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EXHIBIT 4.1
STECK-VAUGHN PUBLISHING CORPORATION
1993 STOCK OPTION PLAN
AS AMENDED
I. GENERAL PROVISIONS
1.1 Purposes of the Plan. The purposes of the 1993 Stock Option
Plan of Steck-Vaughn Publishing Corporation are to provide a means to attract
and retain competent personnel, to provide participating officers and other key
employees, and such other persons (other than Directors who are not employees
of the Company) as the Committee may from time to time determine, with
long-term incentives for high levels of performance and for unusual efforts to
improve the financial performance of Steck-Vaughn Publishing Corporation, and
to align the interests of Plan participants with the interests of the
stockholders. These purposes may be achieved through the grant of Options
under the Plan.
1.2 Definitions.
(a) "Board" means the Board of Directors of Steck-Vaughn Publishing
Corporation.
(b) "Cause" means, with respect to the discharge by the Company of
any Participant, (i) refusal to perform duties assigned in accordance with the
Participant's employment agreement with the Company, if any, or assigned by any
officer of the Company, or overt and willful disobedience of orders or
directives issued to the Participant by the Company and within the scope of the
Participant's duties to the Company; (ii) commission of illegal acts in
connection with the performance of duties on behalf of the Company; or (iii)
material violation of the Company's policies and procedures.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee appointed by the Board of
Directors to administer the Plan. The Committee shall be composed entirely of
members who meet the requirements of Section 1.4(a) hereof. If no committee is
appointed, for purposes of this Plan the Committee shall consist of the Board.
(e) "Common Stock" means the common stock of Steck-Vaughn
Publishing Corporation, par value $0.01 per share.
(f) "Company" means Steck-Vaughn Publishing Corporation and any
present or future parent or subsidiary corporations (as defined in Section 425
of the Code) or any successor to such corporations.
(g) "Employee" means any regular full-time employee of the
Company.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(i) "Fair Market Value" means the fair market value of a share of
Common Stock as determined by the Committee on the basis of such factors as it
may deem appropriate, provided that (i) if on the date such determination is
made, the Common Stock is then traded on a national securities exchange, the
fair market value of the Common Stock shall be determined by reference to the
closing sale price of the Common Stock as of 4:00 p.m. Eastern Time as reported
by the Wall Street Journal; (ii) if the Common Stock is not listed or admitted
to trade on a national securities exchange, the fair market value of the Common
Stock shall be the closing sale price for the Common Stock (or if no closing
sale price is available, then the mean of the last reported bid and asked
price) as furnished by the National Association of Securities Dealers, Inc.
through The Nasdaq National Market or a similar organization if The Nasdaq
National Market is no longer reporting such information; or (iii) if the Common
Stock is not admitted to trade on a national securities exchange and if bid and
asked prices for the Common Stock are not so furnished through The Nasdaq
National Market or a similar organization, the fair market value shall be
determined by the Committee.
(j) "Option" means a right to purchase Common Stock granted under
this Plan.
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(k) "Participant" means any Employee or other person selected to
receive an Option pursuant to Section 1.5 hereof.
(l) "Plan" means the Company's 1993 Stock Option Plan as set forth
herein, as amended from time to time.
1.3 Shares of Common Stock Subject to the Plan.
(a) Subject to the provisions of Section 1.3(c) and Section 3.1 of
the Plan, the aggregate number of shares of Common Stock that may be issued
pursuant to Options under the Plan will not exceed 1,360,000 shares of Common
Stock. Any shares related to grants that are forfeited, terminated,
cancelled, expire unexercised, settled in cash in lieu of shares or in such
manner that some or all of the shares covered by a grant are not issued, will
immediately be available under the Plan.
(b) The Common Stock to be issued under the Plan will be made
available, at the discretion of the Board or the Committee, either from
authorized but unissued shares of Common Stock or from previously issued shares
of Common Stock reacquired by the Company, including shares purchased on the
open market.
(c) If any Option shall expire or terminate for any reason, the
shares of Common Stock available under such Option shall again be available for
the granting of Options.
