Exhibit 10(f)
MYERS INDUSTRIES, INC.
AMENDED AND RESTATED
1999 INCENTIVE STOCK PLAN
- --------------------------------------------------------------------------------
Amended and Restated April 25, 2002
Myers Industries, Inc., (the "Company") adopted the1999 Incentive Stock
Plan ("Plan"), effective as of January 1, 1999, which Plan was approved by the
shareholders at the 1999 Annual Shareholders Meeting. The Company, by its Board
of Directors, has adopted amendments to the Plan related to the grant of stock
options to the non-employee directors of the Company and certain non-material
administrative changes, which amendments are subject to the approval of the
shareholders at the 2002 Annual Shareholders Meeting
The number of shares of Common Stock originally approved and reserved under
the Plan was 1,000,000 shares. The total number of shares currently available
under the Plan, as adjusted, is 1,230,411, of which 50,000 are reserved and
issuable as Director Stock Options, both subject to adjustment pursuant to
Section 2.4.
I. INTRODUCTION
1.1 PURPOSE OF THE PLAN. Myers Industries, Inc., has established the Plan to
further its long-term financial success by creating the opportunity for key
employees and non-employee directors of the Company and its Subsidiaries to
receive stock-based compensation whereby they can share in achieving and
sustaining such success. The Plan also provides a means to attract and retain
the executive talent needed to achieve the Company's long-term growth and
profitability objectives.
1.2 DEFINITIONS
When used in the Plan, unless otherwise defined in Section 4.1, the
following terms shall have the meanings set forth below.
(a) "Award(s)" shall mean Incentive Stock Options, Non-Qualified Stock
Options or Reload Stock Options granted under the Plan.
(b) "Award Agreement" shall mean an agreement which shall evidence the
particular terms, conditions, rights and duties of the Company and the
Participant with respect to an Award.
(c) "Board" shall mean the Board of Directors of the Company.
(d)(i) "Change of Control" shall mean (A) the attainment of beneficial
ownership by any Person (as defined herein) of capital stock of the Company, the
voting power of which
1
constitutes 30 percent or more of the voting power of all of the Company's
outstanding capital stock; or (B) a change in the composition of a majority of
the Board during any period of two (2) years or less, provided that in
determining such change, any Director whose election has been approved in
advance by at least two-thirds (2/3) of the Directors then in office shall not
be considered a new Director. No sale to underwriters or private placement of
capital stock by the Company, nor any acquisition by the Company, through
merger, purchase of assets or otherwise, effected in whole or in part by
issuance or reissuance of shares of its capital stock, shall constitute a Change
of Control.
(ii) For purposes of determining a Change of Control under the Plan, the
following provisions shall apply:
(A) The term "Person" shall mean any individual, corporation or other
entity.
(B) Any Person shall be deemed to be the beneficial owner of any
shares of capital stock of the Company:
(1) which that Person owns directly, whether or not of record,
(2) which that Person has the right to acquire pursuant to any
agreement or understanding or upon exercise of conversion
rights, warrants or options, or otherwise,
(3) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
Paragraph (B)(2) above), by an "affiliate" or "associate"
(as defined in the rules of the Securities and Exchange
Commission) of that Person, or
(4) which are beneficially owned, directly or indirectly
(including shares deemed owned through application of
Paragraph (B)(2) above), by any other Person with which that
Person or his "affiliate" or "associate" has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of capital stock of the
Company.
(C) For purposes of determining whether a Person has acquired
beneficial ownership of 30 percent or more of the Company, the
outstanding shares of capital stock of the Company shall include
shares deemed owned by such Person through application of
Paragraphs (B)(2), (B)(3) and (B)(4) above, but shall not include
any other shares which may be issuable pursuant to any agreement
or upon exercise of conversion rights, warrants or options, or
otherwise, but which are not actually outstanding.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
2
(f) "Committee" shall mean the Compensation Committee of the Board, or such
other committee of the Board which shall be designated by the Board to
administer the Plan (except where such authority has been granted to the
Administrator under Article IV). If the Board does not designate the
Compensation Committee as the Committee, the Committee will be composed of two
(2) or more persons who are from time to time appointed to serve by the Board.
