EXHIBIT A
2001 MANAGEMENT EQUITY INCENTIVE
AND COMPENSATION PLAN
Section 1. Purposes of Plan.
The purpose of this 2001 Management Equity Incentive and
Compensation Plan (the "Plan") of Greif Bros. Corporation, a
Delaware corporation (the "Company"), is to advance the interests
of the Company and its stockholders by providing a means of
attracting and retaining key employees for the Company and its
subsidiary corporations. In order to serve this purpose, the
Plan encourages and enables key employees to participate in the
Company's future prosperity and growth by providing them with
incentives and compensation based on the Company's performance,
development, and financial success. These objectives will be
promoted by granting to key employees equity-based awards in the
form of: (a) Incentive Stock Options ("ISOs"), which are intended
to qualify under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"); (b) stock options which are not
intended to qualify as ISOs ("NQSOs") (ISOs and NQSOs are
referred to together hereinafter generally as "Stock Options");
(c) shares of Class A Common Stock, without par value, of the
Company ("Shares"), which will be subject to a vesting schedule
based on the recipient's continued employment ("Restricted
Shares"); and (d) Shares, which will be subject to a vesting
schedule based on certain performance objectives ("Performance
Shares"). (The Performance Shares, Stock Options and Restricted
Shares are referred to generally hereafter as the "Awards"). For
purposes of this Plan, "subsidiary" shall mean a subsidiary
corporation as defined in Section 424(f) of the Code.
35
Section 2. Administration of Plan.
The Plan shall be administered by the Stock Option Plan
Committee of the Company's Board of Directors (the "Board"), or
such other committee as the Board may designate (the
"Committee"); provided, however, that members of the Committee
shall be (i) "Non-Employee Directors" within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), and (ii) "outside directors" within the meaning of
Section 162(m) of the Code. The members of the Committee shall
serve at the pleasure of the Board, which may remove members from
the Committee or appoint new members to the Committee from time
to time, and members of the Committee may resign by written
notice to the Chairman of the Board or the Secretary of the
Company. The Committee shall have the power and authority to:
(a) select Eligible Employees (as defined in Section 3, below) as
recipients of Awards (such recipients, "Participants"); (b) grant
Stock Options, Restricted Shares, or Performance Shares, or any
combination thereof; (c) determine the number and type of Awards
to be granted; (d) determine the terms and conditions, not
inconsistent with the terms hereof, of any Award, including
without limitation, time and performance restrictions; (e) adopt,
alter, and repeal such administrative rules, guidelines, and
practices governing the Plan as it shall, from time to time, deem
advisable; (f) interpret the terms and provisions of the Plan and
any Award granted hereunder and any agreements relating thereto;
and (g) take any other actions the Committee considers
appropriate in connection with, and otherwise supervise the
administration of, the Plan. All decisions made by the Committee
pursuant to the provisions hereof, including without limitation,
decisions with respect to employees to be granted Awards and the
number and type of Awards, shall be made in the Committee's sole
discretion and shall be final and binding on all persons.
The Committee may designate persons other than its members
to carry out its responsibilities under such conditions and
limitations as it may set, except to the extent that such
delegation is prohibited by law or would cause an Award intended
to be exempt from the limitation on deductibility under Section
162(m) of the Code, or from the short-swing profit recovery rules
of Section 16(b) of the 1934 Act, to fail to be so exempt.
Section 3. Participants in Plan.
The persons eligible to receive Awards under the Plan
("Eligible Employees") shall include officers and other key
employees of the Company or one or more of its subsidiaries who,
in the opinion of the Committee, have responsibilities affecting
the management, development, or financial success of the Company
or such subsidiaries.
36
Section 4. Shares Subject to Plan.
The maximum aggregate number of Shares which may be issued
each calendar year under the Plan ("Available Shares") shall be an amount
equal to the sum of (a) 5.0% of the total outstanding Shares as
of the last day of the Company's immediately preceding fiscal
year, plus (b) any Shares related to Awards
that, in whole or in part, expire or are unexercised, forfeited,
terminated, surrendered, canceled, settled in such a manner that
all or some of the Shares covered by an Award are not issued to a
Participant, or returned to the Company in payment of the
exercise price or tax withholding obligations in connection with
outstanding Awards, plus (c) in calendar year 2001, the number of shares
avaliable for grant under the Plan as of June 1, 2001, and in all
subsequent years of the Plan, any unused portion of the Shares
available under Section (a) above for the immediately preceding
two fiscal years (but not prior to the Company's fiscal year
ending October 31, 2001) as a result of not being made subject to
a grant or award in such preceding two fiscal years.
Notwithstanding the foregoing, for the Company's fiscal year
ending October 31, 2001, the number of total outstanding Shares
in Section (a) above, shall be calculated as of January 1, 2001,
rather than as of October 31, 2000 (the last day of the
immediately preceding fiscal year). In no event shall more than
20% of the Available Shares be granted in the form of Awards
other than Stock Options, and, of the Available Shares, the
maximum number of ISOs that will be issued under the Plan during
its term is 2,500,000 Shares. The Available Shares may be
authorized but unissued Shares or issued Shares reacquired by the
Company, including Shares purchased on the open market, and held
as treasury Shares. The maximum number of Shares with respect to
which Stock Options, Restricted Shares, and Performance Shares
may be granted to any single Participant under the Plan during
any single fiscal year of the Company shall be 100,000. Any of
the Shares delivered upon the assumption of or in substitution
for outstanding grants made by a company or division acquired by
the Company shall not decrease the number of Available Shares,
except to the extent otherwise provided by applicable law or
regulation.
