EXHIBIT 10.1
MILLERS AMERICAN GROUP, INC.
1999 STOCK OPTION PLAN
APRIL 19, 1999
MILLERS AMERICAN GROUP, INC.
1999 STOCK OPTION PLAN
ARTICLE I.
PURPOSES
1.1 PURPOSE OF PLAN. The purposes of the Millers American Group,
Inc. 1999 Stock Option Plan (the "Plan") are to advance the interests of
Millers American Group, Inc. (the "Company") and its shareholders by
providing significant incentives to selected officers, directors and
employees of the Company and its Subsidiaries (as defined herein) and to
enhance the interest of such officers, directors and employees in the
Company's success and progress by providing them with an opportunity to
become shareholders of the Company. Further, the Plan is designed to
enhance the Company's ability to attract and retain qualified management
and other personnel necessary for the success and progress of the Company.
ARTICLE II.
DEFINITIONS
2.1 DEFINITIONS. Certain terms used herein shall have the meaning
below stated, subject to the provisions of Section 8.1 hereof.
(a) "Board" or "Board of Directors" means the Board of Directors
of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the committee of directors appointed by
the Board to administer the Plan pursuant to Article VII hereof.
(d) "Common Stock" means the authorized common stock of the
Company, par value $.01 per share, as constituted on the date the Plan
becomes effective.
(e) "Company" means Millers American Group, Inc., a Texas
corporation.
(f) "Director" means a member of the Board of Directors of the
Company or a Subsidiary who is not an Employee.
(g) "Employee" means an officer or other employee of the Company
or a Subsidiary, including a member of the Board who is also such an
employee.
(h) "Fair Market Value" on any date for which fair market value
is to be determined hereunder means the reported closing price on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading, or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, on the National Association of Securities Dealers Automated
Quotation National Market (the "NASDAQ National Market"), or, if the
shares of Common Stock are not quoted on the NASDAQ National Market,
the average of the highest reported bid and the lowest reported asked
prices as furnished by the National Association of Securities Dealers,
Inc. (the "NASD") through NASDAQ, or, if not so reported through
NASDAQ as reported through the National Quotation Bureau, Incorporated
("NQBI") or a similar organization if NASDAQ or NQBI is no longer
reporting such information. For options approved at such times as the
Common Stock is not reported or quoted by any such organization
(including options approved prior to an initial public stock offering
of the Company), the fair market value of the shares of Common Stock
shall be the fair market value thereof determined in good faith by the
Committee. In addition to the above rules, Fair Market Value shall be
determined without regard to any restriction other than a restriction
which, by its terms, will never lapse.
(i) "Incentive Option" means an Option intended to qualify as an
incentive option under Section 422 of the Code.
(j) "Nonqualified Option" means an Option that does not qualify
as an Incentive Option.
(k) "Option" means an option to purchase Common Stock granted by
the Company to an Employee or a Director pursuant to Section 5.1
hereof.
(l) "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms of an Option granted under the
Plan.
(m) "Optionee" means an Employee or a Director to whom an Option
has been granted under the Plan.
(n) "Plan" means the Millers American Group, Inc. 1999 Stock
Option Plan, as set forth herein and as from time to time amended.
(o) "Subsidiary" means a subsidiary of the Company within the
meaning of Section 424(f) of the Code.
ARTICLE III.
SHAREHOLDER APPROVAL; RESERVATION OF SHARES
3.1 SHAREHOLDER APPROVAL. The Plan shall become effective only if,
within 12 months from the date the Plan is adopted by the Board, the Plan
is approved by the affirmative vote of the holders of a majority of the
shares of Common Stock of the Company, or by the unanimous written consent
of such holders, in accordance with the applicable provisions of the
Articles of Incorporation and Bylaws of the Company and applicable state
law.
3.2 SHARES RESERVED UNDER PLAN. The aggregate number of shares of
Common Stock which may be issued upon the exercise of Options granted under
the Plan shall not exceed 3,000,000 shares, all or any part of which may be
issued pursuant to Options; provided, however, that the maximum number of
shares of Common Stock which may be issued to an Optionee under the Plan
during the term of the Plan shall not exceed 1,200,000 (as may be adjusted
pursuant to Section 9.4 of the Plan). Shares of Common Stock issued upon
the exercise of Options granted under the Plan may consist of either
authorized but unissued shares or shares which have been issued and which
shall have been heretofore or shall be hereafter reacquired by the Company.
