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Exhibit 10(b) Saga Communications, Inc. 1992 Stock Option Plan, as amended
SAGA COMMUNICATIONS, INC.
1992 STOCK OPTION PLAN
Adopted: April 14, 1992
Effective: December 10, 1992
Amended: May 9, 1994 and December 16, 1997
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TABLE OF CONTENTS
Section Subject Page
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1. Title 1
2. Purpose 1
3. Definitions 1
4. Stock Reserved for Options 3
5. Eligibility 3
6. Grants of Options 3
7. Purchase Price 4
8. Term of Options 5
9. Exercise of Options 5
10. Payment for Option Shares 7
11. Administration of the Plan 7
12. Transferability of Options 8
13. No Rights as Shareholder 9
14. Adjustment Upon Changes in Capitalization and the Like 9
15. Amendment and Termination 10
16. Effectiveness of the Plan 11
17. Governing Law 11
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SAGA COMMUNICATIONS, INC.
1992 STOCK OPTION PLAN
AS AMENDED
Section 1.
TITLE
This plan shall be known as the "Saga Communications, Inc. 1992 Stock
Option Plan".
Section 2.
PURPOSE
The Saga Communications, Inc. 1992 Stock Option Plan establishes a method
of granting options to purchase the Class A Common Stock and Class B Common
Stock of the Corporation in order to encourage stock ownership by officers and
key employees of the Corporation, to provide an incentive for such persons to
expand and improve the profits and prosperity of the Corporation, and to assist
the Corporation in attracting key personnel.
Section 3.
DEFINITIONS
3.1 "Board" means the Board of Directors of the Corporation.
3.2 "Committee" means the Stock Option Committee of the Board, which shall
be comprised, in the discretion of the Board, of three or more Directors, each
of whom is a "disinterested person" with the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934. Until the Committee is established,
the Board shall have and exercise the authority and powers of the Committee
described herein.
3.3 "Class A Common Stock" means shares of the Class A Common Stock, $.0l
par value, of the Corporation.
3.4 "Class B Common Stock" means shares of the Class B Common Stock, $.0l
par value, of the Corporation.
3.5 "Common Stock" means shares of the Class A Common Stock and Class B
Common Stock, collectively.
3.6 "Corporation" means Saga Communications, Inc., a Delaware corporation.
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3.7 "Disability" means inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or that has lasted or can be expected to
last for a continuous period of not less than twelve months, as determined
pursuant to Section 22(e)(3) of the Internal Revenue Code.
3.8 "Employee" means an employee or officer of any Participating
Corporation.
3.9 "Incentive Stock Option" means an Option that is an "incentive stock
option" as defined in Section 422A(b) of the Internal Revenue Code.
3.10 "Internal Revenue Code" means the United States Internal Revenue Code
of 1986, or any of its successors, and applicable rules and regulations
promulgated thereunder, each as amended through the date of adoption of the
Plan, or as each may in the future be amended and applicable to the Plan.
3.11 "Non-Qualified Stock Option" means an Option that is not an Incentive
Stock Option.
3.12 "Option" means any option granted under the Plan, including both
Incentive Stock Options and Non-Qualified Stock Options.
3.13 "Option Agreement" means any written agreement pursuant to the Plan
between the Corporation and a Participant regarding any option.
3.14 "Optionee" means a Participant who has delivered to the Corporation or
a Participating Corporation a signed Option Agreement pursuant to Section 6.5 of
the Plan.
3.15 "Option Shares" means shares of Common Stock that are issued or may be
required to be issued upon exercise of an Option and shares that are issued
thereafter with respect to such shares, including shares issued by reason of a
stock split, consolidation, dividend, stock exchange, recapitalization,
reclassification or the like.
3.16 "Participant" means a person to whom an Option has been granted.
3.17 "Participating Corporation" means the Corporation and any present or
future parent or subsidiary of the Corporation that the Committee elects to
treat as a Participating Corporation.
3.18 "Plan" means this Saga Communications, Inc. 1992 stock Option Plan, as
amended.
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Section 4.
STOCK RESERVED FOR OPTIONS
4.1 Subject to adjustment in accordance with the provisions of Section 14.1
of the Plan, as of December 16, 1997, 1,419,474 shares of Class A Common Stock
and 150,000 shares of Class B Common Stock shall be reserved for issuance upon
the exercise of Options granted under the Plan.
4.2 Any or all of the shares subject to Options under the Plan may be
authorized but unissued shares of Common Stock, or issued shares of Common Stock
that have been or shall have been reacquired by the Corporation, as the
Committee shall from time to time determine.
4.3 If any Option shall expire or terminate for any reason without having
been exercised in full, the unpurchased shares of Common Stock previously
subject to the Option shall again be available for the purposes of the Plan.
