<PAGE> 1
As filed with the Securities and Exchange Commission on April 25, 1997
Registration No. 33-_______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------------
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE LTV CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 331
(State or other jurisdiction of (Primary standard Industrial
incorporation or organization) Classification Code Number
75-1070950
(IRS Employer
Identification No.)
200 Public Square
Cleveland, Ohio 44114-2308
(216)622-5000
(Address and telephone number of registrant's principal executive offices)
THE LTV CORPORATION
AMENDED AND RESTATED MANAGEMENT INCENTIVE PROGRAM
(Full title of the plan)
Glenn J. Moran, Esquire
Senior Vice President, General Counsel and Secretary
The LTV Corporation
200 Public Square
Cleveland, Ohio 44114-2308
(216)622-5000
(Name, address and telephone number of agent for service)
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CALCULATION OF REGISTRATION FEE
- -------------------------------------- -------------------- --------------------- -------------------- ---------------------
Proposed Proposed
maximum maximum Amount of
Title of each class of Amount to be offering price aggregate Registration
Securities to be registered Registered(1) per unit(2) offering price(2) Fee(2)
- -------------------------------------- -------------------- --------------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.50 per share 5,000,000 $12.875 $64,375,000 $19,507.58
- -------------------------------------- -------------------- --------------------- -------------------- ---------------------
<FN>
(1) Plus an indeterminate number of additional shares which may be offered
and issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) Estimated pursuant to Rule 457 of the General Rules and Regulations under
the Securities Act of 1933, as amended, solely for the purpose of
computing the registration fee, based on the average of the high and low
sale prices of the securities being registered hereby on the Composite
Tape on April 22, 1997.
</TABLE>
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The LTV Corporation ("LTV" or the "Company") hereby incorporates, or
will be deemed to have incorporated, herein by reference the following
documents:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
(2) All reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 1996;
(3) The description of the Company's Common Stock contained in the
Company's most recent Exchange Act registration statement,
including any amendment thereto or report filed for the
purpose of updating such description; and
In addition, all documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
subsequent to the date of this Registration Statement and
prior to the filing of a post-effective amendment which
indicates that all securities offered herein have been sold or
which deregisters all securities then remaining unsold shall
be deemed to be incorporated herein by reference and to be a
part hereof from the respective date of filing of each such
document.
INTEREST OF NAMED EXPERTS AND COUNSEL
The validity of the Common Stock will be passed upon for the Company by
Glenn J. Moran, Senior Vice President, General Counsel and Secretary of the
Company. As of March 31, 1997, Mr. Moran owned 8,086 shares of Common Stock and
had options to purchase 38,000 additional shares. Additionally, Mr. Moran held
187 phantom derivative securities.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Article Eighth ("Article Eighth") of LTV's Certificate of Incorporation
(the "LTV Certificate") limits the scope of personal liability of LTV's
directors to LTV or its stockholders for monetary damages for breach of
fiduciary duty as a director and defines the rights of LTV directors and
officers to indemnification by LTV in the event of personal liability or
expenses incurred by them as a result of certain litigation against them. Set
forth below is a description of Article Eighth.
Elimination of Liability in Certain Circumstances; Indemnification and Insurance
The Delaware General Corporation Law (the "GCL") empowers LTV to
indemnify subject to the standards therein prescribed, any person in connection
with any action, suit or proceeding brought or threatened by reason of the fact
that such person is or was a director, officer, employee or agent of LTV or is
or was serving as such with respect to another
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corporation or other entity at the request of LTV. Article Eighth of the LTV
Certificate requires LTV to indemnify directors and officers, or any other
person with such right as may be determined by LTV, to the fullest extent
permitted by the GCL.
In addition, the GCL authorizes corporations to limit or eliminate the
personal liability of directors to corporations and their stockholders for
monetary damages for breach of directors' fiduciary duty of care. Article Eighth
of the LTV Certificate limits the liability of the directors to LTV or its
stockholders (in their capacity as directors but not in their capacity as
officers) to the fullest extent permitted by the GCL. Specifically, directors of
LTV will not be personally liable for monetary damages for breach of a
director's fiduciary duty as a director, except, as provided in the GCL, for
liability (a) for any breach of the director's duty of loyalty to LTV or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for unlawful payments
of dividends or unlawful stock repurchases or redemptions, or (d) for any
transaction from which the director derived an improper personal benefit.
The directors and officers of LTV, and certain other employees or
agents as determined by LTV, are covered by insurance, indemnifying them against
certain civil liabilities, including liabilities under the Federal securities
laws, which might be incurred by them in such capacity.
The directors and officers of LTV and other employees or agents of LTV
are also covered by insurance indemnifying them against liabilities relating to
a breach of fiduciary duties imposed by the Employee Retirement Income Security
Act of 1974.
EXHIBITS
The following is a complete list of exhibits filed as part of this
Registration Statement:
<TABLE>
<CAPTION>
Exhibit
No.
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<S> <C>
4.1 Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form S-1
[Registration No. 33-50217])
4.2 By-Laws (incorporated by reference to Exhibit (28)(a)-(3) to the
Company's Annual Report on Form 10-K for the year ended December 31,
1992 and Exhibit 3.1 to the Company's Report on Form 10-Q for the
quarter ended September 30, 1996)
4.3 The LTV Corporation Amended and Restated Management Incentive Program
(included herein)
4.4 Stock Award and Option Agreements (included herein)
5 Opinion of Glenn J. Moran (legality)
23(a) Consent of Ernst & Young LLP, independent auditors (included herein)
23(b) Consent of Glenn J. Moran (included in Exhibit 5)
24 Powers of Attorney (included on page 6)
</TABLE>
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UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement; provided,
however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information to be included in a
post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the
registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's Annual Report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's Annual Report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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<PAGE> 5
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the registrant's certificate of
incorporation or the Delaware General Corporation Law, the registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that such a
claim for indemnification (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cleveland, State of Ohio, on the 25th day of
April 1997.
THE LTV CORPORATION
By: /s/ DAVID H. HOAG
-------------------------------
DAVID H. HOAG
CHAIRMAN, PRESIDENT, CHIEF
EXECUTIVE OFFICER AND DIRECTOR
POWER OF ATTORNEY
We, the undersigned directors and officers of The LTV Corporation and
each of us, do hereby constitute and appoint Arthur W. Huge and Glenn J. Moran,
or any of them, our true and lawful attorneys and agents, each with the power of
substitution, to do any and all acts and things in our name and behalf in our
capacities as directors and officers and to execute any and all instruments for
us and in our names in the capacities indicated above, which said attorneys and
agents, or either of them, may deem necessary or advisable to enable said
corporation to comply with the Securities Act of 1933, as amended, and any
rules, regulations, and requirements of the Securities and Exchange Commission,
in connection with this Registration Statement, including specifically but
without limitation, power and authority to sign for us or any of us in our names
in the capacities indicated below, any and all amendments (including
post-effective amendments) hereto; and we do hereby ratify and confirm all that
the said attorneys and agents, or their substitute or substitutes, or either of
them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
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<S> <C> <C>
/s/ DAVID H. HOAG Chairman, President, Chief April 25, 1997
- --------------------------- Executive Officer and Director
(David H. Hoag) (Principal Executive Officer)
</TABLE>
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<TABLE>
<CAPTION>
Signature Title Date
- --------------------------- ------------------------------- --------------
<S> <C> <C>
/s/ ARTHUR W. HUGE Senior Vice President, April 25, 1997
- --------------------------- Chief Financial Officer
(Arthur W. Huge) (Principal Financial Officer and
Principal Accounting Officer)
/s/ GEORGE T. HENNING Vice President and Controller April 25, 1997
- ---------------------------
(George T. Henning)
/s/ EDGAR L. BALL Director April 25, 1997
- ---------------------------
(Edgar L. Ball)
/s/ COLIN C. BLAYDON Director April 25, 1997
- ---------------------------
(Colin C. Blaydon)
/s/ WILLIAM H. BRICKER Director April 25, 1997
- ---------------------------
(William H. Bricker)
/s/ JOHN E. JACOB Director April 25, 1997
- ---------------------------
(John E. Jacob)
/s/ EDWARD C. JOULLIAN III Director April 25, 1997
- --------------------------
(Edward C. Joullian III)
/s/ M. THOMAS MOORE Director April 25, 1997
- ---------------------------
(M. Thomas Moore)
/s/ HAROLD A. POLING Director April 25, 1997
- ---------------------------
(Harold A. Poling)
/s/ VINCENT A. SARNI Director April 25, 1997
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(Vincent A. Sarni)
</TABLE>
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<TABLE>
<CAPTION>
Signature Title Date
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<S> <C> <C>
/s/ SAMUEL K. SKINNER Director April 25, 1997
- ---------------------------
(Samuel K. Skinner)
/s/ PAUL G. STERN Director April 25, 1997
- ---------------------------
(Paul G. Stern)
/s/ STEPHEN B. TIMBERS Director April 25, 1997
- ----------------------
(Stephen B. Timbers)
/s/ FARAH M. WALTERS Director April 25, 1997
- ---------------------------
(Farah M. Walters)
</TABLE>
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<PAGE> 1
EXHIBIT 4.3
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
(AMENDED AND RESTATED EFFECTIVE APRIL 24, 1997)
<PAGE> 2
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
(AMENDED AND RESTATED EFFECTIVE APRIL 24, 1997)
TABLE OF CONTENTS
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PAGE
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<S> <C> <C>
ARTICLE I -- PURPOSE AND DEFINITIONS
1.1 Purpose...................................................................... A-1
1.2 Effect of Amendment and Restatement.......................................... A-1
1.3 Definitions.................................................................. A-1
1.4 Construction................................................................. A-4
ARTICLE II -- STOCK AVAILABLE UNDER THIS PROGRAM
2.1 Stock Available under this Program........................................... A-4
ARTICLE III -- LONG-TERM INCENTIVE PROGRAM
3.1 Purpose...................................................................... A-4
3.2 Option Rights................................................................ A-5
3.3 Appreciation Rights.......................................................... A-6
3.4 Restricted Stock............................................................. A-7
3.5 Deferred Stock............................................................... A-8
3.6 Performance Shares and Performance Units..................................... A-9
3.7 Transferability.............................................................. A-9
3.8 Fractional Shares............................................................ A-10
3.9 Participation by Employees of a Less-Than-80% Affiliate...................... A-10
3.10 Certain Terminations of Employment, Hardship and Approved Leaves of Absence.. A-10
3.11 Foreign Employees............................................................ A-10
3.12 Certain Forfeitures.......................................................... A-11
ARTICLE IV -- ANNUAL INCENTIVE PROGRAM
4.1 Purpose...................................................................... A-11
4.2 Special Definitions Applicable to this Article............................... A-11
4.3 Participation................................................................ A-11
4.4 Annual Incentives............................................................ A-11
ARTICLE V -- MANAGEMENT STOCK ACQUISITION PROGRAM
5.1 Purpose...................................................................... A-12
5.2 Special Definitions Applicable to this Article............................... A-13
5.3 Participation................................................................ A-13
5.4 Amount of Deferral........................................................... A-13
5.5 Voluntary Purchases of Stock................................................. A-13
5.6 Matching Contributions and Grants............................................ A-13
5.7 Distributions................................................................ A-13
5.8 Dividends.................................................................... A-13
5.9 Administration............................................................... A-13
5.10 Claims Procedure............................................................. A-14
</TABLE>
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<TABLE>
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PAGE
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<S> <C> <C>
ARTICLE VI -- ADMINISTRATION, GENERAL PROVISIONS
6.1 Administration of this Program............................................... A-14
6.2 Amendments and Other Matters................................................. A-14
6.3 Unfunded Status of Program................................................... A-15
6.4 Change in Control Provisions................................................. A-15
6.5 Adjustments.................................................................. A-16
6.6 Withholding Taxes............................................................ A-16
6.7 General Provisions........................................................... A-16
6.8 Effective Date of Program.................................................... A-17
6.9 Term of Program.............................................................. A-17
6.10 Proceeds and Expenses........................................................ A-17
6.11 Severability................................................................. A-17
6.12 Exclusion from Certain Restrictions.......................................... A-17
</TABLE>
<PAGE> 4
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
(AMENDED AND RESTATED EFFECTIVE APRIL 24, 1997)
ARTICLE I
PURPOSE AND DEFINITIONS
1.1 PURPOSE. The LTV Corporation, a Delaware Corporation, hereby amends
and restates The LTV Corporation Management Incentive Program effective April
24, 1997. The purpose of this Program, as amended and restated, is to attract,
retain and motivate officers and key employees of The LTV Corporation and its
Affiliates, to provide such persons with incentives and rewards for superior
performance which share in the growth of the value of the Corporation, and to
promote ownership and holding of Stock of the Corporation by such persons,
thereby reinforcing a mutuality of interest with other stockholders.
1.2 EFFECT OF AMENDMENT AND RESTATEMENT. This amendment and restatement of
this Program shall constitute a continuation of this Program. This amendment and
restatement is generally effective April 24, 1997. Grants and awards made under
the Prior Program before April 24, 1997 shall be governed by the terms and
provisions of the Prior Program.
1.3 DEFINITIONS. As used in this Program,
"Affiliate" means a corporation, partnership, joint venture, unincorporated
association or other entity in which the Corporation has a direct or indirect
ownership or other equity interest; provided, however, for purposes of
determining whether any person may be a Participant for purposes of any grant of
Incentive Stock Options, "Affiliate" means any corporation in which the
Corporation owns or controls, directly or indirectly, more than 50% of the total
combined voting power represented by all classes of stock issued by such
corporation at the time of such grant.
"Appreciation Right" means a right granted pursuant to Section 3.3 of this
Program, including a Free-standing Appreciation Right and a Tandem Appreciation
Right.
"Base Price" means the price to be used as the basis for determining the
Spread upon the exercise of a Free-standing Appreciation Right.
"Board" means the Board of Directors of the Corporation.
"Cause" means, in connection with an involuntary termination by the
Corporation or an Affiliate of a Participant's employment, (i) the willful and
continued failure by the Participant to perform substantially the duties of the
Participant's position or (ii) the willful engaging by the Participant in
conduct which is demonstrably injurious to the Corporation or an Affiliate,
monetarily or otherwise.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee described in Section 6.1(a).
"Corporation" means The LTV Corporation, a Delaware corporation, or its
successor or successors.
"Date of Grant" means the date specified by the Committee on which a grant
of Option Rights or Appreciation Rights or Performance Shares or Performance
Units or a grant or sale of Restricted Stock or Deferred Stock shall become
effective, which shall not be earlier than the date on which the Committee takes
action with respect thereto.
"Deferral Period" means the period of time during which shares of Deferred
Stock are subject to deferral limitations under Section 3.5.
"Deferred Stock" means an award pursuant to Section 3.5 of the right to
receive shares of Stock at the end of a specified Deferral Period.
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"Disability" means a physical or mental condition of a Participant
resulting from a bodily injury, disease, or mental disorder which renders him
incapable of continuing in the active employment of the Corporation or an
Affiliate. Such Disability shall be determined by the Committee based upon
appropriate medical advice and examination.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to a share of Stock as of any given
day (i) the last reported closing price for a share of Stock on the New York
Stock Exchange for the day as of which such determination is being made or, if
there was no sale of Stock so reported for such day, on the most recently
preceding day on which there was such a sale; or if the Stock is not listed or
admitted to trading on the New York Stock Exchange on the day as of which the
determination is being made, the amount determined by the Committee to be the
fair market value of a share of Stock on such day, or (ii) if greater, the
lowest price necessary to avoid any adjustment in the exercise price or exercise
quantity of the Series A Warrants pursuant to the Warrant Agreement dated as of
June 28, 1993 between the Corporation and Society Bank.
"Free-standing Appreciation Right" means an Appreciation Right granted
pursuant to Section 3.3 that is not granted in tandem with an Option Right or
similar right.
"Incentive Stock Options" means Option Rights that are intended to qualify
as "incentive stock options" under Section 422 of the Code.
"Less-Than-80% Affiliate" means an Affiliate with respect to which the
Corporation directly or indirectly owns or controls less than 80% of the total
combined voting or other decision-making power.
"Optionee" means the person so designated in an agreement evidencing an
outstanding Option Right.
"Option Price" means the purchase price payable upon the exercise of an
Option Right.
"Option Right" means the right to purchase shares of Stock upon exercise of
an option granted pursuant to Section 3.2.
"Participant" means a person who is selected by the Committee to receive
benefits under this Program and who is at that time an officer, including
without limitation an officer who may also be a member of the Board or any other
key employee of, the Corporation or any Affiliate, or who has agreed to commence
serving in any such capacity.
"Performance Goals" means a performance objective or objectives established
pursuant to this Program for Participants who have received grants of
Performance Shares or Performance Units or, when so determined by the Committee,
Option Rights, Appreciation Rights, Restricted Stock, Deferred Stock and
dividend credits. Performance Goals may be described in terms of Corporation-
wide objectives or objectives that are related to the performance of the
individual Participant or of the Affiliate, division, department or function
within the Corporation or Affiliate in which the Participant is employed. The
Performance Goals applicable to any award to a Participant who is, or is
determined by the Committee to be likely to become, a "covered employee" within
the meaning of Section 162(m) of the Code shall be limited to specified levels
of or growth in:
(i) cash flow;
(ii) costs;
(iii) earnings per share;
(iv) market share;
(v) net income;
(vi) product quality;
(vii) productivity improvement;
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(viii) return on assets;
(ix) return on equity;
(x) return on invested capital;
(xi) sales growth;
(xii) shareholder return;
(xiii) stock price;
(xiv) value added;
and any combination thereof.
Except in the case of such a covered employee, if the Committee determines
that a change in the business, operations, corporate structure or capital
structure of the Corporation, or the manner in which it conducts its business,
or other events or circumstances render the Performance Goals unsuitable, the
Committee may modify such Performance Goals or the related minimum acceptable
level of achievement, in whole or in part, as the Committee deems appropriate
and equitable.
