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Exhibit 4(g)
SIXTH AMENDED AND RESTATED
VALUE CITY DEPARTMENT STORES, INC.
1991 STOCK OPTION PLAN
1. PURPOSE. This plan (the "Plan") is intended as an incentive and to
encourage stock ownership by certain key employees of and other key persons who
render services to VALUE CITY DEPARTMENT STORES, INC., an Ohio corporation (the
"Company") and any current or future subsidiaries or parent by the granting of
stock options (the "Options") as provided herein. By encouraging such stock
ownership, the Company seeks to attract, retain and motivate employees of
training, experience and ability. The Options granted under the Plan may be
either incentive stock options ("ISOs") which meet the requirements of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or options
which do not meet such requirements ("Non-statutory Options").
2. EFFECTIVE DATE. The Plan shall become effective on June 4, 1991 (the
"Effective Date").
3. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors
of the Company (the "Board") unless the Board shall designate a committee (the
"Committee") of not less than three members of the Board. If any class of equity
securities of the Company is registered under Section 12 of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), all members of the Committee
shall be "disinterested persons" as defined in Rule 16b-3(c)(2)(i) under the
1934 Act. The Board may remove or add members of the Committee. If the Board
does not appoint a Committee, any reference in the Plan or in any stock option
agreements under the Plan shall mean the Board.
(b) Subject to the provisions of the Plan, the Committee is
authorized to establish, amend and rescind such rules and regulations as it may
deem appropriate for its conduct and for the proper administration of the Plan,
to make all determinations under and interpretations of, and to take such
actions in connection with, the Plan or the Options granted thereunder as it may
deem necessary or advisable. All actions taken by the Committee under the Plan
shall be final and binding on all persons. No member of the Committee shall be
liable for any action taken or determination made relating to the Plan, except
for willful misconduct.
(c) Each member of the Committee shall be indemnified by the
Company against costs, expenses and liabilities (other than amounts paid in
settlements to which the Company does not consent, which consent shall not be
unreasonably withheld) reasonably incurred by such member in connection with any
action to which he may be a party by reason of service as a member of the
Committee, except in relation to matters as to which he shall be adjudged in
such action to be personally guilty of negligence or willful misconduct in the
performance of his duties. The foregoing right to indemnification shall be in
addition to such other rights as the Committee member may enjoy as a matter of
law, by reason of insurance coverage of any kind, or otherwise.
4. ELIGIBILITY.
(a) Options and/or Tax Offset Payments may be granted to such
key employees of (or, in the case of Non-statutory Options only, to others who
render services to) the Company or its subsidiaries or parent as the Committee
shall select from time to time (the "Optionees"); provided, however, that no
member of the Board of Directors who is not an officer or employee of the
Company shall be eligible to receive any Option hereunder. The term "key
employees" shall include those executive, administrative, operational and
managerial employees who are determined by the Committee to be eligible for
Options under the Plan. The terms "subsidiary" and "parent" as used in the Plan
shall have the respective meanings set forth in sections 424(f) and (e) of the
Code. More than one option may be granted to one individual.
(b) No ISO may be granted to an individual who, at the time an
ISO is granted, is considered under Section 422(b)(6) of the Code as owning
stock possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or of its parent or any subsidiary corporation;
provided, however, this
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restriction shall not apply if at the time such ISO is granted the option price
per Share of such ISO shall be at least 110% of the fair market value of such
Share, and such ISO by its terms is not exercisable after the expiration of five
years from the date it is granted. This subparagraph 4(b) has no application to
Options granted under the Plan as Non-statutory Options.
(c) The aggregate fair market value (determined as of the date
the ISO is granted) of Shares with respect to which ISOs are exercisable for the
first time by any Optionee during any calendar year under the Plan or any other
ISO plan of the Company or a parent or subsidiary of the Company may not exceed
$100,000. This subparagraph 4(c) has no application to Options granted under the
Plan as Non-statutory Options.
