EXHIBIT 10(EE)
1992 STOCK OPTION
AND INCENTIVE PLAN
COLTEC INDUSTRIES INC
1992 STOCK OPTION AND INCENTIVE PLAN
1. Purpose. The purpose of the Plan is to provide an additional incentive
to officers and other eligible key employees, upon whom
responsibilities for the successful operation, administration and
management of Coltec Industries Inc (the "Corporation") rest and whose
present or potential contributions are important to the continued
success of the Corporation, and to enable the Corporation to attract
and retain in its employ highly qualified persons for the successful
conduct of its business. It is intended that this purpose will be
effected through the granting of Incentive Stock Rights, Stock Options,
Stock Appreciation Rights, Restricted Stock and Dividend Equivalents,
as provided herein, and the making of loans to accomplish the purposes
of the Plan.
2. Definitions. For purposes of this Plan:
a) "Award" means an Incentive Stock Right, Stock Option, Stock
Appreciation Right, Restricted Stock grant and/or Dividend
Equivalent.
b) "Award Agreement" means an agreement granting an Award.
c) "Board of Directors" means the Board of the Directors of the
Corporation.
d) "Change in Control" means the occurrence of an event described
in Section 13(a) hereof.
e) "Code" means the Internal Revenue Code of 1986, as amended.
f) "Committee" means the Stock Option and Compensation Committee
appointed by the Board of Directors to administer the Plan.
g) "Common Stock" means the Common Stock, par value $.01 per
share, of the Corporation.
h) "Corporation" means Coltec Industries Inc, a Pennsylvania
corporation.
i) "Dividend Equivalent" means the right to receive, on a current
or deferred basis, and subject to such conditions as may be
imposed by the Board of Directors, cash payments from the
Corporation equal to the amount which would have been received
had a person owned a specified number of shares of Common
Stock.
j) "Exercise Date" means the date upon which a Stock Option or
Stock Appreciation Right is exercised.
k) "Fair Market Value" means the fair market value of the Common
Stock as determined by the Committee in its sole discretion;
provided, however, that (A) if
Restated as of May 7, 1998 1
the Common Stock is admitted to trading on a national
securities exchange, Fair Market Value on any date shall be
the last sale price reported for the Common Stock on such
exchange on such date or on the last date preceding such date
on which a sale was reported; (B) if the Common Stock is
admitted to quotation on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or
other comparable quotation system and has been designated as a
National market System ("NMS") security, Fair Market Value on
any date shall be the last sale price reported for the Common
Stock on such system on such date or, if no sale occurred on
such date, on the last day preceding such date on which a sale
was reported, or (C) if the Common Stock is admitted to
quotation on NASDAQ and has not been designated a NMS
security, Fair Market Value on any date shall be the average
of the highest bid and lowest asked prices of Common Stock on
such system on such date.
l) "Incentive Stock Option" means an option to acquire stock
within the meaning of Section 422 of the Code.
m) "Incentive Stock Right" means the right to receive, without
payment to the Corporation, shares of Common Stock, subject to
the terms, conditions and restrictions described in Section 8
hereof.
n) "Nonqualified Stock Option" means a Stock Option, which is not
an Incentive Stock Option.
o) "Public Offering" means the initial underwritten public
offering of Common Stock.
p) "Restricted Stock" means shares of Common Stock issued to a
participant, without payment to the Corporation, subject to
the terms, conditions and restrictions described in Section 10
hereof.
q) "Right" means a Stock Appreciation Right or an Incentive Stock
Right.
r) "Stock Appreciation Right" means a right to receive, without
payment to the Corporation, a number of shares of Common Stock
and/or cash, determined pursuant to a formula based upon the
difference between a price determined in accordance with
Section 9(b)(ii) and the Fair Market Value of a share of
Common Stock on the date of exercise of such Stock
Appreciation Right.
s) "Stock Option" means an Incentive Stock Option or Nonqualified
Stock Option providing the holder thereof with the right to
purchase Common Stock at a price to be determined in
accordance with Section 9(a)(i) of the Plan.
t) "Subsidiary" means any future or present corporation which
would be a "subsidiary corporation" of the Corporation as the
term is defined in Section 424 of the Code.
