1
EXHIBIT 10.9
FREMONT GENERAL CORPORATION
AMENDED NON-QUALIFIED STOCK OPTION PLAN OF 1989
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ____________________________ is made by and between
FREMONT GENERAL CORPORATION, a Nevada corporation (the "Company"), and
___________________________________________a key employee of the Company or a
subsidiary of the Company (the "Optionee");
WHEREAS, the Shareholders at their meeting on June 27, 1989 adopted the
NON-QUALIFIED STOCK OPTION PLAN OF 1989, and on May 14, 1992 adopted the
amendment and restatement of the 1989 Plan; and
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its Common stock, $1.00 par value (the "Common Stock"), and
; and
WHEREAS, the Company wishes to carry out the Amended Non-Qualified Stock
Option Plan of 1989, the terms of which are hereby incorporated by reference
and made a part of this Agreement; and
WHEREAS, the Stock Option Committee of the Company's Board of Directors
(the "Committee"), appointed to administer said Plan, has determined that it
would be to the advantage and best interest of the Company and its shareholders
to grant the Non-Qualified Stock Option provided for herein to the Optionee as
an inducement to remain in the service of the Company and as an incentive for
increased efforts during such service, and has advised the Company thereof and
instructed the undersigned officer to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 - General
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary.
SECTION 1.2 - Option
"Option" shall mean the option to purchase Common Stock of the Company
granted under this Agreement.
1
2
SECTION 1.3 - Plan
The "Plan" shall mean the Amended Non-Qualified Stock Option Plan of 1989.
SECTION 1.4 - Pronouns
The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
SECTION 1.5 - Secretary
"Secretary" shall mean the Secretary of the Company.
SECTION 1.6 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
SECTION 1.7 - Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Optionee and the Company or a Subsidiary is terminated
for any reason, including, but not by way of limitation, a termination by
resignation, discharge, death, or retirement but excluding any termination when
there is a simultaneous reemployment by the Company or a Subsidiary. The
Committee, in its absolute discretion, shall determine the effect of all other
matters and questions relating to Termination of Employment, including, but not
by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for good cause, and all questions of whether
particular leaves of absence constitute Terminations of Employment.
ARTICLE II
GRANT OF OPTION
SECTION 2.1 - Grant of Option
In consideration of the Optionee's agreement to remain in the employ of
the Company or its Subsidiary and for other good and valuable consideration, on
the date hereof the Company irrevocably grants to the Optionee the option to
purchase any part or all of an aggregate of shares of its Common Stock upon the
terms and conditions set forth in this Agreement.
SECTION 2.2 - Purchase Price
The purchase price of the shares of Common Stock covered by the Option
shall be per share without commission or other charge.
2
3
SECTION 2.3 - Consideration to Company
In consideration of the granting of this Option by the Company, the
Optionee agrees to render faithful and efficient services to the Company or its
Subsidiaries, with such duties and responsibilities as the Company shall from
time to time prescribe, for a period of at least one (1) year from the date
this Option is granted. Nothing in this Agreement or in the Plan shall confer
upon the Optionee any right to continue in the employ of the Company or any
Subsidiary or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries, which are hereby expressly reserved, to discharge
the Optionee at any time for any reason whatsoever, with or without good cause.
SECTION 2.4 - Adjustments in Option
In the event that the outstanding shares of Common Stock of the Company
are hereafter changed into or exchanged from a different number or kind of
shares or other securities of the Company, or of another corporation, by reason
of merger, consolidation, recapitalization, reclassification, stock split-up,
stock dividend or combination of shares, appropriate adjustments shall be made
by the Committee.
ARTICLE III
PERIOD OF EXERCISABILITY
SECTION 3.1 - Commencement of Exercisability
(a) Subject to Section 3.1(b) and the discretion of the Committee, the
Option is exercisable at a rate of 25% per year beginning on the first (1st)
anniversary of the date the Option is granted; provided, however, that by a
resolution adopted after the Option is granted the Committee may accelerate the
time at which the Option or any portion thereof may be exercised.
(b) No Option or portion of an Option which is unexercisable at
Termination of Employment shall thereafter become exercisable.
SECTION 3.2 - Expiration of Option
No Option may be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of ten (10) years from the date the option was granted;
or
(b) Except in the case of any Optionee who is disabled (within the meaning
of Section 105(d) (4) of the Internal Revenue Code), the expiration of three
(3) months from the date of the Optionee's Termination of Employment for any
reason other than such Optionee's death unless the Optionee dies within said
three (3) month period; or
(c) In the case of an Optionee who is disabled (within the meaning of
Section 105(d) (4) of the Internal Revenue Code), the expiration of twelve (12)
months from the date of the Optionee's Termination of Employment for any reason
other than such Optionee's death unless the Optionee dies within said twelve
(12) month period; or
(d) The expiration of one (1) year from the date of the Optionee's death;
or
3
4
(e) The effective date of either the merger or consolidation of the
Company into another corporation, or the exchange of all or substantially all
of the assets of the Company for the securities of another corporation, or the
acquisition by another corporation of 80% or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company,
unless the Committee waives, or is required to waive, this provision under the
Plan in connection with such transaction. At least thirty (30) days prior to
the effective date of such merger, consolidation, exchange, acquisition,
liquidation or dissolution, the Committee shall give the Optionee notice of
such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.2; or
(f) The expiration of three (3) months from the date of Termination of
Employment unless such Termination of Employment is for insubordination or
refusal to perform assigned duties; being under the influence of, or use, sale,
distribution, or possession of unauthorized drugs or intoxicating beverages
while on duty or on the Company's premises; theft, embezzlement, fraud or
forgery; willful destruction or defacement of Company, a visitor's, or an
employee's property; unauthorized disclosure of confidential information;
falsifying or altering Company records; continued and unexplained absences from
work; in which case this Option shall expire immediately upon Termination of
Employment.
