EXHIBIT 10.2
UNIFAB INTERNATIONAL, INC.
LONG-TERM INCENTIVE PLAN
marked to show amendments to the Plan adopted at the Company's Annual Meeting of
Shareholders held on December 27, 2002. Added provisions are in BOLDED and
ITALICIZED print; deleted provisions are in [brackets].
1. PURPOSE. The purpose of the Long-Term Incentive Plan (the "Plan") of
UNIFAB International, Inc. ("UNIFAB") is to increase shareholder value and to
advance the interests of UNIFAB and its subsidiaries (collectively, the
"Company") by furnishing a variety of economic incentives (the "Incentives")
designed to attract, retain and motivate key employees, officers and directors
and to strengthen the mutuality of interests between such employees, officers
and directors and UNIFAB's shareholders. Incentives consist of opportunities to
purchase or receive shares of common stock, $.01 par value per share, of UNIFAB
(the "Common Stock"), on terms determined under the Plan. As used in the Plan,
the term "subsidiary" means any corporation of which UNIFAB owns (directly or
indirectly) within the meaning of Section 425(f) of the Internal Revenue Code of
1986, as amended (the "Code"), 50% or more of the total combined voting power of
all classes of stock.
2. ADMINISTRATION.
2.1. COMPOSITION. The Plan shall be administered by the
Compensation Committee of the Board of Directors of UNIFAB or by a
subcommittee thereof (the "Committee"). The Committee shall consist of
not fewer than two members of the Board of Directors, each of whom
shall (a) qualify as a "non-employee director" under Rule 16b-3 under
the Securities Exchange Act of 1934 (the "1934 Act") or any successor
rule, and (b) qualify as an "outside director" under Section 162(m) of
the Code.
2.2. AUTHORITY. The Committee shall have plenary authority to
award Incentives under the Plan, to interpret the Plan, to establish
any rules or regulations relating to the Plan that it determines to be
appropriate, to enter into agreements with participants as to the terms
of the Incentives (the "Incentive Agreements") and to make any other
determination that it believes necessary or advisable for the proper
administration of the Plan. Its decisions in matters relating to the
Plan shall be final and conclusive on the Company and participants. The
Committee may delegate its authority hereunder to the extent provided
in Section 3 hereof. The Committee shall not have authority to award
Incentives under the Plan to directors who are not also employees of
the Company ("Outside Directors"). Outside Directors may receive awards
under the Plan only as specifically provided in Section 9 hereof.
3. ELIGIBLE PARTICIPANTS. Key employees, officers, consultants and
advisors of the Company (including officers who also serve as directors of the
Company) shall become eligible to
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receive Incentives under the Plan when designated by the Committee. Employees
may be designated individually or by groups or categories, as the Committee
deems appropriate. With respect to participants not subject to Section 16 of the
1934 Act or Section 162(m) of the Code, the Committee may delegate to
appropriate personnel of the Company its authority to designate participants, to
determine the size and type of Incentives to be received by those participants
and to determine or modify performance objectives for those participants.
Outside Directors may participate in the Plan only as specifically provided in
Section 9 hereof.
4. TYPES OF INCENTIVES. Incentives may be granted under the Plan to
eligible participants in any of the following forms, either individually or in
combination, (a) incentive stock options and non-qualified stock options; (b)
restricted stock; and (c) other stock-based awards ("Other Stock-Based Awards").
