EXHIBIT 10.2
AMBASSADORS GROUP, INC.
A DELAWARE CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
FOR EMPLOYEES AND CONSULTANTS
THIS AGREEMENT, dated ___________________, 200_, is made by and between
Ambassadors Group, Inc. a Delaware corporation hereinafter referred to as the
"Company," and __________________________________________________, an employee
of or consultant to the Company or a Subsidiary of the Company, hereinafter
referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its $.01 par value Common Stock; and
WHEREAS, the Company wishes to issue to Optionee a Non-qualified Stock
Option pursuant to The 2001 Equity Participation Plan of Ambassadors Group, Inc.
(the "Plan"), the terms of which are hereby incorporated by reference and made a
part of this Agreement; and,
WHEREAS, the Committee, appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
stockholders to grant the Non-Qualified Option provided for herein to the
Optionee as an inducement to enter into or remain in the service of the Company
or its Subsidiaries or to provide services to the Company or it Subsidiaries as
a consultant and as an incentive for increased efforts during such service, and
has advised the Company thereof and instructed the undersigned officers to issue
said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
1. DEFINITIONS. Whenever the following terms are used in this Agreement, they
shall have the meaning specified below unless the context clearly indicates to
the contrary.
1.1. "BOARD" shall mean the Board of Directors of the Company.
1.2. "CAUSE" shall mean (i) the Optionee's failure or refusal to perform
specific and lawful directions with respect to the Optionee's employment
with or agreement to provide services to the Company, (ii) the commission
by the Optionee of a felony or the perpetration by the Optionee of an act
of fraud, dishonesty, or misrepresentation against, or breach of
fiduciary duty toward, the Company, or (iii) any willful act or omission
by the Optionee which is injurious in any material respect to the
financial condition or business reputation of the Company.
1.3. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.4. "COMMITTEE" shall mean the Compensation Committee of the Board, or a
subcommittee of the Board, appointed as provided in Section 9.1 of the
Plan.
1.5. "COMMON STOCK" shall mean the common stock of the Company, par value
$.01 per share.
1.6. "DIRECTOR" shall mean a member of the Board.
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1.7. "EMPLOYEE" shall mean any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Company, or of any
corporation which is a Subsidiary.
1.8. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
1.9. "FAIR MARKET VALUE" of a share of Common Stock as of a given date
shall be (I) the mean between the highest and lowest selling price of a
share of Common Stock on the principal exchange on which shares of Common
Stock are then trading, if any, on such date, or if shares were not
traded on such date, then on the closest preceding date on which a trade
occurred, or (ii) if Common Stock is not traded on an exchange, the mean
between the closing representative bid and asked prices for the Common
Stock on such date as reported by NASDAQ or, if NASDAQ is not then in
existence, by its successor quotation system; or (iii) if Common Stock is
not publicly traded, the Fair Market Value of a share of Common Stock as
established by the Committee acting in good faith.
1.10. "OPTION" shall mean a non-qualified stock option granted under this
Agreement and Article III of the Plan.
1.11. "OPTIONEE" shall mean an Employee or consultant granted an Option
under this Agreement and the Plan.
1.12. "PLAN" shall mean The 2001 Equity Participation Plan of Ambassadors
Education Group, Inc.
1.13. "QDRO" shall mean any qualified domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations thereunder.
1.14. "RULE 16B-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended from time to time.
1.15. "SECRETARY" shall mean the Secretary of the Company.
1.16. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
1.17. "SUBSIDIARY" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain then owns stock
possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
1.18. "TERMINATION OF CONSULTANCY" shall mean the time when the
engagement of Optionee as a consultant to the Company or a Subsidiary is
terminated for any reason, with or without Cause, including without
limitation, resignation, discharge, death or retirement; but excluding
terminations where there is a simultaneous commencement of employment
with the Company or any Subsidiary. The Committee, in its absolute
discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way of
limitation, the question of whether a Termination of Consultancy resulted
from a discharge for Cause, and all questions of whether particular
leaves of absence Terminations of Employment. Notwithstanding any other
provision of this Plan, the Company or any Subsidiary has an absolute and
unrestricted right to terminate a consultant's service at any time for
any reason whatsoever, with or without Cause, except to the extent
expressly provided otherwise in writing.
