Exhibit 10.2
THE INTERLAKE CORPORATION
1998 STOCK INCENTIVE PROGRAM
1. Purpose. The purpose of The Interlake Corporation 1998 Stock
Incentive Program (the "Program") is to attract and retain outstanding
individuals as directors, officers and key employees of The Interlake
Corporation (the "Corporation") and its Subsidiaries (as defined herein) and to
furnish incentives for superior performance by providing such persons
opportunities ("Benefits") to acquire shares of the Corporation's common stock,
$1 par value, or any security into which such shares may be changed by reason of
any transaction or event of the type described in Paragraph 15(a) hereof
("Common Stock").
2. Administration. The Program will be administered by the Management
Development and Compensation Committee (the "Committee") of the Corporation's
Board of Directors (the "Board"). The Committee shall consist of not less than
three directors as the Board may designate from time to time, each of whom shall
be a "Non-Employee Director" within the meaning of Rule 16b-3 of the Securities
and Exchange Commission and an "Outside Director" within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The
interpretation and construction by the Committee of any provision of the Program
or of any agreement, notification or document evidencing the grant of any
Benefits and any determination by the Committee pursuant to any provision of
this Program or of any such agreement, notification or document shall be final
and conclusive. No member of the Committee shall be liable for any such action
or determination made in good faith.
3. Participants. Participants in the Program will consist of such
directors, officers or key employees of the Corporation or any Subsidiary (or
any person who has agreed to commence serving in any of such capacities within
90 days following the granting of Benefits to such person) as the committee in
its sole discretion may designate from time to time to receive Benefits
hereunder (each a "Participant"). The Committee's designation of a Participant
at any time shall not require the Committee to designate such person to receive
a Benefit at any other time, or, if so designated, to receive the same type or
amount of Benefit at any other time, or as may be received by any other
Participant at any time. The Committee shall consider such factors as it deems
pertinent in selecting Participants and in determining the type and amount of
their respective Benefits.
4. Types of Benefits. Benefits under the Program may be granted in
any one or a combination of (a) Stock Options, (b) Restricted Shares, and (c)
Shares in Lieu of Certain Cash Payments, all as described below in Paragraphs 6
through 9 hereof.
5. Shares Reserved Under the Program. (a) Subject to adjustment as
provided in Section 15(a) of this Program, the number of shares of Common Stock
that may be issued or transferred (i) upon the exercise of Stock Options, (ii)
as Restricted Shares and released from substantial risks of forfeiture thereof,
or (iii) as Shares in Lieu of Certain Cash Payments shall not exceed in the
aggregate 1,150,000 shares plus any shares relating to Benefits that expire or
are forfeited or cancelled. Such shares may be shares of original issuance or
treasury shares or a combination of the
foregoing. Upon the payment of any Option Price by the transfer to the
Corporation of shares of Common Stock or upon satisfaction of any withholding
amount by means of transfer or relinquishment of shares of Common Stock, there
shall be deemed to have been issued or transferred under this Program only the
net number of shares of Common Stock actually issued or transferred by the
Corporation.
(b) Notwithstanding anything in this Section 5, or elsewhere in this
Program, to the contrary, the aggregate number of shares of Common Stock
actually issued or transferred by the Corporation upon the exercise of Incentive
Stock Options shall not exceed 1,150,000 shares, subject to adjustments as
provided in Section 15(a) of this Program. Further, no Participant shall be
granted Stock Options for more than 575,000 shares of Common Stock during any
three year period, subject to adjustments as provided in Section 15(a) of this
Program.
(c) Notwithstanding any other provision of this Program to the
contrary, in no event shall any Participant in any calendar year receive more
than 100,000 Restricted Shares, subject to adjustments as provided in Section
15(a) of this Program.
6. Definitions. As used in the Program,
(a) The term "Date of Grant" means the date specified by the
Committee on which a grant of a Stock Option, Restricted Shares or
Shares in Lieu of Certain Cash Payments shall become effective (which
date shall not be earlier than the date on which the Committee takes
action with respect thereto).
