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SOCIETY CORPORATION
1988 STOCK APPRECIATION RIGHTS PLAN
1. PURPOSE. The purpose of this 1988 Stock Appreciation Rights Plan (the
"Plan") is to provide to optionees under stock options heretofore or hereafter
granted pursuant to any stock option plan of Society Corporation (the
"Corporation") now or hereafter in effect an alternative method of realizing
the benefits provided by such stock options.
2. DEFINITIONS. As used in the Plan:
(a) "Change in Control" shall be deemed to occur:
(i) upon the approval by the shareholders of the Corporation of (A) any
consolidation or merger of the Corporation with or into another corporation
or entity if, as a result of such consolidation or merger, voting
securities of the Corporation outstanding immediately prior to such
consolidation or merger will not represent or account for (either directly
by continuing to be outstanding as voting securities of the resulting or
surviving corporation or entity or indirectly by being converted into or
exchanged for voting securities of the resulting or surviving corporation
or entity) at least 60% of the voting securities of the resulting or
surviving corporation as of immediately after the consolidation or merger,
(B) any sale, lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of
the Corporation, or (C) adoption of any plan for the liquidation or
dissolution of the Corporation, or
(ii) upon any "person" (as defined in Section 13(d) of the Securities
Exchange Act of 1934 as amended), corporation or other entity, other than
the Corporation, making a tender offer or exchange offer to acquire any
Common Shares (or securities convertible into Common Shares) for cash,
securities or any other consideration provided, that (A) at least a portion
of such securities sought pursuant to the tender offer or exchange offer in
question is acquired and (B) after consummation of such tender offer or
exchange offer, the person, corporation, or other entity in question is the
"beneficial owner" (as such term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
more than 25% of the outstanding Common Shares;
(b) "Committee" means the committee provided for in Section 10.
(c) "Common Shares" means Common Shares, $1 par value, of the
Corporation or, if by reason of the adjustment provision in any stock
option plan under which any stock option is outstanding, the class of
shares subject to such outstanding stock option.
(d) "fair market value" of Common Shares on any relevant date shall be
determined by the Committee.
(e) "limited stock appreciation right" means a right granted pursuant
to Section 5.
(f) "Minimum Price Per Share" shall mean the highest gross price
(before brokerage commissions and soliciting dealers' fees) paid or to be
paid for an Ordinary Share (whether by way of exchange, conversion,
distribution upon liquidation or otherwise) pursuant to any change in
control. For purposes of this definition, if the consideration paid or to
be paid pursuant to any change in control shall consist, in whole or in
part, of consideration other than cash, the Committee shall take such
action, as in its judgment it deems appropriate, to establish the cash
value of such consideration.
(g) "outstanding stock option" means a stock option to purchase Common
Shares (either Ordinary Shares or Book Value Shares) granted by the
Corporation pursuant to any stock option plan of the Corporation now or
hereafter in effect, whether or not such stock option is at the time
exercisable, to the extent that such stock option at such time has not been
exercised and has not terminated.
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(h) "spread", in the case of an outstanding stock option relating to Ordinary
Shares (as defined in the Society Corporation 1988 Stock Option Plan), means
the excess of the fair market value of a Common Share on the date when a stock
appreciation right granted pursuant to the Plan is exercised over the option
price provided for in the related outstanding stock option, and in the case of
an outstanding stock option relating to Book Value Shares, means the excess of
the Book Value Per Share (as defined in the Society Corporation 1988 Stock
Option Plan) on the date when a stock appreciation right granted pursuant to
the Plan is exercised over the option price provided for in the related
outstanding stock option.
(i) "stock appreciation right" means a right granted pursuant to Section 3.
3. GRANT OF STOCK APPRECIATION RIGHTS.
(a) The Committee may at any time and from time to time grant stock
appreciation rights in respect of all or any part of any outstanding stock
option (including any outstanding stock option simultaneously granted) and may
define the terms of such stock appreciation rights, subject to the provisions
of the Plan. Any grant may permit the exercise of stock appreciation rights
with respect to the value of Ordinary Shares or Book Value Shares, or a
combination of both, covered by the related outstanding stock option.
(b) Stock appreciation rights shall entitle the optionee to receive from the
Corporation, upon surrender of the related outstanding stock option, or any
portion thereof, an amount equal to 100%, or such lesser percentage as the
Committee may determine, of the spread at the time of the exercise of the
stock appreciation rights, multiplied by the number of Common Shares in
respect of which the stock appreciation rights shall have been exercised. Such
amount may be paid by the Corporation in cash, in whole Ordinary Shares (taken
at their fair market value at the time of exercise of the stock appreciation
rights), in whole Book Value Shares (taken at their Book Value Per Share as
defined in the Society Corporation 1988 Stock Option Plan), or in any
combination thereof, as the Committee shall determine; provided, however, that
in no event shall the total number of Common Shares which may be paid to the
optionee pursuant to the exercise of stock appreciation rights exceed the
total number of Common Shares subject to the related outstanding stock option.
