Document:

EX-10.2

 

Exhibit 10.2

BLACK BOX CORPORATION

1992 DIRECTOR STOCK OPTION PLAN

(As Amended through August 9, 2007)

     I. PURPOSES

     BLACK BOX CORPORATION (the “Company”) desires to afford certain of its directors, and certain
directors of any subsidiary corporation or parent corporation of the Company now existing or
hereafter formed or acquired an opportunity to acquire a proprietary interest in the Company, and
thus to create in such directors an increased interest in and a greater concern for the welfare of
the Company and its subsidiaries.

     The Company, by means of this 1992 Director Stock Option Plan, as originally approved on
November 11, 1992, and as further amended on, May 10, 1994, August 9, 1994, August 7, 1995, August
12, 1996, August 13, 1997, September 2, 1997, February 3, 1998, May 5, 1998, August 10, 1998,
August 10, 1999, August 23, 2001, August 15, 2002, August 12, 2003, August 10, 2004, March 15,
2005, August 8, 2006 and August 9, 2007 (the “Plan”), seeks to retain the services of certain
persons now serving as directors and to secure the services of persons capable of filling such
positions.

     The stock options (“Options”) and stock appreciation rights (“Rights”) offered pursuant to the
Plan are a matter of separate inducement and are not in lieu of any salary or other compensation
for the services of any director.

     The Options granted under the Plan are intended to be options that do not meet the
requirements for incentive stock options within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”).

     II. AMOUNT OF STOCK SUBJECT TO THE PLAN

     The total number of shares of common stock of the Company which may be purchased or acquired
pursuant to the exercise of Options or Rights granted under the Plan shall not exceed, in the
aggregate, 270,000 shares of the authorized common stock, $.001 par value per share, of the Company
(the “Shares”), such number subject to adjustment as provided in Article XII hereof. Shares that
are the subject of Rights and related Options shall be counted only once in determining whether the
maximum number of Shares that may be purchased or awarded under the Plan has been exceeded.

     Shares acquired under the Plan may be either authorized but unissued Shares or Shares of
issued stock held in the Company’s treasury, or both, at the discretion of the Company. If and to
the extent that Options or Rights granted under the Plan expire or terminate without having been
exercised, the Shares covered by such expired or terminated Options or Rights shall again become
available for award under the Plan.

     Except as provided in Article XVIII and subject to Article II, the Company may, from time to
time during the period beginning on the date on which the Company consummates an underwritten
initial public offering of Shares (the “Effective Date”) and originally ending on

 

 

November 30, 2002 but amended to end on November 30, 2012 (the “Termination Date”), grant to
certain directors of the Company, or of any subsidiary corporation or parent corporation of the
Company now existing or hereafter formed or acquired, Options and/or Rights under the terms
hereinafter set forth.

     Provisions of the Plan that pertain to Options or Rights granted to a director shall apply to
Options, Rights or a combination thereof.

     As used in the Plan, the terms “subsidiary corporation” and “parent corporation” shall mean,
respectively, a corporation coming within the definition of such terms contained in Sections 424(f)
and 424(e) of the Code.

     III. ADMINISTRATION

     The board of directors of the Company (the “Board”) may designate from among its members a
director stock option committee (the “Committee”) to administer the Plan. The Committee shall
consist of no fewer than two members of the Board, each of whom shall be a “Non-Employee Director”
within the meaning of Rule 16b-3 (or any successor rule or regulation) promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). A majority of the members of the
Committee shall constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Any member of the Committee may be removed at any time either
with or without cause by resolution adopted by the Board, and any vacancy on the Committee at any
time may be filled by resolution adopted by the Board.

     Subject to the express provisions of the Plan, the Board and the Committee shall have
authority, in their discretion, to determine the directors to whom Options or Rights shall be
granted, the time when such Options or Rights shall be granted, the number of Shares which shall be
subject to each Option or Right, the purchase price or exercise price of each Option or Right, the
period(s) during which such Options or Rights shall become exercisable (whether in whole or in
part) and the other terms and provisions thereof (which need not be identical).

     Subject to the express provisions of the Plan, the Board and the Committee also shall have
authority to construe the Plan and the Options and Rights granted thereunder, to amend the Plan and
the Options and Rights granted thereunder, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the Options (which need not be
identical) and Rights (which need not be identical) granted thereunder and to make all other
determinations necessary or advisable for administering the Plan. The Board and the Committee also
shall have the authority to require, in its discretion, as a condition of the granting of any such
Option or Right, that the director agree (i) not to sell or otherwise dispose of Shares acquired
pursuant to the exercise of such Option or Right for a period of six (6) months following the date
of the acquisition of such Option or Right and (ii) that in the event of termination of service of
such director, other than as a result of removal without cause, such director will not, for a
period to be fixed at the time of the grant of the Option or Right, enter into any other employment
or participate directly or indirectly in any other business or enterprise which is competitive with
the business of the Company or any subsidiary corporation or parent corporation of the Company, or
enter into any employment in which such director will be called

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upon to utilize special knowledge obtained through service as a director of the Company or any
subsidiary corporation or parent corporation thereof. In no event will a director who is subject
to the reporting requirements of Section 16(a) of the Exchange Act be entitled to sell or otherwise
dispose of any Shares acquired pursuant to exercise of any such Options or Rights for a period of
six (6) months from the date of the acquisition of such Options or Rights. Notwithstanding the
foregoing, the Committee shall not have the authority to reduce the exercise price of (i.e.,
reprice) any outstanding Option or Right without stockholder approval.

