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EXHIBIT 10.04
W. R. GRACE & CO.
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1989 STOCK INCENTIVE PLAN
(As amended through March 7, 1996)
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W. R. GRACE & CO.
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1989 STOCK INCENTIVE PLAN
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1. Purposes: The purposes of this Plan are (a) to enable Key Persons to
have incentives related to Common Stock, (b) to encourage Key Persons to
increase their interest in the growth and prosperity of the Company and to
stimulate and sustain constructive and imaginative thinking by Key Persons, (c)
to further the identity of interests of Key Persons with the interests of the
Company's shareholders, and (d) to induce the service or continued service of
Key Persons and to enable the Company to compete with other organizations
offering similar or other incentives in obtaining and retaining the services of
competent individuals.
2. Definitions: Unless otherwise required by the context, the following
terms when used in this Plan shall have the meanings set forth in this
section 2.
Board of Directors: The Board of Directors of the Company.
Cessation of service (or words of similar import): When a person ceases to
be an employee of, or consultant to, the Company or a Subsidiary; provided,
however, in the case of an Incentive Stock Option, "cessation of service" (or
words of similar import) shall mean when a person ceases to be an employee of
the Company or a Subsidiary.
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 8.
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 as reported on the Consolidated Transactions Tape for
securities listed on the New York Stock Exchange for the applicable date or, if
no sales of shares of Common Stock were reported for such date, for the next
preceding date for which such
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sales were so reported, or (b) the fair market value of a share of Common Stock
determined in accordance with any reasonable method approved by the Incentive
Committee.
Incentive Committee: The committee designated by the Board of Directors to
administer stock incentive and stock option plans of the Company and its
subsidiaries generally or this Plan specifically.
Incentive Stock Option: A stock option which states that it is an
incentive stock option and which is intended to meet the requirements of
Section 422A of the Code and the regulations thereunder applicable to incentive
stock options, as in effect from time to time.
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.
Key Employee: An employee of the Company or a Subsidiary who is a Key
Person.
Key Person: An employee of, or consultant to, the Company or a Subsidiary
who, in the opinion of the Incentive Committee, has contributed or can
contribute significantly to the growth and successful operations of the Company
or a Subsidiary. The grant of a Stock Incentive to an employee or consultant
shall be deemed a determination by the Incentive Committee that such person is
a Key Person.
Non-Statutory Stock Option: An Option which is not an Incentive Stock
Option or another form of statutory stock option (within the meanings of
sections 422, 423 and 424 of the Code and the regulations thereunder, as in
effect from time to time).
Option: An option granted under this Plan to purchase shares of Common
Stock.
Plan: The 1989 Stock Incentive Plan of the Company 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 or a Subsidiary as an employee or
consultant. "To serve" has a correlative meaning.
Stock Award: An issuance of shares of Common Stock at the time the Stock
Incentive is granted or as soon thereafter as practicable, or an undertaking
(other than an Option) to issue such shares in the future.
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Stock Incentive: A stock incentive granted under this Plan in one of the
forms provided for in section 3.
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; provided however, that in the
case of an Incentive Stock Option, the term "Subsidiary" shall mean a
Subsidiary (as defined by the preceding clause) which is also a "subsidiary
corporation" as defined in section 425(f) of the Code and the regulations
thereunder, as in effect from time to time.
3. Grants of Stock Incentives:
(a) Subject to the provisions of this Plan, the Incentive Committee may at
any time, and from time to time, grant Stock Incentives under this Plan to, and
only to, Key Persons; provided, however, that Incentive Stock Options may be
granted to, and only to, Key Employees.
(b) The Incentive Committee may grant a Stock Incentive to be effective at
a specified future date or upon the future occurrence of a specified event.
For the purposes of this Plan, any such Stock Incentive shall be deemed granted
on the date it is effective. An agreement or other commitment to grant a Stock
Incentive in the future to a person who is a Key Person or will be a Key Person
at the time the grant is intended to become effective shall not be deemed the
grant of a Stock Incentive until the date on which the Incentive Committee
makes such grant effective.
(c) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
4. Stock Subject to this Plan:
(a) Subject to the provisions of paragraph (c) of this section 4 and the
provisions of section 8, the maximum number of shares of Common Stock which may
be issued pursuant to Stock Incentives granted under this Plan shall not exceed
7,500,000 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
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under this Plan or otherwise, may be used for purposes of this Plan; provided,
however, that any shares acquired or held by the Company or a Subsidiary, or
otherwise reserved, for the purposes of this Plan shall, unless and until
issued to a Key Person in accordance with the terms and conditions of a Stock
Incentive, be and at all times remain available for any corporate purpose.