Each member of the Committee will be a "non-employee director" within the
meaning of Rule 16b-3 of the Securities Exchange Act or any successor rule, as
any such rule may be amended from time to time, and will also qualify as an
"outside director" within the meaning of Code Section 162(m). A person may be
appointed to the Committee who does not qualify as a "non-employee director" if
the Committee adopts and follows a recusal procedure which qualifies under the
Section 16 Rules.
(g) "Common Stock" shall mean the common stock of the Company, no par value
per share, and may be either stock previously authorized but unissued, or stock
reacquired by the Company.
(h) "Company" shall mean Myers Industries, Inc., and any successor in a
reorganization or similar transaction.
(i) "Director" shall mean a duly elected member of the Board.
(j) "Disability" shall mean the inability of a Participant to perform the
services normally rendered due to any physical or mental impairment that can be
expected to be of either permanent or indefinite duration, as determined by the
Committee on the basis of appropriate medical evidence, and that results in the
Participant's Termination of Employment; provided, however, that with respect to
any Participant who has entered into an employment agreement with the Company or
any of its Subsidiaries, the term of which has not expired at the time a
determination concerning Disability is to be made, Disability shall have the
meaning attributed to "permanent disability" in such employment agreement.
(k) "Fair Market Value" shall mean with respect to a given day, the closing
sales price of a share of Common Stock, as reported by such responsible
reporting service as the Committee may select, or if there were no transactions
in the Common Stock on such day, then the last preceding day on which
transactions took place. The foregoing notwithstanding, the Committee may
determine the Fair Market Value in such other manner as is required by
applicable laws or regulations.
(l) "Incentive Stock Option" or "ISO" shall mean a right to purchase the
Company's Common Stock which is intended to comply with the terms and conditions
for an incentive stock option as set forth in Section 422 of the Code, or such
other sections of the Code as may be in effect from time to time.
(m) "Non-Qualified Stock Option" or "NQSO" shall mean a right to purchase
the Company's Common Stock which is not intended to comply with the terms and
conditions for a
3
tax-qualified stock option, as set forth in Section 422 of the Code, or such
other sections of the Code as may be in effect from time to time.
(n) "Participant" shall mean an officer or full-time salaried employee
(including a Director who is also a full-time employee) of the Company or any of
its Subsidiaries who, in the judgment of the Committee, is in a position to make
a positive contribution to the management, growth and success of the Company and
is thus designated by the Committee to receive an Award.
(o) "Plan" shall mean the Company's 1999 Stock Plan, as set forth herein.
(p) "Qualified Director" shall mean a Director who is both an "outside
director" within the meaning of Code Section 162(m) and a "non-employee
director" within the meaning of Rule 16b-3.
(q) "Reload Stock Option" shall mean an option granted to a Participant who
has paid for shares subject to option through the delivery of shares of Common
Stock having an aggregate Fair Market Value as determined on the date of
exercise equal to the option price.
(r) "Retirement" shall mean a Participant's Termination of Employment by
reason of retirement at his normal retirement date, pursuant to and in
accordance with a pension, retirement or similar plan or other regular
retirement practice of the Company or any of its Subsidiaries, or in accordance
with the early retirement provision(s) thereof.
(s) "Securities Act" shall mean the Securities Act of 1933, as amended.
(t) "Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(u) "Subsidiaries" shall mean the majority-owned subsidiaries of the
Company.
(v) "Termination of Employment" shall mean a cessation of the
employee-employer relationship between a Participant and the Company or its
Subsidiaries for any reason.
