EXHIBIT 10(ae)
MODINE MANUFACTURING COMPANY
STOCK OPTION PLAN
FOR THERMACORE EMPLOYEES
UNDER THE
DTX CORPORATION 1995 STOCK OPTION PLAN
The "Modine Manufacturing Company Stock Option Plan for
Thermacore Employees Under the DTX Corporation 1995 Stock Option
Plan" has been adopted by Modine Manufacturing Company ("Modine")
pursuant to the terms and conditions of an Agreement and Plan of
Merger, dated December 13, 2000, as amended by the First
Amendment thereto, dated March 15, 2001, among Modine, Modine
Merger Co., and Thermacore International, Inc., formerly known as
DTX Corporation ("Thermacore"), providing for the merger of
Modine Merger Co., a wholly owned subsidiary of Modine, with and
into Thermacore (the "Merger"), effective as of April 27, 2001,
the effective date of the Merger. Effective as of that same
date, Modine changed the name of the plan to its present name and
amended and restated the plan in its entirety to read as follows:
1. PURPOSE OF THE PLAN.
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This Modine Manufacturing Company Stock Option Plan for
Thermacore Employees under the DTX Corporation 1995 Stock
Option Plan (hereinafter referred to as the "Plan") is
intended to advance the interests of Thermacore and Modine by
providing key employees who have substantial responsibility
for the direction and management of Thermacore or any
subsidiary corporation with additional incentive for them
to promote the success of Thermacore, as a wholly owned
subsidiary of Modine, and by increasing their proprietary
interest in Modine under conditions which will encourage
their continued employment in the service of Thermacore.
2. ADMINISTRATION OF THE PLAN.
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(a) The Plan shall be administered by the Compensation
Committee (hereinafter referred to as the "Committee")
of the Board of Directors of Thermacore (hereinafter
referred to as the "Board"); provided, however, that
effective as of the effective date of the Merger, all
responsibility for the administration of the Plan shall
be assumed by the Officer Nomination and Compensation
Committee of the Board of Directors of Modine, all
references in this Plan to the "Committee" shall
henceforth be deemed to be references to that
committee, and all references to the "Board" shall
henceforth be deemed to be references to the Board of
Directors of Modine.
(b) The Committee shall act by a majority vote; provided,
however, that no option may be granted without the
affirmative vote of at least one director who is not a
participant in the Plan.
(c) Without limiting the scope of such authority, but
always being subject to the other provisions of the
Plan, the Committee shall have the plenary authority,
in its sole discretion to recommend to the Board: (i)
the employees of Thermacore or any subsidiary
corporation of Thermacore to whom options shall be
granted; (ii) the time or times at which options shall
be granted; (iii) the option price of the shares
subject to each option; (iv) the time or times when
each option shall become exercisable and the duration
of the exercise period; (v) the number of shares of the
stock to be granted pursuant to the Plan; and (vi)
interpretations of the Plan and actions to prescribe,
amend, and rescind rules and regulations for putting it
into effect and administering it. The Committee shall
place its recommendations before the Board in the form
of a motion.
(d) The Committee may consult with counsel, who may be
counsel to the Company, and shall not incur any
liability for any action taken in good faith and
reliance upon the advice of counsel.
(e) The form of the options granted pursuant to this Plan
shall be evidenced by Stock Option Agreements in such
form as the committee shall from time to time adopt.
Options may, but need not, be subject to such terms and
conditions as will qualify their holders for special
Federal income tax treatment pursuant to any provision
of the Internal Revenue Code of 1986 as may be enacted
from time to time. Each option granted under this Plan
shall be exercisable on such date or dates and during
such period and for such number of shares as shall be
determined pursuant to the provisions of the Stock
Option Agreement with respect to such option; provided,
however, that no option shall be exercised later than
ten years from the date of grant of the option.