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1.19. "TERMINATION OF EMPLOYMENT" shall mean the time when the
employee-employer relationship between the Optionee and the Company or
any subsidiary is terminated for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (I) terminations where there is a simultaneous
re-employment, continuing employment of an Optionee by the Company or any
Subsidiary, (II) at the discretion of the Committee, terminations which
result in a temporary severance of the employee-employer relationship,
and (III) at the establishment of a consulting relationship by the
Company or a Subsidiary with the former employee. The Committee, in its
absolute discretion, shall determine the effect of all matters and
questions relating to the Termination of the Employment, including, but
not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for Cause, and all questions of
whether particular leaves of absence constitute Terminations of
Employment. Notwithstanding any other provision of this Plan, the Company
or any Subsidiary has an absolute and unrestricted right to terminate an
Employee's employment at any time for any reason whatsoever, with or
without Cause, except to the extent expressly provided otherwise in
writing.
2. GRANT OF OPTION.
2.1. GRANT OF OPTION. In consideration of the Optionee's agreement to
remain in the employ of (or consult for) the Company or its Subsidiaries
for a period of at least one year after the option is granted and for
other good and valuable consideration, on the date hereof the Company
irrevocably grants to the Optionee the option to purchase any part or all
of an aggregate of ______________________ shares of its Common Stock upon
the terms and conditions set forth in this Agreement.
2.2. PURCHASE PRICE. The purchase price of the shares of stock covered by
the option shall be $_______ per share without commission or other
charge.
2.3. CONSIDERATION TO COMPANY. In consideration of the granting of this
Option by the Company, the Optionee agrees to render faithful and
efficient services to the Company or a Subsidiary, with such duties and
responsibilities as the Company shall from time to time prescribe, for a
period of at least one year for the date this Option is granted. Nothing
in the Plan or this Agreement shall confer upon any Optionee any right to
continue in the employ of, or as a consultant for, the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or
restrict in any way the rights of the Company and any Subsidiary, which
are hereby expressly reserved, to discharge the Optionee at any time for
any reason whatsoever, with or without Cause.
2.4. ADJUSTMENTS IN OPTION.
2.4.1. In the event that the outstanding shares of the stock
subject to the Option are changed into or exchanged for a
different number or kind of shares of the Company or other
securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or combination of
shares, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares as to which the
Option, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Optionee's
proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in the Option may
include any necessary corresponding adjustment in the Option price
per share, but shall be made without change in the total price
applicable to the unexercised portion of the Option (except for
any change in the aggregate price resulting from
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rounding-off of share quantities or prices). Any such adjustment
made by the Committee shall be final and binding upon the
Optionee, the Company and other interested person.
2.4.2. Notwithstanding the foregoing, in the event of such a
reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or combination,
or other adjustment or event which results in shares of Common
Stock being exchanged for or converted into cash, securities or
other property, the Company will have the right to terminate the
Plan as of the date of the exchange or conversion, in which case
all options, rights and other awards under this Plan shall become
the right to receive such cash, securities or other property, net
of any applicable exercise price.
2.4.3. In the even of a "spin-off" or other substantial
distribution of assets of the Company which has a material
diminutive effect upon the Fair Market Value of the Company's
Common Stock, the Board may in its discretion make an appropriate
and equitable adjustment to the Option to reflect such diminution.
3. PERIOD OF EXERCISABILITY.
3.1. COMMENCEMENT OF EXERCISABILITY:
3.1.1. Subject to Section 5.6, the Option shall become exercisable
in four cumulative installments as follows:
3.1.1.1. The first installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall
become exercisable on the first anniversary of the date the
Option is granted.
3.1.1.2. The second installment shall consist of
twenty-five percent (25%) of the shares covered by the
Option and shall become exercisable on the second
anniversary of the date the Option is granted.
3.1.1.3. The third installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall
become exercisable on the third anniversary of the date the
Option is granted.
3.1.1.4. The fourth installment shall consist of
twenty-five percent (25%) of the shares covered by the
Option and shall become exercisable on the fourth
anniversary of the date the Option is granted.