The total number of shares authorized under the Plan shall be subject to
increase or decrease in order to give effect to the provisions of Section
9.4 hereof and to give effect to any amendment adopted pursuant to Article
VIII. If any Option granted under the Plan shall expire, terminate or be
cancelled for any reason without having been exercised in full, the number
of shares as to which such Option was not exercised shall again be
available for purposes of the Plan. The Company shall at all times while
the Plan is in effect reserve such number of shares of Common Stock as will
be sufficient to satisfy the requirements of the Plan.
ARTICLE IV.
PARTICIPATION IN PLAN
4.1 ELIGIBILITY. Options under the Plan may be granted to any
Director or Employee of the Company or a Subsidiary. The Committee shall
determine those Directors or Employees to whom Options shall be granted,
and, subject to Section 3.2 hereof, the number of shares of Common Stock
subject to each such Option. Incentive Options or Nonqualified Options may
be granted to an Employee. Only Nonqualified Options may be granted to a
nonemployee Director.
4.2 PARTICIPATION NOT GUARANTEE OF EMPLOYMENT OR RETENTION. Nothing
in this Plan or in any Option Agreement shall in any manner be construed
(i) to limit in any way the right of the Company or any Subsidiary to
terminate an Employee's employment at any time, without regard to the
effect of such termination on any rights such Employee would otherwise have
under this Plan, or give any right to an Employee to remain employed or
retained by the Company or a Subsidiary thereof in any particular position
or at any particular rate of compensation or (ii) limit in any way the
right of the shareholders of the Company or a Subsidiary or the Board to
remove any Director or fail to nominate any Director for re-election
without regard to the effect of such removal or non-election of a Director
on any rights such Director would have under this Plan, or give any right
to a Director to continue to serve as a Director of the Company or a
Subsidiary.
ARTICLE V.
GRANT AND EXERCISE OF OPTIONS
5.1 GRANT OF OPTIONS. The Committee may from time to time in its
discretion grant Options to Employees or Directors. All Options under the
Plan shall be granted within ten years from the date the Plan is adopted by
the Board or the date the Plan is approved by holders of the Common Stock
of the Company, whichever is earlier.
5.2 OPTION AGREEMENTS. Each Option granted under the Plan shall be
evidenced by an Option Agreement between the Company and the Optionee in
such form as the Committee shall approve and containing such provisions and
conditions not inconsistent with the provisions of the Plan, including the
term during which the Option may be exercised and whether in installments
or otherwise, as the Committee shall determine. Each Option Agreement
issued under the Plan shall contain an agreement of the Optionee with
respect to nondisclosure of information, noncompete provisions and
nonsolicitation of customers and employees as shall be required by the
Board from each Optionee as additional consideration for the issuance of
Options under the Plan.
5.3 OPTION TERMS. Options granted under the Plan shall be subject to
the following requirements:
(a) OPTION PRICE. The exercise price of each Incentive Option
granted under the Plan shall not be less than the higher of the par
value or 100% of the Fair Market Value of the shares of Common Stock
subject to the Option on the date the Option is granted. The exercise
price of any Nonqualified Options granted under the Plan shall be
determined by the Committee. The exercise price of an Option may be
subject to adjustment pursuant to Section 9.4 hereof.
(b) TERM OF OPTION. The term during which an Option is
exercisable shall be that period determined by the Committee as set
forth in the applicable Option Agreement, provided that no Option
shall have a term that exceeds a period of ten years from the date of
its grant.
(c) NONTRANSFERABILITY OF INCENTIVE OPTIONS. No Incentive
Option granted under the Plan shall be transferable by the Optionee
otherwise than by will or the laws of descent and distribution, and
each such Incentive Option shall be exercisable during the Optionee's
lifetime only by him or her. No transfer of an Incentive Option by an
Optionee by will or by the laws of descent and distribution shall be
effective to bind the Company unless the Company shall have been
furnished with written notice thereof and a copy of the will and/or
such other evidence as the Committee may determine necessary to
establish the validity of the transfer.
