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EXHIBIT 4-F
VERITAS DGC INC.
RESTRICTED STOCK PLAN
(AS AMENDED AND RESTATED MARCH 7, 2000)
SECTION 1.
GENERAL PROVISIONS RELATING
TO PLAN GOVERNANCE, COVERAGE AND BENEFITS
1.1 PURPOSE
The purpose of the Plan is to foster and promote the long-term financial
success of Veritas DGC Inc. (the "Company") and its Subsidiaries and to
increase stockholder value by: (a) encouraging the commitment of selected
key Employees, (b) motivating superior performance of such Employees by
means of long-term performance related incentives, (c) encouraging and
providing such Employees with a program for obtaining ownership interests
in the Company which link and align their personal interests to those of
the Company's stockholder, (d) attracting and retaining key Employees by
providing competitive incentive compensation opportunities, and (e)
enabling key Employees to share in the long-term growth and success of the
Company.
The Plan provides for the payment of restricted stock incentive
compensation and it is not intended to be a plan that is subject to the
Employee Retirement Income Security Act of 1974, as amended (ERISA). The
Plan shall be interpreted, construed and administered consistent with its
status as a plan that is not subject to ERISA.
The Plan shall become effective as of June 9, 1998 (the "Effective Date").
The Plan shall commence on the Effective Date, and shall remain in effect,
subject to the right of the Board to amend or terminate the Plan at any
time pursuant to Section 4.6, until all Shares subject to the Plan have
been purchased or acquired according to its provisions. However, in no
event may an Incentive Award be granted under the Plan after the
expiration of ten (10) years from the Effective Date. The plan was amended
and restated by the Board on March 7, 2000.
1.2 DEFINITIONS
Capitalized terms used herein shall have the meanings set forth in
Schedule A attached.
1.3 PLAN ADMINISTRATION
(a) Authority of the Committee. Except as may be limited by law and
subject to the provisions herein, the Committee shall have full
power to (i) select Grantees who shall participate in the Plan; (ii)
determine the sizes, duration and types of Incentive Awards; (iii)
determine the terms and conditions of Incentive Awards
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and Restricted Stock Agreements; (iv) determine whether any Shares
subject to Incentive Awards will be subject to any restrictions on
transfer; (v) construe and interpret the Plan and any Restricted
Stock Agreement or other agreement entered into under the Plan; and
(vi) establish, amend, or waive rules for the Plan's administration.
Further, the Committee shall make all other determinations which may
be necessary or advisable for the administration of the Plan.
The Committee may grant an Incentive Award to an individual who it
expects to become an Employee within the next six months, with such
Incentive Award being subject to such individual actually becoming
an Employee within such time period, and subject to such other terms
and conditions as may be established by the Committee in its
discretion.
(b) Meetings. The Committee shall designate a chairman from among its
members who shall preside at all of its meetings, and shall
designate a secretary, without regard to whether that person is a
member of the Committee, who shall keep the minutes of the
proceedings and all records, documents, and data pertaining to its
administration of the Plan. Meetings shall be held at such times and
places as shall be determined by the Committee and the Committee may
hold telephonic meetings. The Committee may take any action
otherwise proper under the Plan by the affirmative vote, taken with
or without a meeting, of a majority of its members. The Committee
may authorize any one or more of their members or any officer of the
Company to execute and deliver documents on behalf of the Committee.
(c) Decisions Binding. All determinations and decisions made by the
Committee shall be made in its discretion pursuant to the provisions
of the Plan, and shall be final, conclusive and binding on all
persons including the Company, its shareholders, Employees,
Grantees, and their estates and beneficiaries. The Committee's
decisions and determinations with respect to any Incentive Award
need not be uniform and may be made selectively among Incentive
Awards and Grantees, whether or not such Incentive Awards are
similar or such Grantees are similarly situated.
(d) Modification of Outstanding Incentive Awards. Subject to any
required stockholder approval requirements, if applicable, the
Committee may, in its discretion, provide for the extension of the
exercisability of an Incentive Award, accelerate the vesting or
exercisability of an Incentive Award, eliminate or make less
restrictive any restrictions contained in an Incentive Award, waive
any restriction or other provisions of an Incentive Award, or
otherwise amend or modify an Incentive Award in any manner that is
either (i) not adverse to the Grantee to whom such Incentive Award
was granted, or (ii) consented to by such Grantee.
(e) Delegation of Authority. The Committee may delegate to any
Authorized Officer certain of its duties under the Plan pursuant to
such conditions or limitations as
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the Committee may establish from time to time, except that the
Committee may not delegate to any person the authority to (i) grant
Incentive Awards to any Insider, or (ii) take any action that would
contravene the requirements of Rule 16b-3 under the Exchange Act or
the Performance-Based Exception under Section 162(m) of the Code to
the extent that Rule 16b-3 or the Performance-Based Exemption is
applicable to the Grantee as determined by the Committee; provided,
however, any such action if taken by an Authorized Officer may be
subsequently ratified by the Committee, in its discretion, before
the Incentive Award becomes vested and, in such event, any Incentive
Award that is granted to the Insider shall be subject to such
subsequent ratification by the Committee.
