Exhibit 10.10
FM PROPERTIES INC.
1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
PURPOSE OF THE PLAN
The purpose of the 1996 Stock Option Plan for
Non-Employee Directors (the "Plan") is to align more closely the
interests of the non-employee directors of FM Properties Inc.
(the "Company") with that of the Company's stockholders by
providing for the automatic grant to such directors of stock
options ("Options") to purchase Shares (as hereinafter defined),
in accordance with the terms of the Plan.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, the following terms shall
have the meanings indicated:
Board: The Board of Directors of the Company.
Change in Control : A Change in Control shall be deemed
to have occurred if either (a) any person, or any two or more
persons acting as a group, and all affiliates of such person or
persons, shall own beneficially more than 20% of the Common Stock
outstanding (exclusive of shares held in the Company's treasury
or by the Company's Subsidiaries) pursuant to a tender offer,
exchange offer or series of purchases or other acquisitions, or
any combination of those transactions, or (b) there shall be a
change in the composition of the Board at any time within two
years after any tender offer, exchange offer, merger,
consolidation, sale of assets or contested election, or any
combination of those transactions (a "Transaction"), so that (i)
the persons who were directors of the Company immediately before
the first such Transaction cease to constitute a majority of the
Board of Directors of the corporation that shall thereafter be in
control of the companies that were parties to or otherwise
involved in such Transaction, or (ii) the number of persons who
shall thereafter be directors of such corporation shall be fewer
than two-thirds of the number of directors of the Company
immediately prior to such first Transaction. A Change in Control
shall be deemed to take place upon the first to occur of the
events specified in the foregoing clauses (a) and (b).
Code: The Internal Revenue Code of 1986, as amended from
time to time.
Committee: A committee of the Board designated by the
Board to administer the Plan and composed of not fewer than two
directors, each of whom, to the extent necessary to comply with
Rule 16b-3 only, is a "non-employee director" within the meaning
of Rule 16b-3 and, to the extent necessary to comply with Section
162(m) only, is an "outside director" under Section 162(m).
Until otherwise determined by the Board, the Committee shall be
the Corporate Personnel Committee of the Board.
Election Period : The period beginning on the third
business day following a date on which the Company releases for
publication its quarterly or annual summary statements of sales
and earnings, and ending on the twelfth business day following
such date.
Eligible Director : A director of the Company who is not
an officer or an employee of the Company or a Subsidiary or an
officer or an employee of an entity with which the Company has
contracted to receive management services.
Exchange Act : The Securities Exchange Act of 1934, as
amended from time to time.
Fair Market Value: The average of the per Share high and
low quoted sale prices on the date in question (or, if there is
no reported sale on such date, on the last preceding date on
which any reported sale occurred) on the principal exchange or
market on which such Shares are quoted.
Option Cancellation Gain: With respect to the
cancellation of an Option pursuant to Section 3 of Article IV
hereof, the excess of the Fair Market Value as of the Option
Cancellation Date (as that term is defined in Section 3 of
Article IV hereof) of all the outstanding Shares covered by such
Option, whether or not then exercisable, over the purchase price
of such Shares under such Option.
Rule 16b-3: Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in
effect from time to time.
SEC: The Securities and Exchange Commission, including
the staff thereof, or any successor thereto.
Section 162(m): Section 162(m) of the Code and all
regulations promulgated thereunder as in effect from time to
time.
Shares: Shares of common stock, par value $0.01 per
share, of the Company (including any attached Preferred Stock
Purchase Rights).
Subsidiary: Any corporation of which stock representing
at least 50% of the ordinary voting power is owned, directly or
indirectly, by the Company; and any other entity of which equity
securities or interests representing at least 50% of the ordinary
voting power or 50% of the total value of all classes of equity
securities or interests of such entity are owned, directly or
indirectly, by the Company.
ARTICLE III
ADMINISTRATION OF THE PLAN
This Plan shall be administered by the Board. The Board
will interpret this Plan and may from time to time adopt such
rules and regulations for carrying out the terms and provisions
of this Plan as it may deem best; however, the Board shall have
no discretion with respect to the selection of directors who
receive Options, the timing of the grant of Options, the number
of Shares subject to any Options or the purchase price thereof.