     The determination of the Board or Committee on matters referred to in this Article III shall
be conclusive.

     The Board or Committee may employ such legal counsel, consultants and agents as it may deem
desirable for the administration of the Plan and may rely upon any opinion or computation received
from any such legal counsel, consultant or agent. Expenses incurred in the engagement of such
counsel, consultant or agent shall be paid by the Company. No member or former member of the Board
or Committee shall be liable for any action or determination made in good faith with respect to the
Plan or any award of Options or Rights granted hereunder.

     IV. ELIGIBILITY

     Options and Rights may be granted only to non-employee directors of the Company or of any
subsidiary corporation or parent corporation of the Company, except as hereinafter provided. Any
person who shall cease to serve on the Board or the board of directors of any subsidiary
corporation or parent corporation of the Company, although such person shall have entered into a
consulting contract with the Company or a subsidiary corporation or parent corporation thereof,
shall not be eligible to receive an Option or a Right.

     The Plan does not create a right in any director to participate in the Plan, nor does it
create a right in any director to have any Options or Rights granted to him or her.

     V. OPTION PRICE AND PAYMENT

     The price for each Share purchasable under any Option granted hereunder shall be such amount
as the Committee shall deem appropriate but not less than one hundred percent (100%) of the fair
market value per share at the date the Option is granted.

     If the Shares are listed on a national securities exchange in the United States (which, for
purposes of this Article V, shall be deemed to include any last sale reported over-the-counter
market), on any date on which the fair market value per Share shall be deemed to be the average of
the high and low quotations at which such Shares are sold on such national securities exchange on
the date such Option is granted. If the Shares are listed on a national securities exchange in the
United States on such date, but the Shares are not traded on such date, or such national securities
exchange is not open for business on such date, the fair market value per Share shall be determined
as of the closest preceding date on which such exchange shall have been open for business and the
Shares shall have been traded. If the Shares are listed on more than one national securities
exchange in the United States on the date on which the fair market value per Share is to be
determined, the Committee shall determine which national securities exchange shall be used for the
purpose of determining the fair market value per Share.

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     If a public market exists for the Shares on any date on which the fair market value per Share
is to be determined but the Shares are not listed on a national securities exchange in the United
States, the fair market value per Share shall be deemed to be the mean between the closing bid and
asked quotations in the over-the-counter market for the Shares on such date. If there are no bid
and asked quotations for the Shares on such date, the fair market value per Share shall be deemed
to be the mean between the closing bid and asked quotations in the over-the-counter market for the
Shares on the closest date preceding such date for which such quotations are available.

     If no public market exists for the Shares on any date on which the fair market value per Share
is to be determined, the Committee shall, in its sole discretion and best judgment, determine the
fair market value of a Share.

     For purposes of this Plan, the determination by the Committee of the fair market value of a
Share shall be conclusive.

     Upon the exercise of an Option granted hereunder, the Company shall cause the purchased Shares
to be issued only when it shall have received the full purchase price for the Shares in cash or by
certified check; provided, however, that in lieu of cash, the holder of an Option
may, if and to the extent the terms of such Option so provide and to the extent permitted by
applicable law, exercise an Option (i) in whole or in part, by delivering to the Company shares of
common stock of the Company (in proper form for transfer and accompanied by all requisite stock
transfer tax stamps or cash in lieu thereof) owned by such holder having a fair market value equal
to the exercise price applicable to that portion of the Option being exercised by the delivery of
such Shares or (ii) in part, by delivering to the Company an executed promissory note on such terms
and conditions as the Committee shall determine, at the time of grant, in its sole discretion;
provided, however, that the principal amount of such note shall not exceed eighty
percent (80%) (or such lesser percentage as would be permitted by applicable margin regulations) of
the aggregate purchase price of the Shares then being purchased pursuant to the exercise
of such Option. The fair market value of the stock so delivered shall be determined as of the date
immediately preceding the date on which the Option is exercised, or as may be required in order to
comply with or to conform to the requirements of any applicable laws or regulations.

     VI. USE OF PROCEEDS

     The cash proceeds of the sale of Shares pursuant to the Plan are to be added to the general
funds of the Company and used for its general corporate purposes as the Board shall determine.

     VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE

     Any Option shall be exercisable at such times, in such amounts and during such period or
periods as the Board or Committee shall determine at the date of the grant of such Option.

     Subject to the provisions of Article XVII, the Board or Committee shall have the right to
accelerate, in whole or in part, from time to time, conditionally or unconditionally, rights to
exercise any Option granted hereunder.

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     To the extent that an Option is not exercised within the period of exercisability specified
therein, it shall expire as to the then unexercised part.

     In no event shall an Option granted hereunder be exercised for a fraction of a Share.

     VIII. EXERCISE OF OPTIONS

     Options granted under the Plan shall be exercised by the optionee as to all or part of the
Shares covered thereby by the giving of written notice of the exercise thereof to the Corporate
Secretary of the Company at the principal business office of the Company, specifying the number of
Shares to be purchased and specifying a business day not more than fifteen (15) days from the date
such notice is given for the payment of the purchase price against delivery of the Shares being
purchased. Subject to the terms of Articles XIV, XV and XVI, the Company shall cause certificates
for the Shares so purchased to be delivered to the optionee at the principal business office of the
Company, against payment of the full purchase price, on the date specified in the notice of
exercise.

     IX. STOCK APPRECIATION RIGHTS

     In the discretion of the Board or Committee, a Right may be granted (i) alone, (ii)
simultaneously with the grant of an Option and in conjunction therewith or in the alternative
thereto or (iii) subsequent to the grant of an Option and in conjunction therewith or in the
alternative thereto.

     The exercise price of a Right granted alone shall be determined by the Board or Committee but
shall not be less than one hundred percent (100%) of the fair market value of one Share on the date
of grant of such Right. A Right granted simultaneously with or subsequent to the grant of an
Option and in conjunction therewith or in the alternative thereto shall have the same exercise
price as the related Option, shall be transferable only upon the same terms and conditions as the
related Option, and shall be exercisable only to the same extent as the related Option;
provided, however, that a Right, by its terms, shall be exercisable only when the
fair market value of the Shares subject to the Right and related Option exceeds the exercise price
thereof.

     Upon exercise of a Right granted simultaneously with or subsequent to an Option and in the
alternative thereto, the number of Shares for which the related Option shall be exercisable shall
be reduced by the number of Shares for which the Right shall have been exercised. The number of
Shares for which a Right shall be exercisable shall be reduced upon any exercise of a related
Option by the number of Shares for which such Option shall have been exercised.

     Any Right shall be exercisable upon such additional terms and conditions as may from time to
time be prescribed by the Board or Committee.

     A Right shall entitle the holder upon exercise thereof to receive from the Company, upon a
written request filed with the Corporate Secretary of the Company at its principal offices (the
“Request”), a number of Shares (with or without restrictions as to substantial risk of forfeiture
and transferability, as determined by the Board in its sole discretion), an amount of cash, or any
combination of Shares and cash, as specified in the Request (but subject to the approval of the

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Board in its sole discretion, at any time up to and including the time of payment, as to the
making of any cash payment), having an aggregate fair market value equal to the product of (i) the
excess of the fair market value, on the day of such Request, of one Share over the exercise price
per Share specified in such Right or its related Option, multiplied by (ii) the number of Shares
for which such Right shall be exercised.

     Any election by a holder of a Right to receive cash in full or partial settlement of such
Right, and any exercise of such Right for cash, may be made only by a Request filed with the
Corporate Secretary of the Company during the period beginning on the third business day following
the date of release for publication by the Company of quarterly or annual summary statements of
sales and earnings and ending on the twelfth business day following such date. Within thirty (30)
days of the receipt by the Company of a Request to receive cash in full or partial settlement of a
Right or to exercise such Right for cash, the Committee shall, in its sole discretion, either
consent to or disapprove, in whole or in part, such Request. A Request to receive cash in full or
partial settlement of a Right or to exercise a Right for cash may provide that, in the event the
Board shall disapprove such Request, such Request shall be deemed to be an exercise of such Right
for Shares.

     If the Board disapproves in whole or in part any election by a holder to receive cash in full
or partial settlement of a Right or to exercise such Right for cash, such disapproval shall not
affect such holder’s right to exercise such Right at a later date, to the extent that such Right
shall be otherwise exercisable, or to elect the form of payment at a later date, provided that an
election to receive cash upon such later exercise shall be subject to the approval of the Board.
Additionally, such disapproval shall not affect such holder’s right to exercise any related Option
or Options granted to such holder under the Plan.

     A holder of a Right shall not be entitled to request or receive cash in full or partial
payment of such Right unless such Right shall have been held for six (6) months from the date of
acquisition to the date of cash settlement thereof; provided, however, that such
prohibition shall not apply if the holder of such Right is not subject to the reporting
requirements of Section 16(a) of the Exchange Act.

