1
EXHIBIT 10.2
2001 STOCK PLAN FOR OFFICERS OF IDEX CORPORATION
IDEX Corporation, a Delaware corporation (the "Company"), by resolution
of its Board of Directors, on January 23, 2001 approved the 2001 Stock Plan for
Officers of IDEX Corporation (the "Original Plan"), subject to approval of the
Company's shareholders. The purposes of this Plan are as follows:
(1) To further the growth, development and financial success of the
Company by providing additional incentives to certain of its Officers who
have been or will be given responsibility for the management or
administration of the Company's business affairs, by assisting them to
become owners of the Company's Common Stock and thus to benefit directly
from its growth, development and financial success.
(2) To enable the Company to obtain and retain the services of the type
of managerial employees considered essential to the long-range success of
the Company by providing and offering them an opportunity to become owners
of the Company's Common Stock under options and/or deferred compensation
awards (pursuant to this Plan and any Deferred Compensation Plans that
permit deferrals into accounts distributable in Common Stock after the
deferral period).
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
The singular shall include the plural, where the context so indicates.
SECTION 1.1 BOARD
"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 CHANGE IN CONTROL
"Change in Control" shall mean the occurrence of (a) any transaction or
series of transactions which within a 12-month period constitute a change of
management or control where (i) at least 51 percent of the then outstanding
shares of Common Stock are (for cash, property (including, without limitation,
stock in any corporation), or indebtedness, or any combination thereof) redeemed
by the Company or purchased by any person(s), firm(s) or entity(ies), or
exchanged for shares in any other corporation whether or not affiliated with the
Company, or any combination of such redemption, purchase or exchange, or (ii) at
least 51 percent of the Company's assets are purchased by any person(s), firm(s)
or entity(ies) whether or not affiliated with the Company for cash, property
(including, without limitation, stock in any corporation) or indebtedness or any
combination thereof, or (iii) the Company is merged or consolidated with another
corporation regardless of whether the Company is the survivor (except any such
transaction solely for the purpose of changing the Company's domicile or which
does not change the ultimate beneficial ownership of the equity interests in the
Company), or (b) any substantial equivalent of any such redemption, purchase,
exchange, change, transaction or series of transactions, acquisition, merger or
consolidation constituting such a change of management or control. For purposes
hereof, the term "control" shall have the meaning ascribed thereto under the
Exchange Act and the regulations thereunder, and the term "management" shall
mean the chief executive officer of the Company. For purposes of clause (a)(ii)
above or as appropriate for purposes of clause (b) above, the Company shall be
deemed to include on a consolidated basis all subsidiaries and other affiliated
corporations or other entities with the same effect as if they were divisions.
SECTION 1.3 CODE
"Code" shall mean the Internal Revenue Code of 1986, as amended.
2
SECTION 1.4 COMMITTEE
"Committee" shall mean the Compensation Committee of the Board,
appointed as provided in Section 7.1.
SECTION 1.5 COMMON STOCK
"Common Stock" shall mean the common stock, par value $.01 per share,
of the Company.
SECTION 1.6 COMPANY
"Company" shall mean IDEX Corporation.
SECTION 1.7 DEFERRAL DATE
"Deferral Date" shall mean, in connection with any Deferred
Compensation Unit, the date on which any deferred compensation with respect
thereto would have been paid if no deferral election had been made.
SECTION 1.8 DEFERRED COMPENSATION PLANS
"Deferred Compensation Plans" shall mean any deferred compensation plan
adopted by the Company or any Parent Corporation or any Subsidiary that permits
deferrals into accounts payable in Common Stock upon distribution thereof and in
which any Officer is eligible to participate.
SECTION 1.9 DEFERRED COMPENSATION UNITS
"Deferred Compensation Units" shall mean the right of a Grantee to
receive distributions of deferred compensation pursuant to any Deferred
Compensation Plan in the form of Common Stock after the deferral period,
determined in accordance with the terms of such Deferred Compensation Plan and
Article VI of this Plan and based on the Fair Market Value on the deferral date.
SECTION 1.10 DIRECTOR
"Director" shall mean a member of the Board.
