EXHIBIT 10.3
FASTENTECH, INC.
2001 STOCK INCENTIVE PLAN
FASTENTECH, INC.
2001 STOCK INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to promote the long term financial success of
FastenTech, Inc., its Subsidiaries and Affiliates, and to materially increase
shareholder value by: (i) providing performance related incentives that motivate
superior performance on the part of the Company's Employees, Directors and
Consultants; (ii) providing the Company's Employees, Directors and Consultants
with the opportunity to acquire an ownership interest in the Company, and to
thereby acquire a greater stake in the Company and a closer identity with it;
and (iii) enabling the Company to attract and retain the services of Employees,
Directors and Consultants of outstanding ability and upon whose judgment,
interest and special effort the successful conduct of the Company's operations
is largely dependent.
2. Definitions
2.1. "Act" means the Securities Exchange Act of 1934, as amended.
2.2. "Affiliate" means any entity other than the Subsidiaries in which the
Company has a substantial direct or indirect equity interest, as determined by
the Board.
2.3. "Award" means an award of Options, SARs, Restricted Stock, Dividend
Equivalents or any combination thereof.
2.4. "Award Share" means any share of Common Stock purchased upon the
exercise of an Option or SAR, or issued pursuant to an Award of Restricted
Stock.
2.5. "Board" means the Board of Directors of the Company.
2.6. "Cause" means any of the following actions taken by a Participant:
2.6.1. a felony or any act of moral turpitude;
2.6.2. malfeasance, embezzlement, fraud or theft committed against, or
adversely affecting the Company, its Subsidiaries, or Affiliates;
2.6.3. dishonesty in any material respect in the course of fulfilling
his or her employment duties;
2.6.4. willful or deliberate failure to perform his or her employment
duties in any material respect; or
2.6.5. disclosure of trade secrets, customer lists or confidential
information of the Company, its Subsidiaries or Affiliates to a competitor or
unauthorized person.
2.7. "Change of Control" shall mean, following the effective date of this
Plan, the occurrence of any of the following events:
2.7.1. the acquisition in one or more transactions by any "Person" (as
such term is used for purposes of Section 13(d) or Section 14(d) of the Act) but
excluding, for this purpose, the Company or its Subsidiaries, any employee
benefit plan of the Company or its Subsidiaries, or a CVC Group of "Beneficial
Ownership" (within the meaning of Rule 13d-3 under the Act) of fifty percent
(50%) or more of the combined voting power of the Company's then outstanding
voting securities (the "Voting Securities");
2.7.2. the individuals who, as of the effective date of the Plan,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that if the election, or
nomination for election by the Company's shareholders, of any new director was
approved by a vote of at least a majority of the Incumbent Board, such new
director shall be considered as a member of the Incumbent Board, and provided
further that any reductions in the size of the Board that are instituted
voluntarily by the Incumbent Board shall not constitute a Change of Control, and
after any such reduction the "Incumbent Board" shall mean the Board as so
reduced;
2.7.3. a merger or consolidation involving the Company if the
shareholders of the Company, immediately before such merger or consolidation, do
not own, directly or indirectly, immediately following such merger or
consolidation, more than [fifty percent (50%)] of the combined voting power of
the outstanding Voting Securities of the corporation resulting from such merger
or consolidation or a complete liquidation or dissolution of the Company or a
sale or other disposition of all or substantially all of the assets of the
Company; or
2.7.4. acceptance by shareholders of the Company of shares in a share
exchange if the shareholders of the Company, immediately before such share
exchange, do not own, directly or indirectly, immediately following such share
exchange, more than [fifty percent (50%)] of the combined voting power of the
outstanding Voting Securities of the corporation resulting from such share
exchange.
2.8. "Code" means the Internal Revenue Code of 1986, as amended.
2.9. "Committee" means the committee designated by the Board to administer
the Plan under Section 4. After the Company becomes Publicly Traded, the
Committee shall have at least two members, each of whom shall be a "non-employee
director" as defined in Rule 16b-3 under the Act and an "outside director" as
defined in Section 162(m) of the Code and the regulations thereunder.
