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Exhibit
10.2
KVH INDUSTRIES,
INC.
AMENDED AND
RESTATED
2003 INCENTIVE AND
NONQUALIFIED
STOCK OPTION
PLAN
(AS AMENDED ON JULY 26,
2007)
SECTION 1.
PURPOSE
This 2003 Incentive and
Nonqualified Stock Option Plan (the “Plan”) of KVH
Industries, Inc., a Delaware corporation (the
“Company”), is designed to provide additional incentive
to executives and other key employees of the Company and its
subsidiaries and for certain other individuals providing services
to or acting as directors of the Company and its subsidiaries. The
Company intends that this purpose will be effected by the granting
of incentive stock options (“Incentive Stock Options”)
as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”), and nonqualified stock
options (“Nonqualified Options”) under the Plan which
afford such executives, key employees, directors and other eligible
individuals an opportunity to acquire or increase their proprietary
interest in the Company through the acquisition of shares of its
Common Stock. The Company intends that Incentive Stock Options
issued under the Plan will qualify as “incentive stock
options” as defined in Section 422 of the Code and the
terms of the Plan shall be interpreted in accordance with this
intention. The term “subsidiary” shall have the meaning
set forth in Section 424 of the Code.
SECTION 2
ADMINISTRATION
2.1 THE COMMITTEE .
The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company, so long as each member of such
committee shall qualify as an Outside Director, as defined below.
In the event the Compensation Committee shall include any director
who is not an Outside Director, the Outside Directors then serving
as members of the Compensation Committee shall constitute the Stock
Option Committee of the Board of Directors to administer the Plan
(the Compensation Committee or Stock Option Committee, if
appointed, being referred to herein as the
“Committee”). The Committee shall have at least two
members at all times. As used herein, the term “Outside
Director” means any director who (i) is not an employee
of the Company or of any “affiliated group,” as such
term is defined in Section 1504(a) of the Code, which includes
the Company (an “Affiliate”), (ii) is not a former
employee of the Company or any Affiliate who is receiving
compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the Company’s or any
Affiliate’s taxable year, (iii) has not been an officer
of the Company or any Affiliate and (iv) does not receive
remuneration from the Company or any Affiliate, either directly or
indirectly, in any capacity other than as a director. None of the
members of the Committee shall have been granted any incentive
stock option or nonqualified option under this Plan (other than
pursuant to Section 4.4) or any other stock option plan of the
Company within one year prior to service on the Committee. It is
the intention of the Company that the Plan shall be administered by
“disinterested persons” within the
meaning of Rule 16b-3 under the
Securities Exchange Act of 1934 (the “Exchange Act”),
but the authority and validity of any act taken or not taken by the
Committee shall not be affected if any person administering the
Plan is not a disinterested person. Except as specifically reserved
to the Company’s Board of Directors under the terms of the
Plan, the Committee shall have full and final authority to operate,
manage and administer the Plan on behalf of the Company. Action by
the Committee shall require the affirmative vote of a majority of
all members thereof.
2.2 POWERS OF THE
COMMITTEE. Subject to the terms and conditions of the Plan, the
Committee shall have the power:
(a) To determine from time to
time the persons eligible to receive options and the options to be
granted to such persons under the Plan and to prescribe the terms,
conditions, restrictions, if any, and provisions (which need not be
identical) of each option granted under the Plan to such
persons;
(b) 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 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 Committee in the exercise of
this power shall be final and binding upon the Company and
optionees;
(c) Except as provided in
Section 6.3 hereof, to make, in its sole discretion, changes
to any outstanding option granted under the Plan, including:
(i) to accelerate the vesting schedule or (ii) to extend
the expiration date; and
(d) 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.
SECTION 3.
STOCK
3.1 STOCK TO BE
ISSUED. The stock subject to the options granted under the Plan
shall be shares of the Company’s authorized but unissued
Common Stock, $.01 par value (the “Common Stock”), or
shares of the Company’s Common Stock held in treasury. The
total number of shares that may be issued pursuant to options
granted under the Plan shall not exceed an aggregate of 1,000,000
shares of Common Stock; provided, however, that the class and
aggregate number of shares which may be subject to options granted
under the Plan shall be subject to adjustment as provided in
Section 8 hereof.
3.2 EXPIRATION,
CANCELLATION OR TERMINATION OF OPTION. Whenever any outstanding
option under the Plan expires, is cancelled 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.