3.1.2. No portion of the Option which is unexercisable at
Termination of Employment or Termination of Consultancy, as
applicable, shall thereafter become exercisable.
3.2. DURATION OF EXERCISABILITY. The installments provided for in Section
3.1.1 are cumulative. Each such installment which becomes exercisable
pursuant to Section 3.1.1 shall remain exercisable until it becomes
unexercisable under Section 3.3.
3.3. EXPIRATION OF OPTION. The Option may not be exercised to any extent
by anyone after the first to occur of the following events:
3.3.1. The expiration of ten years from the date the Option was
granted; or
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3.3.2. The time of the Optionee's Termination of Employment or
Termination of Consultancy unless such Termination of Employment
or Termination of Consultancy, as applicable, results from death,
retirement, disability or discharge without Cause; or
3.3.3. The expiration of three months from the date of the
Optionee's Termination of Employment or Termination of Consultancy
by reason of retirement or discharge without Cause, unless the
Optionee dies within said three-month period; or
3.3.4. The expiration of one year from the date of the Optionee's
Termination of Employment or Termination of Consultancy by reason
of disability; or
3.3.5. The expiration of one year from the date of the Optionee's
death; or
3.3.6. The effective date of either the merger or consolidation of
the Company with or into another corporation, the exchange of all
or substantially all of the assets of the Company for the
securities of another corporation, the acquisition by another
corporation or the Company's then outstanding voting stock, or the
liquidation or dissolution of the Company, unless the Committee
waives this provision in connection with such transaction. At
least ten days prior to the effective date of such merger,
consolidation, exchange, acquisition, liquidation or dissolution,
the Committee shall give the Optionee notice of such event if the
Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
3.4. ACCELERATION OF EXERCISABILITY. In the event of the merger or
consolidation of the Company with or into another corporation, the
exchange of all or substantially all of the assets of the Company for the
securities of another corporation, the acquisition by another corporation
or person of all or substantially all of the Company's assets or eighty
percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the company, the Committee may, in its
absolute discretion and upon such terms and conditions as it deems
appropriate, provide by resolution, adopted prior to such event and
incorporated in the notice referred to in Section 3.3.6 that at some time
prior to the effective date of such event this Option shall be
exercisable as to all shares covered hereby, notwithstanding that this
Option may not yet have become fully exercisable under Section 3.1.1;
provided, however, that this acceleration of exercisability shall not
take place if:
3.4.1. This Option becomes unexercisable under Section 3.3 prior
to said effective date; or
3.4.2. In connection with such an event, provision is made for an
assumption of the Option or substitution therefor of a new option
by an employer corporation or a parent or subsidiary of such
corporation; and
provided further, that nothing in this Section 3.4 shall make this Option
exercisable if it is otherwise unexercisable by reason of Section 5.6.
The Committee may make such determinations and adopt such rules
and conditions as it, in its absolute discretion, deems appropriate in
connection with such acceleration of exercisability, including, but not
by way of limitation, provisions to ensure that any such acceleration and
resulting exercise shall be conditioned upon the consummation of the
contemplated corporate transaction. None of the foregoing discretionary
terms of this Section shall be permitted to the extent that such
discretion would be inconsistent with the requirements of Rule 16b-3.
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4. EXERCISE OF OPTION.
4.1. PERSON ELIGIBLE TO EXERCISE. During the lifetime of the Optionee,
only the Optionee, or an alternate payee under a QDRO, may exercise the
Option or any portion thereof. After the death of the Optionee, and
exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 3.3, be exercised by the Optionee's
personal representative or by any person empowered to do so under the
Optionee's will or under the then applicable laws of descent and
distribution.
4.2. PARTIAL EXERCISE. Any exercisable portion of the Option or the
entire Option, if then wholly exercisable, may be exercised in whole or
in part at any time prior to the time when the Option or portion thereof
becomes unexercisable under Section 3.3; provided, however, that each
partial exercise shall be for not less than one hundred shares (or
minimum installment set forth in Section 3.1, if a smaller number of
shares) and shall be for whole shares only.
