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Exhibit 10.15
STOCK OPTION AGREEMENT
(Incentive Stock Option)
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THIS AGREEMENT is made to be effective as of July 1, 1997 (the "GRANT
DATE"), by and between Dominion Homes, Inc., an Ohio corporation (the
"COMPANY"), and Xxxxxxx X. Xxxxxxxx (the "OPTIONEE").
WITNESSETH:
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WHEREAS, the Board of Directors of the COMPANY adopted its Incentive
Stock Plan (the "PLAN") on February 28, 1994; and
WHEREAS, the shareholders of the COMPANY, upon the recommendation of
the COMPANY's Board of Directors, approved the PLAN on March 3, 1994; and
WHEREAS, pursuant to the provisions of the PLAN, the Board of Directors
of the COMPANY has appointed a committee (the "COMMITTEE") to administer the
PLAN, and the COMMITTEE has determined that an option to acquire common shares,
without par value, of the COMPANY (the "SHARES") should be granted to the
OPTIONEE upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the promises, the parties hereto
make the following agreement, intending to be legally bound thereby:
1. PLAN AS CONTROLLING. All terms and conditions of the PLAN, as it may
be amended from time to time, applicable to options granted thereunder shall be
deemed incorporated herein by reference. A copy of the PLAN as in effect on the
date of this Agreement is attached hereto as Annex A. In the event of any
provision in this Agreement conflicts with any term in the PLAN, the term in the
PLAN shall be deemed controlling.
2. GRANT OF OPTION. The COMPANY hereby grants to the OPTIONEE an option
(the "OPTION") to purchase ten thousand (10,000) SHARES. The OPTION is intended
to qualify as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "CODE").
3. TERMS AND CONDITIONS OF THE OPTION.
(A) EXERCISE PRICE. The purchase price (the "EXERCISE PRICE") to be
paid by the OPTIONEE to the COMPANY upon the exercise of the OPTION shall be
$4.75 per SHARE, being 100% of the Fair Market Value (as that term is defined in
the PLAN) of the SHARES on the GRANT DATE.
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(B) EXERCISE OF THE OPTION. The OPTIONEE may exercise the OPTION,
from time to time and at any time, after the SHARES subject thereto have vested.
Subject to the provisions of the PLAN and the other provisions of this
Agreement, the OPTION shall remain exercisable as to the SHARES subject thereto
which have vested until the date of expiration of the OPTION term. In accordance
with the vesting schedule set forth below, twenty percent (20%) of the SHARES
subject to the OPTION shall vest for the first time on July 1, 1998, and each
July 1 of the subsequent four years:
Vesting Schedule
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July 1, 1998 July 1, 1999 July 1, 2000 July 1, 2001 July 1, 2002
20% Vested 40% Vested 60% Vested 80% Vested 100% Vested
---------- ---------- ---------- ---------- -----------
Total Total Total Total Total
Number of Number of Number of Number of Number of
SHARES Vested SHARES Vested SHARES Vested SHARES Vested SHARES Vested
------------- ------------- ------------- ------------- --------------
2,000 2,000 2,000 2,000 2,000
The grant of this OPTION shall not confer upon the OPTIONEE any
right to continue in the employment of the COMPANY or any subsidiary nor limit
in any way the right of the COMPANY or a subsidiary to terminate the employment
of the OPTIONEE at any time.
(C) FULL VESTING UPON CHANGE IN CONTROL. Notwithstanding the
foregoing, the OPTION shall fully vest with respect to all SHARES subject
thereto upon the occurrence of a "Change in Control." For purposes of this
Agreement, the term "Change in Control" shall mean the occurrence of any event
which results in either: (a) Xxxxxx Realty Company's failing to own at least
thirty percent (30%) of the combined voting power of the then outstanding voting
securities of the COMPANY entitled to vote generally in the election of
directors; or (b) both Xxxxxx Xxxxxx and Xxxxxxx Xxxxxx ceasing to be directors
and officers of the COMPANY.
(D) OPTION TERM. The OPTION shall in no event be exercisable after
the expiration of ten (10) years from the GRANT DATE.
