KENTUCKY INVESTORS, INC.
1999 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
I. PURPOSES OF THE PLAN
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1. Kentucky Investors, Inc., a Kentucky corporation (the
"Company") desires to afford certain of its directors and key
employees and the directors and key employees of any subsidiary
corporation of the Company who are responsible for the continued
growth of the Company an increased interest in and a greater
incentive to expand and improve the profits, prosperity, and
welfare of the Company. As used in the Plan, the term
"subsidiary corporation" shall have the meaning ascribed to such
term, in Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code").
2. The Company, by means of the Kentucky Investors, Inc.
1999 Stock Option and Stock Appreciation Rights Plan (the
"Plan"), seeks to retain the services of individuals now holding
key positions in the Company and to secure the services of
individuals capable of filling such positions. A key employee or
director to whom Stock Options ("Options") or Stock Appreciation
Rights ("Rights") are granted hereunder may be referred to
herein as "Participant."
3. The Options and Rights offered pursuant to the Plan are
a matter of separate inducement and are not in lieu of any salary
or other compensation for the services of any director or key
employee. Provisions of the Plan which pertain to Options or
Rights shall apply to Options, Rights or a combination thereof.
4. The Options granted under the Plan are intended to be
non-qualified options which, by definition, do not satisfy the
requirements for Incentive Options within the meaning of Code
Section 422.
II. AMOUNT OF STOCK RESERVED UNDER THE PLAN
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1. The total number of shares of common stock of the
Company, which may either be purchased pursuant to the exercise
of Options granted under the Plan or acquired pursuant to the
exercise of Rights granted under the Plan, shall not exceed, in
the aggregate, 250,000 shares of the authorized common stock of
the Company (the "Shares"). Shares which are subject to Rights
and related Options shall be counted only once in determining
whether the maximum number of Shares which may be purchased under
the Plan has been exceeded.
2. The Shares which may be acquired under the Plan may be
either authorized but unissued Shares, Shares of issued stock
that have been acquired by the Company and held in the Company's
treasury, or both, at the discretion of the Company. If and to
the extent that Options or Rights granted under the Plan expire
or terminate without having been exercised, new Options or Rights
may be granted with respect to the Shares covered by such expired
or terminated Options or Rights, provided that the grant and the
terms of such new Options or Rights shall in all respects comply
with the provisions of the Plan.
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III. EFFECTIVE DATE AND TERM OF THE PLAN
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1. Except as otherwise set forth herein, the Plan shall
become effective on the date (the "Effective Date") on which it
is adopted by the board of directors of the Company (the "Board
of Directors") and shall terminate on the earlier of (i) the
tenth anniversary of the Effective Date, in which event the Plan
shall continue in effect until all outstanding Options have been
exercised in full or are no longer exercisable, or (ii) the date
on which all the Shares reserved under Article II of this Plan
have been issued or are no longer available for use under the
Plan in which event this Plan also shall terminate on such date
(the "Termination Date").
2. The Company may, from time to time during the period
beginning on the Effective Date and ending on the Termination
Date, grant to persons eligible to participate in the Plan
Options, Rights or both Options and Rights, under the terms of
the Plan. Options and Rights granted prior to the Termination
Date may extend beyond that date, in accordance with the terms
thereof.
IV. ADMINISTRATION
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1. The Board of Directors, in its sole discretion, may
designate an Option Committee (the "Committee"), which shall
consist of no fewer than three "Non-Employee Directors" within
the meaning of Rule 16b-3 (or any successor rule or regulation)
promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), to administer the Plan. If no such committee is
designated, the Board of Directors or one of its existing
Committees, so designated shall administer the Plan. A majority
of the members of the Committee shall constitute a quorum, and
the act of a majority of the members of the Committee shall
constitute the act of the Committee. The Board of Directors may
from time to time add members to the Committee. Any member of
the Committee may be removed at any time, either with or without
cause, by resolution adopted by the Board of Directors, and any
vacancy on the Committee may be filled at any time by resolution
adopted by the Board of Directors.
2. Any or all powers and functions of the Committee may be
exercised at any time and from time to time by the Board of
Directors. Any reference in the Plan to the Committee shall be
deemed also to refer to the Board of Directors, to the extent
that the Board of Directors is exercising any of the powers and
functions of the Committee.
