Exhibit 10.9
GRAPHIC PACKAGING
EQUITY INCENTIVE PLAN
Amended and Restated,
Effective March 1, 2001
TABLE OF CONTENTS
Page
Section 1 - Introduction 1
1.1 Introduction 1
1.2 Purposes 1
1.3 Effective Date 1
Section 2 - Definitions 1
2.1 Definitions 1
2.2 Gender and Number 3
Section 3 - Plan Administration 3
Section 4 - Stock Subject to the Plan 3
4.1 Number of Shares 3
4.2 Other Shares of Stock 4
4.3 Adjustments for Stock Split, Stock Dividend, Etc 4
4.4 Other Distributions and Changes in the Stock 4
4.5 General Adjustment Rules 4
4.6 Determination by the Committee, Etc 5
Section 5 - Reorganization or Liquidation 5
Section 6 - Participation 6
6.1 In General 6
6.2 Restriction on Award Grants to Certain Individuals 6
6.3 General Restrictions on Awards 6
Section 7 - Stock Option 6
7.1 Grant of Stock Options 6
7.2 Stock Option Certificates 7
7.3 Restrictions on Incentive Options 10
7.4 Shareholder Privileges 10
Section 8 - Restricted Stock Awards 10
8.1 Grant of Restricted Stock Awards 10
8.2 Restrictions 10
8.3 Privileges of a Stockholder, Transferability 11
8.4 Enforcement of Restrictions 11
Section 9 - Purchase of Stock 11
9.1 General 11
9.2 Other Terms 11
Section 10 - Stock Units 11
10.1 Grant 11
10.2 Election Under Phantom Equity Plan 11
Section 11 - Other Common Stock Grants 12
Section 12 - Change in Control 12
12.1 In General 12
12.2 Limitation on Payments 12
12.3 Definition 12
Section 13 - Rights of Employees; Participants 13
13.1 Employment 13
13.2 Nontransferability 13
13.3 No Plan Funding 13
Section 14 - General Restrictions 13
14.1 Investment Representations 13
14.2 Compliance with Securities Laws 13
14.3 Changes in Accounting Rules 14
Section 15 - Other Employee Benefits 14
Section 16 - Plan Amendment, Modification and Termination... 14
Section 17 - Withholding 15
17.1 Withholding Requirement 15
17.2 Withholding With Stock 15
Section 18 - Company Right To Purchase Stock 15
18.1 Right of First Refusal 15
18.2 Marking of Certificates 16
Section 19 - Requirements of Law 16
19.1 Requirements of Law 16
19.2 Federal Securities Law Requirements 16
19.3 Governing Law 16
Section 20 - Duration of the Plan 16
Amended as of March 1, 2001
GRAPHIC PACKAGING
EQUITY INCENTIVE PLAN
Section 1
Introduction
1.1 Introduction. Graphic Packaging International
Corporation, a Colorado corporation hereinafter referred to,
together with its Affiliated Corporations (as defined in
subsection 2.1(a)) as the "Company" except where the context
otherwise requires, previously established the Graphic Packaging
Equity Incentive Plan (the "Plan") for certain employees of the
Company. The Plan, which permits the grant of stock options and
restricted stock awards to certain employees of the Company, was
effective August 12, 1992 and was previously amended and restated
effective November 11, 1992, October 20, 1994, February 14, 1995,
November 14, 1995, and May 13, 1997. Pursuant to the power
granted in Section 16, the Company hereby further amends and
restates the Plan in its entirety, effective March , 2001.
1.2 Purposes. The purposes of the Plan are to provide
the employees selected for participation in the Plan with added
incentives to continue in the service of the Company and to
create in such employees a more direct interest in the future
success of the operations of the Company by relating incentive
compensation to the achievement of long-term corporate economic
objectives, so that the income of the employees is more closely
aligned with the income of the Company's shareholders. The Plan
is also designed to attract employees and to retain and motivate
participating employees by providing an opportunity for invest-
ment in the Company.
1.3 Effective Date. The original effective date of
the Plan (the "Effective Date") was August 12, 1992. This Plan,
each amendment to the Plan, and each option or other award
granted hereunder is conditioned on and shall be of no force or
effect until approval of the Plan by the holders of the shares
of voting stock of the Company unless the Company, on the advice
of counsel, determines that shareholder approval is not necessary.
Section 2
Definitions
2.1 Definitions. The following terms shall have the
meanings set forth below:
(a) "Affiliated Corporation" means any corporation
or other entity (including but not limited to a partnership)
that is affiliated with Graphic Packaging International Corpora-
tion through stock ownership or otherwise and is treated as a
common employer under the provisions of Sections 414(b) and (c)
of the Code, or is a parent or subsidiary of the Company as
defined in Section 424 of the Code, or is designated as an
Affiliated Corporation by the Board.
(b) "Award" means an Option, a Restricted Stock
Award issued hereunder, a grant of Stock made hereunder, an offer
to purchase Stock made hereunder, or Stock Units granted here-
under.
(c) "Board" means the Board of Directors of the
Company.
(d) "Code" means the Internal Revenue Code of 1986,
as it may be amended from time to time.
(e) "Committee" means a committee consisting of
members of the Board who are empowered hereunder to take actions
in the administration of the Plan. Members of the Committee
shall be appointed from time to time by the Board, shall serve
at the pleasure of the Board and may resign at any time upon
written notice to the Board.
(f) "Effective Date" means the original effective
date of the Plan, August 12, 1992.
(g) "Eligible Employees" means those employees
(including, without limitation, officers and directors who are
also employees) of the Company or any division thereof, upon
whose judgment, initiative and efforts the Company is, or will
become, largely dependent for the successful conduct of their
business.
