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EXHIBIT 4.9
MOTIVEPOWER INDUSTRIES, INC.
STOCK INCENTIVE PLAN
SECTION 1 - PURPOSE OF PLAN
This Stock Incentive Plan is intended to promote the long-term interests of the
Company and its shareholders by providing officers, key employees of the Company
and its Affiliates and other key individuals (including non-employees) with an
additional incentive to promote the financial success of the Company and its
Affiliates.
SECTION 2 - DEFINITIONS
Unless otherwise required by the context, the following terms when used in the
Plan shall have the meanings set forth in this Section 2:
(a) "Affiliate": Any "parent corporation" or "subsidiary corporation" of
the Company, as such terms are defined in Sections 424(e) and (f),
respectively, of the Code.
(b) "Agreement": A restricted stock agreement, option agreement or rights
agreement evidencing an Award in such form as adopted by the Committee
pursuant to the Plan.
(c) "Award": An award of Restricted Stock, an Option or a Right, or a
combination thereof, under the Plan.
(d) "Board of Directors": The Board of Directors of the Company.
(e) "Code": The Internal Revenue Code of 1986, as amended from time to
time.
(f) "Committee": The Compensation Committee of the Board of Directors or
such other committee appointed by the Board of Directors which meets
the requirements set forth in Section 14(a) hereof.
(g) "Company": Motive Power Industries, a Delaware corporation.
(h) "Effective Date": The date on which the Plan shall become effective as
set forth in Section 15 hereof.
(i) "Exchange Act": The Securities Exchange Act of 1934, as amended,
together with all regulations and rules issued thereunder.
(j) "Exercise Price":
(i) In the case of an Option, the price per Share at which the
Shares subject to such Option may be purchased upon exercise
of such Option; and
(ii) in the case of a Right, the price per Share which, upon grant,
the Committee determines shall be utilized in calculating the
aggregate value which a Participant shall be entitled to
receive upon exercise of such Right.
(k) "Fair Market Value": As applied to a specific date, the mean between the
highest and lowest quoted selling price of a Share on the NASDAQ system
on such date, or if there are no reported sales on such date, on the
last preceding date on which sales were reported. The foregoing to the
contrary notwithstanding, with respect to initial Awards granted to
Participants in connection with an initial public offering of the
Company's common stock, Fair Market Value shall mean the initial public
offering price. The Fair Market Value determined by the Committee in
good faith in such manner shall be final, binding and conclusive on all
parties.
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(l) "ISO": An Option intended to qualify as an "incentive stock option," as
defined in Section 422 of the Code or any statutory provision that may
replace such Section.
(m) "LSAR": A limited stock appreciation right awarded to a Participant
under Section 9 hereof.
(n) "NQSO": An Option not intended to be an ISO and designated a
nonqualified stock option by the Committee.
(o) "Option": Any ISO or NQSO granted under the Plan.
(p) "Participant": An individual who has been granted an Award under the
Plan.
(q) "Plan": MotivePower Industries Stock Incentive Plan, as the same may be
amended from time to time.
(r) "Related":
(i) in the case of a Right, a Right which is granted in connection
with, and to the extent exercisable, in whole or in part, in
lieu of, an Option or another Right; and
(ii) in the case of an Option, an Option which is granted in
connection with, and to the extent exercisable, in whole or in
part, in lieu of, a Right or another Option.
(s) "Restricted Stock": Shares of restricted stock awarded to a Participant
under Section 10 hereof.
(t) "Right": Any SAR or LSAR granted under the Plan.
(u) "SAR": A stock appreciation right awarded to a Participant under
Section 8 hereof.
(v) "Shares": Shares of the Company's authorized but unissued or reacquired
$.0l par value common stock, or such other class or kind of shares or
other securities as may be applicable pursuant to the provisions of
Section 4(b) hereof.
(w) "Subsidiary": Any "subsidiary corporation" of the Company, as such term
is defined in Section 424(f) of the Code.
(x) "Trigger Event": An event described in Section 9(c) hereof.
SECTION 3 - PARTICIPATION
Except as modified below, the class of persons eligible to receive Awards under
the Plan shall be those officers and other key employees of the Company or its
Affiliates and those non-employees of the Company or its Affiliates, as
designated by the Committee from time to time, but in no case shall any member
of the Committee be eligible to receive any Award under the Plan. Although
designated non-employees are eligible to participate in the Plan, non-employees
are not eligible to receive an ISO or Related Right to an ISO under this Plan.
