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EXHIBIT 10.1
THE GEON COMPANY
INCENTIVE STOCK PLAN
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PURPOSE
The purpose of the Incentive Stock Plan (the "Plan") is to promote the
interests of the stockholders by furthering the long-term performance of The
Geon Company (the "Company") and to enable the Company to be competitive in
encouraging key employees who perform services of special importance to the
management, operation and the development of the business of the Company or
its subsidiaries, to remain in its service, to attract others to it, and to
provide such employees with an additional incentive to contribute to the
prosperity of the Company and its stockholders.
INCENTIVES
Incentives under the Plan may be granted in any one or a combination of (a)
stock options which may consist of (i) Incentive Stock Options (or other
statutory stock options) and/or (ii) Non-Qualified Stock Options; (b) Stock
Appreciation Rights; (c) Limited Stock Appreciation Rights; and (d) stock
awards which may consist of (i) Restricted Stock and/or (ii) Performance
Incentive Stock (together "Incentives"). All Incentives shall be subject to the
terms and conditions set forth herein and to such other terms and conditions as
may be established in the manner prescribed by the Board of Directors.
ADMINISTRATION
To the extent permitted by law the Board may delegate any or all of its powers
under this Plan to a committee (the "Committee") of not less than two
Directors, who are not Officers or employees of the Company, and who are not
eligible to participate in the Plan and have not participated in the Plan for
at least one year. The Board or the Committee may delegate to the chief
executive officer of the Company its duties under the Plan, with respect to not
more than 10% of the shares authorized under this Plan, pursuant to such
conditions or limitations as the Board or Committee may establish, except that
only the Board or the Committee may select participants and grant options,
appreciation rights and stock awards to participants who are subject to Section
16 of the Securities Exchange Act of 1934, as amended. The Board, the Committee
or the chief executive officer, as the case may be, shall be referred to as the
"Granting Authority".
ELIGIBILITY
Regular key employees of the Company and its subsidiaries, including officers
whether or not Directors, shall be eligible to participate in the Plan.
Directors who are not regular employees are not eligible. Participation in the
Plan shall be limited to those key employees of the Company selected by the
Granting Authority.
STOCK OPTIONS
The Granting Authority may in its discretion from time to time grant to
eligible employees options to purchase, except as provided below, at a cash
price not less than 100% of the fair
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market value on the date of grant (the "option price"), treasury stock or
authorized but unissued common stock of the Company, subject to the conditions
set forth in this Plan. Within 60 days of the Company's initial public
offering, the Board or the Committee may grant options to purchase common stock
of the Company at less than 100% of the fair market value to Company employees
who hold stock options from The B.F.Goodrich Company in substitution for such
options in compliance with Section 424 of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code") on condition that (i) the eligible
employees surrender all their then unexercised stock options issued by The
B.F.Goodrich Company; (ii) the excess of the aggregate fair market value of the
stock subject to the option immediately after the substitution over the
aggregate option price of such stock is not more than the excess of the
aggregate fair market value of all stock subject to the option immediately
before such substitution over the aggregate option price of such stock; and
(iii) the new options do not provide the participants any additional benefits
than the surrendered options.
The Granting Authority, at the time of granting to any employee an Incentive
under the Plan, may designate options Incentive Stock Options pursuant to
Section 422 of the Internal Revenue Code or any other statutory stock option
that may be permitted under the Internal Revenue Code from time to time,
provided, however that (i) the date on which such options and related
appreciation rights shall expire, if not exercised, may not be later than ten
years after the date of grant of the option, (ii) in the case of options
designated as Incentive Stock Options, the aggregate fair market value of stock
optioned to an employee (determined at time of grant) under this plan or any
other plan of this Company and its subsidiaries with respect to which incentive
stock options are exercisable for the first time by such employee during any
calendar year shall be limited to $100,000 (unless such Section 422 limit is
revised, then in conformance with such revision) and (iii) in case of any other
statutory stock option permitted under the Internal Revenue Code, then in
accordance with such provisions as in effect from time to time.
Within the foregoing limitations, the Granting Authority shall have the
authority in its discretion to specify all other terms and conditions,
including but not limited to provisions for the exercise of options in
installments, the time limits during which options may be exercised, and in
lieu of payment in cash, the exercise in whole or in part of options by
tendering common stock of the Company owned by the employee, valued at the fair
market value on the date of exercise or other acceptable forms of consideration
equal in value to the option price. The Board or Committee may, in its
discretion, establish rules or conditions with respect to utilization of common
stock for all or part of the option price. Furthermore, the Board or Committee
may, in its discretion, establish rules or conditions for the surrendering of a
portion of a grant in satisfaction of any withholding tax obligation.
