SHARED TECHNOLOGIES CELLULAR INC
EXHIBIT 10.5
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<TYPE>EX-10.5
<SEQUENCE>5
<FILENAME>y47139ex10-5.txt
<DESCRIPTION>EXHIBIT 10.5
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                                                                    EXHIBIT 10.5

                       SHARED TECHNOLOGIES CELLULAR, INC.
                             1994 STOCK OPTION PLAN

As amended, June 28, 2000

      1. Purpose. The Shared Technologies Cellular, Inc. 1994 Stock Option Plan
(the "Plan") is intended to encourage the ownership of stock of Shared
Technologies Cellular, Inc., a Delaware corporation (the "Company"), by
qualified and competent persons who are key to the success of the Company and
its direct and indirect subsidiaries (the "Subsidiaries") and to provide
additional incentive for them to promote the growth, development and financial
success of the Company and its Subsidiaries business as determined by a
committee consisting of two or more members of the Board of Directors of the
Company (the "Board"), as appointed pursuant to Section 2 hereof, by offering
them an opportunity to increase their proprietary interest in the Company
through the grant of nonqualified stock options (the "Options") to purchase
shares of Common Stock of the Company, par value $0.01 per share (the "Common
Stock"). Consistent with these objectives, the Plan authorizes the granting of
Options to acquire shares of Common Stock pursuant to the terms and conditions
hereinafter set forth. The Options are not intended to qualify as "Incentive
Stock Options" within the meaning of Section 422(b) of the Internal Revenue Code
of 1986, as amended (the "Code").

      2. Administration of the Plan.

            a. Members of the Committee. The Plan shall be administered by a
committee (the "Committee") duly appointed by the Board which shall consist of
at least two members of the Board, each of whom shall be a "Non-Employee
Director" as defined in subsection (b)(3)(i) of Rule 16b-3 ("Rule 16b-3") under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Members of
the Committee shall serve at the pleasure of the Board of Directors of the
Company.

            b. Authority of the Committee. The Committee shall adopt such rules
as it may deem appropriate in order to carry out the purposes of the Plan.
Subject to the provisions of this Plan, the Committee shall have the complete
authority, in its discretion, to make the following determinations with respect
to each Option to be granted by the Company: (A) the person to receive the
Option; (B) the time of granting the Option; (C) the number of shares subject
thereto; (D) the Option Price (as defined in Section 5(b) hereof); and (E) the
Option Period (as defined in Section 5(d) hereof). In making such determinations
the Committee may take into account the nature of the services rendered by the
person, their present and potential contributions to the success of the Company
and its Subsidiaries, and such other factors as the Committee in its discretion
shall deem relevant. Subject to the provisions of this Plan, all questions of
interpretation, administration, and application of the Plan shall be determined
by a majority of the members of the Committee then in office, except that the
Committee may
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authorize any one or more of its members, or any officer of the Company, to
execute and deliver documents on behalf of the Committee. The determination of
such majority shall be final and binding in all matters relating to the Plan or
all persons concerned. No member of the Committee shall be liable for any act
done or omitted to be done by such member or by any other member of the
Committee in connection with the Plan, except for such member's own willful
misconduct or as expressly provided by statute.

      3. Persons to Whom Options May be Granted. Options may be granted, at the
discretion of the Committee:

            a. To one or more persons who are employees or employees and
directors of the Company or of any of its present or future Subsidiaries, or any
employee of a Parent Corporation (within the meaning of Code Section 424(e))
(collectively, an "Employee");

            b. To one or more persons who provides services to the Company or of
any of its present or future Subsidiaries as a consultant or otherwise in the
capacity of an independent contractor and who is not otherwise an Employee.

      4. Stock Subject to the Plan. The shares subject to the Plan shall consist
of 2,250,000 shares of Common Stock, subject to adjustment pursuant to Section
5(h) hereof, which shares may be either authorized but unissued shares or
previously issued shares of Common Stock reacquired and held by the Company as
treasury shares, not reserved for any other purpose. The Company shall at all
times during the term of this Plan and of the Options granted hereunder reserve
and keep available such number of shares of the Company's stock as will be
sufficient to satisfy the requirements of this Plan and shall pay all fees and
expenses necessarily incurred by the Company in connection therewith. If any
outstanding Option under the Plan for any reason expires or is canceled or
otherwise terminated without having been exercised in full, the shares of Common
Stock allocable to the unexercised portion of such Option shall (unless the Plan
shall have been terminated) become available for subsequent grants of Options
under the Plan.

