POORE BROTHERS, INC. 1995 STOCK OPTION PLAN
(AS AMENDED THROUGH OCTOBER 6, 1999)
1. PURPOSE. The Poore Brothers, Inc. 1995 Stock Option Plan (the
"Plan") is intended to provide incentives which will attract and retain highly
competent persons as directors, officers and key employees of Poore Brothers,
Inc. (the "Company") and its subsidiaries by providing them opportunities to
acquire shares of Common Stock, par value $.01 per share ("Common Stock"), of
the Company.
2. ADMINISTRATION. The Plan will be administered by a committee of the
Board of Directors (the "Committee") which shall be comprised of one or more
directors who shall be ineligible to receive options while serving as a member
of the Committee; PROVIDED, HOWEVER, that if the Common Stock of the Company
becomes registered under the Securities Exchange Act of 1934, as amended (the
"1934 Act"), members of the Committee must qualify as disinterested persons
within the meaning of Rule 16b-3 under the 1934 Act; and PROVIDED FURTHER,
HOWEVER, that, in the absence of a Committee, all of the authority and powers
granted to the Committee under the Plan may be exercised by the then-serving
members of the Board of Directors of the Company. The Committee is authorized,
subject to the provisions of the Plan, to establish such rules and regulations
as it deems necessary for proper administration of the Plan and to make such
determinations and interpretations and to take such action in connection with
the Plan as it deems necessary or advisable. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
participants and their legal representatives. No member of the Board, no member
of the Committee and no employee of the Company or its subsidiaries shall be
liable for any act or failure to act hereunder, by any other member or employee
or by an agent to whom duties in connection with the administration of this Plan
have been delegated or, except in circumstances involving his bad faith, gross
negligence or fraud, for any act or failure to act by the member or employee.
3. PARTICIPANTS. Participants will consist of such directors, officers
and key employees of the Company or its subsidiaries as the Committee in its
sole discretion determines to be significantly responsible for the success and
future growth and profitability of the Company and whom the Committee may
designate from time to time to receive Stock Options under the Plan. Designation
of a participant in any year shall not require the Committee to designate such
person to receive a Stock Option in any other year or, once designated, to
receive the same type or amount of Stock Option as granted to the participant in
any year. The Committee shall consider such factors as it deems pertinent in
selecting participants and in determining the type and amount of their
respective Stock Options.
4. SHARES RESERVED UNDER THE PLAN. Two Million (2,000,000) shares of
authorized but unissued shares of Common Stock are reserved for issue and may be
issued in connection with Stock Options granted under the Plan. Any shares
subject to Stock Options or issued under such options may thereafter be subject
to new options under this Plan if there is a lapse, expiration or termination of
any such options prior to issuance of the shares or if shares are issued under
such options and thereafter are reacquired by the Company pursuant to rights
reserved by the Company upon issuance thereof, subject to any Securities and
Exchange Commission rules regarding the availability of such shares, if
applicable.
5. STOCK OPTIONS. Stock Options will consist of awards from the
Company, in the form of agreements, which will enable the holder to purchase a
specific number of shares of Common Stock, at set terms and at a fixed purchase
price, subject to adjustment as hereinafter provided. Stock Options may be
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code ("Incentive Stock Options") or Stock Options which do not
constitute Incentive Stock Options ("Nonqualified Stock Options"). The Committee
will have the authority to grant to any participant one or more Incentive Stock
Options, Nonqualified Stock Options, or both types of Stock Options. Each Stock
Option shall be subject to such terms and conditions consistent with the Plan as
the Committee may impose from time to time, subject to the following
limitations:
a) EXERCISE PRICE. Each Stock Option granted hereunder shall have
such per-share exercise price as the Committee may determine at the date of
grant; PROVIDED, HOWEVER, that the per-share exercise price for Incentive Stock
Options shall not be less than 100% of the Fair Market Value of the Common Stock
on the date the option is granted; and PROVIDED, FURTHER, that the per-share
exercise price for Nonqualified Stock Options shall not be less than 85% of the
Fair Market Value of the Common Stock on the date the option is granted.
