Exhibit 4.3
UNIVERSAL CORPORATION
1994 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Article I
DEFINITIONS
1.01 Affiliate means any "subsidiary" or "parent corporation" (within
the meaning of Section 424 of the Code) of the Company.
1.02 Agreement means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the
terms and conditions of a Grant issued to such Participant.
1.03 Board means the Board of Directors of the Company.
1.04 Code means the Internal Revenue Code of 1986, and any amendments
thereto.
1.05 Commission means the Securities and Exchange Commission or any
successor agency.
1.06 Committee means the Executive Compensation Committee of the
Board.
1.07 Common Stock means the Common Stock of the Company.
1.08 Company means Universal Corporation.
1.09 Exchange Act means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
1.10 Fair Market Value means, on any given date, the closing price of
a share of Common Stock as reported on the New York Stock Exchange
composite tape on such day or, if the Common Stock was not traded on the
New York Stock Exchange on such day, then on the next preceding day that
the Common Stock was traded on such exchange, all as reported by such
source as the Committee may select. If there is no regular public trading
market for the Common Stock, the Fair Market Value shall be determined by
the Committee in good faith.
1.11 Grant means the grant of an Option.
1.12 Non-Employee Director means a member of the Board who is not an
employee of the Company or an Affiliate and was not such an employee within
three years prior to his or her first election to the Board.
1.13 Option means a stock option that entitles the holder to purchase
from the Company under the terms of this Plan the number of shares of
Common Stock set forth in Article IV at the Option Price.
1.14 Option Price means the price per share for Common Stock purchased
on the exercise of an Option as provided in Article IV.
1.15 Participant means a Non-Employee Director who is eligible to
receive a Grant under this Plan.
1.16 Rule 16b-3 means Rule 16b-3, as promulgated by the Commission in
Release No. 34-28869 under Section 16(b) of the Exchange Act, effective May
1, 1991, or any successor rule as amended from time to time.
1.17 Securities Broker means the registered securities broker
acceptable to the Company who agrees to effect the cashless exercise of an
Option pursuant to Section 7.03 hereof.
1.18 Subsidiary means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations in the chain (other than the last corporation) owns stock
possessing at least 50 percent of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
Article II
PURPOSE
This Plan is intended to associate the interests of the Non-Employee
Directors with those of the Company and its shareholders through increased
equity ownership, to assist the Company in recruiting and retaining
individuals of ability and experience who are not employed by the Company
to serve on the Board and its committees and to provide incentive to those
individuals by enabling them to participate in the future success of the
Company.
Article III
ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall
have all the powers vested in it by the terms of the Plan, such powers to
include the authority (within the limitations described herein) to
prescribe the form of the Agreements evidencing Grants under the terms of
this Plan. The Committee shall, subject to the provisions of the Plan,
have the power to construe the Plan, to determine all questions arising
thereunder and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable, consistent with the
provisions of the Plan. Any decision of the Committee in the
administration of the Plan, as described herein, shall be final and
conclusive. The Committee may act only by a majority of its members in
office, except that the members thereof may authorize any one or more of
their number or the Secretary or any other officer of the Company to
execute and deliver documents on behalf of the Committee. No member of the
Committee shall be liable for anything done or omitted to be done by such
member or by any other member of the Committee in connection with the Plan,
except in circumstances involving actual bad faith. All costs and expenses
of administering the Plan shall be borne by the Company.
Article IV
GRANTS OF OPTIONS
Every Non-Employee Director who serves on the Board during the term of
the Plan is eligible to receive Grants. Each Non-Employee Director serving
on the Board as of the effective date of this Plan shall be granted an
Option on such date. Every Non-Employee Director who continues to serve in
such capacity on the date which is the first business day following each
Annual Meeting of Shareholders during the term of this Plan shall be
granted an Option on each such date. Each Option shall be for the purchase
by the Participant of 1,000 shares of Common Stock at a price per share
equal to the Fair Market Value of a share of the Common Stock on the date
of the Grant. Each Option shall be evidenced by an Agreement issued by the
Committee in the form prescribed by the Committee and consistent with the
terms of this Plan.
