STANDARD MOTOR PRODUCTS, INC.
INDEPENDENT DIRECTORS' STOCK
OPTION PLAN
1. PURPOSE. The purpose of the Standard Motor Products, Inc. Independent
Directors' Stock Option Plan (the `Plan") is to secure for Standard Motor
Products, Inc., a New York Corporation, (the "Company") and its stockholders the
benefits of the incentive inherent in increased common stock ownership by the
members of the Board of Directors of the Company who are not employees of the
Company or any of its subsidiaries.
2. DEFINITIONS. When used in this Plan, unless the context otherwise
requires:
(a)"Board of Directors" or "Board" shall mean the Board of Directors
of the Company, as constituted from time to time, and as elected at the
Company's annual shareholder's meeting.
(b) "Chief Executive Officer" shall mean the persons who at the time
shall be Chief Executive Officer or Co-Chief Executive Officers of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d)"Fair Market Value" of a Share at any particular time shall mean
with respect to common stock , the average of the high and low sale prices per
share of the Company's common stock on the New York Stock Exchange on the date
prior to the date of a grant.
(e) "Option" shall mean a non-qualified option issued pursuant to
the Plan.
(f)"Plan" shall mean this Standard Motor Products, Inc. Independent
Directors' Stock Option Plan adopted by the Board of Directors at its meeting
held on March 2, 2004, as such Plan from time to time may be amended.
(g) "Share" shall mean a share of the Company's common stock, par
value $2. per share.
3. ADMINISTRATION. The Plan shall be administered by the Board. No member
of the Board shall be liable for anything done or omitted to be done by such
member or by any other member of the Board in connection with the Plan, except
for such member's own willful misconduct or as expressly provided by statute.
4. ELIGIBILITY. Each member of the Board who is (i) not an employee of the
Company or any subsidiary and (ii) not a blood relation of any member of the
Board who is a controlling shareholder of the Company (an "Independent
Director") shall be eligible to receive an Option in accordance with Section 5
below. The adoption of this Plan shall not be deemed to give any director any
right to be granted an option to purchase Shares of the Company, except to the
extent and upon such terms and conditions as may be determined by the Board.
5. GRANT OF OPTIONS. The Shares which may be issued under the Plan will be
common stock of the Company (par value $2. per share). Each year, as of the date
of the annual meeting of the shareholders of the Company (or at such other time
as designated by the Board), each Independent Director who has been elected or
reelected, shall receive an Option for an amount of Shares as determined by the
Board; provided, however, that the maximum amount of Shares that shall be issued
under the Plan shall not exceed 50,000 Shares. The Shares to be issued may be
either Treasury Shares or authorized but unissued Shares. Option grants under
the Plan will be non-qualified options.
A Certificate of Option or Option Agreement, in the form determined by the
Board and signed by the Chairman of the Board, the President or the Chief
Financial Officer of the Company, attested by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Company, and having
the seal of the Company affixed hereto, shall be delivered to each person to
whom an Option is granted. Each Certificate of Option or Option Agreement shall
bear a legend indicating its status as an non-qualified option, and shall
contain the terms designated by the Board pursuant to the Plan and such other
terms and conditions, not inconsistent with the Plan, as the Board deems
necessary or appropriate.
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6. PRICE. The purchase price per share for the Shares to be purchased
pursuant to the exercise of any Option (the "Share Price") shall be equal to
100% of the Fair Market Value of a Share on the date immediately preceding the
day such Option is granted. Except as otherwise permitted below, payment for the
number of Shares to be exercised (the Share price times the number of Shares,
the "Exercise Price") pursuant to the exercise of an Option shall be made in
full at the time of the exercise of the Option, either in cash, or by certified
check payable to the order of the Company. In addition, the Option shall provide
that the Exercise Price may be satisfied, in whole or in part through the
surrender of previously acquired Shares of the Company at their fair market
value on the exercise date or through other financial arrangements made with a
stock broker. Only Shares of the Company held by the Option holder for at least
six (6) months as of the date of exercise may be so used to pay the exercise
price for any Option or portion thereof.
