Exhibit 4.5
CONDOR SYSTEMS, INC.
1999 EMPLOYEE STOCK INCENTIVE PLAN
EFFECTIVE AS OF DECEMBER 14, 1999
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CONDOR SYSTEMS, INC.
1999 EMPLOYEE STOCK INCENTIVE PLAN
EFFECTIVE AS OF DECEMBER 14, 1999
SECTION 1. INTRODUCTION.
The Company's Board of Directors adopted the Condor Systems, Inc. 1999
Employee Stock Incentive Plan on December 14, 1999, subject to approval by
the Company's shareholders.
The purpose of the Plan is to promote the long-term success of the Company
and the creation of shareholder value by offering Key Employees an
opportunity to acquire a proprietary interest in the success of the
Company, or to increase such interest, and to encourage such selected
persons to continue to provide services to the Company and to attract new
individuals with outstanding qualifications.
The Plan seeks to achieve this purpose by providing for Options (which may
constitute Incentive Stock Options or Nonstatutory Stock Options) and
Awards of Restricted Stock.
The Plan shall be governed by, and construed in accordance with, the laws
of the State of California (except its choice-of-law provisions).
Capitalized terms shall have the meaning provided in Section 2 unless
otherwise provided in this Plan or Stock Option Agreement or Restricted
Stock Agreement.
SECTION 2. DEFINITIONS.
(a) "Affiliate" means any entity other than a Subsidiary, if the Company
and/or one or more Subsidiaries own not less than 50% of such entity. For
purposes of determining an individual's "Service," this definition shall
include any entity other than a Subsidiary, if the Company, a Parent
and/or one or more Subsidiaries own not less than 50% of such entity.
(b) "Award" means any award of an Option or Restricted Stock under the
Plan.
(c) "Board" means the Board of Directors of the Company, as constituted
from time to time.
(d) "Cause" means "cause" as defined in any Employment Agreement or Stock
Option Agreement or Restricted Stock Agreement, or if not so defined:
(i) a Participant's willful and continued failure substantially to
perform his or her duties (other than as a result of total or partial
incapacity due to physical or mental illness);
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(ii) an act or acts on a Participant's part constituting a felony
under the laws of the United States or any state thereof or any other
jurisdiction in which the Company conducts business;
(iii) a Participant being repeatedly under the influence of illegal
drugs or alcohol while performing his or her duties; or
(iv) any other act or omission which is materially injurious to the
financial condition or business reputation of the Company or any of its
Affiliates as determined in the sole discretion of the Committee,
including a Participant's breach of the provisions of any non-competition,
non-solicitation or confidentiality covenant in favor of the Company or
its Affiliates binding upon such participant.
(e) "Change In Control", except as may otherwise be provided in the Stock
Option Agreement or Restricted Stock Agreement, means the occurrence of
any of the following:
(i) A change in the composition of the Board, as a result of which
fewer that one-half of the incumbent directors are directors who either
(i) had been directors of the Company on the date 24 months prior to the
date of the event that may constitute a Change in Control (the "original
directors") or (ii) were elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the aggregate of the
original directors who were still in office at the time of the election or
nomination and the directors whose election or nomination was previously
so approved;
(ii) Any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing at least
20% of the total voting power represented by the Company's then
outstanding voting securities. For purposes of this Paragraph (ii), the
term "person" shall have the same meaning as when used in sections 13(d)
and 14(d) of the Exchange Act but shall exclude:
(A) A trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a subsidiary of the Company;
and
(B) A corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as
their ownership of the common stock of the Company.
(iii) any "person" (as such term is used in Section 3(a)(9) and
13(d)(3) of the Exchange Act) other than (A) the DLJMB Entities and/or
their respective Permitted Transferees (as defined in the Investors'
Agreement) or (B) any "group" (within the meaning of such Section
13(d)(3)) of which any of the DLJMB Entities is a part, acquires, directly
or indirectly, by virtue of the consummation of any purchase, merger or
other combination, securities of the Company representing more than 51% of
the combined voting power of the
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Company's then outstanding voting securities with respect to matters
submitted to a vote of the shareholders generally; or
(iv) a sale or transfer by the Company or any of its Subsidiaries of
substantially all of the stock or consolidated assets of the Company and
its Subsidiaries to an entity which is not an Affiliate of the Company
prior to such sale or transfer.