(f) Expenses of Committee. The Committee may employ legal counsel,
including, without limitation, independent legal counsel and counsel
regularly employed by the Company, and other agents as the Committee
may deem appropriate for the administration of the Plan. The
Committee may rely upon any opinion or computation received from any
such counsel or agent. All expenses incurred by the Committee in
interpreting and administering the Plan, including, without
limitation, meeting expenses and professional fees, shall be paid by
the Company.
(g) Surrender of Previous Incentive Awards. The Committee may, in its
absolute discretion, grant Incentive Awards to Grantees on the
condition that such Grantees surrender to the Committee for
cancellation such other Incentive Awards as the Committee directs.
Incentive Awards granted on the condition precedent of surrender of
outstanding Incentive Awards shall not count against the limits set
forth in Section 1.4 until such time as such previous Incentive
Awards are surrendered and canceled.
(h) Indemnification. Each person who is or was a member of the Committee
shall be indemnified by the Company against and from any damage,
loss, liability, cost and expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any
claim, action, suit, or proceeding to which he may be a party or in
which he may be involved by reason of any action taken or failure to
act under the Plan, except for any such act or omission constituting
willful misconduct or gross negligence. Such person shall be
indemnified by the Company for all amounts paid by him in settlement
thereof, with the Company's approval, or paid by him in satisfaction
of any judgment in any such action, suit, or proceeding against him,
provided he shall give the Company an opportunity, at its own
expense, to handle and defend the same before he undertakes to
handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or Bylaws, as a matter of law,
or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.
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1.4 SHARES OF COMMON STOCK AVAILABLE FOR INCENTIVE AWARDS.
Subject to adjustment under Section 3.5, there shall be available for
Incentive Awards under the Plan an aggregate of One Hundred Seventy Three
Thousand Nine Hundred Seventy-Five (173,975) Shares of Common Stock;
provided, however, that, together with all other plans of the Company not
exempt under Para. 312.03(a)(1)-(3) of the NYSE Listed Company Manual, in
no case shall the Plan allow the issuance of more than five percent (5%)
of the Company's Common Stock outstanding as of June 9, 1998 or as of any
such later time at which the Plan is amended to increase the number of
Shares authorized for issuance under the Plan. The number of Shares of
Common Stock subject to Incentive Awards that are forfeited or terminated,
or are settled in a manner such that all or some of the Shares covered by
the Incentive Award are not issued to a Grantee, shall again immediately
become available for Incentive Awards hereunder. The Committee may from
time to time adopt and observe such procedures concerning the counting of
Shares against the Plan maximum as it may deem appropriate.
If the Committee determines that a particular Incentive Award granted to a
Covered Employee is not intended to comply with the Performance-Based
Exception, then, subject to adjustment as provided in Section 3.5, the
maximum aggregate number of Shares of Common Stock that may be granted or
that may vest, as applicable, in any calendar year pursuant to any
Incentive Award held by any individual Covered Employee shall be 50,000
Shares.
1.5 SHARE POOL ADJUSTMENTS FOR AWARDS AND PAYOUTS.
A grant of Shares of Restricted Stock shall reduce, on a one Share for one
Share basis, the number of Shares authorized for issuance under the Share
Pool.
The following transactions shall restore, on a one Share for one Share
basis, the number of Shares authorized for issuance under the Share Pool:
(a) A cancellation, termination, expiration, forfeiture, or lapse for
any reason of any Shares subject to an Incentive Award; and
(b) The payment of any purchase price for Shares by the Grantee with
previously acquired Shares, or by withholding Shares which otherwise
would be acquired on purchase (i.e., the Share Pool shall be
increased by the number of Shares turned in or withheld as payment
of the purchase price, if any, for an Incentive Award).
1.6 COMMON STOCK AVAILABLE.
The Common Stock available for issuance or transfer under the Plan shall
be made available from Shares now or hereafter (a) held in the treasury of
the Company, (b) authorized but unissued Shares or (c) Shares to be
purchased or acquired by the Company. No fractional Shares shall be issued
under the Plan; payment for fractional Shares shall be made in cash.
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1.7 ELIGIBILITY FOR PARTICIPATION.
In its discretion, the Committee shall from time to time designate those
Employees to be granted Incentive Awards under the Plan, the number of
Shares subject to the Incentive Award, and the other terms or conditions
relating to the Incentive Award as it deems appropriate to the extent not
inconsistent with the provisions of the Plan. A Grantee who has been
granted an Incentive Award may, if otherwise eligible, be granted
additional Incentive Awards at any time.
SECTION 2.
RESTRICTED STOCK
2.1 AWARD OF RESTRICTED STOCK
(a) Grant. In consideration for Employment by the Grantee, Shares of
Restricted Stock may be awarded under the Plan by the Committee with
such restrictions during the Restriction Period as the Committee
designates in its discretion, any of which restrictions may differ
with respect to a particular Grantee. Restricted Stock shall be
awarded for no additional consideration or such additional
consideration as the Committee may determine, which consideration
may be less than, equal to or more than the Fair Market Value of the
Shares of Restricted Stock on the date of grant. The terms and
conditions of each grant of Restricted Stock shall be evidenced by a
Restricted Stock Agreement.
(b) Immediate Transfer Without Immediate Delivery of Restricted Stock.