5. STOCK SUBJECT TO PLAN. The stock subject to Options under the Plan
shall be Common Shares without par value of the Company ("Shares"), either
authorized and unissued Shares, Shares purchased on the open market or in a
private transaction, or Shares held as treasury stock. The aggregate number of
Shares for which Options may be granted under the Plan, in the aggregate and to
any one individual, shall not exceed 4,000,000, subject to adjustment in
accordance with the terms of paragraph 13 hereof. The unpurchased Shares subject
to terminated or expired Options may again be offered under the Plan. The
Committee, in its sole discretion, may permit the exercise of any Option as to
full Shares or fractional Shares. Proceeds from the sale of Shares under Options
shall constitute general funds of the Company.
6. TERMS AND CONDITIONS OF OPTIONS.
(a) At the time of grant, the Committee shall determine
whether the Options granted are to be ISOs or Non-statutory Options and shall
enter into stock option agreements with the recipients accordingly. All Options
and/or Tax Offset Payments granted shall be authorized by the Committee and,
within a reasonable time after the date of grant, shall be evidenced by stock
option agreements in writing ("Stock Option Agreements"), in the form attached
hereto as Exhibit A, or in such other form and containing such terms and
conditions not inconsistent with the provisions of this Plan as the Committee
shall from time to time determine. Any action under paragraph 13 may be
reflected in an amendment to or restatement of such Stock Option Agreements.
(b) The Committee may grant Options and/or Tax Offset Payments
having terms and provisions which vary from those specified in the Plan if such
Options are granted in substitution for, or in connection with the assumption
of, existing options granted by another corporation and assumed or otherwise
agreed to be provided for by the Company pursuant to or by reason of a
transaction involving a corporate merger, consolidation, acquisition of property
or stock, separation, reorganization or liquidation to which the Company is a
party.
7. PRICE. The option price per Share (the "Option Price") of each
Option granted under the Plan shall be determined by the Committee; provided,
however, the Option Price of each ISO granted under the Plan shall not be less
than the fair market value (determined without regard to any restrictions other
than a restriction which, by its terms, will never lapse) of a Share on the date
of grant of such Option. In the event that the Shares are publicly traded, the
term "fair market value" shall mean (a) the average of the highest and lowest
sale prices quoted in the NASDAQ National Market System, if the shares are so
quoted, (b) the mean between the bid and asked prices as reported by NASDAQ, if
the Shares are not quoted in the National Market System, or (c) if the Shares
are listed on a securities exchange, the mean between the high and low prices at
which the Shares are quoted or traded on such exchange, in each case on the date
the Option is granted or, if there be no quotation or sale on that date, the
next previous date on which the Shares were quoted or traded. An Option shall be
considered granted on the date the Committee acts to grant the Option or such
later date as the Committee shall specify.
8. OPTION PERIOD. Each Stock Option Agreement shall set forth the
period during which it may be exercised, which period shall not exceed 10 years
from the date any ISO is granted (the "Option Period").
9. NON-TRANSFERABILITY OF OPTIONS. An Option shall not be transferable
by the Optionee otherwise than by will or the laws of descent and distribution
and may be exercised, during the lifetime of the Optionee, only by him or by his
guardian or legal representative. Notwithstanding the foregoing, an Optionee may
transfer a Non-
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statutory Option either (a) to members of his or her immediate family (as
defined in Rule 16a-1 promulgated under the 1934 Act), to one or more trusts for
the benefit of such family members, or to partnerships in which such family
members are the only partners, provided that the Optionee does not receive any
consideration for the transfer, or (b) if such transfer is approved by the
committee. Any Non-statutory Options held by such transferees are subject to the
same terms and conditions that applied to such Non-statutory Options immediately
prior to transfer.