Notwithstanding the foregoing, after the Company becomes Publicly Traded, the
Board may designate one or more of its members to serve as a Secondary Committee
and delegate to the Secondary Committee authority to grant Awards to eligible
individuals who are not subject to the requirements of Rule 16b-3 under the Act
or Section 162(m) of the Code.
-2-
The Secondary Committee shall have the same authority with respect to selecting
the individuals to whom such Awards are granted and establishing the terms and
conditions of such Awards as the Committee has under the terms of the Plan.
2.10. "Common Stock" means the Class A common stock of the Company, par
value $.01 per share, or such other class or kind of shares or other securities
resulting from the application of Section 10.
2.11. "Company" means FastenTech, Inc., a Delaware corporation, or any
successor corporation.
2.12. "Consultant" means a key consultant or advisor to the Company, its
Subsidiaries or Affiliates who is not an Employee.
2.13. "CVC Group" means a group consisting of each of the following: (1)
Citigroup, or any successor thereto by merger or consolidation; (2) Citicorp
Venture Capital Limited, or any successor thereto by merger or consolidation;
(3) any direct or indirect subsidiary of any person specified in clause (1) or
(2) above; (4) any partnership, limited liability company or similar entity
created by or on behalf of or sponsored by any person specified in clause (1),
(2) or (3) above; (5) any officer, director or employee of any person specified
in clause (1), (2), (3) or (4) above; (6) any spouse, parent or lineal
descendent of a parent (including by adoption and stepchildren) of any person
specified in clause (5) above; (7) any trust, limited liability company,
corporation, partnership or similar entity 51% of the beneficiaries, members,
stockholders, partners or interest holders of which consists of one or more to
the persons described in clauses (5) or (6) above, and (8) any charitable trust
the grantor of which consists of one or more of the persons described in clause
(5) or (6) above.
2.14. "Director" means a member of the Board who is not an Employee.
2.15. "Disability" means disabled within the meaning of Section 22(e)(3) of
the Code.
2.16. "Dividend Equivalent" means the right, awarded under Section 6, to
receive the equivalent value (in cash or in Common Stock) of dividends paid on
Common Stock.
2.17. "Employee" means an officer or other key employee of the Company, its
Subsidiary or an Affiliate, including any member of the Board who is such an
employee.
2.18. "Fair Market Value" means, on any given date:
2.18.1. if the Common Stock is listed on an established stock exchange
or exchanges, the closing price of Common Stock on the principal exchange on
which it is traded on such date, or if no sale was made on such date on such
principal exchange, on the last preceding day on which the Common Stock was
traded;
2.18.2. if the Common Stock is not then listed on an exchange, but is
quoted on
-3-
NASDAQ or a similar quotation system, the closing price per share for
the Common Stock as quoted on NASDAQ or similar quotation system on such date,
or if such common Stock is not quoted on such date, on the last preceding date
on which the Common stock was quoted;
2.18.3. if the Common Stock is not then listed on an exchange or
quoted on NASDAQ or a similar quotation system, the value, as determined in good
faith by the Committee.
2.19. "Incentive Stock Option" means an Option which meets the requirements
of Section 422 of the Code and which is designated as an Incentive Stock Option
by the Committee.
2.20. "Non-Qualified Stock Option" means an Option not intended to be an
Incentive Stock Option, and designated as a Non-Qualified Stock Option by the
Committee.
2.21. "Option" means the right, granted from time to time under the Plan,
to purchase Common Stock for a specified period of time at a stated price. An
Option may be an Incentive Stock Option or a Non-Qualified Stock Option.
2.22. "Participant" means an Employee, Director or Consultant who is
designated by the Committee as eligible to participate in the Plan and who
receives an Award under this Plan.
2.23. "Performance Goal" means a goal that has been established by the
Committee and that must be met by the end of a Performance Period (but that is
substantially uncertain to be met before the grant). The Committee shall have
sole discretion to determine the specific targets within each category of
Performance Goals, and whether such Performance Goals have been achieved. With
respect to any Section 162(m) Participant, such Performance Goals shall include,
among other things: (i) the price of Common Stock, (ii) the market share of the
Company, its Subsidiaries or Affiliates (or any business unit thereof), (iii)
sales by the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (iv) earnings per share of Common Stock, (v) return on equity of the
Company, or (vi) costs of the Company, its Subsidiaries or Affiliates (or any
business unit thereof).
