AMERICAN CHURCH MORTGAGE COMPANY
STOCK OPTION PLAN FOR DIRECTORS AND ADVISOR
SEPTEMBER 30, 1994
1. PURPOSE. This Stock Option Plan for Directors and the Advisor (the
"Plan") is intended to attract and retain the services of experienced and
knowledgeable directors and advisors of American Church Mortgage Company, a
Minnesota corporation and Real Estate Investment Trust (the "Company") for
the benefit of the Company and its shareholders and to provide additional
incentive for such directors and the advisor to continue to work for the best
interest of the Company and its shareholders.
2. STOCK SUBJECT TO THE PLAN. There are reserved for issuance upon
the exercise of options granted under the Plan 100,000 shares of common stock
of the Company (the "Common Stock"). If any option granted under the Plan
shall expire or terminate for any reason without having been exercised in
full, the shares subject thereto shall again be available for the purpose of
issuance upon the exercise of options granted under the Plan.
3. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board"). The Board shall have plenary
authority to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
option grants or agreements (which shall comply with the terms and conditions
of the Plan) and to make all other determinations necessary or advisable for
the administration of the Plan. The Board's determination in all matters
shall be final.
4. ELIGIBILITY. Each director of the Company shall automatically be
granted an option to purchase 3,000 shares of Common Stock (subject to
adjustment as provided in Paragraph 7) immediately upon being appointed or
elected as a director of the Company, whichever first occurs. So long as a
director shall remain a director of the Company, on each date of his or her
annual reelection (or the anniversary date of the last annual meeting, if a
current annual meeting is not held) such Director shall be granted an
additional option to purchase 3,000 shares of common stock (subject to
adjustment as provided for in Paragraph 7).
5. OPTION TERMS. Options granted under the Plan shall have the
following terms:
(a) The purchase price of the Common Stock under each option
granted under the Plan shall be 100% of the fair market value of the
stock at the time such option is granted. Fair market value shall
mean the mean of the high and low sale price of the Company's Common
Stock as reported on the National Association of Securities Dealers
Automated Quotation System (NASDAQ) for the date of grant, or if no
quotation is available, at the fair market value as established by the
Board applying the guidelines established by Treasury Regulations
Section 20.2031-2.
(b) No option shall be exercisable until the first anniversary
of the date of grant. Thereafter options shall be exercisable in full
or in part at the discretion of the optionee. The term of each option
shall be five years from the date of grant thereof, or such shorter
period as is prescribed in Paragraph 5(c).
(c) In the event that an optionee shall cease to be a director
in the Company during the one year period following the date of grant
of the option, the option shall forthwith terminate on the date the
optionee ceases to serve as a director.
(d) Upon exercise, the option price is to be paid in full in
cash, or at the discretion of the Board, in common stock owned by the
optionee having a fair market value on the date of exercise equal to
the aggregate option price, or at the discretion of the Board, in a
combination of cash and stock. For purposes of this paragraph, the
market value of shares tendered to exercise an option shall be the
mean of the high and low reported sales prices of the Common Stock as
reported by NASDAQ on the exercise date; if the Common Stock is not
traded on the exercise date, the fair market value on such date shall
be determined under Treasury Regulations Section 20.2031-2.
(e) Nothing in the Plan or in any option granted pursuant to the
Plan shall confer on any individual any right to continue as a
director of the Company or interfere in any way with the right of the
Company to terminate the optionee's services as a director at any
time.
(f) In the event that an individual to whom an option has been
granted under the Plan dies while such option remains unexercised, the
option theretofore granted to the optionholder may be exercised by the
personal representative of the optionholder at any time during the
term that the option could have been exercised by the optionee.
(g) Only options which do not qualify as "incentive stock
options" under Section 422A of the Internal Revenue Code of 1986, as
amended, shall be granted under the Plan.
(h) Each option shall be evidenced by a Stock Option Agreement
in the form attached hereto as Exhibit A.
6. TRANSFERABILITY AND SHARE RIGHTS OF HOLDERS OF OPTIONS. No option
granted under the Plan shall be transferable otherwise than by will or by the
laws of descent and distribution, and the option may be exercised, during the
lifetime of the holder thereof, only by the holder. The holder of an option
shall have none of the rights of a shareholder until the shares subject
thereto have been registered in the name of the person or persons exercising
such option on the transfer books of the Company upon such exercise.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Notwithstanding any
other provision of the Plan, the number and class of shares subject to the
options and option prices of the options covered thereby shall be
proportionally adjusted in the event of changes in the Company's outstanding
Common Stock by reason of stock dividends, stock splits, recapitalizations,
mergers, consolidations, accommodations or exchanges of shares, split ups,
split offs, spin offs, liquidations or other similar changes in
capitalization, or any distribution to common shareholders other than cash
dividends and, in the event of any such change in the outstanding Common
Stock, the aggregate number and class
of shares available under the Plan and the number of shares as to which
options may be granted shall be appropriately adjusted by the Board.
