Exhibit 10(a)(6)
CHEMFAB CORPORATION
SECOND AMENDED AND RESTATED 1991 STOCK OPTION PLAN
1. Definitions. As used in this Second Amended and Restated 1991 Stock
Option Plan of Chemfab Corporation, the following terms shall have the following
meanings:
Annual Shareholders Meeting shall have the meaning ascribed to it in
Section 6.
As Adjusted means as appropriately adjusted for stock dividends payable in
the Stock, split-ups and contractions of the Stock, reclassifications of the
Stock, or similar changes of the outstanding shares of the Stock which occur
after the date of adoption of this Second Amended and Restated 1991 Stock Option
Plan by the Board of Directors.
Automatic Grant Date shall have the meanings ascribed to it in Section 6(a)
and (b), as applicable.
Board of Directors means the Company's board of directors.
Code means the Federal Internal Revenue Code of 1986, as amended.
Committee means a committee comprised of two or more Nonemployee Directors,
appointed by the Board of Directors, responsible for the administration of the
Plan, as provided in Section 4; provided, that the Board of Directors itself may
at any time, in its sole discretion, exercise any or all functions and authority
of the Committee, except that the Committee shall have exclusive authority to
exercise its functions and authority in respect of selection of officers and
directors who are not Nonemployee Directors for participation in and decisions
concerning a grant or award of an Option to any of such persons and the matters
set forth in clauses (b) through (h) of Section 4 (and any other matters
concerning the timing, pricing and amount of a grant or award) in respect of any
such persons.
Company means Chemfab Corporation, a Delaware corporation.
Grant Date means the date on which an Option is granted, as specified in
Section 8 or, as applicable, in Section 6.
Incentive Option means an Option which by its terms is to be treated as an
"incentive stock option" within the meaning of Section 422 of the Code.
Market Value means the closing price for a share of the Stock on any date.
Nonemployee Director means a director of the Company who is not an officer
or employee of the Company.
Nonstatutory Option means any Option that is not an Incentive Option.
Option means an option to purchase shares of the Stock granted under the
Plan.
Option Agreement means an agreement between the Company and an Optionee,
setting forth the terms and conditions of an Option.
Option Price means the price paid or to be paid by an Optionee for a share
of Stock upon exercise of an Option.
Optionee means a person eligible to receive an Option, as provided in
Section 7, to whom an Option shall have been granted under the Plan.
Plan means this Second Amended and Restated 1991 Stock Option Plan of the
Company.
Stock means common stock, par value $.10 per share, of the Company.
Ten Percent Owner means a person who owns, or is deemed within the meaning
of Section 422(b)(6) of the Code to own, stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company (or its
parent or subsidiary corporations). Whether a person is a Ten Percent Owner
shall be determined with respect to each Option based on the facts existing
immediately prior to the Grant Date of such Option.
Vesting Year for any portion of any Incentive Option means the calendar
year in which that portion of the Option first becomes exercisable.
2. Purpose. The Plan is intended to encourage ownership of the Stock by
key employees and directors of, and consultants to, the Company and its
subsidiaries and to provide additional incentive for them to promote the success
of the Company's business. The Plan is intended to qualify as an incentive
stock option plan within the meaning of Section 422 of the Code and to provide
for the grant of Incentive Options and Nonstatutory Options.
3. Term of the Plan. Options under the Plan may be granted not later
than August 27, 2001.
4. Administration. The Plan shall be administered by the Committee.
Subject to the provisions of the Plan (including, without limitation, the
provisions of Sections 6, 9 and 10), the Committee shall have complete
authority, in its discretion, to make the following determinations with respect
to each Option to be granted by the Company: (a) the key employee, director or
consultant to receive the Option; (b) whether the Option (if granted to an
employee) will be an Incentive Option or a Nonstatutory Option; (c) the time of
granting the Option; (d) the number of shares of the Stock subject to the
Option; (e) the Option Price; (f) the vesting schedule, if any, over which the
Option shall become exercisable; (g) the expiration date of the Option (which
may not be more than ten (10) years after the date of grant thereof); and (h)
the restrictions, if any, to be imposed upon transfer of shares of the Stock
purchased by the Optionee upon the exercise of the Option. Subject to the
provisions of Section 6, the Committee shall have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective Option
Agreements (which need not be identical), and to make all other determinations
necessary or advisable for the administration of the Plan. The Committee's
determination on the matters referred to in this Section 4 shall be conclusive.
