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Exhibit (99)(f)
CALLOWAY'S NURSERY, INC.
1999 STOCK OPTION PLAN
ARTICLE I 3
THE PLAN 3
1.1 Name. 3
1.2 Purpose. 3
1.3 Effective Date. 3
1.4 Eligibility to Participate. 3
1.5 Shares Subject to the Plan. 3
1.6 Maximum Number of Plan Shares. 3
1.7 Options and Stock Granted Under Plan. 3
1.8 Conditions Precedent. 3
1.9 Reservation of Shares of Common Stock. 4
1.10 Tax Withholding. 4
1.11 Exercise of Options. 4
1.12 Acceleration of Right to Exercise Options 5
1.13 Written Notice Required. 5
1.14 Compliance with Securities Laws. 5
1.15 Employment of Optionee. 6
1.16 Option Upon Termination of Employment. 6
1.17 Termination of Employment for Cause. 6
1.18 Option Upon Disability of Optionee. 6
1.19 Option Upon Death of Optionee. 6
1.20 Options Not Transferable. 6
1.21 Information to Optionees. 7
ARTICLE II 7
ADMINISTRATION 7
2.1 Committee. 7
2.2 Appointment of Committee. 7
2.3 Majority Rule; Unanimous Written Consent. 7
2.4 Company Assistance. 7
ARTICLE III 7
INCENTIVE STOCK OPTIONS 7
3.1 Option Terms and Conditions. 7
3.2 Duration of Options. 7
3.3 Purchase Price. 7
3.4 Maximum Amount of Options First Exercisable
in Any Calendar Year. 8
3.5 Requirements as to Certain Options. 8
3.6 Individual Option Agreements. 8
ARTICLE IV 8
NONQUALIFIED STOCK OPTIONS 8
4.1 Option Terms and Conditions 8
4.2 Duration of Options. 8
4.3 Purchase Price. 8
4.4 Individual Option Agreements 8
ARTICLE V 8
TERMINATION, AMENDMENT AND ADJUSTMENT 8
5.1 Termination and Amendment. 8
5.2 Adjustments. 9
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ARTICLE VI 9
MISCELLANEOUS 9
6.1 Other Option Plans. 9
6.2 Plan Binding on Successors. 9
6.3 Number and Gender. 9
6.4 Headings. 9
6.5 Conditions 9
ARTICLE VII 9
DEFINITIONS 9
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CALLOWAY'S NURSERY, INC.
1999 STOCK OPTION PLAN
ARTICLE I
THE PLAN
1.1 Name. This Plan shall be known as the "Calloway's Nursery, Inc. 1999 Stock
Option Plan."
1.2 Purpose. the purpose of the Plan is to promote the growth and general
prosperity of the Company by permitting the Company to grant to its full-time
employees Options to purchase Common Stock of the Company. This Plan is designed
to help the Company and its subsidiaries and affiliates attract and retain
superior personnel for positions of substantial responsibility and to provide
employees with an additional incentive to contribute to the success of the
Company. The Company intends that Incentive Stock Options granted pursuant to
Article III will qualify as "incentive stock options" within the meaning of
Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code").
Any option granted pursuant to Article IV shall be clearly and specifically
designated as not being an incentive stock option as defined in Section 422(b)
of the Code.
1.3 Effective Date. The Plan shall become effective upon the Effective Date.
1.4 Eligibility to Participate. Any Employee shall be eligible to participate in
the Plan. The Committee may grant Options to an Employee in accordance with such
determinations as the Committee from time to time in its sole discretion shall
make.
1.5 Shares Subject to the Plan. The Plan Shares shall be shares of Common Stock.
1.6 Maximum Number of Plan Shares. Subject to adjustment pursuant to the
provisions of Section 5.2, and subject to any additional restrictions elsewhere
in the Plan, the number of Plan shares that may be issued and sold hereunder
shall not exceed 286,000 shares. Plan Shares may be either authorized and
unissued shares, or shares issued and thereafter acquired by the Company.
1.7 Options and Stock Granted Under Plan. Plan Shares with respect to which an
Option shall have been exercised shall not again be available for grant
hereunder. If Options terminate for any reason without being wholly exercised,
new Options may be granted hereunder covering the number of Plan Shares to which
such Option termination relates.