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SECTION 4 - SHARES SUBJECT TO PLAN
(a) Maximum Shares. Subject to adjustment by the operation of Section 4(b)
hereof, the maximum number of shares with respect to which Awards may
be made under the Plan is 3,000,000. The Shares with respect to which
Awards may be made under the Plan may be either authorized and unissued
shares or issued shares heretofore or hereafter reacquired and held as
treasury shares. Shares which are subject to Related Rights and Related
Options shall be counted only once in determining whether the maximum
number of Shares with respect to which Awards may be granted under the
Plan has been exceeded. An Award shall not be considered to have been
made under the Plan with respect to any Option or Right to the extent
that it terminates without being exercised, and new Awards may be
granted under the Plan with respect to the number of Shares as to which
such termination has occurred.
(b) Adjustment of Shares and Price. In the event that the Shares are
changed into or exchanged for a different kind or number of shares of
Stock or securities of the Company as the result of any stock dividend,
stock split, combination of shares, exchange of shares, merger,
consolidation, reorganization, recapitalization or other change in
capital structure, then the number of Shares subject to this Plan and
to Awards granted hereunder and the purchase price, repurchase price or
Exercise Price for such Shares shall be equitably adjusted by the
Committee to prevent the dilution or enlargement of Awards, and any new
stock or securities into which the Shares are changed or for which they
are exchanged shall be substituted for the Shares subject to this Plan
and to Awards granted hereunder; provided, however, that fractional
shares may be deleted from any such adjustment or substitution.
SECTION 5 - GENERAL TERMS AND CONDITIONS OF OPTIONS AND RIGHTS
(a) General Terms. The Committee shall have full and complete authority and
discretion, except as expressly limited by the Plan, to grant Options
and Rights and to provide the terms and conditions (which need not be
identical among Participants) thereof. In particular, the Committee
shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, determined in
accordance with Section 5(b) hereof;
(ii) the number of Shares subject to, and the expiration date of,
any Option or Right, provided, however, that no Option or
Right shall have a term in excess of 10 years from the date of
grant of the Option or Right;
(iii) the manner, time and rate (cumulative or otherwise) of
exercise of such Option or Right; and
(iv) the restrictions, if any, to be placed upon such Option or
Right or upon Shares which may be issued upon exercise of such
Option or Right. The Committee may, as a condition of granting
any Option or Right, require that a Participant agree not to
thereafter exercise one or more Options or Rights previously
granted to such Participant.
(b) Exercise Price. The Exercise Price shall be determined by the Committee
and shall not be less than the Fair Market Value per Share on the date
of grant. Notwithstanding the foregoing, in no event shall the Exercise
Price be less than the par value per Share.
SECTION 6 - EXERCISE OF OPTIONS AND RIGHTS
(a) General Exercise Rights. An Option or Right granted under the Plan
shall be exercisable during the lifetime of the Participant to whom
such Option or Right was granted only by such Participant, and with
respect to an
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Option or Right granted to an employee of the Company or its Affiliates
except as provided in Section 6(c) hereof, no such Option or Right may
be exercised unless at the time such Participant exercises such Option
or Right, such participant is an employee of, and has continuously
since the grant thereof been an employee of, the Company or an
Affiliate. Transfer of employment between Affiliates or between an
Affiliate and the Company shall not be considered an interruption or
termination of employment for any purpose of this Plan. Neither shall a
leave of absence at the request, or with the approval, of the Company
or an Affiliate be deemed an interruption or termination of employment,
so long as the period of such leave does not exceed 90 days, or, if
longer, so long as the Participant's right to re-employment with the
Company or an Affiliate is guaranteed by contract. An Option or Right
also shall contain such conditions upon exercise (including, without
limitation, conditions limiting the time of exercise to specified
periods) as may be required to satisfy applicable regulatory
requirements, including, without limitation, Rule 16b-3 (or any
successor rule) promulgated by the Securities and Exchange Commission.
(b) Notice of Exercise. An Option or Right may not be exercised with
respect to less than 25 Shares, unless the exercise relates to all
Shares covered by the Option or Right at the date of exercise. An
Option or Right shall be exercised by delivery of a written notice to
the Company. Such notice shall state the election to exercise the
Option or Right and the number of whole Shares in respect of which it
is being exercised, and shall be signed by the person or persons so
exercising the Option or Right. In the case of an exercise of an
Option, such notice shall either: (a) be accompanied by payment of the
full Exercise Price and all applicable withholding taxes, in which
event the Company shall deliver any certificate(s) representing Shares
which the Participant is entitled as a result of the exercise as soon
as practicable after the notice has been received: or (b) fix a date
(not less than 5 nor more than 15 business days from the date such
notice has been received by the Company) for the payment of the full
Exercise Price and all applicable withholding taxes, against delivery
by the Company of any certificate(s) representing Shares which the
Participant is entitled to receive as a result of the exercise. Payment
of such Exercise Price and withholding taxes shall be made as provided
in Sections 6(d) and 13, respectively. In the event the Option or Right
shall be exercised pursuant to Section 6(c)(i) hereof, by any person or
persons other than the Participant, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise
the Option or Right.
