EXHIBIT 10.10
CSN, INC.
1997 STOCK OPTION PLAN
ARTICLE I
PURPOSE OF PLAN
The 1997 Stock Option Plan (the "PLAN") of CSN, Inc., formerly Color
Spot Nurseries, Inc. (the "COMPANY"), adopted by the Board of Directors and
stockholders of the Company effective as of January 1, 1997, is intended to
advance the best interests of the Company by providing directors, executive
officers and other key employees of the Company and its Subsidiaries who have
substantial responsibility for the management and growth of the Company with
additional incentives by allowing such employees to acquire an ownership
interest in the Company. The Plan is a compensatory benefit plan within the
meaning of Rule 701 under the Securities Act of 1933. The issuance of Common
Stock pursuant to the Plan is intended to qualify for the exemption from
registration under the Securities Act provided by Rule 701.
ARTICLE II
DEFINITIONS
For purposes of the Plan the following terms have the indicated
meanings:
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"COMMITTEE" means the Compensation Committee or such other committee
of the Board as the Board may designate to administer the Plan or, if for any
reason the Board has not designated such a committee, the Board.
"CAUSE" means cause as defined in a Participant's written employment
agreement with the Company or, if no written employment agreement exists, shall
mean (i) a Participant's willful and repeated failure to comply with the lawful
directives of the Board or such Participant's supervisory personnel, (ii) any
criminal act or act of dishonesty, disloyalty, misconduct or moral turpitude by
a Participant that is injurious in any significant respect to the property,
operations, business or reputation of the Company or any subsidiary thereof, or
(iii) material breach by a Participant of his written employment agreement (if
any) with the Company after notice by the Company and reasonable opportunity to
cure.
"COMMON STOCK" means the Common Stock, $.01 par value per share, of
the Company.
"FAIR MARKET VALUE" of the Common Stock as of any date means the fair
market value of the Common Stock (expressed on a per-share basis) as of such
date, as determined in good faith by the Committee based on the consolidated
results of operations, financial condition and future prospects of the Company
and such other factors as the Committee may deem appropriate. Fair Market Value
shall be determined without regard to any restriction on transferability of the
Common Stock other than any such restriction which by its terms will never
lapse.
"PARTICIPANT" means any executive or other key employee of the Company
or any Subsidiary who has been selected to participate in the Plan by the
Committee or the Board.
"SALE OF THE COMPANY" means the acquisition of a majority or more of
the outstanding voting securities of the Company by any person or "group" (as
that term is used in Regulation 13D under the Securities Exchange Act of 1934)
other than the stockholders of the Company as of December 31, 1996 and their
respective affiliates.
"SUBSIDIARY" means any subsidiary corporation (as such term is defined
in Section 424(f) of the Code) of the Company.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the
limitations of the Plan, the Committee acting in good faith shall have the
sole and complete authority to: (i) select Participants, (ii) grant Options
to Participants in such forms and amounts as it shall determine, (iii) impose
such limitations, restrictions and conditions upon such Options and/or shares
of Common Stock issued upon exercise thereof as it shall deem appropriate,
(iv) interpret the Plan and adopt, amend and rescind administrative
guidelines and other rules and regulations relating to the Plan, (v) correct
any defect or omission or reconcile any inconsistency in the Plan or in any
Options granted under the Plan and (vi) make all other determinations and
take all other actions necessary or advisable for the implementation and
administration of the Plan. The Committee's determinations on matters within
its authority shall be conclusive and binding upon the Participants, the
Company and all other persons. All expenses associated with the
administration of the Plan shall be borne by the Company. The Committee may,
as approved by the Board and to the extent permissible by law, delegate any
of its authority hereunder to such persons or entities as it deems
appropriate.
2
ARTICLE IV
LIMITATION ON AGGREGATE SHARES
The number of shares of Common Stock with respect to which stock
purchase options ("OPTIONS") may be granted under the Plan shall not exceed, in
the aggregate, 1,300,000 shares, subject to adjustment in accordance with
paragraph 6.5. To the extent any Options expire unexercised or are cancelled,
terminated or forfeited in any manner without the issuance of Common Stock
thereunder, such shares shall again be available under the Plan. The shares of
Common Stock available under the Plan may consist of authorized and unissued
shares, treasury shares or a combination thereof, as the Committee shall
determine.
