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EXHIBIT 10(e)
SUPERCONDUCTIVE COMPONENTS, INC.
1995 STOCK OPTION PLAN
AMENDED SEPTEMBER 8, 1997, AUGUST 9, 1999 AND AUGUST 22, 2000
1. PURPOSE. This plan (the "Plan") is intended as an incentive
and to encourage stock ownership by certain key associates, officers,
directors, consultants and advisers who render services to Superconductive
Components, Inc., an Ohio corporation (the "Company"), and any current or
future subsidiaries or parent of the Company (the "Company Group"), by the
granting of stock options (the "Options") as provided herein. By encouraging
such stock ownership, the Company seeks to attract, retain and motivate
employees, officers, directors, consultants and advisers of training,
experience and ability. The Options granted under the Plan may be either
incentive stock options ("ISOs") which meet the requirements of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or options
which do not meet such requirements ("Non-statutory Options").
2. EFFECTIVE DATE. The Plan shall become effective on September 29,
1995 (the "Effective Date").
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors of
the Company (the "Board"), which may, to the full extent permitted by law,
delegate all or any of its powers under the Plan to a committee (the
"Committee") which consists of not fewer than three members of the Board. If the
Committee is so appointed and to the extent such powers are delegated, all
references to the Board in the Plan shall mean and relate to the Committee.
(b) Subject to the provisions of the Plan, the Board is
authorized to establish, amend and rescind such rules and regulations as it may
deem appropriate for its conduct and for the proper administration of the Plan,
to make all determinations under and interpretations of, and to take such
actions in connection with, the Plan or the Options granted thereunder as it may
deem necessary or advisable. All actions taken by the Board under the Plan shall
be final and binding on all persons. No member of the Board shall be liable for
any action taken or determination made relating to the Plan, except for gross
negligence or willful misconduct.
(c) Each member of the Board shall be indemnified by the Company
against costs, expenses and liabilities (other than amounts paid in settlements
to which the Company does not consent, which consent shall not be unreasonably
withheld) reasonably incurred by such member in connection with any action taken
in relation to the Plan to which he or she may be a party by reason of service
as a member of the Board, except in relation to matters as to which he or she
shall be adjudged in such action to be personally guilty of gross negligence or
willful misconduct in the performance of his or her duties. The foregoing right
to indemnification shall be in addition to such other rights as the Board member
may enjoy as a matter of law, by reason of insurance coverage of any kind, or
otherwise.
4. ELIGIBILITY.
(a) ISOs and Non-statutory Options may be granted to such key
associates of the Company Group, and Non-statutory Options only may be granted
to directors who are not employees of and to consultants and advisers who render
services to the Company Group, as the Board shall select from time to time (the
"Optionees"). More than one Option may be granted to an individual under the
Plan.
(b) No ISO may be granted to an individual who, at the time an
ISO is granted, is considered under Section 422(b)(6) of the Code to own stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or of its parent or any subsidiary corporation;
PROVIDED, HOWEVER, this restriction shall not apply if at the time such ISO is
granted the option price per Share of such ISO shall be at least 110% of the
fair market value of such Share, and such ISO by its terms is not exercisable
after the expiration of five years from the date it is granted. This
subparagraph 4(b) has no application to Options granted under the Plan as
Non-statutory Options.
(c) The aggregate fair market value (determined as of the date
the ISO is granted) of Shares with respect to which ISOs are exercisable for the
first time by any Optionee during any calendar year under the Plan or any other
ISO plan of the Company or the Company Group may not exceed $100,000. If an ISO
which exceeds the $100,000 limitation of this subparagraph 4(c) is granted, the
portion of such Option which is exercisable for Shares in excess of the $100,000
limitation shall be treated as a Non-statutory Option pursuant to
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Section 422(d) of the Code. Except as otherwise expressly provided in the
immediately preceding sentence, this subparagraph 4(c) has no application to
Options granted under the Plan as Non-statutory Options.