A transaction shall not constitute a Change in Control if its sole
purpose is to change the state of the Company's incorporation or to create
a holding company that will be owned in substantially the same proportions
by the persons who held the Company's securities immediately before such
transactions.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
(g) "Committee" means a committee consisting of one or more members of the
Board that is appointed by the Board (as described in Section 3) to
administer the Plan.
(h) "Common Stock" means the Company's Class A common stock.
(i) "Company" means Condor Systems, Inc., a California corporation.
(j) "Consultant" means an individual who performs bona fide services to
the Company, a Parent, a Subsidiary or an Affiliate other than as an
Employee or Director or Non-Employee Director.
(k) "Director" means a member of the Board who is also an Employee.
(l) "Disability" means that the Key Employee is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months.
(m) "Employee" means any individual who is a common-law employee of the
Company, a Parent, a Subsidiary or an Affiliate.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(o) "Exercise Price" means the amount for which a Share may be purchased
upon exercise of such Option, as specified in the applicable Stock Option
Agreement.
(p) "Fair Market Value" means the market price of Shares, determined by
the Committee as follows:
(i) As of the consummation of the merger of the Company and WDC
Acquisition Corp., $1.00 per share;
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(ii) If the Shares were traded over-the-counter on the date in
question but were not classified as a national market issue, then the Fair
Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the NASDAQ system for such
date;
(iii) If the Shares were traded over-the-counter on the date in
question and were classified as a national market issue, then the Fair
Market Value shall be equal to the last-transaction price quoted by the
NASDAQ system for such date;
(iv) If the Shares were traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date;
and
(v) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in the Wall Street Journal. Such
determination shall be conclusive and binding on all persons.
(q) "Good Reason" means "good reason", as defined in any Employment
Agreement or Stock Option or Restricted Stock Agreement, or if not so
defined,:
(i) A Participant's removal from his/her position or assigned duties
and responsibilities materially inconsistent with his/her position; or
(ii) One or more reductions of more than 10% in the aggregate in a
Participant's base salary and benefits (including target bonus
opportunities and criteria but not actual bonus payments), except for
across-the-board reductions similarly affecting similarly situated
employees.
(r) "Grant" means any grant of an Option under the Plan.
(s) "Incentive Stock Option" or "ISO" means an incentive stock option
described in Code section 422(b).
(t) "Investors' Agreement" means the Investors' Agreement dated as of
April 15, 1999 among Condor Systems and the several Shareholders (as
defined therein) from time to time parties thereto.
(u) "Key Employee" means an Employee, Director, Non-Employee Director or
Consultant who has been selected by the Committee to receive an Award
under the Plan.
(v) "Non-Employee Director" means a member of the Board who is not an
Employee.
(w) "Nonstatutory Stock Option" or "NSO" means a stock option that is not
an ISO.
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(x) "Option" means an ISO or NSO granted under the Plan entitling the
Optionee to purchase Shares.
(y) "Optionee" means an individual, estate or other entity that holds an
Option.
(z) "Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations
other than the Company owns stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the
other corporations in such chain. A corporation that attains the status of
a Parent on a date after the adoption of the Plan shall be considered a
Parent commencing as of such date.
(aa) "Participant" means an individual or estate or other entity that
holds an Award.
(bb) "Permitted Transferee" shall have the meaning assigned to it in the
Investors' Agreement.
(cc) "Plan" means this Condor Systems, Inc. 1999 Employee Stock Incentive
Plan as it may be amended from time to time.
(dd) "Restricted Stock" means a Share awarded under the Plan.
(ee) "Restricted Stock Agreement" means the agreement described in Section
8 evidencing each Award of Restricted Stock.
(ff) "Securities Act" means the Securities Act of 1933, as amended.
(gg) "Service" means service as an Employee, Director, Non-Employee
Director or Consultant.