5. SHARES SUBJECT TO THE PLAN.
5.1. NUMBER OF SHARES. Subject to adjustment as provided in
Section 10.5, a total of 2,500,000 [460,000] shares of Common Stock are
authorized to be issued under the Plan. Incentives with respect to no
more than 250,000 [200,000] shares of Common Stock may be granted
through the Plan to a single participant in one calendar year. In the
event that an Incentive granted hereunder expires or is terminated or
cancelled prior to exercise or payment, any shares of Common Stock that
were issuable thereunder may again be issued under the Plan. In the
event that shares of Common Stock are issued as Incentives under the
Plan and thereafter are forfeited or reacquired by the Company pursuant
to rights reserved upon issuance thereof, such forfeited and reacquired
shares may again be issued under the Plan. If an Other Stock-Based
Award is to be paid in cash by its terms, the Committee need not make a
deduction from the shares of Common Stock issuable under the Plan with
respect thereto. If and to the extent that an Other Stock-Based Award
may be paid in cash or shares of Common Stock, the total number of
shares available for issuance hereunder shall be debited by the number
of shares payable under such Incentive, provided that upon any payment
of all or part of such Incentive in cash, the total number of shares
available for issuance hereunder shall be credited with the appropriate
number of shares represented by the cash payment, as determined in the
sole discretion of the Committee. Additional rules for determining the
number of shares granted under the Plan may be made by the Committee,
as it deems necessary or appropriate.
5.2. TYPE OF COMMON STOCK. Common Stock issued under the Plan
may be authorized and unissued shares or issued shares held as treasury
shares.
6. STOCK OPTIONS. A stock option is a right to purchase shares of
Common Stock from UNIFAB. Stock options granted under this Plan may be incentive
stock options or non-qualified stock options. Any option that is designated as a
non-qualified stock option shall not be treated as an incentive stock option.
Each stock option granted by the Committee under this Plan shall be subject to
the following terms and conditions:
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6.1. PRICE. The exercise price per share shall be determined
by the Committee, subject to adjustment under Section 10.5; provided
that in no event shall the exercise price be less than the Fair Market
Value of a share of Common Stock on the date of grant, except that in
connection with an acquisition, consolidation, merger or other
extraordinary transaction, options may be granted at less than the then
Fair Market Value in order to replace options previously granted by one
or more parties to such transaction (or their affiliates) so long as
the aggregate spread on such replacement options for any recipient of
such options is equal to or less than the aggregate spread on the
options being replaced.
6.2. NUMBER. The number of shares of Common Stock subject to
the option shall be determined by the Committee, subject to Section 5.1
and subject to adjustment as provided in Section 10.5.
6.3. DURATION AND TIME FOR EXERCISE. The term of each stock
option shall be determined by the Committee. Each stock option shall
become exercisable at such time or times during its term as shall be
determined by the Committee. Notwithstanding the foregoing, the
Committee may accelerate the exercisability of any stock option at any
time, in addition to the automatic acceleration of stock options under
Section 10.11.
6.4. MANNER OF EXERCISE. A stock option may be exercised, in
whole or in part, by giving written notice to the Company, specifying
the number of shares of Common Stock to be purchased. The exercise
notice shall be accompanied by the full purchase price for such shares.
The option price shall be payable in United States dollars and may be
paid by (a) cash; (b) uncertified or certified check; (c) unless
otherwise determined by the Committee, by delivery of shares of Common
Stock held by the optionee for at least six months, which shares shall
be valued for this purpose at the Fair Market Value on the business day
immediately preceding the date such option is exercised; (d) unless
otherwise determined by the Committee, by delivering a properly
executed exercise notice together with irrevocable instructions to a
broker approved by UNIFAB (with a copy to UNIFAB) to promptly deliver
to UNIFAB the amount of sale or loan proceeds to pay the exercise
price; or (e) in such other manner as may be authorized from time to
time by the Committee.
6.5. INCENTIVE STOCK OPTIONS. Notwithstanding anything in the
Plan to the contrary, the following additional provisions shall apply
to the grant of stock options that are intended to qualify as Incentive
Stock Options (as such term is defined in Section 422 of the Code):
A. Any Incentive Stock Option agreement authorized
under the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events be
consistent with and contain or be deemed to contain all
provisions required in order to qualify the options as
Incentive Stock Options.
B. All Incentive Stock Options must be granted within
ten years from the date on which this Plan is adopted by the
Board of Directors.
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C. Unless sooner exercised, all Incentive Stock
Options shall expire no later than ten years after the date of
grant.
