EXHIBIT (10)(r)
VAUGHN COMMUNICATIONS, INC.
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. PURPOSE
The Plan is intended to provide a means for Vaughn Communications,
Inc. (the Company), by offering incentives to non-employee Directors, to
attract and retain persons of ability as members of the Company's Board of
Directors and motivate them to advance the interests of the Company.
It is intended that the options granted under the Plan constitute
"nonstatutory options," i.e., options not qualifying under Section 422 or
other similar provisions of the Internal Revenue Code 1986, as from time to
time amended.
2. SHARES SUBJECT TO THE PLAN
A total of 100,000 shares of authorized but unissued or reacquired
$.10 par value Common Stock of the Company (the "Shares") is reserved for
issuance upon exercise of options under the Plan. If any option expires or
terminates without having been exercised in full, the unacquired Shares shall
be available for the grant of future options under the Plan.
3. ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Committee").
4. ELIGIBILITY AND AMOUNT OF GRANT
Options for 2,000 Shares each shall be automatically granted by the
Company under the Plan on June 20, 1995, the date of the Company's 1995
Annual Meeting of Shareholders, and biannually on the date of each Annual
Meeting of Shareholders held in each odd calendar year thereafter, to each
non-employee director of the Company elected at each such Annual Meeting of
Shareholders or whose term of office as a director continues after such
Annual Meeting of Shareholders and who as of the date thereof has served for
at least two (2) calendar years (assuming for such purpose that the Annual
Meeting of Shareholders in each year is one calendar year after and prior to
the date of the preceding and subsequent Annual Meeting of Shareholders,
notwithstanding the actual calendar days then elapsed) (individually an
"Optionee" and collectively the Optionees").
The only persons eligible to be Optionees under the Plan are
persons who are non-employee members of the Company's Board of Directors on
the respective dates of grant set forth above, but Optionees who cease to be
such thereafter may continue to hold and exercise the options granted to them
hereunder in accordance with the terms and conditions hereof.
5. OPTION PRICE
The option exercise price for the options granted under the Plan
shall equal One Hundred Percent (100%) of the fair market value of the
Company's Common Stock on the date of grant. Fair market value shall be
determined by the Committee based upon the last sale price per share of the
Company's Common Stock in the National Association of Securities Dealers
Automated Quotations System (NASDAQ) for National Market Issues or, as
applicable, for Small-Cap Issues, as reported by the National Association of
Securities Dealers for the last business trading day preceding the date of
grant, or, if the Common Stock is not traded on NASDAQ, through such other
measure or means as the Committee may in good faith determine to be
appropriate to determine such fair market value. The Committee may authorize
the Chief Executive Officer or Secretary of the Company to make any
determinations required in this Section 5.
6. OPTION TERMS
The options granted hereunder shall be evidenced by an Option
Agreement, in the form attached hereto as Exhibit A, executed as of the date
of grant by the Company and the Optionee, on identical terms and conditions
for each option, except for the respective date of grant and corresponding
option exercise price, and including the following:
(a) The Option Agreement shall specify that the option is a
nonstatutory option for 2,000 Shares and shall set forth the option
exercise price. It shall also specify that the option shall not be
exercisable for a period of six (6) months after the date of grant and
shall first become exercisable on the last day of such six month
period.
(b) The option price shall be paid at the time of exercise which
shall be in writing and, at the election of the Optionee, may be paid
in cash and/or by the sale and delivery of certificate(s) duly
endorsed for transfer, in shares of the Company's Common Stock already
owned by the Optionee. Any shares so sold to the Company in payment
of the option price shall be valued at fair market value on the
exercise date as determined by
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the Committee. Fair market value for this purpose shall be determined
in the same manner provided by Section 5 substituting the date of
exercise for the date of grant. Any fractional share not required for
payment of the option price shall be paid for the Company in cash on
the basis of the same value utilized for such exercise.
(c) Except as otherwise provided in this subsection and in
subsections (a) above and (e) below, the Optionee may exercise the
option in whole or in part at any time after grant of the option and
prior to seven (7) years from that date; provided, however, that the
option shall not be exercisable until, and shall be subject to,
approval of the Plan by the shareholders of the Company at a meeting
duly called and held for such purpose not later than the Annual
Meeting of Shareholders in 1996. Approval shall require a quorum and
a majority vote of the shares owned by those shareholders present, or
represented, and entitled to vote at the meeting.