"Performance Period" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 3.6 within
which the Performance Goals relating thereto are to be achieved.
"Performance Share" means a bookkeeping entry that records the equivalent
of one share of Stock awarded pursuant to Section 3.6.
"Performance Unit" means a bookkeeping entry that records a dollar
denominated unit awarded pursuant to Section 3.6.
"Prior Program" means The LTV Corporation Management Incentive Program,
approved by its shareholders on April 29, 1994, as amended prior to the adoption
of this Program.
"Program" means The LTV Corporation Management Incentive Program (As
Amended and Restated Effective April 24, 1997) adopted by the Board on January
24, 1997, as it may be amended from time to time.
"Reload Option Rights" means additional Option Rights granted automatically
to an Optionee upon the exercise of Option Rights pursuant to Section 3.2(e).
"Restricted Stock" means Stock granted or sold pursuant to Section 3.4 as
to which neither the substantial risk of forfeiture nor the restrictions on
transfer referred to in Section 3.4 has expired.
"Retirement" means retirement from active employment with the Corporation
and each of its Affiliates on or after attainment of age 65, unless an earlier
retirement is approved by the Committee.
"Rule 16b-3" means Rule 16b-3 of the Securities and Exchange Commission (or
any successor rule to the same effect), as in effect from time to time.
"Spread" means, in the case of a Free-standing Appreciation Right, the
amount by which the Fair Market Value per share of Stock on the date when any
such right is exercised exceeds the Base Price specified in such right or, in
the case of a Tandem Appreciation Right, the amount by which the Fair Market
Value per share of Stock on the date when any such right is exercised exceeds
the Option Price specified in the related Option Right.
"Stock" means (i) shares of the common stock of the Corporation, par value
$.50 per share, and (ii) any security into which Stock may be converted by
reason of any transaction or event of the type referred to in Section 6.5.
"Tandem Appreciation Right" means an Appreciation Right granted pursuant to
Section 3.3 that is granted in tandem with an Option Right or any similar right
granted under any other plan of the Corporation.
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<PAGE> 7
1.4 CONSTRUCTION. To the extent determined by the Committee, Article III
of this Program as hereby amended and restated is intended to continue to meet,
and shall be construed in accordance with, the requirements for deductibility of
compensation under Section 162(m) of the Code. The masculine gender, where
appearing in this Program, shall be deemed to include the feminine gender and
the singular shall be deemed to include the plural, unless the context clearly
indicates to the contrary.
ARTICLE II
STOCK AVAILABLE UNDER THIS PROGRAM
2.1 STOCK AVAILABLE UNDER THIS PROGRAM. (a) Subject to adjustment as
provided in Section 6.5, the number of shares of Stock issued or transferred (i)
upon the exercise of Option Rights or Appreciation Rights, (ii) as Restricted
Stock and released from all substantial risks of forfeiture, (iii) as Deferred
Stock, (iv) in payment of Performance Shares or Performance Units that have been
earned, (v) in payment of dividend equivalents paid with respect to Stock
purchases or awards made under this Program, (vi) upon Stock purchases pursuant
to Article V, (vii) in payment of AIP awards, and (viii) upon distributions of
shares of Stock, shall not in the aggregate exceed 7,296,682 shares of Stock
(2,296,682 of which were approved in 1994 (of which not more than 198,062 may be
shares of Restricted Stock and 1,114,126 were shares under the Interim Stock
Option Program which were not made subject to grants before the expiration of
such Program and which are no longer available for issuance under such Program),
and 5,000,000 of which are being added as of this Amendment and Restatement),
which may be Stock of original issuance or Stock held in treasury or a
combination thereof.
(b) Upon the full or partial payment of any Option Price by the transfer to
the Corporation of shares of Stock or upon satisfaction of tax withholding
provisions in connection with any such exercise or any other payment made or
benefit realized under this Program by the transfer or relinquishment of shares
of Stock, there shall be deemed to have been issued or transferred under this
Program only the net number of shares of Stock actually issued or transferred by
the Corporation.
(c) Upon payment in cash of the benefit provided by any award granted under
this Program, any shares of Stock that were covered by that award shall again be
available for issuance or transfer hereunder.
(d) Subject to adjustment as provided in Section 6.5, the maximum number of
shares of Stock covered by awards under this Program granted to any Participant
during any period of 3 consecutive calendar years shall not exceed 1,000,000
shares of Stock.
(e) In no event shall any Participant in any period of one calendar year be
granted awards of Performance Units having an aggregate maximum value as of the
Date of Grant in excess of $2,500,000.
(f) The aggregate number of shares of Stock actually issued by the
Corporation upon the exercise of Incentive Stock Options shall not exceed the
total number of shares of Stock first specified in Section 2.1(a), subject to
adjustment as provided in Section 6.5.
ARTICLE III
LONG-TERM INCENTIVE PROGRAM
3.1 PURPOSE. The purpose of this long-term incentive component of this
Program is to provide the Corporation a means to devise tailored long-term stock
and other incentive awards to officers and other key employees of the
Corporation or an Affiliate, which will provide incentives for such employees to
act in the best interests of the Corporation's stockholders, will reinforce such
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<PAGE> 8
employees' mutuality of interest with stockholders, and will promote the
long-term interests of the Corporation.
3.2 OPTION RIGHTS. The Committee may from time to time authorize grants to
Participants of options to purchase shares of Stock subject to Section 2.1 upon
such terms and conditions as the Committee may determine in accordance with the
following provisions:
(a) Each grant shall specify an Option Price per share of Stock, which
shall be equal to or greater than the Fair Market Value per share of Stock on
the Date of Grant; provided, however, that in the case of options other than
Incentive Stock Options, if granted in lieu of salary or cash bonus, the Option
Price shall not be less than 85% of the Fair Market Value per share of Stock on
the Date of Grant. Notwithstanding the foregoing, the Committee in its
discretion, may determine a price per share of Stock of less than the Fair
Market Value of the share of Stock at the time of grant, if such option is
granted as substitute for a stock option granted by an entity which has been
merged with or acquired by the Corporation or an Affiliate and such substitute
grant is made in connection with such merger or acquisition.
(b) Each grant shall specify the form of consideration to be paid in
satisfaction of the Option Price and the manner of payment of such
consideration, which may include cash in the form of currency or certified or
cashier's check or other cash equivalent acceptable to the Committee,
nonforfeitable, unrestricted shares of Stock (including by attestation), which
are already owned by the Optionee and have a value at the time of exercise that
is equal to the Option Price, any other legal consideration, that the Committee
may deem appropriate, including without limitation any form of consideration
authorized under Section 3.2(c), on such basis as the Committee may determine in
accordance with this Program and any combination of the foregoing.
(c) Any grant may provide that payment of the Option Price may also be made
in whole or in part in the form of shares of Restricted Stock or other Stock
that are subject to risk of forfeiture or restrictions on transfer. Unless
otherwise determined by the Committee whenever any Option Price is paid in whole
or in part by means of any of the forms of consideration specified in this
Subsection, the shares of Stock received by the Optionee upon the exercise of
the Option Rights shall be subject to the same risks of forfeiture or
restrictions on transfer as those that applied to the consideration surrendered
by the Optionee; provided, however, that such risks of forfeiture and
restrictions on transfer shall apply only to the same number of shares of Stock
received by the Optionee as applied to the forfeitable or restricted Common
Stock surrendered by the Optionee.
(d) Any grant may provide for deferred payment of the Option Price from the
proceeds of sale through a bank or broker on the date of exercise of some or all
of the shares of Stock to which the exercise relates.
(e) Any grant may provide for the automatic grant to the Optionee of Reload
Option Rights upon the exercise of Option Rights, including Reload Option
Rights, for shares of Stock or any other noncash consideration authorized under
Subsections (c) and (d) of this Section.
(f) Successive grants may be made to the same Participant regardless of
whether any Option Rights previously granted to such Participant remain
unexercised.
(g) Each grant shall specify the period or periods of continuous employment
of the Optionee by the Corporation or any Affiliate that are necessary before
the Option Rights or installments thereof shall become exercisable, and any
grant may provide for the earlier exercisability of such rights in the event of
Retirement, death or Disability of the Participant or a change in control of the
Corporation or other similar transaction or event. Unless otherwise determined
by the Committee at or after grant, no option shall be exercisable during the 6
months following the date of the granting of the option.
(h) Any grant of Option Rights may specify Performance Goals that must be
achieved as a condition to the exercise of such rights.
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(i) Option Rights granted under this Program may be (i) options that are
intended to qualify under particular provisions of the Code, including without
limitation Incentive Stock Options, (ii) options that are not intended to so
qualify or (iii) combinations of the foregoing.
(j) On or after the Date of Grant of any Option Rights other than Incentive
Stock Options, the Committee may provide for the payment to the Optionee of
dividend equivalents thereon in cash or shares of Stock on a current, deferred
or contingent basis.
(k) No Option Right granted under this Program which is intended to be an
Incentive Stock Option may be exercised more than 10 years from the Date of
Grant.
(l) Each grant shall be evidenced by an agreement, which shall be executed
on behalf of the Corporation by any officer thereof and delivered to and
accepted by the Optionee and shall contain such terms and provisions as the
Committee may determine consistent with this Program.
(m) Upon receipt of written notice to exercise, the Committee may elect to
cash out all or part of the portion of the Option Rights to be exercised by
paying the Optionee an amount, in cash or Stock, equal to the excess of the Fair
Market Value of the Stock over the Option Price (the "Spread Value") on the
effective date of such cash-out. In addition, the Committee may, at or after the
Date of Grant (with the consent of the Optionee if after the Date of Grant),
require that all or part of the shares of Stock to be issued with respect to the
Spread Value of an exercised Option Right take the form of Restricted Stock,
which shall be valued on the date of exercise on the basis of the Fair Market
Value of such Restricted Stock determined without regard to the forfeiture
restriction involved.
3.3 APPRECIATION RIGHTS. The Committee may also authorize grants to
Participants of Appreciation Rights. An Appreciation Right shall be a right of
the Participant to receive from the Corporation an amount, which shall be
determined by the Committee and shall be expressed as a percentage (not
exceeding 100%) of the Spread at the time of the exercise of such right. Any
grant of Appreciation Rights under this Program shall be upon such terms and
conditions as the Committee may determine in accordance with the following
provisions:
(a) Any grant may specify that the amount payable upon the exercise of an
Appreciation Right may be paid by the Corporation in cash, shares of Stock or
any combination thereof and may (i) either grant to the Participant or reserve
to the Committee the right to elect among those alternatives or (ii) preclude
the right of the Participant to receive and the Corporation to issue shares of
Stock or other equity securities in lieu of cash.
(b) Any grant may specify that the amount payable upon the exercise of an
Appreciation Right shall not exceed a maximum specified by the Committee on the
Date of Grant.
(c) Any grant may specify (i) a waiting period or periods before
Appreciation Rights shall become exercisable and (ii) permissible dates or
periods on or during which Appreciation Rights shall be exercisable.
(d) Any grant may specify that an Appreciation Right may be exercised only
in the event of Retirement, death or Disability of the Participant or a change
in control of the Corporation or other similar transaction or event.
(e) Any grant may provide for the payment to the Participant of dividend
equivalents thereon in cash or shares of Stock on a current, deferred or
contingent basis.
(f) Each grant shall be evidenced by an agreement, which shall be executed
on behalf of the Corporation by any officer thereof and delivered to and
accepted by the Participant and shall contain such terms and provisions as the
Committee may determine consistent with this Program.
(g) Any grant of Appreciation Rights may specify Performance Goals that
must be achieved as a condition of the exercise of such rights.
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(h) Regarding Tandem Appreciation Rights only: Each grant shall provide
that a Tandem Appreciation Right may be exercised only (i) at a time when the
related Option Right (or any similar right granted under any other plan of the
Corporation) is also exercisable and the Spread is positive and (ii) by
surrender of the related Option Right (or such other right) for cancellation.
(i) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each Free-standing
Appreciation Right a Base Price per share of Stock, which shall be
equal to or greater than the Fair Market Value per share of Stock
on the Date of Grant;
(ii) Successive grants may be made to the same Participant regardless
of whether any Free-standing Appreciation Rights previously
granted to such Participant remain unexercised;
(iii) Each grant shall specify the period or periods of continuous
employment of the Participant by the Corporation or any Affiliate
that are necessary before the Free-standing Appreciation Rights or
installments thereof shall become exercisable, and any grant may
provide for the earlier exercise of such rights in the event of
Retirement, death or Disability of the Participant or a change in
control of the Corporation or other similar transaction or event;
and
(iv) No Free-Standing Appreciation Right granted under this Program may
be exercised more than 10 years from the Date of Grant.
3.4 RESTRICTED STOCK. The Committee may also authorize grants or sales to
Participants of shares of Restricted Stock subject to Section 2.1 upon such
terms and conditions as the Committee may determine in accordance with the
following provisions:
(a) Each grant or sale shall constitute an immediate transfer of the
ownership of shares of Stock to the Participant in consideration of the
performance of services, entitling such Participant to dividend, voting and
other ownership rights, subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.
(b) Each grant or sale may be made without additional consideration from
the Participant or in consideration of a payment by the Participant that is less
than the Fair Market Value per share of Stock on the Date of Grant.
(c) Each grant or sale shall provide that the shares of Restricted Stock
covered thereby shall be subject to a "substantial risk of forfeiture" within
the meaning of Section 83 of the Code for a period to be determined by the
Committee on the Date of Grant, and any grant or sale may provide for the
earlier termination of such period in the event of Retirement, death or
Disability of the Participant or a change in control of the Corporation or other
similar transaction or event. If the Committee conditions the nonforfeitability
of shares of Restricted Stock upon service alone, such vesting may not occur
before 3 years from the Date of Grant of such shares of Restricted Stock, and if
the Committee conditions the nonforfeitability of shares of Restricted Stock
upon Performance Goals, such nonforfeitability may not occur before 1 year from
the Date of Grant of such shares of Restricted Stock.
(d) Each grant or sale shall provide that, during the period for which such
substantial risk of forfeiture is to continue, the transferability of the shares
of Restricted Stock shall be prohibited or restricted in the manner and to the
extent prescribed by the Committee on the Date of Grant. Such restrictions may
include without limitation rights of repurchase or first refusal in the
Corporation or provisions subjecting the shares of Restricted Stock to a
continuing substantial risk of forfeiture in the hands of any transferee.
(e) Any grant of shares of Restricted Stock may specify Performance Goals
which, if achieved, will result in termination or early termination of the
restrictions applicable to such shares and each
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such grant shall specify in respect of such specified Performance Goals a
minimum acceptable level of achievement and shall set forth a formula for
determining the number of shares of Restricted Stock on which restrictions will
terminate if performance is at or above the minimum level, but falls short of
full achievement of the specified Performance Goals.
(f) Any grant or sale may require that any or all dividends or other
distributions paid on the shares of Restricted Stock during the period of such
restrictions be automatically sequestered. Such distribution may be reinvested
on an immediate or deferred basis in additional shares of Stock, which may be
subject to the same restrictions as the underlying award or such other
restrictions as the Committee may determine.
(g) Each grant or sale shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered to
and accepted by the Participant and shall contain such terms and provisions as
the Committee may determine consistent with this Program. Unless otherwise
directed by the Committee, all certificates representing shares of Restricted
Stock, together with a stock power that shall be endorsed in blank by the
Participant with respect to such shares, shall be held in custody by the
Corporation until all restrictions thereon lapse.
3.5 DEFERRED STOCK. The Committee may also authorize grants or sales to
Participants of shares of Deferred Stock subject to Section 2.1 upon such terms
and conditions as the Committee may determine in accordance with the following
provisions:
(a) Each grant or sale shall constitute the agreement by the Corporation to
issue or transfer shares of Stock to the Participant in the future in
consideration of the performance of services, subject to the fulfillment during
the Deferral Period of such conditions as the Committee may specify.
(b) Each grant or sale may be made without additional consideration from
the Participant or in consideration of a payment by the Participant that is less
than the Market Value per Share on the Date of Grant.
(c) Each grant or sale shall provide that the shares of Deferred Stock
covered thereby shall be subject to a Deferral Period, which shall be fixed by
the Committee on the Date of Grant, and any grant or sale may provide for the
earlier termination of such period in the event of Retirement, death or
Disability of the Participant or a change in control of the Corporation or other
similar transaction or event. If the Committee conditions the nonforfeitability
of shares of Deferred Stock upon service alone, such nonforfeitability may not
occur before 3 years from the Date of Grant of such shares of Deferred Stock,
and if the Committee conditions the vesting of shares of Deferred Stock upon
Performance Goals, such nonforfeitability may not occur before 1 year from the
Date of Grant of such shares of Deferred Stock.
(d) Any grant of shares of Deferred Stock may specify Performance Goals
which, if achieved, will result in termination or early termination of the
restrictions applicable to such shares and each such grant shall specify in
respect of such specified Performance Goals, a minimum acceptable level of
achievement and shall set forth a formula for determining the number of shares
of Deferred Stock on which restrictions will terminate if performance is at or
above the minimum level, but falls short of full achievement of the specified
Performance Goals.
(e) During the Deferral Period, the Participant shall not have any right to
transfer any rights under the subject award, shall not have any rights of
ownership in the shares of Deferred Stock and shall not have any right to vote
such shares, but the Committee may on or after the Date of Grant authorize the
payment of dividend equivalents on such shares in cash or additional shares of
Stock on a current, deferred or contingent basis.
(f) Each grant or sale shall be evidenced by an agreement, which shall be
executed on behalf of the Corporation by any officer thereof and delivered to
and accepted by the Participant and shall contain such terms and provisions as
the Committee may determine consistent with this Program.
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3.6 PERFORMANCE SHARES AND PERFORMANCE UNITS. The Committee may also
authorize grants to Participants of Performance Shares and Performance Units,
which shall become payable to the Participant upon the achievement of specified
Performance Goals, upon such terms and conditions as the Committee may determine
in accordance with the following provisions:
(a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, subject to the limitations in Section
2.1, which may be subject to adjustment to reflect changes in compensation or
other factors. The Committee shall establish a dollar denominated value for each
Performance Unit at the Date of Grant.
