EXHIBIT 10.8
TISM, Inc.
Stock Option Plan
1. Purpose
The purpose of this Stock Option Plan (the "Plan") is to advance the
interests of TISM, Inc., a Michigan corporation (the "Company"), by enhancing
the ability of the Company and its subsidiaries (if any) to attract and retain
able employees of the Company; to reward such individuals for their
contributions; and to encourage such individuals to take into account the long-
term interests of the Company through interests in shares of the Company's
Common Stock, $.001 par value per share (the "Stock"). Any employee selected to
receive an award under the Plan is referred to as a "participant".
2. Administration
The Plan shall be administered by the Board of Directors (the "Board") of
the Company. Subject to applicable law, the Board shall have discretionary
authority, not inconsistent with the express provisions of the Plan, (a) to
grant option awards to such eligible persons as the Board may select; (b) to
determine the time or times when awards shall be granted and the number of
shares of Stock subject to each award; (c) to determine the terms and conditions
of each award; (d) to prescribe the form or forms of any instruments evidencing
awards and any other instruments required under the Plan and to change such
forms from time to time; (e) to adopt, amend, and rescind rules and regulations
for the administration of the Plan; and (f) 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 Board shall be conclusive
and shall bind all parties. Subject to Section 9 the Board shall also have the
authority, both generally and in particular instances, to waive compliance by a
participant with any obligation to be performed by him or her under an award, to
waive any condition or provision of an award, and to amend or cancel any award
(and if an award is canceled, to grant a new award on such terms as the Board
shall specify), except that the Board may not take any action with respect to an
outstanding award that would adversely affect the rights of the participant
under such award without such participant's consent. Nothing in the preceding
sentence shall be construed as limiting the power of the Board to make
adjustments required by Section 4(c) and Section 6(g).
The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee"), in which event all
references (as appropriate) to
the Board hereunder shall be deemed to refer to the Committee. The Committee, if
one is appointed, shall consist of at least two directors. A majority of the
members of the Committee shall constitute a quorum, and all determinations of
the Committee shall be made by a majority of its members. Any determination of
the Committee under the Plan may be made without notice or meeting of the
Committee by a writing signed by a majority of the Committee members. On and
after registration of the Stock under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the Board shall delegate the power to select directors
and officers to receive awards under the Plan and the timing, pricing, and
amount of such awards to a Committee, all members of which shall be "non-
employee directors" within the meaning of Rule 16b-3 under the 1934 Act and
"outside directors" within the meaning of section 162(m)(4)(c)(i) of the
Internal Revenue Code of 1986, as amended (the "Code"), in which event all
references (as appropriate) to the Board hereunder shall be deemed to refer to
the Committee.
3. Effective Date and Term of Plan
The Plan shall become effective on December 21, 1998, subject to approval
of the stockholders of the Company. Grants of awards under the Plan may be made
prior to that date (but after Board adoption of the Plan), subject to approval
of the Plan by the stockholders.
No awards shall be granted under the Plan after the completion of ten years
from the date on which the Plan was adopted by the Board, but awards previously
granted may extend beyond that date.
4. Shares Subject to the Plan
(a) Number of Shares. Subject to adjustment as provided in Section 4(c),
the aggregate number of shares of Stock that may be the subject of awards
granted under the Plan shall be 563,181 shares of Class A-3 Common Stock and
62,576 shares of Class L Common Stock. If any award granted under the Plan
terminates without having been exercised in full, or upon exercise is satisfied
other than by delivery of Stock, the number of shares of Stock as to which such
award was not exercised shall be available for future grants.
(b) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock, or if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
(c) Changes in Stock. In the event of a stock dividend, stock split or
combination of shares, recapitalization, or other transaction or event that
affects the Company's capital stock, the number and kind of shares of stock or
securities of the Company subject to awards then
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outstanding or subsequently granted under the Plan, the exercise price of such
awards, the maximum number of shares or securities that may be delivered under
the Plan, and other relevant provisions shall be appropriately adjusted to
prevent enlargement or dilution of benefits intended to be made available under
the Plan by the Board, whose determination shall be binding on all persons.
The Board may in good faith also adjust the number of shares subject to
outstanding awards, the exercise price of outstanding awards, and the terms of
outstanding awards, to take into consideration material changes in accounting
practices or principles, extraordinary dividends, consolidations or mergers
(except those described in Section 6(g)), acquisitions or dispositions of stock
or property, or any other event if it is determined by the Board that such
adjustment is appropriate to avoid distortion in the operation of the Plan.
