(As adopted by the
Board on 3/9/95)
KASH N' KARRY FOOD STORES, INC.
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
TABLE OF CONTENTS
1. Purpose.. . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions.. . . . . . . . . . . . . . . . . . . . . . . 1
2.1. "Affiliate" . . . . . . . . . . . . . . . . . . . . 1
2.2. "Award" . . . . . . . . . . . . . . . . . . . . . . 1
2.3. "Award Agreement" . . . . . . . . . . . . . . . . . 1
2.4. "Board" . . . . . . . . . . . . . . . . . . . . . . 1
2.5. "Cause" . . . . . . . . . . . . . . . . . . . . . . 1
2.6. "Change of Control" . . . . . . . . . . . . . . . . 1
2.7. "Code" . . . . . . . . . . . . . . . . . . . . . . 2
2.8. "Committee" . . . . . . . . . . . . . . . . . . . . 2
2.9. "Common Stock" . . . . . . . . . . . . . . . . . . 2
2.10. "Company" . . . . . . . . . . . . . . . . . . . . . 2
2.11. "Date of Grant" . . . . . . . . . . . . . . . . . . 2
2.12. "Disability" . . . . . . . . . . . . . . . . . . . 2
2.13. "Eligible Director" . . . . . . . . . . . . . . . . 2
2.14. "Exchange Act". . . . . . . . . . . . . . . . . . . 2
2.15. "Fair Market Value" . . . . . . . . . . . . . . . . 2
2.16. "Involuntary Termination" . . . . . . . . . . . . . 3
2.17. "Non-Employee Director" . . . . . . . . . . . . . . 3
2.18. "Option" . . . . . . . . . . . . . . . . . . . . . 3
2.19. "Option Period" . . . . . . . . . . . . . . . . . . 3
2.20. "Original Stockholders" . . . . . . . . . . . . . . 3
2.21. "Plan" . . . . . . . . . . . . . . . . . . . . . . 3
2.22. "SEC" . . . . . . . . . . . . . . . . . . . . . . . 3
2.23. "Subsidiary(ies)" . . . . . . . . . . . . . . . . . 3
2.24. "Voluntary Termination" . . . . . . . . . . . . . . 3
2.25. "Voting Interest" . . . . . . . . . . . . . . . . . 4
3. Administration. . . . . . . . . . . . . . . . . . . . . . 4
3.1. The Committee.. . . . . . . . . . . . . . . . . . . 4
3.2. Plan Administration and Plan Rules. . . . . . . . . 4
3.3. Liability Limitation. . . . . . . . . . . . . . . . 4
4. Term of the Plan/Common Stock Subject to the Plan.. . . . 5
4.1. Term. . . . . . . . . . . . . . . . . . . . . . . . 5
4.2. Common Stock. . . . . . . . . . . . . . . . . . . . 5
5. Awards. . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1. Type of Options.. . . . . . . . . . . . . . . . . . 5
5.2. Initial Awards. . . . . . . . . . . . . . . . . . . 5
5.3. Subsequent Awards.. . . . . . . . . . . . . . . . . 6
5.4. Exercise Price. . . . . . . . . . . . . . . . . . . 6
5.5. Method of Exercise. . . . . . . . . . . . . . . . . 6
5.6. Form of Payment.. . . . . . . . . . . . . . . . . . 6
5.7. Option Period.. . . . . . . . . . . . . . . . . . . 7
5.8. Right to Exercise.. . . . . . . . . . . . . . . . . 8
5.9. Limitation of Rights. . . . . . . . . . . . . . . . 8
5.10. Regulatory Approval.. . . . . . . . . . . . . . . . 8
i
6. Exercisability. . . . . . . . . . . . . . . . . . . . . . 8
7. Withholding.. . . . . . . . . . . . . . . . . . . . . . . 8
8. Changes in Capitalization and Other Matters.. . . . . . . 9
8.1. No Corporate Action Restriction.. . . . . . . . . . 9
8.2. Recapitalization Adjustments. . . . . . . . . . . . 9
9. Change of Control.. . . . . . . . . . . . . . . . . . . . 9
9.1. Acceleration of Awards Vesting. . . . . . . . . . . 9
9.2. Change of Control.. . . . . . . . . . . . . . . . . 9
10. Amendment; Termination. . . . . . . . . . . . . . . . . . 10
11. Miscellaneous.. . . . . . . . . . . . . . . . . . . . . . 10
11.1. Unfunded Plan. . . . . . . . . . . . . . . . . . . 10
11.2. Listing, Registration and Other Legal
Compliance.. . . . . . . . . . . . . . . . . . . . 10
11.3. Award Agreements.. . . . . . . . . . . . . . . . . 11
11.4. Designation of Beneficiary.. . . . . . . . . . . . 11
11.5. Governing Law. . . . . . . . . . . . . . . . . . . 11
11.6. Titles and Headings. . . . . . . . . . . . . . . . 11
11.7. Effective Date.. . . . . . . . . . . . . . . . . . 11
ii
KASH N' KARRY FOOD STORES, INC.