(E) METHOD OF EXERCISE. The OPTION may be exercised by giving
written notice of exercise to the COMMITTEE in care of the Treasurer of the
COMPANY stating the number of SHARES subject to the OPTION in respect of which
it is being exercised. The OPTIONEE shall be required, as a condition precedent
to the OPTIONEE'S right to exercise the OPTION and at the OPTIONEE'S expense, to
supply the COMMITTEE with such evidence, representations and agreements as the
COMMITTEE may deem necessary or desirable to establish the OPTIONEE'S right to
exercise the OPTION and the propriety
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of the sale of the SHARES by reason of such exercise under the Securities Act of
1933, as amended from time to time (the "Securities Act"), and any other laws or
requirements of any governmental authority. Without limiting the generality of
the foregoing, the OPTION shall not be exercisable unless the sale of the SHARES
by reason of such exercise has been registered under the Securities Act and all
other applicable securities laws of any jurisdiction or unless such sale is
exempt from such registration requirements.
Payment of the EXERCISE PRICE for all such SHARES shall be made to the
COMPANY at the time of the OPTION is exercised in such form as authorized by
Section 6(d) of the PLAN. After payment in full for the SHARES purchased under
the OPTION has been made, the COMPANY shall take all such action as is necessary
to deliver appropriate stock certificates evidencing the SHARES purchased upon
the exercise of the OPTION as promptly thereafter as is reasonably practicable.
(F) SATISFACTION OF TAXES AND TAX WITHHOLDING REQUIREMENTS. The
COMPANY or a subsidiary shall be entitled and is authorized, if the COMMITTEE
deems it necessary or desirable, to withhold (or secure payment from the
OPTIONEE in lieu of withholding) as provided in Section 10(e) of the PLAN. The
COMPANY may defer delivery of any SHARES pursuant to the exercise of the OPTION
unless indemnified to its satisfaction in this regard.
4. ADJUSTMENTS AND CHANGES IN THE SHARES SUBJECT TO THE OPTION.
(A) In the event that any dividend or other distribution (whether in
the form of SHARES, other securities or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of SHARES or other securities of
the COMPANY, issuance of warrants or other rights to purchase SHARES or other
securities of the COMPANY, or other similar corporate transaction or event
affects the SHARES such that an adjustment is necessary in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the PLAN to the OPTIONEE, then the COMMITTEE shall
proportionately adjust either or both (as necessary) of: (i) the number of
SHARES or other securities of the COMPANY (or number and kind of other
securities or property) subject to the OPTION; and (ii) the EXERCISE PRICE with
respect to the OPTION;
(B) Notwithstanding the foregoing, any and all adjustments in
connection with the OPTION shall comply in all respects with Sections 442 and
424 of the CODE, or any successor provision as in effect from time to time, and
the rules and regulations promulgated thereunder as in effect from time to time.
5. NON-ASSIGNABILITY OF THE OPTION.
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(A) During the lifetime of the OPTIONEE, the OPTION shall not be
assignable or transferable and may be exercised only by the OPTIONEE, or, if
permissible under applicable law, by the OPTIONEE's guardian or legal
representative or a transferee receiving the OPTION pursuant to a qualified
domestic relations order ("QDRO"), as determined by the COMMITTEE.
(B) The OPTION may not be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by the OPTIONEE otherwise than by
will or the laws of descent and distribution or pursuant to a QDRO, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall ve void and unenforceable against the COMPANY or any
subsidiary.
6. EXERCISE AFTER TERMINATION OF EMPLOYMENT
(A) Except as otherwise provided in this Agreement or in the PLAN,
the OPTION: (i) is exercisable only by the OPTIONEE; (ii) is exercisable only
while the OPTIONEE is in the employment of the COMPANY or a subsidiary of the
COMPANY and then only if the OPTION has become exercisable by its terms; and
(iii) if not exercisable by its terms at the time the OPTIONEE ceases to be in
the employment of the Company and its subsidiaries, shall immediately expire on
the date of termination of employment.