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b) PAYMENT OF EXERCISE PRICE. The option exercise price may be
paid by check or, in the discretion of the Committee, by the delivery of shares
of Common Stock, or a combination thereof, or such other consideration as the
Committee may deem appropriate.
c) EXERCISE PERIOD. Stock Options granted under the Plan shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee; PROVIDED, HOWEVER, that no Stock Options
shall be exercisable earlier than six months after the date they are granted. In
addition, Stock Options shall not be exercisable later than ten years after the
date they are granted. All Stock Options shall terminate at such earlier times
and upon such conditions or circumstances as the Committee shall in its
discretion set forth in such Stock Option at the date of grant.
d) LIMITATIONS ON INCENTIVE STOCK OPTIONS. Incentive Stock Options
may be granted only to participants who are employees of the Company or one of
its subsidiaries (within the meaning of Section 424(f) of the Internal Revenue
Code) at the date of grant. The aggregate Fair Market Value (determined as of
the time the option is granted) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a participant
during any calendar year (under all option plans of the Company) shall not
exceed $100,000.00. Incentive Stock Options may not be granted to any
participant who, at the time of grant, owns stock possessing (after the
application of the attribution rules of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company,
unless the option price is fixed at not less than 110% of the Fair Market Value
of the Common Stock on the date of grant and the exercise of such option is
prohibited by its terms after the expiration of five years from the date of
grant of such option.
6. ADJUSTMENT PROVISIONS.
a) If the Company shall at any time change the number of issued
shares of Common Stock without new consideration to the Company (such as by
stock dividend, stock split, recapitalization, reorganization, exchange of
shares, liquidation, combination or other change in corporate structure
affecting the Common Stock), the total number of shares available for Stock
Options under this Plan shall be appropriately adjusted and the number of shares
covered by each outstanding Stock Option and the reference price shall be
adjusted so that the net value of such Stock Option shall not be changed.
(1) In the case of any sale of assets, merger, consolidation,
combination or other corporate reorganization or restructuring of the Company
with or into another corporation which results in the outstanding Common Stock
being converted into or exchanged for different securities, cash or other
property, or any combination thereof (an "Acquisition"), subject to the
provisions of this Plan and any limitation applicable to the Stock Option, any
participant to whom a Stock Option has been granted shall have the right
thereafter and during the term of the Stock Option, to receive upon exercise
thereof in whole or in part the Acquisition Consideration (as defined below)
receivable upon the Acquisition by a holder of the number of shares of Common
Stock which might have been obtained upon exercise of the Stock Option or
portion thereof, as the case may be, immediately prior to the Acquisition.
The term "Acquisition Consideration" shall mean the kind and amount of
securities, cash or other property or any combination thereof receivable in
respect of one share of Common Stock upon consummation of an Acquisition.
(b) Notwithstanding any other provision of this Plan, the
Committee may authorize the issuance, continuation or assumption of Stock
Options or provide for other equitable adjustments after changes in the Common
Stock resulting from any other merger, consolidation, sale of assets,
acquisition of property or stock, recapitalization reorganization or similar
occurrence upon such terms and conditions as it may deem equitable and
appropriate.
7. NONTRANSFERABILITY.
a) Each Stock Option granted under the Plan to a participant shall
not be transferable and shall be exercisable, during the participant's lifetime,
only by the participant.
b) If the participant shall cease to be either a director or a
regular full-time employee of the Company or its subsidiaries for any reason
other than a termination for cause or a termination by reason of death, any
unexercised portion of said Stock Option shall terminate sixty (60) days after
the date of the termination of employment, or upon the expiration of the Stock
Option, whichever shall first occur.
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c) If the event that the participant's employment is terminated
for cause, the unexercised portion of the Stock Option shall terminate
immediately upon the giving of the notice of such termination. For purposes of
this paragraph, "for cause" shall mean incompetence, gross negligence,
insubordination, conviction of a felony or willful misconduct by the participant
as determined in good faith by the Board of Directors of the Company, the
Committee or the Board of Directors of the subsidiary of the Company by which
the participant is employed. Nothing in this Plan or in any Stock Option granted
pursuant to this Plan shall confer on any participant the right to continue in
the employ of the Company or any of its subsidiaries, or interfere in any way
with the right of the Company or any of its subsidiaries to terminate the
participant's employment at any time.
d) In the event of the death of the participant, the participant's
estate shall have the privilege of exercising any Stock Options not theretofore
exercised by the participant, to the extent that the participant was entitled to
exercise such rights on the date of the participant's death; but in such event,
the period of time within which the purchase or exercise may be made shall be
the earlier of (a) 180 days next succeeding the death of the participant or (b)
the expiration of the term of the Stock Option.