(d) ASSIGNABILITY OF NONQUALIFIED OPTIONS. Nonqualified Options
granted hereunder may be transferred by the Optionee thereof to one or
more permitted transferees; provided that (i) there may be no
consideration for such transfer, (ii) the Optionee (or such Optionee's
estate or representative) shall remain obligated to satisfy all
employment tax and other withholding tax obligations associated with
the exercise of the Options, (iii) the Optionee shall notify the
Company in writing that such transfer has occurred, the identity and
address of the permitted transferee and the relationship of the
permitted transferee to the Optionee and (iv) such transfer shall be
effected pursuant to transfer documents approved from time to time by
the Committee. To the extent a Nonqualified Option transferred
pursuant to this Section 5.3(d) is not fully exercisable as of the
date of transfer thereof, the Optionee shall specify in the transfer
document whether and to what extent the transferred Options (if less
than all of the Options subject to the applicable Nonqualified Stock
Option Agreement) are exercisable, subject to the limitations on
exercisability contained in the applicable Nonqualified Stock Option
Agreement. Furthermore, to the extent the Optionee transfers Options
that are not exercisable as of the date of transfer and such Options
are less than all of the Options subject to the applicable
Nonqualified Stock Option Agreement, the Optionee shall specify in the
transfer documents, subject to the limitations on exercisability
contained in the applicable Nonqualified Stock Option Agreement, when
the transferred Options become exercisable as Options under the
applicable Nonqualified Stock Option Agreement subsequent to such
transfer. No permitted transferee may further assign or transfer the
transferred Option otherwise than by will or the laws of descent and
distribution. Following any permitted transfer, any such Options
shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer; provided that for purposes
of Sections 5.4(a), 5.4(b), 5.5, 5.6, Article VII, and Article IX
hereof the term "Optionee" shall be deemed to refer also to each
permitted transferee. The events of termination of relationship in
Article VI hereof shall continue to be applied with respect to the
original Optionee, following which the Options shall be exercisable by
the transferee only to the extent, and for the periods specified in
Article VI and the shares issued upon exercise of Options shall be
subject to repurchase pursuant to Section 9.3. The term "permitted
transferees" shall mean one or more of the following: (i) any member
of the optionee's immediate family; (ii) a trust established for the
exclusive benefit of one or more members of such immediate family; or
(iii) a partnership in which such immediate family members are the
only partners. The term "immediate family" is defined for such
purpose as spouses, children, stepchildren and grandchildren,
including relationships arising from adoption.
(e) TIME AND AMOUNT EXERCISABLE. Each Option shall be
exercisable in accordance with the provisions of the Option Agreement
pursuant to which it is granted in whole, or from time to time in
part, subject to any limitations with respect to the number of shares
for which the Option may be exercised at a particular time and to such
other conditions as the Committee in its discretion may specify in the
Option Agreement. Any portion of an Option which has become
exercisable shall remain exercisable until it is exercised in full or
it terminates or expires pursuant to the terms of the Plan or the
applicable Option Agreement.
(f) OPTIONS GRANTED TO TEN PERCENT STOCKHOLDERS. No Incentive
Option shall be granted to any Employee who owns, directly or
indirectly within the meaning of Section 424(d) of the Code, stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary, unless at the time
the Option is granted, the exercise price of the Option is at least
110% of the Fair Market Value of the Common Stock subject to such
Option and such Option, by its terms, is not exercisable after the
expiration of five years from the date such Option is granted. The
provisions of this Section 5.3(f) shall not apply to the grant of
Nonqualified Options.
5.4 PAYMENT OF EXERCISE PRICE AND DELIVERY OF SHARES.
(a) MANNER OF EXERCISE. Shares of Common Stock purchased upon
exercise of Options shall at the time of purchase be paid for in full.
The Company shall satisfy its employment tax and other tax withholding
obligations by requiring the Optionee (or such Optionee's estate or
representative) to pay the amount of employment tax and withholding
tax, if any, that must be paid under federal, state and local law due
to the exercise of the Option. To the extent that the right to
purchase shares has accrued hereunder, Options may be exercised from
time to time by written notice to the Company stating the full number
of shares with respect to which the Option is being exercised and the
time of delivery thereof, which shall be at least fifteen days after
the giving of such notice unless an earlier date shall have been
mutually agreed upon by the Optionee (or other person entitled to
exercise the Option) and the Company, accompanied by payment to the
Company of the purchase price in full and the amount of employment tax
and withholding tax due, if any, upon the exercise of the Option.
