Exhibit 4.1
THE STANDARD REGISTER COMPANY
1995
Stock Option Plan
ARTICLE 1
OBJECTIVES
The Standard Register Company, an Ohio corporation, has established this
Stock Option Plan effective October 19, 1995 as an incentive to the attraction
and retention of dedicated and loyal employees of outstanding ability, to
stimulate the efforts of such persons in meeting Standard Register's objectives
and to encourage ownership of Standard Register Common Stock by employees.
ARTICLE 2
DEFINITIONS
For purposes of the Plan the following terms shall have the definition
which is attributed to them, unless another definition is clearly indicated by a
particular usage and context.
A. "Code" means the Internal Revenue Code of 1986.
B. The "Company" means The Standard Register Company and any
subsidiary of The Standard Register Company, as the term
"subsidiary" is defined in Section 424(f) of the Code.
C. "Date of Exercise" means the date on which the Company has
received a written notice of exercise of an Option, in such
form as is acceptable to the Committee, and full payment of
the purchase price.
D. "Date of Grant" means the date on which the Committee makes
an award of an Option.
E. "Eligible Employee" means any individual who performs
services for the Company and is treated as an employee for
federal income tax purposes.
F. "Fair Market Value" means the last sale price reported on
any stock exchange or over-the-counter trading system on
which Shares are trading on the last trading day prior to a
specified date or, if no last sales price is reported, the
average of the closing bid and asked prices for a Share on a
specified date. If no sale has been made on the specified
date, then prices on the last preceding day on which any
such sale shall have been made shall be used in determining
Fair Market Value under either method prescribed in the
previous sentence.
G. "Incentive Stock Option" shall have the same meaning as
given to that term by Section 422 of the Code.
H. "Nonqualified Stock Option" means any Option granted under
the Plan which is not considered an Incentive Stock Option.
I. "Option" means the right to purchase a stated number of
Shares at a specified price. The option may be granted to an
Eligible Employee subject to the terms of this Plan, and
such other conditions and restrictions as the Committee
deems appropriate. Each Option shall be designated by the
Committee to be either an Incentive Stock Option or a
Nonqualified Stock Option.
J. "Option Price" means the purchase price per Share subject to
an Option and shall be fixed by the Committee, but shall not
be less than 100% of the Fair Market Value of a Share on the
Date of Grant in the case of an Incentive Stock Option.
K. "Permanent and Total Disability" shall mean any medically
determinable physical or mental impairment rendering an
individual unable to engage in any substantial gainful
activity, which disability can be expected to result in
death or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
L. "Plan" means this 1995 Stock Option Plan as it may be
amended from time to time.
M. "Share" means one share of the Common Stock, $1.00 par
value, of the Company.
ARTICLE 3
ADMINISTRATION
3.1 The Plan shall be administered by a committee (the "Committee")
designated by the Board of Directors of the Company. The Committee shall be
comprised solely of three or more directors each of whom shall be (i) a
"disinterested person" as defined under Rule 16b-3 of the Securities and
Exchange Act of 1934 (the "Act") and (ii) an "outside director" to the extent
required by Section 162(m) of the Internal Revenue Code ("Section 162(m)").
Actions shall be taken by a majority of the Committee.
3.2 Except as specifically limited by the provisions of the Plan, the
Committee in its discretion shall have the authority to:
A. Determine which Eligible Employees shall be granted Options;
B. Determine the number of Shares which may be subject to each
Option;
C. Determine the Option Price;
D. Determine the term of each Option;
E. Determine whether each Option is an Incentive Stock Option
or Nonqualified Stock Option;
F. Interpret the provisions of the Plan and decide all
questions of fact arising in its application; and
G. Prescribe such rules and procedures for Plan administration
as from time to time it may deem advisable.
3.3 Any action, decision, interpretation or determination by the Committee
with respect to the application or administration of this Plan shall be final
and binding upon all persons, and need not be uniform with respect to its
determination of recipients, amount, timing, form, terms or provisions of
Options.
