SWISHER INTERNATIONAL GROUP INC.
1996 STOCK OPTION PLAN
1. Purpose.
This Swisher International Group Inc. 1996 Stock Option Plan
(the "Plan") is intended to afford an incentive to selected employees and
directors of Swisher International Group Inc. (the "Parent"), Swisher
International, Inc. or any Affiliated Corporations (as defined in Section
2(a)hereof) (collectively referred to as the "Company"), to acquire a
proprietary interest in the Company, to continue to perform services for the
Company, to increase their efforts on behalf of the Company and to promote the
success of the Company's business.
2. Definitions.
As used in this Plan, the following words and phrases shall
have the meanings indicated:
(a) "Affiliate Corporation" or "Affiliate" shall mean
any corporation or other entity, directly or indirectly,
through one or more intermediaries, controlling, controlled
by, or under common control with the Parent.
(b) "Award" shall mean any Option or SAR, granted
under the Plan.
(c) "Award Agreement" shall mean any written
agreement, contract, or other instrument or document between
the Company and a Participant evidencing an Award.
(d) "Board" shall mean the Board of Directors of the
Parent.
(e) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(f) "Committee" shall mean the Compensation Committee
of the Board.
(g) "Disability" shall mean a Participant's inability
to engage in any substantial gainful activity by reason of
medically determinable physical or mental impairment that can
be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than
twelve (12) months.
(h) "Fair Market Value" per share as of a particular
date shall mean (i) the closing sales price per share of
Common Stock (as defined in Section 5 hereof) on the New York
Stock Exchange for the last preceding date on which there was
a sale of such Common Stock on such exchange, or (ii) if the
shares of Common Stock are not then admitted for trading on
the New York Stock
Exchange, the closing price for the shares of Common Stock in
such other national securities exchange or interdealer
quotation system on which Common Stock is then traded for the
last preceding date on which there was a sale of such Common
Stock in such market, or (iii) if the shares of Common Stock
are not then listed on a national securities exchange or
interdealer quotation system, such value as the Committee in
its discretion may determine.
(i) "Incentive Stock Option" shall mean an Option
that meets the requirements of Section 422 of the Code, or any
successor provision, and that is designated by the Committee
as an Incentive Stock Option.
(j) "Nonqualified Stock Option" shall mean an Option
other than an Incentive Stock Option.
(k) "Option" shall mean the right, granted pursuant
to this Plan, of a holder to purchase shares of Common Stock
at a price and upon the terms to be specified by the
Committee.
(l) "Parent Corporation" shall mean any corporation
(other than the Parent) in an unbroken chain of corporations
ending with the Parent if, at the time of granting an Award,
each of such corporations (other than the Parent) owns stock
possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
(m) "Participant" shall mean an officer, employee,
consultant or director of the Company who is, pursuant to
Section 4 of the Plan, selected to participate herein.
(n) "SAR" shall mean a tandem or freestanding stock
appreciation right, granted to a Participant under Section 7,
to be paid an amount measured by the appreciation in the Fair
Market Value of Common Stock from the date of grant to the
date of exercise of the right.
(o) "Subsidiary Corporation" shall mean any
corporation (other than the Parent) in an unbroken chain of
corporations beginning with the Parent if, at the time of
granting an Award, each of such corporations other than the
last corporation in the unbroken chain owns stock possessing
fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in
such chain.
(p) "Ten Percent Stockholder" shall mean a
Participant who, at the time an Incentive Stock Option is
granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the
Parent or of its Parent Corporation or Subsidiary
Corporations.
2
3. Administration.
Unless otherwise determined by the Board, the Plan shall be
administered by the Committee which shall consist of two or more members of the
Board who are "outside directors" within the meaning of section 162(m) of the
Code. The Committee may, in its discretion, delegate to a subcommittee or to an
officer of the Company its duties hereunder, including the grant of Awards. The
full Board shall also have the authority, in its discretion, to grant Awards
under the Plan and to administer the Plan. For all purposes under the Plan, any
entity which performs the duties described herein, shall be referred to as the
"Committee."
The Committee shall have the authority in its discretion,
subject to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in the
administration of the Plan, including, without limitation, the authority to
grant Awards; to determine the persons to whom and the time or times at which
Awards shall be granted; to determine the type and number of Awards to be
granted, the number of shares of Common Stock to which an Award may relate, the
vesting schedule for Awards and the terms, conditions and restrictions relating
to any Award; to determine whether, to what extent, and under what circumstances
an Award may be settled, canceled, forfeited, exchanged, or surrendered; to
construe and interpret the Plan and any Award; to prescribe, amend and rescind
rules and regulations relating to the Plan; to determine the terms and
provisions of Award Agreements; and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
No member of the Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any Award
granted hereunder.
