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Exhibit 10.17
SAFELITE GLASS CORP.
1999 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
This stock option plan (the "Plan") is intended to encourage ownership
of the stock of Safelite Glass Corp. (the "Company") by employees of the Company
and its subsidiaries, to induce qualified personnel to enter and remain in the
employ of the Company or its subsidiaries and otherwise to provide additional
incentive for optionees to promote the success of its business.
2. STOCK SUBJECT TO THE PLAN.
(a) The total number of shares of the authorized but unissued or
Treasury shares of the Class B Non-Voting Common Stock, $0.01 par value, of the
Company ("Common Stock") for which options may be granted under the Plan shall
not exceed five hundred twenty-five thousand (525,000) shares, subject to
adjustment as provided in Section 12 hereof.
(b) If an option granted hereunder shall expire or terminate for
any reason without having vested fully or having been exercised in full, the
unvested and/or unpurchased shares subject thereto shall again be available for
subsequent option grants under the Plan.
(c) Stock issuable upon exercise of an option granted under the
Plan may be subject to such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Board of Directors.
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3. ADMINISTRATION OF THE PLAN.
At the discretion of the Company=s Board of Directors, the Plan shall
be administered either (i) by the full Board of Directors of the Company or (ii)
by a committee (the "Committee") consisting of two or more members of the
Company's Board of Directors. In the event the full Board of Directors is the
administrator of the Plan, references herein to the Committee shall be deemed to
include the full Board of Directors. The Board of Directors may from time to
time appoint a member or members of the Committee in substitution for or in
addition to the member or members then in office and may fill vacancies on the
Committee however caused. The Committee shall choose one of its members as
Chairman and shall hold meetings at such times and places as it shall deem
advisable. A majority of the members of the Committee shall constitute a quorum
and any action may be taken by a majority of those present and voting at any
meeting.
Any action may also be taken without the necessity of a meeting by a
written instrument signed by a majority of the Committee. The decision of the
Committee as to all questions of interpretation and application of the Plan
shall be final, binding and conclusive on all persons. The Committee shall have
the authority to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any option agreement or Award agreement granted hereunder in the
manner and to the extent it shall deem expedient to carry the Plan into effect
and shall be the sole and final judge of such
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expediency. No Committee member shall be liable for any action or determination
made in good faith.
4. TYPE OF OPTIONS.
Options granted pursuant to the Plan shall be authorized by action of
the Board of Directors and may be designated as either incentive stock options
meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or non-qualified options which are not intended to meet
the requirements of such Section 422 of the Code, the designation to be in the
sole discretion of the Board of Directors. The Plan shall be administered by the
Board of Directors in such manner as to permit options to qualify as incentive
stock options under the Code.
5. ELIGIBILITY.
Options designated as incentive stock options shall be granted only to
key employees (including officers and directors who are also employees) of the
Company or any of its subsidiaries, including subsidiaries who become such after
adoption of the Plan. Options designated as non-qualified options may be granted
to officers, key employees and non-employee directors of the Company or of any
of its subsidiaries. "Subsidiary" or "subsidiaries" shall be as defined in
Section 424 of the Code and the Treasury Regulations promulgated thereunder (the
"Regulations").
The Committee shall, from time to time, at its sole discretion, select
from such eligible individuals those to whom options shall be granted and shall
determine the number of shares to be subject to each option. In determining the
eligibility of an individual to be granted an option, as well as in determining
the number of shares to be
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granted to any individual, the Board of Directors in its sole discretion shall
take into account the position and responsibilities of the individual being
considered, the nature and value to the Company or its subsidiaries of his or
her service and accomplishments, his or her present and potential contribution
to the success of the Company or its subsidiaries, and such other factors as the
Board of Directors may deem relevant.
