EXHIBIT 4(i)
INSITUFORM MID-AMERICA, INC.
STOCK OPTION PLAN
(AMENDED AS OF OCTOBER 25, 1995)*
1. PURPOSE OF THE PLAN.
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1.1 The Insituform Mid-America, Inc. Stock Option Plan
(herein called the Plan) of Insituform Technologies, Inc., a
Delaware corporation (herein called the "Company") and its
subsidiaries is designed and intended (a) to encourage ownership of
the Company's common stock by employees of the Company and its
subsidiaries, and to provide additional incentive for them to
promote the success of the business of the Company, and (b) to be
helpful as a further incentive in attracting personnel to enter the
employ of the Company and its subsidiaries. It is expected that the
added interest of the participating employees under this Plan, and
their proprietary attitude toward the Company resulting from their
investment in the Company's common stock, will promote the future
growth, development and continued success of the Company.
1.2 As used in the Plan, "subsidiaries" of the Company
shall include any "subsidiary corporation" as defined in Section
425(f) of the Internal Revenue Code of 1954, as amended.
1.3 As used in the Plan, "employee" shall include
officers and shall be an individual who has an "employment
relationship" with the Company or one or more of its subsidiaries
as defined in Section 1.421-7(h) of the Income Tax Regulations. In
addition, for purposes of the Plan the term "employee" shall
include a director of the Company who is not otherwise an employee,
and such person's tenure as a director shall be treated as his or
her term of employment, provided, however, that such persons may
not be granted Incentive Stock Options pursuant to the Plan.
2. STOCK SUBJECT TO THE PLAN.
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One Million (1,000,000) shares of the Class A Common
Stock, $.O1 par value, of the Company shall be reserved for issue
upon the exercise of options granted under the Plan. Such shares
may, as the Board of Directors in its sole discretion from time to
time determine, include whole or fractional shares. In the event an
option is exercised, the Company may use authorized but unissued
shares or shares held in treasury in lieu thereof. If any option
granted under the Plan shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares
subject to such option shall again be available for the purposes of
the Plan.
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* as modified pursuant to Agreement and Plan of Merger dated as
of May 23, 1995 among Insituform Technologies, Inc., ITI
Acquisition Corp. and Insituform Mid-America, Inc.
3. ADMINISTRATION OF THE PLAN.
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3.1 The Plan shall be administered by the Compensation
Committee of the Company (herein called the "Committee") consisting
of not less than three members of the Board of Directors of the
Company, who may also be officers of the Company or any of its
subsidiaries. No person while serving as a member of the Committee
shall be eligible to receive an option under the Plan, and no
person who has ever received an option under the Plan shall be
eligible to be a member of the Committee.
3.2 The Committee shall be appointed by the Board of
Directors of the Company. The Board of Directors of the Company
may, within the limits herein provided, from time to time in its
discretion, fix and change the numbers of members of the Committee,
remove members of the Committee, appoint members of the Committee
in substitution for or in addition to members previously appointed,
and fill vacancies however caused in the Committee.
3.3 The Committee shall select one of its members as its
chairman, and shall hold its meetings at such times and places as
it may determine. A majority of its members shall constitute a
quorum, but all action of the Committee shall be taken by a
majority of its members. Any action, decision or determination
reduced to writing and signed by all the members shall be fully as
effective as if it had been done or made by a vote of a majority of
the members at a meeting duly called and held. The Committee may
appoint a secretary, and shall keep minutes of its meetings and
actions, and shall make such rules and regulations for the conduct
of the business of the Committee as it deems advisable. The
secretary may be, but not need be, an employee of the Company or a
subsidiary. Serving as secretary of the Committee shall not
disqualify an employee from receiving an option under the Plan
provided such person does not participate in the determination of
individuals to whom options shall be granted.
