-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DC6ndEV+Z+JzZ+zOjcYkxgZGCArNBSILchFnS+JPxojiQROPBaxmDGF2CgovpkIp lYFm+Qw7DVYrGkHPeTRnZA== 0000940112-96-000002.txt : 19970102 0000940112-96-000002.hdr.sgml : 19970102 ACCESSION NUMBER: 0000940112-96-000002 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19961231 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GIBRALTAR PACKAGING GROUP INC CENTRAL INDEX KEY: 0000882830 STANDARD INDUSTRIAL CLASSIFICATION: PAPERBOARD CONTAINERS & BOXES [2650] IRS NUMBER: 470496290 STATE OF INCORPORATION: DE FISCAL YEAR END: 0629 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43376 FILM NUMBER: 96688769 BUSINESS ADDRESS: STREET 1: 274 RIVERSIDE AVE CITY: WESTPORT STATE: CT ZIP: 06880 BUSINESS PHONE: 2032270400 MAIL ADDRESS: STREET 1: 274 RIVERSIDE AVE CITY: WESTPORT STATE: CT ZIP: 06880 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ROSE WALTER E CENTRAL INDEX KEY: 0000940112 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 274 RIVERSIDE AVE CITY: WESTPORT STATE: CT ZIP: 06880 BUSINESS PHONE: 2032270400 SC 13D/A 1 WALTER E. ROSE SC 13D/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities and Exchange Act of 1934 (Amendment No. 1)* Gibralter Packaging Group, Inc. - ------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.01 Par Value - ------------------------------------------------------------------------------- (Title of Class of Securities) 374-758-10-0 - ------------------------------------------------------------------------------- (CUSIP Number) Marc C. Krantz, Kohrman Jackson & Krantz P.L.L., 1375 East 9th Street, Cleveland, Ohio 44114, 216-736-7204 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 3, 1996 - ------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 13D CUSIP NO. 374-758-1-0 - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Walter E. Rose - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 331,296 ------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY ------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING 331,296 ------------------------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 331,296 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*[ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.5% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------
3 CUSIP No. 374-758-10-0 This Amendment No. 1 to Schedule 13D Statement is filed on behalf of Walter E. Rose for the purpose of reporting the vesting of certain options ("Options") granted to Mr. Rose for the purchase of shares of common stock, par value $0.01 per share, of Gibraltar Packaging Group, Inc., a Delaware corporation. Item 1. Security and Issuer. Item 1 is amended and supplemented as follows: This Amendment No. 1 to Schedule 13D Statement is filed on behalf of Walter E. Rose and relates to the shares of common stock, par value $0.01 per share (the "Shares"), of Gibraltar Packaging Group, Inc., a Delaware corporation, that has its principal executive offices at 274 Riverside Avenue, Westport Connecticut, 06880 ("Gibraltar"). Item 2. Identity and Background. Item 2 is amended and supplemented as follows: (a) This Amendment No. 1 to Schedule 13D Statement is filed on behalf of Walter E. Rose. (b) Mr. Rose's business address is 274 Riverside Avenue, Westport Connecticut, 06880. (c) Mr. Rose's principal occupation is President and Chief Executive Officer of Gibraltar. (d) Negative with respect to Mr. Rose. (e) Negative with respect to Mr. Rose. (f) Mr. Rose is a citizen of the United States of America. Item 3. Source and Amount of Funds or Other Consideration. Item 3 is amended and supplemented as follows: The Options reported herein as having vested were granted to Mr. Rose as compensation for services rendered by Mr. Rose to Gibraltar. The Stock Option Agreement (the "Option Agreement") and Gibraltar's 1996 Non-Qualified Stock Option Plan (the "Plan") pursuant to which the Options were granted to Mr. Rose are attached hereto, as Exhibits 7.2 and 7.3, respectively. Should Mr. Rose elect to exercise the Options when they vest in accordance with the Option 4 CUSIP No. 374-758-10-0 Agreement, he will be required to purchase the Shares for a purchase price of $4.00 per share. Item 5. Interest in Securities of the Issuer. Item 5 is amended and supplemented as follows: (a) According to the most recently available filing with the Securities and Exchange Commission (the "Commission") by Gibraltar, there would be 5,066,544 Shares outstanding if Mr. Rose exercised the Options reported herein as vesting on February 1, 1997 ("Outstanding Shares"). Mr. Rose beneficially owns 331,296 Shares, or approximately 6.5% of the Outstanding Shares, which is the sum of the 306,296 Shares owned by him and the 25,000 Shares that Mr. Rose has the unconditional right to purchase on February 1, 1997, in accordance with the terms of the Option Agreement. Under Rule 13d(1)(i) promulgated by the Commission under the Securities Exchange Act of 1934, as amended, Mr. Rose may be deemed to have beneficial ownership of the 25,000 Shares because he has the unconditional right to acquire such Shares in 60 days pursuant to the terms of the Option Agreement. (b) Mr. Rose has sole power to vote, or to direct the voting of, and the sole power to dispose or to direct the disposition of, the Shares owned by him. (c) The only transaction in the Shares by Mr. Rose in the last 60 days occurred because, as of December 3, 1996, under Rule 13d(1)(i), Mr. Rose may be deemed to have beneficial ownership of the 25,000 Shares he has the unconditional right to acquire on February 1, 1997 pursuant to the terms of the Option Agreement. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Item 6 is amended and supplemented as follows: Gibraltar granted Mr. Rose Options to purchase 125,000 Shares for an exercise price of $4.00 per Share, on the terms and conditions set forth in the Option Agreement and the Plan. The Options vest in accordance with the Option Agreement as follows: 5 CUSIP No. 374-758-10-0 Date Shares May be Purchased Number of Shares ---------------- ---------------- February 1, 1997 25,000 August 1, 1997 25,000 August 1, 1998 25,000 August 1, 1999 25,000 August 1, 2000 25,000
In accordance with the Option Agreement, the Options otherwise vesting on August 1, 1997, August 1, 1998, August 1, 1999 and August 1, 2000 will not vest unless and until at any time prior to the expiration of the Options, the per Share fair market value (as such term is defined in the Option Agreement) is, for a period of at least 20 consecutive trading days, equal to $6.00, $7.00, $8.00 and $9.00, respectively. The Option Agreement and the Plan are attached hereto as Exhibit 7.2 and 7.3, respectively. 6 CUSIP No. 374-758-10-0 Item 7. Material to be Filed as Exhibits. Item 7 is amended and supplemented as follows: 7.2 -- Stock Option Agreement 7.3 -- Gibraltar 1996 Non-Qualified Stock Option Plan 7 CUSIP No. 374-758-10-0 After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 30, 1996 /s/ Walter E. Rose ------------------ Walter E. Rose 8 CUSIP No. 419-411-10-3 Exhibit Index 7.2 -- Stock Option Agreement 7.3 -- Gibraltar 1996 Non-Qualified Stock Option Plan EX-7.2 2 WALTER E. ROSE 13D/A EX-7.2 EXHIBIT 7.2 GIBRALTAR PACKAGING GROUP, INC. STOCK OPTION AGREEMENT This Agreement, effective as of August 1, 1996 (the "Grant Date"), is by and among GIBRALTAR PACKAGING GROUP, INC., a Delaware corporation (the "Company"), and WALTER E. ROSE ("Optionee"). To carry out the purposes of the Gibraltar Packaging Group, Inc. 1996 Non-Qualified Stock Option Plan ("Plan") by affording Optionee the opportunity to purchase shares of Common Stock, par value $0.01 per share, of the Company ("Stock"), and in consideration of the mutual agreements and other matters set forth herein and in the Plan, the Company and Optionee hereby agree as follows: 1. Grant of Option. The Company hereby grants to Optionee the right and option (the "Option") to purchase all or any part of an aggregate of 125,000 shares of Stock, on the terms and conditions set forth herein and in the Plan. 2. Purchase Price. The purchase price of Stock purchased upon exercise of the Option shall be $4.00 per share. 3. Exercise of Option. (a) Subject to the earlier expiration of the Option as herein provided and subject to the terms and conditions contained herein, the Option may be exercised, by written notice to the Company at its principal executive office, addressed to the attention of the Secretary of the Company, at any time and from time to time on and after the Grant Date, subject to the vesting schedule set forth below, such exercise to be effective at the time of receipt of such written notice at the Company's principal executive office during normal business hours; provided, however, that, except (i) any exercise of the Option must be for a minimum of 500 shares of Stock and (ii) the Option shall only be exercisable in accordance with the following vesting schedule subject to Paragraphs 3(b) and 3(c): Date Shares of Stock May be Purchased Percentage of Shares of Stock -------------------------- ----------------------------- Six months from Grant Date 20% 1 year from Grant Date 20% 2 years from Grant Date 20% 3 years from Grant Date 20% 4 years from Grant Date 20%
2 (b) Notwithstanding Paragraph 3(a) above, (i) the portion of the Option that would otherwise vest on the date that is one year from the Grant Date shall not be vested unless and until at any time prior to the expiration of this Option the "Fair Market Value" (as defined below) of the Stock is equal to or greater than $6.00 for 20 consecutive trading days; (ii) the portion of the Option that would otherwise vest on the date that is two years from the Grant Date shall not be vested unless and until at any time prior to the expiration of this Option the Fair Market Value of the Stock is equal to or greater than $7.00 for 20 consecutive trading days; (iii) the portion of the Option that would otherwise vest on the date that is three years from the Grant Date shall not be vested unless and until at any time prior to the expiration of this Option the Fair Market Value of the Stock is equal to or greater than $8.00 for 20 consecutive trading days; and (iv) the portion of the Option that would otherwise vest on the date that is four years from the Grant Date shall not be vested unless and until at any time prior to the expiration of this Option the Fair Market Value of the Stock is equal to or greater than $9.00 for 20 consecutive trading days. "Fair Market Value" means (i) if the Stock is listed on a domestic securities exchange or admitted to unlisted trading privileges