MELAMINE CHEMICALS, INC.
1996 LONG-TERM INCENTIVE PLAN,
1. Purpose. The purpose of the 1996 Long-Term Incentive Plan
(the "Plan") of Melamine Chemicals, Inc. ("Melamine") is to increase
shareholder value and to advance the interests of Melamine and its
subsidiaries (collectively, the "Company") by furnishing a variety of
economic incentives (the "Incentives") designed to attract, retain and
motivate key employees, officers and directors and to strengthen the
mutuality of interests between such employees, officers and directors
and Melamine's shareholders. Incentives may consist of opportunities
to purchase or receive shares of common stock, $.01 par value per
share, of Melamine (the "Common Stock"), on terms determined under the
Plan. As used in the Plan, the term "subsidiary" means any
corporation of which Melamine owns (directly or indirectly) within the
meaning of Section 425(f) of the Internal Revenue Code of 1986, as
amended (the "Code"), 50% or more of the total combined voting power
of all classes of stock.
2. Administration.
2.1. Composition. The Plan shall be administered by the
long-term incentive plan committee of the Board of Directors of
Melamine (the "Committee"). The Committee shall consist of not
fewer than two members of the Board of Directors, each of whom
shall (a) qualify as a "non-employee director" under Rule 16b-3
under the Securities Exchange Act of 1934 (the "1934 Act"), as in
effect on August 15, 1996, or any successor rule, and (b) qualify
as "outside directors" under Section 162(m) of the Code.
2.2. Authority. The Committee shall have plenary authority
to award Incentives under the Plan, to interpret the Plan, to
establish any rules or regulations relating to the Plan that it
determines to be appropriate, to enter into agreements with
participants as to the terms of the Incentives (the "Incentive
Agreements") and to make any other determination that it believes
necessary or advisable for the proper administration of the Plan.
Its decisions in matters relating to the Plan shall be final and
conclusive on the Company and participants. The Committee may
delegate its authority hereunder to the extent provided in
Section 3 hereof. The Committee shall not have authority to
award Incentives under the Plan to directors who are not also
employees of the Company ("Outside Directors"). Outside
Directors may receive awards under the Plan only as specifically
provided in Section 12 hereof.
3. Eligible Participants. Key employees and officers of the
Company (including the Chairman of the Board and any other officer who
also serves as director of the Company) and persons providing services
as consultants or advisors to the Company shall become eligible to
receive Incentives under the Plan when designated by the Committee.
Employees may be designated individually or by groups or categories,
as the Committee deems appropriate. With respect to participants not
subject to Section 162(m) of the Code, the Committee may delegate to
appropriate personnel of the Company its authority to designate
participants, to determine the size and type of Incentives to be
received by those participants and to determine or modify performance
objectives for those participants. Outside Directors may participate
in the Plan only as specifically provided in Section 12 hereof.
4. Types of Incentives. Incentives may be granted under the
Plan to eligible participants in any of the following forms, either
individually or in combination, (a) incentive stock options and non-
qualified stock options; (b) stock appreciation rights ("SARs") (c)
restricted stock; (d) performance shares; (e) stock awards; and (f)
cash awards.
5. Shares Subject to the Plan.
5.1. Number of Shares. Subject to adjustment as provided in
Section 10.6, a total of 350,000 shares of Common Stock are
authorized to be issued under the Plan. Incentives with respect
to no more than 35,000 shares of Common Stock may be granted
through the Plan to a single participant in one calendar year.