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
* * * * *
1. Purpose. The purpose of the Kash n' Karry Food Stores,
Inc. 1995 Non-Employee Director Stock Option Plan (the "Plan") is
to promote the interests of the Company by enabling the Company
to retain the experienced and knowledgeable non-employee
directors whose initial election to the Board became effective
upon or after consummation of the Company's Plan of
Reorganization through grants of non-qualified stock options to
acquire the Company's Common Stock, par value $0.01 per share,
and certain limited stock appreciation rights in respect thereof.
In addition, such grants will encourage the closer alignment of
the interests of such directors and the Company's shareholders.
2. Definitions. For purposes of the Plan, the following
terms shall have the meanings set forth below:
2.1. "Affiliate" means (a) a member of a controlled
group of corporations of which the Company is a member or (b) an
unincorporated trade or business which is under common control
with the Company as determined in accordance with Section 414(c)
of the Code. For purposes hereof, a "controlled group of
corporations" shall mean a controlled group of corporations as
defined in Section 1563(a) of the Code, determined without regard
to Sections 1563(a)(4) and 1563(e)(3)(C).
2.2. "Award" means an award or grant of Options made to
an Eligible Director under Section 5 of the Plan.
2.3. "Award Agreement" means the agreement executed by
an Eligible Director pursuant to Section 11.3 of the Plan in
connection with the granting of an Option.
2.4. "Board" means the Board of Directors of the
Company, as constituted from time to time.
2.5. "Cause" means (a) personal dishonesty,
(b) incompetence, (c) willful misconduct, (d) intentional failure
to perform stated duties, (e) breach of a fiduciary duty
involving personal profit or (f) willful violation of any law,
rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order. For purposes of the
preceding sentence, no act shall be considered "willful" unless
done, or omitted to be done, by the Eligible Director not in good
faith and without reasonable belief that such act, or failure to
act, was in the best interests of the Company and its
Subsidiaries.
2.6. "Change of Control" shall have the meaning
ascribed thereto in Section 9.2 of the Plan.
2.7. "Code" means the Internal Revenue Code of 1986,
as in effect and as amended from time to time, or any successor
statute thereto, together with any rules, regulations and
interpretations promulgated thereunder or with respect thereto.
2.8. "Committee" means the Board, or any committee of
the Board established to administer the Plan, as described in
Section 3 of the Plan.
2.9. "Common Stock" means the common stock, par value
$0.01 per share, of the Company or any security of the Company
issued by the Company in substitution or exchange therefor.
2.10. "Company" means Kash n' Karry Food Stores, Inc.,
a Delaware corporation, or any successor corporation to Kash n'
Karry Food Stores, Inc.
2.11. "Date of Grant" means, with respect to an Award,
the date as of when it is granted or awarded to an Eligible
Director.
2.12. "Disability" means any physical or mental
disability which is determined in writing to be total and
permanent by a medical physician selected in good faith by the
Company, as a result of which the Eligible Director is unable to
perform for the Company and its Subsidiaries substantially the
same duties as he or she performed prior to incurring such
physical or mental disability.
2.13. "Eligible Director" means any Non-Employee
Director of the Company whose initial election to the Board
became effective on or after December 29, 1994.
