AMENDED AND RESTATED DECRANE AIRCRAFT HOLDINGS, INC.
1993 SHARE INCENTIVE PLAN
1. GENERAL. This Amended and Restated Share Incentive Plan (the "Plan")
provides eligible employees of DeCrane Aircraft Holdings, Inc., an Ohio
corporation (the "Company"), and its subsidiaries with the opportunity to
acquire or expand their equity interest in the Company by making available for
award or purchase Common Shares, without par value, of the Company ("Common
Shares"), through the granting of nontransferable options to purchase Common
Shares ("Stock Options"), the granting of Common Shares subject to temporal
restrictions on transfer and substantial risks of forfeiture ("Restricted
Stock"), and the granting of nontransferable options to receive payments based
on the appreciation of Common Shares ("SARs"). Stock Options, Restricted Stock
and SARs shall be collectively referred to herein as "Grants," and an individual
grant of Stock Options. Restricted Stock or SARs shall be individually
referred to herein as a "Grant".
It is intended that key employees may be granted simultaneously or from
time to time, Stock Options that qualify as incentive stock options ("Incentive
Stock Options") under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") or Stock Options that do not so qualify ("Non-qualified
Stock Options"). No provision of the Plan is intended or shall be construed to
grant employees alternative rights in any Incentive Stock Option granted under
the Plan so as to prevent such Option from qualifying under Section 422 of the
Code.
The Plan is intended to conform to the extent necessary with all provisions
of the Securities Exchange Act of 1933, as amended (the "Securities Act"), and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any
and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including, without limitation, Rule 16b-3.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and Stock Options shall be granted and may be exercised, only in such a manner
as to conform to such laws, rules and regulations. To the extent permitted by
applicable law, the Plan and Stock Options granted hereunder shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.
2. PURPOSE OF THE PLAN. The purpose of the Plan is to provide continuing
incentives to key employees of the Company and of any subsidiary corporation of
the Company , by encouraging such key employees to acquire new or additional
share ownership in the Company, thereby increasing their proprietary interest in
the Company's business and enhancing their personal interest in the Company's
success.
For purposes of the Plan, a "subsidiary corporation" consists of any
corporation fifty percent (50%) of the stock of which is directly or indirectly
owned or controlled by the Company.
3. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective upon its
adoption by the Board of Directors, subject to approval by holders of a majority
of the outstanding shares of voting capital stock of the Company. If the plan
is not so approved within twelve (1) months after the date the Plan is adopted
by the Board of directors, the Plan and any Grants made hereunder shall be null
and void. However, if the Plan is so approved, no further shareholder approval
shall be required with respect to the making of Grants pursuant to the Plan,
except as provided in Section 12 hereof.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a
committee selected by the Board of Directors of the Company (the "Board") by
majority and composed of no fewer than two (2) members of the Board (such
committee, the "Administrator"). No person shall be appointed to the
Administrator who, during the one-year period immediately preceding such
person's appointment to the Administrator, has received any Grants under the
Plan or any similar stock option or stock incentive plan, other than a formula-
based plan, maintained by the Company or any subsidiary corporation. A member
of the Administrator shall not be eligible to participate in the Plan while
serving on the Administrator.
A majority of the members of the Administrator shall constitute a quorum.
The acts of a majority of the members present at any meeting at which a quorum
is present (or acts unanimously approved in writing by the members of the
Administrator) shall constitute binding acts of the Administrator.