7. EXERCISE OF OPTIONS. Except as otherwise provided herein, an Option,
after the grant thereof, shall be exercisable by the holder at such rate and
times as may be fixed by the Board, but not sooner than approval of the Plan by
stockholders of the Company as provided in Section 14 hereof. Notwithstanding
anything to the contrary, no Option may be exercised until the first anniversary
of the date upon which the Option was granted.
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An Option shall be exercised by the delivery to the Company of a
Certificate of Option or Option Agreement duly signed by the holder thereof
accompanied by full payment of the Exercise Price for the Shares to be purchased
pursuant to such exercise. Such deliveries shall be made to the officer of the
Company appointed by the Chairman of the Board or such other designated person
for the purpose of receiving the same.
Within a reasonable time after exercise of an Option, the Company shall
cause to be delivered to the person entitled thereto a certificate for the
Shares purchased pursuant to exercise of the Option. All such Shares and
certificates shall be issued in the name of the person who is entitled at the
time to exercise the Option or, if such person is the original holder and so
elects, in the name of such person and his or her spouse as joint tenants with
right of survivorship. If the Option shall have been exercised with respect to
less than all of the Shares subject thereto, then the Company shall also cause
to be delivered to the person entitled thereto a new Certificate of Option or
Option Agreement in replacement of the certificate or agreement surrendered at
the time of the exercise, indicating the number of Shares with respect to which
the Option remains available for exercise, or else the original certificate or
agreement shall be marked to give effect to the partial exercise thereof.
8. DURATION OF OPTIONS. Except as provided below, each Option granted
under the Plan shall provide that it may not be exercised after ten years from
the date upon which the Option was granted, or such lesser period as determined
by the Board in its discretion.
9. NON-TRANSFERABILITY OF OPTIONS. Options shall not be transferable by
the holder thereof, otherwise than by will or the laws of descent and
distribution to the extent provided in Section 12 hereof. Options may be
exercised or surrendered during the holder's lifetime only by the holder
thereof, provided, however, that in the event that an Option holder becomes
legally incapacitated and a representative or committee is appointed to act on
his or her behalf, such representative or committee may exercise any Options
that are held by the incapacitated Option holder to the same extent as the
holder could have had he or she not suffered such incapacity.
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10. TERMINATION OF INDEPENDENT DIRECTOR RELATIONSHIP. If an Option holder
shall cease to be an Independent Director for any reason other than death, while
holding an Option that has not expired and has not been fully exercised, such
person shall have until the end of the 90th calendar day following the date he
ceases to be such an Independent Director (but in no event after the Option has
expired under Section 8 above), and no longer, to exercise any unexercised
portion of such Option that he or she could have exercised on the day on which
such person ceased to be an Independent Director.
If an Option holder shall cease to be an Independent Director by reason of
death, while holding an Option that has not expired and has not been fully
exercised, such person's executors, administrators or distributees, as the case
may be, may, at any time within 120 calendar days after the date of death (but
in no event after the Option has expired under Section 8 above), exercise the
Option with respect to any shares as to which the decedent could have exercised
at the time of death.
11. ADJUSTMENT OF SHARES. If prior to the complete exercise of any Option
there shall be declared and paid a stock dividend upon the Shares or if the
Shares shall be split up, converted, exchanged, reclassified, combined or in any
way substituted for, the Option to the extent that it has not been exercised,
shall entitle the holder, upon the future exercise of the Option, to purchase
such number and kind of securities or other property subject to the terms of the
Option which he or she would have been entitled to receive had he or she
actually owned the Shares subject to the unexercised portion of the Option at
the time of the occurrence of such event; and the aggregate Option Price payable
upon the future exercise of the Option stall be the same as if the original
Shares were being purchased thereunder. Any fractional Shares or other
securities which may be issuable upon the exercise of the Option as a result of
such adjustment shall be payable in cash based upon the Fair Market Value of
such Shares or other securities as of the time of such exercise, If any such
event should occur, the number of Shares with respect to which Options remain to
be granted, or with respect to which Options may again be granted, shall be
similarly adjusted.
