HANDY & HARMAN
OUTSIDE DIRECTOR STOCK OPTION PLAN
SECTION 1.
Purpose
1.1 The purpose of the HANDY & HARMAN OUTSIDE DIRECTOR STOCK
OPTION PLAN (the "Plan") is to foster and promote the long-term financial
success of the Company and materially increase shareholder value by enabling the
Company to attract and retain the services of outstanding Outside Directors
whose judgment, interest, and special effort is essential to the successful
conduct of its operations.
SECTION 2.
Definitions
2.1. Definitions. Whenever used herein, the following terms
shall have the respective meanings set forth below:
(a) "Annual Award" means an Option for the number of
shares of Stock determined pursuant to Section 5.
(b) "Annual Retainer Fee" means the annual fee payable
to an Outside Director for services as a member of the Board, but
exclusive of any fees paid for services as a member of a committee of
the Board, for attending meetings or for other special services proved
to the Company.
(c) "Board" means the Board of Directors of the
Company.
(d) "Company" means Handy & Harman, a New York
corporation, and any successor thereto.
(e) "Disability means total disability, which if the
Outside Director were an employee of the Company, would be treated as a
total disability under the terms of the Company's long-term disability
plan for employees, as in effect from time to time.
(f) "Fair Market Value" on any date means the closing
price of the Stock as reported by the consolidated tape of the New York
Stock Exchange (or on such other recognized quotation system on which
the trading prices of the stock are quoted at the relevant time) on
such date. In the event that there are no Stock transactions reported
on such tape (or such other system) on such date, Fair Market Value
shall mean the closing price on the immediately preceding date on which
Stock transactions were so reported.
(g) "Option" means the right to purchase Stock at a
stated price for a specified period of time.
(h) "Outside Director" means any member of the Board
who is not an employee of the Company or of any of its subsidiaries.
(i) "Stock" means the common stock of the Company, par
value $1.00 per share.
2.2. Gender and Number. Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.
SECTION 3.
Eligibility and Participation
Each Outside Director shall participate in the plan.
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SECTION 4.
Stock Subject to Plan
4.1. Number. The total number of shares of Stock subject to
Awards under the Plan may not exceed 100,000 shares, subject to adjustment
pursuant to Section 4.3. The shares to be delivered under the Plan may consist,
in whole or in part, of treasury Stock or authorized but unissued Stock, not
reserved for any other purpose.
4.2. Cancelled, Terminated, or Forfeited Awards. Any shares of
Stock subject to an Option which for any reason is cancelled or terminated
without the issuance of any Stock shall again be available for Awards under the
Plan.
4.3. Adjustment in Capitalization. In the event of any Stock
dividend or Stock split, recapitalization (including, without limitation, the
payment of an extraordinary dividend), merger, consolidation, combination,
spin-off, distribution of assets to stockholders, exchange of shares, or other
similar corporate change, the aggregate number of shares of Stock available for
issuance hereunder or subject to Options and the respective exercise prices of
outstanding Option may be appropriately adjusted by the Board, whose
determination shall be conclusive; provided, however, that any fractional shares
resulting from any such adjustment shall be disregarded.
SECTION 5.
Stock Options
5.1. Grant of Options.
(a) Annual Awards. During each calendar year during the
term of the Plan, each Outside Director shall be granted an Annual
Award on
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the first business day of the year; provided, however, that for 1990
such award shall be subject to the approval of the Plan by the
stockholders of the Company.
(b) Number of Shares. Each Outside Director shall be
granted an Annual Award covering the number of shares of Stock which
are equal to the number of whole shares determined by dividing (i)
fifty percent (50%) of the amount of the Outside Director's Annual
Retainer Fee by (ii) the Fair Market Value of a share of Stock of the
date of grant.
(c) Option Agreement. Each Option shall be evidenced by
an Option agreement that shall specify the exercise price, the term of
the Option, and the number of shares of Stock to which the Option
pertains.