(b) The Performance Period with respect to each Performance Share or
Performance Unit shall be determined by the Committee on the Date of Grant, but
may not be less than 1 year; provided, however that the Performance Period may
be subject to earlier termination in the event of Retirement, death or
Disability of the Participant or a change in control of the Corporation or other
similar transaction or event.
(c) Each grant shall specify the Performance Goals that are to be achieved
and each grant shall specify in respect of the specified Performance Goals a
minimum acceptable level of achievement below which no payment will be made and
shall set forth a formula for determining the amount of any payment to be made
if performance is at or above the minimum acceptable level but falls short of
full achievement of the specified Performance Goals.
(d) Each grant shall specify the time and manner of payment of Performance
Shares or Performance Units that shall have been earned, and any grant may
specify that any such amount may be paid by the Corporation in cash, shares of
Stock or any combination thereof and may either grant to the Participant or
reserve to the Committee the right to elect among those alternatives.
(e) Any grant of Performance Shares may specify that the amount payable
with respect thereto may not exceed a maximum specified by the Committee on the
Date of Grant. Any grant of Performance Units may specify that the amount
payable, or the number of shares of Stock issued, with respect thereto may not
exceed maximums specified by the Committee on the Date of Grant.
(f) Any grant may provide for the payment to the Participant of dividend
equivalents thereon in cash or in additional shares of Stock on a current,
deferred or contingent basis.
(g) Each grant of Performance Shares or Performance Units shall be
evidenced by an agreement, which shall be executed on behalf of the Corporation
by any officer thereof and delivered to and accepted by the Participant and
shall contain such terms and provisions as the Committee may determine
consistent with this Program.
3.7 TRANSFERABILITY. (a) No Option Right or other security granted under
this Program shall be transferable by a Participant other than by will or the
laws of descent and distribution. Option Rights and Appreciation Rights shall be
exercisable during a Participant's lifetime only by the Participant or, in the
event of the Participant's legal incapacity, by his guardian or legal
representative acting in a fiduciary capacity on behalf of the Participant under
state law and court supervision.
(b) Notwithstanding the provisions of Subsection (a) of this Section, the
Committee may, in its sole discretion, authorize all or a portion of the Option
Rights to be granted to an Optionee which are not intended to be Incentive Stock
Options to be on terms which permit transfer by such Optionee to (i) the spouse,
children or grandchildren of the Optionee ("Immediate Family Members"), (ii) a
trust or trusts for the exclusive benefit of such Immediate Family Members,
(iii) a partnership in which such Immediate Family Members are the only
partners, or (iv) other persons or entities, provided that (A) the agreement
pursuant to which such Option Rights are transferred must be approved by the
Committee, and must expressly provide for transferability in a manner consistent
with Subsection (a) of this Section, and (B) subsequent transfers of transferred
Option Rights shall be prohibited except those in accordance with Subsection (a)
of this Section. Following transfer, any such Option Rights shall continue to be
subject to the same terms and conditions as
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were applicable immediately prior to transfer, provided that for purposes of
Section 3.2, the term "Optionee" shall be deemed to refer to the transferee. The
events of termination of employment of Section 3.2 shall continue to be applied
with respect to the original Optionee, following which the Option Rights shall
be exercisable by the transferee only to the extent, and for the period
specified in the agreement pursuant to which such Option Rights are granted.
(c) Any grant made under this Program may provide that all or any part of
the shares of Stock that are (i) to be issued or transferred by the Corporation
upon the exercise of Option Rights or Appreciation Rights or upon the
termination of the Deferral Period applicable to shares of Deferred Stock, or in
payment of Performance Shares or Performance Units or (ii) no longer subject to
the substantial risk of forfeiture and restrictions on transfer referred to in
Section 3.4 shall be subject to further restrictions upon transfer.
3.8 FRACTIONAL SHARES. The Corporation shall not be required to issue any
fractional shares of Common Stock pursuant to this Program. The Committee may
provide for the elimination of fractions or for the settlement thereof in cash.
3.9 PARTICIPATION BY EMPLOYEES OF A LESS-THAN-80% AFFILIATE. As a
condition to the effectiveness of any grant to be made hereunder to a
Participant who is an employee of a Less-Than-80% Affiliate, regardless whether
such Participant is also employed by the Corporation or another Affiliate, the
Committee may require the Less-Than-80% Affiliate to agree to transfer to the
Participant (as, if and when provided for under this Program and any applicable
agreement entered into between the Participant and the Less-Than-80% Affiliate
pursuant to this Program) the shares of Stock that would otherwise be delivered
by the Corporation upon receipt by the Less-Than-80% Affiliate of any
consideration then otherwise payable by the Participant to the Corporation. Any
such grant may be evidenced by an agreement between the Participant and the
Less-Than-80% Affiliate, in lieu of the Corporation, on terms consistent with
this Program and approved by the Committee and the Less-Than-80% Affiliate. All
shares of Stock so delivered by or to a Less-Than-80% Affiliate will be treated
as if they had been delivered by or to the Corporation for purposes of Section
2.1 and all references to the Corporation in this Program shall be deemed to
refer to the Less-Than-80% Affiliate except with respect to the definitions of
the Board and the Committee and in other cases where the context otherwise
requires.
3.10 CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES OF
ABSENCE. Notwithstanding any other provision of this Article to the contrary, in
the event of termination of employment by reason of death, Disability,
Retirement, early retirement with the consent of the Committee, termination of
employment to enter public service with the consent of the Committee or leave of
absence approved by the Committee, or in the event of hardship or other special
circumstances, of a Participant who holds an Option Right or Appreciation Right
that is not immediately and fully exercisable, any Restricted Stock as to which
the substantial risk of forfeiture or the prohibition or restriction on transfer
has not lapsed, any Deferred Stock as to which the Deferral Period is not
complete, any Performance Shares or Performance Units that have not been fully
earned, or any shares of Stock that are subject to any transfer restriction
pursuant to Section 3.4(d), the Committee may in its sole discretion take any
action that it deems to be equitable under the circumstances or in the best
interests of the Corporation, including without limitation waiving or modifying
any limitation or requirement with respect to any award under this Program.
3.11 FOREIGN EMPLOYEES. In order to facilitate the making of any grant or
combination of grants under this Article, the Committee may provide for such
special terms for grants to Participants who are foreign nationals, or who are
employed by the Corporation or any Affiliate outside of the United States of
America, as the Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Committee may
approve such supplements to, or amendments, restatements or alternative versions
of, this Program as it may consider necessary or appropriate for such purposes
without thereby affecting
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the terms of this Program as in effect for any other purpose, and the Secretary
or other appropriate officer of the Corporation may certify any such document as
having been approved and adopted in the same manner as this Program. No such
special terms, supplements, amendments, or restatements shall include any
provisions that are inconsistent with the terms of this Program, as then in
effect, unless this Program could have been amended to eliminate such
inconsistency without further approval by the shareholders of the Corporation
where such approval would be required for such provisions to be effective.
3.12 CERTAIN FORFEITURES. Unless otherwise specified in an agreement
covering a grant made under this Article, the Committee may cancel any
unexpired, unpaid, forfeitable, or deferred grants at any time if the
Participant is not in compliance with each of the following conditions:
(a) A Participant shall not render services for any organization or engage
directly or indirectly in any business which, in the judgment of the chief
executive officer of the Corporation or other senior officer designated by the
Committee, is or becomes competitive with the Corporation or any Affiliate, or
which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Corporation or any Affiliate.
(b) Upon exercise, payment or delivery pursuant to a grant, or upon a grant
becoming nonforfeitable, the Participant shall certify on a form acceptable to
the Committee that he is in compliance with the terms and conditions of this
Program. Failure to comply with the provisions of Subsection (a) of this Section
prior to, or during the 6 months after, any exercise, payment or delivery
pursuant to a grant, or a grant has become nonforfeitable, shall cause such
exercise, payment or delivery or nonforfeitability to be rescinded. Upon such
recision, the difference between the Fair Market Value on the date of such
exercise, payment or delivery or nonforfeitability and the price, if any, paid
by the Participant, shall be returned to the Corporation by the Participant, in
cash, within 10 days after notice of the rescission has been given to the
Participant by the Corporation's chief executive officer, chief legal officer or
chief personnel officer. Such notice may be given at any time within 2 years of
the date from such exercise, payment or delivery or nonforfeitability.
ARTICLE IV
ANNUAL INCENTIVE PROGRAM
4.1 PURPOSE. The purpose of the Annual Incentive Program ("AIP") component
of this Program is to provide for the grant of short-term performance awards to
certain key employees of the Corporation or an Affiliate based on their
attainment of predetermined goals which will further the interests of the
Corporation and its stockholders.
4.2 SPECIAL DEFINITIONS APPLICABLE TO THIS ARTICLE. For purposes of this
Article, the following terms shall be defined as set forth below:
"AIP Participant" is an employee of the Corporation or an Affiliate
participating in the AIP pursuant to Section 4.3.
"Business Unit" means the business unit in which the AIP Participant is
employed, as determined by the Committee.
4.3 PARTICIPATION. The Committee annually shall select Participants in the
AIP, based on the impact of the employee's position on Corporation performance,
the measurability of such impact, and the employee's performance and potential.
4.4 ANNUAL INCENTIVES.
(a) Determining Amount of Annual Incentives. The amount of an AIP
Participant's annual incentive award shall be determined by the
Committee in its discretion, based upon such performance factors as the
Committee may determine, including, but not limited to
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corporate, his individual, Business Unit and/or departmental
performance. The Committee shall determine annually for each AIP
Participant a target incentive award.
(b) Performance Measures. The Committee shall adopt performance measures
for each performance element used in determining an AIP Participant's
annual incentive award.
(c) Form of Annual Incentive Award. Annual incentive awards shall be paid
in cash, Stock, or any other form permitted under this Program,
following the Committee's determination of the amount of the award
based on performance results.
(d) Adjustment of Awards. In the event of special or unusual events or
circumstances affecting the application of one or more performance
measures to an annual incentive award, the Committee may revise the
performance measures and/or underlying factors and criteria applicable
to the annual incentive awards affected, to the extent deemed
appropriate by the Committee, in its sole discretion, to avoid
unintended windfalls or hardship.
(e) Termination of Employment. Subject to Section 6.4 and unless otherwise
provided in the applicable award agreement, if an AIP Participant
terminates employment with the Corporation and each Affiliate prior to
the end of a period designated for measuring performance because of
death, Disability or Retirement, such AIP Participant may, in the sole
discretion of the Committee, receive payment with respect to each
outstanding annual incentive award at the end of the applicable period
for measuring performance.
Notwithstanding the preceding, the Committee may provide for an earlier
payment in settlement of such award in such amount and under such terms and
conditions as the Committee deems appropriate.
Subject to Section 6.4, if an AIP Participant terminates employment with
the Company during a performance measurement period for any reason other than
death, Disability, or Retirement, then such AIP Participant shall not be
entitled to any payment with respect to the annual incentive awards subject to
such performance measurement period, unless the Committee shall otherwise
determine, in its sole discretion.
(f) Timing and Form of Payment. The earned portion of an annual incentive
award may be paid currently or on a deferred basis with such interest
or earnings equivalent as may be determined by the Committee, in its
sole discretion. Payment shall be made in the form of cash or whole
shares of Stock, including shares of Restricted Stock, either in a
lump sum payment or in installments commencing as soon as practicable
after the end of the relevant performance measurement period, all as
the Committee shall determine at or after grant.
(g) Effect of Annual Incentive Awards on Stock Available under this
Program. If and to the extent an annual incentive award is payable in
shares of Stock and the full amount of such value is not paid in shares
of Stock, then the shares of Stock representing the portion of the
value of the annual incentive award not paid in shares of Stock shall
again become available for award under the Program.
ARTICLE V
MANAGEMENT STOCK ACQUISITION PROGRAM
5.1 PURPOSE. The purpose of the Management Stock Acquisition Program
("MSAP") component of this Program is to provide designated management employees
with the opportunity to make deferred purchases of Stock through deferral of
income or current purchases of Stock through payment with either or both of cash
compensation and bonus, or voluntary payments of cash. In order to encourage
participation in the MSAP, the Corporation may provide matching grants or awards
under Article III for such deferrals and purchases. The MSAP shall be subject to
such terms and conditions as the Committee may determine in accordance with the
provisions of this Article.
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5.2 SPECIAL DEFINITIONS APPLICABLE TO THIS ARTICLE.
"Beneficiary" means:
(a) The person last designated as Beneficiary by the Participant in
a writing on a form prescribed by the Administrator;
(b) If there is no designated Beneficiary or if the person so
designated shall not survive the Participant, such Participant's spouse;
or
(c) If no such designated Beneficiary and no such spouse is living
upon the death of a Participant, or if all such persons die prior to the
full distribution of the Participant's Account balance, then the legal
representative of the last survivor of the Participant and such persons,
or, if the Administrator shall not receive notice of the appointment of
any such legal representative within one year after such death, the
heirs-at-law of such survivor shall be the Beneficiaries to whom the
then remaining balance of the Participant's Account shall be distributed
(in the proportions in which they would inherit his intestate personal
property).
Any Beneficiary designation may be changed from time to time by the
filing of a new form. No notice given under this Section shall be
effective unless and until the Administrator actually receives such
notice.
"Compensation" means cash or other property payable with respect to a
Plan Year to a Participant under any agreement, plan, program or
arrangement of the Corporation or an Affiliate, including an annual
incentive award under Article IV ("Award").
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
5.3 PARTICIPATION. The Committee may select employees eligible to
participate in the MSAP ("Eligible Employees").
5.4 AMOUNT OF DEFERRAL. An Eligible Employee may elect to defer a
percentage, specified by the Eligible Employee, of his Compensation. Such
deferral shall be notionally invested in Stock.
5.5 VOLUNTARY PURCHASES OF STOCK. An Eligible Employee may elect to have a
designated portion of his Compensation paid in Stock in lieu of a cash payment
of such designated portion, or may purchase Stock for cash.
5.6 MATCHING CONTRIBUTIONS AND GRANTS.
(a) The Corporation may notionally match amounts deferred pursuant to
Section 5.4 upon such terms as the Committee may provide.
(b) The Corporation may match payments of Compensation made in Stock
pursuant to Section 5.5 with awards pursuant to Article III upon such terms as
the Committee may provide.
5.7 DISTRIBUTIONS. The Committee may determine the time and manner of
payment of notional Stock purchased pursuant to Section 5.4, and of any match by
the Corporation pursuant to Section 5.6.
5.8 DIVIDENDS. The Committee may determine the time and manner of payment
and/or crediting of dividends with respect to notional Stock under this Article.
5.9 ADMINISTRATION.
(a) The MSAP shall be administered by the Committee, which shall be the
"administrator" for purposes of, and to the extent required by, ERISA. The
Committee shall have such powers as may be necessary to discharge its duties
hereunder, including, but not by way of limitation, to construe and interpret
any provision of the MSAP or related provisions of this Program or of any
related agreement, notification or document (including, without limitation, by
supplying omissions from,
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correcting deficiencies in, or resolving inconsistencies or ambiguities in the
language of the MSAP or related provisions of this Program or such agreement,
notification or document), to determine the rights and status under the MSAP of
Participants and other persons, to decide disputes arising under the MSAP and to
make any determinations and findings with respect to benefits under the MSAP and
the persons entitled thereto as may be required for the purposes of the MSAP.
(b) The Committee may, from time to time, employ and/or designate agents
and delegate to them such administrative duties as it sees fit, and may from
time to time consult with legal counsel who may be counsel to the Corporation.
No member of the Committee shall act in respect of his own Account. All
decisions and determinations by the Administrator shall be final and binding on
all parties. All decisions of the Committee shall be made by the vote of the
majority, including actions in writing taken without a meeting.
(c) All elections, notices and directions under the MSAP by a Participant
shall be made on such forms as the Committee shall prescribe.
5.10 CLAIMS PROCEDURE. To the extent required by ERISA, the Committee will
provide to any Participant or Beneficiary whose claim for benefits under the
MSAP has been fully or partially denied (the "claimant") a written notice
setting forth (a) the specific reasons for such denial, (b) a designation of any
additional material or information required and (c) an explanation of this claim
review procedure. Such notice shall state that the claimant is entitled to
request a review in writing, by the Committee, of the decision denying the
claim. The claim will be reviewed by the Committee who may, but need not, grant
the claimant a hearing. On review, the claimant may have legal representation,
examine pertinent documents and submit issues and comments in writing. The
decision on review will be made within 120 days following the request, will be
provided in writing to the claimant and will be final and binding on all parties
concerned.
ARTICLE VI
ADMINISTRATION, GENERAL PROVISIONS
6.1 ADMINISTRATION OF THIS PROGRAM. (a) This Program shall be administered
by the Compensation and Organization Committee of the Board. The Committee shall
be composed of not less than two members of the Board, each of whom shall be a
"non-employee director" within the meaning of Rule 16b-3 and an "outside
director" within the meaning of Section 162(m) of the Code. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee.
(b) The interpretation and construction by the Committee of any provision
of this Program or of any agreement, notification or document evidencing the
grant of Option Rights, Appreciation Rights, Restricted Stock or Deferred Stock,
Performance Shares and Performance Units and any determination by the Committee
pursuant to any provision of this Program or any such agreement, notification or
document, shall be final and conclusive. No member of the Committee shall be
liable for any such action taken or determination made in good faith.
6.2 AMENDMENTS AND OTHER MATTERS. (a) This Program may be amended, altered
or discontinued at anytime and from time to time by the Board, and the Committee
may amend this Program to eliminate provisions which are no longer necessary as
a result of changes in tax or securities laws or regulations, or in the
interpretation thereof; provided, however, that except as expressly authorized
by this Program no such amendment, alteration or discontinuation shall:
(i) increase the maximum number of shares specified in Section 2.1(a);
(ii) increase the limitation on value of Performance Units specified in
Section 2.1(e); or
(iii) otherwise materially increase the benefits accruing to
Participants under this Program,
without the further approval of the shareholders of the Corporation.
