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Exhibit 10.5
THE RTK GROUP, INC.
1999 STOCK INCENTIVE PLAN
As adopted June 14, 1999
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Table of Contents
PAGE
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Article 1.GENERAL...........................................................1
1.1 Purpose...................................................1
1.2 Administration............................................1
1.3 Persons Eligible for Awards...............................2
1.4 Types of Awards Under the Plan............................2
1.5 Shares Available for Awards...............................2
1.6 Definitions of Certain Terms..............................3
1.7 Agreements Evidencing Awards..............................3
Article 2.STOCK OPTIONS.....................................................3
2.1 Grant of Stock Options....................................3
2.2 Exercisability of Options.................................4
2.3 Limitation on Exercise....................................4
2.4 Payment of Option Price...................................4
2.5 Termination of Employment.................................6
2.6 Special ISO Requirements..................................7
Article 3.MISCELLANEOUS.....................................................7
3.1 Amendment of the Plan; Modification of Awards.............7
3.2 Restrictions..............................................8
3.3 Nontransferability........................................9
3.4 Withholding Taxes.........................................9
3.5 Adjustments Upon Changes in Capitalization................9
3.6 Right of Discharge Reserved..............................10
3.7 No Rights as a Stockholder...............................10
3.8 Nature of Payments.......................................10
3.9 Non-Uniform Determinations...............................10
3.10 Other Payments or Awards.................................11
3.11 Reorganization...........................................11
3.12 Section Headings.........................................12
3.13 Effective Date and Term of Plan..........................12
3.14 Governing Law............................................12
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ARTICLE 1.
GENERAL
1.1 PURPOSE. The purpose of this 1999 Stock Incentive Plan (the "Plan)
is to provide for certain officers, directors and key employees of The RTK
Group, Inc. (the "Company") or its subsidiaries an equity-based incentive to
maintain and enhance the performance and profitability of the Company.
1.2 ADMINISTRATION.
(a) The Plan shall be administered by the Compensation
Committee or such other committee (the "Committee") appointed by the Board of
Directors of the Company (the "Board"), which committee shall consist of two or
more directors; PROVIDED, HOWEVER, that solely to the extent deemed necessary or
advisable by the Board to satisfy the requirements of Rule 16b-3 under the
Securities Exchange Act of 1934 (the "ACT"), if any class of common equity
securities of the Company is required to be registered under section 12 of the
Act, each director appointed to the Committee shall be a "Non-Employee Director"
within the meaning of Rule 16b-3 under the Act, and solely to the extent deemed
necessary or advisable by the Board to satisfy the requirements of Section
162(m) of the Internal Revenue Code (the "Code"), each director appointed to the
Committee shall be an "outside director" within the meaning of Section 162(m) of
the Code. The members of the Committee shall be appointed by, and may be changed
at any time and from time to time in the discretion of, the Board.
(b) The Committee shall have the authority (i) to exercise all
of the powers granted to it under the Plan, (ii) to construe, interpret and
implement the Plan and any Plan agreements executed pursuant to the Plan, (iii)
to prescribe, amend and rescind rules relating to the Plan, (iv) to make any
determination necessary or advisable in administering the Plan, and (v) to
correct any defect, supply any omission and reconcile any inconsistency in the
Plan.
(c) The determination of the Committee on all matters relating
to the Plan or any Plan agreement shall be conclusive.
(d) No member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any award
hereunder.
(e) Notwithstanding anything to the contrary contained herein,
unless and until the Board shall appoint the members of the Committee, the Plan
shall be administered by the Board; and the Board may, in its sole discretion,
at any time and from time to time, resolve to administer the Plan. In either of
the foregoing events, the term "Committee" as used herein shall be deemed to
mean the Board. Notwithstanding the foregoing, a member of the Committee may not
act with respect to any award of options to such member.
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1.3 PERSONS ELIGIBLE FOR AWARDS. Awards under the Plan may be made to
such officers, directors and executive, managerial, professional or other
employees of the Company or its subsidiaries , as the Committee shall from time
to time in its sole discretion select; officers and directors who are not
employees of the Company or its subsidiaries also shall be eligible to receive
awards under the Plan.
1.4 TYPES OF AWARDS UNDER THE PLAN.
(a) Awards may be made under the Plan in the form of stock
options ("options"), as more fully set forth in Article 2.
(b) Options granted under the Plan may be either (i)
"nonqualified" stock options subject to the provisions of section 83 of the
Internal Revenue Code of 1986, as amended (the "Code") or (ii) options intended
to qualify for incentive stock option treatment described in Code section 422.
(c) All options when granted are intended to be nonqualified
stock options, unless the applicable Plan agreement explicitly states that an
option is intended to be an incentive stock option. If an option is intended to
be an incentive stock option, and if for any reason such option (or portion
thereof) shall not qualify as an incentive stock option, then, to the extent of
such nonqualification, such option (or portion) shall be regarded as a
nonqualified stock option appropriately granted under the Plan provided that
such option (or portion) otherwise meets the Plan's requirements relating to
nonqualified stock options.