(b) The term "Effective Date" shall be the date on which the
1998 Stock Incentive Program is approved by the stockholders of the
Corporation in accordance with Section 18.
(c) The term "Incentive Stock Options" means Stock Options
that are intended to qualify as "incentive stock options" under
Section 422 of the Code or any successor provision.
(d) The term "Management Objectives" means measurable
performance objectives established by the Committee pursuant to this
Program for Participants who have received, when so determined by the
Committee, Stock Options or Restricted Shares. Management Objectives
may be described in terms of Corporation-wide objectives or
objectives that are related to the performance of the Common Stock,
the individual Participant or of the Subsidiary, division,
department, region or function within the Corporation or Subsidiary
in which the Participant is employed. The Management Objectives may
be made relative to the performance of other corporations. If the
Committee determines that a change in the business, operations,
corporate structure or capital structure of the Corporation, or the
manner in which it conducts its business, or other events or
circumstances render the Management Objectives unsuitable, the
Committee may in its discretion modify such Management Objectives, in
whole or in part, as the Committee deems appropriate and equitable.
(e) The term "Market Value per Share" means, at any date,
the average of the high and low price of the Common Stock on that
date (or, if there are no sales on that date,
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the last preceding date on which there was a sale) on (i) the New
York Stock Exchange Composite Transactions or (ii) any national
securities exchange on which the Common Stock is traded if it is not
traded on the New York Stock Exchange or (iii) The Nasdaq Stock
Market if the Common Stock is listed thereon and is not traded on any
national securities exchange, in each case as reported by The Wall
Street Journal, corrected for reporting errors.
(f) The term "Optionee" means the optionee named in an
agreement evidencing an outstanding Stock Option.
(g) The term "Option Price" means the purchase price per
share payable on exercise of a Stock Option.
(h) The term "Restricted Shares" means an award of shares of
Common Stock granted pursuant to Paragraph 8 of the Program.
(i) The term "Shares in Lieu of Certain Cash Payments" means
shares of Common Stock granted pursuant to Paragraph 9 hereof.
(j) The term "Stock Option" means an option to purchase
Common Stock granted pursuant to Paragraph 7 of the Program.
(k) The term "Subsidiary" means a corporation, company or
other entity (i) more than 50 percent of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority) are, or (ii) which does not
have outstanding shares or securities (as may be the case in a
partnership, joint venture or unincorporated association), but more
than 50 percent of whose ownership interest representing the right
generally to make decisions for such other entity is, now or
hereafter, owned or controlled, directly or indirectly, by the
Corporation except that for purposes of determining whether any
person may be a Participant for purposes of any grant of Incentive
Stock Options, "Subsidiary" means any corporation in which at the
time the Corporation owns or controls, directly or indirectly, more
than 50 percent of the total combined voting power represented by all
classes of stock issued by such corporation.
7. Stock Options. The Committee may, from time to time and upon such
terms and conditions as it may determine, authorize the granting to Participants
of options to purchase shares of Common Stock. Each such grant may utilize any
or all the authorizations, and shall be subject to all of the limitations,
contained in the following provisions:
(a) Each grant shall specify the number of shares of Common
Stock to which it pertains, subject to limitations set forth in
Section 5 of this Program.
(b) Each grant shall specify an Option Price which shall not
be less than the Market Value per Share on the Date of Grant.
(c) Each grant shall specify that the Option Price shall be
payable at the time of exercise in cash or by check acceptable to the
Corporation. Any grant may also provide for payment of the Option
Price by the transfer to the Corporation of (i) shares of Common
Stock owned by the Optionee and having a Market Value at the time of
exercise equal to the
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total Option Price or (ii) a combination of cash and shares of Common
Stock owned by the Optionee and having a combined Market Value equal
to the total Option Price.