10. TAX OFFSET PAYMENTS. The Committee has the authority and discretion
under the Plan to make cash grants to Optionees which are intended to offset a
portion of the taxes which may become payable upon exercise of Options by the
Optionee, accruing on exercise of a Non-statutory Option and/or on certain
dispositions of Shares acquired under ISOs ("Tax Offset Payments"). Such Tax
Offset Payments shall be in an amount determined by multiplying a percentage
established by the Committee times the difference between the fair market value
of a Share on the date of exercise as determined by the Committee in accordance
with paragraph 7 and the Option Price (or, if the Tax Offset Payment is being
made on account of the disposition of Shares acquired under an ISO, the
difference between the fair market value of a Share on the date of disposition,
if less than the fair market value on the date of exercise, and the Option
Price), and times the number of Shares as to which the Option is being exercised
or the number of Shares acquired under an ISO of which an Optionee is disposing.
The percentage shall be established, from time to time, by the Committee at that
rate which the Committee, in its sole discretion, determines to be appropriate
and in the best interest of the Company to assist Optionees in the payment of
federal income taxes incurred on exercise of a Non-statutory Option. The
dispositions of Shares acquired under ISOs for which a Tax Offset Payment shall
accrue shall be determined by the Committee in its sole discretion. The Company
shall have the right to withhold and pay over to any governmental entities
(federal, state or local) all amounts under a Tax Offset Payment for payment of
any income or other taxes incurred on exercise.
11. EXERCISE OF OPTIONS.
(a) Options granted hereunder will be exercisable upon the
terms and conditions and in accordance with the vesting percentages determined
by the Committee at its sole discretion. Notwithstanding the foregoing or the
terms and conditions of any Stock Option Agreement to the contrary, (i) in the
event of the Optionee's termination of employment as a result of disability or
death as specified in subparagraph 12(b), the Options shall be immediately
exercisable in full for the period specified in subparagraph 12(b); (ii) in the
event of Optionee's termination of employment as specified in subparagraph
12(a), the Options shall be immediately exercisable to the extent and for the
period specified in subparagraph 12(a); and (iii) in the event of a liquidation
or merger as specified in subparagraph 13(b), the Options shall be exercisable
for the 30-day period after written notice thereof as specified in subparagraph
13(b).
(b) An Option shall be exercisable only upon delivery of a
written notice to the Committee, any member of the Committee, the Company's
Treasurer, or any other officer of the Company designated by the Committee to
accept such notices on its behalf, specifying the number of Shares for which it
is exercised.
(c) Within five business days following the date of exercise
of an Option, the Optionee or other person exercising the Option shall make full
payment of the Option Price (i) in cash; (ii) with the consent of the Committee,
by tendering previously acquired Shares (valued at their fair market value, as
determined by the Committee, as of such date of tender); (iii) with the consent
of the Committee, with a full recourse promissory note of the Optionee for the
portion of the Option Price in excess of the par value of Shares subject to the
Option, under terms and conditions determined by the Committee, provided, that
such promissory note, in the case of exercise of an ISO, shall provide for
interest at no less than the "applicable federal rate" as determined pursuant to
the Code; (iv) with the consent of the Committee, any combination of (i), (ii),
or (iii); or (v) with the consent of the Committee, if the Shares subject to the
Option have been registered under the 1933 Act and there is a regular public
market for the Shares, by delivering to the Company on the date of exercise of
the Option written notice of exercise together with:
(A) written instructions to forward a copy of such
notice of exercise to a broker or dealer, as defined in
Section 3(a)(4) and 3(a)(5) of the 1934 Act ("Broker"),
designated in such
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notice and to deliver to the specified account maintained with
the Broker by the person exercising the Option a certificate
for the Shares purchased upon the exercise of the Option, and
(B) a copy of irrevocable instructions to the Broker
to deliver promptly to the Company a sum equal to the purchase
price of the Shares purchased upon exercise of the Option.
(d) If Tax Offset Payments sufficient to allow for withholding
of taxes are not being made at the time of exercise of an Option, the Optionee
or other person exercising such Option shall pay to the Company an amount equal
to the withholding amount required to be made less any amount withheld by the
Company under paragraph 18.