(c) If any shares of Common Stock subject to a Stock Incentive shall not
be issued and shall cease to be issuable because of the termination, in whole
or in part, of such Stock Incentive or for any other reason, or if any such
shares shall, after issuance, be reacquired by the Company or a Subsidiary 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 made subject
to Stock Incentives.
5. Stock Awards: Except as otherwise provided in section 12, Stock
Incentives in the form of Stock Awards shall be subject to the following
provisions:
(a) For the purposes of this Plan, all shares of Common Stock subject to a
Stock Award shall be valued at not less than 100% of the Fair Market Value of
such shares on the date such Stock Award is granted, regardless of whether or
when such shares are issued to the Key Person and whether or not such shares
are subject to restrictions which affect their value.
(b) Shares of Common Stock subject to a Stock Award may be issued to the
Key Person at the time the Stock Award is granted, or at any time subsequent
thereto, or in installments from time to time. In the event that any such
issuance shall not be made at the time the Stock Award is granted, the Stock
Award may provide for payment to such Key Person, either in cash or shares of
Common Stock, of amounts not exceeding the dividends which would have been
payable to such Key Person in respect of such shares (as adjusted under section
8) if such shares had been issued to such Key Person at the time such Stock
Award was granted. Any Stock Award may provide that the value of any shares of
Common Stock to be issued under the terms of such Stock Award may be paid in
cash, on each date on which shares would otherwise have been issued, in an
amount equal to the Fair Market Value on such date of the shares which would
otherwise have been issued.
(c) The material terms of each Stock Award shall be determined by the
Incentive Committee. Each Stock Award shall be evidenced by a written
instrument consistent with this Plan. A Stock Award (i) may be made contingent
upon the attainment of a specified performance objective or objectives, (ii)
may be subject to restrictions on the sale or other disposition of the Stock
Award or of the shares issued pursuant to such Stock Award, and (iii) may
include restrictions and limitations in addition to those provided for in this
Plan.
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(d) Stock Awards shall be granted for such lawful consideration as may be
provided for in the Stock Award.
6. Options: Except as otherwise provided in section 12, Stock Incentives
in the form of Options shall be subject to the following provisions:
(a) Subject to the provisions of paragraph (f) of this section 6, the
purchase price per share of Common Stock shall be not less than 85% of the Fair
Market Value of a share of Common Stock on the date the Option is granted. The
Option may provide for the purchase price to be paid (i) in cash, or (ii) in
shares of Common Stock (including shares issued pursuant to a Stock Award
granted subject to restrictions as provided for in paragraph (c) of section 5),
or (iii) in a combination of cash and such shares. Any shares of Common Stock
delivered to the Company in payment of the purchase price shall be valued at
their Fair Market Value on the date of exercise. No certificate for shares of
Common Stock shall be issued upon the exercise of an Option until the purchase
price for such shares has been paid in full.
(b) If so provided in the Option, the Company shall, upon the request of
the holder of the Option and at any time and from time to time, cancel all or a
portion of the Option then subject to exercise and either (i) pay the holder an
amount of money equal to the excess, if any, of the Fair Market Value, at such
time or times, of the shares subject to the portion of the Option so cancelled
over the purchase price of such shares, or (ii) issue shares of Common Stock to
the holder with a Fair Market Value, at such time or times, equal to such
excess, or (iii) pay such excess by a combination of money and shares.
(c) Each Option may be exercisable in full at the time of grant, or may
become exercisable in one or more installments and at such time or times or
upon the occurrence of such events, as may be specified in the Option. Unless
otherwise provided in the Option, an Option, to the extent it is or becomes
exercisable, may be exercised at any time in whole or in part until the
expiration or termination of the Option.
(d) Each Option shall be exercisable during the life of the optionee only
by him and, after his death, only by his estate or by a person who acquired the
right to exercise the Option by will or the laws of descent and distribution.
An Option, to the extent that it shall not have been exercised or cancelled,
shall terminate as follows after the optionee ceases to serve: (i) if the
optionee shall voluntarily cease to serve without the consent of the Incentive
Committee or shall have his service terminated for cause, the Option shall
terminate immediately upon cessation of service; (ii) if the optionee shall
cease to serve by reason of death, incapacity or retirement under a retirement
plan of the Company or a Subsidiary, the Option shall terminate three years
after the date on which he ceased to serve, and (iii) except as provided in the
next sentence, in all other cases the Option shall terminate three months after
the date on which the optionee ceased to serve unless the Incentive Committee
shall approve a longer period (which approval may be given before
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or after cessation of service), not to exceed, however, three years. If the
optionee shall die or become incapacitated during the three-month period (or
such longer period as the Incentive Committee may approve) referred to in the
preceding clause (iii), the Option shall terminate three years after the date
on which he ceased to serve. A leave of absence for military or governmental
service or other purposes shall not, if approved by the Incentive Committee
(which approval may be given before or after the leave of absence commences), be
deemed a cessation of service within the meaning of this paragraph (d).