Section 5. Grant of Awards.
ISOs, NQSOs, Restricted Shares, and Performance Shares may
be granted alone or in addition to other Awards granted under the
Plan. Any Awards granted under the Plan shall be in such form as
the Committee may from time to time approve, consistent with the
Plan, and the provisions of Awards need not be the same with
respect to each Participant.
37
Each Award granted under the Plan shall be authorized by the
Committee and shall be evidenced by a written Stock Option
Agreement, Restricted Share Agreement, or Performance Share
Agreement, as the case may be (collectively, "Award Agreements"),
in the form approved by the Committee from time to time, which
shall be dated as of the date approved by the Committee in
connection with the grant, signed by an officer of the Company
authorized by the Committee, and signed by the Participant, and
which shall describe the Award and state that the Award is
subject to all the terms and provisions of the Plan and such
other terms and provisions, not inconsistent with the Plan, as
the Committee may approve. The date on which the Committee
approves the granting of an Award shall be deemed to be the date
on which the Award is granted for all purposes, unless the
Committee otherwise specifies in its approval. The granting of
an Award under the Plan, however, shall be effective only if and
when a written Award Agreement is duly executed and delivered by
or on behalf of the Company and the Participant.
Section 6. Stock Options.
Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional
terms and conditions not inconsistent with the terms of the Plan
as the Committee deems appropriate:
(a.) Exercise Price.
The exercise price per Share issuable upon exercise of
a Stock Option shall be no less than the fair market value
per Share on the date the Stock Option is granted; provided
that, if the Participant at the time an ISO is granted owns
stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any
subsidiary, the exercise price per Share shall be at least
110% of the fair market value of the Shares subject to the
ISO on the date of grant. For purposes of the Plan, the
fair market value of the Shares shall mean, as of any given
date, the (i) last reported sale price on the New York Stock
Exchange on the most recent previous trading day, (ii) last
reported sale price on the NASDAQ National Market System on
the most recent previous trading day, (iii) mean between the
high and low bid and ask prices, as reported by the National
Association of Securities Dealers, Inc. on the most recent
previous trading day, or (iv) last reported sale price on
any other stock exchange on which the Shares are listed on
the most recent previous trading day, whichever is
applicable; provided that if none of the foregoing is
applicable, then the fair market value of the Shares shall
be the value determined in good faith by the Committee, in
its sole discretion.
38
(b.) Vesting and Exercise of Options.
A Stock Option shall be exercisable only with respect
to the Shares which have become vested pursuant to the terms
of that Stock Option. Each Stock Option shall become vested
with respect to Shares subject to that Stock Option on such
date or dates and on the basis of such other criteria,
including without limitation, the performance of the
Company, as the Committee may determine, in its discretion,
and as shall be specified in the applicable Stock Option
Agreement. The Committee shall have the authority, in its
discretion, to accelerate the time at which a Stock Option
shall be exercisable whenever it may determine that such
action is appropriate by reason of changes in applicable tax
or other law or other changes in circumstances occurring
after the grant of such Stock Option.
(c.) Term.
Each Stock Option Agreement shall set forth the period
for which such Option shall be exercisable from the date on
which that Stock Option is granted. In no event, however,
shall a Stock Option be exercisable after the expiration of
10 years from the date on which that Stock Option is
granted. In addition, with respect to ISOs, if the
Participant at the time the ISO is granted owns stock
possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any subsidiary,
the ISO shall not be exercisable after the expiration of
five years from the date on which the ISO is granted.
(d.) Method of Exercise.
A Stock Option may be exercised, in whole or in part,
by giving written notice to the Company stating the number
of Shares (which must be a whole number) to be purchased.
Upon receipt of payment of the full purchase price for such
Shares by certified or bank cashier's check or other form of
payment acceptable to the Company, or, if approved by the
Committee, by (i) delivery of unrestricted Shares having a
fair market value on the date of such delivery equal to the
total exercise price, (ii) surrender of Shares subject to
the Stock Option which have a fair market value equal to the
total exercise price at the time of exercise, or (iii) a
combination of the preceding methods, and subject to
compliance with all other terms and conditions of the Plan
and the Stock Option Agreement relating to such Stock
Option, the Company shall issue, as soon as reasonably
practicable after receipt of such payment, such Shares to
the person entitled to receive such Shares, or such person's
designated representative. Such Shares may be issued in the
form of a certificate, by book entry, or otherwise, in the
Company's sole discretion.
39
(e.) Restrictions on Shares Subject to Stock Options.
Shares issued upon the exercise of any Stock Option may
be made subject to such disposition, transferability or
other restrictions or conditions as the Committee may
determine, in its discretion, and as shall be set forth in
the applicable Stock Option Agreement.
(f.) Transferability.
Except as provided in this paragraph, Stock Options
shall not be transferable, and any attempted transfer (other
than as provided in this paragraph) shall be null and void.