Restated as of May 7, 1998 2
3. Duration of Plan. The Plan shall remain in effect until terminated by
the Board of Directors and thereafter until all Incentive Stock Rights,
Stock Options, Stock Appreciation Rights, Restricted Stock and Dividend
Equivalents granted under the Plan are satisfied by the issuance of
shares of Common Stock or the payment of cash or are terminated under
the terms of the Plan or under the Award Agreements entered into in
connection with the grant thereof.
4. Shares of Stock Subject to the Plan. The number of shares of Common
Stock under the Plan that may be issued pursuant to Incentive Stock
Rights, Stock Options (including any Stock Options granted pursuant to
Section 12(b) hereof), Stock Appreciation Rights and Restricted Stock
grants shall not exceed, in the aggregate, 12,160,000 shares of the
Common Stock. Such shares may be in whole or in part as the Board of
Directors shall from time to time determine authorized and unissued
shares or issued shares, which may have been reacquired by the
Corporation. In no event shall the number of shares of Restricted Stock
issued hereunder after May 6, 1998 be in excess of forty percent (40%)
of any increase in the number of shares authorized to be issued under
the plan above 7,360,000 shares. Any share subject to an Incentive
Stock Right, Stock Option, Stock Appreciation Right or Restricted Stock
grant which for any reason is forfeited due to expiration, cancellation
or termination while unexercised may again be available for purposes of
the Plan if the forfeiting participant received no benefit of ownership
(not including voting rights) from such shares. The number of Dividend
Equivalents which may be granted under the Plan will be as determined
by the Committee in its discretion.
5. Awards Under the Plan. Awards under the Plan may be of five types,
namely, "Incentive Stock Rights", "Stock Options", "Stock Appreciation
Rights", "Restricted Stock" and "Dividend Equivalents". Awards may be
granted in conjunction with each other, at the same time or at
different times, and may provide for the exercise of one to reduce
proportionately or cancel the other.
6. Eligible Employees. Awards may be granted only to salaried employees
who are officers or who are employed in an executive, administrative,
operational, sales or professional capacity by the Corporation or its
Subsidiaries. Awards may be granted to a director of the Corporation
provided that the director is also an officer or salaried employee of
the Corporation or Subsidiary. In determining the employees to whom
Awards shall be granted and the number of such Awards to be granted,
the Committee shall take into account the duties of the employees,
their present and potential contributions to the success of the
Corporation, their other compensation provided pursuant to any plan or
as salary or otherwise and such other factors as it shall deem relevant
in connection with accomplishing the purposes of the Plan.
Awards shall not be affected by any change of duties or positions so
long as the holder continues to be an employee of the Corporation or of
a Subsidiary. Nothing in the plan or in any Award or in any agreement
with respect thereto entered into pursuant to the Plan shall confer
upon any employee any right to continue in the
Restated as of May 7, 1998 3
employ of the Corporation or of any of its Subsidiaries, or interfere
in any way with the right of the Corporation or any such Subsidiary to
terminate such employee's employment at any time.
7. Administration of the Plan. Within the limitations described herein,
the Committee shall administer the Plan, select the employees to whom
Awards will be granted, determine the number of Awards to be granted to
each such employee and interpret, construe and implement the provisions
of the Plan. The Committee shall consist of no fewer than two members
of the Board of Directors who shall serve at the pleasure of the Board
of Directors. The Committee shall have authority to adopt rules and
regulations for administering the Plan. Decisions of the Committee
shall be binding on the Corporation and on all employees eligible to
participate in the Plan. The Board of Directors may from time to time
appoint members of the Committee in substitution for or in addition to
members previously appointed and may fill vacancies, however caused, in
the Committee. All determinations of the Committee at a meeting shall
be made by a majority of the members in attendance. Any decision or
determination reduced to writing and signed by all the members shall be
fully as effective as if it had been made by a majority vote at a
meeting duly called and held. No member of the Committee shall be
personally liable for any action, determination or interpretation made
in good faith with respect to the Plan, and all members of the
Committee shall be fully indemnified by the Corporation with respect to
any such action, determination or interpretation. No employee may be
granted Stock Options or Stock Appreciation Rights under the Plan in
any thirty-six month period beginning on or after January 1, 1994 with
respect to a number of shares of Common Stock which is in excess of
twenty-five percent (25%) of the total number of shares of Common Stock
authorized to be issued pursuant to the Plan immediately following the
date of the annual meeting of shareholders in 1994.