SECTION 3.3 - Acceleration of Exercisability
In the event of the merger or consolidation of the Company into another
corporation, or the exchange of all or substantially all of the assets of the
Company for the securities of another corporation, or the acquisition by
another corporation of 80% or more of the Company's then outstanding voting
stock, or the liquidation or dissolution of the Company, the Committee shall
provide by resolution, adopted prior to such event and incorporated in the
notice referred to in Section 3.2(e), that for a period of at least thirty (30)
days prior to the effective date of such event, this Option shall be
exercisable as to all the shares covered hereby, notwithstanding that this
Option may not yet have become fully exercisable under Section 3.1(a);
provided, however, that this acceleration of exercisability shall not take
place if:
(a) This Option become unexercisable under Section 3.2 prior to said
effective date; or
(b) In connection with such an event, provision is made for an assumption
of this Option or a substitution therefor of a new option by an employer
corporation, or a parent or subsidiary of such corporation. The Committee may
make such determinations and adopt such rules and conditions as it, in its
absolute discretion, deems appropriate in connection with such acceleration of
exercisability, including, but not by way of limitation, provisions to insure
that any such acceleration and resulting exercise shall be conditioned upon the
consummation of the contemplated corporate transaction, and determinations
regarding whether provisions for assumption or substitution have been made as
defined in subsection (b) above.
ARTICLE IV
EXERCISE OF OPTIONS
SECTION 4.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise the option or
any portion thereof. After the death of the Optionee, any exercisable portion
of the Option may, prior to the time when the Option becomes unexercisable
under Section 3.2, be exercised by the Optionee's personal representative or by
any person empowered to do so under the deceased optionee's will or under the
then applicable laws of descent and distribution.
4
5
SECTION 4.2 - Partial Exercise
At any time and from time to time prior to the time when any exercisable
Option or exercisable portion thereof becomes unexercisable under Section 3.2,
such Option or portion thereof may be exercised in whole or in part; provided,
however, that the Company shall not be required to issue fractional shares and
the Committee may, by the terms of the Option, require any partial exercise to
be with respect to a specified minimum number of shares.
SECTION 4.3 - Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.2:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating such Option or portion is
exercised, such notice complying with all applicable rules established by the
Committee; and
(b) (i) Full payment (in cash or by certified or cashier's check
payable to the Company) for the shares with respect to which such Option or
portion is exercised; or
(ii) Shares of any class of the Company's stock owned by the
Optionee duly endorsed for transfer to the Company with a fair market value (as
determinable under Section 4.2(b) of the Plan) on the date of delivery equal to
the aggregate Option price of the shares with respect to which such Option or
portion is exercised; or
(iii) At the option and in the sole discretion of the Committee,
promissory note or notes of the Optionee, to be secured by a security interest
in the shares issued upon exercise and such other security, if any, as the
Committee may require. Any such promissory notes shall bear a rate of interest
not less than a rate, if any, as it may change from time to time, required under
federal tax law to prevent any imputation of interest, unless such rate exceeds
the maximum rate permissible under California law, in which case the rate shall
not exceed the maximum permitted under California law. All other terms of such
loan shall be determined solely by the Committee, and all terms and conditions,
including whether the loan shall become due upon Termination of Employment,
shall be expressly set forth in the promissory note or notes executed by the
Optionee. The Committee shall furnish the Optionee with a Truth-in-Lending
Statement showing the terms of the loan, including the amount financed, total
payments of interest, total payments of principal and annual percentage rate; or
(iv) Any combination of the consideration provided in the
foregoing subparagraphs (i), (ii) and (iii); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act of 1933, as amended (the "Act"), and then
applicable rules and regulations thereunder, and that the Optionee or other
person then entitled to exercise such Option or portion will indemnify the
Company against and hold it free and harmless from any loss, damage, expense or
liability resulting to the Company if any sale or distribution of the shares by
such person is contrary to the representation and agreement referred to above.
5
6
The Committee may, in its absolute discretion, take whatever additional
actions it deems appropriate to insure the observance and performance of such
representation and agreement and to effect compliance with the Act and any
other federal or state securities laws or regulations. Without limiting the
generality of the foregoing, the Committee may require an opinion of counsel
acceptable to it to the effect that any subsequent transfer of shares acquired
on an Option exercise does not violate the Act, and may issue stop-transfer
orders covering such shares. Share certificates evidencing stock issued on
exercise of this Option shall bear an appropriate legend referring to the
provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Act, and such
registration is then effective in respect of such shares; and
(d) In the event the Option or portion thereof shall be exercised pursuant
to section 4.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option or portion
thereof.
Section 4.4 - Conditions to Issuance of Stock Certificates
The share of stock issuable and deliverable upon the exercise of the
Option, or any portion thereof, may be either previously authorized by unissued
shares or issued shares which have then been reacquired by the Company. Such
shares shall be fully paid and nonassessable. The Company shall not be required
to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of the Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may from time to time establish for reasons of
administrative convenience.
SECTION 4.5 - Rights as Shareholder
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
6
7
ARTICLE V
MISCELLANEOUS
SECTION 5.1 - Administration
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon the
Optionee, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. In
its absolute discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan and this
Agreement.
SECTION 5.2 - Options Not Transferable
No Option or interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.2 shall not
prevent transfers by will or by the applicable laws of descent and
distribution.