1.4 Administration of the Plan.
(a) The Plan will be administered by the full Board or by the
Committee, which will consist of at least three directors of the Company, or
such lesser number of directors as permitted by Rule 16b-3 of the Exchange Act,
all of whom shall be "disinterested persons" (within the meaning of Rule 16b-3
of the Exchange Act), to whom administration of the Plan has been duly
delegated. The Committee may, in turn, delegate its administrative powers
except for selection and determination of Options for persons subject to
Section 16 of the Exchange Act. No member of the Committee shall be eligible
for grants or allocations to acquire equity securities of the Company under the
Plan or any other plan of the Company or its affiliates for a period of one
year before or for any year after membership on the Committee (or for such
other period as may be required from time to time by Rule 16b-3 of the Exchange
Act). Any action of the Committee with respect to administration of the Plan
shall be taken by a majority vote or written consent of its members.
(b) The Committee has and may exercise such powers and authority
of the Board as may be necessary or appropriate for the Committee to carry out
its functions as described in the Plan. The Committee has authority in its
discretion to determine the persons to whom, and the time or times at which,
Options may be granted, the nature of the Option, the form of payment (cash or
Common Stock or a combination thereof) payable upon the event or events giving
rise to payment of an Option and such other terms and conditions applicable to
each individual Option as the Committee shall determine. The Committee may
grant at any time new Options as the Committee shall determine. The Committee
may grant at any time new Options to a Participant who has previously received
Options whether such prior Options are still outstanding, have previously been
exercised in whole or in part, or are cancelled in connection with the issuance
of new Options. Further, the Committee may, with the consent of a Participant,
amend the terms of any existing Option previously granted to include or amend
any provisions which could be incorporated in such an Option at the time of
such amendment. Solely to illustrate the foregoing power, but without limiting
its scope, such amendments may accelerate the period of exercise or the vesting
period of any Option, or installment thereof, either absolutely or
conditionally for whatever reasons the Committee deems appropriate, including
without limitation, compensatory considerations, significant changes in the
management or control of the Company, or the occurrence of any attempt to
effect such change.
(c) Each Option will be evidenced by a written instrument signed
by the Participant and may include any other terms and conditions consistent
with the Plan as the Committee may in its discretion determine. The Committee
also has authority to interpret the Plan, to determine the terms and provisions
of the Option agreements and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee has authority to
prescribe, amend and rescind rules and regulations relating to the Plan. All
interpretations, determinations and actions by the Committee will be final,
conclusive and binding upon all parties. Any action of
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the Committee with respect to the administration of the Plan shall be taken
pursuant to a majority vote or by the unanimous written consent of its members.
(d) No member of the Board or the Committee will be liable for any
action or determination made in good faith by the Board or the Committee with
respect to the Plan or any transaction arising under the Plan.
1.5 Participation. All executive and other key employees of the
Company or of any subsidiary corporation (as defined in Section 425(f) of the
Code) and directors of the Company who are regular employees of the Company
shall be eligible for selection to participate in the Plan. Other nonemployees
and other directors who are not regular employees of the Company (excluding
Committee members for the periods specified in paragraph 1.4 hereof) may
participate in the Plan at the discretion of the Committee. An individual who
has been granted an Option may, if such individual is otherwise eligible, be
granted an additional Option or Options if the Committee shall so determine,
subject to the provisions of the Plan.
II. TERMS AND CONDITIONS OF OPTIONS
2.1 Option Price. The purchase price of Common Stock under each
Option will be determined by the Committee.
2.2 Exercise of Options.
(a) Each Option granted under this Plan shall be exercisable in
such installments during the period prior to its expiration date as the
Committee shall determine, but in no event shall any Option be exercisable for
at least six months after grant except in the case of the death or disability
of the Participant; provided that, unless otherwise determined by the
Committee, if the Participant shall not in any given installment period
purchase all of the shares which the Participant is entitled to purchase in
such installment period, then the Participant's right to purchase any shares
not purchased in such installment period shall continue until the expiration
date or sooner termination of the Participant's Option.