(B) Except as otherwise provided in this Section 6, if the OPTION is
exercisable by its terms at the time the OPTIONEE ceases to be in the employment
of the COMPANY, by reason of retirement or otherwise, it must be exercised on or
before the earlier of three months after the date of termination of employment
or the fixed expiration date of the OPTION, after which period the OPTION shall
expire.
(C) In the event of the death of the OPTIONEE while in the
employment of the COMPANY, the unexercised portion of the OPTION (to the extent
then exercisable by its terms) shall be exercisable by his estate for a period
ending on the earlier of the fixed expiration date of the OPTION or twelve
months after the date of death, after which period the OPTION shall expire. For
purposes hereof, the estate of the OPTIONEE shall be defined to include the
legal representative thereof or any person who has acquired the right to
exercise the OPTION by reason of the death of the OPTIONEE.
(D) In the event of the termination of employment by reason of the
"disability" of the OPTIONEE, the unexercised portion of the OPTION (to the
extent then exercisable by its terms) shall be exercisable by the OPTIONEE for a
period ending on the earlier of twelve months after the termination of
employment or other fixed expiration date of the OPTION. For purposes hereof,
"disability" shall have the same meaning as that set forth for that term in
Section 22(e)(3) of the CODE, or any successor provision as in effect from time
to time.
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7. RESTRICTIONS ON TRANSFERS OF SHARES. Anything contained in this
Agreement or elsewhere to the contrary notwithstanding, the OPTION may not be
exercised if the COMMITTEE determines that the sale of SHARES upon exercise of
the OPTION may violate the Securities Act or any other law or requirement of any
governmental authority. An appropriate restrictive legend shall be placed on
certificates representing SHARES acquired upon the exercise of the OPTION,
unless the COMMITTEE determines, upon the advise of counsel to the COMPANY, that
such legend is not required because of the existence of an effective
registration statement registering the SHARES under the Securities Act or
because all applicable federal and state legal requirements have been satisfied.
8. NO RIGHTS OF THE OPTIONEE AS A SHAREHOLDER. The OPTIONEE shall have no
rights as a shareholder of the COMPANY with respect to any SHARES covered by the
OPTION until the date of issuance of a certificate to the OPTIONEE evidencing
such SHARES.
9. GOVERNING LAW. The rights and obligations of the OPTIONEE and the
COMPANY under this Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio (without giving effect to the conflict of
laws principles thereof) in all respects, including, without limitation, matters
relating to the validity, construction, interpretation, administration, effect,
enforcement, and remedies provisions of the PLAN and its rules and regulations,
except to the extent preempted by applicable federal law.
10. RIGHTS AND REMEDIES CUMULATIVE. All rights and remedies of the COMPANY
and of the OPTIONEE enumerated in this Agreement shall be cumulative and, except
as expressly provided otherwise in this Agreement, none shall exclude any other
rights or remedies allowed by law or in equity, and each of said rights or
remedies may be exercised and enforced concurrently.
11. CAPTIONS. The captions contained in this Agreement are included only
for convenience of reference and do not define, limit, explain or modify this
Agreement or its interpretation, construction or meaning and are in no way to be
construed as a part of this Agreement.
12. SEVERABILITY. If any provision of this Agreement or the application of
any provision hereof to any person or any circumstance shall be determined to be
invalid or unenforceable, then such determination shall not affect any other
provision of this Agreement or the application of said provision to any other
person or circumstance, all of which other provisions shall remain in full force
and effect, and it is the intention of each party to this Agreement that if any
provision of this Agreement is susceptible of two or more constructions, one of
which would render the provision enforceable and the other or others of which
would render the provision unenforceable, then the provision shall have the
meaning which renders it enforceable.
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13. NUMBER AND GENDER. When used in this Agreement, the number and gender
of each pronoun shall be construed to be such number and gender as the context,
circumstances or its antecedent may require.
14. AMENDMENT, ETC. OF OPTION. The COMMITTEE may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, the OPTION, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of the OPTIONEE or any holder or
beneficiary of the OPTION shall not to that extent be effective without the
consent of the OPTIONEE, holder or beneficiary.
