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EXHIBIT 10.34
1990 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
OF
THE PHOENIX RESOURCE COMPANIES, INC.
(EFFECTIVE APRIL 9, 1990)
AS AMENDED THROUGH SEPTEMBER 29, 1995
(AMENDED TO REFLECT JANUARY 1995 & SEPTEMBER 1995 TWO-FOR-ONE SPLITS)
1. Purpose of the Plan.
This 1990 Nonemployee Director Stock Option Plan (the "Plan") is
intended as an incentive to retain as independent directors on the
Board of Directors of The Phoenix Resource Companies, Inc., a Delaware
corporation (the "Company"), persons of training, experience and
ability, to attract new directors whose services are considered
unusually valuable, to encourage the sense of proprietorship of such
persons and to stimulate the active interest of such persons in the
development and financial success of the Company. It is further
intended that the options issued pursuant to this Plan will not be
incentive stock options as that term is defined in Section 422A of the
Internal Revenue Code.
2. Administration of the Plan.
The Plan shall be administered by the Board of Directors, which shall
serve as the Stock Option Committee (the "Committee"). No member of
the Committee shall have been eligible to participate in any plan of
the Company or its affiliates other than this Plan which entitles
participants to acquire stock, stock appreciation rights or stock
options of the Company or its affiliates at any time within the
preceding twelve (12) months. No member of the Committee shall be
eligible to receive stock options under any other plan of the Company
or its affiliates which entitles participants to acquire stock, stock
appreciation rights or stock options of the Company or its affiliates
while serving on the Committee, other than the options received under
this Plan ("Options"). The Committee, exclusive of the Optionee (as
defined below) with respect to such grant, shall have power, subject
to the provisions of the Plan, to grant options under this Plan,
determine the terms and provisions of respective option agreements
(which need not be identical) and interpret the provisions and
supervise the administration of the Plan. All decisions and
selections made by the Company pursuant to the provisions of the Plan
shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members shall be fully effective as
if it had been made by a majority at a meeting duly held. The
Committee shall have the authority to grant to all the holders of an
outstanding Option in exchange for the surrender and cancellation of
such Option, a new Option having a purchase price lower than provided
in the Option so surrendered and cancelled and containing such other
terms and conditions as the Committee may prescribe in accordance with
the provisions of this Plan. All Options granted under this Plan are
subject to, and may not be exercised before, the approval of the Plan
by the stockholders of the Company pursuant to Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
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3. Designation of Participants; Grant of Options.
(a) Each director of the Company who is not otherwise an employee
of the Company or of any Parent or Subsidiary ("Optionees")
shall be granted Options as described in this Plan.
(b) Each Optionee serving as a director of the Company immediately
following the 1994 Annual Meeting of Stockholders shall
automatically be granted Options to purchase 16,000 shares of
Stock.
(c) Each Optionee elected as a new member of the Board of
Directors of the Company subsequent to the 1994 Annual Meeting
of Stockholders shall automatically be granted Options to
purchase 12,000 shares of Stock.
(d) If at any time any Optionee owns Options to purchase less than
12,000 shares of Stock, then such Optionee shall automatically
be granted Options covering a sufficient number of shares of
Stock so that after such grant such Optionee would hold in the
aggregate, including all Options previously granted to such
Optionee that remain outstanding, Options covering 12,000
shares of Stock.
4. Stock Reserved for the Plan.
Subject to adjustment as provided in Paragraph 9 hereof, shares of
Common Stock, par value $.001 per share ("Stock"), of the Company
shall be subject to this Plan. The Stock subject to this Plan shall
consist of unissued shares or previously issued shares reacquired and
held by the Company, or any Parent or wholly-owned subsidiary of the
Company. Initially, Three Hundred Thousand (300,000) shares of Stock
shall be and are hereby reserved for such purpose. Any of such shares
that may remain unsold and that are not subject to outstanding Options
at the termination of this Plan shall cease to be reserved for the
purpose of the Plan, but until termination of the Plan the Company
shall at all times reserve a sufficient number of shares to meet the
requirements of the Plan. Should any Option expire or be cancelled
prior to its exercise or relinquishment in full, the shares
theretofore subject to such Option may again be subjected to an Option
under the Plan.
5. Option Price.
(a) The purchase price of each share subject to a nonqualified
stock option under this Plan shall be the fair market value of
each share on the date the Option is granted.
