Exhibit 10.18
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
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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.
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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.
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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
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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.
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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.
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