EXHIBIT 10.15
LPA HOLDING CORP.
1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE OF THE PLAN.
The purpose of the LPA HOLDING CORP. 1999 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS (the "Plan") is to attract and retain the services of
experienced and knowledgeable independent directors of LPA Holding Corp. (the
"Company"), for the benefit of the Company and its stockholders and to provide
additional incentive for such directors to continue to work for the best
interests of the Company and its stockholders through continuing ownership of
its Class A Common Stock, par value $.01 per share.
2. DEFINITIONS.
As used in this Plan, the following capitalized terms shall
have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other
Person that is controlled by, controlling or under common control with, such
Person. Notwithstanding anything to the contrary contained herein, with respect
to the Company, the term "Affiliate" shall include LPA Investment LLC and each
of its members and each Person in which LPA Investment LLC or such members hold
or have the right to acquire, collectively, more than 25% of the voting Equity
Interests.
"Board" has the meaning set forth in Section 3.
"Capital Stock" means any and all shares, interests,
participation or other equivalents (however designated) of corporate stock,
including all Common Stock and preferred stock.
"Change-in-Control" means the occurrence of one or more of the
following:
(a) a sale to any Person (or group of related Persons)
other than an Affiliate or Affiliates of the Company of all or substantially all
of the assets of the Company or of La Petite Academy, Inc.;
(b) a sale by the Company of Capital Stock (whether by
merger or otherwise), if any such sale is made to a Person (or group of related
Persons) other than an Affiliate or Affiliates of the Company, which Person or
Persons, after giving effect to such sale, will own more than 50% of the
outstanding Capital Stock of the Company or
(c) a sale by the stockholders of the Company of Capital
Stock, if any such sale is made to a Person (or group of related Persons) other
than an Affiliate or Affiliates of the Company, which Person or Persons, after
giving effect to such sale, will own more than 50% of the outstanding Capital
Stock of the Company.
"Common Stock" means the Class A Common Stock and the Class B
Common Stock, par value $.01, of the Company.
"Company" has the meaning set forth in Section 1.
"Drag-Along Grantees" has the meaning set forth in Section
10(a).
"Effective Date" has the meaning set forth in Section 15(a).
"Equity Interest" means (a) with respect to a corporation, any
and all Capital Stock or warrants, options or other rights to acquire Capital
Stock (but excluding any debt security which is convertible into, or
exchangeable for, Capital Stock) and (b) with respect to a partnership, limited
liability company or similar Person, any and all units, interests, rights to
purchase, warrants, options or other equivalents of, or other ownership
interests in, any such Person.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" has the meaning set forth in Section 7(a).
"Fair Market Value" means the fair value of Shares or other
property on the date of any determination as reasonably determined in good faith
by the Board after taking into consideration all factors which it deems
appropriate, including, without limitation, in respect of Shares, recent sale
and offer prices of the Shares in private transactions negotiated at arms'
length.
"Notice" has the meaning set forth in Section 12(b).
"Option" has the meaning set forth in Section 4(c).
"Option Agreement" has the meaning set forth in Section 4(c).
"Option Price" has the meaning set forth in Section 5(a).
"Optioned Shares" has the meaning set forth in Section 12(b).
"Optionee" has the meaning set forth in Section 4(b).
"Person" is to be construed in the broadest sense and means
and includes any natural person, company, limited liability company,
partnership, joint venture, corporation, business trust, or unincorporated
organization or any national, federal, state, municipal, local, territorial,
foreign or other government or any department, commission, board, bureau,
agency, regulatory authority or instrumentality thereof, or any court, judicial,
administrative or arbitral body or public or private tribunal.
"Pro Rata Portion" has the meaning set forth in Section 11(a).
"Recapitalization" has the meaning set forth in Section 13(a).
"Repurchase Right" has the meaning set forth in Section 9(a).
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"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of Class A Common Stock, $.01 par value
per share of the Company.
"Tag-Along Grantors" has the meaning set forth in Section
11(a).
"Transfer" means, with respect to any security (including any
Option), a sale, transfer, assignment, encumbrance, pledge or other disposition
of such security either voluntarily or involuntarily and with or without
consideration (including, without limitation, by way of foreclosure or other
acquisition by any lender with respect to any shares pledged to such lender by
an Optionee).