No option designated as an incentive stock option shall be granted to
any employee of the Company or any subsidiary if such employee owns, immediately
prior to the grant of an option, stock representing more than 10% of the voting
power or more than 10% of the value of all classes of stock of the Company or a
parent or a subsidiary, unless the purchase price for the stock under such
option shall be at least 110% of its fair market value at the time such option
is granted and the option, by its terms, shall not be exercisable more than five
years from the date it is granted. In determining the stock ownership under this
paragraph, the provisions of Section 424(d) of the Code shall be controlling. In
determining the fair market value under this paragraph, the provisions of
Section 7 hereof shall apply.
The maximum number of shares of the Company's Common Stock with respect
to which an option or options may be granted to any employee in any calendar
year shall not exceed five hundred and twenty-five thousand (525,000) shares,
taking into account shares subject to options granted and terminated, or
repriced, during such calendar year.
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6. OPTION AGREEMENT.
Each option shall be evidenced by an option agreement (the "Agreement")
duly executed on behalf of the Company and by the optionee to whom such option
is granted, which Agreement shall comply with and be subject to the terms and
conditions of the Plan. The Agreement may contain such other terms, provisions
and conditions which are not inconsistent with the Plan as may be determined by
the Board of Directors, provided that options designated as incentive stock
options shall meet all of the conditions for incentive stock options as defined
in Section 422 of the Code. The date of grant of an option shall be as
determined by the Board of Directors. More than one option may be granted to an
individual.
7. OPTION PRICE.
The option price or prices of shares of the Company's Common Stock for
options designated as non-qualified stock options shall be as determined by the
Board of Directors, but in no event shall the option price of a non-qualified
stock option be less than 50% of the fair market value of such Common Stock at
the time the option is granted, as determined by the Board of Directors. The
option price or prices of shares of the Company's Common Stock for incentive
stock options shall be the fair market value of such Common Stock at the time
the option is granted as determined by the Board of Directors in accordance with
the Regulations promulgated under Section 422 of the Code. If such shares are
then listed on any national securities exchange, the fair market value shall be
the mean between the high and low sales prices, if any, on the largest such
exchange on the business day immediately preceding the date of the grant
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of the option or, if none, shall be determined by taking a weighted average of
the means between the highest and lowest sales prices on the nearest date before
and the nearest date after the date of grant in accordance with Treasury
Regulations Section 25.2512-2. If the shares are not then listed on any such
exchange, the fair market value of such shares shall be the mean between the
high and low sales prices, if any, as reported in the National Association of
Securities Dealers Automated Quotation National Market ("NASDAQ/NM") for the
business day immediately preceding the date of the grant of the option, or, if
none, shall be determined by taking a weighted average of the means between the
highest and lowest sales on the nearest date before and the nearest date after
the date of grant in accordance with Treasury Regulations Section 25.2512-2. If
the shares are not then either listed on any such exchange or quoted in
NASDAQ/NM, the fair market value shall be the mean between the average of the
"Bid" and the average of the "Ask" prices, if any, as reported in the National
Daily Quotation Service for the business day immediately preceding the date of
the grant of the option, or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales prices on the nearest
date before and the nearest date after the date of grant in accordance with
Treasury Regulations Section 25.2512-2. If the fair market value cannot be
determined under the preceding three sentences, it shall be determined in good
faith by the Board of Directors.
8. MANNER OF PAYMENT; MANNER OF EXERCISE.
(a) Options granted under the Plan may provide for the payment of
the exercise price, as determined by the Board of Directors, by delivery of (i)
cash or a
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check payable to the order of the Company in an amount equal to the exercise
price of such options, (ii) shares of Common Stock of the Company owned by the
optionee having a fair market value equal in amount to the exercise price of the
options being exercised, (iii) any combination of (i) and (ii), provided,
however, that payment of the exercise price by delivery of shares of Common
Stock of the Company owned by such optionee may be made only if such payment
does not result in a charge to earnings for financial accounting purposes as
determined by the Board of Directors or (iv) payment may also be made by
delivery of a properly executed exercise notice to the Company, together with a
copy of irrevocable instruments to a broker to deliver promptly to the Company
the amount of sale or loan proceeds to pay the exercise price. The fair market
value of any shares of the Company's Common Stock which may be delivered upon
exercise of an option shall be determined by the Board of Directors in
accordance with Section 7 hereof.
