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EXHIBIT 4.3
TELECOMMUNICATION SYSTEMS, INC.
AMENDED AND RESTATED 1997 STOCK INCENTIVE PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
TeleCommunication Systems, Inc., a Maryland corporation (the
"Company"), hereby establishes the TELECOMMUNICATION SYSTEMS, INC. AMENDED AND
RESTATED 1997 STOCK INCENTIVE PLAN (the "Plan"). The purpose of the Plan is to
promote the long-term growth and profitability of the Company by (i) providing
key people with incentives to improve stockholder value and to contribute to
the growth and financial success of the Company, and (ii) enabling the Company
to attract, retain and reward the best-available persons. This Plan is a
continuation, and amendment and restatement, of the TeleCommunication Systems,
Inc. 1997 Stock Option Plan, the provisions of which shall continue to control
with respect to any options outstanding thereunder that are intended to qualify
as "incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code to the extent necessary to preserve such status.
The Plan permits the granting of stock options (including incentive
stock options qualifying under Code section 422 and nonqualified stock
options), stock appreciation rights, restricted or unrestricted stock awards,
phantom stock, performance awards, other stock-based awards, or any combination
of the foregoing.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Affiliate" shall mean any entity, whether now or hereafter
existing, which controls, is controlled by, or is under common control with,
the Company (including, but not limited to, joint ventures, limited liability
companies, and partnerships). For this purpose, "control" shall mean ownership
of 50% or more of the total combined voting power or value of all classes of
stock or interests of the entity.
(b) "Award" shall mean any stock option, stock appreciation
right, stock award, phantom stock award, performance award, or other
stock-based award.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Change in Control" means:
(i) an acquisition (other than from the Company) in
a transaction, or a series of related transactions, by any person,
entity or "group," within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934 (the "EXCHANGE ACT"),
(excluding for this purpose, (A) the Company or its subsidiaries, (B)
any employee benefit plan of the Company or its subsidiaries which
acquires beneficial ownership of voting securities of the Company, (C)
an underwriter temporarily holding securities pursuant to an offering
of such securities, or (D) any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors) of beneficial ownership, within the meaning of Rule
13d-3 promulgated under the Exchange Act, of 50% or more of either the
then
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outstanding shares of common stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote
generally in the election of directors (the "COMPANY VOTING STOCK");
(ii) the effective time of any merger, share
exchange, consolidation or other reorganization or business
combination of the Company if immediately after such transaction
persons who hold a majority of the outstanding voting securities
entitled to vote generally in the election of directors of the
surviving entity (or the entity owning 100% of such surviving entity)
are not persons who held the Company Voting Stock immediately prior to
such transaction;
(iii) the closing of a sale or conveyance of all or
substantially all of the assets of the Company;
(iv) individuals who were the Board's nominees for
election as directors immediately prior to a meeting of the
stockholders of the Company involving an actual or threatened election
contest relating to the election of the directors of the Company, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act, cease to constitute a majority of the Board
following the election; or
(v) the dissolution or liquidation of the Company;
provided, however, that the term "Change in Control" does not include a public
offering of capital stock of the Company that is effected pursuant to a
registration statement filed with, and declared effective by, the Securities
and Exchange Commission under the Securities Act of 1933.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder.
(f) "Common Stock" shall mean shares of Class A common stock of
the Company, par value of one cent ($0.01) per share.
(g) "Fair Market Value" shall mean, with respect to a share of
the Company's Common Stock for any purpose on a particular date, the value
determined by the Administrator in good faith. However, if the Common Stock is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and listed for trading on a national exchange or market, "Fair
Market Value" shall mean, as applicable, (i) either the closing price or the
average of the high and low sale price on the relevant date, as determined in
the Administrator's discretion, quoted on the New York Stock Exchange, the
American Stock Exchange, or the Nasdaq National Market; (ii) the last sale
price on the relevant date quoted on the Nasdaq SmallCap Market; (iii) the
average of the high bid and low asked prices on the relevant date quoted on the
Nasdaq OTC Bulletin Board Service or by the National Quotation Bureau, Inc. or
a comparable service as determined in the Administrator's discretion; or (iv)
if the Common Stock is not quoted by any of the above, the average of the
closing bid and asked prices on the relevant date furnished by a professional
market maker for the Common Stock, or by such other source, selected by the
Administrator. If no public trading of the Common Stock occurs on the relevant
date, then Fair Market Value shall be determined as of the next preceding date
on which trading of the Common Stock does occur. For all purposes under this
Plan, the term "relevant date" as used in this Section 2.1(g) shall mean either
the date as of which Fair Market Value is to be determined or the next
preceding date on which public trading of the Common Stock occurs, as
determined in the Administrator's discretion.
(h) "Grant Agreement" shall mean a written document memorializing
the terms and conditions of an Award granted pursuant to the Plan and shall
incorporate the terms of the Plan.
