EXHIBIT 10.11
THE GRAFTECH INTERNATIONAL LTD.
MANAGEMENT STOCK INCENTIVE PLAN
(SENIOR MANAGEMENT VERSION)
This 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, restricted stock and other equity based awards to (i) 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 and (ii) 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 granting to them an ownership interest in the Company or a right to acquire
such an ownership interest, 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,
restricted stock and other equity based awards 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 or the relevant Award Agreement provides for the acceleration of the
vesting or exercisability of an Award.
"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.
"Award" shall mean an award of an Option, Restricted Share or
Other Award granted under the Plan.
"Award Agreement" shall mean the relevant Option Agreement,
Restricted Share Agreement or Other Award Agreement between a Participant and
the Company.
"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 Award 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%
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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 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
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be "beneficial ownership") and references to the Exchange Act or rules
and regulations thereunder shall mean those in effect on June 29, 2000.
"Code" or "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended, and any successor statute.
"Committee" shall mean the Organization, Compensation and
Pension Committee of the Board.
"Common Stock" shall mean the common stock of the Company.
"Company" shall mean GrafTech International Ltd., 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.
"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
and the Subsidiaries 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.
"Employee" shall mean any employee of the Company or any of
the 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.
"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.
"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 or Restricted Share
granted after September 29, 1998 or any Other Award granted after January 15,
2003, the closing sale price (or, if there is none, the average of the closing
bid and asked
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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).
"Good Reason," if relevant to a particular Participant, shall
have the meaning of "Good Reason" set forth in such Participant's Award
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 the 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 Award issued in
respect of an Option referred to in clause (a) above by way of distribution or
in connection with a merger, consolidation, reorganization, recapitalization or
similar event.
"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 shares described in clause (a) above by way of
stock dividend or other distribution, stock split, merger, consolidation,
reorganization, recapitalization or similar event.
"Other Award" shall mean, with respect to any Participant, (a)
any award or right that is valued or measured in whole or in part by reference
to, or is otherwise based on, Common Stock, including an award of shares of
Common Stock (other than (i) an award of an Option or a Restricted Share or (ii)
an "incentive stock option" within the meaning of Section 422 of the Code or any
successor provisions) and (b) any award issued in respect of any Other Award
referred to in clause (a) above by way of distribution or in connection with a
merger, consolidation, reorganization, recapitalization or similar event. Other
Awards permitted under the Plan shall include, without limitation, (a) phantom
stock, stock units, performance shares, stock options and restricted shares of
Common Stock with terms different than those specified herein for Options and
Restricted Shares, and unrestricted shares of Common Stock and (b) awards and
rights with respect to compensation previously earned or accrued.
"Other Award Agreement" shall mean the relevant Other Award
Agreement between a Participant and the Company.
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"Participant" shall mean any individual who holds an
outstanding Award granted under the 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).
"Recapitalization" shall mean the recapitalization of the
Company pursuant to the Recapitalization Agreement.
"Recapitalization Agreement" shall mean the Recapitalization
and Stock Purchase 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).
"Restricted Share" shall mean, with respect to any
Participant, (a) any share of Common Stock granted to the Participant under the
Plan and (b) any award issued in respect of a Restricted Share referred to in
clause (a) above by way of stock dividend or other distribution, stock split,
merger, consolidation, reorganization, recapitalization or similar event.
"Restricted Share Agreement" shall mean the relevant
Restricted Share Agreement between a Participant and the Company.
"Retirement," if relevant to a particular Participant, shall
have the meaning of "Retirement" set forth in such Participant's Award
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
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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 such corporation.
"Time Options" shall mean the options described in Section
5.1.
"Transfer" shall mean, with respect to any Award, 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 Award or any interest therein.
ARTICLE III
LIMITATION ON AVAILABLE SHARES
3.1 Available Shares. The aggregate number of shares of Common Stock with
respect to which Awards may be granted under the Plan shall not exceed
3,861,234, plus the number of shares of Common Stock that were previously
approved by stockholders of the Company for award under the Management Stock
Incentive Plan (Original Version) that may become available due to the
cancellation or expiration of options previously granted under the Management
Stock Incentive Plan (Original Version), plus additional new issue shares added
to the Plan by the Board issuable upon the grant or exercise of an Award granted
after June 30, 2003 as an inducement to employment (the issuance of which is
exempt from the requirement for stockholder approval under the rules of the New
York Stock Exchange); provided, however, that such aggregate number of shares of
Common Stock shall be subject to adjustment in accordance with the provisions of
Section 10.2.
