HANDY & HARMAN
LONG-TERM INCENTIVE
STOCK OPTION PLAN
1. Purpose. The purpose of the Handy & Harman Long-Term Incentive Stock
Option Plan (the "Plan") is to benefit Handy & Harman and its subsidiaries (the
"Company') by providing for the acquisition of a greater personal and financial
interest in the Company by key employees upon whom the Company is dependent for
success.
2. Administration of the Plan. The Plan shall be administered by a
Committee (the "Committee") appointed by and responsible to the Board of
Directors of the Company (the "Board"). The Committee shall consist of not less
than three directors who are "disinterested persons" within the meaning of Rule
16b-3 promulgated under the Securities and Exchange Act of 1934, as amended, or
any successor provision ("Rule 16b-3").
The Committee has and may exercise such powers and authority of the
Board as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. The Committee has authority in its
discretion to determine the key employees to whom and the time or times at which
options or stock appreciation rights (together, "Awards") may be granted and the
number of shares of Common Stock applicable to each such Award. Each Award will
be evidenced by a written instrument and may include any terms and conditions
consistent with the Plan, as the Committee may determine. The Committee also has
authority to interpret the Plan, to determine the terms and provisions of the
respective agreements and to make all other determinations necessary or
advisable for Plan administration. The Committee shall interpret the Plan and
Awards hereunder in accordance and consistent with the principles set forth in
Rule 16b-3. The Committee has authority to prescribe, amend, and rescind rules
and regulations relating to the Plan. All interpretations, determinations and
actions by the Committee will be final, conclusive and binding upon parties. Any
action of the Committee with respect to the administration of the Plan shall be
taken pursuant to a majority vote or by the unanimous written consent of its
members.
No member of the Board or the Committee will be liable for any action
or determination made in good faith by the Board or the Committee with respect
to the Plan or any Award under it.
3. Participants. Options shall be granted under the Plan to those key
employees of the Company who are approved by the Committee, including directors
of the Company who are also salaried officers, who perform services of special
importance to the management, operation and development of the Company.
4. Effective Date and Termination of the Plan. The effective date of
the Plan shall be February 28, 1991, and the Plan shall terminate on February
27, 2001, or at such earlier time as the Board of Directors may determine. Any
option or stock appreciation right outstanding under the Plan at the time of its
termination shall remain in effect until it shall have been exercised or shall
have expired or otherwise terminated pursuant to the provisions of the Plan.
5. Stock Subject to Options. The number of shares to be subject to
Awards hereunder shall not exceed 1,000,000 shares of the Common Stock, $1.00
par value, of the Company ("Common Stock"), subject to adjustment as provided in
Section 10 hereof. Any shares subject to an Award under the Plan, which Award
expires or is terminated unexercised as to such shares, may again be subjected
to an Award under the Plan. The Committee may require the surrender of
outstanding Awards as a condition precedent to the grant of new Awards under the
Plan.
6. Payment of Purchase Price. The purchase price of each share acquired
pursuant to the exercise of any option shall be paid in full at the time of such
purchase, and a certificate representing shares so purchased shall be delivered
to the persons entitled thereto. The Committee shall have the sole discretion to
determine at the time of grant of the option the form (cash, shares of Common
Stock, or a combination thereof) in which payment of the purchase price may be
made.
7. Types of Options. It is intended that no options granted under the
Plan shall qualify as an incentive stock option as defined in Section 422 of the
Internal Revenue Code.
8. Terms and Conditions of Options. Each option granted under the Plan
shall contain such terms and conditions, not inconsistent with the Plan, as are
determined by the Committee, subject to the following provisions:
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(a) Such option by its terms shall not be exercisable after
the expiration of ten years from the date such option is granted.
(b) Each option shall become exercisable (commencing one year
after the date of grant) cumulatively at the rate of 20% per year.
(c) The option price shall not be less than 100 percent of the
fair market value of the Common Stock at the time such option is
granted. The term "fair market value" shall mean the average of the
highest price and the lowest price at which the Common Stock shall have
been sold on the New York Stock Exchange on the date of the grant of
such option. In the event that any such option shall be granted on a
date on which there were no such sales on such Exchange, the fair
market value on such date shall be deemed to be the average of such
highest price on the immediately preceding day on which there were such
sales.
(d) Such option by its terms shall not be transferable by the
optionee otherwise than by will or the laws of descent and distribution
and shall be exercisable, during his lifetime, only by him.
(e) No option shall be granted after ten years from the
effective date of the Plan, as set forth in Section 4.
9. Stock Appreciation Rights. Stock appreciation rights may be granted
by the Committee in connection with any option at the time of grant of such
option. Stock appreciation rights shall be subject to the following terms and
conditions and to such other terms and conditions, not inconsistent with the
Plan, as the Committee shall determine:
(a) The number of stock appreciation rights granted to a
participant may not exceed 100% of the number of shares that such
participant is entitled to purchase pursuant to the related option.