on such exchange or listed for trading on the National Association of Securities Dealers automated quotation system ("NASDAQ"), the last reported sale price of a share of Stock on such exchange or NASDAQ, or if no such sale is made any such day, the average closing bid and asked prices for any such day on such exchange or NASDAQ; or (ii) if the Stock is not so listed or admitted to unlisted trading privileges and bid and asked prices are not so reported, the price per share as determined by the board of directors of the Company acting in good faith. For example purposes only, if the Fair Market Value of the Stock does not reach $6.00 on 20 consecutive trading days prior to the date that is one year from the Grant Date, the portion of the Option that would otherwise vest on that date will not vest on that date. If the Fair Market Value of the Stock subsequently is equal to or greater than $6.00 for 20 consecutive trading days at any time prior to the expiration of this Option, such portion of the Option will vest on the 20th day. (c) The Option shall become immediately fully exercisable: (i) if there occurs any transaction (which shall include a series of transactions occurring within 60 days or occurring pursuant to a plan), that has the result that stockholders of the Company immediately before such transaction cease to own at least 51% of the voting stock of the Company or of any entity that results from the participation of the Company in a reorganization, consolidation, merger, liquidation or any other form of corporate transaction; 3 (ii) if the stockholders of the Company approve a plan of merger, consolidation, reorganization, liquidation or dissolution in which the Company does not survive (unless the approved merger, consolidation, reorganization, liquidation or dissolution is subsequently abandoned); or (iii) if the stockholders of the Company approve a plan for the sale, lease, exchange, transfer, assignment or other disposition of all or substantially all the property and assets of the Company (unless such plan is subsequently abandoned). (d) Optionee (or the person permitted to exercise the Option in the event of Optionee's death) shall be and have all of the rights and privileges of a stockholder of record of the Company with respect to shares acquired upon exercise of the Option, effective upon such exercise. 4. Payment of Exercise Price. The purchase price of shares as to which the Option is exercised shall be payable at the time of exercise (i) in cash or check payable and acceptable to the Company, or (ii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the Option exercise price; provided that in the event the Optionee chooses to pay the Option exercise price as provided in clause (ii), the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Committee shall prescribe as a condition of such payment procedure. 5. Transferability. The Option may be sold, exchanged, pledged, transferred, assigned or otherwise encumbered by Optionee only as follows: (1) to the spouse or any children or grandchildren of Optionee; (2) as a charitable contribution or gift to or for the use of any person or entity described in Section 170(c) of the Internal Revenue Code of 1986, as amended; (3) to any "Controlled Entity," as such term is defined below; or (4) by will or the laws of intestate succession. "Controlled Entity" means any trust, partnership, limited liability company or other entity in which Optionee acts as trustee, managing partner, managing member or otherwise controls. 6. Termination of Employment. If the Optionee's employment is terminated for any reason other than a Qualified Termination (defined below), the Option shall automatically expire simultaneously with such termination. In the event of termination of an Optionee's employment due to death, retirement on or after reaching age 65 (or if prior to age 65, with the consent of the Committee), permanent disability (as determined under the standards of the Company's long-term disability program) or termination by the Company for any reason other than "cause" (such four events being a "Qualified Termination"), the Option may be exercised by the Optionee (or his estate, personal 4 representative or beneficiary) at any time within the three-month period commencing on the day next following such Qualified Termination (or within the next succeeding three months if the Optionee dies or becomes disabled within the three-month period following such Qualified Termination) to the full extent that the Optionee was entitled to exercise the same on the day immediately prior to such Qualified Termination. For purposes of this clause, "cause" shall mean: (i) Final conviction of the Optionee of a felony under the laws of the United States or any state thereof which results or was intended to result directly or indirectly in gain or personal enrichment by the Optionee at the expense of the Company; (ii) Participation by the Optionee as an employee, officer or principal shareholder in any business engaged in activities in direct competition with the Company without the consent of the Company; or (iii) Gross and willful inattention to Optionee's duties as an employee for a continuous period of three months other than due to Optionee's total physical disability, or another cause reasonably beyond the control of Optionee, which inattention to duty has a material adverse effect on the Company. 