<PAGE> 1
As filed with the Securities and Exchange Commission on June 3, 1997
Registration No.
-----------------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
CHASE INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0328047
(State or other juris- (I.R.S. Employer
diction of incorporation Identification
or organization) Number)
14212 COUNTY ROAD M-50
MONTPELIER, OHIO 43543
(419) 485-3193
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
CHASE INDUSTRIES INC.
1994 LONG-TERM INCENTIVE PLAN
(full title of the plan)
---------------------
MARTIN V. ALONZO
CHASE INDUSTRIES INC.
14212 COUNTY ROAD M-50
MONTPELIER, OHIO 43543
(419) 485-3193
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies of all communications, including all communications sent to the agent
for service, should be sent to:
RODNEY L. MOORE, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
2200 ROSS AVENUE, SUITE 2800
DALLAS, TEXAS 75201
(214) 855-8000
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
<S> <C> <C> <C> <C>
TITLE OF SECURITIES PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING PRICE REGISTRATION
REGISTERED UNIT(2) (2) FEE
=============================================================================================================================
COMMON STOCK $.01 PAR
VALUE PER SHARE . . . . . 500,000 SHARES $22.13 $11,065,000 $3,353
=============================================================================================================================
</TABLE>
(1) Pursuant to Rule 416, there are also being registered such additional
shares of Common Stock as may become issuable pursuant to the
antidilution provisions of the Plan.
(2) The price is estimated in accordance with Rule 457(h)(1) under the
Securities Act of 1933, as amended, solely for the purpose of
calculating the registration fee, based on the average of the high and
low prices of the Common Stock as reported on the New York Stock
Exchange on May 30, 1997.
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<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
The following document filed by Chase Industries Inc., a Delaware
corporation (f/k/a Chase Brass Industries, Inc.) (the "Company" or the
"Registrant") is incorporated herein by reference: the Company's registration
statement on Form S-8, Registration Number 33-87278, as filed with the
Securities and Exchange Commission on December 12, 1994.
This Registration Statement on Form S-8 is registering 500,000 additional
shares of common stock of the Company, par value $.01 per share, pursuant to the
Company's 1994 Long-Term Incentive Plan.
ITEM 8. EXHIBITS
4 Chase Industries Inc. 1994 Long-Term Incentive Plan, as
amended.
5 Opinion of Fulbright & Jaworski L.L.P.
23.1 Consent of Coopers & Lybrand.
23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5).
24 Power of Attorney (included in signature page).
II-1
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York and State of New York on the 30th day of May 1997.
By:/s/ MARTIN V. ALZONO
--------------------------
Martin V. Alonzo
Chairman of the Board,
President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Martin V. Alonzo and Michael T.
Segraves, or either of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and any
and all related registration statements and post-effective amendments, and to
file the same with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting said
attorneys-in-fact and agents, or either of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ MARTIN V. ALONZO Chairman of the Board, President, Chief May 30, 1997
-------------------------- Executive Officer and Director
Martin V. Alonzo (Principal executive officer)
/s/ MICHAEL T. SEGRAVES Vice President and Chief Financial May 30, 1997
-------------------------- Officer (Principal financial officer)
Michael T. Segraves
/s/ RAYMOND E. CARTLEDGE Director May 30, 1997
--------------------------
Raymond E. Cartledge
/s/ Charles E. Corpening Director May 30, 1997
--------------------------
CHARLES E. CORPENING
/s/ Donald J. Donahue Director May 30, 1997
--------------------------
DONALD J. DONAHUE
/s/ John R. Kennedy Director May 30, 1997
--------------------------
JOHN R. KENNEDY
/s/ Thomas F. McWilliams Director May 30, 1997
--------------------------
THOMAS F. MCWILLIAMS
/s/ William R. Toller Director May 30, 1997
--------------------------
WILLIAM R. TOLLER
</TABLE>
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<PAGE> 4
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ---------- -----------
4 Chase Industries Inc. 1994 Long-Term Incentive
5 Opinion of Fulbright & Jaworski L.L.P.
23.1 Consent of Coopers & Lybrand.
23.2 Consent of Fulbright & Jaworski L.L.P. (include
24 Power of Attorney (included in signature page).
<PAGE> 1
EXHIBIT 4
CHASE INDUSTRIES INC.
1994 LONG-TERM INCENTIVE PLAN
(AS AMENDED AS OF APRIL 1, 1997)
SCOPE AND PURPOSE OF PLAN
Chase Industries Inc., a Delaware corporation (the "Corporation"), has
adopted this 1994 Long-Term Incentive Plan (the "Plan") to provide for the
granting of:
(a) Incentive Options (hereafter defined) to certain Key Employees
(hereafter defined);
(b) Nonstatutory Options (hereafter defined) to certain Key
Employees and Non-Employee Directors (hereafter defined);
(c) Restricted Stock Awards (hereafter defined) to certain Key
Employees; and
(d) Stock Appreciation Rights (hereafter defined) to certain Key
Employees.
The purpose of the Plan is to provide an incentive for Key Employees
and directors of the Corporation or its Subsidiaries (hereafter defined) to
remain in the service of the Corporation or its Subsidiaries, to extend to them
the opportunity to acquire a proprietary interest in the Corporation so that
they will apply their best efforts for the benefit of the Corporation, and to
aid the Corporation in attracting able persons to enter the service of the
Corporation and its Subsidiaries.
SECTION 1. DEFINITIONS
1.1 "Acquiring Person" means any Person other than (a) the
Corporation, any Subsidiary of the Corporation, any employee benefit plan of
the Corporation or of a Subsidiary of the Corporation or of a corporation owned
directly or indirectly by the stockholders of the Corporation in substantially
the same proportions as their ownership of Stock of the Corporation, or any
trustee or other fiduciary holding securities under an employee benefit plan of
the Corporation or of a Subsidiary of the Corporation or of a corporation owned
directly or indirectly by the stockholders of the Corporation in substantially
the same proportions as their ownership of Stock of the Corporation (b)
Citicorp Venture Capital, Ltd., a New York corporation ("CVC"), or (c) any
Affiliate of CVC that is directly controlled by Citicorp or Citibank, N.A., or
otherwise is in the same tier as CVC of Affiliates under the control of such
entities ("Direct Affiliates"), but shall not include any entities that may be
deemed an Affiliate of CVC as a result of the investment by any Direct
Affiliate in such entity.