SECTION 1.11 DIVIDEND EQUIVALENTS
"Dividend Equivalents" shall mean Deferred Compensation Units equal to
(i)(a) the cash dividend paid on one share of Common Stock, multiplied by (b)
the number of Deferred Compensation Units credited to the account of any Grantee
as of each applicable dividend record date, divided by (ii) the Fair Market
Value on the related dividend payment date.
SECTION 1.12 EMPLOYEE
"Employee" shall mean any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section 3401(c) of the
Code) of the Company, or of any corporation which is then a Parent Corporation
or a Subsidiary, whether such employee is so employed at the time this Plan is
adopted or becomes so employed subsequent to the adoption of this Plan.
SECTION 1.13 EXCHANGE ACT
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
SECTION 1.14 FAIR MARKET VALUE
"Fair Market Value" of the Common Stock shall mean as of a given date:
(i) if Common Stock is traded on an exchange when the closing price of a share
of Common Stock as reported in the Wall Street Journal for the first trading
date immediate prior to such date during which a sale occurred; or (ii) if
Common Stock is not traded on an
3
exchange but is quoted on NASDAQ or a successor or other quotation system, (x)
the last sales price (if the Common Stock is then listed as a National Market
Issue under the NASD National Market System) or (y) the mean between the closing
representative bid and asked prices (in all other cases) for the Common Stock on
the date immediately prior to such date on which sales prices or bid and asked
prices, as applicable, are reported by NASDAQ or such successor quotation
system; or (iii) if such Common Stock is not publicly traded on an exchange and
not quoted on NASDAQ or a successor quotation system, the mean between the
closing bid and asked prices for the Common Stock on the day previous to such
date, as determined in good faith by the Committee; or (iv) if the Common Stock
is not publicly traded, the fair market value established by the Committee
acting in good faith.
SECTION 1.15 GRANTEE
"Grantee" shall mean an Officer to whom Deferred Compensation Units are
awarded pursuant to this Plan.
SECTION 1.16 INCENTIVE STOCK OPTION
"Incentive Stock Option" shall mean an Option which conforms to the
applicable provisions of Section 422 of the Code and which is designated as an
Incentive Stock Option by the Committee.
SECTION 1.17 NON-QUALIFIED OPTION
"Non-Qualified Option" shall mean an Option which is not designated as
an Incentive Stock Option by the Committee.
SECTION 1.18 OFFICER
"Officer" shall mean an officer of the Company, as defined in Rule
16a-l(f) under the Exchange Act, as such Rule may be amended in the future.
SECTION 1.19 OPTION
"Option" shall mean a stock option granted under Article III of this
Plan. An Option granted under this Plan shall, as determined by the Committee,
be either a Non-Qualified Option or an Incentive Stock Option.
SECTION 1.20 OPTIONEE
"Optionee" shall mean an Employee to whom an Option is granted under
the Plan.
SECTION 1.21 PARENT CORPORATION
"Parent Corporation" shall mean any corporation in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
Company then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
SECTION 1.22 PERMITTED TRANSFEREE
"Permitted Transferee" shall mean (a) the spouse, children or
grandchildren of the Optionee ("Immediate Family"), (b) a trust for the benefit
of the Optionee or the Optionee's Immediate Family, or (c) a partnership,
limited liability corporation or other entity ("Entity") in which the Optionee
or the Optionee's Immediate Family are the only partners, members or holders of
interests.
SECTION 1.23 PLAN
"Plan" shall mean this 2001 Stock Plan for Officers of IDEX
Corporation.
4
SECTION 1.24 RETIREMENT
"Retirement" shall mean termination of employment with the Company upon
reaching retirement age, or earlier, at the election of the Officer, in
accordance with the Company's policy on retirement.
SECTION 1.25 RULE 16B-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act,
as such Rule may be amended in the future.
SECTION 1.26 SECRETARY
"Secretary" shall mean the Secretary of the Company.
SECTION 1.27 SECURITIES ACT
"Securities Act" shall mean the Securities Act of 1933, as amended.
SECTION 1.28 SUBSIDIARY
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
SECTION 1.29 TERMINATION OF EMPLOYMENT
"Termination of Employment" shall mean (unless otherwise specified in
any applicable Deferred Compensation Plan) the time (which in the absence of any
other determination by the Committee, shall be deemed to be the last day
actually worked by the Optionee or Grantee) when the employee-employer
relationship between the Optionee or Grantee and the Company, a Parent
Corporation or a Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death or Retirement, but excluding terminations where there is a
simultaneous reemployment by the Company, a Parent Corporation or a Subsidiary.
