GLOBECOMM SYSTEMS INC.
DIRECTOR FEE STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has implemented a special director fee stock option
program under the Plan pursuant to which non-employee Board members may, by
prior irrevocable election, apply all or any portion of the annual retainer fee
otherwise payable to them in cash to the acquisition of a special stock option
grant.
B. Optionee is a non-employee Board member who made the requisite
election to apply a portion of his retainer fee to the acquisition of the
special option, and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the grant of such special
option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as
of the Grant Date, a Non-Qualified Option to purchase up to the number of Option
Shares specified in the Grant Notice. The Option Shares shall be purchasable
from time to time during the option term specified in Paragraph 2 at the
Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10) years
measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option may, in connection with the
Optionee's estate plan, be assigned in whole or in part during Optionee's
lifetime to one or more members of the Optionee's immediate family or to a trust
established for the exclusive benefit of one or more such family members. The
assigned portion shall be exercisable only by the person or persons who acquire
a proprietary interest in the option pursuant to such assignment. The terms
applicable to the assigned portion shall be the same as those in effect for this
option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Corporation may deem appropriate. Should
the Optionee die while holding this option, then this option shall be
transferred in accordance with Optionee's will or the laws of descent and
distribution.
4. EXERCISABILITY. This option shall become exercisable for the
Option Shares in installments as specified in the Grant Notice. As the option
becomes exercisable for those installments, the installments shall accumulate
and the option shall remain exercisable for the accumulated installments until
the Expiration Date or sooner termination of the option term under Paragraph 5,
6 or 7.
5. CESSATION OF BOARD SERVICE. Should Optionee's service as a Board
member cease while this option remains outstanding, then the option term
specified in Paragraph 2 shall terminate (and this option shall cease to be
outstanding) prior to the Expiration Date in accordance with the following
provisions:
(i) Should Optionee cease to serve as a Board member for
any reason (other than death or Permanent Disability) while holding this option,
then the period for exercising this option shall be reduced to a three (3)-year
period (commencing with the date of such cessation of Board service), but in no
event shall this option be exercisable at any time after the Expiration Date.
During such limited exercise period, this option may not be exercised in the
aggregate for more than the number of Option Shares (if any) for which the
option is exercisable on the date of Optionee's cessation of Board service.
Upon the EARLIER of (A) the expiration of such three (3)-year period or (B) the
specified Expiration Date, the option shall terminate and cease to be
exercisable with respect to any exercisable Option Shares for which the option
has not been exercised.
(ii) Should Optionee cease service as a Board member by
reason of death or Permanent Disability, then this option shall automatically
accelerate and become immediately exercisable for all the Option Shares at the
time subject to this option so that Optionee (or the personal representative of
Optionee's estate or the person or persons to whom the option is transferred
upon Optionee's death) shall have the right to exercise this option for any or
all of those Option Shares as fully-vested shares of Common Stock. Such right
shall lapse upon the EARLIER of (A) the expiration of the three (3)-year period
measured from the date of Optionee's cessation of Board service or (B) the
specified Expiration Date.
(iii) Upon Optionee's cessation of Board service for any
reason other than death or Permanent Disability, this option shall immediately
terminate and cease to be outstanding with respect to any and all Option Shares
for which the option is not otherwise at that time exercisable.
(iv) In the event of a Corporate Transaction or Change in
Control, the provisions of Paragraph 6 or Paragraph 7 shall govern the period
for which this option is to remain exercisable following Optionee's cessation of
Board service and shall supersede any provisions to the contrary in this
Paragraph 5.
2.
6. CORPORATE TRANSACTION.
(a) This option, to the extent outstanding at the time of a
Corporate Transaction but not otherwise fully exercisable for all the Option
Shares, shall automatically accelerate so that this option shall, immediately
prior to the effective date of such Corporate Transaction, become exercisable
for all the Option Shares at the time subject to this option and may be
exercised for any or all of those Option Shares as fully-vested shares of Common
Stock.
