Exhibit 10.21
CROMPTON & KNOWLES CORPORATION
1993 Stock Option Plan for Non - Employee Directors
(Reflect 5/15/95 Amendment)
1. Purpose
The purpose of this 1993 Stock Option Plan for Non -
Employee Directors (the "Plan") of Crompton & Knowles Corporation
(the "Company") is to attract and retain highly qualified
non-employee directors of the Company and to encourage
non-employee directors to own shares of the Company's Common
Stock, $.10 par value ("Common Stock").
2. Participation
All directors of the Company who are not employees of the
Company or any subsidiary of the Company shall be eligible to
participate in the Plan.
3. Administration
(a) Grants. Grants of stock options under the Plan shall
be automatic as provided in Section 6.
(b) Committee. A committee (the "Committee"), which shall
be the Committee on Executive Compensation of the Board
or such other committee composed of three or more
directors or other persons appointed for such purpose
by the Board, shall administer the Plan. If at any
time no committee designated to administer the Plan
shall be in office, the functions of the Committee
shall be exercised by the Board.
(c) Rules; Committee Action. The Committee shall have the
authority to adopt, alter and repeal such
administrative rules, guidelines, and practices
governing the Plan as it shall from time to time deem
advisable and to interpret the terms and provisions of
the Plan and any award issued under the Plan (and any
agreement relating thereto). The Committee may act
only by a majority of its members then in office,
except that the members thereof may authorize any one
or more of their number or any officer of the Company
to execute and deliver documents on behalf of the
Committee.
4. Stock Available for Options
(a) Shares Available. Subject to adjustment under
subsection (b), options may be granted under the Plan
in respect of a maximum of 100,000 shares of Common
Stock. Shares subject to an option that expires or
terminates unexercised shall again be available for
options hereunder to the extent of such expiration or
termination. Shares issued under the Plan may consist
in whole or in part of authorized but unissued shares
or treasury shares.
(b) Adjustment. In the event of any stock dividend,
extraordinary cash dividend, creation of a class of
equity securities, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination,
exchange of shares, issuance of warrants or activation
of rights to purchase Common Stock at a price
substantially below fair market value, or similar
change affecting the Common Stock, such adjustment
shall be made in the maximum number and kind of shares
subject to the Plan, in the number and kind of shares
subject to outstanding options and subsequent options
grants, and in the purchase price of outstanding
options as the Board shall deem to be appropriate under
the circumstances to prevent substantial dilution or
enlargement of the rights granted to participants
hereunder.
5. Nonstatutory Stock Options
All options granted under the Plan shall be nonstatutory
options not intended to qualify under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
6. Terms and Conditions of Options
Each option granted under the Plan shall be evidenced by a
written instrument in such form as the Committee may approve and
shall be subject to the following terms and conditions:
(a) Grant of Options. As used in the Plan, the term "Grant
Date" means the date of the first regular meeting of
the Boardin the forth quarter of each calendar year.
Each year, an option shall be granted automatically to
each eligible director on the Grant Date to purchase
that number of full shares of Common Stock determined
by dividing an amount equal to twice the annual
retainer then payable to directors for service on
the Board by the Fair Market Value (as hereinafter
defined) of the Common Stock on the Grant Date.
(b) Purchase Price. The purchase price for Common Stock
subject to an option shall be 100% of the Fair Market
Value of the Common Stock on the Grant Date.
(c) Fair Market Value. As used in the Plan, the term "Fair
Market Value" means the mean, as of any given date,
between the highest and lowest reported sales prices of
the Common Stock on the New York Stock Exchange
Composite Index on such date (or, if there is no
reported sale on such date, on the last preceding date
on which any reported sale occurred).
(d) Expiration Date of Options. The expiration date of
each option shall be fixed by the Committee, but no
option granted under the Plan shall be exercisable more
than ten years after the Grant Date.
(e) Exercisability of Options. Options shall be
exercisable in whole or in part with respect to 50% of
the shares covered thereby on or after the first
anniversary of the Grant Date and as to the remaining
50% of such shares on or after the second anniversary
of the Grant Date.
(f) Termination of Service. In the event service on the
Board by the holder of any option terminates for any
reason other than disability, death, or Change in
Control (as hereinafter defined), the then outstanding
options of such holder may thereafter be exercised, to
the extent exercisable at the time of such termination,
for a period of one year from the date of such
termination but in no event after the stated expiration
date of each option.
(g) Disability or Death; Change in Control. In the event
service on the Board by the holder of any option
terminates by reason of disability, death, or Change in
Control, the then outstanding options of such holder
will become immediately exercisable, to the extent not
otherwise exercisable, and will expire one year after
such termination. Such options may be exercised during
such one-year period regardless of their stated
expiration dates. The rights of the option holder may
be exercised by the holder's guardian or legal
representative in the case of disability and by the
beneficiary designated by the holder in writing
delivered to the Company or, if none has been
designated, the holder's estate in the case of death.
