Exhibit 10.2
CUNNINGHAM GRAPHICS INTERNATIONAL, INC.
AMENDED AND RESTATED DIRECTORS' STOCK OPTION PLAN
1. PURPOSE
The purpose of the Cunningham Graphics International, Inc. Amended and
Restated Directors' Stock Option Plan (the "Plan") is to promote the success of
Cunningham Graphics International, Inc. (the "Company") by providing a method
whereby members of the Board of Directors of the Company who are not Employees
of the Company or its Subsidiaries may be encouraged to invest in the Common
Stock of the Company in order to promote long term shareholder value, and
increase their personal interest in the continued success and progress of the
Company.
2. DEFINITIONS
Except where the context otherwise requires, as used herein:
2.1 "Board of Directors" shall mean the Board of Directors of the Company.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any Treasury regulations promulgated thereunder.
2.3 "Common Stock" shall mean the common stock, no par value, of the
Company.
2.4 "Director" shall mean a member of the Board of Directors.
2.5 "Employee" shall mean an individual who is on the active salaried
payroll of the Company or any of its Subsidiaries at the time a Nonstatutory
Stock Option is granted under the Plan.
2.6 "Fair Market Value" of the Common Stock means, for all purposes of the
Plan unless otherwise provided (i) the mean between the high and low sales
prices of the Common Stock as reported on the National Market System or Small
Cap Market of the National Association of Securities Dealers, Inc., Automated
Quotation System, or any similar system of automated dissemination of quotations
of securities prices then in common use, if so quoted, or (ii) if not quoted as
described in clause (i), the mean between the high bid and low asked quotations
for the Common Stock as reported by the National Quotation Bureau Incorporated
or such other source as the Board of Directors shall determine, or (iii) if the
Common Stock is listed or admitted for trading on any national securities
exchange, the mean between the high and low sales price, or the closing bid
price if no sale occurred, of the Common Stock on the principal securities
exchange on which the Common Stock is listed. In the event that the method for
determining the Fair Market Value of the Common Stock provided for above shall
either be not applicable or not be practical, in the opinion of the Board of
Directors, then the Fair Market Value shall be determined by such other
reasonable method as the Board of Directors shall, in its discretion, select and
apply.
2.7 "Nonstatutory Stock Option" shall mean an option to purchase Common
Stock granted under Section 5(b) of the Plan that by its terms does not qualify
as an "incentive stock option" under Section 422 of the Code.
2.8 "Optionee" shall mean a person to whom a Nonstatutory Stock Option has
been granted under the Plan.
2.9 "Outside Director" shall mean each Director who is not an Employee.
2.10 "Subsidiary" shall mean any subsidiary corporation as defined in
Section 424(f) of the Code.
3. ADMINISTRATION
(a) The Board of Directors of the Company shall administer the Plan. The
Board of Directors shall have full power and authority to grant Nonstatutory
Stock Options pursuant to the provisions of the Plan, to interpret the
provisions of the Plan and any agreements reflecting Nonstatutory Stock Options
issued under the Plan, and to supervise the administration of the Plan,
including the adoption of the rules and regulations for the administration of
the Plan. The Board of Directors may act only by a majority of its members in
office, except that the members thereof may authorize any one or more of their
number or the Secretary or any other officer of the Company to execute and
deliver documents on behalf of the Board of Directors.
(b) All decisions of the Board of Directors pursuant to the provisions of
the Plan shall be final, conclusive and binding on all persons, including the
Company, shareholders, employees and Optionees.
(c) No member of the Board of Directors shall be liable for anything done
or omitted to be done by him or any other member of the Board of Directors in
connection with the Plan, except for his own willful misconduct or as expressly
provided by statute.
4. SHARES SUBJECT TO THE PLAN
(a) The shares of Common Stock to be delivered upon exercise of
Nonstatutory Stock Options granted under the Plan may be made available from the
authorized but unissued shares of the Company or treasury shares or from shares
reacquired by the Company, including shares purchased in the open market.