(c) Exercise After Termination of Employment. With respect to an Option or
Related Right granted to an employee of the Company or its Affiliates,
except as otherwise determined by the Committee at the date of grant of
the Option or Award and as is provided in the applicable Agreement
evidencing the Option or Right, upon termination of a Participant's
employment with the Company or any of its Affiliates, such Participant
(or in the case of death, the person(s) to whom the Option or Right is
transferred by will or the laws of descent and distribution) may
exercise such Option or Right during the following periods of time (but
in no event after the normal expiration date of such Option or Right):
(i) in the case of termination as a result of death, disability or
retirement of the Participant, the Option or Right shall
remain exercisable (as to the number of shares exercisable on
the termination date) for one year after the date of
termination; for this purpose, "disability" shall mean such
physical or mental condition affecting the Participant as
determined by the Committee in its sole discretion, and
"retirement" shall mean voluntary retirement under a
retirement plan or program of the Company or any Affiliate;
(ii) in the case of termination for cause, the Option or Right
shall immediately terminate and shall no longer be
exercisable; and
(iii) in the case of termination for any reason other than those set
forth in subparagraphs (i) and (ii) above, with respect to the
shares exercisable on the date of termination, the Option or
Right shall remain exercisable for three months after the date
of termination.
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To the extent the Option or Right is not exercised within the foregoing periods
of time, the Option or Right shall automatically terminate at the end of the
applicable period of time. Notwithstanding the foregoing provisions, failure to
exercise an ISO within the periods of time prescribed under Sections 421 and 422
of the Code shall cause an ISO to cease to be treated as an "incentive stock
option" for purposes of Section 421 of the Code.
(d) Payment of Option Exercise Price. Upon the exercise of an Option,
payment of the Exercise Price shall be made either (i) in cash (by a
certified check, personal check, bank draft or money order), (ii) with
the consent of the Committee and subject to Section 6(e) hereof, by
delivering the Participant's duly-executed promissory note and related
documents, (iii) with the consent of the Committee, by delivering
Shares owned by the Participant for more than six (6) months valued at
Fair Market Value, or (iv) by a combination of the foregoing forms of
payment.
(e) Payment with Loan. The Committee may in its sole discretion assist any
Participant in the exercise of one or more Options granted to such
Participant under the Plan by authorizing the extension of a loan to
such Participant from the Company. Except as otherwise provided in this
Section 6(e), the terms of any loan (including the interest rate and
terms of repayment) shall be established by the Committee in its sole
discretion. The maximum amount of any loan shall not exceed 80% of the
Exercise Price payable for the Shares being purchased. Any such loan by
the Company shall be with full recourse against the Participant to whom
the loan is granted, shall be secured in whole or in part by the Shares
so purchased, and shall bear interest at a rate not less than the
minimum interest rate required at the time of purchase of the Shares in
order to avoid having imputed interest or original issue discount under
Sections 483 or 1272 of the Code. In addition, any such loan by the
Company to an employee shall become immediately due and payable in
full, at the option of the Company, upon termination of the
Participant's employment with the Company or its Affiliates for any
reason or upon a sale of any Shares acquired with such loan to the
extent of the cash and fair market value of any property received by
the Participant in such sale. The Committee may make arrangements for
the application of payroll deductions from compensation payable to the
Participant to amounts owing to the Company under any such loan. Until
any loan by the Company under this Section 6(e) is fully paid in cash,
the Shares shall be pledged to the Company as security for such loan
and the Company shall retain physical possession of the stock
certificates evidencing the Shares so purchased together with a duly
executed stock power for such Shares. No loan shall be made hereunder
unless counsel for the Company shall be satisfied that the loan and the
issuance of Shares funded thereby will be in compliance with all
applicable federal, state and local laws.
(f) Rights as a Shareholder. A Participant shall have no rights as a
shareholder with respect to any Shares issuable on exercise of any
Option or Right until the date of the issuance of a stock certificate
to the Participant for such Shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record
date is prior to the date such stock certificate is issued, except as
provided in Section 4(b) hereof.
(g) Effect of Dissolution, Merger, Etc. Upon the dissolution or liquidation
of the Company, or upon a reorganization, merger, or consolidation of
the Company with one or more corporations as a result of which the
Company is not the surviving corporation, or upon a sale of
substantially all the property of the Company to another corporation,
this Plan shall terminate, and any outstanding Options and Rights shall
terminate, unless provision be made in connection with such transaction
for the assumption of such Options and Awards, or the substitution for
such Options and Awards of new incentive awards covering the stock of a
successor employer corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to number and kind of shares and prices.
