CHARTER MEDICAL CORPORATION
1994 STOCK OPTION PLAN
1. PURPOSE. The purpose of the Charter Medical Corporation 1994 Stock
Option Plan is to motivate and retain officers and other key employees of
Charter Medical Corporation and its Subsidiaries who have major responsibility
for the attainment of the primary long-term performance goals of Charter Medical
Corporation.
2. DEFINITIONS. The following terms shall have the following meanings:
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules promulgated thereunder.
"Committee" means a committee of two or more members of the Board
constituted and empowered by the Board to administer the Plan in accordance
with its terms.
"Corporation" means Charter Medical Corporation, a Delaware
corporation.
"Director" means a member of the Board.
"Disability" means a physical or mental condition under which the
Participant qualifies for (or will qualify for after expiration of a
waiting period) disability benefits under the long-term disability plan of
the Corporation or Subsidiary that employs such Participant.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means: (1) If the Stock is listed on a national
securities exchange (as such term is defined by the Exchange Act) or is
traded on the Nasdaq National Market System on the date of determination,
the price equal to the mean between the high and low sales prices of a
share of Stock on said national securities exchange or on said Nasdaq
National Market System on that day (or if no shares of the Stock are traded
on that date but there were shares traded on dates within a reasonable
period both before and after such
date, the Fair Market Value shall be the weighted average of the means
between the high and low sales prices of the Stock on the nearest date
before and the nearest date after that date on which shares of the Stock
are traded); (2) If the Stock is traded both on a national securities
exchange and in the over-the-counter market, the Fair Market Value shall be
determined by the prices on the national securities exchange; and (3) If
the Stock is not listed for trading on a national securities exchange and
is not traded on the Nasdaq National Market System or otherwise in the
over-the-counter market, then the Committee shall determine the Fair Market
Value of the Stock from time to time in its sole discretion.
"Option" means an Option granted pursuant to Section 6.
"Participant" means an employee of the Corporation or any of its
Subsidiaries who is selected to participate in the Plan in accordance with
Section 4.
"Plan" means the Charter Medical Corporation 1994 Stock Option Plan.
"Stock" means the common stock, par value $0.25 per share, of the
Corporation.
"Stock Option Agreement" means the written agreement or instrument
which sets forth the terms of an Option granted to a Participant under this
Plan.
"Subsidiary" means any corporation, as defined in Section 7701 of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder, of which the Corporation, at the time, directly or indirectly,
owns 50% or more of the outstanding securities having ordinary voting power
to elect directors (other than securities having voting power only by
reason of a contingency).
3. ADMINISTRATION. The Plan shall be administered by the Committee.
Subject to the provisions of the Plan, the Committee, acting in its absolute
discretion, shall exercise such powers and take such action as expressly called
for under this Plan and, further, the Committee shall have the power to
interpret the Plan, to determine the terms of each Stock Option Agreement
(subject to the provisions of the Plan) and (subject to Section 18 and Rule
16b-3 under the Exchange Act, if applicable) to take such other action in the
administration and operation of this Plan as the Committee deems equitable under
the circumstances. All actions of the Committee shall be binding on the
Corporation, on each affected Participant and on each other person directly or
indirectly affected by such action. No member of the Board shall serve as a
member of the Committee unless such member is a
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"disinterested person" within the meaning of Rule 16b-3 under the Exchange Act.
The Committee shall have the right to delegate to the chief executive officer of
the Corporation the authority to select Participants and to grant Options
(except to any person subject to Section 16 of the Exchange Act), subject to any
review, approval, or notification required by the Committee or as may otherwise
be required by law.
4. PARTICIPATION. Participants in the Plan shall be limited to those
officers and employees of the Corporation or any of its Subsidiaries who have
been selected to participate in the Plan by the Committee acting in its absolute
discretion.
5. MAXIMUM NUMBER OF SHARES SUBJECT TO OPTIONS. Subject to the
provisions of Section 9, there shall be 1,300,000 shares of Stock reserved for
use under this Plan, and such shares of Stock shall be reserved to the extent
that the Committee and the Board deems appropriate from authorized but unissued
shares of Stock or from shares of Stock which have been reacquired by the
Corporation. Any shares of Stock subject to any Option which remain after the
cancellation, expiration, exchange or forfeiture of such Option thereafter shall
again become available for use under this Plan. All authorized and unissued
shares issued upon exercise of Options under the Plan shall be fully paid and
nonassessable shares.
