EX-9
AIRGAS, INC.
1997 DIRECTORS' STOCK OPTION PLAN
(Effective May 15, 1997)
1. Purpose. AIRGAS, INC. (the "Company") hereby adopts the Airgas,
Inc. 1997 Directors' Stock Option Plan effective May 15, 1997 (the "Plan") as
an additional incentive to non-employee members of the Company's Board of
Directors to commence or continue service and to devote themselves to the
Company's success by providing them with an opportunity to acquire or increase
their proprietary interest in the Company through receipt of (a) rights (the
"Options") to purchase the Company's Common Stock, par value $0.01 per share
(the "Common Stock") or (b) Common Stock subject to conditions of forfeiture
(the "Restricted Stock Awards").
2. Administration.
(a) Committee. The Plan shall be administered by the Nominating
and Compensation Committee designated by the Company's Board of Directors (the
"Committee") which shall consist of at least two persons, each of whom is a
"non-employee director" as defined under Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act") (the "Non-Employee Director"). If
any Committee member does not qualify as a Non-Employee Director, then such
member shall not participate in any way with respect to Committee action under
the Plan and shall not be treated as a member of the Committee for purposes of
the Plan.
(b) Meetings. The Committee shall hold meetings at such times and
places as it may determine. Acts approved at a meeting by a majority of the
directors who are members of the Committee and present at a meeting at which
there is a quorum, or acts approved in writing by the unanimous consent of the
directors who are members of the Committee (not counting any director who
is an employee for either purpose) shall be the valid acts of the Committee.
(c) Grants. The Committee shall from time to time at its
discretion direct the Company to grant Options or Restricted Stock Awards
pursuant to the terms of the Plan. Subject to the express provisions of the
Plan, the Committee shall have plenary authority to determine the persons to
whom and the times at which Options or Restricted Stock Awards shall be
granted, the number of shares of Common Stock to be granted under an Option or
Restricted Stock Award and the price and other terms and conditions thereof.
In making such determinations the Committee may take into account the nature
of the person's services and responsibilities, the person's present and
potential contribution to the Company's success and such other factors as it
may deem relevant. The Committee's interpretation of any provision of the
Plan or of any Option or Restricted Stock Award granted under it shall be
final, binding and conclusive.
(d) Exculpation. Each Committee member shall be acting in the
capacity of a director of the Company for the purpose of Article VI of the
Company's Certificate of Incorporation in connection with the administration
of the Plan or the granting of Options or Restricted Stock Awards under the
Plan.
(e) Indemnification. Each Committee member shall be entitled to
indemnification by the Company in accordance with the provisions and
limitations of Article VII of the Company's Bylaws, as the same may be amended
from time to time, in connection with or arising out of any action, suit or
proceeding with respect to the administration of the Plan or the granting of
Options or Restricted Stock Awards under the Plan in which he may be involved
by reason of his being or having been a Committee member, whether or not he
continues to be a Committee member at the time of the action, suit or
proceeding.
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3. Eligibility. Each member of the Company's Board of Directors who is
not an employee of the Company or an entity of which the Company owns,
directly or indirectly, at least 50% of the value or voting rights of the
outstanding equity securities shall be eligible to participate (the
"Participants"). The Committee, in its sole discretion, shall determine
whether an individual qualifies as a Participant. A Participant may receive
more than one Option or Restricted Stock Award, but only on the terms and
subject to the restrictions of the Plan.
4. Available Shares. The aggregate maximum number of shares of the
Common Stock for which the Committee may issue Options or Restricted Stock
Awards under the Plan is 500,000 shares, adjusted as provided in Section 9
(the "Plan Shares" or "Shares"); provided, however, the Committee may not
issue more than 100,000 Shares as Restricted Stock Awards in the aggregate,
and Restricted Stock Awards under this Plan and the Company's 1997 Stock
Option Plan in any calendar year may not exceed 0.5% of the shares of Common
Stock issued and outstanding on any date of grant. Plan Shares shall be
issued from authorized and unissued Common Stock or Common Stock held in or
hereafter acquired for the Company's treasury. If any outstanding Option or
Restricted Stock Award granted under the Plan expires, lapses or is terminated
for any reason, the Plan Shares allocable to the unexercised portion of such
Option or forfeited portion of such Restricted Stock Award may again be the
subject of grant pursuant to the Plan.
5. Term of Plan. The Plan is effective as of May 15, 1997, the date on
which it was adopted by the Company's Board of Directors. No Option or
Restricted Stock Award granted under the Plan shall be exercisable or
nonforfeitable unless the Plan is approved by vote of a majority of the
outstanding voting stock of the Company on or before May 15, 1998. No Option
or Restricted Stock Award may be granted under the Plan after May 15, 2007.
