EX-10.26
Stock Incentive Plan
EXHIBIT 10.26
2004 CSA ACQUISITION CORP.
STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to aid the Company and its Affiliates in
recruiting and retaining key employees, directors or consultants of outstanding
ability and to motivate such employees, directors or consultants to exert their
best efforts on behalf of the Company and its Affiliates by providing incentives
through the granting of Awards. The Company expects that it will benefit from
the added interest which such key employees, directors or consultants will have
in the welfare of the Company as a result of their proprietary interest in the
Company's success.
2. DEFINITIONS
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or any
successor thereto.
(b) Affiliate: With respect to an entity, any entity directly or
indirectly controlling, controlled by, or under common control
with, such first entity.
(c) Award: An Option or Other Stock-Based Award granted pursuant to
the Plan.
(d) Board: The Board of Directors of the Company.
(e) Change of Control: The occurrence of any of the following events
after the Effective Date:
(i) the sale or disposition, in one or a series of related
transactions, of all or substantially all of the assets of the
Company to any "person" or "group" (as such terms are defined in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than
Permitted Holders or (ii) any person or group, other than
Permitted Holders, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of greater than or equal to 50% of the
total voting power of the voting stock of the Company, including
by way of merger, consolidation or otherwise, except where one or
more of the Sponsors and/or any of their respective Affiliates
immediately following such merger, consolidation or other
transaction, continue to have the ability to designate or elect a
majority of the Board (or the board of directors of the resulting
entity or its parent company).
(f) Code: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
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(g) Committee: The Board or any committee to which the Board
delegates duties and powers hereunder.
(h) Company: CSA Acquisition Corp., a Delaware corporation.
(i) Effective Date: The date the Board approves the Plan, or such
later date as is designated by the Board.
(j) Employment: The term "Employment" as used herein shall be deemed
to refer to (i) a Participant's employment if the Participant is
an employee of the Company or any of its Affiliates, (ii) a
Participant's services as a consultant, if the Participant is
consultant to the Company or its Affiliates and (iii) a
Participant's services as an non-employee director, if the
Participant is a non-employee member of the Board.
(k) Fair Market Value: On a given date, (i) if there is a public
market for the Shares on such date, the average of the high and
low closing bid prices of the Shares as reported on such date on
the Composite Tape of the principal national securities exchange
on which such Shares are listed or admitted to trading, or, if
the Shares are not listed or admitted on any national securities
exchange, the arithmetic mean of the per Share closing bid price
and per Share closing asked price on such date as quoted on the
National Association of Securities Dealers Automated Quotation
System (or such market in which such prices are regularly
quoted)(the "NASDAQ"), or, if no sale of Shares shall have been
reported on the Composite Tape of any national securities
exchange or quoted on the NASDAQ on such date, on the closest
preceding date on which there were sales of Shares or (ii) if
there is no public market for the Shares on such date, the Fair
Market Value of the Shares will be as determined in good faith by
the Board; provided that with respect to Awards granted on or
shortly following the occurrence of the Closing Date under the
Stock Purchase Agreement among Cooper Tire & Rubber Company,
Cooper Tyre & Rubber Company UK Limited and the Company dated as
of September 16, 2004, unless otherwise determined by the Board,
the Fair Market Value shall be deemed to be the price per share
of common stock paid on the Closing Date by the Sponsors.
(l) Other Stock-Based Awards: Awards granted pursuant to Section 7 of
the Plan.
(m) Option: A stock option granted pursuant to Section 6 of the Plan.
(n) Option Price: The purchase price per Share of an Option, as
determined pursuant to Section 6(a) of the Plan.
(o) Participant: An employee, director or consultant who is selected
by the Committee to participate in the Plan.
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(p) Permitted Holder: As of the date of determination, any and all of
(i) an employee benefit plan (or trust forming a part thereof)
maintained by (A) the Company or its Affiliate or (B) any
corporation or other Person of which a majority of its voting
power of its voting equity securities or equity interest is
owned, directly or indirectly, by the Company or its Affiliate
and (ii) Cypress Merchant Banking Partners II L.P., Cypress
Merchant Banking II C.V., 55th Street Partners II L.P., Cypress
Side-By-Side LLC, GS Capital Partners 2000, L.P., GS Capital
Partners 2000 Offshore, L.P., GS Capital Partners 2000 GmbH & Co.
Beteiligungs KG, GS Capital Partners 2000 Employee Fund, L.P. and
Goldman Sachs Direct Investment Fund 2000, L.P. (collectively,
the "Sponsors") and any of their respective Affiliates.
(q) Person: A "person", as such term is used for purposes of Section
13(d) or 14(d) of the Act (or any successor section thereto).
(r) Plan: The 2004 CSA Acquisition Corp. Stock Incentive Plan.
