Exhibit 6
AMENDMENT TO THE EARTH TECHNOLOGY CORPORATION (USA)
1987 STOCK OPTION PLAN
The Board of Directors has adopted an amendment
("Amendment") to The Earth Technology Corporation (USA) 1987 Stock
Plan ("1987 Stock Option Plan" or "Plan"), which provides for an
increase in the total number of shares of Earth Technology Common
Stock subject to the Plan from 850,000 shares to 1,300,000 shares, of
which up to 450,000 such shares may be issued as restricted stock.
The text of the Amendment is attached hereto as Annex F. The terms of
the 1987 Stock Option Plan require stockholder approval of the
Amendment.
The Board of Directors has adopted the Amendment as part of
its policy to further the long-term growth in earnings of Earth
Technology by providing incentives to those officers and other
employees who are or will be responsible for such growth; to
facilitate the ownership of Earth Technology Common Stock by such
officers and employees, thereby more closely identifying their
interests with those of Earth Technology's stockholders; and to assist
Earth Technology in attracting and retaining officers and other
employees with experience and ability. Incentive stock plans such as
the 1987 Stock Option Plan are an important part of this policy, and
increasing the number of shares available for issuance under the plan
will provide Earth Technology with greater flexibility in carrying out
this policy. The Board believes that the Amendment reflects the best
interests of Earth Technology and recommends its approval by
stockholders.
The summary that follows is subject to the actual terms of
the Plan, which was originally adopted during the 1987 fiscal year,
and amended (with stockholder approval) in 1991 and 1994. A copy of the
Plan is on file with the Corporate Secretary of Earth Technology.
The Plan
The Plan provides for the granting of non-qualified stock
options ("NSOs"), performance stock options ("PSOs") and restricted
stock. NSOs and PSOs are sometimes together referred to herein as
"options." Unless the Plan is earlier terminated by the Board, no
option or restricted stock may be granted under the Plan after 1997.
The Plan is not subject to any provisions of the Employee
Retirement Income Security Act of 1974, as amended, nor is the Plan a
qualified plan within the meaning of Section 401(a) of the Internal
Revenue Code of 1986, as amended.
Plan Administration
The Plan is administered by a committee of Earth
Technology's Board of Directors consisting solely of three or more
"outside," independent directors of Earth Technology. Members of the
committee do not receive any remuneration from the Plan. Committee
members may be removed by the Board.
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Securities Subject to the Plan
Following the Amendment, the Plan will cover 1,300,000
shares of treasury or authorized but unissued shares of Earth Technology
Common Stock, of which up to 450,000 such shares may be issued as
restricted stock.
The Plan provides that, in the event of changes in the Earth
Technology Common Stock by reason of a merger, reorganization,
consolidation, recapitalization, common stock dividend, stock split or
similar change, the committee will make appropriate adjustments in the
aggregate number of shares under the Plan, the number of shares
purchasable upon the exercise thereafter of any option previously
granted and in the purchase price to be paid or the number of shares
issuable pursuant to restricted stock awards.
Eligibility
Options and restrict stock may be generated to eligible
employees of Earth Technology or its subsidiaries as determined and
selected by the committee, provided, however, that PSOs may only be
granted pursuant to a management incentive plan, as described in the
section entitled "Exercise of Options."
Exercise of Options
The purchase price of stock purchased pursuant to the
exercise of an NSO will be 100 percent of the fair market value of Earth
Technology Common Stock on the date the option is granted and may be
adjusted in accordance with the antidilution provisions described in
"Securities Subject to the Plan." Upon the exercise of any option, the
purchase price must be fully paid in cash, in Earth Technology Common Stock
held for a minimum of 6 months, or a combination of both.
PSOs may only be granted in lieu of cash or other taxable
payments under a management incentive plan, and only if the total
discount (from fair market value) on the exercise price for all shares
subject to the PSO is less than or equal to the amount of such
foregone cash or other taxable payment. PSOs are generally subject to
the same terms as NSOs, except that the exercise price of a PSO shall
be as determined by the committee, with a minimum exercise price equal
to the greater of 35% of the fair market value of the Earth Technology
Common Stock covered by the option on the date of grant, or $1.00.