15. ENTIRE AGREEMENT. This Agreement, including the PLAN as amended from
time to time incorporated by reference herein, constitutes the entire agreement
between the COMPANY and the OPTIONEE in respect of the subject matter of this
Agreement, and this Agreement supersedes all prior and contemporaneous
agreements between the parties hereto in connection with the subject matter of
this Agreement. No change, termination or attempted waiver of any of the
provisions of this Agreement shall be binding upon any party hereto unless
contained in a writing signed by the party to be charged.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed to be effective as of the date first above written.
COMPANY:
DOMINION HOMES, INC.
By:________________________________________
Its:________________________________________
OPTIONEE:
________________________________________
Xxxxxxx X. Xxxxxxxx
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ANNEX A
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DOMINION HOMES, INC.
INCENTIVE STOCK PLAN
SECTION 1. PURPOSE. The purposes of the Dominion Homes, Inc. Incentive
Stock Plan are to promote the interests of Dominion Homes, Inc. and its
stockholders by: (i) attracting and retaining Employees and Eligible Directors;
(ii) motivating Employees and Eligible Directors by means of performance-related
incentives to achieve longer-range performance goals; and (iii) enabling
Employees and Eligible Directors to participate in the long-term growth and
financial success of the Company.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
"Award" shall mean any Option, Restricted Stock Award or Performance Award
but shall not include any Director Option.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" shall mean a committee of the Board designated by the Board to
Administer the Plan and composed of not less than the minimum number of persons
from time to time required by Rule 16b-3, each of whom, to the extent necessary
to comply with Rule 16b-3 only, is a "disinterested person" within the meaning
of Rule 16b-3.
"Company" shall mean Dominion Homes, Inc., together with any successor
thereto.
"Director Option" shall mean a "Non-Qualified Stock Option" granted to
each Eligible Director pursuant to Section 6(e) without any action by the Board
or the Committee.
"Eligible Director" shall mean, on any date, a person who is serving as a
member of the Board but shall not include a person who is or was an Employee of
the Company or a subsidiary.
"Employee" shall mean an employee of the Company.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean the fair market value of the property or
other item being valued, as determined by the Committee in its sole discretion,
provided that the fair market value of Shares of Common Stock shall be
determined by reference to the most recent closing price quotation, or, if none,
the average of the bid and asked prices, as reported as of the most recent
available date with respect to the sale of Common Stock on any quotation system
approved by the National Association of Securities Dealers then reporting sales
of Common Stock or on any national securities exchange on which the Common Stock
is then listed.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to meet
the requirements of Section 422 of the Code or any successor provision thereto.
"Non-Qualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not intended
to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option but shall not include a Director Option.
"Participant" shall mean any Employee selected by the Committee to receive
an Award under the Plan.
"Performance Award" shall mean any right granted under Section 8 of the
Plan.
"Person" shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.
"Plan" shall mean the Dominion Homes, Inc. Incentive Stock Plan.
"Restricted Stock" shall mean any Share granted under Section 7 of the
Plan.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by the
SEC under the Exchange Act, or any successor rule or regulation thereto as in
effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto and shall include the staff thereof.
"Shares" shall mean common shares, without par value, of the Company, or
such other securities of the Company as may be designated by the Committee from
time to time.
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"Subsidiary" shall mean any corporation which, on the date of
determination, qualifies as a subsidiary corporation of the Corporation under
Section 425(f) of the Code.
"Substitute Awards" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Company or with which the Company combines.
"Ten Percent Shareholder" shall mean any shareholder who, at the time an
Incentive Stock Option is granted to such shareholder, owns (within the meaning
of Section 425(d) of the Code) more than ten percent of the voting power of all
classes of shares of the Company or a subsidiary.
SECTION 3. ADMINISTRATION.