2.24. "Performance Period" means the time period during which Performance
Goals must be met.
2.25. "Plan" means the FastenTech, Inc. 2001 Stock Incentive Plan herein
set forth, as amended from time to time.
2.26. "Publicly Traded" means the Company is required to register shares of
any class of common equity under Section 12 of the Act.
2.27. "Restricted Stock" means Common Stock awarded by the Committee under
Section 8 of the Plan.
2.28. "Restriction Period" means the period during which Restricted Stock
awarded
-4-
under the Plan is subject to forfeiture.
2.29. "SAR" means the right to receive, in cash or in Common Stock, as
determined by the Committee, the increase in the Fair Market Value of the Common
Stock underlying the SAR from the date of grant to the date of exercise.
2.30. "Section 162(m) Participant" means, after the Company becomes
Publicly Traded, any key employee designated by the Committee as a key employee
whose compensation for the fiscal year in which the key employee is so
designated or a future fiscal year may be subject to the limit on deductible
compensation imposed by Section 162(m) of the Code.
2.31. "Securities Purchase and Holders Agreement" means that certain
Securities Purchase and Holders Agreement dated as of March , 2000 by and
-----
among the Company, Citicorp Venture Capital, Ltd., a New York corporation, the
Continuing Investors (as defined therein) and the other signatures thereto.
2.32. "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company (or any subsequent
parent of the Company) if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
2.33. "Ten Percent Shareholder" means a person who on any given date owns,
either directly or indirectly (taking into account the attribution rules
contained in section 424(d) of the Code), stock possessing more than 10 percent
of the total combined voting power of all classes of stock of the Company or any
Subsidiary.
3. Eligibility
Any Employee, Director or Consultant who is designated by the Committee as
eligible to participate in the Plan shall be eligible to receive an Award under
the Plan, provided that an Incentive Stock Option may only be granted to an
Employee of the Company or a Subsidiary.
4. Administration
4.1. Members of the Committee shall be appointed by and hold office at the
pleasure of the Board. Committee members may resign at any time by delivering
written notice to the Board. Vacancies in the Committee may be filled by the
Board.
4.2. The Plan shall be administered by the Committee, which shall have full
power to interpret and administer the Plan, and full authority to act in
selecting the eligible Employees, Directors and Consultants to whom Awards may
be granted, in determining the times at which such Awards may be granted, in
determining the time and the manner in which Options may be
-5-
exercised, in determining the type and amount of Awards that may be granted, in
determining the terms and conditions of Awards that may be granted under the
Plan and the terms of agreements which will be entered into with Participants,
including Performance Goals, if any (which terms shall not be inconsistent with
the terms of the Plan). Such agreements may include provisions on the Company's
right to purchase any Common Stock issued to the Participant under the Plan upon
the termination of the Participant's service. The Committee also shall have the
power to establish different terms and conditions with respect to (i) the
various types of Awards granted under the Plan, (ii) the granting of the same
type of Award to different Participants (regardless of whether the Awards are
granted at the same time or at different times), and (iii) the establishment of
different Performance Goals for different Participants.
4.3. The Committee shall have the power to accelerate the exercisability or
vesting of any Award. Notwithstanding the foregoing or any other provision of
the Plan, the Committee shall not alter the exercisability or vesting of an
Award granted to a Section 162(m) Participant when such exercisability or
vesting depends on the attainment of one or more Performance Goals, except in
the event of a Change of Control, or the death or Disability of the Participant.
4.4. The Committee's powers shall include, but not be limited to, the power
to determine whether, to what extent and under what circumstances an Award is
made and operates on a tandem basis with other Awards made hereunder and to
grant Awards (other than Incentive Stock Options) that are transferable by a
Participant.
4.5. The Committee shall have the power to adopt regulations for carrying
out the Plan and to make changes in such regulations as it shall, from time to
time, deem advisable. The Committee shall have the full and final authority in
its sole discretion to interpret the provisions of the Plan and to decide all
questions of fact arising in the application of the Plan's provisions, and to
make all determinations necessary or advisable for the administration of the
Plan. Any interpretation by the Committee of the terms and provisions of the
Plan and the administration thereof, and all action taken by the Committee,
shall be final, binding, and conclusive for all purposes and upon all
Participants.