8. Incentive Stock Rights. Incentive Stock Rights shall be evidenced by
Incentive Stock Rights Agreements in such form and not inconsistent
with the Plan as the Committee shall approve from time to time, which
Award Agreements shall contain in substance the following terms and
conditions:
a) Number of Shares, Incentive Period.
An Incentive Stock Rights Agreement shall specify the number
of shares of Common Stock to which it pertains and shall
specify that the holder is entitled to receive, without
payment to the Corporation, such shares of Common Stock in
consideration for services performed for the Corporation or
for its benefit by the person receiving the Right upon the
lapse of a specified period of time (the "Incentive Period")
and upon compliance with any other terms contained in such
Award Agreement.
b) Termination of Employment, Leave of Absence. The Incentive
Stock Rights Agreement shall contain such provisions
concerning termination of employment (by reason of death,
disability or otherwise) and leaves of absence as shall be
Restated as of May 7, 1998 4
determined by the Committee. Such provisions may include, but
are not limited to, granting the right to receive all or a
portion of the shares of Common Stock covered by the Incentive
Stock Rights, partial or complete acceleration of the time
periods in relation to which the right to receive shares is
granted, the waiver of forfeiture provisions for leaves of
absence and other periods when not employed by the Corporation
and the receipt of shares by personal representatives, heirs
or legatees.
c) Issuance of Shares. Upon the lapse of an Incentive Period, the
Corporation shall, without transfer or issue tax to the person
entitled to receive the shares of Common Stock, deliver to
such person a certificate or certificates for the number of
shares as to which such Incentive Period has lapsed.
9. Stock Options and Stock Appreciation Rights.
a) Stock Options. Stock Options shall be evidenced by Stock
Option Agreements in such form and not inconsistent with the
Plan as the Committee shall approve from time to time, which
Award Agreements shall contain in substance the following
terms and conditions:
i. Price. The purchase price per share of Common Stock
deliverable upon the exercise of a Stock Option shall
be the Fair Market Value of such Common Stock on the
date the Stock Option is granted, but in no event
less than the par value of such Common Stock (the
"Exercise Price").
ii. Number of Shares, Exercise Period. The Stock Option
Agreement shall specify the number of shares of
Common Stock to which it pertains. The number of
shares subject to a Stock Option shall be reduced on
a share-for-share basis to the extent that shares
under such Stock Option are used to calculate the
shares of Common Stock or cash to be received by
exercise of a related Stock Appreciation Right, if
any. At the time a Stock Option is granted, the
Committee shall fix the terms and conditions upon
which Stock Options can be exercised, including
fixing the periods during which such Stock Option or
any portion thereof may be exercised, which period
shall not be more than 10 years nor less than one
year (such period referred to as the "Exercise
Period"). The Committee, in the Stock Option
Agreement or otherwise, may allow partial exercise
from time to time during the Exercise Period.
iii. Method of Exercise, Medium and Time of Payment. An
Option shall be exercised by giving written notice of
such exercise to the Corporation. The purchase price
of shares of Common Stock purchased pursuant to a
Stock Option Agreement shall be paid for at the time
of purchase in full in cash or, in the discretion of
the Committee, in whole shares of Common Stock with a
Fair Market Value (as of the date immediately
preceding the Exercise Date) at least equal to the
purchase price (or in a combination of
Restated as of May 7, 1998 5
cash and whole shares of Common Stock). Such whole
shares of Common Stock may be previously owned shares
or shares, which would otherwise have been received
upon exercise of the Stock Option. In its discretion,
the Committee may also provide for a cashless
exercise procedure to exercise Stock Options (whereby
cash would be transmitted to the Corporation by a
broker or other entity). Upon receipt of payment, the
Corporation shall, without transfer or issue tax to
the optionee or other person entitled to exercise the
Stock Option, deliver to such person a certificate or
certificates for such shares.