(d) Unless the issuance of the Shares upon the exercise of an
option hereunder is registered under federal and state securities
laws, the Optionee shall be required to give an investment
representation at the time of exercise, and transfer of the Shares
shall be appropriately restricted. The Company shall not be obligated
for but does currently anticipate registration of the Shares issued
under the Plan under federal and certain state securities laws.
(e) If the Optionee, until such time continuously serving as a
Director of the Company, is terminated as a Director by reason of
death or disability or by retirement at or after age 55, the option,
to the extent not previously exercised, may be exercised in whole or
in part during the balance of term of the option, except that no
option shall be exercisable for a period of six (6) months after the
date of grant. In the event of the Optionee's death, the option may
be exercised by the personal representative of the Optionee's estate
and/or by the Optionee's heirs, as the case may be. If the Optionee's
service as a Director terminates for any other reason, the option
shall be exercisable according to its terms, but shall expire sixty
(60) days after the date the Optionee's service as a Director
terminates. Notwithstanding anything herein to the contrary, unless
expiring
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earlier, all options granted under the Plan shall terminate and expire
seven (7) years after the date of grant.
(f) The options hereunder shall not be transferable by the
Optionee except by will or the laws of descent and distribution.
During the Optionee's life, the options shall be exercisable only by
the Optionee and only while and if continuously serving as a Director
of the Company, except as provided in Section 6(f) above.
7. TERMINATION
Unless extended or sooner terminated by action of the Company's
Board of Directors, the Plan shall terminate ten (10) years from its
effective date. Options outstanding under the Plan at the time of termination
shall remain in effect until exercise or expiration.
8. EFFECTIVE DATE
The effective date of the Plan shall be June 20, 1995, the date of
adoption by the Company's Board of Directors. Options under the Plan shall
be automatically granted in accordance with Section 6 hereof.
9. ADJUSTMENT OF SHARES
In the event of a recapitalization, merger, consolidation,
reorganization, stock dividend, stock split or other change in capitalization
affecting the Common Stock of the Company, appropriate equitable Share and
per Share option price adjustments in outstanding options shall be made by
the Committee to prevent dilution or enlargement of rights.
10. AMENDMENT
The Company's Board of Directors may amend the Plan at any time as
determined to be in the best interests of the Company, including any
amendment to extend or terminate the Plan. The Board shall not, however,
without shareholder approval, increase the maximum number of Shares subject
to the Plan, or to the options to be automatically granted in accordance with
the Plan, or restrict the class of persons eligible to be granted options
under the Plan. Provided, further, in accordance with Rule 16b-3 (c) (2) (ii)
under the Securities Exchange Act of 1934, as said Rule may from time to time
be amended, that the amount and frequency of the option grants under the Plan
shall not, in any event, be amended more than once every six months, other
than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder.
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VAUGHN COMMUNICATIONS, INC.
1995 NON-EMPLOYEE DIRECTOR NONSTATUTORY
STOCK OPTION AGREEMENT
VAUGHN COMMUNICATIONS, INC., a Minnesota corporation (the
"Company"), pursuant to the 1995 Non-Employee Director Stock Option Plan
previously adopted by the Board of Directors of the Company (the "Plan"), and
in consideration of services as a member of the Board of Directors of the
Company to be rendered by __________________ (the "Optionee"), hereby grants
to the Optionee a nonstatutory stock option (the "Option") not in accordance
with Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), to purchase 2,000 shares of the Company's $.10 par value Common
Stock (the "Shares") at a price of $____ per Share (the "Purchase Price"),
equal to 100% of the fair market value of the Common Stock on the date of
grant (set forth at the end of this Agreement), determined in accordance with
Section 5 of the Plan. This grant is made on the following terms and
conditions.