3.3 LIMITATION ON
GRANTS. In no event may any Plan participant be granted options
with respect to more than 120,000 shares of Common Stock in any
calendar year. The number of shares of Common Stock issuable
pursuant to an option granted to a Plan participant in a calendar
year that is subsequently forfeited, cancelled or otherwise
terminated shall continue to count toward the foregoing limitation
in such calendar year. In addition, if the exercise price of an
option is subsequently reduced, the transaction shall be deemed a
cancellation of the original option and the grant of a new one so
that both transactions shall count toward the maximum shares
issuable in the calendar year of each respective
transaction.
SECTION 4.
ELIGIBILITY
4.1 PERSONS ELIGIBLE.
Incentive Stock Options under the Plan may be granted only to
officers and other employees of the Company or its subsidiaries.
Nonqualified Options may be granted to officers or other employees
of the Company or its subsidiaries, and to members of the Board and
consultants or other persons who render services to the Company
(regardless of whether they are also employees), provided, however,
that no such option may be granted to a person who is a member of
the Committee at the time of grant other than pursuant to
Section 4.4.
4.2
GREATER-THAN-TEN-PERCENT STOCKHOLDERS. Except as may otherwise
be permitted by the Code or other applicable law or regulation, no
Incentive Stock Option shall be granted to an individual who, at
the time the option is granted, owns (including ownership
attributed pursuant to Section 424 of the Code) more than ten
percent of the total combined voting power of all classes of stock
of the Company or any subsidiary (a “greater-than-ten-percent
stockholder”), unless such Incentive Stock Option provides
that (i) the purchase price per share shall not be less than
one hundred ten percent of the fair market value of the Common
Stock at the time such option is granted, and (ii) that such
option shall not be exercisable to any extent after the expiration
of five years from the date it is granted.
4.3 MAXIMUM AGGREGATE FAIR
MARKET VALUE. The aggregate fair market value (determined at
the time the option is granted) of the Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by
any optionee during any calendar year (under the Plan and any other
plans of the Company or its subsidiary for the issuance of
incentive stock options) shall not exceed $100,000 (or such greater
amount as may from time to time be permitted with respect to
incentive stock options by the Code or any other applicable law or
regulation).
4.4 OPTION GRANTS TO
NON-EMPLOYEE DIRECTORS.
(a) As compensation for
services to the Company, each director of the Company who is not an
employee of the Company or any subsidiary of the Company (a
“Non-Employee Director”) upon his or her initial
election to the Board shall be automatically granted a Nonqualified
Option to purchase 10,000 shares of Common Stock of the Company
(the “Initial Option Grant”). In addition, any director
of the Company who is elected to the Board but who is not a
Non-Employee Director at the
time of his or her initial election and
later becomes a Non-Employee Director shall automatically receive
an Initial Option Grant to purchase 10,000 shares of Common Stock
of the Company upon his or her first election to the Board as a
Non-Employee Director. Each Initial Option Grant shall vest with
respect to 2,500 shares on each three-month anniversary of the date
of grant, provided that the optionee is a director of the Company
on each such three-month anniversary, and shall expire on the fifth
annual anniversary of the date of grant. At the first meeting of
the Board of Directors following each annual meeting of
stockholders, each Non-Employee Director (other than any
Non-Employee Director who has received an Initial Option Grant as a
result of election to the Board at such meeting) shall be
automatically granted an additional Nonqualified Option to purchase
5,000 shares of Common Stock of the Company (the “Subsequent
Option Grant”). Each Subsequent Option Grant shall be
exercisable in its entirety on the date of grant and shall expire
on the fifth annual anniversary of the date of grant;
(b) Each Non-Employee
Director appointed to serve on the Audit Committee of the Board of
Directors shall automatically receive an Option Grant to purchase
5,000 shares of Common Stock upon his or her appointment to the
Audit Committee and an additional Option Grant of 5,000 shares of
Common Stock on each anniversary of such appointment, so long as
such Director shall serve on the Audit Committee. Each such Option
shall vest with respect to 1,250 shares on each three-month
anniversary of the date of Grant, provided that such optionee is a
Director and member of the Audit Committee on each three-month
anniversary, and shall expire on the fifth anniversary of the date
of Grant;
(c) The exercise price per
share of Common Stock of each Nonqualified Option granted pursuant
to this Section 4.4 shall be equal to the fair market value of
the Common Stock on the date the Nonqualified Option is granted,
such fair market value to be determined in accordance with the
provisions of Section 6.3;
(d) No Nonqualified Option
granted under this Section 4.4 shall be transferable by the
optionee otherwise than by will or by the laws of descent and
distribution, and such Options shall be exercisable during the
optionee’s lifetime only by the optionee. Any Nonqualified
Option granted to a Non-Employee Director and outstanding on the
date of his or her death may be exercised by the legal
representative or legatee of the optionee until the expiration of
the stated term of the option; Nonqualified Options granted under
this Section 4.4 may be exercised only by written notice to
the Company specifying the number of shares to be purchased.