7. Withholding of Tax. To the extent that the exercise of the Option is a taxable event with respect to which the Company has a duty to withhold for federal or state income tax purposes, Optionee shall pay to the Company at the time of such exercise (or such other time as the law permits if Optionee is subject to Section 16(b) of the Securities Exchange Act of 1934) such amount of money as the Company may require to meet its obligation under applicable tax laws or regulations (or to be entitled to a tax deduction), and, if Optionee fails to do so, the Company is authorized to withhold from any cash remuneration then or thereafter payable to Optionee any tax required to be withheld by reason of such resulting compensation income (or to be entitled to a tax deduction) or otherwise refuse to issue or transfer any shares otherwise required to be issued pursuant to the terms hereof. 8. Status of Stock. Unless the offering, sale and delivery of shares of Stock acquirable upon exercise of the Option have been registered and continue to be so at the date of exercise hereof under the Securities Act of 1933 (the "Act"), Optionee agrees that the shares of Stock which Optionee acquires by exercise the Option shall be acquired for investment without a view to distribution, within the meaning of the Act, and shall not be sold, transferred, assigned, pledged or hypothecated in the absence of an effective registration statement for the shares under the Act and applicable state securities laws or an applicable exemption from the registration requirements of the act and any applicable state securities laws. Optionee also agrees that 5 the shares of Stock which Optionee may acquire by exercising the Option will not be sold or disposed of in any manner which would constitute a violation of any other applicable securities law, whether federal or state. In addition, Optionee agrees (a) that the certificates representing the shares of Stock issued under this Agreement may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws, and (b) that the Company may give instruction to its transfer agent, if any, to stop transfer of the shares of Stock issued under this Agreement on the stock transfer records of the Company, if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law or any such agreements. Optionee further agrees that the Option granted herein shall be subject to the requirement that, if at any time the Board of Directors shall determine, in its discretion, that the listing, registration or qualification of the shares subject to such Option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the issue or purchase or issuance of shares hereunder, such Option may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Board of Directors. 9. Employment Relationship. For purposes of this Agreement, Optionee shall be considered to be in the employment of the Company as long as Optionee remains an employee of either the Company or its Subsidiaries (as defined in the Plan). Any question as to whether and when there has been a termination of such employment, for purposes of this Agreement, and the cause of such termination, for purposes of this Agreement, shall be determined by the Committee, and its determination shall be final. Nothing herein shall give Optionee any right to continued employment or affect in any manner the right of the Company or any subsidiary or parent corporation to terminate the employment of Optionee. 10. Miscellaneous. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Optionee. This Agreement and all actions taken hereunder shall be governed by and constructed in accordance with the laws of the State of Delaware. In the event of conflict between this Agreement and the Plan, the terms of the Plan shall control. A copy of the Plan is attached hereto as Exhibit A, and the Plan is incorporated herein by this reference. The Committee shall have authority to construe the terms of this Agreement, and the Committee's determinations shall be final and binding on Optionee and the Company. 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and Optionee has executed this Agreement as of the day and year first above written. OPTIONEE GIBRALTAR PACKAGING GROUP, INC. /s/ Walter E. Rose By: /s/ Rebecca L. Couturier - ------------------ ---------------------------- Name: Rebecca L. Couturier -------------------------- Title: Assistant Secretary ------------------------- EX-7.3 3 WALTER E. ROSE 13D/A EX-7.3 EXHIBIT 7.3 GIBRALTAR PACKAGING GROUP, INC. 1996 NON-QUALIFIED STOCK OPTION PLAN 1. Purpose The purpose of the Gibraltar Packaging Group, Inc. 1996 Non-Qualified Stock Option Plan (the "1996 Plan") is to enhance the ability of Gibraltar Packaging Group, Inc. (the "Company") and its Subsidiaries (as defined below) to attract and retain individuals possessing superior managerial talent to serve as employees of the Company and its Subsidiaries, and to provide long-term incentives to such persons to contribute to the future success and prosperity of the Company and its Subsidiaries. Accordingly, under the 1996 Plan the Company may grant to key employees options ("Options") to purchase shares of the Company's common stock, par value $.01 per share ("Common Stock"). For purposes of the 1996 Plan, a "Subsidiary" shall be any corporation in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of all classes of stock in such corporation. 