iv. Termination of Employment, Leave of Absence. Each
Stock Option Agreement shall contain such provisions
concerning termination of employment (by reason of
death, disability or otherwise) and leaves of absence
as shall be determined by the Committee. Such
provisions may include, but are not limited to,
granting the right to make a partial exercise of a
Stock Option, partial or complete acceleration of any
time periods in relation to which the exercisability
of a Stock Option is calculated, waiver of forfeiture
provisions for leaves of absence and other periods
when not employed by the Corporation and the
extension of any Exercise Periods to cover such
leaves of absence or periods when not employed by the
Corporation and exercise by personal representatives,
heirs or legatees.
v. Incentive Stock Options. No optionee shall be granted
Incentive Stock Options hereunder that in the
aggregate with all other Incentive Stock Options
granted to such optionee (under all plans of the
Corporation or any of its Subsidiaries) entitle the
optionee to purchase in any year through the exercise
of those such options which first became exercisable
in such year (whether under their original terms or
as a result of the occurrence of Change in Control),
stock of the Corporation or any subsidiary of the
Corporation having in the aggregate a Fair Market
Value (determined in the case of each such option as
of the time such option was granted) in excess of
$100,000. The previous sentence shall not apply to
the extent the United States Internal Revenue Service
publicly issues a private ruling to the Corporation,
any optionee of the Corporation, or any legatee,
personal representative or distributee of an optionee
or states in proposed, temporary or final
regulations, provisions which allow that the exercise
of an optionee's Incentive Stock Options upon the
occurrence of a Change in Control do not violate
Section 422(d)(1) of the Code.
b) Stock Appreciation Rights. The Committee, in its discretion,
may grant Stock Appreciation Rights to an eligible employee
whether or not such employee is also granted Stock Options
under the Plan. Such Stock Appreciation Rights shall be
evidenced by stock Appreciation Right Agreements in such form
and not inconsistent with this Plan as the Committee shall
approve from time to time, which Award Agreements shall
contain in substance the following terms and conditions:
Restated as of May 7, 1998 6
i. Exercise. A Stock Appreciation Right shall entitle a
holder thereof, to the extent he or she so designates
from time to time, to receive without payment to the
Corporation, a number of shares of Common Stock,
cash, or a combination of cash and shares as elected
by the Committee, as determined under subsection
(ii). Such shares and/or cash shall be issued or paid
in consideration of services performed for the
Corporation or for its benefit by the holder of such
Stock Appreciation Right. A holder wishing to
exercise a Stock Appreciation Right shall give
written notice of such exercise to the Corporation.
Upon receipt of such notice, the Corporation shall:
(a) without transfer or issue tax to such person,
deliver to the person exercising the Stock
Appreciation Right a certificate or certificates for
shares of Common Stock and/or (b) pay cash.
ii. Number of Shares or Amount of Cash. The number of
shares of Common Stock which shall be issued pursuant
to the exercise of a Stock Appreciation Right shall
be determined by dividing,
1) that portion, as elected by the holder of
the Stock Appreciation Right, of the total
number of shares in relation to which such
Stock Appreciation Right was granted,
multiplied by the amount (if any) by which
the Fair Market Value of a share of Common
Stock on the Exercise Date exceeds an amount
equal to the Fair Market Value of a share of
Common Stock on the date that such Stock
Appreciation Right is granted, which may not
be less than the par value of such Common
Stock, determined by the Committee in
connection with such grant, by
2) the Fair Market Value of a share of Common
Stock on the Exercise Date.
In lieu of issuing shares of Common Stock on
the exercise of a Stock Appreciation Right,
the Committee may elect to pay the cash
equivalent of the Fair Market Value on the
Exercise Date of any or all the shares,
which would otherwise be issuable. No
fractional shares shall be issued under this
subsection (ii); instead, a cash adjustment
equal to the same fraction of the fair
market value per share of Common Stock on
the Exercise Date shall be made.
