EXHIBIT 10.22
THE UCAR INTERNATIONAL INC.
AMENDED AND RESTATED MANAGEMENT STOCK OPTION PLAN
This Management Stock Option Plan is hereby adopted by the Board of
Directors of UCAR International Inc., a Delaware corporation (the "Company"), as
of the Effective Date (as defined below).
ARTICLE I
PURPOSE OF PLAN
The Plan is adopted by the Board for certain management employees of
the Company and its Subsidiaries as a part of the compensation and incentive
arrangements for such employees. The Plan is intended to advance the best
interests of the Company by allowing such employees to acquire an ownership
interest in the Company, thereby motivating them to contribute to the success of
the Company and to remain in the employ of the Company and its Subsidiaries. It
is anticipated that the availability of stock options under the Plan will also
enhance the Company's ability to attract and retain individuals of exceptional
talent to contribute to the sustained progress, growth and profitability of the
Company.
ARTICLE II
DEFINITIONS
For purposes of the Plan, except where the context clearly indicates
otherwise, the following terms shall have the meanings set forth below:
"ACCELERATION EVENT" shall mean an event with respect to which the Plan
provides for the acceleration of the exercisability of Options, as provided in
Section 5.3.
"AFFILIATE" shall mean, with respect to any Person, (i) any other
Person that directly or indirectly Controls, is Controlled by or is under common
Control with such Person, or (ii) any director, officer, partner or employee of
such Person or any Person specified in clause (i) above.
"BOARD" shall mean the Board of Directors of the Company.
"CAUSE" shall have the meaning of "Cause" set forth in a Participant's
Option Agreement.
"CEO" shall mean the Chief Executive Officer of the Company.
"CHANGE OF CONTROL" shall mean the date that:
(i) any "person" (as such term is used in Section 13(d) and
14(d) of the Exchange Act), other than Blackstone Capital Partners II Merchant
Banking Fund L.P. and its Affiliates ("BLACKSTONE"), is or becomes the
beneficial owner (as defined in clause (i)(A) above, except that such person
shall be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 35% of
the total voting power of the Company; or
(ii) the date, following the expiration of any period of two
consecutive years,
that individuals, who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors whose nomination for
election by the shareholders of the Company was approved by a vote of 66-2/3% of
the directors of the Company then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute.
"COMMITTEE" shall mean the Organization and Compensation
Committee of the Board.
"COMMON STOCK" shall mean the common stock of the Company, par
value $.01.
"COMPANY" shall mean UCAR International Inc., a Delaware
corporation.
"CONTROL" (including, with correlative meaning, all
conjugations thereof) shall mean with respect to any Person, the ability of
another Person to control or direct the actions or policies of such first
Person, whether by ownership of voting securities, by contract or otherwise.
"CUMULATIVE EBITDA" shall mean with respect to any Performance
Option, the sum of the EBITDA for the period commencing on the Grant Date and
ending on the last day of the Plan Year preceding the Determination Date.
"CUMULATIVE EBITDA TARGETS" shall mean with respect to any
Performance Option, the sum of the EBITDA Targets for the period commencing on
the Grant Date and ending on the last day of the Plan Year preceding the
Determination Date.
"DETERMINATION DATE" shall mean the last day of the Plan Year.
"DISABILITY" shall mean the inability of a Participant to
perform in all material respects his duties and responsibilities to the Company,
or any Subsidiary of the Company, by reason of a physical or mental disability
or infirmity which inability is reasonably expected to be permanent and has
continued i) for a period of six consecutive months, or (ii) such shorter period
as the Company may determine. A Participant (or his representative)shall furnish
the Company with satisfactory medical evidence documenting the Participant's
disability or infirmity.