5.2. Option Price. Options granted pursuant to Section 5.1(a)
as an Annual Award shall have an exercise price equal to One Dollar ($1.00) per
share of stock.
5.3. Exercise of Options. Options awarded under the Plan
shall be fully and immediately exercisable. Each Option shall be exercisable for
10 years after the date on which it is granted.
5.4. Payment. Options may be exercised by written notice of
exercise accompanied by payment in full of the Option price in cash or cash
equivalents, including by personal check. As soon as practicable after receipt
of such written exercise notice and full payment of the Option price, the
Company shall deliver to the Outside Director a certificate or certificates
representing the acquired shares of stock.
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SECTION 6.
Termination of Duties as a Director
6.1. Termination of Duties Due to Retirement. In the event an
Outside Director's membership on the Board ceases on or after he has attained
age 72, any Options then held by such Outside Director may be exercised at any
time prior to the expiration of the term of the Options or within three (3)
years following his cessation of Board membership, whichever period is shorter.
6.2. Termination of Duties Due to Death or Disability. In the
event an Outside Director's membership on the Board ceases by reason of his
death or Disability, any Options then held by such Outside Director may be
exercised by the Outside Director or his legal representative at any time prior
to the expiration date of the terms of the Options or within one (1) year
following his cessation of Board membership, whichever period is shorter.
6.3. Termination of Duties for Any Other Reason. In the event
an Outside Director's membership on the Board ceases for any reason other than
one described in Section 6.1 or Section 6.2, any Options then held by such
Outside Director shall be cancelled.
6.4. Services as an Employee. If an Outside Director becomes
an employee of the Company or of any of its subsidiaries, the Outside Director
shall be treated as continuing in service for purposes of this Plan, but shall
not be eligible to receive future grants while an employee. If the Outside
Director's services as an employee terminate without his again becoming an
Outside Director, the provisions of this Section 6 shall apply as though such
termination of employment were the termination of the Outside Director's
membership on the Board.
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SECTION 7.
Amendment, Modification, and Termination of Plan
The Board at any time may terminate or suspend the Plan, and from
time to time may amend or modify the Plan, but any amendment that materially
increases the benefits to be provided to Outside Directors shall be subject to
approval by the Company's stockholders. No amendment, modification, or
termination of the Plan shall in any manner adversely affect any Option
theretofore granted under the Plan, without the consent of the Outside Director.
SECTION 8.
Miscellaneous Provisions
8.1. Nontransferability of Awards. No options may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. All rights with respect
to Options granted to an Outside Director shall be exercisable during his
lifetime only by him.
8.2. Beneficiary Designation. Each Outside Director may from
time to time name any beneficiary or beneficiaries (who may be named
contingently or successively) by whom any Option granted under the Plan is to be
exercised in case of his death. Each designation will revoke all prior
designations by such Outside Director and will be effective only when filed by
the Outside Director during his lifetime in writing with the Secretary of the
Company. In the absence of any such designation, Options outstanding at the time
of an Outside Director's death shall be exercised by the Outside Director's
surviving spouse, if any, or otherwise by his estate.
8.3. No Guarantee of Membership. Nothing in the Plan shall
confer upon an Outside Director the right to remain a member of the Board.
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8.4. Requirements of Law. The granting of Options and the
issuance of shares of Stock upon the exercise of Options shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
8.5. Administration. The Plan shall, to the maximum extent
possible, be self-effectuating. Any determinations necessary or advisable for
the administration and interpretation of the Plan in order to carry out its
provisions and purposes shall be made by the Company.
8.6. Term of Plan. The Plan shall be effective upon its
adoption by the Board, subject to approval by the Company's stockholders at
their next annual meeting. The Plan shall continue in effect, unless sooner
terminated pursuant to Section 7, until the tenth anniversary of the date on
which it is adopted by the Board.
8.7. Governing Law. The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State of
New York.
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