AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1996
REGISTRATION NO. 33-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
ASARCO INCORPORATED
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
NEW JERSEY 13-492440
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
180 MAIDEN LANE
NEW YORK, NY 10038
(212) 510-2000
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
_________________________________
ASARCO INCORPORATED
1996 STOCK INCENTIVE PLAN
(FULL TITLE OF PLAN)
__________________
AUGUSTUS B. KINSOLVING, ESQ.
180 MAIDEN LANE
NEW YORK, NY 10038
(NAME AND ADDRESS OF AGENT FOR SERVICE)
<PAGE>
___________________
COPY TO:
KEVIN KEOGH, ESQ.
WHITE & CASE
1155 AVENUE OF THE AMERICAS
NEW YORK, NY 10036
___________________
TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE: (212) 510-2000
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
TITLE OF SECURITIES AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM
TO BE REGISTERED BE REGISTERED OFFERING PRICE AGGREGATE AMOUNT OF
PER SHARE OFFERING PRICE REGISTRATION FREE
<S> <C> <C> <C> <C>
COMMON STOCK,
WITHOUT PAR VALUE 1,500,000 SHARES $25.6875 $38,531,250 $11,676.14
</TABLE>
*PLUS AN INDETERMINATE NUMBER OF ADDITIONAL SHARES THAT MAY BE OFFERED AND
ISSUED TO PREVENT DILUTION RESULTING FROM STOCK SPLITS, STOCK DIVIDENDS OR
SIMILAR TRANSACTIONS.
**ESTIMATED PURSUANT TO RULE 457 OF THE GENERAL RULES AND REGULATIONS UNDER
THE SECURITIES ACT OF 1933 SOLELY FOR THE PURPOSES OF COMPUTING THE
REGISTRATION FEE, BASED ON THE AVERAGE OF THE HIGH AND LOW SALES PRICES OF THE
SECURITIES BEING REGISTERED HEREBY ON THE NEW YORK STOCK EXCHANGE COMPOSITE
TAPE ON DECEMBER 12, 1996.
<PAGE>
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
ASARCO Incorporated (the "Company") hereby incorporates herein by
reference the following documents:
(a) The Company's Annual Report on Form 10-K (File No. 1-164) for
the fiscal year ended December 31, 1995;
(b) Proxy Statement for the Annual Meeting of Stockholders on April
24, 1996 (filed with the Securities and Exchange Commission (the "Commission")
on March 8, 1996);
(c) The Company's Quarterly Reports on Form 10-Q (File No. 1-164)
for the fiscal quarters ended March 31, 1996, June 30, 1996, and September 30,
1996; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-3, as filed with the Commission on
April 9, 1996 (Registration No. 33-02359).
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") subsequent to the date of this Registration Statement and
prior to the filing of a post-effective amendment that indicates that all
securities offered herein have been sold or that 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. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or in
any other subsequently filed document that also is incorporated or deemed to
be incorporated herein by reference modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Article 9 of the Certificate of Incorporation of the Company
provides as follows:
"9. This corporation shall indemnify to the full extent permitted
by law any person made, or threatened to be made, a party to any pending,
threatened or completed civil, criminal, administrative or arbitrative action,
suit or proceeding and any appeal therein (and any inquiry or investigation
which could lead to such action, suit or proceeding) by reason of the fact
that he is or was a director, officer or employee of this corporation or
serves or served any other enterprise as a director, officer or employee at
the request of this corporation. Such right of indemnification shall inure to
the benefit of the legal representative of any such person."
In April 1987, the Company adopted and its shareholders approved a
By-law amendment which requires it to indemnify directors and officers in
<PAGE>
certain circumstances, to advance certain expenses, to obtain indemnification
insurance and to follow specific procedures for determining whether a director
or officer has met applicable standards of conduct. The By-law amendment also
establishes a statute of limitations for certain actions against directors and
officers. These provisions in the Certificate of Incorporation and By-laws
are permitted under Section 14A:3-5 of the New Jersey Business Corporation
Act, set forth below.
Section 14A:3-5 of the New Jersey Business Corporation Act governs
the indemnification of directors, officers and employees of the Company. The
following is the text of the Section which became effective February 4, 1989:
"(1) As used in this section,
(a) "Corporate agent" means any person who is or was a director,
officer, employee or agent of the indemnifying corporation or of any
constituent corporation absorbed by the indemnifying corporation in a
consolidation or merger and any person who is or was a director, officer,
trustee, employee or agent of any other enterprise, serving as such at the
request of the indemnifying corporation, or of any such constituent
corporation, or the legal representative of any such director, officer,
trustee, employee or agent;
(b) "Other enterprise" means any domestic or foreign corporation,
other than the indemnifying corporation, and any partnership, joint venture,
sole proprietorship, trust or other enterprise, whether or not for profit,
served by a corporate agent;
(c) "Expenses" means reasonable costs, disbursements and counsel
fees;
(d) "Liabilities" means amounts paid or incurred in satisfaction of
settlements, judgments, fines and penalties;
(e) "Proceeding" means any pending, threatened or completed civil,
criminal, administrative or arbitrative action, suit or proceeding, and any
appeal therein and any inquiry or investigation which could lead to such
action, suit or proceeding; and
(f) References to "other enterprises" include employee benefit
plans; references to "fines" include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to "serving at the
request of the indemnifying corporation" include any service as a corporate
agent which imposes duties on or involves services by, the corporate agent
with respect to an employee benefit plan, its participants, or beneficiaries;
and a person who acted in good faith and in a manner the person reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not opposed
to the best interests of the corporation" as referred to in this section.
"(2) Any corporation organized for any purpose under any general or
special law of this State shall have the power to indemnify a corporate agent
against his expenses and liabilities in connection with any proceeding
involving the corporate agent by reason of his being or having been such a
corporate agent, other than a proceeding by or in the right of the
corporation, if
(a) such corporate agent acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the corporation; and
(b) with respect to any criminal proceeding, such corporate agent
had no reasonable cause to believe his conduct was unlawful.
The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not of itself create a presumption that such
<PAGE>
corporate agent did not meet the applicable standards of
conduct set forth in paragraphs 14A:3-5(2)(a) and 14A:3-
5(2)(b).
"(3) Any corporation organized for any purpose under any general or
special law of this State shall have the power to indemnify a corporate agent
against his expenses in connection with any proceeding by or in the right of
the corporation to procure a judgment in its favor which involves the
corporate agent by reason of his being or having been such corporate agent, if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation. However, in such proceeding
no indemnification shall be provided in respect of any claim, issue or matter
as to which such corporate agent shall have been adjudged to be liable to the
corporation, unless and only to the extent that the Superior Court or the
court in which such proceeding was brought shall determine upon application
that despite the adjudication of liability, but in view of all circumstances
of the case, such corporate agent is fairly and reasonably entitled to
indemnity for such expenses as the Superior Court or such other court shall
deem proper.
"(4) Any corporation organized for any purpose under any general or
special law of this State shall indemnify a corporate agent against expenses
to the extent that such corporate agent has been successful on the merits or
otherwise in any proceeding referred to in subsections 14A:3-5(2) and 14A:3-
5(3) or in defense of any claim, issue or matter therein.
"(5) Any indemnification under subsection 14A:3-5(2) and, unless
ordered by a court, under subsection 14A:3-5(3) may be made by the corporation
only as authorized in a specific case upon a determination that
indemnification is proper in the circumstances because the corporate agent met
the applicable standard of conduct set forth in subsection 14A:3-5(2) or
subsection 14A:3-5(3). Unless otherwise provided in the certificate of
incorporation or bylaws, such determination shall be made
(a) by the board of directors or a committee thereof, acting by a
majority vote of a quorum consisting of directors who were not
parties to or otherwise involved in the proceeding; or
(b) if such a quorum is not obtainable, or, even if obtainable and
such quorum of the board of directors or committee by a
majority vote of the disinterested directors so directs, by
independent legal counsel, in a written opinion, such counsel
to be designated by the board of directors; or
(c) by the shareholders if the certificate of incorporation or
bylaws or a resolution of the board of directors or of the
shareholders so directs.
"(6) Expenses incurred by a corporate agent in connection with a
proceeding may be paid by the corporation in advance of the final disposition
of the proceeding as authorized by the board of directors upon receipt of an
undertaking by or on behalf of the corporate agent to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified as
provided in this section.
"(7)(a) If a corporation upon application of a corporate agent has
failed or refused to provide indemnification as required under subsection
14A:3-5(4) or permitted under subsections 14A:3-5(2), 14A:3-5(3) and 14A:3-
5(6), a corporate agent may apply to a court for an award of indemnification
by the corporation, and such court
(i) may award indemnification to the extent authorized under
subsections 14A:3-5(2) and 14A:3-5(3) and shall award
indemnification to the extent required under subsection 14A:3-5(4),
notwithstanding any contrary determination which may have been made
under subsection 14A:3-5(5); and
<PAGE>
(ii) may allow reasonable expenses to the extent authorized
by, and subject to the provisions of, subsection 14A:3-5(6), if the
court shall find that the corporate agent has by his pleadings or
during the course of the proceeding raised genuine issues of fact or
law.
(b) Application for such indemnification may be made
(i) in the civil action in which the expenses were or are to
be incurred or other amounts were or are to be paid; or
(ii) to the Superior Court in a separate proceeding. If the
application is for indemnification arising out of a civil action, it
shall set forth reasonable cause for the failure to make application
for such relief in the action or proceeding in which the expenses
were or are to be incurred or other amounts were or are to be paid.
The application shall set forth the disposition of any previous
application for indemnification and shall be made in such manner and form as
may be required by the applicable rules of court or, in the absence thereof,
by direction of the court to which it is made. Such application shall be upon
notice to the corporation. The court may also direct that notice shall be
given at the expense of the corporation to the shareholders and such other
person as it may designate in such manner as it may require.
