UNIROYAL CHEMICAL CORPORATION
PURCHASE RIGHT PLAN
(formerly the UCC Investors Holding,
Inc. Restricted Stock Plan)
Effective as of October 31, 1989
as
Amended and Restated
as of March 10, 1995
UNIROYAL CHEMICAL CORPORATION
PURCHASE RIGHT PLAN
1. Purpose. The purpose of this Uniroyal
Chemical Corporation Purchase Right Plan (this "Plan"),
as herein set forth, by and between Uniroyal Chemical
Corporation (formerly named UCC Investors Holding, Inc.)
(the "Company") and each Management Investor, is to
establish an additional equity participation relationship
between the Company and its key executives and employees,
thereby directly aligning their interests, income oppor-
tunities and risks with those of other shareholders and
to foster teamwork, entrepreneurial spirit and focused
effort toward the achievement of the Company's long-term
business strategy and objectives through the opportunity
pursuant to this Plan to purchase shares of Common Stock,
par value $.01 per share, of the Company ("Shares").
2. Administration. (a) This Plan shall be
administered by a committee as may be constituted from
time to time (the "Committee"). The Committee shall have
as its members the members of the Compensation Committee
of the Board of Directors of the Company (the "Board"),
or if no Compensation Committee exists, the Committee
shall have as its members the members of the Board of
Directors of the Company. The Committee shall interpret
this Plan, prescribe, amend and rescind rules and regula-
tions relating thereto and make all other determinations
necessary or advisable for the administration of this
Plan. Any such action by the Committee shall be final
and conclusive on all persons having any interest in any
right (a "Purchase Right") to purchase Shares pursuant to
this Plan ("Plan Shares"), or Plan Shares to which such
action relates. The Committee shall hold meetings at
such times and places as it may decide and shall keep
minutes of its proceedings. A majority of the members of
the Committee shall constitute a quorum for purposes of
any action taken by the Committee and all such actions
shall be taken by a majority vote of the members present
at any such meeting. Any action by the Committee may be
taken by written instrument signed by all of the members,
and any such action shall be as fully effective as if it
had been taken by a majority of the members at a meeting
duly called and held. No member of the Board or the
Committee shall be liable for any action, determination
or omission made by him or her in good faith with respect
to his or her service on the Committee.
(b) The Committee shall have the power
from time to time:
(i) to determine, upon the recommendation
of the Chief Executive Officer of the Company, and within
the limits of the express provisions of this Plan, those
Participants (as defined in Section 3 hereof) to whom
Purchase Rights shall be granted and the terms and condi-
tions (which need not be identical) of each Purchase
Right, including, without limitation, the number of Plan
Shares to be subject to each Purchase Right, the time
period during which each Purchase Right may be exercised,
the purchase price per Plan Share under each Purchase
Right (subject to Section 7 hereof), the time or times
within which (during the term of the Purchase Right) all
or any portion of each Purchase Right may be exercised
and whether cash, Shares, promissory notes (secured or
unsecured) or other property, or any combination thereof
may be accepted in full or partial payment for Plan
Shares purchased pursuant to a Purchase Right; and
(ii) generally, to exercise such powers
and to perform such acts as are deemed necessary or
advisable to promote the best interests of the Company
with respect to this Plan.
(c) All Purchase Rights previously grant-
ed by the Company on February 1, 1991, December 1, 1991,
January 1, 1993 and September 30, 1994 shall be deemed to
have been granted hereunder on the terms and subject to
the conditions set forth in such Purchase Rights.
3. Participants. Participants will consist of
such key executives and employees of the Company as the
Committee from time to time designates upon the recommen-
dation of the Chief Executive Officer of the Company and
within the limits of the express provisions of this Plan.
Directors of the Company shall not participate in this
Plan as such, but an employee, who is otherwise eligible
to participate, may participate in this Plan notwith-
standing that he is also a director. The Committee's
determination to grant Purchase Rights to a Participant
in any year shall not require the Committee to grant
Purchase Rights to such Participant in any other year.
