1
EXHIBIT 10.06
W. R. GRACE & CO.
_______________
1994 STOCK RETAINER PLAN FOR NONEMPLOYEE DIRECTORS
(AS AMENDED THROUGH MARCH 7, 1996)
_______________
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.
2
W. R. GRACE & CO.
_______________
1994 STOCK RETAINER PLAN FOR NONEMPLOYEE DIRECTORS
_______________
1. Purposes: The purposes of this Plan are (a) to further
the identity of interests of nonemployee directors of the Company with the
interests of the Company's shareholders, (b) to stimulate and sustain
constructive and imaginative thinking by such nonemployee directors, and (c) to
induce the service or continued service of the most highly qualified
individuals to serve as nonemployee directors of the company.
2. Definitions: When used in this Plan, the following
terms shall have the meanings set forth in this section 2.
Board of Directors: The Board of Directors of the Company.
Code: The Internal Revenue Code of 1986, as amended.
Common Stock: The common stock of the Company, par value
$1.00 per share, or such other class of shares or other securities or property
as may be applicable pursuant to the provisions of section 6.
Company: W. R. Grace & Co., a New York corporation.
Fair Market Value: (a) The mean between the high and low
sales prices of a share of Common Stock in New York Stock Exchange Composite
Transactions for the applicable date, as reported in The Wall Street Journal or
another newspaper of general circulation, or, if no sales of shares of Common
Stock were reported for such date, for the next preceding date for which such
sales were so reported, or (b) the fair market value of a share of Common Stock
determined in accordance with any other reasonable method.
issuance (or words of similar import): The issuance of
authorized but unissued Common Stock or the transfer of issued Common Stock
held by the Company or a Subsidiary.
3
nonemployee director: An individual, not employed by the
Company or a Subsidiary, who is serving as a director of the Company.
Plan: The 1994 Stock Retainer Plan for Nonemployee Directors
herein set forth, as the same may from time to time be amended.
Rule 16b-3: Rule 16b-3 of the Securities and Exchange
Commission (or any successor provision in effect at the applicable time).
service: Service to the Company as a nonemployee director.
"To serve" has a correlative meaning.
Stock Retainer: An issuance of shares of Common Stock in
payment of an annual retainer for service as a nonemployee director.
Subsidiary: A corporation (or other form of business
association) of which shares (or other ownership interests) having 50% or more
of the voting power regularly entitled to vote for directors (or equivalent
management rights) are owned, directly or indirectly, by the Company.
3. Eligibility and Participation: All nonemployee
directors are eligible to participate in the Plan and each such director will
participate as described in section 5.
4. Stock Subject to this Plan:
(a) Subject to the provisions of paragraph (c) of this
section 4 and the provisions of section 6, the maximum number of shares of
Common Stock that may be issued pursuant to Stock Retainers under this Plan
shall not exceed 66,000 shares of Common Stock.
(b) Authorized but unissued shares of Common Stock and
issued shares of Common Stock held by the Company or a Subsidiary, whether
acquired specifically for use under this Plan or otherwise, may be used for
purposes of this Plan.
(c) If any shares of Common Stock issued pursuant to a Stock
Retainer shall, after issuance, be reacquired by the Company
2
4
for any reason, such shares shall no longer be charged against the limitation
provided for in paragraph (a) of this section 4 and may again be issued
pursuant to Stock Retainers.
5. Stock Retainers: Stock Retainers shall be subject to
the following provisions:
(a) For the purposes of this Plan, all shares of Common
Stock issued pursuant to a Stock Retainer shall be valued at not less than 100%
of the Fair Market Value of such shares on the effective date as of which such
Stock Retainer is paid, regardless of when such shares are actually issued to
the nonemployee director and whether or not such shares are subject to
restrictions that affect their value.
(b) Except as provided in paragraph (c) of this section 5,
effective as of July 1, 1994, and on each following July 1 through July 1,
1999, each person serving as a nonemployee director on such July 1 will, for
service as such, be paid a Stock Retainer consisting of a whole number of
shares of Common Stock equal to the quotient obtained by dividing (i) $24,000
(the "Retainer Amount") by (ii) the Fair Market Value of a share of Common
Stock on such July 1. To the extent that such calculation does not result in a
whole number of shares, the fractional share shall be rounded upwards to the
next whole number so that no fractional shares shall be issued.