3. Subject to the express provisions of the Plan, the
Committee shall have the authority, in its absolute discretion,
to do any of the following:
(a) determine (i) the directors and key employees
to whom Options or Rights shall be granted, (ii) the
time when such Options or Rights shall be granted,
(iii) the number of Shares which shall be subject to
each Option or Right, (iv) the purchase price or
exercise price of each Share which shall be subject to
each Option or Right, (v) the period(s) during which
such Options or Rights shall be exercisable (whether in
whole or in part), and (vi) the other terms and
provisions of the respective Options (which need not be
identical) and Rights (which need not be identical);
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(b) interpret and construe the Plan, Options and
Rights granted thereunder;
(c) prescribe, amend (subject to the provisions
of Article XIX) and rescind rules relating to the Plan;
and
(d) make all other determinations necessary or
advisable for administering the Plan.
4. Without limiting the foregoing, the Committee also
shall have the authority to require, in its sole discretion, as a
condition of the granting of any Option or Right, that the
Participant agree (i) not to sell or otherwise dispose of Shares
acquired pursuant to the Option or Right for a period following
the date of acquisition of such Shares and (ii) that in the event
of termination of directorship or employment of such Participant,
other than as a result of dismissal without cause, such
Participant will not, for a period to be fixed at the time of the
grant of the Option or Right, enter into any employment or
participate directly or indirectly in any business or enterprise
which is competitive with the business of the Company or any
subsidiary corporation of the Company, or enter into any
employment in which such employee will be called upon to utilize
special knowledge obtained through directorship or employment
with the Company or any subsidiary corporation thereof.
The determination of the Committee on matters referred to in
this Article IV shall be conclusive, and such actions shall be
binding on the Company; the Participants, key employees and
directors and on each other person directly or indirectly
affected by such action.
5. The Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion received
from any such counsel or consultant and any computation received
from any such consultant or agent. Expenses incurred by the
Committee in the engagement of such counsel, consultant or agent
shall be paid by the Company. No member or former member of the
Committee or of the Board of Directors shall be liable for any
action or determination made in good faith with respect to the
Plan or any Option or Right.
V. ELIGIBILITY
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Except as hereinafter provided, Options and Rights may be
granted only to directors, officers and other full-time salaried
key employees of the Company, or of any subsidiary corporation of
the Company now existing or hereafter formed or acquired who in
the judgment of the Committee is essential to the success of the
Company or subsidiary corporation. Any person who shall have
retired from active employment by the Company, although such
person shall have entered into a consulting contract with the
Company, shall not be eligible to receive an Option or a Right.
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VI. OPTIONS: PRICE AND PAYMENT
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1. Options may be granted by the Committee to directors
and key employees to purchase Shares; the Committee shall have
the right to grant new Options in exchange for outstanding
Options which have either a higher or lower Option Price. Each
grant of an Option shall be evidenced by a Stock Option Agreement
which sets forth the terms and conditions of such grant as the
Committee deems consistent with the provisions of the Plan.
2. The Option price for each Share purchasable under any
Option granted hereunder shall be such amount as the Committee
shall deem appropriate, which may be more or less than or equal
to the fair market value of a Share on the date the Option is
granted (the "Option Price"). Determination of the Option Price
shall be within the absolute discretion of the Board of
Directors;
3. Upon the exercise of an Option, the Company shall cause
the purchased Shares to be issued only when it shall have
received the full purchase price for the Shares in cash or by
certified check; provided, however, that in lieu of cash or
certified check, the Participant may, if and to the extent the
terms of the Option so provide and to the extent permitted by
applicable law, exercise an Option, in whole or in part, by
delivering to the Company shares of common stock of the Company
(in proper form for transfer and accompanied by all requisite
stock transfer tax stamps or cash in lieu thereof) owned by such
Participant having a fair market value equal to the Option price
of the Shares as to which the Option is being exercised. The
fair market value of the stock so delivered shall be determined
as of the date immediately preceding the date on which the Option
is exercised, or as may be required in order to comply with or to
conform to the requirements of any applicable laws or
regulations. Any payment made in shares of stock may be made by
tendering the stock certificate to the Company, or to the extent
allowed by the Committee, Shares withheld by the Company that,
would have been otherwise transferred to a Participant under the
exercise of such Option.