(b) Stock appreciation rights shall be exercisable, in whole
or in part, at such time or times and to the extent that the option to
which they relate shall be exercisable, and shall expire simultaneously
with the option to which they relate.
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(c) Upon exercise of a stock appreciation right, the related
option or portion thereof shall be surrendered to the Company in
exchange for payment by the Company of shares of Common Stock (valued
at their fair market value on the date of exercise of the stock
appreciation right) or cash or a combination thereof in an amount equal
to the excess of the aggregate fair market value of the shares subject
to the option or portion thereof being surrendered (valued on the date
of exercise of the stock appreciation right) over the aggregate option
price thereof; provided, however, that fractional shares shall not be
issued. Any option, to the extent surrendered, shall thereupon cease to
be exercisable.
(d) The Committee shall have the sole discretion to determine
the form in which payment (i.e., cash, shares of Common Stock, or any
combination thereof) will be made.
(e) Stock appreciation rights shall be transferable only when
the options to which they relate are transferable, and under the same
conditions.
(f) A stock appreciation right may be exercised only when the
market price of Common Stock exceeds the option price of the option to
which the stock appreciation right relates.
10. Adjustment in the Event of Recapitalization of the Company. Subject
to Section 11, if the outstanding shares of Common Stock of the Company are
increased, decreased or exchanged for a differing number or kind of shares or
other securities, or if additional shares or new or different shares or other
securities are distributed with respect to such shares of Common Stock or other
securities, through merger, consolidation, sale of all or substantially all the
property of the Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other distribution with
respect to such shares of Common Stock, or other securities, an appropriate and
proportionate adjustment may be in (i) the maximum number and kind of shares
provided in Section 5, (ii) the number and kind of shares or other securities
subject to the then-outstanding Awards, and (iii) the price for each share or
other unit of any other securities subject to then-outstanding Awards without
change in the aggregate purchase price or value as to which such options remain
exercisable or subject to restrictions.
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11. Change in Control. (a) Notwithstanding anything in the Plan to the
contrary, upon a Change in Control of the Company, all outstanding options
granted under the Plan shall become immediately exercisable.
(b) For purposes of this Section, a Change in control of the Company
shall be deemed to have occurred if:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company), is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined
voting power of the Company's then outstanding securities;
(ii) during any period of two consecutive years (not including
any period prior to the adoption of the Plan), individuals who at the
beginning of such period constitute the Board of Directors, and any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in
clause (i), (iii) or (iv) of this Section) whose election by the Board
of Directors or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation; other than (A)
a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 70% of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires
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more than 50% of the combined voting power of the company's then
outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
12. General Provisions. (a) Nothing in the Plan or in any instrument
executed pursuant to the Plan will confer upon any participant any right to
continue in the employ of the Company or affect the right of the company to
terminate the employment of any participant at any time with or without cause.
(b) No shares of Common Stock will be issued or transferred pursuant to
the exercise of an option or stock appreciation right unless and until all
then-applicable requirements imposed by federal and state securities and other
laws, rules and regulations and by any regulatory agencies having jurisdiction,
and by any stock exchanges upon which the Common Stock may be listed, have been
fully met. As a condition precedent to the issuance of shares pursuant to the
grant or exercise of an option or stock appreciation right, the Company may
require the participant to take any reasonable action to meet such requirements.
(c) No participant and no beneficiary or other person claiming under or
through such participant will have any right, title or interest in or to any
shares of Common Stock allocated or reserved under the Plan or subject to any
option or stock appreciation right except as to such shares of Common Stock, if
any, that have been issued or transferred to such participant.
(d) The Company may make such provisions as it deems appropriate to
withhold any taxes the Company determines it is required to withhold in
connection with the exercise of any option or stock appreciation right. The
Company may require the participant to satisfy any relevant tax requirements
before authorizing any issuance of Common Stock to the participant.
13. Amendment and Termination of Plan; Amendment of Incentive Awards.
The Board or the Committee will have the power, in its discretion, to amend,
suspend or terminate the Plan at any time. Except as provided in Section 10 of
the Plan, no such amendment will, without approval of the shareholders of the
Company (i) change the class of persons eligible to receive options or stock
appreciation rights under the Plan, (ii) materially increase the benefits
accruing to participants under the
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Plan, (iii) increase the number of shares of common stock subject to the Plan,
or (iv) transfer the administration of the Plan to any person who is not a
"disinterested person" under Rule 16b-3.
No amendment, suspension or termination of the Plan shall, without the
consent of the participant, impair or adversely affect any right or obligation
under any Award previously granted under the Plan.
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