EXHIBIT 10.34
MERITAGE HOSPITALITY GROUP INC.
AMENDED 2001 DIRECTORS' SHARE OPTION PLAN
The purpose of the 2001 Directors' Share Option Plan, as amended, is to
advance the interests of Meritage Hospitality Group Inc. and its shareholders by
affording non-employee members of the Company's Board of Directors an
opportunity to increase their proprietary interest in the Company by the grant
of options to them to purchase common shares under the terms set forth herein.
The Company believes that this Plan will give an incentive to these members of
the Board to increase revenues and profits.
1. Effective Date of the Plan. This Plan shall become effective
on May 15, 2001.
2. Shares Subject to the Plan. The shares to be issued upon the
exercise of the options granted under the Plan shall be common shares, $.01 par
value, of the Company. Either treasury or authorized and unissued common shares,
or both, as the Board of Directors shall from time to time determine, may be so
issued. No common shares which are the subject of any lapsed, expired or
terminated options may be made the subject of additional options under the Plan.
Subject to the provisions of Section 4 hereof, the aggregate number of
common shares for which options may be granted under the Plan shall be 120,000
shares.
3. Administration. The Plan shall be administered by a committee
appointed in accordance with the Bylaws and consisting of three or more
directors which directors may also be eligible to participate in the Plan.
Subject to the express provisions of the Plan, the Committee shall have the
authority to establish the terms and conditions of such option agreements,
consistent with this Plan. Such agreements need not be uniform.
4. Adjustments to Common Shares and Option Price.
4.1 In the event of changes in the outstanding common
shares of the Company as a result of share dividends, split-ups,
recapitalizations, combinations or exchanges, the number and class of
common shares authorized to be the subject of options under the Plan
and the number and class of common shares and option price for each
option which is outstanding under this Plan shall be correspondingly
adjusted by the Committee.
4.2 The Committee shall make appropriate adjustments in
the option price to reflect any spin-off of assets, extraordinary
dividends or other distributions to shareholders.
4.3 In the event of the dissolution or liquidation of the
Company or any merger, consolidation or combination in which the
Company is not the surviving corporation or in which the outstanding
common shares of the Company are converted into cash, other securities
or other property, each outstanding option issued hereunder shall
terminate as of a date fixed by the Committee, provided that no less
than 20 days' written notice of the date of expiration shall be given
to each holder of an option. Each such holder shall have the right
during such period following notice to exercise the option as to all or
any part of the option for which it is exercisable at the time of such
notice.
5. Eligible Directors; Grant of Options. An Eligible Director is
each director of the Company as of the time of grant of an option called for
hereafter who is not also an employee of the Company.
Each Eligible Director shall be granted an option for the purchase of
1,000 common shares immediately after the 2001 Annual Shareholders' Meeting, and
after each subsequent Annual Shareholders' Meeting. Effective at the 2004 Annual
Shareholders' Meeting, and at each subsequent Annual Shareholders' Meeting
thereafter, each Eligible Director shall be granted an option for the purchase
of 5,000 common shares. Persons who become Eligible Directors after the
effective date of the Plan shall be granted an option for 5,000 common shares as
a result of their election, whether by shareholders or directors, and upon each
subsequent Annual Shareholders' Meeting, another option for 5,000 common shares.
All grants shall be made on the date of the event giving rise to the option.
Such grants shall continue until the number of the shares provided for in
Section 2 are exhausted.
Subject to the terms and conditions of the Plan, the Committee may,
from time to time, grant additional options to Eligible Directors on such terms
and conditions as the Committee may determine.
6. Price. The purchase price of the common shares which may be
acquired pursuant to the exercise of any option granted pursuant to the Plan
shall be the last closing sale price reported on the date of grant.
7. Period of Option. The term of each option shall be ten years
from the date of grant.
8. Exercise of Option. At any time following six months from its
date of issue, an option may be exercised by an Eligible Director as to all or
part of the shares covered thereby by giving written notice to the Company at
its principal office, directed to the attention of its Secretary, accompanied by
payment of the option price in full for shares being purchased. The payment of
the option price shall be either in cash or, subject to any conditions set forth
in the option agreement, by delivery of Mature Shares of the Company having a
fair market value equal to the purchase price on the date of exercise of the
option, or by any combination of cash and such Mature Shares. "Mature Shares" is
defined as Company common shares that an Eligible Director has owned for at
least six months. Payment may also be made through a broker-assisted cashless
exercise of Stock Options.
Unless there is in effect at the time of exercise a registration
statement under the Securities Act of 1933 permitting the resale to the public
of shares acquired under the Plan, the holder of the option shall, except to the
extent determined by the Committee that such is not required, (i) represent and
warrant in writing to the Company that the shares acquired are being acquired
for investment and not with a view to the distribution thereof, (ii) acknowledge
that the shares acquired may not be sold unless registered for sale under said
Act or pursuant to an exemption from such registration, and (iii) agree that the
certificates evidencing such shares shall bear a legend to the effect of clauses
(i) and (ii).
9. Nontransferability of Options. An option is not transferable
by an Eligible Director to whom granted other than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code of 1986, as amended (the "Code"), or Title
1 of the Employee Retirement Income Security Act, as amended.
10. Death or Disability of an Optionee. If an optionee shall cease
to be an Eligible Director on account of disability or death, an option
theretofore granted to such Eligible Director may be exercised by the optionee
or, in the case of death, by the legal representative of the estate of the
deceased option holder or by the person or persons to whom such Eligible
Director's rights under the option shall pass by will or the laws of descent and
distribution, at any time within one year from the date the optionee ceased to
be an Eligible Director, but only to the extent the option holder was entitled
to exercise the option at the date of such cessation and only during the option
period. "Disability" shall have the meaning ascribed to it in Section 105(d)(4)
of the Code.
11. Rights as a Shareholder. The holder of an option shall not
have any of the rights of a shareholder of the Company with respect to the
shares subject to an option until a certificate or certificates for such shares
shall have been issued upon the exercise of the option.
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