Except for Stock Options transferred as provided in this
paragraph, all Stock Options shall be exercisable during a
Participant's lifetime only by the Participant or the
Participant's legal representative. Without limiting the
generality of the foregoing, (i) ISOs may be transferred
only upon the Participant's death and only by will or the
laws of descent and distribution and, in the case of such a
transfer, shall be exercisable only by the transferee or
such transferee's legal representative, (ii) NQSOs may be
transferred by will or the laws of descent and distribution
and, in the case of such a transfer, shall be exercisable
only by the transferee or such transferee's legal
representative, and (iii) the Committee may, in its sole
discretion and in the manner established by the Committee,
provide for the irrevocable transfer, without payment of
consideration, of any NQSO by a Participant to such
Participant's parent(s), spouse, domestic partner,
children, grandchildren, nieces, nephews or to the trustee
of a trust for the principal benefit of one or more such
persons or to a partnership whose only partners are one or
more such persons, and, in the case of such transfer, such
NQSO shall be exercisable only by the transferee or such
transferee's legal representative.
40
For purposes of this paragraph (f.), the term "domestic
partner" of a Participant means an adult with whom the
Participant has established a domestic partnership for
purposes of sharing one another's lives in a single,
intimate and committed relationship of mutual caring. A
domestic partnership shall be considered to have been
established when all of the following requirements are met:
(i) the Participant and the domestic partner (A) have a
common, permanent residence; (B) agree to be jointly
responsible for each other's basic living expenses incurred
during the domestic partnership; (C) are not related by
blood in a way that would prevent them from being married to
each other in their state of residence; (D) are each at
least 18 years of age; and (E) are both capable of
consenting to the domestic partnership; (ii) neither the
Participant nor the domestic partner is married or a member
of another domestic partnership; and (iii) the Participant
has delivered to the Committee an acknowledgement signed by
both the Participant and the domestic partner representing
to the Committee that they meet the definition of a domestic
partnership. Such acknowledgement shall be in a form
specified from time to time by the Committee. Upon
acceptance by the Committee, such domestic partnership shall
be deemed to continue unless and until the Participant and
the domestic partner execute and deliver to the Committee a
further acknowledgement whereby they each agree that the
domestic partnership established thereby has terminated.
(g.) Termination of Employment by Reason of Death or Disability.
If a Participant's employment with the Company
terminates by reason of the Participant's death or
disability (as defined in Section 22(e)(3) of the Code with
respect to ISOs, and, with respect to NQSOs, as defined by
the Committee in its sole discretion at the time of grant
and set forth in the Stock Option Agreement), then (i)
unless otherwise determined by the Committee within 60 days
of such death or disability, to the extent a Stock Option
held by such Participant is not vested as of the date of
death or disability, such Stock Option shall automatically
terminate on such date, and (ii) to the extent a Stock
Option held by such Participant is vested (whether pursuant
to its terms, a determination of the Committee under the
preceding clause (i), or otherwise) as of the date of death
or disability, such Stock Option may thereafter be exercised
by the Participant, the legal representative of the
Participant's estate, the legatee of the Participant under
the will of the Participant, or the distributee of the
Participant's estate, whichever is applicable, for a period
of one year (or, with respect to NQSOs, such other period as
the Committee may specify at or after grant or death or
disability) from the date of death or disability or until
the expiration of the stated term of such Stock Option,
whichever period is shorter.
41
(h.) Termination of Employment by Reason of Retirement.
If a Participant's employment with the Company
terminates by reason of the Participant's retirement, then
(i) to the extent such Option is not vested it shall, unless
otherwise provided in the Award Agreement, be forfeited, and
(ii) each vested Option held by such Participant may
thereafter be exercised by the Participant according to its
terms, including, without limitation, for such period after
such termination of employment as shall be set forth in the
applicable Stock Option Agreement. Each ISO held by such
Participant that is exercised by the Participant later than
90 days after the date of such termination of employment may
not receive ISO tax treatment; in such event the Option
shall be treated as an NQSO. For purposes of the Plan,
"retirement" means a termination from employment from the
Company and its subsidiaries that qualifies as either early
or normal retirement under the Company's tax qualified
pension plan, provided that the Participant is not
thereafter employed by (whether as an employee, consultant,
agent, officer, director or independent contractor) or
engaged in (whether as a shareholder or other owner,
partner, creditor, promoter or otherwise) any business which
competes with the Company, as determined by the Committee in
its sole discretion.
(i.) Other Termination of Employment.
If a Participant's employment with the Company and its
subsidiaries terminates for any reason other than death,
disability, or retirement, then (i) to the extent any Stock
Option held by such Participant is not vested as of the date
of such termination, such Stock Option shall automatically
terminate on such date; and (ii) to the extent any Stock
Option held by such Participant is vested as of the date of
such termination, such Stock Option may thereafter be
exercised for a period of 90 days (or, with respect to
NQSOs, such other period as the Committee may specify at or
after grant or termination of employment) from the date of
such termination or until the expiration of the stated term
of such Stock Option, whichever period is shorter; provided
that, upon the termination of the Participant's employment
by the Company or its subsidiaries for Cause (as defined in
an applicable Stock Option Agreement), any and all
unexercised Stock Options granted to such Participant shall
immediately lapse and be of no further force or effect. For
purposes of the Plan, whether termination of a Participant's
employment by the Company and its subsidiaries is for
"Cause" shall be determined by the Committee, in its sole
discretion.
42
(j.) Effect of Termination of Participant's Employment on Transferee.
