Exhibit 10.2
MERCURY COMPUTER SYSTEMS,
INC.
1998 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
The purpose of this Mercury Computer
Systems, Inc. 1998 Stock Option Plan for Non-Employee Directors
(the “Plan”) is to attract and retain the services of
experienced and knowledgeable independent directors who are not
employees (sometimes referred to herein collectively as
“Participants”) of Mercury Computer Systems, Inc.
(“Mercury”) for the benefit of Mercury and its
stockholders and to provide additional incentive for such
Participants to continue to work in the best interests of Mercury
and its stockholders through continuing ownership of its common
stock.
2. SHARES SUBJECT TO THE
PLAN
The total number of shares of common
stock, par value $.01 per share (“Shares”), of Mercury
for which options may be granted under the Plan shall not exceed
50,000 in the aggregate, subject to adjustment in accordance with
Section 9 hereof.
3. ELIGIBILITY; GRANT OF
OPTION
On September 30 of each of
1998, 1999, 2000, 2001 and 2002, each person who is then a member
of the Board of Directors of Mercury (the “Board”) and
who is not then an employee of Mercury or any subsidiary shall be
granted an option to acquire the Formula Number of Shares under the
Plan. Any options granted prior to stockholder approval of this
Plan shall become effective as of their date of grant only upon
stockholder approval of this Plan in accordance with
Section 13 hereof. The options shall be non-qualified options
not intended to meet the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the
“Code”).
The Formula Number shall be that
number equal to one percent (1%) of the net income of Mercury
for the most recent fiscal year ending prior to the grant date as
shown on Mercury’s audited financial statements divided by
the fair market value of a share of Mercury common stock, as
determined under Section 5 hereof, on the first day of such
most recent fiscal year, divided by the number of the non-employee
Directors of Mercury granted options hereunder on such grant date.
No fractional shares shall be issued.
4. OPTION AGREEMENT
Each option granted under the Plan
shall be evidenced by an option agreement (the
“Agreement”) duly executed on behalf of Mercury and by
the director to whom such option is granted, which Agreements shall
comply with and be subject to the terms and conditions of the
Plan.
5. OPTION EXERCISE PRICE
Subject to the provisions of
Section 9 hereof, the option exercise price for an option
granted under the Plan shall be the fair market value of the Shares
of the common stock of Mercury covered by the option on the date of
grant of the option. For the purposes hereof, the fair market value
of the Shares of the common stock of Mercury shall be determined as
follows. If such shares are then listed on any national securities
exchange, the fair market value shall be the mean between the high
and low sales prices, if any, on the largest such exchange on the
date of the grant of the option or, if none, shall be determined by
taking a weighted average of the means between the highest and
lowest sales prices on the nearest date before and the nearest date
after the date of grant in accordance with Treasury Regulations
Section 25.2512-2. If the shares are not then listed on any
such exchange, the fair market value of such shares shall be the
mean between the high and low sales prices, if any, as reported in
the National Association of Securities Dealers Automated Quotation
System National Market System (“NASDAQ/NMS”) for the
date of the grant of the option, or, if none, shall be determined
by taking a weighted average of the means between the highest and
lowest sales on the nearest date before and the nearest date after
the date of grant in accordance with Treasury Regulations
Section 25.2512-2. If the shares are not then either listed on
any such exchange or quoted in NASDAQ/NMS, the fair market value
shall be the mean between the average of the “Bid” and
the average of the “Ask” prices, if any, as reported in
the National Daily Quotation Service for the date of the grant of
the option, or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales prices on
the nearest date before and the nearest date after the date of
grant in accordance with Treasury Regulations
Section 25.2512-2. If the fair market value cannot be
determined under the preceding three sentences, it shall be
determined by the Company’s independent auditors.
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6. TIME AND MANNER OF EXERCISE OF
OPTION
(a) Options granted under the Plan
shall, subject to the provisions of Section 7, be exercisable
as provided in this Section 6(a). The options granted under
this Plan shall vest 1/3 on each of the first, second, and third
anniversaries of the date of grant. Following the third anniversary
of the date of grant, all options granted pursuant to a particular
grant shall be exercisable in full.
(b) To the extent that the right to
exercise an option has accrued and is in effect, the option may be
exercised in full at one time or in part from time to time by
giving written notice, signed by the person or persons exercising
the option, to Mercury, stating the number of Shares with respect
to which the option is being exercised, accompanied by payment in
full for such Shares, which payment must be in cash or certified
check payable to the order of the Company; provided, however, that
there shall be no such exercise at any one as to fewer than Two
Hundred Fifty (250) Shares or all of the remaining Shares then
purchasable by the person or persons exercising the option, if
fewer than Two Hundred Fifty (250) Shares. Upon such exercise,
delivery of a certificate for paid-up non- assessable Shares shall
be made at the principal Massachusetts office of Mercury to the
person or persons exercising the option at such time, during
ordinary business hours, not more than thirty (30) days from
the date of receipt of the notice by Mercury, as shall be
designated in such notice, or at such time, place and manner as may
be agreed upon by Mercury and the person or persons exercising the
option.
7. TERM OF OPTIONS
(a) Each option shall expire ten
(10) years from the date of the granting thereof, but shall be
subject to earlier termination as herein provided.
(b) In the event of the death of an
optionee, the option granted to such optionee may be exercised, to
the extent the optionee was entitled to do so on the date of
such
(c) optionee’s death, by the
estate of such optionee or by any person or persons who acquired
the right to exercise such
(d) option by bequest or inheritance
or otherwise by reason of the death of such optionee. Such option
may be exercised at any time within one (1) year after the
date of death of such optionee, at which time the option shall
terminat
