1994 Non-Employee Director Stock Option Plan - Topps Co. Inc.
THE TOPPS COMPANY, INC.
1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Amended and Restated as of June 27, 2002)
1. Purpose. The 1994 Non-Employee Director Stock Option Plan (Amended and
Restated as of May 18, 1998) (the "Plan") is intended to promote the interests
of The Topps Company, Inc. (the "Company") by providing equity-based
compensation as an inducement to obtain and retain the services of qualified
persons who are neither employees nor officers of the Company to serve as
members of the Board of Directors of the Company (the "Board") which
compensation is tied directly to shareholder return.
2. Rights to be Granted. Under the Plan, options are granted that give an
optionee the right for a specified time period to purchase a specified number of
shares of common stock, par value $0.01, of the Company (the "Common Stock").
The option price is determined in each instance in accordance with the terms of
the Plan. Options granted under the Plan are not intended to be "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
3. Available Shares. The total number of shares of Common Stock for which
options may be granted on or after the date of stockholder approval of the Plan,
as amended, shall not exceed 954,000, subject to adjustment in accordance with
Section 13 hereof. Shares subject to the Plan are authorized but unissued shares
or shares that were once issued and subsequently reacquired by the Company. If
any options granted under the Plan are surrendered before exercise or lapse
without exercise, in whole or in part, the shares reserved therefor revert to
the option pool and continue to be available for grant under the Plan.
4. Administration. The Plan shall be administered by the Board or the
Compensation Committee of the Board (the entity administering the plan from time
to time is hereafter referred to as the "Committee"). The Committee shall,
subject to the provisions of the Plan, have the power, in its discretion, to
reduce the number of options granted under the Plan and to determine the terms
of such options and the time at which and the eligible individuals to whom such
options will be granted. The Committee shall also have the power to construe the
Plan, to determine all questions thereunder, and to adopt and amend such rules
and regulations for the administration of the Plan as it may deem desirable.
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5. Option Agreement. Each option granted under the provisions of the Plan
shall be evidenced by an Option Agreement, in such form as may be approved by
the Committee, which Agreement shall be duly executed and delivered on behalf of
the Company and by the individual to whom such option is granted. The Agreement
shall contain such terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Committee.
6. Eligibility and Limitations. Options may be granted pursuant to the Plan
only to non-employee members of the Board.
7. Option Price. The purchase price of the Common Stock under each option
shall not be less than the "Fair Market Value" of the Common Stock on the date
of grant. For purposes of the Plan, the Fair Market Value of the Common Stock as
of any date means the closing price of the Common Stock, on the day prior to
such date, on the stock exchange (including NASDAQ National Market System) with
the largest volume of sales of Common Stock on such date, if sold on any
exchange, or if not sold on any such exchange, the average of the closing bid
and asked prices of the Common Stock on the day prior to such date, or, if the
stock is not traded, such other price as the Committee determines is the Fair
Market Value of the Common Stock on such date. No option may be granted at a
price per share which is less than the par value of the Common Stock.
8. Automatic Grant of Options. Unless action is taken by the Committee to
reduce such number, each year, on the date of the Company's Annual Meeting of
Stockholders, each member of the Board who is neither an employee nor an officer
of the Company shall be automatically granted on such date without further
action by the Board an option to purchase 17,000 shares of Common Stock.
Anything in the Plan to the contrary notwithstanding, the effectiveness of the
Plan, as amended and restated, and of the grant of additional options hereunder
is in all respects subject to, and the Plan and options granted under it shall
be of no force and effect unless and until, and no option granted hereunder
shall in any way vest or become exercisable in any respect unless and until the
approval of the Plan by the affirmative vote of a majority of the Company's
shares present in person or by proxy and entitled to vote at a meeting of
shareholders at which the Plan is presented for approval.
9. Period of Option. The options granted hereunder after 1997 shall expire
on a date which is ten (10) years after the date of grant of the options and the
Plan shall terminate when all options granted hereunder have terminated.
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10. Exercise of Option. Options shall be exercised by the delivery to the
Company at its principal office or at such other address as may be established
by the Committee (Attention: Assistant Treasurer) of written notice of the
number of shares of Common Stock with respect to which the option is being
exercised accompanied by payment in full of the purchase price of such shares.
Unless otherwise determined by the Committee at the time of grant, payment for
such shares may be made (i) in cash, (ii) by certified check or bank cashier's
check payable to the order of the Company in the amount of such purchase price,
(iii) by delivery to the Company of Common Stock having a Fair Market Value
equal to such purchase price, (iv) by irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds necessary to
pay such purchase price and to sell the Common Stock to be issued upon exercise
of the Option and deliver the cash proceeds less commissions and brokerage fees
to the optionee or to deliver the remaining shares of Common Stock to the
optionee, or (v) by any combination of the methods of payment described in (i)
through (iv) above; provided, however, that Common Stock may not be used in
payment for the exercise of an option unless the shares so used are considered
"mature" for purposes of generally accepted accounting principles. Shares of
Common Stock are considered mature if they (i) have been held by the optionee
for at least six months prior to the use thereof to pay the option exercise
price, (ii) have been purchased by the optionee on the open market or (iii) meet
any other requirement for mature shares as may exist on the date of exercise. An
option holder shall have none of the rights of a stockholder with respect to the
Common Stock subject to the option until such Common Stock shall be transferred
to the holder upon the exercise of his option.
11. Vesting of Shares and Non-Transferability of Options.
(a) Vesting. Options granted under the Plan shall be fully vested and
exercisable on the day immediately preceding the date of the Company's next
regular Annual Meeting of Stockholders which follows the date of the Annual
Meeting on which the options were granted, provided the director's service as a
director continues until such immediately preceding date.
