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EXHIBIT 10.05(a)
GENERAL HOST CORPORATION
1994 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
SECTION 1. PURPOSES
The purposes of this 1994 Non-Employee Directors Stock Option Plan
(the "Plan") are to assist General Host Corporation (the "Company") in
attracting and retaining individuals of exceptional ability to serve as
directors of the Company and to more closely align their interests with those
of the Company's shareholders, through one-time grants of options to purchase
shares of the Company's common stock, par value $1.00 per share ("Company
stock").
SECTION 2. AVAILABLE SHARES
Subject to adjustment as provided in Section 8, the aggregate maximum
number of shares of Company stock available for settlement of options granted
under the Plan is 300,000 shares. Shares of Company stock delivered in
settlement of any exercised Plan option may be authorized but theretofore
unissued shares, previously issued shares held in the Company's treasury, or
both. There shall be reserved at all times for issuance under the Plan a
number of shares of Company stock equal to the aggregate maximum number of
shares that may be issued in settlement of options then outstanding and which
thereafter may be granted under the Plan. If a Plan option shall expire or be
terminated or canceled for any reason without having been exercised in full,
the shares subject to the option immediately prior to such expiration,
termination, or cancellation shall become available for other options under the
Plan.
SECTION 3. ELIGIBILITY
The only persons who shall be granted options under the Plan are those
individuals who at time of grant are members of the Board of Directors of the
Company (the "Board") and are not officers or employees of the Company or any
subsidiary (each, a "non-employee director"). No person may be granted more
than one option under the Plan.
SECTION 4. ADMINISTRATION
4.1 The Plan shall be administered by the Board or such Board
committee as the Board hereafter may designate (the "Administrator"). The
Administrator shall have full power and authority to (a) prescribe and amend
the forms of option agreements, notices, and all other documents or instruments
required under or determined by the Administrator to be advisable with respect
to the Plan; (b) establish, revise, suspend, and waive such rules and
procedures and appoint such agents as it deems appropriate for the
administration or operation of the Plan; (c) construe and interpret the Plan,
any option agreement, and any other instrument or document relating to the Plan
or a Plan option; (d) decide any question and settle any dispute which may
arise in connection with the Plan or any Plan option; and (e) make any other
determination and take any other action that the Administrator deems necessary
or desirable for the administration or operation of the Plan. All
interpretations, determinations or other decisions of the Administrator
concerning the Plan or any Plan option shall be conclusive and binding upon all
interested parties.
4.2 Notwithstanding the foregoing or any other provision of the
Plan to the contrary, however, it being the intention that all options granted
under the Plan shall satisfy all then applicable criteria for "formula awards"
under Securities and Exchange Commission Rule 16b-3 (or any successor
regulation) as in effect and applicable with respect to plans of the Company at
a relevant time ("Rule 16b-3"), the Administrator shall
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have no authority or discretion at any time to make any determination
or take any other action which would cause any Plan option, whether then
outstanding or which thereafter may be granted, to fail to meet such criteria.
4.3 All costs and expenses involved in administering the Plan as
provided for herein, or incident thereto, shall be borne by the Company.
SECTION 5. CERTAIN TERMS OF OPTIONS
5.1 Subject to approval of the Plan by the Company's shareholders
(and subject to adjustment as contemplated by Section 8): (a) as of October 14,
1994, each individual then serving as a non-employee director automatically
shall receive and be granted an option to purchase 25,000 shares of Company
stock and (b) as of the date on which any new non-employee director first
becomes a Company director, such non-employee director shall receive and be
granted an option to purchase 25,000 shares of Company stock (or such lesser
number of whole shares as is then available for options under the terms of the
Plan); provided, however, that if any new non-employee director first becomes a
non-employee director other than by means of election by the shareholders, then
the grant to such non-employee director shall be subject to the condition that
the director be elected by the shareholders at the next annual meeting of
shareholders. If at any time the aggregate maximum number of shares then
available for Plan options is insufficient for grants as contemplated in clause
(b) of the preceding sentence, then no options shall be granted.