"(8)The indemnification and advancement of expenses provided by or
granted pursuant to the other subsections of this section shall not exclude
any other rights, including the right to be indemnified against liabilities
and expenses incurred in proceedings by or in the right of the corporation, to
which a corporate agent may be entitled under a certificate of incorporation,
bylaw, agreement, vote of shareholders, or otherwise; provided that no
indemnification shall be made to or on behalf of a corporate agent if a
judgment or other final adjudication adverse to the corporate agent
establishes that his acts or omissions
(a) were in breach of his duty of loyalty to the corporation or its
shareholders, as defined in subsection (3) of N.J.S. 14A:2-7;
(b) were not in good faith or involved a knowing violation of law;
or
(c) resulted in receipt by the corporate agent of an improper
personal benefit.
"(9) Any corporation organized for any purpose under any general or
special law of this State shall have the power to purchase and maintain
insurance on behalf of any corporate agent against any expenses incurred in
any proceeding and any liabilities asserted against him by reason of his being
or having been a corporate agent, whether or not the corporation would have
the power to indemnify him against such expenses and liabilities under the
provisions of this section. The corporation may purchase such insurance from,
or such insurance may be reinsured in whole or in part by, an insurer owned by
or otherwise affiliated with the corporation, whether or not such insurer does
business with other insureds.
"(10) The powers granted by this section may be exercised by the
corporation, notwithstanding the absence of any provision in its certificate
of incorporation or bylaws authorizing the exercise of such powers.
"(11) Except as required by subsection 14A:3-5(4), no
indemnification shall be made or expenses advanced by a corporation under this
section, and none shall be ordered by a court, if such action would be
inconsistent with a provision of the certificate of incorporation, a bylaw, a
resolution of the board of directors or of the shareholders, an agreement or
other proper corporate action, in effect at the time of the accrual of the
alleged cause of action asserted in the proceeding, which prohibits, limits or
<PAGE>
otherwise conditions the exercise of indemnification powers by the corporation
or the rights of indemnification to which a corporate agent may be entitled.
"(12) This section does not limit a corporation's power to pay or
reimburse expenses incurred by a corporate agent in connection with the
corporate agent's appearance as a witness in a proceeding at a time when the
corporate agent has not been made a party to the proceeding."
The Company has various insurance policies, which became effective
April 15, 1996, insuring directors and officers against certain liabilities
they may incur, including liabilities under the Securities Act of 1933, as
amended. The policies provide coverage for claims not reimbursed by the
Company up to an aggregate limit of $75 million without deductible. For
claims which are reimbursed by the Company, the policies provide coverage up
to $75 million with a deductible of $1 million. These policies remain in
effect.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The following is a complete list of exhibits filed as part of this
Registration Statement:
Exhibit
No. Description
4.1 Certificate of Incorporation:
(a) Certificate of Incorporation--restated, filed May 4, 1970 (Filed as
an Exhibit to the Company's 1980 Annual Report on Form 10-K and
incorporated herein by reference).
(b) Certificate of Amendment to the Certificate of Incorporation
effective April 23, 1975 (Filed as an Exhibit to the Company's 1980
Annual Report on Form 10-K and incorporated herein by reference).
(c) Certificate of Amendment of Certificate of Incorporation executed
April 14, 1981 (Filed as an Exhibit to Post-Effective Amendment No.
8 to Registration Statement No. 2-47616, filed April 30, 1981 and
incorporated herein by reference).
(d) Certificate of Amendment of Restated Certificate of Incorporation
filed on May 6, 1985 (Filed as an Exhibit to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1985 and
incorporated herein by reference).
(e) Certificate of Amendment of Certificate of Incorporation filed July
21, 1986 (Filed as an Exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1986 and incorporated
herein by reference).
(f) Certificate of Amendment of Restated Certificate of Incorporation,
as amended, filed April 22, 1987 (Filed as an Exhibit to the
Company's 1987 Annual Report on Form 10-K and incorporated herein by
reference).
(g) Statement of Cancellation filed July 31, 1987 whereby 155,000 shares
of Series A Cumulative Preferred Stock and 862,500 shares of $9.00
Convertible Exchangeable Preferred Stock were cancelled (Filed as an
Exhibit to the Company's 1987 Annual Report on Form 10-K and
<PAGE>
incorporated herein by reference).
(h) Statement of Cancellation filed November 20, 1987 whereby 1,026,900
shares of Series A Cumulative Preferred Stock were cancelled (Filed
as an Exhibit to the Company's 1987 Annual Report on Form 10-K and
incorporated herein by reference).
(i) Statement of Cancellation filed December 18, 1987 whereby 1,250,000
shares of Series B Cumulative Convertible Preferred Stock were
cancelled (Filed as an Exhibit to the Company's 1987 Annual Report
on Form 10-K and incorporated herein by reference).
(j) Statement of Cancellation filed March 3, 1988 whereby 27,000 shares
of Series A Cumulative Preferred Stock were cancelled (Filed as an
Exhibit to the Company's 1987 Annual Report on Form 10-K and
incorporated herein by reference).
(k) Certificate of Amendment of Restated Certificate of Incorporation,
as amended, filed August 7, 1989 (Filed as an Exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1989 and incorporated herein by reference).
4.2 By-Laws as last amended June 26, 1991 (Filed as an Exhibit to the
Company's 1991 Annual Report on Form 10-K and incorporated herein by
reference).
4.3 Form of Rights Agreement dated as of July 25, 1989, between the
Company and First Chicago Trust Company of New York, as Rights
Agent, defining the rights of shareholders under a July 1989
Shareholders' Rights plan and dividend declaration (filed as an
Exhibit to the Company's report on Form 8-K filed on July 28, 1989
and incorporated herein by reference).
4.4 Rights Agreement Amendment dated as of September 24, 1992, between
the Company and the Bank of New York, as Successor Rights Agent
under the Rights Agreement listed above (filed as an Exhibit to the
Company's 1992 Annual Report on Form 10-K and incorporated herein by
reference).
4.5 Second Rights Agreement Amendment dated as of February 23, 1995,
between the Company and the Bank of New York (filed as an Exhibit to
the Company's 1992 Annual Report on Form 10-K and incorporated
herein by reference).
4.6 ASARCO Incorporated 1996 Stock Incentive Plan, adopted by the
Company's Shareholders on April 24, 1996.
5.1 Opinion of Augustus B. Kinsolving.
15.1 Letters of Coopers & Lybrand L.L.P., independent accountants,
regarding unaudited financial statements (filed as Exhibits to the
Company's Quarterly Reports on Form 10-Q for the periods ended March
31, June 30 and September 30, 1996, and incorporated herein by
reference).
23.1 Consent of Augustus B. Kinsolving (included in Exhibit 5.1).
23.2 Consent of Coopers & Lybrand L.L.P.
24.1 Powers of Attorney (filed as Exhibit 24.1 to the Company's
Registration Statement on Form S-8, Registration No. 33-16875, as
filed with the Commission on November 26, 1996, and incorporated
herein by reference).
ITEM 9. UNDERTAKINGS
<PAGE>
(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 (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 required 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.
(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.
(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 foregoing provisions, or otherwise, 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 a claim for
indemnification against such liabilities (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 Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 New York, State of New York, on this
16th day of November, 1996.
ASARCO Incorporated
By /s/ Richard de J. Osborne
Richard de J. Osborne
Chairman of the Board, Chief
Executive Officer and President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature Title Date
<S> <C> <C>
/s/ Richard de J. Osborne Chairman, President and November 16, 1996
Richard de J. Osborne Chief Executive Officer
_________________________ Director and Executive November 16, 1996
Francis R. McAllister* Vice President
/s/ Kevin R. Morano Vice President and November 16, 1996
Kevin R. Morano Chief Financial Officer
/s/ William Dowd Controller November 16, 1996
William Dowd
_________________________ Director November 16, 1996
Willard C. Butcher*
_________________________ Director November 16, 1996
James C. Cotting*
_________________________ Director November 16, 1996
David C. Garfield*
_________________________ Director November , 1996
E. Gordon Gee*
_________________________ Director November 16, 1996
James W. Kinnear*
_________________________ Director November 16, 1996
Martha T. Muse*
_________________________ Director November 16, 1996
Michael T. Nelligan*
_________________________ Director November 16, 1996
John D. Ong*
_________________________ Director November 16, 1996
James Wood*
</TABLE>
<PAGE>
*Augustus B. Kinsolving, pursuant to a Power of Attorney executed by each
of the directors noted above and filed with the Securities and Exchange
Commission, by signing his name does hereby sign and execute this Registration
Statement on Form S-8 on behalf of each such director.
/s/ Augustus B. Kinsolving
Augustus B. Kinsolving
Attorney-in-Fact
Exhibit 4.6
ASARCO INCORPORATED
1996 STOCK INCENTIVE PLAN
1. Purposes. The purposes of the ASARCO Incorporated 1996 Stock
Incentive Plan are:
(a) To further the growth, development and success of the Company
and its Subsidiaries by enabling the executive and other key salaried
employees of the Company and its Subsidiaries to acquire a continued
proprietary interest in the Company, thereby increasing their personal
interests in such growth, development and success; and
(b) To maintain the ability of the Company and its Subsidiaries to
attract and retain highly qualified and experienced employees by offering
them an opportunity to acquire a continued proprietary interest in the
Company and its Subsidiaries which will reflect the growth, development
and success of the Company and its Subsidiaries.
Toward these objectives, the Committee may grant Options, Stock Appreciation
Rights, Limited Rights, Other Stock-Based Awards or award Restricted Stock or
Dividend Equivalents to such employees or pay such employees' bonuses (if any)
or other compensation in Common Stock or award or grant any combination
thereof, all pursuant to the terms and conditions of the Plan (each, an
"Award").
