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EXHIBIT 10(f)
HUNT MANUFACTURING CO.
1994 NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN
1. Purpose
This 1994 Non-Employee Directors' Non-Qualified Stock Option Plan
(the "Plan") is intended to provide a means whereby Hunt Manufacturing Co.
(the "Company") through the grant to Non-Employee Directors (as defined in
Section 3 herein) of non-qualified stock options ("Options") to purchase
common shares of the Company, may attract and retain capable independent
directors and motivate them to promote the best interests of the Company and
Related Corporations.
For purposes of the Plan, a Related Corporation of the Company shall
mean either a corporate subsidiary of the Company, as defined in section
424(f) of the Internal Revenue Code of 1986, as amended ("Code"), or the
corporate parent of the Company, as defined in section 424(e) of the Code.
2. Administration
The Plan shall be administered by the Company's Compensation
Committee (the "Committee"), which shall consist of not less than two
directors of the Company who shall be appointed by, and shall serve at the
pleasure of, the Company's Board of Directors (the "Board"). Each member of
such Committee, while serving as such, shall be deemed to be acting in his or
her capacity as a director of the Company.
The Committee shall have full authority, subject to the terms of the
Plan, to interpret the Plan, but shall have no discretion with respect to the
selection of Non-Employee Directors to receive Options, the number of shares
subject to the Plan, setting the purchase price for shares subject to an
Option at other than fair market value, the method or methods for determining
the amount of Options to be granted to each Non-Employee Director, the timing
of grants hereunder or with respect to any other matter which would cause this
Plan to fail to comply with Rule 16b-3 under the Securities Exchange Act of
1934 (the "Exchange Act"). Subject to the foregoing, the Committee may
correct any defect, supply any omission and reconcile any inconsistency in
this Plan and in any Option granted hereunder in the manner and to the extent
it shall deem desirable. The Committee also shall have the authority to
establish such rules and regulations, not inconsistent with the provisions of
the Plan, for the proper administration of the Plan, and to amend, modify or
rescind any such rules and regulations, and to make such determinations and
interpretations under, or in connection with, the Plan, as it deems necessary
or advisable. All such rules, regulations, determinations and interpretations
shall be binding and conclusive upon the Company, its shareholders and all
Non-Employee Directors (including former Non-Employee Directors), and upon
their respective legal representatives, beneficiaries, successors and assigns
and upon all other persons claiming under or through any of them.
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No member of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted under it.
3. Eligibility
The persons who shall be eligible to receive Options under the Plan
shall be Non-Employee Directors, which term shall mean those directors of the
Company who:
(i) are not employees of the Company or any Related Corporation;
and
(ii) have not been employees of the Company or any Related
Corporation during the immediately preceding 12-month period.
4. Stock Subject to the Plan
Options may be granted under the Plan to purchase up to a maximum of
90,000 Common Shares, par value $.10 per share ("Common Shares" or "Shares"),
subject to adjustment as provided in Section 7 herein. Shares issuable under
the Plan may be authorized but unissued Shares or reacquired Shares, and the
Company may purchase Shares required for this purpose, from time to time, if
it deems such purchase to be advisable.
If any Option granted under the Plan expires or otherwise
terminates, in whole or in part, for any reason whatever (including, without
limitation, a Non-Employee Director's surrender thereof) without having been
exercised, the Shares subject to the unexercised portion of such Option shall
continue to be available for the granting of Options under the Plan as fully
as if such Shares had never been subject to an Option.
5. Granting of Options
Subject to Section 9 herein, an Option to purchase 5,000 Shares (as
adjusted pursuant to Section 7 herein) automatically shall be granted:
(i) On January 26, 1994 to each director who is a Non-Employee
Director on such date; and
(ii) Upon the date a person who was not a Non-Employee Director on
January 26, 1994 subsequently becomes a Non-Employee Director, whether by
reason of his or her subsequent election by shareholders, appointment by
the Board to be a director or, if applicable, the expiration of the 12-
month period specified in Section 3(ii) herein with respect to a present
or future director who had previously been an employee of the Company or
any Related Corporation; provided, however, that if a Non-Employee
Director who previously received a grant of Options ceases to be a Non-
Employee Director but subsequently again becomes a Non-Employee Director,
such person shall not be eligible to receive a second grant of Options
under this Section 5.
