Exhibit 10.9
ARCH CHEMICALS, INC. 1999 LONG TERM INCENTIVE PLAN
(As amended through February 9, 2005)
Section 1. Purpose
The purposes of the Arch Chemicals, Inc. 1999 Long Term Incentive Plan
(the "Plan") are to encourage selected salaried employees of Arch Chemicals,
Inc. (together with any successor thereto, the "Company") and its Affiliates (as
defined below) to acquire a proprietary interest in the Company's growth and
performance, to generate an increased incentive to contribute to the Company's
future success and to enhance the ability of the Company and its Affiliates to
attract and retain qualified individuals.
Section 2. Definitions
As used in the Plan:
(a) "Affiliate" means (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company, and (ii) any
entity in which the Company has a significant equity interest as
determined by the Committee.
(b) "Award" means any Option, Restricted Stock, Restricted Stock Unit,
Performance Award or Dividend Equivalent granted under the Plan.
(c) "Award Agreement" means any written agreement or other instrument or
document evidencing an Award granted under the Plan. The terms of
any plan or guideline adopted by the Board or the Committee and
applicable to an Award shall be deemed incorporated in and a part of
the related Award Agreement.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(f) "Committee" means a committee of the Board designated by the Board
to administer the Plan and
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composed of not less than two directors, each of whom is qualified
as a "Non-Employee Director" as contemplated by the Section 16 Rules
and as an "Outside Director" as defined in Code Section 162(m) and
any regulations promulgated thereunder.
(g) "Dividend Equivalent" means any right granted under Section 6(d)(iv)
of the Plan.
(h) "Fair Market Value" means, with respect to any property (including,
without limitation, Shares or other securities), the fair market
value of such property determined by such methods or procedures as
shall be established from time to time by the Committee.
(i) "Incentive Stock Option" means an option to purchase Shares granted
under Section 6(a) of the Plan that is intended to meet the
requirements of Section 422 of the Code or a successor provision
thereto.
(j) "Non-Qualified Stock Option" means an option to purchase Shares
granted under Section 6(a) of the Plan that is not intended to be an
Incentive Stock Option.
(k) "Option" means an Incentive Stock Option or a Non-Qualified Stock
Option.
(l) "Participant" means a Salaried Employee granted an Award under the
Plan.
(m) "Performance Award" means any award granted under Section 6(c) of
the Plan.
(n) "Person" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated
organization, or government or political subdivision thereof.
(o) "Released Securities" means securities that were Restricted
Securities with respect to which all applicable restrictions imposed
under the terms of the relevant Award have expired, lapsed or been
waived or satisfied.
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(p) "Restricted Securities" means Awards of Restricted Stock or other
Awards under which outstanding Shares are held subject to certain
restrictions.
(q) "Restricted Stock" means any Share granted under Section 6(b) of the
Plan.
(r) "Restricted Stock Unit" means any right granted under Section 6(b)
of the Plan that is denominated in Shares.
(s) "Salaried Employee" means any salaried employee of the Company or of
an Affiliate.
(t) "Section 16 Rules" means the rules promulgated by the Securities and
Exchange Commission with respect to Section 16 of the Securities
Exchange Act of 1934, as amended, or any successor rules.
(u) "Shares" means the common stock of the Company and such other
securities or property as may become the subject of Awards pursuant
to an adjustment made under Section 4(b) of the Plan.