"Vested Option" means an Option which has vested in accordance
with this Agreement, or pursuant to an Option Agreement, as the case may be.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board of Directors of
the Company (the "Board"). The Board shall have the power to construe the Plan,
to determine all questions arising thereunder and to adopt and amend such rules
and regulations for the administration of the Plan as it may deem desirable.
4. GRANT OF OPTIONS; SHARES SUBJECT TO THIS PLAN.
(a) Grant. Each Optionee who is a director of the Company
on the Effective Date shall automatically be granted an Option to acquire 500
Shares under the Plan. The Board may, from time to time, grant additional
Options to any Optionee.
(b) Eligibility. Each director of the Company who is not,
and has not been during the immediately preceding 12-month period, an officer or
employee of the Company or any subsidiary of the Company (an "Optionee") shall
automatically be a participant in the Plan; provided that no Person employed by
CB Capital Investors, L.P., CB Capital Investors, Inc. or any of their
respective Affiliates may be an Optionee under this Plan.
(c) Option Agreements. Each option to purchase Shares (an
"Option") shall be evidenced by a written agreement (an "Option Agreement"), in
substantially the form of Exhibit A hereto, with such changes thereto as are
consistent with this Plan as the Board shall deem appropriate. Each Option
Agreement shall be executed by the Company and the Optionee. Notwithstanding any
other provision of this Plan to the contrary, the Board may, in its discretion,
provide that, with respect to any Option, the terms of the Option Agreement
evidencing such Option shall control any conflicts between provisions of this
Plan and provisions of such Option Agreement.
(d) Date of Grant. The date of grant of an Option under
this Plan shall be the date as of which the Board approves the grant.
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(e) Number of Shares. Subject to any equitable
adjustments for Recapitalizations pursuant to Section 13 and subject to the
vesting provisions set forth herein, each Option shall be exercisable for one
Share. Subject to any equitable adjustments for Recapitalizations pursuant to
Section 13, the number of Shares subject at any one time to Options granted
under this Plan, and the number of Shares theretofore issued and delivered
pursuant to the exercise of Options granted under this Plan, shall be 10,000
Shares. If and to the extent that Options granted under this Plan terminate,
expire or are canceled without having been fully exercised, new Options may be
granted under this Plan with respect to the Shares covered by the unexercised
portion of such terminated, expired or canceled Options.
(f) Character of Shares. The Shares issuable upon
exercise of Options granted under this Plan shall be (i) authorized but unissued
Shares, (ii) Shares held in the Company's treasury or (iii) a combination of the
foregoing.
5. OPTION PRICE.
(a) The exercise price (the "Option Price") for each
Share subject to an Option shall be the Fair Market Value of a Share covered by
the Option on the date on which such Option is granted (the "Pricing Date").
(b) Repricing of Options. Subsequent to the date of grant of
any Option, the Board may (i) in its sole discretion, establish a new Option
Price for such Option so as to decrease the Option Price of such Option or (ii)
with the consent of the Optionee, establish a new Option Price for such Option
so as to increase the Option Price of such Option.
6. EXERCISABILITY AND VESTING OF OPTIONS.
(a) One-forty eighth of the Options shall become Vested
Options on the last day of each month following the date of grant if the
Optionee is a director of the Company on such date.
(b) All Options shall become Vested Options immediately
prior to a Change-in-Control if the Optionee is a director of the Company on
such date.
(c) Notwithstanding anything to the contrary contained in
this Plan, each Option shall cease vesting as of the time that an Optionee
ceases to serve as a director of the Company and no Option which is not a Vested
Option as of such time shall become a Vested Option thereafter. All decisions by
the Board with respect to any calculations pursuant to this Section (absent
manifest error) shall be final and binding on all Optionees.
7. AUTOMATIC TERMINATION OF OPTION.
Each Option granted under this Plan shall automatically
terminate and shall become null and void and be of no further force or effect
upon the first of the following to occur (the "Expiration Date"):
(a) the tenth anniversary on which such Option is
granted;
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(b) if an Optionee ceases to be a director of the Company
other than due to death or disability, the sixtieth day following the date of
such termination; and
(c) if an Optionee ceases to be a director of the Company
due to the death or disability of the Optionee, six months after the date of
such death or disability.
8. REGISTRATION ON FORM S-8.
On or prior to the first anniversary of a public offering by
the Company of Capital Stock, the Company will file or cause to be filed, and
will use commercially reasonable efforts to cause to be effective, a
registration statement on Form S-8 with respect to the sale of Shares purchased
upon the exercise of Options; provided that the Company may delay such filing on
one or more occasions for up to 180 days if the Company determines that the
filing of a Form S-8 would require disclosure that the Company deems advisable
to defer.