Subject to the terms and conditions of the Plan, the Administrator shall be
authorized and empowered:
(a) To select the key employees to whom Grants may be made;
(b) To determine the number of Common Shares to be covered by any Grant;
(c) To prescribe the terms and conditions of any Grants made under the
Plan, and the form(s) and agreement(s) used in connection with such
Grants, which shall include agreements governing the granting of
Restricted Stock, Stock Options and/or SARs, which may provide that
the stock which is the subject of any such Grant shall be subject to
the restrictions on transfer contained in any agreement
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in effect among the Company and one or more of its shareholders;
(d) To determine the time or times when Stock Options and/or SARs will be
granted and when they will terminate in whole or in part;
(e) To determine the time or times when Stock Options and SARs that are
granted may be exercised;
(f) To determine, at the time a Stock Option is granted under the Plan,
whether such Stock Option is an Incentive Stock Option entitled to the
benefits of Section 422 of the Code;
(g) To establish any other Stock Option agreement provisions not
inconsistent with the terms and conditions of the Plan or, where the
Stock Option is an Incentive Stock Option, with the terms and
conditions of Section 422 of the Code; and
(h) To determine whether SARs will be made part of any Grants consisting
of Stock Options, and to approve any SARs made part of any such Grants
pursuant to Section 9 hereof.
5. EMPLOYEES ELIGIBLE FOR GRANTS. Grants may be made from time to time to
those key employees of the Company or a subsidiary corporation who are
designated by the Administrator in its sole and exclusive discretion. Key
employees may include, but shall not necessarily be limited to, members of the
Board of Directors (excluding members of the Administrator) and officers of the
Company and any subsidiary corporation; however, Stock Options intended to
qualify as Incentive Stock Options shall only be granted to key employees while
actually employed by the Company or a subsidiary corporation. The Administrator
may grant more than one Stock Option, with or without SARs, to the same key
employee. No Stock Option shall be granted to any key employee during any
period of time when such key employee is on a leave of absence.
6. SHARES SUBJECT TO THE PLAN. The shares to be issued pursuant to any
Grant made under the Plan shall be Common Shares. Either Common Shares held as
treasury stock or authorized and unissued Common shares, or both, may be so
issued, in such amount or amounts within the maximum limits of the Plan as the
Administrator shall from time to time determine. In the event a SAR is granted
in tandem with a Stock Option pursuant to Section 9 and such SAR is thereafter
exercised in whole or in part, then such Stock Option or the portion thereof to
which the duly exercised SAR relates shall be deemed to have been exercised for
purposes of such
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Stock Option, but may be made available for reoffering under the Plan to any
eligible employee.
Subject to the provisions of the next succeeding paragraph of this Section
6 and the provisions of Section 7(h), the aggregate number of Common Shares that
can be actually issued under the Plan (exclusive of Restricted Stock forfeited
under the Plan before the holder thereof received any benefits of ownership,
such as dividends) shall be eight hundred sixty-seven thousand (867,000) Common
shares.
If, at any time subsequent to the date of adoption of the Plan by the Board
of Directors, the number of Common Shares are increased or decreased, or changed
into or exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation (whether as a result of a
stock split, stock dividend, combination or exchange of shares, redesignation,
merger, consolidation, recapitalization or otherwise): (1) there shall
automatically be substituted for each Common Share subject to an unexercised
Stock Option or SAR (in whole or in part) granted under the Plan, the number and
kind of shares of stock or other securities into which each outstanding Common
share shall be changed or for which each such Common Share, shall be exchanged;
(ii) the option price per Common share or unit of securities shall be increased
or decreased proportionately so that the aggregate purchase price for the
securities subject to a Stock Option or SAR shall remain the same as
immediately prior to such event; and (iii) any outstanding Restricted Stock that
is converted, exchanged or otherwise changed into a different number or kind of
stock or security shall continue to be subject to any such Restricted Stock. In
addition to the foregoing, the Administrator shall be entitled in the event of
any such increase, decrease or exchange of Common Shares to make other
adjustments to the securities subject to a Stock Option or SAR, the provisions
of the Plan, and to any related Stock Option or SAR agreements (including
adjustments which may provide for the elimination of fractional shares), where
necessary (under Section 422(a) (2) of the code or otherwise) to preserve the
terms and conditions of any Grants hereunder.
7. STOCK OPTION PROVISIONS.
(a). GENERAL. The Administrator may grant to key employees (also referred
to as "Optionees") nontransferable Stock Options that either qualify as
Incentive Stock Options under Section 422 of the Code or do not so qualify.