8. OTHER PROVISIONS. The award of any Stock Option under the Plan may
also be subject to such other provisions (whether or not applicable to any Stock
Option awarded to any other participant) as the Committee determines
appropriate, including without limitation, provisions for the installment
purchase of Common Stock under Stock Options, provisions to assist the
participant in financing the acquisition of Common Stock, provisions for the
forfeiture of, or restrictions on resale or other disposition of shares acquired
under any form of Stock Option, provisions for the acceleration of
exercisability or vesting of Stock Options in the event of a change of control
of the Company, provisions for the payment of the value of Stock Options to
participants in the event of a change of control of the Company, provisions for
the forfeiture of, or provisions to comply with federal and state securities
laws, or understandings or conditions as to the participant's employment in
addition to those specifically provided for under the Plan.
9. FAIR MARKET VALUE. For purposes of this Plan and any Stock Options
awarded hereunder, "Fair Market Value" shall be the average of the highest and
lowest sale prices for the Company's Common Stock on the date of calculation (or
on the last preceding trading date if the Company's Common Stock was not traded
on the date of calculation) if the Company's Common Stock is readily tradable on
a national securities exchange or other market system, and if the Company's
Common Stock is not readily tradable, Fair Market Value shall mean the amount
determined in good faith by the Committee as the fair market value of the Common
Stock of the Company.
10. WITHHOLDING. All payments or distributions made pursuant to the
Plan shall be net of any amounts required to be withheld pursuant to applicable
federal, state and local tax withholding requirements. If the Company proposes
or is required to distribute Common Stock pursuant to the Plan, it may require
the recipient to remit to it an amount sufficient to satisfy such tax
withholding requirements prior to the delivery of any certificates for such
Common Stock. The Committee may, in its discretion and subject to such rules as
it may adopt, permit a participant to pay all or a portion of the federal, state
and local withholding taxes arising in connection with the exercise of a
Nonqualified Stock Option by election to have the Company withhold shares of
Common Stock having a Fair Market Value equal to the amount to be withheld.
11. TENURE. A participant's right, if any, to continue to serve the
Company or a subsidiary of the Company as an officer, director, employee, or
otherwise, shall not be enlarged or otherwise affected by his designation as a
participant under the Plan.
12. DURATION, AMENDMENT AND TERMINATION. No Stock Option shall be
granted more than ten years after the date of the approval of the Plan by the
stockholders of the Company, PROVIDED, HOWEVER, that the terms and conditions
applicable to any Stock Option granted prior to such date may thereafter be
amended or modified by mutual agreement between the Company and the participant
or such other persons as may then have an interest therein. Also, by mutual
agreement between the Company and a participant hereunder or under any other
present or future plan of the Company, Stock Options may be granted to such
participant in substitution and exchange for, and in cancellation of, any Stock
Options previously granted such participant under the Plan, or any other present
or future plan of the Company. The Board of Directors may amend the Plan from
time to time or terminate the Plan at any time. However, no action authorized by
this paragraph shall reduce the amount of any existing Stock Option or change
the terms and conditions thereof without the participant's consent. No amendment
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of the Plan shall, without approval of the stockholders of the Company, (i)
materially increase the total number of shares which may be issued under the
Plan; (ii) materially increase the amount or type of Stock Options that may be
granted under the Plan; (iii) materially modify the requirements as to
eligibility for Stock Options under the Plan; (iv) result in any member of the
Committee losing his or her status as a disinterested person under Rule 16b-3
under the 1934 Act; or (vi) extend the term of this Plan.
13. GOVERNING LAW. The Plan, Stock Options granted hereunder and action
taken in connection herewith shall be governed and construed in accordance with
the laws of the State of Delaware (regardless of the law that might otherwise
govern under applicable Delaware principles of conflict of laws).
14. GOVERNMENT REGULATIONS. The Plan and the grant and exercise of
Stock Options hereunder, and the obligation of the Company to sell and deliver
shares under such Benefits, shall be subject to all applicable laws, rules and
regulations, including without limitation all applicable federal and state
securities laws.
15. STOCKHOLDER APPROVAL. The Plan was adopted by the Board of
Directors of the Company on May 25, 1995. The Plan and any Stock Options granted
thereunder shall be null and void if stockholder approval is not obtained within
twelve (12) months of the adoption of the Plan by the Board of Directors.