Article V
AMOUNT OF STOCK
The total number of shares of Common Stock reserved and available for
issuance upon exercise of Options granted under the Plan shall be 100,000
shares, subject to adjustment as provided in Article VIII below. The
Common Stock to be issued may be either authorized and unissued shares,
issued shares acquired by the Company or its Subsidiaries or any
combination thereof. In the event that an Option is terminated, in whole
or in part, for any reason other than its exercise, the number of shares of
Common Stock allocated to such Option or terminated portion thereof may be
reallocated to other Options to be granted under this Plan. In the event
that the number of shares of Common Stock available for future Grants under
the Plan is insufficient to make all automatic Grants required to be made
on such date, then all Non-Employee Directors shall share ratably in the
number of Options available for Grants under the Plan.
Article VI
EXERCISE OF OPTIONS
Each Option shall be first exercisable on the date which is six months
from the date of the grant of the Option and shall continue to be
exercisable for a term of ten years thereafter; provided however, that:
(i) subject to the six month exercisability requirement set forth above, an
Option shall be exercisable, in the event of a Participant's death prior to
exercising the Option, by his estate, or the person or persons to whom his
rights under the Option shall pass by will or the laws of descent and
distribution but only for a period of two years from the date of the
Participant's death or during the remainder of the period preceding the
expiration of the Option, whichever is shorter; (ii) subject to the six
month exercisability requirement set forth above, an Option shall be
exercisable, if a Participant becomes permanently and totally disabled
(within the meaning of Section 105(d) (4) of the Code) while serving on the
Board prior to exercising the Option, but only for a period of two years
from the date on which he ceases serving on the Board due to such
disability or during the remainder of the period preceding the expiration
of the Option, whichever is shorter; and (iii) subject to the six month
exercisability requirement set forth above, in the event that a Participant
resigns from or is not re-elected or does not stand for re-election to the
Board or in any other circumstance approved by the Board in its sole
discretion, an Option shall be exercisable but only for a period of two
years following the date of his resignation or cessation of service on the
Board, or in the period prescribed by the Board in an approved
circumstance, or during the remainder of the period preceding the
expiration of the Option, whichever is shorter. Any Option shall be
nontransferable, except by will or by the laws of descent and distribution
as set forth above. During the lifetime of the Participant to whom an
Option is granted, the Option may be exercised only by the Participant. No
right or interest of a Participant in any Option shall be liable for, or
subject to, any lien, obligation or liability of such Participant or his
estate.
Article VII
MANNER OF EXERCISE
7.01 Exercise. Subject to the provisions of Article VI, an Option may
be exercised in whole at any time or in part from time to time. An Option
granted under this Plan may be exercised with respect to any number of
whole shares less than the full number for which the Option could be
exercised. Such partial exercise of an Option shall not affect the right
to exercise the Option from time to time in accordance with this Plan with
respect to remaining shares subject to the Option.
7.02 Payment. Payment of the Option Price may be made in cash or by
surrendering previously-owned shares of Common Stock to the Company,
provided the shares surrendered have a Fair Market Value (determined as of
the day preceding the date of exercise) that is not less than such Option
Price or part thereof.
7.03 Cashless Exercise. To the extent permitted under applicable laws
and regulations, at the request of the Participant, the Company will
cooperate in a "cashless exercise" of an Option. The cashless exercise
shall be effected by the Participant delivering to the Securities Broker
instructions to exercise all or part of the Option, including instructions
to sell a sufficient number of shares of Common Stock to cover the costs
and expenses associated therewith.
7.04 Shareholder Rights. No Participant shall have any rights as a
shareholder with respect to shares subject to an Option until the date he
exercises such Option.