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3. ADMINISTRATION
(a) Administration of the Plan. The Plan shall be administered by
the Board or by such committee or committees as may be appointed by the Board
from time to time (the Board, committee or committees hereinafter referred to
as the "Administrator").
(b) Powers of the Administrator. The Administrator shall have all
the powers vested in it by the terms of the Plan, such powers to include
authority, in its sole and absolute discretion, to grant Awards under the Plan,
prescribe Grant Agreements evidencing such Awards and establish programs for
granting Awards.
The Administrator shall have full power and authority to take all
other actions necessary to carry out the purpose and intent of the Plan,
including, but not limited to, the authority to: (i) determine the eligible
persons to whom, and the time or times at which Awards shall be granted; (ii)
determine the types of Awards to be granted; (iii) determine the number of
shares to be covered by or used for reference purposes for each Award; (iv)
impose such terms, limitations, restrictions and conditions upon any such Award
as the Administrator shall deem appropriate; (v) modify, amend, extend or renew
outstanding Awards, or accept the surrender of outstanding Awards and
substitute new Awards (provided however, that, except as provided in Section
7(d) of the Plan, any modification that would materially adversely affect any
outstanding Award shall not be made without the consent of the holder); (vi)
accelerate or otherwise change the time in which an Award may be exercised or
becomes payable and to waive or accelerate the lapse, in whole or in part, of
any restriction or condition with respect to such Award, including, but not
limited to, any restriction or condition with respect to the vesting or
exercisability of an Award following termination of any grantee's employment or
other relationship with the Company; and (vii) establish objectives and
conditions, if any, for earning Awards and determining whether Awards will be
paid after the end of a performance period.
The Administrator shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
(c) Non-Uniform Determinations. The Administrator's
determinations under the Plan (including without limitation, determinations of
the persons to receive Awards, the form, amount and timing of such Awards, the
terms and provisions of such Awards and the Grant Agreements evidencing such
Awards) need not be uniform and may be made by the Administrator selectively
among persons who receive, or are eligible to receive, Awards under the Plan,
whether or not such persons are similarly situated.
(d) Limited Liability. To the maximum extent permitted by law,
no member of the Administrator shall be liable for any action taken or decision
made in good faith relating to the Plan or any Award thereunder.
(e) Indemnification. To the maximum extent permitted by law and
by the Company's charter and by-laws, the members of the Administrator shall be
indemnified by the Company in respect of all their activities under the Plan.
(f) Effect of Administrator's Decision. All actions taken and
decisions and determinations made by the Administrator on all matters relating
to the Plan pursuant to the powers vested in it hereunder shall be in the
Administrator's sole and absolute discretion and shall be conclusive and
binding on all
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parties concerned, including the Company, its stockholders, any participants in
the Plan and any other employee, consultant, or director of the Company, and
their respective successors in interest.
4. SHARES AVAILABLE FOR THE PLAN
Subject to adjustments as provided in Section 7(d) of the Plan, the
shares of Common Stock that may be issued with respect to Awards granted under
the Plan shall not exceed an aggregate of 8,904,110 shares of Common Stock. The
Company shall reserve such number of shares for Awards under the Plan, subject
to adjustments as provided in Section 7(d) of the Plan. If any Award, or
portion of an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares, or if any shares of Common Stock are surrendered to the
Company in connection with any Award (whether or not such surrendered shares
were acquired pursuant to any Award), or if any shares are withheld by the
Company, the shares subject to such Award and the surrendered and withheld
shares shall thereafter be available for further Awards under the Plan;
provided, however, that any such shares that are surrendered to or withheld by
the Company in connection with any Award or that are otherwise forfeited after
issuance shall not be available for purchase pursuant to incentive stock
options intended to qualify under Code section 422.
5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers,
and directors of, and other individuals providing bona fide services to or for,
the Company, or of any Affiliate of the Company, as may be selected by the
Administrator from time to time. The Administrator may also grant Awards to
individuals in connection with hiring, retention or otherwise, prior to the
date the individual first performs services for the Company or an Affiliate
provided that such Awards shall not become vested prior to the date the
individual first performs such services.
6. AWARDS
The Administrator, in its sole discretion, establishes the terms of
all Awards granted under the Plan. Awards may be granted individually or in
tandem with other types of Awards. All Awards are subject to the terms and
conditions provided in the Grant Agreement. The Administrator may permit or
require a recipient of an Award to defer such individual's receipt of the
payment of cash or the delivery of Common Stock that would otherwise be due to
such individual by virtue of the exercise of, payment of, or lapse or waiver of
restrictions respecting, any Award. If any such payment deferral is required or
permitted, the Administrator shall, in its sole discretion, establish rules and
procedures for such payment deferrals.