The Committee, in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment;
provided, however, that, with respect to Incentive Stock Options, a leave of
absence shall constitute a Termination of Employment if, and to the extent that,
such leave of absence interrupts employment for the purposes of Section
422(a)(2) of the Code and the then applicable regulations and revenue rulings
under said Section.
ARTICLE II
GENERAL CONDITIONS
SECTION 2.1 SHARES SUBJECT TO PLAN
The shares of stock subject to Options and awards of Deferred
Compensation Units shall be shares of the Common Stock. The aggregate number of
such shares which may be issued upon exercise of Options and distributed
pursuant to Deferred Compensation Units under the Plan shall not exceed 900,000
shares (of which no more than 300,000 shares may be issued pursuant to Deferred
Compensation Units). Furthermore, the maximum number of shares of Common Stock
which may be subject to Options granted or Deferred Compensation Units issued
under the Plan to any individual in any calendar year shall not exceed 600,000,
and the method of counting such shares shall conform to any requirements
applicable to performance-based compensation under Section 162(m) of the Code.
The shares of Common Stock issuable upon exercise of such Options or upon
distributions with respect to any such Deferred Compensation Units may be either
previously authorized and unissued shares or treasury shares.
5
SECTION 2.2 UNEXERCISED OPTIONS AND UNDISTRIBUTED SHARES
If any Option expires or is cancelled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised prior to its expiration or cancellation may again be
either optioned or awarded hereunder, subject to the limitations of Section 2.1.
SECTION 2.3 CHANGES IN COMPANY'S SHARES
In the event that the outstanding shares of Common Stock of the Company
are hereafter changed into or exchanged for a different number or kind of shares
or other securities of the Company, or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, stock dividend or combination of shares, appropriate adjustments shall
be made by the Committee in the number and kind of shares for the purchase of
which Options may be granted or which are distributable pursuant to Deferred
Compensation Units, including adjustments of the limitations in Section 2.1 on
the maximum number and kind of shares which may be issued on exercise of Options
and distributed with respect to Deferred Compensation Units hereunder; provided,
however, that in the case of Incentive Stock Options, each such adjustment shall
be made in such manner as not to constitute a "modification" within the meaning
of Section 424(h)(3) of the Code. In the event of an adjustment contemplated by
this Section 2.3 in any outstanding Options or Deferred Compensation Units, the
Committee shall make an appropriate and equitable adjustment to the end that
after such event the proportionate interest of the Optionee (or other person
then entitled to exercise Options) or Grantee shall be maintained as before the
occurrence of such event. Such adjustment in any outstanding Options or Deferred
Compensation Units shall be made without change in the total price applicable to
the Option or the unexercised portion of the Option or the aggregate value of
undistributed Common Stock with respect to any Deferred Compensation Units
(except for any change in the aggregate price resulting from rounding-off of
share quantities or prices) and with any necessary corresponding adjustment in
the Option price per share. In the event of a "spin-off" or other substantial
distribution of assets of the Company which has a material diminutive effect
upon Fair Market Value, the Committee may in its discretion make an appropriate
and equitable adjustment to the Option exercise price or the number of shares of
Common Stock distributable pursuant to Deferred Compensation Units to reflect
such diminution. Any such adjustment made by the Committee shall be final and
binding upon all Optionees or other persons then entitled to exercise Options,
Grantees, the Company and all other interested persons.
Notwithstanding the foregoing, in the event of such a reorganization,
merger, consolidation, recapitalization, reclassification, stock split-up, stock
dividend or combination, or other adjustment or event which results in shares of
Common Stock being exchanged for or converted into cash, securities or other
property, the Company will have the right to terminate this Plan as of the date
of the exchange or conversion, in which case all Options and Deferred
Compensation Units under this Plan shall become the right to receive such cash,
securities or other property, net of any applicable exercise price.
