Exhibit 10.48
Nonstatutory Stock Option Grant Agreement
Under The
TeleCommunication Systems, Inc.
Fifth Amended and Restated 1997 Stock Incentive Plan
     1. Terminology. All capitalized words that are not defined in this
Agreement have the meanings ascribed to them in the Plan. For purposes of this
Agreement, the terms below have the following meanings:
          (a) “Cause” has the meaning ascribed to such term or words of similar
import in the Optionee’s written employment or service contract with the Company
and, in the absence of such agreement or definition, means: (i) the willful
commission by the Optionee of a criminal or other act that causes or is likely
to cause substantial economic damage to the Company or substantial injury to the
business reputation of the Company; (ii) the commission by the Optionee of an
act of fraud in the performance of such Optionee’s duties on behalf of the
Company; or (iii) the continuing willful failure of the Optionee to perform the
duties of such Optionee to the Company (other than such failure resulting from
the Optionee’s incapacity due to physical or mental illness), all as determined
by the Administrator, which determination will be conclusive. For purposes of
this Agreement, no act, or failure to act, on the Optionee’s part shall be
considered “willful” unless done or omitted to be done by the Optionee not in
good faith with the reasonable belief that the Optionee’s action or omission was
in the best interest of the Company.
          (b) “Change in Control” means: (i) an acquisition (other than from the
Company) in a transaction, or a series of related transactions, by any person,
entity or “group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the “Exchange Act”), (excluding for this
purpose, (A) the Company or its subsidiaries, (B) any employee benefit plan of
the Company or its subsidiaries which acquires beneficial ownership of voting
securities of the Company, (C) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (D) any corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors) of
beneficial ownership, within the meaning of Rule 13d-3 promulgated under the
Exchange Act, of 50% or more of either the then outstanding shares of common
stock or the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors (the "Company
Voting Stock”); (ii) the effective time of any merger, share exchange,
consolidation or other reorganization or business combination of the Company if
immediately after such transaction persons who hold a majority of the
outstanding voting securities entitled to vote generally in the election of
directors of the surviving entity (or the entity owning 100% of such surviving
entity) are not persons who held the Company Voting Stock immediately prior to
such transaction; (iii) the closing of a sale or conveyance of all or
substantially all of the assets of the Company; (iv) individuals who were the
Board’s nominees for election as directors immediately prior to a meeting of the
stockholders of the Company involving an actual or threatened election contest
relating to the election of the directors of the
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Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act, cease to constitute a majority of the Board following
the election; or (v) the dissolution or liquidation of the Company; provided,
however, that the term “Change in Control” does not include a public offering of
capital stock of the Company that is effected pursuant to a registration
statement filed with, and declared effective by, the Securities and Exchange
Commission under the Securities Act of 1933.
          (c) “Company” includes TeleCommunication Systems, Inc. and its
Affiliates, except where the context otherwise requires.
          (d) “Option Shares” mean the shares of Common Stock underlying the
Options.
          (e) “Total and Permanent Disability” means the inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
twelve months. The Administrator may require such proof of Total and Permanent
Disability as the Administrator in its sole discretion deems appropriate and the
Administrator’s good faith determination as to whether the Optionee is totally
and permanently disabled will be final and binding on all parties concerned.
     2. Vesting. The Options vest in accordance with the vesting schedule
identified in the Stock Option Certificate which is attached hereto and
constitutes a part of the Agreement (the "Vesting Schedule”), so long as the
Optionee is in the continuous employ of, or in a service relationship with, the
Company from the Grant Date through the applicable date upon which vesting is
scheduled to occur. No vesting will accrue to any Options after the Optionee
ceases to be in either an employment or other service relationship with the
Company.
     3. Exercise of Options.
          (a) Right to Exercise. The Optionee may exercise the Options to the
extent vested at any time on or before the Expiration Date or the earlier
termination of the Options, unless otherwise provided in this Agreement.
Section 4 below describes certain limitations on exercise of the Options that
apply in the event of the Optionee’s death, Total and Permanent Disability,
discharge by the Company without Cause or other termination of employment or
other service relationship with the Company. The Options may be exercised only
in multiples of whole shares and may not be exercised at any one time as to
fewer than one hundred shares (or such lesser number of shares as to which the
Options are then exercisable). No fractional shares will be issued under the
Options.