2. Definitions. As used in the Plan, the following capitalized terms
shall have the meanings set forth below, unless the context clearly indicates
otherwise:
(a) "ADDITIONAL ANNUAL INCREMENT" shall have the meaning set forth
in Section 4(a).
(b) "AGREEMENT" shall have the meaning set forth in Section 3(e).
(c) "AWARD" shall have the meaning set forth in Section 1.
(d) "AWARD GAIN" shall have the meaning set forth in Section 12(a).
(e) "AWARD LIMIT" shall mean an aggregate of 375,000 shares of
Common Stock applicable collectively to all Awards during any period of
three consecutive calendar years (as adjusted in accordance with Section
17).
(f) "BOARD" shall mean the Board of Directors of the Company.
(g) "CODE" shall mean the Internal Revenue Code of 1986, as it may
be amended from time to time, including regulations and rules thereunder
and successor provisions and regulations and rules thereto.
(h) "COMMITTEE" shall mean the Organization and Compensation
Committee of the Board, or such other Board committee as may be
designated by the Board to administer the Plan.
(i) "COMMON STOCK" shall mean the no par value common stock of the
Company.
(j) "COMPANY" shall mean ASARCO Incorporated, a New Jersey
<PAGE>
corporation, or any successor entity.
(k) "COMPOSITE TAPE" shall mean the Composite Tape for New York
Stock Exchange issues, or any successor thereto.
(l) "COUPLED STOCK APPRECIATION RIGHTS" shall have the meaning set
forth in Section 7.
(m) "DIVIDEND EQUIVALENTS" shall mean the equivalent value (in cash
or Common Stock) of dividends paid on Common Stock subject to Other
Stock-Based Awards, which are granted under, and determined in accordance
with Section 11.
(n) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as it may be amended from time to time.
(o) "EXERCISE EVENT" shall have the meaning set forth in Section
7(e).
(p) "FAIR MARKET VALUE" of a share of Common Stock or other Company
or Subsidiary equity securities as of a given date shall be the mean of
the high and low sales prices for a share of Common Stock or such
securities as reported on the Composite Tape for such date; provided,
however, that if there is no sale of shares of Common Stock or such
securities reported on the Composite Tape on such date, such fair market
value shall be the mean between the bid and asked prices for a share of
Common Stock or such securities reported on the Composite Tape at the
close of trading on such date; provided further, however, that if no such
prices are reported for such day, the most recent day for which such
prices are available shall be used. In the event that the method for
determining the fair market value of a share of Common Stock or such
securities provided for in the previous sentence shall not be
practicable, then such fair market value shall be determined by such
other reasonable valuation method as the Committee shall, in its
discretion, select and apply in good faith as of the given date;
provided, however, that for purposes of paragraph (a) of Section 6, such
fair market value shall be determined subject to Section 422(c)(7) of the
Code.
(q) "INCENTIVE STOCK OPTION" shall mean an option to purchase
Common Stock granted to a Participant under the Plan in accordance with
the terms and conditions set forth in Section 6 and which conforms to the
applicable provisions of Section 422 of the Code.
(r) "INDEPENDENT STOCK APPRECIATION RIGHTS" shall have the meaning
set forth in Section 7.
(s) "LIMITED RIGHT" shall mean a limited stock appreciation right
granted to a Participant under the Plan in accordance with the terms and
conditions set forth in Section 7(e).
(t) "NOTICE" shall mean written notice actually received by the
Company at its offices, which may be delivered in person to the Company's
Controller or sent by facsimile to the Company's Controller, or sent by
certified or registered mail or reputable overnight courier, prepaid,
addressed to the Company at 180 Maiden Lane, New York, New York 10038,
Attention: Controller, or such other address or facsimile number as may
be furnished in writing by the Company to any Participant.
(u) "OPTION" shall mean an option to purchase Common Stock granted
to a Participant under the Plan in accordance with the terms and
conditions set forth in Section 6. Options may be either Incentive Stock
Options or stock options other than Incentive Stock Options.
<PAGE>
(v) "OPTIONEE" shall mean a Participant who has been granted an
Option under the Plan in accordance with the terms and conditions set
forth in Section 6.
(w) "OTHER STOCK-BASED AWARDS" shall mean Awards granted to
Participants under the Plan that are valued in whole or in part by
reference to, or otherwise based on, the value of a share of Common
Stock, in accordance with the terms and conditions set forth in Section
10.
(x) "PARTICIPANT" shall mean an executive or key salaried employee
of the Company or its Subsidiaries selected to participate in the Plan
pursuant to Section 3.
(y) "PERFORMANCE CRITERIA" applicable to Awards under the Plan,
shall mean one or more of the following, as selected by the Committee:
(i) return on equity calculated by dividing net earnings by either (A)
beginning stockholders' equity or (B) invested capital, or (ii) actual
consolidated beneficial mined copper production. For purposes of the
preceding sentence, equity and invested capital shall exclude unrealized
gain on securities reported at fair value. Net earnings may be defined by
the Committee as reported net earnings, earnings before non-recurring
items (as identified in the Company's annual financial statements and
management's discussion and analysis), net earnings before extraordinary
items, net earnings before the cumulative effect of changes in accounting
principles, or operating income.
(z) "PERMANENT DISABILITY" shall mean a permanent disability under
the terms of the Company's long-term disability plan; provided, however,
that, for purposes of Incentive Stock Options, "Permanent Disability"
shall mean "permanent and total disability" as set forth in Section
22(e)(3) of the Code. The Committee may require medical evidence of
Permanent Disability, including medical examinations by physicians
selected by it, at the expense of the Company.
(aa) "PLAN" shall mean this ASARCO Incorporated 1996 Stock
Incentive Plan.
(ab) "PREDECESSOR PLAN" shall have the meaning set forth in Section
18(h).
(ac) "RESTRICTED STOCK" shall mean Common Stock awarded under the
Plan in accordance with the terms and conditions set forth in Section 8.
(ad) "RESTRICTION PERIOD" shall have the meaning set forth in
Section 8(b).
(ae) "RULE 16b-3" shall mean Rule 16b-3 under the Exchange Act, as
such rule may be amended from time to time.
(af) "SEC" shall mean the Securities and Exchange Commission.
(ag) "STOCK APPRECIATION RIGHT" shall mean a stock appreciation
right granted to a Participant under the Plan and in accordance with the
terms and conditions of Section 7 and shall include both Coupled Stock
Appreciation Rights and Independent Stock Appreciation Rights.
(ah) "SUBSIDIARY" shall mean any present or future corporation
which is or would be a "subsidiary corporation" of the Company as the
term is defined in Section 424(f) of the Code.
3. Administration of the Plan. (a) The Committee shall have total and
<PAGE>
exclusive responsibility to control, operate, manage and administer the Plan
in accordance with its terms and conditions.
(b) The Committee shall be appointed from time to time by the Board, and
the Committee shall consist of not less than three (3) members of the Board,
each of whom is an "outside director" within the meaning of Section 162(m) of
the Code and, to the extent necessary for the Plan and/or Awards thereunder to
satisfy the requirements and conditions of Rule 16b-3, a "disinterested
person," as defined by Rule 16b-3 (or a "non-employee director" under Rule
16b-3 as proposed to be amended by the SEC, if such amendments are finally
adopted by the SEC substantially as proposed); provided, however, that if one
or more of the members of the Committee does not qualify as such an "outside
director" or a "disinterested person" (or a "non-employee director," if
applicable) at the time any Award is granted, such Award nevertheless shall be
deemed to be properly authorized and issued under the Plan and shall remain in
full force and effect subject to the other terms and conditions contained in
the Plan and the relevant Agreement. Appointment of Committee members shall be
effective upon their acceptance of such appointment. Committee members may be
removed by the Board at any time either with or without cause, and such
members may resign at any time by delivering Notice thereof to the Board. Any
vacancy on the Committee, whether due to action of the Board or any other
reason, shall be filled by the Board.
(c) The Committee shall have all authority that may be necessary or
helpful to enable it to discharge its responsibilities with respect to the
Plan. Without limiting the generality of the preceding sentence, the
Committee shall have the exclusive right to: (i) interpret the Plan and the
Agreements; (ii) construe any ambiguous provision in the Plan and/or the
Agreements; (iii) determine eligibility for participation in the Plan; (iv)
select Participants; (v) decide all questions concerning eligibility for and
the amount of Awards payable under the Plan; (vi) establish rules and
regulations and administrative guidelines for carrying out the Plan and amend,
rescind or waive such rules or regulations or administrative guidelines as it
from time to time deems proper; (vii) determine whether Awards to a
Participant are to be granted alone or in combination or in tandem; (viii) to
the extent permitted under the Plan and the applicable Agreement, accelerate
the exercisability of any Option, Stock Appreciation Right or Other Stock-
Based Award (if applicable), or the termination of any Restriction Period with
respect to Restricted Stock when such acceleration and/or termination would be
in the best interest of the Company; (ix) to the extent permitted under the
Plan and the applicable Agreement, grant waivers of Plan terms, conditions,
restrictions and limitations; (x) to the extent permitted under the Plan and
the applicable Agreement, permit the transfer of an Award or the exercise of
an Award by one other than the Participant who received the grant of such
Award; (xi) correct any errors, supply any omissions or reconcile any
inconsistencies in the Plan and/or any Agreement or any other instrument
relating to any Award; (xii) to the extent permitted by the Plan, amend or
adjust the terms and conditions of any outstanding Award and/or adjust the
number and/or class of shares of Common Stock subject to any outstanding
Award; (xiii) in accordance with the Plan, establish and administer any
performance goals in connection with any Awards, including the Performance
Criteria to which such performance goals relate and the applicable measurement
periods, and certify whether, and to what extent, any such performance goals
have been met; and (xiv) take any and all such other action it deems necessary
or advisable for the proper operation and/or administration of the Plan. The
Committee shall have full discretionary authority in all matters related to
the discharge of its responsibilities and the exercise of its authority under
the Plan and its determination of eligibility to participate in the Plan. In
the absence of a showing of arbitrariness or bad faith, as to which the
claimant shall have the burden of proof, decisions and actions by the
Committee with respect to the Plan and any Agreement shall be final,
conclusive and binding on all persons having or claiming to have any right or
interest in or under the Plan and/or any Agreement.
