Exhibit 10(n)
LAWTER INTERNATIONAL, INC.
KEY EMPLOYEE INVESTMENT PLAN
1. PURPOSE
The Key Employee Investment Plan ("Plan"), of Lawter International, Inc.
("Lawter"), is adopted to facilitate the immediate purchase, by key
employees of Lawter and its subsidiaries (collectively, the "Company"), of
Lawter's common stock, $1.00 par value, ("Common Stock"). This plan is in
keeping with the overall compensation philosophy and guiding principles
adopted by the Compensation Committee at its February 18, 1997 meeting. The
purchases facilitated by the Plan are intended to achieve the following
specific purposes:
a) More closely align key employees' financial rewards with the financial
rewards realized by all other holders of the Common Stock.;
b) Increase key employees' motivation to manage the Company as owners;
and
c) Increase the ownership of Common Stock among key employees of the
Company.
2. ELIGIBILITY
To be eligible to participate in the Plan, the individual ("Eligible
Employee") must have been listed on the schedule of eligible participants
approved by the Lawter Compensation Committee ("Compensation Committee") at
its meeting held on October 29, 1998.
3. PARTICIPATION
To become a Plan Participant ("Participant"), an Eligible Employee must
satisfy the following requirements:
a) Submit a completed, signed and irrevocable agreement to purchase all
of the shares the Participant has elected to purchase;
b) Complete and sign all necessary agreements and other documents
relating to the loan described in Section 4 below (provided that this
subsection 3(b) shall not apply to any Participant who does not
utilize a loan to acquire shares); and
c) Satisfy all other conditions of participation specified in the Plan.
The agreements and other documents specified in subsection 3(a), (b)
and (c) must be in such forms and must be submitted at such times and
to such Company officers as specified by the Compensation Committee or
its designee(s). No Eligible Employee is required to participate in the
Plan.
4. PAYMENT FOR SHARES
The share price for each share of stock issued shall be determined by
resolution of the Compensation Committee. Each Participant must deliver in
cash 100% of the aggregate share price of the shares ("Purchased Shares"),
within three business days of enrollment in the plan. The Purchased Shares
will be not issued to the Participant until Lawter has received such
payment. The payment must be made at the time, place and manner specified
by the Compensation Committee or its designee(s).
Lawter has arranged the opportunity for each Participant to obtain an
unsecured loan through Bank of America ("Bank") to fund the purchase of the
Purchased Shares. Participants are not required to obtain such a loan. Each
Participant obtaining such a loan must sign a letter of direction which
directs all loan proceeds to be paid directly to Lawter in payment of the
Purchased Shares. Each Participant is responsible for satisfying all of the
lending requirements specified by the Bank to qualify for the loan. Each
Participant is fully obligated to repay to the Bank all principal,
interest, and any early payment fees on the loan when due and payable.
5. REGISTRATION OF SHARES
The Purchased Shares will be registered in the name of the Participant and
certificated. Each certificate will bear a legend referring to this Plan
and the agreements between the Participant and Lawter relating to the
Purchased Shares. The certificates for the Purchased Shares will be held in
the Office of the Corporate Secretary at Lawter until all restrictions on
the Purchased Shares have lapsed. Each Participant must deliver to the
Office of the Corporate Secretary at Lawter a stock power endorsed in blank
with respect to the Purchased Shares.
6. STOCKHOLDER RIGHTS
The Purchased Shares will be drawn from Treasury Shares. During the period
in which the Purchased Shares are subject to restrictions on transfer, each
Participant will have all of the rights of a stockholder with respect to
the Purchased Shares, including the right to vote the shares and the right
to receive all dividends paid on the shares. To the extent required by the
loan agreements and documents identified in subsection 3(b), Lawter will be
irrevocably directed to deliver all such dividends directly to Bank of
America for payment of loan interest. To the extent that dividends received
do not cover interest owed, the shortfall will be deducted from the
Participant's payroll account and paid directly to the Bank by the Company.
