EXHIBIT 10.4
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CAREY INTERNATIONAL, INC.
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
The purpose of this Stock Plan for Non-Employee Directors (the "Plan") is
to advance the interests of Carey International, Inc. (the "Company") by
increasing the proprietary interest in the Company of non-employee members of
the Company's Board of Directors by providing a portion of their compensation in
options to acquire shares ("Shares") of the Company's common stock ("Common
Stock") and also by providing the opportunity to receive in Shares all or a
portion of the cash compensation otherwise due them.
2. ADMINISTRATION
Except as otherwise provided herein, the Plan shall be administered by the
Board of Directors (the "Board") of the Company. The Committee shall have
authority, not inconsistent with the express provisions of the Plan, (a) to
administer the issuance of options granted in accordance with the formula set
forth in this Plan to such directors as are eligible to receive options; (b) to
prescribe the form or forms of instruments evidencing options and any other
instruments required under the Plan and to change such forms from time to time;
and (c) to adopt, amend and rescind rules and regulations for the administration
of the Plan. The Board shall have the authority to interpret the Plan and to
decide any questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations of the Committee or the Board, as
the case may be, shall be conclusive and shall bind all parties. Transactions
under this plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under Section 16 of the Securities Exchange Act of 1934
("Rule 16b-3"). To the extent any provision of the Plan or action by the
Committee or the Board fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Board.
3. EFFECTIVE DATE OF PLAN
The Plan shall become effective on the date approved by the requisite
percentage of the directors of the Company.
4. SHARES SUBJECT TO THE PLAN
(a) NUMBER OF SHARES. The maximum number of Shares that may be
delivered upon the exercise of options granted under the Plan and elections to
receive Shares in lieu of cash compensation shall be 100,000 Shares. If any
option granted under the Plan terminates
without having been exercised in full or any election to receive Shares in lieu
of cash compensation is not paid in full, the number of Shares as to which such
option was not exercised or such election was not paid shall be available for
future grants and/or elections within the foregoing limit.
(b) SHARES TO BE DELIVERED. Shares delivered under the Plan shall be
authorized but unissued Shares or, if the Board so decides in its sole
discretion, previously issued Shares acquired by the Company and held in
treasury. No fractional Shares shall be delivered under the Plan.
(c) CHANGES IN STOCK; RESTRUCTURING, ETC. In the event of a stock
dividend, stock split or combination of shares, the number and kind of shares of
stock or securities of the Company subject to options then outstanding or
subsequently granted under the Plan, the maximum number of shares or securities
that may be delivered under the Plan, the exercise price, and other relevant
provisions shall be appropriately adjusted by the Committee. In the event of any
other recapitalization, reorganization, extraordinary dividend or distribution
or restructuring transaction affecting the Common Stock, the number of shares
issuable under the Plan shall be subject to such adjustment as the Committee may
deem appropriate, and the number of shares issuable pursuant to any option
theretofore granted (whether or not then exercisable) and/or the option price
per share of such option shall be subject to such adjustment as the Committee
may deem appropriate with a view toward preserving the value of such option.
5. ELIGIBILITY FOR OPTIONS
Directors eligible to receive options under the Plan and to elect to
receive Shares in lieu of cash compensation ("Non-Employee Directors") shall be
those directors who are not present or former employees of the Company or of any
subsidiary of the Company.
6. TERMS AND CONDITIONS OF OPTIONS
(a) NUMBER OF OPTIONS. On the date of the closing of the Company's
initial public offering of Common Stock (the "Closing Date"), each Non-Employee
Director then in office shall be awarded an option covering 7,500 Shares. On the
date of each subsequent annual meeting of the Company's stockholders, each Non-
Employee Director continuing in office shall be awarded an option covering 2,500
Shares and each newly elected Non-Employee Director shall be awarded an option
covering 5,000 Shares. For purposes of this paragraph, each Non-Employee
Director elected to office at a special meeting of stockholders or by the Board
since the then last annual meeting (or since the Closing Date) shall be treated
as a newly elected Non-Employee Director.
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(b) EXERCISE PRICE. The exercise price of each option shall be the
fair market value per Share at the time the option is granted, except that
options awarded on the Closing Date will have an exercise price equal to the
initial public offering price. In no event, however, shall the option price be
less, in the case of an original issue of authorized stock, than par value per
share. For purposes of this subsection, the fair market value of a Share on any
date shall be the last sale price of a share of Common Stock on such day as
reported on the Nasdaq National Market ("NASDAQ") (or if the Common Stock is
then listed or admitted to unlisted trading privileges on a national securities
exchange, the last sale price of a share of Common Stock regular way on the
principal national securities exchange on which the Common Stock is then listed
or admitted to unlisted trading privileges) or, if there was no such reported
price on such day, the latest day prior thereto on which there was such a
reported price.
(c) DURATION OF OPTIONS. The latest date on which an option may be
exercised (the "Final Exercise Date") shall be the date which is five years from
the date the option was granted.
(d) EXERCISE OF OPTIONS.
(1) Each option shall become exercisable to the full extent of
all Shares covered thereby six months after the date of the
grant. No such option shall become exercisable to any extent
prior to the expiration of such six-month period.
(2) Any exercise of an option shall be in writing, signed by the
proper person and delivered or mailed to the Company,
accompanied by (i) any documentation required by the
Committee and (ii) payment in full for the number of Shares
for which the option is exercised.