(hh) "Share" means one share of Class A Common Stock.
(ii) "Stock Option Agreement" means the agreement described in Section 6
evidencing each Grant of an Option.
(jj) "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain. A corporation that attains the status of a Subsidiary on a date
after the adoption of the Plan shall be considered a Subsidiary commencing
as of such date.
(kk) "Substitute Awards" means Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company
acquired by the Company or with which the Company combines. Rollover
Shares shall not constitute Substitute Awards for purposes hereof.
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(ll) "10-Percent Shareholder" means an individual who owns more than ten
percent (10%) of the total combined voting power of all classes of
outstanding stock of the Company, its Parent or any of its subsidiaries.
In determining stock ownership, the attribution rules of section 424(d) of
the Code shall be applied.
SECTION 3. ADMINISTRATION.
(a) Committee Composition. A Committee appointed by the Board shall
administer the Plan. The Board shall designate one of the members of the
Committee as chairperson. If no Committee has been approved, the entire
Board shall constitute the Committee. Members of the Committee shall serve
for such period of time as the Board may determine and shall be subject to
removal by the Board at any time. The Board may also at any time terminate
the functions of the Committee and reassume all powers and authority
previously delegated to the Committee.
Effective with the Company's initial public offering, the Committee shall
consist either (i) of those individuals who shall satisfy the requirements
of Rule 16b-3 (or its successor) under the Exchange Act with respect to
Options to persons who are officers or directors of the Company under
Section 16 of the Exchange Act or (ii) of the Board itself.
The Board may also appoint one or more separate committees of the Board,
each composed of one or more directors of the Company who need not qualify
under Rule 16b-3, who may administer the Plan with respect to Key
Employees who are not considered officers or directors of the Company
under Section 16 of the Exchange Act, may grant Awards under the Plan to
such Key Employees and may determine all terms of such Awards.
(b) Authority of the Committee. Subject to the provisions of the Plan, the
Committee shall have full authority and discretion to take any actions it
deems necessary or advisable for the administration of the Plan. Such
actions shall include:
(i) selecting Key Employees who are to receive Awards under the
Plan;
(ii) determining the type, number, vesting requirements and other
features and conditions of such Awards;
(iii) interpreting the Plan; and
(iv) making all other decisions relating to the operation of the
Plan.
The Committee may adopt such rules or guidelines, as it deems appropriate
to implement the Plan. The Committee's determinations under the Plan shall
be final and binding on all persons.
(c) Indemnification. Each member of the Committee, or of the Board, shall
be indemnified and held harmless by the Company against and from (i) any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim,
action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act
under the Plan or any Stock Option Agreement or any Restricted Stock
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Agreement, and (ii) from any and all amounts paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company
an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or Bylaws, by contract, as a matter of
law, or otherwise, or under any power that the Company may have to
indemnify them or hold them harmless.
(d) Financial Reports. To the extent required by applicable law, the
Company shall furnish to Participants the Company's summary financial
information including a balance sheet regarding the Company's financial
condition and results of operations, unless such Participants have duties
with the Company that assure them access to equivalent information. Such
financial statements need not be audited.
SECTION 4. ELIGIBILITY.
(a) General Rules. Only Employees, Directors, Non-Employee Directors and
Consultants shall be eligible for designation as Key Employees by the
Committee.
(b) Incentive Stock Options. Only Key Employees who are common-law
employees of the Company, a Parent or a Subsidiary shall be eligible for
the grant of ISOs. In addition, a Key Employee who is a 10-Percent
Shareholder shall not be eligible for the grant of an ISO unless the
requirements set forth in section 422(c)(5) of the Code are satisfied.
SECTION 5. SHARES SUBJECT TO PLAN.
(a) Basic Limitation. The stock issuable under the Plan shall be
authorized but unissued Shares or treasury Shares. The aggregate number of
Shares reserved for Awards under the Plan shall not exceed 2,840,000
Shares on a fully diluted basis, subject to adjustment pursuant to Section
9. Any Shares underlying Substitute Awards shall not be counted against
the Shares available for Awards under the Plan.