SECTION 5.3 - Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary and any notice to be
given to the Optionee shall be addressed to him at the address given beneath
his signature hereto. By notice given pursuant to this Section 5.3, either
party may hereafter designate a different address for notices to be given to
him. Any notice which is required to be given to the Optionee shall, if the
Optionee is then deceased, be given to the Optionee's personal representative
if such representative has previously informed the Company of his status and
address by written notice under this Section. Any notice shall have been deemed
duly given when enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service.
SECTION 5.4 - Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
SECTION 5.5 - Notification of Disposition
The Optionee shall give prompt notice to the Company of any disposition or
other transfer of any shares of stock acquired under this Agreement if such
disposition or transfer is made (a) within two (2) years from the date of
granting the Option with respect to such shares or (b) within one (1) year
after the transfer of such shares to him. Such notice shall specify the date of
such disposition or other transfer and the amount realized, in cash, other
property, assumption of indebtedness or other consideration, by the Optionee in
such disposition or other transfer.
7
8
SECTION 5.6 - Tax Withholding
Upon the exercise of the Option by the Optionee, or by any other person
pursuant to Section 4.1, the Company shall have the right to require the
Optionee or such other person to pay by cash or by certified or cashier's check
payable to the Company, the amount of any taxes which the Company may be
required to withhold with respect to such exercise. Notwithstanding the
foregoing, in any case where a tax is required to be withheld in connection
with the issuance or transfer of Common Stock under the Plan, the Optionee may
elect to (i) have the Company reduce the number of such shares issued or
transferred by the appropriate number of shares, or (ii) deliver the
appropriate number of shares of Common Stock owned by the Optionee, in order to
accomplish such withholding; provided, however, that the election shall (a) be
made prior to the date that the amount of tax to be withheld is to be
determined (the "Tax Date"), (b) be irrevocable, (c) be subject to the
disapproval of the Committee, (d) for Officers and Directors of the Company be
made at least six (6) months after the grant of the Option (except that this
limitation shall not apply in the event that death or disability of the
Optionee occurs prior to the expiration of the six month period), and (e) for
Officers and Directors of the Company be made either six (6) months prior to
the Tax Date or in a ten day "window period" beginning on the third day
following the release of the Company's quarterly or annual summary statement of
sales and earnings.
SECTION 5.7 - Governing Law
This Agreement, the Plan and all other related documents shall be governed
by the laws of the State of California, except as such laws may be supplanted
by the laws of the United States of America, which laws shall govern to the
extent they supplant California law. If any provision shall be held invalid and
unenforceable by a court of competent jurisdiction, the remaining provisions
shall continue to be fully effective.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
Fremont General Corporation
By: _______________________________ _______________________________
Xxxxxxx X. Xxxxxx Optionee
Senior Vice President and Name & Address
Chief Administrative Officer
Taxpayer Identification
Date:______________________________ Number:________________________
8
9
AMENDED NON-QUALIFIED STOCK OPTION PLAN OF 1989
FREMONT GENERAL CORPORATION (the "Company"), a corporation organized under
the laws of the State of Nevada, hereby adopts this AMENDED NON-QUALIFIED STOCK
OPTION PLAN OF 1989 (the "Plan") which amends the Non-Qualified Stock Option
Plan of 1989 (1) to change the exercise price provisions of the Plan; (2) to
establish a limitation on option grants to any one Optionee in any fiscal year;
and (3) to conform the Plan to the new rules promulgated under Rule 16b-3 under
the Securities Exchange Act of 1934, as amended.
The purposes of this Plan are as follows:
(1) To further the growth, development and financial success of the
Company by providing additional incentives to certain of the key employees of
the Company and its Subsidiaries who have been or will be given responsibility
for the management or administration of the Company's business affairs, by
assisting them to become owners of Common Stock of the Company and thus to
benefit directly from its growth, development and financial success;
(2) To enable the Company to obtain and retain the services of the
type of professional, technical and managerial persons considered essential to
the long-range success of the Company by providing and offering them an
opportunity to become owners of Common Stock of the Company; and
(3) To attract, motivate and retain experienced and knowledgeable
outside directors through the benefits provided in Article III.
ARTICLE I
DEFINITIONS
SECTION 1.1 - General
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
SECTION 1.2 - Board
"Board" shall mean the Board of Directors of the Company.
SECTION 1.3 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.4 - Committee
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in Section 5.1.
SECTION 1.5 - Company
"Company" shall mean Fremont General Corporation.
1
10
SECTION 1.6 - Director
"Director" shall mean a member of the Board of Directors of Fremont
General Corporation.
SECTION 1.7 - Employee
"Employee" shall mean any employee (including any officer) of the
Company, or of any corporation which is then a subsidiary, whether such
employee is so employed at the time this Plan is adopted or becomes so employed
subsequent to the adoption of this Plan.
SECTION 1.8 - Employee Participant
"Employee Participant" shall mean any Employee who has been granted an
Option under the provisions of Article IV.
SECTION 1.9 - Fair Market Value
"Fair Market Value" shall mean: (i) the closing price of a share of
the Company's stock on the principal exchange on which shares of the Company's
stock are then trading (or the last sale price if the shares are traded on the
National Market System), if any, on such date, or, if shares were not traded on
such date, then on the next preceding day during which a sale occurred; or (ii)
if such stock is not traded on an exchange but quoted on NASDAQ or a successor
quotation system, the mean between the closing representative bid and asked
prices for the stock on such date as reported by NASDAQ or such successor
quotation system; or (iii) if such stock is not publicly traded on an exchange
and not quoted on NASDAQ or a successor quotation system, the mean between the
closing, bid and asked prices for the stock on such date; or (iv) if the
Company's stock is not publicly traded, the fair market value as established by
the Committee acting in good faith at such time for the purposes of this Plan.