D. No Incentive Stock Options shall be granted to any
participant who, at the time such option is granted, would own
(within the meaning of Section 422 of the Code) stock
possessing more than 10% of the total combined voting power of
all classes of stock of the employer corporation or of its
parent or subsidiary corporation.
E. The aggregate Fair Market Value (determined with
respect to each Incentive Stock Option as of the time such
Incentive Stock Option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for
the first time by a participant during any calendar year
(under the Plan or any other plan of UNIFAB or any of its
subsidiaries) shall not exceed $100,000. To the extent that
such limitation is exceeded, such options shall not be
treated, for federal income tax purposes, as Incentive Stock
Options.
7. RESTRICTED STOCK.
7.1. GRANT OF RESTRICTED STOCK. The Committee may award shares
of restricted stock to such officers and key employees as the Committee
determines pursuant to the terms of Section 3. An award of restricted
stock shall be subject to such restrictions on transfer and
forfeitability provisions and such other terms and conditions as the
Committee may determine, subject to the provisions of the Plan. An
award of restricted stock may also be subject to the attainment of
specified performance goals or targets. To the extent restricted stock
is intended to qualify as performance-based compensation under Section
162(m) of the Code, it must be granted subject to the attainment of
performance goals as described in Section 7.2 below and meet the
additional requirements imposed by Section 162(m).
7.2 PERFORMANCE-BASED RESTRICTED STOCK. To the extent that
restricted stock granted under the Plan is intended to vest based upon
the achievement of pre-established performance goals rather than solely
upon continued employment over a period of time, the performance goals
pursuant to which the restricted stock shall vest shall be any or a
combination of the following performance measures: earnings per share,
return on assets, an economic value added measure, shareholder return,
earnings, stock price, return on equity, return on total capital,
safety performance, reduction of expenses or increase in cash flow of
UNIFAB, a division of UNIFAB or a subsidiary. For any performance
period, such performance objectives may be measured on an absolute
basis or relative to a group of peer companies selected by the
Committee, relative to internal goals or relative to levels attained in
prior years. The Committee may not waive any of the pre-established
performance goal objectives, except that such objectives shall be
waived as provided in Section 10.11 hereof, or as may be provided by
the Committee in the event of death, disability or retirement.
7.3. THE RESTRICTED PERIOD. At the time an award of restricted
stock is made, the Committee shall establish a period of time during
which the transfer of the shares of restricted stock shall be
restricted (the "Restricted Period"). The Restricted Period shall be a
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minimum of three years, except that if the vesting of the shares of
restricted stock is based upon the attainment of performance goals, a
minimum Restricted Period of one year is permitted. Each award of
restricted stock may have a different Restricted Period. The expiration
of the Restricted Period shall also occur as provided under Section
10.3 and under the conditions described in Section 10.11 hereof.
7.4. ESCROW. The participant receiving restricted stock shall
enter into an Incentive Agreement with the Company setting forth the
conditions of the grant. Certificates representing shares of restricted
stock shall be registered in the name of the participant and deposited
with the Company, together with a stock power endorsed in blank by the
participant. Each such certificate shall bear a legend in substantially
the following form:
The transferability of this certificate and the shares of
Common Stock represented by it are subject to the terms and
conditions (including conditions of forfeiture) contained in
the UNIFAB International, Inc. Long-Term Incentive Plan (the
"Plan"), and an agreement entered into between the registered
owner and UNIFAB International, Inc. thereunder. Copies of the
Plan and the agreement are on file at the principal office of
UNIFAB International, Inc.
7.5. DIVIDENDS ON RESTRICTED STOCK. Any and all cash and stock
dividends paid with respect to the shares of restricted stock shall be
subject to any restrictions on transfer, forfeitability provisions or
reinvestment requirements as the Committee may, in its discretion,
prescribe in the Incentive Agreement.