8. AMENDMENTS AND TERMINATION. Unless the Plan shall theretofore have
been terminated as hereinafter provided, the Plan shall terminate on and no
awards of options shall be made after, December 31, 2002. The Plan may be
terminated, modified or amended by the shareholders of the Company. The
Board of Directors of the Company may also terminate the Plan at any time or
may modify or amend the Plan in such respects as it shall deem advisable in
order to conform to any changes in the law or regulations applicable thereto,
or in respects which shall not change: (i) the total number of shares as to
which options may be granted, (ii) the class of persons eligible to receive
options under the Plan; (iii) the manner of determining option prices; (iv)
the period during which the options may be granted or exercised, or (v) the
provisions relating to the administration of the Plan by the Board.
Termination of the Plan shall not affect rights under options granted prior
to termination of the Plan.
9. WITHHOLDING. Upon the transfer of Common Stock as a result of the
exercise of an option, the Company shall have the right to retain or sell
without notice, sufficient shares of stock (valued as provided in Paragraph
5(d)) to cover the amount of any tax required by any government to be
withheld or otherwise deducted and paid with respect to such exercise,
remitting any balance to the optionee; provided, however, that the optionee
shall have the right to provide the Company with the funds to enable it to
pay such tax.
10. EFFECTIVE DATE AND APPROVAL. The Plan shall become effective on
the date the Plan is adopted by the Board of Directors. The Plan shall be
submitted to the shareholders for approval as soon as practicable after the
effective date of the Plan.
11. SECTION 16b-3 COMPLIANCE. It is intended that this Plan and all
options granted thereunder shall comply with Rule 16b-3 of the Securities and
Exchange Commission and the Plan shall be administered and interpreted so as
to comply with such rule.
EXHIBIT "A"
AMERICAN CHURCH MORTGAGE COMPANY
DIRECTOR'S AND ADVISOR'S STOCK OPTION AGREEMENT
This Option Agreement made this _____ day of _________________________,
19____, by and between AMERICAN CHURCH MORTGAGE COMPANY, a Minnesota
corporation, hereinafter called the "Company" and
____________________________________ hereinafter called the "Optionee;"
W I T N E S S E T H:
The Company desires to afford Optionee an opportunity to purchase shares
of its $.0l par value Common Stock, hereinafter called the "Shares," pursuant
to the Stock Option Plan for Directors and the Advisor dated September 30,
1994 (the "Plan").
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree
as follows:
I.
GRANT OF OPTION
The Company hereby grants to the Optionee the right and option
(hereinafter called the "Option") to purchase all or any part of an aggregate
of Three Thousand (3,000) Shares (such number being subject to adjustment as
provided in Paragraph V hereof) on the terms and conditions herein set forth.
II.
PURCHASE PRICE
Subject to the provisions of Article V hereof, the purchase price of the
Shares shall be $________ per Share, which has been determined to be the fair
market value of the Shares at the date of grant of this Option in accordance
with the Plan.
III.
TERM AND EXERCISE OF OPTION
Except as provided below, this Option shall expire at the close of
business on the fifth anniversary date of this Stock Option Agreement. The
Optionee shall be entitled to exercise this option and acquire Shares covered
by this Option at any time after the expiration of twelve (12) months from
the date of this Agreement. Thereafter, the Option may be exercised by the
Optionee as to the whole or any part of the Shares covered hereby. If
Optionee ceases to be a director of the Company prior to the date this option
becomes exercisable, the Option and all rights of Optionee hereunder shall
immediately terminate.
IV.
NONTRANSFERABILITY OF OPTION RIGHTS
The Option shall not be transferable otherwise than by will or the laws
of descent and distribution, and the Option may be exercised, during the
lifetime of the Optionee only by Optionee. More particularly (but without
limiting the generality of the foregoing), the Option may not be assigned,
transferred (except as provided above), pledged, or hypothecated in any way,
and shall not be subject to execution, attachment, or similar process. Any
attempted assignment, transfer, pledge, hypothecation, or other disposition
of the Option contrary to the provisions hereof, or the levy of any
execution, attachment or similar process upon the Option, shall be null and
void and without effect.