(h) "Fair Market Value" means the average of the
highest and lowest prices of the Stock as reported on the New
York Stock Exchange ("NYSE") on a particular date. If there are
no Stock transactions on such date, the Fair Market Value shall
be determined as of the immediately preceding date on which there
were Stock transactions. If the price of the Stock is not
reported on NYSE, the Fair Market Value of the Stock on the
particular date shall be as determined by the Committee using a
reference comparable to the NYSE system. If, upon exercise of an
Option, the exercise price is paid by a broker's transaction as
provided in section 7.2(g)(ii)(D), Fair Market Value, for
purposes of the exercise, shall be the price at which the Stock
is sold by the broker.
(i) "Incentive Option" means an Option designated as
such and granted in accordance with Section 422 of the Code.
(j) "Non-Qualified Option" means any Option other
than an Incentive Option.
(k) "Option" means a right to purchase Stock at a
stated price for a specified period of time. Options granted
under the Plan shall be either Incentive Options or Non-Qualified
Options.
(l) "Option Price" means the price at which shares of
Stock subject to an Option may be purchased, determined in
accordance with subsection 7.2(b) and 7.3(b).
(m) "Participant" means an Eligible Employee
designated by the Committee from time to time during the term of
the Plan to receive one or more of the Awards provided under the
Plan.
(n) "Restricted Stock Award" means an award of Stock
granted to a Participant pursuant to Section 8 that is subject
to certain restrictions imposed in accordance with the provisions
of such Section.
(o) "Stock" means the $0.01 par value common stock of
the Company.
(p) "Stock Unit" means a measurement component equal
to the Fair Market Value of one share of Stock on the date
for which a determination is made pursuant to the provisions of
this Plan.
2.2 Gender and Number. Except when otherwise indi-
cated by the context, the masculine gender shall also include
the feminine gender, and the definition of any term herein in
the singular shall also include the plural.
Section 3
Plan Administration
The Plan shall be administered by the Committee. In
accordance with the provisions of the Plan, the Committee shall,
in its sole discretion, select the participants from among the
Eligible Employees, determine the Awards to be made pursuant to
the Plan, the number of Stock Units or shares of Stock to be
issued thereunder and the time at which such Awards are to be
made, fix the Option Price, period and manner in which an Option
becomes exercisable, establish the duration and nature of
Restricted Stock Award restrictions, establish the terms and
conditions applicable to Stock Units, establish the terms and
conditions on which an offer to purchase Stock will be made, and
establish such other terms and requirements of the various
compensation incentives under the Plan as the Committee may deem
necessary or desirable and consistent with the terms of the Plan.
The Committee shall determine the form or forms of the agreements
with Participants that shall evidence the particular provisions,
terms, conditions, rights and duties of the Company and the
Participants with respect to Awards granted pursuant to the Plan,
which provisions need not be identical except as may be provided
herein. The Committee may from time to time adopt such rules and
regulations for carrying out the purposes of the Plan as it may
deem proper and in the best interests of the Company. The
Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or in any agreement
entered into hereunder in the manner and to the extent it shall
deem expedient and it shall be the sole and final judge of such
expediency. No member of the Committee shall be liable for any
action or determination made in good faith. The determinations,
interpretations and other actions of the Committee pursuant to
the provisions of the Plan shall be binding and conclusive for
all purposes and on all persons.
Section 4
Stock Subject to the Plan
4.1 Number of Shares. For each calendar year from and
including the calendar year beginning January 1, 2002, a number
of shares of Stock equal to the amount of two percent (2%) of the
total number of issued and outstanding shares of Stock as of
December 31 of the calendar year immediately preceding such year
shall become available for issuance under the Plan. In addition:
(i) any unused portion of the shares of Stock remaining from
those available as of December 31, 2001; (ii) any shares of Stock
available pursuant to Section 4.2; and (iii) any unused portion
of the two percent (2%) limit for any calendar year shall be
added to the aggregate number of shares of Stock available for
issuance in each calendar year under the Plan. Out of the total
number of shares of Stock available for issuance in any calendar
year for the grant of Awards, no more than ten percent (10%) of
such shares of Stock may be granted under Awards other than
Options. In no event, except as subject to adjustment as
provided in Sections 4.3 and 4.4, shall more than 1,000,000
shares of Stock be cumulatively available for issuance pursuant
to the exercise of Incentive Options. This authorization may be
increased from time to time by approval of the Board and by the
shareholders of the Company if, in the opinion of counsel for the
Company, shareholder approval is required. Shares of Stock that
may be issued upon exercise of Options, that are issued as
Restricted Stock Awards, that are purchased under the Plan, that
are issued with respect to Stock Units, and that are issued as
incentive compensation under the Plan shall be applied to reduce
the maximum number of shares of Stock remaining available for use
under the Plan. The Company shall at all times during the term of
the Plan and while any Options or Stock Units are outstanding
retain as authorized and unissued Stock at least the number of
shares from time to time required under the provisions of the
Plan, or otherwise assure itself of its ability to perform its
obligations hereunder.
4.2 Other Shares of Stock. Any shares of Stock that are
subject to an Option that expires or for any reason is terminated
unexercised, any shares of Stock that are subject to an Award
(other than an Option) and that are forfeited and any shares of
Stock withheld for the payment of taxes or received by the
Company as payment of the exercise price of an Option, shall
automatically become available for use under the Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc.
If the Company shall at any time increase or decrease the
number of its outstanding shares of Stock or change in any way
the rights and privileges of such shares by means of the payment
of a stock dividend or any other distribution upon such shares
payable in Stock, or through a stock split, subdivision, con-
solidation, combination, spin-off, reclassification, or recap-
italization involving the Stock, then in relation to the Stock
that is affected by one or more of the above events, the numbers,
rights and privileges of the following shall be increased,
decreased or changed in like manner as if they had been
issued and outstanding, fully paid and nonassessable at the time
of such occurrence: (i) the shares of Stock under Section 4.1 as
to which Awards may be granted under the Plan and (ii) the shares
of the Stock then included in each outstanding Award granted
hereunder.