Such payment shall be effected (i) by certified or official bank
check, (ii) if so permitted by the Company, by the delivery of a
number of shares of Common Stock (plus cash if necessary) having a
fair market value equal to the amount of such purchase price and
employment or withholding tax or (iii) by delivery of the equivalent
thereof acceptable to the Company. The Company will, as soon as
reasonably possible notify the Optionee (or such Optionee's
representative) of the amount of employment tax and other withholding
tax that must be paid under federal, state and local law due to the
exercise of the Option. At the time of delivery, the Company shall,
without transfer or issue tax to the Optionee (or other person
entitled to exercise the Option), deliver to the Optionee (or to such
other person) at the principal office of the Company, or such other
place as shall be mutually agreed upon, a certificate or certificates
for the shares of Common Stock, provided, however, that the time of
delivery may be postponed by the Company for such period as may be
required for it with reasonable diligence to comply with any
requirements of law. The foregoing notwithstanding, the Committee may
permit in an Option Agreement, at the time of the grant of an Option
or by later amendment to an Option Agreement, an alternative exercise
of an Option by a "cashless exercise" with a broker or by the
surrender of the Option, if the Committee so permits, in exchange for
an amount, payable in cash or shares of Common Stock (except for
fractional shares which shall be paid in cash) valued at Fair Market
Value as of the date of such surrender, that is equal to the
difference between (i) the aggregate Fair Market Value of the shares
subject to the portion of the Option being exercised, minus (ii) the
total exercise price for the portion of the Option being exercised.
In the applicable Option Agreement the Committee may require an
Optionee to accept either cash or shares in settlement of any Option
so surrendered or may permit the Optionee to request, subject to
Committee approval, cash or shares to be received in settlement.
Withholding upon such an alternative exercise shall be effected by any
lawful means approved by the Committee and agreed to with Optionee.
(b) RIGHTS OF OPTIONEE IN STOCK. Neither any Optionee, any
permitted transferee nor the legal representatives, heirs, legatees or
distributees of any Optionee or permitted transferee shall be deemed
to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock issuable upon exercise of an
Option granted hereunder unless and until such shares are issued to
him or her or them and such person or persons have received a
certificate or certificates therefor. Upon the issuance and receipt
of such certificate or certificates, such Optionee or the legal
representatives, heirs, legatees or distributees of such Optionee
shall have absolute ownership of the shares of Common Stock evidenced
thereby, including the right to vote such shares, to the same extent
as any other owner of shares of Common Stock, and to receive dividends
thereon, subject, however, to the terms, conditions and restrictions
of the Plan.
5.5 CHANGE OF CONTROL.
(a) A "Change of Control" for purposes of this Plan shall mean:
(i) the acquisition, by a single entity (or group of affiliated
entities) that is not directly or indirectly controlled by the
existing shareholders, of more than 50% of the Common Stock issued and
outstanding immediately prior to such acquisition; or (ii) the
dissolution or liquidation of the Company or the consummation of any
merger or consolidation of the Company or any sale or other
disposition of all or substantially all of its assets, if the
shareholders of the Company immediately before such transaction own
directly or indirectly, immediately after consummation of such
transaction, equity securities (other than options and other rights to
acquire equity securities) possessing less than 50% of the voting
power of the surviving or acquiring corporation. All adjustments
under this Section shall be made by the Committee, whose determination
as to what adjustments shall be made and the extent thereof shall be
final, binding and conclusive for all purposes of the Plan and of each
Option Agreement.
(b) CHANGE OF CONTROL WITH PROVISION BEING MADE THEREFOR. If in
connection with a Change of Control a written provision is made for
the assumption and continuance of any Option granted under the Plan,
or the substitution for such option of a new Option covering the
shares of the successor employer corporation, with appropriate
adjustment as to the number and kind of shares and prices, the option
granted under the Plan, or the new Option substituted therefor, as the
case may be, shall continue in the manner and under the terms
provided.
(c) CHANGE OF CONTROL WITHOUT PROVISION BEING MADE THEREFOR. If
no written provision is made in connection with a Change of Control
for the continuance and assumption of any Option granted under the
Plan or for the substitution of any Option covering the shares of the
successor employer corporation, then, the holder of any such Option
shall be entitled, prior to the effective date of any such Change of
Control, to purchase the full number of shares not previously
exercised under such Option, without regard to the periods and
installments of exercisability made pursuant to Section 5.3 if (and
only if) such Option has not at that time expired or been terminated,
failing which purchase, any unexercised portion shall be deemed
cancelled as of the effective date of such Change of Control.