In the event that a stock option, SAR or performance share
granted hereunder expires or is terminated or cancelled prior to
exercise or payment, any shares of Common Stock that were
issuable thereunder may again be issued under the Plan. In the
event that shares of Common Stock are issued as Incentives under
the Plan and thereafter are forfeited or reacquired by the
Company pursuant to rights reserved upon issuance thereof, such
forfeited and reacquired shares may again be issued under the
Plan. If an Incentive is to be paid in cash by its terms, the
Committee need not make a deduction from the shares of Common
Stock issuable under the Plan with respect thereto. If and to
the extent that an Incentive may be paid in cash or shares of
Common Stock, the total number of shares available for issuance
hereunder shall be debited by the number of shares payable under
such Incentive, provided that upon any payment of all or part of
such Incentive in cash, the total number of shares available for
issuance hereunder shall be credited with the appropriate number
of shares represented by the cash payment, as determined in the
sole discretion of the Committee. Additional rules for
determining the number of shares granted under the Plan may be
made by the Committee, as it deems necessary or appropriate.
5.2. Type of Common Stock. Common Stock issued under the
Plan may be authorized and unissued shares or issued shares held
as treasury shares.
6. Stock Options. A stock option is a right to purchase shares
of Common Stock from Melamine. Stock options granted under this Plan
may be incentive stock options or non-qualified stock options. Any
option that is designated as a non-qualified stock option shall not be
treated as an incentive stock option. Each stock option granted by
the Committee under this Plan shall be subject to the following terms
and conditions:
6.1. Price. The exercise price per share shall be
determined by the Committee, subject to adjustment under Section
13.5; provided that in no event shall the exercise price be less
than the Fair Market Value of a share of Common Stock on the date
of grant.
6.2. Number. The number of shares of Common Stock subject
to the option shall be determined by the Committee, subject to
Section 5.1 and subject to adjustment as provided in Section
13.5.
6.3. Duration and Time for Exercise. Subject to earlier
termination as provided in Section 13.3, the term of each stock
option shall be determined by the Committee. Subject to Section
13.11, each stock option shall become exercisable at such time or
times during its term as shall be determined by the Committee.
Notwithstanding the foregoing, the Committee may accelerate the
exercisability of any stock option at any time, in addition to
the automatic acceleration of stock options under Section 13.11.
6.4. Repurchase. Upon approval of the Committee, the
Company may repurchase a previously granted stock option from a
participant by mutual agreement before such option has been
exercised by payment to the participant of the amount per share
by which: (i) the Fair Market Value (as defined in Section
13.12) of the Common Stock subject to the option on the business
day immediately preceding the date of purchase exceeds (ii) the
exercise price.
6.5. Manner of Exercise. A stock option may be exercised,
in whole or in part, by giving written notice to the Company,
specifying the number of shares of Common Stock to be purchased.
The exercise notice shall be accompanied by the full purchase
price for such shares. The option price shall be payable in
United States dollars and may be paid by (a) cash; (b)
uncertified or certified check; (c) unless otherwise determined
by the Committee, by delivery of shares of Common Stock held by
the optionee for at least six months, which shares shall be
valued for this purpose at the Fair Market Value on the business
day immediately preceding the date such option is exercised; (d)
by delivering a properly executed exercise notice together with
irrevocable instructions to a broker approved by Melamine (with a
copy to Melamine) to promptly deliver to Melamine the amount of
sale or loan proceeds to pay the exercise price; (e) in such
other manner as may be authorized from time to time by the
Committee. In the case of delivery of an uncertified check upon
exercise of a stock option, no shares shall be issued until the
check has been paid in full. Prior to the issuance of shares of
Common Stock upon the exercise of a stock option, a participant
shall have no rights as a shareholder.
6.6. Incentive Stock Options. Notwithstanding anything in
the Plan to the contrary, the following additional provisions
shall apply to the grant of stock options that are intended to
qualify as Incentive Stock Options (as such term is defined in
Section 422 of the Code):
(a) Any Incentive Stock Option agreement authorized
under the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events be
consistent with and contain or be deemed to contain all
provisions required in order to qualify the options as
Incentive Stock Options.
(b) All Incentive Stock Options must be granted within
ten years from the date on which this Plan is adopted by the
Board of Directors.