iii. Additional Terms. At the time a Stock Appreciation
Right is granted, the Committee shall set the terms
and conditions upon which such Stock Appreciation
Right may be exercised and the number of shares of
Common Stock in relation to which such Stock
Appreciation Right is granted and may provide that
the Stock Appreciation Right is being granted in
connection with a related Stock Option. Each Stock
Appreciation Right Agreement shall contain such
provisions concerning
Restated as of May 7, 1998 7
termination of employment (by reason of death,
disability or otherwise) and leaves of absence as
shall be determined by the Committee. Such provisions
may include, but are not limited to, granting the
right to partially exercise a Stock Appreciation
Right, partial or complete acceleration of any time
periods in relation to which the exercisability of a
Stock Appreciation Right is calculated, waiver of
forfeiture provisions for leaves of absence and other
periods when not employed by the Corporation and the
extension of any period during which such Stock
Appreciation Right or any portion thereof may be
exercised to cover such leaves of absence or periods
when not employed by the Corporation and exercise by
personal representatives, heirs or legatees.
iv. Stock Appreciation Rights Granted in Connection with
Stock Options. If the Committee has provided that a
Stock Appreciation Right has been granted in
connection with a Stock Option, the amounts
determined by the Committee as the purchase price per
share of Common Stock upon the exercise of a Stock
Option under Section 9(a)(i) and the amount
determined by the Committee under Section 9(b)(ii)(1)
shall be the same, the exercise of a Stock
Appreciation Right shall cancel the related Stock
Option to the extent of the number of shares as to
which such Stock Appreciation was exercised and the
exercise of a Stock Option shall cancel the related
Stock Appreciation Right to the extent of the number
of shares as to which such Stock Option was
exercised.
10. Restricted Stock. Restricted Stock shall be evidenced by Restricted
Stock Agreements in such form and not inconsistent with the Plan as the
Committee shall approve from time to time, which Award Agreements shall
contain in substance the following terms and conditions:
i. Number of Shares, Restricted Period. A Restricted
Stock Agreement shall specify the number of shares of
Common Stock to which it pertains and shall specify
that the holder is entitled to receive, without
payment to the Corporation, such shares of Common
Stock in consideration for services performed for the
Corporation or for its benefit by the person
receiving the right upon (x) the achievement of
certain performance goals measuring performance over
a period of time of at least one year subsequent to
the date of such Restricted Stock Agreement, or (y)
the lapse of a specified period of time, which period
of time shall in no event be shorter than three years
(the "Restricted Period") and upon compliance with
any other terms contained in such Award Agreement.
ii. Termination of Employment, Leave of Absence. The
Restricted Stock Agreement shall contain such
provisions concerning termination of employment (by
reason of death, disability or otherwise) and leaves
of absence as shall be determined by the Committee.
Such provisions may include, but are not limited to,
granting the right to receive all or a portion
Restated as of May 7, 1998 8
of the shares of Common Stock covered by the
Restricted Stock Agreement, partial or complete
acceleration of the time periods in relation to which
the right to receive shares is granted, the waiver of
forfeiture provisions for leaves of absence and other
periods when not employed by the Corporation and the
receipt of shares by personal representatives, heirs
or legatees.
iii. Issuance of Shares. Upon the lapse of a Restricted
Period, the Corporation shall, without transfer or
issue tax to the person entitled to receive the
shares of Common Stock, deliver to such person a
certificate or certificates for the number of shares
as to which such Restricted Period has lapsed.
iv. Dividends, Voting. The Restricted Stock Agreement
shall contain such provisions concerning dividends
and voting with respect to Restricted Stock as
determined by the Committee.
11. Dividend Equivalents. The Committee, in its discretion, may grant to
eligible employees Dividend Equivalents. Dividend Equivalents shall be
evidenced by Dividend Equivalent Agreements in such form and not
inconsistent with the Plan as the Committee shall approve from time to
time, which agreements shall contain in substance the following terms
and conditions:
i. Number of Shares, Duration. A Dividend Equivalent
Agreement shall specify the number of shares of
Common Stock to which it relates and provide that the
holder of a Dividend Equivalent shall be entitled to
receive from the Corporation cash payments, either
current or deferred and subject to such conditions as
may be imposed, in the same amounts (or such lesser
fraction of such amounts as may be specifically set
forth therein) that the holder of record of such
number of shares of Common Stock would be entitled to
receive as cash dividends on such Common Stock unless
otherwise limited in the Dividend Equivalent
Agreement. The Dividend Equivalent Agreement shall
state the expiration date for such Dividend
Equivalents. The right to cash payment in respect of
a Dividend Equivalent shall apply to all dividends
the record date for which occurs at any time during
the period commencing on the date the Dividend
Equivalent is granted and ending on the date such
Dividend Equivalent expires or is terminated,
whichever occurs first.