SECTION 7 - SPECIAL PROVISIONS FOR ISO'S
Any provision of the Plan to the contrary notwithstanding, the following special
provisions shall apply to all ISOs granted under the Plan:
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(a) the Option must be expressly designated as an ISO by the Committee and
in the ISO Agreement;
(b) no ISO shall be granted more than ten years from the Effective Date of
the Plan and no ISO shall be exercisable more than ten years from the
date such ISO is granted;
(c) the Exercise Price of any ISO shall not be less than the Fair Market
Value per Share on the date such ISO is granted;
(d) no ISO shall be granted to any individual who, at the time such ISO is
granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Affiliate
unless the Exercise Price of such ISO is at least 110% of the Fair
Market Value per Share at the date of grant and such ISO is not
exercisable after the expiration of five years from the date such ISO
is granted;
(e) the aggregate Fair Market Value (determined as of the time any ISO is
granted) of any Company stock with respect to which any ISOs granted to
a Participant are exercisable for the first time by such Participant
during any calendar year (under this Plan and all other stock option
plans of the Company and any of its Affiliates and any predecessor of
any such corporations) shall not exceed $100,000 as required under
Section 422(d)(7) of the Code. (To the extent the $100,000 limit is
exceeded, the $100,000 in options, measured as described above, granted
earliest in time will be treated as ISOs);
(f) no ISO shall be granted to an individual who is not an employee of the
Company or its Affiliates at the time such ISO is granted; and
(g) any other terms and conditions as may be required in order that the ISO
qualifies as an "incentive stock option" under Section 422 of the Code
or successor provision.
SECTION 8 - STOCK APPRECIATION RIGHTS
(a) Grant of SAR. An SAR shall, upon its exercise, entitle the Participant
to whom such SAR was granted to receive a number of Shares or cash or
combination thereof, as the Committee in its discretion shall
determine, the aggregate value of which (i.e., the sum of the amount of
cash and/or Fair Market Value of such Shares on date of exercise) shall
equal the amount by which the Fair Market Value per Share on the date
of such exercise shall exceed the Exercise Price of such SAR,
multiplied by the number of Shares with respect of which such SAR shall
have been exercised. An SAR may be Related to an Option or may be
granted independently of any Option, as the Committee shall from time
to time in each case determine. A Related SAR may be granted at the
time of grant of an Option or, in the case of an NQSO, at any time
thereafter during the term of the NQSO.
(b) Related SAR. The Exercise Price of a Related SAR shall be the same as
the Exercise Price of the Related Option. A Related SAR shall be
exercisable only at such time or times and only to the extent that the
Related Option is exercisable and then only when the Fair Market Value
per Share on the date of exercise exceeds the Exercise Price. A Related
SAR shall expire no later than the Related Option. Upon exercise of a
Related SAR, in whole or in part, the Related Option shall be canceled
automatically to the extent of the number of Shares covered by such
exercise, and such Shares shall no longer be available for grant of
future Awards. Conversely, if the Related Option is exercised, in whole
or in part, the Related SAR shall be canceled automatically to the
extent of the number of Shares covered by the Option exercise.
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SECTION 9 - LIMITED STOCK APPRECIATION RIGHTS; ACCELERATION OF
AWARDS
(a) Grant of LSAR. At the time of grant of an Option or SAR to any
Participant (or, in the case of an NQSO or an SAR not Related to an
ISO, at any time thereafter during the term of the NQSO or SAR), the
Committee shall have full and complete authority and discretion to also
grant to such Participant an LSAR which is Related to such Option or
SAR.
(b) Exercise of LSAR. An LSAR shall entitle the holder thereof, upon
exercise of the LSAR within the exercise period prescribed below and
satisfaction of any conditions imposed by the Committee in the grant of
the LSAR, to surrender the Related Option and/or SAR or any portion
thereof, and to receive without payment to the Company an amount of
cash determined pursuant to Section 9(d) hereof. An LSAR shall be
exercisable only during one or more of the periods prescribed below in
Section 9(c), provided, however, that no LSAR may be exercised within
six months of the date the LSAR was granted and an LSAR shall be
exercisable only at such time or times and to the extent that the
Related SAR or Option is exercisable and only when the Fair Market
Value per Share exceeds the Exercise Price per Share. To the extent
that an LSAR is exercised, the Related Option and/or SAR shall
automatically be canceled to the extent of the number of Shares covered
by such exercise, and such Shares shall no longer be available for
future Awards. To the extent that a Related Option or SAR is exercised,
the Related LSAR shall automatically be canceled to the extent of the
number of Shares covered by such exercise.
