EXHIBIT 4
PEOPLES BANCORP INC. 1995 STOCK OPTION PLAN
l. NAME AND PURPOSE.
The purpose of this Plan, which shall be known as the
"Peoples Bancorp Inc. 1995 Stock Option Plan" (hereinafter referred
to as the "Plan") is to advance the interests of Peoples Bancorp Inc.
(the "Company") (i) by providing material incentive for the continued
services of those key employees of the Company and its Subsidiaries
and the directors of the Company or of one or more of its Subsidiaries
who make significant contributions toward the Company's success
and development by encouraging those key employees and directors
to increase their proprietary interest in the Company; and (ii)
by attracting new able executives to employment with the Company
and its Subsidiaries or to serve as directors of the Company or
of one or more of its Subsidiaries.
2. DEFINITIONS.
For purposes of this Plan, the following terms
when capitalized shall have the meanings designated herein
unless a different meaning is plainly required by the context.
Where applicable, the masculine pronoun shall mean or include
the feminine and the singular shall include the plural.
(a) "Acquisition Subsidiary" shall mean a corporation which is
acquired directly by the Company and, thereafter, becomes a
Subsidiary.
(b) "Acquisition Subsidiary Director" shall mean a person who
is a director of an Acquisition Subsidiary.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean that an act of (i) fraud or intentional
misrepresentation or (ii) embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any
Subsidiary, has occurred.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations and rulings thereunder. References
to a particular section of the Code shall include references to
successor provisions.
(f) "Committee" shall mean the Stock Option Committee whose
membership shall be determined under Subsection 3(a) below.
(g) "Common Shares" shall mean the common shares of Peoples
Bancorp Inc.
(h) "Company" shall mean Peoples Bancorp Inc.
(i) "Disinterested Person" shall have the meaning assigned to
such term in Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934,
as amended, or any successor provision.
(j) "Effective Date" shall mean the date on which this Plan
shall become effective, as provided in Section 15 below.
(k) "Employee Director" shall mean a director of the Company
who is also an employee of the Company.
(l) The "Fair Market Value" of a Common Share on any relevant
date for purposes of any provision of this Plan shall mean the
last reported sales price of a Common Share of the Company on
the NASDAQ National Market System or on any securities exchange
on which the Common Shares may be listed on such date or, if
there are no reported sales on such date, then the last reported
sales price on the next preceding day on which such a sale was
transacted.
(m) "Incentive Option" shall mean an option granted under this
Plan which is an incentive stock option under the provisions of
Section 422 of the Code; and any provisions elsewhere in this
Plan or in any such Incentive Option which would prevent such
option from being an incentive stock option may be deleted
and/or voided retroactively to the date of the granting of such
option, by action of the Committee; and the Committee may
retroactively add provisions to this Plan or to any Incentive
Option if necessary to qualify such an option as an incentive
stock option.
(n) "Key Employee" shall mean any employee of the Company
and/or its Subsidiaries (as defined in Subsection 2(s) below)
who in the opinion of the Committee has demonstrated a capacity
for contributing in a substantial measure to the success of the
Company and its Subsidiaries.
(o) "Non-employee Director" shall mean a director of the
Company who is not also an employee of the Company.
(p) "Non-qualified Option" shall mean an option granted under
this Plan which is not an Incentive Option. Such Non-qualified
Option shall not be affected by any actions taken retroactively
as provided in Subsection 2(m) above with respect to Incentive
Options.
(q) "Participant" shall mean a Key Employee selected by the
Committee (under Subsection 3(b) below) to receive Incentive
Options granted under this Plan, a Non-employee Director
receiving Non-qualified Options pursuant to Subsection 5(j)
below, a Subsidiary Director receiving Non-qualified Options
pursuant to Subsection 5(k) below or an Acquisition Subsidiary
Director receiving Non-qualified Options pursuant to Subsection
5(l) below.
(r) "Plan" shall mean the Peoples Bancorp Inc. 1995 Stock
Option Plan.
(s) "Subsidiary" shall mean a corporation which is a
subsidiary corporation of the Company as that term is defined in
Subsection 424(f) of the Code. For purposes of Subsection 5(k)
of this Plan, "Subsidiary" shall not include an Acquisition
Subsidiary.
(t) "Subsidiary Board" shall mean the board of directors of a
Subsidiary.
(u) "Subsidiary Director" shall mean a director of one or more
of the Subsidiaries of the Company who is neither a director of
the Company nor an employee of the Company or of any of its
Subsidiaries.