      5. Terms and Conditions of Options. Each Option granted pursuant to the
Plan shall be evidenced by a written agreement (the "Option Agreement") between
the Company and the person to whom such Option is awarded (the "Optionee"),
which Option Agreement shall comply with and be subject to the following terms
and conditions:

            a. Number of Shares. Each Option Agreement shall state the number of
shares of Common Stock to which the Option relates.

            b. Option Price. Each Option Agreement shall state the option price,
which shall not be less than seventy percent (70%) of the Fair Market Value (as
defined below) of the shares of Common Stock on the date of grant of the Option
(the "Option Price"). The term "Fair Market Value" of a share of Common Stock
shall mean (i) if the


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shares of Common Stock are then traded on an over-the-counter market, the
average of the closing bid and asked prices for the shares of Common Stock in
such over-the-counter market for the last preceding date on which there was a
sale of such Common Stock in such market, (ii) if the shares of Common Stock are
then listed on a national securities exchange, the closing sales price per share
for the last preceding date on which there was a sale of such Common Stock on
such exchange, or (iii) if the shares of Common Stock are not then traded in an
over-the-counter market or listed on a national securities exchange, such value
as the Committee in its discretion may determine. The Option Price shall be
subject to adjustment as provided in Section 5(h) hereof.

            c. Payment of Option Price.

            (i) Shares of Common Stock shall be issued to the Optionee upon
payment in full either in cash (or cash equivalent) or by an exchange of shares
of Common Stock of the Company previously owned by the Optionee, or a
combination of both, in an amount or having a combined value equal to the
aggregate purchase price for the shares subject to the Option or portion thereof
being exercised. The value of the previously owned shares of Common Stock
exchanged in full or partial payment for the shares purchased upon the exercise
of an Option shall be equal to the aggregate Fair Market Value of such shares on
the date of the exercise of such Option.

            (ii) Whenever shares of Common Stock are to be issued under the
Plan, the Company shall have the power to require the recipient of the Common
Stock to remit to the Company an amount sufficient to satisfy federal, state and
local withholding tax requirements prior to issuance of the certificate for
shares of Common Stock. The Option Agreement may provide that an Optionee shall
be entitled to elect to pay all or a portion of all federal, state or local
withholding taxes arising in connection with the exercise of an Option by
electing to (1) have the Company withhold shares of Common Stock, or (2) deliver
other shares of Common Stock previously owned by the Optionee having a Fair
Market Value equal to the amount to be withheld; provided, however, that the
amount to be withheld shall not exceed the Optionee's estimated total federal,
state and local tax obligations associated with the transaction. The election
shall be made in writing and shall be made according to such rules and in such
form as the committee shall from time to time determine. The Fair Market Value
of fractional shares remaining after payment of the withholding taxes shall be
paid to the Optionee in cash.

            d. Terms and Exercise of Options. Options shall be exercisable over
the exercise period as and at the times and upon such conditions as the
committee may determine, as reflected in the Option Agreement, including the
authority to accelerate the exercisability of any outstanding Option at such
time and under such circumstances as it, in its sole discretion, deems
appropriate (the "Option Period"), provided however, that the Option period
shall not exceed ten (10) years from the date of grant of such Option. The
Option Period shall be subject to earlier termination as provided in Sections
5(e) and 5(f) hereof. An Option may be exercised, as to any or all full shares
of Common Stock as to


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which the Option has become exercisable, by giving written notice of such
exercise to the Committee or to such individual(s) as the Committee may from
time to time designate.

            e. Termination of Employment Other than for Death, Disability or
Retirement In the event that the employment of an Optionee shall terminate
(other than by reason of death, disability or retirement), all Options of such
Optionee that are exercisable at the time of such termination may, unless
earlier terminated in accordance with their terms, be exercised within three (3)
months after such termination; provided, however, that if the employment of an
Optionee shall terminate for Cause (as defined herein), all options theretofore
granted to such Optionee shall, to the extent not theretofore exercised,
terminate immediately. The term "Cause" means for purposes of whether and when
an Optionee has incurred a termination of employment for Cause any act or
omission which permits the Company or the Parent Corporation to terminate the
written agreement or arrangement between such Optionee and the Company or the
Parent Corporation, as the case may be; Cause as defined in such agreement or
arrangement, or in the event there is no such agreement or arrangement or the
agreement or arrangement does not define the term "Cause", than Cause shall mean
(a) the conviction of the Optionee for committing a felony under Federal law or
the law of the state in which such action occurred or (b) the willful or
negligent failure on the part of such Optionee to perform his duties to the
Company or the Parent Corporation, as the case may be.