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6. Terms and Conditions of Options
Options granted pursuant to the Plan shall be non-qualified Options
not intended to qualify under section 422 of the Code and shall be subject to
the following terms and conditions:
(a) Price. The exercise price shall be the greater of 100% of the
fair market value of the optioned Shares, or the par value thereof, on the
date the Option is granted. As used in the Plan, fair market value shall
mean: (i) if the principal market for the Shares is a registered securities
exchange, the mean between the highest and lowest quoted selling prices of
such Shares on such exchange on the date of grant, or, if there are no such
reported sales on that date but there are sales on dates within a reasonable
period both before and after the date of grant, the weighted average of the
means between the highest and lowest sales on the nearest date before and the
nearest date after the date of grant, or (ii) if clause (i) above is
inapplicable, such other method of determining fair market value as shall be
authorized by the Code, or the rules or regulations thereunder, and adopted by
the Committee.
Where the fair market value of the optioned Shares is determined
under clause (i) above, the average of the means between the highest and
lowest sales on the nearest date before and the nearest date after the date of
grant shall be weighted inversely by the respective numbers of trading days
between the selling dates and the date of grant (i.e., the valuation date), in
accordance with Treas. Reg. * 20.2031-2(b)(1).
(b) Term. Subject to earlier termination as provided in Subsection
(d) below and in Section 7 herein, the stated term of each Option shall be ten
years from the date of grant.
(c) Exercise. Options shall be exercisable in five equal annual
installments commencing one year after the date of grant. Except as otherwise
provided in Subsections (d) and (e) below and Section 7 herein, Options shall
only be exercisable by a Non-Employee Director while he or she remains a
director of the Company. Any Option Shares, the right to the purchase which
has accrued, may be purchased at any time up to the expiration or termination
of the Option. Exercisable Options may be exercised, in whole or in part,
from time to time by giving written notice of exercise to the Company at its
principal office, specifying the number of Shares to be purchased and
accompanied by payment in full of the aggregate price for such Shares. Only
full Shares shall be issued under the Plan, and any fractional Share which
might otherwise be issuable upon exercise of an Option granted hereunder shall
be forfeited.
The Option price shall be payable in cash or its equivalent.
(d) Effect of Ceasing to be a Director. If a Non-Employee Director
ceases to be a director of the Company for any reason, his or her then
outstanding Option shall continue to mature in accordance with its terms
(except that if such cessation is due to death, such then outstanding Option
immediately shall accelerate and become exercisable in full), and shall remain
outstanding and exercisable, but only for a period of one year following such
cessation as a director or until the earlier expiration of the stated term of
such Option or its earlier termination pursuant to Section 7 herein.
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(e) Non-Transferability. No Option shall be assignable or
transferable by a Non-Employee Director otherwise than by will or by the laws
of descent and distribution, and during the lifetime of a Non-Employee
Director, his or her Option shall be exercisable only by him or her or by his
or her guardian or legal representative. If a Non-Employee Director is
married at the time of exercise and if the Non-Employee Director so requests
at the time of exercise, the certificate or certificates for the Option Shares
shall be registered in the name of the Non-Employee Director and the Non-
Employee Director's spouse, jointly, with right of survivorship.
(f) Rights as a Shareholder. A holder of an Option shall have no
rights as a shareholder with respect to any Shares covered by such Option
until the issuance of a stock certificate for such Shares to such holder.
(g) Listing and Registration of Shares. Each Option shall be
subject to the requirement that, if at any time the Committee shall determine,
in its discretion, that the listing, registration or qualification of the
Shares covered thereby upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the
granting of such Option or the purchase of Shares thereunder, or that action
by the Company or by the Non-Employee Director should be taken in order to
obtain an exemption from any such requirement, no such Option may be
exercised, in whole or in part, unless and until such listing, registration,
qualification, consent, approval, or action shall have been effected,
obtained, or taken under conditions acceptable to the Committee. Without
limiting the generality of the foregoing, each Non-Employee Director or his or
her legal representative or beneficiary may also be required to give
satisfactory assurance that Shares purchased upon exercise of an Option are
being purchased for investment and not with a view to distribution, and
certificates representing such Shares may be legended accordingly.