5. STOCK SUBJECT TO PLAN. The stock subject to Options under the
Plan shall be shares of the common stock, no par value, of the Company
("Shares"). The Shares issued pursuant to Options granted under the Plan may
be authorized and unissued Shares, Shares purchased on the open market or in
a private transaction, or Shares held as treasury stock. The aggregate number
of Shares reserved for options under the Plan shall be 600,000 subject to
adjustment in accordance with the terms of paragraph 12 hereof. Any Shares
subject to an option which for any reason expires or is terminated
unexercised as to such Shares and any Shares reacquired by the Company
pursuant to any forfeiture or any repurchase right hereunder may again be the
subject of an Option under the Plan. The Board, in its sole discretion, may
permit the exercise of any Option as to full Shares or fractional Shares.
Proceeds from the sale of Shares under Options shall constitute general funds
of the Company.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) At the time of grant, the Board shall determine whether the
Options granted are to be ISOs or Non-statutory Options and shall enter into
stock option agreements with the recipients accordingly. All Options granted
shall be authorized by the Board and, within a reasonable time after the date of
grant, shall be evidenced by stock option agreements in writing ("Stock Option
Agreements"), in such form and containing such terms and conditions not
inconsistent with the provisions of this Plan as the Board shall from time to
time determine. Any action under paragraph 12 may be reflected in an amendment
to or restatement of such Stock Option Agreements.
(b) The Board may grant Options having terms and provisions
which vary from those specified in the Plan if such Options are granted in
substitution for, or in connection with the assumption of, existing options
granted by another corporation and assumed or otherwise agreed to be provided
for by the Company pursuant to or by reason of a transaction involving a
corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to which the Company is a party.
7. PRICE. The option price per Share (the "Option Price") of
each Option granted under the Plan shall be determined by the Board;
PROVIDED, HOWEVER, the Option Price of each ISO granted under the Plan shall
not be less than the fair market value (determined without regard to any
restrictions other than a restriction which, by its terms, will never lapse)
of a Share on the date of grant of such Option. An Option shall be considered
granted on the date the Board acts to grant the Option or such later date as
the Board shall specify.
8. OPTION PERIOD. The period during which the Option may be
exercised (the "Option Period") shall be determined by the Board; PROVIDED,
HOWEVER, any ISO granted under the Plan shall have an Option Period which
does not exceed 10 years from the date the ISO is granted.
9. NON-TRANSFERABILITY OF OPTIONS. An Option shall not be
transferable by the Optionee otherwise than by will or the laws of descent
and distribution and may be exercised, during the lifetime of the Optionee,
only by him or by his guardian or legal representative.
10. EXERCISE OF OPTIONS.
(a) Options granted hereunder will be exercisable upon the terms
and conditions and in accordance with the vesting percentages determined by the
Board in its sole discretion. Notwithstanding the foregoing or the terms and
conditions of any Stock Option Agreement to the contrary, (i) in the event of
the Optionee's termination of employment as specified in subparagraph 11(a), the
Options shall be exercisable to the extent and for the period specified in
subparagraph 11(a); (ii) in the event of the Optionee's termination of
employment as a result of disability or death as specified in subparagraph
11(b), the Options shall be exercisable to the extent and for the period
specified in subparagraph 11(b); (iii) in the event of a merger, reorganization
or sale of all or substantially all of the assets of the Company as specified in
subparagraph 12(c), the Options shall be exercisable to the extent and for the
period specified in subparagraph 12(c); and (iv) in the event of a change in
control, as defined herein, all Options held by Optionee shall become
exercisable for the period specified in subparagraph 12(d).
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(b) An Option shall be exercisable only upon delivery of a
written notice to the Board, any member of the Board, the Company's Treasurer,
or any other officer of the Company designated by the Board to accept such
notices on its behalf, specifying the number of Shares for which it is
exercised.
(c) Within five business days following the date of exercise of
an Option, the Optionee or other person exercising the Option shall make full
payment of the Option Price (i) in cash; (ii) with the consent of the Board, by
tendering previously acquired Shares (valued at their fair market value as of
the date of tender); (iii) with the consent of the Board, and to the extent
permitted by applicable law, with a full recourse promissory note of the
Optionee for the portion of the Option Price in excess of the par value of
Shares subject to the Option, under terms and conditions determined by the Board
and in cash for the par value of the Shares; or (iv) with the consent of the
Board, any combination of (i), (ii), or (iii).