2. Administration and Interpretation A. Administration. The 1996 Plan shall be administered by the Compensation Committee (the "Committee") of the Board of Directors of the Company (the "Board"). The Committee may prescribe, amend and rescind the rules and regulations for administration of the 1996 Plan and shall have full power and authority to construe and interpret the 1996 Plan. The Committee may correct any defect or any omission or reconcile any inconsistency in the 1996 Plan or in any grant made under the 1996 Plan in the manner and to the extent it shall deem desirable. Committee members shall be appointed by and shall serve at the pleasure of the Board. All members of the Committee shall be "disinterested persons" within the meaning of Rule 16b-3 of the General Rules and Regulations of the Securities Exchange Act of 1934 (the "1934 Act"). The Board may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, in the Committee. A majority of the members of the Committee shall constitute a quorum, and the acts of a majority of the members present at a meeting, or the acts of a majority of the members evidenced in writing, shall be the acts of the Committee. Members of the Committee may, in the discretion of the Board, receive compensation for their services as members, and all expenses and liabilities they incur in connection with the administration of the 1996 Plan shall be borne by the Company. 2 The day-to-day administration of the 1996 Plan may be carried out by such officers and employees of the Company or its Subsidiaries as shall be designated from time to time by the Committee. The Committee may employ attorneys, consultants, accountants, appraisers, brokers or other persons, and the Committee, the Company and the officers and employees of the Company shall be entitled to rely upon the advice, opinions or valuations of any such persons. The Committee shall have the authority (i) to make all decisions concerning Options granted under the 1996 Plan, including without limitation the selection of the persons to whom Options are granted, the number of shares of Common Stock subject to each Option and the terms and conditions of each Option; (ii) to construe the terms and provisions of the 1996 Plan and the option agreements ("Agreements") under which Options are granted; and (iii) to adopt, from time to time, such rules and regulations, not inconsistent with the terms of the 1996 Plan, as it may deem advisable to carry out the 1996 Plan. All decisions by the Committee shall be final. The effective date of an Option, as determined by the Committee, is referred to herein as the "Grant Date." B. Interpretation. The interpretation and construction by the Committee of any provisions of the 1996 Plan or of any grant under the 1996 Plan and any determination by the Committee under any provision of the 1996 Plan or any such grant shall be final and conclusive for all purposes. C. Limitation on Liability. Neither the Committee nor any member thereof shall be liable for any act, omission, interpretation, construction or determination made in connection with the 1996 Plan in good faith, and the members of the Committee shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including counsel fees) arising therefrom to the full extent permitted by law and the certificate of incorporation of the Company. The members of the Committee, if appointed, shall be named as insureds under any directors and officers liability insurance coverage that may be in effect from time to time. 3. Shares Subject to Grants Under the 1996 Plan The aggregate number of shares which may be issued under Options granted under the 1996 Plan shall not exceed 300,000 shares of Common Stock. Such shares may consist of authorized but unissued shares of Common Stock or previously issued shares of Common Stock reacquired by the Company. Any of such shares which remain unissued and which are not subject to outstanding Options at the termination of the 1996 Plan shall cease to be subject to the 1996 Plan, but until termination of the 1996 Plan, the Company shall at all times make available a sufficient number of shares to meet the requirements of the 1996 Plan and the outstanding Options. The number of shares of Common 3 Stock that are available for Options under the 1996 Plan shall be decreased by each exercise of an Option, and to the extent that such Option lapses the shares theretofore subject to such Option may again be subject to other Options granted under the 1996 Plan. If any Option, in whole or in part, expires or terminates unexercised or is canceled or forfeited, the shares theretofore subject to such Option may be subject to another Option granted under the 1996 Plan. The aggregate number of shares which may be issued under Options granted under the 1996 Plan shall be subject to adjustment as provided in Section 6 hereof. 