APPRECIATION RIGHTS
The Granting Authority may, in its discretion, grant Stock Appreciation Rights
and Limited Stock Appreciation Rights (as hereinafter described) in connection
with any stock option, either at the time of grant of such stock option or any
time thereafter during the term of such stock option. Except for the terms of
this Plan with respect to Limited Stock Appreciation Rights, each such
appreciation right shall be subject to the same terms and
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conditions as the related stock option and shall be exercisable at such times
and to such extent as the Granting Authority shall determine, but only so long
as the related option is exercisable. The number of Stock Appreciation Rights
or LimIted Stock Appreciation Rights granted shall not exceed the number of
shares which may be purchased upon exercise of a related option. The number of
both Stock Appreciation Rights and Limited Stock Appreciation Rights shall be
reduced not only by the number of appreciation rights exercised but also by the
number of shares purchased upon the exercise of a related option. A related
stock option shall cease to be exercisable to the extent surrendered for the
exercise of an appreciation right.
STOCK APPRECIATION RIGHTS
Upon surrender to the Company of the unexercised related stock option, or any
portion thereof, a Stock Appreciation Right shall entitle the optionee to
receive from the Company in exchange therefor (a) a payment in stock as
determined below, or (b) to the extent determined by the Granting Authority,
the cash equivalent of the fair market value of such payment in stock on the
exercise date had the employee been awarded a payment in stock instead of cash,
or any combination of stock and cash. The number of shares which shall be
issued pursuant to the exercise of Stock Appreciation Rights shall be
determined by dividing (1) the total number of Stock Appreciation Rights being
exercised multiplied by the amount by which the fair market value of a share of
common stock of the Company on the exercise date exceeds the option price of
the related option, by (2) the fair market value of a share of common stock of
the Company on the exercise date. No fractional shares shall be issued.
LIMITED STOCK APPRECIATION RIGHT
The grant of a Limited Stock Appreciation Right will permit a grantee to
exercise such right for cash during a sixty-day period commencing on the date
on which any of the events described in the definition of Change of Control
occurs, each of which events shall hereinafter be known as a "Change in Control
Event." Notwithstanding the foregoing, however, if the Change in Control Event
occurs within six months after the date on which a Limited Stock Appreciation
Right was granted, then the sixty-day period during which such right may be
exercised for cash shall commence six months after the date on which the
Limited Stock Appreciation Right was granted. The amount of cash received upon
the exercise of any Limited Stock Appreciation Right under either of the
preceding two sentences shall equal the excess, if any, of the fair market
value of a share of the Company's common stock on the date of exercise of the
Limited Stock Appreciation Right, over the option price of the stock option to
which the Limited Stock Appreciation Right relates.
STOCK AWARDS
The Granting Authority in lieu of or in addition to granting stock options with
or without appreciation rights under this Plan, may make awards ("stock
awards") in common stock or denominated in units of common stock. All or part
of any stock award may be subject to conditions established by the Granting
Authority, which may include, but are not limited to, continuous service with
the Company ("Restricted Stock") and attainment of specific
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performance objectives ("Performance Stock"). Stock awards may include the
awarding of additional stock ("Additional Stock") upon attainment of
performance objectives. If the common stock is awarded subject to attainment of
performance objectives or continued service with the Company, the stock may be
registered in the participant's names when initially awarded, but possession of
the certificates for the stock, or appropriate book entry, shall be retained by
the Company for the benefit of participants, subject to the conditions of the
stock awards. In such event, each participant shall have the right to receive
all dividends and other distributions made with respect to stock awards
registered in his or her name and shall have the right to vote or execute
proxies with respect to such registered shares. Stock awards with respect to
which the restrictions are not removed in accordance with the provision of the
stock awards shall be forfeited and shall revert to the treasury of the
Company.
ASSIGNABILITY
Incentives granted under this Plan shall not be transferable other than by will
or the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in the Internal Revenue Code and such Incentive
shall be exercisable during the employee's lifetime only by the employee or by
the employee's guardian or legal representative or permitted transferee or, in
the event of death, by the employee's estate or by a person who acquires the
Incentive by bequest or inheritance.
