Exhibit 10(b)
1992 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
Invacare Corporation, hereinafter called the "Company," hereby adopts a
stock option plan for eligible Directors of the Company pursuant to the
following terms and provisions:
1. Purpose of the Plan. The purpose of this plan, hereinafter called the
"Plan," is to provide additional incentive to those Directors of the Company who
are not employees of the Company or any of its subsidiaries or affiliates and
who have not received options to purchase the Company's Common Shares, without
par value (the "Common Shares"), under any other option plan of the Company, by
encouraging them to acquire a new or an additional share ownership in the
Company, thus increasing their proprietary interest in the Company's business
and providing them with an increased personal interest in the Company's
continued success and progress. These objectives will be promoted through the
grant of options to acquire Common Shares of the Company pursuant to the terms
of the Plan. Only those Directors who meet the qualifications stated above are
eligible for and shall receive options under this Plan.
2. Effective Date of the Plan. The Plan shall become effective on May 27,
1992, subject to approval by holders of shares representing a majority of the
outstanding votes of the Company present at the shareholders meeting called for
that purpose. In the event that such shareholder approval has not occurred on or
before March 2, 1993, the Plan and any options granted hereunder shall be null
and void.
3. Shares Subject to the Plan. The shares to be issued upon the exercise of
the options granted under the Plan shall be Common Shares of the Company. Either
treasury or authorized and unissued Common Shares, or both, as the Board of
Directors shall from time to time determine, may be so issued. Common Shares
which are the subject of any lapsed, expired or terminated options may be made
available for reoffering under the Plan. If an option granted under this Plan is
exercised pursuant to the terms and conditions of subsection 5(b), any Common
Shares which are the subject thereof shall not thereafter be available for
reoffering under the Plan.
Subject to the provisions of the next succeeding paragraph of this Section
3, the aggregate number of Common Shares for which options may be granted under
the Plan shall be Fifty Thousand (50,000) Common Shares.
In the event that subsequent to the date of adoption of the Plan by the
Board of Directors the Common Shares should, as a result of a stock split, stock
dividend, combination or exchange of shares, exchange for other securities,
reclassification, reorganization, redesignation, merger, consolidation,
recapitalization or other such change, be increased or decreased or changed into
or exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation, then (i) there shall
automatically be substituted for each Common Share subject to an unexercised
option (in whole or in part) granted under the Plan, each Common Share available
for additional grants of options under the Plan and each Common Share made
available for grant to each eligible Director pursuant to Section 4 hereof, the
number and kind of shares of stock or other securities into which each
outstanding Common Share shall be changed or for which each such Common Share
shall be exchanged, (ii) the option price per Common Share or unit of securities
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shall be increased or decreased proportionately so that the aggregate purchase
price for the securities subject to the option shall remain the same as
immediately prior to such event, and (iii) the Board shall make such other
adjustments as may be appropriate and equitable to prevent enlargement or
dilution of option rights. Any such adjustment may provide for the elimination
of fractional shares.
4. Grant of Options. Subject to the terms of the Plan, a one-time option
automatically shall be granted to each person who (i) becomes a Director of the
Company for the first time from and after the effective date of the Plan and
(ii) is eligible under the Plan. The option shall be exercisable for that number
of Common Shares (rounded to the nearest whole share) determined by dividing
$150,000 by the fair market value of one Common Share on the date of grant. The
date of grant of such option shall be the date that such optionee is elected or
appointed to the Board as an eligible Director. The option shall be granted at
an option price per share equal to the fair market value of a Common Share of
the Company on the date said option is granted. Subject to the provisions of
paragraph 5(c), each such option granted shall be exercisable for a period of
ten (10) years from the date of grant but shall not be exercisable during the
first year of said period. Thereafter, during each succeeding year each such
option may be exercised for up to a maximum of thirty three and one-third
percent (33/3%) of the total number of Common Shares subject to the option,
which annual rights of exercise shall be cumulative.