3.4 Subject to the express provision of the Plan, the
Committee shall have plenary authority, in its sole discretion, to
determine the individuals to whom options shall be granted, the
number of shares subject to each option, and the time or times at
which options shall be granted. Subject to the express provisions
of the Plan, the Committee shall also have plenary authority, in
its discretion, to construe and interpret the Plan, to make
determinations in administration of the Plan, to make, amend and
rescind rules and regulations regarding the Plan and its
administration, to determine the terms and provisions of the
respective stock option agreements (which need not be identical),
and to take whatever action is necessary to carry out the purposes
of the Plan. The Committee's actions and determinations on matters
referred to in this section shall be conclusive on all persons
whomsoever. No act or failure to act on the part of the Committee,
or on the part of any member thereof, shall result in any liability
whatsoever if taken in good faith.
4. TYPE OF OPTION GRANTED BY THE PLAN.
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The Committee shall have authority to grant options which
qualify as Incentive Stock Options as defined in Section 422A of
the Internal Revenue Code of 1954, as amended and to grant options
which do not qualify as Incentive Stock Options provided, however,
such non-Incentive Stock Options must be identified as such in the
terms of the grant. Paragraphs 5, 6, 7, 9, 10 and 11 shall apply to
an option which is not an Incentive Stock Option only to the extent
determined by the Committee.
5. ELIGIBILITY TO RECEIVE OPTIONS UNDER THE PLAN.
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5.1 Options May be granted under the Plan to all
employees of the Company or of any of its subsidiaries. No option
may be granted under the Plan to any person who immediately before
such option is granted owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company
or of any of its subsidiaries. For the purpose of the preceding
sentence, the employee shall be deemed to own stock which is owned
by the employee's siblings, spouse, ancestors and lineal
descendants. An employee who has been granted an option under the
Plan may be granted an additional option or options hereunder at
any time, if otherwise eligible under the provisions of the Plan.
An option may be granted to an individual upon the condition that
such individual will become an employee of the Company or any of
its subsidiaries, provided however, that such a conditional option
shall be deemed to be granted only on the date such individual
becomes an employee.
5.2 In making a determination as to persons to whom
options shall be granted under the Plan, and the number of shares
to be covered by such options, the Committee shall take into
consideration the nature of the services rendered or to be rendered
by the employee, the employee's present and potential contributions
to the success of the Company, and such other factors as the
Committee shall deem relevant in accomplishing the purposes of the
Plan. Any and all determinations made by the Committee pursuant to
this section shall be binding upon all persons whomsoever, and no
employee eligible to receive an option under the Plan shall have
any legal right to complain as to any determination which shall be
made by the Committee hereunder as to him.
5.3 Nothing contained in the Plan shall be construed to
limit the right of the Company to grant options otherwise than
under the Plan in connection with (a) the employment of any person,
(b) the acquisition of any corporation, firm or association, or the
business or assets thereof, including options granted to employees
thereof who become employees of the Company or a subsidiary, or (c)
other proper corporate purposes.
6. OPTION PRICE.
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6.1 The purchase price of the stock subject to each
option granted hereunder shall be equal to at least 100% of the
fair market value of the stock at the time of the grant of the
option. In no event shall said purchase price per share be less
than the par value of such stock subject to the option.
6.2 The Committee shall adopt criteria for the
determination of the fair market value of stock subject to any
option granted pursuant to this Plan.
7. TERM OF OPTIONS.
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7.1 The term of each option granted pursuant to the Plan
shall be not more than ten (10) years from the date of granting
thereof. Within such ten year limit, options will be exercisable
only at such time or times, subject to the restrictions of
paragraphs 10, 11 and 14, and any other restrictions and
conditions, as the Committee shall in each instance approve, which
need not be uniform for all individuals to whom options are
granted.
7.2 Except as provided in paragraphs 10, 11 and 12, no
option may be exercised at any time unless the optionee is then an
employee of the Company or a subsidiary and has been so employed
continuously since the granting of the option.