(c) Unless sooner exercised, all Incentive Stock
Options shall expire no later than ten years after the date
of grant.
(d) No Incentive Stock Options shall be granted to any
participant who, at the time such option is granted, would
own (within the meaning of Section 422 of the Code) stock
possessing more than 10% of the total combined voting power
of all classes of stock of the employer corporation or of
its parent or subsidiary corporation.
(e) The aggregate Fair Market Value (determined with
respect to each Incentive Stock Option as of the time such
Incentive Stock Option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for
the first time by a participant during any calendar year
(under the Plan or any other plan of Melamine or any of its
subsidiaries) shall not exceed $100,000. To the extent that
such limitation is exceeded, such options shall not be
treated, for federal income tax purposes, as Incentive Stock
Options.
6.7. Equity Maintenance. If a participant exercises an
option during the term of his employment with the Company, and
pays the exercise price (or any portion thereof) through the
surrender of shares of outstanding Common Stock owned by the
participant, the Committee may, in its discretion, grant to such
participant an additional option to purchase the number of shares
of Common Stock equal to the shares of Common Stock so
surrendered by such participant. Any such additional options
granted by the Committee shall be exercisable at the Fair Market
Value of the Common Stock determined as of the business day
immediately preceding the respective dates such additional
options may be granted. As stated above, such additional options
may be granted only in connection with the exercise of options by
the participant during the term of his active employment with the
Company. The grant of such additional options under this Section
6.7 shall be made upon such other terms and conditions as the
Committee may from time to time determine.
7. Restricted Stock.
7.1. Grant of Restricted Stock. The Committee may award
shares of restricted stock to such officers and key employees as
the Committee determines pursuant to the terms of Section 3. An
award of restricted stock may be subject to the attainment of
specified performance goals or targets, restrictions on transfer,
forfeitability provisions and such other terms and conditions as
the Committee may determine, subject to the provisions of the
Plan. To the extent restricted stock is intended to qualify as
performance based compensation under Section 162(m) of the Code,
it must meet the additional requirements imposed thereby.
7.2. The Restricted Period. At the time an award of
restricted stock is made, the Committee shall establish a period
of time during which the transfer of the shares of restricted
stock shall be restricted (the "Restricted Period"). The
Restricted Period shall be a minimum of three years, except that
if the vesting of the shares of Restricted Stock is based upon
the attainment of performance goals, a minimum Restricted Period
of one year is permitted. Each award of restricted stock may
have a different Restricted Period. The expiration of the
Restricted Period shall also occur as provided under Section 13.3
and under the conditions described in Section 13.11 hereof.
7.3. Escrow. The participant receiving restricted stock
shall enter into an Incentive Agreement with the Company setting
forth the conditions of the grant. Certificates representing
shares of restricted stock shall be registered in the name of the
participant and deposited with the Company, together with a stock
power endorsed in blank by the participant. Each such
certificate shall bear a legend in substantially the following
form:
The transferability of this certificate and the shares
of Common Stock represented by it are subject to the
terms and conditions (including conditions of
forfeiture) contained in the Melamine Chemicals, Inc.
1996 Long-Term Incentive Plan (the "Plan"), and an
agreement entered into between the registered owner and
Melamine Chemicals, Inc. thereunder. Copies of the
Plan and the agreement are on file at the principal
office of the Company.
7.4. Dividends on Restricted Stock. Any and all cash and
stock dividends paid with respect to the shares of restricted
stock shall be subject to any restrictions on transfer,
forfeitability provisions or reinvestment requirements as the
Committee may, in its discretion, prescribe in the Incentive
Agreement.
7.5. Forfeiture. In the event of the forfeiture of any
shares of restricted stock under the terms provided in the
Incentive Agreement (including any additional shares of
restricted stock that may result from the reinvestment of cash
and stock dividends, if so provided in the Incentive Agreement),
such forfeited shares shall be surrendered and the certificates
cancelled. The participants shall have the same rights and
privileges, and be subject to the same forfeiture provisions,
with respect to any additional shares received pursuant to
Section 13.5 due to a recapitalization, merger or other change in
capitalization.
