1997 STOCK OPTION PLAN
OF
CHATHAM TECHNOLOGIES, INC.
1.
PURPOSES OF THE PLAN . This stock option plan (the
“Plan”) is intended to provide an incentive to key
employees (including directors and officers who are key employees)
and to consultants and directors who are not employees of CHATHAM
TECHNOLOGIES, INC., a Delaware corporation (the
“Company”), or any of its Subsidiaries (as defined in
Paragraph 19), and to offer an additional inducement in
obtaining the services of such persons. The Plan provides for the
grant of “incentive stock options” (“ISOs”)
within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the “Code”) and nonqualified stock
options which do not qualify as ISOs (“NQSOs”). The
Company makes no representation or warranty, express or implied, as
to the qualification of any option as an “incentive stock
option” under the Code.
2. STOCK
SUBJECT TO THE PLAN . Subject to the provisions of
Paragraph 12, the aggregate number of shares of Class A
Common Stock, $.01 par value per share, of the Company
(“Common Stock”) for which options may be granted under
the Plan shall not exceed 150,000. Such shares of Common Stock
shall consist of authorized but unissued shares of Common Stock.
Subject to the provisions of Paragraph 13, any shares of
Common Stock subject to an option which for any reason expires, is
canceled or is terminated unexercised or which ceases for any
reason to be exercisable, shall again become available for the
granting of options under the Plan. The Company shall at all times
during the term of the Plan reserve and keep available such number
of shares of Common Stock as will be sufficient to satisfy the
requirements of the Plan.
3.
ADMINISTRATION OF THE PLAN . The Plan shall be administered
by the Board of Directors of the Company (the “Board of
Directors”) or a committee of the Board of Directors
(collectively, the “Committee”). Except as otherwise
provided by the Board of Directors, the By-laws of the Company or
applicable law, a majority of the members of the Committee shall
constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, and any acts
approved in writing by all members without a meeting, shall be the
acts of the Committee.
Subject to the
express provisions of the Plan, the Committee shall have the
authority, in its sole discretion, to determine: the key employees,
consultants and Non-Employee Directors (as defined in
Paragraph 19) who shall be granted options; the type of option
to be granted to a key employee; the times when an option shall be
granted; the number of shares of Common Stock to be subject to each
option; the term of each option; the date each option shall become
exercisable; whether an option shall be exercisable in whole, in
part or in installments and, if in installments, the number of
shares of Common Stock to be subject to each installment, whether
the installments shall be cumulative, the date each installment
shall become exercisable and the term of each installment; whether
to accelerate the date of exercise of any option or installment;
whether shares of Common Stock may be issued upon the exercise of
an option as partly paid and, if so, the dates when future
installments of the exercise price shall become due and the amounts
of such installments; the exercise price of each option; the form
of payment of the exercise price; whether to restrict the sale or
other disposition of the shares of Common Stock acquired upon the
exercise of an option and, if so, whether and under what conditions
to waive any such restriction; whether and under what conditions to
subject all or a portion of the grant or exercise of an option or
the shares acquired pursuant to the exercise of an option to the
fulfillment of certain restrictions or contingencies as specified
in the contract referred to in Paragraph 11 hereof (the
“Contract”), including without limitation, restrictions
or contingencies relating to entering into a covenant not to
compete with the Company, any of its Subsidiaries or a Parent (as
defined in Paragraph 19), to financial objectives for the
Company, any of its Subsidiaries or a Parent, a division of any of
the foregoing, a product line or other category, and/or to the
period of continued employment of the optionee with the Company,
any of its Subsidiaries or a Parent, and to determine whether such
restrictions or contingencies have been met; whether an optionee is
Disabled (as defined in Paragraph 19); the amount, if any,
necessary to satisfy the obligation of the Company, a Subsidiary or
Parent to withhold taxes or other amounts; the fair market value of
a share of Common Stock; to construe the respective Contracts and
the Plan; with the consent of the optionee, to cancel or modify an
option, provided, that the modified provision is permitted to be
included in an option granted
under the Plan
on the date of the modification, and further, provided, that in the
case of a modification (within the meaning of Section 424(h) of the
Code) of an ISO, such option as modified would be permitted to be
granted on the date of such modification under the terms of the
Plan; to prescribe, amend and rescind rules and regulations
relating to the Plan; and to make all other determinations
necessary or advisable for administering the Plan. Any controversy
or claim arising out of or relating to the Plan, any option granted
under the Plan or any Contract shall be determined unilaterally by
the Committee in its sole discretion. The determinations of the
Committee on the matters referred to in this Paragraph 3 shall
be conclusive and binding on the parties. No member or former
member of the Committee shall be liable for any action, failure to
act or determination made in good faith with respect to the Plan,
any Contract or any option hereunder.
4.
