STOCK PURCHASE WARRANTS AXD OPTIONS 287
year from 1937 to 1941 as part compensation on account of its subsidiary,
the Barber Asphalt Co.
Such plans are not always approved by stockholders. When the Childs
Co. proposed to sell 23,331 shares of its common stock at $1 per share to five
executives, criticism from the stockholders was so sharp that the plan was
withdrawn.
Restricted Options to Officers.—Options to officers, giving them the right
to buy stock within fixed periods at specified prices, are sometimes limited
in such manner that no one else may take advantage of them. Loew's, Inc.,
provided that options for the purchase of 50,000, 50,000, and 100,000 shares
of common stock, granted to three officers, be nonassignable. The optionees
agreed not to sell, within a specified period, any stock purchased under their
options at less than $15 per share in excess of the price paid. In the event
of the legal termination of any optionee's employment prior to a specified
date, the options were to be canceled except for certain rights to be continued
for a limited period. The Walworth Co. gave its executive head an option,
to be effective only during his continuance as head of the corporation, to
buy 50,000 shares of its stock at any time during the 4 years following the
date of the option. The price at which any block could be purchased was
to be the average price of the stock for the 5 years prior to the purchase.
In 1937, the Tubize Chatillon Corp. granted to a group of its executives
nonassignable options to buy 10,000 shares of Class A stock and 10,000
shares of common stock. The prices were to be $30 and $10, respectively, in
1937 and as fixed by the board of directors for later years. In offering
20,000 shares of stock to selected employees, the Household Finance Corp.
stipulated that: the purchasers may not assign such shares without the
written consent of the company, the certificates to be so stamped to prevent
their sale; the death of the purchaser terminates his option agreement; and
the corporation reserves the right to repurchase the shares at a price stated
in the contract.
A peculiar option was used by the American Fidelity and Casualty Co.,
Inc., in authorizing 20,000 shares of $5 par stock to be held for sale at the
order of one of its officers on the following terms: During 1937-1938, $11.50
per share; 1939, $12; 1940, $13; and 1941, $14. The stock purchased under
this option could not be resold within 18 months after its purchase unless
the entire holdings be sold at the same time. However, the owner was
permitted to pledge his shares. The pledgee may sell the same at any time
for the bona fide purpose of collecting indebtedness due him. In considera-
tion of this option, three officers agreed to continue to serve the corporation
through 1951 at aggregate annual salaries not to exceed $30,000.
Bonus to Executives.—Some plans for encouraging executives contem-
plate outright gift of stock instead of options to buy shares. In merging
McCormick's, Ltd., in 1937, Weston (George), Ltd., a Canadian corporation,