Article VIII
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Company effect one or more (x) stock dividends, stock
split-ups, subdivisions or consolidations of shares or other similar
changes in capitalization; (y) spin-offs, spin-outs, split-ups, split-offs,
or other such distribution of assets to shareholders; or (z) direct or
indirect assumptions and/or conversions of outstanding options due to an
acquisition of the Company, then the maximum number of shares as to which
Grants may be issued under this Plan and the number and price of shares of
Common Stock subject to Grants shall be proportionately adjusted, and the
terms of Options shall be adjusted, as the Committee shall determine to be
equitably required to retain for the Participants the equivalent economic
benefit of their Option(s). Any determination made under this Article VIII
by the Committee shall be final and conclusive.
The issuance by the Company of shares of Common Stock or securities
convertible into shares of Common Stock, for cash or property or for labor
or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to
any Grant.
Article IX
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment
shall be made under this Plan except in compliance with all applicable
federal and state laws and regulations (including, without limitation,
withholding tax requirements, if any) and the rules of all domestic stock
exchanges on which the Company's shares may be listed. The Company may
rely on an opinion of its counsel as to such compliance. Any share
certificate issued to evidence Common Stock for which an Option is
exercised may bear such legends and statements as the Committee may deem
advisable to assure compliance with federal and state laws and regulations.
No Grant shall be exercisable, no Common Stock shall be issued, and no
certificate for shares shall be delivered until the Company has obtained
such consent or approval as the Committee may deem advisable from
regulatory bodies having jurisdiction over such matters.
Article X
GENERAL PROVISIONS
10.01 Rules of Construction. Headings are given to the articles
and sections of this Plan for ease of reference. The reference to any
statute, regulation, or other provision of law shall be construed to refer
to any amendment to or successor of such provision of law.
10.02 Amendment. The Board may amend or terminate this Plan from
time to time; provided, however, that the Board may amend no more often
than once every six months and no amendment may become effective until
shareholder approval is obtained if the amendment would increase the number
of shares that may be issued hereunder pursuant to Options, increase the
benefits to Participants under the Plan, or change the requirements as to
eligibility for participation in the Plan. No amendment shall, without a
Participant's consent, adversely affect any rights of such Participant
under any Grant outstanding at the time such amendment is made except if
such an amendment is made to cause the Plan or a Grant to qualify for the
Rule 16b-3 exemption. No amendment shall be made if it would disqualify
the Plan from the exemption provided by Rule 16b-3.
10.03 No Right. Neither the Plan nor any action taken hereunder
shall be construed as giving any Non-Employee Director any right to be
retained in the service of the Company.
10.04 Unfunded Plan. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make
any other segregation of assets to assure the issuance of shares upon
exercise of any Option under the Plan and issuance of shares upon exercise
of Options shall be subordinated to the claims of the Company's general
creditors.
10.05 Acceptance. By accepting any Option or other benefit under
the Plan, each Participant and each person claiming under or through such
person shall be conclusively deemed to have indicated his acceptance and
ratification of, and consent to, any action taken under the Plan by the
Company or the Board.
10.06 Rule 16b-3 Compliance. It is the intention of the Company
that the Plan comply in all respects with Rule 16b-3, that any ambiguities
or inconsistencies in construction of the
Plan be interpreted to give effect to such intention and that if any
provision of the Plan is found not to be in compliance with Rule 16b-3,
such provision shall be deemed null and void to the extent required to
permit the Plan to comply with Rule 16b-3. The Board may adopt rules and
regulations under, and amend, the Plan in furtherance of the intent of the
foregoing.
10.07 Term of Plan. No Grant may be issued under this Plan before
the effective date of the Plan or after the first business day following
the 2004 Annual Meeting of Shareholders (the "Termination Date"). Grants
issued on or before the Termination Date shall remain valid in accordance
with their terms.
10.08 Effective Date. This Plan has been approved by the Board of
Directors of the Company, effective as of October 25, 1994, subject,
however, to approval by the shareholders of the Company entitled to vote at
the 1994 Annual Meeting of Shareholders.