REINHOLD INDUSTRIES, INC.
12827 EAST IMPERIAL HWY
SANTA FE SPRINGS, CALIFORNIA 90670
INFORMATION STATEMENT PURSUANT TO
SECTION 14 (F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on May 19, 1999 by
Reinhold Industries, Inc. ("Reinhold" or the "Company") pursuant to Section
14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
and Rule 14f-1 thereunder to the holders of record of the Company's Class A
common stock, par value $.01 per share (the "Class A Common Stock") and the
Company's Class B common stock, par value $.01 per share (the "Class B Common
Stock"). You are receiving this Information Statement in connection with the
contemplated election of certain persons to a majority of the seats on the
Company's Board of Directors (the "Board") in connection with the Stock Purchase
Agreement between Reinhold Enterprises, Inc. ("REI") and Keene Creditors Trust,
the holder or all of the Class B Common Stock (the "Trust"), dated May 18, 1999
(the "Stock Purchase Agreement") (See "Sale of Shares; Appointment of New
Directors"). You are urged to read this Information Statement carefully. You are
not, however, required to take any action.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
GENERAL
The outstanding voting securities of the Company as of May 14, 1999
consisted of 978,956 shares of Class A Common Stock and 1,020,000 shares of
Class B Common Stock. On that date, all of the Class B Common Stock was held by
the Trust. The Company's Certificate of Incorporation provides that shares of
Class B Common Stock will be converted into shares of Class A Common Stock upon
a transfer of those shares by the Trust to an unrelated third party. Class A
Common Stock and Class B Common Stock are substantially similar, except as to
voting rights as described below. The holders of Class A Common Stock, voting as
a class, are entitled to elect one director of the Company, and the holders of
Class B Common Stock, voting as a class, are entitled to elect two directors of
the Company until such time as the number of shares of Class B Common Stock
represents less than 25% of the aggregate number of shares of Common Stock then
outstanding, in which event the holders of Class A Common Stock, voting as a
class, are entitled to elect two directors of the Company, and the holders of
Class B Common Stock, voting as a class, are entitled to elect one director. If
all of the shares of Class B Common Stock shall have been converted to Class A
Common Stock as set forth in the Company's Certificate of Incorporation, the
holders of Class A Common Stock, voting as a class, will be entitled to elect
all of the directors of the Company. Each share of Class A Common Stock and
Class B Common Stock is entitled to one vote per share. The Board currently
consists of three members, and there are currently no vacancies. Each director
holds office until the next annual meeting and until such director's successor
is elected and qualified or until such director's earlier resignation or
removal.
<PAGE>
2
PLAN OF REORGANIZATION
On July 31, 1996 (the Effective Date"), Keene Corporation ("Keene")
consummated its plan of reorganization under the Bankruptcy Code (the "Plan")
and emerged from bankruptcy. On the Effective Date, Reinhold was merged into and
with Keene, with Keene becoming the surviving corporation. Pursuant to the
merger, all of the issued and outstanding capital stock of Reinhold was
canceled. Keene, as the surviving corporation of the merger, was renamed
Reinhold. On the Effective Date, Reinhold issued 1,998,956 shares of Common
Stock, of which 1,020,000 shares of Class B Common Stock were issued to the
Trust, which was established to administer asbestos claims against Keene. The
remaining 978,956 shares of Class A Common Stock were issued to Keene's former
stockholders. All of Keene's previously outstanding Common Stock was canceled.
SALE OF SHARES BY THE TRUST; APPOINTMENT OF NEW DIRECTORS
Pursuant to the Stock Purchase Agreement, at a closing scheduled to
occur on May 21, 1999, or at such other time as shall be mutually agreed by the
Trust and REI, the Trust will sell 997,475 shares of Class B Common Stock owned
by it to certain purchasers designated by REI at a purchase price of $9.00 per
share. These shares represent approximately 49.9% of the outstanding common
stock of the Company. Pursuant to the Company's Certificate of Incorporation,
upon consummation of the sale of the shares to the Purchasers, all of the
outstanding shares of Class B Common Stock will automatically be converted into
shares of Class A Common Stock, and at the next meeting of the stockholders of
the Company called for that purpose, the holders of the Class A Common Stock,
voting as a class, will be entitled to elect all of the directors of the
Company.