7.6. FORFEITURE. In the event of the forfeiture of any shares
of restricted stock under the terms provided in the Incentive Agreement
(including any additional shares of restricted stock that may result
from the reinvestment of cash and stock dividends, if so provided in
the Incentive Agreement), such forfeited shares shall be surrendered
and the certificates cancelled. The participants shall have the same
rights and privileges, and be subject to the same forfeiture
provisions, with respect to any additional shares received pursuant to
Section 10.5 due to a recapitalization, merger or other change in
capitalization.
7.7. EXPIRATION OF RESTRICTED PERIOD. Upon the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Committee, the restrictions applicable to
the restricted stock shall lapse and a stock certificate for the number
of shares of restricted stock with respect to which the restrictions
have lapsed shall be delivered, free of all such restrictions and
legends, except any that may be imposed by law, to the participant or
the participant's estate, as the case may be.
7.8. RIGHTS AS A SHAREHOLDER. Subject to the terms and
conditions of the Plan and subject to any restrictions on the receipt
of dividends that may be imposed in the Incentive Agreement, each
participant receiving restricted stock shall have all the rights of a
shareholder with respect to shares of stock during the Restricted
Period, including without limitation, the right to vote any shares of
Common Stock.
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8. OTHER STOCK-BASED AWARDS.
8.1 TERMS OF OTHER STOCK-BASED AWARDS. The Committee is hereby
authorized to grant to eligible employees an "Other Stock-Based Award",
which shall consist of an award, the value of which is based in whole
or in part on the value of shares of Common Stock, that is not an
instrument or Award specified in Sections 6 or 7 of the Plan. Other
Stock-Based Awards may be awards of shares of Common Stock or may be
denominated or payable in, valued in whole or in part by reference to,
or otherwise based on or related to, shares of Common Stock (including,
without limitation, securities convertible or exchangeable into or
exercisable for shares of Common Stock), as deemed by the Committee
consistent with the purposes of the Plan. The Committee shall determine
the terms and conditions of any such Other Stock-Based Award and may
provide that such awards would be payable in whole or in part in cash.
Except in the case of an Other Stock-Based Award granted in assumption
of or in substitution for an outstanding award of a company acquired by
the Company or with which the Company combines, the price at which
securities may be purchased pursuant to any Other Stock-Based Award
granted under this Plan, or the provision, if any, of any such award
that is analogous to the purchase or exercise price, shall not be less
than 100% of the fair market value of the securities to which such
award relates on the date of grant.
8.2 DIVIDEND EQUIVALENTS. In the sole and complete discretion
of the Committee, an Other Stock-Based Award under this Section 8 may
provide the holder thereof with dividends or dividend equivalents,
payable in cash or shares of Common Stock on a current or deferred
basis.
8.3 PERFORMANCE GOALS. Other Stock-Based Awards intended to
qualify as "performance-based compensation" under Section 162(m) of the
Code shall be paid based upon the achievement of pre-established
performance goals. The performance goals pursuant to which Other
Stock-Based Awards granted under the Plan shall be earned shall be any
or a combination of the following performance measures: earnings per
share, return on assets, an economic value added measure, shareholder
return, earnings, stock price, return on equity, return on total
capital, safety performance, reduction of expenses or increase in cash
flow of the Company, a division of the Company or a subsidiary. For any
performance period, such performance goals may be measured on an
absolute basis or relative to a group of peer companies selected by the
Committee, relative to internal goals or relative to levels attained in
prior years. The Committee may not waive any of the pre-established
performance goal objectives if such Other Stock-Based Award is intended
to constitute "performance-based compensation" under Section 162(m),
except that such objectives shall be waived as provided in Section
10.11 hereof, or as may be provided by the Committee in the event of
death, disability or retirement.
8.4. NOT A SHAREHOLDER. The grant of an Other Stock-Based
Award to a participant shall not create any rights in such participant
as a shareholder of the Company,
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until the issuance of shares of Common Stock with respect to an award,
at which time such stock shall be considered issued and outstanding.
