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CAMBRIDGE TECHNOLOGY PARTNERS (MASSACHUSETTS), INC.
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
(as amended through June 20, 2000)
1. PURPOSE
The name of this plan is the Cambridge Technology Partners (Massachusetts),
Inc. 1991 Stock Option Plan (the "Plan"). The purpose of the Plan is to
promote the long-term success of Cambridge Technology Partners (Massachusetts),
Inc., a Delaware corporation (the "Company"), by providing financial
incentives to the officers, employees, directors and consultants of the Company
who are in positions to make significant contributions toward such success. The
Plan is designed to attract individuals of outstanding ability to become or to
continue as officers, employees, directors or consultants of the Company, to
enable such individuals to acquire or increase proprietary interests in the
Company through the ownership of shares of Common Stock of the Company, and to
render superior performance during their associations with the Company. The
Company intends that this purpose will be effected by the granting pursuant to
the Plan of options for shares of the Company's Common Stock (hereinafter
referred to as "Options") that either do meet the definition of "incentive
stock options" ("Incentive Options") in Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), or do not meet such definition
("Nonqualified Options").
References herein to "the Company" shall include any successor
corporation to the Company and also any subsidiary of the Company (such that, if
the Company has one or more subsidiaries, individuals who are officers or key
employees thereof are eligible to be granted Options under the Plan).
2. OPTIONS TO BE GRANTED AND ADMINISTRATION
(a) Options granted under the Plan may be either Incentive Options or
Nonqualified Options. An Option shall not be considered to be an Incentive
Option unless designated as such at the time of grant or in the option agreement
relating to such option, and any option that is not so designated (or even if so
designated fails to meet the definition of "incentive stock option" under
Section 422(b) of the Code) shall be a Nonqualified Option. Unless otherwise
specified in a particular grant, Options granted under the Plan are intended to
qualify as performance-based compensation to the extent required under Section
162(m) of the Code and the regulations thereunder.
(b) The Plan shall be administered by the Board of Directors of the
Company (the "Board") or, in the discretion of the Board, by a committee of not
less than two members of the Board selected by and from the members of the Board
in accordance with the provisions of the Company's By-Laws relating to the
appointment of Committees (the administrator of the Plan being referred to
herein as the "Option Committee");
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provided, however, that the Plan shall be administered so that Options granted
under the Plan will qualify for the benefits provided by Rule 16b-3 (or any
successor rule to the same effect) under the Securities Exchange Act of 1934 and
by Section 162(m) of the Code (or any successor provision to the same effect)
and the applicable regulations thereunder. Subject to the provisions of this
Plan, if a committee has been directed by the Board to administer the Plan, such
committee shall exercise all powers under the Plan, unless and until other
action is taken by the Board. Action by the Option Committee shall require the
affirmative vote of a majority of all its members.
(c) Subject to the terms and conditions of the Plan, the Option Committee
shall have the power:
(i) To grant Options to eligible persons under the Plan, and to
prescribe the terms and provisions (which need not be identical) of each
Option granted under the Plan to such persons;
(ii) To construe and interpret the Plan and Options granted
thereunder and to establish, amend, and revoke rules and regulations for
administration of the Plan. In this connection, the Option Committee may
correct any defect or supply any omission, or reconcile any inconsistency
in the Plan, or in any option agreement, in the manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective. All
decisions and determinations by the Option Committee shall be final and
binding upon the Company and all optionees; and
(iii) Generally, to exercise such powers and to perform such acts as
are deemed necessary or expedient to promote the best interests of the
Company with respect to the Plan.
(d) No issued and outstanding Option shall be repriced to a lower purchase
price per share at any time during the term of such Option, without the prior
affirmative vote of a majority of the shares of stock of the Company present at
a stockholders' meeting in person or by proxy and entitled to vote thereon. Any
amendment or repeal of this Section 2, clause (d), shall require the affirmative
vote of a majority of shares of stock of the Company present at a stockholders'
meeting in person or by proxy and entitled to vote thereon.
3. STOCK SUBJECT TO THE PLAN
(a) The stock subject to the Options granted under the Plan shall be
shares of the Company's authorized but unissued common stock, par value $.01 per
share (the "Common Stock"), or previously issued shares of Common Stock that
have been reacquired and reserved by the Board for resale upon exercise of
Options granted under the Plan. The total number of shares of Common Stock that
may be issued pursuant to Options granted under the Plan shall not exceed an
aggregate of 23,000,000 shares of
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Common Stock. Such number shall be subject to adjustment as provided in Section
9 hereof.