(c) Trigger Event. An LSAR shall be exercisable, subject to the provisos in
Section 9(b), during any one or more of the following periods:
(i) for a period of 60 days beginning on the date on which Shares
are first purchased pursuant to a tender offer or exchange
offer (other than such an offer by MotivePower Industries, the
Company, any Subsidiary, any employee benefit plan of the
Company or of any Subsidiary or any entity holding Shares or
other securities of the Company for or pursuant to the terms
of such plan), whether or not such offer is approved or
opposed by the Company and regardless of the number of Shares
purchased pursuant to such offer;
(ii) for a period of 60 days beginning on the date the Company
acquires knowledge that any person or group deemed a person
under Section 13(d)(3) of the Exchange Act (other than
MotivePower Industries, the Company, any Subsidiary, any
employee benefit plan of the Company or of any Subsidiary or
any entity holding Shares or other securities of the Company
for or pursuant to the terms of any such plan), in a
transaction or series of transactions, has become the
beneficial owner, directly or indirectly (with beneficial
ownership determined as provided in Rule 13d-3, or any
successor rule, under the Exchange Act), of securities of the
Company entitling the person or group to 30% or more of all
votes (without consideration of the rights of any class of
stock to elect directors by a separate class vote) to which
all shareholders of the Company would be entitled in the
election of the Board of Directors were an election held on
such date;
(iii) for a period of 60 days beginning on the date, during, any
period of two consecutive years, when individuals who at the
beginning of such period constitute the Board of Directors of
the Company cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the shareholders of the Company, of each new
Director was approved by a vote of at least two-thirds of the
Directors then still in office who were Directors at the
beginning of such period; and
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(iv) for a period of 60 days beginning on the date of approval by
the shareholders of the Company of an agreement (a
"reorganization agreement) providing for:
(A) the merger or consolidation of the Company with another
corporation where the shareholders of the Company,
immediately prior to the merger or consolidation, do
not beneficially own, immediately after the merger or
consolidation, shares of the corporation issuing cash
or securities in the merger or consolidation entitling
such shareholders to 80% or more of all votes (without
consideration of the rights of any class of stock to
elect directors by a separate class vote) to which all
shareholders of such corporation would be entitled in
the election of Directors or where the members of the
Board of Directors of the Company, immediately prior to
the merger or consolidation, do not, immediately after
the merger or consolidation, constitute a majority of
the Board of Directors of the corporation issuing cash
or securities in the merger or consolidation; or
(B) the sale or other disposition of all or substantially
all the assets of the Company.
Each of the events specified in (i), (ii), (iii) and (iv) above from
which the sixty-day period specified above commences is a "Trigger Event"
for the purposes of the Plan.
(d) Payment Upon Exercise. Upon exercise of an LSAR, the Participant shall be
entitled to receive an amount of cash in respect of each Share subject to
the Related Option or SAR equal to the excess of the fair market value of
such Share over the Exercise Price of such Related Option or SAR. In the
case of LSARs related to ISOs, "fair market value" shall mean the Fair
Market Value of Shares on the date the LSAR is exercised. In the case of
all other LSARS, "fair market value" shall mean the highest last sale
price of the Shares as reported on the NASDAQ system during the period
beginning on the 90th day prior to the date on which the LSAR is
exercised and ending on such date, except that:
(i) in the event of a tender offer or exchange offer for Shares,
fair market value shall mean the greater of such last sale price
or the highest price paid for Shares pursuant to any tender
offer or exchange offer in effect at any time beginning on the
90th day prior to the date on which the LSAR is exercised and
ending on such date,
(ii) in the event of the acquisition by any person or group of
beneficial ownership of securities of the Company entitling the
person or group to 30% or more of the combined voting power of
the Company's outstanding securities, fair market value shall
mean the greater of such last sales price or the highest price
per Share paid shown on the Schedule 13D, or any Amendment
thereto, filed by the person or group becoming a 30% beneficial
owner or disclosing an intention or possible intention to
acquire control of the Company, and
(iii) in the event of approval by shareholders of the Company of a
reorganization agreement, fair market value shall mean the
greater of such last sale price or the fixed or formula price
specified in the reorganization agreement if such price is
determinable as of the date of exercise of the LSAR.
Any securities or property which are part or all of the consideration
paid for Shares in a tender offer or exchange offer or under an approved
reorganization agreement shall be valued at the higher of (1) the
valuation placed on such securities or property by the person making the
tender offer or exchange offer or by the corporation other than the
Company issuing securities or property in the merger or consolidation or
to whom the Company is selling or otherwise disposing of all or
substantially all the assets of the Company and (2) the valuation placed
on such securities or property by the Committee.
(e) Acceleration of Options and SARs. All Options and SARs shall become fully
exercisable upon the occurrence of any Trigger Event, whether or not such
Options or SARs are then exercisable under the provisions of the
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applicable Agreements relating thereto, except that (1) in no event will
SARs or Options Related to SARs be exercisable within six months after
the date on which granted, and (2) SARs Related to LSARs may not be
exercised for cash during any of the 60-day periods after a Trigger
Event.