(s) Shares: Shares of common stock of the Company.
(t) Subsidiary: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
3. SHARES SUBJECT TO THE PLAN
The total number of Shares which may be issued under the Plan is
223,615. The Shares may consist, in whole or in part, of unissued Shares or
treasury Shares. The issuance of Shares or the payment of cash upon the exercise
of an Award or in consideration of the cancellation or termination of an Award
shall reduce the total number of Shares available under the Plan, as applicable.
Shares which are subject to Awards which terminate or lapse without the payment
of consideration may be granted again under the Plan.
4. ADMINISTRATION
The Plan shall be administered by the Committee, which may delegate
its duties and powers in whole or in part to any subcommittee thereof. Awards
may, in the discretion of the Committee, be made under the Plan in assumption
of, or in substitution for, outstanding awards previously granted by the Company
or its Affiliates or a company acquired by the Company or with which the Company
combines. The number of Shares underlying such substitute awards shall be
counted against the aggregate number of Shares available for Awards under the
Plan. The Committee is authorized to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of or calculation by the
Committee in the interpretation and administration of the Plan, as described
herein, shall lie within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned (including, but not limited to,
Participants and their beneficiaries or successors). The
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Committee shall have the full power and authority to establish the terms and
conditions of any Award consistent with the provisions of the Plan and to waive
any such terms and conditions at any time (including, without limitation,
accelerating or waiving any vesting conditions). The Committee shall require
payment of any amount it may determine to be necessary to withhold for federal,
state, local or other taxes as a result of the exercise, grant or vesting of an
Award. Unless the Committee specifies otherwise, the Participant may elect to
pay a portion or all of the minimum statutory required withholding taxes by (a)
delivery in Shares or (b) having Shares withheld by the Company from any Shares
that would have otherwise been received by the Participant. Notwithstanding the
foregoing, no outstanding Award may be amended pursuant to this Section 4
without compliance with Section 12(b).
5. LIMITATIONS
No Award may be granted under the Plan after the tenth anniversary of
the Effective Date, but Awards theretofore granted may extend beyond that date.
6. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be non-qualified stock options
and shall be subject to the foregoing and the following terms and conditions and
to such other terms and conditions, not inconsistent therewith, as the Committee
shall determine:
(a) Option Price. The Option Price per Share shall be determined by
the Committee, but shall not be less than 100% of the Fair Market
Value of the Shares on the date an Option is granted.
(b) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as
may be determined by the Committee, but in no event shall an
Option be exercisable more than ten years after the date it is
granted.
(c) Exercise of Options. Except as otherwise provided in the Plan or
in an Award agreement, an Option may be exercised for all, or
from time to time any part, of the Shares for which it is then
exercisable. For purposes of Section 6 of the Plan, the exercise
date of an Option shall be the later of the date a notice of
exercise is received by the Company and, if applicable, the date
payment is received by the Company pursuant to clauses (i), (ii),
(iii) or (iv) in the following sentence. The Option Price for the
Shares as to which an Option is exercised shall be paid to the
Company in full at the time of exercise at the election of the
Participant (i) in cash or its equivalent (e.g., by check), (ii)
to the extent permitted by the Committee, in Shares having a Fair
Market Value equal to the aggregate Option Price for the Shares
being purchased and satisfying such other requirements as may be
imposed by the Committee; provided, that such Shares have been
held by the Participant for no less than six months (or such
other period as established from time to time by the Committee in
order to avoid adverse accounting treatment applying generally
accepted accounting principles), (iii) partly in cash and, to the
extent permitted by the Committee, partly in
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such Shares or (iv) if there is a public market for the Shares at
such time, through the delivery of irrevocable instructions to a
broker to sell Shares obtained upon the exercise of the Option
and to deliver promptly to the Company an amount out of the
proceeds of such Sale equal to the aggregate Option Price for the
Shares being purchased. No Participant shall have any rights to
dividends or other rights of a stockholder with respect to Shares
subject to an Option until the Participant has given written
notice of exercise of the Option, paid in full for such Shares
and, if applicable, has satisfied any other conditions imposed by
the Committee pursuant to the Plan.
(d) Attestation. Wherever in this Plan or any agreement evidencing an
Award a Participant is permitted to pay the exercise price of an
Option or taxes relating to the exercise of an Option by
delivering Shares, the Participant may, subject to procedures
satisfactory to the Committee, satisfy such delivery requirement
by presenting proof of beneficial ownership of such Shares, in
which case the Company shall treat the Option as exercised
without further payment and shall withhold such number of Shares
from the Shares acquired by the exercise of the Option.