(a) The Plan shall be administered by the Committee. Subject to the terms
of the Plan and applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have
full power and authority to: (i) designate Participants; (ii) determine the type
or types of Awards to be granted to an eligible Employee; (iii) determine the
number of shares to be covered by, or with respect to which payments, rights, or
other matters are to be calculated in connection with, Awards; (iv) determine
the terms and conditions of any Award; (v) determine whether, to what extent,
and under what circumstances Awards may be settled or exercised in cash, Shares,
other securities, other Awards or other property, or cancelled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what circumstances
cash, Shares, other securities, other Awards, other property, and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan; (viii) establish, amend, suspend, or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (ix) make any other determination and take any
other action that the Committee deems necessary or desirable for the
administration of the Plan. Notwithstanding anything else contained in the Plan
to the contrary, neither the Committee nor the Board shall have any discretion
regarding whether an Eligible Director shall receive a Director Option pursuant
to Section 6(e) or regarding the terms of any Director Option, including without
limitation, the number of Shares subject to such Director Option or the exercise
price per Share of such Director Option.
(b) Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, any Subsidiary, any Participant, any holder or
beneficiary of any Award, any shareholder and any Employee.
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SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) SHARES AVAILABLE. Subject to adjustment as provided in Section 4(b),
the number of Shares with respect to which Awards and Director Options may be
granted under the Plan shall be 850,000. If, after the effective date of the
Plan, any Shares covered by an Award or Director Option granted under the Plan,
or to which such an Award or Director Option relates, are forfeited, or if an
Award or Director Option otherwise terminates or is cancelled without the
delivery of Shares, then the Shares covered by such Award or Director Option, or
to which such Award or Director Option relates, or the number of Shares
otherwise counted against the aggregate number of Shares with respect to which
Awards and Director Options may be granted, to the extent of any such
settlement, forfeiture, termination or cancellation, shall again be, or shall
become, Shares with respect to which Awards and Director Options may be granted,
to the extent permissible under Rule 16b-3. In the event that any Option,
Director Option or other Award granted hereunder is exercised through the
delivery of Shares, the number of Shares available for Awards under the Plan
shall be increased by the number of Shares surrendered, to the extent
permissible under Rule 16b-3.
(b) ADJUSTMENTS. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other rights
to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
necessary in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall proportionately adjust any or all (as necessary) of: (i) the
number of Shares or other securities of the Company (or number and kind of other
securities or property) with respect to which Awards may be granted; (ii) the
number of Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards; and (iii) the grant or
exercise price with respect to any Award, provided, in each case, that with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code, as from time to time amended. If, pursuant to the
preceding sentence, an adjustment is made to outstanding Options held by
Participants, a corresponding adjustment shall be made to outstanding Director
Options and if, pursuant to the preceding sentence, an adjustment is made to the
number of Shares authorized for issuance under the Plan, a corresponding
adjustment shall be made to the number of Shares subject to each Director Option
thereafter granted pursuant to Section 6(e).
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(c) SOURCES OF SHARES. Any Shares delivered pursuant to an Award or
Director Option may consist, in whole or in part, of authorized and unissued
Shares or of treasury Shares.
SECTION 5. ELIGIBILITY. Any Employee, including any officer or
employee-director of the Company or any Subsidiary, who is not a member of the
Committee shall be eligible to be designated a Participant, except that only
Employees who are employees of the Company or a Subsidiary shall be eligible for
the grant of nondiscretionary Director Options in accordance with, and only in
accordance with, Section 6(e) hereof.
SECTION 6. OPTIONS AND DIRECTOR OPTIONS.
(a) GRANT. Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Employees to whom Options shall be
granted, the number of Shares to be covered by each Option, the exercise price
therefor and the conditions and limitations applicable to the exercise of the
Option. The Committee shall have the authority to grant Incentive Stock Options,
or to grant Non-Qualified Stock Options, or to grant both types of options. In
the case of Incentive Stock Options, the terms and conditions of such grants
shall be subject to and comply with such rules as may be prescribed by Section
422 of the Code, as from time to time amended, and any regulations implementing
such statute, including, without limitation, the requirements of Code Section
422(d) which limit the aggregate fair market value of Shares for which Incentive
Stock Options are exercisable for the first time to $100,000.00 per calendar
year. Each provision of the Plan and of each written option agreement relating
to an Option designated as an Incentive Stock Option shall be construed so that
such Option qualifies as an Incentive Stock Option, and any provision that
cannot be construed shall be disregarded.