3.4 No member of the Committee shall be liable for any action or
determination taken or made in good faith with respect to the Plan or any Option
granted hereunder, and to the extent permitted by law, all members shall be
indemnified by the Company for any liability and expenses which may occur
through any claim or cause of action.
ARTICLE 4
SHARES SUBJECT TO PLAN
4.1 The Shares that may be made subject to Options granted under the Plan
shall not exceed 2,000,000 Shares in the aggregate. Except as provided in
Section 4.2, upon lapse or termination of any Option for any reason without
being completely exercised, the Shares which were subject to such Option may
again be subject to other Options.
4.2 The maximum number of Shares with respect to which options may be
granted to any employee during each fiscal year of the Company is 100,000. If an
Option is cancelled by mutual agreement, it continues to be counted against the
maximum number of Shares for which Options may be granted to an employee. If an
Option is repriced by mutual agreement, the transaction is treated as a
cancellation of the Option and a grant of a new Option.
ARTICLE 5
GRANTING OF OPTIONS
Subject to the terms and conditions of the Plan, the Committee may, from
time to time prior to October 18, 2005, grant Options to Eligible Employees on
such terms and conditions as the Committee may determine. More than one Option
may be granted to the same Eligible Employee.
ARTICLE 6
TERMS OF OPTIONS
6.1 Subject to specific provisions relating to Incentive Stock Options set
forth in Article 9, each Option shall be for a term of from one to ten years
from the Date of Grant and may not be exercised during the first twelve months
of the term of said Option. The Committee shall establish exercise schedules and
impose other conditions upon exercise for particular Options or groups of
Options at the time of grant. Rights of exercise shall be cumulative and shall
be exercisable in whole or in part. The Committee in its sole discretion may
permit particular holders of Options to exercise an Option to a greater extent
than provided herein.
6.2 The holder of an Option must remain continuously in the service of the
Company as an employee for a period of at least twelve months. Nothing contained
in this Plan or in any Option granted pursuant to it shall confer upon any
employee any right to continue in the employ of the Company or to interfere in
any way with the right of the Company to terminate employment at any time. So
long as a holder of an Option shall continue to be an employee of the Company,
the Option shall not be affected by any change of the employee's duties or
position.
ARTICLE 7
EXERCISE OF OPTIONS
Any person entitled to exercise an Option in whole or in part, may do so by
delivering a written notice of exercise to the Company, attention Corporate
Secretary, at its principal office. The written notice shall specify the number
of Shares for which an Option is being exercised and the grant date of the
option being exercised and shall be accompanied by full payment of the Option
Price for the Shares being purchased.
ARTICLE 8
PAYMENT OF OPTION PRICE
8.1 Payment of the Option Price may be made in cash, by the tender of
Shares, or both. Shares tendered shall be valued at their Fair Market Value on
the date of tender.
8.2 Payment through tender of Shares may be made by instruction from the
Optionee to the Company to withhold from the Shares issuable upon exercise that
number which have a Fair Market Value equal to the exercise price for the Option
or portion thereof being exercised.
ARTICLE 9
INCENTIVE STOCK OPTIONS AND NONQUALIFIED STOCK OPTIONS
9.1 The Committee in its discretion may designate whether an Option is to
be considered an Incentive Stock Option or a Nonqualified Stock Option. The
Committee may grant both an Incentive Stock Option and a Nonqualified Stock
Option to the same individual. However, where both an Incentive Stock Option and
a Nonqualified Stock Option are awarded at one time, such Options shall be
deemed to have been awarded in separate grants, shall be clearly identified, and
in no event will the exercise of one such Option affect the right to exercise
the other such Option.
9.2 Any option designated by the Committee as an Incentive Stock Option
will be subject to the general provisions applicable to all Options granted
under the Plan. In addition, the Incentive Stock Option shall be subject to the
following specific provisions:
A. At the time the Incentive Stock Option is granted, if the
Eligible Employee owns, directly or indirectly, stock
representing more than 10% of (i) the total combined voting power
of all classes of stock of the Company, or (ii) a corporation
that owns 50% or more of the total combined voting power of all
classes of stock of the Company, then:
(i) The Option Price must equal at least 110% of the Fair Market
Value on the Date of Grant; and
(ii) The term of the Option shall not be greater than five years
from the Date of Grant.