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If the Board of Directors approves or authorizes the dissolution or
liquidation of the Company, or the reorganization, merger or consolidation of
the Company with one or more corporations as a result of which either the
Company will become a wholly-owned subsidiary of another corporation or neither
the Company nor a subsidiary is the surviving corporation, or the sale of all or
substantially all of the assets of the Company other than to a subsidiary, or if
a tender offer for the Common Stock (or any other capital stock of the Company
or a subsidiary for which all the Common Stock has heretofore been exchanged or
into which it has been changed (the "Recapitalized Stock") shall commence, or,
if during any twelve month period, a majority of the members of the Board of
Directors are replaced with newly elected individuals, or such existing
directors cease to constitute a majority of the Board of Directors, unless such
new directors were nominated by the management of the Company, (each of the
foregoing being referred to hereinafter as an "Extraordinary Transaction"), or,
if after the adoption of the Plan, any individual, corporation, other entity or
any group (within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended), which is unaffiliated with the Company or a subsidiary
other than as a stockholder of the Company, acquires, directly or indirectly,
within any twelve-month period Shares of the Common stock or any class of
Recapitalized Stock with full voting rights (excluding any Shares issued in any
acquisition or reorganization approved by the Board of Directors in which the
Company is the surviving corporation or in control of the surviving corporation
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and any Shares issued by the Company in a public or private offering), such that
such individual, corporation, other entity or group becomes, directly or
indirectly, after the adoption of the Plan, the holder of Common stock or such
Recapitalized Stock representing 25 percent or more of the then current ordinary
voting power of the Company's stock (a "Substantial Change in Ownership"), then,
effective upon the Board of Directors approval of the Extraordinary Transaction
(other than a tender offer), the commencement of the tender offer, or the
occurrence of the Substantial Change in Ownership, as the case may be, the time
when each then outstanding Option granted under the Plan may be exercised shall
automatically be accelerated so that each holder thereof may exercise his or her
Options in full or in any part prior to the consummation of the Extraordinary
Transaction or promptly after a Substantial Change in Ownership. For the
purposes of determining if a Substantial Change in Ownership has occurred, an
individual, corporation, other entity or group shall not be deemed to hold any
Common stock or Recapitalized Stock issuable upon the conversion of any
convertible securities of the Company or a subsidiary or upon the exercise of
any option or warrant for or other right to purchase Common stock or
Recapitalized Stock unless such Common stock or Recapitalized Stock has actually
been issued upon conversion or exercise. Where any Option, the exercise date of
which has been accelerated pursuant to this paragraph, is thereafter exercised,
the Option Price may be paid in any manner and upon the terms permitted by the
applicable Option.
The determination of the Board as to adjustments to be made pursuant to
this Section 11 shall be final, binding and conclusive.
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12. ISSUANCE OF SHARES COMPLIANCE WITH SECURITIES LAWS. The Company may
postpone the issuance and delivery of Shares upon any exercise of an Option
until (a) the admission of such Shares to listing on NYSE or any stock exchange
or exchanges on which Shares are then listed and (b) the completion of such
registration or other qualification of such Shares or such filings under any
federal or state law, rule or regulation as the Company shall determine to be
necessary or advisable. Any person exercising any Option shall make such
representations and furnish such information as may, in the opinion of counsel
for the Company, be appropriate to permit the Company to issue the Shares in
compliance with the provisions of applicable federal and state securities laws,
rules, and regulations. The Company shall have the right, in its sole
discretion, to issue "stop transfer" instructions for, and to place an
appropriate legend on the certificates for, any Shares which may be issued upon
exercise of an Option.
Nothing in the Plan or any Certificate of Option or Option Agreement shall
be construed to require the Company to register the Shares issued or issuable
under the Options under the Securities Act of 1933, as amended, or under any
applicable state securities law.