6. Terms and Conditions of Options. Options granted pursuant to the
Plan shall be evidenced by written documents (the "Option Documents") in such
form or forms as the Committee shall from time to time approve. Option
Documents shall comply with and be subject to the terms and conditions set
forth below and such other terms and conditions which the Committee shall from
time to time specify with respect to a particular Option or Options provided
they are not inconsistent with the terms of the Plan. The applicable terms
need not be uniform between or among Options.
(a) Number of Shares. Each Option Document shall state the number
of Shares to which it pertains.
(b) Option Price. Each Option Document shall state the price at
which Shares under Option may be purchased (the "Option Price"), which shall
be at least 100% of the Common Stock's closing price on the New York Stock
Exchange (or such other exchange as the Committee selects) on the date the
Option is granted.
(c) Exercisability.
(i) General Rule. Unless the Committee provides otherwise in
an Option Document and contingent upon the Plan's approval under Section 5,
each Option granted under the Plan shall be exercisable in full on the date of
grant. No Option shall be exercisable after its term expires pursuant to
subsection 6(e) or 6(f).
(ii) Change in Control. If a Change in Control of the Company
(as defined below) occurs, then all Options which both were not exercisable
and have not terminated as of the date of such "Change in Control" shall as of
such date become immediately exercisable except to the extent the Participant
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waives such accelerated right to exercise. A "Change in Control" shall be
deemed to have taken place upon the date when (A) as a result of a tender
offer, stock purchase, other stock acquisition, merger, consolidation,
recapitalization, reverse split, sale or transfer of any asset or other
transaction any person or group (as such terms are used in and under Section
13(d) of the Exchange Act) other than the Company, any Affiliate, or any
employee benefit plan of the Company or an Affiliate, shall become the
beneficial owner (as defined in Rule 13-d under the Exchange Act) directly or
indirectly of securities of the Company representing more than 20% of the
combined voting power of the Company's then outstanding securities; providing,
however, that this provision shall not apply to Peter McCausland
("McCausland"), unless and until McCausland, together with all affiliates and
associates, becomes the beneficial owner of 30% or more of the combined voting
power of the Company's then outstanding securities; (B) stockholders approve
the consummation of any merger of the Company or any sale or other disposition
of all or substantially all of its assets, if the Company's stockholders
immediately before such transaction own, immediately after consummation of
such transaction, equity securities (other than options and other rights to
acquire equity securities) possessing less than 50% of the voting power of the
surviving or acquiring corporation; or (C) a change in the majority of the
individuals who constitute the Company's Board of Directors occurs during any
period of two years for any reason without the approval of at least a majority
of directors in office at the beginning of such period.
(d) Medium of Payment. A Participant shall pay for Shares under
Option (i) in cash, (ii) by certified check payable to the order of the
Company, (iii) in shares of the Common Stock held by the Participant for at
least six months as of the exercise date, (iv) by a combination of the
foregoing, (v) by delivery to the Company of a properly executed notice of
exercise together with irrevocable instructions to a broker to deliver to the
Company promptly the amount of the proceeds of the sale of all or a portion of
the Shares or of a loan from the broker to the Participant necessary to pay
the aggregate exercise price payable for the purchased Shares plus all
applicable federal, state and local income and employment taxes required to be
withheld by the Company by reason of such exercise or (vi) by such other mode
of payment as the Committee may approve. If payment is made in whole or in
part in shares of the Common Stock, then the Participant shall deliver to the
Company certificates registered in the name of such Participant representing
shares of Common Stock owned by such Participant, free of all liens, claims
and encumbrances of every kind and having a fair market value on the date of
delivery that is not greater than the Option Price of the Shares with respect
to which such Option is to be exercised, accompanied by stock powers duly
endorsed in blank by the Participant. Notwithstanding the foregoing,
the Committee may impose such limitations and prohibitions on the use of
shares of the Common Stock to exercise an Option as it deems appropriate.
(e) Termination of Options. Unless the Committee provides
otherwise in an Option Document, an Option shall not be exercisable after the
first to occur of the following:
(i) Term Expiration. Expiration of the term specified in the
Option Document, which shall not exceed ten years from the date of grant;
(ii) Death. Expiration of one year from the date the
Participant's service as a member of the Company's Board of Directors
terminates due to death; or
(iii) Forfeiture. The date on which forfeiture occurs
under subsection 6(f).