<PAGE>
(d) In accordance with the terms and conditions and subject to the
limitations of the Plan, the Committee, in its discretion, shall: (i) select,
from time to time, from amongst those eligible, the employees to whom Awards
shall be granted under the Plan, which selection may be based upon information
furnished to the Committee by the Company's management; (ii) determine whether
such Award shall take the form of an Option other than an Incentive Stock
Option, Coupled Stock Appreciation Right, Independent Stock Appreciation
Right, Limited Right, Restricted Stock, bonuses or other compensation payable
in Common Stock, Other Stock-Based Award (and, if so, the form thereof),
Dividend Equivalents or any combination thereof; and (iii) determine the
number of shares of Common Stock to be included in such Awards and the periods
for which such Awards will be outstanding. Such employees who are selected to
participate in the Plan shall be referred to collectively herein as
"Participants." Awards, including Awards under the same section of the Plan,
need not be uniform as to all grants and recipients thereof.
(e) Each Award shall be evidenced by an option agreement or award
agreement (an "Agreement"), which shall be executed by the Company and the
Participant to whom such Award has been granted, unless the Agreement provides
otherwise; however, two or more Awards to a single Participant may be combined
in a single Agreement. An Agreement shall not be a precondition to the
granting of an Award; however, no person shall have any rights under any Award
unless and until the Participant to whom the Award shall have been granted
shall have executed and delivered to the Company an Agreement or other
instrument evidencing the Award, unless such Agreement provides otherwise, and
has otherwise complied with the applicable terms and conditions of the Award.
The Committee shall prescribe the form of all Agreements, and, subject to the
terms and conditions of the Plan, the Committee shall determine the content of
all Agreements. Any Agreement may be supplemented or amended in writing from
time to time as approved by the Committee; provided that the terms and
conditions of any such Agreement as supplemented or amended are not
inconsistent with the provisions of the Plan.
(f) A majority of the members of the entire Committee shall constitute a
quorum and the actions of a majority of the members of the Committee in
attendance at a meeting at which a quorum is present, or actions by a
memorandum or other written instrument or instruments signed by all members of
the Committee, shall be the actions of the Committee.
(g) The Committee may consult with counsel who may be counsel to the
Company. The Committee may, with the approval of the Board, employ such other
attorneys or consultants, accountants, appraisers, brokers or other persons as
it deems necessary or appropriate. In accordance with Section 19, the
Committee shall not incur any liability for any action taken in good faith in
reliance upon the advice of such counsel or such other persons.
(h) In serving on the Committee, the members thereof shall be entitled
to indemnification as directors of the Company, and to any limitation of
liability and reimbursement as directors with respect to their services as
members of the Committee.
(i) The Committee may, in its discretion, delegate to appropriate
officers of the Company the administration of the Plan under this Section 3;
provided, however, that no such delegation by the Committee shall be made (i)
if such delegation would not be permitted under applicable law or (ii) with
respect to the administration of the Plan as it affects executive officers and
directors of the Company, and, provided further, however, the Committee may
not delegate its authority to correct errors, omissions or inconsistencies in
the Plan. All authority delegated by the Committee under this paragraph (i)
of this Section 3 shall be exercised in accordance with the terms and
conditions of the Plan and any rules, regulations or administrative guidelines
for, conditions on, or limitations to the exercise of such authority that may
from time to time be established by the Committee.
<PAGE>
(j) In its absolute discretion, the Board may at any time and from time
to time exercise any and all rights, duties and responsibilities of the
Committee under the Plan, including, but not limited to, establishing
procedures to be followed by the Committee, but excluding matters which under
Rule 16b-3 or Section 162(m) of the Code are required to be determined in the
discretion of the Committee.
4. Shares of Stock Subject to the Plan. (a) The shares of stock
subject to Awards granted under the Plan shall be shares of Common Stock. The
total number of shares of Common Stock that may be delivered pursuant to any
Awards (excluding any shares delivered with respect to Dividend Equivalents)
under the Plan is (i) the amount of shares of Common Stock available for
option or award under the Predecessor Plan as of the date of shareholder
approval of this Plan, which amount shall not exceed 475,076 shares of Common
Stock, of which not more than 54,100 shares may be awarded as Restricted
Stock, plus an additional number of shares on January 1 of each calendar year
during the duration of the Plan, beginning January 1, 1997, equal to one
percent (1.0%) of the number of shares of Common Stock outstanding on December
31 of the immediately preceding year (the "Additional Annual Increment"), of
which (ii) 15% of the amount of shares of Common Stock in (i) above plus an
additional amount of shares of Common Stock each calendar year equal to
fifteen percent (15%) of the Additional Annual Increment with respect to such
year may be awarded as Restricted Stock and (iii) no more than 350,000 shares
of Common Stock may be awarded in any calendar year with respect to Incentive
Stock Options, or an aggregate of 3,500,000 shares of Common Stock for the
duration of the Plan. Shares of Common Stock subject to the Plan may be
either authorized and unissued shares (which will not be subject to preemptive
rights) or previously issued shares acquired by the Company or any Subsidiary.
The exercise of a Stock Appreciation Right, whether paid in cash or Common
Stock, shall be deemed to be an issuance of Common Stock for purposes of
determining the number of shares delivered under the Plan.
(b) The maximum number of shares of Common Stock that may be subject to
all Awards granted under the Plan to a Participant shall not exceed the Award
Limit.
(c) Notwithstanding any of the foregoing limitations set forth in this
Section 4, the numbers of shares of Common Stock specified in this Section 4
shall be adjusted as provided in Section 17.
(d) Any shares of Common Stock subject to an Option or Stock
Appreciation Right or Other Stock-Based Award which for any reason expires or
is terminated without having been fully exercised and any Restricted Stock
which is forfeited may again be granted pursuant to an Award under the Plan,
subject to the limitations of this Section 4; provided, however, that
forfeited shares of Common Stock shall not be available for further Awards if
the recipient thereof has realized any benefits of ownership from such shares.
5. Eligibility. Executive and other key salaried employees, including
officers, of the Company and its Subsidiaries (but excluding non-employee
directors as well as members of the Committee) shall be eligible to receive
Awards under the Plan.
6. Terms and Conditions of Stock Options. All Options to purchase
Common Stock granted under the Plan shall be either Incentive Stock Options or
Options other than Incentive Stock Options. Each Option shall be subject to
all the applicable provisions of the Plan, including the following terms and
conditions, and to such other terms and conditions not inconsistent therewith
as the Committee shall determine and which are set forth in the applicable
Agreement.
(a) The option exercise price per share of shares of Common Stock
<PAGE>
subject to each Option shall be determined by the Committee and stated in the
Agreement; provided, however, that, subject to paragraph (h)(C) of this
Section 6, such price shall not be less than 100% of the Fair Market Value of
a share of Common Stock at the time that the Option is granted.
(b) Each Option shall be exercisable in whole or in such installments
during and over such period ending not later than ten (10) years from the date
such Option was granted as may be determined by the Committee and stated in
the Agreement, subject to paragraph (h)(C) of this Section 6. In no event may
an Option be exercised more than ten (10) years from the date the Option was
granted.
(c) An Option shall not be exercisable with respect to a fractional
share of Common Stock or with respect to the lesser of one hundred (100)
shares or the full number of shares of Common Stock then subject to the
Option. No fractional shares of Common Stock shall be issued upon the exercise
of an Option. If a fractional share of Common Stock shall become subject to an
Option by reason of a stock dividend or otherwise, the Optionee shall not be
entitled to exercise the Option with respect to such fractional share.
(d) Each Option may be exercised by giving Notice to the Company
specifying the number of shares of Common Stock to be purchased, which shall
be accompanied by payment in full including, if required by applicable law,
applicable taxes, if any. Payment, except as provided in the Agreement, shall
be:
(i) in United States dollars by personal check, subject to
collection, or bank draft;
(ii) by tendering to the Company shares of Common Stock owned by the
person exercising the Option (or by such person and his or her spouse),
which may include shares received as the result of a prior exercise of an
Option, and having a Fair Market Value on the date on which the Option is
exercised equal to the cash exercise price applicable to such Option;
(iii) in accordance with a cashless exercise program established by
the Committee in its discretion under which, if so instructed by an
Optionee, either (A) shares of Common Stock may be issued by the Company
directly to the Optionee's broker or dealer upon receipt in cash of the
purchase price thereof under an Option from such broker or dealer, or (B)
shares of Common Stock may be issued by the Company directly to the
Optionee's broker or dealer in consideration of such broker's or dealer's
irrevocable commitment to pay to the Company in cash that portion of the
proceeds from the sale of such shares that is equal to the cash exercise
price of one or more Options relating to such shares of Common Stock; or
(iv) by any combination of the consideration provided in the
foregoing clauses (i), (ii) and (iii).
(e) No Optionee shall have any rights to dividends or other rights of a
shareholder with respect to shares of Common Stock subject to his or her
Option until he or she has given Notice to the Company of exercise of his or
her Option and paid for such shares, in accordance with the provisions of the
Plan.