(b) To the extent that the right to purchase shares under an
option has accrued and is in effect, options may be exercised in full at one
time or in part from time to time, by giving written notice, signed by the
person or persons exercising the option, to the Company, stating the number of
shares with respect to which the option is being exercised, accompanied by
payment in full for such shares as provided in subparagraph (a) above. Upon such
exercise, delivery of a certificate for paid-up non-assessable shares shall be
made at the principal office of the Company to the person or persons exercising
the option at such time, during ordinary business hours, after five (5) but not
more than ten (10) business days from the date of receipt of the
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notice by the Company, as shall be designated in such notice, or at such time,
place and manner as may be agreed upon by the Company and the person or persons
exercising the option. Upon exercise of the option and payment as provided
above, the optionee shall become a shareholder of the Company as to the Shares
acquired upon such exercise.
9. EXERCISE OF OPTIONS.
Except as otherwise determined from time to time by the Board of
Directors, options granted under the Plan shall, subject to Section 10(b) and
Section 12 hereof, not be exercisable during the first twelve (12) months after
the date of grant. Thereafter, options shall become exercisable as to
twenty-five percent (25%) of the shares covered thereby upon the expiration of
twelve (12) months after the date of grant and as to an additional 2.08333%
upon the expiration of each month during the next three (3) succeeding twelve
(12) month periods.
To the extent that an option to purchase shares is not exercised by an
optionee when it becomes initially exercisable, it shall not expire but shall be
carried forward and shall be exercisable, on a cumulative basis, until the
expiration of the exercise period. No partial exercise may be made for less than
one hundred (100) full shares of Common Stock.
Notwithstanding the foregoing, the Board of Directors may in its
discretion (i) specifically provide for another time or times of exercise or
(ii) accelerate the exercisability of any option subject to such terms and
conditions as the Board of Directors deems necessary and appropriate.
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10. TERM OF OPTIONS; EXERCISABILITY.
(a) TERM.
(1) Each option shall expire not more than ten (10) years
from the date of the granting thereof, but shall be subject to earlier
termination as herein provided.
(2) Except as otherwise provided in this Section 10, an
option granted to any employee optionee who ceases to be an employee of the
Company or one of its subsidiaries shall terminate immediately on the date such
optionee ceases to be an employee of the Company or one of its subsidiaries, or
on the date on which the option expires by its terms, whichever occurs first.
(3) If such termination of employment is because the
optionee has become permanently disabled (within the meaning of Section 22(e)(3)
of the Code), such option shall terminate on the last day of the third month
from the date such optionee ceases to be an employee, or on the date on which
the option expires by its terms, whichever occurs first.
(4) In the event of the death of any optionee, any option
granted to such optionee shall terminate on the last day of the sixth month from
the date of death, or on the date on which the option expires by its terms,
whichever occurs first.
(5) If an optionee ceases to be an employee of the
Company or one of its subsidiaries due to a termination of such employment by
the Company without "Cause", as such term is defined in the particular
employment agreement with such optionee, any option granted to such optionee
shall terminate on the last day of the
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second month from the date of such termination, or on the date on which the
option expires by its terms, whichever occurs first.
(6) Notwithstanding subparagraphs (2), (3), (4) and (5)
above, the Board of Directors shall have the authority to extend the expiration
date of any outstanding option in circumstances in which it deems such action to
be appropriate, provided that no such extension shall extend the term of an
option beyond the date on which the option would have expired if no termination
of the optionee's employment had occurred.
(b) Exercisability; Vesting. An option granted to an employee
optionee who ceases to be an employee of the Company or one of its subsidiaries
shall be exercisable only to the extent that the right to purchase shares under
such option has accrued, is vested and is in effect on the date such optionee
ceases to be an employee of the Company or one of its subsidiaries.