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(f) Forfeiture. An Option shall terminate immediately upon a
finding by the Committee, after full consideration of the facts presented on
behalf of both the Company and the Participant, that the Participant has
engaged in any sort of disloyalty to the Company, including, without
limitation, fraud, embezzlement, theft, commission of a felony or proven
dishonesty in the course of his service or has disclosed trade secrets or
confidential information of the Company. In such event, in addition to
immediate termination of the Option, the Participant, upon a determination by
the Committee, shall automatically forfeit all Shares for which the Company
has not yet delivered the share certificates upon the Company's refund of the
Option Price.
(g) Transfers. Generally, a Participant may not transfer any
Option granted under the Plan, except that (i) during his lifetime, a
Participant may transfer an Option to a spouse or a lineal ascendant or
descendant or a trust for the benefit of such a person or persons or a
partnership in which such persons are the only partners, provided the
Participant receives no consideration for any such transfer and (ii) at the
Participant's death, a Participant may transfer an Option by will or by the
laws of descent and distribution. If a transfer occurs under this subsection,
the transferred Option shall remain subject to all Plan provisions. A
transferee shall be required to furnish proof satisfactory to the Committee of
the transfer to him by gift or by will or laws of descent and distribution.
(h) Other Provisions. The Option Documents shall contain such
other provisions including, without limitation, additional restrictions upon
the exercise of the Option or additional limitations upon the term of the
Option, as the Committee shall deem advisable.
(i) Amendment. The Committee shall have the right to amend Option
Documents issued to a Participant subject to the Participant's consent.
7. Method of Option Exercise.
(a) Notice. No Option shall be deemed to have been exercised prior
to the Company's receipt of written notice of such exercise and of payment in
full of the Option Price for the Shares to be purchased. Each such notice
shall specify the number of Shares to be purchased.
(b) Securities Laws. Each notice of exercise shall (unless the
Shares are covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Act")), contain the Participant's
acknowledgment in form and substance satisfactory to the Company that (i) such
Option Shares are being purchased for investment and not for distribution or
resale (other than a distribution or resale which, in the opinion of counsel
satisfactory to the Company, may be made without violating the registration
provisions of the Act), (ii) the Participant has been advised and understands
that (A) the Option Shares may not be registered under the Act and may be
"restricted securities" within the meaning of Rule 144 under the Act and may
be subject to restrictions on transfer and (B) the Company is under no
obligation to register the Option Shares under the Act or to take any action
which would make available to the Participant any exemption from such
registration, and (iii) such Option Shares may not be transferred without
compliance with all applicable federal and state securities laws.
Notwithstanding the foregoing, should the Company be advised by counsel that
issuance of Shares should be delayed pending (iv) registration under federal
or state securities laws or (v) the receipt of an opinion that an appropriate
exemption therefrom is available, the Company may defer exercise of any Option
granted hereunder until either such event in (iv) or (v) has occurred.
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(c) Brokerage Account. Each notice of exercise may instruct the
Company, in such form as the Committee shall prescribe, to deliver Shares upon
Option exercise to any registered broker or dealer which the Company approves
in lieu of delivery to the Participant.
8. Terms and Conditions of Restricted Stock Awards. Restricted Stock
Awards made pursuant to the Plan shall be evidenced by written documents (the
"Award Documents") in such form or forms as the Committee shall from time to
time approve.
(a) Number of Shares. Subject to Section 4, each Award Document
shall state the number of Shares to which it pertains.
(b) Restrictions and Limitations. Each grant shall be subject to
such restrictions as the Committee may impose. The applicable restrictions
may lapse separately or in combination at such time or times, or in such
installments, as the Committee may deem appropriate. In addition, the
Committee may impose limits on the Participant's right to vote Shares or
receive dividends or distributions on Shares under a Restricted Stock Award
until such Shares become nonforfeitable. Each Award Document shall provide
that the Participant shall forfeit all forfeitable Shares upon a finding by
the Committee that the Participant has engaged in conduct which violates
subsection 6(f) and that all forfeitable Shares shall become nonforfeitable
upon the occurrence of a Change in Control (as defined in subsection
6(c)(ii)).
(c) Legend. Any certificate issued in respect of a Restricted
Stock Award shall be registered in the Participant's name and shall bear an
appropriate legend referring to the terms, conditions and restrictions
applicable under the Plan and Award Document to the covered Shares. In
addition, until such time as all restrictions applicable to the Shares lapse,
the Committee may provide for the certificate to be held in escrow by an
escrow agent which the Committee selects and the Company compensates.
(d) Forfeiture.
(i) General Rule. If a Participant terminates service during
any restriction period under circumstances which result in a forfeiture of
Shares covered by the Restricted Stock Award or any event occurs or fails to
occur which results in a forfeiture, the restricted Shares shall revert to the
Company. Notwithstanding the foregoing, the Committee may waive any
restriction applicable to any Restricted Stock Award whenever the Committee
determines that such waiver is in the Company's best interests.