II. ADMINISTRATION
2.1 ADMINISTRATION. The Plan shall be administered by the Committee with regard
to the Employee Stock Option program, and the Administrator with regard to the
Director Stock Option program, which, subject to the express provisions of the
Plan, shall have full and exclusive authority to interpret the applicable
provisions of the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan and to make all other determinations deemed necessary or
advisable in the implementation and administration of the Plan; provided,
however, that subject
4
to the express provisions hereof or unless required by applicable law or
regulation, no action of the Committee or the Administrator shall adversely
affect the terms and conditions of any Award made to, or any rights hereunder or
under any Award Agreement of, any Participant, without such Participant's
consent. The Committee's and Administrator's interpretation and construction of
the applicable parts of the Plan shall be conclusive and binding on all persons,
including the Company and all Participants.
2.2 PARTICIPATION. The Committee shall, from time to time, make the selection of
Participants of the Employee Stock Option program and determine the Award or
Awards to be granted to each Participant. In making its determinations, the
Committee may take into account the nature of the services rendered or expected
to be rendered by the respective Participants, their present and potential
contributions to the Company's success, and such other factors as the Committee
in its discretion shall deem relevant.
2.3 MAXIMUM NUMBER OF SHARES AVAILABLE. The maximum number of shares which
currently may be granted under the Plan is 1,230,411 shares, of which 1,180,411
are reserved for the Employee Stock Option program and 50,000 are reserved for
the Director Stock Option program, both subject to adjustment pursuant to
Section 2.4. No Incentive Stock Options shall be granted after January 1, 2009,
or such other period required under the Code.
2.4 ADJUSTMENTS. In the event of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations, exchanges of shares,
spin-offs, liquidations, reclassifications or other similar changes in the
capitalization of the Company, the number of shares of Common Stock available
for grant under this Plan shall be adjusted proportionately or otherwise by the
Board and, where deemed appropriate, the number of shares covered by outstanding
stock options and the option price of outstanding stock options shall be
similarly adjusted. Also, in instances where another corporation or other
business entity is acquired by the Company, and the Company has assumed
outstanding employee option grants under a prior existing plan of the acquired
entity, similar adjustments are permitted at the discretion of the Committee. In
the event of any other change affecting the Common Stock reserved under the
Plan, such adjustment, if any, as may be deemed equitable by the Board, shall be
made to give proper effect to such event.
2.5 REGISTRATION CONDITIONS.
Unless issued pursuant to a registration statement under the Securities
Act, no shares shall be issued to a Participant under the Plan unless the
Participant represents to and agrees with the Company that such shares are being
acquired for investment and not with a view to the resale or distribution
thereof, or such other documentation as may be required by the Company unless,
in the opinion of counsel to the Company, such representation, agreement or
documentation is not necessary to comply with the Securities Act.
Any restriction on the resale of shares shall be evidenced by an
appropriate legend on the stock certificate.
5
The Company shall not be obligated to deliver any Common Stock until it has
been listed on each securities exchange on which the Common Stock may then be
listed or until there has been qualification under or compliance with such
federal or state laws, rules or regulations as the Company may deem applicable.
The Company shall use reasonable efforts to obtain such listing, qualification
and compliance.
2.6 COMMITTEE ACTION. The Committee may, through Award Agreements, limit its
discretion under this Plan. To the extent such discretion is not specifically
waived in an Award Agreement, the Committee shall retain such discretion.
III. EMPLOYEE STOCK OPTIONS
All stock options granted to Participants under this Article of the Plan shall
be evidenced by Award Agreements which shall be subject to applicable provisions
of the Plan, and such other provisions as the Committee may adopt, including the
following provisions.
3.1 PRICE. The option price per share of Non-Qualified Stock Options ("NQSOs")
shall be set by the Committee at the time of grant. The option price for a NQSO
shall be the Fair Market Value of a share of Common Stock on the date of grant,
unless otherwise expressly set by the Committee at a different price. If a NQSO
is to meet the requirements of Section 162(m) of the Code, it shall be issued at
Fair Market Value. The option price per share of Incentive Stock Options
("ISOs") shall not be less than 100 percent of the Fair Market Value of a share
of Common Stock on the date of grant.