Unless otherwise specified in the Grantee's Restricted Stock
Agreement, each Restricted Stock Award shall constitute an immediate
transfer of the record and beneficial ownership of the Shares of
Restricted Stock to the Grantee in consideration of the performance
of services as an Employee, entitling such Grantee to all voting and
other ownership rights in such Shares subject to any restrictions
thereon.
As specified in the Restricted Stock Agreement, a Restricted Stock
Award may limit the Grantee's dividend rights during the Restriction
Period in which the Shares of Restricted Stock are subject to a
"substantial risk of forfeiture" (within the meaning given to such
term under Code Section 83) and restrictions on transfer. In the
Restricted Stock Agreement, the Committee may apply any restrictions
to the dividends that the Committee deems appropriate. Without
limiting the generality of the preceding sentence, if the grant or
vesting of Shares of Restricted Stock for a Covered Employee is
designed to comply with the requirements of the Performance-Based
Exception, the Committee may apply any restrictions that it deems
appropriate to the payment of dividends declared with respect to
such Shares of Restricted Stock, such that the dividends and/or the
Shares of Restricted Stock maintain eligibility for the
Performance-Based Exception. In the event that any dividend
constitutes a derivative security or an
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equity security pursuant to the rules under Section 16 of the
Exchange Act, if applicable, such dividend shall be subject to a
vesting period equal to the remaining vesting period of the Shares
of Restricted Stock with respect to which the dividend is paid.
As determined by the Committee, Shares awarded pursuant to a grant
of Restricted Stock may be issued in the name of the Grantee and
held, together with a stock power endorsed by the Grantee in blank,
by the Committee or the Secretary of the Company (or their
delegates) as a depository for safekeeping until such time as the
forfeiture restrictions and restrictions on transfer have lapsed.
All such terms and conditions shall be set forth in the particular
Grantee's Restricted Stock Agreement. The Company or Committee shall
issue to the Grantee a receipt evidencing the certificates held by
it which are registered in the name of the Grantee.
2.2 RESTRICTIONS
(a) Forfeiture of Restricted Stock. Restricted Stock awarded to a
Grantee may be subject to the following restrictions until the
expiration of the Restriction Period:
(i) a restriction that constitutes a "substantial risk of
forfeiture" (as defined in Code Section 83), or a restriction
on transferability under Code Section 83; and
(ii) any other restrictions that the Committee determines are
appropriate, including, without limitation, rights of
repurchase or first refusal in the Company or provisions
subjecting the Restricted Stock to a continuing substantial
risk of forfeiture in the hands of any transferee. Any such
restrictions shall be set forth in the particular Grantee's
Restricted Stock Agreement.
(b) Issuance of Certificates. Coincident with or promptly after the
grant date with respect to Shares of Restricted Stock, the Company
shall cause to be issued a stock certificate, registered in the name
of the Grantee to whom such Restricted Stock was granted, evidencing
such Shares; provided, however, that the Company shall not cause to
be issued such a stock certificate unless it has received a stock
power duly endorsed in blank by the Grantee with respect to such
Shares. Each such stock certificate shall bear the following legend
or any other legend approved by the Company:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF
STOCK REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS,
TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS
AGAINST TRANSFER) CONTAINED IN THE VERITAS DGC INC. RESTRICTED
STOCK PLAN AND A RESTRICTED STOCK AGREEMENT DATED
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_______________, ____ BETWEEN THE REGISTERED OWNER OF SUCH
SHARES AND VERITAS DGC INC. RESTRICTIONS ON THE RIGHT TO OWN
OR TRANSFER THE SHARES OF STOCK REPRESENTED BY THIS
CERTIFICATE HAVE BEEN IMPOSED PURSUANT TO SAID RESTRICTED
STOCK AGREEMENT. A COPY OF THE RESTRICTED STOCK AGREEMENT IS
ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE
FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE
UPON RECEIPT BY THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS
OR REGISTERED OFFICE OF A WRITTEN REQUEST FROM THE HOLDER
REQUESTING SUCH COPY.
Such legend shall not be removed from the certificate evidencing
such Shares of Restricted Stock until such Shares vest pursuant to
the terms of the Restricted Stock Agreement.
(c) Removal of Restrictions. The Committee, in its discretion, shall
have the authority to remove any or all of the restrictions on the
Restricted Stock if it determines that, by reason of a change in
applicable law or another change in circumstance arising after the
grant date of the Restricted Stock, such action is appropriate.
2.3 DELIVERY OF SHARES OF COMMON STOCK.
Subject to withholding taxes under Section 4.3 and to the terms of the
Restricted Stock Agreement, a stock certificate evidencing the Shares of
Restricted Stock with respect to which the restrictions in the Restricted
Stock Agreement have lapsed or otherwise been satisfied shall be delivered
to the Grantee or other appropriate recipient free of restrictions. Such
delivery shall be effected for all purposes when the Company shall have
deposited such certificate in the United States mail, addressed to the
Grantee or other appropriate recipient.
2.4 SUPPLEMENTAL PAYMENT ON VESTING OF RESTRICTED STOCK.
The Grantee shall be responsible for the payment of any federal, state or
other income taxes due in connection with the Grant, whether such taxes
are due at the time the Incentive Award is granted or otherwise.
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SECTION 3.