(b) Additional Shares. If Awards are forfeited or terminate for any other
reason before being exercised, then the Shares underlying such Awards
shall again become available for Awards under the Plan.
(c) Dividend Equivalents. Any dividend equivalents distributed under the
Plan shall not be applied against the number of Shares available for
Awards.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each Grant under the Plan shall be evidenced
by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject
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to all applicable terms and conditions of the Plan and may be subject to
any other terms and conditions that are not inconsistent with the Plan and
that the Committee deems appropriate for inclusion in a Stock Option
Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical. A Stock Option Agreement may
provide that new Options will be granted automatically to the Optionee
when he or she exercises the prior Options. The Stock Option Agreement
shall also specify whether the Option is an ISO or an NSO.
(b) Number of Shares. Each Stock Option Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 9.
(c) Exercise Price. An Option's Exercise Price shall be established by the
Committee and set forth in a Stock Option Agreement. To the extent
required by applicable law the Exercise Price of an ISO shall not be less
than 100% of the Fair Market Value (110% for 10-Percent Shareholders) of a
Share on the date of Grant. In the case of an NSO, a Stock Option
Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the NSO is outstanding. To the extent required
by applicable law, the Exercise Price for an NSO shall not be less than
85% of the Fair Market Value (110% for 10-Percent Shareholders) of a Share
on the date of Grant.
(d) Exercisability and Term. Each Stock Option Agreement shall specify the
date when all or any installment of the Option is to become exercisable.
To the extent required by applicable law, Options shall vest at least as
rapidly as 20% annually over a five-year period. The Stock Option
Agreement shall also specify the term of the Option; provided that the
term of an ISO, and to the extent required by applicable law a NSO, shall
in no event exceed ten (10) years from the date of Grant. An ISO that is
granted to a 10-Percent Shareholder shall have a maximum term of five (5)
years. To the extent required by applicable law, vested Options shall be
exercisable for a minimum period of six (6) months following termination
of employment due to death or Disability and thirty (30) days following
termination of employment (other than terminations for cause, as defined
in the Company's personnel policies). Notwithstanding the previous
sentence, no Option can be exercised after the expiration date provided in
the applicable Stock Option Agreement. A Stock Option Agreement may
provide for accelerated exercisability in the event of the Optionee's
death, disability or retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of
the Optionee's service. A Stock Option Agreement may permit an Optionee to
exercise an Option before it is vested, subject to the Company's right of
repurchase over any Shares acquired under the unvested portion of the
Option (an "early exercise"), which right of repurchase shall lapse at the
same rate the Option would have vested had there been no early exercise.
In no event shall the Company be required to issue fractional Shares upon
the exercise of an Option.
(e) Modifications or Assumption of Options. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding options or
may accept the cancellation of outstanding options (whether granted by the
Company or by another issuer) in return for the grant of new Options for
the same or a different number of Shares
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and at the same or a different Exercise Price. The foregoing
notwithstanding, no modification of an Option shall, without the consent
of the Optionee, alter or impair his or her rights or obligations under
such Option.
(f) Transferability of Options. Except as otherwise provided in the
applicable Stock Option Agreement and then only to the extent permitted by
applicable law, no Option shall be transferable by the Optionee other than
by will or by the laws of descent and distribution. Except as otherwise
provided in the applicable Stock Option Agreement, an Option may be
exercised during the lifetime of the Optionee only or by the guardian or
legal representative of the Optionee. No Option or interest therein may be
assigned, pledged or hypothecated by the Optionee during his lifetime,
whether by operation of law or otherwise, or be made subject to execution,
attachment or similar process.
(g) No Rights as a Shareholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a shareholder with respect to any Common
Stock covered by an Option until such person becomes entitled to receive
such Common Stock by filing a notice of exercise and paying the Exercise
Price pursuant to the terms of such Option.
(h) Restrictions on Transfer. Any Shares issued upon exercise of an Option
shall be subject to such rights of repurchase, rights of first refusal and
other transfer restrictions as the Committee may determine. Such
restrictions shall apply in addition to any restrictions that may apply to
holders of Shares generally and shall also comply to the extent necessary
with applicable law.