(b) EXERCISE PRICE. The Committee shall, in its sole discretion, establish
the exercise price of an Option at the time the Option is granted.
Notwithstanding the forgoing sentence and any other provision contained herein
to the contrary, in the case of an Incentive Stock Option, the exercise price at
the time such Incentive Stock Option is granted to any Employee who, at the time
of such grant, is not a Ten Percent Shareholder, shall be not less than 100% of
the per Share Fair Market Value on the date of grant and the exercise price at
the time such Incentive Stock Option is granted to any Employee who, at the time
of such grant, is a Ten Percent Shareholder, shall be not less than 110% of the
per Share Fair market Value on the date of grant.
(c) EXERCISE. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Committee may, in its sole discretion,
specify in the applicable Award Agreement or thereafter; provided, in the case
of an Incentive Stock Option, a Participant may not exercise such Incentive
Stock Option after: (i) the date which is ten years (five years in the case of a
Participant who is a Ten Percent Shareholder) after the date on which such
Incentive Stock Option is granted; or (ii) the
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date which is three months (twelve months in the case of a Participant who
becomes disabled, as defined in Section 22(e)(3) of the Code, or who dies) after
the date on which he ceases to be an Employee of the Company or a Subsidiary.
The Committee may impose such conditions with respect to the exercise of
Options, including without limitation, any relating to the application of
federal or state securities laws, as it may deem necessary or advisable. The
Committee shall have the right to accelerate the exercisability of any Option or
outstanding Option in its discretion.
(d) PAYMENT. No Shares shall be delivered pursuant to any exercise of an
Option until payment in full of the exercise price therefor is received by the
Company. Such payment may be made in cash, or its equivalent, or, if and to the
extent permitted by the Committee, by exchanging Shares owned by the optionee
(which are not the subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares so tendered to the
Company as of the date of such tender is at least equal to such exercise price.
(e) DIRECTOR OPTIONS. Notwithstanding anything else contained herein to
the contrary, each Eligible Director shall receive, on the first business day
after each annual meeting of stockholders of the Company, provided that the
Eligible Director is serving as a member of the Board on such date, a grant of a
Director Option to purchase 2,500 Shares at an exercise price per Share equal to
the Fair Market Value on the date of grant. A Director Option shall be
exercisable until the earlier to occur of the following two dates: (i) the tenth
anniversary of the date of grant of such Director Option; or (ii) three months
(twelve months in the case of an Eligible Director who becomes disabled, as
defined in Section 22(e)(3) of the Code, or who dies) after the date the
Eligible Director ceases to be a member of the Board, except that if the
Eligible Director ceases to be a member of the Board after having been convicted
of, or pled guilty or nolo contendere to, a felony, his Director Option shall be
cancelled on the date he ceases to be a member of the Board. An Eligible
Director may pay the exercise price of a Director Option in the manner described
in Section 6(d).
SECTION 7. RESTRICTED STOCK.
(a) GRANT. Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Employees to whom Shares of
Restricted Stock shall be granted, the number of Shares of Restricted Stock to
be granted to each Participant, the duration of the period during which, and the
conditions under which, the Restricted Stock will vest and no longer be subject
to forfeiture to the Company, and the other terms and conditions of such Awards.
The Committee shall have the right to accelerate the vesting of any Restricted
Stock or outstanding Restricted Stock in its discretion.
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(b) TRANSFER RESTRICTIONS. Until the lapse of applicable restrictions,
Shares of Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered except as provided in the Plan or the applicable Award
Agreements. Certificates issued in respect of Shares of Restricted Stock shall
be registered in the name of the Participant and deposited by such Participant,
together with a stock power endorsed in blank, with the Company. Upon the lapse
of the restrictions applicable to such Shares of Restricted Stock, the Company
shall deliver such certificates to the Participant or the Participant's legal
representative.