The purchasers designated by REI are Massachusetts Mutual Life
Insurance Company, MassMutual High Yield Partners II LLC, MassMutual
Corporate Value Partners Limited, Ralph R. Whitney, Jr., Glenn Scolnik,
Forrest E. Crisman, Jr., Andrew McNally, IV and Ward S. McNally (collectively,
the "Purchasers"). Messrs. Whitney, Scolnik, Crisman, A. McNally and
W. McNally, are directors and/or officers of Hammond, Kennedy, Whitney &
Company, Inc., a private equity firm ("HKW"). It is contemplated that each
Purchaser will pay for the shares using his or its own available funds.
The Stock Purchase Agreement provides that it is a condition to the
closing of the sale of the shares that Lawrence H. Diamond and Robert B.
Steinberg, the members of the Board of Directors elected by the Trust (as the
sole holder of Class B Common Stock), shall resign as directors. Subsequently
(and, in any event no earlier than ten days after this Information Statement has
been mailed to the stockholders of the Company), it is contemplated that Ralph
R. Whitney, Jr. and Andrew McNally IV will be appointed by the remaining
director, Michael T. Furry, as successor directors, following which the Board of
Directors will consist of: Michael T. Furry, Ralph R. Whitney, Jr., and Andrew
McNally IV.
<PAGE>
3
DIRECTOR
MICHAEL T. FURRY. Mr. Furry, age 61, is President and Chief
Executive Officer of Reinhold. Mr. Furry has served as President of Reinhold
since June 1986 and became President of the Reorganized Company on the
Effective Date. Mr. Furry had been a Director of Keene since April 1990.
From April 1976 to June 1986, Mr. Furry was Vice President and General
Manager of the composites division of Reynolds & Taylor, Inc. Mr. Furry is a
member of the audit committee.
NOMINEES FOR DIRECTORS
RALPH R. WHITNEY, JR. Mr. Whitney, age 64, served as President
and CEO of HKW from 1993 to 1998. From 1998 to the present he has been Chairman
of HKW. He also serves as a director for RELM Wireless Corp., Baldwin
Technology Company, Inc., IFR Systems, Inc., Selas Corporation of America,
Dura Automotive Systems, Inc., and First Technology PLC. Mr. Whitney also
served as CEO and a director of Holbrook-Patterson, Inc. which filed a petition
for relief under Chapter 11 of the Federal Bankruptcy Code on July 24, 1998.
ANDREW MCNALLY IV. Mr. McNally, age 59, is retired Chairman and
Chief Executive Officer of Rand McNally & Company, a publishing and map making
company. Mr. McNally was Chairman and Chief Executive Officer from 1993 to 1997
and President and Chief Executive Officer from 1978 to 1993 of Rand McNally &
Company. In addition, Mr. McNally is a Managing Director of HKW. He also holds
three directorships within the Morgan Stanley Funds complex, as well as
directorships for Borg Warner Security Corporation, Hubbell Incorporated and
Zenith Electronics Corporation.
OTHER EXECUTIVE OFFICER
BRETT R. MEINSEN. Mr. Meinsen, age 39, became Vice President -
Finance and Administration, Secretary and Treasurer of Reinhold in June
1997. Prior to coming to Reinhold, Mr. Meinsen worked from 1986 until
January 1997 as the Director of Finance and Administration, Manager of
Financial Analysis, and a senior financial analyst at Philips Medical Systems.
COMPENSATION OF DIRECTORS
During 1998, the Board of Directors of Reinhold met four times for
regular meetings and there were six special meetings. Each non-employee director
received $1,000.00 for each regular or special meeting of the Board he attended
and will receive $1,000.00 for each such regular or special meeting in 1999.
In addition, each non-employee director also receives annual compensation of
$12,000.00 per year, paid quarterly, as a retainer for being a director.
<PAGE>
4
Reinhold has standing Audit and Compensation Committees of the
Board. The Audit Committee and the Compensation Committee met once. The
non-employee directors who are members of the Audit and Compensation Committees
receive $1,000.00 for each meeting attended on a day during which the Board did
not meet for a regular meeting and will receive $1,000.00 for each such meeting
in 1999.