The foregoing determinations may be made at the time of grant of the stock
appreciation rights or at any time thereafter and shall be subject to change
at any time or from time to time.
(c) Each grant of a stock appreciation right shall be evidenced by an
Agreement executed on behalf of the Corporation by an officer designated by
the Committee and accepted by the optionee. Such Agreement shall describe the
stock appreciation rights, specify the related outstanding stock options, and
state that such stock appreciation rights are subject to all the terms and
provisions of the Plan and contain such other terms and provisions, consistent
with the Plan, as the Committee may approve.
(d) A grant of stock appreciation rights may specify waiting periods before
exercise and permissible exercise dates; provided, however, that no stock
appreciation right shall be exercisable except at a time when the related
outstanding stock option may be exercised.
(e) Stock appreciation rights shall not be granted in respect of outstanding
stock options to purchase in excess of 1,350,000 Common Shares. In the event
of any change in the Common Shares subject to outstanding stock options in
respect of which stock appreciation rights have been granted under the Plan,
by reason of any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Corporation,
or any merger, consolidation, separation, reorganization or partial or
complete liquidation, or any other corporate transaction or event having an
effect similar to any of the foregoing, all as more fully described in Section
14 of the Society Corporation 1988 Stock Option Plan, the aggregate number of
Ordinary Shares and Book Value Shares subject to outstanding stock options in
respect of which stock appreciation rights may thereafter be granted under the
Plan and the number and class of shares subject to each outstanding stock
option in respect of which stock appreciation rights have theretofore been
granted under the Plan shall be appropriately adjusted.
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4. EXERCISE OF STOCK APPRECIATION RIGHTS.
(a) Stock appreciation rights may be exercised only (i) when there is a
positive spread, and (ii) by surrender to the Corporation, unexercised, of the
related outstanding stock option or any applicable portion thereof. No stock
appreciation right or related stock option shall in any event be exercised
during the first six months of their respective terms.
(b) Any Ordinary Shares or Book Value Shares covered by outstanding stock
options so surrendered shall not be available for the granting of further
stock options under any stock option plan of the Corporation, anything in such
stock option plan to the contrary notwithstanding.
5. GRANT OF LIMITED STOCK APPRECIATION RIGHTS.
(a) The Committee may at any time and from time to time grant limited stock
appreciation rights in respect of all or any part of any outstanding stock
option (including any outstanding stock option simultaneously granted) and
may define the terms of such limited stock appreciation rights, subject to
the provisions of the Plan. Any grant may permit the exercise of limited stock
appreciation rights with respect to the value of Ordinary Shares or Book Value
Shares, or a combination of both, covered by the related outstanding stock
option.
(b) Limited stock appreciation rights granted with respect to incentive
stock options shall entitle the optionee to receive from the Corporation, upon
surrender of the related outstanding incentive stock option, or any portion
thereof, an amount equal to 100% of the spread at the time of the exercise of
the limited stock appreciation rights, multiplied by the number of Ordinary
Shares in respect of which the limited stock appreciation rights shall have
been exercised. Such amount shall be paid by the Corporation in cash.
(c) Limited stock appreciation rights granted with respect to non-incentive
stock options shall entitle the optionee to receive from the Corporation, upon
surrender of the related outstanding non-incentive stock option, or any
portion thereof, an amount equal to 100% of the higher of (i) the spread at
the time of the exercise of the limited stock appreciation rights, (ii) the
excess of the Minimum Price Per Share over the option price per share of
Ordinary Shares subject to the related non-incentive stock option, or (iii)
the excess of the highest mean between the high and low sales prices per share
in the over-the-counter market, National Market System, as reported by the
National Quotations Bureau, Inc. and NASDAQ on any one day during the period
beginning on the sixtieth day prior to the date on which such limited stock
appreciation rights are exercised and ending on the date on which such limited
rights are exercised over the option price per share of Ordinary Shares
subject to the related non-incentive stock option, multiplied by the number of
Common Shares in respect of which the limited stock appreciation rights have
been exercised. Such amount shall be paid by the Corporation in cash.
(d) Each grant of a limited stock appreciation right shall be evidenced by
an agreement executed on behalf of the Corporation by an officer designated by
the Committee and accepted by the optionee. Such agreement shall describe the
limited stock appreciation rights, specify the related outstanding stock
option(s) and state that such limited stock appreciation rights are subject to
all the terms and provisions of the Plan and contain such other terms and
provisions, consistent with the Plan, as the Committee may approve.
