Document:

Exhibit 4.6

 

1999 DIGITAL FUSION, INC. STOCK OPTION PLAN

 

1.              Purpose.

 

The purposes of the 1999 Digital Fusion, Inc. Stock Option Plan
(the “Plan”) are to advance the interests of Digital Fusion, Inc. (“Digital
Fusion”) and its stockholders by providing incentives and rewards to those
individuals who are in a position to contribute to the long-term growth and
profitability of Digital Fusion and any present or future subsidiaries and
affiliates of Digital Fusion (collectively, the “Company”); to assist the Company
in attracting, retaining and motivating highly qualified employees for the
successful conduct of their business; and to make the Company’s compensation
program competitive with those of other similar employers.

 

2.              Definitions. 

 

2.1              “Award” means an award or grant
made to a Participant under the Plan.

 

2.2              “Award Agreement” means the
agreement provided in connection with an Award under the Plan.

 

2.3              “Award Date” means the date that
an Award is made, as specified in the Award Agreement.

 

2.4              “Board” means the Board of
Directors of Digital Fusion.

 

2.5              A“Change in Control” shall be
deemed to occur in the event that any of the following circumstances have
occurred:

 

(i)                       Any “person” or “group” within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act (a) becomes
the “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act,
of 50% or more of the combined voting power of Digital Fusion’s then
outstanding securities, otherwise than through a transaction or series of
related transactions arranged by, or consummated with the prior approval of,
the Board of Directors of Digital Fusion (hereinafter referred to as the “Board”)
or (b) acquires by proxy or otherwise the right to vote 50% or more of the
then outstanding voting securities of Digital Fusion, otherwise than through an
arrangement or arrangements consummated with the prior approval of the Board
for the election of directors, for any merger or consolidation of Digital
Fusion or for any other matter or question.

 

(ii)                    During any period of 24 consecutive
months (not including any period prior to the adoption of this section),
Present Directors and/or New Directors cease for any reason to constitute a
majority of the Board. For purposes of the preceding sentence, “Present
Directors” shall mean individuals who at the beginning of such consecutive 24
month period were members of the Board and “New Directors” shall mean any
director whose election by the Board or whose nomination for election by
Digital Fusion’s stockholders was approved by a vote of at least two-thirds of
the directors then still in office who were Present Directors or New Directors.

 

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(iii)                               Consummation
of (a) any consolidation or merger of Digital Fusion in which Digital
Fusion is not the continuing or surviving corporation or pursuant to which
shares of Stock would be converted into cash, securities or other property,
other than a merger of Digital Fusion in which the holders of Stock immediately
prior to the merger have the same proportion and ownership of common stock of
the surviving corporation immediately after the merger or (b) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of Digital Fusion; provide, that, the divestiture of less
than substantially all of the assets of Digital Fusion in one transaction or a
series of related transactions, whether effected by sale, lease, exchange,
spin-off, sale of the stock or merger of a subsidiary or otherwise, shall not
constitute a Change in Control.

 

For purposes of this Section 2.5, the rules of Section 318(a) of
the Code and the regulations issued thereunder shall be used to determine stock
ownership.

 

2.6              “Code” means the Internal Revenue
Code of 1986, as now or hereafter amended.

 

2.7              “Committee” means the members of
the Board appointed by the Board to administer the Plan pursuant to Section 4,
or if no such Committee is appointed, the full Board.

 

2.8              “Disability” means a Participant’s
inability to engage in any substantial gainful activity because 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 12 months or longer. A Participant shall not be considered
to be disabled hereunder unless the Participant furnishes proof of the
existence thereof in such form and manner, and at such times, as the Committee
may require.

 

2.9              “Employee” means all employees of
the Company, including officers of the Company, as well as officers of the
Company who are also directors of the Company.

 

2.10        “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.

 

2.11        “Fair Market Value” for purposes of the
Plan, unless otherwise required by any applicable provision of the Code or any
regulation issued thereunder, means, as of any date, the mean of the high and
low prices reported per share of Stock on the applicable date (i) as
reported by the principal national securities exchange in the United States on
which the Stock then traded or (ii) if not traded on any such national
securities exchange, as quoted on the Nasdaq National Market or the Nasdaq
SmallCap Market (collectively, the “Nasdaq Markets”) (or, if the Stock has not
been reported or quoted on such date, on the first day prior thereto on which
the Stock was reported or traded). If the Stock is not readily tradable on a
national securities exchange or a Nasdaq Market, its Fair Market Value shall be
set in good faith by the Committee.