SECTION 1.10 - Non-Employee Director
"Non-Employee Director" shall mean a member of the Board who is not an
officer or employee of the Company or any Subsidiary.
SECTION 1.11 - Non-Employee Director Participant
"Non-Employee Director Participant" shall mean a Non-Employee Director who
has been granted an Option under the provisions of Article III.
SECTION 1.12 - Option
"Option" shall mean an option to purchase Common Stock of the Company
granted under the Plan.
SECTION 1.13 - Plan
The "Plan" shall mean this AMENDED NON-QUALIFIED STOCK OPTION PLAN OF 1989.
SECTION 1.14 - Pronouns
The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, where the context so indicates.
2
11
SECTION 1.15 - Secretary
"Secretary" shall mean the Secretary of the Company.
SECTION 1.16 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns the stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
SECTION 1.17 - Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Employee Participant and the Company or a Subsidiary
is terminated for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death or retirement, but excluding
terminations where there is a simultaneous reemployment by the Company or a
Subsidiary. For purposes of this Section 1.17, an Employee Participant who is
employed by a Subsidiary will be deemed to have terminated employment at such
time as the Employee Participant's employer ceases to be a Subsidiary. The
Committee, in its absolute discretion, shall determine the effect of all other
matters and questions relating to Termination of Employment, including, but not
by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for good cause, and all questions of whether
particular leaves of absence constitute Termination of Employment.
ARTICLE II
SHARES SUBJECT TO PLAN
SECTION 2.1 - Shares Subject to Plan
The shares of stock subject to Options shall be shares of the Company's
Common Stock. The aggregate number of such shares which may be delivered upon
exercise of Options shall not exceed 2,681,250 (adjusted to reflect the 3-for-2
stock splits of June 1993 and February 1996, and the 10% stock dividend of June
1995) subject to adjustments required by this Plan and as may be required by
Rule 16b-3. Shares subject to outstanding options shall be reserved for
issuance under the Plan.
SECTION 2.2 - Unexercised Options
If any Option expires, terminates, is surrendered or cancelled without
having been fully exercised, the number of shares subject to such Option but as
to which such Option was not exercised prior to its expiration or cancellation
will not be charged against the maximum number of shares set forth in Section
2. l above and may again be optioned hereunder.
SECTION 2.3 - Changes in Company's Shares
In the event that the outstanding shares of Common Stock of the Company
are hereafter changed into or exchanged for a different number or kind of
shares or other securities of the Company, or of another corporation, by reason
of reorganization, merger, consolidation, recapitalization, reclassification,
stock split, stock dividend or combination of shares, the Committee shall make
an appropriate proportionate and equitable adjustment in the number and kind of
securities for the purchase of which
3
12
Options may be granted, including adjustments of the limitations in Sections
2.1, 3.2 and 4.9 on the maximum and specific number and kind of securities
which may be issued on exercise of Options.
ARTICLE III
NON-EMPLOYEE DIRECTOR OPTIONS
SECTION 3.1 - Participation
Grants of Options under this Article III shall be made only to
Non-Employee Directors. Each such Option shall provide that the Option shall
not be treated as an incentive stock option within the meaning of Section 422
of the Code.
SECTION 3.2 - Annual Option Grants
(a) Time of Initial Award. Upon approval of this First Restatement of the
Plan by the shareholders of the Company, there shall be granted automatically
(without any action by the Board or Committee) to each director who is not then
an officer or employee of the Company an Option (the date of Extant of which
shall be the date of such approval) to purchase 2,500 shares of Common Stock.
(b) Subsequent Annual Awards. On the date of the annual shareholders'
meeting of the Company in 1993, 1994, and 1995, there shall be granted
automatically (without any action by the Committee or the Board) an Option (the
date of grant of which shall be such shareholders' meeting date) to each
Non-Employee Director then in office to purchase 2,500 shares of Common Stock.
SECTION 3.3 - Option Price
The exercise price per share of the Common Stock covered by each Option
granted pursuant to Section 3.2 hereof shall be 100 percent of the Fair Marker
Value of the Common Stock on the date such Option is granted. Upon exercise of
an Option, the Optionee shall pay to the Company the option exercise price.
SECTION 3.4 - Option Period
Each Option granted under this Article III and all rights or obligations
thereunder shall expire ten years after the date such Option is granted and
shall be subject to earlier termination as provided below.
SECIION 3.5 - Exercise of Options
Each Option granted under this Article III shall become exercisable in four
equal installments at the rate of 25 percent per year beginning on the first
anniversary of the grant date.
The exercise price of each Option granted under this Article III shall
be paid in full at the time of exercise in cash or by check or in shares of
Common Stock valued at their Fair Market Value on the date of exercise of the
Option, or partly in such shares and partly in cash, provided that any such
shares used in payment of such exercise price shall have been owned by the
Non-Employee Director Participant at least six months prior to the date of
exercise. An exercisable Option may be exercised solely by delivery to the
Secretary or his or her office of a notice in writing signed by the
Non-Employee Director Participant (or other person then entitled to exercise
the Option or portion thereof pursuant to Section 6.3, subject to Section 6.8).