(b) Upon the exercise of an Option, the purchase price shall be
paid in full in cash or its equivalent acceptable to the Company. To the
extent provided by the Option agreement executed by the Participant, the
purchase price may be paid by the assignment and delivery to the Company of
shares of Common Stock, a combination of cash and shares of Common Stock equal
in value to the exercise price, or with the proceeds of a loan made by the
Company pursuant to the Plan. Any shares assigned and delivered to the Company
in payment or partial payment of the purchase price will be valued at their
Fair Market Value on the exercise date. No fractional shares will be issued
pursuant to the exercise of an Option nor will any cash payment be made in lieu
of fractional shares. Upon the exercise of an Option, not less than 100 shares
of Common Stock may be purchased at one time unless the number then available
for purchase is less than 100 shares in which case the full number available
must be purchased.
2.3 Termination of Employment.
(a) In the event of the termination of a Participant's employment
with the Company for Cause, all of the Participant's unexercised Options shall
expire as of the date of termination. In the event of a Participant's
termination of employment for any reason other than for Cause, death or
disability, the Participant's Options shall expire three (3) months after the
date of termination, unless a shorter period is provided for in Participant's
Option agreement; provided, however, that such Option shall be exercisable only
to the extent that installments thereof had become exercisable on the date of
termination, unless the Committee, in its discretion, elects to accelerate the
vesting of all or any portion of the unvested shares on the date of
termination. The Option shall expire at the end of such three (3) month period
(or such shorter period provided in the Option agreement) to the extent not
exercised within that period.
(b) In the event of a termination of a Participant's employment as
a result of death or disability, the Participant shall have twelve (12) months,
or such shorter period as is provided in the Option agreement, from the date of
termination of employment to exercise his or her Option to the extent, and only
to the extent, that installments had become exercisable as of the date of
termination of employment, unless the Committee, in its
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discretion, elects to accelerate the vesting of all or any portion of the
unvested shares on the date of termination. The Option shall expire at the end
of such twelve (12) month period (or such shorter period as is provided in the
Option agreement) to the extent not exercised within that period.
III. OTHER PROVISIONS
3.1 Adjustment Provisions.
(a) Subject to Section 3.1(b) below, if the outstanding shares of
Common Stock of the Company are increased, decreased or exchanged for a
different number or kind of shares or other securities, or if additional shares
or new or different shares or other securities are distributed with respect to
such shares of Common Stock or other securities, through merger, consolidation,
sale of all or substantially all of the property of the Company,
reorganization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of Common Stock or
other securities, an appropriate and proportionate adjustment may be made in
(i) the maximum number and kind of shares provided in Section 1.3, (ii) the
number and kind of shares or other securities subject to the outstanding
Options, and (iii) the price for each share or other unit of any other
securities subject to outstanding Options without change in the aggregate
purchase price or value as to which such Options remain exercisable or subject
to restrictions.
(b) In addition to the adjustments required by Section 3.1(a)
above, at the discretion of the Committee, any Option may contain provisions to
the effect that upon the occurrence of certain events, including a change in
control of the Company (as defined by the Committee in the Option), any
outstanding Options not theretofore exercisable, payable or free from
restrictions, as the case may be, shall immediately become exercisable, payable
or free from restrictions, as the case may be, in their entirety, and any
shares of Common Stock acquired pursuant to an Option which are not fully
vested shall immediately become fully vested, notwithstanding any of the other
provisions of the Option or the Plan.
(c) Adjustments under Sections 3.1(a) and 3.1(b) will be made by
the Committee, whose determination as to what adjustments will be made and the
extent thereof will be final, binding and conclusive. No fractional interests
will be issued under the Plan resulting from any such adjustments.
3.2 Loans.
(a) The Company may make loans to a Participant in connection with
the exercise of Options, subject to the following terms and conditions and such
other terms and conditions not inconsistent with the Plan, including the rate
of interest, if any, as the Committee shall impose from time to time.
(b) No loan made under the Plan shall exceed the sum of (i) the
aggregate Option price payable upon exercise of the Option in relation to which
the loan is made, plus (ii) the amount of the reasonably estimated income taxes
payable by a Participant. In no event may any such loan exceed the Fair Market
Value, at the date of exercise, of the related shares of Common Stock.