          (b) Exercise Procedure. In order to exercise the Options, the
following items must be delivered to the Administrator before the expiration or
termination of the Options: (i) an exercise notice, in such form as the
Administrator may require from time to time, specifying the number of Option
Shares to be purchased, and (ii) full payment of the Exercise Price for such
Option Shares or properly executed, irrevocable instructions, in such form as
the Administrator may require from time to time, to effectuate a broker-assisted
cashless exercise, each in accordance with Section 3(c) of this Agreement. An
exercise will not be effective until the Administrator receives all of the
foregoing items.
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          (c) Method of Payment. Payment of the Exercise Price may be made by
delivery of cash, certified or cashier’s check, money order or other cash
equivalent acceptable to the Administrator in its discretion, a broker-assisted
cashless exercise in accordance with Regulation T of the Board of Governors of
the Federal Reserve System through a brokerage firm approved by the
Administrator, or a combination of the foregoing. In addition, payment of the
Exercise Price may be made by any of the following methods, or a combination
thereof, as determined by the Administrator in its discretion at the time of
exercise:
          (i) by tender (via actual delivery or attestation) to the Company of
other shares of Common Stock of the Company which have a Fair Market Value on
the date of tender equal to the Exercise Price, provided that such shares have
been owned by the Optionee for a period of at least six months free of any
substantial risk of forfeiture or were purchased on the open market without
assistance, direct or indirect, from the Company;
          (ii) by delivery of the Optionee’s full recourse promissory note
payable to the Company in a form approved by the Administrator; or
          (iii) by any other method approved by the Administrator.
          (d) Issuance of Shares upon Exercise. Upon exercise of the Options in
accordance with the terms of this Agreement, the Company will issue to the
Optionee, the brokerage firm specified in the Optionee’s delivery instructions
pursuant to a broker-assisted cashless exercise, or such other person exercising
the Options, as the case may be, the number of shares of Common Stock so paid
for, in the form of fully paid and nonassessable stock. The Company will deliver
stock certificates for the Option Shares as soon as practicable after exercise,
which certificates will, unless such Option Shares are registered or an
exemption from registration is available under applicable federal and state law,
bear a legend restricting transferability of such shares.
     4. Termination of Employment or Service.
          (a) Exercise Period Following Cessation of Employment or Other Service
Relationship, In General. If the Optionee ceases to be employed by, or in a
service relationship with, the Company for any reason other than death, Total
and Permanent Disability, or discharge by the Company without Cause, the Options
terminate in their entirety, regardless of whether the Options are vested,
immediately upon the Optionee’s termination of employment or other service
relationship.
          (b) Termination by the Company Without Cause. In the event the
Optionee’s employment or other service relationship is terminated by the Company
without Cause, (i) the unvested Options, after giving effect to the provisions
of Section 2 of this Agreement, terminate immediately upon such cessation, and
(ii) the vested Options remain exercisable during the 90-day period following
such cessation, but in no event after the Expiration Date. Unless sooner
terminated, the vested Options terminate upon the expiration of such 90-day
period.
          (c) Disability of Optionee. Notwithstanding the provisions of Section
4(a) above, if the Optionee ceases to be employed by, or in a service
relationship with, the Company as a result of the Optionee’s Total and Permanent
Disability, (i) the unvested Options, after giving effect to the provisions of
Section 2 of this Agreement, terminate immediately upon such cessation, and (ii)
the vested Options remain exercisable during the six-month period following
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such cessation, but in no event after the Expiration Date. Unless sooner
terminated, the vested Options terminate upon the expiration of such six-month
period.
          (d) Death of Optionee. If the Optionee dies prior to the expiration or
other termination of the Options, (i) the unvested Options, after giving effect
to the provisions of Section 2 of this Agreement, terminate immediately upon the
Optionee’s death, and (ii) the vested Options remain exercisable during the
six-month period following the Optionee’s death, but in no event after the
Expiration Date, by the Optionee’s executor, personal representative, or the
person(s) to whom the Options are transferred by will or the laws of descent and
distribution. Unless sooner terminated, the vested Options terminate upon the
expiration of such six-month period.
          (e) Misconduct. Notwithstanding anything to the contrary in this
Agreement, the Options terminate in their entirety, regardless of whether the
Options are vested, immediately upon the Optionee’s discharge of employment or
other service relationship for Cause or upon the Optionee’s commission of any of
the following acts during any period following the cessation of employment or
other service relationship during which the Options otherwise would be
exercisable: (i) fraud on or misappropriation of any funds or property of the
Company, or (ii) breach by the Optionee of any provision of any employment,
non-disclosure, non-competition, non-solicitation, assignment of inventions, or
other similar agreement executed by the Optionee for the benefit of the Company,
as determined by the Administrator, which determination will be conclusive.