Options may be exercised in amounts determined by the
committee for up to ten years and one day after the grant date or for
such lesser period as the committee may determine. An option shall
first become exercisable at such time as determined by the committee.
Options that are not exercised during their terms will expire without
value.
The section entitled "Death -- Termination of Employment --
Assignment" describes the provisions that relate to the exercise of an
option following termination of employment including death, disability
or retirement.
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Restricted Stock Awards
A restricted stock award is an award of common shares that
may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of for some period of time after the date on which
the award is granted ("restricted period"), as determined by the
committee. The committee may also impose such other restrictions and
conditions on a restricted stock award as it deems appropriate.
During the restricted period, the employee will be entitled
to vote the awarded shares and to receive dividends. If, during the
restricted period, the employee's employment terminates for any
reason, any shares remaining subject to restrictions will be forfeited
by the employee and transferred to Earth Technology, except that the
committee has the authority to waive any or all outstanding
restrictions prior to the end of the restricted period with respect to
certain types of termination of employment, and the authority to add
such new restrictions as it deems appropriate. See the section
entitled "Death -- Termination of Employment -- Assignment."
Death -- Termination of Employment -- Assignment
In the event of termination of employment by reason of
Normal Retirement (as defined in the Plan), any outstanding NSOs and
PSOs shall become vested and immediately exercisable, the restricted
period on any restricted stock shall lapse, and any further
restrictions on NSOs, PSOs or restricted stock shall automatically
terminate. NSOs and PSOs shall then be exercisable for a period of
three years, or until the term of the option expires, whichever period
is shorter.
In the event of termination of employment by reason of Early
Retirement (as defined in the Plan), any NSO or PSO that is not then
exercisable by its terms, and any shares of restricted stock as to
which the restricted period has not expired, shall thereupon be
forfeited and returned to Earth Technology; provided, however, that
the committee, in its discretion, has the authority to waive any such
forfeiture and restrictions on options and restricted stock. Any
outstanding options exercisable by their terms prior to the date of
Early Retirement, and any options as to which any forfeiture or
restrictions are waived, shall be exercisable for a period of three
years, or until the term of the option expires, whichever period is
shorter.
In the event of termination of employment by reason of
death or disability, any option otherwise exercisable at the date of
termination shall be exercisable for a period of one year, or until
the term of the option expires, whichever period is shorter. The
restricted period as to shares of restricted stock will lapse as to a
pro rata portion of the shares subject to restriction, and all other
restricted stock shall forfeited, unless the committee exercises its
discretion to waive such forfeiture and restrictions.
In the event of termination of employment for any other
reason, options otherwise exercisable at the date of termination shall be
exercisable for a period of three months, or until the term of the option
expires, whichever period is shorter. Shares of restricted stock subject
to restriction on the date of termination will be forfeited, except that
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the committee may, in its discretion, waive such forfeiture and
restrictions in the event of an involuntary termination of employment.
Options are not assignable except by will, by the laws of
descent and distribution.
Amendment; Termination
The Board of Directors of Earth Technology may terminate or
amend the Plan at any time, except that stockholder approval is
required for any amendment to (i) materially increase the maximum
number of shares of stock which may be issued under the Plan (except
for adjustments as set forth in the Plan); (ii) change the provisions
as to the price of Options (except for adjustments as set forth in the
Plan), (iii) materially increase the cost of the Plan or materially
increase the benefits to participants; (iv) extend the period during
which awards of Options or Restricted Stock may be granted; (v) extend
the maximum period after the date of grant during which Options may be
exercised; or (vi) materially modify the eligibility requirements.
Payment of Taxes
Earth Technology has the authority to withhold an amount of
Earth Technology Common Stock, or require participants to remit an
amount in cash, sufficiently to satisfy federal, state and local
withholding tax requirements to an any award made under the Plan or
any exercise of an option or termination of the restricted period on
restricted stock.
