EXHIBIT 99.1
THE YORK GROUP, INC.
1996 EMPLOYEE STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of this 1996 Employee Stock Option Plan (the "Plan") of The
York Group, Inc., a Delaware corporation (the "Company"), is to secure for the
Company and its stockholders the benefits arising from stock ownership by
selected executive employees and other key employees of the Company or its
subsidiaries as the Stock Option Committee (the "Committee") of the Board of
Directors of the Company (the "Board") may from time to time determine. The Plan
will provide a means whereby (i) such employees may purchase shares of the
common stock, $0.01 par value per share (the "Common Stock"), of the Company
pursuant to stock options which will qualify as "incentive stock options" under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) such employees may purchase shares of the Common Stock of the Company
pursuant to "non-incentive" or "non-qualified" stock options.
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Committee which shall at all times
consist of not less than two members of the Board, and all members of the
Committee shall be "disinterested persons" within the meaning of Rule 16b-3 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "1934 Act"). All members of the Committee shall be selected by (and
serve at the pleasure of) the Board. Subject to the express provisions of the
Plan and the policies of each stock exchange on which any of the Company's stock
may at any time be traded, the Committee shall have plenary authority, in its
discretion, to recommend to the Board the individuals within the class set forth
in ARTICLE IV to whom, and the time and price per share at which, stock options
shall be granted, the number of shares to be subject to each stock option and
the other terms and provisions of their respective Agreements (as defined
herein), which need not be identical. In making such recommendations and
determinations, the Committee may take into account the nature of the services
rendered by the respective employees, their present and potential contributions
to the Company's success and such other factors as the Committee in its
discretion shall deem relevant.
Subject to the express provisions of the Plan, the Committee shall have
authority (i) to construe and interpret the Plan, (ii) to define the terms used
therein, (iii) to prescribe, amend and rescind rules and regulations relating to
the Plan, (iv) to recommend to the Board the terms and provisions, not
inconsistent with any terms of the Plan, of the respective stock options
(including, without limitation, any exercisability provisions in the event of a
change in control or termination), (v) to approve and determine the duration of
leaves of absence which may be granted to participants without constituting a
termination of their employment for the purposes of the Plan, (vi) to waive the
vesting period established in any stock option, (vii) to establish different
terms and conditions pertaining to the effect of termination, and (viii) to make
all other determinations necessary or advisable for the administration of the
Plan. All determinations and interpretations made by the Committee shall be
binding and conclusive on all participants in the Plan and their legal
representatives and beneficiaries. The Committee shall hold meetings at such
times and places as it may determine. Acts by the majority of the Committee or
acts reduced to or approved in writing by a majority of the members of the
Committee shall be the valid acts of the Committee. From time to time, the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause), and appoint new members in substitution
therefore, or fill vacancies however caused, subject to the requirements that
the members of the Committee shall be "disinterested persons" as described above
and that there always be at least two members of the Committee. No member of the
Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to the Plan or
any transaction under the Plan.
ARTICLE III
SHARES SUBJECT TO PLAN AND DURATION OF PLAN
Under the Plan, the Board may, but only upon recommendation of the
Committee, grant to eligible persons incentive stock options (as defined in the
Code) and/or non-qualified stock options, to purchase up to but not exceeding an
aggregate amount of 500,000 shares of the Company's Common Stock (subject to
adjustment as provided in ARTICLE X). No individual may be granted options to
purchase more than 250,000 shares under the Plan. Shares subject to stock
options under the Plan may be either authorized and unissued shares or issued
shares that have been acquired by the Company and held in its treasury, in the
sole discretion of the Board. When stock options have been granted under the
Plan and have lapsed unexercised or partially unexercised or have been
surrendered for cancellation by the optionee thereof, the unexercised shares
which were subject thereto may be reoptioned under the Plan. No stock options
shall be granted more than 10 years after the effective date of the Plan.