Notwithstanding the foregoing, the Committee shall have the
authority to make all determinations with respect to the
transferability of Options in accordance with Article VIII
hereof. All determinations by the Board or the Committee shall
be made by the affirmative vote of a majority of its respective
members, but any determination reduced to writing and signed by a
majority of its respective members shall be fully as effective as
if it had been made by a majority vote at a meeting duly called
and held. Subject to any applicable provisions of the Company's
By-Laws or of this Plan, all determinations by the Board and the
Committee pursuant to the provisions of this Plan, and all
related orders or resolutions of the Board and the Committee,
shall be final, conclusive and binding on all persons, including
the Company and its stockholders, employees, directors and
optionees. In the event of any conflict or inconsistency between
determinations, orders, resolutions, or other actions of the
Committee and the Board taken in connection with this Plan, the
action of the Board shall control.
ARTICLE IV
STOCK SUBJECT TO THE PLAN
SECTION 1. The Shares to be issued or delivered upon
exercise of Options shall be made available, at the discretion of
the Board, either from the authorized but unissued Shares of the
Company or from Shares reacquired by the Company, including
Shares purchased by the Company in the open market or otherwise
obtained; provided, however, that the Company, at the discretion
of the Board, may, upon exercise of Options granted under this
Plan, cause a Subsidiary to deliver Shares held by such
Subsidiary.
SECTION 2. Subject to the provisions of Section 3 of
this Article IV, the aggregate number of Shares that may be
purchased pursuant to Options shall not exceed 250,000.
SECTION 3. In the event of the payment of any dividends
payable in Shares, or in the event of any subdivision or
combination of the Shares, the number of Shares that may be
purchased under this Plan, and the number of Shares subject to
each Option granted in accordance with Section 2 of Article VII,
shall be increased or decreased proportionately, as the case may
be, and the number of Shares deliverable upon the exercise
thereafter of any Option theretofore granted (whether or not then
exercisable) shall be increased or decreased proportionately, as
the case may be, without change in the aggregate purchase price.
In the event the Company is merged or consolidated into or with
another corporation in a transaction in which the Company is not
the survivor, or in the event that substantially all of the
Company's assets are sold to another entity not affiliated with
the Company, any holder of an Option, whether or not then
exercisable, shall be entitled to receive (unless the Company
shall take such alternative action as may be necessary to
preserve the economic benefit of the Option for the optionee) on
the effective date of any such transaction (the "Option
Cancellation Date"), in cancellation of such Option, an amount in
cash equal to the Option Cancellation Gain relating thereto,
determined as of the Option Cancellation Date.
ARTICLE V
PURCHASE PRICE OF OPTIONED SHARES
The purchase price per Share under each Option shall be
100% of the Fair Market Value of a Share at the time such Option
is granted, but in no case shall such price be less than the par
value of the Shares subject to such Option.
ARTICLE VI
ELIGIBILITY OF RECIPIENTS
Options will be granted only to individuals who are
Eligible Directors at the time of such grant.
ARTICLE VII
GRANT OF OPTIONS
SECTION 1. Each Option shall constitute a nonqualified
stock option that is not intended to qualify under Section 422 of
the Code.
SECTION 2. On September 1, 1996, each Eligible Director
as of such date shall be granted an Option to purchase 20,000
Shares, and, on September 1 of each subsequent year, each
Eligible Director as of each such date shall be granted an Option
to purchase 5,000 Shares. Each Option shall become exercisable
in four equal annual installments on each of the first four
anniversaries of the date of grant and may be exercised by the
holder thereof with respect to all or any part of the Shares
comprising each installment as such holder may elect at any time
after such installment becomes exercisable but no later than the
termination date of such Option; provided that each Option shall
become exercisable in full upon a Change in Control.
ARTICLE VIII
TRANSFERABILITY OF OPTIONS
No Options granted hereunder may be transferred, pledged,
assigned or otherwise encumbered by an optionee except:
(a) by will;
(b) by the laws of descent and distribution; or
(c) if permitted by the Committee and so provided in the
Option or an amendment thereto, (i) pursuant to a domestic
relations order, as defined in the Code, (ii) to Immediate
Family Members, (iii) to a partnership in which Immediate
Family Members, or entities in which Immediate Family Members
are the owners, members or beneficiaries, as appropriate, are
the partners, (iv) to a limited liability company in which
Immediate Family Members, or entities in which Immediate
Family Members are the owners, members or beneficiaries, as
appropriate, are the members, or (v) to a trust for the
benefit of Immediate Family Members; provided, however, that
no more than a de minimus beneficial interest in a
partnership, limited liability company or trust described in
(iii), (iv) or (v) above may be owned by a person who is not
an Immediate Family Member or by an entity that is not
beneficially owned solely by Immediate Family Members.
"Immediate Family Members" shall be defined as the spouse and
natural or adopted children or grandchildren of the optionee
and their spouses.