9. STOCK OPTIONS FOR OUTSIDE DIRECTORS.
9.1 GRANT OF OPTIONS. Upon consummation of the Company's
initial public offering (the "IPO") of its Common Stock, each Outside
Directors shall be granted non-qualified options to purchase 2,500
shares of Common Stock. In addition, beginning with the 1998 annual
meeting of shareholders and for as long as the Plan remains in effect
and shares of Common Stock remain available for issuance hereunder,
each Outside Director shall be automatically granted a non-qualified
stock option on the day of the annual meeting of stockholders of
UNIFAB, provided such Outside Director continues to serve as a director
after such annual meeting. An option to purchase no more than 2,500
shares shall be automatically granted to each Outside Director on the
date of each annual meeting, the exact number of which shall be set by
the Committee.
9.2 EXERCISABILITY OF STOCK OPTIONS. The stock options granted
to Outside Directors under this Section 9 shall become exercisable
immediately and shall expire ten years following the date of grant.
9.3 EXERCISE PRICE. The exercise price of the options granted
upon consummation of the IPO shall be equal to the IPO price. The
exercise price of the options granted to Outside Directors on the date
of each annual meeting shall be equal to the Fair Market Value, as
defined in the Plan, of a share of Common Stock on the date of grant.
The exercise price may be paid as provided in Section 6.4 hereof.
9.4 EXERCISE AFTER TERMINATION OF BOARD SERVICE. In the event
an Outside Director ceases to serve on the Board, the stock options
granted hereunder must be exercised, to the extent otherwise
exercisable at the time of termination of Board service, within one
year from termination of Board service; provided, however, that in the
event of termination of Board service as a result of retirement on or
after reaching age 65, the stock options must be exercised within five
years from the date of retirement; and further provided, that no stock
options may be exercised later than ten years after the date of grant.
10. GENERAL.
10.1. DURATION. Subject to Section 10.10, the Plan shall
remain in effect until all Incentives granted under the Plan have
either been satisfied by the issuance of shares of Common Stock or the
payment of cash or been terminated under the terms of the Plan and all
restrictions imposed on shares of Common Stock in connection with their
issuance under the Plan have lapsed.
10.2. TRANSFERABILITY. No Incentives granted hereunder may be
transferred, pledged, assigned or otherwise encumbered by a participant
except: (a) by will; (b) by the laws of descent and distribution; (c)
pursuant to a domestic relations order, as defined in the
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Code, if permitted by the Committee and so provided in the Incentive
Agreement or an amendment thereto; or (d) as to options only, if
permitted by the Committee and so provided in the Incentive Agreement
or an amendment thereto, (i) to Immediate Family Members, (ii) to a
partnership in which Immediate Family Members, or entities in which
Immediate Family Members are the sole owners, members or beneficiaries,
as appropriate, are the sole partners, (iii) to a limited liability
company in which Immediate Family Members, or entities in which
Immediate Family Members are the sole owners, members or beneficiaries,
as appropriate, are the sole members, or (iv) to a trust for the sole
benefit of Immediate Family Members. "Immediate Family Members" shall
be defined as the spouse and natural or adopted children or
grandchildren of the participant and their spouses. To the extent that
an Incentive Stock Option is permitted to be transferred during the
lifetime of the participant, it shall be treated thereafter as a
nonqualified stock option. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of Incentives, or levy of attachment
or similar process upon Incentives not specifically permitted herein,
shall be null and void and without effect.
10.3. EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH. Except as
provided in Section 9.4 with respect to Outside Directors, in the event
that a participant ceases to be an employee of the Company for any
reason, including death, disability, early retirement or normal
retirement, any Incentives may be exercised, shall vest or shall expire
at such times as may be determined by the Committee in the Incentive
Agreement. The Committee has complete authority to modify the treatment
of an Incentive in the event of termination of employment of a
participant by means of an amendment to the Incentive Agreement.
Consent of the participant to the modification is required only if the
modification materially impairs the rights previously provided to the
participant in the Incentive Agreement.