PROVISIONS RELATING TO PLAN PARTICIPATION
3.1 PLAN CONDITIONS.
(a) Restricted Stock Agreement. Each Grantee to whom an Incentive Award
is granted shall be required to enter into a Restricted Stock
Agreement with the Company, in such a form as is provided by the
Committee. The Restricted Stock Agreement shall contain specific
terms as determined by the Committee, in its discretion, with
respect to the Grantee's particular Incentive Award. Such terms need
not be uniform among all Grantees or any similarly-situated
Grantees. The Restricted Stock Agreement may include, without
limitation, vesting, forfeiture and other provisions particular to
the particular Grantee's Incentive Award, as well as, for example,
provisions to the effect that the Grantee (i) shall not disclose any
confidential information acquired during Employment with the
Company, (ii) shall abide by all the terms and conditions of the
Plan and such other terms and conditions as may be imposed by the
Committee, (iii) shall not interfere with the employment or other
service of any employee, (iv) shall not compete with the Company or
become involved in a conflict of interest with the interests of the
Company, (v) shall forfeit an Incentive Award if terminated for
Cause, (vi) shall not be permitted to make an election under Section
83(b) of the Code when applicable, and (vii) shall be subject to any
other agreement between the Grantee and the Company regarding Shares
that may be acquired under an Incentive Award including, without
limitation, an agreement restricting the transferability of Shares
by Grantee. A Restricted Stock Agreement shall include such terms
and conditions as are determined by the Committee, in its
discretion, to be appropriate with respect to any individual
Grantee. The Restricted Stock Agreement shall be signed by the
Grantee to whom the Incentive Award is made and by an Authorized
Officer.
(b) No Right to Employment. Nothing in the Plan or any instrument
executed pursuant to the Plan shall create any Employment rights
(including without limitation, rights to continued Employment) in
any Grantee or affect the right of the Company to terminate the
Employment of any Grantee at any time without regard to the
existence of the Plan.
(c) Securities Requirements. The Company shall be under no obligation to
effect the registration pursuant to the Securities Act of 1933 of
any Shares of Common Stock to be issued hereunder or to effect
similar compliance under any state laws. Notwithstanding anything
herein to the contrary, the Company shall not be obligated to cause
to be issued or delivered any certificates evidencing Shares
pursuant to the Plan unless and until the Company is advised by its
legal counsel that the issuance and delivery of such certificates is
in compliance with all applicable laws, regulations of governmental
authorities, and the requirements of any securities exchange on
which Shares are traded. The Committee may require, as a condition
of the issuance and delivery of certificates evidencing Shares
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pursuant to the terms hereof, that the recipient of such Shares make
such covenants, agreements and representations, and that such
certificates bear such legends, as the Committee, in its discretion,
deems to be necessary or desirable.
(d) Officer and Director Issuance Limitations. No single officer or
Director may acquire under the Plan more than one percent (1%) of
the Shares of the Company's Common Stock outstanding as of June 9,
1998 or as of any such later time at which the Plan is amended to
increase the number of Shares authorized for issuance.
3.2 TRANSFERABILITY.
(a) Non-Transferable Awards. No Incentive Award and no right under the
Plan, contingent or otherwise, will be (i) assignable, saleable, or
otherwise transferable by a Grantee except by will or by the laws of
descent and distribution, or (ii) subject to any encumbrance,
pledge, lien, assignment or charge of any nature.
No transfer by will or by the laws of descent and distribution shall
be effective to bind the Company unless the Committee has been
furnished with a copy of the deceased Grantee's enforceable will or
such other evidence as the Committee deems necessary to establish
the validity of the transfer. Any attempted transfer in violation of
this Section 3.2(a) shall be void and ineffective.
(b) Ability to Exercise Rights. Subject to a valid beneficiary
designation pursuant to Section 4.5, only the Grantee (or his legal
guardian in the event of Grantee's Disability), or in the event of
his death, his estate, may assume any rights of the Grantee
hereunder.
3.3 RIGHTS AS A STOCKHOLDER.
(a) Stockholder Rights. Except as otherwise provided in his Restricted
Stock Agreement for the grant of Restricted Stock, the Grantee (or a
permitted transferee of such Grantee) shall have voting and other
rights as a stockholder with respect to such Shares of Restricted
Stock prior to the lapse of any restrictions thereon.
(b) Representation of Ownership. In the case of the exercise of an
Incentive Award by a person or estate acquiring the right to
exercise such Incentive Award by reason of the death or Disability
of a Grantee, the Committee may require evidence as to the ownership
of such Incentive Award, or the authority of such person, and may
require such consents and releases of taxing authorities as the
Committee deems advisable.
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3.4 LISTING AND REGISTRATION OF SHARES OF COMMON STOCK.
The exercise of any Incentive Award granted hereunder shall only be
effective at such time as legal counsel to the Company shall have
determined that the issuance and delivery of Shares of Common Stock
pursuant to such exercise is in compliance with all applicable laws,
regulations of governmental authorities and the requirements of any
securities exchange on which Shares are traded. The Committee may, in its
discretion, defer the effectiveness of any exercise of an Incentive Award
in order to allow the issuance of Shares to be made pursuant to
registration or an exemption from registration or other methods for
compliance available under federal or state securities laws. The Committee
shall inform the Grantee in writing of its decision to defer the
effectiveness of the exercise of an Incentive Award. During the period
that the effectiveness of an Incentive Award has been deferred, the
Grantee may, by written notice to the Committee, withdraw such exercise
and obtain the refund of any amount paid with respect thereto.