"EBITDA" shall mean, with respect to the Company and its
Subsidiaries on a consolidated basis for any period, the consolidated net income
of the Company and its Subsidiaries for such period, as determined in accordance
with generally accepted accounting principles consistently applied, PLUS, to the
extent deducted in computing such consolidated net income, without duplication,
the sum of (a) income tax expenses and withholding tax expenses incurred in
connection with cross-border transactions involving non-domestic Subsidiaries,
(b) interest expense, (c) depreciation expense and amortization expense, (d) any
special charges and any extraordinary or non-recurring losses, (e) monitoring
and management fees paid to Blackstone, (f) other noncash items reducing
consolidated net income, and (h) noncash exchange, translation on performance
losses relating to any foreign currency hedging
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transactions or currency fluctuations, MINUS, to the extent added in computing
such consolidated net income, without duplication, (i) interest income, (ii)
extraordinary or non-recurring gains, (iii) other noncash items increasing
consolidated net income, (iv) noncash exchange, translation or performance gains
relating to any foreign currency hedging transactions or currency fluctuations,
and (v) all non-cash pension accruals related to FAS '87; PROVIDED that all
effects of the Recapitalization shall be eliminated in computing EBITDA.
"EBITDA TARGET" shall mean with respect to each Plan Year, the
amount set forth in the following table opposite such Plan Year:
Plan Year Ending EBITDA Target
---------------- -------------
December 31, 1995 $ 216,900,000
December 31, 1996 $ 223,400,000
December 31, 1997 $ 256,600,000*
December 31, 1998 $ 271,700,000*
December 31, 1999 $ 287,800,000*
and such other targets as are established by the Committee after consultation
with the CEO with respect to subsequent Plan Years. Asterisked EBITDA Targets
shall not be more than the stated amount but may be adjusted downward by the
Committee, in its sole discretion and shall otherwise be subject to the
provisions of Section 10.3.
"EFFECTIVE DATE" shall mean the Recapitalization Closing Date.
"EMPLOYEE" shall mean any employee of the Company or any of
its Subsidiaries.
"EMPLOYEE LOAN" shall mean any loan made to a Participant on
the Recapitalization Closing Date to assist the Participant in paying certain
income tax liability.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"EXERCISABLE PERCENTAGE" shall mean, with respect to any
Option, the cumulative percentage of the total number of Shares subject to such
Option (measured as of the Grant Date) which a Participant has the right to
receive upon exercising the Option.
"EXERCISE PRICE" shall mean the amount that a Participant must
pay to exercise an Option with respect to one share of Common Stock subject to
such Option, as determined in Section 4.2.
"FAIR MARKET VALUE" shall mean, with respect to any Common
Stock, the average of the high and low trading prices of the 20 business days
immediately preceding the day of the valuation.
"GOOD REASON" shall have the meaning of "Good Reason" set
forth in a Participant's Option Agreement.
"GRANT DATE" shall mean with respect to the initial grant of
Options hereunder, the Recapitalization Closing Date, and thereafter shall mean
the date an Option is granted pursuant to this Plan.
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"OPTION" shall mean, with respect to any Participant, (a) any
Time Option or Performance Option, and (b) any option, warrant or right to
acquire shares of the capital stock of the Company issued in respect of an
option referred to in clause (a) above, by way of distribution or in connection
with a merger, consolidation, reorganization or other recapitalization.
"OPTION AGREEMENT" shall mean the Option Agreement between a
Participant and the Company, substantially in the form of agreement attached
hereto as EXHIBIT A.
"OPTION SHARES" shall mean, with respect to any Participant,
(a) any shares of Common Stock (or other shares of capital stock of the Company)
issuable or issued by the Company upon exercise of any Option by such
Participant, and (b) any shares of the capital stock of the Company issuable or
issued in respect of any of the securities described in clause (a) above, by way
of stock dividend, stock split, merger, consolidation, reorganization or other
recapitalization.
"PARTICIPANT" shall mean any individual who holds an
outstanding Option granted under this Plan.
"PERFORMANCE OPTIONS" shall mean the Options described in
Section 5.2 hereof.
"PERSON" shall mean an individual, a partnership, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.
"PLAN" shall mean this Management Stock Option Plan, as
amended from time to time.
"PLAN YEAR" shall mean initially the short plan year beginning
January 26, 1995 and ending on December 31, 1995, and thereafter each of the
calendar years from 1996 through 2007.