10.4. ADDITIONAL CONDITION. Anything in this Plan to the
contrary notwithstanding: (a) the Company may, if it shall determine it
necessary or desirable for any reason, at the time of award of any
Incentive or the issuance of any shares of Common Stock pursuant to any
Incentive, require the recipient of the Incentive, as a condition to
the receipt thereof or to the receipt of shares of Common Stock issued
pursuant thereto, to deliver to the Company a written representation of
present intention to acquire the Incentive or the shares of Common
Stock issued pursuant thereto for his own account for investment and
not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or
qualification (or any updating of any such document) of any Incentive
or the shares of Common Stock issuable pursuant thereto is necessary on
any securities exchange or under any federal or state securities or
blue sky law, or that the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with the award of any Incentive, the issuance of shares of
Common Stock pursuant thereto, or the removal of any restrictions
imposed on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restrictions shall
not be removed, as the case may be, in whole or in part, unless such
listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Company.
10.5. ADJUSTMENT. In the event of any merger, consolidation or
reorganization of the Company with any other corporation or
corporations, there shall be substituted for each
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of the shares of Common Stock then subject to the Plan, including
shares subject to restrictions, options or achievement of performance
objectives, the number and kind of shares of stock or other securities
to which the holders of the shares of Common Stock will be entitled
pursuant to the transaction. In the event of any recapitalization,
stock dividend, stock split, combination of shares or other change in
the Common Stock, the number of shares of Common Stock then subject to
the Plan, including shares subject to outstanding Incentives, shall be
adjusted in proportion to the change in outstanding shares of Common
Stock. In the event of any such adjustments, the purchase price of any
option, the performance objectives of any Incentive, and the shares of
Common Stock issuable pursuant to any Incentive shall be adjusted as
and to the extent appropriate, in the reasonable discretion of the
Committee, to provide participants with the same relative rights before
and after such adjustment. No substitution or adjustment shall require
the Company to issue a fractional share under this Plan and the
substitution or adjustment shall be limited by deleting any fractional
share.
10.6. INCENTIVE AGREEMENTS. The terms of each Incentive shall
be stated in an agreement approved by the Committee.
10.7. WITHHOLDING.
A. The Company shall have the right to withhold from
any payments made under the Plan or to collect as a condition
of payment, any taxes required by law to be withheld. At any
time that a participant is required to pay to the Company an
amount required to be withheld under applicable income tax
laws in connection with the issuance of Common Stock, the
lapse of restrictions on Common Stock or the exercise of an
option, the participant may, subject to disapproval by the
Committee, satisfy this obligation in whole or in part by
electing (the "Election") to have the Company withhold shares
of Common Stock having a value equal to the amount required to
be withheld. The value of the shares to be withheld shall be
based on the Fair Market Value of the Common Stock on the date
that the amount of tax to be withheld shall be determined
("Tax Date").
B. Each Election must be made prior to the Tax Date.
The Committee may disapprove of any Election, may suspend or
terminate the right to make Elections, or may provide with
respect to any Incentive that the right to make Elections
shall not apply to such Incentive. If a participant makes an
election under Section 83(b) of the Internal Revenue Code with
respect to shares of restricted stock, an Election is not
permitted to be made.
10.8. NO CONTINUED EMPLOYMENT. No participant under the Plan
shall have any right, because of his or her participation, to continue
in the employ of the Company for any period of time or to any right to
continue his or her present or any other rate of compensation.
10.9. DEFERRAL PERMITTED. Payment of cash or distribution of
any shares of Common Stock to which a participant is entitled under any
Incentive shall be made as
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provided in the Incentive Agreement. Payment may be deferred at the
option of the participant if provided in the Incentive Agreement.
10.10. AMENDMENTS TO OR TERMINATION OF THE PLAN.
A. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, provided that no amendment
shall be made without stockholder approval if such approval is
necessary to comply with any tax or regulatory requirement,
including any approval necessary to qualify Incentives as
"performance-based" compensation under Section 162(m) or any
successor provision, if such qualification is deemed necessary
or advisable by the Committee.
