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EXHIBIT 10.2
COLORADO PRIME HOLDINGS, INC.
1997 STOCK OPTION PLAN
1. Definitions
In this Plan, except where the context otherwise indicates, the
following definitions apply:
1.1. "Affiliate" means parent or subsidiary corporations of the
Company, as defined in Sections 424(e) and (f) of the Code (but substituting
"the Company" for "employer corporation"), including parents or subsidiaries of
the Company which become such after adoption of the Plan.
1.2. "Agreement" means a written agreement granting an Option that is
executed by the Company and the Optionee.
1.3. "Board" means the Board of Directors of the Company.
1.4. "Code" means the Internal Revenue Code of 1986, as amended.
1.5. "Committee" means the committee appointed by the Board to
administer the Plan.
1.6. "Common Stock" means the common stock, par value $0.01 per share,
of the Company.
1.7. "Company" means Colorado Prime Holdings, Inc., a Delaware
corporation.
1.8. "Date of Exercise" means the date on which the Company receives
notice of the exercise of an Option in accordance with the terms of Article 7.
1.9. "Date of Grant" means the date on which an
Option is granted under the Plan.
1.10. "Director" means a member of the Board of Directors of the
Company or any Affiliate.
1.11. "Eligible Individual" means (i) any Employee or Director or (ii)
any consultant or advisor to the Company or an Affiliate who renders bona fide
services to the Company or an Affiliate other than services in connection with
the offer or sale of securities in a capital raising transaction.
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1.12. "Employee" means any employee of the Company or an Affiliate or
any person who has been hired to be an employee of the Company or an Affiliate.
1.13. "Fair Market Value" means the fair market value of a Share as
determined by the Committee pursuant to a reasonable method adopted in good
faith for such purpose.
1.14. "Incentive Stock Option" means an Option granted under the Plan
that qualifies as an incentive stock option under Section 422 of the Code and
that the Company designates as such in the Agreement granting the Option.
1.15. "Nonstatutory Stock Option" means an Option granted under the
Plan that is not an Incentive Stock Option.
1.16. "Option" means an option to purchase Shares granted under the
Plan.
1.17. "Option Period" means the period during which an Option may be
exercised.
1.18. "Option Price" means the price per Share at which an Option may
be exercised. The Option Price shall be determined by the Committee, provided,
however, that, in the case of Incentive Stock Options the Option Price shall not
be less than the Fair Market Value as of the Date of Grant. Notwithstanding the
foregoing, in the case of an Incentive Stock Option granted to an Optionee who
(applying the rules of Section 424(d) of the Code) owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
the Company or an Affiliate (a "Ten-Percent Stockholder"), the Option Price
shall not be less than one hundred and ten percent (110%) of the Fair Market
Value on the Date of Grant. The Option Price of any Option shall be subject to
adjustment to the extent provided in Article 9 hereof.
1.19. "Optionee" means an Eligible Individual to whom an Option has
been granted.
1.20. "Plan" means the Colorado Prime Holdings, Inc. 1997 Stock Option
Plan.
1.21. "Share" means a share of Common Stock.
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2. Purpose
The Plan is intended to assist the Company and its Affiliates in
attracting and retaining Eligible Individuals of outstanding ability and to
promote the identification of their interests with those of the stockholders of
the Company.
3. Administration
The Committee shall administer the Plan and shall have plenary
authority, in its discretion, to award Options to Eligible Individuals, subject
to the provisions of the Plan. The Committee shall have plenary authority and
discretion, subject to the provisions of the Plan, to determine the terms (which
terms need not be identical) of all Options including, but not limited to, which
Eligible Individuals shall be granted Options, the time or times at which
Options are granted, the Option Price, the number of Shares subject to an
Option, whether an Option shall be an Incentive Stock Option or a Nonstatutory
Stock Option, any provisions relating to vesting, any circumstances in which
Options terminate or Shares may be repurchased by the Company, the period during
which Options may be exercised and any other restrictions on Options. In making
these determinations, the Committee may take into account the nature of the
services rendered by the Optionees, their present and potential contributions to
the success of the Company and its Affiliates, and such other factors as the
Committee in its discretion shall deem relevant. Subject to the provisions of
the Plan, the Committee shall have plenary authority to construe and interpret
the Plan and the Agreements, to prescribe, amend and rescind rules and
regulations relating to the Plan and to make all other determinations deemed
necessary or advisable for the administration of the Plan, including, but not
limited to, any determination to accelerate the vesting of outstanding Options.
The determinations of the Committee on the matters referred to in this Article 3
shall be binding and final.
4. Eligibility
Options may be granted only to Eligible Individuals, provided, however,
that only Employees shall be eligible to receive Incentive Stock Options.
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5. Stock Subject to the Plan
5.1. Subject to adjustment as provided in Article 9, the maximum number
of Shares that may be issued under the Plan is 35,405 Shares.
5.2. If an Option expires or terminates for any reason without having
been fully exercised, the unissued Shares which had been subject to such Option
shall become available for the grant of additional Options.