(f) An Option may be exercised only if at all times during the period
beginning with the date of the granting of the Option and ending on the date
of such exercise (or in the case of an Incentive Stock Option, the date three
(3) months before the date of such exercise) the Optionee was an employee of
either the Company or of a Subsidiary or of another corporation referred to in
Section 421(a)(2) of the Code; provided, however, that if any such continuous
employment is terminated by death, Permanent Disability, "normal retirement"
under a retirement plan of the Company and/or a Subsidiary, or otherwise
<PAGE>
terminated with the written consent of such employer at any time when the
Option, or any portion thereof, is exercisable by the Optionee, such Option
may be exercised with respect to that number of shares of Common Stock
(subject to adjustment as provided for in Section 17) which the Optionee could
have acquired by the exercise of such Option immediately prior to any such
termination of employment by the Optionee or the person or persons to whom his
or her rights under the Option shall have passed by will or by the laws of
descent and distribution or otherwise, at any time prior to the termination
date of the Option, as stated in the Agreement; provided further, however,
that if any such continuous employment is otherwise terminated by retirement
before such "normal retirement" at any time when the Option, or any portion
thereof, is exercisable by the Optionee, the Committee may, in its discretion,
determine that such Option shall nevertheless be exercisable in accordance
with this subsection (f) of Section 6.
(g) The Committee may, but need not, require such consideration from an
Optionee at the time of granting an Option as it shall determine, either in
lieu of or in addition to, the limitations on exercisability of such Option
imposed under this Section 6.
(h)(A) Each Option shall state in the Agreement whether it will or will
not be treated as an Incentive Stock Option. No Incentive Stock Option shall
be granted unless such Option, when granted, qualifies as an "incentive stock
option" under Section 422 of the Code. Any Incentive Stock Option granted
under the Plan shall contain such terms and conditions, consistent with the
Plan, as the Committee may determine to be necessary to qualify such Option as
an "incentive stock option" under Section 422 of the Code. No Incentive Stock
Option shall be granted to any Participant who is not an employee of the
Company or a Subsidiary. Any Incentive Stock Option granted under the Plan may
be modified by the Committee to disqualify such Option from treatment as an
"incentive stock option" under Section 422 of the Code.
(h)(B) Notwithstanding any intent to grant Incentive Stock Options, an
Option granted under the Plan will not be considered an Incentive Stock Option
to the extent that it, together with any other "incentive stock options"
(within the meaning of Section 422 of the Code, but without regard to
subsection (d) of such Section) under the Plan or any other incentive stock
option plans of the Company and any Subsidiary, are exercisable for the first
time by any Optionee during any calendar year with respect to Common Stock
having an aggregate Fair Market Value in excess of $100,000 (or such other
limit as may be required by the Code) as of the time the Option with respect
to such Common Stock is granted. The rule set forth in the preceding sentence
shall be applied by taking Options into account in the order in which they
were granted.
(h)(C) No Incentive Stock Option shall be granted to a Participant who
owns (within the meaning of Section 424(d) of the Code), at the time the
Option is granted, more than 10% of the total combined voting power of all
classes of stock of the Company or a Subsidiary. This restriction does not
apply if at the time such Incentive Stock Option is granted the Option
exercise price per share of Common Stock subject to the Option is at least
110% of the Fair Market Value of a share of Common Stock on the date such
Incentive Stock Option is granted, and the Incentive Stock Option by its terms
is not exercisable after the expiration of five (5) years from such date of
grant.
(i) An Option and any shares of Common Stock received upon the exercise
of an Option shall be subject to such other transfer and/or ownership
restrictions and/or legending requirements as the Committee may establish in
its discretion and which are specified in the Agreement and may be referred to
on the certificates evidencing such shares. The Committee may require an
Optionee to give prompt Notice to the Company concerning any disposition of
shares of Common Stock received upon the exercise of an Incentive Stock Option
<PAGE>
within (i) two years from the date of granting such Incentive Stock Option to
such Participant or (ii) one year from the transfer of such shares to such
Participant or (iii) such other period as the Committee may from time to time
determine. The Committee may direct that an Optionee with respect to an
Incentive Stock Option undertake in the applicable Agreement to give such
notice described in the preceding sentence, at such time and containing such
information as the Committee may prescribe, and/or that the certificates
evidencing shares acquired by exercise of an Incentive Stock Option refer to
such requirement to give such notice.
(j) Notwithstanding any other provision contained in the Plan to the
contrary, the maximum number of shares of Common Stock which may be subject to
Options granted under the Plan to any Participant shall not exceed the Award
Limit. To the extent required by Section 162(m) of the Code, shares of Common
Stock subject to Options which are cancelled shall continue to be counted
against the Award Limit and if, after the grant of an Option, the price of
shares subject to such Option is reduced, the transaction is treated as a
cancellation of the Option and a grant of a new Option and both the Option
deemed to be canceled and the Option deemed to be granted are counted against
the Award Limit.
7. Terms and Conditions of Stock Appreciation Rights. Any Stock
Appreciation Rights granted by the Committee under the Plan shall, in the
discretion of the Committee, either be granted alone ("Independent Stock
Appreciation Rights") or in conjunction with all or part of an Option granted
under the Plan ("Coupled Stock Appreciation Rights"), and the applicable
Agreement shall state whether a Stock Appreciation Right is an Independent
Stock Appreciation Right or a Coupled Stock Appreciation Right. Each Stock
Appreciation Right shall be subject to all the applicable provisions of the
Plan, including the following terms and conditions, and to such other terms
and conditions not inconsistent therewith as the Committee shall determine and
which are set forth in the applicable Agreement.
(a) The Committee may grant a Coupled Stock Appreciation Right (i) with
respect to an Option which is not an Incentive Stock Option, either at the
time such Option is granted or at any subsequent time during the term of such
Option, or (ii) with respect to an Incentive Stock Option, only at the time
such Incentive Stock Option is granted. A Coupled Stock Appreciation Right
shall entitle the grantee thereof to elect, in the manner described below and
as set forth in the applicable Agreement, in lieu of exercising his or her
related Option for all or a portion of the shares of Common Stock covered by
such Option, to surrender such Option with respect to any or all of such
shares and to receive from the Company a payment having a value equal to the
amount by which (A) the Fair Market Value of a share of Common Stock on the
date of such election, multiplied by the number of shares of Common Stock as
to which the grantee shall have made such election, exceeds (B) the exercise
price stated in such Option multiplied by such number of shares, subject to
any limitations on such amount, including any periodic change therein, as the
Committee may in its discretion impose, as set forth in the applicable
Agreement. A Coupled Stock Appreciation Right shall be exercisable only to the
extent and at the time the related Option is exercisable, and the Coupled
Stock Appreciation Right shall terminate and shall no longer be exercisable
upon the expiration or exercise of the related Option. An Option with respect
to which an Optionee has elected to exercise a Coupled Stock Appreciation
Right, as described above, shall, to the extent of the shares covered by such
exercise, be canceled automatically and surrendered to the Company, and such
Option shall thereafter remain exercisable according to its terms only with
respect to the number of shares of Common Stock as to which it would otherwise
be exercisable, less the number of such shares with respect to which such
Coupled Stock Appreciation Right has been so exercised.
(b) The Committee, in its discretion, shall establish the terms and
conditions of Independent Stock Appreciation Rights, including the exercise
<PAGE>
price thereof, which shall not be less than 100% of the Fair Market Value of
the Common Stock on the date any such Independent Stock Appreciation Right is
granted, the number of shares of Common Stock covered thereby and the period
of time during which any Independent Stock Appreciation Right may be
exercised, which shall not extend beyond ten (10) years from the date of grant
thereof, and any other terms and conditions the Committee may deem appropriate
and which are consistent with the terms and conditions and limitations of the
Plan. An Independent Stock Appreciation Right shall entitle the grantee
thereof to elect, in the manner described below and as set forth in the
applicable Agreement, to receive from the Company a payment having a value
equal to the amount by which (A) the Fair Market Value of a share of Common
Stock on the date of such election, multiplied by the number of shares of
Common Stock as to which the grantee shall have made such election, exceeds
(B) the exercise price stated in the Agreement applicable to such Independent
Stock Appreciation Right multiplied by such number of shares, subject to any
limitations on such amount, including any periodic change therein, as the
Committee may in its discretion impose, as set forth in the applicable
Agreement. Except as provided in the Agreement, the right to exercise an
Independent Stock Appreciation Right shall terminate as specified in Section
6(f), as if the Independent Stock Appreciation Right were an Option other than
an Incentive Stock Option.
(c) The Company may, in the discretion of the Committee, as set forth in
the Agreement, make payment on a properly exercised Stock Appreciation Right:
(i) in cash equal to the excess of the amount described in clause (A) over the
amount described in clause (B) of either paragraph (a) or (b) above, as
applicable, after taking into account any limitations imposed in accordance
therewith; or (ii) in the nearest whole number of shares of Common Stock
having an aggregate Fair Market Value on the date of exercise of the Stock
Appreciation Right which is not greater than the cash amount calculated in
clause (i) above; or (iii) in a combination of the manners described in
clauses (i) and (ii) above.
(d) An election to exercise Stock Appreciation Rights shall be deemed to
have been made on the date of Notice of such election to the Company;
provided, however, the Committee may provide in the applicable Agreement that
a Stock Appreciation Right shall be deemed to be exercised at the close of
business on the scheduled expiration date of such Stock Appreciation Right if
at such time such Stock Appreciation Right by its terms remains exercisable
and, if so exercised, would result in a payment to the holder thereof.