ELIGIBILITY . The Committee may from time to time, in its
sole discretion, consistent with the purposes of the Plan, grant
options to (a) key employees (including officers and directors
who are key employees) of the Company or any of its Subsidiaries,
(b) consultants to the Company or any of its Subsidiaries and
(c) Non-Employee Directors. In no event, however, may any
consultant or Non-Employee Director participate in the Plan if such
participation is (a) prohibited, or (b) restricted (either
absolutely or subject to various securities requirements, whether
legal or administrative, being complied with), in the jurisdiction
in which such consultant or Non-Employee Director is resident under
the relevant securities laws of that jurisdiction. Provided Always
That in the case of (b) above, the relevant consultant’s
or Non-Employee Director’s participation in the Plan may be
effected at the absolute discretion of the Committee if compliance
with the relevant securities requirements of the jurisdiction in
which such consultant or Non-Employee Director is resident is not
impractical (having regard to the nature of those requirements) and
would not involve undue expense. Such options granted shall cover
such number of shares of Common Stock as the Committee may
determine, in its sole discretion, as set forth in the applicable
Contract; provided, however, that the aggregate market value
(determined at the time the option is granted in accordance with
Paragraph 5) of the shares of Common Stock for which any
eligible employee may be granted ISOs under the Plan or any other
plan of the Company, or of a Parent or a Subsidiary of the Company,
which are exercisable for the first time by such optionee during
any calendar year shall not exceed $100,000. Such ISO limitation
shall be applied by taking ISOs into account in the order in which
they were granted. Any option granted in excess of such ISO
limitation amount shall be treated as a NQSO to the extent of such
excess.
5.
EXERCISE PRICE . The exercise price of the shares of Common
Stock under each option shall be determined by the Committee, in
its sole discretion, as set forth in the applicable Contract;
provided, however, that the exercise price of an ISO shall not be
less than the fair market value of the Common Stock subject to such
option on the date of grant; and further, provided, that if, at the
time an ISO is granted, the optionee owns (or is deemed to own
under Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the
Company, of any of its Subsidiaries or of a Parent, the exercise
price of such ISO shall not be less than 110% of the fair market
value of the Common Stock subject to such ISO on the date of grant.
In no event may the exercise price be less than the par value of a
share.
The fair market
value of a share of Common Stock on any day shall be (a) if
the principal market for the Common Stock is a national securities
exchange, the average of the highest and lowest sales prices per
share of Common Stock on such day as reported by such exchange or
on a composite tape reflecting transactions on such exchange,
(b) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is quoted on The
Nasdaq Stock Market (“Nasdaq”), and (i) if actual
sales price information is available with respect to the Common
Stock, the average of the highest and lowest sales prices per share
of Common Stock on such day on Nasdaq, or (ii) if such
information is not available, the average of the highest bid and
lowest asked prices per share of Common Stock on such day on
Nasdaq, or (c) if the principal market for the Common Stock is
not a national securities exchange and the Common Stock is not
quoted on Nasdaq, the average of the highest bid and lowest asked
prices per share of Common Stock on such day as reported on the OTC
Bulletin Board Service or by National Quotation Bureau,
Incorporated or a comparable service; provided, however, that if
clauses (a), (b) and (c) of this Paragraph are all
inapplicable, or if no trades have been made or no quotes are
available for such day, the fair market value of the Common Stock
shall be determined by the Board of Directors or the Committee by
any method consistent with applicable regulations adopted by the
Treasury Department relating to stock options.
6.
TERM . The term of each option granted pursuant to the Plan
shall be such term as is established by the Committee, in its sole
discretion, as set forth in the applicable Contract; provided,
however, that the term of
-2-
each ISO
granted pursuant to the Plan shall be for a period not exceeding
10 years from the date of grant thereof; and further,
provided, that if, at the time an ISO is granted, the optionee owns
(or is deemed to own under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company, of any of its Subsidiaries or of a
Parent, the term of the ISO shall be for a period not exceeding
five years from the date of grant. Options shall be subject to
earlier termination as hereinafter provided.
7.
EXERCISE . An option (or any part or installment thereof),
to the extent then exercisable, shall be exercised by giving
written notice to the Company at its principal office stating which
option is being exercised, specifying the number of shares of
Common Stock as to which such option is being exercised and
accompanied by payment in full of the aggregate exercise price
therefor (or the amount due on exercise if the applicable Contract
permits installment payments) in cash or by certified check equal
to the aggregate exercise price of all options being exercised, or
with any combination of cash, certified check or shares of Common
Stock having such value. The Company shall not be required to issue
any shares of Common Stock pursuant to any such option until all
required payments, including any required withholding, have been
made.
A person entitled
to receive Common Stock upon the exercise of an option shall not
have the rights of a stockholder with respect to such shares of
Common Stock until the date of allotment of such shares.
In no case may a
fraction of a share of Common Stock be purchased or issued under
the Plan.
8.
TERMINATION OF RELATIONSHIP . Except as may otherwise be
expressly provided in the applicable Contract, an optionee whose
relationship with the Company, its Parent and Subsidiaries as an
employee or a consultant has terminated for any reason (other than
as a result of the death or Disability of the optionee) may
exercise his options, to the extent exercisable on the date of such
termination, at any time within three months after the date of
termination, but no
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