OUTSIDE DIRECTORS STOCK OPTION PLAN
OF
TEMTEX INDUSTRIES, INC.
1. Objective of the Plan
The Plan is intended to encourage more extensive ownership
of Common Stock of Temtex Industries, Inc., a Delaware
corporation (hereinafter called the "Corporation"), and to
provide incentives to attract and retain eligible Outside
Directors", as hereinafter defined.
2. Stock Reserved for the Plan
There will be reserved for issue upon the exercise of
options granted under the Plan thirty thousand (30,000) shares
of the Common Stock, par value $.20 per share ("Common Stock"),
of the Corporation, subject to adjustment as provided in
paragraph 13 below. Such shares may be in whole or in part, as
the Board of Directors of the Corporation shall from time to
time determine, authorized but unissued shares of Common Stock
or issued shares of Common Stock which shall have been
reacquired by the Corporation. If any option granted under the
Plan shall expire or terminate for any reason without having
been exercised in full, or is reduced as to the number of shares
covered thereby, the unpurchased shares subject thereto, or the
shares by which such option is reduced, shall again be available
for the purposes of the Plan.
3. Administration of the Plan
The Plan shall be administered by the Committee referred to
in Paragraph 4 (hereinafter called the "Committee"). Subject to
the express provisions of the Plan, the Committee shall have
plenary authority, in its discretion, to determine the Outside
Directors to whom, and the time or times at which, options shall
be granted, the number of shares to be subject to each option,
and the purchase price of the shares covered by each option.
Subject to the express provisions of the Plan, the Committee
shall also have plenary authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to
it, to determine the terms and provisions of the respective
option agreements (which need not be identical) and to make all
other determinations necessary or advisable for the
administration of the Plan.
4. The Committee
The Committee shall consist of those directors of the
Corporation who are not eligible to participate in the Plan, and
have not, for a period of at least one year prior thereto been
eligible to participate in the Plan, except that if at any time
there shall be less than three directors who are qualified to
serve on the Committee, then the Plan shall be administered by
the full Board of Directors. All references in this Plan to the
Committee shall be deemed to refer instead to the full Board of
Directors at any time there is no committee of three members
qualified to act hereunder. All determinations of the Committee
shall be made by not less than a majority of its members; and
subject to the express provisions of the Plan, all
determinations so made shall be conclusive.
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5. Eligibility
"Outside Directors" eligible to participate at any time in
this Plan shall consist of those directors of the Corporation
who are not at such time regular salaried employees of the
Corporation, and shall include an), directors who were formerly
regular salaried employees but have ceased to be regular
salaried employees through retirement or otherwise. The
determination of a majority of the directors then serving
(excluding the director in question) shall be conclusive as to
the eligibility of any director to participate in the Plan.
6. Option Prices
The purchase price of the Common Stock under each option
shall be determined by the Committee, but shall not be less than
100% of the fair market value of the stock at the time of the
granting of the option. Such fair market value shall be
determined by the Committee and may be computed by such method
as the Committee shall consider will reflect the fair market
value of the Common Stock on such day. The purchase price is to
be paid in full in cash upon the exercise of the option. The
proceeds of sale of stock subject to option are to be added to
the general funds of the Corporation and used for its corporate
purposes as the Board of Directors shall determine.
7. Term of Options
The term of each option shall be for such period as the
Committee shall determine, but not more than ten (10) years from
the date of granting thereof.
8. Limitations on Options
The maximum number of shares for which options may be
granted under the Plan to any Outside Director during any
calendar year shall be two thousand five hundred (2,500).
9. Exercise of Options
Unless otherwise provided in the option agreement, each option
shall be exercisable, in whole at any time, or in part from time
to time during the term of the option. The purchase price of
the shares as to which an option shall be exercised shall be
paid in full in cash at the time of exercise. Except as
provided in paragraphs 11 and 12 hereof, no option may be
exercised at any time unless the holder is then an Outside
Director and has continuously remained an Outside Director at
all times since the date of the granting of the option. The
holder of an option shall not have any of the rights of a
shareholder with respect to the shares covered by his option
until such shares shall be issued to him upon the due exercise
of the option.