Section 3. Administration
The Plan shall be administered by the Committee which shall have full
power and authority to: (i) designate Participants; (ii) determine the Awards to
be granted to Participants; (iii) determine the number of Shares (or securities
convertible into Shares) to be covered by Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards, or other property, or canceled, substituted, forfeited
or suspended, and the method or methods by which Awards may be settled,
exercised, canceled, substituted, forfeited or suspended; (vi) determine
whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award under the Plan shall be deferred either automatically or at the
election of the Participant or of the Committee; (vii) interpret and administer
the Plan and any instrument or agreement relating to, or Award made under, the
Plan; (viii) establish, amend, suspend or waive such rules and guidelines and
appoint such agents as it shall deem appropriate for the administration of
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the Plan; and (ix) make any other determination and take any other action that
it deems necessary or desirable for such administration. All designations,
determinations, interpretations and other decisions with respect to the Plan or
any Award shall be within the sole discretion of the Committee and shall be
final, conclusive and binding upon all Persons, including the Company, any
Affiliate, any Participants, any holder or beneficiary of any Award, any
shareholder and any employee of the Company or of any Affiliate. The Committee's
powers include the adoption of modifications, amendments, procedures, subplans
and the like as are necessary to comply with provisions of the laws of other
countries in which the Company or an Affiliate may operate in order to assure
the viability of Awards granted under the Plan and to enable Participants
employed in such other countries to receive benefits under the Plan and such
laws.
Section 4. Shares Available for Awards
(a) Shares Available. The aggregate number of Shares available for
issuance under the Plan shall be 2,123,000 subject to adjustment
pursuant to subsection (b) below.
(b) Adjustments. In the event that the Committee determines that any
dividend or other distribution, recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of Shares or
other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or
other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate
in order to prevent dilution or enlargement of the benefits intended
to be made available under the Plan, then the Committee shall, in
such manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares (or other securities or property) which
thereafter may be made the subject of Awards, (ii) the number and
type of Shares (or other securities or property) subject to
outstanding Awards, (iii) the grant, purchase or exercise price with
respect to any Award, or, if the Committee deems it appropriate,
make provision for a cash
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payment to the holder of an outstanding Award and (iv) the
limitation contained in Section 4(c). Notwithstanding the foregoing,
a Participant to whom Dividend Equivalents or dividend units have
been awarded shall not be entitled to receive a special or
extraordinary dividend or distribution unless the Committee shall
have expressly authorized such receipt.
(c) Limitation on Awards. Notwithstanding anything contained in this
Plan to the contrary, grants to any one Participant of Awards which
represent or are designated in Shares shall not exceed 300,000
Shares in any calendar year.
Section 5. Eligibility
Any Salaried Employee, including any officer or employee-director of the
Company or an Affiliate shall be eligible to be designated a Participant.
Section 6. Awards
(a) Options. The Committee is authorized to grant Options to
Participants with the following terms and conditions and with such
additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine:
(i) Exercise Price. The purchase price per Share purchasable under
an Option shall be determined by the Committee; provided,
however, that such purchase price shall not be less than the
Fair Market Value of a Share on the date of grant of such
Option.
(ii) Option Term. The term of each Option shall be fixed by the
Committee, provided that in no event shall the term of an
Option exceed a period of ten years from the date of its
grant.
(iii) Exercise. The Committee shall determine the time or times at
which an Option may be exercised in whole or in part (but in
no event shall an Option be exercisable after the expiration
of ten years from the date of
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its grant), and the method or methods by which, and the form
or forms (including, without limitation, cash, Shares, other
Awards or other property, or any combination thereof, having a
Fair Market Value on the exercise date equal to the relevant
exercise price) in which, payment of the exercise price with
respect thereto may be made; provided that no Shares may be
used by a Participant in payment of the exercise price of an
Option unless such Shares were acquired in the open market or
have been held by the Participant for at least six months.
(iv) Incentive Stock Options. The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects
with the provisions of Section 422 of the Code, or any
successor provision thereto, and any regulations promulgated
thereunder. Without limiting the preceding sentence, the
aggregate Fair Market Value (determined at the time an option
is granted) of Shares with respect to which Incentive Stock
Options are exercisable for the first time by a Participant
during any calendar year (under the Plan and any other plan of
the Participant's employer corporation and its parent and
subsidiary corporations providing for Options) shall not
exceed such dollar limitation as shall be applicable to
Incentive Stock Options under Section 422 of the Code or a
successor provision.
(b) Restricted Stock and Restricted Stock Units.
(i) Issuance. The Committee is authorized to grant Awards of
Restricted Stock and Restricted Stock Units to Participants.