3. SHARES OF THE STOCK SUBJECT TO THE PLAN.
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An aggregate of 15,000 shares of Thermacore common stock was
originally reserved for use upon the exercise of options to
be granted from time to time under the Plan, as such number
may have been adjusted, from time to time, under Section 8
of the Plan. Upon the effective date of the Merger, each
outstanding option to acquire one share of Thermacore common
stock under the Plan was converted into an option to acquire
1.01592 shares of Modine common stock. Effective as of the
effective date of the Merger, 25,778 shares of Modine common
stock will be reserved for use upon the exercise of options
previously granted under the Plan. Following the effective
date of the Merger, no additional options will be granted
under the Plan. The shares to be issued upon exercise of
options granted under this Plan shall be made available at
the discretion of the Board either from authorized by
unissued shares of common stock or from issued shares of
common stock reacquired by Modine.
4. ELIGIBILITY AND PARTICIPATION.
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(a) Options may be granted only to persons who are key
employees of Thermacore or a subsidiary corporation of
Thermacore. The term "key employees" shall include
officers, directors, executives, and supervisory
personnel, as well as other employees of Thermacore or
any subsidiary corporation of Thermacore who perform
services of major importance in the management,
operation, and development of Thermacore or any
subsidiary corporation of Thermacore; provided,
however, that the term "key employees" shall not
include a director who is not also a full-time employee
of Thermacore or a subsidiary corporation of
Thermacore. For the purpose of this Plan, "employee"
shall mean any individual who qualifies as a "key
employee."
(b) Notwithstanding any other provision of this Plan, the
aggregate fair value (determined at the time the
options are granted) of the stock for which any
employee may be granted stock options in any calendar
year, under this or any such stock option plan
established by Thermacore or any subsidiary corporation
of Thermacore shall not exceed $100,000.00, plus any
unused limit carryover to such calendar year, as defined
in Section 422A(c)(4) of the Internal Revenue Code.
5. OPTION PRICE.
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(a) The purchase price per share of stock covered by a
qualified option shall be determined by the Board at
the time the option is granted, but in no event shall
the option price be less than the fair value of the
common stock shares at the time the option is granted
as required by Section 422A(b)(4) of the Internal
Revenue Code; provided, however, that with respect to
any incentive stock options granted to an employee who,
at the time of the option is granted, owns stock
possessing more than 10 percent (10%) of the total
combined voting power of all classes of stock of
Thermacore or any subsidiary corporation of Thermacore
("Ten Percent Stockholder"), the option price per share
shall have been at least 110 percent (110%) of such
fair value of the stock subject to the option at the
time the option is granted. The fair value shall mean,
on any given date, the mean between the highest and
lowest prices of actual sales of shares of the common
stock on the principal national securities exchange on
which the common stock is listed on such date or, if
the common stock is not so listed on such date, then
fair value shall be the set price as determined
periodically by the Board in good faith or in the
manner established by the Board from time to time.
(b) In determining the fair value of the shares on the date
of the grant of the option, if such shares of common
stock are not listed on a national securities exchange,
the Board will consider a variety of factors, including
past and current earnings, earnings estimates, the
ratio of Thermacore capital stock to debt, book value,
other factors affecting the business and long range
prospects of Thermacore and general economic
conditions; provided, however, that all valuations of
stock shall be conducted in accordance with the
applicable Department of Treasury Regulations and
generally accepted accounting and valuation procedures.
The fair value of stock shall be determined without
regard to any restriction other than a restriction
which, by its terms, will never lapse, as provided in
Section 422A(c)(10) of the Internal Revenue Code.
6. PERIOD OF OPTION AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE.
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(a) Time Within Which Grant Must Be Made.
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All options granted under this Plan shall be granted on
or before October 25, 2005, and shall be evidenced by a
Notice of Grant of Stock Option ("Notice of Grant")
that shall be executed on behalf of Thermacore, and
following the Merger, by a Stock Option Agreement
executed on behalf of Modine. The terms of the Notice
of Grant shall be determined from time to time by the
Committee consistent, however, with the terms of the
Plan, and the terms of the Stock Option Agreement shall
be consistent with the terms of the Notice of Grant and
the Plan.