Except as otherwise permitted by the Committee in its
sole discretion, no Stock Option held by a transferee of a
Participant pursuant to Section 6(f)(iii), above, shall
remain exercisable for any period of time longer than would
otherwise be permitted under Sections 6(g), (h), and (i)
without specification of other periods by the Committee as
provided therein.
(k.) ISO Limitations and Savings Clause.
The aggregate fair market value (determined as of the
time of grant) of the Shares with respect to which ISOs are
exercisable for the first time by the Participant during any
calendar year under the Plan and any other stock option plan
of the Company and its affiliates shall not exceed $100,000
unless otherwise permitted by Code Section 422 as an unused
limit carryover to such year. Any Options which were
intended to be ISOs that exceed this limitation shall be
deemed to be NQSOs.
Any provision of the Plan to the contrary
notwithstanding, without the consent of each Participant
affected, no provision of the Plan relating to ISOs shall be
interpreted, amended, or altered, nor shall any discretion
or authority granted under the Plan be so exercised, so as
to disqualify the Plan under Section 422 of the Code or so
as to disqualify any ISO under such Code Section 422.
Section 7. Restricted Shares.
Restricted Shares awarded under the Plan shall be subject to
the following terms and conditions and such additional terms and
conditions not inconsistent with the terms of the Plan as the
Committee deems appropriate:
(a.) Price.
The purchase price for Restricted Shares shall be any
price set by the Committee and may be zero. Payment in full
of the purchase price, if any, shall be made by certified or
bank cashier's check or other form of payment acceptable to
the Company, or, if approved by the Committee, by (i)
delivery of unrestricted Shares having a fair market value
on the date of such delivery equal to the total purchase
price, or (ii) a combination of the preceding methods.
43
(b.) Acceptance of Restricted Shares.
At the time of the Restricted Share Award, the
Committee may determine that such Shares shall, after
vesting, be further restricted as to transferability or be
subject to repurchase by the Company or forfeiture upon the
occurrence of certain events determined by the Committee, in
its sole discretion, and specified in the Restricted Share
Agreement. Awards of Restricted Shares must be accepted by
the Participant within 30 days (or such other period as the
Committee may specify at grant) after the grant date by
executing the Restricted Share Agreement. The Participant
shall not have any rights with respect to the grant of
Restricted Shares unless and until the Participant has
executed the Restricted Share Agreement, delivered a fully
executed copy thereof to the Company, and otherwise complied
with the applicable terms and conditions of the Award.
(c.) Share Restrictions.
Subject to the provisions of the Plan and the
applicable Restricted Share Agreement, during such period as
may be set by the Committee, in its discretion, and as shall
be set forth in the applicable Restricted Share Agreement
(the "Restriction Period"), the Participant shall not be
permitted to sell, transfer, pledge, assign, or otherwise
encumber the Restricted Shares. The Committee shall have
the authority, in its sole discretion, to accelerate the
time at which any or all of the restrictions shall lapse
with respect to any Restricted Shares. Unless otherwise
determined by the Committee at or after grant or termination
of the Participant's employment, if the Participant's
employment by the Company and its subsidiaries terminates
during the Restriction Period, all Restricted Shares held by
such Participant and still subject to restriction shall be
forfeited by the Participant.
44
(d.) Stock Issuances and Restrictive Legends.
Upon execution and delivery of the Restricted Share
Agreement as described above and receipt of payment of the
full purchase price, if any, for the Restricted Shares
subject to such Restricted Share Agreement, the Company
shall, as soon as reasonably practicable thereafter, issue
the Restricted Shares. Restricted Shares may be issued,
whenever issued, in the form of a certificate, by book
entry, or otherwise, in the Company's sole discretion, and
shall bear an appropriate restrictive legend.
Notwithstanding the foregoing to the contrary, the Committee
may, in its sole discretion, require that Restricted Shares
be issued to and held by the Company or a trustee of a trust
set up by the Committee, consistent with the terms and
conditions of the Plan, to hold such Restricted Shares until
the restrictions thereon have lapsed (in full or in part, in
the Committee's sole discretion), and the Committee may
require that, as a condition of any Restricted Share Award,
the Participant shall have delivered to the Company or such
trustee, as appropriate, a stock power, endorsed in blank,
relating to the Restricted Shares covered by the Award.
(e.) Shareholder Rights.
Unless otherwise provided in the applicable Restricted
Share Agreement, no Participant (or his executor or
administrator or other transferee) shall have any rights of
a shareholder in the Company with respect to the Restricted
Shares covered by an Award unless and until the Restricted
Shares have been duly issued and delivered to him under the
Plan.
(f.) Expiration of Restriction Period.
Upon the expiration of the Restriction Period without
prior forfeiture of the Restricted Shares (or rights
thereto) subject to such Restriction Period, unrestricted
Shares shall be issued and delivered to the Participant.
45
(g) Termination of Employment.
If a Participant's employment by the Company and its
subsidiaries terminates before the end of any Restriction
Period with the consent of the Committee, or upon the
Participant's death, retirement (as defined in Section 6(h),
above), or disability (as defined by the Committee in its
discretion at the time of grant and set forth in the
Restricted Share Agreement), the Committee may authorize the
issuance to such Participant (or his legal representative or
designated beneficiary) of all or a portion of the
Restricted Shares which would have been issued to him had
his employment continued to the end of the Restriction
Period. If the Participant's employment by the Company and
its subsidiaries terminates before the end of any
Restriction Period for any other reason, all Restricted
Shares shall be forfeited.