(b) The fair market value of a share on a particular date shall be
deemed to be (i) in the event the Stock is not listed on a
stock exchange or traded in the over-the-counter market, the
value determined in good faith by the Board of Directors of
the Company, which determination shall be conclusive, (ii) in
the event the Stock is listed on a national or regional stock
exchange, the closing sales price per share of the Stock on
such exchange on the date, or, if there shall have been no
sale on that date, on the last preceding date on which such a
sale or sales were so reported (the "Sale Date") or (iii) if
the Stock is traded in the over-the-counter market, the mean
between the highest closing bid and lowest closing asked price
for the Stock as reported by the National Association of
Securities Dealers Automated Quotation System on the Sale
Date, or if not reported by such system,
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the mean between the closing bid and asked price on the Sale
Date as quoted by such quotation source as shall be designated
by the Committee.
6. Option Period.
Options granted under this Plan shall terminate and be of no force and
effect with respect to any shares not previously taken up by the
Optionee upon the earliest to occur of the following: (a) the
expiration of ten (10) years from the date of granting of each Option;
(b) one year after the Optionee ceases to be a Director of the Company
by reason of death or Disability (as hereinafter defined) of the
Optionee; or (c) three (3) months after the Optionee ceases to be a
Director of the Company for any reason other than death or Disability.
For purposes of this Plan, Disability shall mean the inability of the
Optionee for a period of six (6) months, or the expected inability of
the Optionee for a period of six (6) months, substantially to perform
his duties to the Company.
7. Exercise of Options.
(a) The Options granted hereunder shall not be exercisable by the
Optionee until the completion of one year of service as a
director of the Company following the date of grant of such
Option, and at that time shall be exercisable as follows:
(i) Options to purchase 8,000 shares of Stock granted
pursuant to the provisions of Paragraph 3(b) shall
become exercisable one year following the date of
grant thereof; Options to purchase 4,000 shares of
Stock granted pursuant to the provisions of Paragraph
3(b) shall become exercisable two years following the
date of grant thereof; and Options to purchase 4,000
shares of Stock granted pursuant to the provisions of
Paragraph 3(b) shall become exercisable three years
following the date of grant thereof.
(ii) One-third of the shares covered by Options to
purchase Stock granted pursuant to the provisions of
Paragraph 3(c) shall become exercisable one year
following the date of grant thereof; an additional
one- third of the shares covered by Options to
purchase Stock granted pursuant to the provisions of
Paragraph 3(c) shall become exercisable two years
following the date of grant thereof; and the final
one-third of the shares covered by Options to
purchase Stock granted pursuant to the provisions of
Paragraph 3(c) shall become exercisable three years
following the date of grant thereof.
(iii) Options to purchase Stock pursuant to the provisions
of Paragraph 3(d) shall become exercisable three
years following the date of grant thereof.
(b) Options may be exercised solely by the Optionee during his
lifetime or after his death by the person or persons entitled
thereto under his will or the laws of descent and
distribution.
(c) In the event of cessation of service as a Director of the
Company for any reason other than death, Disability or
Retirement (as hereinafter defined), Options may be exercised
only with respect to the number of shares purchasable at the
time of such cessation.
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(d) In the event of the death or Disability of the Optionee
following the date of grant and while in service as a Director
of the Company, and while Options granted hereunder are still
in force and unexpired under the terms of Paragraph 6 hereof,
any unmatured installments of the Options shall be
accelerated. Such acceleration shall be effective as of the
date of death or Disability. The Options outstanding in the
name of a deceased Optionee shall thereupon be exercisable in
full without regard to any installment exercise provisions.
(e) In the event the Optionee ceases his service as a Director of
the Company because of his attainment of age seventy (70) or
completion of ten (10) years of service as a Director
("Retirement") while Options granted hereunder are still in
force and unexpired under the terms of Paragraph 6 hereof, any
unmatured installments of the Options shall be accelerated as
of the date of Retirement and the Option shall thereupon be
exercisable in full without regard to any installment exercise
provision.
(f) The purchase price of the shares as to which an Option is
exercised shall be paid in full at the time of the exercise.
Such purchase price shall be payable in cash, or at the option
of the holder of such Option, in Stock theretofore owned by
such holder (or any combination of cash and such Stock). For
purposes of determining the amount, if any, of the purchase
price satisfied by payment in Stock, such Stock shall be
valued at its fair market value on the date of exercise in
accordance with Paragraph 5(b) hereof. Any Stock delivered in
satisfaction of all or a portion of the purchase price shall
be appropriately endorsed for transfer and assignment to the
Company. No holder of an Option shall be, or have any of the
rights or privileges of, a stockholder of the Company in
respect of any shares purchasable upon the exercise of any
part of an Option unless and until certificates representing
such shares shall have been issued by the Company to such
holders. The Company may make loans to the Optionees the
proceeds of which will be used to exercise the Options granted
pursuant to the Plan. Although the terms of any such loans
will be determined on an individual basis, such loans will be
secured by a lien on the Stock to be purchased by the Optionee
and will bear interest at an interest rate to be determined on
the date the loan is made that is sufficient to avoid the
classification of the loan as a below-market loan under
Section 7872 of the Internal Revenue Code of 1986, as amended
(the "Code").