 

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2.12        “Incentive Stock Option” or “ISO” means
any Stock Option granted pursuant to this Plan which is designated in an Award
Agreement as such by the Committee and which complies with Section 422 of
the Code.

 

2.13        “Non-Qualified Stock Option” means any
Stock Option granted pursuant to this Plan which is not an Incentive Stock
Option.

 

2.14        “Option Price” means the purchase price
of one share of Stock under a Stock Option.

 

2.15        “Settlement Date” means, with respect to
any Stock Option that has been exercised in whole or in part, the date or dates
upon which shares of Stock are to be delivered to the Participant and the
Option Price therefor paid.

 

2.16        “Stock” means the Common Stock, par
value $.01 per share, of Digital Fusion.

 

2.17        “Stock Option” or “Option” means
an Award that entitles a Participant to purchase a share of Stock.

 

3.              Participation.

 

The participants in the Plan (“Participants”) shall be (a) all
Employees, (b) directors of the Company and (c) such other persons or
entities which provide services to the Company which are selected to
participate in the Plan by the Committee.

 

4.              Administration.

 

The Plan shall be administered by the Committee. Except as otherwise
provided herein, the Committee shall have full power to: (i) interpret the
Plan; (ii) determine who is eligible to be a Participant in the Plan; (iii) select
Award recipients; (iv) set the terms and conditions of Awards; (v) establish
administrative regulations to further the purpose of the Plan; and (vi) take
any other action desirable or necessary to interpret, construe or implement
properly the provisions of the Plan. All decisions and acts of the Committee
shall be final and binding upon all Participants.

 

5.              Awards. 

 

5.1              Types of Awards. Awards are to be
in the form of Stock Options.

 

5.2              Award Agreements. All Awards shall
be made pursuant to Award Agreements between the Participant and the Company.
Award Agreements shall set forth the details, conditions and limitations for
each Award, which may include the term of the Award, the provisions applicable
in the event the Participant’s employment or service to the Company terminates,
and the Company’s authority to unilaterally or bilaterally amend, modify, suspend,

 

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cancel or rescind any Award. In addition, the Award Agreement may
include provisions relating to control of the Company and future issuances by
the Company of debt and equity securities, such as “drag along” rights, “tag
along” rights, “lock up” or “holdback” provisions in connection with
recapitalizations, reorganizations, acquisitions, divestitures,
debt-financings, private placements of the Company’s securities, public
offerings of the Company’s securities and “voting agreement” provisions which
the Company deems necessary or appropriate in good faith. The Award Agreements
shall be in such form as the Committee approves from time to time.

 

5.3              Maximum Number of Shares Available.
The total number of shares of Stock optioned or granted under the Plan shall
not exceed 350,000 shares. If an Award expires unexercised or is forfeited,
surrendered, cancelled or settled in cash in lieu of Stock, shares of Stock
previously set aside for such Awards shall be available for distribution in
connection with future Awards.

 

5.4              Adjustment in the Event of
Recapitalization, etc. In the event of any change in the outstanding shares
of Digital Fusion by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change or in the event of any special distribution to
the stockholders, the Committee shall make such equitable adjustments in the
number of shares and prices per share applicable to Awards then outstanding and
in the number of shares which are available thereafter for Awards as the
Committee determines are necessary and appropriate. Any such adjustment shall
be conclusive and binding for all purposes of the Plan.

 

6.              Stock Options.

 

6.1              Grant of Award. Stock Options may
be awarded to any Participant. Except as otherwise provided below, Awards of
Stock Options shall be subject to such terms and conditions as are established
by the Committee and set forth in the Award Agreement. The Committee shall
determine with respect to each Award of Stock Options and designate in the
Award Agreement whether a Participant is to receive Incentive Stock Options or
Non-Qualified Stock Options.

