FIRST AMENDMENT TO
1997 RESTRICTED STOCK PLAN
FOR OUTSIDE DIRECTORS
OF COLTEC INDUSTRIES INC
WHEREAS, Coltec Industries Inc, a Pennsylvania corporation
(the "Company"), adopted the 1997 Restricted Stock Plan for Outside Directors
of Coltec Industries Inc (the "Plan"); and
WHEREAS, the Board of Directors of the Company (the "Board")
desires to amend the Plan in certain respects;
WHEREAS, Section 11 of the Plan states that the Plan may be
amended at any time by the Board, subject to shareholder approval if required
under applicable law; and
WHEREAS, the Board has determined that shareholder approval
of the amendments to the Plan as provided herein are not required under
applicable law.
NOW, THEREFORE, the Plan is hereby amended in the following
respects:
1. Section 2 of the Plan is hereby amended by adding a new
paragraph (b) thereto, to read as follows, and by renumbering existing
paragraphs 2(b) through 2(i) as 2(c) through 2(j):
"(b) "Change in Control" shall mean the occurrence of any of
the following events:
(i) any person (as defined in sections 13(d) and
14(d) of the Exchange Act), other than the Company, any
trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any company
2
owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their
ownership of stock of the Company, acquires "beneficial
ownership" (as defined in Rule 13d-3 under the Exchange Act)
of securities representing more than 25% of the combined
voting power of the Company; or
(ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute
the Board 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
subsections 2(b)(i), 2(b)(iii) or 2(b)(iv) whose election by
the Board or nomination for election by the Company's
shareholders 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 a majority thereof; or
(iii) the shareholders of the Company approve a
merger other than (i) a merger 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), in combination with the ownership of
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, at least 67% of the
combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately
after such merger or (ii) a merger effected to implement a
recapitalization of the Company (or similar transaction) in
which no person acquires more than 50% of the combined
voting power of the Company's then outstanding securities;
or
(iv) the shareholders of the Company approve a plan
of complete liquidation of the Company or a sale of
substantially all of the Company's assets."
2. The third sentence of Section 8 of the Plan is hereby
amended by adding the following clause at the end of thereof:
"Notwithstanding the foregoing, the Restricted Period shall
expire, and all restrictions on outstanding
3
shares of Restricted Stock shall lapse, upon the occurrence
of a Change in Control."
3. Exhibit A, which is attached to, and a part of, the Plan
and referenced in Section 5 of the Plan, is hereby amended by adding the
following provision at the end thereof:
"Notwithstanding anything in this Exhibit A to the
contrary, including the schedule of grant dates of
Restricted Stock set forth above in this Exhibit A
(including the footnotes thereto), if a Change in Control
shall occur and, in connection therewith and at any time
following in any way as a result thereof, any of Messrs.
Moses, Stuckey and Coppola shall cease to serve as a
director of the Company upon or following such Change in
Control, all grants of Restricted Stock not yet then made to
any such terminating director shall be granted to such
director immediately prior to the Change in Control and
shall be granted free and clear of all restrictions
otherwise applicable."
4. Notwithstanding the foregoing amendments to the Plan as
provided in this First Amendment, such amendments shall be null and void and
of no force or effect if (x) it shall be determined by the Company's
independent auditors that such amendment shall prevent the Company from
consummating a business combination approved by the Board which combination is
intended to be accounted for under the pooling of interests method of
accounting and (y) the Board affirmatively determines that such amendment
shall not be made.
5. Except as hereinabove provided, the Plan is ratified and
confirmed in all respects.
4
IN WITNESS WHEREOF, this First Amendment to the Plan is
hereby adopted effective as of , 1998.
BOARD OF DIRECTORS OF
COLTEC INDUSTRIES INC
By: ________________________