1.8 Conditions Precedent. the Company shall not issue or deliver any Option
Agreement or any certificate for Plan Shares pursuant to the Plan prior to
fulfillment of all of the following conditions:
(a) The admission of the Plan Shares to listing on all stock exchanges or
qualification with any national quotation system on which the Common Stock is
then listed or qualified for trading, unless the Committee determines in its
sole discretion that such listing or qualification is necessary or advisable;
(b) The completion of any registration or other qualification of the sale of
Plan Shares under any federal or state law or under the rulings or regulations
of the Securities and Exchange
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Commission or any other governmental regulatory body that the committee shall in
its sole discretion deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any federal or state
governmental agency that the Committee shall in its sole discretion determine to
be necessary or advisable.
1.9 Reservation of Shares of Common Stock. During the term of the Plan, the
Company will at all times reserve and keep available such number of shares of
Common Stock as shall be necessary to satisfy the requirements of the Plan as to
the number of Plan Shares. In addition, the Company will from time to time, as
is necessary to accomplish the purposes of the Plan, use its best efforts to
obtain from any regulatory agency having jurisdiction any requisite authority
necessary to issue Plan Shares hereunder. The inability of the Company to obtain
from any regulatory agency having jurisdiction the authority deemed by the
Company's counsel to be necessary for the lawful issuance of any Plan Shares
shall relieve the Company of any liability in respect of the nonissuance of Plan
Shares as to which the requisite authority shall not have been obtained.
1.10 Tax Withholding.
(a) Condition Precedent. The issuance, delivery or exercise of any Options under
the Plan is subject to the condition that if at any time the Committee shall
determine, in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as a condition of, or in connection with, the issuance, delivery or exercise of
the Options, then the issuance, delivery or exercise of the Options shall not be
effective unless the withholding shall have been effected or obtained in a
manner acceptable to the Committee.
(b) Manner of Satisfying Withholding Obligation. When an Optionee participating
in the Plan is required to pay to the Company an amount required to be withheld
under applicable income tax laws in connection with the exercise of an Option,
the Optionee may satisfy the obligation, in whole or in part, by electing to (i)
have the Company withhold a portion of the Plan Shares acquired upon the
exercise of the Option and having an aggregate Fair Market Value on the date the
amount of tax to be withheld is to be determined (the "Tax Date") equal to the
amount required to be withheld or (ii) deliver to the Company shares of Common
Stock already owned by the Optionee and having an aggregate Fair Market Value on
the Tax Date equal to the amount required to be withheld.
1.11 Exercise of Options.
(a) Method of Exercise. Each Option shall be exercisable in accordance with the
terms of the Option Agreement pursuant to which the Option was granted. No
Option may be exercised for a fraction of a Plan Share.
(b) Payment of Purchase Price. The purchase price of any Plan shares purchased
shall be paid at the time of exercise of the Option either (i) in cash, (ii) by
certified or cashier's check, (iii) by shares of Common Stock, if permitted by
the Committee, (iv) if then permitted under the laws of the State of Texas, by
cash or certified or cashier's check for the par value of the Plan Shares plus a
promissory note for the balance of the purchase price, which note shall (A)
provide for full personal liability of the maker, (B) bear interest at the
lowest rate then possible without causing the maker thereof to have income
imputed in connection therewith, (C) be due and payable both as to principal and
interest five years from the date such note is made, (D) be secured by the Plan
Shares issued in connection therewith, (E) be payable in advance in whole or in
part (with the Plan Shares pledged in connection therewith released in the same
proportion as such prepayment) and (F) contain such other terms and provisions
as the Committee may
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determine, including without limitation the right to repay the note partially or
wholly with Common Stock or (v) by delivery of a copy of irrevocable
instructions from the Optionee to a broker or dealer, reasonably acceptable to
the Company, to sell certain of the Plan Shares purchased upon exercise of the
Option or to pledge them as collateral for a loan and promptly deliver to the
Company the amount of sale or loan proceeds necessary to pay such purchase
price. If any portion of the purchase price or a note given at the time of
exercise is paid in shares of Common Stock, those shares shall be valued at the
then Fair Market Value.