3.5 CHANGE IN STOCK AND ADJUSTMENTS.
(a) Changes in Law or Circumstances. Subject to Section 3.7 (which only
applies in the event of a Change in Control), in the event of any
change in applicable laws or any change in circumstances which
results in or would result in any dilution of the rights granted
under the Plan, or which otherwise warrants equitable adjustment
because it interferes with the intended operation of the Plan, then,
if the Committee should determine, in its absolute discretion, that
such change equitably requires an adjustment in the number or kind
of shares of stock or other securities or property theretofore
subject, or which may become subject, to issuance or transfer under
the Plan or in the terms and conditions of outstanding Incentive
Awards, such adjustment shall be made in accordance with such
determination. Such adjustments may include changes with respect to
(i) the aggregate number of Shares that may be issued under the
Plan, (ii) the number of Shares subject to Incentive Awards, and
(iii) the price per Share for outstanding Incentive Awards.
(b) Exercise of Corporate Powers. The existence of the Plan or
outstanding Incentive Awards hereunder shall not affect in any way
the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalization, reorganization
or other changes in the Company's capital structure or its business
or any merger or consolidation of the Company, or any issue of
bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Common Stock or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or
proceeding whether of a similar character or otherwise.
(c) Recapitalization of the Company. Subject to Section 3.7, if while
there are Incentive Awards outstanding, the Company shall effect any
subdivision or consolidation of Shares of Common Stock or other
capital readjustment, the payment of a stock dividend, stock split,
combination of Shares, recapitalization or other increase or
reduction in the number of Shares outstanding, without receiving
compensation therefor in money, services or property, then the
number
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of Shares available under the Plan and the number of Incentive
Awards which may thereafter be exercised shall (i) in the event of
an increase in the number of Shares outstanding, be proportionately
increased and the price per share of the Incentive Awards awarded
shall be proportionately reduced; and (ii) in the event of a
reduction in the number of Shares outstanding, be proportionately
reduced, and the price per share of the Incentive Awards awarded
shall be proportionately increased. The Committee shall take such
action and whatever other action it deems appropriate, in its
discretion, so that the value of each outstanding Incentive Award to
the Grantee shall not be adversely affected by a corporate event
described in this subsection (c).
(d) Reorganization of the Company. Subject to Section 3.7, if the
Company is reorganized, merged or consolidated, or is a party to a
plan of exchange with another corporation, pursuant to which
reorganization, merger, consolidation or exchange, stockholders of
the Company receive any Shares of Common Stock or other securities
or property, or if the Company should distribute securities of
another corporation to its stockholders, each Grantee shall be
entitled to receive, in lieu of the number of Restricted Stock
shares, with a corresponding adjustment to the price per Share of
said Incentive Awards, to which he would have been entitled if,
immediately prior to such corporate action, such Grantee had been
the holder of record of a number of Shares equal to the number of
the outstanding Incentive Awards payable in Shares that were
previously awarded to him. For this purpose, Shares of Restricted
Stock shall be treated the same as unrestricted outstanding Shares
of Common Stock. In this regard, the Committee shall take whatever
other action it deems appropriate to preserve the rights of Grantees
holding outstanding Incentive Awards.
(e) Issue of Common Stock by the Company. Except as hereinabove
expressly provided in this Section 3.5 and subject to Section 3.7,
the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash
or property, or for labor or services, either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor, or
upon any conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to,
the number of, or price per Share of, any Incentive Awards then
outstanding under previously granted Incentive Awards; provided,
however, in such event, outstanding Shares of Restricted Stock shall
be treated the same as outstanding unrestricted Shares of Common
Stock.
(f) Acquisition of the Company. Subject to Section 3.7, in the case of
any sale of assets, merger, consolidation or combination of the
Company with or into another corporation other than a transaction in
which the Company is the continuing or surviving corporation and
which does not result in the outstanding Shares being converted into
or exchanged for different securities, cash or other property, or
any combination thereof (an "Acquisition"), in the absolute
discretion of the Committee, any Grantee who holds an outstanding
Incentive Award shall have the
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right (subject to any limitation applicable to the Incentive Award)
thereafter and during the term of the Incentive Award, to receive
upon exercise thereof the Acquisition Consideration (as defined
below) receivable upon the Acquisition by a holder of the number of
Shares which would have been obtained upon exercise of the Incentive
Award immediately prior to the Acquisition. The term "Acquisition
Consideration" shall mean the kind and amount of shares of the
surviving or new corporation, cash, securities, evidence of
indebtedness, other property or any combination thereof receivable
in respect of one Share upon consummation of an Acquisition. The
Committee, in its discretion, shall have the authority to take
whatever action it deems appropriate to effectuate the provisions of
this subsection (f).