V.
CHANGES IN CAPITAL STRUCTURE
If all or any portion of the Stock Option shall be exercised subsequent
to any share dividend, recapitalization, merger, consolidation, exchange of
shares or reorganization as a result of which shares of any class shall be
issued in respect of outstanding Common Stock, of if Common Stock shall
be changed into the same or a different number of shares of the same or
another class or classes, the person or persons so exercising the Option
shall receive, for the aggregate price paid upon such exercise, the aggregate
number and class of shares to which they would have been entitled if Common
Stock (as authorized at the date hereof) had been purchased at the date
hereof for the same aggregate price (on the basis of the price per share set
forth in Paragraph II hereof) and had not been disposed of. No fractional
share shall be issued upon any such exercise and the aggregate price paid
shall be appropriately reduced on account of any fractional share not issued.
VI.
METHOD OF EXERCISING OPTION
Subject to the terms and conditions of this Option Agreement, the Option
may be exercised by written notice to the Company at its principal office and
place of business in the State of Minnesota. Such notice shall state the
election to exercise the Option and the number of Shares in respect of which
it is being exercised, and shall be signed by the person so exercising the
Option. Such notice shall be accompanied by the payment to the Company of the
full purchase price of such Shares in cash or by delivery of certificates for
shares of Common Stock of the Company owned by optionee having a fair market
value as determined under Section 5(d) of the Plan equal to the full purchase
price, or in cash and shares so valued equal to the full purchase price of
the Shares. The certificate for the Shares as to which the Option shall have
been so exercised shall be registered in the name of the person exercising
the Option. If the Optionee shall so request in the notice exercising the
Option, the certificate shall be registered in the name of the Optionee and
another person jointly with right of survivorship, and shall be delivered as
provided above to or upon the written order of the person exercising the
Option. In the event the Option shall be exercised by any person or persons
other than Optionee, such notice shall be accompanied by appropriate proof of
the right of such
person to exercise the Option. As provided in Section 9 of the Plan, the
Company shall have the right to retain, without notice, sufficient Shares
(valued as provided in Section 5(d) of the Plan) to cover the amount of tax
required to be withheld or otherwise deducted and paid with respect to such
exercise.
VII.
RESERVATION OF SHARES
The Company shall, at all times during the term of this Option, reserve
and keep available such number of Common Shares as will be sufficient to
satisfy the requirements of this Stock Option Agreement, and shall pay all
original issue and transfer taxes with respect to the issue and transfer of
Shares pursuant hereto, and all other fees and expenses necessarily incurred
by the Company in connection therewith.
VIII.
RIGHTS AS STOCKHOLDER
The holder of the Option shall not have any of the rights of a
shareholder with respect to the Shares covered by the Option except to the
extent that one or more certificates for such Shares shall be delivered to
the Optionee upon the due exercise of the Option.
IX.
NO REGISTRATION REQUIREMENTS
The Company shall not be deemed by reason of issuance of any Common
Stock under this Option to have any obligation to register such Shares under
the Securities Act of 1933, as amended, or any state securities law, or
maintain in effect any registration of such Shares. In addition, unless
Shares have been so registered, all options granted shall be on the condition
that prior to the exercise of the option, Optionee shall represent that the
Shares are being acquired for investment purposes
only and that Optionee can bear the economic risk of the investment for an
indefinite period of time since the Shares so acquired cannot be sold unless
they are subsequently registered or an exemption from such registration is
available. Optionee agrees that a legend may be placed on all certificates
for Shares acknowledging the restrictions on subsequent distribution of the
Shares.
X.
INTERPRETATION
This Option is granted pursuant to the Plan and shall be interpreted to
be consistent with such Plan, including the right of the Board of Directors
to make rules relating to the administration of the Plan, to amend, modify or
to terminate the Plan.
XI.
MISCELLANEOUS
This Stock Option Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, successors, assigns and
representatives and shall be governed by the internal laws of the State of
Minnesota.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement
to be duly executed by its officer thereunto duly authorized, and the
Optionee has hereunto set his hand, all on the day and year first above
written.
ATTEST: AMERICAN CHURCH MORTGAGE COMPANY
a Minnesota Corporation
By:
- ------------------------------- ------------------------------------
Secretary President
------------------------------------
Optionee