(e) Limited stock appreciation rights shall not be granted in respect of
outstanding stock options to purchase in excess of 1,350,000 Common Shares. In
the event of any change in the Common Shares subject to outstanding stock
options in respect of which limited stock appreciation rights have been
granted under the Plan, by reason of any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital
structure of the Corporation, or any merger, consolidation, separation,
reorganization or partial or complete liquidation, or any other corporate
transaction or event having an effect similar to any of the foregoing, all as
more fully described in Section 14 of the Society Corporation 1988 Stock
Option Plan, the aggregate number of Ordinary Shares and Book Value Shares
subject to outstanding stock options in respect of which limited stock
appreciation rights may thereafter be granted under the Plan and the number
and class of shares subject to each outstanding stock option in respect of
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which limited stock appreciation rights have theretofore been granted under
the Plan shall be appropriately adjusted.
6. EXERCISE OF LIMITED STOCK APPRECIATION RIGHTS.
(a) Limited stock appreciation rights may be exercised only (i) when
there is a positive spread, (ii) after the expiration of six months from
the date of grant of the limited stock appreciation rights, (iii) during
the 30-day period beginning on the first day after the date of a Change in
Control of the Corporation, (iv) at a time when the holder of the related
outstanding stock option is, directly or indirectly, subject to Section
16(b) of the Securities Exchange Act of 1934, as amended, (v) at a time and
to the same extent as the related outstanding stock option is exercisable,
and (vi) by surrender to the Corporation, unexercised, of the related
outstanding stock option or any applicable portion thereof.
(b) Any Ordinary Shares or Book Value Shares covered by outstanding
stock options so surrendered shall not be available for the granting of
further stock options under any stock option plan of the Corporation,
anything in such stock option plan to the contrary notwithstanding.
7. ASSIGNABILITY. Stock appreciation rights and limited stock appreciation
rights shall not be transferable or assignable by the optionee otherwise
than by will or the laws of descent and distribution.
8. TERMINATION. Stock appreciation rights and limited stock appreciation
rights shall terminate and may no longer be exercised upon the earlier of (a)
exercise or termination of the related outstanding stock option, or (b) any
termination date specified by the Committee at the time of grant of such stock
appreciation rights.
9. AMENDMENT, SUSPENSION, OR TERMINATION. The Committee may at any time
amend, suspend, or terminate any stock appreciation rights or limited stock
appreciation rights theretofore granted under the Plan without the holder's
consent. In case of amendment, the amended stock appreciation rights or
limited stock appreciation rights shall be in accordance with the Plan.
10. ADMINISTRATION. The Plan shall be administered by a committee composed
of not less than three directors of the Corporation to be appointed by the Board
of Directors (the "Committee"). The members of the Committee shall not be
officers or employees of the Corporation or any subsidiary. The Board of
Directors may also appoint one or more directors as alternate members of the
Committee. No stock appreciation right or limited stock appreciation right
shall be granted to any member or alternate member of the Committee. The
Committee shall have authority to grant stock appreciation rights or limited
stock appreciation rights under the Plan, and subject to the terms of the
Plan, (a) to determine the officers to whom stock appreciation rights or
limited stock appreciation rights shall be granted, the number of shares to be
covered by each stock appreciation right or limited stock appreciation right,
the time or times at which stock appreciation rights or limited stock
appreciation rights shall be exercisable, and the terms and provisions of the
instruments by which stock appreciation rights or limited stock appreciation
rights shall be evidenced, (b) to interpret the Plan, and (c) to make all
determinations necessary for the administration of the Plan. Notwithstanding
the foregoing, the Corporation's Board of Directors may exercise any authority
granted herein to the Committee.
The construction and interpretation by the Committee of any provision of the
Plan or any agreement granting stock appreciation rights or limited stock
appreciation rights entered into pursuant to the Plan and any determination by
the Committee pursuant to any provision of the Plan or any agreement granting
stock appreciation rights or limited stock appreciation rights shall be final
and conclusive. No member or alternate member of the Committee shall be liable
for any such action or determination made in good faith.
11. COMMON SHARES. Common Shares issued or delivered on the exercise of
stock appreciation rights may be authorized and unissued Common Shares or
treasury shares or a combination thereof.
12. DURATION AND TERMINATION OF THE PLAN. The Plan shall remain in effect
through February 17, 1998, and shall then terminate, unless terminated at an
earlier date by action of the Board of Directors of the Corporation; provided,
however, that termination of the Plan shall not affect stock appreciation
rights or limited stock appreciation rights granted prior thereto.
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13. AMENDMENT OF PLAN. The Board of Directors may alter or amend the Plan
from time to time, except that, without shareholder approval, no amendment
shall (a) materially increase the benefits accruing to optionees to whom stock
appreciation rights or limited stock appreciation rights have been granted
under the Plan, or (b) materially increase the stock appreciation rights or
limited stock appreciation rights which may be granted under the Plan (except
that adjustments authorized by Sections 3(e) and 5(e) shall not be limited by
this provision), or (c) materially modify the requirements as to eligibility
for participation under the Plan.