13. AMENDMENT OF THE PLAN. Except as hereinafter provided, the Board may
at any time or from time to time amend the Plan and the terms and conditions of
any Options not theretofore granted, and the Board may, with the consent of the
affected holder of any Option, at any time or from time to time amend the terms
and conditions of such Options as have been theretofore granted. Notwithstanding
the foregoing the Board of Directors may not take any of the following actions
unless the holders of a majority of the Company's stock entitled to vote approve
such action:
(a) materially increase the total number of Shares for which Options
may be granted under the Plan in the aggregate or to any one person;
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(b) change the minimum Share Price for Shares subject to Options;
(c) permit an Option to be exercised earlier than one year after it
is granted;
(d) extend the termination date of the Plan; or
(e) take any other action with respect to the Plan which under the
Code would be deemed the adoption of a new plan or which, under Rule
16b-3 promulgated pursuant to the Securities Exchange Act of 1934,
or the rules of the New York Stock Exchange, would require approval
of the Company's stockholders.
To the extent not inconsistent with the Plan, the Board may authorize and
establish such rules and regulations as it may determine to be advisable to make
the Options effective or to provide for their administration, and may take such
other action with regard to the Options as it shall deem desirable to effectuate
their purpose. The Board shall have the authority to interpret the Plan as it
may deem advisable and to make determinations which shall be final, binding and
conclusive upon all persons. No member of the Board shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted under it.
14. APPROVALS. This Plan is conditioned upon its approval by the holders
of a majority of the stock of the Company entitled to vote, present in person or
by proxy, at the Company's annual meeting, to be held on May 20, 2004, provided,
however, that the Plan is adopted and approved by the Board of Directors. Any
Options granted under the Plan prior to such approval shall be granted subject
to such approval, and in the event that this Plan is not approved by the
stockholders of the Company as aforesaid, this Plan shall be void and of no
force and effect, and any Options that may have been granted shall be void and
of no force or effect.
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15. APPLICABLE LAW. The Plan and all Options granted pursuant to it are
subject to all applicable laws and the rules and regulations of governmental
authorities. Notwithstanding any provisions of the Plan or any Option to the
contrary, no option holder shall be entitled to exercise an Option or any other
right under the applicable Option, and the Company shall not be obligated to
issue any Shares to such holder or to take any other action under the applicable
Option, if such exercise, issuance or other action would constitute a violation
of any law, rule, or regulation applicable to the Option holder or the Company
or of any order, judicial decision, or material agreement to which the Company
is a party or by which it is bound. The Plan will be administered in accordance
with and governed by the laws of the state of New York.
16. FINAL ISSUANCE DATE. No Option shall be granted under the Plan after
May 20, 2016.
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FORM OF OPTION AGREEMENT
NON-QUALIFIED STOCK OPTION
(NON-ASSIGNABLE)
FOR _______SHARES
TO PURCHASE COMMON STOCK OF
STANDARD MOTOR PRODUCTS, INC.
ISSUED PURSUANT TO THE STANDARD MOTOR PRODUCTS, INC.
2004 INDEPENDENT DIRECTORS' STOCK OPTION PLAN
THIS CERTIFIES that, on _______, 20__, pursuant to the Standard Motor
Products, Inc. 2004 Independent Directors' Stock Option Plan, _____________ (the
"Holder"), a director of Standard Motor Products, Inc. ("Company"), a New York
Corporation, was granted an option ("Option") to purchase all or any part of
_______ fully paid and non-assessable shares ("Shares") of the Common Stock (par
value of $2.00) of the Company, at the price of $_____* per share ("Share
Price"), subject to the following terms and conditions:
1. EXERCISE OF OPTIONS. Except as otherwise provided herein, an Option
after the grant thereof, shall be exercisable by the Holder at such rate and
times as may be fixed by the Board of Directors, but not sooner than approval of
the Plan by stockholders of the Company. No Option may be exercised until the
first anniversary of the date upon which the Option was granted.
*Average of the high and low price at the close of business on _______, 20__
An Option shall be exercised by the delivery to the Company of a written
notice duly signed by the Holder thereof, accompanied by this Option Agreement
and by full payment to the Company of the Exercise Price for the Shares to be
purchased pursuant to such exercise. Such deliveries shall be made to the
officer of the Company appointed by the Chairman of the Board of Directors or
such other designated person for the purpose of receiving the same.