SECTION 2.4 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate
or certificates for shares of Common Stock purchased upon the exercise of any
Option or upon distribution pursuant to any Deferred Compensation Units, or
portion thereof, prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which the Common Stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental
regulatory body, which the Committee shall, in its absolute discretion,
deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of all
amounts which it is required to withhold under federal, state or local law
in connection with the exercise of the Option or upon distribution pursuant
to the Deferred Compensation Units; and
6
(e) The lapse of such reasonable period of time following the exercise
of the Option or the distribution pursuant to the Deferred Compensation
Units as the Committee may establish from time to time for reasons of
administrative convenience.
SECTION 2.5 MERGER, CONSOLIDATION, ACQUISITION, LIQUIDATION OR DISSOLUTION
Notwithstanding any other provision of this Plan, in its absolute
discretion, and on such terms and conditions as it deems appropriate, the
Committee may provide by the terms of any Option that such Option cannot be
exercised after a Change in Control or the liquidation or dissolution of the
Company (collectively, "Control Events"); and if the Committee so provides, it
may, in its absolute discretion, on such terms and conditions as it deems
appropriate, also provide, either by the terms of any Option or by a resolution
adopted prior to the occurrence of such Control Event, that, for some period of
time beginning prior to and ending as of (and including) the time of such event,
such Option shall be exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in Section 4.3(a), Section 4.3(b) or
any installment provisions of any Option. The treatment of Deferred Compensation
Units and the shares distributable with respect to such Units upon the
occurrence of any Control Event shall be governed by the applicable Deferred
Compensation Plan.
SECTION 2.6 RIGHTS AS SHAREHOLDERS
The holders of Options and Deferred Compensation Units shall not be,
nor have any of the rights or privileges of, shareholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option or
distributable pursuant to a Deferred Compensation Unit unless and until
certificates representing such shares have been issued by the Company to such
holders.
SECTION 2.7 TRANSFER RESTRICTIONS
The Committee, in its absolute discretion, may impose such restrictions
on the transferability of the shares purchasable upon the exercise of an Option
or distribution pursuant to Deferred Compensation Units as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option Agreement
or award of Deferred Compensation Units and may be referred to on the
certificates evidencing such shares. The Committee will require an Officer to
give the Company prompt notice of any disposition of shares of Common Stock
acquired by exercise of an Incentive Stock Option within (i) two years from the
date of granting such Option to such Officer or (ii) one year after the transfer
of such shares to such Officer. The Committee may direct that the certificates
evidencing shares acquired by exercise of an Option refer to such requirement to
give prompt notice of disposition.
SECTION 2.8 NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in this Plan or in any Stock Option Agreement or Deferred
Compensation Plan shall confer upon any Optionee or Grantee any right to
continue in the employ of the Company, any Parent Corporation or any Subsidiary
or shall interfere with or restrict in any way the rights of the Company, its
Parent Corporation and its Subsidiaries, which are hereby expressly reserved, to
discharge any Optionee or Grantee at any time for any reason whatsoever, with or
without cause.
ARTICLE III
GRANTING OF OPTIONS
SECTION 3.1 ELIGIBILITY
Any Officer of the Company shall be eligible to be granted Options
under the Plan, as provided in Section 3.3.
SECTION 3.2 QUALIFICATION OF INCENTIVE STOCK OPTIONS
No Incentive Stock Option shall be granted unless such Option, when
granted, qualifies as an "incentive stock option" under Section 422 of the Code.
Without limitation of the foregoing, no person shall be granted an Incentive
Stock Option under this Plan if such person, at the time the Incentive Stock
Option is granted, owns stock
7
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company unless such Incentive Stock Option conforms to
the applicable provisions of Section 422 of the Code. Any Incentive Stock Option
granted under this Plan may be modified by the Committee to disqualify such
option from treatment as an "incentive stock option" under Section 422 of the
Code.
SECTION 3.3 GRANTING OF OPTIONS
(a) The Committee shall from time to time, in its absolute discretion:
(i) Determine and select from among the Officers (including those to
whom Options have been previously granted under the Plan) such of them as
in its opinion should be granted Options; and
(ii) Determine the number of shares to be subject to such Options
granted to such selected Officers; and
(iii) Determine whether such Options are to be Incentive Stock Options
or Non-Qualified Options; and
(iv) Determine the terms and conditions of such Options, consistent
with the Plan.
