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EXHIBIT 4.1
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HAVERTY FURNITURE COMPANIES, INC.
1993 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE
The purpose of the Haverty Furniture Companies, Inc., 1993 Non-Qualified
Stock Option Plan is to encourage and enable eligible directors, officers and
key employees of Haverty Furniture Companies, Inc. (the "Company") and its
subsidiaries to acquire proprietary interests in the Company through the
ownership of Common Stock of the Company. The Company believes that directors,
officers and key employees who participate in the Plan will have a closer
identification with the Company by virtue of their ability as stockholders to
participate in the Company's growth and earnings. The Plan is also designed to
provide motivation for employee participants to continue their employment and
for all participants to give greater effort on behalf of the Company.
2. DEFINITIONS
The following words or terms shall have the following meanings:
(a) "Agreement" shall mean a non-qualified stock option agreement
between the Company and a director, officer or key employee pursuant to the
terms of this Plan.
(b) "Average Market Price" shall mean the mean between the high
"bid" and low "ask" prices as of the close of business for the Company's shares
of Common Stock in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc., Automated Quotation System (or other
national quotation service). If the Company's Common Stock is not regularly
traded in the over-the-counter market but is registered on a national securities
exchange, "Average Market Price" shall mean the closing price of the Company's
Common Stock on such national securities exchange.
(c) "Board of Directors" shall mean the Board of Directors of the
Company or the Executive Committee of such Board.
(d) "Business Day" shall mean, for the purposes of this Plan, any
day upon which regular trading occurs on the New York Stock Exchange.
(e) "Committee" shall mean the committee appointed by the Board of
Directors to administer the Plan.
(f) "Class A Common Stock" shall mean the $1.00 par value common
stock of the Company which is designated Class A Common Stock in the Sixth
Article of the Company's Articles of Incorporation.
(g) "Company" shall mean Haverty Furniture Companies, Inc., a
Maryland corporation.
(h) "Eligible Participant(s)" shall mean a person or persons who
serve in the capacity of a director, officer or key employee of the Company or
one of its subsidiaries.
(i) "Non-Employee Director" shall mean a director of the Company who
is not a regular salaried employee of the Company or one of its subsidiaries.
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(j) "Optionee" shall mean an Eligible Participant having a right to
purchase Common Stock under an Agreement.
(k) "Option" shall mean the right or rights granted to Eligible
Participants to purchase the Company's Common Stock under this Plan.
(l) "Plan" shall mean this Haverty Furniture Companies, Inc., 1993
Non-Qualified Stock Option Plan.
(m) "Shares," "Stock" or "Common Stock" shall mean shares of $1.00
par value common stock of the Company which is designated Common Stock in the
Sixth Article of the Company's Articles of Incorporation.
(n) "Subsidiary" shall mean any corporation if the Company owns or
controls, directly or indirectly, more than a majority of the voting stock of
such corporation.
3. EFFECTIVE DATE
The Effective Date of the Plan shall be the date the Plan is adopted by
the Board of Directors or the date the Plan is approved by the stockholders of
the Company, whichever is earlier. The Plan must be approved by the affirmative
vote of no less than a majority of all votes present and entitled to be voted on
the matter at a meeting of the Company's shareholders, which shareholder vote
must be taken within twelve (12) months after the date the Plan is adopted by
the Board of Directors. Such shareholder vote shall not alter the Effective
Date of the Plan. In the event shareholder approval of the adoption of the Plan
is not obtained within the aforesaid twelve (12) month period, then any Options
granted in the intervening period shall be void.
4. SHARES RESERVED FOR PLAN
The shares of the Company's Common Stock to be sold to Eligible
Participants under the Plan may at the election of the Board of Directors be
either treasury shares or shares originally issued for such purpose. The
maximum number of shares which shall be reserved and made available for sale
under the Plan shall be 500,000. Any shares subject to an Option which for any
reason expires or is terminated unexercised may again be subject to an Option
under the Plan.