(c) PAYMENT OF DIVIDENDS. Dividends paid on any Shares of Restricted Stock
may be paid directly to the Participant, or may be reinvested in additional
Shares of Restricted Stock, as determined by the Committee in its sole
discretion.
SECTION 8. PERFORMANCE AWARDS.
(a) GRANT. The Committee shall have sole and complete authority to
determine the Employees who shall receive a Performance Award denominated in
cash or Shares: (i) valued, as determined by the Committee, in accordance with
the achievement of such performance goals during such performance periods as the
Committee shall establish; and (ii) payable at such time and in such form as the
Committee shall determine.
(b) TERMS AND CONDITIONS. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award.
(c) PAYMENT OF PERFORMANCE AWARDS. Performance Awards may be paid in a
lump sum or in installments following the close of the performance period or, in
accordance with procedures established by the Committee, on a deferred basis.
SECTION 9. AMENDMENT AND TERMINATION.
(a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without stockholder approval if such approval is necessary to
comply with any tax or regulatory requirement, including for these purposes any
approval requirement which is a prerequisite for exemptive relief from Section
16(b) of the Exchange Act for which or with which the Board deems it necessary
or desirable to qualify or comply; and, provided further that no amendment may
be made to Section 6(e) or any other provision of the Plan relating to Director
Options within six months of the last date on which any such provision was
amended, other than to comport with changes to the Code, the Employee Retirement
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Income Security Act, or the rules thereunder. Notwithstanding anything to the
contrary herein, the Committee may amend the Plan, subject to any shareholder
approval required under Rule 16b-3, in such manner as may be necessary so as to
have the Plan conform with local rules and regulations in any jurisdiction
outside the United States.
(b) AMENDMENTS TO AWARDS. The Committee may waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate,
any Award theretofore granted, prospectively or retroactively; provided that any
such waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of any Participant or any holder or
beneficiary of any Award theretofore granted shall not to that extent be
effective without the consent of the affected Participant, holder or
beneficiary.
(c) CANCELLATION. Any provision of this Plan or any Award Agreement to the
contrary notwithstanding, the Committee may cause any Award granted hereunder to
be cancelled in consideration of the granting to the holder of an alternative
Award having a Fair market Value equal to the Fair Market Value of such
cancelled Award.
SECTION 10. GENERAL PROVISIONS.
(a) NONTRANSFERABILITY.
(i) Each Award and each Director Option, and each right under any
Award or any Director Option, shall be exercisable during the
Participant's or the Eligible Director's lifetime only by the Participant
or the Eligible Director or, if permissible under applicable law, by the
Participant's or the Eligible Director's guardian or legal representative
or a transferee receiving such Award pursuant to a qualified domestic
relations order ("QDRO"), as determined by the Committee.
(ii) No Award or Director Option that constitutes a "derivative
security," for purposes of Section 16 of the Exchange Act, may be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant or Eligible Director otherwise than by will or
by the laws of descent and distribution or pursuant to a QDRO, and any
such purported assignment, alienation, pledge, attachment, sale, transfer
or encumbrance shall be void and unenforceable against the Company or any
Subsidiary; provided that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer
or encumbrance.
(b) NO RIGHTS TO AWARDS. No Employee, Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.
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(c) SHARE CERTIFICATES. All certificates for Shares or other securities of
the Company or any Subsidiary delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange or national
securities association upon which such Shares or other securities are then
listed, and any applicable federal or state laws, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(d) DELEGATION. Subject to the terms of the Plan and applicable law, the
Committee may delegate to one or more officers or managers of the Company or any
Subsidiary, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to grant
Awards to, or to cancel, modify or waive rights with respect to, or to alter,
discontinue, suspend, or terminate Awards held by, Employees who are not
officers or directors of the Company for purposes of Section 16 of the Exchange
Act, or any successor section thereto, or who are otherwise not subject to such
Section.