Section 5.
ELIGIBILITY
5.1 The Committee may grant Incentive Stock Options only to those key
Employees whom the Committee, in its sole discretion, identifies as being in a
position which will enable such Employees to materially contribute to the
Participating Corporation's continued growth, development and future financial
success.
5.2 The Committee may grant Non-Qualified Stock Options to Employees, or to
such other persons, as the Committee deems appropriate in its sole and exclusive
discretion, without regard to the provisions of Section 5.1.
5.3 The Committee may grant Incentive Stock Options for Class B Common
Stock and Non-Qualified Options for Class B Common Stock only to Edward K.
Christian.
Section 6.
GRANTS OF OPTIONS
6.1 The Committee shall clearly designate and identify each Option at the
time it is granted as either an Incentive stock Option or a Non-Qualified Stock
Option, as the case may be.
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6.2 The Committee may grant both Incentive Stock Options and Non-Qualified
Stock Options to the same Employee, provided that the exercise of one such
option does not in any way affect the Employee's right to exercise the other.
6.3 The date of grant of an Option shall be the date that the Committee
granted the Option or such other date as the Committee, in its discretion, may
specify at the time that it grants such Option.
6.4 Upon granting an Option, the Committee shall notify the Participant to
whom the Option shall have been granted and shall deliver an Option Agreement to
such Participant. Delivery of an Option Agreement shall be deemed to occur when
personally delivered or when sent by registered or certified mail, return
receipt requested, postage prepaid to the Participant.
6.5 An Option shall expire thirty (30) days after delivery of the Option
Agreement to the Participant unless the Option Agreement shall have been signed
by the Participant to whom the Option is granted and returned to the Corporation
within such period.
6.6 Nothing contained in the Plan shall be construed to limit the right of
a Participating Corporation to grant options otherwise than under the Plan for
any corporate purpose, including the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any corporation or
other entity.
Section 7.
PURCHASE PRICE
7.1 Subject to Section 7.2 of the Plan, the purchase price of Option Shares
granted under an Incentive Stock Option shall be one hundred percent (100%) of
the fair market value of the Option Shares at the time of granting of the
Incentive Stock Option, or such greater amount as the Committee, in its
discretion, may fix. The Committee shall determine the fair market value of the
Option Shares. In so determining the fair market value of Common Stock, the
Committee shall disregard any restrictions other than a restriction that, by its
terms, will never lapse.
7.2 The purchase price of Option Shares granted under an Incentive Stock
Option to an Employee who owns, immediately prior to the grant of such an
Incentive Stock Option, stock possessing more than ten percent (10%) of the
total combined voting power of all classes of
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stock of a Participating Corporation or any parent or subsidiary corporation,
shall be at least one hundred ten percent (110%) of the fair market value of the
Common Stock (determined in accordance with the provisions of Section 7.1) at
the time that such Incentive Stock Option is granted. The provisions of Section
425(d) of the Internal Revenue Code shall control determination of the
percentage of stock ownership for the purpose of this Section 7.2.
7.3 The purchase price of Option Shares granted under a Non-Qualified Stock
Option shall be determined by the Committee, operating in its sole and exclusive
discretion, without regard to the provisions of Sections 7.1 and 7.2.
7.4 No variable price options shall be permitted.
Section 8.
TERM OF OPTIONS
8.1 The Committee, in its discretion, may prescribe in the Option
Agreement, the period during which Options may be exercised, provided, that an
Incentive Stock Option shall not be exercisable more than ten (10) years from
the date upon which it is granted, and, provided further, that an Incentive
Stock Option granted to an Employee described in Section 7.2 above shall not be
exercisable more than five (5) years from the date upon which it is granted.
8.2 In the Option Agreement, the Committee, in its discretion, may
prescribe conditions or events which may result in the shortening or termination
of the period during which an option may be exercised.
Section 9.
EXERCISE OF OPTIONS
9.1 Subject to the provisions of Sections 9.3 and 9.4, the Committee, in
its discretion, may prescribe in the Option Agreement the manner in which, the
number and size of the installments (which need not be equal) for which, and the
contingencies upon which an option may be exercised during its term.
9.2 No option or installment thereof shall be exercisable except in respect
of whole shares. Fractional share interests shall be disregarded, except that
they may be accumulated. If an Optionee does not purchase all the shares that
the Optionee shall be entitled to purchase in any given installment period, or
if a fractional share interest shall remain, then the Optionee's right to
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purchase the remaining shares or fractional shares shall continue until
expiration of such Option. No less than two hundred fifty (250) shares may be
purchased at one time unless the number purchased is the total number that may
then be purchased under the Option.