3. ADMINISTRATION: SELECTION OF PARTICIPANTS.
(a) The Plan shall be administered by the Committee which
shall consist of three or more members of the Board who are
Disinterested Persons to be appointed by the Board from time to
time and to serve at the pleasure of the Board. No person shall
serve as a member of the Committee unless such person also
qualifies as an "outside director" within the meaning of Section
162(m) of the Code. Except as provided in Subsection 5(j)
below, members of the Committee shall not be eligible to
participate in this Plan, or to receive options under it, while
serving on the Committee or during the one year prior to serving
on the Committee.
(b) The Committee shall select the Participants to receive
Incentive Options from among the Key Employees and shall grant
to such Participants Incentive Options under, and in accordance
with, the provisions of the Plan. The Non-employee Directors
shall receive non-discretionary Non-qualified Options in
accordance with Subsection 5(j) below. The Subsidiary Directors
shall receive non-discretionary Non-qualified Options in
accordance with Subsection 5(k) below. The Acquisition
Subsidiary Directors shall receive non-discretionary
Non-qualified Options in accordance with Subsection 5(l) below.
(c) Subject to the express provisions of this Plan, the
Committee shall have authority to adopt administrative
regulations and procedures which are consistent with the terms
of this Plan; to adopt and amend such option agreements as it
deems advisable; to determine the terms and provisions of such
option agreements (including the number of Common Shares with
respect to which Incentive Options are granted to a Participant
who is a Key Employee, the option price for Common Shares and
the date or dates when the option or parts of it may be
exercised) -- which terms shall comply with the requirements of
Section 5 below; to construe and interpret such option
agreements; to impose such limitations and restrictions as are
deemed necessary or advisable by counsel for the Company so that
compliance with the Federal securities laws and with the
securities laws of the various states may be assured; and to
make all other determinations necessary or advisable for
administering this Plan. Notwithstanding the preceding
sentence, the Committee shall have no discretion to determine
who will be eligible for the grant of Non-qualified Options
under Subsections 5(j), 5(k) and 5(l) of the Plan, to set the
number of Non-qualified Options granted to any Non-employee
Director, Subsidiary Director or Acquisition Subsidiary
Director, to set the number of Common Shares subject to
Non-qualified Options granted to any Non-employee Director,
Subsidiary Director or Acquisition Subsidiary Director or to set
the date and circumstances of grants of Non-qualified Options to
Non-employee Directors under Subsection 5(j), to Subsidiary
Directors under Subsection 5(k) or to Acquisition Subsidiary
Directors under Subsection 5(l), the term of such Non-qualified
Options, the period within which such Non-qualified Options may
be exercised or the exercise price of such Non-qualified
Options. Decisions by the Committee may be made either by a
majority of its members at a meeting of the Committee duly
called and held or without a meeting by a writing signed by all
of the members of the Committee. All decisions and
interpretations made by the Committee shall be binding and
conclusive on all Participants, their legal representatives and
beneficiaries.
(d) At least once each calendar year, the Committee shall
report to the Board describing the action which it has taken in
administering the Plan and making such recommendations for
amendments or otherwise as it may deem necessary. The Board
shall have no authority to amend, alter or otherwise change any
terms or conditions of any options granted by the Committee
pursuant to Subsection (b) of this Section or any Non-qualified
Options granted pursuant to Subsection 5(j), Subsection 5(k) or
Subsection 5(l) of this Plan prior to the adoption of such
amendments in accordance with the provisions of Section 14 of
this Plan.
(e) The Committee may designate any officers or employees of
the Company or its Subsidiaries to assist the Committee in the
administration of this Plan but the Committee may not delegate
to them duties imposed on the Committee under this Plan.
4. SHARES SUBJECT TO THE PLAN.
(a) The shares to be issued and delivered by the Company upon
exercise of options granted under this Plan are Common Shares
which may be either authorized but unissued shares or treasury
shares, in the discretion of the Committee.
(b) The aggregate number of Common Shares which may be issued
under this Plan shall not exceed 100,000 Common Shares; subject,
however, to the adjustment provided in Section 10 of this Plan
in the event of stock splits, stock dividends, combinations or
exchanges of shares or other similar capital adjustments
occurring after the Effective Date. If any outstanding option
under the Plan for any reason expires or is terminated without
having been exercised in full, the Common Shares allocable to
the unexercised portion of such option shall (unless the Plan
shall have been terminated) become available for subsequent
grants of options under the Plan. No option may be granted
under this Plan which could cause the maximum limit to be
exceeded.
