Exhibit 10(c)
QUIXOTE CORPORATION
1991 DIRECTOR STOCK OPTION PLAN
Amended August 28, 1997
1. PURPOSE
This Stock Option Plan (the "Plan") is intended as an incentive to
encourage stock ownership by certain Directors of QUIXOTE CORPORATION (the
"Corporation") so that they may acquire or increase their proprietary
interest in the success of the Corporation and to encourage them to continue
to render their services to the Corporation as Directors. It is further
intended that options granted pursuant to this Plan may constitute "incentive
stock options" within the meaning of Section 422A of the Internal Revenue
Code, as amended (the "Code"), if they satisfy the various requirements
specified under Code Sec. 422A. Otherwise, options granted pursuant to this
Plan shall be "nonqualified stock options".
2. ADMINISTRATION
The Plan shall be administered by a committee appointed by the Board of
Directors of the Corporation (the "Committee"). The Committee shall consist
of all members of the Corporation's Board of Directors unless the Board
adopts a resolution naming other individuals to serve on the Committee. The
Board of Directors may from time to time remove members from, or add members
to, the Committee. Vacancies on the Committee, howsoever caused, shall be
filled by the Board of Directors. The Committee shall select one of its
members as Chairman and shall hold meetings at such times and places as it
may determine. A majority of the Committee at which a quorum is present, or
acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee. The Committee shall from
time to time at its discretion recommend to the Board of Directors with
respect to the Directors who shall be granted options and the amount of stock
to be optioned to each.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final unless otherwise
determined by the Board of Directors. No member of the Board of Directors or
the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any option granted under it.
3. ELIGIBILITY
The persons who shall be eligible to receive options shall be Directors
of the Corporation as the Board of Directors shall select from time to time
from among those nominated by the Committee, provided however, that only
Directors who are also employees of the Corporation shall be eligible to
receive "incentive stock options" under this Plan. An optionee may hold more
than one option, but only on the terms and subject to the restrictions
hereafter set forth. No person shall be eligible to receive an option for a
larger number of shares of stock than is recommended for him by the
Committee, and in no event shall any optionee in any calendar year receive
options under this Plan for stock with an aggregate fair market value
(determined at the time of the grant of the option) in excess of the
limitations set forth in Section 5(b) of the Plan. The number of shares of
stock with respect to which
option rights under the Plan may be granted to any individual during the term
of the Plan shall not exceed 90,000 shares, subject to adjustment as provided
in Section 5(g) of the Plan.
4. STOCK
The stock subject to options under the Plan shall be shares of the
Corporation's authorized but unissued or reacquired $.01-2/3 par value common
stock, hereafter sometimes called Common Stock. The aggregate number of
shares that may be issued under options shall not exceed 419,445 shares of
Common Stock. The limitations established by each of the preceding sentences
shall be subject to adjustment as provided in Section 5(g) of the Plan.
In the event that any outstanding option under the Plan for any reason
expires or is terminated, the shares of Common Stock allocable to the
unexercised portion of such option may again be subjected to an option under
the Plan.
5. TERMS AND CONDITIONS OF OPTIONS
Stock options granted under the Plan shall be authorized by the Board of
Directors and shall be evidenced by agreements in such form as the Committee
shall from time to time recommend and the Board of Directors shall from time
to time approve, which agreements shall comply with and be subject to the
following terms and conditions:
(a) OPTIONEE'S AGREEMENT
Each optionee shall agree to render to the Corporation his services
as a Director (1) for a period of one year from the date of the option, or
(2) until his death, whichever first occurs, but such agreement shall not
impose upon the Corporation any obligation to retain the optionee in any
capacity for any period; provided, however, the agreement shall permit an
optionee to exercise the option after a "change of control" (as defined at
Section 5(g)) notwithstanding the optionee's failure to have served as a
Director for one year from the date of grant.
(b) Number of Shares
Each option shall state the number of shares to which it pertains.
Options granted under this Plan may be considered "incentive stock options"
as defined in Code Sec. 422A to the extent that the aggregate fair market
value of stock (determined at the time the option is granted) with respect to
which any such option is exercisable for the first time in a calendar year is
not more than $100,000.
(c) Option Price
Each option shall state the option price, which shall be not less
than 100% of the current market price of the shares of Common Stock of the
Corporation on the date of the granting of the option; provided, that in the
event an optionee owns stock representing more than ten percent of the voting
power or value of the stock of the Corporation on the date of grant, the
option price of an option which is intended to qualify as an "incentive stock
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option" shall not be less than 110% of the current market price of the shares
on the date of grant. The current market price of the Common Stock at any
date shall be deemed to be the average of the daily closing prices for the
thirty (30) consecutive business days before the date in question. The
closing price for each day shall be the last reported sale price determined
in the regular way or, in case no such reported sale takes place on such day,
the average of the last reported bid and asked prices determined in the
regular way, in either case on the principal national securities exchange on
which the Common Stock is admitted to trading or listed, or if not listed or
admitted to trading on any national securities exchange, the average of
highest reported bid and lowest reported asked prices as reported by NASDAQ
or other similar organization if NASDAQ is no longer reporting such
information, or if not so available, the fair market price as determined by
the Board of Directors. Subject to the foregoing, the Board of Directors and
the Committee shall have full authority and discretion in fixing the option
price and be fully protected in doing so.