(c) No loan shall have an initial term exceeding ten (10) years;
provided that loans under the Plan shall be renewable at the discretion of the
Committee; and provided, further, that the indebtedness under each loan shall
become due and payable, as the case may be, on a date no later than (i) one
year after termination of the Participant's employment due to death, retirement
or disability, or (ii) the day of termination of the Participant's employment
for any reason other than death, retirement or disability.
(d) Loans under the Plan may be satisfied by a Participant, as
determined by the Committee, in cash or, with the consent of the Committee, in
whole or in part in Common Stock at Fair Market Value on the date of such
payment.
(e) A loan shall be secured by a pledge of shares of Common Stock
with a Fair Market Value of not less than the principal amount of the loan.
After partial repayment of a loan, pledged shares no longer required as
security may be released to a Participant.
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(f) Every loan shall meet all applicable laws, regulations and
rules of the Federal Reserve Board and any other governmental agency having
jurisdiction.
3.3 Continuation of Employment. Nothing in the Plan or in any
instrument executed pursuant to the Plan will confer upon any Participant any
right to continue in the employ of the Company or affect the right of the
Company to terminate the employment of any Participant at any time with or
without Cause.
3.4 Compliance with Government Regulations. No shares of Common
Stock will be issued pursuant to an Option unless and until all applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any
stock exchanges upon which the Common Stock may be listed, have been fully met.
As a condition precedent to the issuance of shares of Common Stock pursuant to
an Option, the Company may require the Participant to take any reasonable
action to comply with such requirements.
3.5 Privileges of Stock Ownership. No Participant and no
beneficiary or other person claiming under or through such Participant will
have any right, title or interest in or to any shares of Common Stock allocated
or reserved under the Plan or subject to any Option except as to such shares of
Common Stock, if any, that have been issued to such Participant.
3.6 Withholding. The Company may make such provisions as it deems
appropriate to withhold any taxes the Company determines it is required to
withhold in connection with any Option. The Company may require the
Participant to satisfy any relevant tax requirements before authorizing any
issuance of Common Stock to the Participant. To the extent authorized by the
instrument executed by the Participant evidencing any Option, Participant may
satisfy withholding obligations by delivering to the Company Common Stock
having any aggregate Fair Market Value equal to such withholding obligation.
3.7 Nontransferability of Options. An Option may be exercised
during the life of the Participant solely by the Participant or the
Participant's duly appointed guardian or personal representative. No Option
and no right under the Plan, contingent or otherwise, will be assignable or
subject to any encumbrance, pledge or charge of any nature except that, under
such rules and regulations as the Company may establish pursuant to the terms
of the Plan, a beneficiary may be designated with respect to an Option in the
event of a death of a Participant. If such beneficiary is the executor or
administrator of the estate of the Participant, any rights with respect to such
Option may be transferred to the person or persons or entity (including a
trust) entitled thereto under the will of the Participant of such Option.
3.8 Amendment and Termination of Plan; Amendment of Options.
(a) The Board or the Committee will have the power, in its
discretion, to suspend or terminate the Plan at any time, and may amend it from
time to time in such respects as the Board or the Committee may deem advisable
provided that such amendment, suspension or termination complies with all
applicable state and federal requirements and requirements of any stock
exchange on which the stock is then listed, including any applicable
requirement that the Plan or an amendment to the Plan be approved by the
stockholders of the Company.
(b) Except as otherwise provided by Section 1.4, the Committee may
not, without the consent of a Participant, make modifications in the terms and
conditions of an Option.
(c) No amendment, suspension or termination of the Plan will,
without the consent of the Participant, alter, terminate, impair or adversely
affect any right or obligation under any Option previously granted under the
Plan.
IV. EFFECTIVE DATE AND DURATION OF PLAN
The Plan originally became effective May 5, 1993, and has been amended
effective May 17, 1995, and January 24, 1997. This Plan shall terminate at the
close of business on May 5, 2003, and no Option may be granted under the Plan
thereafter, but such termination shall not affect any Option theretofore
granted.
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