ii. Dividend Equivalents Granted in Conjunction with
Incentive Stock Rights, Stock Options or Stock
Appreciation Rights. The Committee may, in its
discretion, grant Dividend Equivalents in conjunction
with the grant of Incentive Stock Rights, Stock
Options or Stock Appreciation Rights. In such event,
the Dividend Equivalent Agreements entered into shall
provide that the holder thereof is entitled to
receive from the Corporation cash payments either
current or deferred in the same amounts (or such
Restated as of May 7, 1998 9
lesser fraction of such amounts as may be
specifically set forth in the Dividend Equivalent
Agreement) that the holder of record of a number of
shares of Common Stock equal to the number of shares
covered by such Stock Option or Right would be
entitled to receive as dividends on such Common Stock
unless otherwise limited in the Dividend Equivalent
Agreement. Such right to cash payment shall apply to,
and such Dividend Equivalents shall remain
outstanding in respect of all cash dividends, the
record date for which occurs at any time during the
period commencing on the date the related Stock
Option or Right is granted and ending on the date
that such Stock Option or Right is exercised, expires
or terminates, whichever occurs first.
iii. Termination of Employment, Leaves of Absence. The
Dividend Equivalent Agreement shall contain such
provisions, concerning termination of employment (by
reason of death, disability or otherwise) and leaves
of absence as shall be determined by the Committee.
12. Corporate Transactions.
a) Change in Shares of Common Stock. If the outstanding shares of
Common Stock of the Corporation are increased, decreased or
exchanged for different securities through reorganization,
merger, consolidation, recapitalization, reclassification,
stock split, stock dividend or similar capital adjustment, the
number of shares of Common Stock available under the Plan
shall be increased or decreased proportionately, as the case
may be, and the number of shares deliverable upon the exercise
thereafter, or in relation to which benefits are calculated,
of any Stock Option or Stock Appreciation Right or upon
distribution pursuant to Incentive Stock Rights or Restricted
Stock theretofore granted shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate purchase price (where applicable) and the number of
shares in relation to which the amount of cash distributable
under Dividend Equivalents is calculated shall also be
increased or decreased proportionately.
b) Assumption of Stock Options. If the Corporation (or a direct
or indirect Subsidiary) acquires another corporation or merges
or engages in a similar transaction contemplated by Section
424 of the Code, the Corporation may assume stock options held
by employees of the other corporation in accordance with such
Section 424. Upon any such assumption, the Corporation may
grant Stock Options in a manner not inconsistent with the
Plan, provided that no Stock Option so granted shall be
granted to any person who is then a director or officer of the
Corporation.
13. Change in Control.
a) Definition of Change in Control. For purposes of the Plan, a
"Change in Control of the Corporation" shall be deemed to have
occurred if:
Restated as of May 7, 1998 10
i. any "person" (as defined in Sections 13(d) and 14(d)
of the Exchange Act), other than the Corporation, any
trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation, or any
corporation owned, directly or indirectly, by the
shareholders of the Corporation in substantially the
same proportions as their ownership of stock of the
Corporation, acquires "beneficial ownership" (as
defined in Rule 13d-3 under the Exchange Act) of
securities representing more than 35% of the combined
voting power of the Company; or
ii. during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors and any new
director (other than a director designated by a
person who has entered into an agreement with the
Corporation to effect a transaction described in
subsections 13(a)(i), 13(a)(iii) or 13(a)(iv)) whose
election by the Board of Directors or nomination for
election by the Corporation's shareholders was
approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were
directors at the beginning of the period or whose
election or nomination for election was previously so
approved, cease for any reason to constitute a
majority thereof; or
iii. the shareholders of the Corporation approve a merger
other than (i) a merger which would result in the
voting securities of the Corporation outstanding
immediately prior thereto continuing to represent
(either by remaining outstanding or by being
converted into voting securities of the surviving
entity), in combination with ownership of any trustee
or other fiduciary holding securities under an
employee benefit plan of the Corporation, at least
67% of the combined voting power of the voting
securities of the Corporation or such surviving
entity outstanding immediately after such merger or
(ii) a merger effected to implement a
recapitalization of the Corporation (or similar
transaction) in which no person acquires more than
50% of the combined voting power of the Corporation's
then outstanding securities; or
iv. the shareholders of the Corporation approve a plan of
complete liquidation of the Corporation or a sale of
substantially all of the Corporation's assets.
