EXHIBIT 10.4
HUGHES SUPPLY, INC.
Amended and Restated Plan
Directors' Stock Option Plan
(with Amendments Approved Through May 21, 2002)
1. PURPOSE
This Directors' Stock Option Plan (the "Plan") is intended as an
incentive and to encourage Directors of Hughes Supply, Inc. (the "Corporation")
who are not, and for the previous twelve (12) months have not been, employees of
the Corporation eligible to participate in the Hughes Supply, Inc. 1988 Stock
Option Plan (the "Employee Plan") to increase their stock ownership and
proprietary interest in the success of the Corporation, to encourage them to
continue as Directors of the Corporation and as an incentive to work to increase
the value of the stock of the Corporation. The options to be issued pursuant to
this Plan shall not constitute incentive stock options within the meaning of
422A of the 1986 Internal Revenue Code, as amended (the "Code").
2. ADMINISTRATION
The Plan shall be administered by a Directors' Stock Option Plan
committee appointed by the Board of Directors of the Corporation (the
"Committee"). The Committee shall consist of not less than three (3) members of
the Corporation's Board of Directors who are not employees of the Corporation
and who are "disinterested persons" as that term is defined in Rule 16b-3(d)
under the Securities Exchange Act of 1934 (the "Exchange Act") or any successor
statute or regulation regarding the same subject matter. The Board of Directors
may from time to time remove members from, or add members to, the Committee.
Vacancies on the Committee, howsoever caused, shall be filled by the Board of
Directors. The Committee shall elect one of its members as Chairman, and shall
hold meetings at such times and places as it may determine. Acts of the
Committee taken by a majority of the Committee at a meeting at which a quorum is
present, or acts reduced to or approved in writing by a majority of the members
of the Committee, shall be the valid acts of the Committee. A nonemployee
Director shall receive options under the Plan whether or not such Director also
serves as a member of the Committee. Subject to the provisions of the Plan the
Committee may from time to time adopt such rules for administration of the Plan
as it deems appropriate.
The interpretation and construction by the Committee of any
provisions of the Plan or of any option granted under it shall be final unless
otherwise determined by the Board of Directors. No member of the Board of
Directors or the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any option granted under it.
3. PARTICIPANTS AND OPTIONS
The persons who shall be participants under the Plan (the
"Participants") shall be all such Directors of the Corporation as are not on the
date of the grant of an option under the Plan, and for a period of at least
twelve (12) months prior to the grant of such option have not been, employees of
the Corporation. Options are granted and shall be granted to Participants under
the Plan as follows:
(i) Subject to approval of the Plan by the stockholders in
accordance with Section 13 hereof and to the receipt by the Corporation of the
letter from the staff of the Securities and Exchange Commission referred to in
Section 14 hereof, an initial grant of an aggregate of 18,000 shares divided
equally (rounded, if necessary, down to the nearest whole number of shares)
among the Participants is made effective as of January 24, 1989 to the
Participants on that date.
(ii) In addition to the options referred to in subparagraph (i)
above, during the term of the Plan until, but not including, the date of the
1994 annual meeting of shareholders a subsequent grant of options for an
aggregate of 18,000 shares, or such lesser number of shares as shall then
constitute all of the remaining shares which are authorized for options under
the Plan, but which are not then subject to options under the Plan within the
limitation set forth in Section 4 hereof, divided equally (rounded, if
necessary, down to the nearest whole number of shares) among the then
Participants under the Plan, will be made at the meeting of the Board of
Directors of the Corporation immediately following the 1990 annual meeting of
stockholders of the Corporation and at each Board meeting immediately following
each annual meeting of stockholders of the Corporation thereafter during the
term of the Plan and prior to the 1994 annual meeting of Shareholders.
(iii) In addition to the options referred to in subparagraphs (i)
and (ii) above, during the term of the Plan beginning with the date of the 1994
annual meeting of shareholders, a subsequent grant of options for an aggregate
of 22,500 shares or such lesser number of shares as shall then constitute all of
the remaining shares which are authorized for options under the Plan but which
are not then subject to options under the Plan, within the limitations set forth
in Section 4 hereof, divided equally (rounded, if necessary, down to the nearest
whole number of shares) among the Participants under the Plan, will be made at
the meeting of the Board of Directors of the Corporation immediately following
the 1994 annual meeting of stockholders of the Corporation and at each Board
meeting immediately following each annual meeting of stockholders thereafter
through the 1998 annual meeting.