6. GRANT OF OPTIONS. The Committee, acting in its absolute discretion,
shall have the right to grant Options to Participants under this Plan from time
to time; provided, however, that the maximum number of shares of Stock issuable
upon exercise of Options shall not exceed 1,300,000, subject to adjustment as
provided in Section 9. No Option shall be granted after December 31, 1996. The
maximum number of Options that are granted to any Participant shall not exceed
150,000, subject to adjustment as provided in Section 9.
7. TERMS AND CONDITIONS OF OPTIONS. Options granted pursuant to the Plan
shall be evidenced by Stock Option Agreements in such form as the Committee from
time to time shall approve and including such terms and conditions not
inconsistent with the provisions set forth in the Plan as the Committee may
determine; provided, that such Stock Option Agreements and the Options granted
shall comply with and be subject to the following terms and conditions:
(a) EMPLOYMENT. Each Participant shall agree to remain in the employ
of and to render services to the Corporation or a Subsidiary thereof for
such period as the Committee may require in the Stock Option Agreement;
provided, however,
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that such agreement shall not impose upon the Corporation or any Subsidiary
thereof any obligation to retain the Participant in its employ for any
period.
(b) NUMBER OF SHARES. Each Stock Option Agreement shall state the
total number of shares of Stock to which it pertains.
(c) EXERCISE PRICE. The exercise price per share for Options shall
be Fair Market Value of the Stock on the date of grant, subject to
adjustment as contemplated by Section 9.
(d) MEDIUM AND TIME OF PAYMENT. The exercise price shall be payable
upon the exercise of the Option in an amount equal to the number of shares
then being purchased times the per share exercise price. Payment shall be
in cash; except that the Corporation, in its sole discretion, may permit
payment by delivery to the Corporation of a certificate or certificates for
shares of Stock duly endorsed for transfer to the Corporation with
signature guaranteed by a member firm of the New York Stock Exchange or by
a national banking association. In the event of any payment by delivery of
shares of Stock, such shares shall be valued on the basis of their Fair
Market Value determined as of the day prior to the date of delivery. If
payment is made by delivery of shares of Stock, the value of such Stock may
not exceed the total exercise price payment; but the preceding clause shall
not prevent delivery of a stock certificate for a number of shares having a
greater value, if the number of shares to be applied to payment of the
exercise price is designated by the Participant and the Participant
requests that a certificate for the remainder shares be delivered to the
Participant.
In addition to the payment of the purchase price of the shares of
Stock then being purchased, a Participant shall also, pursuant to
Section 15, pay to the Corporation or otherwise provide for payment of an
amount equal to the amount, if any, which the Corporation at the time of
exercise is required to withhold under the income tax withholding
provisions of the Code and other applicable income tax laws.
(e) METHOD OF EXERCISE. All Options shall be exercised by written
notice directed to the Secretary of the Corporation at its principal place
of business, accompanied by payment made in accordance with the foregoing
subsection (d) of the option exercise price for the number of shares
specified in the notice of exercise and by any documents required by
Section 13. The Corporation shall make delivery of such shares within a
reasonable period of time; provided, however, that if any law or regulation
requires the Corporation to take any action (including but not limited to
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the filing of a registration statement under the Securities Act of 1933 and
causing such registration statement to become effective) with respect to
the shares specified in such notice before their issuance, then the date of
delivery of such shares shall be extended for the period necessary to take
such action.
(f) TERM OF OPTIONS. Except as otherwise specifically provided in
the Plan, the terms of all Options shall commence on the date of grant and
shall expire ten years after the date of grant.
(g) EXERCISE OF OPTIONS. Options are exercisable only to the extent
they are vested as provided in Section 8. After Options have vested in
accordance with Section 8, such Options are exercisable at any time, in
whole or in part during their terms if the Participant is at the time of
exercise employed by the Company or a Subsidiary. If a Participant's
employment with the Corporation or any Subsidiary is terminated for any
reason other than death or disability, the vested portion of each Option
held by such Participant on the date of such termination may be exercised
for 90 days following the date of termination of employment (but not after
expiration of the term of the option). In the event of the death or
Disability of a Participant, the vested portion of each Option held by such
Participant on the date of such event may be exercised within twelve months
of the date of such event (but not after the expiration of the term of the
option).