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
To the fullest extent permitted by applicable laws, all executive
employees and other key employees of the Company or of any subsidiary
corporation (as defined in Section 424(f) of the Code) shall be eligible for
selection to fully participate in the Plan; provided, however, that no member of
the Committee shall be entitled to receive a stock option under this Plan while
serving as a member of the Committee. Directors of the Company who are not
regular employees of the Company are not eligible to participate in the Plan. An
individual who has been granted an option may, if such individual is otherwise
eligible, be granted an additional option or options if the Board or the
Committee shall so determine, subject to the other provisions of the Plan.
ARTICLE V
TERMS AND CONDITIONS OF STOCK OPTIONS
Each stock option granted under the Plan shall be evidenced by a stock
option agreement (the "Agreement"), the form of which shall have been approved
by the Committee. The Agreement shall be executed by the Company and the
optionee and shall set forth the terms and conditions of the stock option, which
terms and conditions shall include, but not be limited to the following:
(a) OPTION PRICE. The option price shall be determined by the Committee,
but shall not in any event be less than the par value of the Common Stock.
(b) TERM OF STOCK OPTION. The term of the stock option shall be selected
by the Committee, but in no event shall such term exceed ten years from the date
such stock option is granted. Each stock option shall be subject to earlier
termination as hereinafter provided.
(c) TRANSFERABILITY. Except as set forth below, the stock options
granted hereunder shall not be transferable other than by will or operation of
the laws of descent and distribution or pursuant to a qualified domestic
relations order, as defined in the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder. During the
lifetime of the optionee, stock options granted hereunder shall be exercisable
only by the optionee, the optionee's guardian or legal representative. In
addition to non-transferable stock options, the Committee may grant stock
options that are transferable, without payment of consideration, to immediate
family members of the optionee or to trusts or partnerships for such family
members; the Committee may also amend outstanding options to provide for such
transferability.
(d) VESTING. The Committee shall have complete discretion in determining
when stock options granted
hereunder are to vest. Such determination for each stock option is to be made
prior to or at the time that stock option is granted and shall be set forth in
each Agreement. On a case-by-case basis, the Committee may, in its sole
discretion, accelerate the vesting of any stock option. The sale of shares of
Common Stock issued upon the exercise of a stock option by any person subject to
Section 16 of the 1934 Act shall not be allowed until at least six months after
the grant of the stock option.
(e) TERMINATION OF EMPLOYMENT. In the event of an optionee's termination
of employment with the Company for any reason other than death, all stock
options shall terminate to the extent they were not exercisable at the date of
the optionee's termination, but to the extent they were then exercisable by the
optionee, the optionee shall be entitled to exercise such options for a period
of 30 days from the date of the optionee's termination. Upon the termination of
an optionee's employment by reason of death, the optionee's stock options shall
terminate to the extent they were not exercisable at the date of the optionee's
death, but to the extent they were then exercisable by the optionee, the
optionee's estate or the beneficiaries thereof shall be entitled to exercise
such options for a period of one year from the date of the optionee's death but
not thereafter. Notwithstanding the foregoing termination provisions, the
Committee may, in its sole discretion, establish different terms and conditions
pertaining to the effect of termination, to the extent permitted by applicable
federal and state law. Notwithstanding any other provisions of this subparagraph
(e), no stock option shall be exercised after the expiration of ten years from
the date such stock option is granted.
(f) OTHER CONDITIONS. At its sole discretion, the Committee may impose
other conditions upon the stock options granted hereunder, so long as those
conditions do not conflict with any other provisions of the Plan. Such
conditions may include, by way of illustration, but not by way of limitation,
percentage limitations upon the exercisability of stock options granted
hereunder.
ARTICLE VI
INCENTIVE STOCK OPTIONS
The Committee, in recommending and granting stock options hereunder,
shall have the discretion to determine that certain stock options shall be
incentive stock options, as defined in Section 422 of the Code, while other
stock options shall be non-qualified stock options. Neither the members of the
Committee, the members of the Board nor the Company shall be under any
obligation or incur any liability to any person by reason of the determination
by the Committee or the Board whether a stock option granted under the Plan
shall be an incentive stock option or a non-qualified stock option. The
provisions of this ARTICLE VI shall be applicable to all incentive stock options
at any time granted or outstanding under the Plan.