(g) Assumption under the Plan of Other Restricted Stock Awards. The
Committee, in its absolute discretion, may authorize the assumption
and continuation under the Plan of outstanding stock-based incentive
awards that were granted under a plan or agreement that is or was
maintained by a corporation or other entity that was merged into,
consolidated with, or whose stock or assets were acquired by, the
Company as the surviving corporation. Any such action shall be upon
such terms and conditions as the Committee, in its discretion, may
deem appropriate, including provisions to preserve the holder's
rights under the previously granted stock-based restricted stock
award. Any such assumption and continuation of any such previously
granted and unexercised restricted stock award shall be treated as
an outstanding Incentive Award under the Plan and shall thus count
against the number of Shares reserved for issuance pursuant to
Section 1.4.
(h) Assumption of Incentive Awards by a Successor. In the event of a
dissolution or liquidation of the Company, a sale of all or
substantially all of the Company's assets, a merger or consolidation
involving the Company in which the Company is not the surviving
corporation, or a merger or consolidation involving the Company in
which the Company is the surviving corporation but the holders of
Shares of Common Stock receive securities of another corporation
and/or other property, including cash, the Committee shall, in its
absolute discretion, have the right and power to:
(i) cancel, effective immediately prior to the occurrence of such
corporate event, each outstanding Incentive Award (whether or
not then exercisable), and, in full consideration of such
cancellation, pay to the Grantee to whom such Incentive Award
was granted an amount in cash equal to the excess of (A) the
value, as determined by the Committee, of the property
(including cash) received by the holder of a Share of Common
Stock as a result of such event over (B) the Grantee's
purchase price, if any, under such Incentive Award; or
(ii) provide for the exchange of each Incentive Award outstanding
immediately prior to such corporate event (whether or not then
exercisable) for another award on some or all of the property
for which
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such Incentive Award is exchanged and, incident thereto, make
an equitable adjustment as determined by the Committee, in its
discretion, in the purchase price of the Incentive Award, or
the number of Shares or amount of cash subject to the
Incentive Award or, if deemed appropriate, provide for a cash
payment to the Grantee in consideration for the exchange of
his Incentive Award.
The Committee, in its discretion, shall have the authority to take
whatever action it deems appropriate to effectuate the provisions of
this subsection (h).
3.6 TERMINATION OF EMPLOYMENT, DEATH AND DISABILITY.
(a) Termination of Employment. Unless otherwise expressly provided in
his Restricted Stock Agreement, if the Grantee's Employment is
terminated for Retirement or any other reason except due to his
death or Disability, any non-vested portion of his outstanding
Incentive Award at the time of such termination shall automatically
expire and terminate and no further vesting shall occur.
(b) Disability or Death. Unless otherwise expressly provided in his
Restricted Stock Agreement, upon termination of Employment as a
result of the Grantee's Disability or death, any non-vested portion
of his Incentive Award shall become 100% vested upon termination of
Employment due to Disability or death.
(c) Continuation of Incentive Award. Subject to applicable law, in the
event that a Grantee ceases to be an Employee, for whatever reason,
the Committee and Grantee may mutually agree with respect to any
outstanding Incentive Award then held by the Grantee (i) for an
acceleration or other adjustment in any vesting schedule applicable
to the Incentive Award, or (ii) to any other change in the terms and
conditions of the Incentive Award. In the event of any such change
to an outstanding Incentive Award, a written amendment to the
Grantee's Restricted Stock Agreement shall be required.
3.7 CHANGE IN CONTROL.
Notwithstanding any contrary provision in the Plan, in the event of a
Change in Control (as defined below), the following actions shall
automatically occur as of the day immediately preceding the Change in
Control date unless otherwise expressly provided in the Grantee's
Restricted Stock Agreement:
(a) all of the restrictions and conditions of any Incentive Award then
outstanding shall be deemed satisfied, and the Restriction Period
with respect thereto shall be deemed to have lapsed and expired; and
(b) all Restricted Stock shall be 100% vested and deemed earned in full.
Notwithstanding any other provision of this Plan, unless expressly
provided otherwise in the Grantee's Restricted Stock Agreement, the
provisions of this Section 3.7 may not be
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terminated, amended, or modified to adversely affect any Incentive Award
theretofore granted under the Plan without the prior written consent of
the Grantee with respect to his outstanding Incentive Award subject,
however, to the last paragraph of this Section 3.7.
