EXHIBIT 10.10
BLUE RHINO CORPORATION
AMENDED AND RESTATED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
(AS AMENDED AND RESTATED THROUGH FEBRUARY 21, 2003)
BLUE RHINO CORPORATION
AMENDED AND RESTATED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
(AS AMENDED AND RESTATED THROUGH FEBRUARY 21, 2003)
This Amended and Restated Stock Option Plan for Non-Employee Directors
amends and restates in its entirety as of February 21, 2003, that certain Stock
Option Plan for Non-Employee Directors of Blue Rhino Corporation, which was
originally effective on May 18, 1998 and previously amended and restated as of
December 30, 1998, May 17, 2001 and October 31, 2001.
SECTION 1. PURPOSE. The purpose of the Stock Option Plan for
Non-Employee Directors (the "Plan") is to attract and retain persons of
exceptional ability to serve as members of the Board of Directors of Blue Rhino
Corporation (the "Company"), and to align the interests of the Company's
non-employee directors with that of the stockholders in enhancing the value of
the Company's capital stock. This purpose will be carried out through the
granting of nonqualified stock options (individually, an "option," and
collectively, "options") to eligible non-employee directors of the Company.
SECTION 2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of
Directors of the Company (the "Board" or the "Board of Directors"),
unless the Board delegates all or part of its discretion to administer
the Plan to the Compensation Committee of the Board or such successor
committee of the Board that is designated by the Board to administer
the Plan (collectively, the "Committee"). The Committee shall be
comprised of such number of "non-employee directors," as such term is
defined in Rule 16b-3 adopted under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as may be necessary to comply
with Rule 16b-3, unless otherwise determined by the Board. For the
purposes herein, the Board, and, upon delegation of authority to the
Committee, the Committee, shall be referred to herein collectively as
the "Administrator."
(b) Any action of the Administrator may be taken by a
written instrument signed by all of the members of the Board or the
Committee, as the case may be, and any action so taken by written
consent shall be as fully effective as if it had been taken by a
majority of the members at a meeting duly held and called. Subject to
the provisions of the Plan, the Administrator shall have full and final
authority, in its discretion, to establish, amend and rescind rules and
regulations for the administration of the Plan; to construe and
interpret the Plan, the rules and regulations, and the agreements
evidencing options granted under the Plan; and to make all other
determinations deemed necessary or advisable for administering the
Plan. Notwithstanding any other provision herein, (i) the Administrator
also shall have authority, in its discretion, to accelerate the date
that any option which was not otherwise exercisable or vested shall
become exercisable or vested in whole or in part, and (ii) the
Administrator shall also have authority, in its discretion, to extend
the period during which an option may be exercised. To the extent, if
any,
necessary to comply with Rule 16b-3, provisions in SECTION 6 of the
Plan relating to the grant of options following the annual meeting of
stockholders of the Company, and the amount, price and timing of such
options, shall not be subject to the discretion of the Administrator or
any other person. No member of the Administrator shall be liable for
any action or determination made in good faith with respect to the
Plan. The Administrator may delegate to an officer or officers of the
Company the authorization to execute and deliver on behalf of the
Company any document or instrument required to be delivered under this
Plan.
SECTION 3. TYPE OF OPTIONS. Options granted pursuant to the Plan
shall be nonstatutory options which are not intended to meet the requirements of
SECTION 422 of the Internal Revenue Code of 1986, as amended (the "Code").
SECTION 4. ELIGIBILITY. Directors of the Company who, at the
time of grant, are not employees or officers of the Company ("Eligible
Directors") shall be eligible to participate in the Plan. Each Eligible Director
to whom options are granted shall be referred to herein as a "Participant" in
the Plan.
SECTION 5. SHARES AVAILABLE UNDER THE PLAN. Subject to
adjustment as provided in SECTION 10 below, an aggregate of 400,000 shares of
the Company's Common Stock, par value $0.001 (the "Common Stock"), shall be
available for issuance pursuant to the provisions of the Plan. Such shares may
be authorized and unissued shares or may be shares issued and thereafter
acquired by the Company. If an option granted under the Plan shall expire or
terminate for any reason without having been exercised in whole or in part, the
unpurchased shares subject to such option shall again be available for
subsequent option grants under the Plan.
SECTION 6. AUTOMATIC GRANT OF OPTIONS.
(a) Annual Grants.