1.5 SHARES AVAILABLE FOR AWARDS.
(a) Subject to Section 3.5 (relating to adjustments upon
changes in capitalization), as of any date the total number of shares of Common
Stock with respect to which options may be granted under the Plan shall be
4,000,000. Shares of Common Stock covered by the Plan which expire, terminate,
or are cancelled for any reason whatsoever without grantee (or the grantee's
beneficiary) having enjoyed any of the benefits of stock ownership shall again
become available for awards under the Plan.
(b) Shares of stock that shall be subject to issuance pursuant
to the Plan shall be authorized and unissued or treasury shares of Common Stock.
(c) Without limiting the generality of the foregoing, the
Committee may cancel any award granted under the Plan and issue a new award in
substitution therefor upon such terms as the Committee may in its sole
discretion determine (provided that the substituted award shall satisfy all
applicable Plan requirements as of the date such new award is made) without the
grantee's consent, where (unless the applicable Plan agreement (as defined in
Section 1.7(a)) otherwise provides) the substituted award confers upon the
grantee, until exercised, substantially the same economic benefit inherent in
the replaced award, and with the grantee's consent if otherwise or if such
substitution is deemed to be a modification (within the meaning of Code section
424(h)(3)) of such award.
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1.6 DEFINITIONS OF CERTAIN TERMS.
(a) The term "Common Stock" as used herein means the shares of
voting common stock, par value $.01 per share, of the Company as constituted on
the effective date of the Plan, and any other shares into which such common
stock shall thereafter be changed by reason of a recapitalization, merger,
consolidation, split-up, combination, exchange of shares or the like.
(b) Except as otherwise determined by the Committee in its
sole discretion, the "fair market value" as of any date and in respect of any
share of Common Stock shall be the mean between the high and low sales prices of
a share of Common Stock as reported on the New York Stock Exchange if shares of
Common Stock are then trading upon such exchange, or if not, then such average
on such other stock exchange or, if none, the NASDAQ National Market, on which
shares of the Common Stock are principally trading, on such date, if any, or if
none, then as otherwise determined by the Committee in its sole discretion. In
no event shall the fair market value of any share be less than its par value.
1.7 AGREEMENTS EVIDENCING AWARDS.
(a) Options granted under the Plan shall be evidenced by
written agreements. Any such written agreements shall (i) contain such
provisions not inconsistent with the terms of the Plan as the Committee may in
its sole discretion deem necessary or desirable, (ii) be referred to herein as
"Plan agreements" and (iii) may, but are not required, to be in the form
attached hereto as EXHIBIT 1.
(b) Each Plan agreement with respect to the granting of an
option shall set forth the number of shares of Common Stock subject to the
option granted thereby.
(c) Each Plan agreement with respect to the granting of an
option shall set forth the amount (the "option exercise price") payable by the
grantee to the Company in connection with the exercise of the option evidenced
thereby. Except as otherwise determined by the Committee with respect to
nonqualified stock options, the option exercise price per share shall not be
less than the fair market value of a share of Common Stock on the date the
option is granted. In the case of options intended to be incentive stock
options, the option exercise price per share shall not be less than the fair
market value of a share of Common Stock on the date the option is granted.
ARTICLE 2.
STOCK OPTIONS
2.1 GRANT OF STOCK OPTIONS. The Committee may grant options to purchase
shares of Common Stock in such amounts and subject to such terms and conditions
as the Committee shall from time to time in its sole discretion determine,
subject to the terms of the Plan.
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2.2 EXERCISABILITY OF OPTIONS. Subject to the other provisions of this
Plan:
(a) EXERCISABILITY DETERMINED BY PLAN AGREEMENT. Each Plan
agreement shall set forth the period during which, and the conditions subject to
which, the option evidenced thereby shall be exercisable, as determined by the
Committee in its discretion.
(b) DEFAULT PROVISIONS. Unless the applicable Plan agreement
otherwise specifies:
(i) no option shall be exercisable prior to the first
anniversary of the date of grant, and
(ii) subject to Section 2.5, each option shall, to
the extent it becomes exercisable, remain exercisable through
the day prior to the tenth anniversary of the date of grant,
after which such option shall terminate and cease to be
exercisable.
(c) PARTIAL EXERCISE PERMITTED. Unless the applicable Plan
agreement otherwise provides, an option granted under the Plan may be exercised
from time to time as to all or part of the shares as to which such option shall
then be exercisable.
(d) NOTICE OF EXERCISE; EXERCISE DATE.
(i) An option shall be exercisable by the filing of a
written notice of exercise with the Company, on such form and
in such manner as the Committee shall in its sole discretion
prescribe, and by payment in accordance with Section 2.4.