1.2 "Affiliate" means (a) any Person who is directly or indirectly
the beneficial owner of at least 10% of the voting power of the outstanding
Voting Securities of the Corporation or (b) any Person controlling, controlled
by, or under common control with the Corporation or any Person contemplated in
clause (a) of this Subsection 1.2.
1.3 "Award" means the grant of any form of Option, Restricted
Stock Award, or Stock Appreciation Right under the Plan, whether granted
individually, in combination, or in tandem, to a Holder pursuant to the terms,
conditions, and limitations that the Committee may establish in order to
fulfill the objectives of the Plan.
1.4 "Award Agreement" means the written agreement between the
Corporation and a Holder evidencing the terms, conditions, and limitations of
the Award granted to that Holder.
1.5 "Board of Directors" means the board of directors of the
Corporation.
1.6 "Business Day" means any day other than a Saturday, a Sunday,
or a day on which banking institutions in the state of Ohio are authorized or
obligated by law or executive order to close.
<PAGE> 2
1.7 "Change in Control" means the event that is deemed to have
occurred if:
(a) any Acquiring Person is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing fifty
percent or more of the combined voting power of the then outstanding
Voting Securities of the Corporation; or
(b) a public announcement is made of a tender or exchange
offer by any Acquiring Person for fifty percent or more of the
outstanding Voting Securities of the Corporation, and the Board of
Directors approves or fails to oppose that tender or exchange offer in
its statements in Schedule 14D-9 under the Exchange Act; provided,
however, that the events to occur under Subsection 9.2 hereof shall
not occur solely as a result of an event described in this clause (b)
unless, within one year after the occurrence of such event, an event
described in clauses (a), (c) or (d) hereof shall have occurred, in
which case such events to occur under Subsection 9.2 hereof shall
occur upon the occurrence of such event but shall be deemed to have
been effective as of the time of the occurrence of the event described
in this clause (b); or
(c) the stockholders of the Corporation approve a merger
or consolidation of the Corporation with any other corporation or
partnership (or, if no such approval is required, the consummation of
such a merger or consolidation of the Corporation), other than a
merger or consolidation that would result in the Voting Securities of
the Corporation outstanding immediately before the consummation
thereof continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity or of a
parent of the surviving entity) a majority of the combined voting
power of the Voting Securities and Convertible Voting Securities (on a
fully-diluted basis assuming full conversion thereof) of the surviving
entity (or its parent) outstanding immediately after that merger or
consolidation; or
(d) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale
or disposition by the Corporation of all or substantially all the
Corporation's assets (or, if no such approval is required, the
consummation of such a liquidation, sale, or disposition in one
transaction or series of related transactions) other than a
liquidation, sale or disposition of all or substantially all the
Corporation's assets in one transaction or a series of related
transactions to a Subsidiary of the Corporation or any other
corporation owned directly or indirectly by the stockholders of the
Corporation in substantially the same proportions as their ownership
of stock in the Corporation.
1.8 "Code" means the Internal Revenue Code of 1986, as amended.
1.9 "Committee" means the committee appointed pursuant to Section
3 by the Board of Directors to administer the Plan.
1.10 "Convertible Voting Securities" means any and all options,
warrants, or other rights to purchase, or securities convertible into or
exchangeable or exercisable for, directly or indirectly, Voting Securities of
any Person.
1.11 "Corporation" means Chase Industries Inc., a Delaware
corporation (F/K/A Chase Brass Industries, Inc.)
1.12 "Date of Grant" has the meaning given it in Subsection 4.3.
1.13 "Disability" has the meaning given it in Subsection 10.3.
1.14 "Disinterested Person" means a Person that meets the
definition of both a "Non-Employee Director" under Rule 16b-3(b)(3) and an
"outside director" under Section 162(m).
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1.15 "Effective Date" means the later of (a) the date the Plan is
adopted by the Board of Directors, (b) the date the Plan is approved by the
stockholders of the Corporation and (c) the closing date of the Initial Public
Offering.
1.16 "Eligible Individuals" means (a) Key Employees, (b)
Non-Employee Directors, and (c) any other Person that the Committee designates
as eligible for an Award (other than for Incentive Options) because the Person
performs, or has performed, bona fide consulting or advisory services for the
Corporation or any of its Subsidiaries (other than services in connection with
the offer or sale of securities in a capital-raising transaction) and the
Committee determines that the Person has a direct and significant effect on the
financial development of the Corporation or any of its Subsidiaries.
Notwithstanding the foregoing provisions of this Subsection 1.16, to ensure
that the requirements of the fourth sentence of Subsection 3.1 are satisfied,
the Board of Directors may from time to time specify individuals who shall not
be eligible for the grant of Awards or equity securities under any plan of the
Corporation or its Affiliates. Nevertheless, the Board of Directors may at any
time determine that an individual who has been so excluded from eligibility
shall become eligible for grants of Awards and grants of such other equity
securities under any plans of the Corporation or its Affiliates so long as that
eligibility will not impair the Plan's satisfaction of the conditions of Rule
16b-3.
1.17 "Employee" means any employee of the Corporation or of any of
its Subsidiaries, including officers and directors of the Corporation who are
also employees of the Corporation or of any of its Subsidiaries.
1.18 "Exchange Act" means the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder, or any successor law, as it
may be amended from time to time.
1.19 "Exercise Notice" has the meaning given it in Subsection 5.5.