 

6.2              Option Price. The exercise price
of each share of Stock subject to a Stock Option shall be specified in the
grant. Notwithstanding the foregoing, no Stock Option shall be awarded which
has an exercise price less than the Fair Market Value of the Stock on the date
of grant, if such grant date is subsequent to an initial public offering of
Stock by the Company. Additionally, if the Participant to whom an ISO is
granted owns, at the date of grant, more than ten percent (10%) of the combined
voting power of the Company, the exercise price of the ISO subject to such
grant shall be not less than one hundred ten percent (110%) of the Fair Market
Value.

 

6.3              Vesting and Exercisability of Options.
A Stock Option by its terms shall not be exercisable after such period as
determined by the Committee, provided, that,
in no event shall a Stock Option be exercisable after the expiration of ten (10) years
from the date such option is granted, except than an ISO granted to a
Participant who, at the date of grant, owns Stock representing more than ten
percent (10%) of the combined voting power of the Participating Company shall
by its terms not be exercisable after the expiration of more than five (5) years
from the date such Option is granted.

 

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Subject to the preceding paragraph and except as otherwise provided
herein, an Option shall be only exercisable by a Participant while the
Participant is actively employed by or providing service to the Company,
except: (i) in the case of a Participant’s death in which event an Option
may be exercised by the executor or administrator of Participant’s estate or
Participant’s distributee during the three (3) month period commencing on
the date of Participant’s death; (ii) during the three (3) month
period commencing on the date of a Participant’s Disability or termination of
service or employment by the Company other than for cause; (iii) during
the three (3) month period commencing on the date of the Participant’s
termination of service or employment, by the Participant or the Company, after
a Change in Control, unless such termination of employment is for cause; or (iv) if
the Committee decides that it is in the best interest of the Company to permit
individual exceptions. For purposes hereof, “cause” shall mean: (i) the
disclosure or misuse of confidential information or trade secrets; (ii) activities
in violation of Company policies; (iii) the violation or breach of any
material provision in any employment contract or agreement between a
Participant and any Company; (iv) engaging in conduct relating to the
Participant’s service to or employment with the Company for which either
criminal or civil penalties may be sought; and (v) engaging in activities
which adversely affects or which are inimical, contrary or harmful to the
interest of the Participating Company or its business operations. An Option may
not be exercised pursuant to this paragraph after the expiration date of the
Option. Notwithstanding the foregoing, an Incentive Stock Option may not be
exercised more than 12 months after a Participant’s employment terminates due
to disability or three ( 3) months after such employment terminates for any
other reason.

 

6.4              Exercise of Option. Subject to the
terms and conditions hereof and the terms and conditions specified in the
respective Award Agreement, an Option may be exercised with respect to part or
all of the shares subject to the Option by giving written notice to the Company
of the exercise of the Stock Option. The Option Price for the shares for which
an Option is exercised shall be paid within ten business days after the date of
exercise in cash, in whole shares of Stock, in a combination of cash and such
shares of Stock, or in any other manner that the Committee may approve. The
value of any share of Stock delivered in payment of the Option Price shall be
its Fair Market Value on the date the Option is exercised.

 

6.5              Limitation Applicable to ISOs. The
aggregate Fair Market Value of all shares of Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Participant in
any one calendar year, under the Plan or any other stock option plan maintained
by the Company, shall not exceed $100,000. The fair market value of such shares
of Stock shall be the Fair Market Value on the date the related Stock Option is
granted.

 

7.              Settlement of Awards.

 

At the Committee’s discretion, Awards may be settled in cash, shares of
Stock, or any combination thereof. The Committee may (i) require or permit
Participants to defer the issuance or vesting of shares of Stock or the
settlement of Awards in cash and (ii) provide that deferred settlements
include the payment or crediting of interest on deferred amounts.

 

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8.              General Provisions.

 

8.1              Transferability of Awards. Awards
under the Plan shall not be transferable otherwise than by will or the laws of
descent and distribution, unless otherwise determined by the Committee.

 

8.2              Unfunded Plan. Nothing contained
herein shall require the Company to segregate any monies from its general
funds, or to create any trusts, or to make any special deposits for any
immediate or deferred amounts payable to any Participant for any year.

 

8.3              No Right to Employment.
Participation in this Plan shall not affect the Company’s right to discharge a
Participant or constitute an agreement of employment between a Participant and
the Company.