(b) Periods of Exercise of Options.
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An option shall be exercisable in whole or in part at
such time or times as may be determined by the
Committee and stated in the Notice of Grant, provided
that no option shall be exercisable before the first
anniversary of the date of the grant and that no option
shall be exercisable after the expiration of five (5)
years from the date the option is granted in the case
of an option granted to a Ten Percent Shareholder or
after the expiration of ten (10) years from the date
the option is granted in all other cases, except as
provided below:
(i) In the event that an employee who has been granted
an option (hereinafter referred to as an
"optionee") ceases to be employed by Modine,
Thermacore or any subsidiary corporation of Modine
or Thermacore for any reason other than death or
disability, within the meaning of Section 22(c)(3)
of the Internal Revenue Code, any option or
options granted to him under the Plan which have
not yet expired or been exercised shall not be
exercisable after three (3) months from the date
the optionee ceases to be employed; provided,
however, that in the case of involuntary
termination for cause, all options shall
immediately become invalid.
(ii) If an optionee ceases to be employed by Modine,
Thermacore or any subsidiary corporation of Modine
or Thermacore due to disability, within the
meaning of Section 22(e)(3) of the Internal
Revenue Code, any option or options granted to the
optionee under the Plan which have not yet expired
or been exercised shall not be exercisable after
one (1) year from the date the optionee ceases to
be employed.
(iii) In the event that an optionee ceases to be
employed by Modine, Thermacore or any subsidiary
corporation of Modine or Thermacore by reason of
his or her death, or dies within three (3) months
after his voluntary termination, any option or
options granted to the optionee under this Plan
and not theretofore exercised or expired shall be
exercisable by the estate of the optionee or by
any person to whom the rights of the optionee
shall have passed by will or by the laws of
descent and distribution even if the date of
exercise is within any time period prescribed by
the Plan prior to which such option shall not be
exercisable.
(c) Holder of Shares.
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No optionee or his legal representative, legatees, or
distributees, as the case may be, will be, or will be
deemed to be, a holder of any share subject to an
option unless and until certificates of such shares are
issued to him or them under the terms of the Plan. No
adjustment shall be made for dividends or other rights
for which the record date is prior to the date such
stock certificate is issued.
(d) Restrictions or Transferability.
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Each option granted under this Plan shall not be
transferrable by the optionee otherwise than by will or
the laws of descent and distribution, and shall be
exercisable during the lifetime of the optionee only by
the optionee. Upon the death of an optionee, the
person to whom the rights shall have passed will or by
the laws of descent and distribution may exercise any
options only in accordance with the provisions of
Paragraph 6, subparagraph (b). Except as permitted by
the first sentence in this Paragraph, no option
privileges thereby conferred shall be transferred,
assigned, pledged, or hypothecated in any way (whether
by operation of law or otherwise), and no such option,
right, or privilege shall be subject to execution,
attachment, or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate, or otherwise
dispose of the option, or of any right or privilege
conferred thereby, contrary to the provisions hereof,
or upon the levy of any attachment or similar process
upon such option, right or privilege, the option and
such rights and privileges shall immediately become
null and void.
(e) Payment.
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Full payment for the shares of stock purchased upon the
exercise of an option shall be made (i) in cash, or by
check, bank draft or money order payable to the order
of Modine, (ii) by delivering shares of stock of Modine
of equivalent fair market value on the date the option
is exercised, or (iii) by attestation (i.e., by
affidavit identifying for delivery specific already-
owned shares of Modine common stock having a fair
market value on the date the option is exercised equal
to the aggregate exercise price, but not actually
delivering such shares to Modine). No exercise of an
option granted under this Plan shall be complete, and
no share certificate issued, until full payment is
received by Modine.
(f) Issuance of Certificates; Payment of Cash.
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Only whole shares of stock shall be issuable upon the
exercise of options. Any right to a fractional share
shall be satisfied in cash. Subject to the other
provisions of this Plan, upon payment of the option
price, a certificate for the number of whole shares and
a check for the value on the date of exercise of any
fractional share to which the optionee is entitled
shall be delivered to such optionee.