5. Stock Subject to the Plan. The Plan covers 1,500,000 shares of the
Stock, subject, however, to the provisions of Section 12 of the Plan. The
number of shares of the Stock purchased pursuant to the exercise of Options and
the number of shares of the Stock subject to outstanding Options shall be
charged against the shares covered by the Plan; but shares of the Stock subject
to Options which terminated without being exercised shall not be so charged.
Shares of the Stock to be issued upon the exercise of Options may be either
authorized but unissued shares or shares held by the Company in its treasury.
If any Option expires or terminates for any reason without having been exercised
in full, the shares not purchased thereunder shall again be available for
Options thereafter to be granted.
6. Automatic Grants of Options to Nonemployee Directors.
(a) Directors Elected or Re-Elected at Annual Shareholders Meeting or
Special Meeting in Lieu of Annual Meeting. Each individual who is not an
officer or employee of the Company who is elected or re-elected to the Board of
Directors at an annual shareholders meeting or special meeting in lieu of annual
meeting (an "Annual Shareholders Meeting"), or continues to serve as a director
after such Annual Shareholders Meeting, is hereby granted, on the date of such
meeting (as used in or with reference to this Section 6(a), an "Automatic Grant
Date"), a Nonstatutory Option to purchase 6,000 shares of the Stock (As
Adjusted). Each Nonstatutory Option granted to an Optionee under this
Section 6(a) shall (1) have an exercise price equal to 100% of the Market Value
of the Stock on the Automatic Grant Date, and (2) become exercisable in four (4)
equal installments as follows: 25% on the Automatic Grant Date, an additional
25% on the last day of the fiscal quarter which includes the Automatic Grant
Date (unless the Automatic Grant Date is itself the last day of a fiscal
quarter, in which case this second 25% portion shall become exercisable on the
last day of the immediately subsequent fiscal quarter), and an additional 25% on
the last day of each of the next two fiscal quarters, if the Optionee remains a
director of the Company on such dates.
(b) Directors Elected at Other Times. Each individual who is not an
officer or employee of the Company who is elected to the Board of Directors on a
date other than the day of an Annual Shareholders Meeting (as used in or with
reference to this Section 6(b), such date being an "Automatic Grant Date") is
hereby granted, on the Automatic Grant Date, a Nonstatutory Option to purchase
the number of shares of the Stock set forth below, based on the number of
quarters remaining in the fiscal year during which he or she is so elected,
which option shall become exercisable if the Optionee remains a director of the
Company as set forth below:
(1) If such individual is elected after the day of an Annual
Shareholders Meeting but on or before December 31, he or she is hereby granted a
Nonstatutory Option to purchase 4,500 shares of the Stock (As Adjusted), 33 1/3%
of which shall become exercisable on each of December 31, March 31 and June 30
of the fiscal year of such director's election if he or she remains a director
on such dates.
(2) If such individual is elected on or after January 1 but on or
before March 31, he or she is hereby granted a Nonstatutory Option to purchase
3,000 shares of the Stock (As Adjusted), 50% of which shall become exercisable
on each of March 31 and June 30 of the fiscal year of such director's election
if he or she remains a director on such dates.
(3) If such individual is elected on or after April 1 but on or
before June 30, he or she is hereby granted a Nonstatutory Option to purchase
1,500 shares of the Stock (As Adjusted) which shall become fully exercisable on
June 30 of the fiscal year of such director's election if he or she remains a
director on such date.
Each Option granted to a director under this Section 6(b) shall have an exercise
price equal to 100% of the Market Value of the Stock on the Automatic Grant
Date.
(c) Limitation on Number of Options. Notwithstanding anything else herein
contained, no individual, in his or her capacity as a member of the Board of
Directors who is not an officer or employee of the Company, shall receive grants
of Options under this Section 6 to purchase an aggregate number of shares in
excess of 60,000 shares of Stock (As Adjusted).
7. Eligibility. An Option may be granted only to a key employee,
director or consultant of the Company or one or more of its subsidiaries,
provided that no Options may be granted to any Nonemployee Director except
pursuant to the provisions of Section 6, and provided, further, that Incentive
Options may be granted only to a key employee of the Company or one or more of
its subsidiaries.
8. Time of Granting Options. Subject to the provisions of Section 6, the
granting of an Option shall take place at the time specified by the Committee.
Only if expressly so provided by the Committee shall the Grant Date be the date
on which an Option Agreement shall have been duly executed and delivered by the
Company and the Optionee.