7.6. Expiration of Restricted Period. Upon the expiration
or termination of the Restricted Period and the satisfaction of
any other conditions prescribed by the Committee or at such
earlier time as provided for in Section 7.2 and in the Incentive
Agreement or an amendment thereto, the restrictions applicable to
the restricted stock shall lapse and a stock certificate for the
number of shares of restricted stock with respect to which the
restrictions have lapsed shall be delivered, free of all such
restrictions and legends, except any that may be imposed by law,
to the participant or the participant's estate, as the case may
be.
7.7. Rights as a Shareholder. Subject to the terms and
conditions of the Plan and subject to any restrictions on the
receipt of dividends that may be imposed in the Incentive
Agreement, each participant receiving restricted stock shall have
all the rights of a shareholder with respect to shares of stock
during any period in which such shares are subject to forfeiture
and restrictions on transfer, including without limitation, the
right to vote any shares of voting Common Stock.
8. Stock Appreciation Rights. A SAR is a right to receive,
without payment to the Company, a number of shares of Common Stock,
cash or any combination thereof, the amount of which is determined
pursuant to the formula set forth in Section 8.4. A SAR may be
granted (a) with respect to any stock option granted under the Plan,
either concurrently with the grant of such stock option or at such
later time as determined by the Committee (as to all or any portion of
the shares of Common Stock subject to the stock option), or (b) alone,
without reference to any related stock option. Each SAR granted by
the Committee under the Plan shall be subject to the following terms
and conditions:
8.1. Number. Each SAR granted to any participant shall
relate to such number of shares of Common Stock as shall be
determined by the Committee, subject to Section 5.1 and subject
to adjustment as provided in Section 13.5. In the case of a SAR
granted with respect to a stock option, the number of shares of
Common Stock to which the SAR pertains shall be reduced in the
same proportion that the holder of the option exercises the
related stock option.
8.2. Duration and Time for Exercise. Subject to Section
13.11, the term and exercisability of each SAR shall be
determined by the Committee. Unless otherwise provided by the
Committee in the Incentive Agreement, each SAR issued in
connection with a stock option shall become exercisable at the
same time or times, to the same extent and upon the same
conditions as the related stock option. Notwithstanding the
foregoing, the Committee may in its discretion accelerate the
exercisability of any SAR at any time in addition to automatic
acceleration of SARs under Section 13.11.
8.3. Exercise. A SAR may be exercised, in whole or in part,
by giving written notice to the Company, specifying the number of
SARs that the holder wishes to exercise. The Company shall,
within 30 days of receipt of notice of exercise by the Company,
deliver to the exercising holder certificates for the shares of
Common Stock or cash or both, as determined by the Committee, to
which the holder is entitled pursuant to Section 8.4.
8.4. Payment. Subject to the right of the Committee to
deliver cash in lieu of shares of Common Stock, the number of
shares of Common Stock that shall be issuable upon the exercise
of an SAR shall be determined by dividing:
(a) the number of shares of Common Stock as to which
the SAR is exercised multiplied by the dollar amount of the
appreciation in such shares (for this purpose, the
"appreciation" shall be the amount by which the Fair Market
Value of the shares of Common Stock subject to the SAR on
the Exercise Date exceeds (1) in the case of a SAR related
to a stock option, the purchase price of the shares of
Common Stock under the stock option or (2) in the case of a
SAR granted alone, without reference to a related stock
option, an amount equal to the Fair Market Value of a share
of Common Stock on the date of grant, which shall be
determined by the Committee at the time of grant, subject to
adjustment under Section 13.5); by
(b) the Fair Market Value of a share of Common Stock on
the Exercise Date.