1.12 Acceleration of Right to Exercise Options. Notwithstanding the provisions
of any Option Agreement regarding the time for exercise of an Option, the
following provisions shall apply:
(a) Mergers and Reorganizations. If the Company or its shareholders enter into
an agreement to dispose of all or substantially all of the assets of the Company
by means of a sale, merger or other reorganization or liquidation, or otherwise
in a transaction in which the Company is not the surviving corporation, any
Option shall become immediately exercisable with respect to the full number of
shares subject to that Option during the period commencing as of the date of the
agreement to dispose of all or substantially all of the assets of the Company
and ending when the disposition of assets contemplated by that agreement is
consummated or the Option is otherwise terminated in accordance with its
provisions or the provisions of the Article pursuant to which was granted,
whichever occurs first. The Option shall not become immediately exercisable,
however, if the transaction contemplated in the agreement is a merger or
reorganization in which the Company will survive.
(b) Change in Control. In the event of a change in control or threatened change
in control of the Company, all Options granted prior to the change in control
shall become immediately exercisable. The term "change in control" for purposes
of this Section shall refer to the acquisition of 20 percent or more of the
voting securities of the Company by any person or by persons acting as a group
within the meaning of Section 13(d)(3) of the Exchange Act; provided that no
change in control or threatened change in control shall be deemed to have
occurred if prior to the acquisition of, or offer to acquire, 20 percent or more
of the voting securities of the Company, the full Board shall have adopted by
not less than two-thirds vote a resolution specifically approving such
acquisition or offer. The term "person" for purposes of this Section refers to
an individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein. Whether a change in control is
threatened shall be determined solely by the Committee.
1.13 Written Notice Required. Any Option shall be deemed to be exercised for
purposes of the Plan when written notice of exercise has been received by the
Company at its principal office from the person entitled to exercise the Option
and payment for the Plan Shares with respect to which the Option is exercised
has been received by the Company in accordance with Section 1.11.
1.14 Compliance with Securities Laws. Plan Shares shall not be issued with
respect to any Option unless the exercise of the Option and the issuance and
delivery of the Plan Shares shall comply with all relevant provisions of federal
and state law, including without limitation the Securities Act, the rules and
regulations promulgated thereunder and the requirements of any stock exchange
upon which the Plan shares may then be listed or any national quotation system
on which they may be traded, and shall be further subject to the approval of
counsel for the Company with respect to such compliance, which approval shall
not be unreasonably withheld. The Committee may also require an Optionee to
furnish evidence satisfactory to the Company, including a written and signed
representation letter and consent to be bound by any transfer
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restrictions imposed by law, legend, condition or otherwise, that the Plan
Shares are being acquired only for investment and without any present intention
to sell or distribute the shares in violation of any federal or state law, rule
or regulation. Further each Optionee shall consent to the imposition of a legend
on the certificate representing the Plan Shares issued upon the exercise of the
Option restricting their transferability as required by law or by this Section.
1.15 Employment of Optionee. Nothing in the Plan or in any Option granted
hereunder shall confer upon any Optionee any right to continued employment by
the Company or any of its subsidiaries or affiliates or limit in any way the
right of the Company or any subsidiary or affiliate at any time to terminate or
alter the terms of that employment.
1.16 Option Upon Termination of Employment. If an Optionee ceases to be employed
by the Company or any of its subsidiaries or affiliates for any reason other
than for cause, retirement, death or disability, his Option may be exercised (to
the extent exercisable on the date of termination of employment) at any time
within three months after the date of termination of employment, unless either
the Option or the Article pursuant to which it was granted otherwise provides
for earlier termination. If an Optionee ceases to be employed by the Company or
any of its subsidiaries or affiliates because the Optionee has retired under a
qualified retirement plan of the Company, as determined by the Committee, his
Option shall be exercisable (to the extent exercisable on the effective date of
such retirement) at any time within 12 months after the effective date of such
retirement unless by its terms the Option expires sooner.
1.17 Termination of Employment for Cause. If an Optionee ceases to be employed
by the Company or any of its subsidiaries or affiliates because the Optionee is
terminated for cause, the Option shall automatically expire. For purposes of
this Section, "cause" shall mean an act or acts involving a felony, fraud,
willful misconduct, and the commission of any act that causes or reasonably may
be expected to cause substantial injury to the Company or other good cause. The
term "other good cause" as used in this Section shall include, but shall not be
limited to, habitual impertinence, a pattern of conduct that tends to hold the
Company up to ridicule in the community, conduct disloyal to the Company,
conviction of any crime of moral turpitude and substantial dependence, as judged
by the Committee, on alcohol or any controlled substance. "Controlled substance"
means a drug, immediate precursor, or other substance listed in Schedules I-V or
Penalty Groups 1-4 of the Texas Controlled Substances Act, as amended, or a
drug, immediate precursor, or other substance listed in Schedules I-V of the
Federal Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended.