Within a reasonable time after exercise of an Option, the Company shall
cause to be delivered to the person entitled thereto a certificate for the
Shares purchased pursuant to exercise of the Option. All such Shares and
certificates shall be issued in the name of the person who is entitled at the
time to exercise the Option or, if such person is the original holder and so
elects, in the name of such person and his or her spouse as joint tenants with
right of survivorship. If the Option shall have been exercised with respect to
less than all of the Shares subject thereto, then the Company shall also cause
to be delivered to the person entitled thereto a new Option Agreement in
replacement of the Option Agreement which was surrendered at the time of the
exercise, indicating the number of Shares with respect to which the Option
remains available for exercise, or else the original Option Agreement shall be
marked to give effect to the partial exercise thereof.
2. PAYMENT. Payment for the number of shares to be exercised (the Share
price times the number of Shares the "Exercise Price") pursuant to the exercise
of an Option shall be made in full at the time of the exercise of the Option,
either in cash, or by check payable to the order of the Company. In addition,
the Option shall provide that the Exercise Price may be satisfied, in whole or
in part through the surrender of previously acquired Shares of the Company at
their fair market value on the exercise date or through other financial
arrangements made with a stockbroker.
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3. TERMINATION OF INDEPENDENT DIRECTOR RELATIONSHIP. If an Option Holder
shall cease to be an Independent Director for any reason other than death, while
holding an Option that has not expired and has not been fully exercised, such
person shall have until the end of the 90th calendar day following the date he
ceases to be such an Independent Director, and no longer, to exercise any
unexercised portion of such Option that he or she could have exercised on the
day on which such person ceased to be an Independent Director.
If an Option Holder shall cease to be an Independent Director by reason of
death, while holding an Option that has not expired and has not been fully
exercised, such person's executors, administrators or distributees, as the case
may be, may, at any time within 120 calendar days after the date of death (but
in no event after the Option has expired under Section 7), exercise the Option
with respect to any Shares as to which the decedent could have exercised at the
time of death.
4. ADJUSTMENT OF SHARES. If prior to the complete exercise of any Option
there shall be declared and paid a stock dividend upon the Shares, or if the
Shares shall be split up, converted, exchanged, reclassified, combined or in any
way substituted for, the Option to the extent that it has not been exercised,
shall entitle the Holder upon the future exercise of the Option, to purchase
such number and kind of securities or other property, subject to the terms of
the Option which he or she would have been entitled to receive had he or she
actually owned the Shares subject to the unexercised portion of the Option at
the time of the occurrence of such event; and the aggregate Option Price payable
upon the future exercise of the Option shall be the same as if the original
Shares were being purchased thereunder. Any fractional Shares or other
securities which may be issuable upon the exercise of the Option as a result of
such adjustment shall be payable in cash based upon the Fair Market Value of
such Shares or other securities as of the time of such exercise. If any such
event should occur, the number of Shares with respect to which Options remains
to be granted, or with respect to which Options may again be granted, shall be
similarly adjusted.
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If the Board of Directors approves or authorizes the dissolution or liquidation
of the Company, or the reorganization, merger or consolidation of the Company
with one or more corporations as a result of which either the Company will
become a wholly-owned subsidiary of another corporation or neither the Company
nor a subsidiary is the surviving corporation, or the sale of all or
substantially all of the assets of the Company other than to a subsidiary, or if
a tender offer for the Common Stock (or any other capital stock of the Company
or a subsidiary for which all the Common Stock has heretofore been exchanged or
into which it has been changed (the "Recapitalized Stock")) shall commence, or
if during any twelve month period, a majority of the members of the Board of
Directors are replaced with newly elected individuals, or such existing
directors cease to constitute a majority of the Board of Directors, unless such
new directors were nominated by the management of the Company (each of the
foregoing being referred to hereinafter as an "Extraordinary Transaction"), or
if, after the adoption of the Plan, any individual, corporation, other entity or
any group (within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended), which is unaffiliated with the Company or a subsidiary
other than as a stockholder of the Company, acquires, directly or indirectly,
within any twelve-month period shares of the Common Stock or any class of
Recapitalized Stock with full voting rights (excluding any shares issued in any
acquisition or reorganization approved by the Board of Directors in which the