However, any Stock Option which is an Incentive Stock Option shall only be
granted within 10 years from the earlier of (I) the date this Plan is
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adopted by the Board of directors of the Company and (ii) the date this Plan is
approved by the shareholders of the Company.
(b) STOCK OPTION PRICE. The option price per Common Share which may be
purchased under an Incentive Stock Option under the Plan shall be determined by
the Administrator at the time of Grant, but shall not be less than one hundred
percent (100%) of the fair market value of a Common Share, determined as of the
date such Option is granted; however, if a key employee to whom an Incentive
Stock Option is granted is, at the time of the grant of such Option, an "owner"
as defined in Section 422(b) (6) of the Code (modified as provided in Section
424(d) of the Code) of more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any subsidiary corporation (a
"Substantial Shareholder"), the price per Common Share of such Option, as
determined by the Administrator, shall not be less than one hundred ten percent
(110%) of the market value of a Common share under each Stock Option granted
pursuant to the Plan which is not an Incentive Stock Option shall be determined
by the Administrator at the time of Grant. Except as specifically provided
above, the fair market value of a Common Share shall be determined in accordance
with procedures to be established by the Administrator. The day on which the
Administrator approves the granting of a Stock Option shall be considered the
date on which such Option is granted.
(c) PERIOD OF STOCK OPTION. The Administrator shall determine when each
Stock Option is to expire. However, no Incentive Stock Option shall be
exercisable after the expiration of ten (10) years from the date upon which such
Option is granted. Further, no Incentive Stock Option granted to an employee
who is a Substantial Shareholder at the time of the grant of such Option shall
be exercisable after the expiration of (5) years from the date of grant of such
Option.
(d) LIMITATION ON EXERCISE AND TRANSFER OF STOCK OPTIONS. Only the key
employee to whom a Stock Option is granted may exercise such Option, except
where a guardian or other legal representative has been duly appointed for such
employee, and except as otherwise provided in the case of such employee's
death. No Stock Option granted hereunder shall be transferable by an optionee
other than by will or the laws of descent and distribution. No Stock Option
granted hereunder may be pledged or hypothecated, nor shall any such Option be
subject to execution, attachment or similar process.
(e) EMPLOYMENT, HOLDING PERIOD REQUIREMENTS FOR CERTAIN OPTIONS. The
Administrator may condition any Stock Option granted hereunder upon the
continued employment of the optionee by the Company or by a subsidiary
corporation, and may make any such Stock
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Option immediately exercisable. However, the Administrator will require that,
from and after the date of grant of any Incentive Stock Option granted hereunder
until the day three (3) months prior to the date such Option is exercised, such
optionee must be an employee of the Company or of a subsidiary corporation, but
always subject to the right of the Company or any such subsidiary corporation to
terminate such optionee's employment during such period (except if the
optionee's employment is terminated due to death or permanent and total
disability, in which event such period shall be one year). Each Stock Option
shall be subject to such additional restrictions as to the time and method of
exercise as shall be prescribed by the Administrator. Upon compliance with any
condition or requirement imposed by the Administrator pursuant to the foregoing,
a Stock Option or the appropriate portion thereof may be exercised in whole or
in part from time to time during the option period; however, such exercise
right(s) shall be limited to whole shares.
(f) PAYMENT FOR STOCK OPTION PRICE. A Stock Option shall be exercised by
an optionee giving written notice to the Company of his intention to exercise
the name, accompanied by full payment of the purchase price in cash or by check
or, with the consent of the Administrator, in whole or in part with a surrender
of Common Shares having a fair market value on the date of exercise equal to
that portion of the purchase price for which payment in cash or check is not
made. The Administrator may, in its sole discretion, approve other methods of
exercise for a Stock Option or payment o the option price, provided that no such
method shall cause any option to not qualify under Section 422 of the Code, or
cause any Common Share issued in connection with the exercise of an option not
to be a fully paid and non-assessable Common Share.