(ii) Restrictions. Shares of Restricted Stock and Restricted Stock
Units shall be subject to such restrictions as the Committee
may impose (including, without limitation, any limitation on
the right to vote a Share of Restricted Stock or the right to
receive any
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dividend or other right or property), which restrictions may
lapse separately or in combination at such time or times, in
such installments or otherwise, as the Committee may deem
appropriate, provided that in order for a Participant to vest
in Awards of Restricted Stock or Restricted Stock Units where
vesting is based solely on continued service, the Participant
must remain in the employ of the Company or an Affiliate for a
period of not less than three years commencing on the date of
grant of the Award, subject to Section 9 hereof and subject to
relief for specified reasons as may be approved by the
Committee.
(iii) Registration. Any Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry
registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in
respect of Shares of Restricted Stock granted under the Plan,
such certificate shall be registered in the name of the
Participant and when delivered to the Participant shall bear
an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock.
(iv) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment for any reason during the
applicable restriction period, all Shares of Restricted Stock
and all Restricted Stock Units still subject to restriction
shall be forfeited and reacquired by the Company; provided,
however, that the Committee may, in its sole discretion, waive
in whole or in part any or all remaining restrictions with
respect to Shares of Restricted Stock or Restricted Stock
Units. Unrestricted Shares, evidenced in such manner as the
Committee shall deem appropriate, shall be delivered to the
holder of Restricted Stock
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promptly after such Restricted Stock shall become Released
Securities.
(c) Performance Awards. The Committee is authorized to grant Performance
Awards to Participants. Subject to the terms of the Plan and any
applicable Award Agreement, a Performance Award granted under the
Plan (i) may be denominated or payable in cash, Shares (including,
without limitation, Restricted Stock or Restricted Stock Units),
other securities, other Awards or other property and (ii) shall
confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of such
performance goals during such performance periods as the Committee
shall establish. Subject to the terms of the Plan and any applicable
Award Agreement, the performance goals to be achieved during any
performance period, the length of any performance period, the amount
of any Performance Award granted, and the amount of any payment or
transfer to be made pursuant to any Performance Award shall be
determined by the Committee, provided that a performance period
shall be at least one year, subject to Section 9 hereof.
(d) General.
(i) No Cash Consideration for Awards. Participants shall not be
required to make any cash payment for the granting of an Award
except for such minimum consideration as may be required by
applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may be
granted either alone or in addition to, in tandem with, or in
substitution for any other Award or any award or benefit
granted under any other plan or arrangement of the Company or
any Affiliate, or as payment for or to assure payment of an
award or benefit granted under any such other such plan or
arrangement, provided that the purchase or exercise price
under an Award encompassing the right to purchase Shares shall
not be reduced by the cancellation of such Award and the
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substitution of another Award. Awards so granted may be
granted either at the same time as or at a different time from
the grant of such other Awards or awards or benefits.
(iii) Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments to be
made by the Company or an Affiliate upon the grant, exercise,
or payment of an Award may be made in such form or forms as
the Committee shall determine, including, without limitation,
cash, Shares, other securities, other Awards, or other
property or any combination thereof, and may be made in a
single payment or transfer, in installments, or on a deferred
basis, in each case in accordance with rules and procedures
established by the Committee.
(iv) Dividend Equivalents or Interest. Subject to the terms of the
Plan and any applicable Award Agreement, a Participant,
including the recipient of a deferred Award, shall, if so
determined by the Committee, be entitled to receive, currently
or on a deferred basis, interest or dividends or interest or
dividend equivalents, with respect to the Shares covered by
the Award. The Committee may provide that any such amounts
shall be deemed to have been reinvested in additional Shares
or otherwise reinvested. Notwithstanding the award of Dividend
Equivalents or dividend units, a Participant shall not be
entitled to receive a special or extraordinary dividend or
distribution unless the Committee shall have expressly
authorized such receipt.