2.14. "Exchange Act" means the Securities Exchange Act
of 1934, as in effect and as amended from time to time, or any
successor statute thereto, together with any rules, regulations
and interpretations promulgated thereunder or with respect
thereto.
2.15. "Fair Market Value" means on, or with respect to,
any given date(s), the mean average of the high bid and low asked
prices of the Common Stock, as reported on the National
Association of Securities Dealers Automated Quotation System,
Inc. ("NASDAQ"), for such date(s) or, if the Common Stock was not
traded on such date(s), on the next preceding day or days on
which the Common Stock was traded. If at any time the Common
Stock is not traded on NASDAQ, the Fair Market Value of a share
of the Common Stock shall be determined in good faith by the
Company.
2
2.16. "Involuntary Termination" means any termination
of an Eligible Director's membership on the Board other than a
Voluntary Termination or a removal from the Board for Cause.
2.17. "Non-Employee Director" means any director of
the Company who is not an employee of, and/or consultant to, the
Company or any Subsidiary of the Company.
2.18. "Option" means any non-qualified stock option
granted or awarded to an Eligible Director pursuant to Section 5
of the Plan and the relevant Award Agreement, whether as a Level
One Grant, or as a Level Two Grant, or as part of a Subsequent
Award pursuant to Section 5.3.
2.19. "Option Period" shall mean, with respect to an
Option, the period commencing on the Date of Grant and ending on
the tenth anniversary of the Date of Grant.
2.20. "Original Stockholders" means members of (x) any
group consisting of members of the Board, or (y) the unofficial
committee of holders of the Company's 12-3/8% Senior Notes due
1999, the Company's Senior Floating Rate Notes due August 2,
1996, and the Company's 14% Subordinated Debentures due February
1, 2001, (the "Bondholder Committee"), which committee
participated in the negotiation of the terms of the Company's
Plan of Reorganization dated as of December 12, 1994, filed in
the United States Bankruptcy Court for the District of Delaware
in respect of Case No. 94-1082 (HSB), or any other group of
holders consisting in whole or in part of members of the
Bondholder Committee.
2.21. "Plan" means the Kash n' Karry Food Stores, Inc.
1995 Non-Employee Director Stock Option Plan, as set forth
herein.
2.22. "SEC" means the United States Securities and
Exchange Commission.
2.23. "Subsidiary(ies)" means any corporation(s)
(other than the Company) in an unbroken chain of corporations,
including and beginning with the Company, if each of such
corporations, other than the last corporation in the unbroken
chain, owns, directly or indirectly, more than fifty percent
(50%) of the voting stock in one of the other corporations in
such chain.
2.24. "Voluntary Termination" means a termination of
an Eligible Director's membership on the Board due to or as a
result of any such Eligible Director's resignation from the Board
(other than due to death or Disability) or refusal (other than
due to death or Disability) to stand for election to the Board
after having been nominated by the Board.
3
2.25. "Voting Interest" means securities of any class
or classes or other ownership interests having general voting
power under ordinary circumstances to elect members of a board of
directors of any entity.
3. Administration.
3.1. The Committee. The Plan shall be administered by
the Committee. The Committee shall be appointed from time to
time by the Board and shall be comprised of not less than two (2)
of the then members of the Board. Consistent with the Bylaws of
the Company, members of the Committee serve at the pleasure of
the Board and the Board may at any time and from time to time
remove members from, or add members to, the Committee. Actions
of the Committee shall be taken by the vote of a majority of its
members. Any action may be taken by a written instrument signed
by a majority of the Committee members, and action so taken shall
be fully as effective as if it had been taken by a vote at a
meeting.
3.2. Plan Administration and Plan Rules. The Committee
is authorized to construe and interpret the Plan and to
promulgate, amend, and rescind rules and regulations relating to
the implementation, administration and maintenance of the Plan.