All incentive stock options granted or outstanding under the Plan shall
be granted and held subject to and in compliance with terms and conditions
previously set forth in ARTICLES II, III, IV AND V hereof and, in addition,
subject to and in compliance with the following further terms and conditions:
(a) The per share option price of all incentive stock options shall not
be less than 100% of the Fair Market Value (as defined below) of one share of
the Company's Common Stock at the time the stock option is granted
(notwithstanding any provision of ARTICLE V hereof to the contrary);
(b) No incentive stock option shall be granted to any person who, at the
time of the grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any subsidiary
corporation of the Company; provided, however, that this ownership limitation
will be waived if at the time the option is granted the per share option price
is at least 110% of the Fair Market Value of one share of the Company's Common
Stock and such stock option by its terms is not exercisable after the expiration
of five years from the date such option is granted;
(c) An incentive stock option shall not be transferable other than by
will or the laws of descent and
distribution, and shall be exercisable during the lifetime of the optionee, only
by the optionee; and
(d) The aggregate Fair Market Value of all shares of Common Stock
(determined at the time of the grant of the stock option) with respect to which
incentive stock options are exercisable for the first time by any optionee
during any one calendar year shall not exceed $100,000.
ARTICLE VII
EXERCISE OF STOCK OPTIONS
Each stock option granted hereunder may be exercised in such
installments during the period prior to its expiration date as the Committee
shall determine; provided that, unless otherwise determined by the Committee, if
the optionee shall not in any given installment period purchase all of the
shares which the optionee is entitled to purchase in such installment period,
then the optionee's right to purchase any shares not purchased in such
installment period shall continue until the expiration date or sooner
termination of the optionee's stock option.
The purchase price of the shares of Common Stock acquired upon exercise
of a stock option shall be paid in full at the time of exercise (a) in cash,
check or by certified or cashier's check payable to the order of the Company,
(b) upon receipt of all required regulatory approvals, if any, by delivery of
shares of Common Stock of the Company already owned by, and in the possession
of, the stock option holder having a Fair Market Value equal to such stock
option purchase price, or (c) in any other manner that the Committee may
approve, including, without limitation, any arrangement the Committee may
establish to enable individuals to simultaneously exercise stock options and
sell the shares of Common Stock acquired thereby and apply the proceeds to the
payment of the stock option purchase price therefor, or any combination thereof.
Shares of Common Stock used to satisfy the exercise price of a stock option
shall be valued at their Fair Market Value determined as of the close of
business on the date such stock option is exercised, or if such date is not a
business day, on the business day immediately preceding the date of exercise.
Deliveries of cash, shares and notices to the Company shall be directed to the
Secretary of the Company.
No stock option granted hereunder shall be exercisable unless the Plan
and all shares issuable on the exercise thereof have been registered under the
Securities Act of 1933, as amended (the "1933 Act"), and all other applicable
securities laws, and there is available for delivery a prospectus meeting the
requirements of Section 10 of the 1933 Act, or the Company shall have first
received assurance that registration under the 1933 Act and all other applicable
securities laws is not required in connection with such issuance. At the time of
exercise, if the shares with respect to which the stock option is being
exercised have not been registered under the 1933 Act and all other applicable
securities laws, the Company may require the optionee to provide the Company
whatever written assurance counsel for the Company may require that the shares
are being acquired for investment and not with a view to the distribution
thereof, and that the shares will not be disposed of without the written opinion
of counsel acceptable to the Company that registration under the 1933 Act and
all other applicable securities laws is not required. Share certificates issued
to the optionee upon exercise of the stock option shall bear a legend to the
foregoing effect to the extent counsel for the Company deems it advisable.