4
13
SECTION 3.6 - Termination of Directorship
If a Non-Employee Director Participant's services as a member of the
Board of Directors terminate, an Option granted pursuant to this Article III
held by such Non-Employee Director Participant shall remain exercisable to the
extent it was then exercisable until the first to occur of the following
events:
(i) The expiration of ten (10) years after the date the
Option was granted; or
(ii) Except in the case of any Non-Employee Director
Participant who is disabled (within the meaning of Section 105(d) (4)
of the Code), or dies, the expiration of three (3) months after the
date of the Non-Employee Director Participant's termination from
service; or
(iii) In the case of any Non-Employee Director Participant
who is disabled (within the meaning of Section 105(d) (4) of the
Code), or dies, the expiration of twelve (12) months after the date of
the Non-Employee Director Participant's termination from service.
SECTION 3.7 - Acceleration Upon a Change in Control Event
(a) Upon the occurrence of a Change in Control Event (as defined
below), each Option granted under Section 3.2 shall become immediately
exercisable in full; provided, however, that none of such Options shall be
accelerated to a date less than six months after the initial date of grant of
such Option.
(b) For purposes of this Section 3.7, a "Change in Control Event"
shall mean
(i) Approval by the shareholders of the Company of the
dissolution or liquidation of the Company;
(ii) Approval by the shareholders of the Company of an
agreement to merge or consolidate, or otherwise reorganize, with or
into one or more entities that are not Subsidiaries, as a result of
which less than 50 percent of the outstanding voting securities of the
surviving or resulting entity immediately after the reorganization
are, or will be, owned by shareholders of the Company immediately
before such reorganization (assuming for purposes of such
determination that there is no change in the record ownership of the
Company's securities from the record date of such shareholder action
until such reorganization and that such record owners hold no
securities of the other parties to such reorganization);
(iii) Approval by the shareholders of the Company of the
sale of substantially all of the Company's business and/or assets to a
person or entity which is not a Subsidiary;
(iv) Any "person" (as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of securities of the
Company representing more than 80 percent of the combined voting power
of the Company's then outstanding securities entitled to then vote
generally in the election of directors of the Company; or
(v) During any period not longer than two consecutive
years, individuals who at the beginning of such period constituted the
Board cease to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company's shareholders,
of at least a
5
14
majority of the new Board members during such period was approved by a
vote of at least two-thirds of the Board members then still in office
who were Board members at the beginning of such period.
SECTION 3.8 - Adjustments and Termination
Options granted under this Article III shall be subject to adjustment
as provided in Sections 2.3 and 6.2, but only to the extent that (a) such
adjustment in the case of a Change in Control Event is effected pursuant to the
terms of a reorganization agreement approved by shareholders of the Company,
and (b) such adjustment is consistent with the adjustments to Options held by
persons other than executive officers or directors of the Company. To the
extent that any Option granted under this Article III is not exercised prior to
(x) a dissolution of the Company, or a merger or other corporate reorganization
that the Company does not survive, and (y) no provision is (or consistent with
the provisions of the preceding sentence can be) made for the assumption,
conversion, substitution or exchange of the Option, the Option shall terminate
upon the occurrence of such event.
ARTICLE IV
EMPLOYEE OPTIONS
SECTION 4.1 - Eligibility
Any key Employee of the Company or a Subsidiary who is selected by the
Committee shall be eligible to be granted Options under this Article.
SECTION 4.2
(a) The Committee shall from time to time, in is absolute
discretion:
(i) Determine which Employees are key Employees and
select from among the key Employees (including those to whom
Options have been previously granted under the Plan) such of them as
in its opinion should be granted Options; and
(ii) Determine the number of shares to be subject to such
Options granted to such selected key Employees; and
(iii) Determine the terms and conditions of such Options,
consistent with the Plan.
(b) Upon the selection of a key Employee to be granted an Option,
the Committee shall instruct the Secretary to issue such Option and may impose
such conditions on the grant of such Option as deemed appropriate. Each such
Option shall provide that the Option shall not be treated as an incentive stock
option within the meaning of Section 422A of the Code.
6
15
SECTION 4.3 - Option Price
The exercise price per share of the Common Stock covered by each
Option granted pursuant to Section 3.2 hereof shall be 100 percent of the Fair
Market Value of the Common Stock on the date such Option is granted. Upon
exercise of an Option, the Optionee shall pay to the Company the option
exercise price.
SECTION 4.4 - Commencement of Exercisability
(a) No Option granted under this Article IV may be exercised in
whole or in part during the first year after such option is granted or, if the
exercise price of an option is reduced by amendment, during the first year
after such amendment.
(b) Subject to the provisions of Section 4.4(a), 4.4(c) and 6.3,
such Options are, subject to the discretion of the Committee to otherwise
provide, exercisable at a rate of 25 percent per year beginning on the first
anniversary of the grant date; provided, however, that by a resolution adopted
after an Option is granted the Committee may, on such terms and conditions as
it may determine to be appropriate and subject to Sections 4.4(a), 4.4(c), 4.5
and 6.3, accelerate or extend the time at which such Option or any portion
thereof may be exercised.
(c) Unless the Committee otherwise provides, no portion of an
Option which is unexercisable at Termination of Employment shall thereafter
become exercisable.
SECTION 4.5 - Expiration of Options
(a) No Option may be exercised to any extent by anyone after the
first to occur of the following events (unless, as to clauses (ii) through (iv)
below, the Committee otherwise provides):
(i) The expiration of ten (10) years after the date the
Option was granted; or
(ii) Except in the case of any Employee Participant who is
disabled (within the meaning of Section 105(d) (4) of the Code), the
expiration of three (3) months after the date of the Employee
Participant's Termination of Employment for any reason other than such
Employee Participant's death unless the Employee Participant dies
within said three (3) months period; or
(iii) In the case of an Employee Participant who is
disabled (within the meaning of Section 105(d) (4) of the Code), the
expiration of twelve (12) months from the date of the Employee
Participant's Termination of Employment for any reason other than such
Employee Participant's death unless the Employee Participant dies
within said twelve (12) month period; or
(iv) The expiration of one (1) year after the date of the
Employee Participant's death.