1.20 "Exercise Price" has the meaning given it in Subsection 5.4.
1.21 "Fair Market Value" means, for a particular day:
(a) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges on any national or regional
securities exchange at the date of determining the Fair Market Value,
then the last reported sale price, regular way, on the composite tape
of that exchange on the last Business Day before the date in question
or, if no such sale takes place on that Business Day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to unlisted trading
privileges on that securities exchange; or
(b) If shares of Stock of the same class are not listed
or admitted to unlisted trading privileges as provided in Subsection
1.21(a) and sales prices for shares of Stock of the same class in the
over-the-counter market are reported by the National Association of
Securities Dealers, Inc. Automated Quotations, Inc. ("NASDAQ")
National Market System (or such other system then in use) at the date
of determining the Fair Market Value, then the last reported sales
price so reported on the last Business Day before the date in question
or, if no such sale takes place on that Business Day, the average of
the high bid and low asked prices so reported; or
(c) If shares of Stock of the same class are not listed
or admitted to unlisted trading privileges as provided in Subsection
1.21(a) and sales prices for shares of Stock of the same class are not
reported by the NASDAQ National Market System (or a similar system
then in use) as provided in Subsection 1.21(b), and if bid and asked
prices for shares of Stock of the same class in the over-the-counter
market are reported by NASDAQ (or, if not so reported, by the National
Quotation Bureau Incorporated) at the date of determining the Fair
Market Value, then the average of the high bid and low asked prices on
the last Business Day before the date in question; or
(d) If shares of Stock of the same class are not listed
or admitted to unlisted trading privileges as provided in Subsection
1.21(a) and sales prices or bid and asked prices therefor are not
reported by
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<PAGE> 4
NASDAQ (or the National Quotation Bureau Incorporated) as provided in
Subsection 1.21(b) or Subsection 1.21(c) at the date of determining
the Fair Market Value, then the value determined in good faith by the
Committee, which determination shall be conclusive for all purposes;
or
(e) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges as provided in Subsection
1.21(a) or sales prices or bid and asked prices therefor are reported
by NASDAQ (or the National Quotation Bureau Incorporated) as provided
in Subsection 1.21(b) or Subsection 1.21(c) at the date of determining
the Fair Market Value, but the volume of trading is so low that the
Board of Directors determines in good faith that such prices are not
indicative of the fair value of the Stock, then the value determined
in good faith by the Committee, which determination shall be
conclusive for all purposes notwithstanding the provisions of
Subsections 1.21(a), (b), or (c).
For purposes of valuing Incentive Options, the Fair Market Value of Stock shall
be determined without regard to any restriction other than one that, by its
terms, will never lapse. For purposes of the redemption provided for in
Subsection 9.3(d)(v), Fair Market Value shall have the meaning and shall be
determined as set forth above; provided, however, that the Committee, with
respect to any such redemption, shall have the right to determine that the Fair
Market Value for purposes of the redemption should be an amount measured by the
value of the shares of Stock, other securities, cash, or property otherwise
being received by holders of shares of Stock in connection with the
Restructuring and upon that determination the Committee shall have the power
and authority to determine Fair Market Value for purposes of the redemption
based upon the value of such shares of stock, other securities, cash, or
property. Any such determination by the Committee, as evidenced by a
resolution of the Committee, shall be conclusive for all purposes.
1.22 "Fair Value" means such value as is determined by a majority
of the "disinterested" directors of the Corporation, as evidenced by a
resolution of such disinterested directors, even if the disinterested directors
of the Corporation constitute less than a quorum. If the Corporation does not
have any disinterested directors, the Fair Value shall be such value as is
determined by a nationally recognized investment banking firm selected by the
Corporation, the expenses of which shall be borne by the Corporation.
1.23 "Holder" means an Eligible Individual to whom an outstanding
Award has been granted or a transferee of any Award as permitted under Section
4.7.
1.24 "Incentive Option" means an incentive stock option as defined
under Section 422 of the Code and regulations thereunder.
1.25 "Initial Public Offering" means the first public offering of
Stock by the Corporation effected pursuant to an effective registration
statement under the Securities Act.
1.26 "Key Employee" means any Employee whom the Committee
identifies as having a direct and significant effect on the performance of the
Corporation or any of its Subsidiaries.
1.27 "Non-Employee Director" means a director of the Corporation
who while a director is not an Employee or an officer of the Corporation or any
subsidiary of the Corporation.
1.28 "Nonstatutory Option" means a stock option that does not
satisfy the requirements of Section 422 of the Code or that is designated at
the Date of Grant or in the applicable Award Agreement to be an option other
than an Incentive Option.
1.29 "Non-Surviving Event" means an event of Restructuring as
described in either Subsection 1.36(b) or Subsection 1.36(c).
1.30 "Normal Retirement" means the separation of a Holder from
employment with the Corporation and its Subsidiaries on or after the attainment
of age 59 1/2 with the right to receive an immediate benefit under a
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<PAGE> 5
tax-qualified retirement plan under Section 401(a) of the Code approved by the
Corporation or any Subsidiary thereof.
1.31 "Option" means either an Incentive Option or a Nonstatutory
Option, or both.
1.32 "Person" means any person or entity of any nature whatsoever,
specifically including (but not limited to) an individual, a firm, a company, a
corporation, a partnership, a trust, or other entity. A Person, together with
that Person's affiliates and associates (as "affiliate" and "associate" are
defined in Rule 12b-2 under the Exchange Act for purposes of this definition
only), and any Persons acting as a partnership, limited partnership, joint
venture, association, syndicate, or other group (whether or not formally
organized), or otherwise acting jointly or in concert or in a coordinated or
consciously parallel manner (whether or not pursuant to any express agreement),
for the purpose of acquiring, holding, voting, or disposing of securities of
the Corporation with that Person, shall be deemed a single "Person."
1.33 "Plan" means the Corporation's 1994 Long-Term Incentive Plan,
as it may be amended from time to time.