"PUBLIC OFFERING" shall mean the sale of shares of Common
Stock pursuant to an effective registration statement under the Securities Act,
which results in an active trading market in Common Stock. If the Common Stock
is listed on a national securities exchange or is quoted on the NASDAQ National
Market, it shall be deemed to be actively traded.
"RECAPITALIZATION" shall mean the recapitalization of the
Company pursuant to the Recapitalization Agreement dated as of November 14, 1994
among Union Carbide Corporation, a New York corporation, Mitsubishi Corporation,
a Japanese corporation, the Company, and UCAR International Acquisition Inc., a
Delaware corporation owned by Blackstone.
"RECAPITALIZATION CLOSING DATE" shall mean January 26, 1995.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SUBSIDIARY" shall mean any corporation of which the Company
owns, directly or through one or more Subsidiaries, a fifty percent (50%) or
more equity interest in such corporation or has the right to nominate fifty
percent (50%) or more of the members of the board of directors or other
governing body of the corporation.
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"TIME OPTIONS" shall mean the Options described in Section 5.1
hereof.
"TRANSFER" shall mean, with respect to any Option, the gift,
sale, assignment, transfer, pledge, hypothecation or other disposition (whether
for or without consideration and whether voluntary, involuntary or by operation
of law) of such Option or any interest therein.
ARTICLE III
LIMITATION ON AVAILABLE OPTION SHARES
III.1 OPTION SHARES. The aggregate number of shares of Common
Stock with respect to which Options may be granted under the Plan shall not
exceed 137.63 shares, which represents 12% of the Company's Common Stock
(including the Option Shares) as of the Effective Date; PROVIDED, HOWEVER, that
the aggregate number of shares of Common Stock with respect to which Options may
be granted shall be subject to adjustment in accordance with the provisions of
Section 10.2 below.
III.2 STATUS OF OPTION SHARES. The shares of Common Stock for
which Options may be granted under the Plan may be either authorized and
unissued shares, treasury shares or a combination thereof, as the Committee
shall determine and shall be reserved by the Committee for issuance under this
Plan. To the extent any Options are forfeited, expire or are terminated prior to
exercise, the Option Shares in respect of which such Options were issued shall
become available for reissuance to Employees pursuant to this Plan or any other
plan or agreement approved by the Committee.
ARTICLE IV
GRANT OF OPTIONS
IV.1 OPTIONS. Options shall initially be granted by the
Board of Directors. Thereafter, the Committee shall grant Options to Employees
(after consultation with the Chief Executive Officer).
IV.2 EXERCISE PRICE. The Exercise Price of Options granted
hereunder shall be the Fair Market Value of the Shares subject to the Option,
determined as of the Grant Date.
IV.3 FORM OF OPTION. Options granted under this Plan shall
be non-qualified stock options and are not intended to be "incentive stock
options" within the meaning of Section 422 of the Code or any successor
provisions. Options shall be exercisable with respect to the number of Shares
covered by the Option to the extent they become exercisable (as determined
pursuant to Article VI) and shall thereafter be exercisable until they expire or
are terminated (as determined pursuant to Article VIII).
ARTICLE V
EXERCISABILITY OF OPTIONS
V.1 TIME OPTIONS. Except as otherwise provided in the
Option Agreements, all Time Options granted pursuant to this Plan shall be
immediately exercisable.
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V.2 PERFORMANCE OPTIONS.
(a) Performance Options shall become exercisable with
respect to 20% of the Shares subject to such Option, on each Determination Date
that the Company's EBITDA for a Plan Year equals or exceeds the EBITDA Target
for that Plan Year (and with respect to the first Plan Year, EBITDA for the
entire calendar year).
(b) If, after the Grant Date of a Performance Option,
the Company's EBITDA for a Plan Year is less than 100% of the EBITDA Target for
such Plan Year ( a "Missed Year"), no such Performance Option shall become
exercisable with respect to any additional Shares (the "Missed Shares") on the
Determination Date for such Plan Year. If, in any Plan Year subsequent to a
Missed Year EBITDA exceeds the EBITDA Target for such Plan Year AND Cumulative
EBITDA exceeds the Cumulative EBITDA Targets, then Performance Options shall
become exercisable with respect to the Missed Shares attributable to such Missed
Year (but only to the extent such Option has not otherwise terminated).