3.2 Status of Option Shares and Restricted Shares. The shares of Common Stock as
to which Awards were or may be granted under the Plan or which have been or are
delivered or deliverable as or upon exercise of Awards consist of (i) new issue
shares, the issuance of which to officers of the Company (within the meaning of
the rules of the New York Stock Exchange) or directors of the Company was
approved by stockholders as then required by the New York Stock Exchange, (ii)
treasury shares held prior to June 30, 2003 (all of which have been previously
listed on the New York Stock Exchange), (iii) 771,000 new issue shares issuable
upon the exercise of Options granted in 1998 and 1999 as inducements to
employment (the issuance of which is exempt from the requirement for stockholder
approval under the rules of the New York Stock Exchange) and (iv) additional new
issue shares issuable upon the grant or exercise of an Award granted after June
30, 2003 as an inducement to employment (the issuance of which is exempt from
the requirement for stockholder approval under the rules of the New York Stock
Exchange). To the extent that any Awards (other than Awards as an inducement to
employment) are forfeited or expire (including, without limitation, termination
prior to vesting or exercise), the shares of Common Stock in respect of which
such Awards were granted shall become available for Awards granted pursuant to
the Plan or any other plan or agreement approved by the Committee. To the extent
that any Awards as an inducement to employment are forfeited or expire
(including, without limitation, termination prior to vesting or exercise), the
shares of Common Stock in respect of which such Awards were granted cease to be
available for Awards granted pursuant to the Plan or any other plan or
agreement. For purposes of calculating
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the number of shares of Common Stock used and available for use under the Plan,
only shares of Common Stock subject to Awards that have been or, by their terms,
may be settled by delivery of shares of Common Stock shall be deemed to have
been used or reserved for use.
ARTICLE IV
GRANT OF OPTIONS, RESTRICTED SHARES AND OTHER AWARDS
4.1 Options and Restricted Shares. Options and Restricted
Shares may be granted to Employees, Directors and Non-Employees. Initially,
Options shall be granted by the Board. Thereafter, the Committee or the Board
shall grant Options and Restricted Shares to Employees (other than Directors)
after consultation with the CEO; the Board or the Committee shall grant Options
and Restricted Shares to Directors; and the Board or the Committee shall grant
Options and Restricted Shares 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 and Restricted Shares granted by
it at the time of grant, which terms and conditions shall be set forth in the
relevant Option Agreements and Restricted Share 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 the 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 the 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) under the Plan on or after
September 29, 1998 and only Time Options or Standard Options shall be granted to
Directors under the plan on or after September 29, 1998.
4.5 Other Awards. Commencing January 16, 2003, Other Awards may
be granted to Employees and Directors and, commencing June 26, 2003, Other
Awards may be granted to Non-Employees. The Committee or the Board shall grant
Other Awards to Employees (other than Directors) after consultation with the
CEO; the Board or the Committee shall grant Other Awards to Directors; and the
Board or the Committee shall grant Other Awards to Non-Employees after
consultation with the CEO. Other Awards may be granted alone or in
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addition to any other Awards granted under the Plan. The Board or the Committee
shall establish the terms and conditions applicable to Other Awards granted by
it at the time of grant, which terms and conditions shall be set forth in the
relevant Award Agreement or in amendments to the Plan. Such terms and conditions
may include, without limitation, settlement in cash or shares of Common Stock or
a combination thereof (which form of settlement may be either prescribed by the
Board or the Committee or subject to the discretion of the Company or the
Participant), performance measures, tandem or reload features, vesting schedules
(and provisions regarding acceleration of vesting), registration provisions
(including indemnification and contribution arrangements), terms and conditions
relating to withholding of taxes, transferability provisions, forfeiture and
clawback provisions, anti-dilution provisions and provisions relating to
adjustments to reflect business combinations, provisions relating to dividends
and distributions, and exercise provisions (including provisions relating to
conditional exercises, net exercises and payment of exercise prices with
outstanding shares of Common Stock).
ARTICLE V
EXERCISABILITY OF OPTIONS
5.1 Time Options. Except as otherwise provided in the relevant
Option Agreement or Section 5.3, all then outstanding Time Options became vested
and exercisable prior to March 1, 2002.
5.2 Performance Options. Except as otherwise provided in the
relevant Option Agreement or Section 5.3, all then outstanding Performance
Options became vested and exercisable prior to March 1, 2002.
5.2A Standard Options. Except as otherwise provided in the
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 vest and 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. 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 vesting and exercisability of any or all Options at
any time and for any reason.
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
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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 relevant Option Agreement and Exercise Notice.
In lieu of paying the Exercise Price, 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 Option Agreements and Option Programs. To the extent that
the relevant Option Agreement or any stock option administration program
provides for different administrative, clerical or operational activities than
those provided for in this Article VI and such different activities are not
materially inconsistent with the purposes of this Article VI, then such other
provision shall govern.
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 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 and Standard Options shall
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expire at 5:00 p.m. Eastern Standard Time on the tenth anniversary of the Grant
Date or on such earlier date as shall be specified by the Committee or the Board
at the time of grant and set forth in the relevant Option Agreements (as
applicable, the "Expiration Date").