The Audit Committee reviews and recommends to the Board the
engagement of the independent auditors of the Company, reviews with the auditors
their work and fees, and reviews accounting policies and practices and internal
accounting controls of the Company.
The Compensation Committee reviews and recommends to the Board the
compensation proposed to be paid to officers and key employees of Reinhold,
including base salaries, stock options and management incentive compensation.
The Board does not have a Nominating Committee and as a whole
performs the functions normally performed by a Nominating Committee.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding the beneficial
ownership of Reinhold Common Stock, either Class A or Class B, by the only
person known by Reinhold to be a beneficial owner of 5% or more of Reinhold's
issued and outstanding Common Stock as of March 5, 1999. By virtue of the fact
that it owns 51% of the outstanding Common Stock of Reinhold and appointed two
members to the Board, the Trust may be deemed to be a controlling person of
Reinhold.
<TABLE>
<CAPTION>
Percentage of
Amount and Nature of Issued and
Name and Address of Beneficial Ownership of Outstanding
Beneficial Owner Reinhold Common Stock Common Stock
- -------------------------------------------------------------------------------
<S> <C> <C>
Keene Creditors Trust 1,020,000 51%
The Chancery Class B
190 Willis Avenue
Mineola, NY 11501
</TABLE>
<PAGE>
5
The following table sets forth information regarding the Beneficial
Owners of 5% or more of Reinhold's issued and outstanding Common Stock that will
result upon completion of the transaction described in the section entitled
"Sale of Shares; Appointment of New Directors".
<TABLE>
<CAPTION>
Percentage of
Amount and Nature of Issued and
Name and Address of Beneficial Ownership of Outstanding
Beneficial Owner Reinhold Common Stock Common Stock
- -------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts Mutual Life 314,205 15.7%
Insurance Company Class A
1295 State St.
Springfield, Massachusetts 01111
MassMutual High Yield Partners II 314,204 15.7%
LLC Class A
1295 State St.
Springfield, Massachusetts 01111
MassMutual Corporate Value 119,697 6%
Partners Limited Class A
1295 State St.
Springfield, Massachusetts 01111
</TABLE>
<PAGE>
6
COMMON STOCK OWNERSHIP OF MANAGEMENT
The following table presents information regarding beneficial
ownership of Reinhold Common Stock by each member of or nominee to the Board of
Directors, executive officers, and by all such directors and officers of
Reinhold as a group, as of May 17, 1999.
<TABLE>
<CAPTION>
Percentage of
Amount and Nature of Issued and
Name of Beneficial Owner Beneficial Ownership of Outstanding
Reinhold Class A Common Common Stock on
Stock May 17, 1999 <F1>
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Michael T. Furry 11,115 <F2>
Ralph R. Whitney, Jr. 45,476<F3> 2.3%
Andrew McNally IV 61,336<F4> 3.1%
Brett R. Meinsen 1,000 <F2>
All directors and officers of 118,927 6%
Reinhold as a group (4 persons
including those named above)
- -------------------------
<FN>
<F1>
For the purposes of this table, the issued and outstanding Common Stock of
Reinhold has been calculated for each individual on the basis of all shares of
Common Stock issued and outstanding (excluding treasury shares) on May 14, 1999.
<F2>
The percentage of shares owned does not exceed 1% of the issued and outstanding
Common Stock.
<F3>
This figure includes 43,476 shares to be acquired in trust at the closing of the
stock purchase transaction as of May 21, 1999, or at such other time as shall
mutually be agreed by the Trust and REI.
<F4>
This figure represents shares to be acquired at the closing of the stock
purchase transaction as of May 21, 1999, or at such other time as shall mutually
be agreed by the Trust and REI.
</FN>
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of Forms 3, 4 and 5 received by the
Company, or written representations from certain reporting persons that no
Forms 5 were required for such persons, the Company believes that, during the
fiscal year ended December 31, 1998, the Company's officers, directors and
10% shareholders satisfied all filing requirements under Section 16(a) of the
Securities Exchange Act of 1934.