ARTICLE VIII
FAIR MARKET VALUE OF COMMON STOCK
For purposes of the Plan, the term "Fair Market Value" on any date shall
mean (i) if the Common Stock is not listed or admitted to trade on a national
securities exchange and if bid and asked prices for the Common Stock are not
furnished through NASDAQ or a similar organization as described below, the value
established by the Committee, in its sole discretion, for purposes of the Plan;
(ii) if the Common Stock is listed or admitted to trade on a national securities
exchange or national market system, the closing price of the Common Stock, as
published in THE WALL STREET JOURNAL, so listed or admitted to trade on such
date or, if there is no trading of the Common Stock on such date, then the
closing price of the Common Stock on the next preceding date on which there was
trading in such shares; or (iii) if the Common Stock is not listed or admitted
to trade on a national securities exchange or national market system,
the mean between the bid and asked price for the Common Stock on such date, as
furnished by the National Association of Securities Dealers, Inc. through NASDAQ
or a similar organization if NASDAQ is no longer reporting such information. In
addition to the above rules, Fair Market Value shall be determined without
regard to any restriction other than a restriction which, by its terms, will
never lapse.
ARTICLE IX
WITHHOLDING TAX
Upon (i) the disposition by an employee or other person of shares of
Common Stock acquired pursuant to the exercise of an incentive stock option
granted pursuant to the Plan within two years of the granting of the incentive
stock option or within one year after exercise of the incentive stock option, or
(ii) the exercise of "non-incentive" or "non-qualified" options, the Company
shall have the right to require such employee or such other person to pay the
Company the amount of any taxes (including but not limited to any federal, state
and local income taxes, old-age, survivors, and disability insurance premiums
and taxes, medicare taxes, FICA taxes and any other withholding taxes) which the
Company may be required to withhold with respect to such shares.
ARTICLE X
ADJUSTMENTS
(a) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the Company's directors and stockholders, the number of shares
provided for in each outstanding stock option and the price per share thereof,
and the number of shares provided for in the Plan, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of the
Company's Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend (but only on the Common Stock), a stock
split, a reverse stock split, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company, and shall
also be proportionately adjusted in the event of a spin-off, spin-out, or other
distribution of assets to stockholders of the Company, to the extent necessary
to prevent dilution of the interests of grantees pursuant to the Plan or of the
other stockholders of the Company, as applicable. If the Company shall engage in
a merger, consolidation, reorganization or recapitalization, each outstanding
stock option (or if such transaction involves less than all of the shares of the
Company's Common Stock, then a number of stock options proportionate to the
number of such involved shares), shall become exercisable for the securities and
other consideration to which a holder of the number of shares of the Company's
Common Stock subject to each such stock option would have been entitled to
receive in any such merger, consolidation, reorganization or recapitalization.
(b) SIGNIFICANT EVENT. In the event of a potential merger or
consolidation involving the Company regardless of whether the Company is the
surviving entity of such merger or consolidation, a potential liquidation or
dissolution of the Company, a potential sale or other disposition by the Company
of all or substantially all of its assets, a potential sale or other disposition
by the stockholders of the Company of all or substantially all of the
outstanding Common Stock to one purchaser (any such merger, consolidation,
liquidation, dissolution or sale being referred to herein as a "Significant
Event"), then the Company, upon obtaining approval of the Board, may (but shall
not be required to) waive any and all restrictions on the vesting of optionees'
rights under stock options granted pursuant to the Plan by providing written
notice thereof to the optionees. If the Company, upon obtaining approval of the
Board, elects to waive any such vesting restrictions, the optionees' rights
under their respective stock options shall vest in accordance with the terms of
such waiver, subject to the actual occurrence of the Significant Event. In
consideration for any such waiver of vesting restrictions by the Company, the
Company shall have the option (the "Termination Option") to require all
optionees to exercise or have terminated their vested (determined after taking
into account any waiver of vesting restrictions) but unexercised stock options
upon the occurrence of the Significant Event, by providing written notice to all
optionees at least 15 days before the occurrence of the Significant Event. Any
exercise by an optionee in these circumstances may be conditioned upon the
occurrence of the Significant Event. If the Company exercises the Termination
Option under this paragraph (b), upon the actual occurrence of the Significant
Event, each stock option that is vested (determined after taking into account
any waiver of vesting restrictions) but unexercised
as of such date shall terminate. If the potential Significant Event does not in
fact occur for any reason, then any waiver by the Company of the vesting
restrictions and any exercise by the Company of the Termination Option under
this paragraph (b) shall have no effect, and the optionee's rights will be
vested only to the extent that they would be vested if no restrictions on
vesting had been waived by the Company herein.