(v) Limits on Transfer of Awards. No Award (other than Released
Securities) or right thereunder shall be assignable or
transferable by a Participant, other than (unless limited in
the Award Agreement) by will or the laws of descent and
distribution (or, in the case of an Award of Restricted
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Securities, to the Company), except that an Option may be
transferred by gift to any member of the holder's immediate
family or to a trust for the benefit of one or more of such
immediate family members, if permitted in the applicable Award
Agreement; provided, however, that, if so determined by the
Committee, a Participant may, in the manner established by the
Committee, designate a beneficiary or beneficiaries with
respect to any Award to exercise the rights of the
Participant, and to receive any property distributable, upon
the death of the Participant. Each Award, and each right under
any Award, shall be exercisable, during the Participant's
lifetime, only by the Participant or, if permissible under
applicable law by the Participant's guardian or legal
representative unless it has been transferred to a member of
the holder's immediate family or to a trust for the benefit of
one or more of such immediate family members, in which case it
shall be exercisable only by such transferee. For the purposes
of this provision, a holder's "immediate family" shall mean
the holder's spouse, children and grandchildren. No Award
(other than Released Securities), and no right under any such
Award, may be pledged, attached or otherwise encumbered other
than in favor of the Company, and any purported pledge,
attachment, or encumbrance thereof other than in favor of the
Company shall be void and unenforceable against the Company or
any Affiliate.
(vi) Term of Awards. Except as otherwise expressly provided in the
Plan, the term of each Award shall be for such period as may
be determined by the Committee.
(vii) Section 16 Rule Six-Month Limitations. To the extent required
in order to otherwise satisfy the requirements for exemption
under the Section 16 Rules only, any derivative or equity
security offered pursuant to the Plan may not be sold for at
least six months
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after acquisition or grant (or such other period as may be
required by the Section 16 Rules), except in the case of
death. Terms used in the preceding sentence shall, for the
purposes of such sentence only, have the meanings, if any,
assigned or attributed to them under Section 16 Rules.
(viii) No Rights to Awards. No Salaried Employee, Participant or
other Person shall have any claim to be granted an Award, and
there is no obligation for uniformity of treatment of Salaried
Employees, Participants or holders or beneficiaries of Awards
under the Plan. The terms and conditions of Awards need not be
the same with respect to each recipient. The prospective
recipient of any Award under the Plan shall not, with respect
to such Award, be deemed to have become a Participant, or to
have any rights with respect to such Award, until and unless
such recipient shall have executed an agreement or other
instrument accepting the Award and delivered a fully executed
copy thereof to the Company, and otherwise complied with the
then applicable terms and conditions.
(ix) Delegation. Notwithstanding any provision of the Plan to the
contrary, the Committee may delegate to one or more officers
or managers of the Company or any Affiliate, or a committee of
such officers or managers, the authority, subject to such
terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify, waive rights or
conditions with respect to, alter, discontinue, suspend, or
terminate Awards held by, Salaried Employees who are not
officers or directors of the Company for purposes of the
Section 16 Rules.
(x) Withholding. The Company or any Affiliate may withhold from
any Award granted or any payment due or transfer made under
any Award or under the Plan the amount (in cash, Shares, other
securities, other Awards, or
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other property) of withholding taxes due in respect of an
Award, its exercise or any payment under such Award or under
the Plan, and take such other action as may be necessary in
the opinion of the Company or Affiliate to satisfy all
obligations for the payment of such taxes.
(xi) Other Compensation Arrangements. Nothing contained in the Plan
shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally
applicable or applicable only in specific cases.
(xii) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in
the employ of the Company or any Affiliate. Nothing in the
Plan or any Award Agreement shall limit the right of the
Company or an Affiliate at any time to dismiss a Participant
from employment, free from any liability or any claim under
the Plan or the Award Agreement.
(xiii) Governing Law. The validity, construction and effect of the
Plan and any rules and regulations relating to the Plan shall
be determined in accordance with the laws of the State of
Connecticut and applicable Federal law.
(xiv) Severability. If any provision of the Plan or any Award is
determined to be invalid, illegal or unenforceable in any
jurisdiction, or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed
or deemed amended to conform to applicable laws, or, if it
cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the intent
of the Plan or the Award, such
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provision shall be stricken as to such jurisdiction, Person or
Award, and the remainder of the Plan and any such Award shall
remain in full force and effect.