3.2 PERIOD. An ISO shall not be exercisable for a term longer than ten years
from date of grant. NQSOs shall have a term as established by the Committee.
3.3 TIME OF EXERCISE. The Committee may prescribe the timing of the exercise of
the stock option and any minimums and installment provisions and may accelerate
the time at which a stock option becomes exercisable, provided that with respect
to ISOs, no such acceleration shall result in a violation of Section 3.6.
3.4 EXERCISE PROCEDURES. A stock option, or portion thereof, shall be exercised
by delivery of a written notice of exercise to the Company and payment of the
full price of the shares being purchased.
3.5 PAYMENT. The price of an exercised stock option, or portion thereof, may be
paid pursuant to Section 5.5(k).
3.6 SPECIAL RULE FOR INCENTIVE STOCK OPTIONS. If the aggregate Fair Market Value
of Common Stock with respect to which ISOs are exercisable for the first time by
a Participant
6
during any calendar year (under this Plan and all other plans of the Company and
its Subsidiaries) exceeds One Hundred Thousand Dollars ($100,000), such ISOs
shall be treated as NQSOs to the extent of the excess. In applying the foregoing
limitation, ISOs shall be taken into account in the order in which they were
granted, and the Fair Market Value of Common Stock subject to such ISOs shall be
determined as of the date of grant. If such limit is exceeded in any calendar
year, the Company shall have the right to designate which shares of Common Stock
purchased pursuant to such ISOs shall be treated as having been acquired by the
Participant pursuant to an ISO.
3.7 RELOAD STOCK OPTIONS
A Reload Stock Option may be granted by the Committee in an Award
Agreement. If a reload option is granted and a stock option is exercised while
the Participant is employed by the Company and the Participant pays for the
shares subject to option through the delivery of Common Stock having an
aggregate Fair Market Value as determined on the date of exercise equal to the
option price, the Participant will be granted a Reload Stock Option on the date
of such exercise. The Award shall equal the number of whole shares of Common
Stock used to pay the purchase price, and the exercise price of the Reload Stock
Option shall equal the Fair Market Value of the Common Stock on the date of
grant. If the Company withholds shares of Common Stock to cover applicable
income and employment taxes related to the exercise of an option, then the Award
shall equal the number of whole shares of Common Stock used to pay the purchase
price less the number of shares withheld.
Subject to the provisions of this Plan, the Reload Stock Option may be
exercised between its date of grant and the date of expiration of an option.
Shares of stock acquired upon the exercise of a Reload Stock Option are
restricted from sale for two (2) years. A Reload Stock Option shall be evidenced
by an Award Agreement containing such other terms and conditions as the
Committee approves. No Reload Stock Option shall be granted with respect to a
stock option exercised after the Participant's Retirement, Disability, death or
other Termination of Employment.
3.8 EFFECT OF LEAVES OF ABSENCE. It shall not be considered a Termination of
Employment when a Participant is placed by the Company or any of its
Subsidiaries on military leave, sick leave or other bona fide leave of absence.
In case of such leave of absence, the employment relationship for Plan purposes
shall be continued until the later of the date when such leave of absence equals
ninety (90) days or when the Participant's right to reemployment with the
Company or any of its Subsidiaries shall no longer be guaranteed either by
statute or contract.
3.9 TERMINATION OF EMPLOYMENT
Termination of Employment for Specific Reasons. In the event the employment
of a Participant is terminated for resignation, retirement, Disability or death,
any outstanding Option granted pursuant to the Plan and any rights thereunder
shall be exercisable by the Participant (or in the case of a deceased
Participant by his legal representative) only to the extent of the accrued right
to exercise such Option at the date of such termination. An employee will not be
deemed terminated for leaves of absence related to illness or military leave.
The Committee may, in its sole direction, permit the exercise of all or any
portion of the Option not otherwise exercisable
7
and may provide that all or some portion of the Option shall not terminate upon
or by virtue of such employment termination.