(d) The Committee may also determine, at or after the Date
of Grant, that payment of the Option Price of any option (other than
an Incentive Stock Option) may also be made in whole or in part in
the form of Restricted Shares or other shares of Common Stock that
are forfeitable or subject to restrictions on transfer (based, in
each case, on the Market Value per Share on the date of exercise) or
other Stock Options (based on the difference (the "Spread") between
the Market Value and the exercise price of such option on the date of
exercise). Unless otherwise determined by the Committee at or after
the Date of Grant, whenever any Option Price is paid in whole or in
part by means of any of the forms of consideration specified in this
paragraph, the shares of Common Stock received upon the exercise of
the Stock Options shall be subject to such risks of forfeiture or
restrictions on transfer as may correspond to any that apply to the
consideration surrendered, but only to the extent of (i) the number
of shares so surrendered, or (ii) the Spread of any unexercisable
portion of Stock Options.
(e) Any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a bank or broker on a date
satisfactory to the Corporation of some or all of the shares to which
such exercise relates.
(f) Successive grants may be made to the same Participant
whether or not any Stock Options previously granted to such
Participant remain unexercised.
(g) Each grant shall specify the period or periods of
continuous employment by the Optionee with the Corporation or of
continuous service by the Optionee as a director of the Corporation
which is necessary before a Stock Option or any installment thereof
will become exercisable and may provide that the exercise of a Stock
Option or any installment thereof will be accelerated for any reason
stated therein. Any grant may specify Management Objectives that must
be achieved as a condition to the exercise of such Stock Option.
(h) Stock Options granted under the Program may be (i)
options which are intended to qualify under particular provisions of
the Code (including Incentive Stock Options), (ii) options which are
not intended to so qualify, or (iii) combinations of the foregoing.
(i) No Stock Option shall be exercisable more than ten years
from the Date of Grant.
(j) Each grant of Stock Options shall be evidenced by an
agreement executed on behalf of the Corporation by an officer thereof
and delivered to the Optionee and containing such terms and
provisions, consistent with the Program, as the Committee may
approve.
8. Restricted Shares. The Committee may from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Participants of Restricted Shares. A Restricted Share constitutes an immediate
transfer of ownership of Common Shares to the Participant in consideration of
the performance of services, entitling such Participant to voting, dividend and
other ownership rights, but subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter
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referred to. Each grant may utilize any or all of the authorizations, and shall
be subject to all of the limitations, contained in the following provisions:
(a) Subject to the provisions of Section 5, each such grant
shall specify the number of shares of Common Stock to which it
relates.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant
that is less than Market Value per Share at the Date of Grant.
(c) Each such grant shall be subject to such conditions,
limitations, restrictions and other matters, and shall be subject to
forfeiture or lapse in such circumstances, as the Committee may
prescribe; provided, however, that all or a portion of the shares of
Common Stock covered by such grant shall be subject, for a period to
be determined by the Committee at the Date of Grant, to a substantial
risk of forfeiture within the meaning of Section 83 of the Code or
any successor or substitute provision thereof and of the regulations
issued thereunder. Any grant of Restricted Shares may specify
Management Objectives which, if achieved, will result in termination
or early termination of the restrictions applicable to such shares.
The Committee shall have authority to cause a grant of Restricted
Shares to provide that termination of restrictions applicable to such
Restricted Shares or any installment thereof will be accelerated for
any reason stated therein.
(d) Each such grant shall specify that the Committee may at
any time amend, suspend or terminate the Restricted Share grant
covered thereby, provided that, in the case of an amendment, the
amended grant of Restricted Shares shall conform to the provisions of
the Program.
(e) Each such grant or sale shall provide that during the
period for which such substantial risk of forfeiture is to continue,
the transferability of the Restricted Shares shall be prohibited or
restricted in the manner and to the extent prescribed by the
Committee at the Date of Grant (which restrictions may include,
without limitation, rights of repurchase or first refusal in the
Corporation or provisions subjecting the Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any
transferee).