V.3 ACCELERATION EVENTS. All Time Options not already
exercisable shall become exercisable upon the Participant's termination of
employment on account of death or Disability or upon the satisfaction of
conditions set forth in Participant's Option Agreement. The Committee may, in
its discretion, accelerate the exercisability of Options at any time and for any
reason.
ARTICLE VI
EXERCISE OF OPTIONS
VI.1 RIGHT TO EXERCISE. During the lifetime of a
Participant, Options may be exercised only by such Participant (except that, in
the event of his Disability, Options may be exercised by his or her legal
guardian or legal representative). In the event of the death of a Participant,
exercise of Options shall be made only by the executor or administrator of the
deceased Participant's estate or the Person or Persons to whom the deceased
Participant's rights under the Option shall pass by will or the laws of the
descent and distribution.
VI.2 PROCEDURE FOR EXERCISE. Options may be exercised in
whole or in part with respect to any portion that is exercisable. To exercise an
Option a Participant (or such other Person who shall be permitted to exercise
the Option as set forth in Section 6.1) must complete, sign and deliver to the
Company (to the attention of the Company's Secretary) a notice of exercise in
such form as the Committee may from time to time adopt and provide to a
Participant (the "EXERCISE NOTICE"), together with payment in full of the
Exercise Price multiplied by the number of shares of Common Stock with respect
to which the Option is exercised. Payment of the Exercise Price shall be made in
cash (including check, bank draft or money order). A Participant's right to
exercise the Option shall be subject to the satisfaction of all conditions set
forth in the Exercise Notice. In lieu of paying the Exercise Price, upon a
Participant's request, the Company shall give the Participant a number of shares
of Common Stock equal to (A) divided by (B) where (A) is the excess of the (i)
the Fair Market Value of a share of Common Stock, over (ii) the Exercise Price,
multiplied by (iii) the number of shares for which the Option is being
exercised, and (B) is the Fair Market Value of a share of Common Stock.
VI.3 [Omitted]
VI.4 [Omitted]
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VI.5 WITHHOLDING OF TAXES. The Company shall withhold from
any Participant from any amounts due and payable by the Company to such
Participant (or secure payment from such Participant in lieu of withholding) the
amount of any withholding or other tax due from the Company with respect to any
Option Shares issuable under the Plan, and the Company may defer such issuance
unless indemnified to its satisfaction.
ARTICLE VII
EXPIRATION OF OPTIONS
VII.1 EXPIRATION DATE. Options shall expire at 5:00 p.m.
Eastern Standard Time on the day prior to the twelfth anniversary of the Grant
Date (the "Expiration Date") or upon such earlier time as provided in the Option
Agreements.
VII.2 LIMITED STOCK APPRECIATION RIGHT. Upon a Participant's
request, the Company may, in its sole discretion, cancel any Option (in whole or
in part) granted hereunder and pay the affected Participant, the excess of the
(i) the Fair Market Value of a share of Common Stock, over (ii) the Exercise
Price, multiplied by (iii) the number of shares for which the Option is being
cancelled (the "CANCELLATION AMOUNT"); PROVIDED, HOWEVER, that coincident with
any transaction which is reasonably likely to result in a Change of Control the
Company may in its sole discretion, without a Participant's consent, cancel any
Option (in whole or in part) granted hereunder and pay the affected Participant
the Cancellation Amount.
ARTICLE VIII
RIGHTS AND LIMITATIONS
VIII.1 DIVIDEND EQUIVALENTS. (a) If the Board declares a
special or extraordinary dividend in connection with a recapitalization,
reorganization, restructuring or other nonrecurring corporate event to the
holders of its Common Stock, the Company shall pay to an escrow account on
behalf of each Participant an amount (the "Dividend Equivalent") equal to the
dividend they would have received had they directly owned each Option Share
subject to the Time Options and each Option Share with respect to which
Performance Options are vested.
(b) Upon a Participant's exercise of an Option, the
Company shall offset the Exercise Price of each Option Share subject to Options
in respect of which a Dividend Equivalent was paid by the Dividend Equivalent
set aside with respect to such Option Share. Any Dividend Equivalent in excess
of the Exercise Price shall be paid in cash at the time the dividend is paid.