<PAGE>
7
COMPENSATION OF MANAGEMENT
The following table sets forth a summary of the compensation paid to
the Chief Executive Officer and the Vice President - Finance and Administration
of the Company for services rendered in all capacities to the Company for the
fiscal years ended December 31, 1998, 1997 and 1996. No executive officers of
the Company other than the Chief Executive Officer and the Vice President -
Finance and Administration were paid an annual salary (together with any bonus)
in excess of $100,000 in such fiscal years for services rendered to the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMP. LONG TERM
COMP.
Securities
Other Under- All
Annual lying/ other
Name and Principal Fiscal Mgmt. Compen- Options Compen-
Position Year Salary Incentive sation SARS sation
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Michael T. Furry: 1998 $225,000 $48,000 -- -- --
President and Chief
Executive 1997 $225,000 $47,800 -- -- --
Officer<F1>
1996 $195,833 -- -- -- --
Brett R. Meinsen: 1998 $100,000 $20,860 -- -- --
Vice President
Finance and 1997 $ 50,385 $12,000 -- -- --
Administration<F2>
1996 -- -- -- -- --
- -----------------------
<FN>
<F1>
Mr. Furry became President and Chief Executive Officer of the Company as of the
Effective Date.
<F2>
Mr. Meinsen became Vice President - Finance and Administration on June 30, 1997.
</FN>
</TABLE>
<PAGE>
8
AGGREGATE OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR END OPTIONS
The following table sets forth the number of options exercised and
redeemed and the realized value upon exercise and redemption by the named
executive officers during the fiscal year ended December 31, 1998 and the value
of outstanding options held by each executive officer as of December 31, 1998.
<TABLE>
<CAPTION>
No. of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options at
No. Shares Options at Fiscal Year-end
Acquired Value Fiscal Year-end Exercisable/
Name on Exercise Realized Exercisable/ Unexercisable
Unexercisable
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michael T. Furry -- -- 0/0<F1> 0/0<F1>
Brett R. Meinsen -- -- 0/0<F1> 0/0<F1>
- ------------------------
<FN>
<F1>
No stock options or SAR's have been issued under the Reinhold Stock Incentive
Plan.
</FN>
</TABLE>
EMPLOYMENT AGREEMENT
An employment agreement with Michael T. Furry, as the Company's
President and Chief Executive Officer, was entered into on July 31, 1996 and
provides for employment by the Company for a period of five years commencing on
the Effective Date. The employment agreement was amended as of October 30, 1998
to provide for a base salary of $236,000 per year, and a 5% increase on October
30, 2000 and on every second year following the year 2000 during the term of the
employment agreement. The employment agreement provides for participation in the
Management Incentive Compensation Plan, Reinhold Industries, Inc. Retirement
Plan, and Reinhold Stock Incentive Plan. It also provides Mr. Furry with life
insurance with a face value of $200,000.
MANAGEMENT INCENTIVE COMPENSATION PLAN
As a result of the Plan of Reorganization, Reinhold adopted the
Management Incentive Compensation Plan for the Reinhold staff, under which
awards may be made to officers and other key salaried employees of Reinhold.
Pools of award money are developed in accordance with the earnings of Reinhold
and will be limited to 15% of Reinhold's pre-tax earnings each year.
Distribution of awards to eligible employees will be dependent upon the
<PAGE>
9
individual employee's achievement during a fiscal year, as measured against
predetermined specific objectives for that employee in such fiscal year.
Payments will be made in January of each year with respect to the previous
year's award.
RETIREMENT PLAN
Reinhold presently maintains a non-contributory retirement plan (the
"Retirement Plan") in which all salaried employees and certain hourly employees
participate. The Retirement Plan provides an annual normal retirement benefit at
or after age 65 for a participant equal to the greater of (a) the participants'
accrued benefit as of December 31, 1988, based on the plan in effect at that
time; (b) the product of (x) the sum of 1.3% of the participant's annual average
compensation for the five highest consecutive years of employment during the
most recent ten calendar years of employment and 0.65% of such compensation in
excess of the average of the "Social Security Taxable Wage Base" in each year
during the 35-year period prior to the participant's retirement age under the
social security law multiplied by (y) his years of service credit (to a maximum
of 25) in the Retirement Plan; or (c) the accrued benefit as of December 31,
1993, plus a benefit based on (b) above and service after December 31, 1993,
with total service not in excess of 25 years. Certain maximum benefit
limitations are incorporated in the Retirement Plan. The Retirement Plan
permits a participant who has attained age 55 and completed 10 years of
service to elect to receive an actuarially reduced early retirement benefit
and provides for payment of benefits if certain participants become permanently
disabled. A participant's accrued pension benefit becomes 100% vested on the
date on which the participant completes five years of service. Death benefits
are payable to the surviving spouse of a fully or partially vested participant
who dies before payment of benefits has commenced.