(f) Any such grant or sale of Restricted Shares may require
that any or all dividends or other distributions paid thereon during
the period of such restrictions be automatically deferred and
reinvested in additional Restricted Shares, which may be subject to
the same restrictions and substantial risks of forfeiture as the
underlying award.
(g) Each grant or sale of Restricted Shares shall be
evidenced by an agreement executed on behalf of the Corporation by
any officer and delivered to and accepted by the Participant and
shall contain such terms and provisions, consistent with this
Program, as the Committee may approve. Unless otherwise directed by
the Committee, all certificates representing Restricted Shares shall
be held in custody by the Corporation until all restrictions thereon
shall have lapsed, together with a stock power executed by the
Participant in whose name such certificates are registered, endorsed
in blank and covering such Shares.
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9. Shares in Lieu of Certain Cash Payments. The Committee may also
authorize the granting of shares of Common Stock in lieu of cash which would
otherwise be payable as a bonus, pursuant to any incentive compensation plan or
otherwise, to Participants. Each such grant may utilize any or all of the
authorizations, and shall be subject to all of the limitations, contained in the
following provisions:
(a) The proportion of any such bonus to be paid in shares of
Common Stock shall be as determined by the Committee.
(b) The number of whole shares to be delivered in lieu of
cash shall be determined by dividing the value of the portion of the
bonus to be paid in shares of Common Stock by the Market Value per
Share as of a date selected by the Committee. The value of fractional
shares shall be added to the cash portion of the bonus.
(c) None of the shares of Common Stock granted pursuant to
this Paragraph 9 shall be subject to a substantial risk of forfeiture
within the meaning of Section 83 of the Code or any successor or
substitute provision thereof and of the regulations issued
thereunder.
(d) Each grant shall be evidenced by a written notification
executed on behalf of the Corporation by an officer thereof and
delivered to the Participant.
(e) Except to the extent provided in this Paragraph 9, no
cash bonus, whether payable pursuant to an incentive compensation
plan or otherwise, shall constitute a part of the Program or be
affected by the Program.
10. Limitation of Transferability. Except as otherwise determined by
the Committee, no Stock Option shall be transferable otherwise than by will or
the laws of descent and distribution and Stock Options shall be exercisable
during the lifetime of the Participant to whom such Stock Option has been
granted only by him or by his guardian or legal representative, and after such
Participant's death shall be exercisable only by his legal representative.
11. Other Provisions. The award of any Benefit under the Program may
also be subject to other provisions (whether or not applicable to the Benefit
awarded to any other Participant) as the Committee determines appropriate,
including, without limitation, restrictions on resale or other disposition, such
provisions as may be appropriate to comply with federal and state securities
laws and stock exchange requirements, and understandings or conditions as to the
Participant's employment, in addition to those specifically provided for under
the Program.
12. Manner of Action by the Corporation. The Secretary of the
Corporation (or such other officer as the Chief Executive Officer of the
Corporation may from time to time designate) shall supervise the maintenance of
records for all Participants in the Program. Any determination of such officer,
if approved by the Committee, shall be binding and conclusive for all purposes.
13. Taxes. To the extent that the Corporation is required to withhold
federal, state, local or foreign taxes in connection with any payment made or
benefit realized by a Participant or other person under this Plan, and the
amounts available to the Corporation for the withholding are insufficient, it
shall be a condition to the receipt of any such payment or the realization of
any such
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benefit that the Participant or such other person make arrangements satisfactory
to the Corporation for payment of the balance of any taxes required to be
withheld. At the discretion of the Committee, any such arrangements may include
relinquishment of a portion of any such payment or benefit. The Corporation and
any Participant or such other person may also make similar arrangements with
respect to the payment of any taxes with respect to which withholding is not
required.
14. Tenure. A Participant's right, if any, to continue to serve the
Corporation as a director, officer or employee shall not be enlarged or
otherwise affected by the establishment of the Program or his designation as a
Participant.