(d) The Optionee or other person exercising such Option shall
pay to the Company an amount equal to the withholding amount required to be made
less any amount withheld by the Company under paragraph 16.
If previously acquired Shares are to be used to pay the exercise price of
an ISO, the Company prior to such payment must be furnished with evidence
satisfactory to it that the acquisition of such Shares and their transfer in
payment of the exercise price satisfy the requirements of Section 422 of the
Code and other applicable laws.
11. TERMINATION OF EMPLOYMENT.
(a) Upon termination of an Optionee's employment with all of the
members of the Company Group, other than termination of employment by reason of
disability or death or for cause, the Optionee shall have 30 days after the date
of termination of employment (but not later than the expiration date of the
Stock Option Agreement) to exercise all Options held by him or her to the extent
the same were exercisable on the date of termination; PROVIDED, HOWEVER, if such
termination is due to the Optionee's retirement with the consent of the Company,
such Option shall then be exercisable to the extent of 100% of the Shares
subject thereto. The Board shall determine in each case whether a termination of
employment shall be considered a retirement with the consent of the Company and,
subject to applicable law, whether a leave of absence shall be considered a
termination of employment. The Board may cancel an Option during the 30-day
period after termination of employment referred to in this paragraph if the
Optionee engages in employment or activities contrary, in the sole opinion of
the Board, to the best interests of the Company or any parent or subsidiary of
the Company.
(b) Upon termination of an Optionee's employment by reason of
disability, as defined in subparagraph 25(a) of this Plan, or death, the
Optionee or the Optionee's personal representative, or the person or persons to
whom his or her rights under the Options pass by will or the laws of descent or
distribution, shall have one year after the date of termination of employment by
reason of disability or death (but not later than the expiration date of the
Stock Option Agreement) to exercise all Options held by Optionee to the extent
the same were exercisable on the date of the Optionee's termination of
employment; PROVIDED, HOWEVER, the Board may, but shall not be required to,
permit, in its discretion, the exercise of all or any portion of any Option
granted to such Optionee not otherwise exercisable.
(c) Upon termination of an Optionee's employment for cause, as
defined herein, all Options held by such Optionee shall terminate effective on
the date of termination of employment.
12. STOCK SPLITS; MERGERS; REORGANIZATIONS; SALE OF ASSETS.
(a) In the event of a stock split, stock dividend, combination
or exchange of shares, exchange for other securities, reclassification,
reorganization, redesignation or other change in the Company's capitalization,
the aggregate number of Shares for which Options may be granted under this Plan,
the number of Shares subject to outstanding Options and the Option Price of the
Shares subject to outstanding Options shall be proportionately adjusted or
substituted to reflect the same. The Board shall make such other adjustments to
the Options, the provisions of the Plan and the Stock Option Agreements as may
be appropriate and equitable, which adjustments may provide for the elimination
of fractional Shares.
(b) In the event of a change of the Common Stock resulting from
a merger or similar reorganization as to which the Company is the surviving
corporation, the number and kind of Shares which
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thereafter may be purchased pursuant to an Option under the Plan and the number
and kind of Shares then subject to Options granted hereunder and the price per
Share thereof shall be appropriately adjusted in such manner as the Board may
deem equitable to prevent dilution or enlargement of the rights available or
granted hereunder.
(c) Except as otherwise determined by the Board, in the event of
a merger or a similar reorganization which the Company does not survive (other
than a merger or similar reorganization involving only a change in the state of
incorporation or an internal reorganization not involving a change in control as
defined herein), or a sale of all or substantially all of the assets of the
Company, shall cause every Option hereunder to terminate, to the extent not then
exercised, unless any surviving entity agrees to assume the obligations
hereunder; provided, however, that, in the case of such a merger or similar
reorganization, or such a sale of all or substantially all of the assets of the
Company, if there is no such assumption, the Board may provide that some or all
of the unexercised portion of any one or more of the outstanding Options shall
be immediately exercisable and vested as of such date prior to such merger,
similar reorganization or sale of assets as the Board determines.