4. Eligibility The individuals who shall be eligible to receive Options under the 1996 Plan shall be such key employees of the Company and its Subsidiaries as the Committee from time to time shall determine. In granting Options, the Committee shall take into consideration the contribution an individual has made or may make to the success of the Company or its Subsidiaries and such other factors as the Committee shall determine. The Committee shall also have the authority to consult with and receive recommendations from officers and other employees of the Company and its Subsidiaries with regard to these matters. In no event shall any individual or his legal representatives, heirs, legatees, distributees or successors have any right to participate in the 1996 Plan except to such extent, if any, as the Committee shall determine. Options may be granted under the 1996 Plan from time to time in substitution for stock options, restricted stock or other stock-based compensation granted by other corporations where, as a result of a merger or consolidation of such other corporation with the Company or a Subsidiary, or the acquisition by the Company or a Subsidiary of the assets of such other corporation, or the acquisition by the Company or a Subsidiary of stock of, or other beneficial ownership interest in, such other corporation, the individuals who held such other stock options, restricted stock or other stock-based compensation become eligible to receive Options under the 1996 Plan. 5. Grants and Terms of Options A. Grants of Options. Grants of Options under the 1996 Plan shall be for such number of shares of Common Stock and shall be subject to such terms and conditions as the Committee shall designate. B. Terms of Options. Each grant of an Option shall be evidenced by an Agreement executed by the recipient of the Option (the "Optionee") and an authorized officer of the Company. Each Agreement shall be in a form approved by the Committee, shall comply with and be subject to the terms and conditions of the 1996 Plan and may contain such other provisions, consistent with the terms and conditions of the 1996 Plan, as the Committee shall deem advisable. 4 References herein to an Agreement shall include, to the extent applicable, any amendment to the Agreement and any interpretation or construction thereof by the Committee pursuant to this 1996 Plan. (1) Exercise of Options. Options shall not be exercisable prior to the date six months following the Grant Date. In addition, the Committee may include in each Agreement a provision stating that the Option granted therein may not be exercised in whole or in part for an additional period of time specified in such Agreement, and may further limit the exercisability of the Option in such manner as the Committee deems appropriate, including, without limitation, the achievement of specified performance goals or other criteria. Except as provided herein or as so specified in the Agreement or in a resolution of the Committee, any Option may be exercised in whole at any time or in part from time to time during its term. The Committee may, in its discretion, at any time and from time to time accelerate the exercisability of all or part of any Option, provided such Option shall not be exercisable prior to the date six months following its Grant Date. An Optionee may exercise an Option by providing written notice to the Company at any time or from time to time during the period such Option is exercisable and by satisfying such other conditions as are set forth in the Agreement relating to the Option including, without limitation, satisfying the requirements for tax withholding, if any, with respect to such exercise in a manner acceptable to the Committee, which may include, in its discretion, withholding of shares to be acquired upon such exercise. (2) Payment of Option Exercise Price. Upon exercise of an Option, the full price per share (the "Exercise Price") for the shares with respect to which the Option is being exercised shall be payable to the Company (i) in cash or by check payable and acceptable to the Company or (ii) subject to the approval of the Committee, (a) by tendering to the Company shares of Common Stock owned by the Optionee having an aggregate Market Value Per Share (as defined below) as of the date of exercise and tender that is not greater than the Exercise Price for the shares with respect to which the Option is being exercised and by paying any remaining amount of the Exercise Price as provided in (i) above; provided, however, that the Committee may, upon confirming that the Optionee owns the number of additional shares being tendered, authorize the issuance of a new certificate for the number of shares being acquired pursuant to the exercise of the Option less the number of shares being tendered upon the exercise, and return to the Optionee (or not require surrender of) the certificate for the shares being tendered upon the exercise; or (b) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option exercise price; provided that in the event the Optionee chooses to pay the Option exercise as provided in (ii)(b) above, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and 5 other agreements as the Committee shall prescribe as a condition of such payment procedure. Payment instructions will be received subject to collection. (3) Number of Shares. Each Agreement shall state the total number of shares of Common Stock that is subject to the Option, which option shall be subject to adjustment pursuant to Section 6. (4) Exercise Price. The Exercise Price for each Option shall be fixed by the