5.6 DISSOLUTION OR LIQUIDATION OF THE COMPANY. In the event of the
proposed dissolution or liquidation of the Company, the Options granted
hereunder shall terminate as of a date to be fixed by the Committee,
provided that not less than 15 days' prior written notice of the date so
fixed shall be given to the Optionee, and the Optionee shall have the
right, during the 15-day period preceding such termination, to exercise his
or her Option.
ARTICLE VI.
TERMINATION OF EMPLOYMENT OR DIRECTORSHIP
6.1 TERMINATION OF EMPLOYMENT FOR CAUSE. In the event that an
Optionee is an Employee and such Optionee's employment by the Company or a
Subsidiary shall terminate for Cause (as hereinafter defined), the Options
granted to the Optionee pursuant to this Plan shall terminate immediately
upon termination of employment. For the purposes of this Plan, the term
"Cause" shall mean "Cause" as defined in any written employment agreement
in effect between the applicable Optionee and the Company or a Subsidiary,
or if such Optionee is not a party to a written employment agreement in
which Cause is defined, then Cause shall mean (i) the failure by such
Optionee to substantially perform his or her duties with the Company or a
Subsidiary in a manner reasonably deemed satisfactory by the Board of
Directors, (ii) the abuse of illegal drugs or other controlled substances
or the intoxication of Optionee during working hours, (iii) the arrest for,
or conviction of, a felony, (iv) the unexcused absence by such Optionee
from Optionee's regular job location for more than five consecutive days or
for more than the aggregate number of days permitted to Optionee under
Company vacation and sick leave policies applicable to Optionee or (v) any
conduct or activity of such Optionee deemed injurious to the Company in the
reasonable discretion of the Board of Directors.
6.2 TERMINATION OF DIRECTORSHIP. In the event that an Optionee is a
Director and such Optionee fails to be reelected as a Director, resigns as
a Director or is removed as a Director (other than due to Optionee's
disability as defined in Section 6.3 hereof), the Options granted to such
Optionee pursuant to this Plan shall terminate on the date such Optionee
ceases to be a Director.
6.3 DEATH OR DISABILITY.
(a) In the event that an Optionee shall die while employed by,
or serving as a Director of, the Company or a Subsidiary or if
Optionee's employment by, or service as a Director of, the Company or
a Subsidiary is terminated because Optionee has become disabled,
Optionee, his or her estate, or beneficiary shall have the right to
exercise his or her Option at any time within 60 days from the date of
death of Optionee or termination of Optionee's employment by, or
service as a Director of, the Company or a Subsidiary due to
disability, as the case may be, only to the extent the Optionee was
entitled to exercise his or her Option immediately prior to such
occurrence. To the extent that the Option is not so exercised, it
shall expire at the end of such 60 day period. For purposes of this
Plan, disability shall be as defined in any written employment
agreement in effect between the applicable Optionee and the Company or
a Subsidiary, or if such Optionee is not a party to a written
employment agreement in which disability is defined, an Optionee shall
be considered disabled if he or she is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death
or that has lasted or can be expected to last for a continuous period
of not less than 6 months.
(b) If an Optionee dies during the 60-day period after the
termination of his or her position as an Employee or Director of the
Company or a Subsidiary and at the time of his or her death the
Optionee was entitled to exercise an Option theretofore granted to him
or her, the Option shall, unless the applicable Option Agreement
provides otherwise, expire 60 days after the date on which his or her
position as an Employee or Director of the Company or a Subsidiary
terminated, but in no event, later than the date on which the Option
would have expired if the Optionee had lived. Until the expiration of
such 60-day period, the Option may be exercised by the Optionee's
executor or administrator or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or
inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of his or her death and, to the extent
the Option is not so exercised, it shall expire at the end of such 60-
day period.
6.4 OTHER TERMINATIONS. In the event that termination of employment
with the Company occurs other than for Cause or for death or disability
pursuant to Sections 6.1 or 6.3 above, or in the event that the
directorship of an Optionee who is a Director is terminated for reasons
other than the removal, resignation, death or disability of such Director,
the applicable Optionee shall have the right to exercise his or her Option
at any time within 60 days after such termination to the extent he or she
was entitled to exercise the same immediately prior to such termination.
To the extent that the Option is not so exercised, it shall expire at the
end of such 60 day period.
6.5 SUBJECT TO REPURCHASE. All shares of Common Stock purchased by
an Optionee or his or her estate or beneficiary shall be subject to
repurchase by the Company pursuant to Section 9.3 of this Plan.