In lieu of issuing shares of Common Stock upon the exercise
of a SAR, the Committee may elect to pay the holder of the SAR
cash equal to the Fair Market Value on the Exercise Date of any
or all of the shares which would otherwise be issuable. No
fractional shares of Common Stock shall be issued upon the
exercise of a SAR; instead, the holder of a SAR shall be entitled
to receive a cash adjustment equal to the same fraction of the
Fair Market Value of a share of Common Stock on the Exercise Date
or to purchase the portion necessary to make a whole share at its
Fair Market Value on the Exercise Date.
9. Performance Shares. A performance share consists of an
award that may be paid in shares of Common Stock or in cash, as
described below. The award of performance shares shall be subject to
such terms and conditions as the Committee deems appropriate.
9.1. Performance Objectives. Each performance share will be
subject to performance objectives for Melamine or one of its
subsidiaries, divisions or departments to be achieved by the end
of a specified period. The number of performance shares awarded
shall be determined by the Committee and may be subject to such
terms and conditions as the Committee shall determine. If the
performance objectives are achieved, each participant will be
paid (a) a number of shares of Common Stock equal to the number
of performance shares initially granted to that participant; (b)
a cash payment equal to the Fair Market Value of such number of
shares of Common Stock on the date the performance objectives are
met or such other date as may be provided by the Committee or (c)
a combination of shares of Common Stock and cash, as may be
provided by the Committee. If such objectives are not met, each
award of performance shares may provide for lesser payments in
accordance with a pre-established formula set forth in the
Incentive Agreement. To the extent a performance share is
intended to qualify as performance based compensation under
Section 162(m) of the Code, it must meet the additional
requirements imposed thereby.
9.2. Not a Shareholder. The award of performance shares to
a participant shall not create any rights in such participant as
a shareholder of the Company, until the payment of shares of
Common Stock with respect to an award, at which time such stock
shall be considered issued and outstanding.
9.3. Dividend Equivalent Payments. A performance share
award may be granted by the Committee in conjunction with
dividend equivalent payment rights or other such rights.
Dividend equivalent payments may be made to the participant at
the time of the payment of the dividend or issuance of the other
right or at the end of the specified performance period or may be
deemed to be invested in additional performance shares at the
Fair Market Value of a share of Common Stock on the date of
payment of the dividend or issuance of the right.
10. Stock Awards. A stock award consists of the transfer by the
Company to a participant of shares of Common Stock, without other
payment therefore, as additional compensation for services
previously provided to the Company. The number of shares to be
transferred by the Company to a participant pursuant to a stock
award shall be determined by the Committee.
11. Cash Awards. A cash award consists of a monetary payment
made by the Company to a participant as additional compensation
for his services to the Company. Payment of a cash award may
relate to the tax liability of a participant in connection with
the grant, exercise, or payment of an Incentive or may depend on
achievement of performance objectives by the Company or by
individuals. The amount of any monetary payment constituting a
cash award shall be determined by the Committee in its sole
discretion. Cash awards may be subject to other terms and
conditions, which may vary from time to time among participants,
as the Committee determines to be appropriate.
12. Stock Options for Outside Directors.
12.1 Eligibility Period. For as long as the Plan remains in
effect and shares of Common Stock remain available for issuance
hereunder, each Outside Director shall be automatically granted a
non-qualified stock option to acquire shares of Common Stock on
the day immediately following the annual meeting of shareholders
of Melamine. The number of shares of Common Stock with respect
to which options shall be granted to each Outside Director shall
be determined by dividing the total cash compensation paid to the
Outside Director for services rendered as a director for the
previous twelve months divided by the Fair Market Value of a
share of Common Stock on the date of grant, rounded up to the
nearest whole share.
12.2 Exercisability of Stock Options. The stock options
granted to Outside Directors under this Section 12 shall become
exercisable one year following the date of grant and shall expire
ten years following the date of grant.