4.6. The Committee may condition the grant of any Award or the lapse of any
Restriction Period or Performance Period, or any combination thereof, upon the
Participant's or Company's achievement of a Performance Goal that is established
by the Committee before the grant of the Award. Before granting an Award or
permitting the lapse of any Restriction Period or Performance Period subject to
this Section, the Committee shall certify that an individual has satisfied the
applicable Performance Goal.
4.7. Members of the Committee shall receive such compensation for their
services as may be determined by the Board. All expenses and liabilities which
members of the Committee incur in connection with the administration of the Plan
shall be paid by the Company. The Committee may, with the approval of the Board,
employ attorneys, consultants, accountants and other service providers. The
Committee, the Board, the Company and the Company's officers shall be entitled
to rely upon the advice and opinions of any such person. No member of the
Committee or the Board shall be personally liable for any action, determination
or interpretation
-6-
made with respect to the Plan and all members of the Committee and the Board
shall be fully protected by the Company in respect of any such action,
determination or interpretation in the manner provided in the Company's bylaws.
5. Shares of Stock Subject to the Plan
5.1. Subject to adjustment as provided in Section 10, the total number of
shares of Common Stock available for Awards under the Plan shall be One Hundred
Fifteen Thousand One Hundred Twenty-One and four-tenths (115,121.4) shares.
5.2. The Committee may also grant Awards payable in cash. The payment of
Awards in cash shall not reduce the total number of shares of Common Stock
available for Awards under the Plan.
5.3. After the Company becomes Publicly Traded, the maximum number of
shares of Common Stock covered by Awards granted to any Employee under the Plan
during any calendar year shall not exceed 100,000 (the "Individual Limit").
5.4. Any shares issued hereunder may consist, in whole or in part, of
authorized and unissued shares or treasury shares. Any shares issued by the
Company through the assumption or substitution of outstanding grants from an
acquired company shall not (i) reduce the number of shares of Common Stock
available for Awards under the Plan, or (ii) be counted against the Individual
Limit. If any shares subject to any Award granted hereunder are forfeited or
such Award otherwise terminates without the issuance of such shares or the
payment of other consideration in lieu of such shares, the shares subject to
such Award, to the extent of any such forfeiture or termination, shall again be
available for Awards under the Plan; however, such shares shall be counted
against the Individual Limit.
6. Options
The grant of Options shall be subject to the following terms and
conditions:
6.1. Option Grants: Any Option granted under the Plan shall be evidenced by
a written agreement executed by the Company and the Participant, which agreement
shall conform to the requirements of the Plan and may contain such other
provisions not inconsistent with the terms of the Plan as the Committee shall
deem advisable. Such agreements shall state whether the Option is an Incentive
Stock Option or Non-Qualified Stock Option.
6.2. Number of Shares: Subject to the Individual Limit, the Committee shall
specify the number of shares of Common Stock subject to each Option.
6.3. Option Price: The price per share at which Common Stock may be
purchased upon exercise of an Option shall be as determined by the Committee,
but in the case of an
-7-
Incentive Stock Option shall not be less than the Fair Market Value of a share
of Common Stock on the date of grant. In the case of any Incentive Stock Option
granted to a Ten Percent Shareholder, the option price per share shall not be
less than 110% of the Fair Market Value of a share of Common Stock on the date
of grant.
6.4. Dividend Equivalents. Notwithstanding any provision of the Plan to the
contrary, a Participant who has been granted an Option pursuant to this Section
6 may, at the discretion of the Committee, be credited as of dividend payment
dates, during the period beginning with the date of grant of the Option and
ending with the date such Option is exercised or expires, with Dividend
Equivalents with respect to the Common Stock underlying the Option. Such
Dividend Equivalents shall be credited to an account established on behalf of
the Participant by the Company. The Dividend Equivalents credited under this
Section 6.4 shall be converted to cash or additional shares of Common Stock
under such formula, at such time, and subject to such limitations as may be
determined by the Committee.