(g) CERTAIN REISSUANCES OF STOCK OPTIONS. To the extent Common Shares are
surrendered by an optionee in connection with the exercise of a Stock Option in
accordance with Section 7(f), the Administrator may in its sole discretion grant
new Stock Options to such optionee (to the extent Common Shares remain available
for Grants), subject to the following terms and conditions:
(i) The number of Common shares shall be equal to the number of
Common Shares being surrendered by the optionee;
(ii) The option price per Common Share shall be equal to the fair
market value of Common Shares, determined on the date of exercise
of the Stock Options whose exercise caused such Grant; and
(iii) The terms and conditions of such Stock Options shall in all other
respects replicate such terms
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and conditions of the Stock Options whose exercise caused such
Grant, except to the extent such terms and conditions are
determined to not be wholly consistent with the general
provisions of this Section 7, or in conflict with the remaining
provisions of this Plan.
(h) CANCELLATION AND REPLACEMENT OF STOCK OPTIONS AND RELATED RIGHTS. The
Administrator may at any time or from time to time permit the voluntary
surrender by an optionee who is the holder of any outstanding Stock Options
under the Plan, where such surrender is conditioned upon the granting to such
optionee of new Stock Options for such number of shares as the Administrator
shall determine, or may require such voluntary surrender as a condition
precedent to the grant of new Stock Options. The Administrator shall determine
the terms and conditions of new Stock Options, including the prices at and
periods during which they may be exercised, in accordance with the provisions of
this Plan, all or any of which may differ from the terms and conditions of the
Stock Options surrendered. Any such new Stock Options shall be subject to all
the relevant provisions of this Plan. The Common Shares subject to any Stock
Option so surrendered, and/or any Common Shares subject to any Stock Option that
has lapsed, been forfeited, or been cancelled and extinguished in connection
with the exercise of an SAR, shall no longer be charged against the limitation
provided in Section 6 of this Plan and may again become shares subject to the
Plan. The granting of new Stock Options under this plan shall be considered for
the purposes of the Plan as the granting of new Stock Options and not an
alteration, amendment or modification of the Plan or of the Stock Options being
surrendered.
(i) LIMITATION ON EXERCISABLE INCENTIVE STOCK OPTIONS. The aggregate fair
market value of the Common Shares first becoming subject to exercise as
Incentive Stock Options by a key employee during any given calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). Such aggregate
fair market value shall be determined as of the date such Option is granted,
taking into account, in the order in which granted, any other incentive stock
options granted by the Company, or by a parent or subsidiary thereof.
(j) WITHHOLDING OF TAXES. The Administrator may, in its sole discretion,
require, as a condition to any Grant or to the delivery of certificates for
shares issued hereunder, that the optionee pay to the Company, in cash, any
federal, state or local taxes of any kind required by law to be withheld with
Respect to any Grant or any delivery of Common Shares upon exercise thereof.
The Administrator, in its sole discretion, may permit optionees to pay such
taxes through the withholding of Common Shares otherwise deliverable to such
optionee in connection with such Grant or the
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delivery to the Company of Common Shares otherwise acquired by the optionee.
The fair Market Value of Common Shares withheld by the Company or tendered to
the Company for the satisfaction of tax withholding obligations under this
Section 7 (j) shall be determined on the date such Common Shares are withheld or
tendered. The Company, to the extent permitted or required by law, shall have
the right to deduct from any payment of any kind (including salary, bonus,
severance or insurance proceeds) otherwise due to an optionee any federal, state
or local taxes of any kind required by law to be withheld with respect to any
Grant or to the delivery of Common Shares under the Plan, or to retain or sell
without notice a sufficient number of Common Shares to be issued to such
optionee to cover any such taxes, provided that the Company shall not sell any
such Common Shares if such sale would be considered a sale by such optionee for
purposes of Section 16 of the Exchange Act.
8. RESTRICTED STOCK.
(a) GRANT. The Administrator shall determine the key employees to whom,
and the time or times at which, Grants of Restricted Stock will be made, the
number of shares of Restricted Stock to be granted, the price (if any) to be
paid by such key employees (subject to Section 8 (b)), the time or times within
which such Restricted Stock grants may be subject to forfeiture, and the other
terms and conditions of the grants in addition o those set forth in Section 8
(b). The Administrator may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the
Administrator may determine in its sole discretion.