Certain Federal Income Tax Effects
The following discussion of certain relevant federal income
tax effects applicable to NSOs, PSOs and restricted stock granted
under the Plan is a summary only, and reference is made to the
Internal Revenue Code of 1986, as amended (the "Code"), for a complete
statement of all relevant federal tax provisions. It is recommended
that holders of NSOS or PSOs consult their tax advisers before
exercise of any such option and before disposing of any shares of
common stock acquired upon the exercise thereof.
Options. In the case of an NSO or PSO, an employee
generally will not be taxed upon the grant of such an option. Rather,
at the time of exercise of such option, the employee will recognize
ordinary income for federal income tax purposes in an amount equal to
the excess of the fair market value of the shares purchased over the
option price. Earth Technology will generally be entitled to a tax
deduction at such time as and in the same amount that the employee
recognizes ordinary income. Different rules may apply in the case of
an employee who is an "insider" for purposes of federal securities
laws.
If shares acquired upon exercise of an option are later sold
or exchanged, then the difference between the sales price and the fair
market value of such stock on the date that ordinary income was recognized
with respect thereto will generally be taxable as long-term or short-term
capital gain or loss (if the stock is a capital asset to the employee)
depending upon whether the stock has been held for more than one year after
such date.
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According to a published ruling of the Internal Revenue
Service, an employee who pays the option price upon exercise of an
NSO, in whole or in part, by delivering shares of Earth Technology's
Common Stock already owned by the employee will recognize no gain
or loss for federal income tax purposes on the shares surrendered, but
otherwise will be taxed according to the rules described above for
NSOs. With respect to shares acquired upon exercise which are equal
in number to the shares surrendered, the basis of such shares will be
equal to the basis of the shares surrendered, and the holding period
of the shares acquired will include the holding period of the shares
surrendered. The basis of additional shares received upon exercise
will be equal to the fair market value of such shares on the date
which governs the determination of the employee's ordinary income, and
the holding period for such additional shares will commence on such
date.
Restricted Stock Awards. In the case of a restricted stock
award, an employee generally will not be taxed upon the granted of
such an award, but, rather, the employee will recognize ordinary
income in an mount equal to the fair market value of Earth
Technology's Common Stock at the time the shares are no longer
subject to a substantial risk of forfeiture (as defined in the Code).
Earth Technology will be entitled to a deduction at the time when, and
in the amount that, the employee recognizes ordinary income. However,
an employee may elect (not later than 30 days after acquiring such
shares) to recognize ordinary income at the time the restricted shares
are awarded in an amount equal to their fair market value at that
time, notwithstanding the fact that such shares are subject to
restrictions and a substantial risk of forfeiture. If such an
election is made, no additional taxable income will be recognized by
such employee at the time the restrictions lapse. Earth Technology
will be entitled to a tax deduction at the time when, and to the
extend that, income is recognized by such employee. However, if
shares in respect of which such election was made are later forfeited,
no tax deduction is allowable to the employee for the forfeited
shares, and Earth Technology will be deemed to recognize ordinary
income equal to the amount of the deduction allowed to Earth
Technology at the time of the election in respect of such forfeited
shares.
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The following table sets forth the number of unexercised
stock options and shares of invested restricted stock outstanding under the
1987 Stock Option Plan as of August 26, 1994.
Name Options Outstanding
- ---- -------------------
Diane C. Creel 58,000
Richard R. Pannell 45,000
Creighton K. Early 50,000
Robert A. Colonna 11,000
Elizabeth R. Holbrook 15,000
All current executive officers
as a group (not limited to Named
Executive Officers) 297,497
All current directors (who are
not executive officers) as a group -0-
All nominees for election as
a director 45,000
All associates of any of such
directors, executive officers
or nominees -0-
All other persons who own 5%
or more of outstanding options -0-
All employees, including all current
officers, who are not executive
officers, as a group 430,387
The Board of Directors unanimously recommends that stockholders
vote FOR approval and adoption of the Amendment to the 1987 Stock Option Plan.
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