EXHIBIT 10.10
THE GRAFTECH INTERNATIONAL LTD.
MANAGEMENT STOCK INCENTIVE PLAN
(ORIGINAL VERSION)
Management Stock Incentive Plan was originally adopted as
the Management Stock Option Plan by the Board of Directors of GrafTech
International Ltd. (formerly, UCAR International Inc.) as of January 26, 1995.
It was subsequently amended. This document restates the Plan as amended
(including amendments to eliminate provisions which are no longer operative or
which have been adopted concurrently with this restatement) through July 31,
2003.
ARTICLE I
PURPOSE OF PLAN
The Plan has been adopted by the Board to provide for the
grant of stock options to certain management employees of the Company and its
Subsidiaries and non-employee directors of the Company as a part of the
compensation and incentive arrangements for such employees and directors as well
as consultants, advisers and other non-employees of the Company and its
Subsidiaries who are specifically identified by the Board or the Committee as
compensation for services rendered to the Company or its Subsidiaries. The Plan
is intended to advance the best interests of the Company by allowing such
persons 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 or
service of the Company and its Subsidiaries. It is anticipated that the
availability of stock options under the Plan will also enhance the Company's and
its Subsidiaries' 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," if relevant to a particular Participant, shall have
the meaning of "Cause" set forth in such Participant's Option Agreement.
"CEO" shall mean the Chief Executive Officer of the Company.
"Change of Control" shall mean the occurrence of any of the
following events:
(i) any "person" or "group" within the meaning of Section
13(d) or 14(d)(2) of the Exchange Act becomes the beneficial owner of 15% or
more of the then outstanding Common Stock or 15% or more of the then outstanding
voting securities of the Company;
(ii) any "person" or "group" within the meaning of Section
13(d) or 14(d)(2) of the Exchange Act acquires by proxy or otherwise the right
to vote on any matter or question with respect to 15% or more of the then
outstanding Common Stock or 15% or more of the combined voting power of the then
outstanding voting securities of the Company;
(iii) Present Directors and New Directors cease for any reason
to constitute a majority of the Board (and, for purposes of this clause (iii),
"Present Directors" shall mean individuals who at the beginning of any
consecutive twenty-four month period were members of the Board and "New
Directors" shall mean individuals whose election by the Board or whose
nomination for election as directors by the Company's stockholders was approved
by a vote of at least two-thirds of the directors then in office who were
Present Directors or New Directors);
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company; or
(v) consummation of:
(x) a reorganization, restructuring, recapitalization,
reincorporation, merger or consolidation of the
Company (a "Business Combination") unless,
following such Business Combination, (a) all or
substantially all of the individuals and entities
who were the beneficial owners of the Common Stock
and the voting securities of the Company
outstanding immediately prior to such Business
Combination beneficially own, directly or
indirectly, more than 50% of the common equity
securities and the combined voting power of the
voting securities of the corporation or other
entity resulting from such Business Combination
outstanding after such Business Combination
(including, without limitation, a corporation or
other entity which as a result of such Business
Combination owns the Company or all or
substantially all of the assets of the Company or
the Group (and, for purposes hereof, the "Group"
refers to the Company and its Subsidiaries,
collectively) either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership immediately prior
to such Business Combination of outstanding Common
Stock and the combined voting power of the
outstanding voting securities of the
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Company, respectively, (b) no "person" or "group,"
within the meaning of Section 13(d) or 14(d)(2) of
the Exchange Act (excluding (1) any corporation or
other entity resulting from such Business
Combination and (2) any employee benefit plan (or
related trust) of the Group or any corporation or
other entity resulting from such Business
Combination) beneficially owns 15% or more of the
common equity securities or 15% or more of the
combined voting power of the voting securities of
the corporation or other entity resulting from
such Business Combination outstanding after such
Business Combination, except to the extent that
such beneficial ownership existed prior to such
Business Combination with respect to the Common
Stock and the voting securities of the Company,
and (c) at least a majority of the members of the
board of directors (or similar governing body) of
the corporation or other entity resulting from
such Business Combination were members of the
Board at the time of the execution of the initial
agreement providing for such Business Combination
or at the time of the action of the Board
approving such Business Combination, whichever is
earlier; or
(y) any sale, lease, exchange or other transfer
(in one transaction or a series of related
transactions) of all or substantially all of the
assets of the Company or the Group, whether held
directly or indirectly through one or more
subsidiaries (excluding any pledge, mortgage,
grant of security interest, sale-leaseback or
similar transaction, but including any foreclosure
sale), provided, that, for purposes of clauses
(v)(x) and (v)(y) above, the divestiture of less
than substantially all of the assets of the
Company or the Group in one transaction or a
series of related transactions, whether effected
by sale, lease, exchange, spin-off, sale of stock
of or merger or consolidation of a subsidiary,
transfer or otherwise, shall not constitute a
Change of Control of the Company.