     A Right shall be deemed exercised on the last day of its term, if not otherwise exercised by
the holder thereof, provided that the fair market value of the Shares subject to the Right exceeds
the exercise price thereof on such date.

     For all purposes of this Article IX, the fair market value of Shares shall be determined in
accordance with the principles set forth in Article V.

     X. NON-TRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS 

     Neither an Option nor a Right granted hereunder shall be transferable, whether by operation of
law or otherwise, other than by will or the laws of descent and distribution, and any Option or
Right granted hereunder shall be exercisable during the lifetime of the holder only by such holder.
Except to the extent provided above, Options and Rights 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.

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     XI. TERMINATION OF SERVICE

     Upon the cessation of such person’s status as a director of the Company and all subsidiary
corporations and parent corporations of the Company, an Option or Right previously granted to the
director, unless otherwise specified by the Board or Committee in the Option or Right, shall, to
the extent not theretofore exercised, terminate and become null and void, provided that:

     (a) if the director shall die while serving as a director of such corporation or
during either the three (3) month or one (1) year period, whichever is applicable, specified
in clause (b) below and at a time when such director was entitled to exercise an Option or
Right as herein provided, the legal representative of such director, or such person who
acquired such Option or Right by bequest or inheritance or by reason of the death of the
director, may, not later than one (1) year from the date of death, exercise such Option or
Right, to the extent not theretofore exercised, in respect of any or all of such number of
Shares as specified by the Board or Committee in such Option or Right; and

     (b) if the service of any director to whom such Option or Right shall have been
granted shall terminate by reason of the director’s retirement (at such age or upon such
conditions as shall be specified by the Board), disability (as described in Section 22(e)(3)
of the Code) or removal other than for cause (as defined below), and while such director is
entitled to exercise such Option or Right as herein provided, such director shall have the
right to exercise such Option or Right so granted, to the extent not theretofore exercised,
in respect of any or all of such number of Shares as specified by the Board or Committee in
such Option or Right, at any time up to and including (i) three (3) months after the date of
such termination of service in the case of termination by reason of retirement or removal
other than for cause and (ii) one (1) year after the date of termination of service in the
case of termination by reason of disability.

     If a director voluntarily terminates his or her service, or is discharged for cause, any
Option or Right granted hereunder shall, unless otherwise specified by the Board or Committee in
the Option or Right, forthwith terminate with respect to any unexercised portion thereof.

     If an Option or Right granted hereunder shall be exercised by the legal representative of a
deceased or disabled director or former director, or by a person who acquired an Option or Right
granted hereunder by bequest or inheritance or by reason of death of any director or former
director, written notice of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative or other person to
exercise such Option or Right.

     For the purposes of the Plan, the term “for cause” shall mean (i) with respect to a director
who is party to a written agreement with, or, alternatively, participates in a compensation or
benefit plan of the Company or a subsidiary corporation or parent corporation of the Company, which
agreement or plan contains a definition of “for cause” or “cause” (or words of like import) for
purposes of termination of service thereunder, “for cause” or “cause” as defined in the most recent
of such agreements or plans, or (ii) in all other cases, as determined by the Board in its sole
discretion, (a) the willful commission by a director of a criminal or other act that causes or

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probably will cause substantial economic damage to the Company or a subsidiary corporation or
parent corporation of the Company or substantial injury to the business reputation of the Company
or a subsidiary corporation or parent corporation of the Company; (b) the commission by a director
of an act of fraud in the performance of such director’s duties on behalf of the Company or a
subsidiary corporation or parent corporation of the Company; or (c) the continuing willful failure
of a director to perform the duties of such director to the Company or a subsidiary corporation or
parent corporation of the Company (other than such failure resulting from the director’s incapacity
due to physical or mental illness) after written notice thereof (specifying the particulars thereof
in reasonable detail) and a reasonable opportunity to be heard and cure such failure are given to
the director by the Board or the Committee. For purposes of the Plan, no act, or failure to act,
on the director’s part shall be considered “willful” unless done or omitted to be done by the
director not in good faith and without reasonable belief that the director’s action or omission was
in the best interest of the Company or a subsidiary corporation or parent corporation of the
Company.

     In the event of the complete liquidation or dissolution of a subsidiary corporation, or in the
event that the Company ceases to own, directly or indirectly, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock of such corporation, any
unexercised Options or Rights theretofore granted to any person who served as a director of such
subsidiary corporation will be deemed canceled unless such person serves on the Board or board of
directors of any parent corporation or another subsidiary corporation after the occurrence of such
event. In the event an Option or Right is to be canceled pursuant to the provisions of the
previous sentence, notice of such cancellation will be given to each director holding unexercised
Options or Rights and such holder will have the right to exercise such Options or Rights in full
(without regard to any limitation set forth or imposed pursuant to Article VII) during the thirty
(30) day period following notice of such cancellation.