9. REPURCHASE OF SHARES.
(a) If an Optionee ceases to be a director of the Company
for any reason, the Company shall have the right, but not the obligation, to
repurchase each Vested Option (or portion thereof) and each Share owned by such
Optionee (the "Repurchase Right") beginning on the day the Optionee ceases to be
a director of the Company.
(b) The Repurchase Right may be exercised by delivery of
a notice of exercise to the Optionee, at the address of such Optionee set forth
in the Company's records, specifying the number of Vested Options and Shares to
be repurchased.
(c) The repurchase price for Vested Options and Shares
shall be the Fair Market Value thereof.
(d) The Company shall have the right to assign its
Repurchase Rights to any Affiliate of the Company.
10. DRAG-ALONG RIGHT.
(a) If, prior to the consummation of a Qualified Public
Offering, (i) stockholders of the Company holding more than 50% of the
outstanding shares of Common Stock (assuming all Options are exercised) (the
"Drag-Along Grantees") enter into an agreement with any Person or Persons, to
Transfer (pursuant to a merger or otherwise) all shares of Common Stock then
held by such Drag-Along Grantees, the Drag-Along Grantees shall be entitled, at
their option, to require each Optionee to sell all Shares held by such Optionee
(together with all Options then outstanding and held by such Optionee), by
providing such Optionee with notice at least fifteen days prior to consummation
of the proposed transaction, setting forth in reasonable detail the material
terms and conditions of the proposed transaction or offering, and the price per
share at which such Optionee shall be required to sell all of his or her Shares
(which price per share shall be equal to the same price per share that the
Drag-Along Grantees shall receive pursuant to the proposed transaction) and/or
Options.
(b) Immediately prior to the closing of the proposed
transaction (notice of the date, place and time of which shall be designated by
the Company and provided to such
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Optionee in writing at least five business days prior thereto), if requested by
the Drag-Along Grantees, such Optionee shall exercise all Vested Options. To the
extent that Vested Options are not exercised, such Optionee shall be entitled to
receive the consideration that would have been received had the Option been
exercised less the Option Price in respect of all such Vested Options. At such
closing, the Optionee shall deliver certificates evidencing all Shares then held
by such Optionee, duly endorsed for transfer to the proposed transferee, against
the purchase price therefor and all Option Agreements to which the Optionee is a
party. Such Shares and Options shall be delivered free and clear of all liens,
charges, encumbrances and other security interests. None of the Drag-Along
Grantees nor the Company shall have any liability or obligation to deliver the
purchase price payable pursuant to this Section, except to the extent that any
such Drag-Along Grantees or the Company receive the consideration thereof from
the proposed purchaser. All consideration payable pursuant to this Section shall
be payable in the same form as the consideration received by the Drag-Along
Grantees.
(c) The Drag-Along Optionees shall have the right to
assign its rights pursuant to this Section to the Company or any Affiliate of
the Company.
(d) The rights granted pursuant to this Section shall
terminate upon consummation of a Qualified Public Offering.
11. TAG-ALONG RIGHT
(a) If stockholders of the Company holding more than 50%
of the outstanding shares of Common Stock (assuming all Options are exercised)
(the "Tag-Along Grantors") enter into an agreement with any Person or Persons to
Transfer Shares (pursuant to a merger or otherwise) representing more than 25%
of the outstanding shares of Common Stock, then each Optionee shall have the
right to include a Pro Rata Portion of Shares owned by such Optionee in the
proposed transaction by providing a notice of exercise to the Company at any
time on or before five business days following the last day that a Drag-Along
Notice may be given. The term "Pro Rata Portion" means the total number of
Shares held by such Optionee multiplied by a fraction, the numerator of which is
the total number of shares of Common Stock proposed to be disposed of by the
Tag-Along Grantors in the proposed transaction and the denominator of which is
the total number of shares of Common Stock outstanding on a fully-diluted basis.