<PAGE>
10
The following table presents information regarding estimated annual
benefits payable upon normal retirement classified by remuneration and years of
service under the Reinhold Industries, Inc. Retirement Plan in which all
salaried employees and certain hourly employees participate:
<TABLE>
<CAPTION>
Average
Compensation at
Retirement Years of Service at Retirement
5 10 15 20 25 or more
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$50,000<F1> $3,863 $7,727 $11,590 $15,543 $19,317
75,000<F1> 6,301 12,602 18,903 25,203 31,504
100,000<F1> 8,738 17,477 26,215 34,953 43,692
150,000<F1> 13,613 27,227 40,840 54,453 68,067
160,000<F1> 14,588 29,177 43,765 58,353 72,942
or more
- ---------------------
<FN>
<F1>
In accordance with Internal Revenue Service Regulations, the maximum allowable
compensation permitted in computing a benefit under the Retirement Plan is
$160,000 for 1998. However, employees will receive the greater of the benefit
outlined above or the accrued benefit as of December 31, 1993, which was based
on compensation in excess of $150,000 plus a benefit based on service after
December 31, 1993 and the final average compensation based on the $150,000
limit.
</FN>
</TABLE>
Remuneration covered by the Retirement Plan in a particular year
includes that year's base salary, overtime pay and commissions but excludes
compensation received in that year under the Management Incentive Compensation
Plan in excess of 50% of the participant's annual basic pay rate as of the
December 3 1of the preceding calendar year. The 1998 remuneration covered by
the Retirement Plan for each participant therefore includes management
incentive compensation (up to such 50% ceiling) paid during 1998 in respect of
1997 awards.
For each of the following persons, the credited years of service
under the Retirement Plan, as of December 31, 1998, and the remuneration
received during 1998 covered by the Retirement Plan, were, respectively, as
follows: Mr. Furry, 13 years and $160,000; Mr. Meinsen 1 year and $50,122.
<PAGE>
11
STOCK INCENTIVE PLAN
GENERAL DESCRIPTION
As of the Effective Date, the Company established the Reinhold Stock
Incentive Plan for key employees. The Reinhold Stock Incentive Plan permits the
grant of stock options, stock appreciation rights and restricted stock. The
total number of shares of stock subject to issuance under the Reinhold Stock
Incentive Plan may not exceed 100,000. The maximum number of shares of stock
with respect to which options or stock appreciation rights may be granted to any
eligible employee during the term of the Reinhold Stock Incentive Plan may not
exceed 10,000. The shares to be delivered under the Reinhold Stock Incentive
Plan may consist of authorized but unissued stock or treasury stock, not
reserved for any other purpose.
The exercise price of the options is established at the discretion
of a Committee of the Board of Directors (the "Committee"), provided that it may
not be less than the estimated fair value at the time of grant. The Reinhold
Stock Incentive Plan provides that the options are exercisable based on vesting
schedules, provided that in no event shall such option vest more rapidly than 33
1/3% annually. The options expire no later than ten years from the date of
grant.
The Committee, in its discretion, in connection with grant of an
option, may grant to the optionee Stock Appreciation Rights (SARs). A SAR will
entitle the holder of the related option, upon exercise of the Stock
Appreciation Right, to surrender such option, and receive payment of an amount
determined by multiplying (i) the excess of the fair market value of a share of
stock on the date of exercise of such SAR over the purchase price of a share of
stock under the related option, by (ii) the number of shares as to which the
SARs has been exercised.
The Committee may grant shares of restricted stock to eligible
employees and in such amounts as it shall determine in its sole discretion.