VII. USE OF PROCEEDS
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The cash proceeds of the sale of Shares subject to Options
are to be added to the general funds of the Company and used for
its general corporate purposes, as the Board of Directors shall
determine.
VIII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
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1. Any Option shall be exercisable at such times, in such
amounts and during such period or periods as the Committee shall
determine at the date of the grant of such Option.
2. Subject to the provisions of Article IX, the Committee
shall have the right to accelerate, in whole or in part, from
time to time, conditionally or unconditionally, rights to
exercise any Option. However, no Option granted shall be
exercisable after (a) the date of such Option is exercised in
full or (b) the date which is the tenth anniversary of the date
the Option is granted.
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3. Subject to the provisions of Article XIII, to the
extent that an Option is not exercised within the period of
exerciseability specified therein, it shall expire as to the then
unexercised part.
4. In no event shall an Option granted hereunder be
exercisable for a fraction of a Share.
IX. EXERCISE OF OPTIONS
-------------------
Any Option shall be exercised by the Participant holding
such Option as to all or part of the Shares covered by such
Option by giving written notice of such exercise to the Secretary
of the Company at the principal business office of the Company,
specifying the number of Shares to be purchased and specifying a
business day not more than 15 days from the date such notice is
given, for the payment of the Option Price against delivery of
the Shares being purchased. Subject to the terms of Articles XV
and XVII, the Company shall cause certificates for the Shares so
purchased to be delivered to the Participant at the principal
business office of the Company, against payment of the full
Option price, on the date specified in the notice of exercise.
X. STOCK APPRECIATION RIGHTS
-------------------------
1. In the discretion of the Committee, a Right may be
granted (i) alone, (ii) simultaneously with the grant of an
Option and in conjunction therewith or in the alternate thereto
or (iii) subsequent to the grant of a Option and in conjunction
therewith or in the alternative thereto.
2. The exercise price of a Right granted alone shall be
determined by the Committee, but shall not be less than 100% of
the fair market value of one Share at the date of grant of such
Right. A Right granted simultaneously with or subsequent to the
grant of an Option and in conjunction therewith or in the
alternative thereto shall have upon the same terms and conditions
as the related Option, and shall be exercisable only to the same
extent as the related Option; provided, however, that a Right, by
its terms, shall be exercisable only when the fair market value
per Share subject to the Right and related Option exceeds the
exercise price per Share thereof.
3. Upon any exercise of a Right, the number of Shares for
which any related Option shall be exercisable shall be reduced by
the number of Shares for which the Right shall have been
exercised. The number of Shares for which a Right shall be
exercisable shall be reduced upon any exercise of any related
Option by the number of Shares for which such Option shall have
been exercised.
Any Right shall be exercisable upon such additional terms
and conditions as may be prescribed by the Committee from time to
time.
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4. A Right shall entitle the Participant upon exercise
thereof to receive from the Company, upon a written request filed
with the Secretary of the Company at its principal offices (the
"Request"), a number of Shares (with or without restrictions as
to substantial risk of forfeiture and transferability, as
determined by the Committee in its sole discretion), an amount of
cash, or any combination of Shares and cash, as specified in the
Request (but subject to the approval of the Committee in its sole
discretion, at any time up to and including the time of payment,
as to the making of any cash payment), having an aggregate fair
market value equal to the product of (a) the excess of the fair
market value, on the date of such Request, of one Share over the
exercise price per Share specified in such Right or its related
Option, multiplied by (b) the number of Shares for which such
Right shall be exercised.
5. Any election by a Participant to receive cash in full
or partial settlement of a Right, and any exercise of such Right
for cash, may be made only by a request filed with the Secretary
of the Company during the period beginning on the third business
day following the date of release for publication by the Company
of quarterly or annual summary statements of earnings and ending
on the 12th business day following such date. Within 30 days of
the receipt by the Company of a request to receive cash in full
or partial settlement of a Right or to exercise such Right for
cash, the Committee shall, in its sole discretion, either consent
to or disapprove, in whole or in part, such request. A request
to receive cash in full or partial settlement of a Right or to
exercise a Right for cash may be denied, provided that, in the
event the Committee shall disapprove such request, such request
shall be deemed to be an exercise of such Right for Shares.