(i) On December 30, 1998 each Eligible Director
shall receive an option to purchase 8,000 shares of Common
Stock. During the period commencing with the first annual
meeting of stockholders to occur after December 30, 1998 and
ending October 30, 2001, each Eligible Director of the Company
shall receive an annual option grant to purchase 4,000 shares
of Common Stock. Commencing October 31, 2001, and thereafter,
each Eligible Director shall receive an annual option grant to
purchase 12,000 shares of Common Stock. Except as provided in
SECTION 6(b), the date of grant of an option (the "Grant
Date") shall be December 30, 1998 with respect to the options
granted on that date and the first business day after each
subsequent annual meeting of the stockholders with respect to
the options granted on such subsequent dates.
(ii) Notwithstanding the provisions of SECTION
6(a) herein, in the event that a Participant fails to attend
four Board meetings between the Grant Date and the date of the
next annual meeting of the stockholders of the Company,
2
the Participant shall forfeit options to purchase one-fourth
(1/4) of the shares subject to the particular option for each
meeting less than four which the Participant attends during
such period; provided, however, that in the event the
Participant fails to attend at least two Board meetings
between the Grant Date and the date of the next annual
meeting, the Participant shall forfeit all options granted to
him or her on the previous Grant Date under this SECTION 6(a).
Participation by conference telephone or by other
telecommunications equipment will be deemed attendance at a
Board meeting for the purpose of receiving options under this
SECTION 6(a).
(b) Committee Meeting Grants. Commencing with the date of
the 2001 Annual Meeting of Stockholders, and thereafter, each Eligible Director
who serves on the Board's Executive Committee, Audit Committee and/or
Compensation Committee (each, a "Committee"), shall receive an option for 1,000
shares of Common Stock for each meeting of the respective Committee(s) on which
the Eligible Director serves at which such Eligible Director is in attendance.
The last business day of each of the Company's fiscal quarters shall be a Grant
Date for options under this SECTION 6(b), and, on each such Grant Date, an
option shall be granted to each Eligible Director who served on a Committee at
any time during the quarter then ending based on the number of Committee
meetings attended by such Eligible Director during such quarter. Participation
by telephone conference or by other telecommunications equipment will be deemed
attendance at a Committee meeting for the purpose of receiving options under
this SECTION 6(b). Options granted pursuant to SECTION 6(b) shall not be subject
to the forfeiture provisions of SECTION 6(a)(ii).
SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
7.1 Exercise and Term of Options.
(a) Each option granted under the Plan shall be
exercisable at the rate of one-third (1/3) per year commencing on the
first anniversary of the Grant Date, such that the option shall become
exercisable in full on the third anniversary of each Grant Date,
subject to the provisions of SECTION 7.1(b) and SECTION 9 hereof.
Options granted under the Plan shall expire ten years from the date on
which the option is granted, unless terminated earlier in accordance
with the Plan.
(b) Notwithstanding the provisions of SECTION 7.1(a)
above, an option granted to any Participant shall become immediately
exercisable in full upon the first to occur of:
(i) The death of the Participant, in which case
the option may be exercised by the Participant's executor or
administrator, or if not so exercised, by the legatees or
distributees of his or her estate or by such other person or
persons to whom the Participant's rights under the option
shall pass by will or by the applicable laws of descent and
distribution;
3
(ii) Such time as the Participant ceases to be a
director of the Company by reason of his or her permanent
disability (as determined by the Administrator);
(iii) Such time as the Participant ceases to be a
director of the Company as a result of retirement from the
Board of Directors on or after attaining age 65; or
(iv) Such time as a Participant ceases to be
eligible to participate in this Plan by reason of his or her
becoming an employee of the Company or any of its
subsidiaries.
(c) In the event a Participant ceases to be a director of
the Company by reason of death as described in SECTION 7.1(b)(i), any
option granted to such Participant hereunder shall expire 90 days from
the date the Participant ceases to be a director of the Company, but in
no event later than the day preceding the tenth anniversary of the
Grant Date of such option.
(d) In the event that the Participant ceases to be a
director of the Company due to disability, retirement or becoming an
employee of the Company or a subsidiary as described in SECTIONS
7.1(b)(ii) through (iv), and after his or her option has become
exercisable in whole or in part, such option shall remain exercisable
in whole or in part, as the case may be, in accordance with the terms
hereof for a period of 30 days from the date the Participant ceases to
be a director, but in no event later than the day preceding the tenth
anniversary of the Grant Date of such option.
(e) In the event that the services of a Participant as a
director of the Company terminate for a reason other than due to death,
disability, retirement or becoming an employee of the Company as
provided in SECTION 7.1(b)(i) through (iv) above, then his options
shall terminate at the time of his termination of service; provided,
however, that no portion of the option may be exercised later than the
day preceding the tenth anniversary of the Grant Date of such option.