11. OPTIONS NOT TRANSFERABLE.
The right of any optionee to exercise any option granted to him or her
shall not be assignable or transferable by such optionee otherwise than by will
or the laws of descent and distribution, and any such option shall be
exercisable during the lifetime of such optionee only by him. Any option granted
under the Plan shall be null and void and without effect upon the bankruptcy of
the optionee to whom the option is granted, or upon any attempted assignment or
transfer, except as herein provided, including without limitation any purported
assignment, whether voluntary or by operation of law,
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pledge, hypothecation or other disposition, attachment, divorce, trustee process
or similar process, whether legal or equitable, upon such option.
12. RECAPITALIZATIONS, REORGANIZATIONS AND THE LIKE.
(a) In the event that the outstanding shares of the Common Stock
of the Company are changed into or exchanged for a different number or kind of
shares or other securities of the Company or of another corporation by reason of
any reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, combination of shares, or dividends payable in capital stock,
appropriate adjustment shall be made in the number and kind of shares as to
which options may be granted under the Plan and as to which outstanding options
or portions thereof then unexercised shall be exercisable, to the end that the
proportionate interest of the optionee shall be maintained as before the
occurrence of such event; such adjustment in outstanding options shall be made
without change in the total price applicable to the unexercised portion of such
options and with a corresponding adjustment in the option price per share.
(b) In addition, unless otherwise determined by the Board of
Directors in its sole discretion, in the case of any (i) sale or conveyance to
another entity of all or substantially all of the property and assets of the
Company, including, without limitation, by way of merger or consolidation, or
(ii) Change in Control (as hereinafter defined) of the Company, the purchaser(s)
of the Company's assets or stock may, in his, her or its discretion, deliver to
the optionee the same kind of consideration that is delivered to the
shareholders of the Company as a result of such sale, conveyance or
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Change in Control, or the Board of Directors may cancel all outstanding options
in exchange for consideration in cash or in kind which consideration in both
cases shall be equal in value to the value of those shares of stock or other
securities the optionee would have received had the option been exercised (to
the extent then exercisable) and no disposition of the shares acquired upon such
exercise been made prior to such sale, conveyance or Change in Control, less the
option price therefor. Upon receipt of such consideration by the optionee, his
or her option shall immediately terminate and be of no further force and effect.
The value of the stock or other securities the optionee would have received if
the option had been exercised shall be determined in good faith by the Board of
Directors of the Company, and in the case of shares of the Common Stock of the
Company, in accordance with the provisions of Section 7 hereof. The Board of
Directors shall also have the power and right to accelerate the exercisability
of any options, notwithstanding any limitations in this Plan or in the Agreement
upon such a sale, conveyance or Change in Control. Upon such acceleration, any
options or portion thereof originally designated as incentive stock options that
no longer qualify as incentive stock options under Section 422 of the Code as a
result of such acceleration shall be redesignated as non-qualified stock
options. A "Change in Control" shall be deemed to have occurred if any person,
or any two or more persons acting as a group, and all affiliates of such person
or persons, who prior to such time owned less than ten percent (10%) of the
then outstanding Common Stock of the Company, shall acquire, whether by
purchase, exchange, tender offer, merger, consolidation or otherwise, such
additional shares of the Company's Common Stock in one or more transactions, or
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series of transactions, such that following such transaction or transactions,
such person or group and affiliates beneficially own fifty percent (50%) or more
of the Company's Common Stock outstanding.
(c) Upon dissolution or liquidation of the Company, all options
granted under this Plan shall terminate, but each optionee (if at such time in
the employ of or otherwise associated with the Company or any of its
subsidiaries) shall have the right, immediately prior to such dissolution or
liquidation, to exercise his or her option to the extent then exercisable.
(d) No fraction of a share shall be purchasable or deliverable
upon the exercise of any option, but in the event any adjustment hereunder of
the number of shares covered by the option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the nearest smaller
whole number of shares.