b) Effect of Change in Control Upon Awards. Upon a Change in
Control of the Corporation, the Committee, in order to protect
the holders of Awards granted under this Plan, in its sole
discretion may (i) accelerate any time periods relating to the
exercise or realization of such Awards so that such Awards may
be exercised or realized in full on or before a date fixed by
the Committee, (ii) provide for the purchase of such Awards
for an amount of cash equal to the amount which could have
been attained upon the exercise or realization of such Awards
had such Awards been currently exercisable (which in the event
of a Change in Control set forth in Section 13(a)(i) shall be
based upon the
Restated as of May 7, 1998 11
amount of cash and the Fair Market Value of other
consideration tendered for such outstanding shares), (iii)
make such adjustment to the rights then outstanding as the
Committee deems appropriate to reflect such transaction or
change or (iv) cause the Awards then outstanding to be
assumed, or new Awards substituted therefor, by the surviving
corporation in such change. The Committee may, in its
discretion, include such further provisions and limitations in
any Award Agreement as it may deem equitable and in the best
interests of the Corporation.
14. Loans to Plan Participants. On such terms and conditions as shall be
approved by the Committee, the Corporation or any Subsidiary may
directly or indirectly lend money to any employee or other person to
accomplish the purposes of this Plan, including to assist such person
to acquire or carry shares of Common Stock acquired upon the exercise
of Stock Options granted hereunder, and separately to lend money to any
employee or other person to pay taxes with respect to any of the
transactions contemplated by this Plan.
15. General Restriction. Each Award shall be subject to the requirement,
that, if at any time the Committee shall determine, in its discretion,
that the listing, registration or qualification of the shares or other
securities subject to such Award upon any securities exchange or under
any state or Federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in
connection with, the granting thereof or the issue or purchase of
shares or payments of any amounts thereunder, such Award may not be
exercised in whole or in part and no amounts may be received thereunder
or under such Dividend Equivalents unless such listing, registration,
qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
16. Rights as a Shareholder. The holder of an Award shall have no rights as
a shareholder with respect to any shares covered thereof except as
expressly contained or provided for in the Award Agreement or the Plan
until the date of issuance of a stock certificate to him or her for any
such shares issued pursuant to any Award. Except as otherwise expressly
provided in the Plan or an Award Agreement, no adjustment shall be made
for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
17. Non-Assignability of Awards. No Award shall be assignable or
transferable by the recipient except by will or by the laws of descent
and distribution. An Award shall be exercisable only by the recipient
or his or her personal representatives, heirs or legatees.
Notwithstanding the foregoing, the Committee in its discretion, after
making suitable provision with the employee to provide for the payment
of any required withholding upon the option's exercise, may authorize a
recipient who is an employee of the Corporation or one of its
Subsidiaries to transfer a Nonqualified Stock Option to any member of
the employee's immediate family, to a trust established solely for the
benefit of one or more members of the employee's immediate family or to
a partnership of which the only individuals or entities who are
Restated as of May 7, 1998 12
or could be partners are members of the employee's immediate family
and/or a trust established solely for the benefit of one or more
members of the employee's immediate family (collectively, `Permitted
Transferee'). For this purpose, `immediate family' shall mean the
employee's spouse, children, present or former stepchildren,
grandchildren, present or former stepgrandchildren, parents, present or
former stepparents, grandparents, siblings (including half- brothers
and sisters), in-laws and relationships arising due to legal adoption.