 

8.4              Rights as a Stockholder. Except as
otherwise provided in any Award Agreement, a Participant shall have no rights
as a stockholder of Digital Fusion until he or she becomes the holder of record
of Stock.

 

8.5              Applicable Law. The validity,
construction and effect of the Plan, and any actions taken or relating to the
Plan, shall be determined in accordance with applicable federal law and the
laws of the state in which the Company is incorporated.

 

8.6              Successors and Assigns. The Plan
and any Award Agreement shall be binding on all successors and assigns of a
Participant, including, without limitation, the estate of the Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant’s creditors.

 

9.              Amendment,
Suspension or Termination.

 

The Board may amend, suspend or terminate the Plan, including, but not
limited to, such amendments as may be necessary or desirable resulting from
changes in the federal income tax laws and other applicable laws, but may not,
without approval by the holders of a majority of all outstanding shares
entitled to vote on the subject at a meeting of stockholders of Digital Fusion,
increase the total number of shares of Stock that may be optioned or granted
under the Plan.

 

10.       Tax Withholding.

 

The Company shall have the right to (i) require that shares of
Stock be withheld in an amount sufficient to satisfy withholding of any
federal, state or local taxes required by law and (ii) take such other
action as may be necessary or appropriate to satisfy any such withholding
obligations. The Committee may determine the manner in which such tax
withholding shall be satisfied. The date the Option is exercised shall be the
date used for purposes of determining the Fair Market Value of the shares of
Stock used to satisfy the required tax withholding.

 

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11.       Effective Date and Duration
of the Plan.

 

The Plan shall be effective on the date of the approval of the Plan by
the holders of a majority of the issued and outstanding shares of Stock and
shall terminate on the tenth anniversary of the effective date. The Plan shall be
null and void and of no effect if the foregoing condition is not fulfilled, and
in such event each Stock Option granted hereunder shall, notwithstanding any of
the preceding provisions of the Plan, be null and void and of no effect.

 

*  *  *  *  *

 

7Exhibit 4.7

 

2000 DIGITAL FUSION, INC. STOCK OPTION PLAN

 

1.         Purpose.

 

The purposes of the 2000 Digital Fusion, Inc. Stock Option Plan
(the “Plan”) are to advance the interests of Digital Fusion, Inc. (“Digital
Fusion”) and its stockholders by providing incentives and rewards to those
individuals who are in a position to contribute to the long-term growth and
profitability of Digital Fusion and any present or future subsidiaries and
affiliates of Digital Fusion (collectively, the “Company”); to assist the Company
in attracting, retaining and motivating highly qualified employees for the
successful conduct of their business; and to make the Company’s compensation
program competitive with those of other similar employers.

 

2.         Definitions.

 

2.1              “Award” means an award or grant
made to a Participant under the Plan.

 

2.2              “Award Agreement” means the
agreement provided in connection with an Award under the Plan.

 

2.3              “Award Date” means the date that
an Award is made, as specified in the Award Agreement.

 

2.4              “Board” means the Board of
Directors of Digital Fusion.

 

2.5              A “Change in Control” shall be
deemed to occur in the event that any of the following circumstances have
occurred:

 

(i)                       Any “person” or “group” within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act (a) becomes
the “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act,
of 50% or more of the combined voting power of Digital Fusion’s then
outstanding securities, otherwise than through a transaction or series of
related transactions arranged by, or consummated with the prior approval of,
the Board of Directors of Digital Fusion (hereinafter referred to as the “Board”)
or (b) acquires by proxy or otherwise the right to vote 50% or more of the
then outstanding voting securities of Digital Fusion, otherwise than through an
arrangement or arrangements consummated with the prior approval of the Board
for the election of directors, for any merger or consolidation of Digital
Fusion or for any other matter or question.

 

 

(ii)                    During any period of 24 consecutive
months (not including any period prior to the adoption of this section),
Present Directors and/or New Directors cease for any reason to constitute a
majority of the Board. For purposes of the preceding sentence, “Present
Directors” shall mean individuals who at the beginning of such consecutive 24
month period were members of the Board and “New Directors” shall mean any
director whose election by the Board or whose nomination for election by
Digital Fusion’s stockholders was approved by a vote of at least two-thirds of
the directors then still in office who were Present Directors or New Directors.