(c) Of the 100,000 Common Shares which may be issued under the
Plan, an aggregate of 30,000 Common Shares shall be issuable to
Non-employee Directors, Subsidiary Directors and Acquisition
Subsidiary Directors upon the exercise of Non-qualified Options
to be granted to them under the terms of the Plan and an
aggregate of 70,000 Common Shares shall be issuable to Key
Employees upon the exercise of Incentive Options to be granted
to them under the terms of the Plan; provided, however, that if
Non-qualified Options covering an aggregate of 30,000 Common
Shares have not been granted to Non-employee Directors,
Subsidiary Directors and Acquisition Subsidiary Directors prior
to the date of the 1999 Annual Meeting, that portion of the
30,000 Common Shares not covered by Non-qualified Options so
granted may be the subject of Incentive Options to be granted to
Key Employees under the terms of the Plan.
(d) During the period in which this Plan remains in
effect, no Non-employee Director may be granted Non-qualified
Options covering, in the aggregate, more than 1,500 Common
Shares; no Subsidiary Director or Acquisition Subsidiary Director
may be granted Non-qualified Options covering, in the aggregate,
more than 750 Common Shares; and no Key Employee may be granted
Incentive Options covering, in the aggregate, more than 25,000
Common Shares (in each case, subject to adjustment as provided
in Section 10 of this Plan).
5. TERMS OF OPTIONS.
Options granted under this Plan shall
contain such terms as the Committee shall determine subject to
the following limitations and requirements:
(a) Option price: Subject to the limitations of Subsection
5(h) below, the option price per Common Share shall be not less
than 100% of the Fair Market Value of the Company's Common
Shares on the date of the grant of such option.
(b) Period within which option may be exercised: Subject to
the limitations of Subsections 5(c), 5(h), 5(j), 5(k) and 5(l)
below, each Incentive Option granted under this Plan shall
terminate (become non-exercisable) after the expiration of not
more than ten years from the date of the grant of such Incentive
Option and each Non-qualified Option granted under this Plan
shall terminate (become non-exercisable) after the expiration of
ten years from the date of the grant of such Non-qualified
Option.
(c) Termination of Incentive Options by reason of termination
of employment: If a Participant's employment with the Company
and its Subsidiaries terminates for any reason other than (i)
death of the Participant, (ii) the disability of the Participant
within the meaning of Section 22(e)(3) of the Code, (iii) the
retirement of the Participant under the provisions of any
retirement plan of the Company or any Subsidiary, or (iv) any
reason (other than for Cause) after the Participant has been
employed by the Company and/or one or more Subsidiaries for at
least 10 consecutive years prior to the Participant's
termination of employment, the portion of all Incentive Options
granted under this Plan to such Participant which are not
otherwise exercisable under Subsection 5(i) of this Plan shall
terminate effective immediately upon termination of employment.
If the termination of employment of the Participant was due to
retirement under the provisions of any retirement plan of the
Company or any Subsidiary or if the termination of employment
was due to a reason other than for Cause and the Participant had
been employed by the Company and/or one or more Subsidiaries for
at least 10 consecutive years prior to the Participant's
termination of employment, all of such Participant's Incentive
Options may be exercised in full, whether or not then
exercisable under Subsection 5(i) of this Plan, and the right of
the Participant to exercise the Incentive Options shall
terminate upon the earlier to occur of the expiration of the
term of the Incentive Options or three months after the date of
termination of employment. If the termination of employment was
due to the death of a Participant who was an employee of the
Company and/or any Subsidiary at the time of his death, such
Incentive Options may be exercised in full, whether or not then
exercisable under Subsection 5(i) of this Plan, `and the right
of the representative or representatives of the Participant's
estate (or the person or persons who acquire (by bequest or
inheritance) the right to exercise the Participant's Incentive
Options) to exercise the Incentive Options shall terminate upon
the earlier to occur of the expiration of the term of the
Incentive Options or one year after the date of death of the
Participant. If the termination of employment was due to the
disability of the Participant within the meaning of Section
22(e)(3) of the Code, such Incentive Options may be exercised in
full, whether or not then exercisable under Subsection 5(i) of
this Plan, and the right of the Participant to exercise the
Incentive Options shall terminate upon the earlier to occur of
the expiration of the term of the Incentive Options or one year
after the date of termination of employment. If the termination
of employment of the Participant was due to reasons other than
for Cause and the Participant had not been employed by the
Company and/or one or more Subsidiaries for at least 10
consecutive years prior to the Participant's termination of
employment, the Participant's Incentive Options may be
exercised only to the extent then exercisable under Subsection
5(i) of this Plan on the date of termination of employment, and
the right of the Participant to exercise the Incentive Options
shall terminate upon the earlier to occur of the expiration of
the term of the Incentive Options or three months after the date
of termination of employment. If the termination of employment
of the Participant was for Cause, all Incentive Options which
have not been exercised as of the date of termination of
employment shall terminate immediately as of the date of
termination of employment.