(b) Upon the selection of an Officer to be granted an Option, the Committee
shall instruct the Secretary to issue such Option and may impose such conditions
on the grant of such Option as it deems appropriate. Without limiting the
generality of the preceding sentence, the Committee may, in its discretion and
on such terms as it deems appropriate, require as a condition on the grant of an
Option to an Officer that the Officer surrender for cancellation some or all of
the unexercised Options which have been previously granted to such Officer. An
Option the grant of which is conditioned upon such surrender may have an option
price lower (or higher) than the option price of the surrendered Option, may
cover the same (or a lesser or greater) number of shares as the surrendered
Option, may contain such other terms as the Committee deems appropriate and
shall be exercisable in accordance with its terms, without regard to the number
of shares, price, option period or any other term or condition of the
surrendered Option.
ARTICLE IV
TERMS OF OPTIONS
SECTION 4.1 OPTION AGREEMENT
Each Option shall be evidenced by a written Stock Option Agreement,
which shall be executed by the Optionee and an authorized Officer of the Company
and which shall contain such terms and conditions as the Committee shall
determine, not inconsistent with the Plan. Stock Option Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 422 of the Code.
SECTION 4.2 OPTION PRICE
The price per share of the shares subject to each Option shall be set
by the Committee; provided, however, that the price per share shall not be less
than 100% of the Fair Market Value as of the date such Option is granted.
SECTION 4.3 COMMENCEMENT OF EXERCISABILITY
(a) Except as the Committee may otherwise provide, no Option may be
exercised in whole or in part during the first year after such Option is
granted.
(b) Subject to the provisions of Sections 4.3(a) and 4.3(c), Options
shall become exercisable at such times and in such installments (which may
be cumulative) as the Committee shall provide in the terms of each
individual Option; provided, however, that by a resolution adopted after an
Option is granted the Committee
8
may, on such terms and conditions as it may determine to be appropriate and
subject to Sections 4.3(a) and 4.3(c), accelerate the time at which such
Option or any portion thereof may be exercised.
(c) No portion of an Option which is unexercisable at Termination of
Employment shall thereafter become exercisable; provided, however, that in
the event of a Termination of Employment resulting from the Optionee's
death, disability or Retirement, all Options shall become exercisable,
effective immediately upon the occurrence of such event.
(d) To the extent that the aggregate Fair Market Value with respect to
which "incentive stock options" (within the meaning of Section 422 of the
Code, but without regard to the limitations of Section 422(d) of the Code)
are exercisable for the first time by an Optionee during any calendar year
(under the Plan and all other incentive stock option plans of the Company
and any Parent Corporation or any Subsidiary) exceeds $100,000, such
Options shall be treated as Non-Qualified Options to the extent required by
Section 422 of the Code. The rule set forth in the preceding sentence shall
be applied by taking Options into account in the order in which they were
granted. For purposes of this Section 4.3(d), the Fair Market Value shall
be determined as of the time the Option with respect to such stock is
granted.
SECTION 4.4 EXPIRATION OF OPTIONS
(a) No Option may be exercised to any extent by anyone after, and
every Option shall expire no later than, the expiration of ten years from
the date the Option was granted.
(b) Subject to the provisions of Sections 4.4(a) and 4.4(c), the
Committee shall provide, in the terms of each individual Option, when such
Option expires and becomes unexercisable.
(c) The term of any Incentive Stock Option shall not be more than five
years from such date if the Incentive Stock Option is granted to an
individual then owning (within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of capital
stock of the Company or any Parent Corporation or any Subsidiary.
SECTION 4.5 CONSIDERATION
In consideration of the granting of an Option, the Optionee shall
agree, in the written Stock Option Agreement, to remain in the employ of the
Company, a Parent Corporation or a Subsidiary, with such duties and
responsibilities as the Company shall from time to time prescribe.
SECTION 4.6 TERMINATION OF INCENTIVE STOCK OPTION GRANTS UNDER PLAN
In no event may any Incentive Stock Option be granted under the Plan
after January 23, 2011.