(ii) Unless the applicable Plan agreement otherwise
provides or the Committee in its sole discretion otherwise
determines, the date of exercise of an option shall be the
date the Company receives such written notice of exercise.
(iii) For purposes of the Plan, the "option exercise
date" shall be deemed to be the sixth business day immediately
following the date written notice of exercise is received by
the Company.
2.3 LIMITATION ON EXERCISE. Notwithstanding any other provision of the
Plan, no Plan agreement shall permit an award to be exercisable more than ten
(10) years after the date of grant.
2.4 PAYMENT OF OPTION PRICE.
(a) TENDER DUE UPON NOTICE OF EXERCISE. Unless the applicable
Plan agreement otherwise provides or the Committee in its sole discretion
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otherwise determines, (i) any written notice of exercise of an option shall be
accompanied by payment of the full purchase price for the shares being
purchased, and (ii) the grantee shall have no right to receive shares of Common
Stock with respect to an option exercise prior to the option exercise date.
(b) MANNER OF PAYMENT. Payment of the option exercise price
shall be made in any combination of the following:
(i) by certified or official bank check payable to
the Company (or the equivalent thereof acceptable to the
Committee);
(ii) with the consent of the Committee in its sole
discretion, by personal check (subject to collection), which
may in the Committee's discretion be deemed conditional; and
(iii) if and to the extent provided in the applicable
Plan agreement and only if the Common Stock of the Company is
traded on a stock exchange, by delivery of previously acquired
shares of Common Stock owned by the grantee for at least six
months (or such other period as the Committee may prescribe)
having a fair market value (determined as of the option
exercise date) equal to the portion of the option exercise
price being paid thereby, provided that the Committee may
require the grantee to furnish an opinion of counsel
acceptable to the Committee to the effect that such delivery
would not result in the grantee incurring any liability under
section 16(b) of the Act and does not require any Consent (as
defined in Section 3.2).
(c) CASHLESS EXERCISE. Payment in accordance with clause (i)
of Section 2.4(b) may be deemed to be satisfied, if and to the extent provided
in the applicable Plan agreement, (i) if the Common Stock of the Company is
traded on a stock exchange or admitted to trading on the NASDAQ National Market,
by delivery to the Company of an assignment of a sufficient amount of the
proceeds from the sale of Common Stock acquired upon exercise to pay for all of
the Common Stock acquired upon exercise and an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be made at the
grantee's direction at the time of exercise, and (ii) if the Common Stock of the
Company is not traded on a stock exchange, by having the Company withhold a
sufficient number of shares of Common Stock otherwise issuable to the grantee
upon exercise of the option so that the value of such shares withheld will equal
the aggregate exercise price of the shares of Common Stock delivered to the
grantee and withheld by the Company. For purposes hereof, the value of the
shares of Common Stock delivered and withheld shall be determined by the
Committee. The Committee may require the grantee to furnish an opinion of
counsel acceptable to the Committee to the effect that such exercise would not
result in the grantee incurring any liability under section 16(b) of the Act and
does not require any Consent (as defined in Section 3.2).
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(d) ISSUANCE OF SHARES. As soon as practicable after receipt
of full payment, the Company shall, subject to the provisions of Section 3.2,
deliver to the grantee one or more certificates for the shares of Common Stock
so purchased, which certificates may bear such legends as the Company may deem
appropriate concerning restrictions on the disposition of the shares in
accordance with applicable securities laws, rules and regulations or otherwise.
2.5 TERMINATION OF EMPLOYMENT. Notwithstanding anything herein to the
contrary and unless the applicable Plan agreement otherwise provides:
(a) GENERAL RULE. All options granted to a grantee shall
terminate upon his termination of employment for any reason (including death)
except to the extent post-employment exercise of the vested portion of an option
is permitted in accordance with this Section 2.5. The "vested portion" of any
option shall mean the portion thereof which is vested immediately prior to the
grantee's termination of employment for any reason.
(b) IMPROPER ACTIVITY; QUIT. All options granted to a grantee
shall terminate and expire on the day the grantee's employment is terminated
following the occurrence of an event constituting cause or the grantee quits
employment (other than retirement in the normal course at retirement age (as
established by the Board of Directors)), whether or not he is a party to a
written employment contract. For purposes of this Section 2.5, the Company shall
only have "cause" to terminate the grantee's employment if (i) the grantee is
convicted of fraud, embezzlement or any other unlawful or tortious conduct,
whether or not it involves or is committed against the Company or any
subsidiary, or (ii) the grantee willfully engages in any act of misconduct that
is materially detrimental to the business or reputation of the Company or any
subsidiary; PROVIDED, HOWEVER, that if such misconduct does not involve illegal
conduct and has resulted in a detriment that is reasonably capable of being
cured, the Company shall give the grantee a reasonable period, not to exceed
five business days, to affect such cure.