6.6 ALTERNATIVE PROVISIONS. The provisions of this Article VI shall
apply to all Options granted under the Plan except to the extent expressly
provided otherwise in any Option Agreement.
ARTICLE VII.
ADMINISTRATION OF PLAN
7.1 ADMINISTRATION. The Plan shall be administered by the Board of
Directors or a Committee of the Board of Directors consisting of not less
than three directors who qualify as Non-Employee Directors (as defined in
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended) and "outside directors" for purposes of Section 162(m) of the Code
as may be appointed by the Board of the Company, all of whom are members of
the Board. Any such committee appointed by the Board, or the Board itself
during such periods as no such properly constituted and appointed committee
exists, is herein referred to as the "Committee." A majority of the
Committee shall constitute a quorum thereof and the actions of a majority
of the Committee approved at a meeting at which a quorum is present, or
actions unanimously approved in writing by all members of the Committee,
shall be the actions of the Committee. Vacancies occurring on the
Committee shall be filled by the Board. The Committee shall have full and
final authority (i) to interpret the Plan and each of the Option
Agreements, (ii) to prescribe, amend and rescind rules and regulations, if
any, relating to the Plan, (iii) to make all determinations necessary or
advisable for the administration of the Plan and (iv) to correct any
defect, supply any omission and reconcile any inconsistency in the Plan and
any Option Agreement. The determination by the Committee in all matters
referred to herein shall be conclusive and binding for all purposes and
upon all persons, including, without limitation, the Company, the
shareholders of the Company, the Committee, and each of the members thereof
and the Optionees and their respective successors in interest.
7.2 LIABILITY. No member of the Board or any Committee shall be
liable for anything done or omitted to be done by him or her or by any
other member of the Board or any Committee in connection with the Plan,
except for his or her own willful misconduct or gross negligence (unless
the Company's Articles of Incorporation or Bylaws, or any indemnification
agreement between the Company and such person, in each case in accordance
with applicable law, provides otherwise). The Board and any Committee
shall have power to engage outside consultants, auditors or other
professional help to assist in the fulfillment of the duties or the Board
or any Committee under the Plan at the Company's expense.
7.3 DETERMINATIONS. In making its determinations concerning the
Optionees who shall receive Options as well as the number of shares to be
covered thereby and the time or times at which they shall be granted, the
Committee shall take into account the nature of the services rendered by
the respective Optionees, their past, present and potential contribution to
the Company's success and such other factors as the Committee may deem
relevant. The Committee shall determine the form of Option Agreements
under the Plan and the terms and conditions to be included therein,
provided such terms and conditions are not inconsistent with the terms of
the Plan, the Company's Articles of Incorporation or Bylaws. The Committee
may waive any provisions of any Option Agreement, provided such waiver is
not inconsistent with the terms of the Plan, the Company's Articles of
Incorporation or Bylaws. The determinations of the Committee under the
Plan need not be uniform and may be made by it selectively among persons
who receive, or are eligible to receive, Options under the Plan, whether or
not such persons are similarly situated.
ARTICLE VIII.
AMENDMENT AND TERMINATION OF PLAN
8.1 AMENDMENT OF PLAN. The Plan may be amended at any time and from
time to time by the Board, but no amendment which (i) increases the
aggregate number of shares of Common Stock which may be issued pursuant to
Options granted under the Plan, (ii) decreases the minimum Option exercise
price provided in the Plan, (iii) extends the period during which Options
may be granted pursuant to the Plan, (iv) changes the class of individuals
eligible to be granted Options, or (v) has the effect of any of the above
shall be effective unless and until the same is approved by the affirmative
vote of the holders of a majority of the shares of Common Stock of the
Company, or the unanimous written consent of such holders, in accordance
with the applicable provisions of the Articles of Incorporation and Bylaws
of the Company and applicable state law. No amendment to the Plan shall,
without the consent of an Optionee, affect such Optionee's rights under an
Option previously granted.
8.2 TERMINATION. The Board may, at any time, terminate the Plan as
of any date specified in a resolution adopted by the Board. If not earlier
terminated, the Plan shall terminate on April 19, 2009. No Options may be
granted after the Plan has terminated but the Committee shall continue to
supervise the administration of Options previously granted.