4.4 Other Distributions and Changes in the Stock. If
(a) the Company shall at any time distribute with
respect to the Stock assets or securities of persons other than
the Company (excluding cash or distributions referred to in
Section 4.3),
(b) the Company shall at any time grant to the
holders of its Stock rights to subscribe pro rata for additional
shares thereof or for any other securities of the Company, or
(c) there shall be any other change (except as
described in Section 4.3), in the number or kind of outstanding
shares of Stock or of any stock or other securities into which
the Stock shall be changed or for which it shall have been
exchanged,
and if the Committee shall in its discretion determine that the
event described in subsection (a), (b), or (c) above equitably
requires an adjustment in the number or kind of shares subject to
an Option or other Award, an adjustment in the Option Price, or
an adjustment in the number of shares under Section 4.1 or the
taking of any other action by the Committee, including without
limitation, the setting aside of any property for delivery to the
Participant upon the exercise of an Option or the full vesting of
an Award, then such adjustments shall be made, or other action
shall be taken, by the Committee and shall be effective for all
purposes of the Plan and on each outstanding Option or Award that
involves the particular type of stock for which a change was
effected. Notwithstanding the foregoing provisions of this
Section 4.4, pursuant to Section 8.3 below, a Participant holding
Stock received as a Restricted Stock Award shall have the right
to receive all amounts, including cash and property of any kind,
distributed with respect to the Stock upon the Participant's
becoming a holder of record of the Stock.
4.5 General Adjustment Rules. No adjustment or substitu-
tion provided for in this Section 4 shall require the Company
to sell a fractional share of Stock under any Option, or other-
wise issue a fractional share of Stock, and the total
substitution or adjustment with respect to each Option and other
Award shall be limited by deleting any fractional share. In
the case of any such substitution or adjustment, the total Option
Price for the shares of Stock then subject to the Option shall
remain unchanged but the Option Price per share under each such
Option shall be equitably adjusted by the Committee to reflect
the greater or lesser number of shares of Stock or other
securities into which the Stock subject to the Option may have
been changed, and appropriate adjustments shall be made to other
Awards to reflect any such substitution or adjustment. Any
adjustments to Incentive Options shall comply with the require-
ments of Section 424 of the Code.
4.6 Determination by the Committee, Etc. Adjustments
under this Section 4 shall be made by the Committee, whose
determinations with regard thereto shall be final and binding
upon all parties thereto.
Section 5
Reorganization or Liquidation
If the Company is merged or consolidated with another
corporation and the Company is not the surviving corporation, or
if all or substantially all of the assets or more than fifty
percent (50%) of the outstanding voting stock of the Company is
acquired by any other corporation, business entity or person, or
in case of a reorganization (other than a reorganization under
the United States Bankruptcy Code), including a divisive
reorganization under Section 355 of the Code, or liquidation of
the Company, and if the provisions of Section 12 do not apply,
the Committee, or the board of directors of any corporation
assuming the obligations of the Company, shall, as to the Plan
and outstanding Options and other Awards, either (i) make
appropriate provision for the adoption and continuation of the
Plan or a similar plan by the acquiring or successor corporation
or by the corporation that employs the Participant following the
reorganization and for the protection of any such outstanding
Options and other Awards by the substitution on an equitable
basis of appropriate stock of the Company or of the merged,
consolidated or otherwise reorganized corporation which will be
issuable with respect to the Stock, provided that no additional
benefits shall be conferred upon the Participants holding such
Options and other Awards as a result of such substitution, and
the excess of the aggregate Fair Market Value of the shares
subject to the Options immediately after such substitution over
the Option Price thereof is not more than the excess of the
aggregate Fair Market Value of the shares subject to such Options
immediately before such substitution over the Option Price
thereof, or (ii) upon written notice to the Participants, provide
that all unexercised Options must be exercised within a specified
number of days of the date of such notice or they will be
terminated. In the latter event, the Committee shall accelerate
the exercise dates of outstanding Options and accelerate the
restriction period and modify the performance requirements for
any outstanding Awards so that all Options and Awards become
fully vested or payable prior to any such event. The Committee
may, in its sole discretion, establish a date by which
outstanding Options must be exercised prior to reorganization, or
establish periods during which Options may not be exercised, in
order to comply with corporate or securities law or to facilitate
the orderly administration of the Plan.
Section 6
Participation
6.1 In General. Participants in the Plan shall be
those Eligible Employees who, in the judgment of the Committee,
are performing, or during the term of their incentive arrangement
will perform, vital services in the management, operation and
development of the Company or an Affiliated Corporation, and
significantly contribute, or are expected to significantly
contribute, to the achievement of long-term corporate economic
objectives. Participants may be granted from time to time one or
more Awards; provided, however, that the grant of each such Award
shall be separately approved by the Committee, and receipt of
one such Award shall not result in automatic receipt of any other
Award. Upon determination by the Committee that an Award is
to be granted to a Participant, written notice shall be given to
such person, specifying the terms, conditions, rights and duties
related thereto. Each Participant shall, if required by the
Committee, enter into an agreement with the Company, in such form
as the Committee shall determine and which is consistent with the
provisions of the Plan, specifying such terms, conditions, rights
and duties. Awards shall be deemed to be granted as of the date
specified in the grant resolution of the Committee, which date
shall be the date of any related agreement with the Participant.
In the event of any inconsistency between the provisions of the
Plan and any such agreement entered into hereunder, the
provisions of the Plan shall govern.
6.2 Restriction on Award Grants to Certain Individuals.
Notwithstanding the foregoing provisions of Section 6.1, the
Committee shall not grant any Award to any lineal descendant of
Adolph Coors, Jr. without first consulting with tax counsel for
the Company as to the effect of such grant on the status of the
Company as a "personal holding company" within the meaning of
Section 542 of the Code.