Notwithstanding the foregoing, if an Optionee is an Employee employed pursuant
to a written employment agreement, Employee shall be deemed to be terminated for
"cause" for purposes of the Plan only if Employee is considered under the
circumstances to have been terminated for cause for purposes of such employment
agreement.
1.18 Option Upon Disability of Optionee. If an Optionee becomes disabled within
the meaning of Section 22(e)(3) of the Code while employed by the Company or any
of its subsidiaries or affiliates, his Option shall become fully exercisable and
shall expire 12 months after the date of such termination, unless either the
Option or the Article pursuant to which it was issued otherwise provides for
earlier termination.
1.19 Option Upon Death of Optionee. Except as otherwise limited by the Committee
at the time of the grant of an Option, if an Optionee dies while employed by the
Company or any of its subsidiaries or affiliates, or within three months after
ceasing to be an Employee for reason other than termination for cause, his
Option shall expire 12 months after the date of death, unless by its terms it
expires sooner. During this twelve-month or shorter period, the Option may be
fully exercised, to the extent that it remains unexercised on the date of death,
by the Optionee's personal representative or by the distributees to whom the
Optionee's rights under the Option shall pass by will or by the laws of descent
and distribution.
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1.20 Options Not Transferable. Options granted under Article III may not be
sold, pledged, assigned or transferred in any manner otherwise than by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code and may be exercised during the lifetime
of an Optionee only by that Optionee or by his legally authorized
representative. Options granted under Article IV may not be sold, pledged,
assigned or transferred in any manner otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code, and may be exercised during the lifetime of an Optionee
only by that Optionee or by his legally authorized representative; provided,
however, that the Committee, in its discretion, may allow for transferability of
such Options by the Optionee to "Immediate Family Members."
1.21 Information to Optionees. The Company shall furnish to each Optionee a copy
of the annual report, proxy statements and all other reports sent to the
Company's shareholders. Upon written request, the Company shall furnish to each
Optionee a copy of its most recent Annual Report on Form 10-K and each quarterly
report to shareholders issued since the end of the Company's most recent fiscal
year.
ARTICLE II
ADMINISTRATION
2.1 Committee. The Plan shall be administered by a Committee of not fewer than
two members, who shall be nonemployee members of the Board. No member of the
Committee shall be eligible to receive Options under the Plan (since they shall
not be employees) and each such member shall be a Non-Employee Director. Subject
to the express provisions of the Plan, the Committee shall have the sole
discretion and authority to determine the Employees to whom and the time or
times at which Options may be granted and the number of Plan Shares subject to
each Option.
2.2 Appointment of Committee. The Committee shall be appointed by the Board and
shall consist solely of nonemployee members of the Board; provided that the
Board may remove any Committee member for cause.
2.3 Majority Rule; Unanimous Written Consent. A majority of the members of the
Committee shall constitute a quorum, and any action taken by a majority present
at a meeting at which a quorum is present or any action taken without a meeting
evidenced by a writing executed by all members of the Committee shall constitute
the action of the Committee. Meetings of the Committee may take place by
telephone conference call.
2.4 Company Assistance. The Company shall supply full and timely information to
the Committee on all matters relating to Employees, their employment, death,
retirement, disability or other termination of employment, and such other
pertinent facts as the Committee may require. The company shall furnish the
Committee with such clerical and other assistance as is necessary to the
performance of its duties.
ARTICLE III
INCENTIVE STOCK OPTIONS
3.1 Option Terms and Conditions. The terms and conditions of Options granted
under this Article may differ from one another as the Committee shall, in its
discretion, determine, as long as all Options granted under this Article satisfy
the requirements of this Article.
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3.2 Duration of Options. Each Option granted pursuant to this Article and all
rights granted hereunder shall expire on the date determined by the Committee,
but in no event shall any Option granted under this Article expire earlier than
one year or later than ten years after the date on which the Option is granted.
In addition, each Option shall be subject to early termination as provided
elsewhere in the Plan.
3.3 Purchase Price. The purchase price for each of the Plan Shares acquired
pursuant to the exercise, in whole or in part, of any Option granted under this
Article shall not be less than the Fair Market Value of each of the Plan Shares
at the time the grant of the Option becomes effective.