13. NO SPECIAL EMPLOYMENT RIGHTS.
Nothing contained in the Plan or in any option granted under the Plan
shall confer upon any option holder any right with respect to the continuation
of his or her employment by the Company (or any subsidiary) or interfere in any
way with the right of the Company (or any subsidiary), subject to the terms of
any separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the option holder from
the rate in existence at the time of the grant of an option. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined by the Board of
Directors at the time.
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14. WITHHOLDING.
The Company's obligation to deliver shares upon the exercise of any
option granted under the Plan shall be subject to the option holder's
satisfaction of all applicable Federal, state and local income, excise,
employment and any other tax withholding requirements. On or after the date of
the first registration of an equity security of the Company under Section 12 of
the Securities Exchange Act of 1934 (the "1934 Act"), if an optionee is an
officer of the Company within the meaning of Section 16 of the 1934 Act, such
optionee may elect to pay such withholding tax obligations in accordance with
rules prescribed by the Board of Directors by having the Company withhold shares
of Common Stock having a value equal to the amount required to be withheld. The
value of the shares to be withheld shall equal the fair market value of the
shares on the day the option is exercised as determined by the Board of
Directors. The following provisions shall apply to such elections by persons who
are directors or officers of the Company within the meaning of Section 16(b) of
the 1934 Act: (i) if an optionee has received multiple options, a separate
election must be made for each option; (ii) the election may be a "standing
election," i.e., upon making an election, a fixed date need not be set for the
exercise of the option to which the election relates; (iii) the election will be
subject to the approval or disapproval of the Board of Directors, which approval
or disapproval may be given at any time after the election to which it relates;
(iv) the election may not be made within six months following the date of grant
of the option to which it relates; (v) the election must be made six months
prior to the date the option is exercised, or both the election and exercise
must be made
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in the ten-day "window period" beginning on the third day following the release
of the Company's quarterly or annual summary statement of sales and earnings;
and (vi) an election may be revoked, or may be reinstituted after a revocation,
only upon six months' prior notice.
15. RESTRICTIONS ON ISSUE OF SHARES.
(a) Notwithstanding the provisions of Section 8, the Company may
delay the issuance of shares covered by the exercise of an option and the
delivery of a certificate for such shares until one of the following conditions
shall be satisfied:
(i) The shares with respect to which such option has been
exercised are at the time of the issue of such shares effectively registered or
qualified under applicable Federal and state securities acts now in force or as
hereafter amended; or
(ii) Counsel for the Company shall have given an opinion,
which opinion shall not be unreasonably conditioned or withheld, that such
shares are exempt from registration and qualification under applicable Federal
and state securities acts now in force or as hereafter amended.
(b) It is intended that all exercises of options shall be
effective, and the Company shall use its best efforts to bring about compliance
with the above conditions within a reasonable time, except that the Company
shall be under no obligation to qualify shares or to cause a registration
statement or a post-effective amendment to any registration statement to be
prepared for the purpose of covering the issue of shares in respect of which any
option may be exercised, except as otherwise agreed to by the Company in
writing.
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16. PURCHASE FOR INVESTMENT; RIGHTS OF HOLDER ON SUBSEQUENT
REGISTRATION.
Unless the shares to be issued upon exercise of an option granted under
the Plan have been effectively registered under the Securities Act of 1933, as
now in force or hereafter amended, the Company shall be under no obligation to
issue any shares covered by any option unless the person who exercises such
option, in whole or in part, shall give a written representation and undertaking
to the Company which is satisfactory in form and scope to counsel for the
Company and upon which, in the opinion of such counsel, the Company may
reasonably rely, that he or she is acquiring the shares issued pursuant to such
exercise of the option for his or her own account as an investment and not with
a view to, or for sale in connection with, the distribution of any such shares,
and that he or she will make no transfer of the same except in compliance with
any rules and regulations in force at the time of such transfer under the
Securities Act of 1933, or any other applicable law, and that if shares are
issued without such registration, a legend to this effect may be endorsed upon
the securities so issued. In the event that the Company shall, nevertheless,
deem it necessary or desirable to register under the Securities Act of 1933 or
other applicable statutes any shares with respect to which an option shall have
been exercised, or to qualify any such shares for exemption from the Securities
Act of 1933 or other applicable statutes, then the Company may take such action
and may require from each optionee such information in writing for use in any
registration statement, supplementary registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to the Company and
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its officers and directors and controlling persons from such holder against all
losses, claims, damages and liabilities arising from such use of the information
so furnished and caused by any untrue statement of any material fact therein or
caused by the omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made.