(b) Subject to adjustments made pursuant to the provisions of Section 4(c),
the aggregate number of shares to be delivered upon the exercise of all
Nonstatutory Stock Options which may be granted under the Plan shall not exceed
150,000 shares of Common Stock.
(c) In the event of any change in the outstanding Common Stock of the
Company by reason of any stock split, stock dividend, split-up, split-off,
spin-off, recapitalization, merger, consolidation, rights offering,
reorganization, combination or exchange of shares, a sale by the Company of all
or part of its assets, any distribution to shareholders other than a normal cash
dividend, or other extraordinary or unusual event, the number or kind of shares
that may be issued under the Plan pursuant to Section 4(b) above, the number or
kind of shares subject to, and the Nonstatutory Stock Option price per share
under, all outstanding Nonstatutory Stock Options shall be automatically
adjusted so that the proportionate interest of the Optionee shall be maintained
as before the occurrence of such event; such adjustment in outstanding
Nonstatutory Stock Options shall be made without change in the total
Nonstatutory Stock Option exercise price applicable to the unexercised portion
of such Nonstatutory Stock Options and with a corresponding adjustment in the
Nonstatutory Stock Option exercise price per share, and such adjustment shall be
conclusive and binding for all purposes of the Plan.
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(d) If a Nonstatutory Stock Option granted under the Plan shall expire or
terminate for any reason, the shares subject to, but not delivered under, such
Nonstatutory Stock Option shall be available for other Nonstatutory Stock
Options to the same member or other members of the Board of Directors.
5. ELIGIBILITY AND EXTENT OF PARTICIPATION
(a) Only Outside Directors shall be eligible to receive Nonstatutory Stock
Options under the Plan.
(b) Each individual who is an Outside Director at the time of the closing
of the Company's initial public offering of Common Stock and, thereafter, each
individual who becomes an Outside Director shall receive a Nonstatutory Stock
Option for 15,000 shares of Common Stock. In addition, each year on the first
business day of the month following the month in which the annual meeting of
shareholders occurs, commencing in 1999, each Outside Director shall
automatically receive a Nonstatutory Stock Option for 4,000 shares of Common
Stock.
(c) The Nonstatutory Stock Option shall not be transferable by the Optionee
otherwise than by will or the laws of descent and distribution, or pursuant to a
"qualified domestic relations order" as defined by the Code and shall be
exercisable during his lifetime only by him.
(d) The Nonstatutory Stock Option shall not be exercisable:
(i) before the expiration of six months from the date it is granted
and after the expiration of ten years from the date it is granted, and may
be exercised at any time during such period;
(ii) unless payment in full is made in United States dollars by cash
or check;
(iii) in the case of a person who ceases to be an Outside Director for
any reason while holding a Nonstatutory Stock Option that has not expired
and has not been fully exercised, after the third anniversary of the date
he ceased to be an Outside Director (but in no event after the Nonstatutory
Stock Option has expired under the provisions of Section 5(d)(i) above);
and
(iv) in the case of the executors, administrators, heirs or
distributees, as the case may be, of a person who dies holding a
Nonstatutory Stock Option that has not expired and has not been fully
exercised, after the later of (A) the first anniversary of the date of
death or (B) the expiration date that would be applicable under Section
5(d)(iii) (but in no event after the Nonstatutory Stock Option has expired
under the provisions of Section 5(d)(i) above).
(e) It shall be a condition to the obligation of the Company to issue
shares of Common Stock upon exercise of a Nonstatutory Stock Option, that the
holder (or any beneficiary or person entitled to exercise such Nonstatutory
Stock Option pursuant to the Plan) pay to the Company, upon its demand, such
amount as may be requested by the Company for the purpose of satisfying any
liability to withhold federal, state, or local income or other taxes. If the
amount requested is not paid, the Company may refuse to issue shares of Common
Stock.
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6. OPTION AGREEMENTS
Each Nonstatutory Stock Option under the Plan shall be evidenced by an
option agreement which shall be executed by the Optionee and, on behalf of the
Company, by an officer of the Company and shall contain such provisions
consistent with the Plan as may be approved by the Board of Directors and may be
supplemented and amended from time to time as approved by the Board of
Directors.