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(b) The Committee shall not, without the further approval of the
shareholders of the Corporation, authorize the amendment of any outstanding
Option Right to reduce the Option Price. Furthermore, no Option Rights shall be
cancelled and replaced with grants having a lower Option Price without the
further approval of the shareholders of the Corporation.
(c) With the concurrence of the affected Optionee or Participant, the
Committee may cancel any agreement evidencing Option Rights or any other award
granted under this Program. In the event of such cancellation, the Committee may
authorize the granting of new Option Rights or other awards hereunder, which may
or may not cover the same number of shares of Stock that had been the subject of
the prior award, at such Option Price and subject to such other terms,
conditions and discretions as would have been applicable under this Program had
the cancelled Option Rights or other awards been granted.
(d) The Committee also may require Participants, or may permit Participants
to elect to, defer the issuance of shares of Stock or the settlement of awards
in cash under this Program pursuant to such rules, procedures or programs as it
may establish for purposes of this Program. The Committee also may provide that
deferred settlements include the payment or crediting of interest on the
deferral amounts, or the payment or crediting of dividend equivalents where the
deferral amounts are denominated in shares of Stock. In addition, the Committee
may provide that the deferral amounts may be credited with a notional return
during the period of deferral based upon the corresponding return on one or more
investments selected by the Committee or elected by the Participant in
accordance with the procedures established by the Committee for this purpose.
The Committee shall have the right at any time to accelerate the payment or
settlement of any grant under this Program, including, without limitation, any
grant subject to any prior deferral election.
(e) This Program shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Corporation or
any Affiliate and shall not interfere in any way with any right that the
Corporation or any Affiliate would otherwise have to terminate any Participant's
employment or other service at any time.
(f) To the extent that any provision of this Program would prevent any
Option Right that was intended to qualify under particular provisions of the
Code from so qualifying, such provision of this Program shall be null and void
with respect to such Option Right; provided, however, that such provision shall
remain in effect with respect to other Option Rights, and there shall be no
further effect on any provision of this Program.
6.3 UNFUNDED STATUS OF PROGRAM. This Program is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant, Beneficiary or Optionee by the
Corporation, nothing contained in this Program shall give any such Participant,
Beneficiary or Optionee any rights that are greater than those of a general
creditor of the Corporation. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the obligations created
under this Program to deliver shares of Stock or payments in lieu of or with
respect to awards hereunder, provided, however, that, unless the Committee
otherwise determines with the consent of the affected Participant, the existence
of such trusts or other arrangements shall be consistent with the "unfunded"
status of the Program.
6.4 CHANGE IN CONTROL PROVISIONS. The Committee, in its discretion, may
provide at the time of a grant of any award under this Program that the terms of
the award, including, but not limited to, the method of determining Fair Market
Value, or the date on which an award vests or becomes exercisable, may be
modified in the event of a change in control. Except as otherwise provided under
this Program, the Committee may determine at any time at or after the grant of
an award under this Program, (a) the criteria used to determine whether a change
in control has occurred, and (b) whether a change in control has in fact
occurred.
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6.5 ADJUSTMENTS. The Committee may make or provide for such adjustments in
the (a) number of shares of Stock covered by outstanding Option Rights,
Appreciation Rights, Deferred Stock and Performance Shares granted hereunder,
(b) prices per share applicable to such Option Rights and Appreciation Rights,
and (c) kind of shares (including shares of another issuer) covered thereby, as
the Committee in its sole discretion may in good faith determine to be equitably
required in order to prevent dilution or enlargement of the rights of
Participants that otherwise would result from (i) any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Corporation, (ii) any merger, consolidation, spin-off,
spin-out, split-off, split-up, reorganization, partial or complete liquidation
or other distribution of assets, issuance of rights or warrants to purchase
securities or (iii) any other corporate transaction or event having an effect
similar to any of the foregoing. In the event of any such transaction or event,
the Committee may provide in substitution for any or all outstanding awards
under this Program such alternative consideration as it may in good faith
determine to be equitable under the circumstances and may require in connection
therewith the surrender of all awards so replaced. Moreover, the Committee may
on or after the Date of Grant provide in the agreement evidencing any award
under this Program that the holder of the award may elect to receive an
equivalent award in respect of securities of the surviving entity of any merger,
consolidation or other transaction or event having a similar effect, or the
Committee may provide that the holder will automatically be entitled to receive
such an equivalent award. In any case, such substitution of securities shall not
require the consent of any person who is granted awards pursuant to this
Program.
6.6 WITHHOLDING TAXES. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Program,
and the amounts available to the Corporation for such withholding are
insufficient, it shall be a condition to the receipt of such payment or the
realization of such benefit that the Participant or such other person make
arrangements satisfactory to the Corporation for payment of the balance of such
taxes required to be withheld. At the discretion of the Committee, such
arrangements may include relinquishment of a portion of such benefit. The
Corporation and any Participant or such other person may also make similar
arrangements with respect to the payment of any taxes with respect to which
withholding is not required.
6.7 GENERAL PROVISIONS.
(a) The Committee may require each person purchasing shares of Stock
pursuant to an option or otherwise under this Program to represent to and agree
with the Corporation in writing that the optionee or Participant is acquiring
the shares without a view to distribution thereof. The certificates for such
shares may include any legend which the Committee deems appropriate to reflect
any restrictions on transfer.
All certificates for shares of Stock or other securities delivered under
this Program shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Exchange Act, any stock exchange upon which the
shares of Stock are then listed, and any applicable Federal or state securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(b) Nothing contained in this Program shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.
(c) No later than the date as of which an amount first becomes includible
in the gross income of the Participant for applicable income tax purposes with
respect to any award under this Program, the Participant shall pay to the
Corporation, or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state, or local taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the
Committee, the minimum required withholding obligations may be settled with
Stock, including shares of Stock that are part of
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the award that gives rise to the withholding requirement. The obligations of the
Corporation under this Program shall be conditional on such payment or
arrangements and the Corporation shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant.
(d) At the time of grant, the Committee may provide in connection with any
grant made under this Program that the shares of Stock received as a result of
such grant shall be subject to a right of first refusal, pursuant to which the
Participant shall be required to offer to the Corporation any shares of Stock
that the Participant wishes to sell, with the price being the then Fair Market
Value of the shares of Stock, subject to such other terms and conditions as the
Committee shall specify at the time of grant.
(e) The reinvestment of dividends in additional Restricted Stock (or in
other types of Program awards) at the time of any dividend payment shall only be
permissible if sufficient shares of Stock are available under ArticleII for such
reinvestment (taking into account then outstanding options and other Program
awards).
(f) The Committee shall establish such procedures as it deems appropriate
for a Participant to designate a beneficiary to whom any amounts payable in the
event of the Participant's death are to be paid.
(g) This Program and all awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware,
to the extent not preempted by federal law.
6.8 EFFECTIVE DATE OF PROGRAM. This Program shall be effective on April
24, 1997; provided, however, that the effectiveness of this Program is
conditioned on its approval by an affirmative vote of the holders of shares of
Stock represented at a meeting duly held in accordance with Delaware law within
12 months after the date this Program is adopted by the Board. All awards under
this Program shall be null and void if this Program is not approved by such
stockholders within such twelve-month period.
6.9 TERM OF PROGRAM. No award under this Program shall be granted pursuant
to the Program on or after the 10th anniversary of the earlier of the date of
stockholder approval or the date this Program is adopted by the Board, but
awards granted prior to such 10th anniversary may extend beyond that date.
6.10 PROCEEDS AND EXPENSES. The proceeds received by the Corporation from
the sale of shares of Stock pursuant to the exercise of Option Rights shall be
used for general corporate purposes. The Corporation shall bear any expenses
associated with the administration of this Program.
6.11 SEVERABILITY. If any provision of this Program shall be held illegal
or invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of this Program, but this Program shall be construed and
enforced as if such illegal or invalid provision had never been included herein.
6.12 EXCLUSION FROM CERTAIN RESTRICTIONS. Notwithstanding anything in this
Program to the contrary, not more than 274,036 shares of Stock in the aggregate
available under this Program (consisting of 124,036 shares of Stock approved for
such purposes in 1994 and 150,000 shares of Stock added as of this Amendment and
Restatement) may be subject to awards pursuant to Article III:
(a) in the case of grants of Restricted Stock, which do not meet the
requirements of the last sentence of Section 3.4(c);
(b) in the case of grants of Restricted Stock, as to which the Committee
may accelerate or waive any restrictions imposed under Section 3.4(d);
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(c) in the case of grants of Deferred Stock, which do not meet the
requirements of the last sentence of Section 3.5(c); or
(d) in the case of grants of Performance Shares and Performance Units,
which do not meet the requirements of Section 3.6(b).
The undersigned, pursuant to the approval of the Board on January 24, 1997
does herewith execute The LTV Corporation Management Incentive Program (Amended
and Restated Effective April 24, 1997).
<TABLE>
<S> <C>
ATTEST THE LTV CORPORATION
- -------------------------------------------- --------------------------------------------
Assistant Secretary Chairman of the Board of Directors
</TABLE>
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<PAGE> 22
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
MANAGEMENT STOCK ACQUISITION PROGRAM
Terms and Conditions
--------------------
ARTICLE I
ESTABLISHMENT
1.1 ESTABLISHMENT.
-------------
(a) The Compensation and Organization Committee of the Board of
Directors of The LTV Corporation, pursuant to authority granted in Article V of
The LTV Corporation Management Incentive Program (the "Program"), hereby adopts
the following terms and conditions applicable to the Management Stock
Acquisition Program component of the Program ("MSAP").
(b) Grants under the MSAP shall be subject to the same terms and
conditions as set forth in Articles I, II and III of the Program and, to the
extent not inconsistent herewith, the MSAP shall be administered in accordance
with Article VI of the Program.
1.2 TERM OF MSAP. The MSAP shall terminate upon the earliest of (a) the
termination of the Program, (b) the termination by the Committee of the MSAP or
(c) the amendment of the Program terminating the authority to establish and
maintain the MSAP.
ARTICLE II
DEFINITIONS
1.3 SPECIAL DEFINITIONS APPLICABLE TO THE MSAP. Unless provided
otherwise in the MSAP, all capitalized terms shall have the same meanings as set
forth in the Program. For purposes of the MSAP, the following terms shall be
defined as set forth below:
"ACCOUNT" means the bookkeeping account maintained for each
Participant showing his interest under the MSAP. An account shall
consist of a "Deferred Shares Account" and a "Matching Shares Account".
"AWARD" means the sum of (a) the annual cash award under the AIP
and (b) any similar annual cash incentive bonus under any other
equivalent Corporation or Affiliate-sponsored bonus program (as
determined by the Committee), which, in either case, is earned with
respect to services performed by the Participant during such Plan Year,
whether or not such award is actually paid to the Participant during
such Plan Year.
<PAGE> 23
"DEFERRAL COMMITMENT" means an agreement by a Participant in a
Participation Agreement to have a specified percentage or dollar amount
of his Compensation deferred under the MSAP for a specified period in
the future.
"DEFERRED SHARES" means the shares of Stock notionally credited
to a Participant's Deferred Shares Account.
"FINANCIAL HARDSHIP" means an unforeseeable financial emergency
of the Participant, determined by the Committee as provided in Section
8.6 on the basis of information supplied by the Participant, arising
from an illness, Disability, casualty loss, sudden financial reversal or
other such unforeseeable occurrence, but not including foreseeable
events such as the purchase of a house or education expenses for
children.
"INSIDER PARTICIPANT" means any Participant who is required to
file reports with the Securities and Exchange Commission pursuant to
Section 16(a) of the Exchange Act, and any rules promulgated thereunder.
"MATCHING SHARES" means the notional Stock granted to a
Participant pursuant to Section 5.1(a) and credited to his Matching
Shares Account and/or shares of Restricted Stock granted pursuant to
Section 5.1(b), as the context requires.
"PARTICIPATION AGREEMENT" means the agreement submitted by a
Participant to the Committee with respect to a Plan Year.
"PLAN YEAR" means the 12-month period beginning January 1 through
December 31; provided, however, that the first Plan Year shall mean the
period beginning April 24, 1997 and ending December 31, 1997.
"QUARTER DATE" means the last day of a calendar quarter.
"SETTLEMENT DATE" means the earlier of the date on which a
Participant terminates employment with the Corporation and each of its
Affiliates and the date selected by a Participant in a Participation
Agreement for distribution of all or a portion of the amounts deferred
during a Plan Year as provided in Section 8.2. A leave of absence
granted by the Corporation will not be considered a termination of
employment during the term of such leave.
"WINDOW PERIOD" means the period from the third business day to
the twelfth business day following the public release by the Corporation
of its earnings, or such shorter period, as determined by the Senior
Vice President and General Counsel of the Corporation.
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<PAGE> 24
ARTICLE III
PARTICIPATION
3.1 PARTICIPATION. Any Participant for whom the Committee has
established a stock ownership requirement may participate in the MSAP.
3.2 DURATION OF PARTICIPATION. Participation in the MSAP shall continue
as long as the Participant is eligible to receive benefits under the MSAP.
3.3 INELIGIBLE PARTICIPANT. Notwithstanding any other provisions of the
MSAP to the contrary, if the Committee determines that any Participant may not
qualify as a "management or highly compensated employee" within the meaning of
ERISA or regulations thereunder, the Committee may determine, in its sole
discretion, that such Participant shall cease to be eligible to make deferral
elections under Section 4.1. Upon such determination, the Corporation shall make
an immediate distribution of shares of Stock to the Participant equal to the
amount credited to his Deferred Shares Account and the vested Matching Shares
credited pursuant to Section 5.1(a). Upon such payment all of the Participant's
elections as to the time and manner of payment of his Deferred Shares Account
shall be deemed to be cancelled. All nonvested Matching Shares credited pursuant
to Section 5.1(a) shall continue to be held in the Participant's Account until
vested in accordance with Section 6.6(b).
ARTICLE IV
DEFERRALS AND VOLUNTARY AMOUNTS
4.1 AMOUNT OF DEFERRAL. With respect to each Plan Year, a Participant
may elect to defer a specified dollar amount or percentage of his Compensation.
An election may be made (i) prior to the last business day of May in any Plan
Year with respect to an Award, and (ii) prior to the beginning of any Plan Year
with respect to Compensation, by filing a Participation Agreement with the
Committee. Notwithstanding the preceding sentence, a Participant who first
becomes eligible during a Plan Year may, within 30 days after he becomes a
Participant, elect to participate in the MSAP for such Plan Year by filing a
Participation Agreement with the Committee, and his Deferral Commitment shall be
effective only with regard to Compensation earned during the Plan Year following
the filing of the Participation Agreement with the Committee.
4.2 MODIFICATION OF DEFERRAL COMMITMENTS. A Deferral Commitment shall be
irrevocable with respect to the Plan Year for which it is made, except that the
Committee may, in its sole discretion, permit a Participant to terminate,
prospectively, any Deferral Commitment for a Plan Year. If a Participant
terminates a Deferral Commitment during a Plan Year, such Participant will not
be permitted to enter into a new Deferral Commitment for such Plan Year.
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<PAGE> 25
4.3 AUTOMATIC DEFERRALS. A Participant's Compensation in excess of
amounts deductible by the Corporation with respect to a Plan Year under Section
162(m) of the Code may be deferred under the MSAP under rules adopted by the
Committee.
4.4 VOLUNTARY PURCHASES OF STOCK.
----------------------------
(a) For any calendar month, a Participant may elect by the filing
of a Participation Agreement with the Committee, to have a portion of his
Compensation for such month (the amount so elected referred as a "Voluntary
Amount") paid by the Corporation or any Affiliate in the form of Stock in lieu
of a cash payment of such Voluntary Amount. Such election, unless subsequently
modified, shall remain in effect for the period specified therein or until
modified. Any such modification shall be made in a modified Participation
Agreement.
(b) In addition, during any Window Period, a Participant may
purchase Stock from sources other than the Corporation. The Participant shall
provide such evidence of the purchases as the Committee may require. For
purposes of this Subsection, the exercise of a stock option shall not be
considered a purchase of Stock.
(c) Promptly following each Quarter Date, the Corporation shall
issue whole shares of Stock to each Participant who has made an election
pursuant to Subsection (a) of this Section. The number of whole shares of Stock
shall be calculated with respect to each calendar month and shall be equal to
such Participant's Voluntary Amount for such month (plus any dividends paid with
respect to shares of Stock purchased with Voluntary Amounts in prior months for
which shares of Stock have not been issued) divided by the Fair Market Value
(determined only under clause (i) of such definition) on the last day of such
month. To the extent that the application of the foregoing formula would result
in the issuance of fractional shares, no fractional shares of Stock shall be
issued, but instead, the Corporation shall maintain a separate non-interest
bearing account for each Participant, which account shall be credited with the
amount of any Voluntary Amounts not convertible into whole shares of Stock,
which amounts shall be combined with Voluntary Amounts, which are paid for the
next following calendar month. When whole shares of Stock are issued by the
Corporation to the Participant with respect to a calendar month, the amounts in
such accounts shall be reduced by that amount which (when added to the Voluntary
Amounts for such Participant for such month) results in the issuance of the
maximum number of whole shares of Stock to such Participant. An Insider
Participant shall hold the whole shares of Stock issued by the Corporation
pursuant to this Subsection for a period of 6 months from the date of issuance
unless the issuance of such Stock is otherwise exempt under Rule 16b-3. The
Corporation shall pay any and all fees and commissions incurred in connection
with the payment of Voluntary Amounts to a Participant in shares of Stock.