(b) TERMS AND CONDITIONS. Restricted Stock granted under the Plan shall
contain any terms and conditions, not inconsistent with the provisions of the
Plan, which are deemed desirable by the Administrator. A key employee who
receives a grant of Restricted Stock shall not have any rights with respect to
such Grant unless and until such key employee has executed an agreement
evidencing such Grant in the form approved from time to time by the
Administrator, has delivered a fully executed copy thereof to the Company, and
has otherwise complied with the applicable terms and conditions of such Grant.
In addition, Restricted Stock granted under the Plan shall be subject to the
following terms and conditions:
(i) The purchase price for Common Shares consisting of Restricted Stock,
if any, will be specified by the Administrator.
(ii) Grants of Restricted stock shall only be accepted by executing a
Restricted Stock agreement and paying, in cash or by check, whatever
price (if any) is required under Section 8 (b) (I).
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(iii) Each key employee granted Restricted Stock shall be issued a
stock certificate in respect of such shares of Restricted Stock.
Such certificate shall be registered in the name of such key
employee and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Grant.
(iv) Any stock certificates evidencing Common Shares consisting of
Restricted Stock shall either (a) be held in custody by the
Company until the employment and other restrictions thereon shall
all have lapsed; or (B) be affixed with a legend, identifying
such Shares as Restricted Stock and expressly prohibiting the
sale, transfer, tender, pledge assignment or encumbrance of such
Shares, as the Administrator shall determine. With respect to
any Restricted Stock held in custody by the Company, the key
employee granted such Restricted Stock shall deliver to the
Company a stock power, endorsed in blank, relating to the Common
Shares represented by such Stock. With respect to any Restricted
Stock held by a key employee under legend, the key employee
granted such Restricted Stock shall deliver to the Company an
acknowledgement that such Stock remains subject to a substantial
risk of forfeiture in the event of termination of employment
under certain circumstances, and that the certificates
representing ownership of such Stock will be surrendered to the
Company immediately upon any such termination of employment.
(v) Subject to the provisions of the Plan and the Restricted Stock
agreement, during a temporal period set by the Administrator and
commencing with the date of such Grant (the "Restriction
Period"), a key employee shall not be permitted to sell,
transfer, tender, pledge, assign or otherwise encumber any
Restricted Stock granted under the Plan. However, the
Administrator, in its sole discretion, may provide for the lapse
of such transfer or other restrictions in installments, or
accelerate or waive such restrictions in whole or in part, based
on service, performance or other factors and criteria selected by
the Administrator.
(vi) Except as provided in this Section 8(b) (vi) and in Section 8(b)
(v), a key employee shall have, with respect to shares of
Restricted Stock granted to him, all of the rights of a
shareholder of the
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Company, including the right to vote such Stock and the right to
receive any dividends thereon. The Administrator, in its sole
discretion and as determined at the time of a Grant of Restricted
Stock, may permit or require cash dividends otherwise due and
payable to be deferred and, if the Administrator so determines,
reinvested either in additional Restricted Stock (to the extent
Common Shares are available), or otherwise. Stock dividends
issued with respect to Restricted Stock shall be treated as
additional shares of Restricted Stock. As Restricted Stock, such
additional Common Shares will be subject to the same
restrictions, terms and conditions applicable to the Restricted
Stock with respect to which such additional Common Shares were
issued.
(vii) No Restricted Stock shall be transferable by a key employee other
than by will or by the laws of descent and distribution.
(viii) In the event Restricted Stock is forfeited by a key employee, the
Company will refund to such key employee any payment(s) made by
such key employee to purchase such Stock, promptly upon such
forfeiture (and any corresponding surrender of stock
certificates).
(c) MINIMUM VALUE PROVISIONS. To ensure that Grants of Restricted Stock
actually reflect the performance of the Company and service of the key employee,
the Administrator my provide, in its sole discretion, for a tandem performance-
based award, or other grant, designed to guarantee a minimum value, payable in
cash or Common Shares, to the recipient of a Restricted Stock Grant, subject to
such performance, future service, deferral and other terms and conditions as may
be specified by the Administrator.
