EXHIBIT 10.1
HOWELL CORPORATION
NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
SECTION 1. Purpose. The purpose of this HOWELL CORPORATION NONQUALIFIED
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS ("Plan") is to attract and retain
the services of experienced and knowledgeable non-employee directors for Howell
Corporation, a Delaware corporation (the "Company"), and provide such
non-employee directors an opportunity for ownership of common stock, $1.00 par
value ("Common Stock"), of the Company. Options to be granted under this Plan
will be nonqualified options which are not intended to qualify as Incentive
Stock Options pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended ("Code").
SECTION 2. Administration of the Plan. The Plan shall be administered by
the Board of Directors of the Company ("Board"). Subject to the terms of the
Plan, the Board shall have the power to interpret the provisions and supervise
the administration of the Plan. All decisions made by the Board pursuant to the
provisions of the Plan shall be made by a majority of its members at a duly held
regular or special meeting or by written consent in lieu of any such meeting. A
majority of the directors in office shall constitute a quorum and all decisions
made by the Board pursuant to the provisions of the Plan shall be made by a
majority of the directors present at any duly held regular or special meeting at
which a quorum is present (unless the concurrence of a greater proportion is
required by law or by the certificate of incorporation or bylaws of the Company)
or by the written consent of a majority of the directors in lieu of any such
meeting. All expenses and liabilities incurred by the Board in the
administration of this Plan shall be borne by the Company. The Board may employ
attorneys, consultants, accountants or other persons to assist the Board in the
carrying out of its duties hereunder.
SECTION 3. Stock Reserved. Subject to adjustment as provided in paragraph
5(f) and Section 6 hereof, the aggregate number of shares of Common Stock that
may be issued under this Plan shall not exceed a number of shares of Common
Stock calculated as follows: (i) 75,000, plus (ii) the total number of shares of
Common Stock subject to outstanding options granted only to non-employee
directors of the Company under the 1988 Stock Option Plan of Howell Corporation
("1988 Plan") and which expire or lapse under the terms of the 1988 Plan or
related option agreements during the term of this Plan or which otherwise
terminate or are cancelled, including but not limited to a relinquishment of an
outstanding option for cash, without being exercised during the term of this
Plan; provided, however that, the aggregate number of shares of Common Stock
that may be issued under this Plan shall not exceed 155,000, subject to any
adjustments under paragraph 5(f) and Section 6. The shares subject to this Plan
shall consist of authorized but unissued shares of Common Stock or previously
issued shares of Common Stock reacquired and held by the Company, and such
number of shares shall be and is hereby reserved for sale for such purpose. Any
of such shares which may remain unsold and which are not subject to outstanding
options at the termination of this Plan shall cease to be reserved for the
purpose of this Plan, but until termination of this Plan or the termination of
the last of the options granted under this Plan, whichever last occurs, the
Company shall at all times reserve a sufficient number of shares to meet the
requirements of this Plan. To the extent that an option under this Plan expires,
lapses, or is cancelled, including but not limited to a relinquishment of an
outstanding option for cash, any shares of Common Stock subject to such option
may again be made subject to an option under this Plan.
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SECTION 4. Grant of Options. Each director of the Company who is not
otherwise an employee of the Company or any of the Company's subsidiaries (as
defined in Section 424(f) of the Internal Revenue Code of 1986) (hereinafter
referred to as an "Eligible Director", which term shall include any transferee
permitted pursuant to paragraph 5(d) below) and who is not currently serving as
a director on the date this Plan is approved by the Board, shall be granted an
option to acquire 10,000 shares of Common Stock when such Eligible Director is
first elected to the Board ("Initial Option"). Commencing with the Annual
Meeting of Shareholders approving this Plan, an option to acquire 1,000 shares
of Common Stock ("Subsequent Option") shall automatically be granted to each
Eligible Director on the date following each Annual Meeting of Shareholders. The
term "Date of Grant" means (i) in the case of an Initial Option granted on the
date on which an Eligible Director not currently serving on the Board of
Directors is first elected to the Board, the date of such initial election; and
(ii) in the case of a Subsequent Option, the date following each Annual Meeting,
provided that no Eligible Director shall receive a Subsequent Option at the
Annual Meeting next following the receipt of an Initial Option. The Initial
Option and any Subsequent Option shall be subject to adjustment as provided for
in paragraph 5(f).
SECTION 5.
(a) Terms and Conditions. Each option granted under this Plan shall be
evidenced by an agreement, in a form approved by the Board, which shall be
subject to the following express terms and conditions and to such other terms
and conditions as the Board may deem appropriate.