Notwithstanding the foregoing, a Change of Control of the Company shall not be
deemed to occur pursuant to clause (i) or (ii) above, solely because 15% or more
of the then outstanding Common Stock or the then outstanding voting securities
of the Company is or becomes beneficially owned or is directly or indirectly
held or acquired by one or more employee benefit plans (or related trusts)
maintained by the Group
For purposes hereof, references to "beneficial owner" and correlative phrases
shall have the same definition as set forth in Rule 13d-3 under the Exchange Act
(except that ownership by underwriters for purposes of a distribution or
offering shall not be deemed to be "beneficial ownership") and references to the
Exchange Act or rules and regulations thereunder shall mean those in effect on
June 29, 2000.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute.
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"Committee" shall mean the Organization, Compensation and
Pension 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 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 ending on the
last day of the Plan Year preceding the Determination Date.
"Determination Date" shall mean the last day of the Plan Year.
"Director" shall mean any individual who is a member of the
Board and who is not an employee of the Company or a Subsidiary.
"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 Capital Partners II Merchant Banking Fund
L.P. or its affiliates, (f) other noncash items reducing consolidated net
income, and of noncash exchange, translation on performance losses relating to
any foreign currency hedging 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,
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translation or performance gains relating to anyforeign 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 and, unless otherwise indicated, any Director.
"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 Option Shares subject
to such Option (measured as of the Grant Date) which a Participant has the right
to receive upon exercising such 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 (i) with respect to any Option
granted prior to September 29, 1998, the average of the high and low trading
prices of the Common Stock for the 20 business days immediately preceding the
day of the valuation, (ii) with respect to any Option granted after September
29, 1998, the closing sale price (or, if there is none, the average of the
closing bid and asked prices) of the Common Stock on the last trading day
preceding the day of the valuation and (iii) with respect to any Option granted
on September 29, 1998 after the close of trading, the closing sale price of the
Common Stock on that day (i.e., $17.06).
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"Good Reason," if relevant to a particular Participant, shall
have the meaning of "Good Reason" set forth in such 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 the relevant Options are granted pursuant to this Plan.
"Non-Employee" shall mean any consultant, adviser or other
non-employee of the Company or any of its Subsidiaries who is specifically
identified by the Board or the Committee.
"Option" shall mean, with respect to any Participant, (a) any
Time Option, Performance Option or Standard 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 relevant Option Agreement
between a Participant and the Company.
"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.
"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 Incentive Plan, as
amended from time to time (formerly known as the Management Stock Option Plan).
"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.
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"Recapitalization" shall mean the recapitalization of the
Company pursuant to the Recapitalization Agreement.
"Recapitalization Agreement" shall mean the 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.
"Recapitalization Closing Date" shall mean the closing date of
the Recapitalization (i.e., January 26, 1995).
"Recapitalization Price" shall mean the per share price paid in
the Recapitalization (i.e., $7.60).
"Retirement," if relevant to a particular Participant, shall
have the meaning of "Retirement" set forth in such Participant's Option
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Standard Options" shall mean the options described in Section
5.2A.
"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.
"Time Options" shall mean the options described in Section 5.1.
"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
3.1 Option Shares. The aggregate number of shares of Common
Stock with respect to which Options may be granted under the Plan shall not
exceed 4,886,828 shares; 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.
3.2 Status of Option Shares. The shares of Common Stock for
which Options may be granted under the Plan (i) may be either authorized and
unissued shares, treasury shares or a combination thereof, as the Committee or
the Board
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shall determine and (ii) shall be reserved by the Committee or the Board for
issuance under this Plan; provided, however, that any shares of Common Stock
delivered or deliverable upon exercise of Options granted to officers of the
Company (within the meaning of the rules of the New York Stock Exchange) or
directors of the Company on or after March 31, 1998 shall consist of treasury
shares which shall have been previously listed on the New York Stock Exchange.
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 stock options granted pursuant to this Plan or any other
plan or agreement approved by the Committee.