Subject to the terms and conditions of the Plan, the Committee
shall make all determinations necessary or advisable for the
implementation, administration and maintenance of the Plan
including, without limitation, (a) making Subsequent Awards in
such amounts as the Committee shall determine, and (b) correcting
any technical defects(s) or technical omission(s), or reconciling
any technical inconsistency(ies), in the Plan and/or any Award
Agreement. The Committee may designate persons other than
members of the Committee to carry out the day-to-day ministerial
administration of the Plan under such conditions and limitations
as it may prescribe, except that the Committee shall not delegate
its authority with regard to the granting of any Subsequent
Awards. The Committee's determinations under the Plan need not
be uniform and may be made selectively among Eligible Directors,
whether or not such Eligible Directors are similarly situated.
Any determination, decision or action of the Committee in
connection with the construction, interpretation, administration,
implementation or maintenance of the Plan shall be final,
conclusive and binding upon all Eligible Directors and any
person(s) claiming under or through any Eligible Directors. The
Company shall effect the granting of Awards under the Plan, in
accordance with the determinations made by the Committee, by
execution of written agreements and/or other instruments in such
form as is approved by the Committee.
3.3. Liability Limitation. Neither the Board nor the
Committee, nor any member of either, shall be liable for any act,
omission, interpretation, construction or determination made in
4
good faith in connection with the Plan (or any Award Agreement),
and the members of the Board and the Committee shall be entitled
to indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including, without
limitation, attorneys' fees) arising or resulting therefrom to
the fullest extent permitted by law and/or under any directors
and officers liability insurance coverage which may be in effect
from time to time.
4. Term of the Plan/Common Stock Subject to the Plan.
4.1. Term. The Plan shall terminate on December 31,
2005, except with respect to Awards then outstanding. After such
date, no further Awards shall be granted under the Plan.
4.2. Common Stock. The maximum number of shares of
Common Stock in respect of which Options may be granted under the
Plan, subject to adjustment as provided in Section 8.2 of the
Plan, shall be thirty-six thousand (36,000) shares of the Common
Stock. Common Stock which may be issued under the Plan may be
either authorized and unissued shares or issued shares which have
been reacquired by the Company (in the open market or in private
transactions) and which are being held as treasury shares.
Shares of Common Stock subject to Options granted under the Plan
that remain unissued upon the forfeiture and cancellation of
Options by reason of a Voluntary Termination shall become
available for further awards under the Plan, but only to Eligible
Directors whose initial election or appointment to the Board is
for the purpose of filling the vacancy left by the Eligible
Director who caused the Voluntary Termination. Except as
provided in the foregoing sentence, if any Options expire
unexercised or are forfeited, surrendered, cancelled or otherwise
terminated, the shares of Common Stock which were theretofore
subject to such Options shall not be available for Options under
the Plan, and upon any such expiration, forfeiture, surrender,
cancellation, or other termination, the maximum number of shares
in respect of which Options may be granted under this Plan shall
be reduced to such extent.
5. Awards.
5.1. Type of Options. All Options granted under the
Plan shall be non-statutory options not intended to qualify as
incentive stock options under Section 422 of the Code.
5.2. Initial Awards. Each Eligible Director who is
serving in such capacity on the date as of when the Plan is
adopted by the Company shall be granted each of the following
Awards (collectively, the "Initial Awards"):
5.2.1. a non-qualified stock option to acquire
three thousand (3,000) shares of the Common Stock, subject
5
to adjustment in accordance with Section 8.2 of the Plan
(the "Level One Grant(s)"); and
5.2.2. a non-qualified stock option to acquire
three thousand (3,000) shares of the Common Stock, subject
to adjustment in accordance with Section 8.2 of the Plan
(the "Level Two Grant(s)").
5.3. Subsequent Awards. The Committee may grant
Options (the "Subsequent Awards") to Eligible Directors whose
initial election or appointment to the Board is for the purpose
of filling a vacancy left by an Eligible Director who received an
Initial Award that was forfeited and cancelled pursuant to
Section 5.7 hereof by reason of a Voluntary Termination.
5.4. Exercise Price. The exercise price per share of
Common Stock subject to Options granted hereunder shall be:
5.4.1. Fifteen Dollars ($15.00), in the case of
Level One Grants;
5.4.2. Twenty Dollars ($20.00), in the case of
Level Two Grants;
5.4.3. The Fair Market Value on the business day
immediately preceding the Date of Grant, in the case of
Subsequent Awards made pursuant to Section 5.3 hereof.