17. LOANS.
The Company may make loans to optionees to permit them to exercise
options. If loans are made, the requirements of all applicable Federal and state
laws and regulations regarding such loans must be met.
18. MODIFICATION OF OUTSTANDING OPTIONS.
The Board of Directors may authorize the amendment of any outstanding
option with the consent of the optionee when and subject to such conditions as
are deemed to be in the best interests of the Company and in accordance with the
purposes of this Plan.
19. APPROVAL OF STOCKHOLDERS.
The Plan shall be subject to approval by the vote of stockholders
holding at least a majority of the voting stock of the Company present, or
represented, and entitled to vote at a duly held stockholders' meeting, or by
written consent of the stockholders as provided for under applicable state law,
within twelve (12) months after the adoption of the Plan by the Board of
Directors and shall take effect as of the date of adoption by the Board of
Directors upon such approval. The Board of Directors may grant options
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under the Plan prior to such approval, but any such option shall become
effective as of the date of grant only upon such approval and, accordingly, no
such option may be exercisable prior to such approval.
20. TERMINATION AND AMENDMENT.
Unless sooner terminated as herein provided, the Plan shall terminate
ten (10) years from the date upon which the Plan was duly adopted by the Board
of Directors of the Company. The Board of Directors may at any time terminate
the Plan or make such modification or amendment thereof as it deems advisable;
provided, however, that except as provided in this Section 20, the Board of
Directors may not, without the approval of the stockholders of the Company
obtained in the manner stated in Section 19, increase the maximum number of
shares for which options may be granted or change the designation of the class
of persons eligible to receive options under the Plan, or make any other change
in the Plan which requires stockholder approval under applicable law or
regulations, including any approval requirement which is a prerequisite for
exemptive relief under Section 16 of the 1934 Act. The Board of Directors may
terminate, amend or modify any outstanding option without the consent of the
option holder, provided, however, that, except as provided in Section 12,
without the consent of the optionee, the Board of Directors shall not change the
number of shares subject to an option, nor the exercise price thereof, nor
extend the term of such option.
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21. COMPLIANCE WITH RULE 16b-3.
It is intended that the provisions of the Plan and any option granted
thereunder to a person subject to the reporting requirements of Section 16(a) of
the 1934 Act shall comply in all respects with the terms and conditions of Rule
16b-3 under the 1934 Act, or any successor provisions. Any agreement granting
options shall contain such provisions as are necessary or appropriate to assure
such compliance. To the extent that any provision hereof is found not to be in
compliance with such Rule, such provision shall be deemed to be modified so as
to be in compliance with such Rule, or if such modification is not possible,
shall be deemed to be null and void, as it relates to a recipient subject to
Section 16(a) of the 1934 Act.
22. RESERVATION OF STOCK.
The Company shall at all times during the term of the Plan reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of the Plan and shall pay all fees and expenses necessarily
incurred by the Company in connection therewith.
23. LIMITATION OF RIGHTS IN THE OPTION SHARES.
An optionee shall not be deemed for any purpose to be a stockholder of
the Company with respect to any of the options except to the extent that the
option shall have been exercised with respect thereto and, in addition, a
certificate shall have been issued theretofore and delivered to the optionee.
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24. NOTICES.
Any communication or notice required or permitted to be given under the
Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to its principal place of business,
attention: President, and, if to an optionee, to the address as appearing on the
records of the Company.
APPROVED BY BOARD OF DIRECTORS:
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APPROVED BY SHAREHOLDERS:
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