ARTICLE V
AWARDS
5.1 GRANT OF OPTIONS. The Committee may grant Options to Participants
from time to time in accordance with this Article V. Options granted under the
Plan may be nonqualified stock options or "incentive stock options" within the
meaning of Section 422 of the Code or any successor provision, as specified by
the Committee; provided, however, that no Option intended as an incentive stock
option shall so qualify unless such Option satisfies all of the requirements of
Section 422 of the Code. The exercise price per share of Common Stock under
each Option shall be fixed by the Committee at the time of grant of the Option,
except that the exercise price of any Option shall equal at least 100% of the
Fair Market Value of the Common Stock on the date of grant. Options shall have
a term not to exceed ten years from the date of grant as specified by the
Committee, and shall be exercisable at such time or times as the Committee shall
determine.
5.2 EXERCISE PROCEDURE. Options shall be exercisable by written notice to
the Company (to the attention of the Company's Secretary) accompanied by payment
in full of the applicable exercise price. Payment of such exercise price may be
made (i) in cash (including check, bank draft or money order), (ii) at the
discretion of the Committee, by delivery of a full recourse promissory note
bearing interest at a rate not less than the applicable federal rate determined
pursuant to Section 1274 of the Code as of the date of purchase or exercise (a
"NOTE"), (iii) in shares of Common Stock valued at their Fair Market Value as of
the date of exercise or (iv) a combination of the foregoing.
5.3 CONDITIONS AND LIMITATIONS ON EXERCISE. At the discretion of the
Committee, Options may be made exercisable, in one or more installments, upon
(i) the happening of certain events, (ii) the passage of a specified period of
time, (iii) the fulfillment of certain conditions, or (iv) the achievement by
the Company or any Subsidiary of certain performance goals. As a condition to
the exercise of Options, the Participant shall agree to be bound by the
Stockholders Agreement dated as of December 31, 1996 among the Company and the
various stockholders signatory thereto, with the Option Shares constituting
"Option Stock" as defined therein. In the event of
3
a Sale of the Company, the Committee may provide, in its discretion, that the
outstanding Options shall become immediately exercisable and/or that such
Options shall terminate if not exercised as of the date of the Sale of the
Company or any other designated date or that such Options shall thereafter
represent only the right to receive the excess of the consideration per share
of Common Stock offered in such Sale of the Company over the exercise price
of such Options.
5.4 EXPIRATION OF OPTIONS.
(a) NORMAL EXPIRATION. In no event shall any part of any Option be
exercisable after the tenth anniversary of the date of grant or earlier stated
date of expiration thereof.
(b) EARLY EXPIRATION UPON TERMINATION OF EMPLOYMENT. Except as
otherwise provided by the Committee at the time of grant of such Options, upon
termination for any reason of a Participant's employment by the Company and its
Subsidiaries, all Options or portions thereof held by such Participant that are
not vested and exercisable on the date of such termination shall expire and be
forfeited as of such date and all vested Options held by such Participant shall
expire to the extent not exercised within 90 days following the date of such
termination or, in the case of termination due to the Participant's death or
disability, within one year following the date of such termination.
Notwithstanding the foregoing, in the event of termination of a Participant's
employment by the Company for Cause or a voluntary termination by the
Participant prior to the third anniversary of the date hereof (or, if later, the
third anniversary of the date of commencement of such Participant's employment),
all Options held by such Participant (whether or not vested) shall expire on the
date of such termination.
ARTICLE VI
GENERAL PROVISIONS
6.1 WRITTEN AGREEMENT. Each Option granted hereunder shall be embodied in
a written option agreement which shall be signed by the Participant to whom the
Option is granted and shall be subject to the terms and conditions set forth
herein.