Notwithstanding the foregoing provisions of this paragraph (d) or any other
provision of this Plan, no Option shall be exercisable after expiration of a
period of ten years and one month from the date the Option is granted. Where a
Non-Statutory Stock Option is granted for a term of less than ten years and one
month, the Incentive Committee may, at any time prior to the expiration of the
Option, extend its term for a period ending not later than ten years and one
month from the date the Option was granted. Such an extension shall not be
deemed the grant of an Option under this Plan.
(e) No Option nor any right thereunder may be assigned or transferred
except by will or the laws of descent and distribution.
(f) An Option may, but need not, be an Incentive Stock Option. All shares
of Common Stock which may be made subject to Stock Incentives under this Plan
may be made subject to Incentive Stock Options; provided that (i) no Incentive
Stock Option may be granted more than ten years after the effective date of
this Plan as provided in section 9, (ii) the purchase price per share of Common
Stock subject to an Incentive Stock Option shall be not less than 100% of the
Fair Market Value of a share of Common Stock on the date such Incentive Stock
Option is granted, and (iii) the aggregate Fair Market Value (determined as of
the time an Incentive Stock Option is granted) of the shares subject to each
installment becoming exercisable for the first time in any calendar year under
Incentive Stock Options granted, on or after January 1, 1987 (under all plans,
including this Plan, of his employer corporation and its parent and subsidiary
corporations), to the Key Employee to whom such Incentive Stock Option is
granted, shall not exceed $100,000.
(g) The material terms of each Option shall be determined by the Incentive
Committee. Each Option shall be evidenced by a written instrument consistent
with this Plan. An Option may include restrictions and limitations in addition
to those provided for in this Plan.
(h) Options shall be granted for such lawful consideration as may be
provided for in the Option.
7. Combinations of Stock Awards and Options: Stock Incentives authorized
by paragraph (b)(iii) of section 3 in the form of combinations of Stock Awards
and Options shall be subject to the following provisions:
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(a) A Stock Incentive may be a combination of any form of Stock Award with
any form of Option, provided, however, that the terms and conditions of such
Stock Incentive pertaining to a Stock Award are consistent with section 5 and
the terms and conditions of such Stock Incentive pertaining to an Option are
consistent with section 6.
(b) Such combination Stock Incentive shall be subject to such other terms
and conditions as may be specified therein including, without limitation, a
provision terminating in whole or in part a portion thereof upon the exercise
in whole or in part of another portion thereof.
(c) The material terms of each combination Stock Incentive shall be
determined by the Incentive Committee. Each combination Stock Incentive shall
be evidenced by a written instrument consistent with this Plan.
8. Adjustment Provisions:
(a) In the event that any reclassification, split-up or consolidation of
shares of 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 or other securities or property that may be
issued pursuant to Stock Incentives thereafter granted, (ii) the number and
class of shares or other securities or property which have not been issued
under outstanding Stock Incentives, (iii) the purchase price to be paid per
share or other unit under outstanding Stock Incentives, and (iv) the price to
be paid per share or other unit by the Company or a Subsidiary for shares or
other securities or property issued pursuant to Stock Incentives which are
subject to a right of the Company or a Subsidiary to reacquire such shares or
other securities or property, shall in each case be equitably adjusted as
determined by the Incentive Committee.
(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), (i) the number and class of shares or other securities
or property that may be issued pursuant to Stock Incentives thereafter granted,
(ii) the number and class of shares or other securities or property which have
not been issued under outstanding Stock Incentives, (iii) the purchase price to
be paid per share or other unit under outstanding Stock Incentives, and (iv)
the price to be paid per share or other unit by the Company or a Subsidiary for
shares or other securities or property issued pursuant to Stock Incentives
which are subject to a right of the Company or a Subsidiary to reacquire such
shares or
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other securities or property, shall in each case be equitably adjusted as
determined by the Incentive Committee.
9. 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
Incentives shall be granted under this Plan after April 30, 1999.
10. Administration:
(a) This Plan shall be administered by the Incentive Committee. No
director shall be designated as or continue to be a member of the Incentive
Committee unless he shall at the time of designation and at all times during
service as a member of the Incentive Committee be a "disinterested person"
within the meaning of Rule 16b-3. The Incentive Committee shall have full
authority to act in the matter of selection of Key Persons and in granting
Stock Incentives to them and such other authority as is granted to the
Incentive Committee by this Plan.