(c) CHANGE OF PAR VALUE. In the event of a change in the Company's
Common Stock which is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any such change shall be deemed to be
Common Stock within the meaning of the Plan.
(d) MISCELLANEOUS. The adjustments provided for in this Article shall be
made by the Committee whose determination in that respect shall be final,
binding and conclusive. Any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect and no adjustment by reason thereof shall be made with respect to the
number or price of shares of the Company's Common Stock subject to any stock
option. The grant of a stock option pursuant to the Plan shall not affect in any
way the right or power of the Company to, among other things, make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve or liquidate or sell or
transfer all or any part of its business or assets.
ARTICLE XI
PRIVILEGES OF STOCK OWNERSHIP
No person entitled to exercise any stock option granted under the Plan
shall have any of the rights or privileges of a stockholder of the Company in
respect of any shares of stock issuable upon exercise of such stock option until
certificates representing such shares shall have been issued and delivered. Upon
exercise of a stock option, the person exercising the stock option shall be
entitled to one or more stock certificates evidencing the shares acquired upon
such exercise.
ARTICLE XII
CONTINUATION OF EMPLOYMENT
Nothing contained in the Plan (or in any stock option granted pursuant
to the Plan) shall confer upon any employee any right to continue in the employ
of the Company or any subsidiary corporation or constitute any contract or
agreement of employment or interfere in any way with the right of the Company or
any subsidiary corporation to reduce any person's compensation from the rate in
existence at the time of the granting of a stock option or to terminate such
person's employment. Nothing contained herein or in any Agreement shall affect
any other contractual rights of an employee.
ARTICLE XIII
AMENDMENT OR DISCONTINUANCE
The Board or the Committee may at any time and from time to time amend,
rescind, suspend or terminate the Plan, as it shall deem advisable, provided
that the Plan may not be amended in any manner which would cause the Plan to no
longer comply with the provisions of the Code applicable to incentive stock
options, as such provisions shall read as of the time of amendment. In addition
to Board approval of any amendment to the Plan, if the provisions of the Code
applicable to incentive stock options, as such provisions shall read as of the
time of amendment, requires stockholder approval of such amendment, then such
amendment shall be approved (a) by the holders of a majority of the voting stock
of the Company (voting as a single class) present, or represented, and entitled
to vote at a meeting duly held in accordance with the applicable laws of the
state or other jurisdiction in which the Company is incorporated or (b) by
written consent of the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote
thereon were present and voted.
No change may be made in, and no amendment, rescission, suspension or
termination of the Plan shall have an effect on, stock options previously
granted under the Plan which may impair or alter the rights or obligations of
the holders thereof, except that any change may be made in stock options
previously granted with the consent of the optionees.
ARTICLE XIV
EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL
The Plan shall be effective as of January 24, 1996, the date on which it
received the approval of a majority of the disinterested members of the Board.
However, the Plan and all stock options granted under the Plan shall be void if
the Plan is not approved by the stockholders within twelve (12) months from the
date the Plan is approved by the Board. The Plan shall be deemed approved by the
holders of the outstanding voting stock of the Company (a) by the affirmative
votes of the holders of a majority of the outstanding voting stock of the
Company present, or represented, and entitled to vote at a meeting duly held in
accordance with the applicable laws of the state or other jurisdiction in which
the Company is incorporated or (b) by the written consent of the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Any options granted under the
Plan prior to obtaining such stockholder approval shall be granted under the
conditions that the options so granted (1) shall not be exercisable prior to
such stockholder approval, and (2) shall become null and void if such
stockholder approval is not obtained.