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Exhibit 10.4
As Amended Effective January 11, 2008
99¢ ONLY STORES
1996 STOCK OPTION PLAN
The
purpose of this 1996 Stock Option Plan, as amended and
restated (the “Plan”) is to provide incentives and
rewards to selected eligible directors, officers, employees
and consultants of 99¢ Only Stores (the
“Company”) or its subsidiaries in order to assist
the Company and its subsidiaries in attracting, retaining and
motivating those persons by providing for or increasing the
proprietary interests of those persons in the Company, and by
associating their interests in the Company with those of the
Company’s shareholders.
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2.
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Administration of the Plan.
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The
Plan shall be administered by a committee of the Board of
Directors of the Company (the “Committee”)
consisting of two or more directors, each of whom shall be
both a “non-employee director,” as that term is
defined in Rule 16b-3(b)(3)(i) of the Rules and Regulations
(the “Rules”) of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as
amended, and an “outside director” for purposes of
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the “Code”) and the regulations of the
Internal Revenue Service adopted thereunder, as such Rules and
such Section and regulations may from time to time be amended
or interpreted. Members of the Committee shall
serve at the pleasure of the Board of Directors of the
Company.
The
Committee shall have all the powers vested in it by the terms
of the Plan, including exclusive authority (i) to select from
among eligible directors, officers, employees and consultants,
those persons to be granted “Awards” (as defined
below) under the Plan; (ii) to determine the type, size and
terms of individual Awards (which need not be identical and
will likely vary from person to person) to be made to each
person selected; (iii) to determine the time when Awards will
be granted, and to establish objectives and conditions
(including, without limitation, vesting and performance
conditions), if any, for earning Awards, and whether Awards
will be paid after the end of the Award period; (iv) to amend
the terms or conditions of any outstanding Award, subject to
applicable legal restrictions; (v) to authorize any person to
execute, on behalf of the Company, any instrument required to
carry out the purposes of the Plan; and (vi) to make any and
all other determinations which it determines to be necessary
or advisable in the administration of the Plan. The
Committee shall have full power and authority to administer
and interpret the Plan and to adopt, amend and revoke such
rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its
business as the Committee deems necessary or
advisable. The Committee’s interpretation of
the Plan, and all actions taken and determinations made by the
Committee pursuant to the powers vested in it hereunder, shall
be conclusive and binding on all parties concerned, including
theCompany, its shareholders, any participants in the Plan and
any other employee of the Company or any of its
subsidiaries.
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3.
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Persons Eligible under the Plan.
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Any
person who is an officer, employee or consultant of the
Company, or any of its subsidiaries (an
“Employee”), including any member of the Board of
Directors of the Company who is an Employee, shall be eligible
to be considered for the grant of Awards under the Plan.
Subject to the provisions of Section 5 hereof, members of the
Board of Directors of the Company who are not employees (each
a “non-employee Director”) shall be eligible to be
considered for the grant of Awards under the
Plan. Participants in the Plan are referred to
herein as “participants.”
(a) Common
Stock and Derivative Security Awards. Awards authorized
under the Plan shall consist of any type of arrangement with an
Employee that is not inconsistent with the provisions of the Plan
and that, by its terms, involves or might involve or be made with
reference to the issuance of (i) shares of the Common Stock, no par
value, of the Company (the “Common Stock”) or (ii) a
“derivative security” (as that term is defined in Rule
16a-l(c) of the Rules, as the same may be amended from time to
time) with an exercise or conversion price related to the Common
Stock or with a value derived from the value of the Common
Stock
(b) Types
of Awards. Awards are not restricted to any specified form
or structure and may include, but need not be limited to, sales,
bonuses and other transfers of stock, restricted stock, stock
options, reload stock options, stock purchase warrants, other
rights to acquire stock or securities convertible into or
redeemable for stock, stock appreciation rights, phantom stock,
dividend equivalents, performance units or performance shares, or
any other type of Award which the Committee shall determine is
consistent with the objectives and limitations of the
Plan. An Award may consist of one such security or
benefit, or two or more of them in tandem or in the
alternative.
(c) Consideration
. Common Stock may be issued pursuant to an Award for
any lawful consideration as determined by the Committee, including,
without limitation, a cash payment, services rendered, or the
cancellation of indebtedness.
(d) Guidelines. The
Committee may adopt, amend or revoke from time to time written
policies that provide guidelines implementing the
Plan. Such guidelines may include, but need not be
limited to, the type, size and term of Awards to be made to
participants and the conditions for payment of such
Awards. No employee shall have any right to receive an
Award unless so determined by the Committee.
(e) Terms and Conditions. Subject to the provisions of the Plan, the
Committee, in its sole and absolute discretion, shall determine all
of the terms and conditions of each Award granted pursuant to the
Plan, which terms and conditions may include, among other
things:
(i) any
provision necessary for such Award to qualify as an incentive
stock Option under Section 422 of the Code (an
“Incentive Stock Option”);
(ii) a
provision permitting the recipient of such Award (including
any recipient who is a director or officer of the Company) to
pay the purchase price of the Common Stock or other property
issuable pursuant to such Award, or to pay such
recipient’s tax withholding obligation with respect to
such issuance, in whole or in part, by delivering previously
owned shares of capital stock of the Company (including
“pyramiding”) or other property, or by reducing
the number of shares of Common Stock or the amount of other
property otherwise issuable pursuant to such Award;
or
(iii) a
provision conditioning or accelerating the receipt of
benefits pursuant to the Award, or terminating the
Award, either automatically or in the discretion of the
Committee, upon the occurrence of specified events, including,
without limitation, a change of control of the Company, an
acquisition of a specified percentage of the voting power of
the Company, the dissolution or liquidation of the Company, a
sale of substantially all of the property and assets of the
Company or an event of the type described in
Section g of the Plan.
(f) Maximum Awards. An
Employee may be granted multiple Awards under the
Plan. However, notwithstanding any other provision of
the Plan, the maximum number of shares of Common Stock with respect
to which options or rights or other Awards may be granted under the
Plan to any Employee during any fiscal year shall be 450,000,
subject to adjustment as provided in Section 8 of the
Plan.
(g) Suspension or Termination of
Awards. The Committee may cancel, rescind,
suspend, withhold or otherwise terminate, limit or restrict any and
all unexpired, unpaid, deferred or other Awards, whether vested or
unvested, at any time if it determines that the applicable
participant, while employed by the Company or subsequent thereto,
engaged in any Detrimental Activity. In the event
a participant has engaged in Detrimental Activity, any exercise,
payment or delivery pursuant to an Award may be refused if not
already granted or, if already granted, may be rescinded within one
year thereafter. In the event of any such rescission,
the participant shall pay to the Company the amount of any gain
realized or payment received as a result of the rescinded exercise,
payment or delivery, in such manner and on such terms and
conditions as may be required, and the Company shall be entitled to
set-off against
the amount of any such gain any amount owed to the participant by
the Company.
(i) With
respect to an Employee, “Detrimental Activity”
means conduct that constitutes a breach of an Employee’s
fiduciary duty to the Company under applicable law, a failure
to maintain the confidentiality of the Company’s
confidential or proprietary information that could reasonably
be expected to cause material harm to the Company, or any
material misconduct relating to the Company or its
subsidiaries, including, but not limited to:
a) The
disclosure to anyone outside the Company or its Affiliates, or
the use in other than the Company's or a subsidiary’s
business, without written authorization from an executive
officer of the Company, of any confidential or proprietary
information of the Company or its subsidiaries (of which such
Employee became aware during his or her employment
with the Company or a subsidiary) in a manner that could
reasonably be expected to cause material harm to the
Company;
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