(c) REGULAR TERMINATION; LEAVES OF ABSENCE. If the grantee's
employment terminates for reasons other than as provided in subsection (b) or
(d) of this Section 2.5, the portion of options granted to such grantee which
were vested and exercisable immediately prior to such termination of employment
may be exercised until the earlier of (a) 30 days after his termination of
employment or (b) the date on which such options terminate or expire in
accordance with the provisions of the Plan (other than this Section 2.5) and the
Plan agreement; provided, that the Committee may in its sole discretion
determine such other period for exercise in the case of an individual who
transfers his employment with the Company's consent to a purchaser of a business
disposed of by the Company. The Committee may in its discretion determine (i)
whether any leave of absence (including short-term or long-term disability or
medical leave) shall constitute a termination of employment for purposes of the
Plan, and (ii) the impact, if any, of any such leave on outstanding awards under
the Plan.
(d) DEATH. If a grantee's employment terminates by reason of
death, or if a grantee's employment terminates in the manner described in
Section 2.5(c)
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and he dies within the period for exercise provided for therein, the options
vested and exercisable by him immediately prior to his death shall be
exercisable by the person to whom such options pass under the grantee's will
(or, if applicable, pursuant to the laws of descent and distribution) until the
earlier of (a) one year after the grantee's death or (b) the date on which such
options terminate or expire in accordance with the provisions of the Plan (other
than this Section 2.5) and the Plan agreement.
2.6 SPECIAL ISO REQUIREMENTS. In order for a grantee to receive special
tax treatment with respect to stock acquired under an option intended to be an
incentive stock option, the grantee of such option must be, at all times during
the period beginning on the date of grant and ending on the day three months
before the date of exercise of such option, an employee of the Company or any of
the Company's parent or subsidiary corporations (within the meaning of Code
section 424), or of a corporation or a parent or subsidiary corporation of such
corporation issuing or assuming a stock option in a transaction to which Code
section 424(a) applies. No option intended to be an incentive stock option shall
be granted under the Plan unless the Plan is approved by the stockholders of the
Company, within 12 months before or after the date the Plan is adopted. If an
option granted under the Plan is intended to be an incentive stock option, and
if the grantee, at the time of grant, owns stock possessing 10 percent or more
of the total combined voting power of all classes of stock of the grantee's
employer corporation or of its parent or subsidiary corporation, then (a) the
option exercise price per share shall in no event be less than 110 percent of
the fair market value of the Common Stock on the date of such grant and (b) such
option shall not be exercisable after the expiration of five years after the
date such option is granted. To the extent that the aggregate fair market value
of the Common Stock with respect to which incentive stock options are
exercisable for the first time by any grantee during any calendar year exceeds
$100,000, such options shall be treated as options which are not incentive stock
options.
ARTICLE 3.
MISCELLANEOUS
3.1 AMENDMENT OF THE PLAN; MODIFICATION OF AWARDS.
(a) PLAN AMENDMENTS. The Board may, without stockholder
approval, at any time and from time to time suspend, discontinue or amend the
Plan in any respect whatsoever, except that no such amendment shall impair any
rights under any award theretofore made under the Plan without the consent of
the grantee of such award. Furthermore, from and after the time the Plan is
initially approved by the stockholders, except as and to the extent otherwise
permitted by Section 3.5 or 3.11, no such amendment shall, without stockholder
approval:
(i) materially increase the benefits accruing to
grantees under the Plan;
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(ii) increase, beyond the amounts set forth in
Section 1.5, the total number of shares of Common Stock in
respect of which options may be issued under the Plan;
(iii) materially modify the designation in Section
1.3 of the class of persons eligible to receive awards under
the Plan;
(iv) permit a stock option to be exercisable more
than 10 years after the date of grant; or
(v) extend the term of the Plan beyond the period set
forth in Section 3.13.
(b) AWARD MODIFICATIONS. With the consent of the grantee
(except with respect to the Committee's ability to substitute awards without the
consent of the grantee in accordance with Section 1.5(c)), and subject to the
terms and conditions of the Plan (including Section 3.1(a)), the Committee may
amend outstanding Plan agreements with such grantee, including, without
limitation, any amendment which would (i) accelerate the time or times at which
an award may vest or become exercisable and/or (ii) extend the scheduled
termination or expiration date of the award.
3.2 RESTRICTIONS.
(a) CONSENT REQUIREMENTS. If the Committee shall at any time
determine that any Consent (as hereinafter defined) is necessary or desirable as
a condition of, or in connection with, the granting of any award under the Plan,
the acquisition, issuance or purchase of shares or other rights hereunder or the
taking of any other action hereunder (each such action being hereinafter
referred to as a "Plan Action"), then such Plan Action shall not be taken, in
whole or in part, unless and until such Consent shall have been effected or
obtained to the full satisfaction of the Committee. Without limiting the
generality of the foregoing, if (i) the Committee may make any payment in cash,
Common Stock or both, and (ii) the Committee determines that Consent is
necessary or desirable as a condition of, or in connection with, payment in any
one or more of such forms, then the Committee shall be entitled to determine not
to make any payment whatsoever until such Consent has been obtained.