6.5. Term of Option and Vesting: The Committee shall specify when an Option
may be exercisable and the terms and conditions applicable thereto. The term of
an Option shall in no event be greater than 10 years (five years in the case of
an Incentive Stock Option granted to a Ten Percent Shareholder). The right to
exercise an option or the underlying shares of Common Stock obtained upon the
exercise of an Option may be subject to a vesting schedule or the attainment of
Performance Goals as determined by the Committee and set forth in the applicable
stock option agreement.
6.6. Incentive Stock Options: Each provision of the Plan and each agreement
relating to an Incentive Stock Option shall be construed and interpreted in a
manner consistent with the requirements of Section 422 of the Code. In no event
may a Participant be granted an Incentive Stock Option which does not comply
with the limitations prescribed by Section 422 of the Code. Without limiting the
foregoing, the aggregate Fair Market Value (determined as of the time the Option
is granted) of the Common Stock with respect to which an Incentive Stock Option
may first become exerciseable by a Participant in any one calendar year under
the Plan shall not exceed $100,000.
6.7. Restrictions on Transferability: No Incentive Stock Option shall be
transferable other than by will or the laws of descent and distribution and,
during the lifetime of the Participant, shall be exercisable only by the
Participant. Upon the death of a Participant, the person to whom the rights have
passed by will or by the laws of descent and distribution may exercise an
Incentive Stock Option only in accordance with this Section 6.
6.8. Exercise of Option and Payment of Option Price: An Option may be
exercised only for a whole number of shares of Common Stock. The Committee shall
establish the time and the manner in which an Option may be exercised. The
option price of the shares of Common Stock received upon the exercise of an
Option shall be paid in full in cash at the time of the exercise or, with the
consent of the Committee, in whole or in part in Common Stock held by the
Participant for at least 6 months and valued at their Fair Market Value on the
date of exercise. With the consent of the Committee, the option price may also
be paid in full by the
-8-
delivery of a properly executed exercise notice, together with irrevocable
instructions to a Company-designated broker to promptly deliver to the Company
the amount of sale or loan proceeds required to pay the exercise price, or in
such other manner deemed appropriate by the Committee.
6.9. Termination by Death or Disability: If a Participant's employment or
service with the Company, a Subsidiary or Affiliate terminates by reason of
death or as a result of the Participant's Disability, any unexercised Option
granted to the Participant may thereafter be exercised (to the extent such
Option was exercisable at the time of the Participant's death or Disability or
to a greater extent permitted by the Committee) by the Participant (or where
appropriate, the Participant's transferee, personal representative, heir or
legatee), for a period of up to one year, as specified by the Committee (but
only three months in the case of an Incentive Stock Option which shall be
extended to 12 months in cases involving the Participant's Disability), from the
date of death or termination due to Disability, or until the expiration of the
stated term of the Option, whichever period is shorter.
6.10. Termination for Cause: If a Participant's employment or service with
the Company, a Subsidiary or Affiliate terminates for Cause, unless otherwise
determined by the Committee, any Options granted to the Participant and which
are unexercised shall terminate on the date of such termination, or notice of
such termination, if earlier.
6.11. Other Termination: If a Participant's employment or service with the
Company, a Subsidiary or Affiliate terminates for any reason other than Death,
Disability, or Cause, any unexercised Option granted to the Participant may
thereafter be exercised (to the extent such Option was exercisable at the time
of the Participant's termination or to a greater extent permitted by the
Committee) by the Participant (or, where appropriate, the Participant's
transferee, personal representative, heir or legatee) for a period of up to
three months, as specified by the Committee, from the date of termination, or
until the expiration of the stated term of the Option, whichever period is
shorter.
7. Stock Appreciation Rights
The grant of SARs shall be subject to the following terms and conditions:
7.1. Grant of SARs: Any SAR granted under the Plan shall be evidenced by a
written agreement executed by the Company and the Participant, which agreement
shall conform to the requirements of the Plan and shall specify the number of
shares of Common Stock subject to the Award and the base price for the Award.
The Agreement may contain such other provisions not inconsistent with the terms
of the Plan as the Committee shall deem advisable. The base price of an SAR
shall be the Fair Market Value of the Common Stock on the date of grant.