SECTION 7. PAYMENT FOR OPTION SHARES.
(a) General Rule. The entire Exercise Price of Shares issued upon exercise
of Options shall be payable in cash at the time when such Shares are
purchased, except as follows:
(i) In the case of an ISO granted under the Plan, payment shall be
made only pursuant to the express provisions of the applicable Stock
Option Agreement. The Stock Option Agreement may specify that payment may
be made in any form(s) described in this Section 7.
(ii) In the case of an NSO granted under the Plan, the Committee may
in its discretion, at any time accept payment in any form(s) described in
this Section 7.
(b) Surrender of Stock. To the extent that this Section 7(b) is
applicable, payment for all or any part of the Exercise Price may be made
with Shares which have already been owned by the Optionee for such
duration as shall be specified by the Committee. Such Shares shall be
valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan.
(c) Other Forms of Payment. To the extent that this Section 7(c) is
applicable, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
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SECTION 8. TERMS AND CONDITIONS FOR AWARDS OF RESTRICTED STOCK.
(a) Time, Amount and Form of Awards. Awards under the Plan may be granted
in the form of Restricted Stock.
(b) Restricted Stock Agreement. Each Award of Restricted Stock under the
Plan shall be evidenced by a Restricted Stock Agreement between the
Participant and the Company. Such Award shall be subject to all applicable
terms and conditions of the Plan and may be subject to any other terms and
conditions that are not inconsistent with the Plan and that the Committee
deems appropriate for inclusion in a Restricted Stock Agreement. The
provisions of the various Restricted Stock Agreements entered into under
the Plan need not be identical.
(c) Payment for Restricted Stocks. Restricted Stock may be issued with or
without cash consideration under the Plan.
(d) Vesting Conditions. Each Award of Restricted Stock shall become
vested, in full or in installments, upon satisfaction of the conditions
specified in the Restricted Stock Agreement. A Restricted Stock Agreement
may provide for accelerated vesting in the event of the Participant's
death, Disability or retirement or other events.
(e) Assignment or Transfer of Restricted Stocks. Except as provided in
Section 12, or in a Restricted Stock Agreement, or as required by
applicable law, a Restricted Stock granted under the Plan shall not be
anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor's process, whether voluntarily, involuntarily or
by operation of law. Any act in violation of this Section 8(e) shall be
void. However, this Section 8(e) shall not preclude a Participant from
designating a beneficiary who will receive any outstanding Restricted
Stocks in the event of the Participant's death, nor shall it preclude a
transfer of Restricted Stocks by will or by the laws of descent and
distribution.
(f) Trusts. Neither this Section 8 nor any other provision of the Plan
shall preclude a Participant from transferring or assigning Restricted
Stock to (a) the trustee of a trust that is revocable by such Participant
alone, both at the time of the transfer or assignment and at all times
thereafter prior to such Participant's death, or (b) the trustee of any
other trust to the extent approved in advance by the Committee in writing.
A transfer or assignment of Restricted Stock from such trustee to any
person other than such Participant shall be permitted only to the extent
approved in advance by the Committee in writing, and Restricted Stock held
by such trustee shall be subject to all of the conditions and restrictions
set forth in the Plan and in the applicable Restricted Stock Agreement, as
if such trustee were a party to such Agreement.
(g) Voting and Dividend Rights. The holders of Restricted Stock awarded
under the Plan shall have the same voting, dividend and other rights as
the Company's other shareholders. A Restricted Stock Agreement, however,
may require that the holders of Restricted Stock invest any cash dividends
received in additional Restricted Stock. Such additional Restricted Stock
shall be subject to the same conditions and restrictions as the
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Award with respect to which the dividends were paid. Such additional
Restricted Stock shall not reduce the number of Shares available under
Section 5.
SECTION 9. PROTECTION AGAINST DILUTION.