(b) The Incentive Committee may establish such rules and regulations, not
inconsistent with the provisions of this Plan, as it deems necessary to
determine eligibility to be granted Stock Incentives under this Plan and for
the proper administration of this Plan, and may amend or revoke any rule or
regulation so established. The Incentive Committee may make such
determinations and interpretations under or in connection with this Plan as it
deems necessary or advisable. All such rules, regulations, determinations and
interpretations shall be binding and conclusive upon the Company, its
Subsidiaries, its shareholders and its directors, officers, consultants and
employees, and upon their respective legal representatives, beneficiaries,
successors and assigns, and upon all other persons claiming under or through
any of them.
(c) Members of the Board of Directors and members of the Incentive
Committee acting under this Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability in the
performance of their duties except as otherwise provided by applicable law.
11. General Provisions:
(a) Nothing in this Plan or in any instrument executed pursuant hereto
shall confer upon any person any right to continue in the service of the
Company or a Subsidiary, or shall affect the right of the Company or of a
Subsidiary to terminate the service of any person with or without cause.
(b) No shares of Common Stock shall be issued pursuant to a Stock
Incentive 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
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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 Incentive except as to such
shares of Common Stock, if any, as shall have been issued to him.
(d) In the case of a grant of a Stock Incentive to a Key Person of a
Subsidiary, such grant may provide for the issuance of the shares covered by
the Stock Incentive to the Subsidiary, for such consideration as may be
provided, upon the condition or understanding that the Subsidiary will transfer
the shares to the Key Person in accordance with the terms of the Stock
Incentive.
(e) In the event the laws of a foreign country, in which the Company or a
Subsidiary has employees, prescribe certain requirements for stock incentives
to qualify for advantageous tax treatment under the laws of that country
(including, without limitation, laws establishing options analogous to
Incentive Stock Options), the Board of Directors, upon the recommendation of
the Incentive Committee, may, for the benefit of such employees, amend, in
whole or in part, this Plan and may include in such amendment additional
provisions for the purposes of qualifying the amended plan and Stock Incentives
granted thereunder under such laws of such foreign country; provided, however,
that (i) the terms and conditions of a Stock Incentive granted under such
amended plan may not be more favorable to the recipient than would be permitted
if such Stock Incentive had been granted under this Plan as herein set forth,
(ii) all shares allocated to or utilized for the purposes of such amended plan
shall be subject to the limitations of section 4, and (iii) the provisions of
the amended plan may restrict but may not extend or amplify the provisions of
sections 9 and 13.
(f) The Company or a Subsidiary may make such provisions as it may deem
appropriate for the withholding of any taxes which the Company or a Subsidiary
determines it is required to withhold in connection with any Stock Incentive.
(g) 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
directors, officers, employees or consultants generally, or to any class or
group of such persons, which the Company or any Subsidiary now has or may
hereafter put into effect, including, without limitation, any incentive
compensation, retirement, pension, group insurance, stock purchase, stock bonus
or stock option plan.
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12. Acquisitions: If the Company or any Subsidiary should merge or
consolidate with, or purchase stock or assets or otherwise acquire the whole or
part of the business of, another company, the Company, upon the approval of the
Incentive Committee, (a) may assume, in whole or in part and with or without
modifications or conditions, any stock incentives granted by the acquired
company to its directors, officers, employees or consultants in their capacity
as such, or (b) may grant new Stock Incentives in substitution therefor. Such
assumed or substitute stock incentives may contain terms and conditions
inconsistent with the provisions of this Plan, including additional benefits
for the recipient, provided that, if such assumed or substitute stock
incentives are Incentive Stock Options, such terms and conditions are permitted
under the plan of the other company. For the purposes of any applicable plan
provision involving time or a date, a substitute stock incentive shall be
deemed granted as of the date of grant of the original stock incentive by the
other company.
13. Amendments and Termination:
(a) This Plan may be amended or terminated by the Board of Directors upon
the recommendation of the Incentive Committee; provided that, without the
approval of the shareholders of the Company, no amendment shall be made which
(i) causes this Plan to no longer comply with Rule 16b-3 or applicable law,
(ii) permits any person who is not a Key Person to be granted a Stock Incentive
(except as otherwise provided in section 12), (iii) amends the provisions of
paragraph (a) of section 5 or paragraph (a) or paragraph (f) of section 6 to
permit shares to be valued at, or to have a purchase price of, respectively,
less than the respective percentages of Fair Market Value specified therein,
(iv) amends section 9 to extend the date set forth therein, or (v) amends this
section 13.
(b) No amendment or termination of this Plan shall adversely affect any
Stock Incentive theretofore granted, and no amendment of any Stock Incentive
granted pursuant to this Plan shall adversely affect such Stock Incentive,
without the consent of the holder thereof.
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