In the event of a subdivision or combination of the Company's shares,
the maximum number of shares that may thereafter be issued and sold under the
Plan and the number of shares under option will be proportionately increased or
decreased, the terms relating to the price at which shares under option will be
sold will be appropriately adjusted, and such other action will be taken as in
the opinion of the Board of Directors is appropriate under the circumstances.
In case of a reclassification or other change in the Company's shares, the Board
of Directors also will make appropriate adjustments.
5. ELIGIBILITY
Options may be granted only to Eligible Participants.
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6. TERM OF THE PLAN
The Plan shall remain in effect until all shares subject or which may
become subject to the Plan shall have been purchased pursuant to Options granted
under the Plan provided that Options under the Plan must be granted within five
(5) years from the Effective Date.
7. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. The Committee shall be
comprised of not less than three (3) members appointed by the Board of Directors
of the Company from among its members. No member of such Board of Directors
shall be appointed or serve as a member of the Committee, and any such
appointment or service immediately and automatically shall terminate, in the
event that such person is, becomes, or has been within the immediately preceding
year, eligible, otherwise than as a Non-Employee Director hereunder, for the
allocation of stock or the grant of any option or stock appreciation right under
any other plan of the Company or its affiliates (as such term is defined in the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended).
Within the limitations described herein, the Committee shall administer
the Plan, select the Eligible Participants to whom Options will be granted,
determine the number of shares to be optioned to each Eligible Participant and
interpret, construe and implement the provisions of the Plan. Committee members
shall be reimbursed for out-of-pocket expenses reasonably incurred in the
administration of the Plan.
The Committee shall select one of its members as Chairman and shall hold
its meeting at such time and place, and pursuant to such rules consistent with
the Plan, as it may determine. A majority of the members of the Committee shall
constitute a quorum, and acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in writing by a majority
of the members of the Committee, shall be the acts of the Committee. The
Committee may participate in a meeting by means of conference telephone or
similar communications equipment, by means of which all persons participating in
the meeting can hear each other. Vacancies in the membership of the Committee
arising from death, resignation or other inability to serve shall be filled by
the Board of Directors.
8. NON-QUALIFIED STOCK OPTIONS
All Options granted under the Plan shall be evidenced by Agreements
approved by the Committee and shall include such terms and conditions deemed
advisable by the Committee. All Agreements shall include the following terms
and conditions:
(a) Price. The purchase price for shares purchased upon the
exercise of an Option will be the Average Market Price on the day the Option is
granted, as determined by the Committee, but in no case less than the par value
of such stock.
(b) Number of Shares. The Agreement shall specify the number of
shares which the Optionee may purchase under such Option.
(c) Exercise of Options. The shares subject to the Option may be
purchased in whole or in part by the Optionee from time to time after
shareholder approval of the Plan, but in no event later than five (5) years from
the date of the grant of the Option. No partial exercise may be less than one
hundred (100) shares of the Common Stock of the Company, or its equivalent.
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(d) Medium and Time of Payment. Stock purchased pursuant to an
Agreement shall be paid for in full at the time of purchase. Payment of the
purchase price shall be in cash or shares of the Class A Common Stock or Common
Stock of the Company, or a combination of cash and shares of the Class A Common
Stock or Common Stock of the Company. Upon receipt of payment, the Company
shall, without transfer or issue tax, deliver to the Optionee (or other person
entitled to exercise the Option) a certificate or certificates for such shares.
(e) Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to any shares covered by his or her Option until the
date of the issuance of the stock certificate to the Optionee for such shares.
Except as otherwise expressly provided in the Plan, no adjustments shall be made
for dividends or other rights for which the record date is prior to the date
such stock certificate is issued.
(f) Nonassignability of Option. No Option shall be assignable or
transferable by an Optionee except by will or by the laws of descent and
distribution. During the lifetime of an Optionee, the Option shall be
exercisable only by him or her.