(b) At the closing of the proposed transaction (notice of
the date, place and time of which shall be designated by the Company and
provided to each such Optionee in writing at least five business days prior
thereto), such Optionee shall deliver certificates evidencing the Pro Rata
Portion of the Shares owned by such Optionee, duly endorsed for transfer to the
proposed purchaser, against delivery of the purchase price therefor. Such Shares
shall be delivered free and clear of all liens, charges, encumbrances and other
security interests. None of the Tag-Along Grantors or the Company shall have any
liability or obligation to deliver the purchase price payable pursuant to this
Section, except to the extent that any such Tag-Along Grantors or the Company
receive the consideration thereof from the proposed purchaser. All consideration
payable pursuant to this Section shall be payable in the same form as the
consideration received by the Tag-Along Grantors.
(c) The rights granted pursuant to this Section shall
terminate upon consummation of a public offering of Shares that is registered
under the Securities Act.
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12. PROCEDURE FOR EXERCISE.
(a) Payment. At the time an Option is granted under this
Plan, the Board shall, in its discretion, specify one or more of the following
forms of payment which may be used by an Optionee upon exercise of his Option:
(i) cash or personal or certified check payable
to the Company in an amount equal to the aggregate Option Price of the
Shares with respect to which the Option is being exercised and the
aforementioned form of payment shall be the only form available on or
after a Qualified Public Offering;
(ii) stock certificates (in negotiable form)
representing Shares having a Fair Market Value on the date of exercise
equal to the aggregate Option Price of the Shares with respect to which
the Option is being exercised;
(iii) Vested Options, valued for such purposes at
the Fair Market Value per share of Class A Common Stock on the date of
exercise, net of the Option Price for each such Share; or
(iv) a combination of the methods set forth in
clauses (i), (ii) and (iii) above.
(b) Notice. An Optionee (or other person, as provided in
Section 14(c)) may exercise a Vested Option granted under this Plan in whole or
in part (but for the purchase of whole Shares only), as provided in the Option
Agreement evidencing his Option, by delivering a written notice (the "Notice")
to the Secretary of the Company. The Notice shall include:
(i) a statement that the Optionee elects to
exercise the Vested Option;
(ii) the number of Shares with respect to which
the Vested Option is being exercised (the "Optioned Shares");
(iii) the method of payment for the Optioned
Shares (which method must be available to the Optionee under the terms
of his or her Option Agreement);
(iv) the date upon which the Optionee desires to
consummate the purchase (which date must be prior to the termination of
such Option);
(v) a copy of any election filed by the Optionee
pursuant to Section 83(b) of the Code; and
(vi) such further provisions consistent with this
Plan as the Board may from time to time require.
The exercise date of a Vested Option shall be the date on which the Company
receives the Notice from the Optionee.
(c) Issuance of Certificates. The Company shall issue a
stock certificate in the name of the Optionee (or such other person exercising
the Option in accordance with the
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provisions of the Plan) for the Shares purchased upon exercise of an Option as
soon as practicable after receipt of the Notice and payment of the aggregate
Option Price for such Shares. Neither the Optionee nor any person exercising a
Vested Option in accordance with the provisions of the Plan shall have any
privileges as a stockholder of the Company with respect to any Shares of stock
subject to an Option granted under this Plan until the date of issuance of a
stock certificate pursuant to this Section 12(c).
13. ADJUSTMENTS.
(a) Changes in Capital Structure. If the Class A Common
Stock is changed by reason of a stock split, reverse stock split or stock
combination, stock dividend or distribution, or recapitalization, or converted
into or exchanged for other securities as a result of a merger, consolidation or
reorganization (each such event being a "Recapitalization"), the Board shall
make such adjustments in the number and class of shares of stock available under
this Plan as shall be necessary to preserve to an Optionee rights substantially
proportionate to his or her rights existing immediately prior to such
transaction or event (but subject to the limitations and restrictions on such
rights), including, without limitation, a corresponding adjustment changing the
number and class of shares allocated to, and the Option Price of, each Option or
portion thereof outstanding at the time of such change and the number of shares
that vest pursuant to this Plan.
(b) Special Rules. The following rules shall apply in
connection with Section 13(a) above:
(i) no adjustment shall be made for cash
dividends or the issuance to stockholders of rights to subscribe for
additional Shares; and
(ii) any adjustments referred to in Section 13(a)
shall be made by the Board in its sole and absolute discretion, and
shall be conclusive and binding on all persons holding any Options
granted under this Plan.
14. RESTRICTIONS ON OPTIONS AND OPTIONED SHARES.
(a) No Options shall be granted under this Plan, and no
Shares shall be issued and delivered upon the exercise of Options granted under
this Plan, unless and until the Company and/or the Optionee shall have complied
with all applicable Federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction.