6.3 General Restrictions on Awards. Awards covering no
more than 600,000 shares of Stock may be granted to any
Participant under this Plan during any calendar year, beginning
with the 1997 calendar year. The number of shares set forth in
the preceding sentence shall be adjusted to reflect changes in
the capital of the Company in accordance with the provisions of
Section 4.3 and 4.4. To the extent required by Section 162(m) of
the Code, shares of Stock subject to Awards which are canceled or
which are otherwise adjusted as provided in Section 162(m) of the
Code shall continue to be counted against the foregoing.
Section 7
Stock Options
7.1 Grant of Stock Options. Coincident with or following
designation for participation in the Plan, a Participant may be
granted one or more Options. The Committee in its sole dis-
cretion shall designate whether an Option is an Incentive Option
or a Non-Qualified Option. The Committee may grant both an
Incentive Option and a Non-Qualified Option to an Eligible
Employee at the same time or at different times. Incentive
Options and Non-Qualified Options, whether granted at the
same time or at different times, shall be deemed to have been
awarded in separate grants and shall be clearly identified, and
in no event shall the exercise of one Option affect the right to
exercise any other Option or affect the number of shares of Stock
for which any other Option may be exercised, except as provided
in subsection 7.2(j). An Option shall be considered as having
been granted on the date specified in the grant resolution of the
Committee.
7.2 Stock Option Certificates. Each Option granted under
the Plan shall be evidenced by a written stock option certifi-
cate. A stock option certificate shall be issued by the Company
in the name of the Participant to whom the Option is granted
(the "Option Holder") and shall incorporate and conform to the
conditions set forth in this Section 7.2.
(a) Number of Shares. Each stock option certificate
shall state that it covers a specified number of shares of
the Stock, as determined by the Committee.
(b) Price. The price at which each share of Stock
covered by an Option may be purchased shall be determined in each
case by the Committee and set forth in the stock option certifi-
cate, but in no event shall the price be less than 100 percent
of the Fair Market Value of the Stock on the date the Option is
granted.
(c) Duration of Options: Restrictions on Exercise.
Each stock option certificate shall state the period of time,
determined by the Committee, within which the Option may be
exercised by the Option Holder (the "Option Period"), and shall
also set forth any installment or other restrictions on Option
exercise during such period, if any, as may be determined by
the Committee. The Option Period for Incentive Options must end,
in all cases, not more than 10 years from the date the Incentive
Option is granted.
(d) Termination of Employment, Death, Disability, Etc.
The Committee may, at the time of grant of an Option, specify the
period during which the Option may be exercised following
termination of employment. The Committee may amend an Option
previously granted to an Option Holder to extend the period
during which the Option may be exercised following termination of
employment. The effect of this subsection 7.2(d) shall be
limited to determining the consequences of a termination and
nothing in this subsection 7.2(d) shall restrict or otherwise
interfere with the Company's discretion with respect to the
termination of any person's employment or other relationship
with the Company. If the Committee does not so specify at
the time of the grant of an Option or does not subsequently
amend the Option, the following shall apply:
(i) If the employment of the Option Holder is
terminated within the Option Period for cause, as determined by
the Company, the Option shall thereafter be void for all purposes.
As used in this subsection 7.2(d), "cause" shall mean, as
determined by the Company, a violation of the Company's
established policies and procedures or a breach of the Option
Holder's fiduciary duty to the Company, provided that the effect
of this subsection 7.2(d) shall be limited to determining the
consequences of a termination and that nothing in this subsection
7.2(d) shall restrict or otherwise interfere with the Company's
discretion with respect to the termination of any employee.
(ii) If the Option Holder retires from employ-
ment by the Company or its affiliates during the Option Period
pursuant to the Company's Retirement Plan, the Option may be
exercised by the Option Holder, or in the case of death by
the persons specified in subsection (iii) of this subsection
7.2(d), during the remainder of the Option Period; provided,
however, that the Committee may, in its sole discretion, at the
time of the Option Holder's retirement, require that the
Option be exercised within such shorter period as may be speci-
fied by the Committee, which in no event shall be less than
three months (provided that such exercise must occur within
the Option Period). The foregoing sentence shall apply only to
Options granted under the Plan on or after February 13, 1996.
The provisions of the Plan in effect prior to such date shall
apply to Options granted prior to such date. If the Option
Holder becomes disabled (as determined pursuant to the Company's
Long-Term Disability Plan), the Option may be exercised by the
Option Holder, or in the case of death by the persons specified
in subsection (iii) of this subsection 7.2(d), within thirty-six
months following his or her disability (provided that such
exercise must occur within the Option Period). In any of
the foregoing cases, the Option may be exercised only within
the applicable time period specified above and only as to the
shares as to which the Option had become exercisable on or
before the date of the Option Holder's termination of employ-
ment.
(iii) If the Option Holder dies during the
Option Period while still employed or within the three-month
period referred to in (iv) below, or within the applicable
period referred to in (ii) above, the Option may be exercised by
those entitled to do so under the Option Holder's will or by the
laws of descent and distribution within fifteen months follow-
ing the Option Holder's death (provided that such exercise
must occur within the Option Period), but not thereafter. In
any such case, the Option may be exercised only as to the shares
as to which the Option had become exercisable on or before the
date of the Option Holder's death.
(iv) If the employment of the Option Holder by
the Company is terminated (which for this purpose means that the
Option Holder is no longer employed by the Company or by an
Affiliated Corporation) within the Option Period for any reason
other than cause, retirement pursuant to the Company's Retire-
ment Plan, disability or the Option Holder's death, the Option
may be exercised by the Option Holder within three months follow-
ing the date of such termination (provided that such exercise
must occur within the Option Period), but not thereafter. In
any such case, the Option may be exercised only as to the shares
as to which the Option had become exercisable on or before the
date of termination of employment.