B. The aggregate Fair Market Value of Shares (deter mined at the
Date of Grant) with respect to which Incentive Stock Options are
exercisable by an Eligible Employee for the first time during any
calendar year under this Plan or any other plan maintained by the
Company shall not exceed $100,000.
9.3 If any Option is not granted, exercised, or held pursuant to the
provisions noted immediately above, it will be considered to be a Nonqualified
Stock Option to the extent that the grant is in conflict with these
restrictions.
ARTICLE 10
TRANSFERABILITY OF OPTION
During the lifetime of an Eligible Employee to whom an Option has been
granted, such Option is not transferable voluntarily or by operation of law and
may be exercised only by such individual. Upon the death of an Eligible Employee
to whom an Option has been granted, the Option may be transferred to the
beneficiaries or heirs of the holder of the Option by will or by the laws of
descent and distribution.
ARTICLE 11
TERMINATION OF OPTIONS
11.1 An Option will terminate as follows:
A. Upon exercise or expiration by its terms.
B. Except as provided in Subsection 11.1.C, upon termination of
employment for reasons other than cause, the then
exercisable portion of any Option will terminate on the 60th
day after the date of termination. The portion not then
exercisable will terminate on the date of termination of
employment. For purposes of the Plan, a leave of absence
approved by the Company shall not be deemed to be
termination of employment.
C. If an Eligible Employee holding an Option dies or becomes
subject to a Permanent and Total Disability while employed
by the Company, or within 60 days after termination of
employment for reasons other than cause, such Option may be
exercised, to the extent exercisable on the date of the
occurrence of the event which triggers the operation of this
paragraph, at any time within one year after the date of
termination of employment of such Eligible Employee, by the
estate or guardian of such person or by those persons to
whom the Option may have been transferred by will or by the
laws of descent and distribution.
D. Options shall terminate immediately if employment is
terminated for cause. Cause is defined as including, but not
limited to, theft of or intentional damage to Company
property, intentional harm to the Company's reputation,
material breach of the optionee's duty of fidelity to the
Company, excessive use of alcohol, the use of illegal drugs,
the commission of a criminal act, willful violation of
Company policy, or trading in securities of the Company for
personal gain based on knowledge of the Company's activities
or results when such information is not available to the
general public.
E. If an Eligible Employee holding an Option violates any terms
of any written employment or noncompetition agreement
between the Company and the Eligible Employee, all existing
options held by such Employee will terminate. In addition,
if at the time of such violation the Employee has exercised
Options but has not received certificates for the shares to
be issued, the Company may void the Option and its exercise.
Any such actions by the Company shall be in addition to any
other rights or remedies available to the Company in such
circumstances.
11.2 Except as provided in Article 12 hereof, in no event will the
continuation of the term of an Option beyond the date of termination of
employment allow the Eligible Employee, or his beneficiaries or heirs, to accrue
additional rights under the Plan, or to purchase more Shares through the
exercise of an Option than could have been purchased on the day that employment
was terminated. In addition, notwithstanding anything contained herein, no
option may be exercised in any event after the expiration of ten years from the
date of grant of such option.
ARTICLE 12
ADJUSTMENTS TO SHARES AND OPTION PRICE
12.1 In the event of changes in the outstanding Common Stock of the Company
as a result of stock dividends, splitups, recapitalizations, combinations of
Shares or exchanges of Shares, the number and class of Shares for all purposes
covered by the Plan and number and class of Shares and price per Share for each
Option and each outstanding Option covered by the Plan shall be correspondingly
adjusted by the Committee.
12.2 The Committee may make appropriate adjustments in the Option Price to
reflect any spin-off of assets, extraordinary dividends or other distributions
to shareholders.