(d) If a change in control, as defined herein, occurs, all
outstanding options granted under this Plan shall then be immediately
exercisable to the extent of 100% of the Shares subject thereto notwithstanding
any contrary waiting or vesting periods specified in this Plan or in any
applicable Stock Option Agreement.
13. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder with respect to any Shares covered by an Option until the date of
issuance of a stock certificate to the Optionee for such Shares.
14. NO CONTRACT OF EMPLOYMENT. Nothing in the Plan or in any
Option or Stock Option Agreement shall confer on any Optionee any right to
continue in the employ or service of the Company Group or interfere with the
right of the Company Group to terminate such Optionee's employment or other
services at any time. The establishment of the Plan shall in no way, now or
hereafter, reduce, enlarge or modify the employment relationship between the
Company Group and the Optionee. Options granted under the Plan shall not be
affected by any change of duties or position of the Optionee with the Company
Group.
15. AGREEMENTS AND REPRESENTATIONS OF OPTIONEES. As a condition
to the exercise of an Option, the Board may, in its sole determination,
require the Optionee to represent in writing that the Shares being purchased
are being purchased only for investment and without any present intent at the
time of the acquisition of such Shares to sell or otherwise dispose of the
same.
16. WITHHOLDING TAXES. The Company's obligation to deliver Shares
upon exercise of an Option shall be subject to the Optionee's satisfaction of
all applicable federal, state or local tax withholding obligations. The
Company shall have the right to withhold from any salary, wages, or other
compensation for services payable by the Company to or with respect to an
Optionee, amounts sufficient to satisfy any federal, state or local
withholding tax liability attributable to such Optionee's (or any
beneficiary's or personal representative's) receipt or disposition of Shares
purchased under any Option or to take any such other action as it deems
necessary to enable it to satisfy any such tax withholding obligations. The
Board, in its sole discretion, may permit Optionees to elect to have Shares
that would be acquired upon exercise of Options (valued at their fair market
value as of the date of exercise) withheld by the Company in satisfaction of
such Optionees' withholding tax liabilities.
17. EXCHANGES. The Board may permit the voluntary surrender of
all or a portion of any Option granted under the Plan to be conditioned upon
the granting to the Optionee of a new Option for the same or a different
number of Shares as the Option surrendered, or may require such voluntary
surrender as a condition precedent to a grant of a new Option to such
Optionee. Subject to the provisions of the Plan, such new Option shall be
exercisable at the same price, during such period and on such other terms and
conditions as are specified by the Board at the time the new Option is
granted. Upon surrender, the Options surrendered shall be cancelled and the
Shares previously subject to them shall be available for the grant of other
Options.
18. REPURCHASE OF SHARES BY THE COMPANY. Any Shares purchased or
acquired upon exercise of an Option may, in the sole discretion of the Board,
be subject to repurchase by or forfeiture to the Company if and to the extent
and at the repurchase price, if any, specifically set forth in the Stock
Option Agreement pursuant to which the Shares were purchased or acquired.
Certificates representing Shares subject to such repurchase or forfeiture may
be subject to such escrow and stock legending provisions as may be set forth
in the Stock Option Agreement pursuant to which the Shares were purchased or
acquired.
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19. CONFIDENTIALITY AGREEMENTS. Upon the Company's request, each
Optionee shall execute, prior to or contemporaneously with the grant of any
Option hereunder, the Company's then standard form of agreement relating to
nondisclosure of confidential information, noncompetition and/or assignment
of inventions and related matters.
20. COMPLIANCE WITH LAWS AND REGULATIONS. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Company to sell and
deliver the Shares under such Options, shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
government or regulatory agency as may be required. Options issued under the
Plan shall not be exercisable prior to (i) the date upon which the Company
shall have registered the Shares for which Options may be issued hereunder
under the l933 Act, and (ii) the completion of any registration or
qualification of such Shares under state law, or any ruling or regulation of
any governmental body which the Company shall, in its sole discretion,
determine to be necessary or advisable in connection therewith, or
alternatively, unless the Company shall have received an opinion from counsel
to the Company stating that the exercise of such Options may be effected
without registering the Shares subject to such Options under the l933 Act, or
under state or other law.
21. ASSUMPTION. The Plan may be assumed by the successors and
assigns of the Company.
