Exhibit 10.21
KVH INDUSTRIES,
INC.
SECOND AMENDED AND
RESTATED
2003 INCENTIVE AND NONQUALIFIED
STOCK OPTION PLAN
(AS AMENDED AND RESTATED ON
APRIL 13, 2009)
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. 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).
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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).
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
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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. Notwithstanding
any other provision of the Plan or of any option agreement, each
option shall expire on the date specified in the option agreement,
which date shall not, in the case of an Incentive Stock Option, be
later than the tenth anniversary (fifth anniversary in the case of
a greater-than-ten-percent stockholder) of the date on which the
option was granted, or as specified in Section 5
hereof.
6.2 EXERCISE.
Subject to Section 7.3 hereof,
each option may be exercised, so long as it is valid and
outstanding, from time to time in part or as a whole, subject to
any limitations with respect to the number of shares for which the
option may be exercised at a particular time and to such other
conditions as the Committee in its discretion may specify upon
granting the option.
6.3 PURCHASE PRICE.
The purchase price per share under
each option shall be determined by the Committee at the time the
option is granted; provided, however, (i) that the option
price of any Incentive Stock Option shall not, unless otherwise
permitted by the Code or other applicable law or regulation, be
less than the fair market value of the Common Stock on the date the
option is granted (110% of the fair market value in the case of a
greater-than-ten-percent stockholder), and (ii) that, unless
approved by the holders of a majority of the shares present and
entitled to vote at a duly convened meeting of the Company’s
stockholders, the option price of any stock option shall not be
less than the fair market value of the Common Stock on the date the
option is granted and the exercise price of any outstanding stock
option grant under any existing or future stock option plan may not
be reduced. Subsection 6.3(ii) hereof may not be amended or
repealed without the affirmative vote of the holders of a majority
of the shares of the Company present and entitled to vote at a duly
convened meeting of the Company’s stockholders. For the
purpose of the Plan the fair market value of the Common Stock shall
be the closing price per share on the date of grant of the option
as reported by a nationally recognized stock exchange, or, if the
Common Stock is not listed on such an exchange, as reported by the
National Association of Securities Dealers Automated Quotation
System, Inc. (“NASDAQ”), or, if the Common Stock is not
quoted on NASDAQ, the fair market value as determined by the
Committee.
6.4 TRANSFERABILITY OF
OPTIONS. Options shall
not be transferable by the optionee otherwise than by will or under
the laws of descent and distribution, and shall be exercisable,
during his or her lifetime, only by him or her.
6.5 RIGHTS OF
OPTIONEES. No optionee
shall be deemed for any purpose to be the owner of any
shares