9. STOCK APPRECIATION RIGHTS. A key employee may be granted the right to
receive a payment based on the increase in the value of Common Shares occurring
after the date of such Grant; such rights shall be known as Stock Appreciation
Rights ("SARs"). SARs may (but need not) be granted to a key employee in tandem
with, and exercisable in lieu of exercising, a Grant of Stock Options. SARs
will be specifically granted upon terms and conditions specified by the
Administrator, if the Company is the employer of the key employee, or by a
subsidiary corporation subject to the Administrator's approval, if such
subsidiary corporation is the employer of the key employee. No optionee shall
be entitled to SAR rights solely as a result of the grant of a Stock Option to
him. Any such rights, if granted, may only be exercised by the holder thereof,
either with respect to all, or a portion, of the Stock
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Option to which it applies. When granted in tandem with a Stock Option, an SAR
shall provide that the holder of a Stock Option shall have the right to receive
an amount equal to one hundred percent (100%) of the excess, if any, of the fair
market value of the Common Shares covered by such Option, determined as of the
date of exercise of such SAR by the Administrator (in the same manner as such
value is determined for purposes of the granting of Stock Options), over the
price to be paid for such Common Shares under such Option. Such amount shall be
payable by either the Company or the subsidiary corporation, whichever such
corporation is the employer of the key employee, in one or more of the following
manners, as determined by the Administrator:
(a) cash (or check);
(b) fully paid Common Shares having a fair market value equal to such
amount; or
(c) a combination of cash (or check) and Common Shares.
In no event may any person exercise any SARs granted hereunder unless (I) such
person is then permitted to exercise the Stock Option or the portion thereof
with respect to which such SARs relate, and (ii) the fair market value of the
Common Shares covered by the Stock Option, determined as provided above, exceeds
the option price of such Common Shares. Upon the exercise of any SARs , the
Stock Option, or that portion thereof to which such SARs relate, shall be
canceled and automatically extinguished. A SARs granted in tandem with a Stock
Option hereunder shall be made a part of the Stock Option agreement to which
such SAR relates, in a form approved by the Administrator and not inconsistent
with this Plan. The granting of a Stock Option or SAR shall impose no
obligation upon the optionee to exercise such Stock Option or SAR. The
Company's or a subsidiary corporation's obligation to satisfy SARs shall not be
funded or secured in any manner. No SAR granted hereunder shall be transferable
by the key employee granted such SAR, other than by will or the laws of descent
and distribution.
After the Grant of an SAR, an optionee intending to rely on an exemption
from Section 16(b) of the Exchange Act shall be required to hold such SAR for
six months (6) months from the date the price for such SAR is fixed to the date
of cash settlement. Additionally, in order to remain exempt from Section 16(b)
of the Exchange Act, a SAR must be exercised by an optionee subject to such
Section only during the period beginning on the third business day following the
release of a summary statement of the Company's quarterly or annual sales and
earnings and ending on the twelfth business day following said date.
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10. TERMINATION OF EMPLOYMENT. If a key employee ceases to be an employee
of the Company and every subsidiary corporation, for a reason other than death,
retirement, "permanent and total disability" (as defined below) or such key
employee's employment is terminated "without cause" (as defined below), his
Grants shall, unless extended by the Administrator on or before his date of
termination of employment, terminate on the effective date of such termination
of employment. Neither the key employee nor any other person shall have any
right after much date to exercise all or any part of his Stock Options or SARs,
and all Restricted Stock which is not vested or otherwise subject to restriction
shall thereupon be forfeited, and/or declared void and without value.