12.3 In the event of the dissolution or liquidation of the Company or any
merger, consolidation, exchange or other transaction in which the Company is not
the surviving corporation or in which the outstanding Shares of the Company are
converted into cash, other securities or other property, each outstanding Option
shall terminate as of a date fixed by the Committee provided that not less than
20 days' written notice of the date of expiration shall be given to each holder
of an Option and each such holder shall have the right during such period
following notice to exercise the Option as to all or any part of the Shares for
which it is exercisable at the time of such notice. The Committee, in its sole
discretion, may provide that Options in such circumstances may be exercised to
an extent greater than the number of shares for which they were exercisable at
the time of such a notice.
12.4 All outstanding Options shall become immediately exercisable in full
if a change in control of the Company occurs. For purposes of this Agreement, a
"change in control of the Company" shall be deemed to have occurred if any
"person," as such term is used in Sections 13(d) and 14(d) of the Act, other
than (i) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or (ii) a trustee under the John Q. Sherman
Testamentary Trust or the William C. Sherman Testamentary Trust or the William
C. Sherman Intervivos Trust dated December 29, 1939, becomes the "beneficial
owner," as defined in Rule 13d-3 under the Act, directly or indirectly, of
securities of the Company representing 35% or more of the combined voting power
of the Company's then outstanding securities.
ARTICLE 13
OPTION AGREEMENTS
13.1 All Options granted under the Plan shall be evidenced by a written
agreement in such form or forms as the Committee in its sole discretion may
determine.
13.2 Each optionee, by acceptance of an Option under this Plan, shall be
deemed to have consented to be bound, on the optionee's own behalf and on behalf
of the optionee's heirs, assigns and legal representatives, by all terms and
conditions of this Plan.
ARTICLE 14
AMENDMENT OR DISCONTINUANCE OF PLAN
14.1 The Board of Directors of the Company may at any time amend, suspend,
or discontinue the Plan; provided, however, that no amendments by the Board of
Directors of the Company shall, without further approval of the shareholders of
the Company:
A. Change the definition of Eligible Employees;
B. Except as provided in Articles 4 and 12 hereof, increase the
number of Shares which may be subject to Options granted
under the Plan.
C. Cause the Plan or any Option granted under the Plan to fail
to (i) qualify for exemption from Section 16(b) of the Act,
(ii) be excluded from the $1 million deduction limitation
imposed by Section 162(m) of the Code, or (iii) qualify as
an "Incentive Stock Option" as defined by Section 422 of the
Code.
14.2 No amendment or discontinuance of the Plan shall alter or impair any
Option granted under the Plan without the consent of the holder thereof.
ARTICLE 15
EFFECTIVE DATE
This Plan shall become effective as of October 19, 1995, having been
adopted by the Board of Directors of the Company on such date subject to
approval by the affirmative vote of the holders of a majority of the shares of
Capital Stock of the Company voting on the issue, and all Options granted prior
to such approval are expressly conditioned upon such approval being received. If
shareholder approval is not received, within 12 months of the effective date,
Options granted pursuant to this Plan shall be null and void.
ARTICLE 16
MISCELLANEOUS
16.1 Nothing contained in this Plan or in any action taken by the Board of
Directors or shareholders of the Company shall constitute the granting of an
Option. An Option shall be granted only at such time as a written Option shall
have been executed and delivered to the respective employee and the employee
shall have executed an agreement respecting the Option in conformance with the
provisions of the Plan.
16.2 Certificates for Shares purchased through exercise of Options will be
issued in regular course after exercise of the Option and payment therefor as
called for by the terms of the Option but in no event shall the Company be
obligated to issue certificates more often than once each quarter of each fiscal
year. No persons holding an Option or entitled to exercise an Option granted
under this Plan shall have any rights or privileges of a shareholder of the
Company with respect to any Shares issuable upon exercise of such Option until
certificates representing such Shares shall have been issued and delivered. No
Shares shall be issued and delivered upon exercise of an Option unless and until
the Company, in the opinion of its counsel, has complied with all applicable
registration requirements of the Securities Act of 1933 and any applicable state
securities laws and with any applicable listing requirements of any national
securities exchange on which the Company securities may then be listed as well
as any other requirements of law.
16.3 This Plan shall continue in effect until the expiration of all Options
granted under the Plan unless terminated earlier in accordance with Article 14;
provided, however, that it shall otherwise terminate ten years after the
Effective Date.