12. TERMINATION OF EMPLOYMENT OR OTHER SERVICES.
(a) Upon termination of employment or service with the
Company, any parent or subsidiary of the Company, or any successor corporation
to either the Company or any parent or subsidiary of the Company, other than (i)
by reason of death or disability, or (ii) for cause by reason of the Optionee's
dishonesty or disloyalty, the Optionee shall have 30 days after the date of
termination (but not later than the expiration date of the Stock Option
Agreement) to exercise all Options held by him to the extent the same were
exercisable on the date of termination; provided, however, if such date of
termination is after the Optionee has attained age 60 or 30 years of employment
or service, such Option shall then be exercisable to the extent of 100% of the
Shares subject thereto.
(b) Upon termination of such employment or service by reason
of death or disability, all Options previously granted to such Optionee may be
exercised by the Optionee, the Optionee's personal representative, or the person
or persons to whom his rights under the Option pass by will or the laws of
descent or distribution at any time during the period ending one year after date
of death or termination of employment by reason of disability (but not later
than the expiration date of the Stock Option Agreement). Such Options shall then
be exercisable to the extent of 100% of the Shares subject thereto.
(c) Upon termination of such employment or service for cause
by reason of the Optionee's dishonesty or disloyalty, all Options held by him
shall terminate on the date of termination.
(d) "Disability," as used herein, shall mean a physical or
mental condition resulting from bodily injury, disease, or mental disorder which
renders the Optionee incapable of continuing the Optionee's usual and customary
employment with the Company.
13. REORGANIZATIONS.
(a) In the event of a stock split, stock dividend, combination
or exchange of shares, exchange for other securities, reclassification,
reorganization, redesignation or other change in the Company's capitalization,
the aggregate number of Shares for which Options may be granted under this Plan,
the number of Shares subject to outstanding Options and the Option Price of the
Shares subject to outstanding Options shall be proportionately adjusted or
substituted to reflect the same. The Committee shall make such other adjustments
to the Options, the provisions of the Plan and the Stock Option Agreements as
may be appropriate and equitable, which adjustments may provide for the
elimination of fractional Shares.
(b) If the Company shall liquidate or dissolve, or shall be a
party to a merger or consolidation in which the Company shall not be the
surviving corporation, other than a merger or consolidation involving only a
change in state of incorporation or an internal reorganization not involving a
substantial change in underlying ownership, the Company shall give written
notice thereof to all holders of Options granted under the Plan at least 30 days
prior to the effective date of such liquidation, dissolution, merger or
consolidation, and the holders shall have the right within such 30-day period to
exercise their Options in full regardless of restrictions on exercise contained
in the Stock Option Agreements; provided, however, that in no event shall such
Options be exercised after the specific expiration date set forth therein. To
the extent such Options shall not have been exercised on or prior to the
effective date of such liquidation, dissolution, merger or consolidation, they
shall terminate on that date.
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14. SALE OF OPTION SHARES. The Optionee or other person exercising the
Option shall not sell or otherwise dispose of the Shares subject to Option
unless at least six months have elapsed from the date of grant.
15. RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder with respect to any Shares covered by an Option until the date of
issuance of a stock certificate to the Optionee for such Shares.
16. NO CONTRACT OF EMPLOYMENT. Nothing in the Plan or in any Option or
Stock Option Agreement shall confer on any Optionee any right to continue in the
service of the Company or any parent or subsidiary of the Company or interfere
with the right of the Company to terminate such Optionee's employment or other
services at any time. The establishment of the Plan shall in no way, now or
hereafter, reduce, enlarge or modify the employment relationship between the
Company or any parent or subsidiary of the Company and the Optionee. Options
granted under the Plan shall not be affected by any change of duties or position
as long as the Optionee continues to be employed by the Company or any parent or
subsidiary of the Company.
17. AGREEMENTS AND REPRESENTATIONS OF OPTIONEES. As a condition to the
exercise of an Option, the Committee may in its sole determination require the
Optionee to represent in writing that the Shares being purchased are being
purchased only for investment and without any present intent at the time of the
acquisition of such Shares to sell or otherwise dispose of the same.