5.2 Each option granted under the Plan shall be evidenced by a
written option agreement in form approved by the Administrator, which agreement
shall identify the option as one granted under the Plan, the optionee, and the
date of grant; provide that in the event of any inconsistency between the Plan
and the agreement the terms of the Plan shall govern; and set forth the number
of shares subject to option, the exercise price per share, and (either
expressly or by reference to the Plan) the other terms and conditions of the
option.
5.3 The per share exercise price for each option granted under the
Plan shall be the Fair Market Value of a share of Company stock on the date the
option is granted. For purposes of the Plan, "Fair Market Value" for any given
date means: (a) if Company stock is then listed on one or more national
securities exchanges (including, for this purpose, the National Market of the
National Association of Securities Dealers Automated Quotation System
("NASDAQ")), the average on such date of the highest and lowest sale prices for
a share of Company stock on the principal such exchange (or, if no Company
stock traded on such exchange on such date, the next preceding date on which
such trading occurred); (b) if (a) is then inapplicable but bid and asked
prices for shares of Company stock are quoted through NASDAQ, the average on
such date of the highest bid and lowest asked prices so quoted for a share of
Company stock (or, if no prices for Company stock were quoted on such date, the
next preceding date on which they were quoted); and (c) if both (a) and (b) are
inapplicable, the fair market value of a share of Company stock on the date in
question as determined in good faith by the Board.
5.4 Each option granted under the Plan shall consist of five
tranches (hereinafter referred to as tranches "A,""B,""C,""D,""E"), with each
such tranche relating to 20% of the aggregate number of shares subject to the
option. Except as otherwise hereafter provided in this Section 5.4 or Section
9, each option tranche shall first be exercisable, in whole or in part, and (to
the extent not earlier exercised or terminated) shall expire, in accordance
with the following schedule:
Tranche A: first exercisable at first anniversary of grant;
expiration on fifth anniversary of grant
Tranche B: first exercisable at second anniversary of grant;
expiration on sixth anniversary of grant
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Tranche C: first exercisable at third anniversary of grant;
expiration on seventh anniversary of grant
Tranche D: first exercisable at fourth anniversary of grant;
expiration on eighth anniversary of grant
Tranche E: first exercisable at fifth anniversary of grant;
expiration on ninth anniversary of grant.
However, upon the death of the grantee of a Plan option, any and all then
outstanding but unexercisable tranches of the option immediately shall become
exercisable.
5.5 During the lifetime of the grantee of a Plan option, the
option shall be exercisable only by such optionee. A Plan option shall be
exercisable only while the optionee continues to serve as a Company director
and for the 90 days following cessation of such service, whereupon the option
shall terminate (except that, upon the death of an optionee, each tranche of
the optionee's then outstanding Plan option shall be exercisable until the
earlier of the first anniversary of the optionee's death and the expiration
date of such tranche, whereupon such tranche shall terminate).
SECTION 6. EXERCISE PROCEDURES AND PAYMENT
Whenever exercisable, any tranche of an option granted under the Plan
may be exercised by delivery to the Secretary of the Company (or any of such
other Company officers or employees as the Administrator from time to time may
designate) of a written notice of exercise in form acceptable to the
Administrator and payment in full of the aggregate exercise price for the
number of shares for which the option is being exercised. Payment may be made
in any one or more of the following forms: (a) cash, (b) shares of Company
stock (valued at their aggregate Fair Market Value for the date immediately
preceding the date of delivery), and (c) if authorized by the Administrator in
its discretion exercised on a case by case basis, a promissory note evidencing
a Company loan pursuant to Section 7 and all collateral and/or security
documents (if any) required by the Administrator in connection with such loan.
SECTION 7. FINANCING
In connection with the exercise of a Plan option tranche by an
optionee then still a director of the Company, the Administrator, in its
discretion, may approve and authorize a loan to the optionee by the Company to
finance some or all of the aggregate exercise price payable and/or income taxes
incurred by the optionee in respect of such exercise; provided, that the
aggregate principal amount of such loan shall not exceed the aggregate Fair
Market Value on the loan date of the number of shares being purchased by such
exercise. The debt for any such loan shall be evidenced by a negotiable
promissory note in form prescribed by the Administrator, shall bear interest at
such fixed or floating rate as shall be specified by the Administrator, shall
have a term not in excess of five years, and shall have such other terms and be
subject to such conditions (including, at the Administrator's discretion, the
provision of collateral security) as the Administrator may determine.