(b) This option shall be assumed by the successor corporation
(or parent thereof) in connection with such Corporate Transaction and shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
to the number and class of securities which would have been issuable to Optionee
in consummation of such Corporate Transaction had the option been exercised
immediately prior to such Corporate Transaction, and appropriate adjustments
shall also be made to the Exercise Price, PROVIDED the aggregate Exercise Price
shall remain the same.
(c) This option, as so accelerated and assumed, shall remain
exercisable until the EARLIER of (i) the expiration of the three (3)-year period
measured from the date of Optionee's cessation of Board service or (ii) the
specified Expiration Date.
(d) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. CHANGE IN CONTROL/HOSTILE TAKE-OVER.
(a) This option, to the extent outstanding at the time of a
Change in Control but not otherwise fully exercisable for all the Option Shares,
shall automatically accelerate, so that this option shall, immediately prior to
the effective date of such Change in Control, become fully exercisable for all
of the Option Shares at the time subject to this option and may be exercised for
all or any portion of such shares as fully-vested shares of Common Stock. This
option shall remain exercisable for such fully-vested Option Shares until the
EARLIEST to occur of (i) the specified Expiration Date, (ii) the sooner
termination of this option in accordance with Paragraph 5 or 6 or (iii) the
surrender of this option under Paragraph 7(b).
(b) Optionee shall have an unconditional right (exercisable
during the thirty (30)-day period immediately following the consummation of a
Hostile Take-Over) to surrender this option to the Corporation in exchange for a
cash distribution from the Corporation in an amount equal to the excess of (i)
the Take-Over Price of the Option Shares at the time subject to the surrendered
option (whether or not the option is exercisable for those shares) over (ii) the
aggregate Exercise Price payable for such shares.
3.
This Paragraph 7(b) limited stock appreciation right shall in all events
terminate upon the expiration or sooner termination of the option term and may
not be assigned or transferred by Optionee.
(c) To exercise the Paragraph 7(b) limited stock appreciation
right, Optionee must, during the applicable thirty (30)-day exercise period,
provide the Corporation with written notice of the option surrender in which
there is specified the number of Option Shares as to which the option is being
surrendered. Such notice must be accompanied by the return of Optionee's copy
of this Agreement, together with any written amendments to such Agreement. The
cash distribution shall be paid to Optionee within five (5) business days
following such delivery date, and neither the approval of the Plan Administrator
nor the consent of the Board shall be required in connection with such option
surrender and cash distribution. Upon receipt of such cash distribution, this
option shall be cancelled with respect to the shares subject to the surrendered
option (or the surrendered portion), and Optionee shall cease to have any
further right to acquire those Option Shares under this Agreement. The option
shall, however, remain outstanding for the balance of the Option Shares (if any)
in accordance with the terms and provisions of this Agreement, and the
Corporation shall accordingly issue a new stock option agreement (substantially
in the same form as this Agreement) for those remaining Option Shares.
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the number and/or
class of securities subject to this option and (ii) the Exercise Price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:
4.
(A) cash or check made payable to the Corporation,
(B) shares of Common Stock held by Optionee (or any
other person or persons exercising the option) for the requisite
period necessary to avoid a charge to the Corporation's earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date, or
(C) through a special sale and remittance procedure
pursuant to which Optionee (or any other person or persons exercising
the option) shall concurrently provide irrevocable written
instructions (I) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Corporation, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate Exercise Price payable
for the purchased shares plus all applicable Federal, state and local
income taxes required to be withheld by the Corporation by reason of
such exercise and (II) to the Corporation to deliver the certificates
for the purchased shares directly to such brokerage firm in order to
complete the sale.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if other
than Optionee) have the right to exercise this option.
(b) As soon after the Exercise Date as practical, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for any fractional
shares.
11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations
5.
of any stock exchange (or the Nasdaq National Market, if applicable) on which
the Common Stock may be listed for trading at the time of such exercise and
issuance.