18. WITHHOLDING TAXES. The Company shall have the right to withhold
from any salary, wages, or other compensation for services payable by the
Company to or with respect to an Optionee, amounts sufficient to satisfy any
federal, state or local withholding tax liability attributable to such
Optionee's (or any beneficiary's or personal representative's) receipt or
disposition of Shares purchased under any Option or to take any such other
action as it deems necessary to enable it to satisfy any such tax withholding
obligations.
19. EXCHANGES. The Committee may permit the voluntary surrender of all
or a portion of any Option granted under the Plan to be conditioned upon the
granting to the Participant of a new Option for the same or a different number
of Shares as the Option surrendered, or may require such voluntary surrender as
a condition precedent to a grant of a new Option to such Optionee. Subject to
the provisions of the Plan, such new Option shall be exercisable at the same
price, during such period and on such other terms and conditions as are
specified by the Committee at the time the new Option is granted. Upon
surrender, the Options surrendered shall be cancelled and the Shares previously
subject to them shall be available for the grant of other Options. The Committee
may also grant Tax Offset Payments to any Optionee surrendering such Option for
a new Option.
20. COMPLIANCE WITH LAWS AND REGULATIONS. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Company to sell and
deliver the Shares under such Options, shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
government or regulatory agency as may be required. Options issued under this
Plan shall not be exercisable prior to (i) the date upon which the Company shall
have registered the Shares for which Options may be issued hereunder under the
1933 Act, and (ii) the completion of any registration or qualification of such
shares under state law, or any ruling or regulation of any government body which
the Company shall, in its sole discretion, determine to be necessary or
advisable in connection therewith, or alternatively, unless the Company shall
have received an opinion from counsel to the Company stating that the exercise
of such Options may be effected without registering the shares subject to such
Options under the 1933 Act, or under state or other law.
21. ASSUMPTION. The Plan may be assumed by the successors and assigns
of the Company.
22. EXPENSES. All expenses and costs in connection with administration
of the Plan shall be borne by the Company.
23. AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN. The Board may
terminate, amend or modify the Plan at any time; provided, however, that no such
action of the Board without approval of the Shareholders, may (a) materially
increase the number of Shares for which Options may be granted under the Plan,
except as provided in paragraph 13; (b) increase the maximum Option Period; (c)
materially modify the
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requirements as to eligibility for participation in the Plan; (d) materially
increase the benefits accruing to Optionees; (e) permit the granting of ISOs to
anyone other than an employee of the Company or a parent or subsidiary of the
Company; (f) increase the minimum ISO Option Price; (g) increase the maximum
ISOs that can be exercised per Optionee as set forth in subparagraph 4(c); or
(h) if the Company has a class of equity securities registered under Section 12
of the 1934 Act, transfer the administration of the Plan to any person who is
not a "disinterested person" as that term is defined in Rule 16b-3(c)(2)(i)
under the 1934 Act. No amendment, modification or termination of the Plan shall
in any manner adversely affect any Option previously granted to an Optionee
under the Plan without the consent of the Optionee or the transferee of such
Option.
24. TERM OF PLAN. The Plan shall become effective on the date of its
adoption by the Board, subject to the approval of the Plan by the holders of a
majority of the shares of stock of the Company entitled to vote within twelve
months of the Effective Date, and all Options granted prior to such approval
shall be subject to such approval. The Plan shall terminate on the tenth
anniversary of the Effective Date, or such earlier date as may be determined by
the Board. Termination of the Plan, however, shall not affect the rights of
Optionees under Options previously granted to them, and all unexpired Options
shall continue in force and operation after termination of the Plan except as
they may lapse or be terminated by their own terms and conditions.
25. LIMITATION OF LIABILITY. The liability of the Company under this
Plan or in connection with any exercise of an Option is limited to the
obligations expressly set forth in the Plan and in any Stock Option Agreements,
and no term or provision of this Plan or of any Stock Option Agreements shall be
construed to impose any further or additional duties, obligations or costs on
the Company not expressly set forth in the Plan or the Stock Option Agreements.
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