CORPORATE REORGANIZATION
The number and kind of shares authorized for delivery under this Plan and, if
appropriate, the purchase price per share, shall be adjusted appropriately in
the event of any stock split,, stock dividend, combination of shares, merger,
consolidation, reorganization, or other change in the nature of the shares of
the Company (any one or more of the foregoing hereinafter a "corporate
reorganization"). The determination of what adjustments, if any, are
appropriate shall be made by the Board or Committee.
CORPORATE REORGANIZATIONS
In the event of a dissolution or liquidation of the Company or a merger,
consolidation, sale of all or substantially all of its assets, or other
corporate reorganization in which the Company is not the surviving corporation
or any merger in which the Company is the surviving corporation but the holders
of its common stock receive securities of another corporation, any outstanding
options hereunder shall terminate, provided that each optionee shall, in such
event,, have the right immediately prior to such dissolution, liquidation,
merger, consolidation, sale of assets or reorganization in which the Company is
not the surviving corporation or any merger in which the Company is the
surviving corporation but the holders of its common stock receive securities of
another corporation, to exercise any unexpired option and/or Stock Appreciation
Right in whole or in part without regard to the exercise date contained in such
option. Nothing herein contained shall prevent the assumption and continuation
of any outstanding option or the substitution of a new option by the surviving
corporation.
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CHANGE IN CONTROL
Options and any related appreciation rights that are not exercisable shall
become immediately exercisable in the event of a Change in Control. Anything to
the contrary notwithstanding, in the event a Change in Control of the Company
shall occur, then an interim removal of restrictions on all or a portion of the
Performance Stock award and the awarding of Additional Stock, if appropriate,
(the "Interim Action") shall be made to each participant within five days
following the occurrence of the Change in Control with respect to all
outstanding Performance Stock awarded to such participant. The Interim Action
with respect to each outstanding Performance Stock award shall be calculated
(i) based upon the performance objectives attained as of the end of the most
recent quarter in the plan cycle related to each such award (the "Determination
Date") ending prior to the Change in Control and as if the Determination Date
were the end of the last quarter in such plan cycle and (ii) based upon the
number of full and partial months through the occurrence of the Change in
Control that have elapsed in the plan cycle with respect to each such
Performance Stock award. The amount of such Interim Action with respect to each
such outstanding Performance Stock award shall be a prorated portion (based
upon the number of full and partial months through the occurrence of the Change
in Control that have elapsed in the plan cycle related to such award) of the
amount of the Performance Stock award that would have been payable to the
participant at the end of the relevant plan cycle, calculated assuming
attainment of the greater of (i) 100% of the performance objective with respect
to such plan cycle or (ii) the actual percentage (annualizing a partial year,
if any) of the performance objective attained as of the Determination Date and
as if the Determination Date were the end of the plan cycle related to such
Performance Stock award. The Interim Action shall not reduce the obligation of
the Company to make a final removal of restrictions or award of additional
stock ("Final Action") under the terms of the Plan, but any Interim Action made
with respect to a Performance Stock award shall be offset against the Final
Action, if any, required under the terms of the Plan with respect to such
Performance Stock award at the actual end of the plan cycle related to such
Performance Stock award. Notwithstanding the foregoing, in no event shall a
participant be required to return stock or refund to the Company, or have
offset against any other payment due such participant from or on behalf of the
Company, all or any portion of an Interim Action. In the event of a Change in
Control all restrictions on Restricted Stock shall lapse and the participant
shall immediately receive all Restricted Stock free of further restrictions.
For purposes of the Plan, a Change in Control shall mean
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common
Stock") or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change of Control: (A) any acquisition directly from the
Company (other than by exercise of a conversion privilege), (B) any
acquisition by the Company or any of its subsidiaries, (C) any
acquisition by any
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employee benefit plan (or related trust) sponsored or maintained by
the Company or any of its subsidiaries or (D) any acquisition by any
corporation with respect to which, following such acquisition, more
than 70% of, respectively, the then outstanding shares of common stock
of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Company Voting Securities
immediately prior to such acquisition in substantially the same
proportions as their ownership, immediately prior to such acquisition,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be; or
(ii) During any period of two consecutive years,
individuals who, as of the beginning of such period, constitute the
Board (the "Incumbent Board"), cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the beginning of such period whose
election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act); or
(iii) approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such reorganization, merger or consolidation, do not,
following such reorganization, merger or consolidation, beneficially
own, directly or indirectly, more than 70% of, respectively, the then
outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation in
substantially the same proportions as their ownership, immediately
prior to such reorganization, merger or consolidation of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be; or
(iv) Approval by the shareholders of the Company of (A) a
complete liquidation or dissolution of the Company or (B) a sale or
other disposition of all or substantially all of the assets of the
Company, other than to a corporation, with respect to which following
such sale or other disposition, more than 70% of, respectively, the
then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities
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who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale
or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be.