The Committee shall consider such factors as it deems
pertinent in selecting Participants and in determining
the number and terms of Purchase Rights to be granted to
them, including without limitation: (i) the recommenda-
tion of the Chief Executive Officer of the Company; (ii)
the financial condition of the Company; (iii) anticipated
profits for the current or future years; (iv) contribu-
tions of Participants to the profitability and develop-
ment of the Company; and (v) other compensation provided
to Participants.
4. Plan Shares. The total number of Plan
Shares reserved for issuance, and potentially available
for purchase by all Participants, under this Plan is
757,030; provided, however, that such number of Plan
Shares shall be adjusted in accordance with the provi-
sions of Section 10 hereof. The Company shall reserve
for the purposes of the Plan such number of Shares as
determined by the Board of Directors of the Company out
of either authorized but unissued Shares, treasury Shares
or partly out of each.
5. Vested Shares. All Plan Shares upon issu-
ance shall be fully vested shares of Common Stock of the
Company.
6. Issuance of Plan Shares. Plan Shares shall
be issued upon exercise, in part or in full, of a Pur-
chase Right covering at least the number of Plan Shares
to be so issued, and payment of the Plan Share exercise
price under such Purchase Right.
7. Purchase Price. The purchase price of
each Plan Share pursuant to the exercise of a Purchase
Right shall be $1.00 per share or such higher price as
the members of the Board of Directors of the Company
shall determine; provided, however, that such purchase
price shall be adjusted in accordance with the provisions
of Section 10 hereof.
8. Unexercised Purchase Rights. If any Pur-
chase Right granted under this Plan expires unexercised,
or is surrendered by a Participant for cancellation, or
is terminated or ceases to be exercisable for any other
reason without having been fully exercised prior to the
end of the period during which Purchase Rights may be
granted under this Plan, the Plan Shares theretofore sub-
ject to such Purchase Right, or to the unexercised por-
tion thereof, shall again become available for new Pur-
chase Rights to be granted under this Plan to any Partic-
ipant.
9. Terms and Conditions of Purchase Rights.
(a) Purchase Rights granted pursuant to
this Plan shall be authorized by the Committee and shall
be evidenced by delivery to the Participant of an Award
and Share Purchase Agreement (the "Share Purchase Agree-
ment") substantially in the form attached hereto as
Exhibit A. Such Share Purchase Agreement shall state:
(i) the number of Plan Shares with respect to which the
Purchase Right is granted, (ii) the purchase price per
Plan Share, (iii) the duration of the Purchase Right,
(iv) the method of purchasing such Plan Shares, and (v)
such other information as the Committee deems appropriate
or necessary. The terms and conditions of each Purchase
Right must be consistent with the provisions of this Plan
and will be applicable only to the grant that it announc-
es.
(b) The Purchase Rights granted under
this Plan shall be in such form and upon such terms and
conditions as the Committee shall from time to time
determine, subject to the provisions of this Plan. As a
condition to exercise of a Purchase Right granted hereun-
der a Participant shall be required to agree to and
execute a counterpart of a Share Purchase Agreement. The
purchase of Plan Shares pursuant to any Purchase Right
may be subject to such other provisions (whether or not
applicable to the Purchase Right awarded to any other
Participant) as the Committee, reasonably determines
appropriate, including, without limitation, restrictions
on resale or other disposition, such provisions as may be
appropriate to comply with federal or state securities
laws and stock exchange requirements, and undertakings or
conditions as to the Participant's employment in addition
to those specifically provided for under this Plan or the
Share Purchase Agreement.
10. Adjustments. The aggregate number of Plan
Shares with respect to which Purchase Rights may be
granted hereunder, the number of Shares subject to each
outstanding Purchase Right, the number of Plan Shares
subject to repurchase by the Company and the purchase
price for each such Plan Share, shall all be equitably
and appropriately adjusted, in such manner as the Commit-
tee may determine, for any increase, reduction or change
or exchange of Shares for a different number or kind of
shares or other securities of the Company by reason of a
reclassification, recapitalization, merger, consolida-
tion, reorganization, issuance of warrants or rights,
stock dividend, stock split or reverse stock split,
combination or exchange of shares, repurchase of shares,
change in corporate structure or otherwise.