1.34 "Restricted Stock" means Stock that is nontransferable or
subject to substantial risk of forfeiture until specific conditions are met.
1.35 "Restricted Stock Award" means the grant of or the right to
purchase, on the terms and conditions of Section 7 or that the Committee
otherwise determines, Restricted Stock.
1.36 "Restructuring" means the occurrence of any one or more of the
following:
(a) The merger or consolidation of the Corporation with
any Person, whether effected as a single transaction or a series of
related transactions, with the Corporation remaining the continuing or
surviving entity of that merger or consolidation and the Stock
remaining outstanding and not changed into or exchanged for stock or
other securities of any other Person or of the Corporation, cash, or
other property;
(b) The merger or consolidation of the Corporation with
any Person, whether effected as a single transaction or a series of
related transactions, with (i) the Corporation not being the
continuing or surviving entity of that merger or consolidation or (ii)
the Corporation remaining the continuing or surviving entity of that
merger or consolidation but all or a part of the outstanding shares of
Stock are changed into or exchanged for stock or other securities of
any other Person or the Corporation, cash, or other property; or
(c) The transfer, directly or indirectly, of all or
substantially all of the assets of the Corporation (whether by sale,
merger, consolidation, liquidation, or otherwise) to any Person,
whether effected as a single transaction or a series of related
transactions.
1.37 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the
Exchange Act, or any successor rule, as it may be amended from time to time,
and references to paragraphs or clauses of Rule 16b-3 shall refer to the
corresponding paragraphs or clauses of Rule 16b-3 as it exists at the Effective
Date or the comparable paragraph or clause of Rule 16b-3 as it may thereafter
be amended.
1.38 "Section 162(m)" means Section 162(m) of the Code, or any
successor section under the Code, as it may be amended from time to time and as
interpreted by final or proposed regulations promulgated thereunder from time
to time.
1.39 "Securities Act" means the Securities Act of 1933 and the
rules and regulations promulgated thereunder, or any successor law, as it may
be amended from time to time.
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<PAGE> 6
1.40 "Stock" means the Corporation's authorized common stock, par
value $.01 per share, or any other securities that are substituted for the
Stock as provided in Section 9.
1.41 "Stock Appreciation Right" means the right to receive an
amount equal to the excess of the Fair Market Value of a share of Stock (as
determined on the date of exercise) over, as appropriate, the Exercise Price of
a related Option or the Fair Market Value of the Stock on the Date of Grant of
the Stock Appreciation Right.
1.42 "Subsidiary" means, with respect to any Person, any
corporation, or other entity of which a majority of the Voting Securities is
owned, directly or indirectly, by that Person.
1.43 "Total Shares" has the meaning given it in Subsection 9.2.
1.44 "Voting Securities" means (i) any securities that are entitled
to vote generally in the election of directors, in the admission of general
partners or in the selection of any other similar governing body and (ii) with
respect to the Corporation, all shares of the Corporation's nonvoting common
stock, par value $.01 per share (all of which are convertible into shares of
the Corporation's common stock, par value $.01 per share).
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN
2.1 Maximum Number of Shares. Subject to the provisions of
Subsections 2.2 and 2.5 and Section 9 of this Plan, the aggregate number of
shares of Stock that may be issued, transferred or exercised pursuant to Awards
under the Plan shall be one million five hundred thousand (1,500,000) shares of
Stock. Except as provided in Section 8, awards to which shares of such Stock
relate may be awarded to any one Eligible Individual or allocated among the
Eligible Individuals, as determined by the Committee; provided that no more
than 100,000 shares of Stock may be subject to Incentive Awards granted under
this Plan to any single Eligible Individual during any two-year period.
2.2 Limitation of Shares. For purposes of the limitations
specified in Subsection 2.1, the following principles shall apply:
(a) the following shall count against and decrease the
number of shares of Stock that may be issued for purposes of
Subsection 2.1: (i) shares of Stock subject to outstanding Options,
outstanding shares of Restricted Stock, and shares subject to
outstanding Stock Appreciation Rights granted independent of Options
(based on a good faith estimate by the Corporation or the Committee of
the maximum number of shares for which the Stock Appreciation Right
may be settled (assuming payment in full in shares of Stock)), and
(ii) in the case of Options granted in tandem with Stock Appreciation
Rights, the greater of the number of shares of Stock that would be
counted if one or the other alone was outstanding (determined as
described in clause (i) above);
(b) the following shall be added back to the number of
shares of Stock that may be issued for purposes of Subsection 2.1: (i)
shares of Stock with respect to which Options, Stock Appreciation
Rights granted independent of Options, or Restricted Stock Awards
expire, are canceled, or otherwise terminate without being exercised,
converted, or vested, as applicable, and (ii) in the case of Options
granted in tandem with Stock Appreciation Rights, shares of Stock as
to which an Option has been surrendered in connection with the
exercise of a related ("tandem") Stock Appreciation Right, to the
extent the number surrendered exceeds the number issued upon exercise
of the Stock Appreciation Right;
(c) shares of Stock subject to Stock Appreciation Rights
granted independent of Options (calculated as provided in clause (a)
above) that are exercised and paid in cash shall be added back to the
number of shares of Stock that may be issued for purposes of
Subsection 2.1;
(d) shares of Stock that are transferred by a Holder of
an Award (or withheld by the Corporation) as full or partial payment
to the Corporation of the purchase price of shares of Stock subject to
an Option or the Corporation's or any Subsidiary's tax withholding
obligations shall not be added back
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<PAGE> 7
to the number of shares of Stock that may be issued for purposes of
Subsection 2.1 and shall not again be subject to Awards; and
(e) if the number of shares of Stock counted against the
number of shares that may be issued for purposes of Subsection 2.1 is
based upon an estimate made by the Corporation or the Committee as
provided in clause (a) above and the actual number of shares of Stock
issued pursuant to the applicable Award is greater or less than the
estimated number, then, upon such issuance, the number of shares of
Stock that may be issued pursuant to Subsection 2.1 shall be further
reduced by the excess issuance or increased by the shortfall, as
applicable.