(v) Notwithstanding the foregoing, the acquisition of the
beneficial ownership of the Outstanding Company Common Stock from or
by The B.F.Goodrich Company shall not constitute a Change in Control.
SHARES AVAILABLE FOR INCENTIVES
Subject to adjustment as provided in the following paragraph, there is hereby
reserved for issuance under the Plan, 2,500,000 shares in 1993, and in each
calendar year thereafter one % of the outstanding shares of the Company's
Common Stock as of the first business day of each calendar year. The shares
available for granting Incentives in any year shall be increased by the number
of shares available under the Plan in previous years but not covered by
Incentives granted under the Plan in those years plus any shares as to which
options or other benefits granted under the Plan have lapsed, expired,
terminated, forfeited or been cancelled for any reason without being exercised.
However, upon surrender of a stock option on exercise of the related
appreciation right, the number of shares subject to the surrendered option
shall be charged against the maximum number of shares issuable under the Plan
and shall not be available for future options.
FAIR MARKET VALUE
For all purposes of this Plan the fair market value of a share of stock shall
be the mean of the high and low prices of the Company's common stock on the
relevant date or, if no sale was made on such date, then on the next preceding
day on which such a sale was made (a) if the Company's stock is listed on the
New York Stock Exchange, as reported on the New York Stock Exchange Composite
Transactions listing (or similar report), or (b) if the Company's stock is
listed on the NASDAQ National Market System, then as reported on such system,
or (c) if not listed on either the New York Stock Exchange or the NASDAQ
National Market System, as determined by the Board or Committee.
TERMINATION OF EMPLOYMENT
Upon the termination of employment of any employee for any reason, his or her
options and any related appreciation rights shall terminate at that time with
respect to all shares which were not then purchasable by him or her, provided,
however, that if the termination of employment is by reason of death,
disability or retirement the Board may in its sole discretion provide that such
options and related appreciation rights shall not terminate upon death,
disability or retirement and may become immediately exercisable or continue to
become exercisable in accordance with the terms of the original grant.
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COMPLIANCE WITH LAW
Notwithstanding any other provisions of the Plan, the issuance or delivery of
any shares may be postponed for such period as may be required to comply with
any applicable requirements of any national securities exchange or any
requirements under any other law or regulation applicable to the issuance or
delivery of such shares, and the Company shall not be obligated to issue or
deliver any such shares if the issuance or delivery thereof shall constitute a
violation of any provision of any law or any regulation of any governmental
authority or any national securities exchange.
EMPLOYMENT
Nothing in the Plan or in any agreement entered into pursuant to the Plan shall
confer upon any participant the right to continue in the employment of the
Company or affect any right which the Company may have to terminate the
employment of such participant.
GRANTING AUTHORITY'S DETERMINATION
The Granting Authority's determinations under the Plan including without
limitation, determinations of the participants to receive awards or grants, the
form, amount and timing of such awards or grants, the terms and provisions of
such awards or grants and the agreements evidencing same, and the establishment
of any performance objectives need not be uniform and may be made by it
selectively among participants who receive, or are eligible to receive
Incentives under the Plan whether or not such participants are similarly
situated.
INTERPRETATION AND AMENDMENT
The Board or Committee shall have the power to interpret the provisions of this
Plan and of all Incentives granted hereunder and the Board shall have the power
to amend this Plan from time to time, provided, however, that no amendment
shall be made without the approval of stockholders which has the effect of
increasing the number of shares of stock subject to this Plan (other than in
connection with a corporate reorganization), changing the class of employees
eligible to participate, reducing the purchase price of shares pursuant to
options to an amount less than 100% of the fair market value on the date of
grant or extending the time during which options may be granted hereunder, or
otherwise materially increasing the benefits accruing to participants under
this Plan. The Granting Authority shall have the authority to amend the terms
of any Incentive granted by it subject to the foregoing limitations and
provided that no such amendment shall deprive any optionee of any rights
thereunder without his written consent unless such amendment or rescission is
required by law.
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