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<PAGE> 26
ARTICLE V
MATCHING CONTRIBUTIONS AND GRANTS
5.1 MATCHING CONTRIBUTIONS AND GRANTS.
---------------------------------
(a) The Corporation shall credit to the Participant's Matching
Shares Account 25% of the amounts allocated to his Deferred Shares Account as
the result of deferrals made pursuant to Section 4.1. Matching Shares credited
pursuant to this Subsection shall become nonforfeitable in accordance with
Section 6.6.
(b) On each Quarter Date, the Corporation shall grant pursuant to
Section 3.4 of the Program shares of Restricted Stock equal in number to 25% of
the sum of the whole shares of Stock purchased by the Participant during the
calendar quarter ending on the Quarter Date as provided in Section 4.4(b) and
issued to the Participant under Section 4.4(c) on account of his Voluntary
Amount on such Quarter Date. Shares of Restricted Stock shall become
nonforfeitable three years after the Date of Grant, subject to such conditions
of continuous employment and continuous stock ownership as are set forth in a
Restricted Stock Agreement by and between the Corporation and the Participant.
ARTICLE VI
PARTICIPANT ACCOUNTS
6.1 ESTABLISHMENT OF ACCOUNTS. The Corporation, through its accounting
records, shall establish a Deferred Shares Account and a Matching Shares Account
for each Participant who elects to defer Compensation as provided in Section
4.1.
6.2 CREDITING OF DEFERRAL COMMITMENTS AND MATCHING CONTRIBUTIONS. The
portion of a Participant's Compensation that is deferred pursuant to a Deferral
Commitment and the related matching contribution under Section 5.1(a) shall be
credited to the Participant's Deferred Shares Account and Matching Shares
Account, respectively, as of the date the corresponding non-deferred portion of
the Compensation would have been paid to the Participant; provided, however,
that the portion of a Participant's Compensation that is deferred pursuant to
Section 4.3 shall be credited to the Participant's Account as of the date the
Compensation would have been paid to the Participant absent the application of
Section 4.3. As of the end of each calendar month, (i) the credits to each
Participant's Deferred Shares Account for the calendar month shall be notionally
invested in a number of whole and fractional Deferred Shares determined by
dividing such credits by the Fair Market Value (determined only under clause (i)
of such definition) at the end of such month, and (ii) the credits for the
calendar month to each Participant's Matching Shares Account shall be notionally
invested in a number of whole and fractional Matching Shares determined by
dividing such credits by the Fair Market Value (determined only under clause (i)
of such definition) at the end of such month. Matching Shares shall be grants of
Deferred Shares pursuant to Section 3.5 of the Program.
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<PAGE> 27
6.3 DETERMINATION OF ACCOUNTS.
-------------------------
(a) The balance credited to each Participant's Account as of a
particular date shall equal the amount credited pursuant to Section 6.2, and
shall be adjusted in the manner provided in Section 6.4.
(b) The Corporation, through its accounting records, shall
maintain a separate and distinct record of the amount in each Account as
adjusted to reflect income and distributions.
6.4 ADJUSTMENTS TO ACCOUNTS.
-----------------------
(a) Each Account shall be credited as of the end of each calendar
month with additional Deferred Shares and Matching Shares equal in value to the
amount of cash dividends paid by the Corporation during such calendar month on
that number of Shares equivalent to the number of Deferred Shares and Matching
Shares in such Account on any dividend payment date during such calendar month.
The dividend equivalents shall be calculated by dividing the dollar value of
such dividend equivalents by the Fair Market Value (determined only under clause
(i) of such definition) at the end of such month next following the dividend
payment date. Until a Participant or his Beneficiary receives his entire
Account, the unpaid balance thereof credited in Deferred Shares and Matching
Shares shall be credited with dividend equivalents as provided in this
Subsection.
(b) Each Participant's Account shall be immediately debited with
the amount of any distributions under Article VIII to or on behalf of the
Participant or, in the event of his death, his Beneficiary.
6.5 STATEMENT OF ACCOUNTS. As soon as practicable after the end of each
calendar quarter, a statement shall be furnished to each Participant or, in the
event of his death, to his Beneficiary showing the status of his Account as of
the end of the calendar quarter, any changes in his Account since the end of the
immediately preceding calendar quarter, and such other information as the
Committee shall determine.
6.6 VESTING OF ACCOUNTS.
-------------------
(a) Each Participant shall at all times have a nonforfeitable
interest in his Deferred Shares Account balance.
(b) Matching Shares attributable to Section 5.1(a) in a
Participant's Matching Shares Account shall become nonforfeitable as of the
Quarter Date coinciding with or next following the third anniversary of the
crediting of such Matching Shares (the "vesting period"), provided that:
(i) the Participant has remained in the continuous employ
of the Corporation or an Affiliate during the applicable vesting
period; and
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<PAGE> 28
(ii) the Participant has, during the applicable vesting
period, continuously owned not less than the number of shares of
Stock owned by the Participant at the beginning of such vesting
period.
A Participant will not be deemed to have failed to satisfy the ownership
requirement described in Paragraph (ii) of this Subsection if at all times
during the applicable vesting period the number of shares of Stock owned by the
Participant together with the number of Deferred Shares and Matching Shares
(whether or not vested) credited to the Participant's Account equal or exceed
the Participant's stock ownership requirement which takes effect on December 31,
1999, or such other date as the Committee determines.
(c) Notwithstanding the provisions of Subsection (b) of this
Section, the nonvested portion of a Participant's Account will become
immediately nonforfeitable in the event of the Participant's death or
Disability, or upon the occurrence of a change in control of the Corporation
that shall occur while the Participant is an employee of the Corporation or an
Affiliate.
(d) Notwithstanding the provisions of Subsection (b) of this
Section, the nonvested portion of a Participant's Account will become
nonforfeitable in the event of the Participant's Retirement, provided that he
retains ownership of the nonvested shares of Stock in such Account until the
third anniversary of the Date of Grant.
(e) Any portion of an Account as to which the requirements of
Subsection (b) of this Section have not been satisfied shall be forfeited,
unless the Committee determines otherwise.
(f) For purposes of this Section, (i) the continuous employment
of a Participant with the Corporation or an Affiliate shall not be deemed to
have been interrupted, and the Participant will not be deemed to have ceased to
be an employee of the Corporation or an affiliate, by reason of the transfer of
his employment among the Corporation and its Affiliates or of an approved leave
or absence; and (ii) the term "change in control" will have the meaning given
such term under The LTV Corporation Supplemental Management Retirement Plan as
in effect at the time of such occurrence.
ARTICLE VII
FINANCING OF BENEFITS
7.1 FINANCING OF BENEFITS. Benefits distributable under the MSAP to a
Participant or, in the event of his death, to his Beneficiary shall be
distributed by the Corporation from its general assets. The obligation to make
distribution of benefits under the MSAP represents an unfunded, unsecured
obligation of the Corporation. Notwithstanding the fact that the Participants'
Accounts may be adjusted by Deferred Shares and Matching Shares that are
measured by reference to the notional performance of Stock, no person entitled
to distribution under the MSAP shall have any claim, right, security interest or
other interest
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in any fund, trust, account, insurance contract, or asset of the Corporation
which may be responsible for such distribution.
ARTICLE VIII
DISTRIBUTIONS
8.1 DISTRIBUTION OF STOCK.
---------------------
(a) A Participant or, in the event of his death, his Beneficiary
shall be entitled to distribution of all or a part of the balance of his
Account, payable in shares of Stock, as provided in this Article, following his
Settlement Date or Dates. Any fractional share shall be paid in cash with the
final distribution of a Participant's Account.
(b) The number of shares of Stock distributable shall be equal to
the number of Deferred Shares and Matching Shares in the Participant's Account
determined as of the Quarter Date coincident with or next following his
Settlement Date or Dates.
8.2 IN-SERVICE DISTRIBUTION. A Participant may irrevocably elect to
receive an in-service distribution of the Deferred Shares attributable to his
deferred Compensation, and related nonforfeitable Matching Shares, for any Plan
Year on or commencing not earlier than the beginning of the fourth Plan Year
following the Plan Year in which such Compensation otherwise would have been
first payable. A Participant's election of an in-service distribution shall be
made in the Participation Agreement filed for the Plan Year as provided in
Article III. The Participant shall elect irrevocably to receive such Deferred
Shares and related Matching Shares as an in-service distribution of Stock under
one of the forms provided in Section 8.3.
8.3 FORM OF DISTRIBUTION.
--------------------
(a) As soon as practicable after the end of the Quarter Date in
which a Participant's Settlement Date occurs, but in no event later than 30 days
following the end of such Quarter Date, the Corporation shall distribute or
cause to be distributed to the Participant a number of shares as determined
under Section 8.1, under one of the forms provided in this Section.
Notwithstanding the foregoing, if a Participant is at least age 55, he may elect
that the distribution of all or a portion of his nonforfeitable Account balance
be made or commence on a date between the Settlement Date and the date the
Participant attains age 65.
(b) Distribution of a Participant's Account with respect to any
Plan Year shall be made in one of the following forms as elected by the
Participant:
(i) in a single distribution;
(ii) in not more than 10 annual installments; or
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<PAGE> 30
(iii) a combination of (i) and (ii) above. The
Participant shall designate the percentage payable
under each option.
(c) In the event of a Participant's death, the number of shares
of Stock in his Account shall be distributed to his Beneficiary in a single
distribution as soon as practicable after the end of the Quarter Date in which
the Participant's death occurs.
(d) The Participant's election of the form of distribution shall
be made at the time his initial election to defer is made pursuant to Section
4.1, or if later by written notice filed with the Committee at least one year
prior to the Participant's voluntary termination of employment with, or
Retirement from, the Corporation. Any such election may be changed by the
Participant at any time and from time to time without the consent of any other
person by filing a later signed written election with the Committee; provided
that any election made less than one year prior to the Participant's voluntary
termination of employment or Retirement shall not be valid, and in such case
payment shall be made in accordance with the Participant's prior election.
(e) The number of shares of Stock to be distributed in each
installment shall be equal to the quotient obtained by dividing the number of
Deferred Shares and nonforfeitable Matching Shares in the Participant's Account
as of the date of such installment payment by the number of installment payments
remaining to be made to such Participant at the time of calculation. Fractional
shares of Stock shall be rounded down to the nearest whole share, and such
fractional amount shall be re-credited as a fractional Deferred Share or
Matching Share in the Participant's Account.
(f) If a Participant fails to make an election in a timely manner
as provided in this Section, distribution shall be made in a single distribution
as soon as practicable after the end of the Quarter Date in which a
Participant's Settlement Date occurs.
8.4 SPECIAL DISTRIBUTIONS. Notwithstanding any other provision of the
MSAP, a Participant may elect at any time to receive a distribution of part or
all of the nonforfeitable portion of his Account in one or more distributions if
(and only if) the number of Deferred Shares and nonforfeitable Matching Shares
in the Participant's Account subject to such distribution is reduced by 10%. Any
distribution made pursuant to such an election shall be made as soon as
practicable following the date such election is submitted to the Committee. The
remaining 10% of the portion of the electing Participant's Account subject to
such distribution shall be forfeited. Forfeitable Matching Shares attributable
to the portion of the electing Participant's Deferred Shares subject to such
distribution shall also be forfeited.
8.5 FACILITY OF PAYMENT. Whenever and as often as any Participant or his
Beneficiary entitled to payments under the MSAP shall be under a legal
disability or, in the sole judgment of the Committee, shall otherwise be unable
to apply such payments to his own best interests and advantage, the Committee in
the exercise of its discretion may direct all or any portion of such payments to
be made in any one or more of the following ways: (a) directly to him; (b) to
his legal guardian or conservator; or (c) to his spouse or to any
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<PAGE> 31
other person, to be expended for his benefit; and the decision of the Committee,
shall in each case be final and binding upon all persons in interest.
8.6 HARDSHIP DISTRIBUTIONS. Upon a finding by the Committee that a
Participant has suffered a Financial Hardship, the Committee may, in its sole
discretion, distribute to the Participant shares of Stock which do not exceed in
value the amount required to meet the immediate financial needs created by the
Financial Hardship and not reasonably available from other sources of the
Participant; provided, however, that in no event shall any amount attributable
to a Deferral Commitment be distributed less than 6 months after the date of the
applicable Participation Agreement. No distributions pursuant to this Section
may be made in excess of the value of the Participant's nonforfeitable Account
at the time of such distribution. Notwithstanding the foregoing provisions of
this Section, no distributions pursuant to this Section may be made to a
Participant who is an Insider Participant if such distribution could cause a
matchable transaction under Rule 16b-3.
8.7 PAYMENT OF SMALL ACCOUNTS. Notwithstanding any other provision of
the MSAP, if a Participant's Account is credited with 1,000 shares of Stock or
less on his Settlement Date, his Account shall be distributed to him in a single
distribution as soon as practicable following his Settlement Date.
ARTICLE IX
ADMINISTRATION
9.1 ADMINISTRATION OF MSAP.
----------------------
(a) The MSAP shall be administered by the Committee. The
Committee shall have such powers as may be necessary to discharge its duties
hereunder, including, but not by way of limitation, to construe and interpret
any provision of the MSAP or related provisions of the Program or of any related
agreement, notification or document (including, without limitation, by supplying
omissions from, correcting deficiencies in, or resolving inconsistencies or
ambiguities in the language of the MSAP or related provisions of the Program or
such agreement, notification or document), to determine the rights and status
under the MSAP of Participants and other persons, to decide disputes arising
under the MSAP and to make any determinations and findings with respect to
benefits under the MSAP and the persons entitled thereto as may be required for
the purposes of the MSAP. The Committee may, from time to time, employ and/or
designate agents and delegate to them such administrative duties as it sees fit,
and may from time to time consult with legal counsel who may be counsel to the
Corporation. All decisions and determinations by the Committee shall be final
and binding on all parties. All decisions of the Committee shall be made by the
vote of the majority, including actions in writing taken without a meeting. All
elections, notices and directions under the MSAP by a Participant shall be made
on such forms as the Committee shall prescribe.
(b) The Committee shall be the "administrator" under the MSAP for
purposes of ERISA.
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<PAGE> 32
9.2 CLAIMS PROCEDURE. The Committee will provide to any Participant or
Beneficiary whose claim for benefits under the MSAP has been fully or partially
denied (the "claimant") a written notice setting forth (a) the specific reasons
for such denial, (b) a designation of any additional material or information
required and (c) an explanation of the MSAP's claim review procedure. Such
notice shall state that the claimant is entitled to request a review in writing,
by the Committee, of the decision denying the claim. The claim will be reviewed
by the Committee who may, but need not, grant the claimant a hearing. On review,
the claimant may have legal representation, examine pertinent documents and
submit issues and comments in writing. The decision on review will be made
within 120 days following the request, will be provided in writing to the
claimant and will be final and binding on all parties concerned.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 AMENDMENT AND WITHDRAWAL.
------------------------
(a) The MSAP may be amended from time to time by the Committee.
No amendment, or termination of the MSAP pursuant to Section 1.2, however, may
adversely affect the amount or timing of payment of any person's benefits
accrued under the MSAP to the date of amendment or termination without such
person's written consent.
(b) The Corporation shall require any successor (whether direct
or indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business and/or assets of the Corporation
expressly to assume and to agree to perform the MSAP in the same manner and to
the same extent the Corporation would be required to perform if no such
succession had taken place. The MSAP shall be binding upon and inure to the
benefit of the Corporation and any successor of or to the Corporation, including
without limitation any persons acquiring directly or indirectly all or
substantially all of the business and/or assets of the Corporation whether by
sale, merger, consolidation, reorganization or otherwise (and such successor
shall thereafter be deemed the "Corporation" for the purposes of the MSAP), and
the heirs, beneficiaries, executors and administrators of each Participant.
10.2 INTERESTS NOT TRANSFERABLE. No person shall have any right to
commute, encumber, pledge or dispose of any interest herein or right to receive
payments under the MSAP, nor shall such interests or payments be subject to
seizure, attachment or garnishment for the payments of any debts, judgments,
alimony or separate maintenance obligations or be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise, all payments and rights
hereunder being expressly declared to be nonassignable and nontransferable.
10.3 TOP-HAT PLAN. The MSAP is intended to be a plan which is unfunded
and maintained primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees within the meaning
of Sections 201, 301
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<PAGE> 33
and 401 of ERISA, and therefore to be exempt from the provisions of Parts 2, 3
and 4 of Title I of ERISA. Accordingly, notwithstanding any other provision of
the MSAP, the MSAP will terminate and no further benefits will accrue hereunder
in the event it is determined by a court of competent jurisdiction or by an
opinion of counsel based upon a change in law that the MSAP constitutes an
employee pension benefit plan within the meaning of Section 3(2) of ERISA, which
is not so exempt. In addition and notwithstanding any other provision of the
MSAP, in the absolute discretion of the Committee, the amount credited to each
Participant's Account under the MSAP as of the date of termination, which shall
be a Quarter Date for purposes of the MSAP, will be distributed immediately to
such Participant in shares of Stock.
COMPENSATION AND ORGANIZATION
COMMITTEE OF THE BOARD OF
DIRECTORS OF THE LTV CORPORATION
By:
-------------------------------------
Dated:
--------------
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<PAGE> 1
EXHIBIT 4.4
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Incentive Stock Option Agreement
--------------------------------
WHEREAS, ____________________ (the "Optionee") is an employee of
The LTV Corporation (the "Corporation") or an Affiliate;
WHEREAS, the grant of an incentive stock option to the Optionee
has been duly authorized by a resolution of the Compensation and Organization
Committee (the "Committee") of the Board of Directors (the "Board") of the
Corporation duly adopted on April 25, 1997 (the "Date of Grant"); and
WHEREAS, the option granted hereunder is intended to be an
"incentive stock option" within the meaning of that term under Section 422 of
the Internal Revenue Code of 1986 (the "Code").