Notwithstanding the provisions of this Subsection 2.2, (i) no Stock
shall be treated as issuable under the Plan to Eligible Individuals (A) subject
to Section 16 of the Exchange Act if otherwise prohibited from issuance under
Rule 16b-3 or (B) subject to Section 162(m) if otherwise prohibited from
issuance under Section 162(m) and (ii) the Committee may impose restrictions
which are more limited than set forth herein with respect to shares of stock
subject to Awards that may be added back to the number of shares of stock that
may be issued for purposes of Subsection 2.1.
2.3 Description of Shares. The shares to be delivered under the
Plan shall be made available from (a) authorized but unissued shares of Stock,
(b) Stock held in the treasury of the Corporation, or (c) previously issued
shares of Stock reacquired by the Corporation, including shares purchased on
the open market, in each situation as the Board of Directors or the Committee
may determine from time to time at its sole option.
2.4 Registration and Listing of Shares. From time to time, the
Board of Directors and appropriate officers of the Corporation shall and are
authorized to take whatever actions are necessary to file required documents
with governmental authorities, stock exchanges, and other appropriate Persons
to make shares of Stock available for issuance pursuant to the exercise of
Awards.
2.5 Reduction in Outstanding Shares of Stock. Nothing in this
Section 2 shall impair the right of the Corporation to reduce the number of
outstanding shares of Stock pursuant to repurchases, redemptions, or otherwise;
provided, however, that no reduction in the number of outstanding shares of
Stock shall (a) impair the validity of any outstanding Award, whether or not
that Award is fully exercisable or fully vested, or (b) impair the status of
any shares of Stock previously issued pursuant to the exercise of an Award or
thereafter issued pursuant to a then-outstanding Award as duly authorized,
validly issued, fully paid, and nonassessable shares.
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 Committee. The Board of Directors may administer the Plan
with respect to all Eligible Individuals or may delegate all or part of that
duty to the Committee; provided that the Committee shall not have the power to
appoint members of the Committee. Except for references in Subsections 3.1,
3.2, and 3.3, and unless the context otherwise requires, references herein to
the Committee shall also refer to the Board of Directors as administrator of
the Plan. The Committee shall be constituted so that, as long as Stock is
registered under Section 12 of the Exchange Act, each member of the Committee
shall be a Disinterested Person and so that the Plan in all other applicable
respects will qualify transactions related to the Plan for the exemptions from
Section 16(b) of the Exchange Act provided by Rule 16b-3 and the exemption from
the deductibility limitation imposed by Section 162(m) provided by the
performance-based compensation exception described in Section 162(m), to the
extent exemptions thereunder may be available. The number of Persons that
shall constitute the Committee shall be determined from time to time by a
majority of all the members of the Board of Directors and, unless that majority
of the Board of Directors determines otherwise or Rule 16b-3 or Section 162(m)
is amended to require otherwise, shall be no less than two Persons.
Notwithstanding the foregoing, the Board of Directors may designate the
Compensation Committee of the Board of Directors to serve as the Committee
hereunder, provided that each member of such Compensation Committee is a
Disinterested Person.
3.2 Duration, Removal, Etc. The members of the Committee shall
serve at the discretion of the Board of Directors, which shall have the power,
at any time and from time to time, to remove members from or add
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members to the Committee. Removal from the Committee may be with or without
cause. Any individual serving as a member of the Committee shall have the
right to resign from membership in the Committee by at least three days'
written notice to the Board of Directors. The Board of Directors, and not the
remaining members of the Committee, shall have the power and authority to fill
all vacancies on the Committee. The Board of Directors shall promptly fill any
vacancy that causes the number of members of the Committee to be below two or
any other number that Rule 16b-3 or Section 162(m) may require from time to
time.
3.3 Meetings and Actions of Committee. The Board of Directors
shall designate which of the Committee members shall be the chairman of the
Committee. If the Board of Directors fails to designate a Committee chairman,
the members of the Committee shall elect one of the Committee members as
chairman, who shall act as chairman until he ceases to be a member of the
Committee or until the Board of Directors elects a new chairman. The Committee
shall hold its meetings at those times and places as the chairman of the
Committee may determine. At all meetings of the Committee, a quorum for the
transaction of business shall be required and a quorum shall be deemed present
if at least a majority of the members of the Committee are present. At any
meeting of the Committee, each member shall have one vote. All decisions and
determinations of the Committee shall be made by the majority vote or majority
decision of all of its members present at a meeting at which a quorum is
present; provided, however, that any decision or determination reduced to
writing and signed by all of the members of the Committee shall be as fully
effective as if it had been made at a meeting that was duly called and held.
The Committee may make any rules and regulations for the conduct of its
business that are not inconsistent with the provisions of the Plan, the
Certificate of Incorporation of the Corporation, the by-laws of the
Corporation, and Rule 16b-3 and Section 162(m) so long as applicable, as the
Committee may deem advisable.