9. Option Price. The Option Price under each Incentive Option shall be
not less than 100% of the Market Value of the Stock on the Grant Date, or not
less than 110% of the Market Value of the Stock on the Grant Date if the
Optionee is a Ten Percent Owner. The Option Price under each Nonstatutory
Option shall not be so limited by reason of this Section 9, and need not be fair
market value.
10. Option Period. No Incentive Option may be exercised later than the
fifth anniversary of the Grant Date if the Optionee is a Ten Percent Owner. The
option period under any Nonstatutory Option shall not be so limited by reason of
this Section 10.
11. Limit on Incentive Option Characterization. No Incentive Option shall
be considered an Incentive Option to the extent that pursuant to its terms it
would permit the Optionee to purchase for the first time in any Vesting Year
under that Incentive Option more than the number of shares of Stock calculated
by dividing the current limit by the Option Price. The current limit for any
Optionee for any Vesting Year shall be $100,000 minus the aggregate Market Value
at the date of grant of the number of shares of Stock available for purchase for
the first time in the Vesting Year under each other Incentive Option granted to
the Optionee under the Plan and each other incentive stock option granted to the
Optionee after December 31, 1986 under any other incentive stock option plan of
the Company (and any parent and subsidiary corporations).
12. Exercise of Option.
(a) Unless the Committee otherwise determines, and except as otherwise
provided in Section 6, all Options shall permit the Optionee to exercise,
cumulatively, 25% of the option shares on each of the first four anniversary
dates of the Grant Date. The Optionee shall give written notice of exercise to
the Company. The notice shall specify the number of shares of the Stock which
the Optionee elects to purchase. For shares of the Stock which the Optionee
elects to purchase, the Optionee shall, except as otherwise permitted by Section
12(c) below, enclose a personal check equal to the aggregate option price
payable with respect to such shares. Subject to, and promptly after, the
Optionee's compliance with all of the provisions of this Section 12(a), the
Company shall deliver or cause to be delivered to the Optionee a certificate for
the number of shares of the Stock then being purchased by him or her. If any
law or applicable regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the Company or the
Optionee to take any action in connection with shares of the Stock being
purchased upon exercise of the Option, exercise of the Option and delivery of
the certificate or certificates for such shares (including, without limitation,
any exercise of the Option and delivery of the certificate or certificate for
such shares in accordance with the procedures set forth in Section 12(c) below)
shall be postponed until completion of the necessary action, which shall be
taken at the Company's expense. Each outstanding Option shall be reduced by one
share for each share of the Stock purchased upon exercise of the Option.
(b) The Company's obligation to deliver shares of Stock upon exercise of
an Option shall be subject to the Optionee's satisfaction of all applicable
federal, state and local income and employment tax withholding obligations. The
Optionee shall satisfy such obligations by making a payment of the requisite
amount in cash or by check, unless the Optionee is entitled to and has elected
to effect such payment through a "cashless" exercise in accordance with Section
12(c) below.
(c) In lieu of enclosing a personal check together with the written notice
of exercise as described in Section 12(a) above, an Optionee that is not subject
to the provisions of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (a "Qualified
Optionee"), may, unless prohibited by applicable law, elect to effect payment by
including with the written notice of exercise referred to in Section 12(a) above
irrevocable instructions to deliver for sale to a registered securities broker
acceptable to the Company a number of shares of Stock subject to the Option
being exercised sufficient, after brokerage commissions, to cover the aggregate
option price payable with respect to such shares and, if the Qualified Optionee
further elects, the Qualified Optionee's withholding obligations under Section
12(b) with respect to such exercise, together with irrevocable instructions to
such broker to sell such shares and to remit directly to the Company such
aggregate option price and, if the Qualified Optionee has so elected, the amount
of such withholding obligations. The Company shall not be required to deliver
to such securities broker any stock certificate for such shares until it has
received from the broker such aggregate option price and, if the Qualified
Optionee has so elected, the amount of such withholding obligations.
13. Transferability of Options. Options shall not be transferable,
otherwise than by will or the laws of descent and distribution, and may be
exercised during the life of the Optionee only by the Optionee.
14. Termination of Employment, Etc. If an Optionee ceases to be an
employee, director or consultant of the Company for any reason other than
retirement of an employee or death of an Optionee, any Option held by that
Optionee may be exercised by the Optionee at any time within 90 days after the
termination of such relationship, but only to the extent exercisable at
termination and in no event after the option period. If an Optionee enters
retirement from employment or dies, any Option held by that Optionee may be
exercised by the Optionee or the Optionee's executor or administrator at any
time within the shorter of the option period or 12 months after the date of
retirement or death, but only to the extent exercisable at retirement or death.