7.2. Tandem SARs. An SAR granted under the Plan may be granted in tandem
with all or a portion of a related Option. An SAR granted in tandem with an
Option may be granted either at the time of the grant of the Option or at a time
thereafter during the term of the Option
-9-
and shall be exercisable only to the extent that the related Option is
exercisable. The base price of an SAR granted in tandem with an Option shall be
the option price under the related Option.
7.3. Exercise of an SAR: An SAR shall entitle the Participant to surrender
unexercised the SAR (or any portion of such SAR) and to receive a payment equal
to the excess of the Fair Market Value of the shares of Common Stock covered by
the SAR on the date of exercise over the base price of the SAR. Such payment may
be in cash, in shares of Common Stock, in shares of Restricted Stock, or any
combination thereof, as the Committee shall determine. Upon exercise of an SAR
issued in tandem with an Option or lapse thereof, the related Option shall be
canceled automatically to the extent of the number of shares of Common Stock
covered by such exercise, and such shares shall no longer be available for
purchase under the Option. Conversely, if the related Option is exercised, or
lapses, as to some or all of the shares of Common Stock covered by the grant,
the related SAR, if any, shall be canceled automatically to the extent of the
number of shares of Common Stock covered by the Option exercise.
7.4. Other Applicable Provisions: SARs shall be subject to the same terms
and conditions applicable to Options as stated in sections 6.5, 6.9, 6.10, and
6.11.
8. Restricted Stock
An Award of Restricted Stock is a grant by the Company of a specified
number of shares of Common Stock to the Participant, which shares are subject to
forfeiture upon the happening of specified events or upon the Participant's
and/or Company's failure to achieve Performance Goals established by the
Committee. A grant of Restricted Stock shall be subject to the following terms
and conditions:
8.1. Grant of Restricted Stock Award. Any Restricted Stock granted under
the Plan shall be evidenced by a written agreement executed by the Company and
the Participant, which agreement shall conform to the requirements of the Plan,
and shall specify (i) the number of shares of Common Stock subject to the Award,
(ii) the Restriction Period applicable to each Award, (iii) the events that will
give rise to a forfeiture of the Award, and (iv) the Performance Goals, if any,
that must be achieved in order for the restriction to be removed from the Award.
The agreement may contain such other provisions not inconsistent with the terms
of the Plan as the Committee shall deem advisable.
8.2. Delivery of Restricted Stock. Upon determination of the number of
shares of Restricted Stock to be granted to the Participant, the Committee shall
direct that a certificate or certificates representing the number of shares of
Common Stock be issued to the Participant with the Participant designated as the
registered owner. The certificate(s) representing such shares shall be legended
as to restrictions on the sale, transfer, assignment, or pledge of the
Restricted Stock during the Restriction Period and deposited by the Participant,
together with a stock power endorsed in blank, with the Company.
-10-
8.3. Dividend and Voting Rights. Unless otherwise determined by the
Committee, during the Restriction Period, the Participant shall have all of the
rights of a shareholder, including the right to vote the shares of Restricted
Stock and receive dividends and other distributions, provided that distributions
in the form of Common Stock shall be subject to the same restrictions as the
underlying Restricted Stock.
8.4. Receipt of Common Stock. At the end of the Restriction Period, the
Committee shall determine, in light of the terms and conditions set forth in the
Restricted Stock agreement, the number of shares of Restricted Stock with
respect to which the restrictions imposed hereunder shall lapse. The Restricted
Stock with respect to which the restrictions shall lapse shall be converted to
unrestricted Common Stock by the removal of the restrictive legends from the
Restricted Stock. Thereafter, Common Stock equal to the number of shares of the
Restricted Stock with respect to which the restrictions hereunder shall lapse
shall be delivered to the Participant (or, where appropriate, the Participant's
legal representative). The Committee may, in its sole discretion, modify or
accelerate the vesting and delivery of shares of Restricted Stock.
8.5. Termination of Service. Unless otherwise determined by the Committee,
if a Participant's employment or service with the Company, a Subsidiary or an
Affiliate terminates for any reason, any unvested Restricted Stock shall be
forfeited.