If termination of employment is due to death or permanent and total
disability or is without cause, then outstanding Stock Options and SARs may be
exercised within the one (1) year period ending on the anniversary of such
death, permanent and total disability or termination without cause (except that,
with respect to Incentive Stock Options held by key employees whose employment
is terminated without cause, such Incentive Stock Options must be exercised
within three months of the date of such termination). In the case of death,
such outstanding Stock Options and SARs shall be exercised by such key
employee's estate, or the person designated by such key employee by will, or as
otherwise designated by the laws of descent and distribution. Notwithstanding
the foregoing, in no event shall any Stock Option or SAR be exercisable after
the expiration of the option period, and in the case of exercises made after a
key employee's death, not to any greater extent then such key employee would
have been entitled to exercise such option or SAR at the time of his death.
Restricted Stock held by a key corporation terminates by reason of death shall
thereupon vest and all restrictions and risks of forfeiture thereon shall
thereupon lapse.
Subject to the discretion of the Administrator, in the event a key employee
terminates employment with the Company and all subsidiary corporations because
of normal or early retirement under any pension plan or retirement plan
hereafter adopted by the Company, or (in the case of Restricted Stock) permanent
and total disability, (a) any then-outstanding Stock Options and/or SARs held by
such key employee shall
lapse at the end of the term of such Stock Option or SAR, or thirty (3) days
after such retirement, whichever first occurs; and (b) any Restricted Stock held
by such key employee shall thereafter vest and any applicable restrictions shall
lapse, to the extent such Restricted Stock would have become vested or no longer
subject to restriction within one year from the time of termination had the key
employee continued to fulfill all of the conditions of the Restricted Stock
during such period (or on such accelerated basis as the Committee may determine
at or after date of Grant).
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For purposes hereof, "permanent and total disability" means a permanent and
total disability as defined in "without cause" means termination of the
employee's employment by the Company for reasons other than (i) conviction of
the employee for a felony or for any crime or offense lesser than a felony
involving the property of the Company or a subsidiary corporation or affiliate
of the Company; (ii) conduct by the employee that has caused demonstrable and
serious injury to the Company or a subsidiary, monetary or otherwise; or (iii)
substandard performance, or material misconduct or negligence in the
performance, of the employee's duties in the reasonable judgment of the Board.
In the event an employee of the Company or one of its subsidiary
corporations is granted a leave of absence by the Company or such subsidiary
corporation to enter military service or because of sickness, his employment
with the Company or such subsidiary corporation shall not be considered
terminated, and he shall be deemed an employee of the Company or such subsidiary
corporation during such leave of absence or any extension thereof granted by the
Company or such subsidiary corporation.
11. AMENDMENTS TO PLAN. The Administrator is authorized to interpret this
Plan and from time to time adopt any rules and regulations for carrying out this
Plan that it may deem advisable. Subject to the approval of the Board of
Directors of the Company, the Administrator may at any time amend, modify,
suspend or terminate this Plan. In no event, however, without the approval of
shareholders, shall any action of the Administrator or the Board of Directors
result in:
(a) Materially amending, modifying or altering the eligibility
requirements provided in Section 5 hereof;
(b) Materially increasing, except as provided in Section 6 hereof,
the maximum number of Common Shares that may be made subject to
Grants; or
(c) Materially increasing the benefits accruing to participants under
this Plan;
except to conform this Plan and any agreements made hereunder to changes in the
Code or required by governing law.
12. INVESTMENT REPRESENTATION, APPROVALS AND LISTING. The Administrator
may, if it deems appropriate, condition its grant of any Stock Option hereunder
upon receipt of the following investment representation from the optionee:
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"I agree that any Common Shares of DeCrane Aircraft Holdings, Inc. which I
may acquire by virtue of this Stock Option shall be acquired for investment
purposes only and not with a view to distribution or resale, and may not be
transferred, sold, assigned, pledged, hypothecated or otherwise disposed of
by me unless (I) a registration statement or post-effective amendment to a
registration statement under the Securities Act, with respect to said
Common Shares has become effective so as to permit the sale or other
disposition of said shares by me; or (ii) there is presented to DeCrane
Aircraft Holdings, Inc. an opinion of counsel satisfactory to DeCrane
Aircraft Holdings, Inc. to the effect that the sale or other proposed
disposition of said Common Shares by me may lawfully be made otherwise than
pursuant to an effective registration statement or post-effective amendment
to a registration statement relating to the said shares under the
Securities Act of 1933, as amended."