     5. Nontransferability of Options. These Options are nontransferable
otherwise than by will or the laws of descent and distribution and during the
lifetime of the Optionee, the Options may be exercised only by the Optionee or,
during the period the Optionee is under a legal disability, by the Optionee’s
guardian or legal representative. Except as provided above, the Options may not
be assigned, transferred, pledged, hypothecated or disposed of in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process.
     6. Nonstatutory Nature of the Options. The Options are not intended to
qualify as incentive stock options within the meaning of Code section 422, and
this Agreement shall be so construed. The Optionee acknowledges that, upon
exercise of the Options, the Optionee will recognize taxable income in an amount
equal to the excess of the then Fair Market Value of the Option Shares over the
Exercise Price and must comply with the provisions of Section 7 of this
Agreement with respect to any tax withholding obligations that arise as a result
of such exercise.
     7. Withholding of Taxes. At the time the Options are exercised, in whole or
in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll or any other payment of any kind due
the Optionee and otherwise agrees to make adequate provision for foreign,
federal, state and local taxes required by law to be withheld, if any, which
arise in connection with the Options. The Company may require the Optionee to
make a cash payment to cover any withholding tax obligation as a condition of
exercise of the Options or issuance of share certificates representing Option
Shares.
     The Administrator may, in its sole discretion, permit the Optionee to
satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the Options either by electing to have the Company withhold from
the shares to be issued upon exercise that number
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of shares, or by electing to deliver to the Company already-owned shares, in
either case having a Fair Market Value equal to the amount necessary to satisfy
the statutory minimum withholding amount due.
     8. Adjustments for Corporate Transactions and Other Events.
          (a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock
dividend of, or stock split or reverse stock split affecting, the Common Stock,
the number of shares covered by and the exercise price and other terms of the
Options, shall, without further action of the Board, be adjusted to reflect such
event unless the Board determines, at the time it approves such stock dividend,
stock split or reverse stock split, that no such adjustment shall be made. The
Administrator may make adjustments, in its discretion, to address the treatment
of fractional shares and fractional cents that arise with respect to the Options
as a result of the stock dividend, stock split or reverse stock split.
          (b) Non-Change in Control Transactions. Except with respect to the
transactions set forth in Section 8(a), in the event of any change affecting the
Common Stock, the Company or its capitalization, by reason of a spin-off,
split-up, dividend, recapitalization, merger, consolidation or share exchange,
other than any such change that is part of a transaction resulting in a Change
in Control, the Administrator, in its discretion and without the consent of the
Optionee, shall make any adjustments in the Options, including but not limited
to reducing the number, kind and price of securities subject to the Options.
          (c) Change in Control Transactions. In the event of any transaction
resulting in a Change in Control, the Options will terminate upon the effective
time of any such Change in Control unless provision is made in connection with
the transaction in the sole discretion of the parties thereto for the
continuation or assumption of the Options, or the substitution of the Options
with new options of the surviving or successor entity or a parent thereof. In
the event of such termination, the Employee will be permitted, for a period of
at least 10 days prior to the effective time of the Change in Control, to
exercise all of the Options that are then exercisable or will become exercisable
upon or prior to the effective time of the Change in Control; provided, however,
that any such exercise of any Options that become exercisable as a result of the
Change in Control shall be deemed to occur immediately prior to the effective
time of such Change in Control.
          (d) Pooling of Interests Transaction. Notwithstanding anything in the
Plan or this Agreement to the contrary, in connection with any business
combination authorized by the Board, the Administrator, in its sole discretion
and without the consent of the Optionee, may make any modifications to the
Options, including but not limited to cancellation, forfeiture, surrender or
other termination of the Options, in whole or in part, regardless of their
vested status, but solely to the extent necessary to facilitate the compliance
of such transaction with requirements for treatment as a pooling of interests
transaction for accounting purposes under generally accepted accounting
principles.
          (e) Adjustments for Unusual Events. The Administrator is authorized to
make, in its discretion and without the consent of the Optionee, adjustments in
the terms and conditions of, and the criteria included in, the Options in
recognition of unusual or nonrecurring events affecting the Company, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Administrator
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determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Options or the Plan.