(d) Non-transferability: No option granted under this Plan
shall be assignable or transferable except, in the event of the
death of a Participant, by his will or by the laws of descent
and distribution. An option granted under this Plan shall be
exercisable, during the Participant's lifetime, only by him. In
the event the death of a Participant occurs, the representative
or representatives of his estate, or the person or persons who
acquired (by bequest or inheritance) the right to exercise his
options granted under this Plan, may exercise any of the
unexercised options or parts thereof prior to the expiration of
the applicable exercise period, as specified in Subsections
5(b), 5(c), 5(h), 5(j), 5(k) and 5(l) of this Plan.
(e) More than one option granted to a Participant: More than
one option may be granted to a Participant under this Plan.
(f) Aggregate annual limit on Incentive Options: The
aggregate Fair Market Value (determined at the time of the grant
of the option) of the Common Shares with respect to which
Incentive Options are first exercisable by any Key Employee in
any calendar year under this Plan and any other plans of the
Company and its Subsidiaries shall not exceed $100,000.
(g) Partial exercise: Unless otherwise provided in the
option agreement, any exercise of an option granted under this
Plan may be made in whole or in part.
(h) 10% Shareholder: If a Participant owns (including
constructive ownership pursuant to Section 424(d) of the Code)
more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any of its
Subsidiaries, then each Incentive Option granted under this Plan
to such Participant shall by its terms fix the option price per
Common Share to be at least 110% of the Fair Market Value of the
Common Shares on the date of the grant of such Incentive Option
and such Incentive Option shall terminate (become
non-exercisable) after the expiration of five years from the
date of the grant of such Incentive Option.
(i) Exercisability: Incentive Options awarded to Key
Employees under the Plan shall be exercisable at such times and
shall be subject to such restrictions and conditions including
the performance of a minimum period of service as the Committee
may impose at the time of grant of such Incentive Options;
provided, however, that if the Committee does not specify
another vesting schedule at the time of grant, each Incentive
Option shall become exercisable as follows: (i) with respect to
25% of the Common Shares covered thereby after 24 months of
continuous employment by the Company and/or one or more
Subsidiaries; (ii) with respect to an additional 25% of the
Common Shares covered thereby after 36 months of continuous
employment by the Company and/or one or more Subsidiaries; (iii)
with respect to an additional 25% of the Common Shares covered
thereby after 48 months of continuous employment by the Company
and/or one or more Subsidiaries; and (iv) with respect to an
additional 25% of the Common Shares covered thereby after 60
months of continuous employment by the Company and/or one or
more Subsidiaries. If a Key Employee does not purchase in any
one year the full number of Common Shares which may be purchased
with his then exercisable Incentive Options, such Key Employee
may purchase those Common Shares in any subsequent year during
the term of the Incentive Options.
In no event shall any Incentive Option or any Non-qualified
Option granted under this Plan be exercisable until a period of
at least six months has elapsed from the date of the option
grant.
(j) Non-employee Directors: Each Non-employee Director
then serving on the Board and who has served on the Board and/or a
Subsidiary Board for all or a portion of at least the five
calendar years immediately preceding the January 1 immediately
prior to the date of grant, shall automatically be granted a
Non-qualified Option for 750 Common Shares effective on the date
on which the annual meeting of the Company's shareholders is
held in 1995 in accordance with the Regulations of the Company
(the "1995 Annual Meeting") and for 750 Common Shares effective
on the date on which the annual meeting of the Company's
shareholders is held in 1997 in accordance with the Regulations
of the Company (the "1997 Annual Meeting"). Each Non-Employee
Director then serving on the Board and who has served on the
Board and/or a Subsidiary Board for fewer than the five calendar
years (including all or any portion of any such year)
immediately preceding the January 1 immediately prior to the
date of grant, shall automatically be granted a Non-qualified
Option for 150 Common Shares plus 150 Common Shares for all or
any portion of each calendar year preceding the date of grant
during which such Non-Employee Director has served on the Board
and/or a Subsidiary Board as of such January 1 effective on the
date of each of the 1995 Annual Meeting and the 1997 Annual
Meeting. Any individual who was not a member of the Board on
the date of the 1995 Annual Meeting, (i) who is subsequently
appointed or elected to the Board at least six months prior to
the date on which the annual meeting of the Company's
shareholders is to be held in 1996 in accordance with the
Regulations of the Company (the "1996 Annual Meeting") shall
automatically be granted a Non-qualified Option on the date of
such appointment or election for the same number of Common
Shares as such individual would have received if he had been a