Each Initial Option and Subsequent Option shall not be exercisable for
more than a percentage of the aggregate number of shares offered under each
Initial Option and Subsequent Option determined by the number of full years
occurring since the Date of Grant of each such Initial Option and Subsequent
Option in accordance with the following schedule:
Number of Percentage of
Full Years Shares Purchasable
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Less than One 0%
One 25%
Two 50%
Three 75%
Four 100%
If an Eligible Director ceases to serve on the Board prior to the time all or a
portion of any Initial Option or Subsequent Option becomes exercisable pursuant
to the above schedule, the portion of such option which is not exercisable shall
expire and be forfeited; provided however, that upon the death of an Eligible
Director, all options granted the Eligible Director under this Plan shall be
fully exercisable as set forth below and in accordance with paragraph 5(d).
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Each exercisable option granted under this Plan shall provide that it
shall terminate and be of no force or effect with respect to any shares not
previously purchased under such option by an Eligible Director upon the first to
occur of (i) the expiration of ten years from the Date of Grant of the option or
(ii) the expiration of one hundred eighty (180) days after the termination of
the Eligible Director's service as a Director of the Company for any reason.
(b) Exercise Price. The exercise price of each share of Common Stock
subject to an Initial Option or Subsequent Option shall be the fair market value
of a share of Common Stock on the Date of Grant of the Initial Option or
Subsequent Option. For all purposes under this Plan, the fair market value of a
share of Common Stock means, as of any specified date, the closing price of the
Common Stock as reported in The Wall Street Journal's New York Stock Exchange
("NYSE") - Composite Transactions listing for such day (corrected for obvious
typographical errors), or if the shares are listed for trading on the NYSE but
no closing price is reported in such listing for such day, then the last
reported closing price for such shares on the NYSE, or if such shares are not
listed or traded on the NYSE, the closing sales price on any national securities
exchange on which the Common Stock is traded, or if the Common Stock is not
traded on any national securities exchange, then the mean of the reported high
and low sales prices for such shares in the over-the-counter market, as reported
on the National Association of Securities Dealers Automated Quotations System,
or, if such prices shall not be reported thereon, the mean between the closing
bid and asked prices reported by the National Quotation Bureau Incorporated, or,
in all other cases, the value established by the Board in good faith.
(c) Procedure for Exercise. Options shall be exercised by the delivery by
the Eligible Director of written notice to the Secretary of the Company setting
forth the number of shares of Common Stock with respect to which the option is
being exercised. The notice shall be accompanied by, at the election of the
Eligible Director, (i) cash, cashier's check, bank draft, or postal or express
money order payable to the order of the Company, (ii) certificates representing
shares of Common Stock theretofore owned by the Eligible Director duly endorsed
for transfer to the Company, or (iii) any combination of the preceding, equal in
value to the full amount of the exercise price. Moreover, an option agreement
may provide for a "cashless exercise" of the option by establishing procedures
whereby the Eligible Director, by a properly-executed written notice, directs
(i) an immediate market sale or margin loan respecting all or a part of the
shares of Common Stock to which he is entitled upon exercise pursuant to an
extension of credit by the brokerage firm or other financial institution to the
Eligible Director of the option price, (ii) the delivery of the shares of Common
Stock from the Company directly to a brokerage firm or other financial
institution and (iii) the delivery of the option price from the sale or margin
loan proceeds from the brokerage firm or other financial institution directly to
the Company. Notice may also be delivered by telecopy provided that the exercise
price of such shares is received by the Company via wire transfer on the same
day the telecopy transmission is received by the Company. The notice shall
specify the address to which the certificates for such shares are to be mailed.
An option to purchase shares of Common Stock in accordance with this Plan shall
be deemed to have been exercised immediately prior to the close of business on
the date (i) written notice of such exercise and (ii) payment in full of the
exercise price for the number of share for which options are being exercised,
are both received by the Company and the Eligible Director shall be treated for
all purposes as the record holder of such shares of Common Stock as of such
date.
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As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to the Eligible Director certificates for the
number of shares with respect to which such option has been so exercised, issued
in the Eligible Director's name or such other name as Eligible Director directs;
provided, however, that such delivery shall be deemed effected for all purposes
when a stock transfer agent of the Company shall have deposited such
certificates in the United States mail, addressed to the Eligible Director at
the address specified pursuant to this paragraph 5(c).