For all purposes of the Plan, a "Change in Control" of the Company shall
mean:
(a) The acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of fifty percent (50%) or more
of the total voting power of all the Company's then outstanding
securities entitled to vote generally in the election of Directors
to the Board; provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition by the Company or its Parent
or Subsidiaries, (ii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or its
Parent or Subsidiaries, or (iii) any acquisition consummated with
the prior approval of the Board; or
(b) During the period of two consecutive calendar years, individuals who
at the beginning of such period constitute the Board, and any new
Directors whose election by the Board or nomination for election by
the Company's shareholders was approved by a vote of at least
two-thirds of the Directors then still in office, who either were
Directors at the beginning of the two-year period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board; or
(c) The Company becomes a party to a merger, plan of reorganization,
consolidation or share exchange in which either (i) the Company will
not be the surviving corporation or (ii) the Company will be the
surviving corporation and any outstanding Shares of the Company's
Common Stock will be converted into shares of any other company
(other than a reincorporation or the establishment of a holding
company involving no change of ownership of the Company) or other
securities, cash or other property (excluding payments made solely
for fractional Shares; or
(d) The shareholders of the Company approve a merger, plan of
reorganization, consolidation or share exchange with any other
corporation, and immediately following such merger, plan of
reorganization, consolidation or share exchange the holders of the
voting securities of the Company outstanding immediately prior
thereto hold securities representing fifty percent (50%) or less of
the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger,
plan of reorganization, consolidation or share exchange; provided,
however, that notwithstanding the foregoing, no Change in Control
shall be deemed to have occurred if one-half (1/2) or more of the
members of the Board of the Company or such surviving entity
immediately after such merger, plan of reorganization, consolidation
or share exchange is comprised of persons who served as Directors of
the Company immediately prior
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to such merger, plan of reorganization, consolidation or share
exchange or who are otherwise designees of the Company; or
(e) Upon approval by the Company's shareholders of a complete
liquidation and dissolution of the Company or the sale or other
disposition of all or substantially all of the assets of the Company
other than to a Parent or Subsidiary; or
(f) Any other event that a majority of the Board, in its sole
discretion, shall determine constitutes a Change in Control.
Notwithstanding the occurrence of any of the foregoing events of this
Section 3.7 which would otherwise result in a Change in Control, the Board
may determine in its complete discretion, if it deems it to be in the best
interest of the Company, that an event or events otherwise constituting a
Change in Control shall not be considered a Change in Control. Such
determination shall be effective only if it is made by the Board prior to
the occurrence of an event that otherwise would be a Change in Control, or
after such event if made by the Board a majority of which is composed of
Directors who were members of the Board immediately prior to the event
that otherwise would be a Change in Control.
3.8 EXCHANGE OF INCENTIVE AWARDS.
The Committee may, in its discretion, permit any Grantee to surrender
outstanding Incentive Awards in order to exercise or realize his rights
under other Incentive Awards or in exchange for the grant of new Incentive
Awards, or require holders of Incentive Awards to surrender outstanding
Incentive Awards (or comparable rights under other plans or arrangements)
as a condition precedent to the grant of new Incentive Awards.
3.9 FINANCING.
The Company may extend and maintain, or arrange for and guarantee, the
extension and maintenance of financing to any Grantee to purchase Shares
pursuant to exercise of an Incentive Award upon such terms as are approved
by the Committee in its discretion.
SECTION 4.
GENERAL
4.1 EFFECTIVE DATE AND GRANT PERIOD.
This Plan is adopted by the Board effective as of the Effective Date.
Unless sooner terminated by the Board, no Incentive Award shall be granted
under the Plan after ten (10) years from the Effective Date.
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4.2 FUNDING AND LIABILITY OF COMPANY.
No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made, or
otherwise to segregate any assets. In addition, the Company shall not be
required to maintain separate bank accounts, books, records or other
evidence of the existence of a segregated or separately maintained or
administered fund for purposes of the Plan. The Company shall not be
required to segregate any assets that may at any time be represented by
cash, Common Stock or rights thereto. The Plan shall not be construed as
providing for such segregation, nor shall the Company, the Board or the
Committee be deemed to be a trustee of any cash, Common Stock or rights
thereto. Any liability or obligation of the Company to any Grantee with
respect to an Incentive Award shall be based solely upon any contractual
obligations that may be created by this Plan and any Restricted Stock
Agreement, and no such liability or obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property of
the Company. Neither the Company, the Board nor the Committee shall be
required to give any security or bond for the performance of any
obligation that may be created by the Plan.
4.3 WITHHOLDING TAXES.
(a) Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Grantee to remit to the Company, an
amount sufficient to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of an
Incentive Award.
(b) Share Withholding. With respect to tax withholding required upon the
lapse of restrictions on Shares of Restricted Stock, or upon any
other taxable event arising as a result of any Incentive Awards,
Grantees may elect, subject to the approval of the Committee in its
discretion, to satisfy the withholding requirement, in whole or in
part, by having the Company withhold Shares having a Fair Market
Value on the date the tax is to be determined equal to the minimum
statutory total tax which could be imposed on the transaction. All
such elections shall be made in writing, signed by the Grantee, and
shall be subject to any restrictions or limitations that the
Committee, in its discretion, deems appropriate.
(c) Loans. The Committee, in its discretion, may provide for loans, on
either a short term or demand basis, from the Company to a Grantee
to permit the payment of taxes required by law.
4.4 NO GUARANTEE OF TAX CONSEQUENCES.
Neither the Company nor the Committee makes any commitment or guarantee
that any federal, state or local tax treatment will apply or be available
to any person participating or eligible to participate hereunder.
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4.5 DESIGNATION OF BENEFICIARY BY PARTICIPANT.
Each Grantee may, from time to time, name any beneficiary or beneficiaries
(who may be named contingently or successively) to whom any benefit under
any Incentive Award is to be paid in case of his death before he receives
any or all of such benefit. Each such designation shall revoke all prior
designations by the same Grantee, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Grantee in writing
with the Committee during the Grantee's lifetime.