member of the Board on the date of the 1995 Annual Meeting; (ii)
who is subsequently appointed or elected to the Board less than
six months prior to the date of the 1996 Annual Meeting but
prior to such 1996 Annual Meeting shall automatically be granted
a Non-qualified Option on the date of such appointment or
election for 75% of the number of Common Shares which such
individual would have received if he had been a member of the
Board on the date of the 1995 Annual Meeting; (iii) who is
subsequently appointed or elected to the Board on or after the
date of the 1996 Annual Meeting but at least six months prior to
the date of the 1997 Annual Meeting shall automatically be
granted a Non-qualified Option on the date of such appointment
or election for 50% of the number of Common Shares which such
individual would have received if he had been a member of the
Board on the date of the 1995 Annual Meeting; and (iv) who is
subsequently appointed or elected to the Board less than six
months prior to the 1997 Annual Meeting but prior to such 1997
Annual Meeting shall automatically be granted a Non-qualified
Option on the date of such appointment or election for 25% of
the Common Shares which such individual would have received if
he had been a member of the Board on the date of the 1995 Annual
Meeting. Any individual who was not a member of the Board on
the date of the 1997 Annual Meeting and who is subsequently
appointed or elected to the Board prior to the date on which the
annual meeting of the Company's shareholders is to be held in
1999 in accordance with the Regulations of the Company (the
"1999 Annual Meeting") shall automatically be granted a
Non-qualified Option on the same basis as described in the
immediately preceding sentence. Notwithstanding anything to the
contrary in this Section 5(j), any individual who was serving as
a Subsidiary Director or as an Acquisition Subsidiary Director
and is subsequently appointed or elected as a Non-employee
Director after the date of the 1995 Annual Meeting but prior to
the date of the 1997 Annual Meeting, or after the date of the
1997 Annual Meeting but prior to the date of the 1999 Annual
Meeting, as the case may be, and who is to be granted a
Non-qualified Option pursuant to either of the two immediately
preceding sentences, shall have deducted from the number of
Common Shares to be covered by the Non-qualified Option granted
to him under this Subsection 5(j), the number of Common Shares
covered by any Non-qualified Option which he received pursuant
to Subsection 5(k) or Subsection 5(l) of this Plan.
Each Non-qualified Option granted to a Non-employee Director
shall have an exercise price equal to 100% of the Fair Market
Value of the Common Shares on the date of the grant of such
Non-qualified Option.
If a Non-employee Director does not purchase in any one year
the full number of Common Shares which may be purchased with his
then exercisable Non-qualified Options, such Non-employee
Director may purchase those Common Shares in any subsequent year
during the term of the Non-qualified Options.
If a Non-employee Director ceases to be a director of the
Company for any reason other than his death or for Cause, the
Non-qualified Options granted to him under this Plan may be
exercised in full, whether or not then exercisable by their
terms, on or before the expiration of the term of the
Non-qualified Options; provided, however, that if the former
Non-employee Director shall die prior to the expiration of the
term of the Non-qualified Options, such Non-qualified Options
may only be exercised on or before the earlier of the expiration
of such term or two years following the date of death. If a
Non-employee Director ceases to be a director of the Company
because of his death, such Non-qualified Options may be
exercised in full, whether or not then exercisable by their
terms, only on or before the earlier of the expiration of the
term of the Non-qualified Options or two years following the
date of death. If a Non-employee Director ceases to be a
director of the Company and/or any Subsidiary for Cause, all of
his then unexercised Non-qualified Options shall immediately
terminate.
Non-employee Directors shall not be eligible to receive any
options under the Plan other than pursuant to this Subsection
5(j).
(k) Subsidiary Directors: Each Subsidiary Director then
serving on a Subsidiary Board and who has served on a Subsidiary
Board and/or the Board for all or a portion of at least the five
calendar years immediately preceding the January l immediately
prior to the date of grant, shall automatically be granted a
Non-qualified Option for 375 Common Shares effective on the date
of the 1995 Annual Meeting and for 375 Common Shares effective
on the date of the 1997 Annual Meeting. Each Subsidiary
Director then serving on a Subsidiary Board and who has served
on a Subsidiary Board and/or the Board for fewer than the five
calendar years (including all or any portion of any such year)
immediately preceding the January 1 immediately prior to the
date of grant shall automatically be granted a Non-qualified
Option for 75 Common Shares plus 75 Common Shares for all or any
portion of each calendar year preceding the date of grant during
which such Subsidiary Director has served on a Subsidiary Board
and/or the Board as of such January 1, effective on the date of
each of the 1995 Annual Meeting and the 1997 Annual Meeting.