4. Eligibility.
Awards may be granted to employees and directors of the
Company, except that Incentive Stock Options shall be granted only to
individuals who, on the date of such grant, are employees of the Parent or a
Parent Corporation or a Subsidiary Corporation. In determining the persons to
whom Awards shall be granted and the number of shares to be covered by each
Award, the Committee shall take into account the duties of the respective
persons, their present and potential contributions to the success of the Company
and such other factors as the Committee shall deem relevant in connection with
accomplishing the purpose of the Plan.
5. Stock.
The stock subject to Awards hereunder shall be shares of the
Parent's Class A common stock, par value $0.01 per share ("Common Stock"). Such
shares may, in whole or in part, be (i) authorized but unissued shares or shares
that shall have been or that may be reacquired by the Company; and (ii)
registered with the Securities and Exchange Commission
3
(under the Securities Act of 1933) or unregistered. The aggregate number of
shares of Common Stock as to which Awards may be granted from time to time under
the Plan shall not exceed at any time more than 10% of the sum of (x) the then
outstanding Common Stock; and (y) Parent's Class B common stock, par value $0.01
per share (the AClass B Common Stock@). No person may be granted Options or SARs
under the Plan during any calendar year representing an aggregate of more than
2.5% of the sum of the outstanding Common Stock and Class B Common Stock on any
day during such calendar year. The limitations established by the preceding two
sentences shall be subject to adjustment as provided in Section 8 hereof.
6. Stock Options.
The Committee shall have authority to grant Nonqualified Stock
Options and Incentive Stock Options to Participants on the following terms and
conditions:
(a) Number of Shares. Each Award Agreement shall
state the number of shares of Common Stock to which the Option
relates.
(b) Type of Option. Each Award Agreement shall
specifically state that the Option constitutes an Incentive
Stock Option or a Nonqualified Stock Option.
(c) Option Price. Each Award Agreement shall state
the Option Price. The Option Price per share of Common Stock
purchasable under an Option shall be not less than the Fair
Market Value of a share of Common Stock on the date of grant
of such Option. The date as of which the Committee adopts a
resolution expressly granting an Option shall be considered
the day on which such Option is granted.
(d) Method and Time of Payment. The Option Price
shall be paid in full, at the time of exercise, in cash or in
shares of Common Stock having a Fair Market Value equal to
such Option Price or in a combination of cash and Common Stock
or, in the sole discretion of the Committee, through a
cashless exercise procedure.
(e) Term and Exercisability of Options. Options shall
be exercisable over the exercise period (which, with respect
to Incentive Stock Options, shall not exceed ten years from
the date of grant), at such times as provided in Section 6(f)
hereof subject to such conditions as may be prescribed by the
Committee in the Award Agreement. Notwithstanding the
foregoing, the Committee shall have the authority to
accelerate the exercisability of any outstanding Option at
such time and under such circumstances as it, in its sole
discretion, deems appropriate. Subject to Section 6(j) hereof,
an Option may be exercised, as to any or all full shares of
Common Stock as to which the Option has become exercisable, by
written notice delivered in person or by mail to the
4
Compensation Committee, specifying the number of shares of
Common Stock with respect to which the Option is being
exercised. The exercise period shall be subject to earlier
termination as provided in Section 6(g) hereof.
(f) Exercise Period. The exercisability of any
Options under this Section 6(f) shall be determined by
reference to the date on which such Options were granted (the
AGrant Date@). The initial Award of Options granted under the
Plan shall become exercisable in equal one-third increments on
the penultimate business day of 1997, 1998 and 1999,
respectively. Subsequent Awards of Options shall become
exercisable in accordance with the terms of the Award.
(g) Termination. If a Participant's employment by, or
service as a consultant or director with, the Company
terminates:
(i) Unless provided otherwise in the
applicable Award Agreement, upon a Participant's
termination of employment or service as a consultant
or a director with the Company by reason of death or
Disability, all Options shall become immediately
exercisable and shall remain exercisable for a period
of one year following such termination and shall
terminate thereafter;
(ii) Unless provided otherwise in the
applicable Award Agreement, if a Participant's
employment or service as a consultant or a director
with the Company is terminated for any reason other
than death or Disability, all Options that are not
then exercisable shall immediately terminate and all
Options that are then exercisable shall remain
exercisable for a period of three months from the
date of such termination and shall terminate
thereafter.
(h) Other Provisions. Options may be subject to such
other conditions including, but not limited to, restrictions
on transferability of the shares acquired upon exercise of
such Options (including a right of first refusal in favor of
the Company to purchase any shares acquired through the Award
Agreement which a Participant or former Participant desires to
sell), as the Committee may prescribe in its discretion. There
shall be a legend making appropriate reference to any such
conditions on all certificates representing shares sold
pursuant to the Award Agreement.