7. OTHER STOCK-BASED AWARDS
The Committee, in its sole discretion, may grant or sell Awards of
Shares, Awards of restricted Shares and Awards that are valued in whole or in
part by reference to, or are otherwise based on the Fair Market Value of, Shares
("Other Stock-Based Awards"). Such Other Stock-Based Awards shall be in such
form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive, or vest with respect to,
one or more Shares (or the equivalent cash value of such Shares) upon the
completion of a specified period of service, the occurrence of an event and/or
the attainment of performance objectives. Other Stock-Based Awards may be
granted alone or in addition to any other Awards granted under the Plan. Subject
to the provisions of the Plan, the Committee shall determine to whom and when
Other Stock-Based Awards will be made, the number of Shares to be awarded under
(or otherwise related to) such Other Stock-Based Awards; whether such Other
Stock-Based Awards shall be settled in cash, Shares or a combination of cash and
Shares; and all other terms and conditions of such Awards (including, without
limitation, the vesting provisions thereof and provisions ensuring that all
Shares so awarded and issued shall be fully paid and non-assessable).
8. ADJUSTMENTS UPON CERTAIN EVENTS
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding Shares
after the Effective Date by reason of any Share dividend or
split, reorganization, recapitalization, merger, consolidation,
spin-off, combination, combination or transaction or exchange of
Shares or other corporate exchange, or any distribution to
shareholders of Shares other than regular
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cash dividends or any transaction similar to the foregoing, the
Committee in its sole discretion and without liability to any
Person may make such substitution or adjustment, if any, as it
deems to be equitable, as to (i) the number or kind of Shares or
other securities issued or reserved for issuance pursuant to the
Plan or pursuant to outstanding Awards, (ii) the Option Price
and/or (iii) any other affected terms of such Awards.
(b) Change of Control. In the event of a Change of Control after the
Effective Date, (i) if and to the extent determined by the
Committee in the applicable Award agreement or otherwise, any
outstanding Awards then held by Participants which are
unexercisable or otherwise unvested or subject to lapse
restrictions may be deemed exercisable or otherwise vested or no
longer subject to lapse restrictions, as the case may be, as of
immediately prior to such Change of Control and (ii) the
Committee may, but shall not be obligated to, with respect to
some or all of the outstanding Awards (A) cancel such Awards for
fair value (as determined in the sole discretion of the
Committee) which, in the case of Options, may equal the excess,
if any, of value of the consideration to be paid in the Change of
Control transaction to holders of the same number of Shares
subject to such Options (or, if no consideration is paid in any
such transaction, the Fair Market Value of the Shares subject to
such Options) over the aggregate exercise price of such Options
or (B) provide for the issuance of substitute Awards that will
substantially preserve the otherwise applicable terms of any
affected Awards previously granted hereunder as determined by the
Committee in its sole discretion or (C) provide that for a period
of at least 15 days prior to the Change of Control, any such
Options shall be exercisable as to all shares subject thereto and
that upon the occurrence of the Change of Control, such Options
shall terminate and be of no further force and effect.
9. NO RIGHT TO EMPLOYMENT OR AWARDS
The granting of an Award under the Plan shall impose no obligation on
the Company or any Affiliate to continue the Employment of a Participant and
shall not lessen or affect the Company's or Affiliate's right to terminate the
Employment of such Participant. No Participant or other Person shall have any
claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards. The terms and
conditions of Awards and the Committee's determinations and interpretations with
respect thereto need not be the same with respect to each Participant (whether
or not such Participants are similarly situated).
10. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of the Company
and a Participant, including without limitation, the estate of such Participant
and the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.
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11. NONTRANSFERABILITY OF AWARDS
Unless otherwise determined by the Committee, an Award shall not be
transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. An Award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant in accordance with the terms of such Award.
12. AMENDMENTS OR TERMINATION
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made, (a) without the approval of the
shareholders of the Company, if such action would (except as is provided in
Section 8 of the Plan), increase the total number of Shares reserved for the
purposes of the Plan or (b) without the consent of a Participant, if such action
would diminish any of the rights of the Participant under any Award theretofore
granted to such Participant under the Plan; provided, however, that the
Committee may amend the Plan in such manner as it deems necessary to permit the
granting of Awards meeting the requirements of the Code or other applicable
laws.
13. INTERNATIONAL PARTICIPANTS
With respect to Participants who reside or work outside the United
States of America, the Committee may, in its sole discretion, amend the terms of
the Plan or Awards with respect to such Participants in order to conform such
terms to the requirements of local law.
14. CHOICE OF LAW
The Plan shall be governed by and construed in accordance with the
laws of the State of New York without regard to conflicts of laws.
15. EFFECTIVENESS OF THE PLAN
The Plan shall be effective as of the Effective Date, subject to the
approval of the shareholders of the Company.