3.4 Committee's Powers. Subject to the express provisions of the
Plan and Rule 16b-3, the Committee shall have the authority, in its sole and
absolute discretion, to (a) adopt, amend, and rescind administrative and
interpretive rules and regulations relating to the Plan; (b) determine the
Eligible Individuals to whom, and the time or times at which, Awards shall be
granted; (c) determine the amount of cash and the number of shares of Stock,
Stock Appreciation Rights, or Restricted Stock Awards, or any combination
thereof, that shall be the subject of each Award; (d) determine the terms and
provisions of each Award Agreement (which need not be identical), including
provisions defining or otherwise relating to (i) the term and the period or
periods and extent of exercisability of the Options, (ii) the extent to which
the transferability of shares of Stock issued or transferred pursuant to any
Award is restricted, (iii) the effect of termination of employment of a Holder
on the Award, and (iv) the effect of approved leaves of absence (consistent
with any applicable regulations of the Internal Revenue Service); (e)
accelerate, pursuant to Section 8, the time of exercisability of any Option
that has been granted; (f) construe the respective Award Agreements and the
Plan; (g) make determinations of the Fair Market Value of the Stock pursuant to
the Plan; (h) delegate its duties under the Plan to such agents as it may
appoint from time to time, provided that the Committee may not delegate its
duties with respect to making Awards to, or otherwise with respect to Awards
granted to, Eligible Individuals who are subject to Section 16(b) of the
Exchange Act or Section 162(m); (i) subject to ratification by the Board of
Directors, terminate, modify, or amend the Plan; and (j) make all other
determinations, perform all other acts, and exercise all other powers and
authority necessary or advisable for administering the Plan, including the
delegation of those ministerial acts and responsibilities as the Committee
deems appropriate. Subject to Rule 16b-3 and Section 162(m), the Committee may
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan, in any Award, or in any Award Agreement in the manner and to the extent
it deems necessary or desirable to carry the Plan into effect, and the
Committee shall be the sole and final judge of that necessity or desirability.
The determinations of the Committee on the matters referred to in this
Subsection 3.4 shall be final and conclusive.
SECTION 4. ELIGIBILITY AND PARTICIPATION
4.1 Eligible Individuals. Awards may be granted pursuant to the
Plan only to persons who are Eligible Individuals at the time of the grant
thereof.
4.2 Grant of Awards. Subject to the express provisions of the
Plan, the Committee shall determine which Eligible Individuals shall be granted
Awards from time to time. In making grants, the Committee shall take into
consideration the contribution that the potential Holder has made or may make
to the success of the Corporation
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or its Subsidiaries and such other considerations as the Board of Directors may
from time to time specify. The Committee shall also determine the number of
shares subject to each of the Awards and shall authorize and cause the
Corporation to grant Awards in accordance with those determinations.
4.3 Date of Grant. Subject to the penultimate sentence of this
Subsection 4.3 and clause (ii) of the first sentence of Subsection 10.9, the
date on which the Committee completes all action resolving to offer an Award to
an individual, including the specification of the number of shares of Stock to
be subject to the Award, shall be the date on which the Award covered by an
Award Agreement is granted (the "Date of Grant"), even though certain terms of
the Award Agreement may not be determined at that time and even though the
Award Agreement may not be executed until a later time. With respect to Awards
granted to Non-Employee Directors under Subsection 8.2(b) or 8.2(c), the Date
of Grant shall be the date identified in the applicable subsection. In no
event shall a Holder gain any rights in addition to those specified by the
Committee in its grant, regardless of the time that may pass between the grant
of the Award and the actual execution of the Award Agreement by the Corporation
and the Holder.
4.4 Award Agreements. Each Award granted under the Plan shall be
evidenced by an Award Agreement that is executed by the Corporation
incorporating those terms that the Committee shall deem necessary or desirable.
More than one Award may be granted under the Plan to the same Eligible
Individual and be outstanding concurrently. In the event an Eligible
Individual is granted both one or more Incentive Options and one or more
Nonstatutory Options, those grants shall be evidenced by separate Award
Agreements, one for each of the Incentive Option grants and one for each of the
Nonstatutory Option grants.
4.5 Limitation for Incentive Options. Notwithstanding any
provision contained herein to the contrary, (a) a person shall not be eligible
to receive an Incentive Option unless he is an Employee of the Corporation or a
corporate Subsidiary (but not a partnership Subsidiary) and (b) a Person shall
not be eligible to receive an Incentive Option if, immediately before the time
the Option is granted, that person owns (within the meaning of Sections 422 and
424(d) of the Code) stock possessing more than ten percent of the total
combined voting power or value of all classes of outstanding stock of the
Corporation or a Subsidiary; provided, however, Subsection 4.5(b) shall not
apply if, at the time the Incentive Option is granted, the Exercise Price of
the Incentive Option is at least one hundred ten percent of Fair Market Value
and the Incentive Option is not, by its terms, exercisable after the expiration
of five years from the Date of Grant.
4.6 No Right to Award. The adoption of the Plan shall not be
deemed to give any Person a right to be granted an Award.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
Except as otherwise provided in Section 8 with respect to Awards to
Non-Employee Directors, all Options granted under the Plan shall comply with,
and the related Award Agreements shall be deemed to include and be subject to,
the terms and conditions set forth in this Section 5 (to the extent each term
and condition applies to the form of Option) and also to the terms and
conditions set forth in Sections 9 and 10; provided, however, that the
Committee may authorize an Award Agreement that expressly contains terms and
provisions that differ from the terms and provisions set forth in Subsections
9.2, 9.3, and 9.4 and any of the terms and provisions of Section 10 (other than
Subsections 10.5, 10.8 and 10.9).
5.1 Number of Shares. Each Award Agreement shall state the total
number of shares of Stock to which it relates.
5.2 Vesting. Each Award Agreement shall state the time or periods
in which, or the conditions upon satisfaction of which, the right to exercise
the Option or a portion thereof shall vest and the number of shares of Stock
for which the right to exercise the Option shall vest at each such time,
period, or fulfillment of condition.
5.3 Expiration of Options. Options may be exercised during the
term determined by the Committee and set forth in the Award Agreement; provided
that no Incentive Option shall by its terms be exercisable after the expiration
of a period of ten years commencing on the Date of Grant of the Incentive
Option.
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5.4 Exercise Price. Each Award Agreement shall state the exercise
price per share of Stock (the "Exercise Price"); provided, however, that the
exercise price per share of Stock subject to an Incentive Option shall not be
less than the greater of (a) the par value per share of the Stock or (b) 100%
of the Fair Market Value per share of the Stock on the Date of Grant of the
Option, and the exercise price per share of Stock subject to a Nonstatutory
Option shall not be less than the par value per share of the Stock (but may be
less than the Fair Market Value of a share of the Stock on the Date of Grant).