7. OPTION PRICE
The price at which shares of Common Stock may be purchased upon exercise of
a particular Nonstatutory Stock Option shall be 100 percent of the Fair Market
Value of such shares at the time such Nonstatutory Stock Option is granted, but
in no event less than the par value thereof (if any). In the case of the options
granted to persons who are or who become Outside Directors at the time of the
initial public offering of the Common Stock, the exercise price shall be the
initial public offering price.
8. TRANSFERABILITY OF NONSTATUTORY STOCK OPTIONS
A Nonstatutory Stock Option granted under the Plan may not be transferred
except by will or the laws of descent and distribution. During the lifetime of
an Optionee, a Nonstatutory Stock Option may be exercised only by the Optionee,
or by a duly appointed legal guardian in the event of the legal disability of
the Optionee. Except as specifically provided in the Plan, no person shall have
any right to assign, transfer, alienate, pledge, encumber or subject to lien the
benefits to which such person is entitled thereunder, and benefits under the
Plan shall not be subject to adverse legal process of any kind. No prohibited
assignment, transfer, alienation, pledge or encumbrance of benefits or
subjection of benefits to lien or adverse legal process of any kind will be
recognized by the Board of Directors and in such case the Board of Directors may
terminate the right of such person to such benefits and direct that they be held
or applied for the benefit of such person, his spouse, children or other
dependents in such manner and in such proportion as the Board of Directors deems
advisable. If a person to whom benefits are due shall be or become incompetent,
either physically or mentally, in the judgment of the Board of Directors, the
Board of Directors shall have the right to determine to whom such benefits shall
be paid for the benefit of such person.
9. DELIVERY OF SHARES
No shares shall be delivered pursuant to any exercise of a Nonstatutory
Stock Option until the requirements of such laws and regulations as may be
deemed by the Board of Directors to be applicable thereto are satisfied.
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10. AMENDMENTS, SUSPENSION OR DISCONTINUANCE
The Board of Directors may amend, suspend, or discontinue the Plan, but
except as permitted by Section 4(c), may not, without the prior approval of the
shareholders of the Company, make any amendment which operates (a) to make any
material change in the persons eligible to receive Nonstatutory Stock Options
under the Plan, (b) to increase the total number of shares which may be
delivered under the Plan except as provided in Section 4(c), (c) to extend the
maximum option period or the period during which Nonstatutory Stock Options may
be granted under the Plan, (d) to decrease the option price, or (e) increase the
number of shares subject to an option granted to a director each year hereunder.
Except with the consent of an Optionee, no amendment, suspension or termination
of the Plan shall impair the right of any recipient of any Nonstatutory Stock
Options granted under the Plan.
11. TERM OF THE PLAN
(a) This Plan shall be effective as of the date of its approval by both the
Board of Directors and shareholders of the Company.
(b) No Nonstatutory Stock Option shall be granted under the Plan after
December 31, 2007. Unless otherwise expressly provided in the Plan or in an
applicable option agreement, any Nonstatutory Stock Option granted hereunder
may, and the authority of the Board of Directors to amend, alter, adjust,
suspend, discontinue, or terminate any such Nonstatutory Stock Option shall,
continue after December 31, 2007.
12. MISCELLANEOUS
(a) All expenses and costs in connection with the operation of the Plan
shall be borne by the Company.
(b) Proceeds from the sale of shares pursuant to Nonstatutory Stock Options
granted under this Plan shall constitute general funds of the Company.
(c) Upon any distribution of shares of Common Stock pursuant to any
provision of the Plan, the distributee may be required to represent in writing
that he is acquiring such shares for his own account for investment and not with
a view to, or for sale in connection with, the distribution of any part thereof.
The certificates for shares delivered under the Plan may include any legend
which the Board of Directors or counsel for the Company deems appropriate to
reflect any restrictions on transfers.
(d) Except as expressly provided for in the Plan, no member of the Board of
Directors or other person shall have any claim or right to be granted a
Nonstatutory Stock Option under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any member of the Board of Directors any
right to be retained in the service of the Company.
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