12.3 Exercise Price. The Exercise Price of the Stock
Options granted to Outside Directors shall be equal to the Fair
Market Value, as defined in the Plan, of a share of Common Stock
on the date of grant. The Exercise Price may be paid as provided
in Section 6.5 hereof, including pursuant to a brokerage
arrangement approved in advance by the Committee.
12.4 Exercise After Termination of Board Service. In the
event an Outside Director ceases to serve on the Board, the stock
options granted hereunder must be exercised, to the extent
otherwise exercisable at the time of termination of Board
service, within one year from termination of Board service;
provided, however, that in the event of termination of Board
service as a result of retirement on or after reaching age 65,
the stock options must be exercised within five years from the
date of retirement; and further provided, that no stock options
may be exercised later than ten years after the date of grant.
13. General.
13.1. Duration. Subject to Section 13.10, the Plan shall
remain in effect until all Incentives granted under the Plan have
either been satisfied by the issuance of shares of Common Stock
or the payment of cash or been terminated under the terms of the
Plan and all restrictions imposed on shares of Common Stock in
connection with their issuance under the Plan have lapsed.
13.2. Transferability of Incentives. Options, SARs and
performance shares granted under the Plan shall not be
transferred, pledged, assigned or otherwise encumbered by the
holder thereof except: (a) by will; (b) by the laws of descent
and distribution; or (c) in the case of non-qualified stock
options, SARs, and performance shares only, pursuant to a
domestic relations order, as defined in the Code, to family
members, to a family partnership, to a family limited liability
company, to a trust for the benefit of family members or to
charitable institutions, if permitted by the Committee and so
provided in the Incentive Agreement or an amendment thereto. Any
attempted assignment, transfer, pledge, hypothecation or other
disposition of an Incentive, or levy of attachment or similar
process upon the Incentive not specifically permitted herein,
shall be null and void and without effect.
13.3. Effect of Termination of Employment or Death. Except
as provided in Section 12.4 with respect to Outside Directors, in
the event that a participant ceases to be an employee of the
Company for any reason, including death, disability, early
retirement or normal retirement, any Incentives may be exercised,
shall vest or shall expire at such times as may be determined by
the Committee in the Incentive Agreement. The Committee has
complete authority to modify the treatment of an Incentive in the
event of termination of employment of a participant by means of
an amendment to the Incentive Agreement. Consent of the
participant to the modification is required only if the
modification impairs the rights previously provided to the
participant in the Incentive Agreement.
13.4. Additional Condition. Anything in this Plan to the
contrary notwithstanding: (a) the Company may, if it shall
determine it necessary or desirable for any reason, at the time
of award of any Incentive or the issuance of any shares of Common
Stock pursuant to any Incentive, require the recipient of the
Incentive, as a condition to the receipt thereof or to the
receipt of shares of Common Stock issued pursuant thereto, to
deliver to the Company a written representation of present
intention to acquire the Incentive or the shares of Common Stock
issued pursuant thereto for his own account for investment and
not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing,
registration or qualification (or any updating of any such
document) of any Incentive or the shares of Common Stock issuable
pursuant thereto is necessary on any securities exchange or under
any federal or state securities or blue sky law, or that the
consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with
the award of any Incentive, the issuance of shares of Common
Stock pursuant thereto, or the removal of any restrictions
imposed on such shares, such Incentive shall not be awarded or
such shares of Common Stock shall not be issued or such restric-
tions shall not be removed, as the case may be, in whole or in
part, unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
13.5. Adjustment. In the event of any recapitalization,
stock dividend, stock split, combination of shares or other
change in the Common Stock, the number of shares of Common Stock
then subject to the Plan, including shares subject to outstanding
Incentives, shall be adjusted in proportion to the change in
outstanding shares of Common Stock. In the event of any such
adjustments, the purchase price of any option, the performance
objectives of any Incentive, and the shares of Common Stock
issuable pursuant to any Incentive shall be adjusted as and to
the extent appropriate, in the reasonable discretion of the
Committee, to provide participants with the same relative rights
before and after such adjustment.