15. Adjustment Provisions. (a) The Committee shall make or provide
for such adjustments in the number of shares of Common Stock covered by
outstanding Stock Options granted hereunder, in the Option Price applicable to
such Stock Options, and in the kind of securities covered thereby, as the
Committee in its sole discretion, exercised in good faith, determines is
equitably required to prevent dilution or enlargement of the rights of Optionees
that otherwise would result from (a) any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Corporation, or (b) any merger, consolidation, spin-off, reorganization,
partial or complete liquidation, repurchase or exchange of shares, issuance of
rights or warrants to purchase securities, or (c) any other corporate
transaction or event having an effect similar to any of the foregoing. Moreover,
in the event of any such transaction or event, the Committee, in its discretion,
may provide in substitution for any or all outstanding Benefits under this
Program such alternative consideration as it, in good faith, may determine to be
equitable in the circumstances and may require in connection therewith the
surrender of all Benefits so replaced. The Committee shall also make or provide
for such adjustments in the numbers of shares specified in Section 5 of the
Program as the Committee in its sole discretion, exercised in good faith,
determines is appropriate to reflect any transaction or event described in the
preceding sentence.
(b) Notwithstanding any other provision of the Program, and without
affecting the number of shares available hereunder, the Committee may authorize
the issuance or assumption of Benefits in connection with any merger,
consolidation, acquisition of property or stock, or reorganization upon such
terms and conditions as it may deem appropriate.
16. Fractional Shares. The Corporation shall not be required to issue
any fractional shares of Common Stock pursuant to this Program. The Corporation
may provide for the elimination of fractions or for the settlement of fractions
in cash.
17. Amendment and Termination of Benefits and the Program. (a) The
Committee may at any time and from time to time amend, suspend or terminate the
Program; provided, however, that any amendment which must be approved by the
stockholders of the Corporation in order to comply with applicable law or the
rules of the principal national securities exchange upon which the shares of
Common Stock are traded or quoted shall not be effective unless and until such
approval has been obtained. No Benefit shall be granted pursuant to the Program
after the tenth anniversary of the Effective Date.
(b) The Committee may, with the concurrence of the affected Optionee,
amend or cancel any agreement evidencing Stock Options granted under this
Program; provided, however, that no such amendment will lower the exercise price
of any outstanding option, and no such amendment will cause any Stock Option to
cease to qualify as "performance-based" within the meaning of Section 162(m) of
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the Code. In the event of cancellation, the Committee may authorize the granting
of new Stock Options (which may or may not cover the same number of shares which
had been the subject of the prior agreement) in such manner, at such Option
Price, and subject to the same terms, conditions and descriptions, as under the
Program would have been applicable had the cancelled Stock Options not been
granted; provided, however, that in the event of a cancellation of a holders'
Stock Options, such Stock Options may not be reissued to such holder at a lower
price.
(c) In case of termination of employment or cessation of services as
a director, in each case by reason of death, disability or retirement under a
retirement plan of the Corporation or any Subsidiary or in the case of hardship
or other special circumstances of a Participant who holds a Stock Option not
immediately exercisable in full, or any Restricted Shares as to which a
condition, limitation, restriction or substantial risk of forfeiture has not
lapsed, the Committee may, in its sole discretion, accelerate the time at which
such Stock Option may be exercised or the time at which such condition,
limitation, restriction or substantial risk of forfeiture will lapse.
(d) Presentation of the Program or any amendment to the Program for
stockholder approval is not to be construed to limit the Corporation's authority
to offer similar or dissimilar benefits through plans or programs that are not
subject to stockholder approval.
18. Effective Date. This 1998 Stock Incentive Program shall become
effective on the date (the "Effective Date") that it is approved by the
affirmative vote of a majority of the shares present or represented at an annual
or special meeting of stockholders of the Corporation and entitled to vote on
the subject matter; provided that such stockholder approval is obtained within
12 months after the adoption of this 1998 Stock Incentive Program by the Board.