6.2 LISTING, REGISTRATION AND LEGAL COMPLIANCE. If at any time the
Committee determines, in its discretion, that the listing, registration or
qualification of the shares subject to Options upon any securities exchange or
under any state or federal securities or other law or regulation, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition to or in connection with the granting of Options or the purchase or
issuance of shares thereunder, no Options may be granted or exercised, in whole
or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee. The holders of such Options will supply the
Company with such certificates, representations and information as the Company
shall request and shall otherwise cooperate with the Company in obtaining such
listing, registration, qualification, consent or approval. In the case of
officers and other persons subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended, the Committee may at any time impose
4
any limitations upon the exercise of Options that, in the Committee's
discretion, are necessary or desirable in order to comply with such Section
16(b) and the rules and regulations thereunder. If the Company, as part of
an offering of securities or otherwise, finds it desirable because of federal
or state regulatory requirements to reduce the period during which any
Options may be exercised, the Committee may, in its discretion and without
the Participant's consent, so reduce such period on not less than 20 days'
prior written notice to the holders thereof.
6.3 OPTIONS NOT TRANSFERABLE. Options may not be transferred other than
by will or the laws of descent and distribution and, during the lifetime of the
Participant to whom they were granted, may be exercised only by such Participant
(or his or her legal guardian or legal representative). In the event of the
death of a Participant, exercise of Options granted hereunder to such
Participant may be made only by the executor or administrator of such
Participant's estate or the person or persons to whom such Participant's rights
under the Options will pass by will or the laws of descent and distribution.
6.4 WITHHOLDING OF TAXES. The Company may, if necessary or desirable,
withhold from any amounts due and payable by the Company to any Participant (or
secure payment from such Participant in lieu of withholding) the amount of any
withholding or other tax due from the Company with respect to any issuance or
exercise of Options granted under the Plan to such Participant, and the Company
may defer such issuance or exercise unless indemnified to its satisfaction
against the payment of any such amount.
6.5 ADJUSTMENTS. In the event of a reorganization, recapitalization,
stock dividend or stock split, or combination or other change in the shares of
Common Stock, the Board or the Committee shall, in order to prevent the dilution
or enlargement of rights under outstanding Options, make such adjustments in the
number and type of shares authorized by the Plan, the number and type of shares
covered by outstanding Options and the exercise prices specified therein as may
be determined to be appropriate and equitable.
6.6 RIGHTS OF PARTICIPANTS. Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any Subsidiary to terminate any
Participant's employment at any time (with or without cause), or confer upon any
Participant any right to continue in the employ of the Company or any Subsidiary
for any period of time or to continue to receive such Participant's current (or
other) rate of compensation. No employee shall have a right to be selected as a
Participant or, having been so selected, to be selected again as a Participant.
6.7 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN. The Board or the
Committee may suspend or terminate the Plan or any portion thereof at any time
and may amend it from time to time in such respects as the Board or the
Committee may deem advisable; provided, however, that no such amendment shall be
made without stockholder approval to the extent such approval is required by
law, agreement or the rules of any exchange upon which the Common Stock is
listed, and no such amendment, suspension or termination shall impair the rights
of Participants under outstanding Options without the consent of the
Participants affected thereby, except as provided below. No Options shall be
granted hereunder after the tenth anniversary of the approval of the Plan by the
stockholders of the Company.
5
6.8 AMENDMENT OF OUTSTANDING OPTIONS. The Committee may amend or modify
any Option in any manner to the extent that the Committee would have had the
authority under the Plan initially to grant such Option; provided that, except
as expressly contemplated elsewhere herein or in any agreement evidencing such
Option, no such amendment or modification shall impair the rights of any
Participant under any outstanding Option without the consent of such
Participant.
6.9 INDEMNIFICATION. In addition to such other rights of indemnification
as they may have as members of the Board or the Committee, the members of the
Committee shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or proceeding to
which they or any of them may be party by reason of any action taken or failure
to act under or in connection with the Plan or any Option granted under the
Plan, and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding; provided, however, that any such Committee member shall be entitled
to the indemnification rights set forth in this paragraph 6.9 only if such
member has acted in good faith and in a manner that such member reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
that such conduct was unlawful, and further provided that upon the institution
of any such action, suit or proceeding a Committee member shall give the Company
written notice thereof and an opportunity to handle and defend the same before
such Committee member undertakes to handle and defend it on his own behalf.
* * * * *
6