(e) Notwithstanding anything in this Section 7 to the contrary, the
Committee may grant Limited Rights to an eligible employee of the Company or a
Subsidiary, either alone or in conjunction with all or part of an Option
granted to such employee, and, in the case of any such conjunctive grant, at
the time of such Option grant or thereafter during the term of such Option. A
Limited Right shall be exercisable upon the occurrence of an Exercise Event
specified in the applicable Agreement, and shall expire thirty (30) days after
the occurrence of such Exercise Event. Exercise Events may include, at the
discretion of the Committee and as specified in the applicable Agreement,
consummation of a tender or exchange offer for the shares of Common Stock
outstanding at the commencement of such offer, or a proxy contest the result
of which is the replacement of one-third or more of the members of the Board,
or consummation of a merger or reorganization of the Company in which the
Company does not survive or in which the shareholders of the Company receive
stock or securities of another corporation or cash, or a liquidation or
dissolution of the Company or other similar events. As determined by the
Committee, in its discretion, at the time Limited Rights are awarded to a
Participant, and as stated in the applicable Agreement, Limited Rights shall
permit such a Participant to receive in cash for each share of Common Stock
covered by a corresponding Option, in the case of a Limited Right granted in
conjunction with an Option (without regard to the date on which the Option
otherwise would be exercisable), or covered by a Limited Right granted alone,
<PAGE>
either (i) the highest market trading price per share of Common Stock reported
on the Composite Tape during the sixty (60) days immediately preceding the
date of the applicable Exercise Event or (ii) the highest market trading price
per share of Common Stock reported on the Composite Tape on the date of
exercise of the Limited Right, less the per share exercise price of the
corresponding Option, in the case of a Limited Right granted in conjunction
with an Option, or the exercise price of the Limited Right, as stated in the
Agreement, in the case of a Limited Right granted alone. In the event that the
Exercise Event is the consummation of a tender or exchange offer, the value
per share set by the offeror shall be substituted for the highest market price
per share provided in clause (i) of the preceding sentence if the value per
share set by the offeror is higher than such highest market price per share.
Limited Rights shall not extend the exercise period of any Option and, to the
extent exercised, shall reduce the shares of Common Stock available under the
Plan, pursuant to Section 4, and the shares of Common Stock covered by the
Options to which such Limited Rights relate, if applicable.
(f) Notwithstanding any other provision contained in the Plan to the
contrary, the maximum number of shares of Common Stock for which Stock
Appreciation Rights may be granted under the Plan to any Participant shall not
exceed the Award Limit. To the extent required by Section 162(m) of the Code,
shares of Common Stock subject to Stock Appreciation Rights which are
cancelled continue to be counted against the Award Limit and if, after grant
of a Stock Appreciation Right, the price of shares subject to such Stock
Appreciation Right is reduced, the transaction is treated as a cancellation of
the Stock Appreciation Right and a grant of a new Stock Appreciation Right and
both the Stock Appreciation Right deemed to be canceled and the Stock
Appreciation Right deemed to be granted are counted against the Award Limit.
8. Terms and Conditions of Restricted Stock Awards. All awards of
Restricted Stock under the Plan shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and to
such other terms and conditions not inconsistent therewith, as the Committee
shall determine and which are set forth in the applicable Agreement.
(a) Awards of Restricted Stock may be in addition to or in lieu of any
other types of Awards granted under the Plan.
(b) During a period set by the Committee at the time of each award of
Restricted Stock (the "Restriction Period"), as specified in the Agreement,
the recipient shall not be permitted to sell, transfer, pledge, assign,
encumber or otherwise dispose of the shares of Restricted Stock and any
attempt by such recipient to sell, transfer, pledge, assign, encumber or
otherwise dispose of such Restricted Stock shall constitute the immediate and
automatic forfeiture of such Award.
(c) Shares of Restricted Stock shall become free of all restrictions
applicable thereto if the recipient dies or his or her employment with the
Company or a Subsidiary terminates by reason of Permanent Disability, as
determined by the Committee, during the Restriction Period and, to the extent
set by the Committee at the time of the award or later, if the recipient
retires under a retirement plan of the Company or a Subsidiary during such
period. If the Committee determines that any such recipient is not subject to
a Permanent Disability or that a retiree's Restricted Stock is not to become
free of restrictions, the Restricted Stock held by either such recipient, as
the case may be, shall be forfeited and revert to the Company.
(d) Shares of Restricted Stock shall be forfeited and revert to the
Company upon the recipient's termination of employment with the Company or a
Subsidiary during the Restriction Period for any reason other than death,
Permanent Disability or, to the extent determined by the Committee, retirement
under a retirement plan of the Company or a Subsidiary except to the extent
the Committee, at its sole discretion, finds that such forfeiture might not be
<PAGE>
in the best interest of the Company, and, therefore, waives all or part of the
application of this provision to the Restricted Stock held by such recipient.
(e) Each recipient of shares of Restricted Stock hereunder may, but need
not, be issued one or more stock certificates in respect of such shares of
Restricted Stock. Stock certificates for shares of Restricted Stock shall be
registered in the name of the recipient but shall be appropriately legended
and returned to the Company by the recipient, together with a stock power,
endorsed in blank by the recipient. As the Committee, in its discretion, may
deem appropriate, in lieu of the issuance of certificates for any shares of
Restricted Stock during the applicable Restriction Period, a "book entry"
(i.e., a computerized or manual entry) may be made in the records of the
Company, or its designated stock transfer agent, to evidence the ownership of
such shares of Restricted Stock in the name of the applicable recipient. Such
records of the Company or such agent shall, absent manifest error, be binding
on all recipients of Restricted Stock hereunder.
(f) The recipient of shares of Restricted Stock shall be entitled to
vote shares of Restricted Stock and shall be entitled to all dividends paid
thereon, except that dividends paid in Common Stock or other property shall be
subject to the same restrictions to the extent determined by the Committee.
(g) In the event of any adjustment as provided in Section 17, or any
stock or securities received as a dividend on shares of Restricted Stock, such
new or additional shares or securities shall be subject to the same terms and
conditions as relate to the original shares of Restricted Stock.
(h) Restricted Stock shall become free of the foregoing restrictions
upon expiration of the applicable Restriction Period and the Company shall,
subject to paragraphs (d) and (e) of Section 18, then deliver Common Stock
certificates evidencing such stock to the Participant.
(i) Restricted Stock and any Common Stock received upon the expiration
of the Restriction Period shall be subject to such other transfer restrictions
and/or legending requirements that are imposed by the Committee, in its
discretion, and specified in the Agreement.
9. Bonuses or Other Compensation Payable in Stock. In lieu of cash
bonuses or other compensation otherwise payable under the Company's or
applicable Subsidiary's compensation practices to employees of either who are
eligible to participate in the Plan, the Committee, in its discretion, may
determine that such bonuses or other compensation shall be payable in Common
Stock or partly in Common Stock and partly in cash. Such bonuses or other
compensation shall be in consideration of services previously performed and as
an incentive toward future services and shall consist of shares of Common
Stock subject to such terms as the Committee may determine in its discretion.
The number of shares of Common Stock payable in lieu of a bonus or other
compensation otherwise payable shall be determined by dividing the amount of
such bonus or other compensation by the Fair Market Value of one share of
Common Stock on the date such bonus or other compensation is payable.
10. Terms and Conditions of Other Stock-Based Awards. The Committee may
grant to Participants Awards under the Plan that are valued in whole or in
part by reference to, or otherwise based on Common Stock ("Other Stock-Based
Awards"). The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient or each Award. The Committee, in its discretion, may
grant Other Stock-Based Awards as it deems appropriate, including, by way of
example and not in limitation, (i) to take advantage of the compensation
practices or tax laws or accounting rules applicable at the time of grant of
such an Award, even if such practices, laws and/or rules are different from
those in effect on the effective date of the Plan, (ii) to reflect the
financial situation of the Company from time to time or (iii) to conform to
and comply with tax, securities or other law or regulations in jurisdictions
<PAGE>
outside the United States. Other Stock-Based Awards shall take such form as
the Committee, in its discretion, from time to time, determines, including, by
way of example, and not in limitation, deferred stock, performance shares,
performance units and convertible debentures. All Other Stock-Based Awards
under the Plan shall be subject to all the applicable provisions of the Plan,
including the following terms and conditions, and to such other terms,
conditions, restrictions and/or limitations, if any, not inconsistent with the
Plan, as the Committee shall determine, in its discretion, and which are set
forth in the applicable Agreement.
(a) The recipient of an Other Stock-Based Award may be entitled to
receive, currently or on a deferred basis, Dividend Equivalents or interest
with respect to the number of shares of Common Stock covered by such Award and
such amounts (if any) may be deemed to be reinvested in additional Common
Stock or otherwise reinvested, all as determined, at the time of grant of such
Award or subsequently during the term of such Award, by the Committee, in its
discretion, and stated in the Agreement.
(b) An Other Stock-Based Award, and any Common Stock covered by such
Award, may be forfeited to the extent determined by the Committee, in its
discretion, and stated in the Agreement.
(c) All Other Stock-Based Awards, and any Common Stock covered thereby,
shall be forfeited upon termination of the recipient's employment with the
Company or a Subsidiary; provided, however, the Committee may, in its
discretion, determine, at or after the time an Other Stock-Based Award is
granted, that if any such employment is terminated by reason of death or
Permanent Disability or, to the extent that subsection (d) of this Section 10
is inapplicable to a Participant's Other Stock-Based Award, "normal
retirement" under a retirement plan of the Company and/or a Subsidiary, or
otherwise with the written consent of such employer any or all remaining
limitations, restrictions or requirements, if any, imposed pursuant to the
Plan or in the Agreement with respect to such Other Stock-Based Award shall be
waived. The Committee may, in its discretion, otherwise modify or accelerate
the exercisability or other terms and conditions of any Other Stock-Based
Award to the extent that any such modification or acceleration is (i)
permitted under, and not inconsistent with the Plan and (ii) in the best
interests of the Company and provided that subsection (d) of this Section 10
is not applicable to such Other Stock-Based Award.
(d) An Other Stock-Based Award based in whole or in part upon the
attainment of particular performance goals established by the Committee is
intended to qualify as "other performance-based compensation," as used in Code
Section 162(m)(4)(C). Such performance goals shall be determined over a
measurement period or periods established by the Committee and shall relate to
one or more Performance Criteria, as determined by the Committee, in its
discretion. The maximum number of shares of Common Stock that may be awarded
to a Participant subject to an Other Stock-Based Award shall not exceed the
Award Limit.