5. Eligibility and Participation
Persons eligible to receive awards under the Plan shall be those persons
who, in the opinion of the Board, are in a position to make a significant
contribution to the success of the Company and its subsidiaries. A subsidiary
for purposes of the Plan shall be a corporation in which the Company owns,
directly or indirectly, stock possessing 50% or more of the total combined
voting power of all classes of stock.
6. Terms and Conditions of Options
(a) Exercise Price of Options. The exercise price of each option shall
be determined by the Board, but the exercise price shall not be less, in the
case of an original issue of authorized stock, than par value.
(b) Duration of Options. An option shall be exercisable during such
period or periods as the Board may specify. The latest date on which an option
may be exercised (the "Expiration Date") shall be the date that is eleven years
from the date the option was granted or such earlier date as may be specified by
the Board at the time the option is granted.
(c) Exercise of Options.
(1) An option shall become exercisable at such time or times and upon such
conditions as the Board shall specify. In the case of an option not
immediately exercisable in full, the Board may at any time accelerate
the time at which all or any part of the option may be exercised.
(2) Any exercise of an option shall be in writing, signed by the proper
person and furnished to the Company, accompanied by (i) such documents
as may be
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required by the Board and (ii) payment in full as specified below in
Section 6(d) for the number of shares for which the option is
exercised.
(3) The Board shall have the right to require that the participant
exercising the option remit to the Company an amount sufficient to
satisfy any federal, state, or local withholding tax requirements (or
make other arrangements satisfactory to the Company with regard to
such taxes) prior to the delivery of any Stock pursuant to the
exercise of the option. If permitted by the Board, either at the time
of the grant of the option or in connection with exercise, the
participant may elect, at such time and in such manner as the Board
may prescribe, to satisfy such withholding obligation by (i)
delivering to the Company Stock owned by such individual having a fair
market value equal to such withholding obligation, or (ii) requesting
that the Company withhold from the shares of Stock to be delivered
upon the exercise a number of shares of Stock having a fair market
value equal to such withholding obligation.
In addition, if at the time the option is exercised the Board
determines that under applicable law and regulations the Company could
be liable for the withholding of any federal or state tax with respect
to a disposition of the Stock received upon exercise, the Board may
require as a condition of exercise that the participant exercising the
option agree to give such security as the Board deems adequate to meet
the potential liability of the Company for the withholding of tax, and
to augment such security from time to time in any amount reasonably
deemed necessary by the Board to preserve the adequacy of such
security.
(4) If an option is exercised by the executor or administrator of a
deceased participant, or by the person or persons to whom the option
has been transferred by the participant's will or the applicable laws
of descent and distribution, the Company shall be under no obligation
to deliver Stock pursuant to such exercise until the Company is
satisfied as to the authority of the person or persons exercising the
option.
(d) Payment for and Delivery of Stock. Stock purchased upon exercise of
an option under the Plan shall be paid for as follows: (i) in cash, check
acceptable to the Company (determined in accordance with such guidelines as the
Board may prescribe), or money order payable to the order of the Company, or
(ii) if so permitted by the Board, (A) through the delivery of shares of Stock
(which, in the case of Stock acquired from the Company, shall have been held for
at least six months unless the Board specifies a shorter period) having a fair
market value on the last business day preceding the date of exercise equal to
the purchase price, or (B) by delivery of a promissory note of the participant
to the Company, such note to be payable on such terms as are specified by the
Board, or (C) by delivery of an unconditional
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and irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (D) by any combination of the
permissible forms of payment; provided, that if the Stock delivered upon
exercise of the option is an original issue of authorized Stock, at least so
much of the exercise price as represents the par value of such Stock shall be
paid other than with a personal check or promissory note of the person
exercising the option.
(e) Delivery of Stock. A participant shall not have the rights of a
stockholder with regard to awards under the Plan except as to Stock actually
received by him under the Plan.
The Company shall not be obligated to deliver any shares of Stock (i)
until, in the opinion of the Company's counsel, all applicable federal and state
laws and regulations have been complied with, (ii) if the outstanding Stock is
at the time listed on any stock exchange, until the shares to be delivered have
been listed or authorized to be listed on such exchange upon official notice of
issuance, and (iii) until all other legal matters in connection with the
issuance and delivery of such shares have been approved by the Company's
counsel. Without limiting the generality of the foregoing, if the sale of Stock
has not been registered under the Securities Act of 1933, as amended, the
Company may require, as a condition to exercise of the award, 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 Stock bear an appropriate legend restricting transfer.
(f) Nontransferability of Awards. Except as specifically provided in an
option approved by the Board, no option or other award may be transferred other
than by will or by the laws of descent and distribution, and during a
participant's lifetime an award may be exercised only by him or her.