(b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraph 3, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the Corporation and its successors and assigns and
Optionee, Optionee's assigns and the legal representatives, heirs and legatees
of Optionee's estate.
13. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to
be given or delivered to Optionee shall be in writing and addressed to Optionee
at the address indicated below Optionee's signature line on the Grant Notice.
All notices shall be deemed effective upon personal delivery or upon deposit in
the U.S. mail, postage prepaid and properly addressed to the party to be
notified.
14. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the director fee option grant program in effect
under the Plan and are in all respects limited by and subject to the terms of
that program.
15. GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of New York without
resort to that State's conflict-of-laws rules.
6.
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Director Fee Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CHANGE IN CONTROL shall mean change of control of the Corporation of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or in response to any similar item on any
similar schedule or form) promulgated under the 1934 Act whether or not the
Corporation is then subject to such reporting requirement; provided, however,
that, without limitation, such a Change in Control shall be deemed to have
occurred if:
(i) any person or group (as such terms are used in connection
with Sections 13(d) and 14(d) of the ▇▇▇▇ ▇▇▇) becomes the "beneficial
owner" (as defined in Rule 13d-3 and 13d-5 under the 1934 Act), directly or
indirectly, of securities of the Corporation representing 35% or more of
the combined voting power of the Corporation's then outstanding securities;
(ii) the Corporation is a party to a merger, consolidation,
sale of assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board in office immediately prior to
such transaction or event constitute less than a majority of the Board
thereafter; or
(iii) during any period of twenty-four consecutive months,
individuals who at the beginning of such period constituted the Board
(including for this purpose any new director whose election or nomination
for election by the Corporation's stockholders was approved by a vote of at
lest two-thirds of the directors then still in office who were directors at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board.
Notwithstanding the foregoing provisions of this Section C, a "Change
in Control" will not be deemed to have occurred solely because of the
acquisition of securities of the Corporation (or any reporting requirement under
the 1934 Act relating thereto) by an employee benefit plan maintained by the
Corporation for its employees.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
A-1.
F. CORPORATE TRANSACTION shall mean a stockholder-approved sale, transfer
or other disposition of all or substantially all of the Corporation's assets in
complete liquidation or dissolution of the Corporation.
G. CORPORATION shall mean Globecomm Systems Inc., a Delaware corporation.
H. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 10 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per share as specified in
the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question, as such price is reported by
the National Association of Securities Dealers on the Nasdaq National
Market or any successor system. If there are no selling prices quoted for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(ii) If the Common Stock is at the time listed on any Stock Exchange,
then the Fair Market Value shall be the closing selling price per share of
Common Stock on the date in question on the Stock Exchange serving as the
primary market for the Common Stock, as such price is officially quoted in
the composite tape of transactions on such exchange. If there are no
selling prices quoted for the Common Stock on the date in question, then
the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
▇. ▇▇▇▇▇ DATE shall mean the date of grant of the option as specified in
the Grant Notice.
▇. ▇▇▇▇▇ NOTICE shall mean the Notice of Grant of Stock Option Under
Director Fee Option Grant Program accompanying the Agreement, pursuant to which
Optionee has been informed of the basic terms of the option evidenced hereby.
A-2.
N. HOSTILE TAKE-OVER shall mean the acquisition, directly or indirectly,
by any person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Corporation) of beneficial ownership (within the
meaning of Rule 13d-3 of the ▇▇▇▇ ▇▇▇) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept.
O. 1934 ACT shall mean the Securities Exchange Act of 1934, as amended.
P. NON-QUALIFIED OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
Q. NOTICE OF EXERCISE shall mean the written notice of the option
exercise on the form provided by the Corporation for such purpose.
R. OPTION SHARES shall mean the number of shares of Common Stock subject
to the option as specified in the Grant Notice.
S. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
T. PERMANENT DISABILITY shall mean the inability of Optionee to perform
his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
U. PLAN shall mean the Corporation's 1997 Stock Incentive Plan.
V. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
Stock Exchange.
A-3.