(b) Whenever any outstanding Option under the Plan expires, is canceled or
is otherwise terminated (other than by exercise), the shares of Common Stock
allocable to the unexercised portion of such Option may again be the subject of
Options under the Plan.
(c) No employee of the Company may be granted Options to acquire, in the
aggregate, more than 3,000,000 shares of Common Stock under the Plan. If any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject to such Option shall be
included in the determination of the aggregate number of shares of Common Stock
deemed to have been granted to such employee under the Plan.
4. STOCK OPTION GRANTS
(a) Incentive Options may be granted only to persons who are employees of
the Company, including members of the Board who are also employees of the
Company. Nonqualified Options may be granted to officers and employees of the
Company, to directors of the Company, whether or not they are also employees of
the Company, to consultants to the Company who are not employees, and to such
other persons as the Option Committee shall select from time to time. The
determination of the persons eligible to receive grants, the number of shares of
Common Stock for which Options are granted and the determination of whether an
Option shall be an Incentive Option or a Nonqualified Option shall be made by
the Option Committee.
(b) No person shall be eligible to receive any Incentive Option under the
Plan if at the date of grant such person beneficially owns (or would own upon
the exercise of any Options held, or which upon such grant would be held, by
such person) in excess of ten percent (10%) of the outstanding shares of Common
Stock, unless (i) the exercise price is at least 110% of the fair market value
(determined as provided in Section 5(c) hereof at the time the Incentive Option
is granted) of the shares of Common Stock subject to the Option and (ii) such
Option by its terms is not exercisable after the expiration of five (5) years
from the date such Option is granted.
(c) The aggregate fair market value (determined as provided in Section
5(c) hereof at the time the Incentive Option is granted) of shares of Common
Stock with respect to which any Incentive Option is exercisable for the first
time by the optionee during any calendar year (plus the value of any other such
shares of Common Stock first purchasable in such year under any other Option
under the Plan or any other plan of the Company or any parent or subsidiary
thereof intended to be an "incentive stock option" under Section 422 of the
Code) shall not exceed $100,000, and no person shall be eligible to receive an
Incentive Option for shares of Common Stock in excess of such limitation.
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5. TERMS OF THE OPTION AGREEMENTS
Each option agreement for Options granted under the Plan (each, an "Option
Agreement") shall contain such provisions as the Option Committee shall from
time to time deem appropriate. Option agreements need not be identical, but each
option agreement by appropriate language, or by reference to this Section 5 of
the Plan, shall include the substance of all of the following provisions:
(a) Expiration. Each Option shall expire on the date specified in the
option agreement, which date shall not be later than the tenth anniversary of
the date on which the Option was granted. Each Incentive Option shall in any
event expire not later than three months after the optionee is for any reason no
longer employed by the Company, except (i) if such termination of employment
results from optionee's disability (within the meaning of Section 22(e)(3) of
the Code), an Option may be exercised within twelve months thereafter, whether
or not exercisable at the time of such termination, and (ii) if such termination
of employment results from the optionee's death, an Option may be exercised by
his executors or administrators within twenty-four months thereafter, whether or
not exercisable at the time of such termination.
(b) Exercise. Unless the Option Committee shall otherwise determine at
the time an Option is granted or except as set forth in the form of Option
Agreement, each Option shall become vested and exercisable with respect to 25%
of the shares of Common Stock subject to such Option as of the first anniversary
of the date of grant and, thereafter, with respect to an additional 2.083% of
the shares subject to such Option as of the same day (or the immediately
preceding day if a month does not have such day) of each calendar month
thereafter, so that such Option shall be exercisable in full as of the fourth
anniversary of the date of grant. Unless otherwise provided in the vote of the
Option Committee, for this purpose the date of the grant of an Option shall be
the date on which the Option Committee approves the grant. To the extent not
exercised, vested installments shall accumulate and be exercisable in whole or
in part at any time after becoming exercisable, but not later than the date the
Option expires or terminates.
(c) Purchase Price. Unless the Option Committee shall otherwise determine
at the time the Option is granted, the purchase price per share of Common Stock
under each Option shall be not less than the fair market value of a share of
Common Stock on the date the Option is granted. For the purposes of the Plan,
the fair market value as of the date of grant (i) shall be determined as of the
last business day for which such prices or quotes are available prior to the
date of grant and shall mean (A) the last reported sale price (on that date) of
the Common Stock on the principal national securities exchange on which the
Common Stock is traded, if the Common
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Stock is then traded on a national securities exchange; or (B) the last reported
sale price (on that date) of the Common Stock on the Nasdaq National Market (or
successor trading system), if the Common Stock is not then traded on a national
securities exchange; or (ii) shall be determined by the Option Committee if
neither (i)(A) or (i)(B) above are applicable.