(b) CONSENT DEFINED. The term "Consent" as used herein with
respect to any Plan Action means (i) any and all listings, registrations or
qualifications in respect thereof upon any securities exchange or other
self-regulatory organization or under any federal, state or local law, rule or
regulation, (ii) the expiration, elimination or satisfaction of any
prohibitions, restrictions or limitations under any federal, state or local law,
rule or regulation or the rules of any securities exchange or other
self-regulatory organization, (iii) any and all written agreements and
representations by the grantee with respect to the disposition of shares, or
with respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (iv) any and all consents,
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clearances and approvals in respect of a Plan Action by any governmental or
other regulatory bodies or any parties to any loan agreements or other
contractual obligations of the Company.
3.3 NONTRANSFERABILITY. No award granted to any grantee under the Plan
or under any Plan agreement shall be assignable or transferable by the grantee
other than by will or by the laws of descent and distribution. During the
lifetime of the grantee, all rights with respect to any option granted to the
grantee under the Plan or under any Plan agreement shall be exercisable only by
him. The grantee hereby covenants and agrees that the grantee will not sell,
assign, mortgage, pledge, encumber or otherwise transfer any interest in the
Shares of Common Stock acquired upon exercise of any option without the prior
written consent of the Company. Any purported sale, assignment, mortgage,
pledge, encumbrance or other transfer in violation of this Section 3.3 shall be
null and void and of no force or effect.
3.4 WITHHOLDING TAXES.
(a) Whenever under the Plan shares of Common Stock are to be
delivered upon exercise of an option, the Company may require as a condition of
delivery that the grantee remit an amount sufficient to satisfy all federal,
state and other governmental withholding tax requirements related thereto.
Whenever cash is to be paid under the Plan, the Company may, as a condition of
its payment, deduct therefrom, or from any salary or other payments due to the
grantee, an amount sufficient to satisfy all federal, state and other
governmental withholding tax requirements related thereto or to the delivery of
any shares of Common Stock under the Plan.
(b) Without limiting the generality of the foregoing, if and
to the extent provided in the applicable Plan agreement, (i) a grantee may elect
to satisfy all or part of the foregoing withholding requirements by delivery of
unrestricted shares of Common Stock owned by the grantee for at least six months
(or such other period as the Committee may determine) having a fair market value
(determined as of the date of such delivery by the grantee) equal to all or part
of the amount to be so withheld, provided that the Committee may require, as a
condition of accepting any such delivery, that the grantee furnish an opinion of
counsel acceptable to the Committee to the effect that such delivery would not
result in the grantee incurring any liability under section 16(b) of the Act;
and (ii) the Committee may permit any such delivery to be made by withholding
shares of Common Stock from the shares otherwise issuable pursuant to the
award(s) giving rise to the tax withholding obligation (in which event the date
of delivery shall be deemed the date the award(s) was exercised).
3.5 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. If and to the extent
specified by the Committee, the number or character of shares of Common Stock
which may be issued pursuant to awards under the Plan, the number of shares of
Common Stock subject to awards under the Plan, the option exercise price
theretofore granted under the Plan, and the amount payable by a grantee in
respect of an award (if any), may be appropriately adjusted (as the Committee
may determine) for any change in the number or character of issued shares of
common stock resulting from the subdivision or
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combination of shares of common stock or other capital adjustments, or the
payment of a stock dividend after the effective date of this Plan, or other
change in such shares of common stock effected without receipt of consideration
by the Company; provided, that any awards covering fractional shares of common
stock resulting from any such adjustment shall be eliminated, and provided
further, that each incentive stock option granted under the Plan shall not be
adjusted in a manner that causes such option to fail to continue to qualify as
an "incentive stock option" within the meaning of Code section 422. Adjustments
under this Section 3.5 shall be made by the Committee, whose determination as to
what adjustments shall be made, and the extent thereof, shall be final, binding
and conclusive.
3.6 RIGHT OF DISCHARGE RESERVED. Nothing in the Plan or in any Plan
agreement shall confer upon any person the right to continue in the employment
or service of the Company or affect any right which the Company may have to
terminate the employment or service of such person.
3.7 NO RIGHTS AS A STOCKHOLDER. No grantee or other person shall have
any of the rights of a stockholder of the Company with respect to shares subject
to an option until the issuance of a stock certificate to him for such shares.
Except as otherwise provided in Section 3.5, no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date is
prior to the date such stock certificate is issued. In the case of a grant of an
award which has not yet vested and/or become exercisable, the grantee shall have
the rights of a stockholder of the Company if and only to the extent provided in
the applicable Plan agreement.
3.8 NATURE OF PAYMENTS.
(a) Any and all awards or payments hereunder shall be granted,
issued or paid, as the case may be, in consideration of services performed for
the Company by the grantee.