6. If the Committee disapproves, in whole or in part, any
election by a Participant to receive cash in full or partial
settlement of a Right or to exercise such Right for cash, such
disapproval shall not affect such Participant's right to exercise
such Right at a later date, to the extent that such Right shall
be otherwise exercisable, or to elect the form of payment at a
later date, provided that an election to receive cash upon such
later exercise shall be subject to the approval of the Committee.
Additionally, such disapproval shall not affect such
Participant's right to exercise any related Option.
7. A Participant shall not be entitled to request or
receive cash in full or partial payment of a Right, if such Right
or any related Option shall have been exercised during the first
six (6) months of its respective term; provided, however, that
such prohibition shall not apply if the Participant dies or
becomes disabled (within the meaning of Code Section 422(c)(6))
prior to the expiration of such six-month period, or if such
Participant is not a director or officer of the Company or a
beneficial owner of the Company who is described in Section 16(1)
of the Exchange Act.
8. A Right shall be deemed exercised on the last day of
its term, if not otherwise exercised by the holder thereof,
provided that the fair market value of the Shares subject to the
Right exceeds the exercise price thereof on such date.
9. For all purposes of this Article X, the fair market
value of Shares shall be determined in accordance with the
principals set forth in Article VI.
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XI. NONTRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS
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No Option or Rights granted under this Plan shall be
transferable, whether by operation of law or otherwise, other
than by will or the laws of descent and distribution, and the
person(s) to whom an Option was transferred shall be treated as a
Participant under the Plan. Any Option or Right granted
hereunder shall be exercisable, during the lifetime of the
Participant, only by such Participant.
XII. TERMINATION OF DIRECTORSHIP OR EMPLOYMENT
-----------------------------------------
1. Upon termination of the directorship or employment of
any Participant with the Company and all subsidiary corporations
of the Company, any Option or Right previously granted to the
Participant, unless otherwise specified by the Committee in the
Option or Right, shall, to the extent not theretofore exercised,
terminate and become null and void, provided that:
(a) if the Participant shall die while serving as
a director or while in the employ of such corporation
or during either the three (3) months or one (1) year
period, whichever is applicable, specified in clause
(b) below and at a time when such Participant was
entitled to exercise an Option or Right as herein
provided, the legal representative of such Participant,
or such person who acquired such Option or Right by
bequest or inheritance or by reason of the death of the
Participant, may, not later than one (1) year from the
date of death, exercise such Option or Right, to the
extent not theretofore exercised, in respect of any or
all of such number of Shares as specified by the
Committee in such Option or Right; and
(b)if the directorship or employment of any
Participant to whom such Option or Right shall have
been granted shall terminate by reason of the
Participant's retirement (at such age or upon such
conditions as shall be specified by the Committee),
disability (as described in Code Section 422(c)(3)) or
dismissal by the employer other than for cause (as
defined below), and which such Participant is entitled
to exercise such Option or Right as herein provided,
such Participant shall have the right to exercise such
Option or Right, to the extent not theretofore
exercised, in respect of any or all of such number of
Shares as specified by the Committee in such Option or
Right at any time up to and including three (3) months
after the date of such termination of directorship or
employment in the case of termination by reason of
disability.
In no event, however, shall any Person be entitled to
exercise any Option or Right after the expiration of the period
of exerciseability of such Option or Right as specified therein.
2. If a Participant voluntarily terminates his
directorship or employment, or is discharged for cause, any
Option or Right granted hereunder shall, unless otherwise
specified by the Committee in the Option or Right, forthwith
terminate with respect to any unexercised portion thereof.
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3. If an Option or Right shall be exercised by the legal
representative of a deceased Participant, or by a person who
acquired an Option or Right by bequest or inheritance or by
reason of the death of any Participant, written notice of such
exercise shall be accompanied by a certified copy of letter
testamentary or equivalent proof of the right of such legal
representative or other person to exercise such Option or Right.