(xv) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of
any kind or a fiduciary relationship between the Company or
any Affiliate and a Participant or any other Person. To the
extent that any Person acquires a right to receive payments
from the Company or any Affiliate pursuant to an Award, such
right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.
(xvi) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee
shall determine whether cash, other securities or other
property shall be paid or transferred in lieu of any
fractional Shares, or whether such fractional Shares or any
rights thereto shall be canceled, terminated or otherwise
eliminated.
(xvii) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or
the exercise thereof shall be subject to such stop transfer
orders and other restrictions as the Committee may deem
advisable under the Plan or the rules, regulations and other
requirements of the Securities and Exchange Commission, any
stock exchange upon which such Shares or other securities are
then listed, and any applicable Federal or state securities
laws, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to
such restrictions.
(xviii) Conflict with Plan. In the event of any inconsistency or
conflict between the terms of the Plan and an Award Agreement,
the terms of the Plan shall govern.
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(xix) Performance Based Awards. Notwithstanding any provision in
this Plan to the contrary, Awards granted under Sections 6(b)
or 6(c) and designated by the Committee as being
performance-based shall have as performance measures Return on
Equity, Total Return to Shareholders, Cumulative Earnings per
Share Growth, Cash Flow, Earnings Per Share, EBIT, EBITDA,
EBITDA Margins, Operating Cash Flow, Operating Income,
Operating Margins, Working Capital, Working Capital as a
Percent of Net Sales, Return on Net Assets, Return on Capital,
Profit Margin, and Return on Total Assets. For purposes of the
Plan, "Return on Equity" shall mean consolidated net income of
the Company before the after tax effect of any extraordinary
expenses or losses, losses on sale of businesses, impairment
charges, special charges or extraordinary gains, gains on the
sale of businesses or sales not in the ordinary course of
business and any cumulative effect of any change in accounting
principle (at the end of such fiscal year), divided by average
shareholders' equity (the average calculated using
shareholders' equity at the beginning and end of such fiscal
year excluding the impact on ending shareholders' equity of
extraordinary expenses or losses, losses on sale of
businesses, impairment charges, special charges or
extraordinary gains, gains on sale of businesses or sales not
in the ordinary course of business); "Total Return to
Shareholders" shall mean for the performance period total
return to shareholders of $100 worth of Shares for such period
assuming reinvestment of dividends on a quarterly basis;
"Cumulative Earnings per Share Growth" shall mean the compound
annual growth rate for Arch diluted Earnings per Share for the
performance or measurement period. The base Earnings per Share
upon which the annual growth rate will be computed will be
determined by the Committee prior to the start of the
performance period. "Earnings per Share"
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shall mean for a fiscal year the actual diluted earnings per
share at the end of such fiscal year calculated as the net
income available to common stockholders excluding the impact
of extraordinary expenses or losses, losses on sale of
businesses, impairment charges and any special charges minus
any extraordinary gains, gains on the sale of businesses or
sales not in the ordinary course of business divided by the
weighted average number of shares of common stock plus any
potential dilutive shares of common stock (such as stock
options) outstanding at the end of such fiscal year, "Cash
Flow" shall mean for a fiscal year EBITDA consolidated net
income (loss), before the after-tax effect of any special
charge or gain or cumulative effect of any change in
accounting principle, plus depreciation and amortization, less
capital and investment spending and plus or minus changes in
working capital (excluding the effect of any reclassifications
to/from long-term assets and liabilities, current or deferred
taxes) at the end of such fiscal year; "Consolidated Net
Assets" shall mean for a fiscal year consolidated total assets
less consolidated non-interest bearing liabilities at the end
of such fiscal year; "EBIT" shall mean for a fiscal year
consolidated net income (loss) plus income tax expense,
interest expense (including costs incurred on accounts
receivable securitization program if not included in interest
expense), extraordinary expenses or losses, losses on sale of
businesses, impairment charges and any special charges minus
interest income and any extraordinary gains, gains on sale of
businesses or sales not in the ordinary course of business at