8. Relinquishment of Options; Assignability.
(a) Options granted hereunder shall include a right of
relinquishment as hereinafter provided by this Paragraph 8.
Any Option granted under the Plan, and the option agreement
evidencing such Option, shall provide:
(i) That the Optionee, or his heirs or other legal
representatives to the extent entitled to exercise
the Option under the terms thereof, in lieu of
purchasing the entire number of shares subject to
purchase thereunder, shall have the right to
relinquish all or any part of the then unexercised
portion of the Option (to the extent exercisable as
provided in (iv) hereinbelow) for a number of shares
of Stock, to be determined as follows: The number of
shares of Stock of the Company, if any, issuable
pursuant to such relinquishment shall be the number
of such shares, rounded to the next greater number of
full shares, as shall be equal to: the Appreciated
Value, multiplied by the excess of (A) the aggregate
current market
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value of the shares of Stock covered by the Option or
the portion thereof so relinquished over (B) the
aggregate purchase price for such shares specified in
such Option (which excess is called the "Appreciated
Value"), divided by the then-current market value per
share of such Stock; and
(ii) That such right of relinquishment may be exercised
only upon receipt by the Company of a written notice
of such relinquishment which shall be dated the date
of election to make such relinquishment; and that,
for the purposes of the Plan, such date of election
shall be deemed to be the date when such notice is
sent by registered or certified mail, or when receipt
is acknowledged by the Company, if mailed by other
than registered or certified mail or if delivered by
hand or by any telegraphic communications equipment
of the sender or otherwise delivered, provided that,
in the event the method described above for
determining such date of election shall not be or
remain consistent with provisions of Section 16(b) of
the Exchange Act or the rules and regulations adopted
by the Securities and Exchange Commission thereunder,
as presently existing or as may be hereafter amended,
which exempt from the operation of said Section 16(b)
in whole or in part any election shall be determined
by such other method consistent with said Section
16(b) or rules or regulations as the Committee shall
in its discretion select and apply;
(iii) That the "current market value" of a share on a
particular date shall be deemed to be its fair market
value on that date as determined in accordance with
Paragraph 5(b) hereof; and
(iv) That the Option, or any portion thereof, may be
relinquished only to the extent that (A) it is
exercisable on the date written notice of
relinquishment is received by the Company and (B) the
holder of such Option pays, or makes provision
satisfactory to the Company for the payment of, any
taxes which the Company is obligated to collect with
respect to such relinquishment.
(b) The Committee, in granting Options hereunder, shall have the
power to amend any Options outstanding and option agreements
evidencing such Options to include such provisions as are deemed
advisable to permit the exemption from the operation from Section
16(b) of the Exchange Act in whole or in part of any such transaction
involving such relinquishment. If an Option is relinquished, such
Option shall be deemed to have been exercised to the extent of the
number of shares of Stock covered by the Option or part thereof which
is relinquished, and no further Options may be granted covering such
shares of Stock.
(c) Neither any Option nor any right to relinquish the same to the
Company as contemplated by this Paragraph 8 shall be assignable or
otherwise transferable except by will or the laws of descent and
distribution.
9. Capital Change of the Company; Certain Corporate Transactions.
(a) The existence of this Plan and Options granted hereunder shall
not affect in any way the night or power of the Company or its
stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of
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bonds, debentures, preferred or prior preference stocks ahead
of or affecting the Company's Stock or the rights thereof, or
the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar
character or otherwise.
(b) The shares with respect to which Options may be granted
hereunder are shares of the Stock of the Company as presently
constituted. If, and whenever, prior to the delivery by the
Company of all of the shares of the Stock that are subject to
Options granted hereunder, the Company shall effect a
subdivision or consolidation of shares or other capital
readjustment, the payment of a stock dividend, a stock split,
combination of shares or recapitalization or other increase or
reduction of the number of shares of the Stock outstanding
without receiving compensation therefor in money, services or
property, the number of shares of Stock available under the
Plan and the number of shares of Stock with respect to which
Options granted hereunder may thereafter be exercised shall
(i) in the event of an increase in the number of outstanding
shares, be proportionately increased, and the cash
consideration payable per share with respect to Options then
issued and outstanding shall be proportionately reduced; and
(ii) in the event of a reduction in the number of outstanding
shares, be proportionately reduced, and the cash consideration
payable per share with respect to Options then issued and
outstanding shall be proportionately increased.