SECTION 8. STOCK ADJUSTMENT AND NUMBER OF SHARES
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, exchange of shares, merger, consolidation,
rights offering, or any other change in the corporate structure or shares of
the Company, the Board shall, at the time of such event or at a subsequent
time, make such adjustment or adjustments as it deems appropriate in the number
and kind of shares authorized by the Plan and covered by outstanding options;
provided, however, that such adjustments must be in the nature of pro rata
anti-dilution adjustments which provide for the equivalent treatment of all
holders of options, provided
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that the aggregate exercise prices of all unexercised options shall not change.
Without limiting the preceding sentence in any respect, in the event of any
merger, consolidation, or combination of the Company with or into another
corporation (other than a merger, consolidation, or combination in which the
Company is the surviving corporation and which does not result in any
reclassification or change of outstanding Company stock), the Board prior
thereto may in its discretion provide that each holder of an option granted
pursuant to the Plan shall have the right thereafter and during the term of
such option to receive upon exercise of such option, or any portion thereof,
for each share of Company stock as to which the option shall be exercised, the
kind and amount of shares of the surviving or new corporation, cash,
securities, evidences of indebtedness, other property, or any combination
thereof, which would have been received upon such merger, consolidation, or
combination by a party holding one share of Company stock immediately prior to
such merger, consolidation, or combination. In the event of a merger,
consolidation or combination in which the consideration issued with respect to
shares of Company stock is a combination of different types of property, the
Board may designate the property or combination of property to be received upon
the exercise of an option outstanding under the Plan.
SECTION 9. EFFECT OF CHANGE IN CONTROL
In the event of a change in control of the Company, unless otherwise
directed by resolution of the Board adopted by the affirmative votes of a
majority consisting entirely of directors who were directors before the change
in control occurred, all then outstanding but theretofore unexercisable Plan
option tranches shall become exercisable. For purposes of the Plan, "change in
control" means that:
(a) 20% or more of the Company's voting stock has been
acquired by any person (as defined by Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended) other than directly from
the Company;
(b) there has been a merger or equivalent combination in
which 49% or more of the voting stock of the surviving corporation is
issued for reasons other than that the recipients were shareholders of
the Company; or
(c) 20% or more of the directors elected by shareholders
to the Board are persons who were not nominated by management in the
then most recent proxy statement of the Company.
SECTION 10. MISCELLANEOUS
10.1 The Board may at any time and from time to time amend, modify,
suspend, or terminate the Plan, with or without the approval of shareholders of
the Company, except that: (a) those provisions of this Plan of the nature
described in Rule l6b-3(c)(ii)(A) shall not be amended more often than once
every six months, other than to comport with changes in the Internal Revenue
Code, the Employee Retirement Income Security Act, or the rules thereunder; (b)
no amendment or modification of the Plan shall be effective without shareholder
approval at any time at which such approval is required, either by the
applicable rules of the New York Stock Exchange or any other securities
exchange on which Company stock is then principally traded, or by Rule 16b-3;
and (c) none of the foregoing actions by the Board shall adversely affect any
then outstanding Plan option without the holder's consent.
10.2 The Plan has been adopted by the Board, subject to shareholder
approval. Options granted under the Plan prior to such approval also shall be
subject to shareholder approval and shall be of no effect unless and until such
approval is obtained.
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10.3 If at any time the Board shall determine, in its discretion,
that the listing, registration or qualification of any shares covered by the
Plan upon any national securities exchange or under any Federal, state, local
or foreign law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the
issuance of shares under the Plan, then, notwithstanding any other provision of
the Plan to the contrary, no shares will be delivered unless and until such
listing, registration, qualification, consent or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Board.
10.4 The holder of any option granted under the Plan shall not have
any rights as a shareholder with respect to any shares subject to the option
until such shares have been issued to him or her upon due exercise of the
option.
10.5 The Company shall have the right to require the holder of a
Plan option to make payments in cash or Company stock (valued at Fair Market
Value on the payment date) upon the exercise of the option, in connection with
any obligation of the Company to withhold taxes upon such exercise. Any such
required payment shall be a condition precedent to settlement of such option.
10.6 The Plan and all actions taken under it shall be governed by
the laws of the State of New York.
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