(b) No such awards, issuances and payments shall, unless
otherwise determined by the Committee, be taken into account in computing the
amount of the grantee's salary or compensation for the purposes of determining
any pension, retirement, death or other benefits under (i) any pension,
retirement, life insurance or other benefit plan of the Company or (ii) any
agreement between the Company and the grantee.
(c) By accepting an award under the Plan, the grantee shall
thereby waive any claim to continued exercise or vesting of an award or to
damages or severance entitlement related to non-continuation of the award beyond
the period provided herein or in the applicable Plan agreement.
3.9 NON-UNIFORM DETERMINATIONS. The Committee's determinations under
the Plan need not be uniform and may be made by it selectively among persons who
receive, or are eligible to receive, awards under the Plan (whether or not such
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persons are similarly situated). Without limiting the generality of the
foregoing, the Committee shall be entitled, among other things, to make
non-uniform and selective determinations, and to enter into non-uniform and
selective Plan agreements, as to (a) the persons to receive awards under the
Plan, (b) the terms and provisions of awards under the Plan and (c) the
treatment of leaves of absence for purposes of Section 2.5(c).
3.10 OTHER PAYMENTS OR AWARDS. Nothing contained in the Plan shall be
deemed in any way to limit or restrict the Company or the Committee from making
any award or payment to any person under any other plan, arrangement or
understanding, whether now existing or hereafter in effect.
3.11 REORGANIZATION.
(a) In the event that the Company is merged or consolidated
with another corporation and, whether or not the Company shall be the surviving
corporation, there shall be any change in the shares of common stock by reason
of such merger or consolidation, or in the event that all or substantially all
of the assets of the Company are acquired by another person, or in the event of
a "change of control" (as defined in Section 3.11(c) below) after the date of
the adoption of this Plan, or in the event of a reorganization or liquidation of
the Company (each such event being hereinafter referred to as a "Reorganization
Event") or in the event that the Board shall propose that the Company enter into
a Reorganization Event, then the dates upon which any or all outstanding options
shall be vested and/or exercisable shall be advanced and the Committee may in
its discretion by written notice to each grantee provide that his options will
be terminated unless exercised within 30 days (or such longer period as the
Committee shall determine in its sole discretion) after the date of such notice
(without acceleration of the vesting and/or exercisability of such awards).
(b) Whenever deemed appropriate by the Committee, any action
referred to in Section 3.11(a) may be made conditional upon the consummation of
the applicable Reorganization Event.
(c) For purposes of Section 3.11(a), the term "change of
control" means either (i) a person or "group" (within the meaning of section
13(d)(3) of the Act) acquiring or having beneficial ownership of securities
(including options, warrants, rights and convertible and exchangeable
securities) having a majority of the ordinary voting power of the capital stock
of the Company (assuming exercise or conversion solely of the securities held by
such person or group) or (ii) the election of a majority of the directors of the
Company who are not currently directors of the Company and are not designated or
approved by a majority of the Company's current directors or their designated or
approved successors. Notwithstanding the foregoing, the term "change of control"
shall not include an offering of any class of shares of common stock of the
Company registered under the Securities Act of 1933, as amended (or any
successor act).
11
<PAGE> 14
3.12 SECTION HEADINGS. The section headings contained herein are for
the purposes of convenience only and are not intended to define or limit the
contents of said sections.
3.13 EFFECTIVE DATE AND TERM OF PLAN.
(a) The Plan shall be deemed adopted and become effective upon
the approval thereof by the Board or on such other date as the Board shall
determine; PROVIDED, HOWEVER, that no option shall be exercisable unless and
until the Plan shall have been approved by the stockholders; and provided
further that, notwithstanding any other provision of the Plan, if any class of
common equity securities of the Company is required to be registered under
section 12 of the Act, the Board shall, in its discretion, take such action as
it deems necessary to satisfy the requirement for shareholder approval of Rule
16b-3 under the Act.
(b) The Plan shall terminate 10 years after the earlier of the
date on which it becomes effective or the date on which it is approved by
shareholders, and no awards shall thereafter be made under the Plan.
Notwithstanding the foregoing, all awards made under the Plan prior to such
termination date shall remain in effect until such awards have been satisfied or
terminated in accordance with the terms and provisions of the Plan.
3.14 GOVERNING LAW. This Plan shall be governed by the laws of the
State of New York applicable to agreements made and to be performed entirely
within such State.
12
<PAGE> 15
Exhibit 1
FORM OF STOCK OPTION AGREEMENT
<PAGE> 16
INCENTIVE STOCK OPTION AGREEMENT
THE RTK GROUP, INC.
1999 Stock Incentive Plan
STOCK OPTION AGREEMENT (this "Agreement"), dated as of ______,
1999 (the "Date of Grant"), between THE RTK GROUP, INC. (the "Company"), a New
Jersey corporation, and __________ (the "Grantee").