(b) Subject to the provisions of Section 4.5(a), the Committee
shall provide, in the terms of each individual Option granted to an Employee
Participant, when such Option expires and becomes unexercisable; and (without
limiting the generality of the foregoing) the Committee may provide in the
terms of individual Options that said Options expire immediately upon a
Termination of Employment for any one or more reasons.
7
16
SECTION 4.6 - Consideration
In consideration of the granting of the Option, the Employee
Participant shall agree, in the written Stock Option Agreement, to remain in
the employ of the Company or a Subsidiary for a period of at least one (1) year
after the Option is granted. Nothing in this Plan or in any Stock Option
Agreement hereunder shall confer upon an Employee Participant any right to
continue in the employ of the Company or any Subsidiary. The granting of the
Option shall not interfere with or restrict in any way the rights of the
Company and Subsidiaries, which are hereby expressly reserved, to discharge any
Employee Participant at any time for any reason whatsoever, with or without
good cause.
SECTION 4.7 - Merger, Consolidation, Exchange, Acquisition, Liquidation or
Dissolution
In its absolute discretion, and on such terms and conditions as it
deems appropriate, the Committee may provide by the terms of any Option granted
to an Employee Participant that such Option cannot be exercised after the
merger or consolidation of the Company into another corporation, the exchange
of all or substantially all of the assets of the Company for the securities of
another corporation, the acquisition by another corporation of 80 percent or
more of the Company's then outstanding voting stock or the liquidation or
dissolution of the Company; and if the Committee so provides, it may, in its
absolute discretion and on such terms and conditions as it deems appropriate,
also provide either by the terms of such Option or by a resolution adopted
prior to the occurrence of such merger, consolidation, exchange, acquisition,
liquidation or dissolution, that, for some period of time prior to such event,
such Options or some of them shall be exercisable as to all shares covered
thereby, notwithstanding anything to the contrary in Section 4.4(a), Section
4.4(b) and/or in any installment provisions of such Option.
SECTION 4.8 - Manner of Exercise
An exercisable Option granted to an Employee Participant, or any
exercisable portion thereof, may be exercised solely by delivery to the
Secretary or his or her office of all of the following prior to the time when
such Option or such portion becomes unexercisable under Section 4.5 or Section
4.7:
(a) Notice in writing signed by the Employee Participant or other
person then entitled to exercise such Option or portion, stating that such
Option or portion is exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (in cash or by check payable to the
Company) for the shares with respect to which such Option or portion is thereby
exercised; or
(ii) Subject to such conditions and rules as the Committee
may establish, shares of any class of the Company's stock owned by the
Employee Participant duly endorsed for transfer to the Company with a
Fair Market Value on the date of delivery equal to the aggregate
Option price of the shares with respect to which such Option or
portion is thereby exercised; or
(iii) At the option and in the sole discretion of the
Committee, promissory note or notes of the Employee Participant, to be
secured by a security interest in the shares issued upon exercise and
such other security, if any, as the Committee may require. Any such
promissory notes shall bear a rate of interest not less than a rate,
if any, as it may change from time to time required under federal tax
law to prevent any imputation of interest, unless such rate exceeds
the maximum rate permissible under Nevada law, in which case the rate
shall not exceed the maximum permitted under Nevada law. All other
terms of such note shall be determined, subject
8
17
to compliance with applicable laws (including federal margin
requirements if applicable), solely by the Committee. All terms and
conditions, including whether the note shall become due upon
Termination of Employment, shall be expressly set forth in the
promissory note or notes executed by the Employee Participant. The
Committee shall furnish the Employee Participant with a
Truth-in-Lending statement if required showing the terms of the loan,
including the amount financed, total payments of interest, total
payments of principal and annual percentage rate; or
(iv) Any combination of the consideration permitted by the
foregoing subsections.
(c) Such representation and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to agents and registrars.
(d) In the event the Option or portion shall be exercised pursuant
to Section 6.3 by any person or persons other than the Employee Participant,
appropriate proof of the right of such person or persons to exercise the Option
or portion.
SECTION 4.9 - Performance-Based Compensation Limitation
The following limitations shall apply to grants of Options under the
Plan:
(i) No Employee shall be granted, in any fiscal year of
the Company, Options under the Plan to purchase more than 165,000
shares of Common Stock, provided that the Company may make an
additional one-time grant of up to 33,000 shares of Common Stock to
newly-hired Employees.
(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's
capitalization as described in Section 6. 2.
(iii) If an Option is cancelled (other than in connection
with a transaction described in Section 4.7 or Section 6. 2), the
cancelled Option will be counted against the limit set forth in
Section 4.9(i). For this purpose, if the exercise price of an Option
is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.
ARTICLE V
ADMINISTRATION
SECTION 5.1 - Stock Option Committee
(a) The Stock Option Committee shall be composed of no fewer than
three (3) members (or, as of September l, 1992, two (2) members) of the Board,
designated by and holding office at the pleasure of the Board. Appointment of
Committee members shall be effective upon acceptance of appointment. Committee
members may resign at any time by delivering written notice to the Board.
Vacancies in the Committee shall be filled by the Board.
9
18
(b) No options shall be granted to any member of the Committee
during the term of his or her membership on the Committee except as provided in
Article III. No person shall be eligible to serve or continue to serve on the
Committee unless he or she is a "non-employee director" for purposes of Rule
16b-3, as amended from time to time.