(g) Date of Exercise.
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The date of exercise of an option shall be the date on
which written notice of exercise, addressed to Modine
at its main office to the attention of its Secretary,
is hand-delivered, telecopied, or mailed first class,
postage prepaid; provided, however, that Modine shall
not be obliged to deliver any certificates for shares
pursuant to the exercise of an option until the
optionee shall have made payment in full of the option
price of such shares. Each such exercise shall be
irrevocable when given.
(h) Prior Options.
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No incentive stock option granted under this Plan shall
be exercisable while there is outstanding in the hands
of the optionee any incentive stock option (whether
granted under this Plan or any other stock option plan
established by Thermacore or a parent or subsidiary
corporation of Thermacore or a predecessor corporation
of any such corporations) which was granted prior to
time to the incentive stock option then proposed to be
exercised. For purposes of the Plan, an incentive
stock option shall be considered and treated as
outstanding until such option is exercised in full or
expires by reason of the lapse of time.
7. RIGHTS AS SHAREHOLDERS.
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An optionee shall have no rights as a shareholder with
respect to any shares covered by his or her options until
the date of the issuance of a stock certificate for such
shares.
8. CHANGES IN CAPITALIZATION.
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In the event of a stock dividend, stock split,
recapitalization, combination, subdivision, issuance of
rights, or other similar corporate change, the Board shall,
subject to the various restrictions of the Plan, make an
appropriate proportional adjustment in the aggregate number
of shares that may be subject to options, and the number of
shares subject to, and the option price of, each then-
outstanding option. No adjustment shall be made for cash
dividends or the issuance to stockholders of rights to
subscribe for additional common stock or securities.
9. MERGERS, DISPOSITIONS AND CERTAIN OTHER TRANSACTIONS.
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If, during the term of an option, Modine shall be merged
into or consolidated with or otherwise combined with or
acquired by another person or entity, or there is a divisive
reorganization or a liquidation or partial liquidation of
Modine, Modine may choose to take no action with regard to
the options outstanding or to take any of the following
courses of action:
(a) Not less than 15 days nor more than 60 days prior to
any such transaction, all optionees shall be notified
that their options shall expire on the 15th day after
the date of such notice, in which event all optionees
shall have the right to exercise all of their options
prior to such new expiration date; or
(b) Modine shall provide in any agreement with respect to
any such merger, consolidation, combination or
acquisition that the surviving, new or acquiring
corporation shall grant options to the optionees to
acquire shares in such corporation with respect to
which the excess of the fair value of the shares of
such corporation immediately after the consummation of
such merger, consolidation, combination or acquisition
over the option price, shall not be greater than the
excess of the value of the shares over the option price
of options, immediately prior to the consummation of
such merger, consolidation, combination or acquisition;
or
(c) Modine shall take such other action as the Committee
shall determine to be reasonable under the
circumstances in order to permit optionees to realize
the value of rights granted to them under the Plan.
10. PLAN NOT TO AFFECT EMPLOYMENT.
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Neither the existence of the Plan nor the granting of any
option thereunder shall confer upon any employee of
Thermacore any right to continue in the employment of
Thermacore.
11. EFFECTIVE DATE AND TERM OF PLAN.
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The Plan became effective on October 25, 1995 and was
adopted by Modine, and amended and restated in its entirety,
effective April 27, 2001. The Plan shall expire on October 25,
2005, unless sooner terminated by the Board.
12. AMENDMENT OF PLAN.
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The Board of Directors may at any time and from time to time
make such amendments of this Plan (including the Notice of
Grant and the Stock Option Agreement) as it shall deem
advisable; provided, however, that no amendment of this Plan
may, without the consent of the holder of an existing
option, adversely affect his rights thereunder.
13. EXPIRATION AND TERMINATION OF THE PLAN.
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The Plan may be abandoned or terminated at any time by the
Board except with respect to any options then outstanding
under the Plan.
April 27, 2001