The Company has agreed to grant an option to the Grantee
pursuant to the Company's 1999 Stock Incentive Plan (the "Plan"). A copy of the
Plan, as in effect on the Date of Grant, has been supplied to the Grantee and
the Grantee hereby acknowledges receipt thereof. The provisions of the Plan,
including the definitions of terms that are not otherwise defined in this
Agreement, are incorporated herein by reference. The parties hereto agree as
follows:
1. Grant of Option. Subject to all the terms and conditions of
the Plan and this Agreement, the Company grants to the Grantee an option to
purchase ___ shares of common stock of the Company, no par value (the "Common
Stock"). The option is intended to qualify as an "incentive stock option" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") and
accordingly the provisions of Section 2.6 of the Plan are applicable hereto.
2. Exercise Price. The option exercise price per share of
Common Stock covered by this option shall be $[ ].
3. Vesting and Exercisability. [The option granted under this
Agreement shall become cumulatively exercisable with respect to [20]% of the
shares of Common Stock subject thereto, rounded down to the next lower full
share, on each of December 31, 1999, December 31, 2000, December 31, 2001,
December 31, 2002 and December 31, 2003; provided, however, that the Grantee is
employed by the Company on such December 31.]
4. Term. The term of the option shall commence on the Date of
Grant and shall expire on the day prior to the tenth anniversary of the Date of
Grant, unless the option shall have been earlier terminated in accordance with
the terms of the Plan.
5. Procedure for Exercise.
(a) To the extent exercisable, the option may be
exercised, in whole or in part, by the Grantee's filing of a written
notice of exercise with the Company, which notice shall:
(i) state that the Grantee elects to exercise
the option;
(ii) state the number of shares with respect to
which the Grantee is exercising the option
(the "Shares");
<PAGE> 17
(iii) state the method of payment for the Shares,
pursuant to Section 5(b) hereof;
(iv) in the event that the option shall be
exercised by any person other than the
Grantee, include appropriate proof of the
right of such person to exercise the option;
and
(v) comply with such further requirements
consistent with the Plan as the Committee
may from time to time prescribe.
(b) Subject to Section 2.4 of the Plan, payment of the
option exercise price for the Shares shall be made in any combination
of the following:
(i) by certified or official bank check payable
to the Company;
(ii) with the consent of the Committee, by
personal check (subject to collection); and
(iii) if the Common Stock of the Company is traded
on a stock exchange or on the NASDAQ
National Market, by the delivery of
previously acquired shares of Common Stock
owned by the Grantee for at least six (6)
months and having a fair market value equal
to the portion of the option exercise price
being paid.
(c) Subject to Section 2.4(c) of the Plan, payment in
accordance with Section 5(b)(i) above may be deemed to be satisfied,
(i) if the Common Stock of the Company is traded on a stock exchange or
the NASDAQ National Market, by delivery to the Company of an assignment
of a sufficient amount of the proceeds from the sale of Common Stock
acquired upon exercise to pay for all of the Common Stock acquired upon
exercise and an authorization to the broker or selling agent to pay
that amount to the Company, which sale shall be made at the Grantee's
direction at the time of exercise, or (ii) if the Common Stock of the
Company is not traded on a stock exchange, by having the Company
withhold a sufficient number of shares of Common Stock otherwise
issuable to the Grantee upon exercise of the option so that the fair
market value of such shares withheld will equal the aggregate exercise
price of the shares of Common Stock delivered to the Grantee and
withheld by the Company.
(d) As a condition of delivery of the Shares, the Grantee
shall remit an amount sufficient to satisfy all Federal, state and
other governmental withholding tax requirements relating thereto. The
use of shares of stock to satisfy such withholding requirements is
permitted if the Common Stock of the Company is traded on a stock
exchange. The Grantee may also elect to have the Company withhold
sufficient shares of Common Stock otherwise issuable pursuant to the
option (determined in a manner comparable to that described in Section
5(c)(ii) hereof) in order to satisfy such withholding requirements.
(e) As a further condition of delivery of the Shares, the
Grantee shall become
2
<PAGE> 18
a party to and agree to become bound by the Stockholders Agreement
among the Company and the other parties thereto dated as of June __,
1999 (the "Stockholders Agreement"). The Grantee shall execute and
deliver to the Company a signature page to the Stockholders Agreement.
(f) Upon the exercise of the option at a time when there
is not in effect a registration statement under the Securities Act of
1933 relating to the Shares, the Grantee hereby represents and
warrants, and by virtue of such exercise shall be deemed to represent
and warrant, to the Company that the Shares shall be acquired for
investment and not with a view to the distribution thereof, and not
with any present intention of distributing the same, and the Grantee
shall provide the Company with such further representations and
warranties as the Company may require in order to ensure compliance
with applicable Federal and state securities, blue sky and other laws.