7.2 Exercise Price. The exercise price of each share of Common
Stock subject to an option shall be the "Fair Market Value" of a share of Common
Stock on the Grant Date of the option. "Fair Market Value" means the value
determined on the basis of the good faith determination of the Administrator,
without regard to whether the Common Stock is restricted or represents a
minority interest, pursuant to the applicable method described below:
(a) If the Common Stock is listed on a national
securities exchange or quoted on The NASDAQ Stock Market ("NASDAQ"),
the "Fair Market Value" shall be the closing price per share of the
Common Stock on the date on which the option is granted or other
determination is made (each, a "valuation date") or the most recent
trading date preceding the valuation date for which such information is
available, as reported by the principal national exchange on which such
shares are traded (in the case of an exchange) or by the NASDAQ, as the
case may be;
4
(b) If the Common Stock is not listed on a national
securities exchange or quoted on the NASDAQ, but is actively traded in
the over-the-counter market, the "Fair Market Value" shall be the
average of the closing bid and asked prices for the Common Stock on the
valuation date, or the most recent trading date preceding the valuation
date for which such quotations are reported; and
(c) If, on the relevant date, the Common Stock is not
publicly traded or reported as described in SECTION 7.2(a) or (b)
herein, the "Fair Market Value" shall be determined in good faith by
the Administrator.
7.3 Payment of Exercise Price; Tax Withholding.
(a) Subject to the terms and conditions of the Plan, an
option granted hereunder shall, to the extent then exercisable, be
exercisable in whole or in part by giving written notice to the
Company's Secretary stating the number of shares with respect to which
the option is being exercised, accompanied by payment in full for such
shares.
(b) An option may be exercised by providing payment (i)
in cash or check and (ii) if approved by the Administrator, payment in
full or in part may also be made (A) by delivering Common Stock already
owned by the Participant having a total Fair Market Value on the date
of such delivery equal to the Option Price; (B) by authorizing the
Company to retain shares of Common Stock which would otherwise be
issuable upon exercise of the Option having a total Fair Market Value
on the date of delivery equal to the Option Price; (C) by the delivery
of cash by a broker-dealer to whom the Participant has submitted a
notice of exercise (in accordance with Part 220, Chapter II, Title 12
of the Code of Federal Regulations, so-called "cashless" exercise); or
(D) by any combination of the foregoing. No shares of Common Stock will
be issued until full payment therefor has been made.
(c) The Participant shall pay the Company an amount
sufficient to cover withholding required by law for any federal, state,
local or foreign taxes, if any, in connection with an exercise of
options herewith. A Participant may elect in lieu of paying cash to
deliver shares of Common Stock or direct the Company that shares of
Common Stock be withheld to satisfy required tax withholding and such
shares shall be valued at the Fair Market Value as of the exercise date
and the Administrator shall determine the timing and other terms and
conditions in which the use of shares of Common Stock to satisfy tax
withholding may take place.
7.4 Rights as a Stockholder. No person will have any rights of a
stockholder as to shares of Common Stock subject to an option until, after
proper exercise of the option or other action required, such shares have been
recorded on the Company's official stockholder records as having been issued or
transferred. Upon exercise of the option or any portion thereof, the Company
will have thirty (30) days in which to issue the shares, and the Participant
will not be treated as a stockholder for any purpose whatsoever prior to such
issuance. No adjustment will be made for cash dividends or other rights for
which the record date is prior to the date such
5
shares are recorded as issued or transferred in the Company's official
stockholder records, except as provided herein or in an option agreement.
7.5 Documentation of Option Grants. Option grants shall be
evidenced by written instruments prescribed by the Administrator from time to
time. The instruments may be in the form of agreements to be executed by both
the Participant and the president or any vice president of the Company or in the
form of certificates, letters or similar instruments, which need not be executed
by the Participant but acceptance of which will evidence agreement to the terms
of the grant.