NOW, THEREFORE, pursuant to the Corporation's Management Incentive
Program (the "Program"), the Corporation hereby grants to the Optionee an option
(the "Option") pursuant to this Incentive Stock Option Agreement (the
"Agreement") to purchase ______ shares of the Corporation's common stock, par
value $0.50 per share ("Stock"), at the price of ______ Dollars ($______) per
share (the "Option Price"), and agrees to cause certificates for any shares of
Stock purchased hereunder to be delivered to the Optionee upon full payment of
the Option Price, subject to the applicable terms and conditions of the Program
and this Agreement.
1. EXERCISE OF OPTION. (a) Unless and until terminated as hereinafter
provided, the Option will become exercisable to the extent of one-third of the
Stock hereinabove specified on each of the first 3 anniversaries of the Date of
Grant for so long as the Optionee remains in the continuous employ of the
Corporation or an Affiliate. For the purposes of this Agreement, the continuous
employment of the Optionee with the Corporation or an Affiliate will not be
deemed to have been interrupted, and the Optionee will not be deemed to have
ceased to be an employee of the Corporation or an Affiliate, by reason of (i)
the transfer of his employment among the Corporation and its Affiliates or (ii)
an approved leave of absence. To the extent that the Option will have so become
exercisable, it may be exercised in whole or in part from time to time.
(b) Notwithstanding the provisions of Subsection (a) of this
Section, the Option will become immediately exercisable in full upon the
occurrence of a change in control of the Corporation. For purposes of this
Agreement, the term "change in control" will have the meaning given such term
under The LTV Corporation Supplemental Management Retirement Plan as in effect
on the Date of Grant.
<PAGE> 2
2. PAYMENT OF OPTION PRICE. The Option Price is payable (a) in cash or by
certified or cashier's check or other cash equivalent acceptable to the
Corporation payable to the order of the Corporation, (b) by Stock (including by
attestation) owned by the Optionee for (i) more than one year prior to the date
of exercise and for more than 2 years from the date on which the option was
granted, if they were originally acquired by the Optionee pursuant to the
exercise of an incentive stock option, or (ii) more than 6 months prior to the
date of exercise, if they were originally acquired by the Optionee other than
pursuant to the exercise of an incentive stock option, or (c) by a combination
of Stock and cash or certified or cashier's check. The requirement of payment in
cash will be deemed satisfied if the Optionee has made arrangements satisfactory
to the Corporation with a bank or broker that is a member of the National
Association of Securities Dealers, Inc. to sell on the date of exercise a
sufficient number of shares of Stock being purchased so that the net proceeds of
the sale transaction will at least equal the aggregate Option Price and pursuant
to which the bank or broker undertakes to deliver the aggregate Option Price to
the Corporation not later than the date on which the sale transaction will
settle in the ordinary course of business.
3. TERM OF OPTION. The Option will terminate on the earliest of the
following dates:
(a) Three months after the Optionee ceases to be an employee of
the Corporation or an Affiliate for any reason other than Retirement, death or
Disability;
(b) Five years after the Retirement, death or Disability of the
Optionee, if the Optionee retires, dies or becomes disabled while an employee of
the Corporation or an Affiliate;
(c) Ten years from the Date of Grant.
In the event that the Optionee's employment with the Corporation and its
Affiliates is terminated for Cause, the Option will terminate as of the time of
such termination, notwithstanding any other provision of this Agreement.
4. TRANSFERABILITY. The Option may not be transferred except by will or
the laws of descent and distribution and may not be exercised during the
lifetime of the Optionee except by the Optionee or the Optionee's guardian or
legal representative acting on behalf of the Optionee in a fiduciary capacity
under state law and court supervision.
5. COMPLIANCE WITH LAW. The Corporation will make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Corporation will not
be obligated to issue any Stock pursuant to this Agreement if the issuance
thereof would result in a violation of any such law.
6. ADJUSTMENTS. The Committee will make any adjustments in the Option
Price and in the number and kind of shares of stock or other securities covered
by this Agreement that the Committee may determine to be equitably required to
prevent dilution or enlargement
2
<PAGE> 3
of the Optionee's rights under this Agreement that would result from any (a)
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Corporation, (b) merger, consolidation,
spin-off, spin-out, split-off, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of rights or warrants to
purchase securities or (c) other corporate transaction or event having an effect
similar to any of the foregoing; provided, however, that no adjustment may be
made without the prior written consent of the Optionee if the adjustment would
constitute a "modification" within the meaning of Section 424(h) of the Code.
Furthermore, in the event that any transaction or event described or referred to
in the immediately preceding sentence will occur, the Committee may provide in
substitution for any or all of the Optionee's rights under this Agreement such
alternative consideration as it may in good faith determine to be equitable
under the circumstances and may require in connection therewith the surrender of
all grants so replaced.
7. WITHHOLDING. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with Stock
obtained upon the exercise of the Option, and the amounts available to the
Corporation for such withholding are insufficient, it will be a condition to the
receipt of such Stock that the Optionee make arrangements satisfactory to the
Corporation for payment of the balance of such taxes required to be withheld. If
necessary, the Committee may require relinquishment of a portion of such Stock.
8. EMPLOYMENT RIGHTS. The Program and this Agreement will not confer upon
the Optionee any right with respect to the continuance of employment or other
service with the Corporation or any Affiliate and will not interfere in any way
with any right that the Corporation or any Affiliate would otherwise have to
terminate any employment or other service of the Optionee at any time.
9. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Optionee under this Agreement will not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Corporation
or an Affiliate and will not effect the amount of any life insurance coverage
available to any beneficiary under any life insurance plan covering employees of
the Corporation or any Affiliate.
10. NOTICES. Any notice necessary under this Agreement will be addressed
to the Corporation or the Committee at the principal executive office of the
Corporation and to the Optionee at the address appearing in the personnel
records of the Corporation for such Optionee, or to either party at such other
address as either party may designate in writing to the other. Any such notice
will be deemed effective upon receipt thereof by the addressee.
11. AGREEMENT SUBJECT TO THE PROGRAM; DEFINITIONS. The Option Rights
granted under this Agreement and all of the terms and conditions hereof are
subject to all of the terms and conditions of the Program, including, without
limitation, the provisions of Section 3.12 of the Program regarding certain
forfeitures. In the event of any inconsistency between this
3
<PAGE> 4
Agreement and the Program, the terms of the Program will govern. All terms used
herein with initial capital letters have the meanings assigned to them in the
Program or in this Agreement.
12. AMENDMENTS. Any amendment to the Program will be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment will adversely affect the rights of
the Optionee under this Agreement without the Optionee's consent.
13. SEVERABILITY. In the event that one or more of the provisions of this
Agreement is invalidated for any reason by a court of competent jurisdiction,
any provision so invalidated will be deemed to be separable from the other
provisions hereof, and the remaining provisions hereof will continue to be valid
and fully enforceable.
14. GOVERNING LAW. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware.
This Agreement is executed as of the Date of Grant.
THE LTV CORPORATION
By:
----------------------------
Title:
The undersigned Optionee hereby acknowledges receipt of an
executed original of this Incentive Stock Option Agreement and accepts the
Option subject to the applicable terms and conditions of the Program and the
terms and conditions hereinabove set forth.
-------------------------------
Optionee
4
<PAGE> 5
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Nonqualified Stock Option Agreement
-----------------------------------
WHEREAS, ______________ (the "Optionee") is an employee of The LTV
Corporation (the "Corporation") or an Affiliate;
WHEREAS, the grant of a stock option to the Optionee has been duly
authorized by a resolution of the Compensation and Organization Committee (the
"Committee") of the Board of Directors (the "Board") of the Corporation duly
adopted on April 25, 1997 (the "Date of Grant"); and
WHEREAS, the option granted hereunder is intended to be a
nonqualified stock option and will not be treated as an "incentive stock option"
within the meaning of that term under Section 422 of the Internal Revenue Code
of 1986 (the "Code").
NOW, THEREFORE, pursuant to the Corporation's Management Incentive
Program (the "Program"), the Corporation hereby grants to the Optionee an option
(the "Option") pursuant to this Nonqualified Stock Option Agreement (the
"Agreement") to purchase ______ shares of the Corporation's common stock, par
value $0.50 per share ("Stock"), at the price of ______ Dollars ($______) per
share (the "Option Price"), and agrees to cause certificates for any shares of
Stock purchased hereunder to be delivered to the Optionee upon full payment of
the Option Price, subject to the applicable terms and conditions of the Program
and this Agreement.
1. EXERCISE OF OPTION. (a) Unless and until terminated as hereinafter
provided, the Option will become exercisable to the extent of one-third of the
Stock hereinabove specified on each of the first 3 anniversaries of the Date of
Grant for so long as the Optionee remains in the continuous employ of the
Corporation or an Affiliate. For the purposes of this Agreement, the continuous
employment of the Optionee with the Corporation or an Affiliate will not be
deemed to have been interrupted, and the Optionee will not be deemed to have
ceased to be an employee of the Corporation or an Affiliate, by reason of (i)
the transfer of his employment among the Corporation and its Affiliates or (ii)
an approved leave of absence. To the extent that the Option will have so become
exercisable, it may be exercised in whole or in part from time to time.
(b) Notwithstanding the provisions of Subsection (a) of this
Section, the Option will become immediately exercisable in full upon the
occurrence of a change in control of the Corporation. For purposes of this
Agreement, the term "change in control" will have the meaning given such term
under The LTV Corporation Supplemental Management Retirement Plan as in effect
on the Date of Grant.
<PAGE> 6
2. PAYMENT OF OPTION PRICE. The Option Price is payable (a) in cash or by
certified or cashier's check or other cash equivalent acceptable to the
Corporation payable to the order of the Corporation, (b) by Stock (including by
attestation) owned by the Optionee for (i) more than one year prior to the date
of exercise and for more than 2 years from the date on which the option was
granted, if they were originally acquired by the Optionee pursuant to the
exercise of an incentive stock option, or (ii) more than 6 months prior to the
date of exercise, if they were originally acquired by the Optionee other than
pursuant to the exercise of an incentive stock option, or (c) by a combination
of Stock and cash or certified or cashier's check. The requirement of payment in
cash will be deemed satisfied if the Optionee has made arrangements satisfactory
to the Corporation with a bank or broker that is a member of the National
Association of Securities Dealers, Inc. to sell on the date of exercise a
sufficient number of shares of Stock being purchased so that the net proceeds of
the sale transaction will at least equal the aggregate Option Price and pursuant
to which the bank or broker undertakes to deliver the aggregate Option Price to
the Corporation not later than the date on which the sale transaction will
settle in the ordinary course of business.
3. TERM OF OPTION. The Option will terminate on the earliest of the
following dates:
(a) Three months after the Optionee ceases to be an employee of
the Corporation or an Affiliate for any reason other than Retirement, death or
Disability;
(b) Five years after the Retirement, death or Disability of the
Optionee, if the Optionee retires, dies or becomes disabled while an employee of
the Corporation or an Affiliate;
(c) Ten years from the Date of Grant.
In the event that the Optionee's employment with the Corporation and its
Affiliates is terminated for Cause, the Option will terminate as of the time of
such termination, notwithstanding any other provision of this Agreement.
4. TRANSFERABILITY. (a) The Option may not be transferred except by will
or the laws of descent and distribution and may not be exercised during the
lifetime of the Optionee except by the Optionee or the Optionee's guardian or
legal representative acting on behalf of the Optionee in a fiduciary capacity
under state law and court supervision.
(b) Notwithstanding the Subsection (a) of this Section, all or a
portion of the Options may be transferred to (i) the spouse, children or
grandchildren of the Optionee ("Immediate Family Members"), (ii) a trust or
trusts for the exclusive benefit of such Immediate Family Members, or (iii) a
partnership in which such Immediate Family Members are the only partners;
provided that (A) the agreement pursuant to which such Options are transferred
must be approved by the Committee, and must expressly provide for
transferability in a manner consistent with Subsection (a) of this Section, and
(B) subsequent transfers of transferred Options shall be prohibited except those
in accordance with Subsection (a) of this Section. Following transfer, any such
Options shall
2
<PAGE> 7
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer, provided that the term "Optionee" shall be deemed
to refer to the transferee. The events of termination of employment of Sections
1 and 3 shall continue to be applied with respect to the original Optionee,
following which the Options shall be exercisable by the transferee only to the
extent, and for the period specified in this Agreement.
5. COMPLIANCE WITH LAW. The Corporation will make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Corporation will not
be obligated to issue any Stock pursuant to this Agreement if the issuance
thereof would result in a violation of any such law.
6. ADJUSTMENTS. The Committee will make any adjustments in the Option
Price and in the number and kind of shares of stock or other securities covered
by this Agreement that the Committee may determine to be equitably required to
prevent dilution or enlargement of the Optionee's rights under this Agreement
that would result from any (a) stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Corporation, (b) merger, consolidation, spin-off, spin-out, split-off, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities or (c) other corporate
transaction or event having an effect similar to any of the foregoing.
Furthermore, in the event that any transaction or event described or referred to
in the immediately preceding sentence will occur, the Committee may provide in
substitution for any or all of the Optionee's rights under this Agreement such
alternative consideration as it may in good faith determine to be equitable
under the circumstances and may require in connection therewith the surrender of
all grants so replaced.
7. WITHHOLDING. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with Stock
obtained upon the exercise of the Option, and the amounts available to the
Corporation for such withholding are insufficient, it will be a condition to the
receipt of such Stock that the Optionee make arrangements satisfactory to the
Corporation for payment of the balance of such taxes required to be withheld. If
necessary, the Committee may require relinquishment of a portion of such Stock.
8. EMPLOYMENT RIGHTS. The Program and this Agreement will not confer upon
the Optionee any right with respect to the continuance of employment or other
service with the Corporation or any Affiliate and will not interfere in any way
with any right that the Corporation or any Affiliate would otherwise have to
terminate any employment or other service of the Optionee at any time.
9. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Optionee under this Agreement will not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Corporation
or an Affiliate and will not effect the
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<PAGE> 8
amount of any life insurance coverage available to any beneficiary under any
life insurance plan covering employees of the Corporation or any Affiliate.
10. NOTICES. Any notice necessary under this Agreement will be addressed
to the Corporation or the Committee at the principal executive office of the
Corporation and to the Optionee at the address appearing in the personnel
records of the Corporation for such Optionee, or to either party at such other
address as either party may designate in writing to the other. Any such notice
will be deemed effective upon receipt thereof by the addressee.
11. AGREEMENT SUBJECT TO THE PROGRAM; DEFINITIONS. The Option Rights
granted under this Agreement and all of the terms and conditions hereof are
subject to all of the terms and conditions of the Program, including, without
limitation, the provisions of Section 3.12 of the Program regarding certain
forfeitures. In the event of any inconsistency between this Agreement and the
Program, the terms of the Program will govern. All terms used herein with
initial capital letters have the meanings assigned to them in the Program or in
this Agreement.
12. AMENDMENTS. Any amendment to the Program will be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment will adversely affect the rights of
the Optionee under this Agreement without the Optionee's consent.
13. SEVERABILITY. In the event that one or more of the provisions of this
Agreement is invalidated for any reason by a court of competent jurisdiction,
any provision so invalidated will be deemed to be separable from the other
provisions hereof, and the remaining provisions hereof will continue to be valid
and fully enforceable.
14. GOVERNING LAW. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware.
This Agreement is executed as of the Date of Grant.
THE LTV CORPORATION
By:
------------------------------
The undersigned Optionee hereby acknowledges receipt of an
executed original of this Nonqualified Stock Option Agreement and accepts the
Option subject to the applicable terms and conditions of the Program and the
terms and conditions hereinabove set forth.
-----------------------------------
Optionee
4
<PAGE> 9
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Restricted Stock Agreement
for Matching Shares Under the
Management Stock Acquisition Program
------------------------------------
WHEREAS, ______________ (the "Grantee") is an employee of The
LTV Corporation (the "Corporation") or an Affiliate; and
WHEREAS, the execution of a restricted stock agreement in the
form hereof (the "Agreement") has been authorized by a resolution of the
Compensation and Organization Committee (the "Committee") of the Board of
Directors (the "Board") of the Corporation duly adopted on April 25, 1997;
NOW, THEREFORE, pursuant to the Corporation's Management
Incentive Program (the "Program"), the Corporation grants, as of
_________________, 199_ (the "Date of Grant"), to the Grantee shares of the
Corporation's common stock, par value $0.50 per share (the "Stock"), subject to
the terms and conditions of the Program and the following terms, conditions,
limitations and restrictions:
1. ISSUANCE OF STOCK. The Stock covered by this Agreement shall be fully
paid and nonassessable and shall be represented by a certificate(s) registered
in the name of the Grantee and bearing a legend referring to the restrictions
hereinafter set forth.
2. RESTRICTIONS ON TRANSFER OF STOCK. The Stock subject to this
Agreement may not be transferred, sold, pledged, exchanged, assigned or
otherwise encumbered or disposed of by the Grantee, except to the Corporation,
until it has become vested in accordance with Section 3; provided, however, that
the Grantee's interest in the Stock covered by this Agreement may be transferred
at any time by will or the laws of descent and distribution. Any purported
transfer, encumbrance or other disposition of the Stock covered by this
Agreement that is in violation of this Section will be null and void, and the
other party to any such purported transaction will not obtain any rights to or
interest in the Stock covered by this Agreement. When and as permitted by the
Program, the Corporation may waive the restrictions set forth in this Section
with respect to all or any portion of the Stock covered by this Agreement.
3. VESTING OF STOCK. (a) The Stock covered by this Agreement will become
nonforfeitable, provided that:
(i) The Grantee remains in the continuous employ of the
Corporation or an Affiliate until the third anniversary of the
Date of Grant; and
<PAGE> 10
(ii) The Grantee, until such third anniversary, retains
ownership of the shares of Stock, evidenced by ______ and, in
addition, retains ownership of not less than ______ other shares
of Stock.
For the purposes of this Agreement, the continuous employment of the Grantee
with the Corporation or an Affiliate shall not be deemed to have been
interrupted, and the Grantee will not be deemed to have ceased to be an employee
of the Corporation or an Affiliate, by reason of (A) the transfer of his
employment among the Corporation and its Affiliates or (B) an approved leave of
absence.