11. Dividend Equivalents. On the date of grant (or at any subsequent
time during the applicable term) of any Other Stock-Based Award, the Committee
may choose to include as part of such Other Stock-Based Award the right to
receive Dividend Equivalents with respect to the Common Stock, or any portion
thereof, subject to such Other Stock-Based Award. Any such Dividend
Equivalents shall be calculated in the manner prescribed by the Committee, in
its discretion, consistent with the Plan. Any such Dividend Equivalents shall
be paid to the Participant for record dates during the period of time between
such date of grant and the date the applicable Other Stock-Based Award is
exercised or terminates. Dividend Equivalents shall be subject to such terms,
conditions, restrictions and/or limitations as the Committee may establish and
shall be paid in such form and manner and at such times as the Committee shall
determine. Any Dividend Equivalents may, at the Committee's discretion, be
<PAGE>
converted into cash by such formula and at such time and subject to such
limitations as may be determined by the Committee in its discretion, and any
Dividend Equivalents that are not paid currently in cash may, at the
discretion of the Committee, accrue interest or be reinvested into additional
shares of Common Stock. The total number of shares of Common Stock available
for delivery under the Plan under Section 4 shall not be reduced to reflect
any Dividend Equivalents that are reinvested into additional shares of Common
Stock.
12. Deferral of Awards. In the discretion of the Committee, payment of
any Award, or any portion thereof, may be deferred by a Participant until such
time as the Committee may establish. All such deferrals shall be accomplished
by the delivery of a written, irrevocable election (in the form prescribed by
the Committee) by the Participant prior to the time established by the
Committee for such purpose. All such deferrals shall be made in accordance
with administrative guidelines established by the Committee to ensure that
such deferrals comply with the requirements of applicable law, including,
without limitation, the Code. Deferred payments shall be paid in a lump sum
or installments, as determined by the Committee. Deferred Awards may also be
credited with interest or other growth factors, at such rates or in such
manner as are determined by the Committee, and, with respect to those deferred
Awards denominated in the form of Common Stock, with Dividend Equivalents.
13. Change in Control. (a) In the event of a change in control of the
Company or a threatened or anticipated change in control of the Company, each
as defined (if at all) by the Committee in the Agreement, the Committee may,
in its discretion, provide in the Agreement that any of the following
applicable actions be taken as a result, or in anticipation, of any such event
to assure fair and equitable treatment of Participants:
(i) accelerate time periods for purposes of vesting in, or
realizing gain from, any outstanding Option or Stock Appreciation Right
or Other Stock-Based Award or shares of Restricted Stock granted or
awarded pursuant to the Plan;
(ii) offer to purchase any outstanding Option or Stock Appreciation
Right or Other Stock-Based Award or shares of Restricted Stock granted or
awarded pursuant to the Plan from the holder thereof for its equivalent
cash value, as determined by the Committee, in its discretion, as of the
date of the change in control; or
(iii) make adjustments or modifications to outstanding Options or
Stock Appreciation Rights or Other Stock-Based Awards or with respect to
Restricted Stock as the Committee deems appropriate to maintain and
protect the rights and interests of the Participants following such
change in control.
In no event, however, may any Option be exercised after ten (10)
years from the date it was originally granted.
(b) The Company shall pay all legal fees and related expenses incurred
by a Participant in seeking to obtain or enforce any payment, benefit or right
he or she may be entitled to under the Plan or an Agreement after a change in
control of the Company; provided, however, such a Participant shall be
required to repay any such amounts to the Company to the extent a court of
competent jurisdiction issues a final and non-appealable order setting forth
the determination that the position taken by the Participant was frivolous or
advanced in bad faith.
14. Transfer, Leave of Absence. For purposes of the Plan: (a) a
transfer of an employee from the Company to a Subsidiary or an affiliate of
the Company, whether or not incorporated, or vice versa, or from one
Subsidiary or affiliate of the Company to another, and (b) a leave of absence,
<PAGE>
duly authorized in writing by the Company or a Subsidiary or affiliate of the
Company, shall not be deemed a termination of employment of the employee.
15. Rights of Employees and Other Persons. (a) No person shall have
any rights or claims under the Plan except in accordance with the provisions
of the Plan and the Agreement.
(b) Nothing contained in the Plan or in any Agreement shall be deemed to
give any employee the right to be retained in the service of the Company or
its Subsidiaries nor restrict in any way the right of the Company or any
Subsidiary to terminate any employee's employment at any time with or without
cause.
(c) The adoption of the Plan shall not be deemed to give any employee of
the Company or any Subsidiary or any other person any right to be selected as
a Participant or to be granted an Award.
(d) Nothing contained in the Plan or in any Agreement shall be deemed to
give any employee the right to receive any bonus, whether payable in cash or
in Common Stock, or in any combination thereof, from the Company, nor be
construed as limiting in any way the right of the Company to determine, in its
sole discretion, whether or not it shall pay any employee bonuses, and, if so
paid, the amount thereof and the manner of such payment.
16. Tax Withholding Obligations. (a) The Company and/or any Subsidiary
are authorized to take whatever actions are necessary and proper to satisfy
all obligations of Participants for the payment of all Federal, state and
local taxes in connection with any Awards (including, but not limited to,
actions pursuant to the following paragraphs (b) and (c) of this Section 16).
(b) If any Participant properly elects, within the period permitted
under Section 83 of the Code after the date on which property subject to an
Award is transferred to such Participant to include in gross income for
Federal income tax purposes an amount equal to the Fair Market Value (on the
date of transfer) of the Common Stock subject to such Award, such Participant
shall pay, or make arrangements satisfactory to the Company, as determined in
the Committee's discretion, to pay to the Company, at the time of such
election, any Federal, state or local taxes required to be withheld with
respect to such Award. If any such Participant shall fail to make such tax
payments as are required, the Company and its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Participant.
(c) Any Participant who does not or cannot make the election described
in paragraph (a) of this Section 16 with respect to an Award shall (and in no
event shall Common Stock be delivered to such Participant with respect to such
Award until), no later than the date as of which the value of the Award first
becomes includible in the gross income of the Participant for income tax
purposes, pay to the Company in cash, or make arrangements satisfactory to the
Company, as determined in the Committee's discretion, regarding payment to the
Company of, any taxes of any kind required by law to be withheld with respect
to the Common Stock or other property subject to such Award, and the Company
and any Subsidiary shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to such
Participant; provided, however, the Committee may, in its discretion and
pursuant to procedures approved by the Committee, permit the Participant to
elect withholding by the Company of Common Stock otherwise deliverable to such
Participant pursuant to such Award (provided, however, that the amount of any
Common Stock so withheld shall not exceed the minimum required withholding
obligation taking into account the Participant's effective tax rate and all
applicable Federal, state, local and foreign taxes) and/or to tender to the
Company Common Stock or other marketable equity securities issued by the
Company or a Subsidiary owned by such Participant (or by such Participant and
<PAGE>
his or her spouse jointly) and acquired more than six (6) months prior to such
tender valued at Fair Market Value on the date of such tender in full or
partial satisfaction of such tax obligations.
17. Changes in Capital. (a) Upon changes in the outstanding Common
Stock by reason of a stock dividend, stock split, reverse split, subdivision,
recapitalization, merger, consolidation (whether or not the Company is a
surviving corporation), an extraordinary dividend payable in cash or property,
combination or exchange of shares, separation, reorganization or liquidation,
the aggregate number and class of shares available under the Plan as to which
Awards may be granted, the number and class of shares under (i) each Option
and the option price per share, (ii) each Stock Appreciation Right and the
exercise price thereof, (iii) each Other Stock-Based Award and the exercise
price (or equivalent, if applicable) thereof and (iv) each award of Restricted
Stock shall, in each case, be correspondingly adjusted by the Committee, such
adjustments to be made in the case of any outstanding Options and/or Stock
Appreciation Rights without change in the total price applicable to such
Options and Stock Appreciation Rights.
(b) If a transaction shall occur or be proposed which the Committee, in
its discretion, determines may materially adversely affect the market value of
the Common Stock after such transaction, the Committee may make such
adjustments as it deems appropriate and equitable in respect of outstanding
Awards, including, but not limited to: (i) cancel all restrictions on
Restricted Stock previously awarded to Participants under the Plan, (ii)
accelerate the time of exercise so that Options and/or Stock Appreciation
Rights and/or Other Stock-Based Awards which are outstanding shall become
immediately exercisable in full without regard to any limitations of time or
amount otherwise contained in the Plan or the applicable Agreements, (iii)
determine that the Options or Stock Appreciation Rights or Other Stock-Based
Awards shall be adjusted and make such adjustments by substituting for Common
Stock subject to such Options or Stock Appreciation Rights or Other Stock-
Based Awards stock or other securities of any successor corporation to the
Company or stock or other securities that may be issuable by another
corporation in the transaction if such stock or other securities are publicly
traded, or, if such stock or other securities are not publicly traded, by
substituting stock or other securities of an affiliate of such corporation if
the stock or other securities of such affiliate are publicly traded. In any
such adjustment event the aggregate exercise price (as applicable) shall
remain the same and the amount of shares or other securities subject to option
or other rights under an Award shall be the amount of shares or other
securities which could have been purchased on the closing date or expiration
date of such transaction with the proceeds which would have been received by
the Participant if the Option or Stock Appreciation Right or Other Stock-Based
Award had been exercised in full prior to such transaction or expiration date
and the Participant exchanged all of such shares in the transaction. No
Participant shall have any right to prevent the consummation of any of the
foregoing acts affecting the number of shares available to such Participant.
Any actions or determinations of the Committee under this paragraph (b) of
Section 17 need not be uniform as to all outstanding Awards, nor treat all
Participants identically. Notwithstanding the foregoing adjustments, any
changes to Incentive Stock Options shall, unless the Committee determines
otherwise, only be effective to the extent such adjustments or changes do not
cause a "modification" (within the meaning of Section 424(h)(3) of the Code)
of such Incentive Stock Options or adversely affect the tax status of such
Incentive Stock Options.