     Notwithstanding anything to the contrary contained in this Article XI, in no event, however,
shall any person be entitled to exercise any Option or Right after the expiration of the period of
exercisability of such Option or Right as specified therein.

     XII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS

     In the event of any change in the outstanding Shares through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, or other like change in capital structure of the
Company, the Board or Committee shall make such adjustment to each outstanding Option and Right
that it, in its sole discretion, deems appropriate. The term “Shares” after any such change shall
refer to the securities, cash and/or property then receivable upon exercise of an Option or Right.
In addition, in the event of any such change, the Board or Committee shall make any further
adjustment as may be appropriate to the maximum number of Shares which may be acquired under the
Plan pursuant to the exercise of Options and Rights, the maximum number of Shares which may be so
acquired by one director and the number of Shares and prices per Share subject to outstanding
Options and Rights as shall be equitable to prevent dilution or enlargement of rights under such
Options or Rights, and the determination of the Board or Committee as to these matters shall be
conclusive.

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     In the event of a “change in control” of the Company, all then outstanding Options and Rights
shall immediately become exercisable. For purposes of the Plan, a “change in control” of the
Company occurs if: (a) any “Person” (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing (i) fifty percent (50%) or
more of the combined voting power of the Company’s then-outstanding securities; or (ii) twenty-five
percent (25%) or more but less than fifty percent (50%) of the combined voting power of the
Company’s then outstanding securities if such transaction(s) giving rise to such beneficial
ownership are not approved by the Board; or (b) at any time a majority of the members of the Board
has been elected or designated by any Person; or (c) the Board shall approve a sale of all or
substantially all of the assets, the result of which would be the occurrence of any event described
in clause (a) or (b) above.

     The Board or Committee, in its discretion, may determine that, upon the occurrence of a
transaction described in the preceding paragraph, each Option or Right outstanding hereunder shall
terminate within a specified number of days after notice to the holder, and such holder shall
receive, with respect to each Share subject to such Option or Right, cash in an amount equal to the
excess of the fair market value of such Shares immediately prior to the occurrence of such
transaction over the exercise price per Share of such Option or Right.

     XIII. RIGHT TO TERMINATE SERVICE

     The Plan shall not impose any obligation on the Company or on any subsidiary corporation or
parent corporation thereof to continue the service of any holder of Options or Rights and it shall
not impose any obligation on the part of any holder of Options or Rights to remain in the service
of the Company or of any subsidiary corporation or parent corporation thereof.

     XIV. PURCHASE FOR INVESTMENT

     Except for hereinafter provided, the Board or Committee may require a director, as a condition
upon exercise of any Option or Right granted hereunder, to execute and deliver to the Company (a)
stock powers with respect to Shares underlying a particular Option or Right and required to be held
by a custodian, and (b) a written statement, in form satisfactory to the Board or Committee in
which the director represents and warrants that Shares are being acquired for such person’s own
account for investment only and not with a view to the resale or distribution thereof. The
director shall, at the request of the Board or Committee, be required to represent and warrant in
writing that any subsequent resale or distribution of Shares by the director shall be made only
pursuant to either (i) a Registration Statement on an appropriate form under the Securities Act of
1933, as amended (the “Securities Act”), which Registration Statement has become effective and is
current with regard to the Shares being sold, or (ii) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption the director shall, prior to any
offer of sale or sale of such Shares, obtain a prior favorable written opinion of counsel, in form
and substance satisfactory to counsel for the Company, as to the application of such exemption
thereto. The foregoing restriction shall not apply to (i) issuances by the Company so long as the
Shares being issued are registered under the Securities Act and a prospectus in respect thereof is
current or (ii) re-offerings of Shares by affiliates of the Company

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(as defined in Rule 405 or any successor rule or regulation promulgated under the Securities
Act) if the Shares being re-offered are registered under the Securities Act and a prospectus in
respect thereof is current.

     XV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES

     Upon any exercise of an Option or Right which may be granted hereunder and, in the case of an
Option, payment of the purchase price, a certificate or certificates for the Shares shall be issued
by the Company in the name of the person exercising the Option or Right and shall be delivered to
or upon the order of such person.

     The Company may endorse such legend or legends upon the certificates for Shares issued
pursuant to the Plan and may issue such “stop transfer” instructions to its transfer agent in
respect of such Shares as, in its discretion, it determines to be necessary or appropriate to (i)
prevent a violation of, or to perfect an exemption from, the registration requirements of the
Securities Act, or (ii) implement the provisions of the Plan and any agreement between the Company
and the optionee or grantee with respect to such Shares.

     The Company shall pay all issue or transfer taxes with respect to the issuance or transfer of
Shares, as well as all fees and expenses necessarily incurred by the Company in connection with
such issuance or transfer, except fees and expenses which may be necessitated by the filing or
amending of a Registration Statement under the Securities Act, which fees and expenses shall be
borne by the recipient of the Shares unless such Registration Statement has been filed by the
Company for its own corporate purposes (and the Company so states) in which event the recipient of
the Shares shall bear only fees and expenses as are attributable solely to the inclusion of the
Shares he or she receives in the Registration Statement.