5. Option Provisions.
a. Limitation on Exercise and Transfer of Options. Only the Director
to whom the option is granted may exercise the same except where a guardian
or other legal representative has been duly appointed for such Director and
except as otherwise provided in the case of such Director's death. No
option granted hereunder shall be transferable otherwise than by the Last
Will and Testament of the Director to whom it is granted or, if the
Director dies intestate, by the applicable laws of descent and
distribution. No option granted hereunder may be pledged or hypothecated,
nor shall any such option be subject to execution, attachment or similar
process.
b. Exercise of Option. Each option granted hereunder may be exercised
in whole or in part (to the maximum extent then exercisable) from time to
time during the option period, but this right of exercise shall be limited
to whole shares. Options shall be exercised by the optionee giving written
notice to the Treasurer of the Company at its principal business office, by
certified mail, return receipt requested, of the optionee's intention to
exercise the same and the number of shares with respect to which the option
is being exercised (the "Notice of Exercise of Option") accompanied by full
payment of the purchase price in cash or in whole or in part in Common
Shares having a fair market value on the date the option is exercised equal
to that portion of the purchase price for which payment in cash is not
made. Such Notice of Exercise of Option shall be deemed delivered upon
deposit into the mails.
c. Termination of Directorship. If the optionee ceases to be a
Director of the Company, his or her option shall terminate three (3) months
after the effective date of termination of his or her directorship and
neither he nor she nor any other person shall have any right after such
date to exercise all or any part of such option. If the termination of the
directorship is due to death, then the option may be exercised within one
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(1) year after the optionee's death by the optionee's estate or by the
person designated in the optionee's Last Will and Testament or to whom
transferred by the applicable laws of descent and distribution (the
"Personal Representative"). Notwithstanding the foregoing, in no event
shall any option be exercisable after the expiration of the ten-year option
period and no option shall be exercisable to any greater extent than the
optionee would have been entitled to exercise the option at the time of
termination or death.
d. Acceleration of Exercise of Options in Certain Events.
Notwithstanding anything to the contrary described in the Plan, in the
event of a "change in control," the eligible Director shall have the
immediate right and option (notwithstanding the provisions of paragraph 4
hereof) to exercise the option with respect to all Common Shares covered by
the option, which exercise, if made, shall be irrevocable. The term "change
in control" shall include, but not be limited to: (i) the first purchase of
shares pursuant to a tender offer or exchange (other than a tender offer or
exchange by the Company) for all or part of the Company's common shares of
any class or any securities convertible into such common shares; (ii) the
receipt by the Company of a Schedule 13D or other advice indicating that a
person is the "beneficial owner" (as that term is defined in Rule 13d-3
under the Securities Exchange Act of 1934) of twenty percent (20%) or more
of the voting power of the Company; (iii) the date of the approval by
shareholders of the Company of an agreement providing for any consolidation
or merger of the Company in which the Company will not be the continuing or
surviving corporation or pursuant to which shares of capital stock of any
class, or any securities convertible into such capital stock, of the
Company would be converted into cash, securities, or other property, other
than a merger of the Company in which the holders of shares of all classes
of the Company's capital stock immediately prior to the merger would own at
least a majority of the voting power of the surviving corporation (or the
parent company of the surviving corporation) immediately after the merger;
(iv) the date of the approval by shareholders of the Company of any sale,
lease, exchange, or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of the Company
(other than a sale, lease, exchange or other transfer of such assets to an
affiliate of the Company): or (v) the adoption of any plan or proposal for
the liquidation (but not a partial liquidation) or dissolution of the
Company.
e. Option Agreements. Options granted under the Plan shall be subject
to the further terms and provisions of an Option Agreement, a copy of which
is attached hereto as Exhibit A, the execution of which by each optionee
shall be a condition to the receipt of an option.
6. Investment Representation; Approvals and Listing. The options to be
granted hereunder shall be further conditioned upon receipt of the following
investment representation from the optionee:
"I further agree that any Common Shares of Invacare
Corporation which I may acquire by virtue of this option shall
be acquired for investment purposes only and not with a view
to distribution or resale; provided, however, that this
restriction shall become inoperative in the event that the
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said Common Shares subject to this option shall be registered
under the Securities Act of 1933, as amended, or in the event
that the offer or sale of the Common Shares subject to this
option may be lawfully made without registration of the said
Common Shares under the Securities Act of 1933, as amended."
The Company shall not be required to issue any certificate or certificates for
Common Shares upon the exercise of an option granted under the Plan prior to (i)
the obtaining of any approval from any governmental agency which the Company
shall, in its sole discretion, determine to be necessary or advisable, (ii) the
admission of such Common Shares to listing on any national securities exchange
on which the Common Shares may be listed, (iii) the completion of any
registration or other qualification of the Common Shares under any state or
federal law or ruling or regulations of any governmental body which the Company
shall, in its sole discretion, determine to be necessary or advisable or the
determination by the Company, in its sole discretion, that any registration or
other qualification of the Common Shares is not necessary or advisable and (iv)
the obtaining of an investment representation from the optionee in the form
stated above or in such other form as the Company, in its sole discretion, shall
determine to be adequate.