6. Options
6.1. Options granted under the Plan shall be either Incentive Stock
Options or Nonstatutory Stock Options, as designated by the Committee. Each
Option granted under the Plan shall be clearly identified either as an Incentive
Stock Option or a Nonstatutory Stock Option and shall be evidenced by an
Agreement that specifies the terms and conditions of the grant. Options granted
to Eligible Individuals shall be subject to the terms and conditions set forth
in this Article 6 and such other terms and conditions not inconsistent with this
Plan as the Committee may specify. All Incentive Stock Options shall comply with
the provisions of the Code governing incentive stock options and with all other
applicable rules and regulations.
6.2. The Option Period for Options granted to Eligible Individuals
shall be determined by the Committee and specifically set forth in the
Agreement, provided, however, that an Option shall not be exercisable after ten
years (five years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) from its Date of Grant.
7. Exercise of Options
7.1. An Option may, subject to the terms of the applicable Agreement
under which it is granted, be exercised in whole or in part by the delivery to
the Company of written notice of the exercise, in such form as the Committee may
prescribe, accompanied by full payment of the Option Price for the Shares with
respect to which the Option is exercised as provided in Section 7.2 hereof.
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7.2. Payment of the aggregate Option Price for the Shares with respect
to which an Option is being exercised shall be made in cash; provided, however,
that the Committee, in its sole discretion, may provide in an Agreement that
part or all of such payment may be made by the Optionee in one or more of the
following manners:
(a) by delivery (including constructive delivery) to the Company of Shares
valued at Fair Market Value on Date of Exercise; (b) by delivery on a form
prescribed by the Committee of a properly executed exercise notice and
irrevocable instructions to a registered securities broker approved by the
Committee to sell Shares and promptly deliver cash to the Company; (c) by
delivery of a promissory note as provided in Section 7.3 hereof; or (d) by
surrender to the Company of an Option (or a portion thereof) that has become
exercisable and the receipt from the Company upon such surrender, without any
payment to the Company (other than required tax withholding amounts), of (x)
that number of Shares (equal to the highest whole number of Shares) having an
aggregate Fair Market Value as of the date of surrender equal to that number of
Shares subject to the Option (or portion thereof) being surrendered multiplied
by an amount equal to the excess of (i) the Fair Market Value on the date of
surrender over (ii) the Option Price, plus (y) an amount of cash equal to the
Fair Market Value of any fractional Share to which the Optionee would be
entitled but for the parenthetical in clause (x) above relating to whole number
of Shares.
7.3. To the extent provided in an Option Agreement and permitted by
applicable law, the Committee may accept as payment of the Option Price a
promissory note executed by the Optionee evidencing his or her obligation to
make future cash payment thereof; provided, however, that in no event may the
Committee accept a promissory note for an amount in excess of the difference
between the aggregate Option Price and the par value of the Shares. Promissory
notes made pursuant to this Section 7.3 shall be payable upon such terms as may
be determined by the Committee, shall be secured by a pledge of the Shares
received upon exercise of the Option and shall bear interest at a rate fixed by
the Committee.
8. Restrictions on Transfer
Options shall not be transferable other than by will or the laws of
descent and distribution. An Option may be exercised during the Optionee's
lifetime only by
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the Optionee or, in the event of his or her legal disability, by his or her
legal representative. The Shares acquired pursuant to the Plan shall be subject
to such restrictions and agreements regarding sale, assignment, encumbrances, or
other transfers or dispositions thereof (i) as are in effect among the
stockholders of the Company at the time such Shares are acquired, (ii) as the
Committee shall deem appropriate and (iii) as are required by applicable law.
9. Capital Adjustments
In the event of any change in the outstanding Common Stock by reason of
any stock dividend, split-up (or reverse stock split), recapitalization,
reclassification, reorganization, reincorporation, combination or exchange of
shares, merger, consolidation, liquidation or similar change in corporate
structure, the Committee may, in its discretion, provide for a substitution for
or adjustment in (i) the number and class of Shares subject to outstanding
Options, (ii) the Option Price of outstanding Options, and (iii) the aggregate
number and class of Shares that may be issued under the Plan.
10. Termination or Amendment
The Board may amend, alter, suspend or terminate the Plan in any
respect at any time; provided, however, that after the Plan has been approved by
the stockholders of the Company, no amendment, alteration, suspension or
termination of the Plan shall be made by the Board without approval of (i) the
Company's stockholders to the extent stockholder approval is required by
applicable law or regulations and (ii) each affected Optionee if such amendment,
alteration, suspension or termination would adversely affect his or her rights
or obligations under any Option granted prior to the date of such amendment,
alteration, suspension or termination. No Option may be granted nor any Shares
issued under the Plan during any suspension or after termination of the Plan.