(g) Effect of Termination of Employment or Death. In the event that
an Optionee ceases to be an employee or director of the Company or of any
subsidiary of the Company during his or her lifetime for any reason, including
retirement, any Option or unexercised portion thereof which was otherwise
exercisable on the date of termination of employment or directorship (the
"Termination Date") shall expire unless exercised within a period of three
months from the Termination Date, but in no event after the expiration of five
(5) years from the date the Option was granted. In the event of the death of an
Optionee during the option period, the Option shall be exercisable by his or her
legal representative, heirs or legatees within a period of twelve (12) months
from the date on which the Optionee died, but in no event after the expiration
of five (5) years from the date the Option was granted.
(h) Reorganization. In case the Company is merged or consolidated with
another corporation and the Company is not the surviving corporation, or in case
the property or stock of the Company is acquired by another corporation, or in
case of a separation, reorganization, recapitalization or liquidation of the
Company, the Board of Directors of the Company, or the Board of Directors of any
corporation assuming the obligations of the Company hereunder, shall either (i)
make appropriate provision for the protection of any outstanding Options by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to the shares of Common Stock of the Company, provided only
that the excess of the aggregate fair market value of the shares subject to
option immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market value of shares subject to
option immediately before such substitution over the purchase price thereof, or
(ii) upon written notice to the Eligible Participant provide that the Option
must be exercised within sixty (60) days of the date of such notice or it will
be terminated.
(i) General Restriction. Each Option shall be subject to the
requirement that if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to such Option upon any securities exchange or under any state or
federal law, or the consent or approval of any government regulatory body is
necessary or desirable as a condition of, or in connection with, the granting of
such Option or the issue or purchase of shares thereunder, such Option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Board of Directors.
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9. NON-EMPLOYEE DIRECTOR PARTICIPATION
The participation and eligibility of Non-Employee Directors of the
Company shall be limited exclusively to the following:
On the last Business Day of October in each year during the term of this
Plan, each then Non-Employee Director of the Company shall be granted, without
the necessity of action by the Committee, an Option hereunder to purchase 3,000
shares of Common Stock at the Average Market Price of such stock on the date of
grant.
Such options granted under this Plan shall be exercisable commencing on
the date of grant or, with respect to any option granted prior to shareholder
approval of the Plan, upon such shareholder approval, and thereafter until the
earlier of the following: (i) the date which is the fifth anniversary of the
date of grant; (ii) the date which is three calendar months following the date
upon which such Non-Employee Director ceases to be a director of the Company
otherwise than by reason of death; or (iii) the date which is the first
anniversary of the date on which such Non-Employee Director ceases to be a
director of the Company as a result of his or her death.
In all other respects, options granted to Non-Employee Directors
hereunder shall conform to the terms of this Plan and no Non-Employee Director
shall be eligible to receive options hereunder except as provided in this
Section 9.
10. AMENDMENT TO THE PLAN
The Plan may at any time or from time to time be terminated, modified or
amended by the affirmative vote of no less than a majority of all votes present
and entitled to be voted on the matter at a meeting of the Company's
shareholders. The Board of Directors may at any time and from time to time
terminate, modify or amend the Plan in any respect, except that without
shareholder approval the Board of Directors may not (i) increase the maximum
number of shares for which Options may be granted under the Plan either in the
aggregate or to any Eligible Participant (other than increases due to changes in
capitalization as referred to in Section 4 hereof), or (ii) change the class of
persons eligible for non-qualified stock options under Section 5 hereof, or
(iii) otherwise materially modify (within the meaning of Rule 16(b)-3 of the
Securities Exchange Act of 1934, as amended) the requirements as to eligibility
for participation in the Plan, or (iv) otherwise materially increase (within the
meaning of Rule 16(b)-3 of the Securities Exchange Act of 1934, as amended) the
benefits accruing to participants under the Plan. The termination or any
modification or amendment of the Plan shall not, without the consent of an
Optionee, affect his or her rights under an Option previously granted to him or
her. With the consent of the Optionee affected, the Committee may amend
outstanding option Agreements in a manner not inconsistent with the Plan.
11. BINDING EFFECT
All decisions of the Board of Directors or the Committee involving the
implementation, administration or operation of the Plan or any offering under
the Plan shall be binding on the Company, all Eligible Participants
participating in the Plan, and all persons eligible or who become eligible to
participate in the Plan.
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