(d) Transferability. An option granted pursuant to this Plan shall not be
assignable or otherwise transferable by an Eligible Director otherwise than by
an Eligible Director's will or by the laws of descent and distribution. During
the lifetime of an Eligible Director, an option shall be exercisable only by
such Eligible Director or the Eligible Director's legal representative. Any heir
or legatee of the Eligible Director shall take rights granted herein and in the
option agreement subject to the terms and conditions hereof and thereof. No such
transfer of any option to heirs or legatees of the Eligible Director shall be
effective to bind the Company unless the Company shall have been furnished with
written notice thereof and a copy of such evidence as the Board may deem
necessary to establish the validity of the transfer and the acceptance by the
transferee or transferees of the terms and conditions hereof.
(e) No Rights as Shareholder. No Eligible Director shall have any rights
as a shareholder with respect to shares covered by an option until the option is
exercised by written notice and accompanied by payment as provided in paragraph
5(c) above.
(f) Changes in Capital Structure. If the outstanding shares of Common
Stock or other securities of the Company, or both, for which the option is then
exercisable shall at any time be changed or exchanged by declaration of a stock
dividend, stock split, or combination of shares, then (i) the number and kind of
shares of Common Stock or other securities which are subject to this Plan, (ii)
the number and kind of shares of Common Stock or other securities which shall be
subject to any Initial Option or Subsequent Option, and the total number of
shares granted after such event, and (iii) the number and kind of shares of
Common Stock or other securities which are subject to any options theretofore
granted, and the exercise prices thereof, shall be appropriately and equitably
adjusted so as to maintain the proportionate number of shares or other
securities without changing the aggregate exercise price.
SECTION 6. Corporate Transactions.
(a) The existence of outstanding options granted hereunder shall not
affect in any way the right or power of the Company or its shareholders to make
or authorize any or all adjustments, recapitalizations, reorganizations,
exchanges, or other changes in the Company's capital structure or its business,
or any merger or consolidation of the Company, or any issuance of Common Stock
or other securities or subscription rights thereto, or any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or 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, whether of a similar character or otherwise.
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(b) If the Company is reorganized, merged or consolidated or is otherwise
a party to a plan of exchange with another corporation pursuant to which
reorganization, merger, consolidation or plan of exchange, shareholders of the
Company receive any shares of Common Stock or other securities or if the Company
shall distribute ("Spin Off") securities of another corporation to its
shareholders, there shall be substituted for the shares subject to the
unexercised portions of outstanding options granted hereunder an appropriate
number of shares of (i) each class of stock or other securities which were
distributed to the shareholders of the Company in respect of such shares in the
case of a reorganization, merger, consolidation or plan of exchange, or (ii) in
the case of a Spin Off, the securities distributed to shareholders of the
Company together with shares of Common Stock, such number of shares or
securities to be determined in accordance with the provisions of Section 425 of
the Code (or other applicable provisions of the Code or regulations issued
thereunder which may from time to time govern the treatment of incentive stock
options in such a transaction); provided, however, that all such options may be
canceled by the Company as of the effective date of (x) a reorganization,
merger, consolidation, plan of exchange or Spin Off or (y) any dissolution or
liquidation of the Company, by giving notice to each Optionee or his personal
representative of its intention to do so and by permitting the purchase for a
period of at least thirty days during the sixty days next preceding such
effective date of all of the shares subject to such outstanding options, without
regard to the installment provisions set forth in the option agreements; and
provided further that in the event of a Spin Off, the Company may, in lieu of
substituting securities or accelerating and canceling options as contemplated
above, elect (i) to reduce the purchase price for each share of Common Stock
subject to an outstanding option by an amount equal to the fair market value, as
determined in accordance with the provisions of Section 5(b), of the securities
distributed in respect of each outstanding share of Common Stock in the Spin Off
or (ii) to reduce proportionately the purchase price per share and to increase
proportionately the number of shares of Common Stock subject to each option in
order to reflect the economic benefits inuring to the shareholders of the
Company as a result of the Spin Off.
(c) The Board may, in its sole discretion, at the time the option is
granted or by amendment of the option thereafter, provide that an option granted
hereunder shall become fully exercisable upon a Change in Control of the Company
(as defined in the next sentence). A "Change in Control" of the Company shall be
conclusively deemed to have occurred if (and only if) any of the following shall
have taken place: (i) a change in control is reported by the Company in response
to Item 1 or Form 8-K (or any successor item of Form 8-K or any similar item of
any other reports required to be filed by the Company under the Securities
Exchange Act of 1934, as amended ("Exchange Act")); (ii) any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing forty percent
or more of the combined voting power of the Company's then outstanding
securities; or (iii) following the election or removal of directors, a majority
of the Board consists of individuals who were not members of the Board two years
before such election or removal, unless the election of each director who was
not a director at the beginning of such two-year period has been approved in
advance by directors representing at least a majority of the directors then in
office who were directors at the beginning of the two-year period.