8.3 TAX STATUS OF OPTIONS. To the extent applicable, the Plan is
intended to permit the issuance of Options to Employees in accordance with
the provisions of Section 422 of the Code. Subject to the provision of
Section 8.1 of the Plan, the Plan and Option Agreements may be modified or
amended at any time, both prospectively and retroactively, and in a manner
that may affect Options previously granted, if such amendment or
modification is necessary for the Plan and Options granted hereunder to
qualify under said provision of the Code. All Options granted under the
Plan to Employees shall be intended to qualify as incentive stock options
under Section 422 of the Code to the extent that any portion of the Options
granted meet the requirements of Section 422 of the Code. To the extent
that any portion of the Options granted under the Plan do not meet the
requirements of Section 422 of the Code, such Options shall be deemed to be
Nonqualified Options. Nothing in the Plan shall be deemed to prohibit the
issuance of Nonqualified Options to Employees under the Plan. Any Options
issued to Directors shall be Nonqualified Options.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
9.1 RESTRICTIONS UPON GRANT OF OPTIONS. If the listing upon any
stock exchange or the registration or qualification under any federal or
state law of any shares of Common Stock to be issued on the exercise of
Options granted under the Plan (whether to permit the grant of Options the
issuance of shares of Common Stock to any permitted transferee or the
resale or other disposition of any such shares of Common Stock by or on
behalf of the Optionees receiving such shares) should be or become
necessary or desirable, the Board in its sole discretion may determine that
delivery of the certificates for such shares of Common Stock shall not be
made until such listing, registration or qualification shall have been
completed. The Company agrees that it will use its reasonable best efforts
to effect any such listing, registration or qualification; provided,
however, that the Company shall not be required to use its reasonable best
efforts to effect such registration under the Securities Act of 1933 other
than on Form S-8 or such other forms as may be in effect from time to time
calling for information comparable to that presently required to be
furnished under Form S-8. In no event shall the Company be required to
register shares of Common Stock for issuance to a permitted transferee and
any requested exercise of Options by a permitted transferee shall be
subject to any applicable prior registration of the shares of Common Stock
issuable upon such exercise.
9.2 RESTRICTIONS UPON RESALE OF UNREGISTERED STOCK. Each Optionee
shall, if the Company deems it advisable, represent and agree in writing
(i) that any shares of Common Stock acquired by such Optionee pursuant to
this Plan will not be sold except pursuant to an effective registration
statement under the Securities Act of 1933 or pursuant to an exemption from
registration under said Act, (ii) that such Optionee is acquiring such
shares of Common Stock for his or her own account and not with a view to
the distribution thereof and (iii) to such other customary matters as the
Company may request. In such case, no shares of Common Stock shall be
issued to such Optionee unless such Optionee provides such representations
and agreements and the Company is reasonably satisfied that such
representations and agreements are correct.
9.3 REPURCHASE BY THE COMPANY.
(a) The Company shall have the right, exercisable within 60 days
after the later of (i) the date of Optionee's termination of
employment with the Company or a Subsidiary or termination of service
as a Director or (ii) the date of the exercise by any person other
than Optionee of the Option pursuant to any provision of this Plan, to
purchase any shares of Common Stock (or securities into which any
Common Stock has been converted) that were acquired pursuant to the
exercise of an Option under this Plan ("Option Shares"). To the
extent that an Optionee holds exercisable Options at the time of
termination of employment or termination of service as a Director, the
Company may elect to purchase such exercisable Options in the same
manner as the Option Shares at a price equal to the Repurchase Price
(as hereinafter defined) less the exercise price of such exercisable
Options.
(b) The Repurchase Price for the purchase of the Option Shares
shall be determined as follows:
(i) if the Common Stock has been registered pursuant to a
registration statement filed under the Securities Act of 1933, as
amended, and the rules and regulations of the Securities and
Exchange Commission thereunder (the "Act"), then the Repurchase
Price per share shall be equal to the average closing price per
share of the Common Stock for the 30 days preceding the date of
termination of employment by the Company or a Subsidiary as
published in the Wall Street Journal; or
(ii) if the Common Stock has not been registered under the
Act, then the price shall be the book value per share of Common
Stock as of the last day of the month during which termination of
employment with the Company or a Subsidiary (or termination of
service as a Director occurs) as determined by the formula:
P = A - L
-----
S
P = the purchase price (book value) per Option
Share,
A = the total assets of the Company and its
Subsidiaries (determined pursuant to generally
accepted accounting principles) shown on the
Company's balance sheet for the most recent fiscal
year ended,
L = the total liabilities of the Company and its
Subsidiaries (determined pursuant to generally
accepted accounting principles) shown on the
Company's balance sheet for the most recent fiscal
year ended,
S = the total number of shares of capital stock
of the Company outstanding on a fully diluted
basis as shown on the Company's balance sheet for
the most recent fiscal year ended and as adjusted
for any capital transactions, dividends, or
reclassification of stock subsequent to such date.