(b) Notwithstanding the provisions of Subsection (a) of this
Section, the Stock covered by this Agreement will become nonforfeitable in the
event of the Grantee's Retirement, provided that he retains ownership of the
shares of Stock evidenced by _____________ until the third anniversary of the
Date of Grant.
(c) Notwithstanding the provisions of Subsection (a) of this
Section, all of the Stock covered by this Agreement will become immediately
nonforfeitable in the event of the Grantee's death or Disability, or upon the
occurrence of a change in control of the Corporation that shall occur while the
Grantee is an employee of the Corporation or an Affiliate. For the purposes of
this Agreement, the term "change in control" will have the meaning given such
term under The LTV Corporation Supplemental Management Retirement Plan as in
effect on the Date of Grant.
4. FORFEITURE OF STOCK. (a) Any of the Stock covered by this Agreement
that has not become vested in accordance with Section 3 will be forfeited unless
the Committee determines to provide otherwise. In the event of a forfeiture, the
certificates representing all of the Stock covered by this Agreement that has
not become vested in accordance with Section 3 shall be cancelled.
(b) Notwithstanding the provisions of Subsection (a) of this
Section, the Committee may, in its sole discretion, require that, to the extent
the value of any of the Stock covered by this Agreement may not be deducted by
the Corporation, such Stock will be forfeited. Such forfeiture may be credited
to the Participant's Deferred Shares Account under the Corporation's Management
Stock Acquisition Program ("MSAP") as Deferred Shares (as such term is defined
in the MSAP) and, if so credited, will thereafter be subject to the terms and
conditions of the MSAP.
5. DIVIDEND, VOTING AND OTHER RIGHTS. The Grantee will have all of the
rights of a shareholder with respect to the Stock covered by this Agreement,
including the right to vote the Stock and receive any dividends that may be paid
thereon. Any additional Stock that the Grantee may become entitled to receive
pursuant to a share dividend or a merger or reorganization in which the
Corporation is the surviving corporation or any other change in the capital
structure of the Corporation will be subject to the same restrictions as the
Stock covered by this Agreement.
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<PAGE> 11
6. RETENTION OF SHARE CERTIFICATE(S) BY CORPORATION. The certificate(s)
representing the Stock covered by this Agreement will be held in custody by the
Corporation, together with a stock power endorsed in blank by the Grantee with
respect thereto, until those shares have become vested in accordance with
Section 3.
7. COMPLIANCE WITH LAW. The Corporation will make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Corporation will not
be obligated to issue any restricted or unrestricted Stock pursuant to this
Agreement if the issuance thereof would result in a violation of any such law.
8. ADJUSTMENTS. The Committee will make any adjustments in the number or
kind of shares of stock or other securities covered by this Agreement that the
Committee may determine to be equitably required to prevent any dilution or
enlargement of the Grantee's rights under this Agreement that would result from
any (a) stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Corporation, (b) merger,
consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of rights or
warrants to purchase securities or (c) other corporate transaction or event
having an effect similar to any of the foregoing. Furthermore, in the event that
any transaction or event described or referred to in the immediately preceding
sentence will occur, the Committee may provide in substitution for any or all of
the Grantee's rights under this Agreement such alternative consideration as it
may in good faith determine to be equitable under the circumstances and may
require in connection therewith the surrender of all grants so replaced.
9. WITHHOLDING. To the extent that the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any issuance
of restricted or unrestricted Stock or other securities pursuant to this
Agreement, and the amounts available to the Corporation for such withholding are
insufficient, it will be a condition to the receipt of such Stock that the
Grantee make arrangements satisfactory to the Corporation for payment of the
balance of such taxes required to be withheld. If necessary, the Committee may
require relinquishment of a portion of such Stock.
10. EMPLOYMENT RIGHTS. The Program and this Agreement will not confer
upon the Grantee any right with respect to the continuance of employment or
other service with the Corporation or any Affiliate and will not interfere in
any way with any right that the Corporation or any Affiliate would otherwise
have to terminate any employment or other service of the Optionee at any time.
11. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Grantee under this Agreement will not be taken into account in determining any
benefits to which the Grantee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Corporation
or an Affiliate and shall not affect the amount of any life insurance coverage
available to any beneficiary under any life insurance plan covering employees of
the Corporation or an Affiliate.
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<PAGE> 12
12. AGREEMENT SUBJECT TO THE PROGRAM; DEFINITIONS. The Stock granted
under this Agreement and all of the terms and conditions hereof are subject to
all of the terms and conditions of the Program, including, without limitation,
the provision of Section 3.12 of the Program regarding certain forfeitures. In
the event of any inconsistency between this Agreement and the Program, the terms
of the Program will govern. All terms used herein with initial capital letters
have the meanings assigned to them in the Program or in this Agreement.
13. AMENDMENTS. Any amendment to the Program will be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment will adversely affect the rights of
the Grantee under this Agreement without the Grantee's consent.
14. SEVERABILITY. In the event that one or more of the provisions of
this Agreement is invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof will continue
to be valid and fully enforceable.
15. GOVERNING LAW. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware.
This Agreement is executed as of the Date of Grant.
THE LTV CORPORATION
By:
-------------------------
The undersigned Grantee hereby acknowledges receipt of an
executed original of this Restricted Stock Agreement and accepts the right to
receive the Stock subject to the terms and conditions of the Program and the
terms and conditions hereinabove set forth.
----------------------------
Grantee
4
<PAGE> 13
THE LTV CORPORATION
MIP RESTRICTED STOCK AGREEMENT
This MIP Restricted Stock Agreement is entered into as of
_______________ __, 19__ by and between _________________ (the "Grantee") and
the LTV Corporation, a Delaware corporation (the "Company"). Capitalized terms
not defined in this Agreement shall have the meanings specified in The LTV
Corporation Management Incentive Program (the "Program").
WHEREAS, the Grantee is an employee of the Company;
WHEREAS, the Committee has heretofore awarded _______ shares of
Restricted Stock to the Grantee; and
WHEREAS, the execution and delivery of this Agreement in the form
hereof has been authorized by the Committee pursuant to Article III of the
Program;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Grantee and the Company hereby agree as follows:
I. ACCEPTANCE OF AWARD
The Grantee hereby accepts the award of _______________ shares of Restricted
Stock heretofore made by the Company subject to the restrictions set forth in
this Agreement. The Restricted Stock represented by such award shall be fully
paid and nonassessable and shall be represented by a certificate or certificates
registered in the Grantee's name, endorsed with an appropriate legend referring
to the restrictions hereinafter set forth. Except as otherwise provided in this
Agreement, the Grantee shall have all the rights of a stockholder with respect
to such shares, including the right to vote the shares and to receive all cash
dividends paid thereon, provided that such shares, together with any additional
shares which the Grantee may become entitled to receive by virtue of a stock
dividend, a merger or a reorganization in which the Company is the surviving
company, or any other change in capital structure, shall be subject to the
restrictions hereinafter set forth.
II. NONFORFEITABILITY, LAPSE OF RESTRICTIONS
The Grantee's right to receive the Restricted Stock covered by this Agreement
shall be nonforfeitable and all restrictions with respect to such Restricted
Stock described in Article III below shall lapse on the earliest of the
following dates:
<PAGE> 14
A. ______________ __, ____, provided that the Grantee remains in
the continuous employ of the Company or an Affiliate until such date and retains
ownership of the shares of Stock granted pursuant to Article I hereof and, in
addition, retains ownership of not less than ___________ other shares of Stock;
B. One year following the Grantee's Retirement, provided that the
Grantee retains ownership of the shares of Stock granted pursuant to Article I
hereof and, in addition, retains ownership of not less than ___________ other
shares of Stock;
C. The date of occurrence of any of the events described in
Paragraphs (a), (b), (c) or (d) of Section 4.6 of the Program;
D. The date of the Grantee's discharge from employment for reasons
other than Cause;
E. The date of the Grantee's death; or
F. The date that the Committee, in its discretion, determines the
restrictions on the Stock subject to this Agreement should lapse because the
Grantee has suffered a Disability which is expected to be permanent.
For purposes of this Agreement, the continuous employment of the Grantee with
the Company or an Affiliate will not be deemed to have been interrupted, and the
Grantee will not be deemed to have ceased to be an employee of the Company or an
Affiliate by reason of (i) the transfer of his employment among the Company and
its Affiliates or (ii) an approved leave of absence.
III. FORFEITURE, RESTRICTIONS
The Grantee's right to the Common Stock granted under this Agreement shall be
forfeited immediately, and the Company will have no further obligation hereunder
to the Grantee, if the Grantee voluntarily terminates employment with the
Company or is discharged from employment for Cause prior to a lapse of
restrictions as provided in Article II.
IV. PAYMENT OF AWARDS
The Grantee understands that the certificate for his grant of Restricted Stock,
until the restrictions lapse and such Stock becomes nonforfeitable under Article
II hereof, will bear a legend referring to this Agreement, to the restrictions
contained herein, and to any other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which shares of Common Stock
are then listed, and any applicable Federal or state securities law. The Grantee
further understands that the Company may elect to retain such certificate in
escrow, together with an accompanying stock power signed by the Grantee and
endorsed in blank, in its possession as a means of enforcing such
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<PAGE> 15
restrictions. Upon the lapse of such restrictions and the possibility of
forfeiture with respect to the grant of Restricted Stock covered by this
Agreement, the Company will deliver to the Grantee a new certificate for shares
of Stock, subject to reduction in the amount of such shares under Article VI
hereof.
V. TRANSFERABILITY
Until the possibility of forfeiture with respect to any share of Restricted
Stock covered by this Agreement lapses, such shares shall be non-transferable.
Any attempt to make, any sale, assignment, transfer, or pledge of any share of
Restricted Stock prior to the date on which the possibility of forfeiture with
respect to such share lapses shall be void and of no effect.
VI. WITHHOLDING UPON NONFORFEITABILITY
Upon the lapse of any possibility of forfeiture with respect to the grant of
Restricted Stock covered by this Agreement, the Grantee authorizes the Company
to withhold income tax, to the extent required by law, from amounts otherwise
payable to the Grantee or from the shares of Stock which become nonforfeitable.
VII. RIGHTS TO CONTINUED EMPLOYMENT
The grant of Restricted Stock made under the Program in this Agreement shall not
confer upon the Grantee any rights to continue serving as an employee of the
Company, and this Agreement shall not be construed in any way to limit the
Company's right to terminate or change the terms of the Grantee's employment.
VIII. SEVERABILITY
In the event that one or more of the provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision
so invalidated shall be deemed to be separable from the other provisions hereof,
and the remaining provisions shall continue to be valid and fully enforceable.
IX. GOVERNING LAW
This Agreement is made under, and shall be construed in accordance with, the
laws of the State of Ohio.
X. HEADINGS
The headings contained in this Agreement are for convenience only and shall not
affect the meaning or interpretation of this Agreement.
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<PAGE> 16
XI. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, and all of which together shall be deemed to
be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
THE LTV CORPORATION
By:
-----------------------------
Title:
--------------------------------
Grantee
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<PAGE> 17
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Performance Shares Agreement
----------------------------
WHEREAS, ______________________________ ("Participant") is an employee of
The LTV Corporation (the "Corporation") or an Affiliate; and
WHEREAS, the execution of a performance shares agreement in the form
hereof (the "Agreement") has been authorized by a resolution of the Compensation
and Organization Committee (the "Committee") of the Board of Directors (the
"Board") of the Corporation duly adopted on April 25, 1997 (the "Date of
Grant");
NOW, THEREFORE, in consideration of the premises, and pursuant to the
Corporation's Management Incentive Program (the "Program"), the Corporation and
the Participant agree as follows:
1. DEFINITIONS. All terms used herein with initial capital letters will
have the meanings assigned to them in the WHEREAS clauses and the Program and
the following additional terms, when used herein with initial capital letters,
will have the following meanings:
(a) "Change in Control" has the meaning given such term under The LTV
Corporation Supplemental Management Retirement Plan as in effect on the Date of
Grant.
(b) "Covered Employee" means a Participant named in the proxy
statement summary compensation table of the Corporation for the year of such
statement, or who is determined by the Committee likely to become a "covered
employee" within the meaning of Section 162(m) of the Code.
(c) "Participant Performance Goals" means the Performance Goals
applicable to the Participant under this Agreement, as more particularly set
forth in Section 4.
(d) "Peer Group" means the companies listed on the attached Exhibit A.
(e) "Peer Group Stock" means the common stock of the Peer Group.
(f) "Performance Period" means the period commencing January 26, 1997
and ending January 31, 2001.
(g) "Performance Shares Earned" means the number of shares of Stock of
the Corporation (or cash equivalent) earned by a Participant following the
conclusion of the Performance Period in which the Participant Performance Goals
were met or exceeded.
<PAGE> 18
(h) "Total Shareholder Return" means the appreciation in the price of
the Stock and each Peer Group Stock, calculated as a percentage of the price at
the beginning of the Performance Period, assuming immediate reinvestment of all
dividends, whether in the form of cash or property, at the closing price of such
Stock on the dividend payment date. The price of Stock and each Peer Group Stock
will be determined at the beginning of the Performance Period by averaging the
closing price of each such Stock on the first 10 trading days of the Performance
Period and will be determined at the end of the Performance Period by averaging
the closing price of each such Stock on the last 10 trading days of the
Performance Period.
2. GRANT OF PERFORMANCE SHARES. Pursuant to the Program, the Corporation
hereby grants to the Participant _______________ Performance Shares, under
Section 3.6 of the Program, with dividend equivalents, effective as of the Date
of Grant.
3. ISSUANCE OF PERFORMANCE SHARES. The Performance Shares covered by this
Agreement will only result in the transfer of Stock (or cash or a combination of
Stock and cash, as determined by the Committee in its sole discretion), after
the completion of the Performance Period and only if such Performance Shares are
earned as provided in Section 5.
4. PARTICIPANT PERFORMANCE GOALS. The Participant's Performance Goals are
based on the comparative Total Shareholder Returns for the Performance Period of
the Corporation and each member of the Peer Group. If any member of the Peer
Group ceases to exist during the Performance Period it will be deemed to rank
last.
5. PERFORMANCE SHARES EARNED. Payout of Performance Shares Earned, if any,
will be based upon the degree of achievement of the Participant Performance
Goals, described in Section 4, as provided on the attached Exhibit B. In the
event the Total Shareholder Return of the Corporation is negative, Performance
Shares Earned will be reduced by two-thirds. Notwithstanding any other provision
of this Agreement or the Program, in the event changes occur to any company in
the Peer Group prior to the end of the Performance Period, including changes
resulting from mergers, acquisitions, divestitures or other similar
transactions, the Committee, may in its sole discretion, reduce the number of
Performance Shares Earned and/or the percentage level of achievement of the
Performance Goals.
6. CALCULATION OF PAYOUT. (a) The Performance Shares granted will become
Performance Shares Earned based on the degree of achievement of the Performance
Goals established for the Performance Period. Once the degree of achievement of
Participant Performance Goals is determined, the percentage level of achievement
will be multiplied by the number of Performance Shares granted to determine the
actual number of Performance Shares Earned. The calculation as to whether the
Participant Performance Goals have been met or exceeded will be determined in
accordance with this Agreement.
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<PAGE> 19
(b) Performance Shares will be credited as of the end of each calendar
quarter with additional grants of Performance Shares equal in value to the
amount of dividends, whether in the form of cash or property, paid by the
Corporation during such calendar quarter on that number of shares of Stock
equivalent to the number of Performance Shares granted as of any dividend
payment date during such calendar quarter. The dividend equivalents will be
calculated by dividing the dollar value of such dividend equivalents by the Fair
Market Value (determined only under clause (i) of such definition) on the last
day of the calendar quarter next following the dividend payment date. Until the
Participant or his beneficiary receives his Performance Shares Earned, the
Performance Shares will be credited with dividend equivalents as provided in
this Subsection.
7. PAYMENT OF PERFORMANCE SHARES. (a) Payment of Performance Shares Earned
will be made in the form of Stock (and cash for any fractional share of Stock),
unless determined otherwise by the Committee, and will be paid as soon as
practicable after the end of the Performance Period and after the determination
by the Committee of the level of attainment of the Participant Performance
Goals, which will be evidenced in writing and certified by the Committee.
(b) Notwithstanding Subsection (a) of this Section, the Committee may,
in its sole discretion, require the deferral of receipt of all or a portion of
Performance Shares Earned so as to assure the Corporation will not be prevented
from deducting the value of the Performance Shares Earned by the Participant.
Such deferral may be credited to the Participant's Deferred Shares Account under
the Corporation's Management Stock Acquisition Program ("MSAP") as Deferred
Shares (as such term is defined in the MSAP) and, if so credited, will
thereafter be subject to the terms and conditions of the MSAP. Any payment of
Performance Shares Earned on behalf of a deceased Participant will be paid to
the beneficiary designated by the Participant on the Designation of Death
Beneficiary attached as Exhibit C and filed with the Committee. If no such
beneficiary has been designated or survives the Participant, payment will be
made to the estate of the Participant. A beneficiary designation may be changed
or revoked by the Participant at any time, provided the change or revocation is
filed with the Committee.
(c) Prior to payment, the Corporation will only have an unfunded and
unsecured obligation to make payment of Performance Shares Earned to the
Participant. No person has any right to commute, encumber, pledge or dispose of
any interest herein or right to receive payments under the Program or this
Agreement, nor are such interests or payments subject to seizure, attachment or
garnishment for the payments of any debts, judgments, alimony or separate
maintenance obligations or transferable by operation of law in the event of
bankruptcy, insolvency or otherwise, all payments and rights hereunder being
expressly declared to be nonassignable and nontransferable.