(c) (i) In the event that a Stock Retainer is to be paid,
effective July 1 of any calendar year, to a person who shall have commenced
service as a nonemployee director subsequent to January 1 of such calendar
year, the Retainer Amount shall be proportionately reduced to reflect the
percentage of such calendar year prior to such commencement of service.
(ii) In the event that a Stock Retainer is to be paid,
effective July 1 of any calendar year, to a person who shall have commenced
service as a nonemployee director subsequent to July 1 of the prior calendar
year, the Retainer Amount shall be proportionately increased to reflect the
percentage of the prior calendar year during which such nonemployee director
served as such.
(d) The shares referred to in paragraph (b) of this section
5 shall be delivered to each nonemployee director as soon as practicable
following each July 1 during the term of this plan. After the delivery of the
shares, each nonemployee director shall have all
3
5
the rights of a shareholder with respect to such shares (including the right to
vote such shares and the right to receive all dividends paid with respect to
such shares).
(e) No shares will be issued in a calendar year to a
nonemployee director who, prior to July 1 of such calendar year, is removed for
cause, as specified in the Company's Certificate of Incorporation, as the same
may be amended, or who voluntarily terminates service prior to retirement under
the Company's Retirement Plan for Outside Directors, as the same may be
amended.
6. Adjustment Provisions:
(a) In the event that any reclassification, split-up or
consolidation of the Common Stock shall be effected, or the outstanding shares
of Common Stock are, in connection with a merger or consolidation of the
Company or a sale by the Company of all or a part of its assets, exchanged for
a different number or class of shares of stock or other securities or property
of the Company or for shares of the stock or other securities or property of
any other corporation or person, or a record date for determination of holders
of Common Stock entitled to receive a dividend payable in Common Stock shall
occur, (i) the number and class of shares that may be issued pursuant to Stock
Retainers thereafter paid, and (ii) the number and class of shares that have
not been issued under effective Stock Retainers, shall in each case be
equitably adjusted.
(b) In the event that there shall occur any spin-off or
other distribution of assets of the Company to its shareholders (including
without limitation an extraordinary dividend), the number and class of shares
that may be issued pursuant to Stock Retainers thereafter paid shall be
equitably adjusted as determined by the Board of Directors.
7. Term: This Plan shall be deemed adopted and shall
become effective on the date it is approved by the shareholders of the Company.
No Stock Retainers shall be paid under this Plan with respect to any period
beginning after July 1, 1999.
4
6
8. General Provisions:
(a) Nothing in this Plan or in any instrument executed
pursuant hereto shall confer upon any person any right to continue to serve as
a nonemployee director of the Company.
(b) No shares of Common Stock shall be issued pursuant to a
Stock Retainer unless and until all legal requirements applicable to the
issuance of such shares have, in the opinion of counsel to the Company, been
complied with. In connection with any such issuance, the person acquiring the
shares shall, if requested by the Company, give assurances, satisfactory to
counsel to the Company, in respect of such matters as the Company or a
Subsidiary may deem desirable to assure compliance with all applicable legal
requirements.
(c) No person (individually or as a member of a group), and
no beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to any Stock Retainer except
as to such shares of Common Stock, if any, as shall have been issued to him.
(d) Nothing in this Plan is intended to be a substitute for,
or shall preclude or limit the establishment or continuation of, any other
plan, practice or arrangement for the payment of compensation or benefits to
nonemployee directors that the Company now has or may hereafter put into
effect.
9. Amendments and Termination:
(a) This Plan may be terminated, suspended or amended at any
time by the Board of Directors upon the recommendation of its Compensation,
Employee Benefits and Stock Incentive Committee; provided, however, that (i)
no amendment shall become effective without the approval of the shareholders of
the Company to the extent shareholder approval is required in order to comply
with Rule 16b-3, and (ii) neither the Retainer Amount, nor any other provision
of this Plan affecting the number of shares of Common Stock receivable pursuant
to a Stock Retainer or the frequency with which Stock Retainers are paid, shall
be amended or otherwise modified more than once every six months, except as may
be necessary or appropriate to comport with the Code or the Employee Retirement
Income Security Act, as either of the same may be amended, or the rules and
regulations promulgated thereunder.
5
7
(b) No termination, suspension or amendment of this Plan
shall adversely affect any Stock Retainer theretofore paid.
6