(a) Adjustments. In the event of a subdivision of the outstanding Shares,
a declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material
effect on the price of Shares, a combination or consolidation of the
outstanding Shares (by reclassification or otherwise) into a lesser number
of Shares, a recapitalization, a spin-off or a similar occurrence, the
Committee shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of:
(i) the number of Shares available for future Awards under
Section 5;
(ii) the number of Shares covered by each outstanding Award; or
(iii) the Exercise Price under each outstanding Option.
(b) Participant Rights. Except as provided in this Section 9, a
Participant shall have no rights by reason of any issue by the Company of
stock of any class or securities convertible into stock of any class, any
subdivision or consolidation of shares of stock of any class, the payment
of any stock dividend or any other increase or decrease in the number of
shares of stock of any class.
SECTION 10. EFFECT OF A CHANGE IN CONTROL.
(a) Merger or Reorganization. In the event that the Company is a party to
a merger or other reorganization, outstanding Awards shall be subject to
the agreement of merger or reorganization. Such agreement may provide,
without limitation, for the assumption of outstanding Awards by the
surviving corporation or its parent, for their continuation by the Company
(if the Company is a surviving corporation), for accelerated vesting or
for their cancellation with or without consideration, in all cases without
the consent of the Participant.
(b) Acceleration. The Committee may determine, at the time of granting an
Award or thereafter, that such Award shall become fully vested as to all
Shares subject to such Award in the event that a Change in Control occurs
with respect to the Company.
SECTION 11. LIMITATIONS ON RIGHTS.
(a) Retention Rights. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an employee,
consultant or director of the Company, a Parent, a Subsidiary or an
Affiliate. The Company and its Parents and Subsidiaries and Affiliates
reserve the right to terminate the Service of any person at any
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time, and for any reason, subject to applicable laws, the Company's
Articles of Incorporation and Bylaws and a written employment agreement
(if any).
(b) Shareholders' Rights. A Participant shall have no dividend rights,
voting rights or other rights as a shareholder with respect to any Shares
covered by his or her Award prior to the issuance of a stock certificate
for such Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such
certificate is issued, except as expressly provided in Section 9.
(c) Regulatory Requirements. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Shares under the
Plan shall be subject to all applicable laws, rules and regulations and
such approval by any regulatory body as may be required. The Company
reserves the right to restrict, in whole or in part, the delivery of
Shares pursuant to any Award prior to the satisfaction of all legal
requirements relating to the issuance of such Shares, to their
registration, qualification or listing or to an exemption from
registration, qualification or listing.
SECTION 12. WITHHOLDING TAXES.
(a) General. A Participant shall make arrangements satisfactory to the
Company for the satisfaction of any withholding tax obligations that arise
in connection with his or her Award. The Company shall not be required to
issue any Shares or make any cash payment under the Plan until such
obligations are satisfied.
(b) Share Withholding. If a public market for the Company's Shares exists,
the Committee may permit a Participant to satisfy all or part of his or
her withholding or income tax obligations by having the Company withhold
all or a portion of any Shares that otherwise would be issued to him or
her or by surrendering all or a portion of any Shares that he or she
previously acquired. Such Shares shall be valued at their Fair Market
Value on the date when taxes otherwise would be withheld in cash. Any
payment of taxes by assigning Shares to the Company may be subject to
restrictions, including, but not limited to, any restrictions required by
rules of the Securities and Exchange Commission.
SECTION 13. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board, subject to the
approval of the Company's shareholders. No Options shall be exercisable
until such shareholder approval is obtained. In the event that the
shareholders fail to approve the Plan within twelve (12) months after its
adoption by the Board, any Awards made shall be null and void and no
additional Awards shall be made. To the extent required by applicable law,
the Plan shall terminate on the date that is ten (10) years after its
adoption by the Board and may be terminated on any earlier date pursuant
to Section 13(b).
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(b) Right to Amend or Terminate the Plan. The Board may amend or terminate
the Plan at any time and for any reason. The termination of the Plan, or
any amendment thereof, shall not affect any Award previously granted under
the Plan. No Awards shall be granted under the Plan after the Plan's
termination. An amendment of the Plan shall be subject to the approval of
the Company's shareholders only to the extent required by applicable laws,
regulations or rules.
SECTION 14. EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused
its duly authorized officer to execute this Plan on behalf of the Company.