3.4 Maximum Amount of Options First Exercisable in Any Calendar Year. The
maximum aggregate Fair Market Value of Plan shares (determined at the time the
Option is granted) with respect to which Options issued under this Article are
exercisable for the first time by any Employee during any calendar year under
all incentive stock option plans of the Company and its subsidiaries and
affiliates shall not exceed $100,000. Any Option granted under the Plan and
first exercisable in excess of the foregoing limitation shall be considered
granted pursuant to Article IV and shall be clearly and specifically designated
as not being an incentive stock option.
3.5 Requirements as to Certain Options. In the event of the grant of any Option
under this Article to an individual who, at the time the Option is granted, owns
shares of stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or any of its subsidiaries or
affiliates within the meaning of Section 422(b)(6) of the code, the purchase
price for each of the Plan Shares subject to that Option must be at least 110%
of the Fair Market Value of those Plan Shares at the time the Option is granted
and the Option must not be exercisable after the expiration of five years from
the date of its grant.
3.6 Individual Option Agreements. Each Optionee receiving Options pursuant to
this Article shall be required to enter into a written Option Agreement with the
Company as a precondition to receiving an Option under this Article. In such
Option Agreement, the Optionee shall agree to be bound by the terms and
conditions of the Plan and such other matters as the Committee deems
appropriate.
ARTICLE IV
NONQUALIFIED STOCK OPTIONS
4.1 Option Terms and Conditions. The terms and conditions of Options granted
under this Article may differ from one another as the Committee shall in its
discretion determine, as long as all Options granted under this Article satisfy
the requirements of this Article.
4.2 Duration of Options. Each Option granted pursuant to this Article and all
rights thereunder shall expire on the date determined by the Committee, but in
no event shall any Option granted under this Article expire later than ten years
after the date on which the Option is granted. In addition, each Option shall be
subject to early termination as provided elsewhere in the Plan.
4.3 Purchase Price. The purchase price for each of the Plan Shares acquired
pursuant to the exercise, in whole or in part, of any Option granted under this
Article shall not be less than the Fair Market Value of each of the Plan Shares
at the time the grant of the Option becomes effective.
4.4 Individual Option Agreements. Each Optionee receiving Options pursuant to
this Article shall be required to enter into a written Option Agreement with the
Company as a precondition
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to receiving an Option under this Article. In such Option Agreement, the
Optionee shall agree to be bound by the terms and conditions of the Plan and
such other matters as the Committee deems appropriate.
ARTICLE V
TERMINATION, AMENDMENT AND ADJUSTMENT
5.1 Termination and Amendment. The Plan shall terminate ten years after the
Effective Date. No Options shall be granted under the Plan after that date of
termination. Subject to the limitation contained in this Section, the Committee
may at any time amend or revise the terms of the Plan, including the form and
substance of the Option Agreements to be used in connection herewith; provided
that no amendment or revision shall (i) increase the maximum aggregate number of
Plan Shares, except as permitted under Section 5.2, (ii) increase the maximum
term established under the Plan for any Option or (iii) permit the granting of
an Option to anyone other than as provided in the Plan. No amendment, suspension
or termination of the Plan shall, without the consent of the Employee who has
received an Option hereunder, alter or impair any of that Employee's rights or
obligations under any Option granted under the Plan prior to that amendment,
suspension or termination.
5.2 Adjustments. If the outstanding Common Stock is increased, decreased,
changed into or exchanged for a different number or kind of shares or securities
through merger, consolidation, combination, exchange of shares, other
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, an appropriate and proportionate adjustment shall be
made in the maximum number and kind of Plan Shares as to which Options may be
granted under the Plan. A corresponding adjustment changing the number and kind
of shares allocated to unexercised Options or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment in outstanding Options shall be made without change in the aggregate
purchase price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share covered by the Option. The
foregoing adjustments and the manner of application of the foregoing provisions
shall be determined solely by the Committee, and any such adjustment may provide
for the elimination of factional share interests.
ARTICLE VI
MISCELLANEOUS
6.1 Other Option Plans. The adoption of the Plan shall not affect any other
stock option or incentive or other compensation plan in effect for the Company
or any of its subsidiaries or affiliates, nor shall the Plan preclude the
Company or any of its subsidiaries or affiliates from establishing any other
form of incentive or other compensation for Employees.
6.2 Plan Binding on Successors. The Plan shall be binding upon the successors
and assigns of the Company and any of its subsidiaries or affiliates that adopt
the Plan.
