EYP CRITICAL
FACILITIES, INC.
2001 Stock Option and Grant
Plan
1.
GENERAL PURPOSE OF THE PLAN;
DEFINITIONS
The name of the plan is
the EYP Mission Critical Facilities, Inc. 2001 Stock Option and
Grant Plan (the “Plan”). The purpose of the Plan is to
encourage and enable the officers, employees, directors,
consultants and other key persons of EYP Mission Critical
Facilities, Inc., a New York corporation (the
“Company”), and its Subsidiaries, upon whose judgment,
initiative and efforts the Company largely depends for the
successful conduct of its business, to acquire a proprietary
interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company’s welfare will
assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company’s
behalf and strengthening their desire to remain with the
Company.
The following terms
shall be defined as set forth below:
“Act”
shall mean the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
“Award” or “
Award ”, except where referring to a particular
category of grant under the Plan, shall mean Incentive Stock
Options, Non-Qualified Stock Options, Restricted Stock Awards,
Unrestricted Stock Awards, or any combination of the
foregoing.
“Board” shall mean the
Board of Directors of the Company or its successor
entity.
“Cause” shall mean a vote
of the Board resolving that the grantee should be dismissed as a
result of: (i) the commission of any act by the grantee
constituting financial dishonesty against the Company (which act
would be chargeable as a crime under applicable law); (ii) the
grantee’s engaging in any other act of dishonesty, fraud,
intentional misrepresentation, or illegality which, as
determined in good faith by the Board, would: (A) materially
adversely affect the business or the reputation of the Company
with its current or prospective customers, suppliers, lenders
and/or other third parties with whom it does or might do
business; or (B) expose the Company to a material risk of
material civil or criminal legal damages, liabilities or
penalties; (iii) the indictment or conviction of or a plea of
nolo contendere by the grantee for: (A) a felony or (B) any
misdemeanor involving deceit, dishonesty or fraud
(“indictment,” for these purposes, meaning an
indictment, probable cause hearing or any other procedure
pursuant to which an initial determination of probable or
reasonable cause with respect to such offense is made); (iv) the
repeated failure by the grantee to follow the directives of the
Board; (v) disqualification of the grantee from practicing his
profession in any jurisdiction by the licensing authority in
such jurisdiction; provided , that a disqualification
that would not have a material adverse effect on the business of
the Company shall not be deemed to constitute Cause hereunder if
the grantee either (A) cures such disqualification within thirty
(30) days of the discovery of such disqualification of the
grantee or, if first discovered by the Company, within thirty
(30) days after notification to the
grantee, or (B) the
Board waives such disqualification; (vi) any material
misconduct, violation of the Company’s policies, or
deliberate non-performance of duty by the grantee in connection
with the business affairs of the Company; or (vii) the breach by
the grantee of any provision of the Non-Competition and
Proprietary Rights Agreement or the Employee Non-Disclosure,
Non-Competition and Assignment Agreement (the
“Non-Competition Agreement”) entered into between
the grantee and the Company as of May 11, 2001, if
applicable.
“Code” shall mean the Internal
Revenue Code of 1986, as amended, and any successor Code, and
related rules, regulations and interpretations.
“Committee” has the meaning
specified in Section 2.
“Effective
Date” shall mean the date on which the Plan is
approved by stockholders as set forth at the end of this
Plan.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
“Fair Market
Value” of the Stock on any given date shall mean the
fair market value of the Stock determined in good faith by the
Committee; provided , however , that (i) if the
Stock trades on a national securities exchange, the Fair Market
Value on any given date is the closing sale price on such date;
(ii) if the Stock does not trade on any national securities
exchange but is admitted to trading on the National Association
of Securities Dealers, Inc. Automated Quotation System
(“NASDAQ”), the Fair Market Value on any given date
is the closing sale price as reported by NASDAQ on such date; or
if no such closing sale price information is available, the
average of the highest bid and lowest asked prices for the Stock
reported on such date. For any date that is not a trading day,
the Fair Market Value of the Stock for such date will be
determined by using the closing sale price or the average of the
highest bid and lowest asked prices, as appropriate, for the
immediately preceding trading day. The Committee can substitute
a particular time of day or other measure of closing sale price
if appropriate because of changes in exchange or market
procedures. Notwithstanding the foregoing, if the date for which
Fair Market Value is determined is the first day when trading
prices for the Stock are reported on NASDAQ or trading on a
national securities exchange, the Fair Market Value shall be the
“Price to the Public” (or equivalent) set forth on
the cover page for the final prospectus relating to the
Company’s Initial Public Offering.
