TITANIUM METALS CORPORATION
AMENDED AND RESTATED
1996 NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
AS AMENDED AND RESTATED EFFECTIVE MAY 19, 1998
1. Purpose. The purpose of the Amended and Restated 1996 Non-Employee
Director Compensation Plan is to promote the interests of the Company by
providing an inducement to obtain and retain the services of qualified persons
who are neither employees nor officers of the Company to serve as members of the
Company's Board of Directors.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cause" shall mean any misappropriation of the assets of the
Company or any of its Subsidiaries resulting in material loss to such
entity.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Company" shall mean Titanium Metals Corporation, a Delaware
corporation.
(e) "Director" shall mean any person serving as a member of the
Board.
(f) "Disability" shall mean the condition of a Grantee who is unable
to engage in any substantial gainful activities by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months.
(g) "Eligible Directors" shall mean those Directors eligible to
participate in the Plan pursuant to Section 4.
(h) "Fair Market Value" shall mean the last reported sale price of
Stock on the NASDAQ National Market (or other exchange upon which the Stock
is traded as of the date of determination).
(i) "Grantee" shall mean an Eligible Director who has been granted an
Option.
(j) "Ineligible Directors" shall mean those Directors who are not
Eligible Directors.
(k) "Meeting Fees" shall mean the fees to be paid to each Eligible
Director for such Eligible Director's attendance at a regular or special
meeting of the Board or Board committee, as follows:
ATTENDED IN ATTENDED BY
PERSON TELEPHONE
Board Meeting $1,000 $350
Committee
Meeting-- $2,000 $700
Chair only
Committee
Meeting--Non- $1,000 $350
Chair Members
(l) "Option" shall mean an option to purchase shares of Stock,
granted pursuant to the Plan and subject to the terms and conditions
described in the Plan. Options shall not be incentive stock options within
the meaning of Code Section 422A.
(m) "Optionee" shall mean a person who holds an Option.
(n) "Parent" shall mean a corporation of the type defined in Code
Section 424(e).
(o) "Plan" shall mean this Amended and Restated 1996 Non-Employee
Director Compensation Plan, as it may be amended from time to time pursuant
to Section 9.
(p) "Retainer" shall mean a retainer paid annually to Eligible
Directors which shall equal $15,000 in cash plus 500 shares of Stock.
(q) "Stock" shall mean the Company's $.01 par value common stock.
(r) "Subsidiary" shall mean a corporation of the type defined in Code
Section 424(f).
3. Administration. The Plan shall be administered by the Ineligible
Directors. The amount and nature of the awards to be granted under the Plan,
including grants of Options, shall be automatic as described in Section 7. The
Ineligible Directors, subject to the provisions of the Plan, have the power to
construe the Plan, to determine all questions thereunder and to adopt and amend
such rules and regulations for the administration of the Plan as they may deem
desirable. Any interpretation, determination, or other action made or taken by
the Ineligible Directors shall be final, binding, and conclusive. A majority of
the total number of Ineligible Directors shall constitute a quorum for purposes
of any action by the Ineligible Directors, and the vote of a majority of the
Ineligible Directors present at a meeting of the Ineligible Directors at which a
quorum is present shall be the act of the Ineligible Directors. Any action
reduced to writing and signed by all of the Ineligible Directors shall be as
fully effective as if it had been taken by a vote at a meeting of the Ineligible
Directors duly called and held. None of the Ineligible Directors shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Options.
4. Eligibility. All Directors of the Company shall be eligible to
participate in the Plan unless they are employees of the Company or any
Subsidiary or Parent of the Company.
5. Shares Subject to the Plan
(a) Class. The shares which are to be made the subject of awards
granted under the Plan shall be the Company's authorized but unissued
Stock. In connection with the issuance of Stock under the Plan, the
Company may repurchase Stock in the open market or otherwise.
(b) Aggregate Amount. The total number of shares of Stock authorized
under the Plan shall not exceed 62,500 (subject to adjustment under Section
10(c)). If any outstanding Option under the Plan expires or is terminated
for any reason, then the Stock allocable to the unexercised portion of such
Option shall not be charged against the limitation of this Section 5(b) and
may again become the subject of an Option granted under the Plan.
6. Retainer\Meeting Compensation.
(a) Retainer. The cash amount of the Retainer shall be paid, and
certificates for the Stock portion of the Retainer shall be delivered, to
Eligible Directors on or as soon as practicable following the annual
meeting of the stockholders of the Company, in each such case to the
Eligible directors elected at such meeting. Such certificates shall be
registered in the name of the Eligible Director, and all Stock so issued
shall be fully paid and nonassessable. The Company shall pay any issuance
or transfer taxes with respect to the issuance of Stock.
(b) Meeting Fees. Meeting Fees shall be paid in cash on or as soon
as practicable after any regular or special meeting attended by an Eligible
Director.