7.6 Nontransferability of Options. Except as otherwise provided in
this SECTION 7.6, no option granted under the Plan shall be assignable or
transferable by the Participant to whom it is granted, either voluntarily or by
operation of law, except (a) by will or the laws of descent and distribution or
(b) to the extent permitted by the Administrator in a manner consistent with the
registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), during the lifetime of the Participant, to (i) the spouse or
lineal descendants of the Participant ("Immediate Family Members"), (ii) a trust
or trusts maintained for the exclusive benefit of the Participant and/or such
Immediate Family Members, or (iii) a limited partnership or limited liability
company in which the only partners or members are the Participant and/or such
Immediate Family Members, formed for estate planning purposes; provided, that
(y) the stock option agreement or any amendment thereto executed by the
Administrator pursuant to which such option is granted must expressly provide
for the transferability in a manner consistent with this SECTION, and (z)
subsequent transfers of a transferred option shall be prohibited (except as
otherwise provided in this SECTION 7.6), and except that distributions may be
made to the Participant and/or such Immediate Family members from trusts, family
limited partnerships or family limited liability companies described herein).
Following a transfer permitted herein, any such option shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided, that for the purposes of SECTIONS 7.3 and 7.4 of this Plan,
the term "Participant" shall be deemed to refer to the permitted transferee with
respect of the options so transferred. The events contained in SECTIONS 7.1(b),
7.1(c) 7.1(d) and 7.1(e) shall continue to be applied with respect to the
original Participant, and transferred options shall expire at or after the date
the original Participant ceases to be a director of the Company as provided in
SECTIONS 7.1(c), 7.1(d) and 7.1(e) and shall otherwise be exercisable by the
transferee only to the extent and for the periods specified in SECTIONS 7.1 and
7.3.
7.7 Approvals. The effectiveness of the Plan and any options
granted hereunder are subject to the approval of the Plan by affirmative vote of
a majority of the shares of the Common Stock present in person or by proxy and
entitled to vote at an annual or special meeting of the stockholders or by
written consent as provided in the Company's charter or by-laws. In the event
that the Plan is not approved by the stockholders, the Plan and any options
granted hereunder shall be void as of no effect.
The Company's obligation to sell and deliver shares of Common Stock
under the Plan is subject to the approval of any governmental authority required
in connection with the authorization, issuance or sale of the Common Stock.
6
SECTION 8. REGULATORY COMPLIANCE AND LISTING. The issuance or
delivery of any shares of stock subject to exercisable options hereunder may be
postponed by the Administrator for such period as may be required to comply with
any applicable requirements under federal securities laws, any applicable
listing requirements of any national securities exchange or similar organization
or any requirements under any law or regulation applicable to the issuance or
delivery of such shares. The Company shall not be obligated to issue or deliver
any such shares if the issuance or delivery thereof would constitute a violation
of any provision of any law or of any regulation of any governmental authority
or any rule of any national securities exchange or similar organization.
SECTION 9. CHANGE IN CONTROL. Notwithstanding anything to the
contrary in the Plan, the following shall apply to all outstanding options
granted under the Plan:
9.1 Definitions. The following definitions shall apply to this
SECTION 9:
(a) A "Change in Control" shall mean:
(i) The acquisition by any individual entity or
group (within the meaning of SECTION 13(d)(3) or 14(d)(2) of
the 1934 Act) or beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the 1934 Act) of 50% or more of
the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change of Control: (A) any acquisition directly
from the Company or any of its subsidiaries, (B) any
acquisition by the Company or any of its subsidiaries, (C) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its
subsidiaries, (D) any acquisition by any corporation with
respect to which, following such acquisition, more than 50%
of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by individuals,
entities or groups who were the beneficial owners,
respectively, of at least 50% of the Outstanding Voting
Securities immediately prior to such acquisition in
substantially the same proportions as their ownership,
immediately prior to such acquisition, of the Outstanding
Voting Securities, or (E) the acquisition by any individual,
entity or group which on the date this Plan was adopted by the
Board owned 50% or more of the Outstanding Voting Securities.
(ii) Approval by the stockholders of the Company
of a reorganization, merger or consolidation, in each case,
with respect to which all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Voting Securities immediately
prior to such reorganization, merger or consolidation do not,
following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 50% of the
combined voting
7
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such reorganization,
merger or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization,
merger or consolidation, of the Outstanding Voting Securities;
or
(iii) Approval by the stockholders of the Company
of (A) a complete liquidation or dissolution of the Company or
(B) the sale or other disposition of all or substantially all
of the assets of the Company other than to a corporation, with
respect to which following such sale or other disposition,
more than 50% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power
for the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Voting
Securities immediately prior to such sale or other disposition
in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Voting Securities.
(b) "CIC Price" shall mean the higher of (i) the highest
price paid for a share of Common Stock in the transaction or series of
transactions pursuant to which a Change in Control of the Company shall
have occurred, or (ii) the highest reported sales price of a share of
Common Stock during the 60-day period immediately preceding the date
upon which the event constituting a Change in Control shall have
occurred.