(e) Transferability. Each Option shall not be trans-
ferable by the Option Holder except by will or pursuant to the
laws of descent and distribution, and such Option shall be exer-
cisable during the Option Holder's lifetime only by him or her,
or in the event of disability or incapacity, by his or her
guardian or legal representative. Notwithstanding the foregoing
to the contrary, at the Committee's discretion, an Option may
permit the transfer of such Option, other than an Incentive
Option, by the recipient thereof, subject to such terms, condi-
tions and limitations prescribed by the Committee, and the
applicable transferee of such Option shall be treated under
the Plan and any agreement covering such Option as the Parti-
cipant for purposes of any exercise of such Option.
(f) Agreement to Continue in Employment. Each Option
Holder agrees to remain in the employment of the Company, at the
pleasure of the Company, for a continuous period of at least one
year after the date of such stock option agreement, at the salary
rate in effect on the date of such agreement or at such changed
rate as may be fixed, from time to time, by the Company.
(g) Exercise, Payments, Etc.
(i) The method for exercising the Option granted
therein shall be by delivery to the Corporate Secretary of the
Company a written notice specifying the number of shares with
respect to which such Option is exercised and payment of the
Option Price. Such notice shall be in a form satisfactory to the
Committee and shall specify the particular Option (or portion
thereof) that is being exercised and the number of shares with
respect to which the Option is being exercised. The exercise of
the Stock Option shall be deemed effective upon receipt of such
notice by the Corporate Secretary and payment to the Company. If
requested by the Company, such notice shall contain the Option
Holder's representation that he or she is purchasing the Stock
for investment purposes only and his or her agreement not to sell
any Stock so purchased in any manner that is in violation of the
Securities Act of 1933, as amended, or any applicable state law.
Such restrictions, or notice thereof, shall be placed on the
certificates representing the Stock so purchased. The purchase
of such Stock shall take place at the principal offices of the
Company upon delivery of such notice, at which time the purchase
price of the Stock shall be paid in full by any of the methods or
any combination of the methods set forth in (ii) below. A
properly executed certificate or certificates representing the
Stock shall be issued by the Company and delivered to the Option
Holder. If shares of Stock are used to pay all or part of the
exercise price, an additional certificate shall be issued by the
Company and delivered to the Option Holder representing the
additional shares, in excess of the Option Price, to which the
Option Holder is entitled as a result of the exercise of the
Option.
(ii) The exercise price shall be paid by any of
the following methods or any combination of the following methods:
(A) in cash;
(B) by certified or cashier's check payable
to the order of the Company;
(C) by delivery to the Company of a written
statement of attestation, in such form as may be prescribed for
this purpose by the Committee, signed by the Option Holder and
certifying that the Option Holder is electing to use a specified
number of shares of Stock then owned by the Option Holder to pay
the purchase price of the Stock purchased pursuant to the Option
and that the Option Holder is electing to have issued to him
or her the additional shares of Stock, in excess of the Option
Price, to which the Option Holder is entitled as a result of the
exercise of the Option; provided, however, that no shares of
Stock owned by an Option Holder may be used for this purpose
unless such Stock has been held by the Option Holder for more
than six months; for purposes of this Plan, the Fair Market
Value of any shares of Stock designated by an Option Holder as
payment of the purchase price upon exercise of the Option shall
be the Fair Market Value as of the exercise date; the exercise
date shall be the day of delivery of the certificate of attesta-
tion with respect to the shares of Stock used as payment of the
Option Price; or
(D) by delivery to the Company of a properly
executed notice of exercise together with irrevocable instruc-
tions to a broker to deliver to the Company promptly the amount
of the proceeds of the sale of all or a portion of the Stock or
of a loan from the broker to the Option Holder necessary to pay
the exercise price.
(h) Date of Grant. An option shall be considered as
having been granted on the date specified in the grant resolution
of the Committee.
(i) Notice of Sale of Stock: Withholding. Upon
exercise of the Option, the Option Holder shall make appro-
priate arrangements with the Company to provide for the
amount of additional withholding required by Sections 3102 and
3402 of the Code and applicable state income tax laws, including
payment of such taxes through delivery of shares of Stock or by
withholding Stock to be issued under the Option, as provided in
Section 18.
(j) Issuance of Additional Option. If an Option
Holder pays all or any portion of the exercise price of a sub-
stituted Option with Stock, or pays all or any portion of the
applicable withholding taxes with respect to the exercise of a
substituted Option with Stock that has been held by the Option
Holder for more than a period, not shorter than six months, to
be determined by the Committee, the Committee may, in its sole
discretion, grant to such Option Holder a new Option covering
the number of shares of Stock used to pay such exercise price
and/or withholding tax. The new Option shall have an Option
Price per share equal to the Fair Market Value of a share of
Stock on the date of the exercise of the substituted Option and
shall have the same terms and provisions as the substituted
Option, except as otherwise determined by the Committee in its
sole discretion.
7.3 Restrictions on Incentive Options.
(a) Initial Exercise. The aggregate Fair Market
Value of the shares of Stock with respect to which Incentive
Options are exercisable for the first time by an Option Holder in
any calendar year, under this Plan or otherwise, shall not exceed
$100,000. For this purpose, the Fair Market Value of the shares
of Stock shall be determined as of the date of grant of the
Incentive Option.
(b) Ten Percent Shareholders. Incentive Options
granted to an Option Holder who is the holder of record of ten
percent (10%) or more of the outstanding Stock of the Company
shall have an Option Price equal to 110 percent (110%) of the
Fair Market Value of the shares of Stock on the date of grant of
the Option and the Option Period for any such Option shall not
exceed five years.
7.4 Shareholder Privileges. No Option Holder shall have
any rights as a shareholder with respect to any shares of Stock
covered by an Option until the Option Holder becomes the holder
of record of such Stock, and no adjustments shall be made for
dividends or other distributions or other rights as to which
there is a record date preceding the date such Option Holder
becomes the holder of record of such Stock, except as provided in
Section 4.