8. DATE OF GRANT OF OPTION.
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The grant of an option under the Plan shall take place on
or as of the date the Committee grants an employee a particular
option; provided, however, that if the resolution or other written
determination of the Committee specifies that an option is to be
granted as of and at some future date, the date of grant shall be
such future date.
9. OPTION AMOUNT.
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9.1 Prior to January 1, 1987, the aggregate fair market
value (determined as of the time the option is granted) of the
stock for which an employee may be granted Incentive Stock Options
in any calendar year (under all plans of the Company and its
subsidiaries) shall not exceed $100,000 plus any Unused Limit
Carryover as defined in Section 422A of the Internal Revenue Code
of 1954, as amended.
9.2 After December 31, 1986, no employee may be granted
an Incentive Stock Option that is first exercisable during any
calendar year to the extent the aggregate fair market value of the
stock subject to all Incentive Stock Options granted to such
employee that are first exercisable during such calendar year
exceeds $100,000 (such value determined on the date of each
respective grant).
10. EXERCISE OF OPTION.
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10.1 Except as provided in paragraphs 11 and 14 and
unless otherwise provided in the terms under which the Committee
granted the option, each option shall be exercisable in whole or in
part at any time and from time to time during the terms of the
option.
10.2 To the extent that the right to purchase shares
under an option granted under the Plan is exercisable, the right
may be exercised from time to time by written notice to the Company
stating the number and identity of shares with respect to which the
option is being exercised, accompanied by payment either (i) in
cash, (ii) in the discretion of the Committee, by tender to the
Company of shares of the common stock of the Company, owned by the
optionee and registered in the optionee's name, having a fair
market value equal to the cash exercise price of the option being
exercised, or (iii) in the discretion of the Committee, by any
combination of (i) and (ii) hereof. The fair market value of stock
tendered as payment shall be determined according to the criteria
for determining fair market value adopted by the Committee or as
may be required in order to comply with or to conform to the
requirements of any applicable laws or regulations.
10.3 The holder of an option may, instead of exercising
an option as provided in paragraph 10.2, request that the Committee
authorize the payment to the holder of the difference between the
fair market value of part or all of the stock which is the subject
of the option and the exercise price of the option, such difference
to be determined as of the date the Committee receives the request
from the holder. The Committee in its sole discretion may grant
such a request from the holder with respect to part or all of the
shares of stock as to which the option is then exercisable and, to
the extent granted, shall direct the Company to make payment to the
holder either in cash or in common stock of the Company or in any
combination thereof, provided, however, that any common stock of
the Company shall be distributed based upon its fair market value
as of the date the Committee received the request from the holder.
An option shall be deemed to have been exercised and shall be
cancelled to the extent that the Committee grants a request
pursuant to this paragraph.
10.4 The proceeds of sale of stock subject to an option
shall be added to (a) the capital stock account of the Company to
the extent of the par value of the shares and (b) the excess to the
account reflecting capital in excess of par. In the case of
payments made in shares of common stock of the Company, such shares
evidencing payment shall be added to the common stock of the
Company, held in its treasury and used for corporate purposes as
the Board of Directors shall determine, with appropriate credits to
the capital stock accounts of the Company.
10.5 After the exercise of an option, as above provided,
the Company shall within a reasonable time deliver to the person
exercising the option a certificate or certificates issued in the
name of the person who exercised the option and such additional
name, or names, if any, as may be requested (subject to the general
policy of the Company as to registration of shares), for the
appropriate number of shares, without liability of the person
exercising the option for any transfer or issue tax, state of
Federal, then payable. Each option granted under the Plan shall be
subject to the requirement that, if at any time the Board of
Directors of the Company shall determine, in its discretion, that
the listing, registration or qualification of the shares subject to
such option upon any securities exchange or under any state or
Federal law, or the consent or approval of any governmental or
regulatory body, is necessary or desirable, as a condition of, or
in connection with, the granting of such option or the issue or
purchase of shares thereunder, no such option may be 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 Board of Directors.