the end of such fiscal year; "EBITDA" shall mean for a fiscal
year consolidated net income (loss) plus income tax expense,
interest expense (including costs incurred on accounts
receivable securitization program if not included in interest
expense), depreciation, amortization,
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extraordinary expenses or losses, losses on sale of
businesses, impairment charges and any special charges minus
interest income and any extraordinary gains, gains on sale of
businesses or sales not in the ordinary course of business at
the end of such fiscal year; "EBITDA Margins" shall mean for a
fiscal year EBITDA (at the end of such fiscal year) divided by
consolidated net sales at the end of such fiscal year;
"Operating Cash Flow" per share shall mean for a fiscal year
the net operating activities less the impact of the accounts
receivable securitization program divided by the weighted
average number of shares of common stock plus any potential
dilutive shares of common stock (such as stock options)
outstanding at the end of such fiscal year; "Operating Income"
shall mean for a fiscal year consolidated net income (loss)
plus income tax expense, interest expense (including costs
incurred on accounts receivable securitization program if not
included in interest expense), extraordinary expenses or
losses, losses on sale of businesses, impairment charges and
any special charges minus equity in earnings of affiliated
companies, interest income and any extraordinary gains, gains
on sale of businesses or sales not in the ordinary course of
business at the end of such fiscal year; "Operating Margins"
shall mean for a fiscal year Operating Income (at the end of
such fiscal year) divided by consolidated net sales at the end
of such fiscal year; "Profit Margin" shall mean for a fiscal
year consolidated EBIT (at the end of such fiscal year)
divided by consolidated net sales at the end of such fiscal
year; "Return on Capital" shall mean for a fiscal year
consolidated net income plus after-tax interest expense
(including costs incurred on accounts receivable
securitization program if not included in interest expense)
and the after-tax effect of any extraordinary expenses or
losses, special charges or extraordinary gains, gains on the
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sale of businesses or sales not in the ordinary course of
business and any cumulative effect of a change in accounting
principle (at the end of such fiscal year), divided by average
Consolidated Net Assets (the average calculated using
Consolidated Net Assets at the beginning and end of such
fiscal year); "Return on Net Assets" shall mean for a fiscal
year the consolidated EBIT (at the end of such fiscal year)
divided by consolidated average total assets less consolidated
non-interest bearing liabilities (the average calculated using
the balances at the beginning and end of such fiscal year);
"Return on Total Assets" shall mean for a fiscal year the
consolidated EBIT (at the end of such fiscal year) divided by
consolidated average total assets (the average calculated
using the consolidated total assets at the beginning and end
of such fiscal year); "Working Capital" shall mean for a
fiscal year total current assets excluding cash and cash
equivalents plus accounts receivable securitization program
minus total current liabilities excluding short-term
borrowings; "Working Capital as a Percent of Net Sales" shall
mean for a fiscal year Working Capital divided by consolidated
net sales at the end of such fiscal year. The Committee shall
determine the performance goals for each such performance
measure with respect to each such Award.
(xx) Transfer from Olin Plans. As of the dividend payment date
fixed by the board of directors of Olin Corporation for the
distribution of all outstanding shares of common stock of the
Company to the shareholders of Olin Corporation
("Distribution"), Options for Shares, options for common stock
of Olin Corporation, Restricted Stock Units and restricted
stock units of Olin Corporation held by employees of the
Company (after giving effect to the adjustment for the
Distribution) shall be transferred to this
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Plan from stock option and incentive plans maintained by Olin
Corporation. Any Options and Restricted Stock Units
transferred to this Plan shall not reduce the number of Awards
that may be designated in Shares for any Participant in any
calendar year pursuant to Section 4(c). As used in and for all
purposes of the Plan (other than for purposes of Sections 4(a)
with respect to options to purchase stock of Olin Corporation,
4(c) and 6(a)(i) of the Plan), the term "Option" includes an
option transferred to the Plan in connection with the
Distribution ("Transferred Option"), the term "Restricted
Stock Unit" includes a restricted stock unit transferred to
the Plan in connection with the Distribution ("Transferred
Stock Unit") and the term "Award" includes a Transferred
Option and a Transferred Stock Unit.