No Shares shall be purchased upon the exercise of the option unless and
until the Company and/or the Grantee shall have complied with all
applicable Federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory
agencies having jurisdiction, unless the Committee has received
evidence satisfactory to it that a prospective Grantee may acquire such
shares pursuant to an exemption from registration under the applicable
securities laws. Any determination in this connection by the Committee
shall be final, binding, and conclusive. The Company reserves the right
to place a legend on any certificate for shares of Common Stock,
conditioning sales of such shares upon compliance with applicable
federal and state securities laws and regulations.
6. Termination of Employment. The option shall terminate and
expire upon the Grantee's termination of employment for any reason (including
death) except to the extent post-employment exercise of the vested portion of
the option is permitted in accordance with Section 2.5 of the Plan.
7. No Rights as a Stockholder, Employee, etc.
(a) The Grantee shall not have any of the rights of a
stockholder of the Company with respect to shares subject to the option
until the issuance of a stock certificate to the Grantee for such
shares and execution and delivery by Grantee of the Stockholders
Agreement. Except as provided in Section 3.5 of the Plan, no adjustment
shall be made for dividend distributions or other rights for which the
record date is prior to the date such stock certificate is issued.
(b) Nothing in this Agreement or the option shall confer
upon the Grantee the right to continue in the employment or service of
the Company or affect the right of the Company to terminate the
Grantee's employment or service.
8. Restriction on Transfer. No award granted to any Grantee
under the Plan or this Agreement shall be assignable or transferable by the
Grantee other than by will or by the laws of descent and distribution. Shares
acquired upon exercise of the option are subject to the restrictions on transfer
set forth in Section 3.3 of the Plan.
3
<PAGE> 19
9. Reorganization. In the event of a Reorganization Event or
in the event that the Board shall propose that the Company enter into a
Reorganization Event, then the dates upon which any or all outstanding options
shall be vested and/or exercisable shall be advanced to the date of such
Reorganization Event and the Committee may in its discretion by written notice
to each Grantee, provide that his options will be terminated unless exercised
within 30 days (or such longer period as the Committee shall determine in its
sole discretion) after the date of such notice.
10. Notices. All notices or other communications which are
required or permitted hereunder shall be deemed sufficient if contained in a
written instrument given by personal delivery, telecopier, air courier or
registered or certified mail, postage prepaid, return receipt requested,
addressed to such party at the address set forth below or such other address as
may thereafter be designated in a written notice from such party to the other
party:
if to the Company: The RTK Group, Inc.
c/o Communication Resources Incorporated
1001 West Cyprus Creek Road
Suite 200
Ft. Lauderdale, FL 33309
Attention: Craig Russey
Facsimile: (800) 243-5198
with a copy to: Crest Communications Partners, LP
320 Park Avenue
New York, NY 10022
Attention: General Counsel
Facsimile: (212) 317-2710
if to the Grantee:
-------------------------
-------------------------
-------------------------
-------------------------
All such notices, advances and communications shall be deemed to have been
delivered and received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of telecopier, upon receipt of machine confirmation
and (iii) in the case of mailing, on the third business day following such
mailing.
11. No Waiver. No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.
12. Grantee Undertaking. The Grantee shall take whatever
additional actions and execute whatever additional documents the Company or the
Committee may in its judgment deem necessary or advisable in order to carry out
or effect one or more of the obligations or restrictions imposed on the Grantee
pursuant to the express provisions of this Agreement.
4
<PAGE> 20
13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, excluding the
choice of law rules thereof.
14. Capitalized Terms. Any capitalized term used in this
Agreement and not otherwise defined shall have the meaning set forth in the
Plan.
15. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
16. Entire Agreement. This Agreement and the Plan constitute
the entire agreement between the parties with respect to the subject matter
hereof and thereof.
5
<PAGE> 21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date hereof.
THE RTK GROUP, INC.,
a New Jersey corporation
By:
----------------------------------
Name:
Title:
GRANTEE:
---------------------------------------
---------------------------------------
6
<PAGE> 22
OPTION EXERCISE NOTICE
INCENTIVE STOCK OPTION AGREEMENT
THE RTK GROUP, INC.
1999 Stock Incentive Plan
The undersigned participant in the THE RTK GROUP,INC. 1999 Stock
Incentive Plan (the "Plan") does hereby exercise the right to purchase
__________ shares of Common Stock, no par value, of The RTK Group, Inc. pursuant
to the Option granted to me on _________, ____ under the Plan. Enclosed herewith
is $ __________, an amount equal to the total exercise price for the shares of
Common Stock being purchased pursuant to this Option Exercise Form.
Date:
---------------------------------
OPTIONEE:
------------------------------
Send a completed copy of this Option Exercise Notice to:
The RTK Group, Inc.
c/o Communication Resources Incorporated
1001 West Cypress Creek Road Suite 200
Fort Lauderdale, FL 33309
Attn: Craig Russey