(iv) In addition to the options referred to in subparagraphs (i),
(ii) and (iii) above, during the term of the Plan beginning with the date of the
1999 annual meeting of shareholders, a subsequent grant of options for an
aggregate of 20,000 shares or such lesser number of shares as shall then
constitute all of the remaining
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shares which are authorized for options under the Plan but which are not then
subject to options under the Plan, within the limitations set forth in Section 4
hereof, divided equally (rounded, if necessary, down to the nearest whole number
of shares) among the Participants under the Plan, will be made at the meeting of
the Board of Directors of the Corporation immediately following the 1999 annual
meeting of shareholders of the Corporation and at each Board meeting immediately
following each annual meeting of shareholders thereafter through and including
the 2001 annual meeting.
(v) In addition to the options referred to in subparagraphs (i),
(ii), (iii) and (iv) above, during the term of the Plan beginning with the date
of the 2002 annual meeting of shareholders, a subsequent grant of options for
5,000 shares to each Participant (or if the number of shares authorized, as set
forth in Section 4 hereof, is insufficient to grant 5,000 shares to each
Participant, then a number of shares determined by dividing (a) the number of
authorized shares which are not then subject to options under the Plan by (b)
the number of Participants at that time, and, if necessary, rounding down to the
nearest whole number of shares) will be made at the meeting of the Board of
Directors of the Corporation immediately following the 2002 annual meeting of
shareholders of the Corporation, and at each Board meeting immediately following
each annual meeting of shareholders thereafter.
4. STOCK
The stock which may be subject to the options under the Plan shall
be 302,500 shares of the Corporation's authorized but unissued or reacquired
$1.00 par value common stock hereafter sometimes called capital stock. The
aggregate number of shares of capital stock which are subject to outstanding
options and which will be subject to options to be granted under the Plan shall
be subject to adjustment in accordance with the provisions of subsection (h) of
Section 5 hereof.
In the event that any outstanding option under the Plan for any
reason expires or is terminated, the shares of capital stock allocable to the
unexercised portion of such option may again be subjected to an option under the
Plan.
Of the stock which may be subject to options under the Plan, 112,500
of such shares have been added by an amendment to the Plan approved by the
stockholders on May 24, 1994 and such additional shares constitute shares as to
which "Amendment Options" within the meaning of Section 6 hereof may be granted,
and approval by the stockholders of such amendment extends the term of the Plan
in accordance with Section 6 thereof.
Furthermore, of the stock which may be subject to options under the
Plan, 100,000 of such shares have been added by an amendment to the Plan
approved by the stockholders on May 19, 1999 and such additional shares
constitute shares as to which "Amendment Options" within the meaning of Section
6 hereof may be
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granted, and approval by the stockholders of such amendment extends the term of
the Plan in accordance with Section 6 hereon.
5. TERMS AND CONDITIONS OF OPTIONS: STOCK OPTION AGREEMENTS
Stock options granted pursuant to the Plan shall be evidenced by
stock option agreements in such form as the Committee shall from time to time
recommend and the Board of Directors shall from time to time approve, which
agreements shall comply with and be subject to the following terms and
conditions:
(a) Optionee's Agreement
Each optionee shall agree to remain as a Director of the
Corporation but such agreement shall not impose upon the Corporation any
obligation to retain the optionee as a Director for any period.
(b) Number of Shares
Each option shall state the number of shares to which it
pertains.
(c) Option Price
Each option shall state the option price, which shall be not
less than one hundred percent (100%) of the fair market value of the shares of
capital stock of the Corporation on the date of the granting of the option.
During such time as such stock is not listed upon an established stock exchange
the fair market value per share shall be the mean between dealer "bid" and "ask"
prices of the capital stock in over-the-counter market applicable to
transactions effected in Orlando, Florida on the day the option is granted, as
reported by the National Association of Securities Dealers, Inc. If the stock is
listed upon an established stock exchange or exchanges such fair market value
shall be deemed to be the highest closing price of the capital stock on such
stock exchange or exchanges on the day the option is granted or if no sale of
the Corporation's capital stock shall have been made on any stock exchange on
that day, on the next preceding day on which there was a sale of such stock.
Subject to the foregoing, the Board of Directors and the Committee in fixing the
option price shall have full authority and discretion and be fully protected in
doing so.
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(d) Medium and Time of Payment
The option price shall be payable in United States dollars
upon the exercise of the option and may be paid in cash, by check or with shares
of capital stock of the Corporation valued at their fair market value, as that
term is defined in the preceding paragraph.