Any individual who was not a member of a Subsidiary Board on the
date of the 1995 Annual Meeting, (i) who is subsequently
appointed or elected to a Subsidiary Board at least six months
prior to the date of the 1996 Annual Meeting shall automatically
be granted a Non-qualified Option on the date of such
appointment or election for the same number of Common Shares as
such individual would have received if he had been a member of
the Subsidiary Board on the date of the 1995 Annual Meeting;
(ii) who is subsequently appointed or elected to a Subsidiary
Board less than six months prior to the date of the 1996 Annual
Meeting but prior to such 1996 Annual Meeting shall
automatically be granted a Non-qualified Option on the date of
such appointment or election for 75% of the number of Common
Shares which such individual would have received if he had been
a member of the Subsidiary Board on the date of the 1995 Annual
Meeting; (iii) who is subsequently appointed or elected to a
Subsidiary Board on or after the date of the 1996 Annual Meeting
but at least six months prior to the date of the 1997 Annual
Meeting shall automatically be granted a Non-qualified Option on
the date of such appointment or election for 50% of the number
of Common Shares which such individual would have received if he
had been a member of the Subsidiary Board on the date of the
1995 Annual Meeting; and (iv) who is subsequently appointed or
elected to a Subsidiary Board less than six months prior to the
1997 Annual Meeting but prior to such 1997 Annual Meeting shall
automatically be granted a Non-qualified Option on the date of
such appointment or election for 25% of the Common Shares which
such individual would have received if he had been a member of
the Subsidiary Board on the date of the 1995 Annual Meeting.
Any individual who was not a member of a Subsidiary Board on the
date of the 1997 Annual Meeting and who is subsequently
appointed or elected to a Subsidiary Board prior to the date of
the 1999 Annual Meeting shall automatically be granted a
Non-qualified Option on the same basis as described in the
immediately preceding sentence.
Each Non-qualified Option granted to a Subsidiary Director
shall have an exercise price equal to 100% of the Fair Market
Value of the Common Shares on the date of the grant of such
Non-qualified Option.
If a Subsidiary Director does not purchase in any one year the
full number of Common Shares which may be purchased with his
then exercisable Non-qualified Options, such Subsidiary Director
may purchase those Common Shares in any subsequent year during
the term of the Non-qualified Options.
If a Subsidiary Director ceases to be a director of a
Subsidiary and/or the Company for any reason other than his
death or for Cause, the Non-qualified Options granted to him
under this Plan may be exercised in full, whether or not then
exercisable by their terms, on or before the expiration of the
term of the Non-qualified Options; provided, however, that if
the former Subsidiary Director shall die prior to the expiration
of the term of the Non-qualified Options, such Non-qualified
Options may be exercised only on or before the earlier of the
expiration of such term or two years following the date of
death. If a Subsidiary Director ceases to be a director of a
Subsidiary and/or the Company because of his death, such
Non-qualified Options may be exercised in full, whether or not
then exercisable by their terms, only on or before the earlier
of the expiration of the term of the Non-qualified Options or
two years following the date of death. If a Subsidiary Director
ceases to be a director of a Subsidiary and/or the Company for
Cause, all of his then unexercised Non-qualified Options shall
immediately terminate.
Subsidiary Directors shall not be eligible to receive any
options under the Plan other than pursuant to this Subsection
5(k).