4. For the purposes of the Plan, the term "for cause"
shall mean (i) with respect to an employee who is a party to a
written agreement with, or, alternatively, participates in a
compensation or benefit plan of the Company or a subsidiary
corporation of the Company, which agreement or plan contains a
definition of "for cause" or "cause" (or words of like import)
for purposes of termination of employment thereunder by the
Company or such subsidiary corporation of the Company, "for
cause" or "cause" as defined in the most recent of such
agreements or plans, or (ii) in all other cases, as determined by
the Board of Directors, in its sole discretion, (a) the willful
commission by an employee of a criminal or other act that causes
or probably will cause substantial economic damage to the Company
or a subsidiary corporation or substantial injury to the business
reputation of the Company or a subsidiary corporation of the
Company; (b) the commission by an employee of an act of fraud in
the performance of such employee's duties on behalf of the
Company or a subsidiary corporation of the Company; (c) the
continuing willful failure of an employee to perform the duties
of such employee to the Company or a subsidiary corporation of
the Company (other than such failure resulting from the
employee's incapacity due to physical or mental illness) after
written notice thereof (specifying the particulars thereof in
reasonable detail) and a reasonable opportunity to be heard and
cure such failure are given to the employee by the Board of
Directors; or (d) the order of a court of competent jurisdiction
requiring the termination of the employee's employment. For
purposes of the Plan, no act, or failure to act, on the
employee's part shall be considered "willful" unless done or
omitted to be done by the employee not in good faith and without
reasonable belief that the employee's action or omission was in
the best interest of the Company or a subsidiary corporation of
the Company.
5. For the purposes of the Plan, an employment
relationship shall be deemed to exist between an individual and
the Company if, at the time of the determination, the individual
was an employee of the Company. If an individual is on
maternity, military, or sick leave or other bona fide leave of
absence, such individual shall be considered an "employee" for
purposes of the exercise of an option or Right and shall be
entitled to exercise such Option or Right during such leave if
the period of such leave does not exceed 90 days, or, if longer,
so long as the individual's right to reemployment with the
Company is guaranteed either by statute or by contract. If the
period of leave exceeds 90 days, the employment relationship
shall be deemed to have terminated on the 91st day of such leave,
unless the individual's right to reemployment is guaranteed by
statute or contract.
6. A termination of employment shall not be deemed to
occur by reason of (i) the transfer of a Participant from
employment by the Company to employment by a subsidiary
corporation of the Company or (ii) the transfer of a Participant
from employment by a subsidiary corporation of the Company to
employment by the Company or by another subsidiary corporation of
the Company.
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XIII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS
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1. In the event of any change in the outstanding Shares
through recapitalization, stock dividend, stock split, or other
like change in capital structure of the Company, an adjustment
shall be made to each outstanding Option and Right by the
Committee such that each such Option and Right shall thereafter
be exercisable for such securities, cash and/or other property as
would have been received in respect of the Shares subject to such
Option or Right had such Option or Right been exercised in full
immediately prior to such change, and such an adjustment shall be
made successively each time any such change shall occur. The
Committee shall have the right to adjust in a manner which
satisfies the requirements of Code Section 424(a), the number,
kind or class (or any combination thereof) of the Shares reserved
under Article II and the number, kind or class of Shares subject
to Options granted under this Plan and the Option Price of such
Options in the event of any corporate transaction described in
Code Section 424(a) which provides for the substitution or
assumption or such Options or grants in order to take into
account the effect of such transaction. The term "Shares" after
any such change shall refer to the securities, cash and/or
property then receivable upon exercise of an Option or Right. In
addition, in the event of such change, the Committee shall make
any further adjustment as may be appropriate to the maximum
number of Shares subject to the Plan and the number of Shares and
price per Share subject to outstanding Options or Rights as shall
be equitable to prevent dilution or enlargement of rights under
such Options or Rights, and the determination of the Committee as
to these matters shall be conclusive.