(h) Exercise and Payment. Options may be exercised only by
written notice to the Secretary of the Company
accompanied by payment of the full purchase price for
the shares as to which they are exercised. The
purchase price may be paid in cash, in shares of Common
Stock already owned for at least six months by the
optionee (or other person entitled to exercise the
option), or partly in cash and partly in such shares of
Common Stock. The value of shares delivered in payment
of the purchase price shall be their Fair Market Value,
as determined above, as of the date of exercise. Upon
receipt of such notice and payment, the Company shall
promptly issue and deliver to the optionee (or other
person entitled to exercise the option) a certificate
or certificates for the number of shares as to which
the exercise is made.
(i) Change in Control. As used herein, a "Change in
Control" means a change in control of the Company of a
nature that would be required to be reported in
response to Item 1(a) of the Current Report on Form
8-K, as in effect on the effective date of the Plan,
pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"); provided
that, without limitation, such a "Change in Control"
shall be deemed to have occurred if:
(i) A third person, including a "group" as such term
is used in Section 13(d)(3) of the Exchange Act,
other than the trustee of a Company employee
benefit plan, becomes the beneficial owner,
directly or indirectly, of 20 percent or more of
the combined voting power of the Company's
outstanding voting securities ordinarily having
the right to vote for the election of directors
of the Company;
(ii) During any period of 24 consecutive months
individuals who, at the beginning of such
consecutive 24-month period, constitute the Board
of Directors of the Company (the "Board"
generally and as of the effective date of the
Plan the "Incumbent Board") cease for any reason
(other than retirement upon reaching normal
retirement age, disability, or death) to
constitute at least a majority of the Board;
provided that any person becoming a director
subsequent to the effective date of the Plan
whose election, or nomination for election by the
Company's shareholders, was approved by a vote of
at least three-quarters of the directors
comprising the Incumbent Board other than an
election or nomination of an individual whose
initial assumption of office is in connection
with an actual or threatened election contest
relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange
Act) shall be, for purposes of this Agreement,
considered as though such person were a member of
the Incumbent Board; or
(iii) The Company shall cease to be a publicly owned
corporation having its outstanding stock listed
on the New York Stock Exchange or quoted in the
NASDAQ National Market System.
7. Options not Transferable
Options granted under the Plan shall not be transferable by
the holder other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement
Income Security Act ("ERISA") or the rules thereunder.
8. Limitation of Rights
Neither the Plan nor the granting of any option hereunder
shall constitute an agreement or understanding that the Company
will retain a director for any period of time or at any
particular rate of compensation. The holder of an option shall
have no rights as a shareholder with respect to shares as to
which the option has not been exercised and payment made
hereunder.
9. Purchase for Investment
Unless the options and shares of Common Stock covered by the
Plan have been registered under the Securities Act of 1933, as
amended, or the Company has determined that such registration is
unnecessary, each holder exercising an option may be required by
the Company to represent in writing that such holder is acquiring
the shares subject to the option for his own account for
investment and not with a view to, or for sale in connection
with, the distribution of any part thereof.
10. Compliance with Regulations
It is the intention of the Company that the Plan comply in
all respects with Rule 16b-3 promulgated under Section 16(b) of
the Exchange Act and that eligible directors remain disinterested
persons for purposes of administering other employee benefit
plans of the Company and having such other plans be exempt from
Section 16(b) of the Exchange Act. Therefore, if any Plan
provision or Committee rule is later found not to be in
compliance with Rule 16b-3 or if any Plan provision or Committee
rule would disqualify eligible directors from remaining
disinterested persons, that provision or rule shall be deemed
null and void, and in all events the Plan shall be construed in
favor of its meeting the requirements of Rule 16b-3.
11. Effective Date of the Plan
The Plan shall be effective as of the date it is adopted by
the Board. Options granted under the Plan may not be exercised
prior to the time the Plan shall have been approved by the
holders of a majority of the outstanding Common Stock present or
represented and entitled to vote at a meeting of shareholders of
the Company. If such approval of the Plan by the shareholders is
not obtained within one year of the adoption of the Plan by the
Board, the Plan and any options granted pursuant to the Plan
shall be null and void.
12. Amendment of the Plan
The Board may amend, suspend, or terminate the Plan or any
portion thereof at any time, provided that no amendment affecting
the amount of Common Stock subject to options granted under the
Plan, the exercise price of options, or the timing of grants may
be made more than once every six months, other than to comport
with changes in the Code, ERISA, or the rules thereunder.
13. Governing Law
The Plan shall be governed by and interpreted in accordance
with the laws of the Commonwealth of Massachusetts.
Amended 10/18/95
Amended 05/15/96