(l) Acquisition Subsidiary Directors: If the Company
directly acquires a corporation such that such corporation then
becomes an Acquisition Subsidiary, each Acquisition Subsidiary
Director then serving on the board of directors of the Acquisition
Subsidiary (the "Acquisition Board") and who has served on the
Acquisition Board for all or a portion of at least the five
calendar years immediately preceding the January 1 immediately
prior to the date of grant shall automatically be granted a
Non-qualified Option for 375 Common Shares on the effective date
of the acquisition of the Acquisition Subsidiary by the Company
(the "Acquisition Date") and each Acquisition Subsidiary
Director then serving on the Acquisition Board and who has
served on the Acquisition Board for all or a portion of at least
the five calendar years immediately preceding the January 1
immediately prior to the date of grant shall automatically be
granted a Non-qualified Option for 375 Common Shares effective
on the second anniversary of the Acquisition Date (the
"Acquisition Second Anniversary"). Each Acquisition Subsidiary
Director then serving on the Acquisition Board and who has
served on the Acquisition Board for fewer than the five calendar
years (including all or any portion of any such year)
immediately preceding the January 1 immediately prior to the
date of grant shall automatically be granted a Non-qualified
Option for 75 Common Shares plus 75 Common Shares for all or any
portion of each calendar year preceding the date of grant during
which such Acquisition Subsidiary Director has served on the
Acquisition Board as of such January 1, effective on the
Acquisition Date and on the Acquisition Second Anniversary,
respectively. Any individual who is not a member of the
Acquisition Board on the Acquisition Date (i) who is
subsequently appointed or elected to the Acquisition Board at
least six months prior to the first anniversary of the
Acquisition Date (the "Acquisition First Anniversary"), shall
automatically be granted a Non-qualified Option on the date of
such appointment or election for the same number of Common
Shares as such individual would have received if he had been a
member of the Acquisition Board on the Acquisition Date; (ii)
who is subsequently elected or appointed to the Acquisition
Board less than six months prior to the Acquisition First
Anniversary but prior to the Acquisition First Anniversary shall
automatically be granted a Non-qualified Option on the date of
such appointment or election for 75% of the number of Common
Shares which such individual would have received if he had been
a member of the Acquisition Board on the Acquisition Date; (iii)
who is subsequently appointed or elected to the Acquisition
Board on or after the date of the Acquisition First Anniversary
but at least six months prior to the Acquisition Second
Anniversary shall automatically be granted a Non-qualified
Option on the date of such appointment or election for 50% of
the number of Common Shares which such individual would have
received if he had been a member of the Acquisition Board on the
Acquisition Date; and (iv) who is subsequently appointed or
elected to the Acquisition Board less than six months prior to
the Acquisition Second Anniversary but prior to the Acquisition
Second Anniversary shall automatically be granted a
Non-qualified Option on the date of such appointment or election
for 25% of the Common Shares which such individual would have
received if he had been a member of the Acquisition Board on the
Acquisition Date. Any individual who was not a member of the
Acquisition Board on the Acquisition Second Anniversary and who
is subsequently appointed or elected to the Acquisition Board
prior to the date of the fourth anniversary of the Acquisition
Date shall automatically be granted a Non-qualified Option on
the same basis as described in the immediately preceding
sentence.
Each Non-qualified Option granted to an Acquisition Subsidiary
Director shall have an exercise price equal to 100% of the Fair
Market Value of the Common Shares on the date of the grant of
such Non-qualified Option.
If an Acquisition Subsidiary Director does not purchase in any
one year the full number of Common Shares which may be purchased
with his then exercisable Non-qualified Options, such
Acquisition Subsidiary Director may purchase those Common Shares
in any subsequent year during the term of the Non-qualified
Options.
If an Acquisition Subsidiary Director ceases to be a director
of an Acquisition Subsidiary and/or the Company for any reason
other than his death or for Cause, the Non-qualified Options
granted to him under this Plan may be exercised in full, whether
or not then exercisable by their terms, on or before the
expiration of the term of the Non-qualified Options; provided,
however, that if the former Acquisition Subsidiary Director
shall die prior to the expiration of the term of the
Non-qualified Options, such Non-qualified Options may be
exercised only on or before the earlier of the expiration of
such term or two years following the date of death. If an
Acquisition Subsidiary Director ceases to be a director of the
Acquisition Subsidiary because of his death, such Non-qualified
Options may be exercised in full, whether or not then
exercisable by their terms, only on or before the earlier of the
expiration of the term of the Non-qualified Options or two years
following the date of death. If an Acquisition Subsidiary
Director ceases to be a director of an Acquisition Subsidiary
for Cause, all of his then unexercised Non-qualified Options
shall immediately terminate.
Acquisition Subsidiary Directors shall not be eligible to
receive any options under the Plan other than pursuant to this
Subsection 5(l).
6. PERIOD FOR GRANTING OPTIONS.
No options shall be granted under this Plan subsequent to the
tenth anniversary of the earlier of (a) the day prior to the date on
which this Plan is adopted by the Board or (b) the day prior to the
date on which this Plan is approved by the affirmative vote of the
holders of a majority of the outstanding shares of the Company.
7. NO EFFECT UPON EMPLOYMENT STATUS.
The fact that an employee has been designated a Key Employee
or selected as a Participant shall not limit or otherwise qualify the
right of his employer to terminate his employment at any time.