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 VIIA
RESTRICTED SHARES
7A.1Dividends. If the Board declares a special or
extraordinary dividend or distribution payable on the Common Stock, the Company
shall notify each Participant who (on the record date for determination of
stockholders entitled to receive such dividend or distribution) holds unvested
Restricted Shares of the amount of the dividend or distribution which such
Participant would have received if such Restricted Shares had vested prior to
such record date. Upon the vesting of such Restricted Shares, such dividend or
distribution shall be promptly paid, in cash if such dividend or distribution
was a cash dividend or distribution or in securities or other property if such
dividend or distribution was a dividend or distribution of securities or other
property, to such Participant. If any of such Restricted Shares are forfeited or
fail to vest, the Participant shall forfeit all rights to any such dividend or
distribution and it shall revert to the Company.
7A.2Acceleration Events. The Committee or the Board may, but
are not required to, provide for the accelerated vesting of Restricted Shares at
the time of grant and any such provisions shall be set forth in the relevant
Restricted Share Agreement(s). The Committee or the Board may, in its
discretion, accelerate the vesting of any or all Restricted Shares at any time
and for any reason.
7A.3 Withholding of Taxes. The Company and its Subsidiaries
shall withhold or deduct from any or all payments or amounts due to or held for
the Participant or require payment by the Participant of an amount equal to all
taxes (including social security and medical (including FICA), and other
governmental charges of any kind as well as income and other taxes) required to
be withheld or deducted with respect to any and all taxable income and other
amounts attributable to the Restricted Shares. The procedures and arrangements
with respect thereto shall be set forth in the relevant Restricted Stock
Agreement.
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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
ividend 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 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 and Restricted Shares.
(a) Registration. The Company shall file, at its own
expense, a registration statement or statements on Form S-8 or Form S-3, as
appropriate, to register the issuance or resale of the Option Shares and the
Restricted Shares.
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(b) Limitations on Resale. Any resale of the Option Shares
or the Restricted Shares pursuant to such registration statement or statements
shall be subject to (i) the continued effectiveness, at the Company's
discretion, of such registration statement or statements and (ii) any blackout,
insider trading, short-swing profits or other restrictions on trading activity
which the Company may impose or to which the Participant may be subject, by law,
under Company policies or otherwise.
(c) Indemnification. Any Participant for whom the resale
of Option Shares or Restricted Shares is included in such registration statement
or statements will indemnify the Company, each of its directors and officers and
each Person who Controls the Company (other than such Participant) against all
claims, losses, damages, expenses and liabilities (or actions in respect
thereof) arising out of or based upon any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement or
statements, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company, each of its directors and
officers and each Person Controlling the Company (other than such Participant)
for all legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged statement) or omission (or alleged omission) is made in such
registration statement or statements in reliance upon and in conformity with
written information furnished to the Company by such Participant with respect to
such Participant and expressly stated to be specifically for use therein;
provided, however, that the liability of any such Participant under this Section
8.2(c) shall be limited to the amount of proceeds received by such Participant
in the resale giving rise to such liability.
8.3 Transfer of Options. Options may not be Transferred (other
than by will or descent), except that Options may be Transferred to the Company
to secure indebtedness on any Employee Loan.
8.4 Transfer of Restricted Shares. Unless otherwise determined
by the Board or the Committee and in accordance with the vesting conditions set
forth in the relevant Restricted Share Agreement, Restricted Shares may not be
Transferred until the termination or lapse of all restrictions relating to such
Restricted Shares.
8.5 Agreements. Award Agreements may contain such additional
provisions (including rights, restrictions and obligations), not materially
inconsistent with the Plan, as may be approved by the Board or the Committee or
by the officers of the Company pursuant to authority delegated to them by the
Board or the Committee.
ARTICLE IX
ADMINISTRATION
9.1 Plan Administrator. Subject to the ultimate authority of
the Board, the 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.
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9.2 Option Grants. The Committee and the Board shall have
authority to select Employees (other than Directors) to receive Awards and to
grant Awards (except for the 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 and Restricted Shares, the terms and conditions of which
(including the aggregate number of shares subject to Options and Restricted
Shares 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 Award Agreement 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 Awards granted hereunder prior to the date of such suspension,
termination or amendment without the consent of such Participant.
10.2 Adjustments.
(a) [omitted]
(b) Changes in Common Stock. In the event of a stock
dividend, stock split, share combination or other nonrecurring corporate
transaction, the Committee or the Board shall make such adjustments in the
number and type of Awards authorized by and shares subject to the Plan and the
number and type of shares covered by outstanding Awards 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 [omitted]
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.
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10.5 No Employment Contract. Nothing in the Plan shall
interfere with or limit in any way the right of the Company or any of the
Subsidiaries to terminate any Participant's employment at any time (with or
without Cause) or shall confer upon any Participant any right to continued
employment by the Company or any of the 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 the 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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