(i) Incentive Stock Options. Options granted as
Incentive Stock Options shall be subject to the following
special terms and conditions, in addition to the general terms
and conditions specified in this Section 6.
(i) Value of Shares. The aggregate Fair
Market Value (determined as of the date the Incentive
Stock Option is granted) of the shares of Common
Stock with respect to which Incentive Stock Options
5
granted under this Plan and all other plans of the
Company become exercisable for the first time by each
Participant during any calendar year shall not exceed
$100,000.
(ii) Ten Percent Stockholder. In the case of
an Incentive Stock Option granted to a Ten Percent
Stockholder, (x) the Option Price shall not be less
than one hundred ten percent (110%) of the Fair
Market Value of the shares of Common Stock on the
date of grant of such Incentive Stock Option, and (y)
the exercise period shall not exceed five (5) years
from the date of grant of such Incentive Stock
Option.
(j) Purchase of Options. Each Award Agreement shall
specifically state that the Company shall have the right, in
lieu of the delivery of any Company stock to a Participant, to
purchase for cash (or other property) the Participant's Option
or Options (at the then fair market value of such Option or
Options) after receipt of the written notice of the exercise
of such Option or Options described in Section 6(e), above.
7. Stock Appreciation Rights. The Committee is authorized to
grant freestanding SARs and SARs granted in tandem with Options to Participants
on the following terms and conditions:
(a) In General. Unless the Committee determines
otherwise, (1) an SAR granted in tandem with a Nonqualified
Stock Option may be granted at the time of grant of the
related Nonqualified Stock Option or at any time thereafter or
(2) an SAR granted in tandem with an Incentive Stock Option
may only be granted at the time of grant of the related
Incentive Stock Option. An SAR granted in tandem with an
Option shall be exercisable only to the extent the underlying
Option is exercisable (pursuant to Sections 6(e) and 6(f),
above).
(b) SARs. An SAR shall confer on the Participant a
right to receive with respect to each share subject thereto,
upon exercise thereof, the excess of (1) the Fair Market Value
of one share of Common Stock on the date of exercise over (2)
the grant price of the SAR (which in the case of an SAR
granted in tandem with an Option shall be equal to the
exercise price of the underlying Option, and which in the case
of any other SAR shall be such price as the Committee may
determine).
(c) Treatment of Related Options and Tandem SARs Upon
Exercise. Upon the exercise of a tandem SAR, the related
Option shall be canceled to the extent of the number of shares
of Common Stock as to which the tandem SAR is exercised and
upon the exercise of an Option (or a purchase of such Option
pursuant to Section 6(j)) granted in connection with a tandem
SAR, the tandem SAR shall be canceled to the extent of the
number of shares of Common Stock as to which the Option is
exercised (or purchased).
6
(d) Method of Exercise. SARs shall be exercised by a
Participant only by a written notice delivered in person or by
mail to the Committee, specifying the number of shares of
Common Stock with respect to which the SAR is being exercised.
(e) Form of Payment. Payment of the amount determined
under paragraph (b) above may be made in whole shares of
Common Stock in a number determined based upon their Fair
Market Value on the date of exercise of the SAR or,
alternatively, at the sole discretion of the Committee, solely
in cash, or in a combination of cash and shares of Common
Stock as the Committee deems advisable. If the Committee
decides to make full payment in shares of Common Stock, and
the amount payable results in a fractional share, payment for
the fractional share will be made in cash.
(f) Term and Exercisability of Freestanding SARs.
Each Award Agreement shall provide the exercise schedule for
the freestanding SAR as determined by the Committee, provided,
that, the Committee shall have the authority to accelerate the
Exercisability of any freestanding SAR at such time and under
such circumstances as it, in its sole discretion, deems
appropriate. The exercise period shall be ten (10) years from
the date of the grant of the freestanding SAR or such other
period as is determined by the Committee. The exercise period
shall be subject to earlier termination as provided in Section
7(g) hereof.
(g) Termination. The terms and conditions set forth
in Section 6(g) hereof, relating to exercisability of Options
in the event of termination of employment or service as a
consultant or director with the Company, shall apply equally
with respect to the exercisability of freestanding SARs
following termination of employment or service as a consultant
or director.
