THE FINOVA GROUP INC.
1992 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
FOR DIRECTORS
[Date]
(NQ)
The FINOVA Group Inc. (Company), a Delaware corporation, hereby grants
to "1" (Grantee) the option (Option) to purchase from the Company, pursuant to
The FINOVA Group Inc. 1992 Stock Incentive Plan (Plan), at the price of $____
per share (Option Price) ____ shares of its Common Stock of the par value of
$.01 each (Common Stock) through the exercise of this Option in accordance with
the terms and conditions hereinafter set forth.
1. Option Period and Termination of Employment of Grantee. The period
during which this Option may be exercised (Option Period) is the period
beginning on the date hereof and ending ten (10) years from such date, subject
to paragraph 2 below, and during this period this Option may be exercised only
by the Grantee personally and while a director of the Company or an affiliate
thereof, except that:
(a) If the Grantee ceases to be a director of the Company or
any subsidiary or affiliate of the Company for any reason, excluding death,
disability, retirement and termination as a director for cause, the option
rights hereunder (as they exist on the day the Grantee ceases to be a director)
may be exercised only within a period of three (3) months thereafter, subject to
the notice requirements set forth below, or prior to the expiration of the
Option Period, whichever shall occur sooner. If Grantee is terminated for cause,
all the option rights hereunder shall expire immediately upon the giving to such
Grantee of notice of such termination.
(b) If the Grantee ceases to be a director of the Company or
any subsidiary or affiliate of the Company due to death, or dies within the
three month or three year periods referred to in Sections (a) or (c) of this
paragraph, the option rights hereunder (as they exist immediately prior to the
Grantee's death) may be exercised by the Grantee's personal representative only
during a period of twelve (12) months thereafter, subject to the notice
requirements set forth below, or prior to the expiration of the Option Period,
whichever shall occur sooner.
(c) If the Grantee ceases to be a director of the Company or
any subsidiary or affiliate of the Company by reason of disability or
retirement, the option rights hereunder (as they exist on the day the Grantee
ceases to be a director) may be exercised only within a period of three (3)
years thereafter, subject to the notice requirements set forth below, or prior
to the expiration of the Option Period, whichever shall occur sooner.
2. Method of Exercise of this Option. This Option may be exercised in
the manner
hereinafter prescribed, in whole or in part, at any time or from time to time,
during the Option Period as follows:
100% of the shares hereby optioned at any time after six (6) months
from the date hereof.
Notwithstanding the above, in the event the Grantee ceases to be a director of
the Company or any subsidiary or affiliate of the Company due to death,
disability or retirement at age 62 or later, the entire Option shall become
exercisable upon such occurrence.
On or before the expiration of the Option Period specified herein,
written notice of the exercise of this Option with respect to all or a part of
the Common Stock hereby optioned may be mailed or delivered to the Company by
the Grantee in substantially the form attached hereto or in such other form as
the Company may require, properly completed and among other things stating the
number of shares of Common Stock with respect to which the Option is being
exercised, and specifying the method of payment for such Common Stock. The
notice must be mailed or delivered prior to the expiration of this Option.
Before any stock certificates shall be issued, the entire purchase
price of the Common Stock purchased shall be paid to the Company. Certificates,
registered in the name of the purchaser for the Common Stock purchased, will be
issued to the purchaser as soon as practicable thereafter. Failure to pay the
purchase price for any Common Stock within the time specified in said notice
shall result in forfeiture of the Grantee's right to purchase the Common Stock
at a later date and the number of shares of Common Stock which may thereafter be
purchased hereunder shall be reduced accordingly.
The purchase price may be paid either entirely in cash or in whole or
in part with unrestricted Common Stock already owned by the Grantee. If the
Grantee elects to pay the purchase price entirely in cash, he or she will be
notified of the purchase price by the Company. If the Grantee elects to pay the
purchase price either substantially all with Common Stock or partly with Common
Stock and the balance in cash, he or she will be notified by the Company of the
fair market value of the Common Stock on the exercise date and the amount of
Common Stock or cash payable. Within three business days after the exercise
date, the Grantee shall deliver to the Company either cash or Common Stock
certificates, in negotiable form, at least equal in value to the purchase price,
or that portion thereof to be paid for with Common Stock, together with cash
sufficient to pay the full purchase price. Only full shares of Common Stock
shall be utilized for payment purposes.