            f. Termination of Employment Due to Death, Disability or Retirement
of Optionee. If an Optionee shall die while employed by the Company, its
Subsidiaries or the Parent Corporation, or within three (3) months after the
termination of such Optionee's employment other than for Cause, or if the
Optionee's employment shall terminate by reason of Disability (within the
meaning of Section 22(e)(3) of the Code) or retirement, all Options theretofore
granted to such Optionee (to the extent otherwise exercisable at the time of
death or termination of employment) may, unless earlier terminated in accordance
with their terms, be exercised by the Optionee or by the Optionee's estate or by
a person who acquired the right to exercise such Option by bequest or
inheritance or otherwise by reason of death or disability of the Optionee, at
any time within six months (or such longer period as may be determined by the
Committee in its sole discretion) after the date of any such death, disability
or retirement of the Optionee.

            g. Nontransferability of Options. Options granted under the Plan
shall not be transferable otherwise than by will or by the laws of descent and
distribution, and Options may be exercised, during the lifetime of the Optionee,
only by the Optionee or by his guardian or legal representative.

            h. Effect of Certain Changes.

            (i) If there is any change in the number or class of shares of
Common Stock through the declaration of stock or cash dividends, or,
recapitalization resulting in stock splits, or combinations or exchanges of such
shares, the number or class of shares


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of Common Stock available for Options, the number or class of such shares
covered by outstanding Options, and the exercise price per share of such Options
may be proportionately adjusted by the Committee in its sole discretion to
reflect any such change in the number or class of issued shares of Common Stock;
provided, however, that any fractional shares resulting from any such adjustment
shall be eliminated. In the event of any other extraordinary corporate
transaction, including but not limited to distributions of cash or other
property to the Company's shareholders, the Committee may equitably adjust
outstanding Options as it deems appropriate in its sole discretion.

            (ii) In the event of the proposed dissolution or liquidation of the
Company, in the event of any corporate separation or division, including, but
not limited to, split-up, split-off or spin-off, or in the event of a merger or
consolidation of the Company with another corporation, the Committee may provide
that the holder of each Option then exercisable shall have the right to exercise
such Option (at its then Option Price) solely for the kind and amount of shares
of stock and other securities, property, cash or any combination thereof
receivable upon such dissolution, liquidation or corporate separation or
division, or merger or consolidation by a holder of the number of shares of
Common Stock for which such option might have been exercised immediately prior
to such dissolution, liquidation, or corporate separation or division, or merger
or consolidation.

            (iii) Paragraph (ii) of this Section 5(h) shall not apply to a
merger or consolidation in which the Company is the surviving corporation and
shares of Common Stock are not converted into or exchanged for stock, securities
of any other corporation, cash or any other thing of value. Notwithstanding the
preceding sentence, in case of any consolidation or merger of another
corporation into the Company in which the Company is the surviving corporation
and in which there is a reclassification or change (including a change to the
right to receive cash or other property) of the shares of Common Stock (other
than a change in par value, or from par value to no par value, or as a result of
a subdivision or combination, but including any change in such shares into two
or more classes or series of shares), the Committee may provide that the holder
of each Option then exercisable shall have the right to exercise such Option
solely for the kind and amount of shares of stock and other securities
(including those of any new direct or indirect parent of the Company), property,
cash or any combination thereof receivable upon such reclassification, change,
consolidation or merger by the holder of the number of shares of Common Stock
for which such Option might have been exercised.

            (iv) In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the Common Stock within the meaning of the Plan.


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            (v) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive.

            (vi) Except as expressly provided in this Section 5(h), the Optionee
shall have no rights by reason of any subdivision or consolidation of shares of
stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger, or consolidation or spin-off of assets or
stock of another corporation; and any issue by the Company of shares of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to the Option. The grant of
any Option pursuant to the Plan shall not affect in any way the right or power
of the Company to make adjustments, reclassification, reorganizations or changes
of its capital or business structures or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or part of its business or assets.

            i. Rights as a Stockholder. An Optionee or a transferee of an Option
shall have no rights as a stockholder with respect to any shares covered by the
Option until the date of the issuance of a stock certificate to him or her for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distribution of
other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 5(h) hereof.

            j. Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Optionee's employment at any
time, nor confer upon any Optionee any right to continue in the employ of the
Company, nor will anything in the Plan require an Optionee to continue in the
employ of the Company.

            k. Other Provisions. The Option Agreements authorized under the Plan
shall contain such other provisions not inconsistent with this Plan, including,
without limitation, the imposition of restrictions upon the exercise of an
Option as the Committee shall deem advisable.

            l. Change of Control.