Committee on the Grant Date. The Exercise Price shall be in no event less than the par value of the Common Stock. The Exercise Price shall be subject to adjustment pursuant to Section 6. (5) Term. The term of each Option shall be determined by the Committee at the Grant Date; provided, however, that each Option shall expire no later than ten years from the Grant Date (such date, as determined by the Committee or provided for herein, being referred to hereafter as the "Expiration time"); provided further, however, if the initial term of an Option is for less than 10 years, the Committee, in its discretion, may modify the Expiration Time to a date that is no later than 10 years from the initial Grant Date. (6) Termination of Employment. If the employment of an Optionee is terminated for any reason other than a Qualified Termination (defined below), the Option granted to such Optionee shall automatically expire simultaneously with such termination. In the event of termination of an Optionee's employment due to death, retirement, on or after reaching age 65 (or if prior to age 65, with the consent of the Committee), permanent disability (as determined under the standards of the Company's long-term disability program) or termination by the Company for any reason other than "cause" (each of such four events being a "Qualified Termination"), the Option may be exercised by the Optionee (or his estate, personal representative or beneficiary) at any time within the three-month period commencing on the day next following such Qualified Termination (or within the next succeeding three months if the Optionee dies or becomes disabled within the three-month period following a Qualified Termination relating to other than the Optionee's death or disability) to the full extent that the Optionee was entitled to exercise the same on the day immediately prior to such Qualified Termination. For purposes of this clause, "cause" shall mean: (i) Final conviction of the Optionee of a felony under the laws of the United States or any state thereof which results or was intended to result directly or indirectly in gain or personal enrichment by the Optionee at the expense of the Company; (ii) Participation by the Optionee as an employee, officer or 6 principal shareholder in any business engaged in activities in direct competition with the Company without the consent of the Company; or (iii) Gross and willful inattention to Optionee's duties as an employee for a continuous period of three months other than due to Optionee's total physical disability, or other cause reasonably beyond the control of Optionee, which inattention to duty has a material adverse effect on the Company. Notwithstanding the foregoing however, the Committee may, in its discretion provide that an Option shall remain outstanding and be exercisable following termination of employment on such other terms and conditions as the Committee shall approve. 6. Recapitalization or Reorganization A. The existence of the 1996 Plan and the Options granted hereunder shall not affect in any way the right or power of the Board or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, or shares of preferred stock ahead of or affecting Common Stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. B. The shares with respect to which Options may be granted are shares of Common Stock as presently constituted. If, and whenever, prior to the termination of the 1996 Plan or the expiration of an outstanding Option, the Company shall effect a subdivision of shares of Common Stock or the payment of a stock dividend on Common Stock without receipt of consideration by the Company, the remaining shares of Common Stock available under the 1996 Plan and the number of shares of Common Stock with respect to which outstanding Options may thereafter be exercised shall be proportionately increased, and the Exercise Price under outstanding Options shall be proportionately reduced. If, and whenever, prior to the termination of the 1996 Plan or the expiration of an outstanding Option, the Company shall effect a consolidation of shares of Common Stock, the remaining shares of Common Stock available under the 1996 Plan and the number of shares of Common Stock with respect to which any outstanding Option may thereafter be exercised shall be proportionately reduced, and the Exercise Price under the outstanding Options shall be proportionately increased. C. Except as may otherwise be expressly provided in the 1996 Plan, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to 7 subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock available under the 1996 Plan or subject to Options theretofore granted or the Exercise Price per share. D. Unless otherwise provided in any Option, each outstanding Option shall become immediately fully exercisable: (1) if there occurs any transaction (which shall include a series of transactions occurring within 60 days or occurring pursuant to a plan), that has the result that stockholders of the Company immediately before such transaction cease to own at least 51% of the voting stock of the Company or of any entity that results from the participation of the Company in a reorganization, consolidation, merger, liquidation or any other form of corporate transaction; (2) if the stockholders of the Company approve a plan of merger, consolidation, reorganization, liquidation or dissolution in which the Company does not survive (unless the approved merger, consolidation, reorganization, liquidation or dissolution is subsequently abandoned); or (3) if the stockholders of the Company approve a plan for the sale, lease, exchange, transfer, assignment or other disposition of all or substantially all the property and assets of the Company (unless such plan is subsequently abandoned). E. Any adjustment provided for above shall be subject to any required shareholder action. 