 

(iii) Consummation of (a) any consolidation or merger of
Digital Fusion in which Digital Fusion is not the continuing or surviving
corporation or pursuant to which shares of Stock would be converted into cash,
securities or other property, other than a merger of Digital Fusion in which
the holders of Stock immediately prior to the merger have the same proportion
and ownership of common stock of the surviving corporation immediately after
the merger or (b) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of Digital Fusion; provide,
that, the divestiture of less than substantially all of the assets
of Digital Fusion in one transaction or a series of related transactions,
whether effected by sale, lease, exchange, spin-off, sale of the stock or
merger of a subsidiary or otherwise, shall not constitute a Change in Control.

 

For purposes of this Section 2.5, the rules of Section 318(a) of
the Code and the regulations issued thereunder shall be used to determine stock
ownership.

 

2.6              “Code” means the Internal Revenue
Code of 1986, as now or hereafter amended.

 

2.7              “Committee” means the members of
the Board appointed by the Board to administer the Plan pursuant to Section 4,
or if no such Committee is appointed, the full Board.

 

2.8              “Disability” means a Participant’s
inability to engage in any substantial gainful activity because 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 12 months or longer. A Participant shall not be considered
to be disabled hereunder unless the Participant furnishes proof of the
existence thereof in such form and manner, and at such times, as the Committee
may require.

 

2.9              “Employee” means all employees of
the Company, including officers of the Company, as well as officers of the
Company who are also directors of the Company.

 

2.10        “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.

 

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2.11        “Fair Market Value” for purposes of the
Plan, unless otherwise required by any applicable provision of the Code or any
regulation issued thereunder, means, as of any date, the mean of the high and
low prices reported per share of Stock on the applicable date (i) as
reported by the principal national securities exchange in the United States on
which the Stock then traded or (ii) if not traded on any such national
securities exchange, as quoted on the Nasdaq National Market or the Nasdaq
SmallCap Market (collectively, the “Nasdaq Markets”) (or, if the Stock has not
been reported or quoted on such date, on the first day prior thereto on which
the Stock was reported or traded). If the Stock is not readily tradable on a
national securities exchange or a Nasdaq Market, its Fair Market Value shall be
set in good faith by the Committee.

 

2.12        “Incentive Stock Option” or “ISO”
means any Stock Option granted pursuant to this Plan which is designated in an
Award Agreement as such by the Committee and which complies with Section 422
of the Code.

 

2.13        “Non-Qualified Stock Option” means any
Stock Option granted pursuant to this Plan which is not an Incentive Stock
Option.

 

2.14        “Option Price” means the purchase price
of one share of Stock under a Stock Option.

 

2.15        “Settlement Date” means, with respect to
any Stock Option that has been exercised in whole or in part, the date or dates
upon which shares of Stock are to be delivered to the Participant and the
Option Price therefor paid.

 

2.16        “Stock” means the Common Stock, par
value $.01 per share, of Digital Fusion.

 

2.17        “Stock Option” or “Option” means
an Award that entitles a Participant to purchase a share of Stock.

 

3.              Participation.

 

The participants in the Plan (“Participants”) shall be (a) all
Employees, (b) directors of the Company and (c) such other persons or
entities which provide services to the Company which are selected to
participate in the Plan by the Committee.

 

4.              Administration.

 

The Plan shall be administered by the Committee. Except as otherwise
provided herein, the Committee shall have full power to: (i) interpret the
Plan; (ii) determine who is eligible to be a Participant in the Plan; (iii) select
Award recipients; (iv) set the terms and conditions of Awards; (v) establish
administrative regulations to further the purpose of the Plan; and (vi) take
any other action desirable or necessary to interpret, construe or implement
properly the provisions of the Plan. All decisions and acts of the Committee
shall be final and binding upon all Participants.

 

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5.              Awards.