13.6. Incentive Agreements. The terms of each Incentive
shall be stated in an agreement approved by the Committee. The
Committee may also determine to enter into agreements with
holders of options to reclassify or convert certain outstanding
options, within the terms of the Plan, as Incentive Stock Options
or as non-qualified stock options.
13.7. Withholding.
(a) The Company shall have the right to withhold from
any payments made under the Plan or to collect as a
condition of payment, any taxes required by law to be
withheld. At any time that a participant is required to pay
to the Company an amount required to be withheld under
applicable income tax laws in connection with the issuance
of Common Stock, the lapse of restrictions on Common Stock
or the exercise of an option, the participant may, subject
to the approval of the Committee, satisfy this obligation in
whole or in part by electing (the "Election") to have the
Company withhold shares of Common Stock having a value equal
to the amount required to be withheld. The value of the
shares to be withheld shall be based on the Fair Market
Value of the Common Stock on the date that the amount of tax
to be withheld shall be determined ("Tax Date").
(b) Each Election must be made prior to the Tax Date.
The Committee may disapprove of any Election, may suspend or
terminate the right to make Elections, or may provide with
respect to any Incentive that the right to make Elections
shall not apply to such Incentive. If a participant makes
an election under Section 83(b) of the Internal Revenue Code
with respect to shares of restricted stock, an Election is
not permitted to be made.
13.8. No Continued Employment. No participant under the
Plan shall have any right, because of his or her participation,
to continue in the employ of the Company for any period of time
or to any right to continue his or her present or any other rate
of compensation.
13.9. Deferral Permitted. Payment of cash or distribution
of any shares of Common Stock to which a participant is entitled
under any Incentive shall be made as provided in the Incentive
Agreement. Payment may be deferred at the option of the
participant if provided in the Incentive Agreement.
13.10. Amendment of the Plan. The Board may amend or
discontinue the Plan at any time. In addition, no amendment or
discontinuance shall, subject to adjustments permitted under
Section 12.5, change or impair, without the consent of the
recipient, an Incentive previously granted, except that the
Company retains the right to (a) convert any outstanding
Incentive Stock Option to a non-qualified stock option, (b)
require the forfeiture of an Incentive if a participant's
employment is terminated for cause, and (c) exercise all rights
under Section 13.11.
13.11. Change of Control.
(a) Notwithstanding anything to the contrary in the
Plan or any related Incentive Agreement, if
(1.) Melamine shall not be the surviving entity in
any merger, consolidation or other reorganization (or
survives only as a subsidiary of an entity other than a
previously wholly-owned subsidiary of the Company),
(2.) the Company sells, leases or exchanges all or
substantially all of its assets to any other person or
entity (other than a wholly-owned subsidiary of the
Company),
(3.) Melamine is to be dissolved or liquidated,
(4.) any person or entity, including a "group" as
contemplated by section 13(d)(3) of the 1934 Act, other
than an employee benefit plan of the Company or a
related trust, acquires or gains ownership or control
(including, without limitation, power to vote) of more
than 30% of the outstanding shares of Melamine's voting
stock, or
(5.) as a result of or in connection with a
contested election of directors, the persons who were
directors of Melamine before such election shall cease
to constitute a majority of the Board of Directors of
Melamine (each such event is referred to herein as a
"Corporate Change"),
then upon the approval by the Board of Directors of Melamine
of any Corporate Change of the type described in clauses
(a)(1.) to (a)(3.) or upon a Corporate Change described in
clauses (a)(4.) or (a)(5.), all outstanding options and SARs
shall automatically become fully exercisable, all
restrictions or limitations on any Incentives shall lapse
and all performance criteria and other conditions relating
to the payment of Incentives shall be deemed to be achieved
or waived by the Company, without the necessity of any
action by any person.