Section 8. Performance Shares.
Performance Shares awarded under the Plan shall be subject
to the following terms and conditions and such additional terms
and conditions not inconsistent with the terms of the Plan as the
Committee deems appropriate:
(a.) Performance Periods and Goals.
(i) The performance period for each Award of
Performance Shares shall be of such duration as the
Committee shall establish at the time of the Award (the
"Performance Period"). There may be more than one Award in
existence at any one time, and Performance Periods may
differ.
(ii) At the time of each Award of Performance Shares,
the Committee shall establish a range of performance goals
(the "Performance Goals") to be achieved during the
Performance Period. The Performance Goals shall be
determined by the Committee using such measures of the
performance of the Company over the Performance Period as
the Committee shall select, including without limitation
earnings, return on capital, or any performance goal
approved by the shareholders of the Company in accordance
with Section 162(m) of the Code. Performance Shares awarded
to Participants will be earned as determined by the
Committee with respect to the attainment of the Performance
Goals set for the Performance Period. Attainment of the
highest Performance Goal for the Performance Period will
earn 100% of the Performance Shares awarded for the
Performance Period; failure to attain the lowest Performance
Goal for the Performance Period will earn none of the
Performance Shares awarded for the Performance Period. After
the applicable Performance Period shall have ended, the
Committee shall certify in writing the extent to which the
established Performance Goals have been achieved and the
number of Performance Shares earned.
46
(iii) Attainment of the Performance Goals will be
determined by the Committee. If Performance Goals are based
on the financial performance of the Company, attainment of
the Performance Goals shall be determined from the
consolidated financial statements of the Company, as
applicable, but shall generally exclude (A) the effects of
changes in federal income tax rates, (B) the effects of
unusual, non-recurring, and extraordinary items as defined
by Generally Accepted Accounting Principles ("GAAP"), and
(C) the cumulative effect of changes in accounting
principles in accordance with GAAP. The Performance Goals
may vary for different Performance Periods and need not be
the same for each Participant receiving an Award for a
Performance Period. The Committee may, in its sole
discretion, subject to the limitations of Section 17, vary
the terms and conditions of any Performance Share Award,
including without limitation the Performance Period and
Performance Goals, without shareholder approval, as applied
to any recipient who is not a "covered employee" with
respect to the Company as defined in Section 162(m) of the
Code. In the event applicable tax or securities laws change
to permit the Committee discretion to alter the governing
performance measures as they pertain to covered employees
without obtaining shareholder approval of such changes, the
Committee shall have sole discretion to make such changes
without obtaining shareholder approval.
(b.) Price.
The purchase price for Performance Shares shall be any
price set by the Committee and may be zero. Payment in full
of the purchase price, if any, shall be made by certified or
bank cashier's check or other form of payment acceptable to
the Company, or, if approved by the Committee, by (i)
delivery of unrestricted Shares having a fair market value
on the date of such delivery equal to the total purchase
price, or (ii) a combination of the preceding methods.
47
(c.) Acceptance of Performance Shares.
At the time of the Performance Share Award, the
Committee may determine that such Shares shall, after
vesting pursuant to the Performance Period and Performance
Goal provisions described above, be further restricted as to
transferability or be subject to repurchase by the Company
or forfeiture upon the occurrence of certain events
determined by the Committee, in its sole discretion, and
specified in the Performance Share Agreement. Awards of
Performance Shares must be accepted by the Participant
within 30 days (or such other period as the Committee may
specify at grant) after the grant date by executing the
Performance Share Agreement. The Participant shall not have
any rights with respect to the grant of Performance Shares
unless and until the Participant has executed the
Performance Share Agreement, delivered a fully executed copy
thereof to the Company, and otherwise complied with the
applicable terms and conditions of the Award.
(d.) Share Restrictions.
Subject to the provisions of the Plan and the
applicable Performance Share Agreement, during the
Performance Period and any additional restriction period (as
described in Section 8(c), above), the Participant shall not
be permitted to sell, transfer, pledge, assign, or otherwise
encumber the Performance Shares. The Committee shall have
the authority, in its sole discretion, to accelerate the
time at which any or all of the restrictions shall lapse
with respect to any Performance Shares. Unless otherwise
determined by the Committee at or after grant or termination
of the Participant's employment, if the Participant's
employment by the Company and its subsidiaries terminates
during the Performance Period or any additional period of
restriction, all Performance Shares held by such Participant
and still subject to restriction shall be forfeited by the
Participant.
48
(e.) Stock Issuances and Restrictive Legends.
Upon execution and delivery of the Performance Share
Agreement as described above and receipt of payment of the
full purchase price, if any, for the Performance Shares
subject to such Performance Share Agreement, the Company
shall, as soon as reasonably practicable thereafter, issue
the Performance Shares. Performance Shares may be issued,
whenever issued, in the form of a certificate, by book
entry, or otherwise, in the Company's sole discretion, and
shall bear an appropriate restrictive legend.
Notwithstanding the foregoing to the contrary, the Committee
may, in its sole discretion, require that the Performance
Shares be issued to and held by the Company or a trustee of
a trust set up by the Committee, consistent with the terms
and conditions of the Plan, to hold such Performance Shares
until the restrictions on such Performance Shares have
lapsed (in full or in part, in the Committee's sole
discretion), and the Committee may require that, as a
condition of any Performance Share Award, the Participant
shall have delivered to the Company or such trustee a stock
power, endorsed in blank, relating to the Performance Shares
covered by the Award.