22. EXPENSES. All expenses and costs in connection with
administration of the Plan shall be borne by the Company.
23. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The
Board may terminate, amend or modify the Plan at any time without further
action on the part of the shareholders of the Company; PROVIDED, HOWEVER,
that (a) in no event shall any amendment be made to the Plan which would
cause the ISOs granted hereunder to fail to qualify as incentive stock
options under the Code; and (b) any amendment to the Plan which requires the
approval of the shareholders of the Company under the Code or the regulations
promulgated thereunder shall be subject to approval by the shareholders of
the Company in accordance with the Code or such regulations.
With the consent of the Optionee affected, the Board may amend
outstanding Options or related agreements in a manner not inconsistent with the
Plan. The Board shall have the right to amend or modify the terms and provisions
of the Plan and of any outstanding ISO's granted under the Plan to the extent
necessary to qualify any or all such Options for such favorable federal income
tax treatment (including deferral of taxation upon exercise) as may be afforded
incentive stock options under Section 422 of the Code.
24. LIMITATION OF LIABILITY. The liability of the Company under
this Plan or in connection with any exercise of an Option is limited to the
obligations expressly set forth in the Plan and in any Stock Option
Agreements, and no term or provision of this Plan or of any Stock Option
Agreements shall be construed to impose any further or additional duties,
obligations or costs on the Company not expressly set forth in the Plan or
the Stock Option Agreements.
25. DEFINITIONS.
(a) DISABILITY. "Disability," as used herein, shall mean a
physical or mental condition resulting from bodily injury, disease, or mental
disorder which renders the Optionee incapable of continuing the Optionee's usual
and customary employment or service with the Company Group.
(b) FAIR MARKET VALUE. If the Shares are publicly traded, the
term "fair market value" as used in this Plan shall mean (a) the closing price
quoted in the NASDAQ National Market System, if the shares are so quoted, (b)
the last quote reported by NASDAQ for small-cap issues, if the shares are so
quoted, (c) the mean between the bid and asked prices as reported by NASDAQ, if
the Shares are so quoted, or (d) if the Shares are listed on a securities
exchange, the closing price at which the Shares are quoted on such exchange, in
each case at the close of the date immediately before the Option is granted or,
if there be no quotation or sale on that date, the next previous date on which
the Shares were quoted or traded. In all other cases, the fair market value
shall be determined by and in accordance with procedures established in good
faith by the Board and with respect to ISOs, conforming to regulations issued by
the Internal Revenue Service regarding incentive stock options.
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(c) KEY ASSOCIATES. The term "key associates" shall include
those executive, administrative, operational and managerial employees who are
determined by the Board to be eligible for Options under the Plan.
(d) PARENT AND SUBSIDIARY. The terms "subsidiary" and "parent"
as used in the Plan shall have the respective meanings set forth in sections
424(f) and (e) of the Code.
(e) TERMINATION FOR CAUSE. The term "termination of employment
for cause" shall mean termination of employment for (a) the commission of an act
of dishonesty, including but not limited to misappropriation of funds or
property of the Company; (b) the engagement in activities or conduct injurious
to the reputation of the Company; (c) the conviction or entry of a guilty or no
contest plea to a misdemeanor involving an act of moral turpitude or a felony;
(d) the violation of any of the terms and conditions of any written agreement
the Optionee may have from time to time with the Company Group (following 30
days' written notice from the Company specifying the violation and the
employee's failure to cure such violation within such 30-day period); or (e) any
refusal to comply with the written directives, policies or regulations
established from time to time by the Board or the person to whom the Optionee
reports.
(f) CHANGE IN CONTROL. A "change in control" shall be deemed to
have taken place if, as a result of a tender offer, merger, consolidation, sale
of assets or contested election, or any combination of the foregoing
transactions (a "Transaction"), the persons who were directors of the Company
immediately before the Transaction shall cease to constitute a majority of the
Board of Directors of the Company or of any successor to the Company; provided,
however, that any Transaction shall not be deemed to be a change in control if
the Transaction causing such change shall have been approved by the affirmative
vote of at least a majority of the members of the Board of Directors of the
Company in office immediately prior to the change in control.
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