2. In the event of a Change in Control of the Company
(defined hereinafter), the Committee, in its absolute discretion,
may determine that each Option or Right outstanding hereunder
shall terminate within a specified number of days after notice
to the holder, and such holder shall receive, with respect to
each Share subject to such Option or Right, an amount of cash
equal to the excess of the fair market value of such Share
immediately prior to the occurrence of such transaction over the
exercise price per Share of such Option or Right. The provisions
contained in the preceding sentence may, in the discretion of the
Committee, be inapplicable to an Option or Right granted within
six (6) months before the occurrence of a transaction described
above if the holder of such Option or Right is a director or
officer of the Company or a beneficial owner of the Company who
is described in Section 16(a) of the Exchange Act, unless such
holder dies or becomes disabled (within the meaning of
Section 22(e)(3) of the Code) prior to the expiration of such
six-month period.
3. "Change in Control" of the Company shall mean (i) an
event or series of events which have the effect of any "person"
as such term is used in Section 13(d) and 14(d) of the Exchange
Act, becoming a "beneficial owner" as defined in Rule 13d-3 under
the Exchange Act, directly or indirectly, of securities of the
Company representing a greater percentage of the combined voting
power of the Company's then outstanding stock, than the
Waterfield Family Members as a group; (ii) an event or series of
events which have the effect of decreasing the Waterfield Family
Members' percentage ownership of the combined voting power of the
Company's then outstanding stock to less than 20%; or (iii) the
business of the Company is disposed of pursuant to a partial or
complete liquidation, sale of assets, or otherwise. A Change in
Control shall also be deemed to occur if (i) the Company enters
into an agreement, the consummation of which would result in the
occurrence of a Change in Control, (ii) any person
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(including the Company) publicly announces an intention to take
or to consider taking actions which if consummated would
constitute a Change in Control, or (iii) the Board adopts a
resolution to the effect that a potential Change in Control for
purposes of this Plan has occurred. For purposes of this
paragraph, "Waterfield Family Member" shall mean Rose Gayle
Waterfield Hardy, Harry Lee Waterfield II, Nancy Waterfield
Walton and any of their lineal descendants, and any corporation,
partnership, limited liability company or trust the majority
owners or beneficiaries of which are directly or indirectly
through another entity, Rose Gayle Waterfield Hardy, Harry Lee
Waterfield II, Nancy Waterfield Walton or one or more of their
lineal descendants.
Alternatively, the Committee may determine, in its absolute
discretion, that all of the then outstanding Options and Rights
shall immediately become exercisable upon a Change in Control of
the Company.
XIV. RIGHT TO TERMINATE EMPLOYMENT
-----------------------------
The Plan shall not impose any obligation on the Company or
on any subsidiary corporation thereof to continue the employment
of any Participant; and it shall not impose any obligation on the
part of any Participant to remain in the employ of the Company or
of any subsidiary corporation thereof.
XV. PURCHASE FOR INVESTMENT REPRESENTATION/SECURITIES
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REGISTRATION
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1. Except as hereafter provided, a Participant shall, upon
any exercise of an Option or Right, execute and deliver to the
Company a written statement, in form satisfactory to the Company,
in which such Participant represents and warrants that such
Participant is purchasing or acquiring the Shares acquired
thereunder for such Participant's own account, for investment
only and not with a view to the resale or distribution thereof,
and agrees that any subsequent offer for sale or sale or
distribution of any of such Shares shall be made only pursuant to
either (a) a Registration Statement on an appropriate form under
the Securities Act of 1933, as amended (the "Securities Act"),
which Registration Statement has become effective and is current
with regard to the Shares being offered or sold, or (b) a
specific exemption from the registration requirements of the
Securities Act, but in claiming such exemption the holder shall,
if so requested by the Company, prior to any offer for sale or
sale of such Shares, obtain a prior favorable written opinion, in
form and substance satisfactory to the Company, from counsel for
or approved by the Company, as to the applicability of such
exemption thereto. The foregoing restriction shall not apply to
(i) issuances by the Company so long as the Shares being issued
are registered under the Securities Act and a prospectus in
respect thereof is current or (ii) reofferings of Shares by
affiliates of the Company (as defined in Rule 405 or any
successor rule or regulation promulgated under the Securities
Act) if the Shares being reoffered are registered under the
Securities Act and a prospectus in respect thereof is current.
2. Subject to Article XVIII, the Company shall not have
any obligation to take any action to register the Plan or the
Shares issued pursuant to the Plan under the Securities Act of
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1933, as amended or under any other applicable securities laws or
to qualify such Shares for an exemption under any such laws.
XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
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1. Upon any exercise of an Option or Right and, in the
case of an Option, payment of the Option price, a certificate or
certificates for the Shares as to which the Option or Right has
been exercised shall be issued by the Company in the name of the
person exercising the Option or Right and shall be delivered to
or upon the order of such person or persons.
2. The Company may endorse such legend or legends upon the
certificates for Shares issued upon exercise of an Option or
Right granted hereunder and may issue such "stop transfer"
instructions to its transfer agent in respect of such Shares as,
in its discretion, it determines to be necessary or appropriate
to (i) prevent a violation of, or to perfect an exemption from,
the registration requirements of the Securities Act, or (ii)
implement the provisions of the Plan and any agreement between
the Company and the optionee with respect to such Shares.
3. The Company shall pay all issue or transfer taxes with
respect to the issuance or transfer of Shares, as well as all
fees and expenses incurred by the Company in connection with such
issuance or transfer.
All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.
XVII. WITHHOLDING TAXES
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The Company may require a Participant exercising a Right or
a Option granted hereunder, to reimburse the corporation that
employs such Participant for any taxes required by any government
to be withheld or otherwise deducted and paid by such corporation
in respect of the issuance or disposition of such Shares. The
Committee may provide in the Stock Option Agreement that the
Participant may elect to satisfy federal and state tax
withholding requirements through a reduction in the number of
Shares actually transferred to the Participant under this Plan.
In lieu thereof, the corporation employing such Participant shall
have the right to withhold the amount of such taxes from any
other sums due or to become due from such corporation to the
Participant upon such terms and conditions as the Committee shall
prescribe. The corporation employing such Participant may, in
its discretion, hold the stock certificate to which such employee
is entitled upon the exercise of an Option or Right as security
for the payment of such withholding tax liability, until an
amount sufficient to pay that liability has been accumulated.
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XVIII. LISTING OF SHARES AND RELATED MATTERS
If at any time the Board of Directors shall determine in its
discretion that the listing, registration or qualification of the
Shares covered by the Plan upon any national 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 sale or purchase of
Shares under the Plan, no Shares shall be issued unless and until
such listing, registration, qualification, consent or approval
shall have been effected or obtained, or otherwise provided for,
free of any conditions not acceptable to the Board of Directors.
XIX. AMENDMENT OF THE PLAN
---------------------
The Board of Directors or the Committee may, from time to
time, amend the Plan. The rights and obligations under any
Option or Right granted before amendment of the Plan or any
unexercised portion of such Option or Right shall not be
adversely affected by amendment of the Plan or the Option or
Right without the consent of the holder of the Option or Right.
XX. TERMINATION OR SUSPENSION OF THE PLAN
-------------------------------------
The Board of Directors or the Committee may suspend or
terminate the Plan at any time and for any reason. The Plan,
unless sooner terminated under Article III or by action of the
Board of Directors, shall terminate at the closing of business on
the Termination Date. An Option or Right may not be granted
while the Plan is suspended or after it is terminated. Options
and Rights granted while the Plan is in effect shall not be
altered or impaired by suspension or termination of the Plan,
except upon the consent of the person to whom the Option or Right
was granted. The power of the Committee under Article IV to
construe and administer any Options or Rights granted prior to
the termination or suspension of the Plan shall continue after
such termination or during such suspension.
XXI. GOVERNING LAW
-------------
The Plan, such Options and Rights as may be granted
thereunder, and all related matters shall be governed by, and
construed and enforced in accordance with, the laws of the
Commonwealth of Kentucky from time to time obtaining.
XXII. PARTIAL INVALIDITY
------------------
The invalidity or illegality of any provision herein shall
not be deemed to affect the validity of any other provision.
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XXIII. SHAREHOLDER RIGHTS
------------------
No participant shall have any rights as a Shareholder of the
Company as a result of the grant of an Option or Right under this
Plan or his or her exercise of such Option or Right pending the
actual delivery of the Shares subject to such Option or Right.
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This Kentucky Investors, Inc. 1999 Stock Option and Stock
Appreciation Rights Plan was adopted initially by the Company's
Board of Directors on September 16, 1999.
/s/ Wilma Yeary
- -------------------------------
Secretary
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