NONSTATUTORY STOCK OPTION
1. The Optionee may first exercise the Option at any time on or
after six (6) months after the date of grant (set forth at the end of this
Agreement) and thereafter may exercise the Option at any time on or before
___________, 19___, (seven (7) years after such date of grant); provided,
however, that the Option shall not be exercisable unless and until the Plan
has been approved by the shareholders of the Company as provided in the Plan.
2. The Option shall not be transferable by the Optionee, except
by will or the laws of descent and distribution. During the Optionee's life,
the Option shall be exercisable only by the Optionee and only while and if
the Optionee is continuously serving as a Director of the Company, except as
provided in Section 4 of this Agreement.
3. The Option may be exercised in whole or in part, from time to
time, by delivery to the Secretary of the Company of a written notice
specifying the number of Shares desired to be purchased and accompanied by
full payment of the Purchase Price, at the election of the Optionee, in cash
and/or by delivery of certificate(s) duly endorsed for transfer, in shares of
the Company's Common Stock already owned by the Optionee. Any shares
endorsed and delivered to the Company in payment of the Purchase Price shall
be valued at the fair market value of the shares
on the date of exercise. Fair market value for this purpose shall be
determined in accordance with Section 6(b) of the Plan. Any fractional share
not required for payment of the Purchase Price shall be paid for by the
Company in cash on the basis of the same value utilized for such exercise.
4. All unexercised rights under the Option shall expire at the
end of the term specified in Section 1 above or on such earlier date sixty
(60) days after termination of Optionee's directorship for any reason other
than by reason of death or disability or retirement at or after age 55. In
the event of the Optionee's death, the Option may be exercised by the
personal representative of the Optionee's estate and/or by the Optionee's
heirs entitled by law to the Optionee's rights under the Option, as the case
may be.
5. Unless the issuance of the Shares purchased upon the exercise
of the Option is registered with federal and state securities authorities
(which is anticipated, but for which the Company has no obligation), or is
determined by counsel for the Company to be exempt from such registration
without need therefor, the Optionee shall be required to sign and be bound by
a customary "investment letter", setting forth the Optionee's investment
representation and securities law transfer restrictions consistent with
federal and state securities law exemptions from registration for issuance of
the Shares on exercise and consistent with Rule 144 under the Securities Act
of 1933 and requisite legends shall be placed upon the certificates for the
Shares. Without regard to registration or exemption therefrom on exercise,
because the Optionee may be an affiliate of the Company within the meaning of
said Rule 144, securities law transfer restrictions consistent with said Rule
144 shall in any event be applicable and requisite legends and stop transfer
orders shall be placed upon or against the certificates for the Shares by the
Company's Transfer Agent and Registrar.
6. If prior to the expiration of the Option, the Shares then
subject to the Option shall be affected by any recapitalization, merger,
consolidation, reorganization, stock dividend, stock split, or other change
in capitalization affecting the present Common Stock of the Company, then the
number and kind of Shares covered by this Agreement, and the Purchase Price
per Share, shall be appropriately adjusted in accordance with the Plan to
prevent dilution or enlargement of the Optionee's rights which might
otherwise result.
7. It is intended that the Plan and this nonstatutory Option
comply and be interpreted in accordance with Rule 16b-3 under the Securities
Exchange Act of 1934, as amended. The
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provisions of the Plan pertaining to Options, to the extent not set forth in
this Agreement, are incorporated herein by reference.
IN WITNESS WHEREOF, this Non-Employee Director Nonstatutory Stock
Option Agreement is hereby executed as of the ___ day of ____________, 199__
(date of grant).
VAUGHN COMMUNICATIONS, INC.
By
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Its
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OPTIONEE:
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RESOLUTION ADOPTED BY SHAREHOLDERS ON JUNE 20, 1995 PROVIDING FOR APPROVAL OF
1995 STOCK OPTION PLAN
RESOLVED, that the Vaughn Communications, Inc. 1995 Stock Option
Plan, heretofore adopted by the Board of Directors of Vaughn Communications,
Inc. (the "Company") on April 18, 1995, providing for the grant to selected
management and other key employees of the Company of incentive stock options
and/or nonstatutory stock options for up to an aggregate of 200,000 shares of
the Company's $.10 par value Common Stock, as described in Proposal 2 of the
Company's Proxy Statement dated May 19, 1995, is hereby approved.