ARTICLE V
EXERCISE OF OPTIONS
SECTION 5.1 PERSON ELIGIBLE TO EXERCISE
Except as otherwise provided in Section 8.1, during the lifetime of the
Optionee, only such Optionee may exercise an Option (or any portion thereof)
granted to such Optionee. After the death of the Optionee, any exercisable
portion of an Option may, prior to the time when such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement, be
exercised by such Optionee's Beneficiary. "Beneficiary" shall mean any one or
more persons, corporations, trusts, estates, or any combination thereof, last
designated by an Optionee in accordance with the applicable Stock Option
Agreement.
SECTION 5.2 PARTIAL EXERCISE
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes unexercisable under
the Plan or the applicable Stock Option Agreement, such Option or portion
9
thereof may be exercised in whole or in part; provided, however, that the
Company shall not be required to issue fractional shares and the Committee may,
by the terms of the Option, require any partial exercise to be with respect to a
specified minimum number of shares.
SECTION 5.3 MANNER OF EXERCISE
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or the Secretary's office of all
of the following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:
(a) Notice in writing signed by the Optionee or other person then
entitled to exercise such option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee;
(b) Full payment (in cash or by check) for the shares with respect to
which such Option or portion thereof is exercised, including payment to the
Company (or other employer corporation) of all amounts which it is required
to withhold under federal, state or local law in connection with the
exercise of the Option. However, in the discretion of the Committee,
payment may be made, in whole or in part, through (i) the delivery of
shares of Common Stock owned by the Optionee or other person then entitled
to exercise such Option for a period of at least six months, duly endorsed
for transfer to the Company with a Fair Market Value on the date of
delivery equal to that portion of the aggregate exercise price of the
Option or exercised portion thereof plus the amount of the applicable
withholding tax for which such payment is permitted by the Committee; (ii)
the surrender of shares of Common Stock then issuable upon exercise of the
Option having a Fair Market Value on the date of Option exercise equal to
that portion of the aggregate exercise price of the Option or exercise
portion thereof, plus the amount of the applicable withholding tax, for
which such payment is permitted by the Committee; (iii) the delivery of a
full recourse promissory note bearing interest (at no less than such rate
as shall then preclude the imputation of interest under the Code) and
payable upon such terms as may be prescribed by the Committee; (iv) to the
extent permitted by law (including then-existing interpretations of Rule
16b-3), a "cashless exercise procedure" satisfactory to the Committee which
permits the Optionee or other person then entitled to exercise such Option
to deliver an exercise notice to a broker-dealer, who then sells Option
shares, delivers the proceeds of the sale, less commission, to the Company,
which delivers such proceeds, less the exercise price and withholding
taxes, to the Optionee or other person then entitled to exercise such
Option, or (v) any combination of the consideration provided in the
foregoing subparagraphs (i), (ii), (iii) and (iv). In the case of a
promissory note, the Committee may also prescribe the form of such note and
the security (if any) to be given for such note. Notwithstanding the
foregoing, the Option may not be exercised by delivery of a promissory note
or by a loan from the Company where such loan or other extension of credit
is prohibited by law;
(c) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act and any other federal or
state securities laws or regulations. The Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer orders to transfer agents and
registrars; and
(d) In the event that the Option or portion thereof shall be exercised
pursuant to Section 5.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
Option or portion thereof.
10
ARTICLE VI
DEFERRED COMPENSATION UNITS
SECTION 6.1 GRANTING OF DEFERRED COMPENSATION UNITS
To the extent elected by any Grantee and permitted by any Deferred
Compensation Plan, the Committee may award Deferred Compensation Units to any
Grantee in lieu of all or any portion of the compensation deferred by the
Grantee, including without limitation, salary and bonuses, that would otherwise
be payable to such Grantee in cash. Deferred Compensation Units may be awarded,
in the discretion of the Committee, either (i) with respect to any deferral by
any Grantee who so elects, or (ii) with respect to all or a specified maximum
portion of the amount of compensation deferred or to be deferred under any
Deferred Compensation Plan for any fiscal year or longer period by any Grantee
or group of Grantees who may deliver one or more irrevocable written elections
to the Company to receive Deferred Compensation Units in lieu of all or such
portion of such cash compensation as shall be specified in such election.
SECTION 6.2 EFFECT OF GRANTS
The number of shares of Common Stock distributable pursuant to each
Deferred Compensation Unit shall be charged against the maximum number of shares
of Common Stock that may be issued under this Plan at any time. The number of
shares of Common Stock to be distributed to a Grantee at such time as such
distribution is to be made consistent with the terms of the applicable Deferred
Compensation Plan and such deferral, and to be charged against the number of
shares issuable under this Plan at any time, shall equal the number of Deferred
Compensation Units credited to the account of such Grantee, subject to Section
2.1.