SECTION 10 - TERMS AND CONDITIONS OF AWARDS OF RESTRICTED STOCK
(a) General Terms. The Committee shall have full and complete authority and
discretion, except as expressly limited by the Plan, to grant Awards of
Restricted Stock and to provide the terms and conditions (which need not
be identical among Participants) thereof. Awards of Restricted Stock
shall be evidenced by written Agreements in such form as the Committee
from time to time shall approve. In particular, the Committee shall
prescribe the following terms and conditions:
(i) the number of Shares of Restricted Stock to be awarded to each
Participant;
(ii) the restriction period applicable to each Award of Restricted
Stock, which period shall be determined at the time of the Award
and need not be the same for all Awards; and
(iii) the payment, if any, to be made by the Participant in
consideration of the Award. Any Award may be made without
payment of consideration by the Participant or may provide for
payment of cash or deferred consideration which is less than the
Fair Market Value of the awarded shares at the date of grant.
Any such Award may be on the basis that the shares awarded
thereby may be repurchased by the Company at a fixed price or at
a price established by formula, either upon forfeiture of the
awarded shares or in other specified circumstances.
(b) Restrictions. The Shares of Restricted Stock awarded shall be subject to
restrictions as set forth in Section 11.
(c) Certificates. A stock certificate or certificates evidencing the Shares
of Restricted Stock awarded shall be issued in the name of the recipient
and delivered to the Committee or its designee to be held in safekeeping
until the periodic expiration of the restrictions. The certificates
issued pursuant to the Plan shall contain a legend necessary to reflect
the restrictions on such Shares as contained in Section 11.
(d) Rights as a Shareholder. Subject to the restrictions contained in Section
11 hereof, the recipient of an Award of Restricted Stock pursuant to the
Plan shall have all the rights as a shareholder with respect to the
Shares covered by the Award including, but not limited to, the right to
vote such Shares, the right to receive cash or stock dividends with
respect thereto and the right to participate in any subdivision or
consolidation of Shares or other capital adjustment, or the payment of a
stock dividend or other increase or decrease in such Shares, effected
without receipt of consideration by the Company. In the event the
recipient receives additional Shares pursuant to any of the foregoing
events, the Shares acquired shall be subject to the terms, conditions and
restrictions contained herein as if such additional Shares were received
at the date of the original Award.
SECTION 11 - RESTRICTIONS ON RESTRICTED STOCK AND LAPSE THEREOF
(a) Restrictions. Shares of Restricted Stock awarded shall be subject to the
restrictions that, during the restriction period or prior to the lapse of
the restrictions in accordance with subsection (c) hereof, such Shares:
(i) shall not be sold, exchanged, transferred, pledged or otherwise
disposed of; and
(ii) shall be forfeited to the Company if the recipient's employment
is terminated (if the Restricted Stock is awarded to an employee
of the Company or its Affiliates) or upon such other
circumstance as determined by the Committee at the time such
Award is granted;
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except as provided in subsection (c) hereof.
(b) Restriction Period. Restrictions shall lapse at the times determined by
the Committee unless such restrictions are terminated earlier in
accordance with subsection (c) below.
(c) Lapse of Restrictions. The restrictions contained herein shall lapse upon
the occurrence of any of the following events:
(i) Upon the retirement of a recipient at the normal retirement date
as defined under the MotivePower IndustriesSavings Plan, the
restrictions applicable to stock awards to said recipient shall
lapse according to the following formula.
For each award of restricted stock:
Number of shares for which
restrictions shall lapse = X x N
Y
Where:
X = number of months from the date of award to the
date of the Participant's termination;
Y = number of months required under the award for
all restrictions to lapse without regard to
early lapse under Section 11(c) of the Plan;
and
N = the number of shares under each award for which
restrictions have not lapsed.
(ii) The death or total and permanent disability of a recipient while
employed by the Company or an Affiliate;
(iii) The occurrence of a Trigger Event;
(iv) At such times, other than as described in (i), (ii) or (iii),
above, including termination by the Company or an Affiliate of a
recipient's employment for any reason or the early retirement of
a recipient with the consent of the Company, if the Committee
determines in the exercise of its sole discretion that the lapse
of restrictions at such time with respect to all or a portion of
the shares awarded is in the best interest of the Company.
SECTION 12 - RESTRICTIONS ON TRANSFERS; GOVERNMENT REGULATIONS
(a) Awards Not Transferable. No Option or Right nor any right or interest of
a Participant under the Plan in any instrument evidencing any Option or
Right under the Plan may be assigned, encumbered, or transferred, except,
in the event of the death of a Participant, by will or the laws of
descent and distribution.
