EXHIBIT 10.13
RUSSELL-STANLEY HOLDINGS, INC.
1998 STOCK OPTION PLAN
Russell-Stanley Holdings, Inc., a Delaware corporation
(together with its successors, the "Company"), hereby adopts this Stock Option
Plan for Employees (as defined below) of the Company and its affiliates. The
purposes of this Plan are as follows:
(i) To further the growth, development and financial success
of the Company by providing additional incentives to certain of its Employees,
by assisting them to become owners of capital stock of the Company and thus to
benefit directly from its growth, development and financial success.
(ii) To enable the Company to obtain and retain the services
of Employees considered essential to the long range success of the Company by
providing and offering them an opportunity to become owners of capital stock of
the Company under Options.
ARTICLE 1
DEFINITIONS
Section 1.1 - General. Whenever the following terms are used
in this Plan they shall have the meaning specified below unless the context
clearly indicates to the contrary.
Section 1.2 - Board. "Board" shall mean the Board of
Directors of the Company.
Section 1.3 - Code. "Code" shall mean the Internal Revenue
Code of 1986, as amended.
Section 1.4 - Committee. "Committee" shall mean the
Compensation Committee of the Board determined as provided in Section 6.1.
Section 1.5 - Common Stock. "Common Stock" shall mean the
common stock, par value $0.01 per share, of the Company.
Section 1.6 - Common Stock Equivalents. "Common Stock
Equivalents" shall mean any stock, warrants, rights, calls, options or other
securities exchangeable or exercisable for or convertible into Common Stock.
2
Section 1.7 - Employee. "Employee" shall mean any employee
(as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Code) of the Company or an affiliate,
whether such employee is so employed at the time this Plan is adopted or becomes
so employed subsequent to the adoption of this Plan.
Section 1.8 - Grant Date. "Grant Date" shall mean the date on
which an Option is granted under the Plan.
Section 1.9 - Option. "Option" shall mean an option granted
under the Plan to purchase Common Stock. Options include only options which are
not intended to be "incentive stock options" under Section 422 of the Code.
Section 1.10 - Option Price. "Option Price" shall have the
meaning given in Section 4.2.
Section 1.11 - Optionee. "Optionee" shall mean an Employee to
whom an Option is granted under the Plan.
Section 1.12 - Permitted Transferee. "Permitted Transferee"
shall have the meaning set forth in the Option Agreement.
Section 1.13 - Plan. "Plan" shall mean the Company 1998 Stock
Option Plan.
Section 1.14 - Pronouns. The masculine pronoun shall include
the feminine and neuter and the singular shall include the plural, where the
context so indicates.
Section 1.15 - Secretary. "Secretary" shall mean the
Secretary of the Company.
Section 1.16 - Stock Option Agreement. "Stock Option
Agreement" shall mean any agreement between the Optionee and the Company
providing for the granting of an Option.
Section 1.17 - Termination of Employment. "Termination of
Employment" shall mean the time when the Optionee's employment with the Company
is terminated for any reason whatsoever. The Board, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination
of Employment, including, but not by way of limitation, all questions of whether
particular leaves of absence constitute Terminations of Employment and the
question of whether any reemployment by or renewal of service for the Company is
simultaneous with termination.
3
ARTICLE II
SHARES SUBJECT TO PLAN
Section 2.1 - Shares Subject to Plan. The shares of capital
stock subject to Options shall be shares of Common Stock of the Company. The
aggregate number of shares of Common Stock which may be issued upon exercise of
Options under the Plan shall not exceed 120,000.
Section 2.2 - Unexercised Options. If any Option expires or
is canceled without having been fully exercised the number of shares subject to
such Option but as to which such Option was not exercised prior to its
expiration or cancellation may again be optioned hereunder, subject to the
limitations of Section 2.1.