“Good
Reason” shall (A) have the meaning set forth in the
grantee’s employment agreement with the Company, if any, or
(B) shall mean the occurrence of any of the following events: (i) a
material diminution in the job responsibilities, authority or staff
support of the grantee unless agreed upon by the grantee in advance
in writing; or (ii) a reduction in the grantee’s annual base
salary except for across-the-board salary reductions similarly
affecting all or substantially all management employees.
“Incentive
Stock Option” shall mean any Stock Option designated and
qualified as an “incentive stock option” as defined in
Section 422 of the Code.
“Initial Public
Offering” shall mean the consummation of the first fully
underwritten, firm commitment public offering pursuant to an
effective registration statement under the Act,
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other than on Forms
S-4 or S-8 or their then equivalents, covering the offer and
sale by the Company of its equity securities, as a result of or
following which the Stock shall be publicly held.
“Non-Qualified Stock
Option” shall mean any Stock Option that is not an
Incentive Stock Option.
“Option” or “Stock
Option” shall mean any option to purchase shares of
Stock granted pursuant to Section 5.
“Restricted
Stock Award” shall mean Awards granted pursuant to
Section 6.
“Stock” shall mean the
Common Stock, par value $.01 per share, of the Company, subject
to adjustments pursuant to Section 3.
“Subsidiary” shall mean any
corporation or other entity (other than the Company) in any
unbroken chain of corporations or other entities beginning with
the Company if each of the corporations or entities (other than
the last corporation or entity in the unbroken chain) owns stock
or other interests possessing 50 percent or more of the economic
interest or the total combined voting power of all classes of
stock or other interests in one of the other corporations or
entities in the chain.
“Unrestricted Stock Award”
shall mean any Award granted pursuant to Section 7.
2.
ADMINISTRATION OF PLAN;
COMMITTEE AUTHORITY TO SELECT
GRANTEES AND DETERMINE AWARDS
(a)
Administration of Plan
. The Plan shall be
administered by the Board, or at the discretion of the Board, by
a committee of the Board, comprised, except as contemplated by
Section 2(c), of not less than two Directors in accordance with
the terms of the Stockholders Agreement (as defined below) as in
effect on the date hereof. All references herein to the
Committee shall be deemed to refer to the group then responsible
for administration of the Plan at the relevant time (i.e.,
either the Board of Directors or a committee or committees of
the Board, as applicable).
(b)
Powers of Committee
. The Committee shall have
the power and authority to grant Awards consistent with the
terms of the Plan, including the power and authority:
(i)
to select the individuals to whom Awards may from time to time
be granted;
(ii) to
determine the time or times of grant, and the extent, if any, of
Incentive Stock Options, Non-Qualified Stock Options, Restricted
Stock Awards, Unrestricted Stock Awards, or any combination of
the foregoing, granted to anyone or more grantees;
(iii) to
determine the number of shares of Stock to be covered by any
Award;
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(iv) to determine
and modify from time to time the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of
any Award, which terms and conditions may differ among
individual Awards and grantees, and to approve the form of
written instruments evidencing the Awards;
(v) to accelerate at any
time the exercisability or vesting of all or any portion of any
Award;
(vi) to impose any
limitations on Awards granted under the Plan, including
limitations on transfers, repurchase provisions and the like and
to exercise repurchase rights or obligations;
(vii) subject to the
provisions of Section 5(a)(ii), to extend at any time the period
in which Stock Options may be exercised; and
(viii) at any time to adopt, alter and
repeal such rules, guidelines and practices for administration
of the Plan and for its own acts and proceedings as it shall
deem advisable; to interpret the terms and provisions of the
Plan and any Award (including related written instruments); to
make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in
connection with the Plan, provided such decisions shall be made
reasonably and in good faith; and to otherwise supervise the
administration of the Plan.