Section 8
Restricted Stock Awards
8.1 Grant of Restricted Stock Awards. Coincident with
or following designation for participation in the Plan, the
Committee may grant a Participant one or more Restricted
Stock Awards consisting of shares of Stock. The number of shares
granted as a Restricted Stock Award shall be determined by the
Committee.
8.2 Restrictions. A Participant's right to retain a
Restricted Stock Award granted to him under Section 8.1 shall be
subject to such restrictions, including but not limited to
his continuous employment by the Company or an Affiliated
Corporation for a restriction period specified by the Committee
or the attainment of specified performance goals and objec-
tives, as may be established by the Committee with respect to
such Award. The Committee may in its sole discretion require
different periods of employment or different performance goals
and objectives with respect to different Participants, to dif-
ferent Restricted Stock Awards or to separate, designated por-
tions of the Stock shares constituting a Restricted Stock Award.
In the event of the death or disability (as defined in subsection
7.2(d)) of a Participant, or the retirement of a Participant
in accordance with the Company's established retirement policy,
all employment period and other restrictions applicable to
Restricted Stock Awards then held by him shall lapse with respect
to a pro rata part of each such Award based on the ratio between
the number of full months of employment completed at the time of
termination of employment from the grant of each Award to the
total number of months of employment required for such Award
to be fully nonforfeitable, and such portion of each such
Award shall become fully nonforfeitable. The remaining portion
of each such Award shall be forfeited and shall be immediately
returned to the Company. In the event of a Participant's termi-
nation of employment for any other reason, any Restricted Stock
Awards as to which the employment period or other restrictions
have not been satisfied (or waived or accelerated as provided
herein) shall be forfeited, and all shares of Stock related
thereto shall be immediately returned to the Company.
8.3 Privileges of a Stockholder, Transferability. A
Participant shall have all voting, dividend, liquidation and
other rights with respect to Stock in accordance with its terms
received by him as a Restricted Stock Award under this Section 8
upon his becoming the holder of record of such Stock; provided,
however, that the Participant's right to sell, encumber, or
otherwise transfer such Stock shall be subject to the limi-
tations of Section 13.2 and Section 18.
8.4 Enforcement of Restrictions. The Committee shall
cause a legend to be placed on the Stock certificates issued
pursuant to each Restricted Stock Award referring to the restric-
tions provided by Sections 8.2 and 8.3 and, in addition, may in
its sole discretion require one or more of the following methods
of enforcing the restrictions referred in Sections 8.2 and 8.3:
(a) Requiring the Participant to keep the Stock
certificates, duly endorsed, in the custody of the Company while
the restrictions remain in effect; or
(b) Requiring that the Stock certificates, duly
endorsed, be held in the custody of a third party while the
restrictions remain in effect.
Section 9
Purchase of Stock
9.1 General. From time to time the Company may make an
offer to certain Participants, designated by the Committee in
its sole discretion, to purchase Stock from the Company. The
number of shares of Stock offered by the Company to each
selected Participant shall be determined by the Committee in its
sole discretion. The purchase price for the Stock shall be the
Fair Market Value of the Stock on the date the Stock is
purchased. The Participants who accept the Company's offer shall
purchase the Stock at the time designated by the Committee. The
purchase shall be on such additional terms and conditions as
may be determined by the Committee in its sole discretion.
9.2 Other Terms. The Committee may, in its sole
discretion, grant Options, Restricted Stock, Stock Units, or
any combination thereof, on terms and conditions determined by
the Committee, in its sole discretion, to the Participants who
purchase Stock pursuant to Section 9.1.
Section 10
Stock Units
10.1 Grant. A Participant may be granted a number of
Stock Units determined by the Committee. The number of shares of
Stock Units, the goals and objectives to be satisfied with
respect to each grant of Stock Units, the time and manner of
payment for each Stock Unit, and the other terms and conditions
applicable to a grant of Stock Units shall be determined by the
Committee.
10.2 Election Under Phantom Equity Plan. A Participant
who makes the election provided for in Section 17.4 of the
Company's Phantom Equity Plan to receive payment for his interest
under the Company's Phantom Equity Plan in shares of Stock shall
receive a grant of a number of Stock Units calculated pursuant to
Section 17.4 of the Company's Phantom Equity Plan. The number of
Stock Units so determined shall be credited to a bookkeeping
account in the Participant's name on the books of the Company. A
number of shares of Stock equal to the number of Stock Units
credited to the Participant shall be transferred to the
Participant at the times and in the manner (lump sum or
installments) specified in Section 17.4 of the Phantom Equity
Plan and as otherwise provided under the Phantom Equity Plan.
Section 11
Other Common Stock Grants
From time to time during the duration of this Plan, the
Board may, in its sole discretion, adopt one or more incentive
compensation arrangements for Participants pursuant to which the
Participants may acquire shares of Stock, whether by purchase,
outright grant, or otherwise. Any such arrangements shall be
subject to the general provisions of this Plan and all shares of
Stock issued pursuant to such arrangements shall be issued under
this Plan.
Section 12
Change in Control
12.1 In General. Upon a change in control of the
Company (which for this purpose means Graphic Packaging
International Corporation) as defined in Section 12.3, then (a)
all Options shall become immediately exercisable in full during
the remaining term thereof, and shall remain so, whether or not
the Participants to whom such Options have been granted remain
employees of the Company or an Affiliated Corporation; (b) all
restrictions with respect to outstanding Restricted Stock Awards
shall immediately lapse; and (c) all Stock Units shall become
immediately payable.