(a) Stock Options. The Administrator may from time to time grant
to eligible participants Awards of incentive stock options as that term is
defined in Code section 422 or nonqualified stock options; provided, however,
that Awards of incentive stock options shall be limited to employees of the
Company or of any current or hereafter existing "parent corporation" or
"subsidiary corporation," as defined in Code sections 424(e) and (f),
respectively, of the Company. Options intended to qualify as incentive stock
options under Code section 422 must have an exercise price at least equal to
Fair Market Value as of the date of grant, but nonqualified stock options may
be granted with an exercise price less than Fair Market Value. No stock option
shall be an incentive stock option unless so designated by the Administrator at
the time of grant or in the Grant Agreement evidencing such stock option.
(b) Stock Appreciation Rights. The Administrator may from time to
time grant to eligible participants Awards of Stock Appreciation Rights
("SAR"). An SAR entitles the grantee to receive, subject to the provisions of
the Plan and the Grant Agreement, a payment having an aggregate value equal
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to the product of (i) the excess of (A) the Fair Market Value on the exercise
date of one share of Common Stock over (B) the base price per share specified
in the Grant Agreement, times (ii) the number of shares specified by the SAR,
or portion thereof, which is exercised. Payment by the Company of the amount
receivable upon any exercise of an SAR may be made by the delivery of Common
Stock or cash, or any combination of Common Stock and cash, as determined in
the sole discretion of the Administrator. If upon settlement of the exercise of
an SAR a grantee is to receive a portion of such payment in shares of Common
Stock, the number of shares shall be determined by dividing such portion by the
Fair Market Value of a share of Common Stock on the exercise date. No
fractional shares shall be used for such payment and the Administrator shall
determine whether cash shall be given in lieu of such fractional shares or
whether such fractional shares shall be eliminated.
(c) Stock Awards. The Administrator may from time to time grant
restricted or unrestricted stock Awards to eligible participants in such
amounts, on such terms and conditions, and for such consideration, including no
consideration or such minimum consideration as may be required by law, as it
shall determine. A stock Award may be paid in Common Stock, in cash, or in a
combination of Common Stock and cash, as determined in the sole discretion of
the Administrator.
(d) Phantom Stock. The Administrator may from time to time grant
Awards to eligible participants denominated in stock-equivalent units ("phantom
stock") in such amounts and on such terms and conditions as it shall determine.
Phantom stock units granted to a participant shall be credited to a bookkeeping
reserve account solely for accounting purposes and shall not require a
segregation of any of the Company's assets. An Award of phantom stock may be
settled in Common Stock, in cash, or in a combination of Common Stock and cash,
as determined in the sole discretion of the Administrator. Except as otherwise
provided in the applicable Grant Agreement, the grantee shall not have the
rights of a stockholder with respect to any shares of Common Stock represented
by a phantom stock unit solely as a result of the grant of a phantom stock unit
to the grantee.
(e) Performance Awards. The Administrator may, in its discretion,
grant performance awards which become payable on account of attainment of one
or more performance goals established by the Administrator. Performance awards
may be paid by the delivery of Common Stock or cash, or any combination of
Common Stock and cash, as determined in the sole discretion of the
Administrator. Performance goals established by the Administrator may be based
on the Company's or an Affiliate's operating income or one or more other
business criteria selected by the Administrator that apply to an individual or
group of individuals, a business unit, or the Company or an Affiliate as a
whole, over such performance period as the Administrator may designate.
(f) Other Stock-Based Awards. The Administrator may from time to
time grant other stock-based awards to eligible participants in such amounts,
on such terms and conditions, and for such consideration, including no
consideration or such minimum consideration as may be required by law, as it
shall determine. Other stock-based awards may be denominated in cash, in Common
Stock or other securities, in stock-equivalent units, in stock appreciation
units, in securities or debentures convertible into Common Stock, or in any
combination of the foregoing and may be paid in Common Stock or other
securities, in cash, or in a combination of Common Stock or other securities
and cash, all as determined in the sole discretion of the Administrator.
7. MISCELLANEOUS
(a) Withholding of Taxes. Grantees and holders of Awards shall
pay to the Company or its Affiliate, or make provision satisfactory to the
Administrator for payment of, any taxes required to be withheld in respect of
Awards under the Plan no later than the date of the event creating the tax
liability. The Company or its Affiliate may, to the extent permitted by law,
deduct any such tax obligations from
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any payment of any kind otherwise due to the grantee or holder of an Award. In
the event that payment to the Company or its Affiliate of such tax obligations
is made in shares of Common Stock, such shares shall be valued at Fair Market
Value on the applicable date for such purposes.
(b) Loans. The Company or its Affiliate may make or guarantee
loans to grantees to assist grantees in exercising Awards and satisfying any
withholding tax obligations.