(e) Term and Exercise of Options
An option shall be exercisable either in whole or in part at
any time after the date on which it is granted and prior to its expiration date
which, unless sooner terminated under subsections (f) or (g) of this Section 5
hereof, shall be ten (10) years from the date on which it is granted. The
procedure for exercise of an option shall be as set forth in the Plan and in the
stock option agreement evidencing the grant of the option. In the event of any
conflict between the language of the stock option agreement and the language of
the Plan, the language of the Plan shall govern. No option shall be exercisable
after its expiration date. Not less than ten (10) shares may be purchased at any
one time unless the number purchased is the total number at the time purchasable
tinder the option. During the lifetime of the optionee, the option shall be
exercisable only by him and shall not be assignable or transferable by him and
no other person shall acquire any rights therein.
(f) Termination of Service as a Director Except Death
In the event that an optionee shall cease to be a Director of
the Corporation for any reason other than his death, subject to the condition
that no option shall be exercisable after its expiration date, such optionee
shall have the right to exercise the option at any time within one (1) year
after such termination as a Director to the extent his right to exercise such
option has not previously been exercised at the date of such termination. For
purposes of this paragraph, in the case of an optionee who becomes disabled
within the meaning of 22(3)(e) of the Code, the words "three months" shall be
replaced by the words "one year".
(g) Death of Optionee and Transfer of Option
If the optionee shall die while a Director of the Corporation
or within a period of three (3) months after the termination of his service as a
Director of the Corporation and shall not have fully exercised the option, an
option may be exercised at any time within one (1) year after the optionee's
death, subject to the condition that no option shall be exercisable after its
expiration date, to the extent that the optionee's right to exercise such option
at the time of his death had not been previously exercised, by the executors or
administrators of the optionee or by any person or persons who shall have
acquired the option directly from the optionee by bequest or inheritance or by
reason of the death of the decedent.
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No option shall be transferable by the optionee otherwise than
by Will or the laws of descent and distribution.
(h) Recapitalization
Subject to any required action by the stockholders, the number
of shares of capital stock which are subject to each outstanding option or which
will be subject to each option to be granted under the Plan, and the price per
share thereof in each such option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of capital stock of the
Corporation resulting from a subdivision or consolidation of shares or the
payment of a stock dividend (but only on the capital stock) or any other
increase or decrease in the number of such shares effected without receipt of
consideration by the Corporation.
Subject to any required action by the stockholders if the
Corporation shall be the surviving corporation in any merger or consolidation,
each outstanding option shall pertain to and apply to the securities to which a
holder of the number of shares of capital stock subject to the option would have
been entitled. A dissolution or liquidation of the Corporation or a merger or
consolidation in which the Corporation is not the surviving corporation, shall
cause each outstanding option to terminate provided that each optionee shall, in
such event, have the right immediately prior to such dissolution or liquidation,
or merger or consolidation in which the Corporation is not the surviving
corporation, to exercise his option in whole or in part.
In the event of a change in the capital stock of the
Corporation 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 capital stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock
or securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.
Except as hereinbefore expressly provided in this subsection
5(h), the optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or consolidation
or spin-off of assets or stock of another corporation, and any issue by the
Corporation of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no
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adjustment by reason thereof shall be made with respect to, the number or price
of shares of capital stock subject to the option.
The grant of an option pursuant to the Plan shall not affect
in any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.
(i) Rights as a Stockholder
An optionee or a transferee of an option shall have no
rights as a stockholder with respect to any shares covered by his option until
the date of the issuance of a stock certificate to him for such shares. No
adjustments shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
provided in subsection 5(h) hereof
(j) Modification, Extension and Renewal of Options
Subject to the terms and conditions and within the
limitations of the Plan, the Board of Directors may modify, extend or renew
outstanding options granted under the Plan, or accept the surrender of
outstanding options (to the extent not theretofore exercised) and authorize the
granting of new options in substitution therefor (to the extent not theretofore
exercised). Notwithstanding the foregoing, however, no modification of an option
shall, without consent of the optionee, alter or impair any rights of
obligations under any option theretofore granted under the Plan.
(k) Investment Purpose
Each option under the Plan shall be granted on the
condition that the purchases of stock thereunder shall be for investment
purposes, and not with a view to resale or distribution except that in the event
the stock subject to such option is registered under the Securities Act of 1933,
as amended (the "Securities Act"), or in the event a resale of such stock
without such registration would otherwise be permissible, such condition shall
be inoperative if in the opinion of counsel for the Corporation such condition
is not required under the Securities Act, or any other applicable law,
regulation, or rule of any governmental agency.
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(l) Other Provisions
The option agreements authorized under the Plan shall
contain such other provisions, including, without limitation, restrictions upon
the exercise of the option, as the Committee and the Board of Directors of the
Corporation shall deem advisable.