8. Effect of Certain Changes.
If there is any change in the number of outstanding shares of
Common Stock by reason of any stock dividend, stock split, recapitalization,
combination, exchange of shares, merger, consolidation, liquidation, split-up,
spin-off or other similar change in capitalization, any distribution to common
shareholders, including a rights offering, other than cash dividends, or any
like change, then the number of shares of Common Stock available for Awards, the
number of such shares covered by outstanding Awards, and the Option Price of
such Options or the applicable grant price of SARs, shall be proportionately
adjusted by the Committee to reflect such change or distribution; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated. In the event of a change in the Common Stock of the Company as
presently constituted, which is limited to a change of all of its authorized
shares with par value into the same number of shares with a different par value
or without par value, the shares resulting from any such change shall be deemed
to be the
7
Common Stock within the meaning of the Plan. To the extent that the
foregoing adjustments relate to stock or securities of the Company, such
adjustments shall be made by the Committee, whose determination in that respect
shall be final, binding and conclusive, provided that each Incentive Stock
Option granted pursuant to this Plan shall not be adjusted in a manner that
causes such Option to fail to continue to qualify as an Incentive Stock Option
within the meaning of Section 422 of the Code.
9. General Provisions.
(a) Compliance with Legal Requirements. The Plan and
the granting and exercising of Awards, and the other
obligations of the Company under the Plan and any Award
Agreement or other agreement shall be subject to all
applicable federal and state laws, rules and regulations, and
to such approvals by any regulatory or governmental agency as
may be required. The Company, in its discretion, may postpone
the issuance or delivery of Common Stock under any Award as
the Company may consider appropriate, and may require any
Participant to make such representations and furnish such
information as it may consider appropriate in connection with
the issuance or delivery of Common Stock in compliance with
applicable laws, rules and regulations.
(b) Nontransferability. Except to the extent provided
otherwise in the applicable Award Agreement, Awards shall not
be transferable by a Participant except by will or the laws of
descent and distribution and shall be exercisable during the
lifetime of a Participant only by such Participant or his
guardian or legal representative.
(c) No Right To Continued Employment. Nothing in the
Plan or in any Award granted or any Award Agreement or other
agreement entered into pursuant hereto shall confer upon any
Participant the right to continue in the employ of the Company
or to be entitled to any remuneration or benefits not set
forth in the Plan or such Award Agreement or other agreement
or to interfere with or limit in any way the right of the
Company to terminate such Participant's employment.
(d) Withholding Taxes. Where a Participant or other
person is entitled to receive shares of Common Stock or cash
pursuant to an Award hereunder, the Company shall have the
right to require the Participant or such other person to pay
to the Company the amount of any taxes which the Company may
be required to withhold before delivery to such Participant or
other person of cash or a certificate or certificates
representing such shares. Unless otherwise prohibited by the
Committee or by applicable law, a Participant may satisfy any
8
such withholding tax obligation by either of the following
methods, or by a combination of such methods: (a) tendering a
cash payment; or (b) delivering to the Company previously
acquired shares of Common Stock having an aggregate Fair
Market Value, determined as of the date the withholding tax
obligation arises, less than or equal to the amount of the
total withholding tax obligation.
(e) Amendment and Termination of the Plan. The Board
or the Committee may at any time and from time to time alter,
amend, suspend, or terminate the Plan in whole or in part;
provided that, no amendment which requires stockholder
approval under applicable law or in order for the Plan to
continue to comply with Section 162(m) of the Code shall be
effective unless the same shall be approved by the requisite
vote of the stockholders of the Company. Notwithstanding the
foregoing, no amendment shall affect adversely any of the
rights of any Participant, without such Participant's consent,
under any Award theretofore granted under the Plan. The power
to grant Awards under the Plan will automatically terminate
ten years after the adoption of the Plan by the Board. If the
Plan is terminated, any unexercised Award shall continue to be
exercisable in accordance with its terms and the terms of the
Plan in effect immediately prior to such termination.
(f) Participant Rights. No Participant shall have any
claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment for Participants.
Except as provided specifically herein, a Participant or a
transferee of an Award shall have no rights as a stockholder
with respect to any shares covered by any Award until the date
of the issuance of a stock certificate to him or her for such
shares.
(g) No Fractional Shares. No fractional shares of
Common Stock shall be issued or delivered pursuant to the Plan
or any Award. The Committee shall determine whether cash,
other Awards, or other property shall be issued or paid in
lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise
eliminated.
(h) Governing Law. The Plan and all determinations
made and actions taken pursuant hereto shall be governed by
the laws of the State of Delaware without giving effect to the
conflict of laws principles thereof.
(i) Interpretation, Construction. The Plan is
designed and intended to comply with Section 162(m) of the
Code, and all provisions hereof shall be construed in a manner
to so comply. The section and subsection headings contained
herein are for convenience only and shall not affect the
construction hereof.
9
10. Effectiveness.
The Plan shall take effect upon its adoption by the Board.
10