     All Shares issued as provided herein shall be fully paid and non-assessable to the extent
permitted by law.

     XVI. LISTING OF SHARES AND RELATED MATTERS

     The Board or Committee may delay any award, issuance or delivery of Shares if it determines
that listing, registration or qualification of Shares or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in connection with,
the sale or purchase of Shares under the Plan, until such listing, registration, qualification,
consent or approval shall have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Committee.

     XVII. AMENDMENT OF THE PLAN

     The Board or the Committee, as the case may be, may, from time to time, amend the Plan,
provided that no amendment shall be made, without the approval of the stockholders of the Company,
that will (i) increase the total number of Shares reserved for Options under the Plan (other than
an increase resulting from an adjustment provided for in Article XII), (ii) reduce the exercise
price of any Option granted hereunder below the price required by Article V, (iii) modify the
provisions of the Plan relating to eligibility, or (iv) materially increase the benefits accruing
to participants under the Plan. The rights and obligations under any Option or Right

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granted before amendment of the Plan or any unexercised portion of such Option or Right shall
not be adversely affected by amendment of the Plan, Option or Right without the consent of the
holder of such Option or Right.

     XVIII. TERMINATION OR SUSPENSION OF THE PLAN

     The Board may at any time suspend or terminate the Plan. The Plan, unless sooner terminated
by action of the Board, shall terminate at the close of business on the Termination Date. Options
and Rights may not be granted while the Plan is suspended or after it is terminated. Rights and
obligations under any Option or Right granted while the Plan is in effect shall not be altered or
impaired by suspension or termination of the Plan, except upon the consent of the person to whom
the Option or Right was granted. The power of the Board or Committee to construe and administer
any Options or Rights granted prior to the termination or suspension of the Plan under Article III
nevertheless shall continue after such termination or during such suspension.

     XIX. GOVERNING LAW

     The Plan, such Options and Rights as may be granted thereunder and all related matters shall
be governed by, and construed and enforced in accordance with, the laws of the State of Delaware
from time to time obtaining.

     XX. PARTIAL INVALIDITY

     The invalidity or illegibility of any provision hereof shall not be deemed to affect the
validity of any other provision.

     XXI. EFFECTIVE DATE

     The Plan shall become effective at 5:30 P.M., New York City Time, on the Effective Date.

11EX-10.1

 

Exhibit 10.1

 

AMENDMENT NUMBER NINE TO CREDIT AGREEMENT

dated as of August 15, 2007

between

ULTRALIFE BATTERIES, INC.

and

THE LENDERS PARTY THERETO

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

 

AMENDMENT NUMBER NINE TO CREDIT AGREEMENT

     This Amendment, dated as of August 15, 2007 (“Amendment”), is made by and between ULTRALIFE
BATTERIES, INC. (the “Borrower”) and the Lenders party to the Credit Agreement and JPMORGAN
CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank) as Administrative Agent for the Lenders
(in such capacity, the “Agent”).

Statement of the Premises

     The Borrower, the Lenders and the Agent have previously entered into, among other agreements,
a Credit Agreement, dated as of June 30, 2004, which was amended by Amendment Number One dated as
of September 24, 2004, Amendment Number Two dated as of May 4, 2005, Amendment Number Three dated
as of August 5, 2005 and Amendment Number Four dated as of November 1, 2005 and that certain waiver
letter dated May 3, 2006, Amendment Number Five dated June 29, 2006, that certain waiver letter
dated October 20, 2006, that certain waiver letter dated November 30, 2006 as extended, that
certain Forbearance and Amendment Number Six to Credit Agreement dated February 14, 2007 and that
certain Extension of Forbearance and Amendment Number Seven to Credit Agreement dated as of March
23, 2007 and that certain Extension of Forbearance and Amendment Number Eight to Credit Agreement
dated as of May 18, 2007 (collectively, the “Credit Agreement’). The Borrower has advised
the Agent and the Lenders that the Borrower wishes to extend the maturity of the Revolving Loan and
amend certain financial covenants contained therein. The Borrower, the Lenders and the Agent
desire to amend the Credit Agreement to extend the Maturity Date with respect to the Revolving
Loans and to amend the financial covenants under the Credit Agreement.

Statement of Consideration

     Accordingly, in consideration of the premises and under the authority of Section 5-1103 of the
New York General Obligations Law, the parties agree as follows:

Agreement

     1. Defined Terms. The terms “this Agreement”, “hereunder” and similar
references in the Credit Agreement shall be deemed to refer to the Credit Agreement as amended by
this Amendment. Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in the Credit Agreement.