A Grantee may, from time to time, revoke or change his beneficiary
designation by filing a new designation form with the Committee (or its
delegate). The last valid designation received shall be controlling;
provided, however, that no beneficiary designation, or change or
revocation thereof, shall be effective unless received prior to the
Grantee's death and in no event shall it be effective as of a date prior
to its receipt. Notwithstanding any contrary provision of this Section
4.5, no beneficiary designation made by a married Grantee, other than one
under which the surviving lawful spouse of such Grantee is designated as
the sole beneficiary, shall be valid and effective without the written
consent of such spouse.
If no valid and effective beneficiary designation exists at the time of
the Grantee's death, or if no designated beneficiary survives the Grantee,
or if such designation conflicts with applicable law, the payment of the
Grantee's Incentive Award, if earned and payable hereunder, shall be made
to the Grantee's surviving lawful spouse, if any, or if there is no such
surviving spouse, to the executor or administrator of his estate. If the
Committee is in doubt as to the right of any person to receive such
amount, the Committee may direct that the amount be paid into any court of
competent jurisdiction in an interpleader action, and such payment shall
be a full and complete discharge of any liability or obligation of the
Plan, Company, Committee or Board therefor.
4.6 AMENDMENT AND TERMINATION.
The Board shall have the plenary power and authority to terminate or amend
the Plan at any time. No termination, amendment, or modification of the
Plan shall adversely affect in any material way any outstanding Incentive
Award previously granted to a Grantee under the Plan, without the written
consent of such Grantee or other designated holder of such Incentive
Award.
To the extent that the Committee determines that (a) the listing for
qualification requirements of any national securities exchange or
quotation system on which the Company's Common Stock is then listed or
quoted, if applicable, (b) Rule 16b-3 under the Exchange Act or other
requirements of applicable securities laws, regulations or rules, or (c)
the Code (or regulations promulgated thereunder), require stockholder
approval in order to maintain compliance with such listing or securities
requirements or to maintain any favorable tax advantages or
qualifications, then the Plan shall not be amended in such respect without
approval of the Company's stockholders.
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4.7 REQUIREMENTS OF LAW.
The granting of Incentive Awards and the issuance of Shares under the Plan
shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities
exchanges as may be required. Certificates evidencing Shares of Common
Stock delivered under this Plan (to the extent that such Shares are so
evidenced) may be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules and
regulations of the Securities and Exchange Commission, any securities
exchange or transaction reporting system upon which the Common Stock is
then listed or to which it is admitted for quotation, and any applicable
federal or state securities law. The Committee may cause a legend or
legends to be placed upon such certificates to make appropriate reference
to such restrictions.
4.8 RULE 16b-3 SECURITIES LAW COMPLIANCE.
With respect to Insiders, to the extent applicable, as determined by the
Committee, transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 under the Exchange Act. Any
ambiguities or inconsistencies in the construction of an Incentive Award
or the Plan shall be interpreted to give effect to such intention.
However, to the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void to the
extent permitted by law and deemed advisable by the Committee in its
discretion.
4.9 NYSE SHAREHOLDER APPROVAL COMPLIANCE.
With respect to the Shares available for issuance under the Plan,
transactions under the Plan are intended to comply with all applicable
conditions of Para. 312.03(a)(4) in the NYSE Listed Company Manual
exempting the Plan from shareholder approval. Those conditions are
specifically set forth in Section 1.4 and Section 3.1(d) of the Plan. Any
ambiguities or inconsistencies in the construction of an Incentive Award
or the Plan shall be interpreted to give effect to such intention.
However, to the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void to the
extent permitted by law and deemed advisable by the Committee in its
discretion.
4.10 SUCCESSORS.
All obligations of the Company under the Plan with respect to Incentive
Awards granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.
4.11 MISCELLANEOUS PROVISIONS.
(a) No Employee shall have any claim or right to be granted an Incentive
Award under the Plan. Neither the Plan, nor any action taken
hereunder, shall be construed as giving any Employee any right to be
retained in Employment.
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(b) No Shares of Common Stock shall be issued hereunder unless counsel
for the Company is then satisfied that such issuance will be in
compliance with federal and state securities laws.
(c) The expenses of the Plan shall be borne by the Company.
(d) By accepting any Incentive Award, each Grantee and each person
claiming by or through him shall be deemed to have indicated his
acceptance of the Plan.
4.12 SEVERABILITY.
In the event that any provision of this Plan shall be held illegal,
invalid or unenforceable for any reason, such provision shall be fully
severable, but shall not affect the remaining provisions of the Plan, and
the Plan shall be construed and enforced as if the illegal, invalid, or
unenforceable provision was not included herein.
4.13 GENDER, TENSE AND HEADINGS.
Whenever the context so requires, words of the masculine gender used
herein shall include the feminine and neuter, and words used in the
singular shall include the plural. Section headings as used herein are
inserted solely for convenience and reference and constitute no part of
the interpretation or construction of the Plan.
4.14 GOVERNING LAW.
The Plan shall be interpreted, construed and constructed in accordance
with the laws of the State of Texas without regard to its conflicts of law
provisions, except as may be superseded by applicable laws of the United
States.
IN WITNESS WHEREOF, Veritas DGC Inc. has caused this Plan to be duly executed in
its name and on its behalf by its duly authorized officer.
VERITAS DGC INC.
By:
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Anthony Tripodo
Executive Vice President,
Treasurer and Chief Financial Officer
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