In the event of the death of a Participant, the vested portion of each
Option previously held by such Participant may be exercised within the time
set forth above by the executor, other legal representative or, if none,
the heir or legatee of such Participant.
(h) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Upon a change in
capitalization pursuant to Section 9, the number of shares covered by an
Option and the per share option exercise price shall be adjusted in
accordance with the provisions of Section 9.
(i) TRANSFERABILITY. No Option shall be assignable or transferable
by the Participant except by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
by the Code or ERISA. The designation of a beneficiary shall not
constitute a transfer; and, during the lifetime of a Participant, all
Options held by such Participant shall be exercisable only by him or his
lawful representative in the event of his incapacity.
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(j) RIGHTS AS A STOCKHOLDER. A Participant shall have no rights as a
stockholder with respect to shares covered by his Option until the date of
the issuance of the shares to him and only after such shares are fully
paid. Unless specified in Section 9, no adjustment will be made for
dividends or other rights for which the record date is prior to the date of
such issuance.
(k) MISCELLANEOUS PROVISIONS. The Stock Option Agreements authorized
under the Plan may contain such other provisions not inconsistent with the
terms of this Plan as the Committee shall deem advisable.
8. VESTING. Options granted under this Plan shall be exercisable only to
the extent such Options have become vested pursuant to this Section 8. An
Option shall vest at the rate of 33-1/3% of the shares covered by the Option on
each of the first three anniversary dates of the grant of the Option if the
Participant is an employee of the Company or a Subsidiary on such dates.
9. CHANGE IN CAPITALIZATION. If the Stock should, as a result of a stock
split or stock dividend, combination of shares, recapitalization or other change
in the capital structure of the Corporation or exchange of Stock for other
securities by reclassification or otherwise, be increased or decreased or
changed into, or exchanged for, a different number or kind of shares or other
securities of the Corporation, or any other corporation, then the number of
shares covered by Options, the number and kind of shares which thereafter may be
distributed or issued under the Plan and the per share option price of Options
shall be appropriately adjusted consistent with such change in such manner as
the Committee may deem equitable to prevent dilution of or increase in the
rights granted to, or available for, Participants.
10. FRACTIONAL SHARES. In the event that any provision of this Plan or a
Stock Option Agreement would create a right to acquire a fractional share of
Stock, such fractional share shall be disregarded.
11. SUCCESSOR CORPORATION. If the Company is merged or consolidated with
another corporation or other legal entity and the Company is not the surviving
corporation or legal entity, or in the event all or substantially all of the
property or common stock of the Company is acquired by another corporation or
legal entity, or in case of a dissolution, reorganization or liquidation of the
Company, the Board of Directors of the Company, or the board of directors or
governing body of any corporation or other legal entity assuming the obligations
of the Company hereunder,
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shall either: (i) make appropriate provision for the preservation of
Participants' rights under the Plan in any agreement or plan it may enter into
or adopt to effect any of the foregoing transactions; or (ii) upon written
notice to each Participant, provide that all Options, whether or not vested, may
be exercised within thirty days of the date of such notice and if not so
exercised, shall be terminated.
12. NON-ALIENATION OF BENEFITS. Except insofar as applicable law may
otherwise require, (i) no Options, rights or interest of Participants or Stock
deliverable to any Participant at any time under the Plan shall be subject in
any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge of encumbrance of any kind, and any
attempt to so alienate, sell, transfer, assign, pledge, attach, charge or
otherwise encumber any such amount, whether presently or thereafter payable,
shall be void; and (ii), to the fullest extent permitted by law, the Plan shall
in no manner be liable for, or subject to, claims, liens, attachments or other
like proceedings or the debts, liabilities, contracts, engagements, or torts of
any Participant or beneficiary. Nothing in this Section 12 shall prevent a
Participant's rights and interests under the Plan from being transferred by will
or by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or ERISA; provided, however, that no
transfer by will or by the laws of descent and distribution shall be effective
to bind the Corporation unless the Committee or its designee shall have been
furnished before or after the death of such Participant with a copy of such will
or such other evidence as the Committee may deem necessary to establish the
validity of the transfer.