The Company shall not be required to issue any certificate or certificates
for Common Shares upon the exercise of any Stock Option or a SAR granted under
this Plan prior to (I) the obtaining of any approval from any governmental
agency which the Administrator shall, in its sole discretion, determine to be
necessary or advisable; (ii) the admission of such shares to listing on any
national securities exchange on which the Common Shares may be listed; (iii) the
completion of any registration or other qualifications of the Common Shares
under any state or federal law or ruling or regulations of any governmental body
which the Administrator shall, in its sole discretion, determine to be necessary
or advisable or the determination by the Administrator, in its sole discretion,
that any registration or other qualification of the Common Shares is not
necessary or advisable; or (iv) the obtaining of an investment representation
from the optionee in the form stated above or in such other form as the
Administrator, in its sole discretion, shall determine to be adequate.
13. GENERAL PROVISIONS. The form and substance of Stock Option Agreements,
Restricted Stock agreements, and SAR agreements made hereunder, whether granted
at the same or different times, need not be identical. Nothing in this Plan or
in any Stock Option, Restricted Stock or SAR agreement shall confer upon any
employee any right to continue in the employ of the Company or any of its
subsidiary corporations or affiliates or to interfere with or limit the right of
the Company or any subsidiary corporation or affiliate to terminate his
employment at any time, with or without cause. Nothing contained in this Plan
or in any Stock Option agreement or SAR shall be construed as entitling any
optionee to any rights of a shareholder as a result of the grant of Stock
Option or an SAR, until such time as Common Shares are actually issued to such
optionee pursuant to the exercise of such option or
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SAR. This Plan may be assumed by the successors and assigns of the Company.
The liability of the Company under this Plan and any sale made hereunder is
limited to the obligations set forth herein with respect to such sale and no
term or provision of this Plan shall be construed to impose any liability on the
Company in favor of any employee (or any other party acting on his behalf or in
his stand) with respect to any loss, cost or expense which such employee or
party may incur in connection with or arising out of any transaction in
connection with this Plan. The cash proceeds received by the Company from the
issuance of Common Shares pursuant to this Plan will be used for general
corporate purposes. The expense of administering this Plan shall be borne by
the Company. The captions and section numbers appearing in this Plan are
inserted only as a matter of convenience. They do not define, limit, construe
or describe the scope or intent of the provisions of this Plan.
14. PROVISIONS APPLICABLE SOLELY TO INSIDERS. The following provisions
shall apply only to persons who are subject to Section 16 of the Exchange Act
with respect to securities of the Company ("Insiders"), and shall apply to
Insiders notwithstanding any provision of the Plan to the contrary:
(a) No Insider shall be permitted to transfer any security of the
company acquired by him, except to the extent permitted by 17 C.F.R. Section
240.16a-2(d) (1), upon the exercise of any Stock Option, until at least six
months and one day after the later of (I) the day on which such security is
granted to the Insider or (ii) the day on which the exercise or conversion
price of such security is fixed.
(b) An Insider may elect to have shares withheld from a Grant or tender
shares to the Company in order to satisfy the tax withholding consequences of
a Grant only during the period beginning on the third business day following
the date on which the Company releases the financial information specified in
17 C.F.R. Section 240.16b-3(e) (1) (ii) and ending on the twelfth business
day following such date. Notwithstanding the foregoing, an Insider may elect
to have shares withheld from a Grant in order to satisfy tax withholding
consequences thereof by providing the Company with a written election to so
withhold at least six months in advance of the withholding of shares
otherwise issuable upon exercise of a Stock Option.
15. TERMINATION OF THIS PLAN. This Plan shall terminate on February 1,
2003, and thereafter no Stock Options, Restricted Stock or SARs shall be granted
hereunder. All Stock Options and SARs outstanding at the time of termination of
this Plan shall continue in full force and effect according to their terms and
the terms and conditions of this Plan.
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