B. Any provision of this Plan or any Incentive
Agreement to the contrary notwithstanding, the Committee may
cause any Incentive granted hereunder to be cancelled in
consideration of a cash payment or alternative Incentive made
to the holder of such cancelled Incentive equal in value to
such cancelled Incentive. The determinations of value under
this subparagraph shall be made by the Committee in its sole
discretion.
10.11. CHANGE OF CONTROL.
A. "Change of Control" shall mean:
1. the acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the 1934 Act of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under
the 1934 Act) of more than 30% of the outstanding
shares of the Common Stock; provided, however, that
for purposes of this subsection 1., the following
shall not constitute a Change of Control:
(a) any acquisition of Common Stock
directly from UNIFAB,
(b) any acquisition of Common Stock
by UNIFAB,
(c) any acquisition of Common Stock
by any employee benefit plan (or related
trust) sponsored or maintained by UNIFAB or
any corporation controlled by UNIFAB, or
(d) any acquisition of Common Stock
by any corporation pursuant to a transaction
that complies with clauses (a), (b) and (c)
of subsection (A)(3) of this Section 10.11;
or
2. individuals who, as of the date of
adoption of the Plan by the Board of Directors of
UNIFAB (the "Adoption Date"), constitute the Board
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(the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board;
provided, however, that any individual becoming a
director subsequent to the Adoption Date whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the
Incumbent Board shall be considered a member of the
Incumbent Board, unless such individual's initial
assumption of office occurs as a result of an actual
or threatened election contest with respect to the
election or removal of directors or other actual or
threatened solicitation of proxies or consents by or
on behalf of a person other than the Incumbent Board;
or
3. approval by the stockholders of UNIFAB of
a reorganization, merger or consolidation, or sale or
other disposition of all of substantially all of the
assets of the Company (a "Business Combination"), in
each case, unless, following such Business
Combination,
(a) all or substantially all of the
individuals and entities who were the
beneficial owners of UNIFAB's outstanding
common stock and UNIFAB's voting securities
entitled to vote generally in the election
of directors immediately prior to such
Business Combination have direct or indirect
beneficial ownership, respectively, of more
than 50% of the then outstanding shares of
common stock, and more than 50% of the
combined voting power of the then
outstanding voting securities entitled to
vote generally in the election of directors,
of the corporation resulting from such
Business Combination (which, for purposes of
this paragraph (a) and paragraphs (b) and
(c), shall include a corporation which as a
result of such transaction controls the
Company or all or substantially all of the
Company's assets either directly or through
one or more subsidiaries), and
(b) except to the extent that such
ownership existed prior to the Business
Combination, no person (excluding any
corporation resulting from such Business
Combination or any employee benefit plan or
related trust of the Company or such
corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 30% or more of the then
outstanding shares of common stock of the
corporation resulting from such Business
Combination or 30% or more of the combined
voting power of the then outstanding voting
securities of such corporation, and
(c) at least a majority of the
members of the board of directors of the
corporation resulting from such Business
Combination were members of the Incumbent
Board at the time of the execution of the
initial agreement, or of the action of the
Board, providing for such Business
Combination; or
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4. approval by the shareholders of the
Company of a complete liquidation or dissolution of
the Company.
B. Upon a Change of Control, all outstanding options
shall automatically become fully exercisable, all restrictions
or limitations on any Incentives shall lapse and all
performance criteria and other conditions relating to the
payment of Incentives shall be deemed to be achieved or waived
by the Company, without the necessity of any action by any
person.