6. LIMITATION ON RIGHTS OF OPTIONEES
(a) Transferability of Options. Except as set forth below, (i) no Option
shall be transferable by any optionee other than by will or by the laws of
descent and distribution and (ii) Options may be exercised during the optionee's
lifetime only by the optionee (or, if the optionee is disabled and so long as
the Option remains exercisable, by the optionee's duly appointed guardian or
other legal representative). However, the Committee may, in its discretion,
permit a Nonqualified Option holder to transfer the Nonqualified Option to
family members or other persons for estate planning purposes. In connection with
permitting transfers, the Committee may require that (i) no consideration be
given or payment made for any such transfer, (ii) the stock option agreement
pursuant to which such Option is granted must be approved by the Committee, and
must expressly provide for transferability at the date of grant in a manner
consistent with the Plan, and (iii) subsequent transfers of the transferred
Option shall be prohibited except those in accordance with the first sentence of
this Section. Following any such transfer, any such Options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of Sections 2(c)(ii), 6(b), 6(c), 7, 8, 9
and 12 hereof the term "optionee" shall be deemed to refer to the transferee.
The events and consequences of termination of employment set forth in an
optionee's option agreement shall continue to be applied and triggered with
reference to the original optionee, following which the Options shall be
exercisable by the transferee only to the extent and for the periods specified
in such option agreement.
(b) No Shareholder Rights. No optionee shall be deemed for any purpose to
be the owner of any shares of Common Stock subject to any Option unless and
until (i) the Option shall have been exercised pursuant to the terms thereof,
(ii) the Company shall have issued and delivered the shares to the optionee, and
(iii) the optionee's name shall have been entered as a shareholder of record on
the books of the Company. Thereupon, the optionee shall have full voting,
dividend and other ownership rights with respect to such shares of Common Stock.
(c) No Employment Rights. Neither the Plan nor the grant of any Option
thereunder shall be deemed to confer upon any optionee any rights of employment
with the Company, including without limitation any right to continue in the
employ of the Company, or affect the right of the Company to terminate the
employment of an optionee at any time, with or without cause.
(d) Authority of Company. The existence of the Options shall not affect:
the right or power of the Company or its shareholders to make adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business; any issue of bonds, debentures, preferred or prior
preference stock affecting the Common Stock or the rights thereof; the
dissolution or liquidation of the Company, or sale or
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transfer of any part of its assets or business; or any other act, whether of a
similar character or otherwise.
7. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE
(a) Notice of Exercise. Any Option granted under the Plan may be exercised
by the optionee by delivering to the Chief Financial Officer of the Company (or
such other representative of the Company as the Option Committee may designate)
on any business day a written notice specifying the number (which shall be
consistent with the provisions of Section 5(b) hereof) of shares of Common Stock
the optionee then desires to purchase (the "Notice").
(b) Payment. Payment for the shares of Common Stock purchased pursuant to
the exercise of an Option shall be made either (i) in cash or by check
representing good funds in an amount equal to the option price for the number of
shares of Common Stock specified in the Notice (the "Total Option Price"), or
(ii) if authorized by the applicable option agreement, by the valid and properly
completed transfer to the Company of a number of shares of Common Stock that
have been held by the optionee for at least six months having a fair market
value, determined as provided in Section 5(c) hereof, equal to or less than the
Total Option Price, plus cash or check in an amount equal to the excess, if any,
of the Total Option Price over the fair market value of such shares of Common
Stock.