7. Recipient's Agreement If, in the opinion of counsel for the Company, at the time of the exercise of any Option it is necessary or desirable, in order to comply with any then applicable laws or regulations relating to the sale of securities, for the individual exercising the Option to agree to hold any shares issued to the individual for investment and without intention to resell or distribute the same and for the individual to agree to dispose of such shares only in compliance with such laws and regulations, the individual shall be required, upon the request of the Company, to execute and deliver to the Company a further agreement to such effect. 8. Miscellaneous A. No Employment Contract. Nothing contained in the 1996 Plan shall be 8 construed as conferring upon any employee the right to continue in the employ of the Company or any Subsidiary. B. Employment with Subsidiaries. Employment by the Company for the purpose of this 1996 Plan shall be deemed to include employment by, and to continue during any period in which an employee is in the employment of, any Subsidiary. C. No Rights as a Shareholder. A person granted an Option under the 1996 Plan shall have no rights as a shareholder with respect to shares covered by such person's Option until the date of the issuance of shares to the person upon the exercise of the Option. No adjustment will be made for dividends or other distributions or rights for which the record date is prior to the date of such issuance. D. No Restriction on Corporate Action. Nothing contained in the 1996 Plan shall be construed to prevent the Company or any Subsidiary from taking any corporate action that is deemed by the Company or such Subsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on the 1996 Plan or any Option granted under the 1996 Plan. No person that receives, or is eligible to receive, Options under the 1996 Plan shall have any claim against the Company or any Subsidiary as a result of any such action. E. Transferability. A person that receives Options under the 1996 Plan or such person's beneficiary shall have the power or right to sell, exchange, pledge, transfer, assign or otherwise encumber or dispose of such person's or beneficiary's Options received under the 1996 Plan only as follows: (1) to the spouse or any children or grandchildren of such person that receives Options under the 1996 Plan; (2) as a charitable contribution or gift to or for the use of any person or entity described in Section 170(c) of the Internal Revenue Code of 1986, as amended; (3) to any "Controlled Entity," as such term is defined below; or (4) by will or the laws of intestate succession. "Controlled Entity" means any trust, partnership. limited liability company or other entity in which such person that receives Options under the 1996 Plan acts as trustee, managing partner, managing member or otherwise controls; provided that to the extent any such Option received under the 1996 Plan is awarded to a spouse pursuant to any divorce proceeding, such interest shall be deemed to be terminated and forfeited notwithstanding any vesting provisions or other terms herein or in the Agreement evidencing such Option. F. Governing Law; Construction. All rights and obligations under the 1996 Plan shall be governed by, and the 1996 Plan shall be construed in accordance with, the laws of the State of Delaware without regard to the principles of conflicts of laws. Titles and headings to Sections herein are for purposes of reference only, and shall in no way limit, define or otherwise affect the meaning or interpretation of any provisions of the 1996 Plan. 9 G. Amendment and Termination. The Committee may from time to time and at any time alter, amend, suspend, discontinue or terminate this 1996 Plan and any grants of Options hereunder. The 1996 Plan shall terminate on the tenth anniversary date of the effective date of the 1996 Plan and no Options shall be awarded after such date. H. Preemption by Applicable Laws and Regulations. Anything in the 1996 Plan or any Agreement to the contrary notwithstanding, if, at any time specified herein or therein for the making of any determination or the taking of any action, any law, regulation or requirements of any governmental authority having jurisdiction in the premises shall require the Company to take any additional action not otherwise required by the 1996 Plan or an Agreement in connection with any such determination or action, the making of such determination or the taking of such action, as the case may be, shall be deferred until such additional action shall have been taken. I. Effective Date. The 1996 Plan was adopted by the Board on August 1, 1996, and shall be deemed to have become effective on that date. -----END PRIVACY-ENHANCED MESSAGE-----