(h) Option Agreements. Options granted under the Plan shall be
evidenced by a written document or documents (an "Option Agreement") in such
form as the Committee shall, from time to time, approve, which Option
Agreement shall contain such provisions, not inconsistent with the provisions
of the Plan as the Committee shall deem advisable. Each Non-Employee Director
shall enter into, and be bound by, an Option Agreement.
7. Capital Adjustments, Acceleration and Cancellation of Options
The number of Shares which may be issued under the Plan, as stated
in Section 4 herein, and the number of Shares issuable upon exercise of
outstanding Options under the Plan (as well as the Option price per Share
under such outstanding Options), shall, subject to the provisions of section
424(a) of the Code, be adjusted proportionately to reflect any stock dividend,
stock split, share combination, or similar change in the capitalization of the
Company.
In the event of a corporate transaction (as that term is described
in section 424(a) of the Code and the Treasury Regulations issued thereunder,
such as, for example, a merger, consolidation, acquisition of property or
stock, separation, reorganization, or liquidation), and, provision is not made
for the continuance and assumption of Options under the Plan, or the
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substitution for such Options of new Options to acquire securities or other
property to be delivered in connection with the transaction, all unexercised
Options shall accelerate and become fully exercisable, but all unexercised
Options shall terminate on the day immediately prior to the consummation of
such corporate transaction. The Committee shall give the holders of
outstanding Options not less than ten days prior written notice of any such
acceleration and termination pursuant to this Section 7, and such outstanding
Options thereafter may be exercised in whole or in part up to and including
the date of such termination or until their earlier stated expiration date or
their earlier termination pursuant to Section 6(d) herein.
8. Amendment or Discontinuance of the Plan
The Board from time to time may suspend or discontinue the Plan or
amend it in any respect whatsoever; provided, however, that an amendment to
the Plan shall require shareholder approval (given in compliance with Rule
16b-3 under the Exchange Act) if such amendment would materially:
(i) increase the benefits accruing to Non-Employee Directors
under the Plan;
(ii) increase the number of Shares which may be issued to Non-
Employee Directors under the Plan other than as provided in Section
7 herein; or
(iii)modify the requirements as to eligibility to participate
in the Plan.
Notwithstanding the foregoing, no such suspension, discontinuance or
amendment shall materially impair the rights of any holder of an outstanding
Option without the consent of such holder. Further, the provisions of the
Plan establishing the directors eligible to receive Options under the Plan,
the timing of the grants of such Options, the purchase price for Shares
subject to Options, the number of Shares covered by each Option, the method or
methods for determining the amount of Options to be granted to each Non-
Employee Director, and any other provision of the Plan which, if amended more
than once every six months, would cause the Plan to fail to comply with Rule
16b-3 under the Exchange Act, shall not be amended more than once every six
months.
9. Effective Date and Duration
The Plan shall become effective on January 26, 1994, the date on
which it was adopted by the Board; provided, however, that if the Plan is not
approved by the shareholders of the Company in the manner required by Rule
16b-3 under the Exchange Act within one year after said date, the Plan and all
Options granted hereunder shall be null and void.
Unless earlier terminated as provided in the Plan, the Plan shall
terminate absolutely at 12:00 midnight on January 25, 2004, and no Options
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hereunder shall be granted thereafter. Nothing contained in this Section 9,
however, shall terminate or affect the continued existence of rights created
under Options issued hereunder and then outstanding which by their terms
extend beyond such date.
10. Miscellaneous
(a) Governing Law. The operation of, and the rights of Non-
Employee Directors under, the Plan, the Option Agreements and any Options
granted hereunder shall be governed by applicable Federal law, and otherwise
by the laws of the Commonwealth of Pennsylvania.
(b) Rights. Neither the adoption of the Plan nor any action of the
Board or the Committee shall be deemed to give any individual any right to be
granted an Option, or any other right hereunder, unless and until the
Committee shall have granted such individual an Option, and then his or her
rights shall be only such as are provided by the Option Agreement.
(c) Application of Funds. The proceeds received by the Company
from the sale of Shares pursuant to Options granted under the Plan shall be
used for general corporate purposes.
(d) No Obligation to Exercise Option. The granting of an Option
shall impose no obligation upon a Non-Employee Director to exercise such
Option.