10.6 An optionee under an option granted under the Plan
shall have no rights as a shareholder with respect to any shares
covered by an option except to the extent that one or more
certificates for shares shall have been delivered to him upon due
exercise of an option as above provided.
10.7 Unless provided otherwise by its express terms, an
option granted under the Plan, including the exercise of the right
to request payment in lieu of exercise of the option pursuant to
paragraph 10.3, shall be nontransferable by the optionee other than
by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order, as defined in the Internal
Revenue Code of 1986, as amended, or in Title I of the Employment
Retirement Income Security Act, or the rules thereunder, and shall
be exercisable during the optionees lifetime only by the optionee
or a transferee permitted pursuant to this paragraph 10.7, unless
the optionee or transferee is under legal disability, in which case
it may be exercised by the optionee's or transferee's duly
appointed legal representative.
11. TERMINATION OF EMPLOYMENT.
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11.1 If an optionee under an option granted under the
Plan ceases to be an employee of the Company or a subsidiary for
any reason other than the death of the employee, all of the
optionee's options under the Plan (including options transferred in
accordance with paragraph 10.7 thereof) shall expire three months
after the optionee ceases to be an employee (or, if the optionee
becomes disabled within the meaning of Section 1O5(d)(4) of the
Internal Revenue Code, such options shall expire twelve months
after the termination of the optionee's employment on account of
such disability) as to all shares for which they have not
theretofore been exercised, and during such three-month (or twelve-
month) period an option shall be exercisable only as to those
shares with respect to which it had become exercisable, under the
provisions of the particular option, on the date of termination of
employment; provided, however, that if the termination of
employment is (a) for a cause, (b} voluntary on the part of the
employee and without the written consent of the Company, or a
subsidiary, or (c) is in violation of any employment contract with
the Company or a subsidiary, then all options granted to such
person under the Plan (including options transferred in accordance
with paragraph 10.7 hereof) shall terminate and expire concurrently
with the termination of the optionee's employment and shall not
thereafter be exercisable to any extent; provided further however,
that no option may be exercised after the expiration date specified
for the particular option.
11.2 The transfer of an employee from one corporation to
another among the Company and its subsidiaries, leave of absence
(as described in Section 1.421-7(h)(2) of the Income Tax
Regulations) with the written consent of the Company or a
subsidiary, or retirement at or after the normal retirement date
defined in the retirement plan of the Company, shall not be a
termination of employment for the purposes of the Plan.
12. DEATH OF OPTIONEE.
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If an optionee under an option granted under the Plan
dies while an employee of the Company or a subsidiary, or dies
within three months after the termination of such employment, the
shares which the optionee was entitled to purchase on the date of
the optionee's death under an option or options under the Plan
may be purchased under the option or options at any time after the
optionee's death by the person or persons to whom said rights under
the option or options shall have passed (including transferees
permitted pursuant to paragraph 10.7 hereof) provided however, that
no option may be exercised after the earlier of (a) eighteen (18)
months after the original optionee's death or (b) the expiration
date specified for the particular option.
13. EFFECT OF MERGER, CHANGE IN CAPITALIZATION, ETC.
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13.1 In the event of any reclassification or increase or
decrease in the number of the issued shares of common stock of the
Company by reason of the payment of a stock dividend, a split-up or
consolidation of shares, a recapitalization, a combination or
exchange of shares or any like capital adjustment, then (a) the
aggregate number, and the class, or shares reserved under the Plan
shall be a though the shares reserved had been outstanding prior to
any adjustment as aforesaid, and (b) as to any outstanding
unexercised options theretofore granted under the Plan, there shall
be a corresponding adjustment as to the class and number of shares
covered by each option, and as to the purchase price under each
option, to the end that the optionee's proportionate interest shall
be maintained as before the occurrence of such event without change
in the total purchase price applicable to said option.