5.5. Method of Exercise. Upon becoming exercisable in
accordance with Section 6 of the Plan, and subject to the
provisions of Section 5.7 hereof, an Option may be exercised in
whole or in part at any time and from time to time during the
Option Period. A partial exercise of an Option will not affect
an Eligible Director's subsequent right to exercise the Option as
to the remaining Common Stock subject to the Option. Any portion
of an Option that is exercised may not be exercised again. To
exercise an Option, an Eligible Director must do the following:
(a) deliver to the Company a written notice of exercise,
specifying the number of shares to be purchased; and (b) tender
to the Company payment in full of the exercise price. The
exercise date of an Option will be the date when the Company has
received the notice of exercise and full payment of the exercise
price. No Option may be exercised at any time in respect of a
fractional share.
5.6. Form of Payment. An Eligible Director may pay
all or any part of the exercise price under an Option in cash, by
certified check, bank draft or money order payable to the order
of the Company or such other form or method of payment as may be
acceptable to the Company and available to all Eligible
Directors. Payment may also be made in whole or in part by the
transfer to the Company of shares of Common Stock already owned
6
by an Eligible Director for at least six months prior to the
exercise date and having a Fair Market Value equal to all or a
portion of the exercise price as of the exercise date. All
payment instruments shall be accepted by the Company subject to
collection.
5.7. Option Period. Each Award shall expire on the
last day of the Option Period, but shall be subject to earlier
termination as follows:
5.7.1. If the Eligible Director is removed from
the Board for Cause, all rights of such Eligible Director
under any then exercisable and unexercisable Options shall
automatically expire and be forfeited and cancelled on the
effective date of any such removal.
5.7.2. In the event of a Voluntary Termination,
all rights of such Eligible Director under any unexercisable
Options shall automatically expire and be forfeited and
cancelled on the effective date of such Voluntary
Termination, and any then exercisable Options shall expire
forty-five (45) days after the date of such Voluntary
Termination (but not beyond the last day of the Option
Period).
5.7.3. In the event of an Involuntary
Termination, the then outstanding Options of such Eligible
Director shall become one hundred percent (100%)
exercisable, to the full extent of the number of shares of
Common Stock remaining covered by such Options, regardless
of whether such Options were previously exercisable, and
each such Option shall expire forty-five (45) days after the
date of such Involuntary Termination (but not beyond the
last day of the Option Period) and thereafter such Options
shall be forfeited and cancelled by the Company.
Notwithstanding the immediately preceding sentence, if any
Involuntary Termination is due to the death or Disability of
an Eligible Director, such Eligible Director (and such
Eligible Director's estate, designated beneficiary or other
legal representative, as the case may be) shall have the
right, to the extent exercisable immediately prior to or as
a result of any such Involuntary Termination, to exercise
any Option at any time within the one hundred eighty (180)
day period following such cessation to serve (but not beyond
the last day of the Option Period).
5.7.4. Exercise of a deceased Eligible Director's
Awards that become or remain exercisable shall be by (a) the
person or persons whom the Eligible Director has designated
in a writing filed with the Company in accordance with
Section 11.4 of the Plan, or (b) if no such designation has
been made, by the person or persons to whom the Eligible
7
Director's rights have passed by will or the laws of
intestate succession.
5.8. Right to Exercise. The right of any Eligible
Director to exercise an Award granted under the Plan shall,
during the lifetime of such Eligible Director, be exercisable
only by such Eligible Director and shall not be assignable or
transferable by such Eligible Director other than by will or the
laws of intestate succession.
5.9. Limitation of Rights. Neither the recipient of an
Award under the Plan nor an Eligible Director's beneficiaries or
successors in interest shall have any rights as a shareholder of
the Company with respect to any Common Stock subject to any Award
until the issuance of a stock certificate in respect of such
Common Stock. Neither the Plan, nor the granting of any Award
thereunder, nor any other action taken pursuant to the Plan,
shall constitute or be evidence of any agreement or
understanding, express or implied, that an Eligible Director has
a right to continue as a director of the Company for any period
of time or at any particular rate of remuneration.