4.3. MANNER OF EXERCISE. The Option, or any exercisable portion thereof,
may be exercised solely by delivery to the Secretary or the Secretary's
office of all of the following prior to the time when the Option or such
portion becomes unexercisable under Section 3.3:
4.3.1. Notice in writing signed by the Optionee or the other
person then entitled to exercise the Option or portion, stating
that the Option or portion is thereby exercised, such notice
complying with all applicable rules established by the Committee
or the Board; and
4.3.2. Payment of the purchase price by one of the following
means:
4.3.2.1. Full payment (in cash) for the shares with respect
to which such Option or portion is exercised; or
4.3.2.2. With the consent of the Committee, payment delayed
for up to thirty (30) days from the date the Option, or
portion thereof, is exercised; or
4.3.2.3. With the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Optionee duly
endorsed for transfer to the Company or (ii) subject to the
timing requirements of Section 4.4, shares of the Company's
Common Stock issuable to the Optionee upon exercise of the
Option, with a Fair Market Value on the date of the Option
exercise equal to the aggregate purchase price of the
shares with respect to which such Option or portion is
exercised; or
4.3.2.4. With the consent of the Committee, property of any
kind which constitutes good and valuable consideration; or
4.3.2.5. With the consent of the Committee, a full recourse
promissory note bearing interest (at no less than such rate
as shall then preclude the imputation of interest under the
Code or successor provision) and payable upon such terms as
may be prescribed by the Committee or the Board.
Notwithstanding the foregoing, upon exercise Optionee shall
pay such amount in cash of the total consideration as
required pursuant to Section 154 of the Delaware general
Corporation Law (including any successor provisions). Until
such time as the Optionee has paid the full consideration
required hereunder, any shares of Common Stock issuable
upon exercise of the
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Option and delivered to the Optionee shall be designated as
partly paid. The Committee may also prescribe the form of
such note and security to be given for such note. The
Option may not be exercised, however, by delivery of a
promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by
law; or,
4.3.2.6. With the consent of the Committee, any combination
of the consideration provided in the foregoing
subparagraphs 4.3.2.1 through 4.3.2.5; and,
4.3.3. A bona fide written representation and agreement, in a form
satisfactory to the Committee or the Board, signed by the Optionee
or other person then entitled to exercise such Option or portion,
stating that the shares of stock are being acquired for the
Optionee's own account, for investment and without any present
intention of distributing or reselling said shares of any of them
except as may be permitted under the Securities Act and then
applicable rules and regulations thereunder, and that the Optionee
or other person then entitled to exercise such Option or portion
will indemnify the Company against and hold it free and harmless
from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person
is contrary to the representation and agreement referred to above.
The Committee may, in its absolute discretion, take whatever
additional actions it deems appropriate to insure the observance
and performance of such representation and agreement and to effect
compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of
the foregoing, the Committee may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of
shares acquired on an Option exercise does not violate the
Securities Act, and may issue stop-transfer orders covering such
shares. Share certificates evidencing stock issued on exercise of
this Option shall bear an appropriate legend referring to the
provisions of this subsection 4.3.3 and the agreements herein. The
written representation and the agreement referred to in the first
sentence of this subsection 4.3.3 shall, however, not be required
if the shares to be issued pursuant to such exercise have been
registered under the Securities Act, and such registration is then
effective in respect of such shares; and
4.3.4. Full payment to the Company (or other employer corporation)
of all amounts which, under federal, state or local tax law, it is
required to withhold upon exercise of the Option; with the consent
of the Committee, (i) shares of the Company's Common Stock owned
by the Optionee duly endorsed for transfer, or (ii) subject to the
timing requirements of Section 4.4, shares of the Company's Common
Stock issuable to the Optionee upon exercise of the Option, having
a Fair Market Value at the date of Option exercise equal to the
sums required to be withheld, may be used to make all or part of
such payment; and
4.3.5. In the event the Option or portion shall be exercised
pursuant to Section 4.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons
to exercise the Option.