To the extent that any such Option is exercisable at termination or, as the
result of Committee approval, becomes exercisable at termination, the Option
will remain exercisable for the earlier of the expiration date of the Option, or
the following time periods beginning after the event which gives rise to the
basis for termination: (a) resignation or retirement, three (3) months; (b)
Disability, twelve (12) months; and (c) death, six (6) months.
If at any time the Committee determines that a Participant has committed an
act adverse to the interests of the Company, including but not limited to acts
in competition with the Company or otherwise adverse to or not in the best
interests of the Company, the Committee may rescind the right of the Participant
to exercise all or part of any Options then held, whether vested or unvested,
said Options thereupon becoming null, void and of no effect.
Termination of Employment for Other Reasons. If the employment of the
Participant shall terminate for any reason other than one of those specified in
the Section of the Plan above, the rights under any then outstanding Option
granted pursuant to the Plan which, pursuant to the terms of the Option
Agreement between the Participant and the Company, is exercisable as of the date
of such termination, shall terminate upon the expiration date of the Option or
three (3) months after such date of termination of employment, whichever first
occurs. In its sole discretion, the Committee may extend the three (3) months up
to twelve (12) months, but in no event beyond the expiration date of the Option.
IV. DIRECTOR STOCK OPTION PROGRAM
All stock options granted to Participants under this Article of the Plan shall
be evidenced by Award Agreements which shall be subject to applicable provisions
of the Plan, and such other provisions as the Committee may adopt, including the
following provisions.
4.1 DEFINITIONS.
(a) "Administrator" means the Vice President-Finance of the Company (or in
the event of there is no such person in said position the Secretary of the
Company), who shall administer the Director Stock Option program.
(b) "Director Stock Option" means an Option granted to an Eligible
Director. Each Director Stock Option shall be a nonqualified stock option the
grant of which is not intended to fall under the provisions of Section 422A of
the Code.
(c) "Eligible Director" means any statutory director of the Company who is
not an employee of the Company.
(d) "Option Agreement" also means an agreement entered into between the
Company and Eligible Director pursuant to the Director Stock Option program in
the form prescribed by the Administrator.
8
(e) "Return on Common Equity" means the result obtained by dividing "Net
Income" by the "Common Shareholders Equity," as such terms are defined by the
Company's accountant.
4.2 DIRECTOR STOCK OPTIONS. Eligible Directors are entitled to participate in
the Plan solely with respect to the grant of Director Stock Options. The
selection of Eligible Directors is not subject to the discretion of the
Committee or Administrator. Persons serving on the Committee who are Eligible
Directors may receive grants of Director Stock Options.
4.3 GRANT OF DIRECTOR STOCK OPTIONS. Subject to any limitations stated herein,
Director Stock Options shall be granted to Eligible Directors as provided in
this Section and neither the Administrator nor the Committee shall have any
discretion with respect to any matters set forth in this Section.
Commencing immediately after the adjournment of the Annual Meeting each
year, any Eligible Director who was an Eligible Director immediately preceding
such Annual Meeting and who has been elected as a director at such Annual
Meeting shall automatically be granted a Director Stock Option for 1,000 shares
of Common Stock if, but only if, the Return on Common Equity of the Company as
set forth in the Company's annual report to shareholders for the immediately
preceding fiscal year is equal to or greater than ten percent (10%). The
Administrator reserves the right to increase the number of shares granted
annually, which increase shall not be considered material and shall not require
shareholder approval unless such increase exceeds 2,000 shares per annum during
the term of the Plan.
4.4 OPTION AGREEMENT. Each Director Stock Option shall be evidenced by an Option
Agreement that shall specify the type of Option granted, the Option Price, the
duration of the Option, the number of shares of Common Stock to which the Option
pertains, and such other provisions as the Administrator shall determine for the
Director Stock Options.
4.5 OPTION PRICE. Director Stock Options shall have an Option Price that is
equal to the Fair Market Value of the Common Stock on the date the Option is
granted.
4.6 DURATION OF OPTIONS. Director Stock Options must be exercisable no later
than ten years and one day from the date of its grant.