                  (i) In the event of a Change of Control of the Company,
subject to the condition set forth in Section 5(l)(ii) below, all restrictions
and conditions applicable to Options then outstanding shall be deemed satisfied,
and such Options shall be deemed to be fully vested, as of the date of the
Change of Control. For purposes of this Plan, a Change in Control shall be
deemed to occur if the persons who were directors of the Company shall cease to
constitute a majority of the Board of the Company in connection with any of the
following transactions: (A) the acquisition by a third person, including a
"person" as defined in Section 13(d)(3) of the Exchange Act, of beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly, of securities of the


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Company representing fifty percent (50%) or more of the total number of votes
that may be cast for the election of the directors of the Company; or (B) as the
result of, or in connection with, any tender or exchange offer, merger,
consolidation or other business combination, sale of assets, or any combination
of the foregoing transactions.

            (ii) Notwithstanding the occurrence of any Change of Control, an
Option shall only receive the benefit of the removal of restrictions and
accelerated vesting, as provided by Section 5(l)(i) above, if such Option is
held by an employee of the Company and such employee's employment with the
Company's terminates, for any reason, following such Change of Control. For the
purposes hereof, termination shall include any reduction in compensation,
geographic relocation of the employee, or any material diminution in job status
or responsibilities.

            (iii) In the case of any tender or exchange offer, merger,
consolidation or other business combination or sale of all or substantially all
of the assets of the Company, which does not constitute a Change in Control, or
in the case of a reorganization or liquidation of the Company, the Committee, or
the board of directors of any corporation assuming the obligations of the
Company hereunder shall, as to outstanding Options, (A) make appropriate
provision for the protection of any such outstanding Options by the substitution
on an equitable basis of appropriate stock of the Company or of the merged,
consolidated or otherwise reorganized corporation which will be issuable in
respect of the shares of Company Stock, or (B) upon written notice to the
Participants, provide that the Company or the merged, consolidated or otherwise
reorganized corporation shall have the right, upon the effective date of any
such merger, consolidation, sale of assets or reorganization, to purchase all
Options held by each Participant as to which restrictions have not lapsed as of
that date at an amount equal to the aggregate fair market value on such date of
the shares, such amount to be paid in cash or, if stock of the merged,
consolidated or otherwise reorganized corporation is issuable in respect of the
shares of the Common Stock of the Company, then, in the discretion of the
Committee, in stock of such merged, consolidated or otherwise reorganized
corporation equal in fair market value to the aforesaid amount. In any such case
the Committee shall, in good faith, determine fair market value. The Committee
may, in its discretion, advance the lapse of restrictions and conditions
applicable to Options outstanding as of the date of the merger, consolidation,
sale of assets or reorganization.

      6. Term of Plan. Options under this Plan may be granted pursuant to the
Plan from time to time within a period of ten (10) years from the date the Plan
is adopted by the Board, or the date the Plan is approved by the stockholders of
the Company, whichever is earlier.

      7. Amendment. The Board may at the time and from time to time alter,
amend, suspend, or terminate the Plan in whole or in part; provided, however,
that no amendment which requires shareholder approval in order for the
exemptions available under Rule 16b-3 to be applicable to the Plan and the
Optionees, shall be effective unless the same shall be approved by the
stockholders of the Company entitled to vote thereon


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on or before the effective date of the amendment. Such approval shall be
obtained in such manner as is required by the Company's Certificate of
Incorporation, its By-Laws, and the laws of the State of Delaware as in effect
at the time of such approval. Notwithstanding the foregoing, no amendment shall
affect adversely any of the rights or obligations of any Optionee, without such
Optionee's consent, under any Option theretofore granted under the Plan.

      8. Headings. The headings of sections and subsections herein are included
solely for convenience of reference and shall not affect the meaning of any of
the provisions of the Plan.

      9. Governing Law. The Plan and all rights hereunder shall be construed in
accordance with and governed by the laws of the State of Delaware.



Dated as of June 28, 2000


-------------------------------
Anthony D. Autorino
Chairman and Chief Executive Officer


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