(c) If the Options of a Participant with respect to
which a Dividend Equivalent is set aside are terminated or cancelled prior to
the date the Options are exercised, the Participant shall forfeit the right to
the Dividend Equivalent and any amounts set aside in the Participant's escrow
account in respect of such Dividend Equivalent shall revert to the Company.
VIII.2 REGISTRATION OF OPTION SHARES. The Company has filed,
and shall use its best efforts to keep effective while any Options remain
outstanding, at its own expense, a registration statement on Form S-8 to
register the Option Shares.
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VIII.3 TRANSFER OF OPTIONS. Options may not be Transferred
(other than by will or descent).
ARTICLE IX
ADMINISTRATION
IX.1 PLAN ADMINISTRATOR. This Plan shall be administered by
the Committee; provided, however, that the Committee may delegate to the CEO
responsibility for the routine administration of the Plan.
IX.2 COMMITTEE OPTION GRANTS. The Committee shall have the
authority to select Employees to receive Options and to grant Options (except
for the initial grant of Options, which shall be granted by the Board) to
Employees in such amounts as it shall determine, in its full discretion, after
consultation with the Chief Executive Officer.
IX.3 COMMITTEE AUTHORITY. The Committee shall have the sole
and complete responsibility and authority to (a) interpret and construe the
terms of this Plan, (b) correct any defect, error or omission or reconcile any
inconsistency in the Plan or in any Option granted hereunder, and (c) make all
other determinations and take all other actions necessary or advisable for the
implementation and administration of the Plan. The Committee's determinations on
matters within its authority shall be conclusive and binding upon the
Participants, the Company and all other Persons.
IX.4 [Omitted]
ARTICLE X
MISCELLANEOUS
X.1 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN. No
suspension, termination or amendment of or to the Plan shall affect adversely
the rights of any Participant with respect to Options issued hereunder prior to
the date of such suspension, termination or amendment without the consent of
such holder.
X.2 ADJUSTMENTS.
(a) PERFORMANCE TARGETS. The Committee, in consultation
with the Chief Executive Officer, shall adjust the performance targets for Plan
Years following the Plan Year in which an initial Public Offering occurs so that
the Performance Options continue to represent equivalent value for equivalent
performance.
(b) CHANGES IN COMMON STOCK. In the event of a stock
dividend, stock split, or share combination, the Committee shall make such
adjustments in the number and type of shares authorized by the Plan, the number
and type of shares covered by outstanding Options and the Exercise Prices
specified therein and other amendments to the Plan as the Board, in good faith,
determines to be appropriate and equitable.
X.3 FUTURE ACQUISITIONS OR DISPOSITIONS. The EBITDA Targets
are based upon certain revenue and expense assumptions about the future business
of the Company and its Subsidiaries as of the Effective Date. Accordingly, if
the Company or any Subsidiary
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acquires, by purchase or otherwise, or disposes of, by sale of stock or assets,
the business, property, or fixed assets, of another Person, which acquisition or
disposition, either singly or together with one or more other such transactions,
will, in the Board's good faith determination, affect the Company's EBITDA, the
Committee shall, in good faith, adjust the EBITDA Targets to reflect the
projected effect of such transaction or transactions.
X.4 NO RIGHT TO PARTICIPATE. Except as otherwise agreed to
by the Company, no Employee shall have a right to be selected as a Participant
or, having been so selected, to be selected again to receive a grant of Options.
X.5 NO EMPLOYMENT CONTRACT. Nothing in this Plan shall
interfere with or limit in any way the right of the Company or any of its
Subsidiaries to terminate any Participant's employment at any time (with or
without Cause as defined in the Participant's Employment Agreement, if
applicable), nor confer upon any Participant any right to continued employment
by the Company or any of its Subsidiaries for any period of time or to continue
such employee's present (or any other) rate of compensation.
X.6 CONSTRUCTION OF PLAN. This terms of this Plan shall be
administered in accordance with the laws (excluding conflict of interest laws)
of the State of New York.
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