Section 7. Amendment and Termination
(a) Amendments to the Plan. The Board (or any authorized committee
thereof) may amend, suspend, discontinue or terminate the Plan,
including, without limitation, any amendment, suspension,
discontinuation or termination that would impair the rights of any
Participant, or any other holder or beneficiary of any Award
theretofore granted, without the consent of any shareholder,
Participant, other holder or beneficiary of an Award, or other
Person; provided, however, that, notwithstanding any other provision
of the Plan or any Award Agreement, without the approval of the
shareholders of the Company, no such amendment, suspension,
discontinuation or termination shall be made that would (i) amend
the definition of "Participant" or the definition of "Salaried
Employee" to include non-employee directors of the Company, (ii)
except for adjustments provided in Section 4(b), increase the number
of shares available for issuance under the Plan as specified in
Section 4(a), or (iii) permit any Award encompassing rights to
purchase Shares to be granted with per Share purchase or exercise
prices of less than the Fair Market Value of a Share on the date of
grant thereof; and
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provided further that no amendment, suspension, discontinuation or
termination that would impair the rights of such Participant, holder
or beneficiary shall be made with respect to Section 9 of the Plan
after a Change in Control, as defined therein.
(b) Amendments to Awards. The Committee may waive any conditions or
rights with respect to, or amend, alter, suspend, discontinue, or
terminate, any unexercised Award theretofore granted, prospectively
or retroactively, without the consent of any relevant Participant or
holder or beneficiary of an Award, provided that no amendment,
alteration, suspension, discontinuation or termination of an Award
that would impair the rights of such Participant, holder or
beneficiary shall be made after a Change in Control, as defined in
Section 9; provided further that the Committee may not increase the
payment of any Award granted any Participant.
(c) Adjustments of Awards Upon Certain Acquisitions. In the event the
Company or any Affiliate shall assume outstanding employee awards or
the right or obligation to make future such awards in connection
with the acquisition of another business or another company, the
Committee may make such adjustments, not inconsistent with the terms
of the Plan, in the terms of Awards as it shall deem appropriate.
(d) Adjustments of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms
and conditions of Awards in recognition of unusual or nonrecurring
events (including, without limitation, the events described in
Section 4(b) hereof) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes
in applicable laws, regulations, or accounting principles, whenever
the Committee determines that statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or
accounting principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or
enlargement of the benefits to be made available under the Plan.
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Section 8. Additional Conditions to Enjoyment of Awards.
(a) The Committee may cancel any unexpired, unpaid or deferred Awards if
at any time the Participant is not in compliance with all applicable
provisions of the Award Agreement, the Plan and the following
conditions:
(i) A Participant shall not render services for any organization
or engage, directly or indirectly, in any business which, in
the judgment of the Committee or, if delegated by the
Committee to the Chief Executive Officer, in the judgment of
such Officer, is or becomes competitive with the Company or
any Affiliate, or which is or becomes otherwise prejudicial to
or in conflict with the interests of the Company or any
Affiliate. Such judgment shall be based on the Participant's
positions and responsibilities while employed by the Company
or an Affiliate, the Participant's post-employment
responsibilities and position with the other organization or
business, the extent of past, current and potential
competition or conflict between the Company or an Affiliate
and the other organization or business, the effect on
customers, suppliers and competitors of the Participant's
assuming the post-employment position, the guidelines
established in the then current edition of the Company's
Standards of Ethical Business Practices, and such other
considerations as are deemed relevant given the applicable
facts and circumstances. The Participant shall be free,
however, to purchase as an investment or otherwise, stock or
other securities of such organization or business so long as
they are listed upon a recognized securities exchange or
traded over the counter, and such investment does not
represent a substantial investment to the Participant or a
greater than 1% equity interest in the organization or
business.
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(ii) Participant shall not, without prior written authorization
from the Company, disclose to anyone outside the Company, or
use in other than the Company's business, any secret or
confidential information, knowledge or data, relating to the
business of the Company or an Affiliate in violation of his or
her agreement with the Company or the Affiliate.