The Committee's authorization to allow such a transfer must be
evidenced by the written Stock Option Agreement pursuant to which the
Nonqualified Stock Option is awarded, or by a written amendment
thereto. In the event of a transfer, the Permitted Transferee may
exercise the Nonqualified Stock Option generally in accordance with the
terms of this Plan and the Stock Option Agreement, but may not
subsequently assign or transfer the Nonqualified Stock Option except by
will or by the laws of descent and distribution. The foregoing sentence
shall not be interpreted to prohibit a Permitted Transferee that is
either a trust or partnership from modifying or expanding its
beneficiaries or partners, respectively, provided that such
beneficiaries or partners also independently would be considered
Permitted Transferees.
No Option shall be exercisable and no transfer of the shares of Common
Stock underlying such Option (the "Underlying Shares") may be made to
any Permitted Transferee; and any attempt to exercise any Option or to
transfer any Underlying Shares to any Permitted Transferee shall be
void and of no effect, unless and until (i) a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"),
has been duly filed and declared effective pertaining to the Underlying
Shares and the Underlying Shares have been duly qualified under
applicable state securities or blue sky laws or (ii) the Board, in its
sole discretion after securing the advice of counsel, determines, or
the Permitted Transferee provides an opinion of counsel satisfactory to
the Board, that such registration or qualification is not required as a
result of the availability of an exemption from registration or
qualification under such laws.
18. Withholding Taxes. Whenever under the Plan shares are to be issued in
satisfaction of Awards, the Corporation shall have the right to require
the employee (or if the employee is not then living, the employee's
estate) to remit to the Corporation an amount sufficient to satisfy
Federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. Whenever
under the Plan payments are to be made in cash, such payments shall
include an amount sufficient to satisfy Federal, state and local
withholding tax requirements.
19. Amendment of the Plan. The Board of Directors may at any time and from
time to time terminate, modify, or amend the Plan in any respect,
except that no termination, modification or amendment shall be
effective without shareholder approval if such approval is required to
comply with Rule 16b-3 under the Exchange Act or to comply with any
other law, regulation or stock exchange rule. The termination or any
modification or amendment of the Plan shall not, without the consent of
an employee, affect his or her rights under an Award previously granted
to him or her. With the
Restated as of May 7, 1998 13
consent of the employee affected, the Committee may amend outstanding
Award Agreements in a manner not inconsistent with the Plan. The
Committee may not, however, amend any outstanding Award Agreements to
decrease the Exercise Price set forth in such Award Agreements.
20. Effectiveness of the Plan. The Plan shall become effective immediately
prior to the consummation of the Public Offering, subject to approval
by the shareholders of the Corporation.
21. Nonexclusively of the Plan. Neither the adoption of the Plan by the
Board of Directors and the shareholders of the Corporation nor any
provision of the Plan shall be construed as creating any limitations on
the power of the Board of Directors to adopt such additional
compensation arrangements as it may deem desirable and such
arrangements may be either generally applicable or applicable only in
specific cases nor shall the Plan be construed as restricting the
Committee's ability to grant any rights under the Plan to any person by
reason of such person holding or being granted rights or options or
participating in any other plans, arrangements or agreements.
22. Additional Incentive Benefits. In addition to the Awards described in
the Plan which may be granted by the Committee, the Board of Directors
may, at its discretion, create and permit the Committee to grant such
other incentive benefits ("Incentive Benefits") under the Plan as it
believes are desirable (including, without limitation, stock bonus
awards), provided that:
i. any such Incentive Benefits shall be governed by the terms of
the Plan as in effect on the date of grant of such Incentive
Benefits, and for such purposes, notwithstanding the
provisions of Section 19, the Board of Directors may amend the
Plan to create and describe such Incentive Benefits and the
governing terms thereof;
ii. the creation of such Incentive Benefits may not, without
shareholder approval (1) increase the total number of shares
of Common Stock issuable under the Plan, or (2) materially
modify the requirements as to eligibility for participation in
the Plan; and
iii. the Board of Directors shall not have the power to create and
grant Incentive Benefits which would result in the grant of a
prohibited tandem stock option or other prohibited tandem
arrangement, with respect to any Incentive Stock Options
granted under the Plan, as described in applicable regulations
under Section 422 of the Code.
Restated as of May 7, 1998 14