SECTION 5.2 - Duties and Powers of Committee
It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules. Any such
interpretations and rules shall be consistent with the basic purposes of the
Plan. Notwithstanding the foregoing, the provisions of Article III relating to
Non-Employee Director Options shall be nondiscretionary, automatic and, to the
maximum extent possible, self-effectuating.
SECTION 5.3 - Action by the Committee
The Committee shall act by a majority of its members in office by vote
at a meeting or by unanimous written consent of all members of the Committee.
SECTION 5.4 - Compensation; Professional Assistance; Good Faith Actions
Members of the Committee shall not receive compensation for their
service as members but all expenses and liabilities they incur in connection
with the administration of the Plan shall be borne by the Company. The
Committee may, with the approval of the Board, employ attorneys, consultants,
accountants, appraisers, brokers or other persons. The Committee, the Company
and its officers and Directors shall be entitled to rely upon the advice,
opinions or valuations and determinations made by the Committee in good faith
and the same shall be final and binding upon all Employee Participants and
Non-Employee Director Participants, the Company and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Options and all members of the Committee shall be fully protected by the
Company in respect to any such action, determination on interpretation.
ARTICLE VI
OTHER PROVISIONS
SECTION 6.1 - Option Agreement
Each Option granted under Article IV shall be evidenced by a written
Stock Option Agreement, which shall be executed by the Employee Participant and
an authorized officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with the Plan. Each
Option granted under Article III shall be evidenced by a written Stock Option
Agreement in the form heretofore approved by the Board and shall be signed by
the President or a Senior Vice President of the Company. The terms upon which,
the times at which and the exercise price of all Options granted under the Plan
shall be established by resolution of the Committee providing for the grant of
Option and shall be set forth in or incorporated by reference in the Stock
Option Agreement.
10
19
SECTION 6.2 - Adjustments in Outstanding Options
In the event that the outstanding shares of stock subject to Options
are changed into or exchanged for a different number of kind of shares of the
Company or other securities of the Company by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend or combination of shares, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which all
outstanding Options, or portions then unexercised, shall be exercisable, to the
end that after such event the Employee Participant or Non-Employee Director
Participant's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in an outstanding Option shall be
made without change in the total price applicable to the Option or the
unexercised portion of the Option (except for any change in the aggregate price
resulting from rounding-off of share quantities or prices) and with any
necessary corresponding adjustment in the option price per share.
SECTION 6.3 - Person Eligible to Exercise
Except as permitted by Section 6.8, during the lifetime of the
Employee Participant or Non-Employee Director Participant, his or her Option,
or any portion, shall be exercisable only by him or her or by his or her
guardian or legal representative. After the death of the Employee Participant
or Non-Employee Director Participant, any exercisable portion of an Option may,
prior to the time when such portion becomes unexercisable under Section 3.6,
4.5 or 4.7, be exercised by his or her personal representative or by any person
empowered to do so under the deceased Employee Participant or Non-Employee
Director Participant's will or under the then applicable laws of the descent
and distribution.
SECTION 6.4 - Partial Exercise
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion becomes unexercisable under Section
3.6, 4.5 or 4.7, such Option or portion thereof may be exercised in whole or in
part; provided, however, that the Company shall not be required to issue
fractional shares and the Committee may, by the terms of an Option granted
under Article IV, require any partial exercise to be with respect to a
specified minimum number of shares.
SECTION 6.5 - Conditions to Issuance of Stock Certificates
The shares of stock issuable and deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the
Company. The Company shall not be required to issue or deliver any certificate
or certificates for shares of stock purchased upon the exercise of any Option
or portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges,
if any, on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body, which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
11
20
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may establish from time to time for
reasons of administrative convenience; and
(e) The satisfaction of all other applicable legal requirements
incident to such action.
SECTION 6.6 - Rights as Shareholders
The holders of Options shall not be, nor have any of the rights or
privileges of, shareholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until certificates
representing such shares have been issued by the Company to such holders.
SECTION 6.7 - Transfer Restrictions After Exercise
The Committee, in its absolute discretion, may impose such
restrictions on the transferability of the shares purchasable upon the exercise
of an Option as it deems appropriate and any such restriction shall be set
forth in the respective Stock Option Agreement and may be referred to on the
certificates evidencing such shares, but in respect of any option granted under
Article III, such restrictions shall be limited to those required by applicable
law.
SECTION 6.8 - Options Not Transferable
No Option or interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Employee Participant or
Non-Employee Director Participant or his or her successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition is volumes
or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy)
and any attempted disposition thereof shall be null and void and of no effect;
provided, however, that nothing in this Section 6.8 shall prevent transfers by
will or by the applicable laws of descent and distribution or, effective
September 1, 1992 pursuant to a "qualified domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act of 1974.
The designation by an Employee Participant or Non-Employee Director Participant
of persons or trust entitled upon such participant's death, by will or the laws
of descent and distribution, to receive the Employee Participant or
Non-Employee Director Participant' Options in the event of the death of such
option holder shall not constitute a transfer.
SECTION 6.9 - Amendment, Suspension or Termination of the Plan; Amendment of
Options
Subject to Section 3. 8, the Plan may be wholly or partially amended
or otherwise modified, suspended or terminated at any time or from time to time
by the Board. The Company shall obtain shareholder approval of any Plan
amendment to the extent necessary and desirable to comply with Rule 16b-3 or
with Sections 162(m) or 422 of the Code (or any successor rule or statute or
other applicable law, rule or regulation, including the requirements of any
exchange or quotation system on which the Common Stock is listed). Such
shareholder approval, if required, shall be obtained in such a manner and to
such a degree as is required by the applicable law, rule or regulation.