(g) Mergers, etc. In the event of any merger, consolidation,
dissolution, or liquidation of the Company, the Board in its sole discretion
may, as to any outstanding options or other awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under the
Plan and in the number and purchase price (if any) of shares subject to such
awards as it may determine, or accelerate, amend, or terminate such awards upon
such terms and conditions as it shall provide (which, in the case of the
termination of the vested portion of any award, shall require payment or other
consideration that the Board deems equitable in the circumstances).
7. Termination of Employment
(a) If a participant's employment with the Company and its subsidiaries
terminates prior to the Expiration Date, the Board in its sole discretion may
provide (either prior to or within 30 days following termination) that (i) any
or all of such portion of any option not
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otherwise vested (i.e., exercisable) prior to termination shall be treated as
having become vested immediately prior to termination, in which case, as to that
number of shares of Stock for which the award was vested, or deemed vested by
action of the Board, immediately prior to termination, such award shall continue
to be exercisable thereafter during the period prior to the Expiration Date and
within 90 days following the termination (180 days in the event that a
participant's service terminates by reason of death); or (ii) except if
otherwise set forth in an award, the participant or beneficiary receive in cash,
with respect to each share of Stock to which an option or other award relates,
the excess of (x) the share's fair market value on the date of the participant's
termination over (y) the option exercise price. Except as otherwise provided in
an award, after completion of the 90-day (or 180-day) period, such awards shall
terminate to the extent not previously exercised, expired, or terminated. No
option shall be exercised or surrendered in exchange for a cash payment after
the Expiration Date.
(b) Notwithstanding the foregoing, except as otherwise provided in an
award, if the participant is terminated for "cause" (as defined in (c) below)
all options and other awards shall immediately terminate as to all shares of
Stock subject hereto, whether or not vested immediately prior to such
termination for cause.
(c) "Cause" with respect to any participant, shall mean the following
events or conditions: (i) the failure to devote substantially all of his or her
business time to the performance of his or her duties to the Company or any of
its subsidiaries (other than by reason of disability), or refusal or failure to
follow or carry out any reasonable direction of the Board of Directors, and the
continuance of such refusal or failure for a period of ten days after notice to
such participant; (ii) the material breach by the participant of any material
agreement to which such participant and the Company or any of its affiliates are
party; (iii) the commission of fraud, embezzlement, theft or other dishonesty by
such participant with respect to the Company or any of its affiliates; (iv) the
conviction of such participant of, or plea by such participant of nolo
contendere to, any felony or any other crime involving dishonesty or moral
turpitude; and (v) any other intentional action or intentional omission that
involves a material breach of fiduciary obligation on the part of such
participant.
(d) The Board may provide in the case of any award for post-termination
exercise provisions different from those expressly set forth in this Section 7,
including without limitation terms allowing a later exercise by a former
employee (or, in the case of a former employee who is deceased, the person or
persons to whom the award is transferred by will or the laws of descent and
distribution) as to all or any portion of the award not exercisable immediately
prior to termination of employment or other service, but in no case may an award
be exercised after the Expiration Date.
8. Employment Rights
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Neither the adoption of the Plan nor the grant of awards shall confer upon
any participant any right to continue as an employee of the Company, its parent,
or any subsidiary or affect in any way the right of the Company, its parent, or
a subsidiary to terminate the participant's relationship at any time. Except as
specifically provided by the Board in any particular case, the loss of existing
or potential profit in awards granted under this Plan shall not constitute an
element of damages in the event of termination of the relationship of a
participant.
9. Effect, Discontinuance, Cancellation, Amendment, and Termination
Neither adoption of the Plan nor the grant of awards to a participant shall
affect the Company's right to make awards to such participant that are not
subject to the Plan, to issue to such participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued. No
option granted pursuant to the Plan is intended to be an incentive stock option
under Section 422 of the Code.
The Board may at any time or times amend the Plan or any outstanding award
for the purpose of satisfying the requirements of any changes in applicable laws
or regulations or for any other purpose that may at the time be permitted by
law, or may at any time terminate the Plan as to any further grants of awards;
provided that, except to the extent expressly required by the Plan, no such
amendment shall adversely affect the rights of any participant (without his or
her consent) under any award previously granted, nor shall such amendment,
without the approval of the stockholders of the Company, effectuate a change for
which stockholder approval is required to comply with any tax or regulatory
requirement including in order for the Plan to continue to qualify under Rule
16b-3 promulgated under Section 16 of the 1934 Act.
10. Miscellaneous
The Plan shall be governed by Michigan law. The Board may provide in a
particular case that an award shall be evidenced by an award agreement or
certificate.
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