(f.) Shareholder Rights.
Unless otherwise provided in the applicable Performance
Share Agreement, no Participant (or his executor or
administrator or other transferee) shall have any rights of
a shareholder in the Company with respect to the Performance
Shares covered by an Award unless and until the Performance
Shares have been duly issued and delivered to him under the
Plan.
(g.) Expiration of Restricted Period.
Subject to fulfillment of the terms and conditions of
the applicable Performance Share Agreement and any other
vesting requirements related to the applicable Performance
Period or Performance Goals, and upon the expiration of any
additional period of restriction as described in Section
8(c), if any, without prior forfeiture of the Performance
Shares (or rights thereto) subject to such Restriction
Period, unrestricted Shares shall be issued and delivered to
the Participant.
49
(h.) Termination of Employment.
If a Participant's employment by the Company and its
subsidiaries terminates before the end of any Performance
Period with the consent of the Committee, or upon the
Participant's death, retirement (as defined in Section 6(h),
above), or disability (as defined by the Committee in its
discretion at the time of grant and set forth in the
Performance Share Agreement), the Committee, taking into
consideration the performance of such Participant and the
performance of the Company over the Performance Period, may
authorize the issuance to such Participant (or his legal
representative or designated beneficiary) of all or a
portion of the Performance Shares which would have been
issued to him had his employment continued to the end of the
Performance Period. If the Participant's employment by the
Company and its subsidiaries terminates before the end of
any Performance Period for any other reason, all such
Performance Shares shall be forfeited.
Section 9. Restriction on Exercise After Termination.
Notwithstanding any provision of this Plan to the contrary,
no unexercised right created under this Plan (an "Unexercised
Right") and held by a Participant on the date of termination of
such Participant's employment with the Company and its
subsidiaries for any reason shall be exercisable after such
termination if, prior to such exercise, the Participant (a) takes
other employment or renders services to others without the
written consent of the Company, (b) violates any non-competition,
confidentiality, conflict of interest, or similar provision set
forth in the Award Agreement pursuant to which such Unexercised
Right was awarded, or (c) otherwise conducts himself in a manner
adversely affecting the Company in the sole discretion of the
Committee.
50
Section 10. Withholding Tax.
The Company, at its option, shall have the right to require
the Participant or any other person receiving Shares, Restricted
Shares, or Performance Shares (including cash in lieu of
Performance Shares) to pay the Company the amount of any taxes
which the Company is required to withhold with respect to such
Shares, Restricted Shares, or Performance Shares or, in lieu of
such payment, to retain or sell without notice a number of such
Shares sufficient to cover the amount required to be so withheld.
The Company, at its option, shall have the right to deduct from
all dividends paid with respect to Shares, Restricted Shares, and
Performance Shares the amount of any taxes which the Company is
required to withhold with respect to such dividend payments. The
Company, at its option, shall also have the right to require a
Participant to pay to the Company the amount of any taxes which
the Company is required to withhold with respect to the receipt
by the Participant of Shares pursuant to the exercise of a Stock
Option, or, in lieu of such payment, to retain, or sell without
notice, a number of Shares sufficient to cover the amount
required to be so withheld. The obligations of the Company under
the Plan shall be conditional on such payment or other
arrangements acceptable to the Company.
Section 11. Securities Law Restrictions.
No right under the Plan shall be exercisable and no Share
shall be delivered under the Plan except in compliance with all
applicable federal and state securities laws and regulations.
The Company shall not be required to deliver any Shares or other
securities under the Plan prior to such registration or other
qualification of such Shares or other securities under any state
or federal law, rule, or regulation as the Committee shall
determine to be necessary or advisable.
The Committee may require each person acquiring Shares under
the Plan (a) to represent and warrant and agree with the Company,
in writing, that such person is acquiring the Shares without a
view to the distribution thereof, and (b) to make such additional
representations, warranties, and agreements with respect to the
investment intent of such person or persons as the Committee may
reasonably request. Any certificates for such Shares may include
any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All Shares or other securities delivered under the Plan
shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon or market in which
the Shares are then listed or traded, and any applicable federal
or state securities law, and the Committee may cause a legend or
legends to be put on any certificates evidencing such Shares to
make appropriate reference to such restrictions.
51
Section 12. Change in Control.
(a.) Accelerated Vesting and Company Purchase Option.
Notwithstanding any provision of this Plan or any Award
Agreement to the contrary (unless such Award Agreement
contains a provision referring specifically to this Section
12 and stating that this Section 12 shall not be applicable
to the Award evidenced by such Award Agreement), if a Change
in Control or a Potential Change in Control (each as defined
below) occurs, then:
(i) Any and all Stock Options theretofore granted
and not fully vested shall thereupon become vested and
exercisable in full and shall remain so exercisable in
accordance with their terms, and the restrictions
applicable to any or all Restricted Shares and
Performance Shares shall lapse and such Shares and
Awards shall be fully vested; provided that no Stock
Option or other Award which has previously been
exercised or otherwise terminated shall become
exercisable; and
(ii) The Company may, at its option, terminate any
or all unexercised Stock Options and portions thereof
not more than 30 days after such Change in Control or
Potential Change in Control; provided that the Company
shall, upon such termination and with respect to each
Stock Option so terminated, pay to the Participant (or
such Participant's transferee, if applicable)
theretofore holding such Stock Option cash in an amount
equal to the difference between the fair market value
(as defined in Section 6(a), above) of the Shares
subject to the Stock Option at the time the Company
exercises its option under this Section 12(a)(ii) and
the exercise price of the Stock Option; and provided
further that if such fair market value is less than
such exercise price, then the Committee may, in its
discretion, terminate such Stock Option without any
payment.