(b) Government Regulations. This Plan, the granting of Awards under this Plan
and the issuance or transfer of Shares (and/or the payment of money)
pursuant thereto are subject to all applicable Federal and state laws,
rules and regulations and to such approvals by any regulatory or
governmental agency (including without limitation "no action" positions
of the Securities and Exchange Commission) which may, in the opinion of
counsel for the Company, be necessary or advisable in connection
therewith. Without limiting the generality of the foregoing, no Awards
may be granted under this Plan, and no Shares shall be issued by the
Company, nor cash payments made by the Company, pursuant to or in
connection with any such Award, unless and until,
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in each such case, all legal requirements applicable to the issuance or
payment have, in the opinion of counsel to the Company, been complied
with. In connection with any stock issuance or transfer, the person
acquiring the shares shall, if requested by the Company, give assurances
satisfactory to counsel to the Company in respect of such matters as the
Company may deem desirable to assure compliance with all applicable legal
requirements. The Company shall not be required to deliver any Shares
under the Plan prior to (i) the admission of such Shares to listing or
for quotation on any stock exchange or automated quotation system on
which Shares may then be listed or quoted, and (ii) the completion and
effectiveness of such registration or other qualification of such Shares
under any state or federal law, rule or regulation, as the Committee
shall determine to be necessary or advisable.
SECTION 13 - TAX WITHHOLDING
The Company shall have the right to withhold from amounts due Participants, or
to collect from Participants directly, the amount which the Company deems
necessary to satisfy any taxes required by law to be withheld at any time by
reason of participation in the Plan, and the obligations of the Company under
the Plan shall be conditional on payment of such taxes. The Participant may,
prior to the due date of any taxes, pay such amounts to the Company in cash, or
with the consent of the Committee, in Shares (which shall be valued at their
Fair Market Value on the date of payment). There is no obligation under this
Plan that any Participant be advised of the existence of the tax or the amount
required to be withheld. Without limiting, the generality of the foregoing, in
any case where it determines that a tax is or will be required to be withheld in
connection with the issuance or transfer or vesting of Shares under this Plan,
the Company may, pursuant to such rules as the Committee may establish, reduce
the number of such Shares so issued or transferred by such number of Shares as
the Company may deem appropriate in its sole discretion to accomplish such
withholding or make such other arrangements as it deems satisfactory.
Notwithstanding, any other provision of this Plan, the Committee may impose such
conditions on the payment of any withholding obligation as may be required to
satisfy applicable regulatory requirements, including, without limitation, Rule
16b-3 (or successor provision) promulgated by the Securities and Exchange
Commission.
SECTION 14 - ADMINISTRATION OF PLAN
(a) The Committee. The Plan shall be administered by the Committee, which
shall be comprised of two or more members of the Board of Directors, each
of whom shall be a "disinterested person" as defined in Rule 16b-3 (or
successor provision) promulgated by the Securities and Exchange
Commission.
(b) Committee Action. A majority of the members of the Committee at the time
in office shall constitute a quorum for the transaction of business, and
any determination or action may be taken at a meeting by a majority vote
or may be taken without a meeting by a written resolution signed by all
members of the Committee. All decisions and determinations of the
Committee shall be final, conclusive and binding upon all Participants
and upon all other persons claiming any rights under the Plan with
respect to any Options or Rights. Members of the Board of Directors and
members of the Committee acting under the Plan shall be fully protected
in relying in good faith upon the advice of counsel and shall incur no
liability except for willful misconduct in the performance of their
duties.
(c) Committee Authority. In amplification of the Committee's powers and
duties, but not by way of limitation, the Committee shall have full
authority and power to:
(i) Construe and interpret the provisions of the Plan and make rules
and regulations for the administration of the Plan not
inconsistent with the Plan;
(ii) Decide all questions of eligibility for Plan participation and
for the grant of Awards;
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(iii) Adopt forms of Agreements and other documents consistent with
the Plan;
(iv) Engage agents to perform legal, accounting and other such
professional services as it may deem proper for administering
the Plan; and
(v) Take such other actions as may be reasonably required or
appropriate to administer the Plan or to carry out the Committee
activities contemplated by other sections of this Plan.
(d) Indemnification. In addition to such other rights of indemnification as
they may have as directors or as members of the Committee, the Board of
Directors and the members of the Committee shall be indemnified by the
Company against the reasonable expenses, including court costs and
reasonable attorneys' fees, actually incurred in connection with the
defense of any action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of
any action taken or failure to act under or in connection with the Plan
or any Award granted hereunder, and against all amounts paid by them in
settlement thereof or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except where such indemnification is
expressly prohibited by applicable law.