4.4. CERTAIN TIMING REQUIREMENTS. Shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option may be used to
satisfy the Option price or the tax withholding consequences of such
exercise only (i) during the period beginning on the third (3rd) business
day following the date of release of the quarterly or annual summary
statement of sales and earnings of the Company and ending on the twelfth
business day following such date or (ii) pursuant to an irrevocable
written election by the Optionee to use shares of the Company's Common
Stock issuable to the Optionee upon exercise of the Option to pay all or
part of the Option price or the withholding taxes (subject to the
approval of the Committee) made at least six months prior to the payment
of such Option price or withholding taxes.
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4.5. CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The shares of stock
deliverable upon the exercise of the Option, or any portion thereof, may
be either previously authorized but unissued shares or issued shares
which have then been reacquired to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of the
Option or portion thereof prior to fulfillment of all of the following
conditions:
4.5.1. The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
4.5.2. The completion of any registration or other qualification
of such shares under any state or federal law or under rulings or
regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Committee or Board
shall, in its absolute discretion, deem necessary or advisable;
and
4.5.3. The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee or Board
shall, in its absolute discretion, determine to be necessary or
advisable; and
4.5.4. The receipt by the Company of full payment for such shares,
including payment of all amounts which, under federal, state or
local tax law, it is required to withhold upon exercise of the
Option; and
4.5.5. The lapse of such reasonable period of time following the
exercise of the Option as the Committee or Board may from time to
time establish for reasons of administrative convenience.
4.6. RIGHTS AS A SHAREHOLDER. The holder of the Option shall not be, nor
have any of the rights or privileges of, a shareholder of the Company in
respect of any shares purchasable upon the exercise of any part of the
Option unless and until certificates representing such shares shall have
been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
5.1 ADMINISTRATION. The Committee shall have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret or revoke any such rules. All actions taken and all interpretations
and determinations made by the Committee in good faith shall be final and
binding upon the Optionee, the Company and all other interested persons. No
member of the Committee shall be personally liable for any action, determination
or interpretation made in good faith with respect to the Plan or the Option. In
its absolute discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under this Plan except
with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or
any regulations or rules issued thereunder, are required to be determined in the
sole discretion of the Committee.
5.2 OPTION NOT TRANSFERABLE. Neither the Option nor any interest or right
therein or part thereof shall be liable for the debts, contracts or engagements
of the Optionee or the Optionee's successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted
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disposition thereof shall be null and void and of no effect; provided, however,
that this Section 5.2 shall not prevent transfers by will or by the applicable
laws of descent and distribution.
5.3 SHARES TO BE RESERVED. The Company shall at all times during the term
of the Option reserve and keep available such number of shares of stock as will
be sufficient to satisfy the requirements of this Agreement.
5.4 NOTICES. Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to the Optionee at the
address given beneath the Optionee's signature hereto. By a notice given
pursuant to this Section 5.4, either party may hereafter designate a different
address for notices to be given to such party. Any notice which is required to
be given to the Optionee shall, if the Optionee is then deceased, be given to
the Optionee's personal representative if such representative has previously
informed the Company of the representative's status and address by written
notice under this Section 5.4. Any notice shall be deemed duly given when
enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.
5.5 TITLES. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.
5.6 STOCKHOLDER APPROVAL. The Plan will be submitted for approval by the
Company's stockholders within twelve (12) months after the date the Plan was
initially adopted by the Board. This Option may not be exercised to any extent
to any extent by anyone prior to the time when the Plan is approved by the
shareholders, and if such approval has not been obtained by the end of said
twelve-month period, this Option shall thereupon be canceled and become null and
void.
5.7 CONSTRUCTION. This Agreement shall be administered, interpreted and
enforced under the laws of the State of Delaware.
5.8 CONFORMITY TO SECURITIES LAWS. The Optionee acknowledges that the
Plan is intended to conform to the extent necessary with all provisions of the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, including
without limitation Rule 16b-3. Notwithstanding anything herein to the contrary,
the Plan shall be administered, and the Option is granted and may be exercised,
only in such a manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.
5.9 AMENDMENTS. This Agreement may not be modified, amended, or
terminated except by an instrument in writing, signed by the Optionee or such
other person as may be permitted to exercise the Option pursuant to Section 4.1
and by a duly authorized representative of the Company.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
AMBASSADORS GROUP, INC.
By
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President
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By
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Secretary
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Optionee
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Address
Optionee's Taxpayer
Identification Number:
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