(b) Legend on Certificates. The certificates representing shares of Common
Stock acquired under the Plan shall carry such appropriate legend, and such
written instructions shall be given to the Company's transfer agent, as may be
deemed necessary or advisable by counsel to the Company in order to comply with
the requirements of the Securities Act of 1933 or any state securities laws.
(c) Non-Transferability. Unless otherwise determined by the Committee,
either at the time of grant or prior to the time of transfer, options granted
pursuant to the Plan shall not be assignable or transferable other than by will
or the laws of descent and distribution, and shall be exercisable during an
optionee's lifetime only by him.
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12. Termination of Option Rights. In the event an optionee ceases to be a
member of the Board for any reason, all unvested options shall be forfeited back
to the Company and any then unexercised options granted to such optionee which
were exercisable at the time the optionee ceased to be a member of the Board may
be exercised until the expiration of the option term.
13. Adjustments Upon Changes in Capitalization and other Matters. In the
event that the outstanding shares of Common Stock are changed into or exchanged
for a different number or kind of shares or other securities of the Company or
of another corporation by reason of any reorganization, merger, consolidation,
recapitalization or reclassification, or in the event of a stock split,
combination of shares or dividends payable in capital stock, automatic
adjustment shall be made in the number and kind of shares as to which
outstanding options or portions thereof then unexercised shall be exercisable
and in the available shares set forth in Section 3 hereof, to the end that the
proportionate interest of the optionee shall be maintained as before the
occurrence of such event. Such adjustment in outstanding options shall be made
without change in the total price applicable to the unexercised portion of such
options and with a corresponding adjustment in the option price per share.
If the Company shall be reorganized, consolidated, or merged with another
corporation, or if all or substantially all of the assets of the Company shall
be sold or exchanged, the optionee shall, after the occurrence of such a
corporate event, be entitled to receive upon the exercise of his option the same
number and kind of shares of stock or the same amount of property, cash, or
securities as he would have been entitled to receive upon the happening of any
such corporate event as if he had exercised such option and had been,
immediately prior to such event, the holder of the number of shares covered by
such option.
Any adjustment in the number of shares shall apply proportionately to only
the unexercised portion of any option granted hereunder. If fractions of a share
would result from any such adjustment, the adjustment shall be revised to the
next higher whole number of shares.
14. Change in Control.
(a) Notwithstanding the vesting period set forth in Section 11(a) herein or
any vesting schedule set forth in any option agreement issued pursuant hereto,
all unexercised outstanding options shall become fully vested and immediately
exercisable upon a Change in Control, as defined below.
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(b) Unless more limited definition is provided in the option
agreement, a "Change in Control" shall be deemed to have occurred upon the first
to occur of the following:
(i) The acquisition by any person (including a group, within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Act")), other than the Company, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Act) of 50% or more of the combined voting power of the
Company's then outstanding voting securities, without the prior
approval of the Board;
(ii) The first purchase under a tender offer or exchange offer, other
than an offer by the Company, pursuant to which shares of Common Stock
have been purchased, unless such tender offer or exchange offer was
previously approved by the Board; or
(iii) During any period of 24 months or less, the persons who were
Continuing Directors, as defined below, immediately before the
beginning of such period shall cease, for any reason other than death,
to constitute at least a majority of the Board, provided that any
director who was not a director at the beginning of such period shall
be deemed to be a Continuing Director if clause (ii) of the definition
of "Continuing Director" applies.
(c) "Continuing Director" shall mean any member of the Board who either (i)
is a member of the Board on May 1, 1998, or (ii) was nominated for election to
the Board by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Continuing Directors.
15. Restrictions on Issuance of Shares. Notwithstanding the provisions of
Section 10 hereof, the Company shall have no obligation to deliver any
certificate or certificates upon exercise of an option until the following
conditions shall be satisfied:
(i) The shares with respect to which the option has been exercised are
at the time of the issue of such shares effectively registered under
applicable federal and state securities acts as now in force or hereafter
amended; or
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(ii) Counsel for the Company shall have given an opinion that such
shares are exempt from registration under federal and state securities acts
as now in force or hereafter amended;
and the Company has complied with all applicable laws and regulations, including
without limitation all regulations required by any stock exchange upon which the
Common Shares are then listed.
The Company shall use its best efforts to bring about compliance with the
above conditions within a reasonable time, except that the Company shall be
under no obligation to cause a registration statement or a post-effective
amendment to any registration statement to be prepared at its expense solely for
the purpose of covering the issue of shares in respect of which any option may
be exercised.
16. Representation of Optionee. The Company may require the optionee to
deliver written warranties and representations upon exercise of the option that
are necessary to show compliance with federal and state securities laws
including to the effect that a purchase of shares under the option is made for
investment and not with a view to their distribution (as that term is used in
the Securities Act of 1933).
17. Approval of Stockholders. The effectiveness of this Plan, as amended
and restated, and of the grant of all options hereunder is in all respects
subject to approval by the Company's shareholders as more fully set forth in
Section 8 hereof.
18. Termination and Amendment of Plan. The Committee may at any time
terminate the Plan or make such modification or amendment thereof as it deems
advisable, provided, however, that (i) the Committee may not, without approval
by the affirmative vote of the holders of a majority of the shares present in
person or by proxy and entitled to vote at a meeting of stockholders, (a)
increase the maximum number of shares for which options may be granted under the
Plan; or (b) change the price at which options are to be granted. Termination or
any modification or amendment of the Plan shall not, without consent of a
participant, affect his rights under an option previously granted to him.
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