12.2 Limitation on Payments. If the provisions of this
Section 12 would result in the receipt by any Participant of a
payment within the meaning of Section 280G of the Code and the
regulations promulgated thereunder and if the receipt of such
payment by any Participant would, in the opinion of independent
tax counsel of recognized standing selected by the Company,
result in the payment by such Participant of any excise tax
provided for in Sections 280G and 4999 of the Code, then the
amount of such payment shall be reduced to the extent required,
in the opinion of independent tax counsel, to prevent the
imposition of such excise tax; provided, however, that the
Committee, in its sole discretion, may authorize the payment of
all or any portion of the amount of such reduction to the
Participant.
12.3 Definition. For purposes of the Plan, a "change
in control" shall mean any of the following:
(i) The acquisition of or the ownership of fifty
percent or more of the total Stock of the Company then issued
and outstanding, by any person, or group of affiliated persons,
or entities not affiliated with the Company as of the Effective
Date of this Plan, without the consent of the Board, or
(ii) The election of individuals constituting a
majority of the Board who were not either (A) members of the
Board prior to the election or (B) recommended to the share-
holders by management of the Company, or
(iii) A legally binding and final vote of the share-
holders of the Company in favor of selling all or substantially
all of the assets of the Company.
Section 13
Rights of Employees; Participants
13.1 Employment. Nothing contained in the Plan or in
any Option, Restricted Stock Award or Stock Unit granted under
the Plan shall confer upon any Participant any right with respect
to the continuation of his employment by the Company or any
Affiliated Corporation, or interfere in any way with the right of
the Company or any Affiliated Corporation, subject to the terms
of any separate employment agreement to the contrary, at any time
to terminate such employment or to increase or decrease the
compensation of the Participant from the rate in existence at the
time of the grant of an Option, Restricted Stock Award or Stock
Unit. Whether an authorized leave of absence, or absence in
military or government service, shall constitute a termination of
employment shall be determined by the Committee at the time.
13.2 Nontransferability. Except as may be specifically
authorized by the Committee in accordance with the provisions of
subsection 7.2(e), no right or interest of any Participant in an
Option, a Restricted Stock Award (prior to the completion of the
restriction period applicable thereto), or a Stock Unit, granted
pursuant to the Plan, shall be assignable or transferable during
the lifetime of the Participant, either voluntarily or
involuntarily, or subjected to any lien, directly or indirectly,
by operation of law, or otherwise, including execution, levy,
garnishment, attachment, pledge or bankruptcy. In the event of a
Participant's death, a Participant's rights and interests in
Options, Restricted Stock Awards and Stock Units shall, to the
extent provided in Sections 7, 8, 9, and 11, be transferable by
will or the laws of descent and distribution, and payment of any
amounts due under the Plan shall be made to, and exercise of any
Options may be made by, the Participant's legal representatives,
heirs or legatees. If in the opinion of the Committee a person
entitled to payments or to exercise rights with respect to the
Plan is disabled from caring for his affairs because of mental
condition, physical condition or age, payment due such person may
be made to, and such rights shall be exercised by, such person's
guardian, conservator or other legal personal representative upon
furnishing the Committee with evidence satisfactory to the
Committee of such status.
13.3 No Plan Funding. Obligations to Participants
under the Plan will not be funded, trusteed, insured or secured
in any manner. The Participants under the Plan shall have no
security interest in any assets of the Company or any Affiliated
Corporation, and shall be only general creditors of the Company.
Section 14
General Restrictions
14.1 Investment Representations. The Company may
require any person to whom an Option, Restricted Stock Award,
Stock Unit, or Stock is granted, or to whom Stock is sold, as a
condition of exercising such Option, or receiving such Restricted
Stock Award, Stock Unit, or Stock, or purchasing such Stock, to
give written assurances in substance and form satisfactory to the
Company and its counsel to the effect that such person is
acquiring the Stock for his own account for investment and not
with any present intention of selling or otherwise distributing
the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with Federal and
applicable state securities laws.
14.2 Compliance with Securities Laws. Each Option,
Restricted Stock Award, Stock Unit, and Stock grant or purchase
shall be subject to the requirement that, if at any time counsel
to the Company shall determine that the listing, registration or
qualification of the shares subject to such Option, Restricted
Stock Award, Stock Unit, or Stock grant or purchase upon any
securities exchange or under any state or federal law, or the
consent or approval of any governmental or regulatory body, is
necessary as a condition of, or in connection with, the issuance
or purchase of shares thereunder, such Option, Restricted Stock
Award, Stock Unit, Stock grant or purchase may not be accepted or
exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Committee. Nothing
herein shall be deemed to require the Company to apply for or to
obtain such listing, registration or qualification.
14.3 Changes in Accounting Rules. Notwithstanding any
other provision of the Plan to the contrary, if, during the term
of the Plan, any changes in the financial or tax accounting rules
applicable to Options, Restricted Stock Awards or Stock Units
shall occur which, in the sole judgment of the Committee, may
have a material adverse effect on the reported earnings, assets
or liabilities of the Company, the Committee shall have the right
and power to modify as necessary, any then outstanding and
unexercised Options, outstanding Restricted Stock Awards, and
outstanding Stock Units as to which the applicable employment or
other restrictions have not been satisfied.
Section 15
Other Employee Benefits
The amount of any compensation deemed to be received by
a Participant as a result of the exercise of an Option, the sale
of shares received upon such exercise, the vesting of any
Restricted Stock Award, distributions with respect to Stock
Units, or the grant or purchase of Stock shall not constitute
"earnings" or "compensation" with respect to which any other
employee benefits of such employee are determined, including
without limitation benefits under any pension, profit sharing,
life insurance or salary continuation plan.
Section 16
Plan Amendment, Modification and Termination
The Board may at any time terminate, and from time to
time may amend or modify the Plan provided, however, that no
amendment or modification may become effective without approval
of the amendment or modification by the shareholders if
shareholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the
Company, on the advice of counsel, determines that shareholder
approval is otherwise necessary or desirable.