9.3 During any calendar year, an Optionee may exercise an Incentive Stock
Option only to the extent that the aggregate fair market value of the Common
Stock (determined in accordance with the provisions of Section 7.1 of the Plan)
with respect to which Incentive Stock Options are exercisable for the first time
by the Optionee during such calendar year (under this Plan and all similar plans
of the Participating Corporation by which the Optionee is employed and its
parent or subsidiary corporations) does not exceed One Hundred Thousand Dollars
($100,000).
9.4 Except as otherwise provided in Sections 9.5, 9.6 and 9.7, no Incentive
Stock Option may be exercised unless, at the time of exercise, the Optionee
shall be an Employee or the Optionee's status as an Employee shall have
terminated within the preceding three (3) months. Incentive Stock Options
granted under the Plan shall not be affected by any change in the nature of the
Optionee's employment so long as the Optionee continues to be an Employee.
Option Agreements may contain such provisions as the Committee may approve with
reference to the effect of approved leaves of absence. Nothing in the Plan, or
in any Option Agreement, or any Option, shall confer upon any individual any
right to continue in the employ of any Participating Corporation, or shall
interfere in any way with the right of any Participating Corporation to
terminate the status of any Employee at any time.
9.5 If the holder of an Incentive Stock Option retires at the normal
retirement date as prescribed from time to time under any policy of the
Participating Corporation then in force or at any other date with the consent of
such Participating Corporation, he may exercise his Incentive Stock Option at
any time within three (3) months after such retirement, to the extent of the
number of shares that he shall have been entitled to purchase on the date of his
retirement.
9.6 If the holder of an Incentive Stock Option ceases to be employed by a
Participating Corporation because of Disability, he may exercise his Incentive
Stock Option within twelve months from the date of the termination of his
employment, to the extent of the number of shares that he shall have been
entitled to purchase on the date his employment terminated.
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9.7 If the holder of an Incentive Stock Option dies: (a) while he is an
Employee, (b) within three (3) months after the termination of his employment,
or (c) within twelve (12) months after the termination of his employment on
account of Disability, his legatee or legatees or his personal representatives
or distributees (collectively, "legal representatives") may exercise the
holder's Incentive Stock Option to the extent of the number of shares that the
holder shall have been entitled to purchase on the date of the holder's death.
9.8 The Committee, in its discretion, shall determine the extent, if any,
to which the holder of a Non-Qualified Stock Option may exercise said Option
upon his termination as an Employee, his retirement or Disability, or to which a
legal representative of a deceased holder of a Non-Qualified Stock Option may
exercise said Option after the death of the holder.
Section 10.
PAYMENT FOR OPTION SHARES
10.1. Upon the exercise of an Incentive Stock Option the purchase price of
the Option Shares shall be paid in full in cash or by personal check, or by
transfer to the Corporation by the Optionee of stock of the Corporation owned by
the Optionee which, on the date of such a transfer, has a fair market value
equal to the purchase price of the Option Shares.
10.2 The means of payment for Option Shares purchased under a Non-Qualified
Stock Option shall be determined by the Committee, operating in its sole
discretion.
10.3 The proceeds received from the sale of Option Shares shall be added to
the general funds of the Corporation and shall be used for such of its corporate
purposes as the Board shall determine.
Section 11.
ADMINISTRATION OF THE PLAN
11.1 The Plan shall be administered by the Committee.
11.2 Subject to the express provisions of the Plan, the Committee, in its
sole discretion, shall have the plenary authority to: (a) grant or refrain from
granting Options; (b) determine the individuals to whom, and the time or times
at which, Options shall be granted; the type of Option to be granted; the number
of shares of Common Stock to be subject to each Option; the class of
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shares of Common Stock to be subject to each Option; and the purchase price of
the Common Stock subject to each Option; (c) interpret the Plan; (d) prescribe,
amend and rescind rules and regulations relating to the Plan; (e) determine the
terms, conditions and provisions of all Option Agreements entered into pursuant
to the Plan (which need not be identical); and (f) make all other determinations
necessary or advisable for administration of the Plan.
11.3 The Committee's determination of all matters referred to the
Committee's discretion shall be final and conclusive. In making such
determinations, the Committee may take into account such factors as the
Committee, in its discretion, may deem relevant, including the nature of the
services rendered by the individuals involved and the present and potential
contributions of such individuals to the success of the Corporation.
11.4 No member of the Committee, nor of the Board of Directors of any
Participating Corporation, nor any officer, director, employee or agent of any
Participating Corporation, shall be liable for any action or determination made,
or other action taken, in good faith with respect to the Plan or any Option.
Section 12.