(c) Except as expressly provided herein, the issue by the Company
of shares of stock of any class, or securities convertible
into shares of stock of any class, for cash or property, or
for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to,
the number of shares of Stock subject to Options granted
hereunder.
(d) If the Company is reorganized, or merged or consolidated or
party to a plan of exchange with another corporation pursuant
to which reorganization, merger, consolidation, or plan of
exchange stockholders of the Company receive any shares of
Stock or other securities or if the Company shall distribute
("Spin Off") securities of another corporation to its
stockholders, there shall be substituted for the shares
subject to the unexercised portions of outstanding Options an
appropriate number of shares of (i) each class of stock or
other securities which were distributed to the stockholders of
the Company in respect of such shares in the case of a
reorganization, merger, consolidation, or plan of exchange, or
(ii) in the case of a Spin Off, the securities distributed to
stockholders of the Company together with shares of Stock,
such number of shares or securities to be determined in
accordance with the provisions of Section 425 of the Code (or
other applicable provisions of the Code or regulations issued
thereunder which may from time to time govern the treatment of
incentive stock options in such a transaction).
Notwithstanding the foregoing, any unmatured installments of
the Options shall be accelerated and the Option shall be
exercisable in full without regard to any installment exercise
provision in the event of a Change of Control (as defined
below).
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(i) For purposes of this Plan, a Change of Control will
occur when
(A) any "person," including a "group" as
determined in accordance with Section
13(d)(3) of the Exchange Act is, or becomes
the beneficial owner, directly or indirectly,
of securities of the Company representing a
Control Percentage (as defined below) of the
combined voting power of the then outstanding
securities of the Company;
(B) as a result of, or in connection with, any
tender offer or exchange offer, merger or
other business combination, sale of assets or
contested election, or any combination of the
foregoing transactions (a "Transaction"), the
persons who were Directors of the Company
before the Transaction shall cease to
constitute a majority of the Board of
Directors of the Company, or any successor to
the Company;
(C) the Company is merged or consolidated with
another corporation and as a result of such
merger or consolidation a Control Percentage
of the outstanding voting securities of the
surviving or resulting corporation shall no
longer be owned in the aggregate by the
stockholders of the Company on April 9, 1990,
or their respective affiliates within the
meaning of the Exchange Act;
(D) the Company transfers substantially all of
its assets to another corporation that is not
an affiliate of the Company.
(ii) The term "Control Percentage" shall mean at least 25%
in the event the applicable securities are registered
under the Exchange Act or at least 40% in the event
the applicable securities are not registered under
the Exchange Act.
10. Purchase for Investment.
Unless the Options and shares covered by the Plan have been registered
under the Securities Act of 1933, as amended, or the Company has
determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to
give a representation in writing that he is acquiring such shares for
his own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof.
11. Taxes.
The Company may make such provisions as it may deem appropriate for
the withholding of any taxes which it determines is required in
connection with any Options granted under the Plan. In the event such
provisions for withholding shall not be or remain consistent with
provisions of Section 16(b) of the Exchange Act or the rules and
regulations adopted by the Securities and Exchange Commission
thereunder, as now existing or as may be hereafter amended, then
provisions for withholding shall be determined by such other method
consistent with the provisions of Section 16(b) or rules or
regulations as the Committee shall select and apply.
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12. Effective Date of Plan.
The Plan shall be effective as of April 9, 1990.
13. Amendments or Termination.
The Board of Directors may amend, alter or discontinue the Plan,
except that no amendment or alteration shall be made which would
impair the rights of any Optionee under any Option theretofore
granted, without his consent, and except that no amendment or
alteration shall be made which, without the approval of the
stockholders, would:
(a) Increase or decrease the number of shares subject to Option or
the schedule of grants provided for in Paragraph 3; or
(b) Extend the option period provided for in Paragraph 6; or
(c) Materially increase the benefits accruing to Optionees under
the Plan; or
(d) Materially modify the requirements as to eligibility for
participation in the Plan.
14. Government Regulations.
The Plan, and the granting and exercise of Options thereunder, and the
obligation of the Company to sell and deliver shares under such
Options, shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
THE PHOENIX RESOURCE COMPANIES, INC.
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