     2. Amendment. Effective upon the satisfaction of all conditions specified in Section 4
hereof, the Credit Agreement is hereby amended as follows:

          A. The Definition “Maturity Date” as set forth in Section 1.01 of the Credit Agreement
is hereby superseded and replaced in its entirety and amended to read:

“Maturity Date” means (i) in respect of the Revolving Loans (including any
reference in respect of Letters of Credit), January 31, 2009, and (ii) in respect of
the Term Loans, July 1, 2009.

          B. The following Definitions are hereby added to Section 1.01 of the Credit Agreement in the
appropriate alphabetical order:

“Capital Expenditures” means the gross dollar amount of expenditures made
for fixed assets, real property, plant and equipment, and all renewals, improvements
and replacements thereto (but not repairs thereto) incurred for any period, but
excluding any expenditures made in connection with the removal, improvement or
replacement of

2

 

assets to the extent financed (i) from insurance proceeds of other similar
recoveries paid on account of the loss or damage to assets being replaced or
restored, or (ii) with awards of compensation arising from the taking by eminent
domain or condemnation of the assets being replaced. Capital Expenditures shall not
include any amounts paid on Capital Lease Obligations.

“Fixed Charges” means, for any period, the sum of (i) the aggregate of all
interest paid in cash by the Borrower during such period, including all interest,
fees and costs payable with respect to the Indebtedness (including the interest
portion of Capital Lease Obligations) of the Borrower (other than fees and costs
that may be capitalized as transaction costs in accordance with GAAP consistently
applied), (ii) all Taxes paid in cash by the Borrower for such period, (iii) all
principal payments on Indebtedness (including the principal portion of Capital Lease
Obligations, but excluding Revolving Loan payments) of the Borrower actually made
for such period by the Borrower, (iv) all Capital Expenditures paid by the Borrower
for such period, and (v) all earn out payments paid in cash by the Borrower during
such period.

          C. Section 5.01 of the Credit Agreement is hereby amended so that subsections (h) and (i)
contained therein are superseded and replaced in their entirety to read:

	 	(h)	 	Until notified to the contrary by Required Lenders, within
twenty (20) days after the close of each calendar month end, Borrower’s
internally prepared financial statements for such month, including balance
sheet and related statements of operating and cash flows in form historically
prepared by Borrower.

	 	(i)	 	Until notified to the contrary by Required Lenders, on a weekly
basis, the Borrower’s cash forecast, in form historically prepared by Borrower.

          D. Section 6.09(a) of the Credit Agreement entitled “Debt to Earnings Ratio” is
superseded and replaced in its entirety and amended to read:

	 	(a)	 	Debt to Earnings Ratio: The Borrower shall maintain at
Fiscal Quarter ending September 29, 2007 and at each Fiscal Quarter thereafter,
the ratio of (x) Consolidated Senior Funded Debt measured at the subject Fiscal
Quarter end, to (y) EBITDA, measured for the four Fiscal Quarter period then
ended, taken together as a single accounting period, at or below 2.50 to 1.0.

          E. Section 6.09(b) of the Credit Agreement currently entitled “Minimum EBIT and EBIT to
Interest Expense Ratio” is superseded and replaced in its entirety and amended to read:

	 	(b)	 	Fixed Charge Coverage Ratio: The Borrower shall
maintain, at Fiscal Quarter ending September 29, 2007 and at each Fiscal
Quarter thereafter, a ratio of (i) EBITDA for the four Fiscal Quarter period
then ended, taken together as a single accounting period, to (ii) Fixed Charges
for the four Fiscal Quarter period then ended, taken together as a single
accounting period, at or above 1.25 to 1.

     3. Representations. The Borrower hereby represents and warrants to the Lenders and the
Agent that: (i) the covenants, representations and warranties set forth in the Credit Agreement are
true and correct on and as of the date of execution hereof as if made on and as of said date and as
if each reference therein to the Credit Agreement were a reference to the Credit Agreement as
amended by this Amendment; (ii) no Default or Event of Default specified in the Credit Agreement
has occurred and is continuing, (iii) since the date of the Credit Agreement, there has been no
material adverse change in the financial condition or business operations of the Borrower which has
not been disclosed to Lenders; (iv) the making and performance by the Borrower of this Amendment
have been duly authorized by all necessary corporate action, and do not, and will not, (a)
contravene the Borrower’s certificate of incorporation or by-laws, (b) violate any law, including
without limitation the Securities Act of 1933, as

3

 

amended, or the Securities Exchange Act of 1934, as amended, or any rule, regulation (including
Regulations T, U or X of the Board of Governors of the Federal Reserve System) order, writ,
judgment, injunction, decree, determination or award, and (c) conflict with or result in the breach
of, or constitute a default under, any material contract, loan agreement, indenture, note,
mortgage, deed of trust or any other material instrument or agreement binding on the Borrower or
any Subsidiary or any of their properties or result in or require the creation or imposition of any
lien upon or with respect to any of their properties; (v) this Amendment has been duly executed and
delivered by the Borrower and is the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms; (vi) no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or regulatory body or
any other third party is required for (a) the due execution, delivery or performance by the
Borrower of this Amendment or any other agreement or document related hereto or contemplated hereby
to which the Borrower is or is to be a party or otherwise bound except for required filings and
approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations thereunder, or (b) the exercise by the Agent or any Lender of its rights under the
Credit Agreement as modified by this Amendment; and (vii) the security interests and charges
granted by the Borrower and its Subsidiaries pursuant to the Security Agreements continue to
constitute valid, binding and enforceable, first in priority Liens on the Collateral, subject only
to Liens permitted under the terms of the Security Agreements and Credit Agreement.