Any attempted assignment, transfer, pledge, hypothecation or
other disposition of Options, or levy of attachment or similar
process upon Options not specifically permitted herein, shall be
null and void and without effect.
ARTICLE IX
EXERCISE OF OPTIONS
SECTION 1. Each Option shall terminate 10 years after
the date on which it was granted.
SECTION 2. Except in cases provided for in Article X
hereof, each Option may be exercised by the holder thereof only
while the optionee to whom such Option was granted is an Eligible
Director.
SECTION 3. Each Option shall provide that the Option or
any portion thereof may be exercised only during an Election
Period. Each Option shall provide, however, that in the event of
a Change in Control, the Election Period exercise requirement is
waived.
SECTION 4. A person electing to exercise an Option or
any portion thereof then exercisable shall give written notice to
the Company of such election and of the number of Shares such
person has elected to purchase, and shall at the time of purchase
tender the full purchase price of such Shares, which tender shall
be made in cash or cash equivalent (which may be such person's
personal check) or in Shares already owned by such person (which
Shares shall be valued for such purpose on the basis of their
Fair Market Value on the date of exercise), or in any combination
thereof. The Company shall have no obligation to deliver Shares
pursuant to the exercise of any Option, in whole or in part,
until such payment in full of the purchase price of such Shares
is received by the Company. No optionee, or legal
representative, legatee, distributee, or assignee of such
optionee shall be or be deemed to be a holder of any Shares
subject to such Option or entitled to any rights of a stockholder
of the Company in respect of any Shares covered by such Option
distributable in connection therewith until such Shares have been
paid for in full and certificates for such Shares have been
issued or delivered by the Company.
SECTION 5. Each Option shall be subject to the
requirement that if at any time the Board shall be advised by
counsel that the listing, registration or qualification of the
Shares subject to such Option upon any securities exchange or
under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Option
or the issue or purchase of Shares thereunder, such Option may
not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained free from any conditions not reasonably
acceptable to such counsel for the Board.
SECTION 6. The Company may establish appropriate
procedures to provide for payment or withholding of such income
or other taxes as may be required by law to be paid or withheld
in connection with the exercise of Options, and to ensure that
the Company receives prompt advice concerning the occurrence of
any event that may create, or affect the timing or amount of, any
obligation to pay or withhold any such taxes or that may make
available to the Company any tax deduction resulting from the
occurrence of such event.
ARTICLE X
TERMINATION OF SERVICE
AS AN ELIGIBLE DIRECTOR
SECTION 1. If and when an optionee shall cease to be an
Eligible Director for any reason other than death or retirement
from the Board, all of the Options granted to such optionee
shall be terminated except that any Option, to the extent then
exercisable, may be exercised by the holder thereof within three
months after such optionee ceases to be an Eligible Director, but
not later than the termination date of the Option.
SECTION 2. If and when an optionee shall cease to be an
Eligible Director by reason of the optionee's retirement from the
Board, all of the Options granted to such optionee shall be
terminated except that any Option, to the extent then exercisable
or exercisable within one year thereafter, may be exercised by
the holder thereof within three years after such retirement, but
not later than the termination date of the Option.
SECTION 3. Should an optionee die while serving as an
Eligible Director, all the Options granted to such optionee
shall be terminated, except that any Option to the extent
exercisable by the holder thereof at the time of such death,
together with the unmatured installment (if any) of such Option
which at that time is next scheduled to become exercisable, may
be exercised within one year after the date of such death, but
not later than the termination date of the Option, by the holder
thereof, the optionee's estate, or the person designated in the
optionee's last will and testament, as appropriate.
SECTION 4. Should an optionee die after ceasing to be an
Eligible Director, all of the Options granted to such optionee
shall be terminated, except that any Option, to the extent
exercisable by the holder thereof at the time of such death, may
be exercised within one year after the date of such death, but
not later than the termination date of the Option, by the holder
thereof, the optionee's estate, or the person designated in the
optionee's last will and testament, as appropriate.
ARTICLE XI
AMENDMENTS TO PLAN AND OPTIONS
The Board may at any time terminate or from time to time
amend, modify or suspend this Plan; provided, however, that no
such amendment or modification without the approval of the
stockholders shall:
(a) except pursuant to Section 3 of Article IV, increase
the maximum number (determined as provided in this Plan) of
Shares that may be purchased pursuant to Options, either
individually on an annual basis or in the aggregate; or
(b) permit the granting of any Option at a purchase
price other than 100% of the Fair Market Value of the Shares
at the time such Option is granted, subject to adjustment
pursuant to Section 3 of Article IV.