7. Terms, Conditions and Form of Options. Each Option granted under the
Plan shall be evidenced by a written agreement substantially in the form
attached hereto or in such other form as the Ineligible Directors shall from
time to time approve, which agreements shall be executed by a duly authorized
officer of the Company and shall comply with and be subject to the following
terms and conditions:
(a) Option Grant Dates. Commencing in 1999, Options shall be granted
automatically to each Eligible Director elected at the annual meeting of
stockholders of the Company as of the date of such meeting.
(b) Option Formula. Each Eligible Director shall receive an Option
to purchase1,500 shares of Stock on the grant date of the Option without
further action by the Board or the Ineligible Directors.
(c) Period of Options. Options shall vest and become exercisable on
the first anniversary of grant date of the Option; and Options shall
terminate and cease to be exercisable on the tenth anniversary of the grant
date of the Option (subject to prior termination as provided in Sections
7(g) and (h) below).
(d) Option Price. The exercise price of each Option shall be the
Fair Market Value of a share of Stock on the date the Option is granted.
(e) Exercise of Options. Vested and exercisable Options may be
exercised (in full or in part) only by written notice of exercise delivered
to the Company at its principal executive office accompanied either (i) by
cash payment of the aggregate exercise price for all shares of Stock being
acquired upon exercise of the Option, or (ii) written direction to deliver
the shares of Stock being acquired upon exercise of the Option to a
registered broker dealer with instruction to sell such shares for the
account of Optionee, and to remit to the Company out of such sale proceeds
a cash payment equal to the aggregate exercise price for all shares of
Stock being acquired upon exercise of the Option. Such Option shall be
deemed to have been exercised on the date both such required items have
been received by the Company.
(f) Transferability. No Option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution;
provided, however, that the Ineligible Directors may determine to grant
Options that are transferable, without payment of consideration, to
immediate family members of the Grantee or to trusts or partnerships for
such family members, and may amend outstanding Options to provide for such
transferability. No interest of any Optionee in any Option shall be
subject to attachment, execution, garnishment, sequestration, the laws of
bankruptcy or any other legal or equitable process. Except as otherwise
determined by the Ineligible Directors, during the lifetime of the Grantee,
Options shall be exercisable only by the Grantee or the Grantee's guardian
or legal representative.
(g) Death or Disability of Grantee. If a Grantee dies or terminates
performance of services as a Director because of Disability, any unvested
and unexercisable Option granted to such Grantee shall immediately and
fully vest. Such Option, together with any other vested and unexercisable
Options granted to such Grantee, may be exercised, at any time, or from
time to time, prior to the earlier of (i) the termination of such Option in
accordance with Section 7(c), or (ii) one year after the date of Grantee's
death or termination of services as a Director, at which date all then-
outstanding and unexercised Options granted to such Grantee shall
terminate. In the case of death, an Option may be exercised by the person
or persons to whom the Optionee's rights under the Option pass by will or
applicable law, or if no such person has such rights, by the Optionee's
executors or administrators; provided that such person(s) consent in
writing to abide by and be subject to the terms of the Plan and the Option
and such writing is delivered to the Company.
(h) Termination of Services as Director.
(i) If a Grantee's performance of services for the Company and
its Subsidiaries shall terminate for any reason other than death or
Disability or termination of services as a Director for Cause, any
unvested and unexercisable Option granted to such Grantee shall
immediately and fully vest. Such Option, together with any other
vested and exercisable Options granted to such Grantee, may be
exercised, at any time, or from time to time, prior to the earlier of
(i) the termination of such Option in accordance with Section 7(c) or
(ii) three months after the date of such Grantee's termination of
services as a Director, at which date all then-outstanding and
unexercised Options granted to such Grantee shall terminate.
(ii) If a Grantee's performance of services as a Director is
terminated for Cause, any unvested and unexercisable Option granted to
such Grantee shall terminate as of the date of such termination of
services. All Option s previously granted to such Grantee which are,
as of the date of such termination of services, vested and
exercisable, may be exercised at any time, or from time to time, prior
to the earlier of (i) the termination of such Option in accordance
with Section 7(c) or (ii) one month after the date of such Grantee's
termination of services as a Director, at which date all then-
outstanding and unexercised Options granted to such Grantee shall
terminate. For this purpose of the Plan and any Option agreement,
such Grantee's service shall be deemed to have terminated on the
earlier of (A) the date when the Grantee's service in fact terminated
or (B) the date when such Grantee received written notice that his
service is to terminate for Cause.
(i) No Rights as Shareholder. No Optionee shall have any rights as a
shareholder with respect to any Stock subject to an Option prior to the
date of issuance to such Optionee of a certificate or certificates for such
shares.