(c) Transferability. Except as otherwise determined by the
Administrator, and in any event in the case of an incentive stock option or a
stock appreciation right granted with respect to an incentive stock option, no
Award granted under the Plan shall be transferable by a grantee otherwise than
by will or the laws of descent and distribution. Unless otherwise determined by
the Administrator in accord with the provisions of the immediately preceding
sentence, an Award may be exercised during the lifetime of the grantee, only by
the grantee or, during the period the grantee is under a legal disability, by
the grantee's guardian or legal representative.
(d) Adjustments for Corporate Transactions and Other Events.
(i) Stock Dividend, Stock Split and Reverse Stock Split.
In the event of a stock dividend of, or stock split or reverse stock split
affecting, the Common Stock, (A) the maximum number of shares of such Common
Stock as to which Awards may be granted under this Plan as provided in Section
4 of the Plan, and (B) the number of shares covered by and the exercise price
and other terms of outstanding Awards, shall, without further action of the
Board, be adjusted to reflect such event unless the Board determines, at the
time it approves such stock dividend, stock split or reverse stock split, that
no such adjustment shall be made. The Administrator may make adjustments, in
its discretion, to address the treatment of fractional shares and fractional
cents that arise with respect to outstanding Awards as a result of the stock
dividend, stock split or reverse stock split.
(ii) Non-Change in Control Transactions. Except with
respect to the transactions set forth in Section 7(d)(i), in the event of any
change affecting the Common Stock, the Company or its capitalization, by reason
of a spin-off, split-up, dividend, recapitalization, merger, consolidation or
share exchange, other than any such change that is part of a transaction
resulting in a Change in Control, the Administrator, in its discretion and
without the consent of the holders of the Awards, shall make (A) appropriate
adjustments to the maximum number and kind of shares reserved for issuance or
with respect to which Awards may be granted under the Plan as provided in
Section 4 of the Plan; and (B) any adjustments in outstanding Awards, including
but not limited to reducing the number, kind and price of securities subject to
Awards.
(iii) Pooling of Interests Transactions. In connection
with any business combination authorized by the Board, the Administrator, in
its sole discretion and without the consent of the holders of the Awards, may
make any modifications to any Awards, including but not limited to
cancellation, forfeiture, surrender or other termination of the Awards, in
whole or in part, regardless of the vested status of the Award, but solely to
the extent necessary to facilitate the compliance of such transaction with
requirements for treatment as a pooling of interests transaction for accounting
purposes under generally accepted accounting principles.
(iv) Unusual or Nonrecurring Events. The Administrator is
authorized to make, in its discretion and without the consent of holders of
Awards, adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring events affecting the
Company, or the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever the
Administrator determines that such adjustments are appropriate in
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order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan.
(e) Substitution of Awards in Mergers and Acquisitions. Awards
may be granted under the Plan from time to time in substitution for Awards held
by employees, officers, consultants or directors of entities who become or are
about to become employees, officers, consultants or directors of the Company or
an Affiliate as the result of a merger or consolidation of the employing entity
with the Company or an Affiliate, or the acquisition by the Company or an
Affiliate of the assets or stock of the employing entity. The terms and
conditions of any substitute Awards so granted may vary from the terms and
conditions set forth herein to the extent that the Administrator deems
appropriate at the time of grant to conform the substitute Awards to the
provisions of the awards for which they are substituted.
(f) Termination, Amendment and Modification of the Plan. The
Board may terminate, amend or modify the Plan or any portion thereof at any
time.
(g) Non-Guarantee of Employment or Service. Nothing in the Plan
or in any Grant Agreement thereunder shall confer any right on an individual to
continue in the service of the Company or shall interfere in any way with the
right of the Company to terminate such service at any time with or without
cause or notice.
(h) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or
a fiduciary relationship between the Company and a grantee or any other person.
To the extent that any grantee or other person acquires a right to receive
payments from the Company pursuant to an Award, such right shall be no greater
than the right of any unsecured general creditor of the Company.
(i) Governing Law. The validity, construction and effect of the
Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Grant Agreements, 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 applicable federal laws and the laws of the
State of Maryland, without regard to its conflict of laws principles.
(j) Effective Date; Termination Date. The Plan is effective as of
the date on which the Plan is adopted by the Board, subject to approval of the
stockholders within twelve months before or after such date. No Award shall be
granted under the Plan after the close of business on the day immediately
preceding the tenth anniversary of the effective date of the Plan, or if
earlier, the tenth anniversary of the date this Plan is approved by the
stockholders. Subject to other applicable provisions of the Plan, all Awards
made under the Plan prior to such termination of the Plan shall remain in
effect until such Awards have been satisfied or terminated in accordance with
the Plan and the terms of such Awards.
Date Approved by the Board: April 11, 2000
Date Approved by the Stockholders: June 15, 2000