11. Modification, Extension and Renewal of Options; Substituted Options
11.1. Subject to the terms and conditions of the Plan, the Committee
may modify, extend or renew the
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terms of any outstanding Options, or accept the surrender of outstanding Options
granted under the Plan or options and stock appreciation rights granted under
any other plan of the Company or an Affiliate (to the extent not theretofore
exercised) and authorize the granting of new Options in substitution therefor
(to the extent not theretofore exercised). Any such substituted Options may
specify a lower exercise price than the surrendered options and stock
appreciation rights, a longer term than the surrendered options and stock
appreciation rights, or have any other provisions that are authorized by the
Plan. Notwithstanding the foregoing, however, no modification of an Option
shall, without the consent of the Optionee, alter or impair any of the
Optionee's rights or obligations under such Option.
11.2. Anything contained herein to the contrary notwithstanding,
Options may, at the discretion of the Committee, be granted under the Plan in
substitution for stock appreciation rights and options to purchase shares of
capital stock of another corporation which is merged into, consolidated with, or
all or a substantial portion of the property or stock of which is acquired by,
the Company or one of its Affiliates. The terms and conditions of the substitute
Options so granted may vary from the terms and conditions set forth in this Plan
to such extent as the Committee may deem appropriate in order to conform, in
whole or part, to the provisions of the options and stock appreciation rights in
substitution for which they are granted.
12. Effectiveness of the Plan
The Plan and any amendment thereto shall be effective on the date on
which it is adopted by the Board, provided that any such adoption requiring
stockholder approval is subject to approval by vote of the stockholders of the
Company within 12 months after such adoption by the Board. Options may be
granted prior to stockholder approval of the Plan, and the date on which any
such Option is granted shall be the Date of Grant for all purposes provided that
(a) each such Option shall be subject to stockholder approval of the Plan, (b)
no Option may be exercised prior to such stockholder approval, and (c) any such
Option shall be void ab initio if such stockholder approval is not obtained.
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13. Withholding
The Company's obligation to deliver Shares or pay any amount pursuant
to the terms of any Option shall be subject to the satisfaction of applicable
federal, state and local tax withholding requirements. To the extent provided in
the applicable Agreement and in accordance with rules prescribed by the
Committee, an Optionee may satisfy any such withholding tax obligation by any of
the following means or by a combination of such means: (i) tendering a cash
payment, (ii) authorizing the Company to withhold Shares otherwise issuable to
the Optionee, or (iii) delivering to the Company already owned and unencumbered
Shares.
14. Term of the Plan
Unless sooner terminated by the Board pursuant to Section 10, the Plan
shall terminate on May 9, 2007, and no Options may be granted after such date.
The termination of the Plan shall not affect the validity of any Option
outstanding on the date of termination.
15. Indemnification of Committee
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees, actually and reasonably incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any Option granted hereunder, and
against all amounts reasonably paid by them in settlement thereof or paid by
them in satisfaction of a judgment in any such action, suit or proceeding, if
such members acted in good faith and in a manner which they believed to be in,
and not opposed to, the best interests of the Company.
16. General Provisions
16.1. The establishment of the Plan shall not confer upon any Eligible
Individual any legal or equitable right against the Company, any Affiliate or
the Committee, except as expressly provided in the Plan.
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16.2. The Plan does not constitute inducement or consideration for the
employment or service of any Eligible Individual, nor is it a contract between
the Company or any Affiliate and any Eligible Individual. Participation in the
Plan shall not give an Eligible Individual any right to be retained in the
service of the Company or any Affiliate.
16.3. Neither the adoption of this Plan nor its submission to the
stockholders, shall be taken to impose any limitations on the powers of the
Company or its Affiliates to issue, grant, or assume options, warrants, rights,
or restricted stock, otherwise than under this Plan, or to adopt other stock
option or restricted stock plans or to impose any requirement of stockholder
approval upon the same.
16.4. The interests of any Eligible Individual under the Plan are not
subject to the claims of creditors and may not, in any way, be assigned,
alienated or encumbered except as provided in an Agreement.
16.5. The Plan shall be governed, construed and administered in
accordance with the laws of the State of Delaware and it is the intention of the
Company that Incentive Stock Options granted under the Plan qualify as such
under Section 422 of the Code.
16.6. The Committee may require each person acquiring Shares pursuant
to Options hereunder to represent to and agree with the Company in writing that
such person is acquiring the Shares without a view to distribution thereof. The
certificates for such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer. All certificates for Shares
issued pursuant to the Plan shall be subject to such stock transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange or interdealer quotation system upon which the Common Stock
is then listed or quoted, and any applicable federal or state securities laws.
The Committee may place a legend or legends on any such certificates to make
appropriate reference to such restrictions. The certificates for Shares acquired
pursuant to an Option may also include any legend which the Committee deems
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appropriate to reflect restrictions contained in this Plan or in the applicable
Agreement or to comply with the Delaware General Corporation Law.
16.7. The Company shall not be required to issue any certificate or
certificates for Shares upon the exercise of Options, or record any person as a
holder of record of such Shares, without obtaining, to the complete satisfaction
of the Committee, the approval of all regulatory bodies deemed necessary by the
Committee, and without complying to the Committee's complete satisfaction, with
all rules and regulations, under federal, state or local law deemed applicable
by the Committee.