TRANSFERABILITY OF OPTIONS
12.1 No Incentive Stock Option granted under the Plan shall be transferable
otherwise than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Internal Revenue Code or
Title I of the Employee Retirement Income Security Act, or the rules thereunder.
An Incentive Stock Option may be exercised, during the lifetime of the Optionee,
only by him.
12.2 The Committee, operating in its sole and exclusive discretion, shall
determine the restrictions, if any, on transferability of Non-Qualified Stock
Options without regard to the provisions of Section 12.1.
12.3 Each Option Agreement may contain such provisions consistent with this
Plan as the Committee, in its discretion, may determine to be appropriate for
restriction on transfer, and redemption by the Corporation, or other
disposition, of all Option Shares received by the
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Optionee (or his legal representatives), notwithstanding any tax consequences to
the Optionee of such restriction, redemption or other disposition.
Section 13.
NO RIGHTS AS SHAREHOLDER
The holder of an Option shall have none of the rights of a shareholder of
the Corporation with respect to the Option Shares until such shares shall have
been issued to him upon exercise of his Option in accordance with the terms of
the Plan.
Section 14.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION AND THE LIKE
14.1 If any change in the outstanding Common Stock of the Corporation by
reason of stock dividends, stock splits, subdivisions, exchanges of shares, or
recapitalizations, is effected after the effective date of the Plan without
receipt of consideration by the Corporation, then the aggregate number of shares
reserved for issuance upon the exercise of Options granted under the Plan shall
be appropriately adjusted by the Board, whose determination shall be conclusive.
Each Option Agreement may contain such provisions as the Committee, in its
discretion, shall determine to be appropriate for adjustment of the number of
Option Shares and of the purchase price provided for in such Option. Any such
adjustments may provide for elimination of any fractional shares that might
otherwise become subject to any Option.
14.2 Each Option Agreement may contain such provisions as the Committee, in
its discretion, shall determine to be appropriate for the termination of,
adjustment in or vesting or repurchase of shares and Options, in the event of
the dissolution or liquidation of the Corporation, or upon any consolidation or
merger involving the Corporation, or upon sale or transfer of all or
substantially all of the assets of the Corporation, or upon exchange by the
stockholders of the Corporation of 80% or more of the shares of the Corporation
for securities of another entity.
14.3 The existence of any Option shall not in any way prevent any
Participating Corporation from engaging in any of the transactions described in
this Section 14, nor shall it confer any rights upon the holder of any such
Option to participate in any such transaction,
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except those expressly conferred by the Plan and the Option Agreement pursuant
to which such Option shall have been granted.
14.4 Nothing contained in this Plan shall prevent the assumption of an
Option, or the substitution of a new option for an Option, by any corporation,
or the parent or subsidiary of any corporation, that becomes the employer of an
Optionee by reason of a merger, consolidation, acquisition, reorganization or
liquidation; provided, however, that with respect to an Incentive Stock Option,
the following additional conditions are applicable:
(a) the excess of the aggregate fair market value of the shares
subject to the Option immediately after the substitution or assumption over
the aggregate option price of such shares is not more than the excess of
the aggregate fair market value of the Option Shares immediately before
such substitution or assumption over the aggregate purchase price of the
Option Shares; and
(b) the new option or the assumption of the old Option does not give
the Optionee additional benefits that the Optionee did not have under the
old Option.
Section 15.
AMENDMENT AND TERMINATION
15.1 Unless the Plan shall have been terminated sooner, the Plan shall
terminate on, and no Option shall be granted after: (a) the later of the tenth
(10th) anniversary of: (i) the date upon or as of which the Plan is adopted, or
(ii) the date upon which the Plan is approved by the shareholders of the
Corporation; or (b) the date upon which the total number of shares set forth in
Section 4.1 of the Plan shall have been issued pursuant to the Plan.
15.2 The shareholders of the Corporation may terminate, modify or amend the
Plan at any time.
15.3 The Board also may terminate, modify or amend the Plan at any time,
provided that, without the approval of the shareholders of the Corporation, the
Board shall not change (a) the maximum number of shares as to which Options may
be granted under the Plan (except as the number provided in Section 4.1 may be
adjusted from time to time in accordance with Section 14.1), or (b) the class of
Employees eligible to receive Incentive Stock Options.
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15.4 Except as may be set forth in a Plan Agreement, no termination,
modification or amendment of the Plan shall adversely affect the rights of any
Optionee under an Option Agreement without such Optionee's written consent.
Section 16.
EFFECTIVENESS OF THE PLAN
The Plan shall become effective only upon (a) adoption by the Board and (b)
approval by the shareholders of the Corporation within twelve (12) months before
or after the date of such adoption by the Board.
Section 17.
GOVERNING LAW
This Plan shall be governed by and construed under the laws of the State of
Delaware.
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