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10. Non-Transferability of Options
No Option granted under the Plan shall be transferable otherwise
than by will or the laws of descent and distribution, and an
option may be exercised, during the lifetime of the holder
thereof, only by him.
11. Termination
In the event of the termination of the status as an Outside
Director of the bolder of an option under the Plan, other than
by reason of death, unless otherwise provided in his option
agreement, he may exercise his option at any time within three
months after such termination, but in no event after the
expiration of the term of the option, if and to the extent he
was entitled to exercise such option at the date of such
termination.
12. Death of Holder of Option
In the event of the death of the holder of an option while
an Outside Director, or while he is still entitled to exercise
the option as provided in paragraph 11 hereof, the option
theretofore granted to him may be exercised by a legatee or
legatees of the option holder under his last will, or by his
personal representatives or distributees, at any time within a
period of one year after his death, but in no event after the
expiration of the term of such option, if and to the extent that
be was entitled to exercise such option at the date of his
death.
13. Adjustments Upon Changes in Capitalization
Notwithstanding any other provision of the Plan, the option
agreements may contain such provisions as the Committee shall
determine to be appropriate for the adjustment of the number and
class of shares subject to each outstanding option and the
option prices in the event of changes in the outstanding Common
Stock of the Corporation by reason of stock dividends,
recapitalizations, mergers, separations, reorganizations,
liquidations, consolidations, split-ups, combinations or
exchanges of shares and the like, and, in the event of any such
change in the outstanding Common Stock of the Corporation, the
aggregate number and class of shares available under the Plan
and the maximum number of shares as to which options may be
granted to any individual may be adjusted by the Committee in
its discretion, and the determination of the Committee shall be
conclusive.
14. No Loans to Holders of Options
The Corporation shall not directly or indirectly lend money
to any individual for the purpose of assisting him to acquire or
carry shares of Common Stock issued upon the exercise of options
granted under the Plan.
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15. Time of Granting of Options
The effective date of granting of an option pursuant to the
Plan shall be the date specified by the Committee at the time it
awards such option provided that such date shall not be prior to
such date of award. The Committee shall promptly notify an
optionee of an award and a written option agreement in form
specified by the Committee shall promptly be duly executed and
delivered by or on behalf of the Corporation and the optionee
confirming the option. The Committee shall have the right to
terminate an option if the written option agreement is not
signed by the optionee and returned to the Corporation within 30
days after the delivery thereof to the optionee.
16. Government and Stock Exchange Regulations
The Plan, and the granting and exercise of options
thereunder, and the obligation of the Corporation to sell and
deliver shares under such options, shall be subject to all
applicable governmental laws, rules and regulations, and to such
approvals by any governmental agencies as may then be required,
and shall also be subject to all applicable rules and
regulations of any stock exchange upon which the Common Stock of
the Corporation may then be listed. The Committee is expressly
authorized to impose such restrictions and limitations as it may
deem advisable upon the exercise of options in order to satisfy
any such regulatory requirements.
17. Amendment and Termination
Unless the Plan shall theretofore have been terminated as
hereinafter provided, the Plan shall terminate on, and no option
shall be granted after December 31, 1999. The Plan may be
terminated, modified or amended by the shareholders of the
Corporation. The Board of Directors of the Corporation may also
terminate the Plan at any time and may modify or amend the Plan
in such respects as it shall deem advisable; provided, however,
that the Board of Directors may not, without further approval by
the holders of outstanding shares of the Corporation having a
majority of the general voting power (i) increase the maximum
number of shares as to which options may be granted under the
Plan except as provided in paragraph 13, (ii) decrease the
minimum option price, (iii) extend the term of the Plan or the
maximum period during which any option may be exercised, or (iv)
change the provisions governing eligibility of directors to
receive options under the Plan. No termination or modification
or amendment of the Plan may, without the consent of the person
to whom any option shall theretofore have been granted,
adversely affect the rights of' such person under such option.
With the consent of the person to whom such option was granted,
an outstanding option may be modified or amended by the
Committee in such manner as it may deem appropriate consistent
with the requirements of this Plan applicable to the grant of a
new option on the date of modification or amendment.
18. Adoption
This Plan shall become effective upon its adoption by the
favorable vote of the holders of a majority of the outstanding
shares of Common Stock of the Corporation.
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