ARTICLE IV
GRANT OF OPTIONS
4.1 Options. Options may be granted to Employees and
Non-Employees. Initially, Options shall be granted by the Board. Thereafter, the
Committee or the Board shall grant Options to Employees (other than Directors)
after consultation with the CEO; the Board shall grant Options to Directors; and
the Committee or the Board shall grant Options to Non-Employees after
consultation with the CEO. Except as otherwise provided herein, the Committee or
the Board shall establish the terms and conditions applicable to Options granted
by it at the time of grant, which terms and conditions shall be set forth in the
relevant Option Agreements.
4.2 Exercise Price. The Exercise Price of Time Options and
Performance Options granted hereunder shall be not less than the Fair Market
Value of the Option Shares subject to such Options, determined as of the
relevant Grant Date. For purposes of the initial grant of Time Options and
Performance Options hereunder, the Exercise Price of such Options shall be the
Recapitalization Price. The Exercise Price of Standard Options granted hereunder
shall be specified by the Committee or the Board at the time of grant and set
forth in the relevant Option Agreements, but in no event shall the Exercise
Price of a Standard Option be less than the Fair Market Value of a share of
Common Stock on the relevant Grant Date.
4.3 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 Option Shares covered
by the Option to the extent they become exercisable and shall thereafter be
exercisable until they expire or are terminated.
4.4 Available Options All Options granted under this Plan prior
to September 29, 1998 have been Time Options or Performance Options.
Notwithstanding anything to the contrary contained herein, only Standard Options
shall be granted to Employees (other than Directors) and Non-Employees and only
Time Options or Standard Options shall be granted to Directors under this Plan
on or after September 29, 1998.
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ARTICLE V
EXERCISABILITY OF OPTIONS
5.1 Time Options. Except as otherwise provided in the relevant
Option Agreement or Section 5.3, all Time Options shall become exercisable in
accordance with the following schedule:
Exercisable Percentages
-----------------------
Prior to December 31, 1995 0%
On or after December 31, 1995 20%
On or after December 31, 1996 40%
On or after December 31, 1997 60%
On or after December 31, 1998 80%
On or after December 31, 1999 100%
5.2 Performance Options. Except as otherwise provided in the
relevant Option Agreement or Section 5.3:
(a) Performance Options shall become exercisable with
respect to 20% of the Option Shares subject to such Options, as of 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 Option 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).
5.2A Standard Options. Except as otherwise provided in this
Plan, Standard Options shall be subject to such terms and conditions as are
established by the Committee or the Board at the time of grant and set forth in
the relevant Option Agreements. Except as otherwise provided in the relevant
Option Agreement or Section 5.3, a Standard Option shall become exercisable at
such time or under such circumstances as the Committee or the Board shall
determine and specify in the relevant Option Agreement.
5.3 Acceleration Events.
(a) Notwithstanding anything contained in this Article V
to the contrary: Time Options granted to Employees (other than Directors) shall
become exercisable upon the first to occur of the following events: (i) a
Participant's termination of employment on account of death or Disability, (ii)
a Change of Control and (iii) to the extent provided in a
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Participant's Option Agreement, a Participant's termination by the Company
without Cause or a Participant's resignation for Good Reason; and Time Options
granted to Directors shall become exercisable upon the first to occur of the
following events: (i) a Director ceases to be a Director on account of death or
Disability or (ii) a Change of Control. The Committee or the Board may, but are
not required to, provide for the accelerated vesting and exercisability of
Standard Options at the time of grant and any such provisions shall be set forth
in the relevant Option Agreements. The Committee or the Board may, in its
discretion, accelerate the exercisability of any or all Options at any time and
for any reason.
(b) Notwithstanding anything contained in this
Article V to the contrary, all outstanding Time Options and Performance Options
(other than Performance Options for the 1999 Plan Year) granted on or before
March 17, 1998 have become vested and exercisable.
ARTICLE VI
EXERCISE OF OPTIONS
6.1 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 Options shall pass by will or the laws of descent and distribution.
6.2 Procedure for Exercise. Vested 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 a notice of exercise in such form as the Company 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). The 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, on or after an initial Public Offering, upon a Participant's (or such
other Person's) request, with the Committee's or the Board's consent, 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 on the date of exercise, 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 on the
date of exercise.
6.3 [Omitted]
6.4 Conditional Exercise in Contemplation of an Acceleration
Event. In contemplation of an Acceleration Event, a Participant may
conditionally exercise at least 15 days prior to the Acceleration Event all or a
portion of his Options which are exercisable and which
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will become exercisable upon the occurrence of the Acceleration Event. Such
conditional exercise shall become null and void if the anticipated Acceleration
Event does not occur within six (6) months following the date of such
conditional exercise. A conditional exercise shall become binding upon a
Participant (and such Participant shall become obligated to pay the Exercise
Price therefor) upon the occurrence of the Acceleration Event.