No amendment, modification or termination of the Plan
shall in any manner adversely affect any Options, Restricted
Stock Awards, Stock Units, or Stock theretofore granted under the
Plan, without the consent of the Participant holding such
Options, Restricted Stock Awards, Stock Units, or Stock.
The Committee may amend or modify, in any manner, any
Award granted under the Plan to any Participant; provided that no
amendment or modification may adversely affect the Award without
the consent of the Participant holding the Award.
Section 17
Withholding
17.1 Withholding Requirement. The Company's
obligations to deliver shares of Stock upon the exercise of any
Option, the vesting of any Restricted Stock Award, payment with
respect to Stock Units, or the grant of Stock shall be subject to
the Participant's satisfaction of all applicable federal, state
and local income and other tax withholding requirements.
17.2 Withholding With Stock. At the time the Committee
grants an Option, Restricted Stock Award, Stock Unit, or Stock,
it may, in its sole discretion, grant the Participant an election
to pay all such amounts of tax withholding, or any part thereof,
by electing to transfer to the Company, or to have the Company
withhold from shares otherwise issuable to the Participant,
shares of Stock having a value equal to the amount required to be
withheld or such lesser amount as may be elected by the
Participant. All elections shall be subject to the approval or
disapproval of the Committee. The value of shares of Stock to be
withheld shall be based on the Fair Market Value of the Stock on
the date that the amount of tax to be withheld is to be
determined (the "Tax Date"). Any such elections by Participants
to have shares of Stock withheld for this purpose will be subject
to the following restrictions:
(a) All elections must be made prior to the Tax Date.
(b) All elections shall be irrevocable.
(c) If the Participant is an officer or director of
the Company within the meaning of Section 16 of the 1934 Act
("Section 16"), the Participant must satisfy the requirements of
such Section 16 and any applicable Rules thereunder with respect
to the use of Stock to satisfy such tax withholding obligation.
Section 18
Company Right To Purchase Stock
18.1 Right of First Refusal.
(a) In the event of the death of a Participant, or
if a Participant at any time proposes to transfer any of the
Stock acquired pursuant to the Plan to a third party, the
Participant (or his personal representative or estate, as the
case may be) shall make a written offer (the "Offer") to sell
all of the Stock acquired pursuant to the Plan then owned by the
Participant (or thereafter acquired by the Participant's estate
or personal representative pursuant to any Award hereunder) to
the Company at the "purchase price" as hereinafter defined. The
Company shall have the right to elect to purchase all (but not
less than all) of the shares of Stock. The Company shall have
the right to elect to purchase the shares of Stock for a period
of ten days after the receipt by the Company of the Offer. In
all cases, the purchase price for the Stock shall be determined
pursuant to subsection 18.1(d).
(b) The Company shall exercise its right to purchase
the Stock by giving written notice of its exercise to the
Participant (or his personal representative or estate, as the
case may be). If the Company elects to purchase the Stock,
payment for the shares of Stock shall be made in full by Company
check. Any such payments shall be made within ten days after the
election to purchase has been exercised.
(c) If the Stock is not purchased pursuant to the
foregoing provisions, the shares of Stock may be transferred by
the Participant to the proposed transferee named in the Offer to
the Company, in the case of a proposed sale to a third party.
However, if such transfer is not made within 120 days following
the termination of the Company's right to purchase, a new offer
must be made to the Company before the Participant can transfer
any portion of his shares and the provisions of this Section 18
shall again apply to such transfer. In the event that the
Company's right of first refusal under this Section 18 is created
by an event other than a proposed transfer to a third party, the
shares of Stock shall remain subject to the provisions of this
Section 18 in the hands of the registered owner of the Stock.
(d) The purchase price for each share of Stock
purchased by the Company pursuant to this Section 18 shall be
equal to the Fair Market Value of the Stock on the date the
Company receives the Offer under subsection 18.1(a).
18.2 Marking of Certificates. Each certificate
representing shares of Stock acquired pursuant to this Plan shall
bear the following legend:
The shares of stock represented by this
Certificate are subject to all the terms of
the Graphic Packaging Equity Incentive Plan,
as the Plan may be amended from time to time
(the "Plan") and to the terms of a
[Non-Qualified Option Agreement] [Incentive
Option Agreement] [Restricted Stock
Agreement] [Stock Purchase Agreement] between
the Company and the Participant (the
"Agreement"). Copies of the Plan and the
Agreement are on file at the office of the
Company. The Plan and the Agreement, among
other things, limit the right of the Owner to
transfer the shares represented hereby and
provides that in certain circumstances the
shares may be purchased by the Company.
Section 19
Requirements of Law
19.1 Requirements of Law. The issuance of Stock and
the payment of cash pursuant to the Plan shall be subject to all
applicable laws, rules and regulations.
19.2 Federal Securities Law Requirements. If a
Participant is an officer or director of the Company within the
meaning of Section 16, Awards granted hereunder shall be subject
to all conditions required under Rule 16b-3, or any successor
rule promulgated under the 1934 Act, to qualify the Award for any
exception from the provisions of Section 16(b) of the 1934 Act
available under that Rule. Such conditions shall be set forth in
the agreement with the Participant which describes the Award.
19.3 Governing Law. The Plan and all agreements
hereunder shall be construed in accordance with and governed by
the laws of the State of Colorado.
Section 20
Duration of the Plan.
The Plan shall terminate at such time as may be
determined by the Board of Directors, and no Option, Restricted
Stock Award, Stock Unit, or Stock shall be granted, or offer to
purchase Stock made, after such termination, provided, however,
that no Incentive Options may be issued under the Plan after
January 1, 2007. Options, Restricted Stock Awards, and Stock
Units outstanding at the time of the Plan termination may
continue to be exercised, or become free of restrictions, or
paid, in accordance with their terms.
ATTEST: GRAPHIC PACKAGING
INTERNATIONAL CORPORATION
__________________________ By: _______________________
Dated: ___________________