(b) In addition, no later than (i.) 30 days after the
approval by the Board of Directors of Melamine of any
Corporate Change of the type described in clauses (a)(1.) to
(a)(3.) or (ii.) 30 days after a Corporate Change of the
type described in clauses (a)(4.) or (a)(5.), the Committee,
acting in its sole discretion without the consent or
approval of any participant (and notwithstanding any removal
or attempted removal of some or all of the members thereof
as directors or committee members), may act to effect one or
more of the following alternatives, which may vary among
individual participants and which may vary among Incentives
held by any individual participant:
(1.) require that all outstanding options and/or
SARs be exercised on or before a specified date (before
or after such Corporate Change) fixed by the Committee,
after which specified date all unexercised options and
SARs and all rights of participants thereunder shall
terminate,
(2.) provide for mandatory conversion of some or
all of the outstanding options and SARs held by some or
all participants as of a date, before or after such
Corporate Change, specified by the Committee, in which
event such options and SARs shall be deemed
automatically cancelled and the Company shall pay, or
cause to be paid, to each such participant an amount of
cash per share equal to the excess, if any, of the
Change of Control Value of the shares subject to such
option or SAR, as defined and calculated below, over
the exercise price(s) of such options or SARs, or, in
lieu of such cash payment, the issuance of Common Stock
having a Fair Market Value equal to such excess,
(3.) make such equitable adjustments to Incentives
then outstanding as the Committee deems appropriate to
reflect such Corporate Change (provided, however, that
the Committee may determine in its sole discretion that
no adjustment is necessary to Incentives then
outstanding) or
(4.) provide that thereafter upon any exercise of
an option or SAR theretofore granted the participant
shall be entitled to purchase under such option or SAR,
in lieu of the number of shares of Common Stock then
covered by such option or SAR, the number and class of
shares of stock or other securities or property
(including, without limitation, cash) to which the
participant would have been entitled pursuant to the
terms of the agreement providing for the merger,
consolidation, asset sale, dissolution or other
Corporate Change of the type described in clause
(a)(1.) to (a)(3.) above, if, immediately prior to such
Corporate Change, the participant had been the holder
of record of the number of shares of Common Stock then
covered by such options or SARs.
(c) For the purposes of clause B.(ii)) above, the
"Change of Control Value" shall equal the amount determined
by whichever of the following items is applicable:
(1.) the per share price offered to shareholders
of Melamine in any such merger, consolidation or other
reorganization, determined as of the date of the
definitive agreement providing for such transaction,
(2.) the price per share offered to shareholders
of Melamine in any tender offer or exchange offer
whereby a Corporate Change takes place, or
(3.) in all other events, the Fair Market Value
per share of Common Stock into which such options or
SARs being converted are exercisable, as determined by
the Committee as of the date determined by the
Committee to be the date of conversion of such options
or SARs.
(d) In the event that the consideration offered to
shareholders of Melamine in any transaction described herein
consists of anything other than cash, the Committee shall
determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.
13.12. Definition of Fair Market Value. Whenever "Fair
Market Value" of Common Stock shall be determined for purposes of
this Plan, it shall be determined as follows: (i) if the Common
Stock is listed on an established stock exchange or any automated
quotation system that provides sale quotations, the closing sale
price for a share of the Common Stock on such exchange or
quotation system on the applicable date, or if no sale of the
Common Stock shall have been made on that day, on the next
preceding day on which there was a sale of the Common Stock; (ii)
if the Common Stock is not listed on any exchange or quotation
system, but bid and asked prices are quoted and published, the
mean between the quoted bid and asked prices on the applicable
date, and if bid and asked prices are not available on such day,
on the next preceding day on which such prices were available;
and (iii) if the Common Stock is not regularly quoted, the fair
market value of a share of Common Stock on the applicable date as
established by the Committee in good faith.