 

5.1              Types of Awards. Awards are to be
in the form of Stock Options.

 

5.2              Award Agreements. All Awards shall
be made pursuant to Award Agreements between the Participant and the Company.
Award Agreements shall set forth the details, conditions and limitations for
each Award, which may include the term of the Award, the provisions applicable
in the event the Participant’s employment or service to the Company terminates,
and the Company’s authority to unilaterally or bilaterally amend, modify, suspend,
cancel or rescind any Award. In addition, the Award Agreement may include
provisions relating to control of the Company and future issuances by the
Company of debt and equity securities, such as “drag along” rights, “tag along”
rights, “lock up” or “holdback” provisions in connection with
recapitalizations, reorganizations, acquisitions, divestitures,
debt-financings, private placements of the Company’s securities, public
offerings of the Company’s securities and “voting agreement” provisions which
the Company deems necessary or appropriate in good faith. The Award Agreements
shall be in such form as the Committee approves from time to time.

 

5.3              Maximum Number of Shares Available.
The total number of shares of Stock optioned or granted under the Plan shall
not exceed 700,000 shares. If an Award expires unexercised or is forfeited,
surrendered, cancelled or settled in cash in lieu of Stock, shares of Stock
previously set aside for such Awards shall be available for distribution in
connection with future Awards.

 

5.4              Adjustment in the Event of
Recapitalization, etc. In the event of any change in the outstanding shares
of Digital Fusion by reason of any stock split, stock dividend,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change or in the event of any special distribution to
the stockholders, the Committee shall make such equitable adjustments in the
number and kind of shares and prices per share applicable to Awards then
outstanding and in the number and kind of shares which are available thereafter
for Awards as the Committee determines are necessary and appropriate. Any such
adjustment shall be conclusive and binding for all purposes of the Plan.

 

6.              Stock Options.

 

6.1              Grant of Award. Stock Options may
be awarded to any Participant, except that Incentive Stock Options may only be
awarded to Participants who are also Employees. Except as otherwise provided
below, Awards of Stock Options shall be subject to such terms and conditions as
are established by the Committee and set forth in the Award Agreement. The
Committee shall determine with respect to each Award of Stock Options and
designate in the Award Agreement whether a Participant is to receive Incentive
Stock Options or Non-Qualified Stock Options.

 

6.2              Option Price. The exercise price
of each share of Stock subject to a Stock Option shall be specified in the
grant. Notwithstanding the foregoing, no Stock Option shall be awarded which
has an exercise price less than the Fair Market Value of the Stock on the date
of grant, if such grant date is subsequent to an initial public offering of
Stock by the Company. Additionally, if the Participant to whom an ISO is
granted owns, at the date of grant, more than ten percent (10%) of the combined
voting power of the Company, the exercise price of the ISO subject to such
grant shall be not less than one hundred ten percent (110%) of the Fair Market
Value.

 

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6.3              Vesting and Exercisability of Options.
A Stock Option by its terms shall not be exercisable after such period as
determined by the Committee, provided, that,
in no event shall a Stock Option be exercisable after the expiration of ten (10) years
from the date such option is granted, except that an ISO granted to a
Participant who, at the date of grant, owns Stock representing more than ten
percent (10%) of the combined voting power of the Participating Company shall
by its terms not be exercisable after the expiration of more than five (5) years
from the date such Option is granted.

 

Subject to the preceding paragraph and except as otherwise provided
herein, an Option shall be only exercisable by a Participant while the
Participant is actively employed by or providing service to the Company,
except: (i) in the case of a Participant’s death in which event an Option
may be exercised by the executor or administrator of Participant’s estate or
Participant’s distributee during the three (3) month period commencing on
the date of Participant’s death; (ii) during the three (3) month
period commencing on the date of a Participant’s Disability or termination of
service or employment by the Company other than for cause; (iii) during
the three (3) month period commencing on the date of the Participant’s
termination of service or employment, by the Participant or the Company, after
a Change in Control, unless such termination of employment is for cause; or (iv) if
the Committee decides that it is in the best interest of the Company to permit
individual exceptions. For purposes hereof, “cause” shall mean: (i) the
disclosure or misuse of confidential information or trade secrets; (ii) activities
in violation of Company policies; (iii) the violation or breach of any
material provision in any employment contract or agreement between a
Participant and any Company; (iv) engaging in conduct relating to the
Participant’s service to or employment with the Company for which either
criminal or civil penalties may be sought; and (v) engaging in activities
which adversely affects or which are inimical, contrary or harmful to the
interest of the Participating Company or its business operations. An Option may
not be exercised pursuant to this paragraph after the expiration date of the
Option. Notwithstanding the foregoing, an Incentive Stock Option may not be
exercised more than 12 months after a Participant’s employment terminates due
to disability or three (3) months after such employment terminates for any
other reason.