6.5 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
7.1 Expiration Date. Time Options and Performance Options shall
expire at 5:00 p.m. Eastern Standard Time on the day prior to the twelfth
anniversary of the Grant Date or upon such earlier time as provided in the
relevant Option Agreements (the "Expiration Date"). Standard Options shall
expire at 5:00 p.m. Eastern Standard Time on such date as shall be specified by
the Committee or the Board at the time of grant and set forth in the relevant
Option Agreements.
7.2 Limited Stock Appreciation Right. Upon a Participant's
request, the Company may, in its sole discretion, cancel any vested 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
8.1 Dividend Equivalents. The following Sections 8.1(a), 8.1(b)
and 8.1(c) shall apply to Options granted prior to September 29, 1998. The
following Section 8.1(d) shall apply to Options granted on or after September
29, 1998.
(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 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
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received had they directly owned each Option Share subject to Time Options and
each Option Share with respect to which Performance Options are vested.
(b) Upon a Participant's exercise of a Time Option or
Performance Option, the Company shall offset the Exercise Price of each Option
Share subject to such Option 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 Time Options or Performance Options of a
Participant with respect to which a Dividend Equivalent is set aside are
terminated or cancelled prior to the date such 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.
(d) If the Board declares a special or extraordinary
dividend payable on the Common Stock in connection with a recapitalization,
reorganization, restructuring or other nonrecurring corporate event, the Company
shall notify each Participant who (on the record date for determination of
stockholders entitled to receive such dividend) holds vested Standard Options or
vested Time Options granted on or after September 29, 1998 of the amount of the
dividend (the "Dividend Adjustment") which such Participant would have received
if such Participant had owned the Option Shares subject to such Options. Upon
such Participant's exercise of any of such Options, (i) the Company shall reduce
the Exercise Price of such Options (but not below $.01) by the amount of the
Dividend Adjustment with respect to the Option Shares issuable upon such
exercise and (ii) to the extent that such Dividend Adjustment exceeds the amount
of such reduction, such excess shall be promptly paid in cash to such
Participant. If any of such Options expire or are terminated or cancelled prior
to exercise thereof, the Participant shall forfeit all rights to all Dividend
Adjustments.
8.2 Registration of Option Shares. The Company shall file, at
its own expense, a registration statement on Form S-8 to register the Option
Shares.
8.3 Transfer of Options. Options may not be Transferred (other
than by will or descent), except that Options may be pledged, assigned or
otherwise Transferred to the Company to secure indebtedness on any Employee
Loan.
ARTICLE IX
ADMINISTRATION
9.1 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.
9.2 Option Grants. The Committee and the Board shall have
authority to select Employees (other than Directors) to receive Options and to
grant Options (except for the
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initial grant of Options, which shall be granted by the Board) to Employees
(other than Directors) in such amounts as it shall determine, in its full
discretion, after consultation with the CEO; provided, however, that the Board
or the Committee may delegate to the CEO responsibility to designate Employees
(other than Directors) to participate in a pool of Standard Options, the terms
and conditions of which (including the aggregate number of shares subject to
Options within the pool) shall have been specified by the Board or the
Committee.
9.3 Additional Authority. As between a Participant and the
Company: the Committee and the Board shall have the sole and complete
responsibility and authority to (a) interpret and construe the terms of the
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; and the Committee's or the
Board's determination on matters within its authority shall be conclusive and
binding upon the Participants, the Company and all other Persons. The authority
of the Committee and the Board granted under this Article IX shall be additive
to the authority granted to them under Section 4.1.
ARTICLE X
MISCELLANEOUS
10.1 Amendment, Suspension and Termination of Plan. The Board
may amend or terminate the Plan at any time. 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 Participant.
10.2 Adjustments.
(a) Performance Targets. The Committee, in consultation
with the CEO, 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 or the Board shall
make such adjustments in the number and type of options authorized by and shares
subject to the Plan and the number and type of shares covered by outstanding
Options and the Exercise Prices specified therein and such other amendments to
the Plan as the Board or the Committee, in good faith, determines to be
appropriate and equitable.
10.3 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 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
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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.
10.4 No Right to Participate. Except as otherwise agreed 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.
10.5 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), 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.
10.6 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 (as to grants made prior to March 1, 2002) or the State
of Delaware (as to grants made on or after March 1, 2002).
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