9. Deferral Election
Notwithstanding any provision of the Plan to the contrary, any Participant
may elect, with the concurrence of the Committee and consistent with any rules
and regulations established by the Committee, to defer to a specified date the
receipt of unrestricted Common Stock that the Participant would otherwise be
entitled to receive pursuant to an Award. Notwithstanding such an election, the
Committee may distribute the unrestricted Common Stock deferred by all
Participants pursuant to this Section 9 if the Committee determines, in its
discretion, that the continued deferral of Common Stock hereunder is no longer
in the best interest of the Company.
10. Adjustments upon Changes in Capitalization
In the event of a reorganization, recapitalization, stock split, spin-off,
split-off, split-up, stock dividend, issuance of stock rights, combination of
shares, merger, consolidation or any other change in the corporate structure of
the Company affecting Common Stock, or any distribution to shareholders other
than a cash dividend, the Committee shall make appropriate adjustment in the
number and kind of shares authorized for use under the Plan, the Individual
Limit and any adjustments to outstanding Awards as it determines appropriate.
The adjustments to outstanding Awards shall include, without limitation, the
number of shares covered, the respective prices, limitations, and/or Performance
Goals applicable to the outstanding Awards. No fractional shares of Common Stock
shall be issued pursuant to such an adjustment. The Fair Market Value of any
fractional shares resulting from adjustments pursuant to this Section shall,
-11-
where appropriate, be paid in cash to the Participant. The determinations and
adjustments made by the Committee pursuant to this Section 10 shall be
conclusive.
11. Change Of Control of the Company
11.1. Options and SARs. Upon a Change of Control, all Options and SARs that
are unexercised and outstanding may, at the discretion of the Committee:
11.1.1. become immediately and fully vested and exercisable;
11.1.2. be canceled in exchange for a cash payment in an amount equal
to the excess, if any, of the Fair Market Value of the Common Stock underlying
an Option or SAR (to the extent such Option or SAR is exercisable at such time)
as of the date of the Change of Control over the option price of the Option or
the base price of the SAR;
11.1.3. be terminated immediately prior to the Change of Control,
provided that the Participant fails to exercise the Option or SAR (to the extent
such Option or SAR is exercisable at such time) within a specified period (of at
least seven days) following the Participant's receipt of a written notice of
such Change in Control and of the Company's intention to terminate the Option or
SAR prior to such Change of Control; and/or
11.1.4. be assumed by the successor corporation, and shall be
substituted with options or SARs involving the common stock of the successor
corporation, with the terms and conditions of the substituted options or SARs
being no less favorable than the Options or SARs granted by the Company.
11.2. Restricted Stock Awards. Upon a Change of Control, all Restricted
Stock Awards that are outstanding may, at the discretion of the Committee,
become immediately and fully vested.
12. Effective Date, Termination and Amendment
The Plan shall become effective on the date it is approved by the Board,
subject to shareholder approval. The Plan shall remain in full force and effect
until the earlier of 10 years from the date of its adoption by the Board, or the
date it is terminated by the Board. The Board shall have the power to amend,
suspend or terminate the Plan at any time, provided that no such amendment shall
be made without shareholder approval to the extent such approval is required
under Code (S) 422 or any other applicable law, or after the Company becomes
Publicly Traded, Code (S) 162(m) or the rules of a stock exchange or NASDAQ.
Termination of the Plan pursuant to this Section 12 shall not affect Awards
outstanding under the Plan at the time of termination.
-12-
13. Transferability
Except as provided below, Awards may not be pledged, assigned or
transferred for any reason during the Participant's lifetime, and any attempt to
do so shall be void and the relevant Award shall be forfeited. The Committee may
grant Awards (except Incentive Stock Options) that are transferable by the
Participant during his lifetime, but such Awards shall be transferable only to
the extent specifically provided in the agreement entered into with the
Participant. The transferee of the Participant shall, in all cases, be subject
to the provisions of the agreement between the Company and the Participant. The
rights of the transferee shall be no greater than the rights that would be
acquired by the Participant's estate if the Participant were to die prior to the
transfer of the Award.
14. General Provisions
14.1. No Employment Rights. Nothing contained in the Plan, or any Award
granted pursuant to the Plan, shall confer upon any Employee any right with
respect to continuance of employment by the Company, a Subsidiary or Affiliate,
or upon any Director or Consultant any right with respect to continued service
for the Company, a Subsidiary or Affiliate nor interfere in any way with the
right of the Company, a Subsidiary or Affiliate to terminate the employment or
service of any Employee, Director or Consultant at any time.