Payment of the full purchase may be made by one or more of the
methods specified in Section 7.2. An optionee shall have the
rights of a stockholder only as to shares acquired upon the
exercise of an option and not as to unexercised options.
(e) The provisions of this
Section 4.4 shall apply only to options granted or to be
granted to Non-Employee Directors, and shall not be deemed to
modify, limit or otherwise apply to any other provision of this
Plan or to any option issued under this Plan to a participant who
is not a Non-Employee Director of the Company. To the extent
inconsistent with the provisions of any other Section of this Plan,
the provisions of this Section 4.4 shall govern the rights and
obligations of the Company and Non-
Employee Directors respecting options
granted or to be granted to Non-Employee Directors.
SECTION 5. TERMINATION OF
EMPLOYMENT OR DEATH OF OPTIONEE
5.1 TERMINATION OF
EMPLOYMENT. Except as may be otherwise expressly provided
herein, options shall terminate on the earlier of:
(a) the date of expiration
thereof;
(b) the date of termination
of the optionee’s employment with or services to the Company
by it for cause (as determined by the Company), or voluntarily by
the optionee; or
(c) thirty days after the
date of termination of the optionee’s employment with or
services to the Company by it without cause; provided, that
Nonqualified Options granted to persons who are not employees of
the Company need not, unless the Committee determines otherwise, be
subject to the provisions set forth in clauses (b) and
(c) above.
An employment relationship
between the Company and the optionee shall be deemed to exist
during any period in which the optionee is employed by the Company
or any subsidiary. Whether authorized leave of absence, or absence
on military or government service, shall constitute termination of
the employment relationship between the Company and the optionee
shall be determined by the Committee at the time
thereof.
As used herein,
“cause” shall mean (x) any material breach by the
optionee of any agreement to which the optionee and the Company are
both parties, (y) any act or omission to act by the optionee
which may have a material and adverse effect on the Company’s
business or on the optionee’s ability to perform services for
the Company, including, without limitation, the commission of any
crime (other than ordinary traffic violations), or (z) any
material misconduct or material neglect of duties by the optionee
in connection with the business or affairs of the Company or any
affiliate of the Company.
5.2 DEATH OR PERMANENT
DISABILITY OF OPTIONEE. In the event of the death or permanent
and total disability of the holder of an option prior to
termination of the optionee’s employment with or services to
the Company and before the date of expiration of such option, such
option shall terminate on the earlier of such date of expiration or
one year following the date of such death or disability. After the
death of the optionee, his/her executors, administrators or any
person or persons to whom his/her option may be transferred by will
or by the laws of descent and distribution, shall have the right,
at any time prior to such termination, to exercise the option to
the extent the optionee was entitled to exercise such option
immediately prior to his/her death. An optionee is permanently and
totally disabled if he/she is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to last for a continuous
period of not less than twelve months; permanent and total
disability shall be determined in accordance with
Section
22(e)(3) of the Code and the regulations
issued thereunder.
SECTION 6. TERMS OF THE
OPTION AGREEMENTS
Each option agreement shall
be in writing and shall contain such terms, conditions,
restrictions, if any, and provisions as the Committee shall from
time to time deem appropriate. Such provisions or conditions may
include without limitation restrictions on transfer, repurchase
rights, or such other provisions as shall be determined by the
Committee; provided, that such additional provisions shall not be
inconsistent with any other term or condition of the Plan and such
additional provisions shall not cause any Incentive Stock Option
granted under the Plan to fail to qualify as an incentive option
within the meaning of Section 422 of the Code. Option
agreements need not be identical, but each option agreement by
appropriate language shall include the substance of all of the
following provisions:
6.1 EXPIRATION OF
OPTION. Subject to Section 4.4 hereof, notwithstanding any
other provision of the Plan or of
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