6.3 Number and Gender. Whenever used herein, nouns in the singular shall include
the plural where appropriate, and the masculine pronoun shall include the
feminine gender.
6.4 Headings. Headings of articles and sections hereof are inserted for
convenience of reference and constitute no part of the Plan.
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6.5 Conditions. No Options granted under the Plan shall become effective until
and unless the Plan has been presented to and approved by the shareholders of
the Company within twelve months before or after the date the Plan is adopted by
the Board.
ARTICLE VII
DEFINITIONS
As used herein with initial capital letters, the following terms have the
meanings hereinafter set forth unless the context clearly indicates to the
contrary:
7.1 "Board" shall mean the Board of Directors of the Company.
7.2 "Code" shall mean the Internal Revenue Code of 1986, as amended.
7.3 "Committee" shall mean the Committee appointed in accordance with Section
2.2.
7.4 "Common Stock" shall mean the Common Stock, par value $0.01 per share, of
the Company or, in the event that the outstanding shares of such Common Stock
are hereafter changed into or exchanged for shares of a different stock or
security of the Company or some other corporation, such other stock or security.
7.5. "Company" shall mean Calloway's Nursery, Inc. a Texas Corporation.
7.6. "Effective Date" shall mean the date of the shareholder approval required
by Section 6.5 of the Plan.
7.7 "Employee(s)" shall mean employee(s) of the Company or of any of its
subsidiaries or affiliates that adopt the Plan and shall not include members of
the Board who are not otherwise employed by the Company.
7.8 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
7.9 "Fair Market Value" shall mean such value as determined by the Committee on
the basis of such factors as it deems appropriate; provided that if the Common
Stock is traded on a national securities exchange or transactions in the Common
stock are quoted on a national quotation system, such value shall be determined
by the Committee on the basis of the last reported sales price for the Common
Stock on the date for which such determination is relevant, as reported on the
national securities exchange or the national quotation system. If the Common
Stock is not listed and traded upon a recognized securities exchange or on a
national quotation systems, the Committee shall make a determination of Fair
Market Value on the basis of the mean between the closing bid and asked
quotations for such stock on the date for which such determination is relevant
(as reported by a recognized stock quotation service) or, in the event that
there shall be no bid or asked quotations on the date for which such
determination is relevant, then on the basis of the mean between the closing bid
and asked quotations on the date nearest preceding the date for which such
determination is relevant for which such bid and asked quotations were
available.
7.10 "Immediate Family Members" means children, grandchildren, spouse, siblings
or parents of the Optionee or bona fide trusts, partnerships or other entities
controlled by, and of which the beneficiaries are, Immediate Family members of
the Optionee. Any option grants that are transferable are further conditioned on
the Optionee and Immediate Family Members agreeing to abide by the Company's
then current stock option transfer guidelines.
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7.ll "Incentive Stock Option" shall mean an Option granted pursuant to Article
III.
7.12 "Non-Employee Director" shall mean a director who:
(i) Is not currently an officer (as defined in Rule 16a-1(f)) of the Exchange
Act of the issuer or a parent or subsidiary of the issuer, or otherwise
currently employed by the issuer or a parent or subsidiary of the issuer;
(ii) Does not receive compensation, either directly or indirectly, from the
issuer or a parent or subsidiary of the issuer, for services rendered as a
consultant or in any capacity other than as a director, except for an amount
that does not exceed the dollar amount for which disclosure would be required
pursuant to Item 404(a) of Reg. S-K of the Exchange Act ("Reg. S-K");
(iii) Does not possess an interest in any other transaction for which disclosure
would be required pursuant to Item 404(a) of Reg. S-K; and
(iv) Is not engaged in a business relationship for which disclosure would be
required pursuant to Item 404(b) of Reg. S-K.
7.13 "Nonqualified Stock Option" shall mean an Option granted pursuant to
Article IV.
7.14 "Option" shall mean an Incentive Stock Option or a Nonqualified Stock
Option.
7.15 "Optionee" shall mean an Employee to whom an Option has been granted
hereunder.
7.16 "Option Agreement" shall mean an agreement between the Company and an
Optionee with respect to one or more Options.
7.17 "Plan" shall mean the Calloway's Nursery, Inc. 1999 Stock Option Plan, the
terms of which are set forth herein.
7.18 "Plan Shares" shall mean shares of Common Stock issuable pursuant to the
Plan.
7.19 "Securities Act" shall mean the Securities Act of 1933, as amended.
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