8. METHOD OF EXERCISE.
An option granted under this Plan may be exercised only by
written notice to the Committee, signed by the Participant, or in
the event of his death, by such other person as is entitled to exercise
such option. The notice of exercise shall state the number of Common
Shares in respect of which the option is being exercised, and shall
either be accompanied by the payment of the full option price of such
Common Shares, or shall fix a date (not more than 10 business
days from the date of such notice) for the payment of the full
option price of the Common Shares being purchased. The option
price may be paid in cash, or by the transfer by the Participant
to the Company of Common Shares, free and clear of any liens,
security interests or other encumbrances, already owned by the
Participant which shall be valued at the Fair Market Value of
such Common Shares on the date of such transfer, or by a
combination of cash and such Common Shares, all in accordance
with such regulations, procedures and determinations as may be
adopted by the Committee pursuant to Subsection 3(c) above.
During the option period, no person entitled to exercise any
option granted under this Plan shall have any of the rights or
privileges of a shareholder with respect to any Common Shares
issuable upon exercise of such option until the books of the
Company evidence that such person has become the record owner of
such Common Shares.
9. IMPLIED CONSENT OF PARTICIPANTS.
Every Participant, by his acceptance of an option under this
Plan, shall be deemed to have consented to be bound, on his own behalf
and on behalf of his heirs, permitted assigns and legal representatives,
by all of the terms and conditions of this Plan.
10. SHARE ADJUSTMENTS.
In the event there is any change in the Common Shares resulting
from stock splits, stock dividends, combinations or exchanges of shares,
or other similar capital adjustments, equitable proportionate adjustments
shall be made by the Committee in (a) the number of Common Shares
available for the grant of options under this Plan, (b) the number of
Common Shares subject to options granted under this Plan, and
(c) the exercise price of outstanding options.
11. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
In the event the Company shall consolidate with, merge into,
or transfer all or substantially all of its assets (an "Acquisition
Transaction") to another corporation or corporations (herein referred
to as "successor employer corporation"), then each Incentive Option
and each Non-Qualified Option outstanding under the Plan shall
become exercisable in full, whether or not then exercisable by
its terms, immediately upon consummation of the Acquisition
Transaction. As a condition of any such Acquisition
Transaction, the Company shall require that the successor
employer corporation obligate itself to continue this Plan and
to assume all obligations under the Plan in a manner consistent
with the provisions of Section 424(a) of the Code. In the event
that such successor employer corporation terminates for any
reason the employment of any Participant who is a Key Employee
within the one year period immediately following the
consummation of the Acquisition Transaction, such Participant
shall have the right to exercise his then unexercised Incentive
Options during the period ending on the earlier of the
expiration of the term of the Incentive Options or three months
following the date of the Participant's termination of
employment.
12. COMPANY RESPONSIBILITY.
All expenses of this Plan, including the cost of maintaining
records, shall be borne by the Company. The Company shall have no
responsibility or liability (other than under applicable securities
laws) for any act or thing done or left undone with respect to the
price, time, quantity or other conditions and circumstances of the
purchase of Common Shares under the terms of the Plan, so long as the
Company acts in good faith.
13. SECURITIES LAWS.
The Committee shall take all necessary or appropriate action to
ensure that all option grants and all exercises thereof under this Plan
are in full compliance with all Federal and state securities laws.
No option granted under this Plan shall be exercised before the Common
Shares subject to the Plan have been registered or qualified for sale
under appropriate Federal and state securities laws.
14. AMENDMENT AND TERMINATION OF THE PLAN.
The Committee, with the approval of the Board, may amend the Plan
from time to time or terminate the Plan at any time without the approval
of the shareholders of the Company except as such shareholder approval
may be required (a) to satisfy the requirements of Rule 16b-3
under the Securities Exchange Act of 1934, as amended, or any
successor provision, (b) to satisfy applicable requirements of
the Code or (c) to satisfy applicable requirements of any
securities exchange on which are listed any of the Company's
equity securities or any requirements applicable to issuers
whose securities are traded in the NASDAQ National Market
System. No such action to amend or terminate the Plan shall
reduce the then existing number of any Participant's options or
adversely change the term or conditions thereof without the
Participant's consent. No amendment of the Plan shall result in
any Committee member's losing his status as a Disinterested
Person with respect to any employee benefit plan of the Company
or result in the Plan losing its status as a plan satisfying the
requirements of Rule 16b-3 under the Securities Exchange Act of
1934, as amended, or any successor provision. In no event shall
Subsection 5(j) of the Plan be amended, with or without
shareholder approval, more than once every six months, other
than to comport with changes in the Code. If the Plan is
terminated, any unexercised option shall continue to be
exercisable in accordance with its terms.
15. EFFECTIVE DATE.
The Plan was adopted by the Board on January 19, 1995. The
Plan shall become effective as of the date it is approved by the
affirmative vote of the holders of a majority of the outstanding
shares of the Company. The Plan shall be null and void if shareholder
approval is not obtained within twelve (12) months of the adoption of
the Plan by the Board.