5.10. Regulatory Approval. The Company shall not be
required to issue any certificates for Common Stock upon the
exercise of an Option granted under the Plan or to record as a
holder of record of Common Stock the name of the person
exercising an Option under the Plan, (a) without first obtaining
to the complete satisfaction of the Company the approval of all
regulatory bodies deemed necessary by the Company, and
(b) without first complying, to the Company's satisfaction, with
all rules and regulations under federal, state, or local law
deemed applicable by the Company. Common Stock acquired upon
exercise of an Option may not be sold or otherwise disposed of
prior to six months after the Date of Grant.
6. Exercisability. Subject to Sections 5.7 and 5.10 of
the Plan, all Level One Options granted under the Plan shall
become exercisable on July 30, 1995, all Level Two Options
granted under the Plan shall become exercisable on July 28, 1996,
and all Subsequent Awards shall become exercisable in accordance
with such vesting schedule as the Committee shall determine at
the time of grant.
7. Withholding. The Company shall have the right to
require an Eligible Director, upon the exercise of any Option, to
remit or otherwise arrange for the payment of any federal, state,
local or other taxes of any kind which the Company, in its sole
discretion, deems necessary to be withheld to comply with the
Code and/or any other applicable law, rule or regulation.
8
8. Changes in Capitalization and Other Matters.
8.1. No Corporate Action Restriction. The existence
of the Plan, any Award Agreement and/or the Awards granted
hereunder shall not limit, affect or restrict in any way the
right or power of the Board or the shareholders of the Company to
make or authorize (a) any adjustment, recapitalization,
reorganization or other change in the Company's or any
Subsidiary's capital structure or its business, (b) any merger,
consolidation or change in the ownership of the Company or any
Subsidiary, (c) any issue of bonds, debentures, capital,
preferred or prior preference stocks ahead of or affecting the
Company's or any Subsidiary's capital stock or the rights
thereof, (d) any dissolution or liquidation of the Company or any
Subsidiary, (e) any sale or transfer of all or any part of the
Company's or any Subsidiary's assets or business, or (f) any
other corporate act or proceeding by the Company or any
Subsidiary. No Eligible Director, beneficiary or any other
person shall have any claim against any member of the Board, the
Company or any Subsidiary, or any employees, officers or agents
of the Company or any Subsidiary, as a result of any such action.
8.2. Recapitalization Adjustments. If the outstanding
shares of Common Stock of the Company are increased, decreased,
or changed into or exchanged for, a different number or kind of
securities of the Company through a stock dividend,
reclassification, stock split, reverse stock split,
consolidation, subdivision, split-up, spin-off, split-off or
combination, proportionate adjustments shall be made to reflect
such change, including, without limitation, with respect to the
aggregate number and class of shares of Common Stock subject to
and authorized by the Plan, the number of shares of Common Stock
covered by each outstanding Option, and the exercise price or
other price per share of Common Stock in respect of outstanding
Options.
9. Change of Control.
9.1. Acceleration of Awards Vesting. Anything in the
Plan to the contrary notwithstanding, if a Change of Control of
the Company (as defined in Section 9.2 of the Plan) occurs, all
Awards then unexercised and outstanding shall become fully vested
and exercisable as of the date of the Change of Control. The
immediately preceding sentence shall apply to only those Eligible
Directors who are serving in such capacity as of the date of the
Change of Control.
9.2. Change of Control. For the purpose of this Plan,
a "Change of Control" shall have occurred if at any time either
(a) any person or any persons acting together (excluding the
Original Stockholders) that constitute a "group" for purposes of
Section 13(d) of the Exchange Act shall beneficially own at least
9
fifty percent (50%) of the total Voting Interest of the Company
or (b) any person or any persons acting together (excluding the
Original Stockholders) that constitute a "group" for purposes of
Section 13(d) of the Exchange Act shall succeed in having a
sufficient number of its nominees elected to the Board to
constitute a majority of the Board.
10. Amendment; Termination. The Board may suspend or
terminate the Plan (or any portion thereof) at any time and may
amend the Plan at any time and from time to time in such respects
as the Board may deem advisable.No such amendment, suspension or
termination shall be effective if it would materially adversely
affect the rights of any Eligible Director under any outstanding
Awards, without the consent of such Eligible Director.