CONDOR SYSTEMS, INC.
By
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SECTION 1. INTRODUCTION......................................................1
SECTION 2. DEFINITIONS.......................................................1
(a) "Affiliate"..................................................1
(b) "Award"......................................................1
(c) "Board"......................................................1
(d) "Cause"......................................................1
(e) "Change In Control"..........................................2
(f) "Code".......................................................3
(g) "Committee"..................................................3
(h) "Common Stock"...............................................3
(i) "Company"....................................................3
(j) "Consultant".................................................3
(k) "Director"...................................................3
(l) "Disability".................................................3
(m) "Employee"...................................................3
(n) "Exchange Act"...............................................3
(o) "Exercise Price".............................................3
(p) "Fair Market Value"..........................................3
(q) "Good Reason"................................................4
(r) "Grant"......................................................4
(s) "Incentive Stock Option" or "ISO"............................4
(t) "Investors' Agreement".......................................4
(u) "Key Employee"...............................................4
(v) "Non-Employee Director"......................................4
(w) "Nonstatutory Stock Option" or "NSO".........................4
(x) "Option".....................................................5
(y) "Optionee"...................................................5
(z) "Parent".....................................................5
(aa) "Participant"................................................5
(bb) "Permitted Transferee".......................................5
(cc) "Plan".......................................................5
(dd) "Restricted Stock"...........................................5
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(ee) "Restricted Stock Agreement".................................5
(ff) "Securities Act".............................................5
(gg) "Service"....................................................5
(hh) "Share"......................................................5
(ii) "Stock Option Agreement".....................................5
(jj) "Subsidiary".................................................5
(kk) "Substitute Awards"..........................................5
(ll) "10-Percent Shareholder".....................................6
SECTION 3. ADMINISTRATION....................................................6
(a) Committee Composition........................................6
(b) Authority of the Committee...................................6
(c) Indemnification..............................................6
(d) Financial Reports............................................7
SECTION 4. ELIGIBILITY.......................................................7
(a) General Rules................................................7
(b) Incentive Stock Options......................................7
SECTION 5. SHARES SUBJECT TO PLAN............................................7
(a) Basic Limitation.............................................7
(b) Additional Shares............................................7
(c) Dividend Equivalents.........................................7
SECTION 6. TERMS AND CONDITIONS OF OPTIONS...................................7
(a) Stock Option Agreement.......................................7
(b) Number of Shares.............................................8
(c) Exercise Price...............................................8
(d) Exercisability and Term......................................8
(e) Modifications or Assumption of Options.......................8
(f) Transferability of Options...................................9
(g) No Rights as a Shareholder...................................9
(h) Restrictions on Transfer.....................................9
SECTION 7. PAYMENT FOR OPTION SHARES.........................................9
(a) General Rule.................................................9
(b) Surrender of Stock...........................................9
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(c) Other Forms of Payment.......................................9
SECTION 8. TERMS AND CONDITIONS FOR AWARDS OF RESTRICTED STOCK...............10
(a) Time, Amount and Form of Awards..............................10
(b) Restricted Stock Agreement...................................10
(c) Payment for Restricted Stocks................................10
(d) Vesting Conditions...........................................10
(e) Assignment or Transfer of Restricted Stocks..................10
(f) Trusts.......................................................10
(g) Voting and Dividend Rights...................................11
SECTION 9. PROTECTION AGAINST DILUTION.......................................11
(a) Adjustments..................................................11
SECTION 10. EFFECT OF A CHANGE IN CONTROL....................................11
SECTION 11. LIMITATIONS ON RIGHTS............................................12
(a) Retention Rights.............................................12
(b) Shareholders' Rights.........................................12
(c) Regulatory Requirements......................................12
SECTION 12. WITHHOLDING TAXES................................................12
(a) General......................................................12
(b) Share Withholding............................................12
SECTION 13. DURATION AND AMENDMENTS..........................................12
(a) Term of the Plan.............................................12
(b) Right to Amend or Terminate the Plan.........................13
SECTION 14. EXECUTION........................................................13
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