All decisions
and interpretations of the Committee made reasonably on matters
within its authority shall be conclusive and binding on all
persons, including the Company and Plan grantees. All expenses
associated with the administration of the Plan shall be borne by
the Company.
(c)
Delegation of Authority to
Grant Awards. The
Board, in its discretion, may delegate to the chairman,
president or chief executive officer of the Company all or part
of the Committee’s authority and duties with respect to
the granting of Awards at Fair Market Value to individuals who
are not subject to the reporting and other provisions of Section
16 of the Exchange Act or “covered employees” within
the meaning of Section 162(m) of the Code, and in the event of
such delegation, such chairman, president or chief executive
officer shall be deemed a one-person Committee of the Board. Any
such delegation by the Committee shall include a limitation as
to the amount of Awards that may be granted during the period of
the delegation and shall contain guidelines as to the
determination of the exercise price of any Option, the
conversion ratio or price of other Awards and the vesting
criteria. The Committee may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any
prior actions of the Committee’s delegate or delegates
that were consistent with the terms of the Plan.
(d)
Indemnification.
Neither the Board nor the
Committee, nor any member of either, shall be liable for any
act, omission, interpretation, construction or determination
made in good faith in connection with the Plan or any Award
granted under the Plan, and the members of the Board and the
Committee shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss,
damage or expense (including, without limitation, reasonable
attorneys’ fees) arising or resulting therefrom (including
amounts paid in settlement
4
thereof, provided
that such settlement is approved by independent legal counsel
selected by the Company) to the fullest extent permitted by law
and/or under any directors’ and officers’ liability
insurance coverage which may be in effect from time to
time.
3.
STOCK ISSUABLE UNDER THE PLAN;
MERGERS: SUBSTITUTION
(a)
Stock Issuable . The maximum number of shares of Stock
reserved and available for issuance under the Plan shall be
1,000,000 shares of Stock, subject to adjustment as provided in
Section 3(b). For purposes of this limitation, the shares of
Stock underlying any Award which is forfeited, canceled,
reacquired by the Company, satisfied without the issuance of
Stock or otherwise terminated (other than by exercise) shall be
added back to the shares of Stock available for issuance under
the Plan. Subject to such overall limitation, shares of
Stock may be issued up to such maximum number pursuant to any
type or types of Award; provided , however , that
from and after the date the Company becomes subject to the
deduction limit imposed by Section 162(m) of the Code, Stock
Options with respect to no more than 1,000,000 shares of Stock
may be granted to any one individual grantee during any one
calendar year period. The shares available for issuance under
the Plan may be authorized but unissued shares of Stock or
shares of Stock reacquired by the Company and held in its
treasury.