6. EFFECTIVE DATE AND TERM OF PLAN
Subject to approval by the stockholders as required by Section 13
hereof and to the receipt by the Corporation of the letter from the staff of the
Securities and Exchange Commission referred to in Section 14 hereof, the Plan
shall become effective as of January 24, 1989, the date of its adoption by the
Board of Directors of the Corporation and, subject to such stockholder approval
and the receipt of such letter, the initial grant of options hereunder as
provided in subsection 3(i) shall be effective as of the effective date of the
Plan. This Plan shall remain in effect and options shall be granted hereunder
from time to time until ten (10) years from the date the Plan is approved by the
stockholders or until terminated by the Board of Directors in accordance with
Section 8 hereof, whichever is earlier. Notwithstanding the foregoing part of
this Section 6, with respect to any amendment to this Plan adopted for the
purpose of increasing the number of shares as to which options ("Amendment
Options") may be granted hereunder, the Plan shall remain in effect as to
Amendment Options and Amendment Options may be granted hereunder from time to
time until ten (10) years from the date such amendment is adopted or the date
such amendment is approved by the stockholders if such approval is required or
until the Plan, as amended, is terminated by the Board of Directors in
accordance with Section 8 hereof, whichever is earlier. For purposes of options
outstanding under the Plan the Plan shall continue in effect until all
outstanding options have been exercised in full or are no longer exercisable.
7. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have
as Directors or as members of the Committee, the members of the Committee shall
be indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any option
granted thereunder, and against all amounts paid by them in settlement thereof,
not to exceed, in the judgment of the Board of Directors, the estimated expense
of litigating the proceeding to conclusion (provided such settlement is approved
by independent legal counsel selected by the Corporation) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
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proceeding that the member of the Committee is liable. A Committee member shall
in writing offer the Corporation the opportunity, at its own expense, to handle
and defend the same.
8. AMENDMENT OF THE PLAN
The Board of Directors of the Corporation may, insofar as permitted
by law, from time to time, with respect to any shares at the time not subject to
options, suspend or discontinue the Plan or revise or amend it in any respect
whatsoever except that, without approval of the stockholders, no such revision
or amendment shall change the number of shares subject to the Plan, extend the
term of the Plan or the term of any option which may be granted under the Plan,
change the designation of the Participants or the manner in which options are
granted under the Plan or materially increase the benefits accruing under the
Plan (materially, within the meaning of Rule 16b-3 implementing the Exchange
Act), decrease the price at which options may be granted or remove the
administration of the Plan from the Committee (except as may be required by the
staff of the Commission to provide the letter described in Section 13 hereof).
9. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of capital
stock pursuant to options will be used for general corporate purposes.
10. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the
optionee to exercise such option.
11. WITHHOLDING
The exercise of any option granted under the Plan shall constitute
an optionee's full and complete consent to whatever action the Committee directs
to satisfy the federal and state withholding requirements, if any, which the
Committee in its discretion deems applicable to such exercise or surrender.
12. CONSTRUCTION
The Plan shall be construed under the laws of the State of Florida.
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13. APPROVAL OF STOCKHOLDERS
The Plan shall be submitted for approval by the stock holders of the
Corporation within twelve (12) months from the date the Plan is adopted by the
Board of Directors. Any amendment to the Plan requiring approval by the
stockholders of the Corporation shall be submitted for approval by the
stockholders within twelve (12) months from the date the amendment is adopted by
the Board of Directors.
The initial options granted under the Plan, as set forth in
subsection 3(1) hereof are granted as of the date set forth therein; provided,
however, that such options shall not be exercisable until after the date on
which the Plan shall have approved by a vote of the stockholders. Options may be
granted pursuant to any amendment to this Plan adopted for the purpose of
increasing the number of shares as to which options may be granted, the types of
options which may be granted or the rights applicable to options which may be
granted hereunder, commencing with the date of adoption of such amendment by the
Board of Directors of the Corporation; provided, however, that options granted
in reliance upon any such amendment shall not be exercisable until the date on
which such amendment shall have been submitted for approval of the stockholders.
14. LETTER FROM COMMISSION STAFF
The Corporation will request a letter from the staff of the
Securities and Exchange Commission (the "Commission") concurring with the
opinion of legal counsel to the Corporation that the Plan complies with the
requirements set forth in Rule 6b-3 promulgated by the Commission to provide
exemptive relief from certain aspects of Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). If, as a condition of
providing its concurring letter, the staff of the Commission requires
modifications to the Plan which are not material and such modifications are
approved by the Board of Directors, the Plan shall be so modified and amended
under the provisions of Section 8 hereof. In the event the Corporation is unable
to obtain the aforementioned concurring letter from the staff of the Commission
as required by this Section 14 or the Plan is not approved by the stockholders
as required by Section 13 hereof, the Plan shall be deemed null and void ab
initio.
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