8. NOTICE OF DISPOSITION; WITHHOLDING; ESCROW
An optionee shall immediately notify the Company in writing of any sale,
transfer, assignment or other disposition (or action constituting a
disqualifying disposition within the meaning of Section 421 of the Code) of any
shares of Common Stock acquired through exercise of an Incentive Option, within
two (2) years after the grant of such Incentive Option or within one (1) year
after the acquisition of such shares of Common Stock, setting forth the date and
manner of disposition, the number of shares of Common Stock disposed of and the
price at which such shares of Common Stock were disposed of. The Company shall
be entitled to withhold from any compensation or other payments then or
thereafter due to the optionee such amounts as may be necessary to satisfy any
withholding requirements of federal or state law or regulation and, further, to
collect from the optionee any additional amounts which may be required for such
purpose as a condition of delivering the shares of Common Stock acquired
pursuant to an Option.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
(a) Events for Adjusting Number and Price. In the event of any stock
dividend, stock split, combination or other similar recapitalization affecting
the outstanding shares of Common Stock, an appropriate and proportionate
adjustment shall be made in the number and kind of shares of Common Stock
subject to the Plan and in the number, kind, and per share exercise price of
shares of Common Stock subject to unexercised Options or
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portions thereof granted prior to any such change. In the event of any such
adjustment in an outstanding Option, the optionee thereafter shall have the
right to purchase the number of shares of Common Stock under such Option at the
per share price, as so adjusted, which the optionee could purchase at the total
purchase price applicable to the Option immediately prior to such adjustment.
(b) Option Committee and Board Action. Adjustments under this Section 9
shall be determined by the Option Committee and such determinations shall be
conclusive. The Option Committee shall have the discretion, and power in any
such event to determine and to make effective provision for acceleration of the
time or times at which any Option or portion thereof shall become exercisable.
No fractional interests shall be issued under the Plan on account of any
adjustment specified above.
10. AMENDMENT OR TERMINATION OF PLAN.
The Board may modify, revise or terminate this Plan at any time and from
time to time, except that, other than as provided in Section 9 hereof, no
amendment shall be effective unless approved by the stockholders of the Company
in accordance with applicable law and regulations at an annual or special
meeting held within twelve (12) months before or after the date of adoption of
such amendment, where such amendment will:
(a) increase the number of shares of Common Stock as to which Options may
be granted under the Plan;
(b) change in substance Section 4 hereof relating to eligibility to
participate in the Plan;
(c) change the minimum purchase price of Incentive Options to be granted
under the Plan;
(d) increase the maximum term of Options provided herein; or
(e) otherwise materially increase the benefits accruing to participants
under the Plan.
Except as provided in Section 9 hereof, rights and obligations under any
Option granted before any amendment of the Plan shall not be altered or impaired
by such amendment, except with the consent of the optionee.
11. EFFECTIVE DATE; NONEXCLUSIVITY
(a) Effective Date. This Plan will be deemed to have been adopted and to
be effective when approved by the stockholders of the Company in compliance with
Temporary Regulation (S)14a-422A-2 under the Code.
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(b) Nonexclusivity. The adoption of the Plan shall not be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of options otherwise than under the Plan, and such arrangements may be
either applicable generally or only in specific cases.
12. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW
(a) Securities Laws. If in the opinion of legal counsel for the Company
the issuance or sale of any shares of Common Stock pursuant to the exercise of
an Option would not be lawful for any reason, including without limitation the
inability of the Company to obtain from any governmental authority or regulatory
body having jurisdiction the authority deemed by such counsel to be necessary to
such issuance or sale, the Company shall not be obligated to issue or sell any
shares of Common Stock pursuant to the exercise of an Option to an Optionee or
any other authorized person unless a registration statement that complies with
the provisions of the Securities Act of 1933, as amended, (the "Act") in
respect of such shares of Common Stock is in effect at the time thereof, or
other appropriate action has been taken under and pursuant to the terms and
provisions of the Act, or the Company receives evidence satisfactory to such
counsel that the issuance and sale of such shares of Common Stock, in the
absence of an effective registration statement or other appropriate action,
would not constitute a violation of the Act or any applicable state securities
law. The Company is in no event obligated to register any such shares of Common
Stock, to comply with any exemption from registration requirements or to take
any other action which may be required in order to permit, or to remedy or
remove any prohibition or limitation on, the issuance or sale of such shares of
Common Stock of any optionee or other authorized person.
(b) Withholding Taxes. As a condition of exercise of an Option, the
Company may, in its sole discretion, withhold or require the optionee to pay or
reimburse the Company for any taxes which the Company determines are required to
be withheld in connection with the grant or any exercise of an Option.
(c) Governing Law. The Plan shall be interpreted such that all options
hereunder intended to be Incentive Options shall meet the requirements therefor
set forth in Section 422 of the Code (and any applicable regulations, rulings or
judicial decisions interpreting said Section). Otherwise, the Plan shall be
governed by and interpreted under the laws of the State of Delaware.
13. TERMINATION OF GRANTING OF OPTIONS UNDER THE PLAN
No Option may be granted under the Plan after the tenth anniversary of the
effective date of the Plan.