(b)
Changes in Stock . Subject to Section 3(c) hereof, if, as a result of any reorganization,
recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar change in the
Company’s capital stock, the outstanding shares of Stock
are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company, or
additional shares or new or different shares or other securities
of the Company or other non-cash assets are distributed with
respect to such shares of Stock or other securities, or, if, as
a result of any merger, consolidation or sale of all or
substantially all of the assets of the Company, the outstanding
shares of Stock are converted into or exchanged for a different
number or kind of securities of the Company or any successor
entity (or a parent or subsidiary thereof), the Committee shall,
in order to prevent the dilution of enlargement of rights under
the Plan or any other then-outstanding Award under the Plan,
make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan,
(ii) the number of Stock Options that can be granted to any one
individual grantee, (iii) the number and type of shares or other
securities subject to any then outstanding Awards under the
Plan, (iv) the number and type of shares or other consideration
as to which Stock Options may be granted under the Plan, (v) the
repurchase price per share for each outstanding Restricted Stock
Award, and (vi) the exercise price and/or exchange price for
each share subject to any then outstanding Stock Options under
the Plan, without changing the aggregate exercise price (i.e.,
the exercise price multiplied by the number of Stock Options )
as to which such Stock Options remain exercisable. The
adjustment by the Committee made in good faith shall be final,
binding and conclusive. No fractional share of Stock shall be
issued under the Plan resulting from any such adjustment, but
the Committee in its discretion may make a cash payment at Fair
Market Value in lieu of a fractional share.
The Committee may
also adjust the number of shares subject to outstanding Awards
and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices
or principles, extraordinary dividends, acquisitions or
dispositions of stock or property or any other event if it is
determined by the Committee that such
5
adjustment is
appropriate to avoid distortion in the operation of the Plan;
provided that no such adjustment shall be made in the
case of an Incentive Stock Option, without the consent of the
grantee, if it would constitute a modification, extension or
renewal of the Option within the meaning of Section 424(h) of
the Code; and provided further , that no such
adjustment shall adversely affect an outstanding
Award.
Without
limitation of the foregoing, and subject to the written
agreement underlying any Award granted hereunder, and upon any
transaction as a result of which the Company becomes a
subsidiary of a holding company, options to purchase stock of
such holding company shall be substituted for outstanding Stock
Options hereunder without change in the terms of such Stock
Options (other than changes in the governing law governing such
Stock Options, if applicable, or any other changes required by
such governing law).
(c)
Mergers and Other Sale Events . In the case of and
subject to the consummation of (i) the dissolution or
liquidation of the Company, (ii) the sale of all or
substantially all of the assets of the Company on a consolidated
basis to an Unaffiliated Third Party (as defined in that certain
Stockholders and Investors Rights Agreement, dated as of May 11,
2001, by and between the Company and the signatories thereto
(the “Stockholders Agreement”)) or entity, (iii) a
merger, reorganization or consolidation in which the outstanding
shares of Stock are converted into or exchanged for a different
kind of securities of the successor entity and the holders of
the Company’s outstanding voting power immediately prior
to such transaction do not own a majority of the outstanding
voting power of the successor entity immediately upon completion
of such transaction, (iv) the sale of all or a majority of the
outstanding capital stock of the Company to an Unaffiliated
Third Party or entity or (v) any other transaction in which the
owners of the Company’s outstanding voting power prior to
such transaction do not own at least a majority of the
outstanding voting power of the successor entity immediately
upon completion of the transaction (in each case, regardless of
the form thereof, a “Sale Event”), unless otherwise
provided in the Award agreement, the Plan and all outstanding
Options issued hereunder shall terminate upon the effective time
of any such Sale Event, unless provision is made in connection
with such transaction in the sole discretion of the parties
thereto for the assumption or continuation of Options
theretofore granted (after taking into account any acceleration
hereunder) by the successor entity, or the substitution of such
Options with new Options of the successor entity or a parent or
subsidiary thereof, with such adjustment as to the number and
kind of shares and the per share exercise prices as such parties
shall agree (after taking into account any acceleration if any,
hereunder). In the event of such termination, each grantee shall
be permitted, within a specified period of time prior to the
consummation of the Sale Event as determined by the Committee,
to exercise all outstanding Options held by such grantee which
are then exercisable or will become exercisable as of the
effective time of the Sale Event; provided ,
however , that the exercise of Options not exercisable
prior to the Sale Event shall be subject to the consummation of
the Sale Event. Notwithstanding anything herein to the contrary,
in the event that provision is made in connection with the Sale
Event for the assumption or continuation of Awards, or the
substitution of such Awards with new Awards of the successor
entity or parent thereof, then, except