To the extent permissible under applicable tax, securities, and other
laws, the Grantee may satisfy any tax withholding requirement by surrendering
Shares, including Shares to which Grantee is entitled as a result of the
exercise of this Option, in such manner as the Company shall choose in its
discretion to satisfy such requirement.
3. Non-Transferability of this Option. This Option may not be assigned,
encumbered or transferred, in whole or in part, except by the Grantee's will or
in accordance
with the applicable laws of descent and distribution.
4. Adjustments for Changes in Capitalization of Company. The Common
Stock covered by this Option is, at the option of the Company, either authorized
but unissued or reacquired Common Stock. In the event of any merger,
reorganization, consolidation, recapitalization, stock dividend, stock split,
extraordinary distribution with respect to the Common Stock or other change in
corporate structure affecting the Common Stock during the Option Period, the
number of shares of Common Stock which may thereafter be purchased pursuant to
this Option and the purchase price per share, shall be appropriately adjusted,
or other appropriate substitutions shall be made, and the determination of the
Board of Directors of the Company, or the Executive Compensation Committee of
the Board of Directors, as the case may be, as to any such adjustments shall be
final, conclusive and binding upon the Grantee.
5. Effect of Change in Control.
(a) In the event of a Change in Control (as defined in the
Plan), this Option (to the extent outstanding as of the date such Change in
Control is determined to have occurred) if not then exercisable and vested shall
become fully exercisable and vested to the full extent of the original grant,
without regard to the three month limit on exercisability imposed by Section
5(i) of the Plan or any successor provisions.
(b) Notwithstanding any other provision of the Plan, during
the 60-day period from and after a Change in Control (the "Exercise Period"),
the Grantee shall have the right, whether or not this Option is fully
exercisable and in lieu of the payment of the exercise price for the shares of
Common Stock being purchased under the Option and by giving notice to the
Company, to elect (within the Exercise Period) to surrender all or part of the
Option to the Company and to receive cash, within 30 days of such notice, in an
amount equal to the amount by which the Change in Control Price (as defined in
the Plan) per share of Common Stock on the date of such election shall exceed
the exercise price per share of Common Stock under the Option (the "Spread")
multiplied by the number of shares of Common Stock granted under the Option as
to which the right granted hereunder shall have been exercised; provided,
however, that if the Change in Control is within six months of the date of grant
of a particular Option held by a Grantee who is an officer or director of the
Company and is subject to Section 16(b) of the Securities Exchange Act of 1934,
no such election shall be made by such Grantee with respect to such Option prior
to six months from the date of grant. Notwithstanding any other provision
hereof, if the end of such 60-day period from and after a Change in Control is
within six months of the date of grant of an Option held by a Grantee who is an
officer or director of the Company and is subject to Section 16(b), such Option
shall be canceled in exchange for a cash payment to the Grantee, effected on the
day which is six months and one day after the date of grant of such Option,
equal to the Spread multiplied by the number of shares of Common Stock granted
under the Option.
6. Plan and Plan Interpretations as Controlling. This Option and the
terms and conditions herein set forth are subject in all respects to the terms
and conditions of the Plan,
which are controlling. The Plan provides that the Executive Compensation
Committee of the Board of Directors may from time to time make changes therein,
interpret it and establish regulations for the administration thereof; provided
that no such amendment shall impair the rights of any Grantee under an Option
without the Grantee's consent, except an amendment for purposes of compliance
with the federal securities laws. The Grantee, by acceptance of this Option,
agrees to be bound by said Plan and such Board actions.
This Option may not be exercised whenever such exercise or the issuance
of any of the optioned shares would be contrary to law or the regulations of any
governmental authority having jurisdiction.
IN WITNESS WHEREOF, THE FINOVA GROUP INC. has caused this Option to be
duly executed in its name and dated as of the date of grant hereof.
Dated:
--------------------- THE FINOVA GROUP INC.
-----------------------------
By: XXXXXX X. XXXXXXXXXXX
Chairman
ATTEST:
--------------------------------
Secretary or Assistant Secretary