(ii) Forfeiture for Cause. A Participant shall forfeit all
forfeitable Shares covered by a Restricted Stock Award immediately upon a
finding by the Committee, after full consideration of the facts presented on
behalf of both the Company and the Participant, that the Participant has
engaged in any sort of disloyalty to the Company or an Affiliate, including,
without limitation, fraud, embezzlement, theft, commission of a felony or
proven dishonesty in the course of his employment or service or has disclosed
trade secrets or confidential information of the Company or an Affiliate or
engaged in competition with the Company or an Affiliate.
(e) Transfers. Generally, a Participant may not transfer, assign,
alienate, sell, encumber, or pledge Shares under a Restricted Stock Award
until they are nonforfeitable and any purported transfer, assignment,
alienation, sale, encumbrance or pledge shall be void and unenforceable.
Notwithstanding the foregoing, (i) a Participant may transfer forfeitable
Shares under a Restricted Stock Award to a spouse or a lineal ascendant or
descendant or a trust for the benefit of such a person or persons or a
partnership in which such persons are the only partners, provided the
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Participant receives no consideration for any such transfer and (ii) at the
Participant's death, a Participant may transfer forfeitable Shares under a
Restricted Stock Award by will or by the laws of descent and distribution.
If a permitted transfer occurs under this subsection, the transferred Shares
shall remain subject to all Plan provisions and all applicable conditions and
restrictions under the Award Document. A transferee shall be required to
furnish proof satisfactory to the Committee of the transfer to him by gift or
by will or laws of descent and distribution.
(f) Securities Laws. Upon the advice of counsel, the Committee may
require a Participant to take or defer any action with respect to Shares
covered under a Restricted Stock Award which counsel determines is necessary
to comply with federal or state securities laws.
9. Adjustments on Changes in Common Stock. The aggregate number of
shares and class of shares as to which Options or Restricted Stock Awards may
be granted hereunder, the number of Shares covered by each outstanding Option
and the Option Price thereof and each Restricted Stock Award shall be
appropriately adjusted in the event of a stock dividend, stock split,
recapitalization or other change in the number or class of issued and
outstanding equity securities of the Company resulting from a subdivision or
consolidation of the Common Stock and/or other outstanding equity security or
a recapitalization or other capital adjustment (not including the issuance of
Common Stock upon the conversion of other securities of the Company which are
convertible into Common Stock) affecting the Common Stock which is effected
without receipt of consideration by the Company. The Committee shall have
authority to determine the adjustments to be made under this Section and any
such determination by the Committee shall be final, binding and conclusive.
10. Amendment of the Plan. The Board of Directors of the Company may
amend the Plan from time to time in such manner as it may deem advisable or
terminate the Plan in full. Nevertheless, the Board of Directors of the
Company may not, without obtaining approval by vote of a majority of the
outstanding voting stock of the Company within twelve months after such
action, increase the maximum number of shares of Common Stock as to which
Options or Restricted Stock Awards may be granted, except as provided in
Section 9 hereof.
11. Continued Service. The grant of an Option or a Restricted Stock
Award pursuant to the Plan shall not be construed to imply or to constitute
evidence of any agreement, express or implied, on the part of the Company to
retain the Participant as a member of the Company's Board of Directors or
in any other capacity.
12. Withholding of Taxes.
(a) General Rule. As a condition for the receipt of an Option or
Restricted Stock Award, the Participant agrees that the Company (or the
Affiliate employing him) may deduct from fees or other amounts payable to him
or that he will pay over to the Company any amount necessary to satisfy
any federal, state and/or local withholding tax requirements and that the
Company shall have the right to take whatever action it deems necessary to
protect its interests with respect to tax liabilities resulting
from any act or event in connection with the Plan.
(b) Payment in Shares. The Participant may elect that the Company
satisfy any applicable minimum federal, state and/or local withholding tax
requirement by retaining Shares the Company would otherwise transfer to him
upon his exercise of an Option or satisfaction of all vesting conditions under
a Restricted Stock Award which have a fair market value equal to such
withholding requirement. Notwithstanding the foregoing, the Committee may
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impose such limitations and prohibitions on the use of shares of the Common
Stock to satisfy withholding tax requirements as it deems appropriate.
13. Rules of Interpretation. Regardless of the number and gender
specifically used, words used in the Plan shall be deemed and construed to
include any other number (singular or plural) and any other gender (masculine,
feminine or neuter) as the context indicates is appropriate. Section headings
are for convenience only; they form no part of the Plan.