No options, SARs or restricted stock have been granted under the
Reinhold Stock Incentive Plan.
GRANTS TO EMPLOYEES UNDER THE REINHOLD STOCK INCENTIVE PLAN
STOCK OPTIONS. The Compensation Committee can grant employees stock
options at an option exercise price not less than the fair market value of a
share on the date of grant. To exercise an option, an employee would pay the
option price in cash, or if permitted by the Committee, by delivering shares of
Reinhold Class A Common Stock already owned by the employee that have a fair
market value equal to the option price.
The term of each option is fixed by the Committee provided that no
option may be exercisable for more than 10 years after the date on which it
becomes exercisable. The Committee will determine the time or times at which
each option granted to an employee may be exercised as well as other terms and
<PAGE>
12
conditions applicable to the option. Such options may be made exercisable in
installments, and the exercisability of options may be accelerated by the
Committee.
STOCK APPRECIATION RIGHTS. A SAR will entitle the holder of the
related option, upon exercise of the Stock Appreciation Right, to surrender such
option, and receive payment of an amount determined by multiplying (i) the
excess of the fair market value of a share of stock on the date of exercise of
such SAR over the purchase price of a share of stock under the related option,
by (ii) the number of shares as to which the SARs has been exercised.
A Stock Appreciation Right will be exercisable at such time or times
and only to the extent that a related option is exercisable, and will not be
transferable except to the extent that such related option may be transferable.
A Stock Appreciation Right granted in connection with an incentive stock option
shall be exercisable only if the fair market value of a share of stock on the
date of exercise exceeds the purchase price of a share of stock specified in the
related option.
Upon the exercise of a Stock Appreciation Right, the related option
shall be canceled to the extent of the number of shares of Stock as to which the
Stock Appreciation Right is exercised, and upon the exercise of an option
granted in connection with a Stock Appreciation Right, the Stock Appreciation
Right shall be canceled to the extent of the number of shares of stock as to
which the option is exercised or surrendered.
RESTRICTED STOCK. The Committee at any time and from time to time,
may grant shares of Restricted Stock under the Reinhold Stock Incentive Plan to
such Eligible Employees and in such amounts as it shall determine in its sole
discretion. Each grant of Restricted Stock shall be made pursuant to a written
agreement which shall contain such restrictions, terms and conditions as the
Committee may determine in its discretion. Restrictions upon shares of
Restricted Stock shall lapse at such time or times and on such terms and
conditions as the Committee may determine; provided, however, that in no event
shall such restrictions on vesting lapse at a rate more rapidly, on an annual
basis, than 33 1/3% of the number of shares such Restricted Stock subject to
such grant beginning on the first anniversary date following the grant of such
Restricted Stock.
TERMINATION OF EMPLOYMENT. Unless otherwise determined by the
Committee, in the event of termination of employment by reason of retirement,
long term disability or death, any option may thereafter be exercised in full
for a period of three years (or such shorter period as the Committee shall
determine at grant), subject in each case to the stated term of the option. In
the event of termination of employment for any reason other than retirement,
disability or death, unless otherwise determined by the Committee, any
outstanding options held by the terminated employee will be canceled. The
Committee may permit an employee whose employment terminates for any such other
reason up to three years following termination to exercise an option.
CHANGE IN CONTROL PROVISIONS. The Reinhold Stock Incentive Plan
provides that, except as provided below, in the event of a "Change in Control"
(as defined in the Reinhold Stock Incentive Plan), the Committee, either at the
<PAGE>
13
time Employee Options or shares of Restricted Stock are granted or, if so
provided in the applicable Option Agreement or Restricted Stock grant, at any
time thereafter, shall [have the authority to] accelerate in whole or in part
the exercisability of Employee Options and/or the last day of the period of
restriction upon a Change in Control. The Option Agreements and Restricted Stock
grants approved by the Committee may contain provisions whereby, in the event of
a Change in Control, the acceleration of the exercisability of Employee Options
and/or the last day of the period of restriction may be automatic or may be
subject to the discretion of the Committee or may depend upon whether the Change
in Control shall be approved by a majority of the members of the Board or such
other criteria as the Committee may specify. Nothing herein shall obligate the
Committee to take any action upon a Change in Control.