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SECTION 7. Amendments or Termination. Except as set forth herein, the
Board in its discretion may terminate the Plan at any time with respect to any
shares for which options have not theretofore been granted. Except as set forth
herein, the Board shall have the right to alter or amend the Plan or any part
thereof from time to time. Neither a termination of the Plan nor a change in any
options theretofore granted may be made which would impair the rights of an
Eligible Director holding such option without the consent of the Eligible
Director. The Board may not, without approval of the shareholders, amend the
Plan:
(a) to increase the maximum number of shares which may be issued on
exercise or surrender of an option, except as provided in paragraph 5(f) and
Section 6;
(b) to change the class of persons eligible to receive options;
(c) to extend the maximum period during which options may be granted under
the Plan;
(d) to extend the expiration date of the Plan; or
(e) to decrease to any extent the price at which options may be granted
under the Plan, except as provided in paragraph 5(f) and Section 6.
SECTION 8. Compliance With Other Laws and Regulations. This Plan, the
grant and exercise of options thereunder, and the obligation of the Company to
sell and deliver shares under such options, shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
governmental or regulatory agency as may be required. The Company shall not be
required to issue or deliver any certificates for shares of Common Stock prior
to the completion of any registration or qualification of such shares under any
federal or state law or issuance of any ruling or regulation of any government
body which the Company shall, in its sole discretion, determine to be necessary
or advisable.
SECTION 9. Purchase for Investment. Unless the options and shares of
Common Stock covered by this Plan have been registered under the Securities Act
of 1933, as amended, or the Company has determined that such registration is
unnecessary, each person exercising an option under this Plan may be required by
the Company to give a representation in writing that such person is acquiring
such shares for his or her own account for investment and not with a view to, or
for sale in connection with, the distribution of any part thereof.
SECTION 10. Taxes.
(a) The Company may make such provisions as it may deem appropriate for
the withholding of any taxes which it determines is required in connection with
any options granted under this Plan.
(b) Any Eligible Director may pay all or any portion of the taxes required
to be withheld by the Company or paid by the Eligible Director in connection
with the exercise of an option by electing to have the Company withhold shares
of Common Stock, or by delivering previously owned shares of Common Stock,
having a fair market value, determined in accordance with paragraph 5(b), equal
to the amount required to be withheld or paid. An Eligible Director must make
the foregoing election on or before the date that the amount of tax to be
withheld is determined. All such elections are irrevocable and subject to
disapproval by the Board.
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SECTION 11. Liability of Company for Non-Issuance of Shares
and Tax Consequences. The Company shall not be liable to an
Eligible Director or other persons as to:
(a) The non-issuance or sale of shares as to which the Company has been
unable to obtain from any regulatory body having jurisdiction the authority
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any shares hereunder; and
(b) Any tax consequence expected, but not realized, by any Eligible
Director or other person due to the exercise of any option granted hereunder.
SECTION 12. Effectiveness and Expiration of Plan. The Plan shall be
effective on the date of its approval and adoption by the Board subject to
approval of the shareholders of the Company. All Initial Options and Subsequent
Options granted to any Eligible Director prior to shareholder approval of the
Plan shall be expressly subject to such approval. If the shareholders of the
Company fail to approve the Plan within twelve months of the date the Board
approved the Plan, the Plan shall terminate and all options previously granted
under the Plan shall become void and of no effect. The Plan shall expire ten
years after the date the Board approves the Plan and thereafter no option shall
be granted pursuant to the Plan; provided, however, that the Plan provisions
shall remain in effect with respect to all options granted under the Plan until
such options are satisfied or expire.
SECTION 13. Non-Exclusivity of this Plan. The adoption by the Board shall
not be construed as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including without
limitation, the granting of restricted stock or stock options otherwise than
under this Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
SECTION 14. Governing Law. This Plan and any agreements
hereunder shall be interpreted and construed in accordance with
the laws of the State of Delaware and applicable federal law.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the
foregoing by the Board, Howell Corporation has caused this document to be duly
executed in its name and behalf by its proper officer thereunto duly authorized
as of the date of the adoption of the Plan by the Board, being March 16,1999.
HOWELL CORPORATION
By: /s/ ROBERT T. MOFFETT
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Robert T. Moffett
Vice President
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