7. SALE OF PURCHASED SHARES
Each Participant is permitted to sell all or any portion of the Purchased
Shares, subject to the following restrictions;
a) Except in the event of death or disability, termination of employment
as described in Sections 10 or 11, or a Change in Control (as defined
in Paragraph 8), no Participant may sell any portion of the Purchased
Shares before the third anniversary of the enrollment date;
b) No Participant may sell any portion of the Purchased Shares unless all
principal, interest and any early payment fees due on the loan
contemplated by Section 4 of this Plan have previously been paid or
all proceeds of the sale are simultaneously applied first to the
payment of all such principal, interest and early payment fees; and
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c) The Compensation Committee has the right to impose restrictions on the
timing, amount and form of the sale of the Purchased Shares with
respect to any Participant to the extent it determines that such
restrictions are in the best interest of Lawter. Each Participant must
notify the office of the Corporate Secretary at Lawter of his or her
intention to sell the Purchased Shares before such a sale is
implemented. Lawter may elect to allow the Participant to sell the
Purchased Shares in the open market, Lawter may repurchase the shares,
or Lawter may take other actions as it deems appropriate. If Lawter
repurchases the Purchased Shares, the purchase price will be the
closing price of a share of Common Stock on the New York Stock
Exchange Composite Reporting Tape on the date the Participant chooses
to sell.
8. CHANGE OF CONTROL
The term "Change of Control" shall mean a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Securities Exchange Act of
1934. In the event of a Change of Control the Participant may thereafter
sell all or any portion of the Purchased Shares, subject only to the
conditions specified in subsections 7(b) and 7(c).
9. DEATH OR DISABILITY
If a Participant's employment with the Company terminates because of the
Participant's death or disability, the Participant (or the Participant's
representative in the case of death) may sell all or any portion of the
Purchased Shares subject to the conditions specified in subsection 7(b) and
7(c). Upon the death of a Participant, his or her loan may become due and
payable ninety days (90) after the Participant's death.
10. EMPLOYMENT TERMINATION BY TRANSACTION
If a Participant's employment with the Company terminates because of an
acquisition, divestiture, merger, spin-off or similar transaction
("Transaction"), the Participant may sell all or any portion of the
Purchased Shares, subject to the conditions specified in subsection 7(b)
and (c).
11. OTHER EMPLOYMENT TERMINATION
If a Participant's employment with the Company terminates for any reason
other than (i) death or disability or (ii) pursuant to a Transaction or a
Change in Control, the Participant may sell all or any portion of the
Purchased Shares, subject to the conditions specified in Subsections 7(b)
and 7 (c).
12. PREPAYMENT PENALTIES
If a Participant voluntarily terminates employment with the Company, any
prepayment penalties charged by the Bank for early repayment of the loan
will be the responsibility of the terminating employee. If termination
occurs for any other reason, any prepayment penalty will be paid by the
Company.
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13. LOAN GUARANTEE
Lawter will guarantee repayment to Bank of America of 100% of all
principal, interest, early payment fees and other obligations of each
Participant under such Participant's loan described in Section 4. The
Lawter loan guarantee is a condition to the loan arrangement Lawter has
made with Bank of America. The terms and conditions of the guarantee are as
agreed by Lawter and Bank of America. Each Participant is fully obligated
to repay Bank of America all principal, interest, and other amounts on the
loan when due and payable. Lawter may take all action relating to the
Participant and her or his assets, which the Compensation Committee deems
reasonable and necessary, to obtain full reimbursement for amounts Lawter
pays to Bank of America under its guarantee related to the Participant's
loan.
14. AMENDMENT
The Compensation Committee may amend the Plan at any time; provided,
however, that no amendment shall adversely affect any outstanding right of
any Participant in the plan without that Participant's consent, and if any
law, agreement or exchange on which Common Stock of Lawter is traded
requires stockholder approval for an amendment to become effective, no such
amendment shall become effective unless approved by vote of Lawter's
stockholders.
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