     4. Conditions of Effectiveness of Amendments. The effectiveness of each and all of the
modifications contained in the Amendment is subject to the satisfaction, in form and substance
satisfactory to the Agent, of each of the following conditions precedent:

          A. Agent shall have received four (4) duplicate original counterparts of this Amendment
executed by Borrower, Lenders and Agent.

          B. Agent shall have received a secretarial certificate of the Borrower in a form reasonably
acceptable to Agent, certifying that the organizational documents and the incumbency of officers of
the Borrower previously delivered to Agent are true and correct as of the date of execution hereof.

          C. As of the effective date of this Amendment, no Default or Event of Default shall have
occurred and be continuing.

          D. The representations and warranties contained in Section 3 hereof and in the Credit
Agreement shall be true, correct and complete as of the effective date of this Amendment as though
made on such date.

          E. The Agent shall have received all fees for the benefit of the Lenders and itself as agent
as set forth in that certain fee letter dated August 15, 2007 by the Agent.

     5. Covenants.

          A. Borrower hereby covenants and agrees to cooperate with the Agent in any manner reasonably
necessary in order to promptly continue, or in the case of after-acquired property, create a first
lien in favor of the Agent, on behalf of the Lenders, in all personal property assets acquired by
Borrower or its subsidiaries.

          B. Borrower agrees to pay all out-of-pocket expenses and fees of the Agent and Lenders in
connection with the negotiation, preparation and execution of this Amendment and any related
document, including the reasonable fees and disbursements of counsel to the Agent.

     6. Reference to and Effect on Loan Documents.

          A. Upon the effectiveness hereof, each reference in the Credit Agreement to “this Agreement,”
“hereunder,’ “hereof,” “herein,” or words of like import, and each reference in the other Loan
Documents to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended
hereby.

4

 

          B. Except as specifically amended above, the Credit Agreement, and all other Loan Documents
shall remain in full force and effect and are hereby ratified and confirmed.

          C. The amendments set forth in Section 2 hereof are only applicable and shall only be
effective in the specific instance and for the specific purpose for which made, are expressly
limited to the facts and circumstances referred to herein, and shall not operate as (i) a waiver
of, or consent to non-compliance with any other provision of the Credit Agreement or any other Loan
Document, (ii) a waiver or modification of any right, power or remedy of either the Agent or any
Lender under the Credit Agreement or any Loan Document, or (iii) a waiver or modification of, or
consent to, any Event of Default or Default under the Credit Agreement or any Loan Document.

     7. Governing Law. This Amendment shall be governed and construed in accordance with
the laws of the State of New York without regard to any conflicts-of-laws rules which would require
the application of the laws of any other jurisdiction.

     8. Headings. Section headings in this Amendment are included herein for convenience
of reference only and shall not constitute a part of this Amendment for any other purpose.

     9. Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all or which taken together shall
constitute but one and the same instrument.

[Signature Page Follows]

5

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by
their respective representatives thereunto duly authorized as of the date first above written.

	 	 	 	 	 
	 	 	ULTRALIFE BATTERIES, INC.

	 

	 	By:
	 	/s/ Robert W. Fishback

	 

	 	 	 	 
	 

	 	Name:
	 	ROBERT W. FISHBACK

	 

	 	 	 	 
	 

	 	Title:
	 	VP-Finance & CFO

 

ADMINISTRATIVE AGENT:

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as Agent

	 

	 	By:
	 	/s/ Thomas C. Strasenburgh

	 

	 	 	 	 
	 

	 	Name:
	 	THOMAS C. STRASENBURGH

	 

	 	 	 	 
	 

	 	Title:
	 	Vice President

 

LENDERS:

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.

	 

	 	By:
	 	/s/ Thomas C. Strasenburgh

	 

	 	 	 	 
	 

	 	Name:
	 	THOMAS C. STRASENBURGH

	 

	 	 	 	 
	 

	 	Title:
	 	Vice President

 

	 	 	 	 	 
	 	 	MANUFACTURERS AND TRADERS TRUST COMPANY

	 

	 	By:
	 	/s/ Jon M. Fogle

	 

	 	 	 	 
	 

	 	 	 	Jon Fogle, Vice President

6

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