8. Compliance With Other Laws and Regulations. The Plan, the grant and
exercise of Options under the Plan, and the obligation of the Company to
transfer shares under such Options shall be subject to all applicable federal
and state laws, rules and regulations, including those related to disclosure of
financial and other information to Optionees, and to any approvals by any
government or regulatory agency as may be required. The Company shall not be
required to issue or deliver any certificates for shares of Stock prior to (a)
the listing of such shares on any stock exchange on which the Stock may then be
listed, where such listing is required under the rules or regulations of such
exchange, and (b) the compliance with applicable federal and state securities
laws and regulations relating to the issuance and delivery of such certificates;
provided, however, that the Company shall make all reasonable efforts to so list
such shares and to comply with such laws and regulations.
9. Amendment and Discontinuance. The Board may from time to time amend,
suspend or discontinue the Plan; provided, however, that, the Plan shall not be
amended without the consent of the shareholders of the Company to the extent
such consent is required under Rule 16b-3, Section 162(m) of the Code or any
stock exchange or market quotation system on which the Stock is then listed or
quoted. Except where approval of the Board is required by applicable law, the
power of the Board to amend, suspend or discontinue the Plan shall be exercised
by the Ineligible Directors.
10. General Provisions.
(a) Assignability. The rights and benefits under the Plan shall not
be assignable or transferable by an Eligible Director other than by will or
by the laws of descent and distribution, and, except as otherwise
determined by the Ineligible Directors, during the lifetime of the Grantee,
Options granted under the Plan shall be exercisable only by the Grantee.
(b) Termination of Plan. No Options may be granted under the Plan
after May 18, 2006 (or if such date is not a business day, on the next
succeeding business day). The Plan shall automatically terminate on the
date all Options granted under the Plan have been exercised or have
terminated or expired.
(c) Adjustments in Event of Change in Stock. In the event of any
change in the Stock by reason of any stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination, or exchange
of shares, or of any similar change affecting the Stock, the number and
class of shares subject to outstanding Options, the exercise price per
share, and any other terms of the Plan or the Options which in the
Ineligible Directors' sole discretion require adjustment shall be
appropriately adjusted consistent with such change in such manner as the
Ineligible Directors may deem appropriate.
(d) No Right to Continue as a Director. Neither the Plan, nor the
granting of an Option nor any other action taken pursuant to the Plan,
shall constitute or be evidence of any agreement or understanding, express
or implied, that the Company will retain a Director for any period of time,
or at any particular rate of compensation.
(e) ERISA. The Plan is not an employee benefit plan which is subject
to the provisions of the Employee Retirement Income Security Act of 1974,
and the provisions of Section 401(a) of the Code are not applicable to the
Plan.
(f) Non-Statutory Options. All Options granted under the Plan shall
be non-statutory options not entitled to special tax treatment under
Section 422A of the Code.
(g) Effective Date of the Plan. The Plan originally took effect on
May 8, 1996 (ten days following last adoption by the stockholders of the
Company on May 8, 1996). The Plan was originally adopted by the Board on
March 29, 1996, was subsequently amended by the Board on April 15, 1996,
and was amended and restated by the Board on February 14, 1997, February
19, 1998 and May 19, 1998. The Plan was originally adopted by the
stockholders of the Company on March 29, 1996, and again on May 8, 1996
following the amendment of the Plan by the Board.
(h) Effect of Amendment and Restatement of the Plan. This amended
and restated version of the Plan shall amend and supersede in its entirety
previous versions of the Plan, provided, however, that such amendment and
restatement is not intended to affect the validity of any actions taken
under previous versions of the Plan, as summarized on Exhibit A hereto.
(i) Governing Law. The Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of
Colorado and construed accordingly.
(j) Variation of Pronouns. All pronouns and any variations thereof
contained herein shall be deemed to refer to masculine, feminine, neuter,
singular or plural, as the identity of the person or persons may require.
EXHIBIT A
HISTORY OF PLAN ACTIONS/AMENDMENTS
MEETING FEES
RETAINER (In Person/By OPTIONS
Telephone)
Committee Meeting
Non-Chair Number @Price/
Amount of Cash/ # of Shares Board Committee Term/
DATE ACTION Date Paid Date Paid Meeting Member Date Issued
3-29- Plan $8,000/ $8000 in $1,000/ 625 @ IPO
96 Adopted IPO shares $350 price then
closing (rounded at FMV/
then 1st to next 5 years/
business 100)/ IPO
day of IPO Closing
year closing then 3rd
then 1st business
business day after
day of earnings
year release
4-15- Plan 400
96 Amended shares/
IPO
closing
then 1st
business
day of
year
2-14- Plan $8,000/ 400 1,500 @
97 Amended Annual shares/ FMV/
Meeting Annual 10 years/
Meeting 3rd
business
day after
earnings
release
2-19- Plan 1,500 @
98 Amended FMV/
10 years/
Annual
Meeting
5-19- Plan $15,000/ 500 $2,000 $1,000
98 Amended Annual shares/ / /
Meeting Annual $700 $350
Meeting