(d) Medium and Time of Payment
The option price is to be paid in full in United States dollars upon
the exercise of the option and may be paid in cash or by check, or with the
approval of the Committee, by the optionee tendering to the Corporation shares
of common stock of the Corporation owned by him and having a fair market value
(determined at the time the Corporation receives written notice of the
optionee's election to exercise the option) equal to the aggregate exercise
price of the options being exercised. With the approval of the Board of
Directors, the optionee may borrow from the Corporation all or any portion of
the funds needed to pay the option price on such terms and conditions as the
Committee deems appropriate, provided that: (1) the interest rate for any such
loan by the Corporation shall not be less than the "applicable federal rate" (as
defined by Code Section 1274(d)(1)(A) in effect on the date of such loan or any
other rate as necessary to avoid the imputation of interest under the Code or
other applicable law, (2) proceeds of the loan are used solely to pay the
exercise price of an option granted pursuant to this Plan, and (3) the optionee
executes a promissory note and such other documents as the Committee deems
appropriate to evidence the optionee's indebtedness to the Corporation.
(e) Term and Exercise of Options
Subject to this Section 5(e) and Sections 5(f) and 5(g) of this
Plan, no option shall be exercised either in whole or in part prior to twelve
months from the date it is granted. Subject to the right of cumulation
provided in this Section 5(e), each option granted pursuant to the Plan shall
be exercisable to the extent provided for in the agreement between the
Corporation and each optionee as determined by the Committee in its
discretion. The Committee may provide, however, for the exercise of options
after the initial twelve month period, either as to an increased percentage
of shares per year or as to all remaining shares, if the optionee shall, with
the approval of the Corporation, retire as a Director of the Corporation. To
the extent not exercised, installments shall accumulate and be exercisable,
in whole or in part, in any subsequent period, prior to the expiration of the
term described in the next sentence of this Section 5(e). No option shall be
exercisable after the expiration of ten years from the date it is granted,
provided that in the event the optionee owned stock representing more than
ten
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percent (10%) of the voting power or value of the stock of the Corporation on
the date the option was granted, any option which is intended to qualify as
an "incentive stock option" must be exercised within five (5) years from the
date of grant. During the optionee's lifetime, the options granted under this
Plan may be exercised only by him.
(f) Death of Optionee and Transfer of Option
If the optionee shall die and shall not have fully exercised the
option, the entire unexercised portion of the option may be exercised within
one year from the date of the optionee's death by the executors or
administrators of the optionee or by any person or persons who shall have
acquired the option directly from the optionee by bequest or inheritance,
subject to the condition that no option shall be exercisable after the
expiration of ten years (five years for an option which is intended to
qualify as an "incentive stock option" to an optionee who owned more than ten
percent of the value or voting power of the stock of the Corporation on the
date of grant) from the date it is granted.
No option shall be assignable or transferable by the optionee
otherwise than by will or the laws of descent and distribution.
(g) Recapitalization
Subject to any required action by the stockholders, the number of
shares of Common Stock covered by each outstanding option, and the price per
share thereof in each such option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock of the
Corporation resulting from a subdivision or consolidation of shares or the
payment of a stock dividend (but only on the Common Stock) or any other
increase or decrease in the number of such shares effected without receipt of
consideration by the Corporation.
Subject to any required action by the stockholders, if the
Corporation shall be the surviving corporation in any merger or
consolidation, each outstanding option shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject
to the option would have been entitled. A dissolution or liquidation of the
Corporation, or a merger or consolidation in which the Corporation is not the
surviving corporation, or a change in control of the Corporation, as defined,
shall cause each optionee to have the right to exercise his option in whole
or in part, notwithstanding the provisions of Section 5(e) above: (i)
immediately prior to such dissolution or liquidation or merger or
consolidation in which the Corporation is not the surviving corporation, and
thereafter; or (ii) after such change of control.