(iii) A Participant, pursuant to his or her agreement with the
Company or an Affiliate, shall disclose promptly and assign to
the Company or the Affiliate all right, title and interest in
any invention or idea, patentable or not, made or conceived by
the Participant during employment by the Company or the
Affiliate, relating in any manner to the actual or anticipated
business, research or development work of the Company or the
Affiliate and shall do anything reasonably necessary to enable
the Company or the Affiliate to secure a patent where
appropriate in the United States and in foreign countries.
(b) Notwithstanding any other provision of the Plan, the Committee in
its sole discretion may cancel any Award at any time prior to the
exercise thereof, if the employment of the Participant shall be
terminated, other than by reason of death, unless the conditions in
this Section 8 are met.
(c) Failure to comply with the conditions of this Section 8 prior to, or
during the six months after, any exercise, payment or delivery
pursuant to an Award shall cause the exercise, payment or delivery
to be rescinded. The Company shall notify the Participant in writing
of any such rescission within two years after such exercise payment
or delivery and within 10 days after receiving such notice, the
Participant shall pay to the Company the amount of any gain realized
or payment received as a result of the exercise, payment or delivery
rescinded. Such payment shall be made either in cash or by returning
to the Company the number of Shares that the Participant received in
connection with the rescinded exercise, payment or delivery.
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(d) Upon exercise, payment or delivery pursuant to an Award, the
Committee may require the Participant to certify on a form
acceptable to the Committee, that he or she is in compliance with
the terms and conditions of the Plan.
(e) Nothing herein shall be interpreted to limit the obligations of a
Participant under his or her employee agreement or any other
agreement with the Company.
Section 9. Change in Control
(a) Except as the Board or the Committee may expressly provide otherwise
prior to a Change in Control of the Company (as defined below), in
the event of a Change in Control of the Company:
(i) all Options then outstanding shall become immediately and
fully exercisable, notwithstanding any provision therein for
the exercise in installments;
(ii) all restrictions and conditions of all Restricted Stock and
Restricted Stock Units then outstanding shall be deemed
satisfied as of the date of the Change in Control; and
(iii) all Performance Awards shall become vested, deemed earned in
full and promptly paid to the Participants, cash units in cash
and phantom stock units in the Shares represented thereby or
such other securities, property or cash as may be deliverable
in respect of Shares as a result of a Change in Control,
without regard to payment schedules and notwithstanding that
the applicable performance cycle or retention cycle shall not
have been completed.
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(b) A Change in Control of the Company shall have occurred in the event
that:
(i) the Company ceases to be, directly or indirectly, owned of
record by at least 1,000 shareholders;
(ii) a person, partnership, joint venture, corporation or other
entity, or two or more of any of the foregoing acting as a
"person" within the meaning of Sections 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Act"), other
than the Company, a majority-owned subsidiary of the Company
or an employee benefit plan of the Company or such subsidiary
(or such plan's related trust), become(s) the "beneficial
owner" (as defined in Rule 13d-3 under the Act) of 20% or more
of the then outstanding voting stock of the Company;
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Company's Board of
Directors (together with any new Director whose election by
the Company's Board or whose nomination for election by the
Company's shareholders, was approved by a vote of at least
two-thirds of the Directors then still in office who either
were Directors at the beginning of such period or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Directors then in office;
(iv) all or substantially all of the business of the Company is
disposed of pursuant to a merger, consolidation or other
transaction in which the Company is not the surviving
corporation or the Company combines with another company and
is the surviving corporation (unless the shareholders of the
Company immediately following such merger, consolidation,
combination, or other transaction beneficially own, directly
or indirectly, more than 50% of the aggregate
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voting stock or other ownership interests of (x) the entity or
entities, if any, that succeed to the business of the Company
or (y) the combined company); or
(v) the shareholders of the Company approve a sale of all or
substantially all of the assets of the Company or a
liquidation or dissolution of the Company.
Section 10. Effective Date of the Plan
The Plan shall be effective as of the Distribution Date.
Section 11. Term of the Plan
No Award shall be granted under the Plan after January 31, 2009, but
unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award theretofore granted may extend beyond such date.