9.2 Acceleration of Vesting and Payment of Stock Options.
(a) Upon the occurrence of an event constituting a Change
in Control, all options outstanding on such date shall become 100%
vested and exercisable and shall be repurchased by the Company by
making a cash payment to the Participant for such options as soon as
may be practicable. Upon such payment, such stock options shall be
canceled.
(b) The amount of cash to be paid to a Participant shall
be determined by multiplying the number of shares subject to the
Participant's outstanding options by the difference between the
exercise price per share and the CIC Price, if higher.
(c) Notwithstanding SECTION 9.2(a) and 9.2(b) herein, if
the exercise price of options held by a Participant exceeds the CIC
Price or the Fair Market Value on the date on which the first event
constituting a Change in Control (as defined in SECTION 9.1 herein)
occurs, as the case may be, such option shall be 100% vested and
exercisable but shall not be canceled.
SECTION 10. ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION.
In the event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capitalization, or other
distribution with respect to holders of the
8
Common Stock (other than normal cash dividends), automatic adjustment shall be
made in the number and kind of shares as to which outstanding options or
portions thereof then unexercised shall be exercisable and in the available
shares set forth in SECTION 5 hereof, to the end that the proportionate interest
of the option holder 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. Automatic adjustment
shall also be made in the number and kind of shares subject to options
subsequently granted under the Plan.
SECTION 11. NO RIGHT TO REELECTION. Nothing in the Plan shall be
deemed to create any obligation on the part of the Board to nominate any
non-employee director for reelection by the Company's stockholders, nor confer
upon any non-employee director the right to remain a member of the Board for any
period of time or at any particular rate of compensation.
SECTION 12. AMENDMENT AND TERMINATION.
(a) The Board may amend, modify or terminate the Plan at
any time and from time to time; provided, however, that unless required
by law, no such amendment or modification shall (i) materially
adversely affect any right or obligation with respect to any
outstanding option without the consent of the holder of the option, or
(ii) unless previously approved by the stockholders, increase the
number of shares of Common Stock available for grants as provided in
SECTION 5 hereof other than an adjustment pursuant to SECTION 10
hereof. In addition, no such amendment shall, unless previously
approved by the stockholders (where such approval is necessary to
satisfy then applicable requirements of federal securities laws, the
Code or rules of any stock exchange on which the Company's Common Stock
is listed) (i) in any manner affect the eligibility requirements set
forth in SECTION 4 hereof, (ii) increase the number of shares of Common
Stock subject to any option, (iii) change the purchase price of the
shares of Common Stock subject to any option, (iv) extend the period
during which options may be granted under the Plan, or (v) materially
increase the benefits to Participants under the Plan.
(b) Unless earlier terminated by the Board of Directors,
or the shares reserved under the Plan shall have all been committed for
options granted pursuant to the Plan, the Plan shall terminate on
December 31, 2008; provided, however, that options which are granted on
or before this date shall remain exercisable in accordance with their
respective terms after the termination of the Plan.
SECTION 13. SUCCESSORS AND ASSIGNS. The Plan shall be binding on
all successors and permitted assigns of a Participant, including but not limited
to, the estate of such Participant and the executor, administrator or trustee of
such estate, the guardian or legal representative of the Participant.
SECTION 14. GOVERNING LAW. The validity, construction and effect
of the Plan and any action taken or relating to the Plan shall be determined in
accordance with the laws of
9
the State of Delaware, without regard to the principles of conflicts of laws,
and applicable federal law.
SECTION 15. SECTION 16(B) COMPLIANCE. It is the intention of the
Company that transactions by Eligible Directors under the Plan shall comply with
Rule 16b-3 under the Exchange Act. If any Plan provision is later found not to
be in compliance with SECTION 16 of the Exchange Act, then, unless the
Administrator shall determine otherwise, the provision shall be deemed null and
void or otherwise construed in such a manner as to enable transactions under the
Plan to meet the requirements of Rule 16b-3 or any successor rule.
10
IN WITNESS WHEREOF, this Amended and Restated Stock Option Plan for
Non-Employee Directors, as further amended and restated effective as of February
21, 2003, has been executed in behalf of the Company.
BLUE RHINO CORPORATION
By: /S/ BILLY D. PRIM
-----------------------------------------
Billy D. Prim
President and Chief Executive Officer
Attest:
/s/ Mark Castaneda
- ---------------------------------
Mark Castaneda
Secretary
[Corporate Seal]
11