13. LISTING AND QUALIFICATION OF SHARES. The Corporation, in its
discretion, may postpone the issuance or delivery of shares of Stock until
completion of any stock exchange listing, or other qualification or registration
of such shares under any state or federal law, rule or regulation, as the
Corporation may consider appropriate, and may require any Participant to make
such representations, including, but not limited to, a written representation
that the shares are to be acquired for investment and not for resale or with a
view to the distribution thereof, and furnish such information as it may
consider appropriate in connection with the issuance or delivery of the shares
in compliance with applicable laws, rules and regulations. The Corporation may
cause a legend or legends to be placed on such certificates to make appropriate
reference to such representation and to restrict transfer in the absence of
compliance with applicable federal or state securities laws.
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14. NO CLAIM OR RIGHT UNDER THE PLAN. No employee of the Corporation or
any Subsidiary shall at any time have the right to be selected as a Participant
in the Plan nor, having been selected as a Participant and granted an Option, to
be granted any additional Option. Neither the action of the Corporation in
establishing the Plan, nor any action taken by it or by the Board or the
Committee thereunder, nor any provision of the Plan, nor participation in the
Plan, shall be construed to give, and does not give, to any person the right to
be retained in the employ of the Corporation or any Subsidiary, or interfere in
any way with the right of the Corporation or any Subsidiary to discharge or
terminate any person at any time without regard to the effect such discharge or
termination may have upon such person's rights, if any, under the Plan.
15. TAXES. The Corporation may make such provisions and take such steps
as it may deem necessary or appropriate for the withholding of all federal,
state, local and other taxes required by law to be withheld with respect to
Options under the Plan, including, but not limited to, (i) deducting the amount
required to be withheld from salary or any other amount then or thereafter
payable to a Participant, beneficiary or legal representative or (ii) requiring
a Participant, beneficiary or legal representative to pay to the Corporation the
amount required to be withheld as a condition of releasing the Stock.
16. NO LIABILITY OF DIRECTORS. No member of the Board or Committee shall
be personally liable by reason of any contract or other instrument executed by
such member on his behalf in his capacity as a member of the Board or Committee,
nor for any mistake of judgment made in good faith, and the Corporation shall
indemnify and hold harmless each employee, officer and Director of the
Corporation, to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Board) arising out of any act or
omission to act in connection with the Plan to the fullest extent permitted or
required by the Corporation's governing instruments and, in addition, to the
fullest extent of any applicable insurance policy purchased by the Corporation.
17. OTHER PLANS. Nothing contained in the Plan is intended to amend,
modify or rescind any previously approved compensation plans or programs entered
into by the Corporation or its Subsidiaries. The Plan shall be construed to be
in addition to any and all such plans or programs. No award of Options under
the Plan shall be construed as compensation under any other executive
compensation or employee benefit plan of the Corporation or any of its
Subsidiaries, except as specifically provided in any such plan or as otherwise
provided by the Committee. The adoption of the
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Plan by the Board shall not be construed as creating any limitations on the
power or authority of the Board to adopt such additional compensation or
incentive arrangements as the Board may deem necessary or desirable.
18. AMENDMENT OR TERMINATION. This Plan may be amended by the Board from
time to time to the extent that the Board deems necessary or appropriate;
provided, however, no such amendment shall be made absent the approval of the
stockholders of the Corporation: (1) if stockholder approval of such amendment
is required for continued compliance with Rule 16b-3 of the Exchange Act, or (2)
if stockholder approval of such amendment is required by any other applicable
laws or regulations or by the rules of any stock exchange as long as the Stock
is listed for trading on such exchange. The Committee also may suspend the
granting of Options under this Plan at any time and may terminate this Plan at
any time; provided, however, the Corporation shall not have the right to modify,
amend or cancel any Option granted before such suspension or termination unless
(1) the Participant consents in writing to such modification, amendment or
cancellation or (2) there is a dissolution or liquidation of the Corporation or
a transaction described in Section 11 of this Plan.
19. CAPTIONS. The captions preceding the sections of the Plan have been
inserted solely as a matter of convenience and shall not, in any manner, define
or limit the scope or intent of any provisions of the Plan.
20. GOVERNING LAW. The Plan and all rights thereunder shall be governed
by, and construed in accordance with, the laws of the State of Georgia, without
reference to the principles of conflicts of law thereof.
21. EXPENSES. All expenses of administering the Plan shall be borne by
the Corporation.
22. EFFECTIVE DATE. The Plan shall be effective as of the date of its
adoption by the Board, subject to approval of this Plan by the stockholders of
the Corporation after the date of its adoption in accordance with the
requirements of Rule 16b-3 under the Exchange Act.
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