14.2. Transfer of Employment. For purposes of this Plan, a transfer of
employment between the Company and its Subsidiaries and Affiliates shall not be
deemed a termination of employment.
14.3. Payment of Taxes. The Company shall have the power to withhold, or
require a Participant to remit to the Company, all taxes required to be paid in
connection with any Award, the exercise thereof and the transfer of shares of
Common Stock pursuant to this Plan. The Company's power to withhold a portion of
the cash or Common Stock received pursuant to an Award, or require that the
Participant remit the applicable taxes shall extend to all applicable Federal,
state, local or foreign withholding taxes. In the case of the payment of Awards
in the form of Common Stock or cash, or the exercise of Options or SARs, the
Company shall have the right to retain the shares of Common Stock or cash to be
paid pursuant to the Award, or the exercise of the Option or the SAR, until the
Company determines that the applicable withholding taxes have been satisfied.
14.4. Restrictions on Shares. The Award Shares shall be subject to
restrictions on transfer pursuant to applicable securities laws and such other
agreements as the Committee shall deem appropriate and shall bear a legend
subjecting the Award Shares to those restrictions on transfer in accordance with
the applicable Award. The certificates shall also bear a legend referring to any
restrictions on transfer arising hereunder or under any other applicable law,
regulation, rule or agreement.
-13-
14.5. Requirements of Law. The Plan and each Award under the Plan shall be
subject to the requirement that if at any time the Committee shall determine
that (a) the listing, registration or qualification of the Award Shares upon any
securities exchange or under any state or federal law, (b) the consent or
approval of any government regulatory body or (c) an agreement by the recipient
of an Award with respect to the disposition of the Award Shares is necessary or
desirable as a condition of, or in connection with, the Plan or the granting of
such Award or the issue or purchase of the Award Shares thereunder, the Award
may not be consummated in whole or in part until such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.
14.6. Amending of Awards. The Committee may amend any outstanding Awards to
the extent it deems appropriate. Such amendment may be made by the Committee
without the consent of the Participant, except in the case of amendments adverse
to the Participant, in which case the Participant's consent is required to any
such amendment.
14.7. No Shareholder Rights. A Participant shall have no rights as a
shareholder with respect to shares of Common Stock subject to an Award unless
and until certificates for the Award Shares are issued to the Participant.
14.8. Participation of Foreign Nationals. Without amending the Plan, Awards
may be granted to Participants who are foreign nationals or employed or
providing services outside the United States or both, on such terms and
conditions different from those specified in the Plan as may, in the judgment of
the Committee, be necessary or desirable to further the purpose of the Plan.
14.9. Changes in Current Law. A citation to any law, regulation or rule
herein shall be construed to be a citation to the most recent version of, or
successor to, any such law, regulation or rule.
14.10. Headings. Section headings are included only for ease of reference.
Headings are not intended to constitute substantive provisions of the Plan and
shall not be used to interpret the scope of this Plan or the rights or
obligations of the Company in any way.
14.11. Governing Law. To the extent that Federal laws do not otherwise
control, the Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of the State of Delaware and construed accordingly.
14.12. Securities Purchase and Holdings Agreement. Unless the Committee
shall otherwise provide in the applicable Award, each Participant shall be
required to execute either, in the sole discretion of the Committee, (i) an
agreement whereby the Participant agrees to be bound by the terms and conditions
of the Securities Purchase and Holders Agreement or (ii) a joinder to the
Securities Purchase and Holders Agreement with respect to any and all Award
Shares issued hereunder, and such Award Shares shall be deemed "Securities"
under the Securities Purchase and Holders Agreement. The Committee, in its sole
discretion, shall set
-14-
forth the terms and conditions of any agreement or joinder that is to be
executed pursuant to this Section 14.12.
To record the adoption of the Plan, FastenTech, Inc. has caused its
authorized officers to affix its corporate name and seal this 26th day of
April, 2001.
FASTENTECH, INC.
Attest:
/s/ David Harbert By: /s/ Ronald B. Kalich
- --------------------- -----------------------------
David Harbert Ronald B. Kalich
Chief Financial Officer President
-15-