4.7 EXERCISE OF OPTIONS. Director Stock Options granted under the Plan shall be
exercisable one year after the date of its grant.
4.8 THE ADMINISTRATOR. The Administrator, being the Vice President-Finance of
the Company, or in the event of there is no such person in said position, the
Secretary of the Company, shall be responsible for the administration of the
Plan as it relates solely to Director Stock Options. The Administrator is
authorized to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Company, and to
make all other determinations necessary or advisable for the administration of
the Plan, but only to the extent not contrary to the explicit provisions of the
Plan. Determinations, interpretations, or other actions made or taken by the
Administrator pursuant to the provisions of the Plan relating to
9
Director Stock Options shall be final and binding and conclusive for all
purposes and upon all persons whomsoever.
4.9 TERMINATION OF ELIGIBLE DIRECTOR STATUS. In the event that an Eligible
Director ceases to be an Eligible Director for any reason, the rights under any
outstanding Director Stock Options granted shall become immediately vested and
exercisable pursuant to the terms of the original grant. If an Eligible Director
ceases to be such by reason of death, any period shall be extended to the sooner
of twelve months or the expiration date of the Director Stock Option.
V. GENERAL PROVISIONS
5.1 AMENDMENT AND TERMINATION. The Board may, at any time and from time to time,
suspend or terminate the Plan in whole or amend it from time to time in such
respects as the Board may deem appropriate, subject, however, to the regulatory
requirements of Section 16(b) of the Securities Exchange Act and the
requirements of the Code.
5.2 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to issue
Awards under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any government agencies as may be
required.
5.3 OTHER COMPENSATION PLANS AND PROGRAMS. The Plan shall not be deemed to
preclude the implementation by the Company and its Subsidiaries of other
compensation plans or programs which may be in effect from time to time.
5.4 FOREIGN PARTICIPANTS. The Committee may, in its sole discretion, from time
to time and at anytime, take any and all action it deems desirable or necessary,
which may include the following as example, but without limitation: (a) amending
the Plan, (b) adopting new plan provisions, (c) adopting sub-plans, (d) adopting
forms of Award Agreements, and (e) modification of any option grants to be
awarded or which have been awarded; so that Awards to Participants who are
foreign nationals or employed outside the United States recognize and comply
with the differences in laws, rules, regulations or customs of such foreign
jurisdictions with respect to tax, securities, currency, employee benefit or
other matters.
5.5 MISCELLANEOUS PROVISIONS.
(a) NO RIGHT TO CONTINUE EMPLOYMENT. Nothing in the Plan or in any Award or
Award Agreement confers upon any Participant the right to continue in the employ
of the Company or its Subsidiaries or interferes with or restricts in any way
the rights of the Company or its Subsidiaries to discharge any Participant at
any time for any reason whatsoever, with or without cause.
10
(b) NON-TRANSFERABILITY. No right or interest of any Participant in any
Award under the Plan shall be (i) assignable or transferable, except by will or
the laws of descent and distribution or a valid beneficiary designation made in
accordance with procedures established by the Committee, or (ii) liable for, or
subject to, any lien, obligation or liability. An ISO may be exercised only by
the Participant during his lifetime, by his estate or by the person who acquires
the right to exercise such option by bequest or inheritance.
(c) DESIGNATION OF BENEFICIARY. A Participant, in accordance with
procedures established by the Committee, may designate a person or persons to
receive, in the event of the Participant's death, (i) any payments with respect
to which the Participant would then be entitled, and (ii) the right to continue
to participate in the Plan to the extent of such Participant's outstanding
Awards. Such designation shall be made upon forms supplied by and delivered to
the Company and may be revoked in writing.