"Change of control" of the Corporation shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended ("Exchange Act"); provided that, without
limitation, such a change in control shall be deemed to have occurred if (i)
any "person" (as such term is used in Section 13(d) and 14(d) of the Exchange
Act) is, or becomes, the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Corporation
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representing twenty percent (20%) or more of the combined voting power of the
Corporation's then outstanding securities; or, (2) during any period of two
consecutive years, individuals who at the beginning of such period constitute
all members of the Board of Directors of the Corporation who are not employed
by the Corporation (the "Outside Directors") shall cease for any reason to
constitute at least a majority of the Outside Directors unless the election
of each Outside Director, who was not an Outside Director at the beginning of
the period, was approved by a vote of at least two-thirds (2/3) of the
Directors then still in office who were Directors at the beginning of the
period; or, (3) there shall be consummated (A) any consolidation or merger of
the Corporation in which the Corporation is not the continuing or surviving
corporation or pursuant to which shares of the Corporation's Common Stock
would be converted into cash, securities or other property, other than a
merger of the Corporation in which the holders of the Corporation's Common
Stock immediately prior to the merger have the same proportionate ownership
of common stock of the surviving corporation immediately after the merger, or
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets
of the Corporation or, (4) the stockholders of the Corporation approve a plan
or proposal for the liquidation or dissolution of the Corporation.
To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final and binding and
conclusive; provided that each option granted pursuant to this Plan which
could qualify as an "incentive stock option" shall not be adjusted in a
manner that causes the option to fail to continue as an "incentive stock
option" within the meaning of Code Section 422A.
Except as hereinbefore expressly provided in this Section 5(g), the
optionee shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any class or
by reason of any change of control, dissolution, liquidation, merger, or
consolidation or spin-off of assets or stock of another corporation, and any
issue of the Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to the option.
The grant of an option pursuant to the Plan shall not affect in any
way the right of power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve, liquidate, sell, or transfer
all or any part of its business or assets.
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(h) Rights as a Stockholder
An optionee or a transferee of an option shall have no rights as a
stockholder with respect to any shares covered by his option until the date
of the issuance of a stock certificate to him for such shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
provided in Section 5(g) hereof.
(i) Modification, Extension and Renewal of Options
Subject to the terms and conditions and within the limitations of
the Plan, the Committee, with the approval of the Board of Directors, may
modify, extend or renew outstanding options granted under the Plan, or accept
the surrender of outstanding options (to the extent not theretofore
exercised) and authorize the granting of new options in substitution therefor
(to the extent not theretofore exercised). The Board of Directors shall not,
however, modify any outstanding options so as to specify a lower price or
accept the surrender of outstanding options and authorize the granting of new
options in substitution therefor specifying a lower price. Notwithstanding
the foregoing however no modification of an option shall, without the consent
of the optionee, alter or impair any rights or obligations under any option
theretofore granted under the Plan.
(j) Investment Purpose
Each option under the Plan shall be granted on the condition that
the stock purchased shall be held for investment purposes, and not with a
view to resale or distribution except that in the event the stock subject to
such option is registered under the Securities Act of 1933, as amended, or in
the event a resale of such stock without such registration would otherwise be
permissible, such condition shall be inoperative if in the opinion of counsel
for the Corporation such condition is not required under the Securities Act
of 1933 or any other applicable law, regulation, or rule of any governmental
agency.
(k) Other Provisions
The option agreements authorized under the Plan shall contain such
other provisions, including, without limitation, restrictions upon the
exercise of the option, as the Committee and the Board of Directors of the
Corporation shall deem advisable.
6. TERM OF PLAN
Options may be granted under the Plan from time to time within a period
of ten years from the date the Plan is adopted, or the date the Plan is
approved by the Stockholders, whichever is earlier.
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7. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall
be indemnified by the Corporation against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted thereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Corporation) or paid by them in satisfaction of a judgment
except in relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such Committee member is liable for
negligence or misconduct in the performance of his duties; provided that
within sixty (60) days after institution of any such action, suit or
proceeding a Committee member shall in writing offer the Corporation the
opportunity at its own expense, to handle and defend the same.
8. AMENDMENT OF THE PLAN
Upon recommendation of the Committee, the Board of Directors of the
Corporation may, insofar as permitted by law, from time to time, with respect
to any shares at the time not subject to options, suspend or discontinue the
Plan or revise or amend it in any respect whatsoever except that without
approval of the stockholders, no such revision or amendment shall change the
number of shares subject to the Plan, change the designation of the
individuals eligible to receive options, decrease the price at which options
may be granted, remove the administration of the Plan from the Committee, or
extend the period during which options may be granted.
The Board of Directors of the Corporation shall, from time to time,
revise, modify, or amend the Plan, in part or in total, without approval of
the stockholders, as may be necessary to satisfy the requirements of the Code
such that certain stock options which are granted under the Plan may qualify
as "incentive stock options" as defined in Code Section 422A and any
amendments or revisions thereof.
9. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of Common Stock
pursuant to options will be used for general corporate purposes.
10. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the optionee to
exercise such option.
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Date Plan was adopted by Board of Directors: August 19, 1991
Date Plan was approved by Stockholders: November 19, 1991
Date Plan was amended by Board of Directors: June 25, 1997
Date Plan was amended by Board of Directors: August 28, 1997
Date amended Plan was approved by Stockholders: 1997
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