11. Miscellaneous.
11.1. Unfunded Plan. The Plan shall be unfunded and
the Company shall not be required to segregate any assets in
connection with any Awards under the Plan. Any liability of the
Company to any person with respect to any Award under the Plan or
any Award Agreement shall be based solely upon the contractual
obligations that may be created as a result of the Plan or any
such award or agreement. No such obligation of the Company shall
be deemed to be secured by any pledge of, encumbrance on, or
other interest in, any property or asset of the Company or any
Subsidiary. Nothing contained in the Plan or any Award Agreement
shall be construed as creating in respect of any Eligible
Director (or beneficiary thereof or any other person) any equity
or other interest of any kind in the assets of the Company or any
Subsidiary or creating a trust of any kind or a fiduciary
relationship of any kind between the Company, any Subsidiary
and/or any such Eligible Director, any beneficiary thereof or any
other person.
11.2. Listing, Registration and Other Legal
Compliance. No Options or Common Stock shall be issued under the
Plan unless legal counsel for the Company shall be satisfied that
any such issuance will be in compliance with all applicable
federal and state securities laws and regulations and any other
applicable laws or regulations. The Company may require, as a
condition of any payment or share issuance, that certain
agreements, undertakings, representations, certificates, and/or
information, as the Company may deem necessary or advisable, in
its sole discretion, be executed or provided to the Company to
assure compliance with all such applicable laws or regulations.
Certificates for any Options and/or Common Stock delivered under
the Plan may be subject to such stock-transfer orders and such
other restrictions as the Company may deem advisable under the
rules, regulations, or other requirements of the SEC, any stock
exchange upon or trading system in which the Common Stock is then
listed or traded, and any applicable federal or state securities
10
law. In addition, if, at any time specified herein (or in any
Award Agreement) for the issuance or other distribution of any
Options and/or Common Stock, or the payment of amounts to any
Eligible Director, any law, rule, regulation or other requirement
of any governmental authority or agency shall require either the
Company, any Affiliate or any Subsidiary or any Eligible Director
(or any estate, designated beneficiary or other legal
representative thereof) to take any action in connection
therewith, any such issuance or distribution, or any such
payment, as the case may be, shall be deferred until such
required action is taken.
11.3. Award Agreements. Each Eligible Director shall
enter into an Award Agreement with the Company in a form
specified by the Company. Each such Eligible Director shall
agree therein to the restrictions, terms and conditions set forth
in such Award Agreement and/or the Plan.
11.4. Designation of Beneficiary. Each Eligible
Director may designate a beneficiary or beneficiaries to exercise
an Option or to receive any payment which, under the terms of the
Plan and the relevant Award Agreement, may become exercisable or
payable on or after the Eligible Director's death. At any time,
and from time to time, any such designation may be changed or
cancelled by the Eligible Director without the consent of any
such beneficiary. Any such designation, change or cancellation
must be on a form provided for that purpose by the Company and
shall not be effective until received by the Company. If no
beneficiary has been designated by a deceased Eligible Director,
or if the designated beneficiaries have predeceased the Eligible
Director, the beneficiary shall be the Eligible Director's
estate. If the Eligible Director designates more than one such
beneficiary, any payments under the Plan to such beneficiaries
shall be made in equal shares unless the Eligible Director has
expressly designated otherwise, in which case the payments shall
be made in the shares designated by the Eligible Director.
11.5. Governing Law. The validity, construction,
enforcement and interpretation of this Plan, and all actions
taken hereunder, are governed by, and shall be construed in
accordance with, the laws of the State of Delaware and the
federal laws of the United States of America, excluding the laws
of those jurisdictions pertaining to the resolution of conflicts
with laws of other jurisdictions.
11.6. Titles and Headings. Any titles and headings
herein are for reference purposes only, and shall in no way
limit, define or otherwise affect the meaning, construction or
interpretation of any provisions of the Plan.
11.7. Effective Date. The Plan shall be effective
upon its adoption by the Board.
11 20/LWH/KNK.SEC/S1.95/EX-10-7A.ASC