Section 2.3 - Changes in Common Stock. If the outstanding
shares of Common Stock are hereafter changed into or exchanged for a different
number or kind of shares of capital stock or other securities of the Company, or
of another corporation, by reason of a reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend, combination
of shares or otherwise, appropriate adjustments shall be made by the Committee
in the number and kind of shares for the purchase of which Options may be
granted, including adjustment of the limitations of Section 2.1 on the maximum
number and kind of shares which may be issued upon exercise of Options.
ARTICLE III
GRANTING OF OPTIONS
Section 3.1 - Eligibility. Any Employee shall be eligible to
be granted Options.
Section 3.2 - Granting of Options. The Committee shall from
time to time, in its absolute discretion:
(1) determine which Employees shall be granted Options under
the Plan; and
(2) determine the number of shares to be subject to such
Options granted to such Employees; and
(3) determine the terms and conditions of such Options,
consistent with the Plan; and
(4) establish such conditions as to the manner of exercise of
such Options as it may deem necessary, including but not
limited to requiring Optionees to enter into agreements
regarding transferability and other restrictions with respect
to shares issuable
4
upon exercise of such Options.
ARTICLE IV
TERMS OF OPTIONS
Section 4.1 - Option Agreement. Each Option shall be
evidenced by a written Stock Option Agreement, which shall be executed by the
Optionee and an authorized officer of the Company, and which shall contain such
terms and conditions as the Committee shall determine, consistent with the Plan.
Section 4.2 - Option Price. The price per share of the Common
Stock subject to each Option shall be set by the Committee on the Grant Date and
may be at, above or below the fair market value (but not below par value) of a
share of Common Stock.
Section 4.3- Commencement of Exercisability. Subject to the
provisions of Section 7.2, Options shall become exercisable at such times and in
such installments (which may be cumulative) as the Committee shall provide in
the terms of each individual Stock Option Agreement; provided, however, that by
a resolution adopted after an Option is granted the Committee may, on such terms
and conditions as it may determine to be appropriate and subject to Section 7.2,
accelerate the time at which such Option or any portion thereof may be
exercised.
Section 4.4 - Expiration of Options. The Committee shall
provide, in the terms of each individual Stock Option Agreement, when such
Option expires and becomes unexercisable, except that no Option may be exercised
to any extent by anyone after, and every Option shall expire no later than, the
expiration of ten (10) years and one (1) day from the Grant Date.
Section 4.5 - Adjustments in Outstanding Options. If the
outstanding shares of Common Stock subject to Options are, from time to time,
changed into or exchanged for a different number or kind of shares of capital
stock or other securities of the Company, or of another corporation, by reason
of a reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, stock dividend, combination of shares or otherwise, the
Committee shall make an appropriate adjustment in the aggregate number and kind
of shares which may be issued pursuant to Section 2.1 hereof and the number and
kind of shares as to which all outstanding Options, or portions thereof then
unexercised, shall be exercisable. Such adjustment in an outstanding Option
shall be made without change in the total price applicable to the Option or the
unexercised portion of the Option (except for any change in the aggregate price
resulting from rounding-off of share quantities or prices) and with any
necessary corresponding adjustment in Option Price per share.
5
Section 4.6 - Merger, Consolidation, Exchange, Acquisition,
Liquidation or Dissolution. In its absolute discretion, and on such terms and
conditions as it deems appropriate, coincident with or after the grant of any
Option, the Committee may provide by the terms of any Option that such Option
cannot be exercised after the merger or consolidation of the Company into
another corporation, the exchange of all or substantially all of the assets of
the Company for the securities of another corporation, the acquisition by
another corporation of 80% or more of the Company's then outstanding shares of
voting stock or the liquidation or dissolution of the Company, and if the
Committee so provides, it will also provide either by the terms of such Option
or by a resolution adopted prior to the occurrence of such merger,
consolidation, exchange, acquisition, liquidation or dissolution, that, for ten
business days prior to such event, such Option shall be exercisable as to all
shares subject thereto, notwithstanding anything to the contrary in Section 4.3
or in any installment provisions of such Option (but subject to the provisions
of Section 4.4) and that, upon the occurrence of such event, such Option shall
terminate and be of no further force or effect; provided, however, that the
Committee may also provide, in its absolute discretion, that even if the Option
shall remain exercisable after any such event, from and after such event, any
such Option shall be exercisable only for the kind and amount of securities and
other property (including cash), or the cash equivalent thereof, receivable as a
result of such event by the holder of a number of shares of stock for which such
Option could have been exercised immediately prior to such event.