52
(b.) Definition of Change in Control.
For purposes of the Plan, a "Change in Control" shall
mean the happening of either of the following:
(i) When any "person" as defined in Section
3(a)(9) of the 1934 Act and as used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in
Section 13(d) of the 1934 Act, but excluding the
Company, any subsidiary of the Company, and any
employee benefit plan sponsored or maintained by the
Company or any subsidiary of the Company (including any
trustee of such plan acting as trustee), directly or
indirectly, becomes the "beneficial owner" (as defined
in Rule 13d-3 under the 1934 Act) of securities of the
Company representing 50% or more of the combined voting
power of the Company's then outstanding securities; or
(ii) The occurrence of a transaction requiring
stockholder approval for the acquisition of the Company
by an entity other than the Company, a subsidiary of
the Company, or any of their respective affiliates
through purchase of assets, by merger, or otherwise.
Notwithstanding the foregoing to the contrary, a change
in control shall not be deemed to be a Change in Control for
purposes of this Plan if the Incumbent Directors of the
Board approve or had approved such change (A) described in
Sections 12(b)(i), (ii), or 12(c)(i) of this Plan, or (B)
prior to the commencement by any person other than the
Company of a tender offer for Shares.
(c.) Definition of Potential Change in Control.
For purposes of the Plan, a "Potential Change in
Control" means the happening of either one of the following:
(i) The approval by the stockholders of the
Company of an agreement by the Company, the
consummation of which would result in a Change in
Control of the Company as defined in Section 12(b),
above; or
(ii) The acquisition of beneficial ownership of
the Company, directly or indirectly, by any entity,
person, or group (other than the Company, a subsidiary
of the Company, or any Company employee benefit plan
(including any trustee of such plan acting as such
trustee)) representing 15% or more of the combined
voting power of the Company's outstanding securities
and the adoption by the Board of a resolution to the
effect that a Potential Change in Control of the
Company has occurred for purposes of the Plan.
53
Section 13. Changes in Capital Structure.
In the event the Company changes its outstanding Shares by
reason of stock splits, stock dividends, or any other increase or
reduction of the number of outstanding Shares without receiving
consideration in the form of money, services, or property deemed
appropriate by the Board, in its sole discretion, the aggregate
number of Shares subject to the Plan, the limitation on the
number of Shares available under the Plan for issuance pursuant
to an Award other than Stock Options, the limitation on the
number of Shares subject to ISOs and the limitations on the
number of Shares subject to Stock Options, Restricted Shares and
Performance Shares granted to any single Participant shall be
proportionately adjusted or substituted and the number of Shares,
and the exercise price for each Share subject to the unexercised
portion of any then-outstanding Award shall be proportionately
adjusted, with the objective that the Participant's proportionate
interest in the Company shall reflect equitably the effects of
such changes as applicable to the unexercised portion of any
then-outstanding Awards, all as determined by the Committee in
its sole discretion.
In the event of any other recapitalization, corporate
separation or division, or any merger, consolidation, or other
reorganization of the Company, the Committee shall make such
adjustment, if any, as it may deem appropriate to accurately
reflect the number and kind of shares deliverable, and the
exercise prices payable, upon subsequent exercise of any
then-outstanding Awards, as determined by the Committee in its
sole discretion.
The Committee's determination of the adjustments appropriate
to be made under this Section 13 shall be conclusive upon all
Participants under the Plan.
Section 14. No Enlargement of Employee Rights.
The adoption of this Plan and the grant of one or more
Awards to an employee of the Company or any of its subsidiaries
shall not confer any right to the employee to continue in the
employ of the Company or any such subsidiary and shall not
restrict or interfere in any way with the right of his employer
to terminate his employment at any time, with or without cause.
Section 15. Rights as a Shareholder.
No Participant or his executor or administrator or other
transferee shall have any rights of a shareholder in the Company
with respect to the Shares covered by an Award unless and until
such Shares have been duly issued and delivered to him under the
Plan.
54
Section 16. Acceleration of Rights.
The Committee shall have the authority, in its discretion,
to accelerate the time at which a Stock Option or other Award
right shall be exercisable whenever it may determine that such
action is appropriate by reason of changes in applicable tax or
other laws or other changes in circumstances occurring after the
grant of the Award.
Section 17. Interpretation, Amendment, or Termination of the
Plan.
The interpretation by the Committee of any provision of the
Plan or of any Award Agreement executed pursuant to the grant of
an Award under the Plan shall be final and conclusive upon all
Participants or transferees under the Plan. The Board, without
further action on the part of the shareholders of the Company,
may from time to time alter, amend, or suspend the Plan or may at
any time terminate the Plan, provided that: (a) no such action
shall materially and adversely affect any outstanding Stock
Option under the Plan without the consent of the holder of such
Stock Option; and (b) except for the adjustments provided for in
Section 13, above, no amendment may be made by Board action
without shareholder approval if the amendment would require
shareholder approval under applicable law or regulation. Subject
to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in applicable tax and
securities laws and accounting rules, stock exchange or market
rules, as well as other developments.