          (f) Binding Nature of Adjustments. Adjustments under this Section 8
will be made by the Administrator, whose determination as to what adjustments,
if any, will be made and the extent thereof will be final, binding and
conclusive. No fractional shares will be issued pursuant to the Options on
account of any such adjustments. The terms and conditions of this Agreement
shall apply with equal force to any additional and/or substitute securities
received by the Optionee pursuant to this Section 8 in exchange for, or by
virtue of the Optionee’s ownership of, the Options or the Option Shares, except
as otherwise determined by the Administrator.
     9. Confidential Information. In consideration of the Options granted to the
Optionee pursuant to this Agreement, the Optionee agrees and covenants that,
except as specifically authorized by the Company, the Optionee will keep
confidential any trade secrets or confidential or proprietary information of the
Company which are now or which hereafter may become known to the Optionee as a
result of the Optionee’s employment by or other service relationship with the
Company, and shall not at any time, directly or indirectly, disclose any such
information to any person, firm, Company or other entity, or use the same in any
way other than in connection with the business of the Company, at all times
during and after the Optionee’s employment or other service relationship. The
provisions of this Section 9 shall not narrow or otherwise limit the obligations
and responsibilities of the Optionee set forth in any agreement of similar
import entered into between the Optionee and the Company.
     10. Non-Guarantee of Employment or Service Relationship. Nothing in the
Plan or this Agreement shall alter the at-will or other employment status or
other service relationship of the Optionee, nor be construed as a contract of
employment or service relationship between the Company and the Optionee, or as a
contractual right of Optionee to continue in the employ of, or in a service
relationship with, the Company for any period of time, or as a limitation of the
right of the Company to discharge the Optionee at any time with or without cause
or notice and whether or not such discharge results in the failure of any
Options to vest or any other adverse effect on the Optionee’s interests under
the Plan.
     11. No Rights as a Stockholder. The Optionee shall not have any of the
rights of a stockholder with respect to the Option Shares until such shares have
been issued to him or her upon the due exercise of the Options. No adjustment
shall be made for dividends or distributions or other rights for which the
record date is prior to the date such shares are issued.
     12. The Company’s Rights. The existence of the Options shall not affect in
any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
other stocks with preference ahead of or convertible into, or otherwise
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of the
Company’s assets or business, or any other corporate act or proceeding, whether
of a similar character or otherwise.
     13. Optionee. Whenever the word “Optionee” is used in any provision of this
Agreement under circumstances where the provision should logically be construed,
as
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determined by the Administrator, to apply to the estate, personal
representative, or beneficiary to whom the Options may be transferred by will or
by the laws of descent and distribution, or another permitted transferee, the
word “Optionee” shall be deemed to include such person.
     14. Notices. All notices and other communications made or given pursuant to
this Agreement shall be in writing and shall be sufficiently made or given if
hand delivered or mailed by certified mail, addressed to the Optionee at the
address contained in the records of the Company, or addressed to the
Administrator, care of the Company for the attention of its Corporate Secretary
at its principal office or, if the receiving party consents in advance,
transmitted and received via telecopy or via such other electronic transmission
mechanism as may be available to the parties.
     15. Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the Options granted hereunder. Any oral or written
agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Agreement with respect to the
Options granted hereunder shall be void and ineffective for all purposes.
     16. Amendment. This Agreement may be amended from time to time by the
Administrator in its discretion; provided, however, that this Agreement may not
be modified in a manner that would have a materially adverse effect on the
Options or Option Shares as determined in the discretion of the Administrator,
except as provided in the Plan or in a written document signed by each of the
parties hereto.
     17. Conformity with Plan. This Agreement is intended to conform in all
respects with, and is subject to all applicable provisions of, the Plan.
Inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of the Plan. In the event of any ambiguity in this
Agreement or any matters as to which this Agreement is silent, the Plan shall
govern. A copy of the Plan is available upon request to the Administrator.
     18. Governing Law. The validity, construction and effect of this Agreement,
and of any determinations or decisions made by the Administrator relating to
this Agreement, and the rights of any and all persons having or claiming to have
any interest under this Agreement, shall be determined exclusively in accordance
with the laws of the State of Maryland, without regard to its provisions
concerning the applicability of laws of other jurisdictions. Any suit with
respect hereto will be brought in the federal or state courts in the districts
which include the city and state in which the principal offices of the Company
are located, and the Optionee hereby agrees and submits to the personal
jurisdiction and venue thereof.
     19. Headings. The headings in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
Enclosure: Prospectus of the TeleCommunication Systems, Inc. Fifth Amended and
Restated 1997 Stock Incentive Plan
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