(b) The Board in its sole and absolute discretion may, as
a condition to the exercise of any Vested Option granted under this Plan,
require an Optionee (i) to represent in writing that the Shares received upon
exercise of a Vested Option are being acquired for investment and not with a
view to distribution and (ii) to make such other representations and warranties
as are reasonably deemed appropriate by the Company to satisfy the requirements
of applicable law, including, without limitation, an applicable private
placement exemption of the Securities Act as determined by the Board. Stock
certificates representing Shares acquired upon the exercise of Options that have
not been registered under the Securities Act shall, if required by the Board,
bear the following legend and such additional legends as may be required by the
Option Agreement evidencing a particular Option:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL TO THE ISSUER HEREOF THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT."
(c) No Option granted under this Plan may be Transferred
by the Optionee, except by will or by the laws of descent and distribution. An
Option may be exercised during the lifetime of the Optionee only by the
Optionee. If an Optionee dies, his or her Vested Options shall thereafter be
exercisable, during the period specified in Section 7(c) or the applicable
Option Agreement (as the case may be), by his or her executors or administrators
to the full extent (but only to such extent) to which such Options were
exercisable by the Optionee at the time of his or her death.
(d) No Share issued upon the exercise of an Option may be
Transferred except (i) as otherwise provided by this Plan, (ii) by will, (iii)
by the laws of descent and distribution or (iv) to the Company or any Affiliate
of the Company.
15. EFFECTIVE DATE; TERMINATION AND AMENDMENT OF PLAN.
(a) The effective date (the "Effective Date") of this
Plan shall be the date on which the Plan is approved by the stockholders of the
Company.
(b) Unless sooner terminated as herein provided, the Plan
shall terminate ten years from the Effective Date. The Board may at any time
terminate the Plan or make such modification or amendment thereof as it deems
advisable; provided, however, that the Plan may not be amended more than once
every six months, other than to comport with changes in the Internal Revenue
Code of 1986, as amended, the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder; and provided further, however, that, except
as provided in Section 13, the Board may not, without the approval of the
stockholders of the Company, increase the maximum aggregate number of shares for
which Options may be granted under the Plan or the number of Shares for which an
Option may be granted to any Optionee. Termination or any modification or
amendment of the Plan shall not, without the consent of an Optionee, affect his
or her rights under an Option previously granted to him or her.
16. WITHHOLDING TAXES.
Whenever under this Plan, Shares are to be delivered to an
Optionee, the Company shall be entitled to require as a condition of delivery
that the Optionee remit or, in appropriate cases, agree to remit when due, an
amount sufficient to satisfy all current or estimated future Federal, state and
local withholding taxes and employment taxes relating thereto.
17. MISCELLANEOUS.
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(a) Inconsistent Provisions. Each Option granted under
this Plan may contain such other terms and conditions not inconsistent with this
Plan as may be determined by the Board, in its sole and absolute discretion.
(b) Number and Gender. With respect to words used in this
Plan, the singular form shall include the plural form, the masculine gender
shall include the feminine gender, and vice-versa, as the context requires.
(c) Captions. The use of captions in this Plan is for
convenience. The captions are not intended to provide substantive rights.
(d) Amendment of Plan. This Plan may be modified or
amended in any respect by the Board.
(e) Governing Law. All questions concerning the
construction, interpretation and validity of this Plan and the instruments
evidencing the Options granted hereunder shall be governed by and construed and
enforced in accordance with the domestic laws of the State of New York, without
giving effect to any choice or conflict of law provision or rule (whether in the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York. In furtherance of
the foregoing, the internal law of the State of New York will control the
interpretation and construction of this Plan, even if under such jurisdiction's
choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.
(f) Exchange Act Compliance. The Company will use its
commercially reasonable efforts to cause the exemption from Section 16 of the
Exchange Act afforded by Rule 16b-3 to be available at the time the Company has
a class of equity securities registered under Section 12 of the Exchange Act.
(g) No Evidence of Continued Service on Board. Nothing
contained in this Plan or in any Option Agreement shall confer upon any Optionee
any right with respect to the continuation of his or her service as a director
of the Company or any of its Affiliates or interfere in any way with the right
of the stockholders of the Company or any such Affiliate at any time to
terminate such service or to increase or decrease the compensation of the
Optionee from the rate in existence at the time of the grant of an Option, if
any.
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