The Committee may amend the terms of any Award theretofore
granted, prospectively or retroactively; provided, no such
amendment shall impair the rights of any Participant without the
Participant's consent, unless it is made to cause the Plan or
such Award to comply with applicable law, stock exchange or
market rules or accounting rules.
Section 18. Unfunded Status of the Plan.
The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any
payments or deliveries of Shares not yet made by the Company to a
Participant or transferee nothing contained herein shall give any
such Participant or transferee any rights that are greater than
those of a general creditor of the Company. The Committee may
authorize the creation of trusts or other arrangements to meet
obligations created under the Plan to deliver Shares or payments
hereunder consistent with the foregoing.
Section 19. Protection of Board and Committee.
No member of the Board or the Committee shall have any
liability for any determination or other action made or taken in
good faith with respect to the Plan or any Award granted under
the Plan.
55
Section 20. Government Regulations.
Notwithstanding any provision of the Plan or any Award
Agreement executed pursuant to the Plan, the Company's
obligations under the Plan and such Award Agreement shall be
subject to all applicable laws, rules, and regulations and to
such approvals as may be required by any governmental or
regulatory agencies, including without limitation, any stock
exchange or market on which the Company's Shares may then be
listed or traded.
Section 21. Governing Law.
The Plan shall be construed under and governed by the laws
of the State of Delaware.
Section 22. Genders and Numbers.
When permitted by the context, each pronoun used in the Plan
shall include the same pronoun in other genders and numbers.
Section 23. Captions.
The captions of the various sections of the Plan are not
part of the context of the Plan, but are only labels to assist in
locating those sections, and shall be ignored in construing the
Plan.
Section 24. Effective Date.
The Plan shall be effective December 4, 2000 (the "Effective
Date"). The Plan shall be submitted to the shareholders of the
Company for approval and ratification as soon as practicable but
in any event not later than 12 months after the adoption of the
Plan by the Board. If the Plan is not approved and ratified by
the shareholders of the Company within 12 months after the
adoption of the Plan by the Board, the Plan and all Awards
granted under the Plan shall became null and void and have no
further force or effect.
Section 25. Term of Plan.
No Award shall be granted pursuant to the Plan on or after
the 10th anniversary of the Effective Date, but Awards granted
prior to such tenth anniversary may extend beyond that date.
56
Section 26. Savings Clause.
In case any one or more of the provisions of this Plan or
any Award shall be held invalid, illegal, or unenforceable in any
respect, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby, and the invalid, illegal, or unenforceable provision
shall be deemed null and void; however, to the extent permissible
by law, any provision which could be deemed null and void shall
first be construed, interpreted, or revised retroactively to
permit this Plan or such Award, as applicable, to be construed so
as to foster the intent of this Plan. This Plan and all Awards
are intended to comply in all respects with applicable law and
regulation, including, as applicable, Section 422 of the Code,
Rule 16b-3 under the 1934 Act (with respect to persons subject to
Section 16 of the 1934 Act ("Reporting Persons")), and Section
162(m) of the Code (with respect to covered employees as defined
under Section 162(m) of the Code ("Covered Employees")). In case
any one or more of the provisions of this Plan or any Award shall
be held to violate or be unenforceable in any respect under Code
Section 422, if applicable, Rule 16b-3, or Code Section 162(m),
then, to the extent permissible by law, any provision which could
be deemed to violate or be unenforceable under Code Section 422,
Rule 16b-3, or Code Section 162(m) shall first be construed,
interpreted, or revised retroactively to permit the Plan or such
Award, as applicable, to be in compliance with Code Section 422,
Rule 16b-3, and Code Section162(m). Notwithstanding anything in
this Plan to the contrary, the Committee, in its sole discretion,
may bifurcate the Plan so as to restrict, limit, or condition the
use of any provision of this Plan to Participants who are
Reporting Persons or Covered Employees without so restricting,
limiting, or conditioning this Plan with respect to other
Participants.
The Committee may modify the terms of any Award under the
Plan granted to a Participant who, at the time of grant or during
the term of the Award, is resident or employed outside of the
United States in any manner deemed by the Committee to be
necessary or appropriate in order to accommodate differences in
local law, regulation, tax policy or custom, or so that the value
and other benefits of the Award to the Participant, as affected
by foreign tax laws and other restrictions applicable as a result
of the Participant's residence or employment abroad, will be
comparable to the value of such Award to a Participant who is
resident or employed in the United States. Moreover, the
Committee may approve such supplements to, or amendments,
restatements or alternative versions of this Plan as it may
consider necessary or appropriate for such purposes without
thereby affecting the terms of this Plan as in effect for any
other purpose, provided that no such supplements, amendments,
restatements or alternative versions shall include any provisions
that are inconsistent with the terms of the Plan, as then in
effect, unless this Plan could have been amended to eliminate
such inconsistency without further approval of shareholders of
the Company.
57
Executed this 4th day of December, 2000.
GREIF BROS. CORPORATION
By:_________________________________
Title: Chairman and Chief
Executive Officer
58