 

6.4              Exercise of Option. Subject to the
terms and conditions hereof and the terms and conditions specified in the
respective Award Agreement, an Option may be exercised with respect to part or
all of the shares subject to the Option by giving written notice to the Company
of the exercise of the Stock Option. The Option Price for the shares for which
an Option is exercised shall be paid within ten business days after the date of
exercise in cash, in whole shares of Stock, in a combination of cash and such
shares of Stock, or in any other manner that the Committee may approve. The
value of any share of Stock delivered in payment of the Option Price shall be
its Fair Market Value on the date the Option is exercised.

 

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6.5              Limitation Applicable to ISOs. The
aggregate Fair Market Value of all shares of Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Participant in
any one calendar year, under the Plan or any other stock option plan maintained
by the Company, shall not exceed the amount set forth in section 422(d) of
the Code (currently $100,000). The fair market value of such shares of Stock
shall be the Fair Market Value on the date the related Stock Option is granted.

 

7.         Settlement of Awards.

 

At the Committee’s discretion, Awards may be settled in cash, shares of
Stock, or any combination thereof. The Committee may (i) require or permit
Participants to defer the issuance or vesting of shares of Stock or the
settlement of Awards in cash and (ii) provide that deferred settlements include
the payment or crediting of interest on deferred amounts.

 

8.         General Provisions.

 

8.1              Transferability of Awards. Awards
under the Plan shall not be transferable otherwise than by will or the laws of
descent and distribution or, in the case of Non-Qualified Stock Options only,
unless otherwise determined by the Committee.

 

8.2              Unfunded Plan. Nothing contained
herein shall require the Company to segregate any monies from its general
funds, or to create any trusts, or to make any special deposits for any
immediate or deferred amounts payable to any Participant for any year.

 

8.3              No Right to Employment or Service.
Participation in this Plan shall not affect the Company’s right to discharge a
Participant or constitute an agreement of employment or agreement to provide
services between a Participant and the Company.

 

8.4              Rights as a Stockholder. Except as
otherwise provided in any Award Agreement, a Participant shall have no rights
as a stockholder of Digital Fusion until he or she becomes the holder of record
of Stock.

 

8.5              Applicable Law. The validity,
construction and effect of the Plan, and any actions taken or relating to the
Plan, shall be determined in accordance with applicable federal law and the
laws of the state in which the Company is incorporated.

 

8.6              Successors and Assigns. The Plan
and any Award Agreement shall be binding on all successors and assigns of a
Participant, including, without limitation, the estate of the Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant’s creditors.

 

7

 

9.         Amendment, Suspension or
Termination.

 

The Board may amend, suspend or terminate the Plan, including, but not
limited to, such amendments as may be necessary or desirable resulting from
changes in the federal income tax laws and other applicable laws, but may not,
without approval by the holders of a majority of all outstanding shares
entitled to vote on the subject at a meeting of stockholders of Digital Fusion,
increase the total number of shares of Stock that may be optioned or granted
under the Plan.

 

10.            Tax Withholding.

 

The Company shall have the right to (i) require that shares of
Stock be withheld in an amount sufficient to satisfy withholding of any
federal, state or local taxes required by law and (ii) take such other
action as may be necessary or appropriate to satisfy any such withholding
obligations. The Committee may determine the manner in which such tax withholding
shall be satisfied. The date the Option is exercised shall be the date used for
purposes of determining the Fair Market Value of the shares of Stock used to
satisfy the required tax withholding.

 

11.            Effective Date and
Duration of the Plan.

 

The Plan shall be effective on the date of the approval of the Plan by
the holders of a majority of the issued and outstanding shares of Stock and
shall terminate on the tenth anniversary of the effective date. The Plan shall
be null and void and of no effect if the foregoing condition is not fulfilled,
and in such event each Stock Option granted hereunder shall, notwithstanding
any of the preceding provisions of the Plan, be null and void and of no effect.

 

*  *  *  *  *

 

8

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