Options which are not exercisable at the time of termination of such
relationship or which are so exercisable but are not exercised within the time
periods described above shall terminate. Military or sick leave shall not be
deemed a termination under this Section 14 provided that it does not exceed the
longer of 90 days or the period during which the rights of the absent employee,
director or consultant are guaranteed by statute or by contract.
15. Adjustment of Number of Shares; Fractional Shares. Each Option
Agreement shall provide that in the event of any stock dividend payable in the
Stock or any split-up or contraction in the number of shares of the Stock, or
any reclassification or change of outstanding shares of the Stock, in each case
occurring after the date of such Option Agreement and prior to the exercise in
full of the Option, the number and kind of shares for which the Option may
thereafter be exercised shall be proportionately and appropriately adjusted.
Each Option Agreement shall further provide that upon any consolidation or
merger of the Company with or into another company, or any sale or conveyance to
another company or entity of the property of the Company as a whole, or the
dissolution or liquidation of the Company, the Option shall terminate, but the
Optionee (if at the time an employee, director or consultant of the Company, or
any of its subsidiaries, as appropriate) shall have the right, immediately prior
to such event, to exercise the Option, to the extent then exercisable by its
terms and not theretofore exercised. No fraction of a share of the Stock shall
be purchasable or deliverable, but in the event any adjustment of the number of
shares of the Stock covered by the Option shall cause such number to include a
fraction of a share, such fraction shall be adjusted to the nearest smaller
whole number of shares. In the event of changes in the outstanding Stock by
reason of any stock dividend, split-up, contraction, reclassification, or change
of outstanding shares of the Stock of the nature contemplated by this Section 15
after the date of adoption of this Plan by the Board of Directors, the number of
shares of the Stock available for the purpose of the Plan as stated in Section 5
and the exercise price per share of each Option shall be correspondingly
adjusted.
16. Stock Reserved. The Company shall at all times during the term of the
Options reserve and keep available such number of shares of the Stock as will be
sufficient to satisfy the requirements of this Plan and shall pay all other fees
and expenses necessarily incurred by the Company in connection therewith.
17. Limitation of Rights in Option Stock. The Optionee shall have no
rights as stockholder in respect of shares of the Stock as to which his or her
Option shall not have been exercised, certificates issued and delivered and
payment as herein provided made in full, and shall have no rights with respect
to such shares not expressly conferred by this Plan.
18. Purchase for Investment. The Optionee shall make such representations
with respect to investment intent and the method of disposal of optioned shares
of the Stock as the Board of Directors may deem advisable in order to assure
compliance with applicable securities laws.
19. Termination and Amendment of Plan. The Board of Directors may at any
time terminate the Plan or make such modifications of the Plan as it shall deem
advisable, provided, that the Board of Directors may not (a) except as provided
in Section 15, without approval by the holders of a majority of the shares
represented within twelve (12) months after the adoption of such amendment by
the Board of Directors, increase the maximum number of shares available for
option under the Plan or extend the period during which Options may be granted
or exercised or (b) more than once in any six (6) month period, amend the Plan
so as to (1) modify Section 6 or (2) otherwise provide for or permit the grant
of Options to Nonemployee Directors, provided, however, that the Board of
Directors may make a modification of the type set forth in clause (b)(1) or
(b)(2) above which is made to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules and regulations
under either such statute. No termination or amendment of the Plan may, without
the consent of the Optionee to whom any Option shall theretofore have been
granted, adversely affect the rights of that Optionee under that Option.
20. Effective Date. The Company's 1991 Stock Option Plan was initially
adopted by the Board of Directors on August 28, 1991, and was approved by the
stockholders of the Company on October 31, 1991. The Company's Amended and
Restated 1991 Stock Option Plan was approved by the Board of Directors on
September 8, 1993, and was approved by the stockholders of the Company on
October 27, 1993. The First Amendment to the Company's Amended and Restated
1991 Stock Option Plan was approved by the Board of Directors on August 3, 1995,
and was approved by the stockholders of the Company on October 26, 1995. The
addition of Section 6(c), which did not require shareholder approval, was
approved by the Board of Directors on October 27, 1993. The 3-for-2 stock split
of the Stock (effected on February 22, 1996) and the Second Amendment to the
Company's Amended and Restated 1991 Stock Option Plan, neither of which required
shareholder approval, were approved by the Board of Directors on February 1,
1996.