7. General Provisions. For all purposes of this Plan, the fair market value
of a Common Share shall be determined as follows: so long as the Common Shares
of the Company are listed upon an established stock exchange or exchanges or
contained in the NASDAQ National Market System, such fair market value shall be
determined to be the highest closing sale price of such Common Shares on such
stock exchange or exchanges on the day the option is granted (or the date the
Common Shares are tendered as payment, in the case of determining fair market
value for that purpose) or if no sale of such Common Shares shall have been made
on any stock exchange on that day, then on the closest preceding day on which
there was a sale of such Common Shares; and during any period of time as such
Common Shares are not listed upon an established stock exchange or contained in
the NASDAQ National Market System, the fair market value per share shall be the
mean between dealer "Bid" and "Ask" prices of such Common Shares in the
over-the-counter market on the day the option is granted (or the day the Common
Shares are tendered as payment, in the case of determining fair market value for
that purpose), as reported by the National Association of Securities Dealers,
Inc.
The liability of the Company under the Plan and any distribution of Common
Shares made hereunder is limited to the obligations set forth herein with
respect to such distribution and no term or provision of the Plan shall be
construed to impose any liability on the Company in favor of any person with
respect to any loss, cost or expense which the person may incur in connection
with or arising out of any transaction in connection with the Plan, including,
but not limited to, any liability to any Federal, state, or local tax authority
and/or any securities regulatory authority.
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Nothing in the Plan or in any option agreement shall confer upon any
optionee any right to continue as a Director of the Company, or to be entitled
to any remuneration or benefits not set forth in the Plan or such option.
Nothing contained in the Plan or in any option agreement shall be construed
as entitling any optionee to any of the rights of a shareholder as a result of
the grant of an option until such time as Common Shares are actually issued to
such optionee pursuant to the exercise of an option.
The Plan may be assumed by the successors and assigns of the Company.
The Plan shall not be amended more than once every six months, other than
to comport with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act, or the rules thereunder.
The cash proceeds received by the Company from the issuance of Common
Shares pursuant to the Plan will be used for general corporate purposes or in
such other manner as the Board of Directors deems appropriate.
The expense of administering the Plan shall be borne by the Company.
The captions and section numbers appearing in the Plan are inserted only as
a matter of convenience. They do not define, limit, construe or describe the
scope or intent of the provisions of the Plan.
8. Termination of the Plan. The Plan shall terminate ten (10) years from
the date of its adoption by the Board of Directors of the Company and thereafter
no options shall be granted hereunder. All options outstanding at the time of
termination of the Plan shall continue in full force and effect in accordance
with and subject to their terms and the terms and conditions of the Plan.
9. Taxes. Appropriate provisions shall be made for all taxes required to be
withheld and for paid in connection with the Options or the exercise thereof,
and the transfer of Common Shares pursuant thereto, under the applicable laws or
other regulations of any governmental authority, whether federal, state, or
local and whether domestic or foreign. In its discretion, the Company may permit
the optionee to satisfy such withholding requirements by (a) the Company
withholding from issuance to the optionee such number of Common Shares
other-wise issuable upon exercise of the option as the Company and the optionee
may agree, provided, however, that the optionee must have had on file with the
Committee, for at least six (6) months prior thereto, an effective standing
election to satisfy said optionee's tax withholding obligations in such a
fashion, which election form by its terms shall not be revocable or amendable
for at least six (6) months, or (b) with the consent of the Board, in whole or
in part, in Common Shares having a fair market value on the date the option is
exercised equal to that portion of the withholding obligation for which payment
in cash is not made.
10. Changes in Governing Rules and Regulations. All references herein to
the Internal Revenue Code of 1986, as amended, or sections thereof, or to rules
and regulations of the Department of Treasury or of the Securities and Exchange
Commission, shall mean and include the Code sections thereof and such rules and
regulations as are now in effect or as they may be subsequently amended,
modified, substituted or superseded.
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IN WITNESS WHEREOF, INVACARE CORPORATION, by its appropriate officers duly
authorized, has executed this instrument this _____ day of ________________,
1992.
INVACARE CORPORATION
By:
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And:
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