13.2 In the event the Company shall approve a plan of
reorganization or of merger into or consolidation with any other
corporation, and appropriate provision is made for the resulting
corporation's assumption of the Plan under terms whereby
unexercised portion of each option then outstanding under the Plan
shall thereafter apply to such number and kind of securities as
would have been issuable by reason of such reorganization, merger
or consolidation, to a holder of the number of shares which were
subject to the option immediately prior to such reorganization,
merger or consolidation, without change in the total purchase price
applicable to said option, then such options shall continue under
the Plan.
13.3 In the event the Company shall approve a plan of
reorganization or of merger into or consolidation with any other
corporation, and appropriate provision is not made for the
assumption of the Plan by the resulting corporation as above
provided in paragraph 13.2, or in the event the Company shall
approve a plan of dissolution, liquidation or sale of substantially
all of its assets, then in any such event, the unexercised portion
of each option then outstanding under the Plan shall terminate as
of a date fixed by the Committee and approved by the Board of
Directors of the Company upon not less than thirty days written
notice to each optionee; provided however, that any such option
shall be accelerated and may be exercised in whole or in part
before the termination date fixed as aforesaid without regard to
any installment provisions thereof; provided further however, that
such termination date shall be fixed as a date on or before the
effective date of such reorganization, merger, consolidation,
dissolution, liquidation or sale.
13.4 In the event the Company shall issue additional
capital stock of any class for cash or other consideration, there
shall be no adjustment in the number of shares covered by the
outstanding options under the Plan, and no adjustment in the
purchase price under such options.
14. SUCCESSIVE OPTION GRANTS.
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Successive option grants may be made to any holder of
options under the Plan but each Incentive Stock Option granted
under this Plan by its terms shall provide that it may not be
exercised by the holder thereof while there is outstanding any
Incentive Stock Option as defined in Section 422A of the Internal
Revenue Code of 1954, as amended, granted at an earlier date, under
this Plan or otherwise, to such holder to purchase shares of the
Common Stock of the Company. For the purpose of this paragraph, an
Incentive Stock Option shall be deemed to be outstanding until such
option is exercised in full or expires by reason of lapse of time.
15. TERMINATION AND AMENDMENT OF THE PLAN.
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15.1 This Plan shall terminate on November 30, 1997, and
no option shall be granted hereunder after said date, but such
termination shall not affect any option theretofore granted. The
Board of Directors of the Company may suspend, discontinue or
terminate the Plan at any time, and may from time to time make such
changes in and additions to the Plan as the Board of Directors
shall deem advisable; provided, however, that the Board of
Directors may not, without approval by the shareholders of the
Company, change (a) the maximum number of shares for which options
may be granted under the Plan, (b) the minimum option price, (c)
the maximum periods during which options may be granted or
exercised, or (d) the provisions relating to the eligibility of
employees to whom options may be granted and to the eligibility of
members of the Committee.
15.2 Subject to other provisions of the Plan, no
termination or amendment of the Plan may, without the consent of
the optionee under an option then outstanding, terminate such
option or materially or adversely affect the rights of the optionee
thereunder.
16. SHAREHOLDER APPROVAL.
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No option granted under this Plan may be exercised in
whole or in part until this Plan is approved by the shareholders
holding a majority of the outstanding shares of the Company, which
approval must occur within the twelve month period after the date
the Plan is adopted by the Board of Directors of the Company. In
the event such shareholder approval is not forthcoming within the
time specified, this Plan and any options granted pursuant to it
shall be null and void.
17. AMENDMENTS TO INTERNAL REVENUE CODE OR REGULATIONS.
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Any reference in this Plan to a section of the Internal
Revenue Code or a section of the Income Tax Regulations shall
include any amendments thereto and shall include such additional
sections of the Code or Regulations into which the substance of the
cited sections shall be incorporated.
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