18. Miscellaneous Provisions. (a) The Plan shall be unfunded. The
Company shall not be required to establish any special or separate fund or to
make any other segregation of assets to assure the issuance of shares or the
payment of cash upon exercise or payment of any Award. Proceeds from the sale
of shares of Common Stock pursuant to Options granted under the Plan shall
constitute general funds of the Company. The expenses of the Plan shall be
<PAGE>
borne by the Company.
(b) Subject to the provisions of the Plan and the applicable Agreement,
an Award by its terms shall be personal and no Award may be sold, transferred,
pledged, assigned, encumbered or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. During the lifetime
of a Participant, his or her Award shall be exercisable only by such
Participant. In the event any Award is exercised by the executors,
administrators, heirs or distributees of the estate of a deceased Participant
pursuant to the terms and conditions of the Plan and the applicable Agreement,
the Company shall be under no obligation to issue Common Stock thereunder
unless and until the Company is satisfied, as determined in the discretion of
the Committee, that the person or persons exercising such Award are the duly
appointed legal representative of the deceased Participant's estate or the
proper legatees or distributees thereof. Notwithstanding anything contained in
the Plan to the contrary, at the Committee's discretion, an Agreement may
permit the transfer of an Award other than an Incentive Stock Option by the
recipient thereof, subject to such terms, conditions and limitations
prescribed by the Committee, and the applicable transferee of such Award shall
be treated under the Plan and the applicable Agreement as the Participant for
purposes of any exercise of such Award.
(c) It is understood that the Committee may, at any time and from time
to time after the granting of an Award, specify such additional terms,
conditions and restrictions with respect to any such Option, Stock
Appreciation Right, Limited Right, Other Stock-Based Award, Restricted Stock
and/or Dividend Equivalent subject to such Award as may be deemed necessary or
appropriate to ensure compliance with any and all applicable laws, including,
but not limited to, terms, restrictions and conditions for compliance with
Federal and state securities laws and methods of withholding or providing for
the payment of required taxes and restrictions regarding a Participant's
ability to exercise Awards under a cashless exercise program established by
the Committee.
(d) If at any time the Committee shall determine, in its discretion,
that the listing, registration and/or qualification of shares of Common Stock
upon any national securities exchange or under any state or Federal law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
shares of Common Stock hereunder, no Option or Stock Appreciation Right or
Other Stock-Based Award may be exercised or Restricted Stock or bonus or other
compensation payable in Common Stock may be transferred in whole or in part
unless and until such listing, registration, qualification, consent and/or
approval shall have been effected or obtained, or otherwise provided for, free
of any conditions not acceptable to the Committee.
(e) The Committee may require Participants receiving Common Stock in
connection with any Award under the Plan to represent and agree with the
Company in writing that the Participant is acquiring the shares for investment
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.
(f) The Committee may, in its discretion, extend one or more loans to
Participants who are key employees of the Company or a Subsidiary in
connection with the exercise or receipt of an Award granted to any such
employees. The terms and conditions of any such loan shall be set by the
Committee.
(g) By accepting any benefit under the Plan, each Participant and each
person claiming under or through such Participant shall be conclusively deemed
to have indicated their acceptance and ratification of, and consent to, all of
the terms and conditions of the Plan and any action taken under the Plan by
<PAGE>
the Committee, the Company or the Board.
(h) From and after the date of approval of the Plan by the Company's
stockholders, no subsequent awards of any kind shall be granted under the
Company's Stock Incentive Plan approved by its shareholders in April 1990 (the
"Predecessor Plan").
(i) Neither the adoption of the Plan nor anything contained herein shall
(i) affect any other compensation or incentive plans or arrangements of the
Company or any Subsidiary (other than the Predecessor Plan, as provided in
paragraph (h) of this Section 18), or (ii) prevent or limit the right of the
Company or any Subsidiary to (A) establish any other forms of incentives or
compensation for their employees or consultants or directors, or (B) grant or
assume options or other rights otherwise than under the Plan.
(j) The Plan shall be governed by and construed in accordance with the
laws of the State of New Jersey, except as superseded by applicable Federal
law.
19. Limits of Liability. (a) Any liability of the Company or a
Subsidiary to any Participant with respect to any Award shall be based solely
upon contractual obligations created by the Plan and the Agreement.
(b) Neither the Company nor a Subsidiary nor any member of the Committee
or the Board, nor any other person participating in any determination of any
question under the Plan, or in the interpretation, administration or
application of the Plan, shall have any liability, in the absence of bad
faith, to any party for any action taken or not taken in connection with the
Plan, except as may expressly be provided by statute.
20. Limitations Applicable to Certain Awards Subject to Section 16 and
Code Section 162(m). Unless stated otherwise in the Agreement, notwithstanding
any other provision of the Plan, any Award granted to an executive or officer
of the Company who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive
rule under Section 16 of the Exchange Act (including Rule 16b-3 as it may be
amended from time to time) that are requirements for the application of such
exemptive rule, and the Plan shall be deemed amended to the extent necessary
to conform to such limitations. Furthermore, unless stated otherwise in the
Agreement, notwithstanding any other provision of the Plan, any Award granted
to an officer or executive of the Company intended to qualify as "other
performance-based compensation" as described in Section 162(m)(4)(C) of the
Code shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or
any regulations or rulings issued thereunder that are requirements for
qualification as "other performance-based compensation" as described in
Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the
extent necessary to conform to such requirements.
21. Amendments and Termination. The Board may, at any time and with or
without prior notice, amend, alter, suspend or terminate the Plan; provided,
however, no amendment, alteration, suspension or termination shall be made
which would impair the rights of any holder of an Award theretofore granted
without his or her written consent or which, without first obtaining approval
of the stockholders of the Company (where such approval is necessary to
satisfy the then-applicable requirements of Rule 16b-3, or any requirements
under the Code relating to Incentive Stock Options or for exemption from
Section 162(m) of the Code, or applicable state law), would:
(a) except as is provided in Sections 4(a) and 17, increase the
maximum number of shares of Common Stock which may be sold or awarded
under the Plan;
<PAGE>
(b) change the class of persons eligible to receive an Award under
the Plan; or
(c) extend the duration of the Plan or the period during which
Options may be exercised under Section 6(b).
The Committee may amend the terms of any Award theretofore granted,
including any Agreement, retroactively or prospectively, but no such amendment
shall impair the previously accrued rights of any Participant without his or
her written consent.
22. Duration. Following adoption of the Plan by the Board, the Plan
shall become effective as of the date on which it is approved by the holders
of a majority of the Company's outstanding Common Stock which is present and
voted at a meeting, which approval must occur within the period ending twelve
months after the date the Plan is adopted by the Board. The Plan shall
terminate upon the earliest of the following dates or events to occur:
(a) upon the effective date of a resolution adopted by the Board
terminating the Plan;
(b) the date all shares of Common Stock subject to the Plan are
delivered pursuant to the Plan's provisions; or
(c) ten (10) years from the date the Plan is approved by the
Company's shareholders.
No Award may be granted under the Plan after the earliest to occur of the
events or dates described in the foregoing paragraphs (a) through (c) of this
Section 22; however, Awards theretofore granted may extend beyond such date.
No such termination of the Plan shall affect the rights of any
Participant hereunder and all Awards previously granted hereunder shall
continue in force and in operation after the termination of the Plan, except
as they may be otherwise terminated in accordance with the terms of the Plan
or the Agreement.
Exhibit 5.1
November 16, 1996
ASARCO Incorporated
180 Maiden Lane
New York, New York 10038
Dear Sirs:
You have requested my opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") filed by ASARCO
Incorporated (the "Company") with the Securities and Exchange Commission (the
"Commission") for registration under the Securities Act of 1933, as amended,
of 1,500,000 shares of the Company's Common Stock (the "Shares") which may be
acquired by certain executive and other key salaried employees of the Company
and its subsidiaries pursuant to the terms and provisions of the Company's
1996 Stock Incentive Plan (the "Plan").
I am familiar with the corporate proceedings relating to the
authorization of the Shares and have reviewed the corporate proceedings taken
with respect to the approval of the Plan by the stockholders of the Company at
the Annual Meeting of Stockholders held on April 24, 1996. I have examined
and relied on originals, or copies certified to my satisfaction, of all such
corporate records of the Company and such other instruments and other
certificates of public officials, officers and representatives of the Company
and such other persons, and I have made such investigations of law, as I have
deemed appropriate as a basis for the opinion herein expressed.
Based upon the foregoing, it is my opinion that the Shares will, if
issued and delivered in accordance with the terms and provisions of the Plan,
be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. By giving such consent I do not thereby admit that I
am an expert with respect to any part of such Registration Statement within
the meaning of the term "expert" as used in the Securities Act of 1933, as
amended, or the rules or regulations of the Commission issued thereunder.
Very truly yours,
/s/ Augustus B. Kinsolving
Augustus B. Kinsolving
ABK:dah
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
ASARCO Incorporated on Form S-8 of our reports dated January 30, 1996 on our
audits of the consolidated financial statements and financial statement
schedules of ASARCO Incorporated and Subsidiaries as of December 31, 1995 and
1994 and for the years ended December 31, 1995, 1994, and 1993 which are
included in the ASARCO Incorporated Annual Report on Form 10K for the fiscal
year ended December 31, 1995. Our report on the consolidated financial
statements includes an explanatory paragraph that describes Southern Peru
Copper Corporation's change in method of accounting for income taxes.
We also consent to the reference to our Firm as experts under the caption
"Independent Public Accountants" only insofar as such reference relates to our
reports on our audits of the consolidated financial statements and financial
statement schedule referred to above.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
New York, New York
December 16, 1996