SECTION 6.3 ACCOUNTING; FRACTIONAL UNITS
(a) The number of Deferred Compensation Units credited to the account
of any Grantee shall be rounded to the nearest one-thousandth of a Unit.
The account to which Deferred Compensation Units are credited shall be an
unsecured, unfunded general obligation of the Company. The Company will
maintain records of the number of Deferred Compensation Units for the
account of each officer, in part, to prevent an issuance of shares of
Common Stock in excess of the authorized shares.
(b) Notwithstanding paragraph (a) above, upon distribution of any
Common Stock represented by Deferred Compensation Units, the number of
shares shall be rounded downward to the nearest whole share and no
fractional shares shall be issued. Fractional Units remaining after the
final distribution to any Grantee shall be cancelled without obligation to
the Grantee.
(c) The number of Deferred Compensation Units awarded to each Grantee,
together with any conditions applicable thereto pursuant to this Plan,
shall be specified in writing to each Grantee by the Committee after each
Deferral Date.
11
ARTICLE VII
ADMINISTRATION
SECTION 7.1 COMPENSATION COMMITTEE
The Compensation Committee shall consist of two or more Directors,
appointed by and holding office at the pleasure of the Board, none of whom may
(i) be an Officer, (ii) receive compensation, either directly or indirectly,
from the Company or any Parent Corporation or Subsidiary, for services rendered
in any capacity other than as a Director, except for an amount that does not
exceed the dollar amount for which disclosure would be required pursuant to Item
404 of Regulation S-K ("Item 404"), (iii) possess an interest in any other
transaction for which disclosure would be required pursuant to Item 404 or (iv)
be engaged in a business relationship for which disclosure would be required
pursuant to Item 404. The constitution of the Committee must also comply with
the requirements of Section 162(m) of the Code. The failure of the constitution
of the Committee to comply with the foregoing requirements shall not adversely
affect the validity of any shares issued upon exercise of Options or distributed
pursuant to Deferred Compensation Units under the Plan. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time. Vacancies in the Committee shall be filled by the Board.
SECTION 7.2 DUTIES AND POWERS OF COMMITTEE
It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan, the Options and the Deferred
Compensation Plans pursuant to which Deferred Compensation Units are granted and
to adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret, amend or revoke any such
rules. Any such interpretations and rules in regard to Incentive Stock Options
shall be consistent with the basic purpose of the Plan to grant "incentive stock
options" within the meaning of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Section 162(m) of the Code, or any regulations or rules
issued thereunder, are required to be determined in the sole discretion of the
Committee.
SECTION 7.3 MAJORITY RULE
The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.
SECTION 7.4 COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS
Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Committee, the Company and its Officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Optionees or other
persons then entitled to exercise Options, Grantees, the Company and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Options or Deferred Compensation Units, and all members of the
Committee shall be fully protected by the Company in respect to any such action,
determination or interpretation.
12
ARTICLE VIII
OTHER PROVISIONS
SECTION 8.1 TRANSFER RESTRICTIONS ON OPTIONS AND UNITS
No Option, Deferred Compensation Unit or interest or right therein or
part thereof shall be liable for the debts, contracts or engagements of the
Optionee, Grantee or their respective successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect; provided,
however, that nothing in this Section 8.1 shall prevent transfers to a
Beneficiary upon the death of the Optionee or pursuant to the following
paragraph.