C. No later than 30 days after the approval by the
Board of a Change of Control of the types described in
Subsections A.3 and A.4 of this Section 10.11, and no later
than 30 days after a Change of Control of the type described
in Subsections A.1 and A.2 of this Section 10.11 of the Plan,
the Committee (as the Committee was composed immediately prior
to such Change of Control and notwithstanding any removal or
attempted removal of some or all of the members thereof as
directors or Committee members), acting in its sole discretion
without the consent or approval of any participant, may act to
effect one or more of the alternatives listed below and such
act by the Committee may not be revoked or rescinded by
persons not members of the Committee immediately prior to the
Change of Control:
1. require that all outstanding options be
exercised on or before a specified date (before or
after such Change of Control) fixed by the Committee,
after which specified date all unexercised options
shall terminate,
2. provide for mandatory conversion of some
or all of the outstanding options held by some or all
participants as of a date, before or after such
Change of Control, specified by the Committee, in
which event such options shall be deemed
automatically cancelled and UNIFAB shall pay, or
cause to be paid, to each such participant an amount
of cash per share equal to the excess, if any, of the
Change of Control Value of the shares subject to such
option, as defined and calculated below, over the
exercise price(s) of such options, or, in lieu of
such cash payment, the issuance of Common Stock or
securities of an acquiring entity having a Fair
Market Value equal to such excess,
3. make such equitable adjustments to
Incentives then outstanding as the Committee deems
appropriate to reflect such Change of Control
(provided, however, that the Committee may determine
in its sole discretion that no adjustment is
necessary), or
4. provide that thereafter upon any exercise
of an option the participant shall be entitled to
purchase under such option, in lieu of the number of
shares of Common Stock then covered by such option,
the number and class of shares of stock or other
securities or property (including, without
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limitation, cash) to which the participant would have
been entitled pursuant to the terms of the agreement
providing for the merger, consolidation, asset sale,
dissolution or other Change of Control of the type
described in Sections 10.11.A.3 and A.4 of the Plan,
if, immediately prior to such Change of Control, the
participant had been the holder of record of the
number of shares of Common Stock then covered by such
options.
D. For the purposes of paragraph 2. of Section
10.11.C. the "Change of Control Value" shall equal the amount
determined by whichever of the following items is applicable:
1. the per share price to be paid to
shareholders of UNIFAB in any such merger,
consolidation or other reorganization,
2. the price per share offered to shareholders
of UNIFAB in any tender offer or exchange offer
whereby a Change of Control takes place, or
3. in all other events, the Fair Market Value
per share of Common Stock into which such options
being converted are exercisable, as determined by the
Committee as of the date determined by the Committee
to be the date of conversion of such options.
4. in the event that the consideration offered
to shareholders of UNIFAB in any transaction
described in this Section 10.11 consists of anything
other than cash, the Committee shall determine the
fair cash equivalent of the portion of the
consideration offered that is other than cash.
10.12. DEFINITION OF FAIR MARKET VALUE. Whenever "Fair Market
Value" of Common Stock shall be determined for purposes of this Plan,
it shall be determined as follows: (i) if the Common Stock is listed on
an established stock exchange or any automated quotation system that
provides sale quotations, the closing sale price for a share of the
Common Stock on such exchange or quotation system on the applicable
date; (ii) if the Common Stock is not listed on any exchange or
quotation system, but bid and asked prices are quoted and published,
the mean between the quoted bid and asked prices on the applicable
date, and if bid and asked prices are not available on such day, on the
next preceding day on which such prices were available; and (iii) if
the Common Stock is not regularly quoted, the fair market value of a
share of Common Stock on the applicable date as established by the
Committee in good faith.
10.13 LOANS. In order to assist a participant in acquiring
shares of Common Stock pursuant to an Incentive granted under the Plan,
the Committee may authorize, subject to the provisions of Regulation G
of the Board of Governors of the Federal Reserve System, at either the
time of the grant of the Incentive, at the time of the acquisition of
Common Stock pursuant to the Incentive, or at the time of the lapse of
restrictions on shares of restricted stock granted under the Plan, the
extension of a loan to the participant by the Company. The
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terms of any loans, including the interest rate, collateral and terms
of repayment, will be subject to the discretion of the Committee. The
maximum credit available hereunder shall be equal to the aggregate
purchase price of the shares of Common Stock to be acquired pursuant to
the Incentive plus the maximum tax liability that may be incurred in
connection with the Incentive.
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