(d) WITHHOLDING TAXES. The Company's obligation to deliver shares of Common
Stock or cash upon the exercise of stock options granted will be subject to the
satisfaction by the Participant of all applicable federal, state and local
income tax and employment tax withholding requirements. The Committee (or plan
administrator) may, in its discretion and in accordance with any applicable tax
or securities laws (including the applicable safe-harbor provisions of
Securities and Exchange Commission Rule 16b-3), provide any or all holders of
NQSOs under the Plan, with the right to use shares of the Company's Common Stock
in satisfaction of all or part of the federal, state and local income tax and
employment tax liabilities incurred by such holders in connection with the
exercise of their options or the vesting of their shares (the "Taxes"). Such
right may be provided to any such option holder in either or both of the
following formats:
(i) STOCK WITHHOLDING. The holder of the NQSO may be provided with
the election to have the Company withhold, from the shares of
Common Stock otherwise issuable upon the exercise of such NQSO, a
portion of those shares with an aggregate fair market value not
to exceed one hundred percent (100%) of the applicable Taxes.
(ii) STOCK DELIVERY. The holder of the NQSO may be provided with the
election to deliver to the Company, at the time the NQSO is
exercised, one (1) or more shares of Common Stock previously
acquired by such individual (other than in connection with the
option exercise triggering the Taxes) with an aggregate fair
market value equal to the designated percentage (up to 100% as
specified by the option holder) of the Taxes incurred in
connection with such option exercise.
(e) PLAN EXPENSES. Any expenses of administering the Plan shall be borne by
the Company.
(f) CONSTRUCTION OF PLAN. The interpretation of the Plan and the
application of any
11
rules implemented hereunder shall be determined solely in accordance with the
laws of the State of Ohio.
(g) UNFUNDED PLAN. The Plan shall be unfunded, and the Company shall not be
required to segregate any assets which may at any time be represented by Awards.
Any liability of the Company to any person with respect to an Award under this
Plan shall be based solely upon any obligations which may be created by this
Plan; no such obligation of the Company shall be deemed to be secured by any
pledge or other encumbrance on any property of the Company.
(h) BENEFIT PLAN COMPUTATIONS. Any benefits received or amounts paid to a
Participant with respect to any Award granted under the Plan shall not have any
effect on the level of benefits provided to or received by any Participant, or
the Participant's estate or beneficiary, as part of any employee benefit plan
(other than the Plan) of the Company.
(i) PRONOUNS, SINGULAR AND PLURAL. The masculine may be read as feminine,
the singular as plural and the plural as singular as necessary to give effect to
the Plan.
(j) MAXIMUM ANNUAL GRANT. In no event shall any one individual
participating in the Plan, be granted stock options for more than one and
one-half percent (1.5%) of the total outstanding shares of Common Stock of the
Company, in the aggregate, in any calendar year.
(k) PAYMENT. The exercise price will be payable in one of the alternative
forms specified below:
(i) full payment in cash or check made payable to the Company's
order; or
(ii) full payment in shares of Common Stock held for the requisite
period necessary to avoid a charge to the Company's reported
earnings and valued at fair market value on the Exercise Date (as
such term is defined below); or
(iii) full payment in a combination of shares of Common Stock held for
the requisite period necessary to avoid a charge to the Company's
reported earnings and valued at fair market value on the Exercise
Date and cash or check payable to the Company's order; or
(iv) full payment through a sale and remittance procedure pursuant to
which the Participant will provide irrevocable written directives
to a designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased
shares and shall concurrently provide written instructions to the
Company to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale
transaction.
12
For purposes of this subsection, the "Exercise Date" will be the date on
which written notice of the option exercise is delivered to the Company, and the
fair market value per share of Common Stock on any relevant date shall be
determined in accordance with the provisions of the Plan. Except to the extent
the sale and remittance procedure specified above is utilized for the exercise
of the option, payment of the option price for the purchased shares must
accompany the exercise notice.
5.6 EFFECTIVE DATE. The Plan became effective as of January 1, 1999, upon
approval by shareholders of the Company in April 1999. The Plan was amended and
restated by the Company in February, 2002, subject to the approval of the
shareholders effective April 25, 2002. The Plan and all outstanding Awards shall
remain in effect until all outstanding Awards have been exercised, expired or
canceled.
13