A Non-Qualified Option may be transferred by the Optionee to a
Permitted Transferee; provided, however, that (i) there may not be consideration
for any such transfer, and (ii) once transferred pursuant to the preceding
provisions of this Section 8.1, no subsequent transfer of the Non-Qualified
Option shall be permitted except a transfer by will or the laws of descent and
distribution or, in the case of a trust or Entity which is a Permitted
Transferee, to the Optionee or Immediate Family partners, members or holders of
interests in the trust or Entity pursuant to the terms of such trust or Entity
agreement. Following transfer, the terms and conditions of the Plan and the
applicable Stock Option Agreement shall continue to be applicable in all
respects to the Optionee and the Non-Qualified Option shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer as if the Non-Qualified Option had not been transferred, including, but
not limited to, the terms and conditions with respect to the lapse and
termination of such Non-Qualified Option. None of the Company, the Committee or
the Optionee shall have any obligation to inform any transferee of the
termination or lapse of the Non-Qualified Option for any reason. Notwithstanding
any other provision of the Plan, any Non-Qualified Option transferred in
accordance with this Section 8.1 shall be exercisable by the transferee only to
the extent, and for the periods specified in the applicable Stock Option
Agreement as if such Non-Qualified Option had not been transferred.
SECTION 8.2 AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Committee.
However, unless otherwise determined by the Board and permitted by Rule 16b-3 as
then in effect, without approval of the Company's shareholders given within 12
months before or after the action by the Committee, no action of the Committee
may, except as provided in Section 2.3, increase the limits imposed in Section
2.1 on the maximum number of shares which may be issued on exercise of Options
or distributed pursuant to Deferred Compensation Units, materially modify the
eligibility requirements of Section 3.1, reduce the minimum Option price
requirements of Section 4.2(a) or extend the limit imposed in this Section 8.2
on the period during which Options may be granted or amend or modify the Plan in
a manner requiring shareholder approval under Rule 16b-3 or the Code. Neither
the amendment, suspension nor termination of the Plan shall, without the consent
of the holder of an Option or Deferred Compensation Unit, impair any rights or
obligations under any Option or Deferred Compensation Unit theretofore granted.
No Option or Deferred Compensation Unit (except Dividend Equivalents) may be
granted during any period of suspension nor after termination of the Plan, and,
except as provided in Section 4.6, in no event may any Option or Deferred
Compensation Unit (except Dividend Equivalents) be granted under this Plan after
ten years from the date the Plan is approved by the Company's Shareholders.
SECTION 8.3 EFFECT OF PLAN UPON OTHER OPTION AND COMPENSATION PLANS
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company, any Parent Corporation or any Subsidiary (a) to establish any other
forms of incentives or compensation for employees of the Company, any Parent
Corporation or any Subsidiary or (b) to grant or assume options otherwise than
under this Plan in connection with any proper corporate purpose, including, but
not by way of limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.
13
SECTION 8.4 TITLES
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan.
SECTION 8.5 CONFORMITY TO SECURITIES LAWS AND OTHER STATUTORY REQUIREMENTS
The Plan is intended to conform to the extent necessary with all
provisions of the Securities Act, the Exchange Act and the Code and any and all
regulations and rules promulgated by the Securities and Exchange Commission and
Internal Revenue Service thereunder, including without limitation Rule 16b-3 of
the Exchange Act. Notwithstanding anything herein to the contrary, the Plan
shall be administered, and Options and Deferred Compensation Units shall be
granted and may be exercised or distributed, only in such a manner as to conform
to such laws, rules and regulations. To the extent permitted by applicable law,
the Plan, Options and Deferred Compensation Units granted hereunder shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations. Without limitation of the foregoing and notwithstanding any other
provision of this Plan, any Option or Deferred Compensation Units granted to an
Officer who is then subject to Section 16 of the Exchange Act, shall be subject
to any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the
Exchange Act) that are requirements for the application of such exemptive rule,
and this Plan shall be deemed amended to the extent necessary to conform to such
limitations. Furthermore, notwithstanding any other provision of this Plan, any
Option or award intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall be subject to any additional
limitations set forth in Section 162(m) of the Code (including any amendment to
Section 162(m) of the Code) or any regulations or rulings issued thereunder that
are requirements for qualification as performance-based compensation as
described in Section 162(m)(4)(C) of the Code, and this Plan shall be deemed
amended to the extent necessary to conform to such requirements.
SECTION 8.6 GOVERNING LAW
This Plan and any agreements hereunder shall be administered,
interpreted and enforced in accordance with the laws of the State of Illinois
(without reference to the choice of law provisions of Illinois law).
* * * *
I hereby certify that the foregoing Plan was duly approved by the Board
of Directors of IDEX Corporation effective January 23, 2001
Executed on this ____ day of ___________, 2001.
------------------------------------------
Secretary
Corporate Seal