SECTION 15 - EFFECTIVE DATE
The effective date of this Plan shall be April 1, 1994 (the date such Plan will
be approved by the Board of Directors), subject to receipt of shareholder
approval of this Plan within one year of that date. All Awards pursuant to this
Plan prior to receipt of shareholder approval shall be effective when made but
shall be subject to the terms of this Plan only upon receipt of such shareholder
approval. If such approval is not received within the one-year period specified
above, all Awards made on or after April 1, 1994 shall be forfeited.
SECTION 16 - AMENDMENT AND TERMINATION
(a) The Plan.
(i) Amendment. The Board of Directors may amend the Plan from time
to time in its sole discretion; provided, however, that no such
amendment shall, without the approval of the shareholders of the
Company if such approval is required by the laws of the State of
Delaware or Section 422 of the Code or Rule 16b-3 under the
Exchange Act: (a) change the class of persons eligible to
receive Awards or otherwise materially modify the requirements
as to eligibility for participation in the Plan; (b) increase
the aggregate number of Shares with respect to which Awards may
be made under the Plan; (c) materially increase the benefits
accruing, to Participants under the Plan; or (d) remove the
administration of the Plan from the Committee or render any
member of the Committee eligible to receive an Award under the
Plan while serving thereon. Any purported amendment in violation
of these restrictions shall be void and of no effect.
Furthermore, no amendment shall impair the rights of any
Participant under any Award theretofore made under the Plan,
without the Participant's consent.
(ii) Termination. The Board of Directors may suspend or terminate the
Plan at any time. Upon termination of the Plan, no additional
Awards shall be granted under the Plan; provided, however, that
the terms of the Plan shall continue in full force and effect
with respect to outstanding and unexercised Options and Rights
granted under the Plan and Shares issued under the Plan.
(b) Awards. Subject to the terms and conditions and the limitations of the
Plan, the Committee may in the exercise of its sole discretion modify,
extend or renew the terms of outstanding Awards granted under the Plan,
or accept the surrender of outstanding Awards (to the extent not
theretofore exercised) and authorize the granting of new Awards in
substitution therefor (to the extent not theretofore exercised). Without
limiting the generality of the
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foregoing, the Committee may in its discretion at any time accelerate the
time at which any Option or Right is exercisable, subject to compliance
with the requirements of Rule 16b-3 (or successor provision) promulgated
by the Securities and Exchange Commission. Notwithstanding the foregoing,
however, no modification of an Award shall, without the consent of the
Participant, impair any rights or obligations under any Awards
theretofore granted under the Plan.
SECTION 17 - MISCELLANEOUS
(a) Employment. Neither the establishment of the Plan nor any amendments
thereto, nor the granting of any Award under the Plan, shall be construed
as in any way modifying or affecting, or evidencing any intention or
understanding with respect to, the terms of the employment of any
Participant with the Company or any of its Affiliates. No person shall
have a right to be granted Awards or, having been selected as a
Participant for one Award, to be so selected again.
(b) Multiple Awards. Subject to the terms and restrictions set forth in the
Plan, a Participant may hold more than one Award.
(c) Written Notice. As used herein, any notices required hereunder shall be
in writing and shall be given on the forms, if any, provided or specified
by the Committee. Written notice shall be effective upon actual receipt
by the person to whom such notice is to be given; provided, however, that
in the case of notices to Participants and their heirs, legatees and
legal representatives, notice shall be effective upon delivery if
delivered personally or three business days after mailing, registered
first class postage prepaid to the last known address of the person to
whom notice is given. Written notice shall be given to the Committee and
the Company at the following address or such other address as may be
specified from time to time:
MotivePower Industries
Two Gateway Center, 14th Floor
Pittsburgh, PA 15222
Attn: Scott Wahlstrom
(d) Applicable Law; Severability. The Plan shall be governed by and construed
in all respects in accordance with the laws of the State of Delaware. If
any provisions of the Plan shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.
SECTION 18 - ADMINISTRATION OF THE PLAN PRIOR TO INITIAL PUBLIC
OFFERING
(a) In General. The Company anticipates that a portion of its common stock
will be sold in an initial public offering ("Public Offering"). Until the
consummation of the Public Offering, the provisions of this Section 18
shall govern the administration and operation of the Plan. To the extent
any other provision of this Plan conflicts with the terms of this Section
18, this Section 18 shall control. However, upon the consummation of the
Public Offering, the terms of this Section 18 shall cease to be effective
and the administration and operation of the Plan shall thereafter be
determined without reference to this Section 18.
(b) Administration of Plan by Board. Prior to the earlier of (i) the
consummation of the Public Offering or (ii) the appointment of a
compensation committee meeting the requirements of Section 14 of the
Plan, the Board shall have full and complete authority and discretion to
grant Awards and to provide the terms and conditions of such Awards
(which need not be identical among individual participants). The Board
may grant such Awards to members of the Board provided that any member of
the Board who receives an Award must also be an officer or key employee
of the Company or its Affiliates.
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