Option and Right to Purchase and the
consideration to be received by the Company upon exercise thereof; (b) to
interpret the Plan; (c) to create, amend or rescind rules and regulations
relating to the Plan; (d) to determine the terms, conditions and restrictions
contained in, and the form of, Option Agreements and Stock Purchase Agreements;
(e) to determine the identity or capacity of any persons who may be entitled to
exercise a participant's rights under any Option or Right to Purchase under the
Plan; (f) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Option Agreement or Stock Purchase
Agreement; (g) to amend outstanding Option Agreements and Stock Purchase
Agreements; and (h) to make all other determinations necessary or advisable for
the administration of the Plan, but only to the extent not contrary to the
express provisions of the Plan. Any action, decision, interpretation or
determination made in good faith by the Administrator in the exercise of its
authority conferred upon it under the Plan shall be final and binding on the
Company and all Participants.
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7.3 LIMITATION ON LIABILITY. No employee or the Company or member of the
Board or Committee shall be subject to any liability with respect to duties
under the Plan unless the person acts fraudulently or in bad faith. To the
extent permitted by law, the Company shall indemnify each member of the Board or
Committee, and any employee of the Company with duties under the Plan, who was
or is a party, or is threatened to be made a party, to any threatened, pending
or completed proceeding, whether civil, criminal, administrative or
investigative, by reason of such person's conduct in the performance of duties
under the Plan.
ARTICLE 8
MERGERS, REORGANIZATIONS, ETC.
In the event that the Company at any time proposes to sell
substantially all of its assets, merge into, consolidate with or to enter into
any other reorganization in which the Company is not the surviving corporation,
or if the Company is the surviving corporation and the ownership of the voting
power of the Company's capital stock changes by more than 50% as a result of
such transaction, the Plan and all unexercised Options and Rights to Purchase
shall terminate upon the effective date of such transaction unless provision is
made in writing in connection with such transaction for (a) the continuance of
the Plan and for the assumption of outstanding Options or Rights to Purchase, or
the substitution of such Options and Rights to Purchase with new options and new
rights to purchase of comparable value covering shares of a successor
corporation, with appropriate adjustments as to the number and kind of shares
and prices, in which event the Plan and such Options and Rights to Purchase, or
the new options and rights to purchase substituted therefor, shall continue in
the manner and under the terms so provided, or (b) the substitution for the Plan
and outstanding Options and Rights to Purchase of a program or plan to provide
rights to the Participants to receive on exercise of such rights, the type and
amount of consideration they would have received had they exercised all Options
or Rights to Purchase prior to such transaction and less the aggregate Exercise
Price or Purchase Price therefor. If such provision is not made in such
transaction, then the Administrator shall cause written notice of the proposed
transaction to be given to all Participants no less than fifteen (15) days prior
to the anticipated effective date of the proposed transaction.
ARTICLE 9
AMENDMENT AND TERMINATION OF THE PLAN
9.1 AMENDMENTS. The Board may from time to time alter, amend, suspend or
terminate the Plan in such respects as the Board may deem advisable. No such
alteration, amendment, suspension or termination shall be made which shall
substantially affect or impair the rights of any Participant under an
outstanding Option or Right to Purchase without such Participant's consent. The
Board may alter or amend the Plan to comply with requirements under the Code
relating to Incentive Options or other types of options which give Optionees
more favorable tax treatment than that applicable to Options granted under this
Plan as of the date of its adoption. Upon any such alteration or amendment, any
outstanding Option granted hereunder may, if the Administrator so determines and
if permitted by applicable law, be subject to the more favorable tax treatment
afforded to an Optionee pursuant to such terms and conditions. However, the
Board shall not, without the approval of the Corporation's shareholders (a)
increase the maximum number of shares issuable under the Plan, except for
permissible adjustments under Article 4, (b) materially modify the eligibility
requirements for grants of
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Options, or (c) materially increase the benefits accruing to Option holders. In
addition, the Board shall also obtain shareholder approval of any Plan amendment
to the extent necessary and desirable to comply with applicable laws, rules or
regulations.
9.2 PLAN TERMINATION. Unless the Plan shall theretofore have been
terminated by the Board, the Plan shall terminate on March 13, 2011 and no
Options or Rights to Purchase may be granted under the Plan thereafter, but
Options and Rights to Purchase then outstanding shall continue in effect in
accordance with their respective terms.
ARTICLE 10
TAX WITHHOLDING
The Company shall have the power to withhold, or require a Participant
to remit to the Company, an amount sufficient to satisfy any applicable Federal,
State, and local tax withholding requirements with respect to any Options
exercised or Restricted Stock issued under the Plan. To the extent permissible
under applicable tax, securities and other laws, the Administrator may, in its
sole discretion and upon such terms and conditions as it may deem appropriate,
permit a Participant to satisfy his or her obligation to pay any such tax, in
whole or in part, up to an amount determined on the basis of the highest
marginal tax rate applicable to such Participant, by (a) directing the Company
to apply shares of Common Stock to which the Participant is entitled as a result
of the exercise of an Option or as a result of the lapse of restrictions on
Restricted Stock, or (b) delivering to the Company shares of Common Stock owned
by the Participant. The shares of Common Stock so applied or delivered in
satisfaction of the Participant's tax withholding obligation shall be valued at
their Fair Market Value as of the date of measurement of the amount of income
subject to withholding.
ARTICLE 11
MISCELLANEOUS
11.1 BENEFITS NOT ALIENABLE. Other than as provided above, benefits
under the Plan may not be assigned or alienated, whether voluntarily or
involuntarily. Any unauthorized attempt at assignment, transfer, pledge or other
disposition shall be without effect.
11.2 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a
voluntary undertaking on the part of the Company and shall not be deemed to
constitute a contract between the Company and any Participant to be
consideration for, or an inducement to, or a condition of, the employment of any
Participant. Nothing contained in the Plan shall be deemed to give the right to
any Participant to be retained as an employee of the Company or any Affiliated
Company or to interfere with the right of the Company or any Affiliated Company
to discharge any Participant at any time.
11.3 APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of Common Stock pursuant to Option Agreements and Stock Purchase
Agreements, except as otherwise provided herein, will be used for general
corporate purposes.
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