(e) WITHHOLDING. A Participant or Eligible Director may be required to pay
to the Company or any Subsidiary and the Company or any Subsidiary shall have
the right and is hereby authorized to withhold from any Award or Director
Option, from any payment due or transfer made under any Award or any Director
Option or under the Plan or from any compensation or other amount owing to a
Participant or Eligible Director the amount of any applicable withholding taxes
in respect of an Award or a Director Option, its exercise, or any payment or
transfer under an Award, under a Director Option or under the Plan and to take
such other action as may be necessary in the opinion of the Company to satisfy
all obligations for the payment of such taxes. With respect to participants who
are not subject to Section 16 of the Exchange Act, the withholding may be in the
form of cash, Shares, other securities, other Awards or other property as the
Committee may allow. With respect to Participants and Eligible Directors who are
subject to Section 16 of the Exchange Act, the withholding shall be in cash or
in any other property permitted by Rule 16b-3 as the Committee may allow. The
Committee may provide for additional cash payments to holders of Awards to
defray or offset any tax arising from the grant, vesting, exercise or payments
of any Award.
(f) AWARD AGREEMENTS. Each Award hereunder shall be evidenced by an Award
Agreement which shall be delivered to the Participant and shall specify the
terms and conditions of the Award and any rules applicable thereto, including
but not limited to the effect on such Award of the death, retirement or other
termination of employment of a Participant and the effect, if any, of a change
in control of the Company.
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(g) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the
Plan shall prevent the Company or any Subsidiary from adopting or continuing in
effect other compensation arrangements, which may, but need not, provide for the
grant of Options, Restricted Stock, Shares and other types of Awards provided
for hereunder (subject to stockholder approval if such approval is required),
and such arrangements may be either generally applicable or applicable only in
specific cases.
(h) NO RIGHT TO EMPLOYMENT. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or
any Subsidiary. Further, the Company or a Subsidiary may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or any Award Agreement.
(i) NO RIGHTS AS SHAREHOLDER. Subject to the provisions of the applicable
Award, no Participant or holder or beneficiary of any Award shall have any
rights as a shareholder with respect to any Shares to be distributed under the
Plan until he or she has become the holder of such Shares. Notwithstanding the
foregoing, in connection with each grant of Restricted Stock hereunder, the
applicable Award shall specify if and to what extent the Participant shall not
be entitled to the rights of a shareholder in respect of such Restricted Stock.
(j) GOVERNING LAW. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Ohio.
(k) SEVERABILITY. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(l) OTHER LAWS. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole discretion, it
determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the
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Committee in its sole discretion has determined that any such offer, if made,
would be in compliance with all applicable requirements of the U.S. federal
securities laws.
(m) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary and a Participant or any
other Person. To the extent that any Person acquires a right to receive payments
from the Company or any Subsidiary pursuant to an Award, such rights shall be no
greater than the right of any unsecured general creditor of the Company or any
Subsidiary.
(n) RULE 16B-3 COMPLIANCE. With respect to Persons subject to Section 16
of the Exchange Act, transactions under this Plan are intended to comply with
all applicable terms and conditions of Rule 16b-3 and any successor provisions.
To the extent that any provision of the Plan or action by the Committee fails to
so comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
(o) HEADINGS. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
(p) NO IMPACT ON BENEFITS. Plan Awards shall not be treated as
compensation for purposes of calculating an Employee's rights under any employee
benefit plan.
(q) INDEMNIFICATION. Each person who is or shall have been a member of the
Committee or of the Board shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be made a party or in which he may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with the
Company's approval, or paid by him in satisfaction of any judgment in any such
action, suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive and shall be independent of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or Regulations, by contract, as a matter of
law, or otherwise.
(r) Notwithstanding anything to the contrary contained in the Plan, no
Participant shall, during any calendar year, receive Awards covering more than
50,000 Shares in the aggregate pursuant to such Awards.
SECTION 11. TERM OF THE PLAN.
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(a) EFFECTIVE DATE. The Plan shall be effective as of the date of
shareholder approval of the Plan.
(b) EXPIRATION DATE. No Award shall be granted under the Plan after
December 31, 2003. Unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted hereunder may, and the authority
of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or
terminate any such Award or to waive any conditions or rights under any such
Award shall, continue after December 31, 2003.
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