11. Stock Certificates. Each Participant who
exercises a Purchase Right or any portion thereof in
accordance with the Plan and the relevant Share Purchase
Agreement shall be issued a stock certificate in respect
of such Plan Shares. Such certificate shall be regis-
tered in the name of the Participant.
12. Legal and Other Requirements. The obliga-
tion of the Company to sell and deliver Plan Shares
granted and purchased under this Plan shall be subject to
all applicable laws, regulations, rules and approvals,
including, but not by way of limitation, the effective-
ness of a registration statement under the Securities Act
of 1933, as amended, if deemed necessary or appropriate
by the Committee, covering the Plan Shares reserved for
issuance. All certificates for Plan Shares delivered
under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other require-
ments of the Securities and Exchange Commission, any
stock exchange upon which the Plan Shares are then listed
and any applicable federal or state securities laws and
the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to
any such restrictions.
13. Rights as a Shareholder. Upon exercise of
all or any portion of any Purchase Right, a Participant
shall have all of the rights as a stockholder with re-
spect to the Plan Shares covered by the Purchase Right or
the portion thereof exercised by him, subject to the
provisions of this Plan and the Share Purchase Agreement
related to the Purchase Right.
14. Nontransferability of Purchase Rights.
During the lifetime of a Participant, any Purchase Right
granted to him shall be exercisable only by him. No
Purchase Right shall be assignable or transferable (ex-
cept by will or the laws of descent and distribution).
Any such attempt to transfer or assign such Purchase
Right shall be null and void. The granting of a Purchase
Right shall impose no obligation upon the Participant to
exercise such Purchase Right.
15. Tax Withholding. The Company shall comply
with the obligations imposed on the Company under appli-
cable tax withholding laws, if any, with respect to
Purchase Rights granted, and Plan Shares purchased, here-
under, and the disposition of Plan Shares thereafter, and
shall be entitled to do any act or thing to effectuate
any such required compliance, including, without limita-
tion, withholding from amounts payable by the Company to
a Participant and making demand on a Participant for the
amounts required to be withheld.
16. No Contract of Employment. Neither the
adoption of this Plan, the grant of any Purchase Right or
the purchase of Plan Shares hereunder shall be deemed to
obligate the Company to continue the appointment, employ-
ment, or engagement of any Participant for any particular
period.
17. No Effect on Plans. Neither the adoption
of this Plan, the grant of any Purchase Right or the
purchase of Plan Shares hereunder shall be deemed to pre-
clude the making of any award pursuant to any other
compensation, stock option, long-term incentive, bonus or
other plan that may be in effect from time to time.
18. Indemnification of Committee. The members
of the Committee shall be indemnified by the Company to
the fullest extent permitted by Delaware law, the Company's
Certificate of Incorporation and the Company's By-laws.
19. Amendment and Termination of Plan. The
Company may amend this Plan from time to time or termi-
nate this Plan at any time; provided, however, that no
such action shall reduce the number of Plan Shares sub-
ject to then outstanding Purchase Rights granted to any
Participant or materially adversely change the terms and
conditions thereof without the Participant's consent.
Without further action by the Board or the stockholders
of the Company, this Plan shall terminate ten years after
the effective date of this Plan; provided, however, that
the termination of this Plan shall not effect any Pur-
chase Rights outstanding at such date.
20. Regulations and Other Approvals Governing Law.
(a) This Plan shall be governed by and
construed in accordance with the laws of the State of
Delaware.
(b) Except as otherwise provided in
Section 19, the Committee may make such changes as may be
necessary or appropriate to comply with the rules and
regulations of any government authorities.
21. Effective Date of Plan. This Plan shall
become effective as of October 31, 1989.