ARTICLE V
EXERCISE OF OPTIONS
Section 5.1 - Persons Eligible to Exercise. During the
lifetime of the Optionee, only he or his guardian may exercise an Option granted
to him, or any portion thereof. After the death of the Optionee, any exercisable
portion of an Option may, prior to the time when such portion becomes
unexercisable under Section 4.4 or Section 4.6, be exercised by his personal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.
Section 5.2 - Partial Exercise. At any time and from time to
time prior to the time when any exercisable Option or exercisable portion
thereof expires or becomes unexercisable under Section 4.4 or Section 4.6, such
Option or portion thereof may be exercised in whole or in part; provided,
however, that the Company shall not be required to issue fractional shares and
the Committee may, by the terms of any Option, require any partial exercise to
be with respect to a specified minimum number of shares.
Section 5.3- Manner of Exercise. An exercisable Option, or
any exercisable portion thereof, may be exercised solely by delivery to the
Secretary or his office of all of the following prior to the time when such
Option or such portion becomes unexercisable under Section 4.4 or Section 4.6:
6
(1) Notice in writing signed by the Optionee or other person
then entitled to exercise such Option or portion thereof,
stating that such Option or portion thereof is exercised; and
(2) Full payment of the Option Price (in cash or by check)
for the shares with respect to which such Option or portion
thereof is thereby exercised, together with payment or
arrangement for payment of any federal income or other tax
required to be withheld by the Company with respect to such
shares; and
(3) Such representations and documents as the Committee
reasonably deems necessary or advisable to effect compliance
with all applicable provisions of the Securities Act of 1933,
as amended, and any other federal, state or foreign
securities laws or regulations. The Committee may, in its
absolute discretion, also take whatever additional actions it
deems appropriate to effect such compliance, including,
without limitation, placing legends on share certificates,
issuing stop-transfer orders to transfer agents and
registrars and requiring execution of an agreement as
described in Section 5.5 hereof; and
(4) In the event that the Option or portion thereof shall be
exercised pursuant to Section 5.1 by any person or persons
other than the Optionee, appropriate proof of the right of
such person or persons to exercise the Option or portion
thereof.
Section 5.4- Rights as Stockholders. The holders of Options
shall not be, nor have any of the rights or privileges of, stockholders of the
Company in respect of any shares purchasable upon the exercise of any part of an
Option unless and until certificates representing such shares have been issued
by the Company to such holders and the Company agrees to issue any such
certificates on a timely basis.
Section 5.5- Transfer Restrictions. The transferability of
the shares of Common Stock purchasable upon the exercise of any part of an
Option shall be subject to the restrictions which are set forth in the Stock
Option Agreement, any agreement referred to in Section 7.3 and any agreement
referenced in any thereof.
ARTICLE VI
ADMINISTRATION
Section 6.1 - Committee. The Committee, when appointed by the
Board, shall consist of at least three Directors and shall serve at the pleasure
of the Board. Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee shall be
filled by the Board. In the event that the Board does not specifically appoint a
Committee hereunder, the Board shall be deemed to be the Committee for purposes
of administration of the Plan and all references herein to the Committee shall
be deemed to be references to the Board acting with respect to the Plan in lieu
of the Committee.