Neither the amendment, suspension nor termination of the Plan shall, without
the consent of the holder of the Option, alter or impair any rights or
obligations of the holder, and neither the suspension nor termination of the
Plan shall impair the authority of the Committee in respect of outstanding
options during any period of suspension. In no event may any Option be granted
under this Plan after February 1, 1999.
12
21
The Committee by resolution may waive conditions of or limitations on
rights under Options granted to any or all Employee Participants that the
Committee in the prior exercise of its discretion has imposed, or make other
changes to the terms of such Options consistent with the express provisions
hereof that do not adversely affect such Participants. No change of or
affecting an outstanding Option shall, however, without the written consent of
the Participant, adversely affect the Participant's rights or benefits under
any Option then outstanding. Changes contemplated by Sections 2.3, 3.8, 4.6 or
6.2 shall not be deemed to constitute changes for purposes of this Section.
SECTION 6.10 - Approval of Plan by Stockholders
This Plan was originally adopted by the Stockholders in May 1989.
Subsequent amendments were adopted by the Shareholders in 1992 and in 1994.
SECTION 6.11 - Effect of Plan Upon Other Options and Compensation Plans
The adoption of this Plan shall not affect any other Compensation or
incentive plans in effect for the Company or any Subsidiary. Nothing in this
Plan shall be construed to limit the right of the Company or any Subsidiary (a)
to terminate employees of the Company or any Subsidiary or (b) to grant or
assume options otherwise than under this Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.
SECTION 6.12 - Tax Withholding
Upon the exercise of an option by an Employee Participant or other
person, the Company shall have the right to require such person to pay, by cash
or check payable to the Company, the amount of any taxes which the Company may
be required to withhold with respect to such exercise. Notwithstanding the
foregoing, in any case where a tax is required to be withheld in connection
with the issuance or transfer of Company stock under this Plan, an Employee
Participant or other person entitled to exercise an Option (other than an
Option granted under Article III), may elect, pursuant to such rules as the
Committee may establish, to have the Company reduce the number of such shares
issued or transferred by the appropriate number of shares to accomplish such
withholding; provided the Committee may impose such conditions on the payment
of any withholding obligation as may be required to satisfy any applicable
regulatory requirements.
SECTION 6.13 - Governing Law
(a) The Plan and the Option Agreements and all other related
documents shall be governed by the laws of the State of California, except to
the extent such laws way be supplanted by the supreme laws of the United States
of America, or by Nevada law as the law of the State of incorporation of the
Company. If any provision shall be held invalid and unenforceable by a court
of competent jurisdiction, the remaining provisions shall continue to be fully
effective.
(b) It is the intent of the Company that this Plan and Options
granted hereunder satisfy and be interpreted in a manner that in the case of
Participants who are or may be subject to Section 16 of the Exchange Act
satisfies the applicable requirements of Rule 16b-3 so that such persons will
be entitled to the benefits of Rule 16b-3 or other exemptive rules under
Section 16 of the Securities Exchange Act of 1934 and will not be subjected to
avoidable liability thereunder. If any provision of this Plan or of any
13
22
Option would otherwise frustrate or conflict with the intent expressed above,
that provision to the extent possible shall be interpreted and deemed amended
so as to avoid such conflict, but to the extent of any remaining irreconcilable
conflict with such intent as to such persons in the circumstances, such
provision shall be deemed void.
SECTION 6.14 - Titles
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of the Plan.
----------------
As last Amended on November 7, 1996
14
23
FREMONT GENERAL CORPORATION
NON-EMPLOYEE DIRECTOR
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the <>, between FREMONT
GENERAL CORPORATION, a Nevada corporation (the "Corporation"), and
<> <> (the "Director").
WITNESSETH
WHEREAS, the Corporation adopted and the shareholders of the
Corporation have approved an Amended Non-Qualified Stock Option Plan of 1989
(the "Plan"):
WHEREAS, pursuant to Article III of the Plan, the Corporation
has granted an option (the "Option") to the Director upon the terms and
conditions evidenced hereby, as required by the Plan, which Option is not
intended and shall not be deemed to be an incentive stock option within the
meaning of Section 422 of the Code;
NOW THEREFORE, in consideration of the services rendered and
to be rendered by the Director, the Corporation and the Director agree to the
terms and conditions set forth herein as required by the terms of the Plan.
1. OPTION GRANT. This Agreement evidences the grant to
the Director, as of <> (the "Award Date"), of an Option to purchase
an aggregate of <> shares of Common Stock, par value $1.00 per
share, under Article III of the Plan, subject to adjustment as provided in or
pursuant to the Plan.
2. EXERCISE PRICE. The Option entitles the Director to
purchase all or any part of the Option shares at a price per share of
$<>, which represents the Fair Market Value of the shares on the
Award Date.
3. OPTION TERM. The Option shall terminate
<>, unless earlier terminated in accordance with the
terms of Article III of the Plan. Any portion of the Option that is
unexercisable at the time the Director's services as a Director terminate
shall thereupon terminate.
4. GENERAL TERMS. The Option and this Agreement are
subject to, and the Corporation and the Director agree to be bound by, the
provisions of the Plan that apply to the Option, including but not limited to
Articles I, II, III and VI. Such provisions are incorporated herein by this
reference. The Director acknowledges receiving a copy of the Plan and reading
its applicable provisions. Capitalized terms not otherwise defined herein
shall have the meaning assigned to such terms in the Plan.
24
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
FREMONT GENERAL CORPORATION
BY:____________________________
Xxxxxxx X. Xxxxxx
Senior Vice President
_______________________________
(Signature)
<> <>
<>
<>
<>
<>
Tax I.D. Number <>
