Non-employee Director Stock Potion Plan

CARIBBEAN CIGAR COMPANY


1996 Non-Employee Directors Stock Option Plan


1. PURPOSE. The purpose of the Caribbean Cigar Company 1996 Non-Employee Directors Stock Option Plan (the "Plan") is to enable Caribbean Cigar Company (the "Company") to attract, retain and reward independent directors for services to the Company and its Subsidiaries by providing for the grant of options to such persons.


2. ADMINISTRATION. The Plan shall be administered by a Committee of not less than two Disinterested Persons, who shall be appointed by the Board and who shall serve at the pleasure of the Board. The Committee shall have the authority to administer the Plan and, in such connection, to make such determinations, not inconsistent with the provisions of the Plan, as it may deem appropriate.


3. STOCK SUBJECT TO PLAN.


(a) The total number of shares of Stock reserved and available for distribution under the Plan shall be one hundred thousand (100,000) shares of Common Stock. Such shares may consist, in whole or in part, of authorized and unissued shares or treasury shares. If any shares of Common Stock that have been optioned cease to be subject to an Option, such shares shall again be available for distribution in connection with future awards under the Plan.


(b) In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, stock distribution, reverse split, combination of shares or other change in corporate structure affecting the Stock, such substitution or adjustment shall be made in the aggregate number of shares reserved for issuance under the Plan, in the number and option price of shares subject to outstanding Options granted under the Plan, in the number and purchase price of shares subject to outstanding Options.


4. ELIGIBILITY AND GRANT.


(a) On the date that each non-employee director shall first be elected to the board, such individual shall receive a non-qualified option to purchase five thousand (5,000) shares of Common Stock at an exercise price per share equal to the greater of the fair market value on the date of grant or the par value of the Common Stock. Such option shall have a term of ten (10) years and be exercisable immediately upon issuance.


(b) On April 1 or each year, commencing with April 1, 1997, each director who is a non-employee director on such date, shall be granted nonqualified options to purchase two thousand five hundred (2,500) shares of Common Stock (or such lesser number of shares of Common Stock as remain available for grant at such date under the Plan, divided by the number of non-management di ...