Company is the surviving corporation or in control of the surviving corporation
and any shares issued by the Company in a public or private offering), such that
such individual, corporation, other entity or group becomes, directly or
indirectly, after the adoption of the Plan, the holder of Common Stock or such
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Recapitalized Stock representing 25 percent or more of the then current ordinary
voting power of the Company's stock (a "Substantial Change in Ownership"), then,
effective upon the Board of Directors approval of the Extraordinary Transaction
(other than a tender offer), the commencement of the tender offer, or the
occurrence of the Substantial Change in Ownership, as the case may be, the time
when each then outstanding Option granted under the Plan may be exercised shall
automatically be accelerated so that each Holder thereof may exercise his or her
Options in full or in any part prior to the consummation of the Extraordinary
Transaction or promptly after a Substantial Change in Ownership. For the
purposes of determining if a Substantial Change in Ownership has occurred, an
individual, corporation, other entity or group shall not be deemed to hold any
Common Stock or Recapitalized Stock issuable upon the conversion of any
convertible securities of the Company or a subsidiary or upon the exercise of
any option or warrant for or other right to purchase Common Stock or
Recapitalized Stock unless such Common Stock or Recapitalized Stock has actually
been issued upon conversion or exercise. Where any Option, the exercise date of
which has been accelerated pursuant to this paragraph, is thereafter exercised
the Share Price may be paid in any manner and upon the terms permitted by the
applicable Option. The determination of the Board of Directors as to adjustments
to be made pursuant to this Section 4 shall be final, binding and conclusive.
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5. ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES LAWS. The Company may
postpone the issuance and delivery of Shares upon the exercise of the Option
until (a) the admission of such Shares to listing on NYSE or on any stock
exchange or exchanges on which Shares are then listed and (b) the completion of
such registration or other qualification of such Shares or such filings under
any federal or state law, rule of regulation as the Company shall determine to
be necessary or advisable. Any person exercising the Option shall make such
representations and furnish such information as may, in the opinion of counsel
for the Company, be appropriate to permit the Company to issue the Shares in
compliance with the provisions of applicable federal and state securities laws,
rules, and regulations. The Company shall have the right, in its sole
discretion, to issue "stop transfer" instructions for, and to place an
appropriate legend on the certificates for, any Shares which may be issued upon
exercise of an Option. Nothing in the Plan or this Option Agreement shall be
construed to require the Company to register the Shares issued or issuable under
the Options under the Securities Act of 1933, as amended, or under any
applicable state securities law.
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6. APPLICABLE LAW. The Options are subject to all applicable laws and
rules and regulations of governmental authorities. Notwithstanding any
provisions of the Plan or this Option Agreement to the contrary, the Holder
shall not be entitled to exercise the Option and the Company shall not be
obligated to issue any Shares to the Holder or to take any other action under
the applicable Option, if such exercise, issuance or other action would
constitute a violation of any law, rule, or regulation applicable to the Holder
or the Company, or a violation of any order, judicial decision, or material
agreement to which the Company is a party or by which it is bound. This Option
Agreement will be administered in accordance with and governed by the laws of
the state of New York.
7. DURATION OF OPTION. The duration of this Option shall be a period of
ten years from the date upon which the Option was granted.
8. NON-TRANSFERABILITY OF OPTIONS. This Option shall not be transferable
by the Holder hereof, otherwise than by will or the laws of descent and
distribution to the extent provided herein. This Option may be exercised or
surrendered during the Holder's lifetime only by the Holder thereof, provided,
however, that in the event that the Holder becomes legally incapacitated and a
representative or a committee is appointed to act on his or her behalf, such
representative or committee may exercise any Options that are held by the
incapacitated Holder to the same extent as the Holder could have had he or she
not suffered such incapacity.
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9. STATUS. This Option is not intended to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended.
10. PLAN. This Option Agreement is subject to, and shall be governed by,
the terms of the Plan. In the case of a conflict between the terms of this
Option Agreement and the terms of the Plan, the terms of the Plan shall control.
IN WITNESS WHEREOF, the Company hereby sets its hand this ___ day of
_____, 20__.
STANDARD MOTOR PRODUCTS, INC.
By:
------------------------------
Name:
Title:
Accepted:
- -----------------------------
Holder,
---------------------
Address:
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