8. TERMINATION OF EMPLOYMENT DURING PERFORMANCE PERIOD. (a) In the event
the Participant's employment with the Corporation and its Affiliates is
voluntarily terminated on or after attaining age 62 or as a result of his death,
Disability or involuntary termination during the Performance Period and the
Performance Goals for such Performance Period
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<PAGE> 20
are, at least to the minimum required level, achieved at the end of the
Performance Period, the Participant or, in the case of his death, his
beneficiary designated pursuant to Section 7(b), will receive a payment of the
full amount of the Performance Shares Earned for such Performance Period in
accordance with Section 7. The Committee may in its sole discretion decrease the
number of Performance Shares Earned under this Subsection.
(b) In the event the Participant's employment with the Corporation and
its Affiliates is voluntarily terminated before attaining age 62 (other than for
Disability) or is involuntarily terminated for Cause during the Performance
Period, the Participant will forfeit all rights to any Performance Shares that
would have been earned for the Performance Period.
9. CHANGE IN CONTROL. In the event a Change in Control occurs before
completion of the Performance Period, the Performance Shares granted to the
Participant will immediately become Performance Shares Earned, the value of
which will be paid in Stock within 10 days of the Change in Control; any
fractional share of Stock will be forfeited. The number of Performance Shares
Earned under this Section will be equal to the greater of (a) 100% of the
Performance Shares granted to the Participant and (b) the number of Performance
Shares Earned in accordance with Section 5, as if the Performance Period ended
on the date of the Change in Control.
10. COMMITTEE DISCRETION. In addition to any other power granted under this
Agreement, the Committee may, in its sole discretion and notwithstanding any
other provision of this Agreement, on or after the Date of the Grant, reduce (a)
the number of Performance Shares granted to a Participant, (b) the percentage
level of attainment of Performance Goals and/or (c) the number of Performance
Shares Earned by a Participant.
11. COMPLIANCE WITH LAW. The Corporation will make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Corporation will not
be obligated to issue any Stock pursuant to this Agreement if the issuance
thereof would result in a violation of any such law.
12. WITHHOLDING TAXES. To the extent the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any payment
of Performance Shares Earned to a Participant, and the amounts available to the
Corporation for such withholding are insufficient, it will be a condition to the
receipt of such payment of Performance Shares Earned or the realization of such
benefit that the Participant make arrangements satisfactory to the Corporation
for payment of the balance of such taxes required to be withheld. If necessary,
the Committee may require relinquishment of a portion of such Performance Shares
Earned.
13. CONTINUOUS EMPLOYMENT. For purposes of this Agreement, the continuous
employment of the Participant with the Corporation or an Affiliate will not be
deemed to have been interrupted, and the Participant will not be deemed to have
ceased to be an
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<PAGE> 21
employee of the Corporation or an Affiliate, by reason of the transfer of his
employment among the Corporation and its Affiliates or an approved leave of
absence.
14. CLAIM TO AWARDS AND EMPLOYMENT RIGHTS. No Participant has any claim or
right to be granted another award under the Program. The Program does not confer
upon any Participant any right with respect to the continuance of employment or
other service with the Corporation or any Affiliate and does not interfere in
any way with any right that the Corporation or any Affiliate would otherwise
have to terminate any employment or other service of the Participant at any
time.
15. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Participant under this Agreement or the Program will not be taken into account
in determining any benefits to which the Participant may be entitled under any
profit-sharing, retirement or other benefit or compensation plan maintained by
the Corporation or any Affiliate and will not effect the amount of any life
insurance coverage available to any beneficiary under any life insurance plan
covering employees of the Corporation or any Affiliate.
16. AGREEMENT SUBJECT TO PERFORMANCE SHARE PROGRAM. The Performance Shares
granted under this Agreement and all of the terms and conditions hereof are
subject to all of the terms and conditions of the Program.
17. AMENDMENTS. Any amendment to the Program will be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment will adversely affect the rights of
the Participant under this Agreement without the Participant's consent.
18. SEVERABILITY. In the event that one or more of the provisions of this
Agreement is invalidated for any reason by a court of competent jurisdiction,
any provision so invalidated will be deemed to be separable from the other
provisions hereof, and the remaining provisions hereof will continue to be valid
and fully enforceable.
19. TERM. This Agreement is effective as of the Date of Grant and will
remain in effect upon completion of the Performance Period.
20. GOVERNING LAW. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware.
This Agreement is executed as of the Date of Grant.
THE LTV CORPORATION
By:
----------------------------
Title:
5
<PAGE> 22
The undersigned hereby acknowledges receipt of an executed original of this
Agreement and accepts the grant of Performance Shares thereunder on the terms
and conditions set forth therein and in the Program.
-------------------------------
Participant
Date:
--------------------------
6
<PAGE> 23
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Performance Shares Agreement
----------------------------
EXHIBIT A
---------
Steel Industry Peer Group
AK Steel
Bethlehem Steel
Inland Steel
National Steel
Nucor
Weirton
WHX
USX-Steel Group
<PAGE> 24
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Performance Shares Agreement
----------------------------
EXHIBIT B
---------
Performance Shares Schedule
Total Shareholder Return Ranking Performance Shares Earned
at End of Performance Period (as a Percentage of Shares Granted)
---------------------------- -----------------------------------
1 300%
2 250%
3 200%
4 150%
5 100%
6 0%
7 0%
8 0%
9 0%
<PAGE> 25
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Performance Shares Agreement
----------------------------
WHEREAS, ______________________________ ("Participant") is an employee
of The LTV Corporation (the "Corporation") or an Affiliate; and
WHEREAS, the execution of a performance shares agreement in the form
hereof (the "Agreement") has been authorized by a resolution of the Compensation
and Organization Committee (the "Committee") of the Board of Directors (the
"Board") of the Corporation duly adopted on April 25, 1997 (the "Date of
Grant");
NOW, THEREFORE, in consideration of the premises, and pursuant to the
Corporation's Management Incentive Program (the "Program"), the Corporation and
the Participant agree as follows:
1. All terms used herein with initial capital letters will have the
meanings assigned to them in the WHEREAS clauses and the Program and the
following additional terms, when used herein with initial capital letters, will
have the following meanings:
(a) "Change in Control" has the meaning given such term under The LTV
Corporation Supplemental Management Retirement Plan as in effect on the Date of
Grant.
(b) "Participant Performance Goals" means the Performance Goals
applicable to the Participant under this Agreement, as more particularly set
forth in Section 4.
(c) "Peer Group" means the companies listed on the attached Exhibit A.
(d) "Peer Group Stock" means the common stock of the Peer Group.
(f) "Performance Period" means the period commencing January 26, 1997
and ending January 31, 2001.
(g) "Performance Shares Earned" means the number of shares of Stock of
the Corporation (or cash equivalent) earned by a Participant following the
conclusion of the Performance Period in which the Participant Performance Goals
were met or exceeded.
(h) "Total Shareholder Return" means the appreciation in the price of
the Stock and each Peer Group Stock, calculated as a percentage of the price at
the beginning of the Performance Period, assuming immediate reinvestment of all
dividends, whether in the form of cash or property, at the closing price of such
Stock on the dividend payment date. The price of Stock and each Peer Group Stock
will be determined at the beginning of the Performance Period by averaging the
closing price of each such Stock on the first 10 trading days of the Performance
Period and will be determined at the end of the Performance
<PAGE> 26
Period by averaging the closing price of each such Stock on the last 10 trading
days of the Performance Period.
2. GRANT OF PERFORMANCE SHARES. Pursuant to the Program, the Corporation
hereby grants to the Participant ___________ Performance Shares, under Section
3.6 of the Program, with dividend equivalents, effective as of the Date of
Grant.
3. ISSUANCE OF PERFORMANCE SHARES. The Performance Shares covered by this
Agreement will only result in the transfer of Stock (or cash or a combination of
Stock and cash, as determined by the Committee in its sole discretion), after
the completion of the Performance Period and only if such Performance Shares are
earned as provided in Section 5.
4. PARTICIPANT PERFORMANCE GOALS. The Participant's Performance Goals are
based on the comparative Total Shareholder Returns for the Performance Period of
the Corporation and each member of the Peer Group. If any member of the Peer
Group ceases to exist during the Performance Period it will be deemed to rank
last.
5. PERFORMANCE SHARES EARNED. Payout of Performance Shares Earned, if any,
will be based upon the degree of achievement of the Participant Performance
Goals, described in Section 4, as provided on the attached Exhibit B. In the
event the Total Shareholder Return of the Corporation is negative, Performance
Shares Earned will be reduced by two-thirds. Notwithstanding any other provision
of this Agreement or the Program, in the event changes occur to any company in
the Peer Group prior to the end of the Performance Period, including changes
resulting from mergers, acquisitions, divestitures or other similar
transactions, the Committee, may in its sole discretion, make adjustments in the
number of Performance Shares Earned and/or the percentage level of achievement
of the Performance Goals.
6. CALCULATION OF PAYOUT. (a) The Performance Shares granted will become
Performance Shares Earned based on the degree of achievement of the Performance
Goals established for the Performance Period. Once the degree of achievement of
Participant Performance Goals is determined, the percentage level of achievement
will be multiplied by the number of Performance Shares granted to determine the
actual number of Performance Shares Earned. The calculation as to whether the
Participant Performance Goals have been met or exceeded will be determined in
accordance with this Agreement.
(b) Performance Shares will be credited as of the end of each calendar
quarter with additional grants of Performance Shares equal in value to the
amount of dividends, whether in the form of cash or property, paid by the
Corporation during such calendar quarter on that number of shares of Stock
equivalent to the number of Performance Shares granted as of any dividend
payment date during such calendar quarter. The dividend equivalents will be
calculated by dividing the dollar value of such dividend equivalents by the Fair
Market Value (determined only under clause (i) of such definition) on the last
day of the calendar quarter next following the dividend payment date. Until the
Participant or his beneficiary
2
<PAGE> 27
receives his Performance Shares Earned, the Performance Shares will be credited
with dividend equivalents as provided in this Subsection.
7. PAYMENT OF PERFORMANCE SHARES. (a) Payment of Performance Shares Earned
will be made in the form of Stock (and cash for any fractional share of Stock),
unless determined otherwise by the Committee, and will be paid as soon as
practicable after the end of the Performance Period and after the determination
by the Committee of the level of attainment of the Participant Performance
Goals, which will be evidenced in writing and certified by the Committee.
(b) Any payment of Performance Shares Earned on behalf of a deceased
Participant will be paid to the beneficiary designated by the Participant on the
Designation of Death Beneficiary attached as Exhibit C and filed with the
Committee. If no such beneficiary has been designated or survives the
Participant, payment will be made to the estate of the Participant. A
beneficiary designation may be changed or revoked by the Participant at any
time, provided the change or revocation is filed with the Committee.
(c) Prior to payment, the Corporation will only have an unfunded and
unsecured obligation to make payment of Performance Shares Earned to the
Participant. No person has any right to commute, encumber, pledge or dispose of
any interest herein or right to receive payments under the Program or this
Agreement, nor are such interests or payments subject to seizure, attachment or
garnishment for the payments of any debts, judgments, alimony or separate
maintenance obligations or transferable by operation of law in the event of
bankruptcy, insolvency or otherwise, all payments and rights hereunder being
expressly declared to be nonassignable and nontransferable.
8. TERMINATION OF EMPLOYMENT DURING PERFORMANCE PERIOD. (a) In the event
the Participant's employment with the Corporation and its Affiliates is
terminated as a result of his Retirement, death, Disability or involuntary
termination during the Performance Period and the Performance Goals for such
Performance Period are, at least to the minimum required level, achieved at the
end of the Performance Period, the Participant or, in the case of his death, his
beneficiary designated pursuant to Section 7(b), will receive a payment of the
full amount of the Performance Shares Earned for such Performance Period in
accordance with Section 7. The Committee may in its sole discretion increase or
decrease the number of Performance Shares Earned under this Subsection.
(b) In the event the Participant's employment with the Corporation and
its Affiliates is voluntarily terminated before attaining age 65 (other than as
a result of Retirement or Disability) or is involuntarily terminated for Cause
during the Performance Period, the Participant will forfeit all rights to any
Performance Shares that would have been earned for the Performance Period,
unless otherwise determined by the Committee.
9. CHANGE IN CONTROL. In the event a Change in Control occurs before
completion of the Performance Period, the Performance Shares granted to the
Participant will immediately become Performance Shares Earned, the value of
which will be paid in Stock within 10 days of the Change in Control; any
fractional share of Stock will be forfeited. The number of
3
<PAGE> 28
Performance Shares Earned under this Section will be equal to the greater of (a)
100% of the Performance Shares granted to the Participant and (b) the number of
Performance Shares Earned in accordance with Section 5, as if the Performance
Period ended on the date of the Change in Control.
10. COMMITTEE DISCRETION. In addition to any other power granted under this
Agreement, the Committee may, in its sole discretion and notwithstanding any
other provision of this Agreement, on or after the Date of the Grant, adjust (a)
the number of Performance Shares granted to a Participant, (b) the percentage
level of attainment of Performance Goals and/or (c) the number of Performance
Shares Earned by a Participant.
11. COMPLIANCE WITH LAW. The Corporation will make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Corporation will not
be obligated to issue any Stock pursuant to this Agreement if the issuance
thereof would result in a violation of any such law.
12. WITHHOLDING TAXES. To the extent the Corporation is required to
withhold federal, state, local or foreign taxes in connection with any payment
of Performance Shares Earned to a Participant, and the amounts available to the
Corporation for such withholding are insufficient, it will be a condition to the
receipt of such payment of Performance Shares Earned or the realization of such
benefit that the Participant make arrangements satisfactory to the Corporation
for payment of the balance of such taxes required to be withheld. If necessary,
the Committee may require relinquishment of a portion of such Performance Shares
Earned.
13. CONTINUOUS EMPLOYMENT. For purposes of this Agreement, the continuous
employment of the Participant with the Corporation or an Affiliate will not be
deemed to have been interrupted, and the Participant will not be deemed to have
ceased to be an employee of the Corporation or an Affiliate, by reason of the
transfer of his employment among the Corporation and its Affiliates or an
approved leave of absence.
14. CLAIM TO AWARDS AND EMPLOYMENT RIGHTS. No Participant has any claim or
right to be granted another award under the Program. The Program does not confer
upon any Participant any right with respect to the continuance of employment or
other service with the Corporation or any Affiliate and does not interfere in
any way with any right that the Corporation or any Affiliate would otherwise
have to terminate any employment or other service of the Participant at any
time.
15. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Participant under this Agreement or the Program will not be taken into account
in determining any benefits to which the Participant may be entitled under any
profit-sharing, retirement or other benefit or compensation plan maintained by
the Corporation or any Affiliate and will not effect the amount of any life
insurance coverage available to any beneficiary under any life insurance plan
covering employees of the Corporation or any Affiliate.
4
<PAGE> 29
16. AGREEMENT SUBJECT TO PERFORMANCE SHARE PROGRAM. The Performance Shares
granted under this Agreement and all of the terms and conditions hereof are
subject to all of the terms and conditions of the Program.
17. AMENDMENTS. Any amendment to the Program will be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment will adversely affect the rights of
the Participant under this Agreement without the Participant's consent.
18. SEVERABILITY. In the event that one or more of the provisions of this
Agreement is invalidated for any reason by a court of competent jurisdiction,
any provision so invalidated will be deemed to be separable from the other
provisions hereof, and the remaining provisions hereof will continue to be valid
and fully enforceable.
19. TERM. This Agreement is effective as of the Date of Grant and will
remain in effect upon completion of the Performance Period.
20. GOVERNING LAW. This Agreement will be construed and governed in
accordance with the laws of the State of Delaware.
This Agreement is executed as of the Date of Grant.
THE LTV CORPORATION
By:
-----------------------
Title:
The undersigned hereby acknowledges receipt of an executed original of this
Agreement and accepts the grant of Performance Shares thereunder on the terms
and conditions set forth therein and in the Program.
--------------------------
Participant
Date:
-----------------
5
<PAGE> 30
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Performance Shares Agreement
----------------------------
EXHIBIT A
---------
Steel Industry Peer Group
AK Steel
Bethlehem Steel
Inland Steel
National Steel
Nucor
Weirton
WHX
USX-Steel Group
<PAGE> 31
THE LTV CORPORATION
MANAGEMENT INCENTIVE PROGRAM
Performance Shares Agreement
----------------------------
EXHIBIT B
---------
Performance Shares Schedule
Performance Shares Earned
Total Shareholder Return Ranking (as a Percentage of Shares Granted)
- -------------------------------- -----------------------------------
1 300%
2 250%
3 200%
4 150%
5 100%
6 0%
7 0%
8 0%
9 0%
<PAGE> 1
Exhibit 5
The LTV Corporation
200 Public Square
Cleveland, Ohio 44114-2308
Dear Sirs:
I am the Senior Vice President, General Counsel and Secretary and have acted as
counsel for The LTV Corporation (the "Corporation") in connection with its
Registration Statement on Form S-8 (the "Registration Statement") to register
under the Securities Act of 1933, as amended, an additional 5,000,000 shares
(the "Shares") of Common Stock ($0.50 par value) of the Corporation issuable
pursuant to the Amended and Restated Management Incentive Program (the "AMIP").
In connection therewith, I have examined, or caused to be examined, originals or
copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records, certificates of public officials and other
instruments as I have deemed necessary for the purpose of this opinion.
Upon the basis of the foregoing, I am of the opinion that the Shares deliverable
pursuant to the Plan have been duly authorized and, when and to the extent
issued pursuant to the Plan upon receipt by the Corporation of adequate
consideration therefor, will be validly issued, fully paid and nonassessable.
I consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
Glenn J. Moran
GJM/efa/8939
-9-
<PAGE> 1
EXHIBIT 23(a)
We consent to the incorporation by reference in the Registration Statement (Form
S-8 dated April 25, 1997) pertaining to The LTV Corporation Amended and Restated
Management Incentive Program of our report dated January 23, 1997, with respect
to the consolidated financial statements of The LTV Corporation incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 1996,
filed with the Securities and Exchange Commission.
/s/ Ernst & YOung LLP
Cleveland, Ohio
April 24, 1997