7
Section 6.2- Duties and Powers of Committee. It shall be the
duty of the Committee to conduct the general administration of the Plan in
accordance with its provisions. The Committee shall have the power to interpret
the Plan and to adopt such rules for the administration, interpretation, and
application of the Plan as are consistent herewith and to interpret, amend or
revoke any such rules. Any such interpretations and rules shall be consistent
with the basic purpose of the Plan to grant Options. The Board may, in its
absolute discretion, at any time and from time to time, exercise any and all
rights and duties of the Committee under the Plan.
Section 6.3- Majority Rule. The Committee shall act by a
majority of its members in office and the Committee may act either by vote at a
telephonic or other meeting or by a memorandum or other written instrument
signed by a majority of the Committee.
Section 6.4- Compensation; Professional Assistance; Good
Faith Actions. Members of the Committee shall not receive compensation for their
services as members, but all expenses and liabilities they incur in connection
with the administration of the Plan shall be borne by the Company. The Committee
may employ attorneys, consultants, accountants, appraisers, brokers or other
persons in connection with the administration of the Plan. The Committee, the
Company and the officers and directors of the Company shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the Committee in good faith
shall be final and binding upon all Employees, the Company and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan, and all members of the Committee shall be fully protected by the
Company in respect to any such action, determination or interpretation.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1 - Options Not Transferable. No Option or interest
or right therein shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means, whether such
disposition be voluntary or involuntary or by operation of law or by judgment,
levy, attachment, garnishment or any other legal or equitable proceeding
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that nothing in this Section 7.1 shall
prevent transfers otherwise permitted by any Stock Option Agreement, by will or
by the applicable laws of descent and distribution.
8
Section 7.2 - Amendment, Suspension or Termination of the
Plan. The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board. However,
without approval of the Company's stockholders given within 12 months before or
after the action by the Committee, no action of the Committee or the Board may,
except as provided in Section 2.3, increase any limit imposed in Section 2.1 on
the maximum number of shares which may be issued upon exercise of Options or
extend the limit imposed in this Section 7.2 on the period during which Options
may be granted. Neither the amendment, suspension nor termination of the Plan
shall, without the consent of the Employee, alter or impair any rights or
obligations under any Option theretofore granted. No Option may be granted
during any period of suspension nor after termination of the Plan, and in no
event may any Option be granted under this Plan after the expiration of ten
years from the date the Plan is adopted or the date the stockholders of the
Company approve this Plan, if earlier.
Section 7.3- Securityholder Agreements. Except as otherwise
consented to in writing by the Board of Directors of the Company, prior to the
grant of any Option hereunder, the Optionee shall become a party to all voting
agreements, stock transfer agreements, registration rights agreements and other
securityholder agreements to which any holder of Common Stock or Common Stock
Equivalents is a party, as provided therein. Any Permitted Transferee of the
Optionee shall become a party to such agreements and shall be bound by the terms
thereof as provided therein.
Section 7.4- Effect of Plan Upon Other Compensation Plans.
The adoption of the Plan shall not affect any other compensation or incentive
plans in effect for the Company. Nothing in this Plan shall be construed to
limit the right of the Company to establish any other forms of incentives or
compensation for Employees of the Company; or to grant or assume options or
other awards otherwise than under the Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the grant or
assumption of options or other awards in connection with the acquisition by
purchase, lease, merger, consolidation or otherwise, of the business, stock or
assets of any corporation, firm or association.
Section 7.5- No Right to Continue in Employment. Nothing in
this Plan or in any Stock Option Agreement hereunder shall confer upon any
Employee any right to continue in the employ or service of the Company or shall
interfere with or restrict in any way the rights of the Company, which are
hereby expressly reserved, to discharge any Employee at any time for any reason
whatsoever, with or without good cause.
Section 7.6 - Titles. Titles are provided herein for
convenience only and are not to serve as a basis for interpretation or
construction of the Plan.
9
I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of the Company on February 26, 1998.
Executed on this 24th day of April, 1998.
/s/ Alan E. Davis
- ----------------------------------
Secretary of the Meeting of the
Board of Directors