(3) If an option is exercised by the executor or administrator
of a deceased director, or by the person or persons to whom
the option has been transferred by the director's will or
the applicable laws of descent and distribution, the Company
shall be under no obligation to deliver Shares pursuant to
such exercise until the Company is satisfied as to the
authority of the person or persons exercising the option.
(e) PAYMENT FOR AND DELIVERY OF SHARES. Shares purchased under the
Plan shall be paid for as follows: (i) by certified or bank check or other
instrument acceptable to the Committee (in accordance with guidelines
established for this purpose), (ii) through the delivery of shares of Common
Stock (which, in the case of shares acquired from the Company, have been
outstanding for at least six months) having a fair market value on the last
business day preceding the date of exercise equal to the purchase price, (iii)
by delivery of an unconditional and irrevocable undertaking by a broker to
deliver promptly to the
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Company sufficient funds to pay the exercise price or (iv) by any combination of
the permissible forms of payment.
(f) NON-TRANSFERABILITY OF OPTIONS. No option may be transferred
other than by will or by the laws of descent and distribution, and during a
director's lifetime an option may be exercised only by him or her.
(g) DEATH, RETIREMENT AND DISABILITY OF A DIRECTOR. Upon departure
from the Board by reason of death or disability (as determined by the
Committee), all options outstanding hereunder that are not otherwise exercisable
shall become immediately exercisable. All options held by such director may be
exercised by such director or by his or her executor or administrator, or by the
person or persons to whom the option is transferred by will or the applicable
laws of descent and distribution, at any time within one year after such
departure. After completion of the one-year period, such options shall terminate
to the extent not previously exercised. Notwithstanding the foregoing, options
held by a director who dies following departure by reason of disability shall
remain exercisable for one year following death. In no event shall any option
referred to in this paragraph 6(g) be exercisable beyond its stated term, if
earlier.
(h) OTHER TERMINATION OF STATUS OF DIRECTOR. If a director's service
with the Company terminates for any reason other than death or disability as
specified in paragraph 6(g), all options held by the director that are not then
exercisable shall terminate. Options that are exercisable on the date of
termination shall continue to be exercisable for a period of sixty days (but not
beyond their stated term if earlier). After completion of that sixty-day period,
such options shall terminate to the extent not previously exercised, expired or
terminated.
(i) MERGERS, ETC. In the event of a consolidation or merger in which
the Company is not the surviving corporation or which results in the acquisition
of substantially all the Company's outstanding Common Stock by a single person
or entity or by a group or persons and/or entities acting in concert, or in the
event of a sale of all or substantially all assets or a dissolution or
liquidation of the Company, all options hereunder will terminate; provided,
however, that 20 days prior to the effective date of any such merger,
consolidation, sale, dissolution, or liquidation, all options outstanding
hereunder that are not otherwise exercisable shall become immediately
exercisable.
7. ELECTION TO BE PAID ANNUAL CASH RETAINER IN SHARES
(a) ELECTION. A Non-Employee Director may elect to be paid his or
her annual retainer as a director of the Company in whole or in part in shares
of Common Stock. Any such election must be in writing, must state what
percentage of the annual retainer the director elects to receive in shares of
Common Stock, and must be received by the Company at least 30 days prior to the
date such annual retainer will be paid by the Company. Failure
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to make any such election in accordance with the provisions of the second
preceding sentence shall mean that the annual retainer shall be paid solely in
cash.
(b) VALUATION. For purposes of determining the number of shares of
Common Stock to be delivered to a director pursuant to an election duly made
pursuant to the immediately preceding subsection (a), the amount of the annual
retainer shall be divided by the fair market value of a share of Common Stock on
the date the annual retainer is to be paid (but in the event of an original
issue of authorized stock, in no event shall the value of a share of Common
Stock be less than the par value of a share of Common Stock). Cash shall be paid
to the directors in lieu of any fractional share. For purposes of this
subsection, the fair market value of a share of Common Stock on any date shall
be the last sale price of a share of Common Stock on such day as reported on
NASDAQ (or if the Common Stock is then listed or admitted to unlisted trading
privileges on a national securities exchange, the last sale price of a share of
Common Stock regular way on the principal national securities exchange on which
the Common Stock is then listed or admitted to unlisted trading privileges) or,
if there was no reported price on such day, the latest day prior thereto on
which there was a reported price.
8. MISCELLANEOUS
(a) RIGHTS AS A SHAREHOLDER. Any option holder and any Non-Employee
Director who shall have elected to receive Shares under the Plan in lieu of cash
compensation shall not have the rights of a shareholder with regard to awards
and/or elections under the Plan except as to Shares actually received by him or
her under the Plan.
(b) COMPLIANCE WITH SECURITIES LAWS. The Company shall not be
obligated to deliver any Shares until (1), in the opinion of the Company's
counsel, all applicable federal, state and foreign laws and regulations have
been complied with, (2) if the Common Stock outstanding is at the time listed on
any stock exchange or automated quotation system, the Shares to be delivered
have been listed or authorized to be listed on such exchange or system upon
official notice of issuance, and (3) all other legal matters in connection with
the issuance and delivery of such Shares have been approved by the Company's
counsel. If the sale of Shares has not been registered under the Securities Act
of 1933, as amended, the Company may require, as a condition to exercise of the
option, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Shares bear an appropriate legend restricting
transfer.
9. EFFECT, TERMINATION AND AMENDMENT
The Committee may at any time terminate the Plan, but options previously
granted and elections previously made shall not be affected thereby. The Board
may at any time or times amend the Plan for any purpose which may at the time be
permitted by law.
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