(c) To the extent that the Company has the right to purchase
Option Shares, the Company may exercise such right by delivery (upon
or within sixty days after the later of Optionee's termination of
employment with the Company or a Subsidiary (or termination of service
as a Director) or exercise by a person other than Optionee of the
Option) of written notice to the Optionee (or such other person
exercising such Option) stating the full number of Option Shares that
the Company has elected to purchase, the purchase price per Option
Share, and the time of purchase (which time shall not be earlier than
5 days from the date of notice). At the time of purchase, the
Optionee shall deliver the certificate or certificates representing
his Option Shares to the Company at its offices and shall execute any
stock powers or other instruments as may be necessary to transfer full
ownership of the Option Shares to the Company. At the time of
purchase, the Company shall issue its own check within 60 days to the
Optionee in an amount equal to the aggregate purchase price for the
Option Shares for which the Company has exercised its right to
purchase, less any amounts required to be withheld under applicable
laws. In the event of Optionee's death or disability, the Company's
right to purchase and the manner of purchase shall apply with regard
to the Optionee's estate, beneficiary, administrator or personal
representative.
9.4 ADJUSTMENTS. The number of shares of Common Stock of the Company
authorized for issuance under the Plan, as well as the price to be paid and
the number of shares issued upon exercise of outstanding Options, shall be
subject to adjustment by the Committee, in its sole discretion, to reflect
any stock split, stock dividend, recapitalization, merger consolidation,
reorganization, combination or exchange of shares or other similar event.
9.5 USE OF PROCEEDS. The proceeds from the sale of Common Stock
pursuant to Options granted under the Plan shall constitute general funds
of the Company and may be used for such corporate purposes as the Company
may determine.
9.6 SUBSTITUTION OF OPTIONS.
(a) The Committee may, with the consent of the holder of any
Option granted under the Plan, cancel such Option and grant a new
Option in substitution therefor, provided that the Option as so
substituted shall satisfy all of the requirements of the Plan as of
the date such new Option is granted.
(b) Options may be granted under the Plan in substitution for
options held by individuals who are employees or directors of another
corporation and who become Employees or Directors of the Company or
any Subsidiary of the Company eligible to receive Options pursuant to
the Plan as a result of a merger, consolidation, reorganization or
similar event. The terms and conditions of any Options so granted may
vary from those set forth in the Plan to the extent deemed appropriate
by the Committee in order to conform the provisions of Options granted
pursuant to the Plan to the provisions of the options in substitution
for which they are granted.
9.7 RESTRICTIVE LEGENDS.
(a) Certificates representing shares of Common Stock delivered
pursuant to the exercise of Options shall bear an appropriate legend
referring to the terms, conditions and restrictions described in this
Plan. Any attempt to dispose of any such shares of Common Stock in
contravention of the terms, conditions and restrictions described in
the Plan shall be ineffective, null and void, and the Company shall
not effect any such transfer on its books.
(b) Any shares of Common Stock of the Company received by an
Optionee (or his or her heirs, legatees, distributees or
representative) as a stock dividend on, or as a result of a stock
split, combination, exchange of shares, reorganization, merger,
consolidation or otherwise with respect to, shares of Common Stock
received pursuant to the exercise of Options, shall be subject to the
terms and conditions of the Plan and bear the same legend as the
shares received pursuant to the exercise of Options.
9.8 NOTICES. Any notice required or permitted hereunder shall be
sufficiently given only if sent by registered or certified mail, return
receipt requested, postage prepaid, addressed to the Company at its
principal place of business, and to the Optionee at the address on file
with the Company at the time of grant hereunder, or to such other address
as either party may hereafter designate in writing by notice similarly
given by one party to the other.
9.9 EFFECTIVE DATES. The Plan is effective on April 19, 1999,
subject to any required shareholder approval.
IN WITNESS WHEREOF, upon authorization of the Board of Directors and
the Shareholders of the Company, the undersigned has caused the Millers
American Group, Inc. 1999 Stock Option Plan to be executed effective as of
the 19th day of April 1999.
By: /S/ DAVID N. THOMPSON
-----------------------------------
David N. Thompson
President and Chief Executive Officer