5.5 Method of Exercise. The Option shall be exercisable only by
written notice of exercise (the "Exercise Notice") delivered to the Corporation
during the term of the Option, which notice shall (a) state the number of
shares of Stock with respect to which the Option is being exercised, (b) be
signed by the Holder of the Option or, if the Holder is dead or becomes
affected by a Disability, by the person authorized to exercise the Option
pursuant to Subsection 10.3, (c) be accompanied by the Exercise Price for all
shares of Stock for which the Option is being exercised, and (d) include such
other information, instruments, and documents as may be required to satisfy any
other condition to exercise contained in the Award Agreement. The Option shall
not be deemed to have been exercised unless all of the requirements of the
preceding provisions of this Subsection 5.5 have been satisfied.
5.6 Incentive Option Exercises. Except as otherwise provided in
Subsection 10.3, during a Holder's lifetime, only the Holder may exercise an
Incentive Option.
5.7 Medium and Time of Payment. The Exercise Price of an Option
shall be payable in full upon the exercise of the Option (a) in cash or by an
equivalent means acceptable to the Committee, (b) on the Committee's prior
consent, with shares of Stock owned by the Holder (including shares received
upon exercise of the Option or shares of Restricted Stock already held by the
Holder) and having a Fair Market Value at least equal to the aggregate Exercise
Price payable in connection with such exercise, or (c) by any combination of
clauses (a) and (b). If the Committee elects to accept shares of Stock in
payment of all or any portion of the Exercise Price, then (for purposes of
payment of the Exercise Price) those shares of Stock shall be deemed to have a
cash value equal to their aggregate Fair Market Value determined as of the date
the certificate for such shares is delivered to the Corporation. If the
Committee elects to accept shares of Restricted Stock in payment of all or any
portion of the Exercise Price, then an equal number of shares issued pursuant
to the exercise shall be restricted on the same terms and for the restriction
period remaining on the shares used for payment.
5.8 Payment with Sale Proceeds. In addition, at the request of a
Holder and to the extent permitted by applicable law, the Committee may (but
shall not be required to) approve arrangements with a brokerage firm under
which that brokerage firm, on behalf of the Holder, shall pay to the
Corporation the Exercise Price of the Option being exercised and the
Corporation shall promptly deliver the exercised shares of Stock to the
brokerage firm. To accomplish this transaction, the Holder must deliver to the
Corporation an Exercise Notice containing irrevocable instructions from the
Holder to the Corporation to deliver the Stock certificates representing the
shares of Stock directly to the broker. Upon receiving a copy of the Exercise
Notice acknowledged by the Corporation, the broker shall sell that number of
shares of Stock or loan the Holder an amount sufficient to pay the Exercise
Price and any withholding obligations due. The broker then shall deliver to
the Corporation that portion of the sale or loan proceeds necessary to cover
the Exercise Price and any withholding obligations due. The Committee shall
not approve any transaction of this nature if the Committee believes that the
transaction would give rise to the Holder's liability for short-swing profits
under Section 16(b) of the Exchange Act.
5.9 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's Subsidiary if
the Holder is an employee of a Subsidiary of the Corporation), at the time of
the exercise of an Option or thereafter, the amount that the Committee deems
necessary to satisfy the Corporation's or its Subsidiary's current or future
obligation to withhold federal, state, or local income or other taxes that the
Holder incurs by exercising an Option. In connection with the exercise of an
Option requiring tax withholding, a Holder may (a) direct the Corporation to
withhold from the shares of Stock to be issued to the Holder the number of
shares necessary to satisfy the Corporation's obligation to withhold taxes,
that determination to be based on the shares' Fair Market Value as of the date
of exercise; (b) deliver to the Corporation sufficient shares of Stock (based
upon the Fair Market Value as of the date of such delivery) to satisfy the
Corporation's tax withholding obligation, which tax withholding obligation is
based on the shares' Fair Market Value as of the later
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of the date of exercise or the date as of which the shares of Stock issued in
connection with such exercise become includable in the income of the Holder; or
(c) deliver sufficient cash to the Corporation to satisfy its tax withholding
obligations. Holders who elect to use such a Stock withholding feature must
make the election at the time and in the manner that the Committee prescribes.
The Committee may, at its sole option, deny any Holder's request to satisfy
withholding obligations through Stock instead of cash. In the event the
Committee subsequently determines that the aggregate Fair Market Value (as
determined above) of any shares of Stock withheld or delivered as payment of
any tax withholding obligation is insufficient to discharge that tax
withholding obligation, then the Holder shall pay to the Corporation,
immediately upon the Committee's request, the amount of that deficiency in the
form of payment requested by the Committee.
5.10 Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option. Except as
otherwise provided in Subsection 9.3, with respect to any Incentive Option
granted under the Plan, the aggregate Fair Market Value of shares of Stock
subject to an Incentive Option and the aggregate Fair Market Value of shares of
Stock or stock of any Subsidiary (or a predecessor of the Corporation or a
Subsidiary) subject to any other incentive stock option (within the meaning of
Section 422 of the Code) of the Corporation or its Subsidiaries (or a
predecessor corporation of any such corporation) that first become purchasable
by a Holder in any calendar year may not (with respect to that Holder) exceed
$100,000, or such other amount as may be prescribed under Section 422 of the
Code or applicable regulations or rulings from time to time. As used in the
previous sentence, Fair Market Value shall be determined as of the Date of
Grant of the Incentive Option. For purposes of this Subsection 5.10,
"predecessor corporation" means (a) a corporation that was a party to a
transaction described in Section 424(a) of the Code (or which would be so
described if a substitution or assumption under that Section had been effected)
with the Corporation, (b) a corporation which, at the time the new incentive
stock option (within the meaning of Section 422 of the Code) is granted, is a
Subsidiary of the Corporation or a predecessor corporation of any such
corporations, or (c) a predecessor corporation of any such corporations.
Failure to comply with this provision shall not impair the enforceability or
exercisability of any Option, but shall cause the excess amount of shares to be
reclassified in accordance with the Code.
5.11 No Fractional Shares. The Corporation shall not in any case
be required to sell, issue, or deliver a fractional share with respect to any
Option. In lieu of the issuance of any fractional share of Stock, the
Corporation shall pay to the Holder an amount in cash equal to the same
fraction (as the fractional Stock) of the Fair Market Value of a share of Stock
determined as of the date of the applicable Exercise Notice.
5.12 Modification, Extension, and Renewal of Options. Subject to
the terms and conditions of and within the limitations of the Plan, Rule 16b-3,
and any consent required by the last sentence of this Subsection 5.12, the
Committee may (a) modify, extend, or renew outstanding Options granted under
the Plan, (b) accept the surrender of Options outstanding hereunder (to the
extent not previously exercised) and authorize the granting of new Options in
substitution for outstanding Options (to the extent not previously exercised),
and (c) amend the terms of an Incentive Option at any time to include
provisions that have the effect of changing the Incentive Option to a
Nonstatutory Option. Nevertheless, without the consent of the Holder, the
Committee may not modify any outstanding Options so as to specify a higher or
lower Exercise Price or accept the surrender of outstanding Incentive Options
and authorize the granting of new Options in substitution therefor specifying a
higher or lower Exercise Price. In addition, no modification of an Option
granted hereunder shall, without the consent of the Holder, alter or impair any
rights or obligations under any Option theretofore granted to such Holder under
the Plan except, with respect to Incentive Options, as may be necessary to
satisfy the requirements of Section 422 of the Code or as permitted in clause
(c) of this Subsection 5.12.
5.13 Other Agreement Provisions. The Award Agreements authorized
under the Plan shall contain such provisions in addition to those required by
the Plan (including, without limitation, restrictions or the removal of
restrictions upon the exercise of the Option and the retention or transfer of
shares thereby acquired) as the Committee may deem advisable. Each Award
Agreement shall identify the Option evidenced thereby as an Incentive Option or
Nonstatutory Option, as the case may be, and no Award Agreement shall cover
both an Incentive Option and a Nonstatutory Option. Each Award Agreement
relating to an Incentive Option granted hereunder shall contain such
limitations and restrictions upon the exercise of the Incentive Option to which
it relates as shall be necessary
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for the Incentive Option to which such Award Agreement relates to constitute an
incentive stock option, as defined in Section 422 of the Code.
5.14 Option Status. To the extent an Incentive Option (or any
portion thereof) fails to constitute an incentive stock option under Section
422 of the Code, such portion of the Incentive Option which fails to so qualify
shall be deemed to be a Nonstatutory Option under this Plan.
SECTION 6. STOCK APPRECIATION RIGHTS
All Stock Appreciation Rights granted under the Plan shall comply
with, and the related Award Agreements shall be deemed to include and be
subject to, the terms and conditions set forth in this Section 6 (to the extent
each term and condition applies to the form of Stock Appreciation Right) and
also the terms and conditions set forth in Sections 9 and 10; provided,
however, that the Committee may authorize an Award Agreement related to a Stock
Appreciation Right that expressly contains terms and provisions that differ
from the terms and provisions set forth in Subsections 9.2, 9.3, and 9.4 and
any of the terms and provisions of Section 10 (other than Subsection 10.9).
6.1 Form of Right. A Stock Appreciation Right may be granted to
an Eligible Individual (a) in connection with an Option, either at the time of
grant or at any time during the term of the Option, or (b) independent of an
Option.
6.2 Rights Related to Options. A Stock Appreciation Right granted
pursuant to an Option shall entitle a Holder, upon exercise, to surrender that
Option or any portion thereof, to the extent unexercised, and to receive
payment of an amount computed pursuant to Subsection 6.2(b). That Option shall
then cease to be exercisable to the extent surrendered. Stock Appreciation
Rights granted in connection with an Option shall be subject to the terms of
the Award Agreement governing the Option, which shall comply with the following
provisions in addition to those applicable to Options:
(a) Exercise and Transfer. Subject to Subsection 10.8, a
Stock Appreciation Right granted in connection with an Option shall be
exercisable only at such time or times and only to the extent that the
related Option is exercisable and shall not be transferable except to
the extent that the related Option is transferable.
(b) Value of Right. Upon the exercise of a Stock
Appreciation Right related to an Option, a Holder shall be entitled to
receive payment from the Corporation of an amount determined by
Multiplying:
(i) The difference obtained by subtracting the
Exercise Price of a share of Stock specified in the related
Option from the Fair Market Value of a share of Stock on the
date of exercise of the Stock Appreciation Right, by
(ii) The number of shares as to which that Stock
Appreciation Right has been exercised.
6.3 Right Without Option. A Stock Appreciation Right granted
independent of an Option shall be exercisable as determined by the Committee
and set forth in the Award Agreement governing the Stock Appreciation Right,
which Award Agreement shall comply with the following provisions:
(a) Number of Shares. Each Award Agreement shall state
the total number of shares of Stock to which the Stock Appreciation
Right relates.
(b) Vesting. Each Award Agreement shall state the time
or periods in which the right to exercise the Stock Appreciation Right
or a portion thereof shall vest and the number of shares of Stock for
which the right to exercise the Stock Appreciation Right shall vest at
each such time or period.
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(c) Expiration of Rights. Each Award Agreement shall
state the date at which the Stock Appreciation Rights shall expire if
not previously exercised.
(d) Value of Right. Each Stock Appreciation Right shall
entitle a Holder, upon exercise thereof, to receive payment of an
amount determined by multiplying:
(i) The difference obtained by subtracting the
Fair Market Value of a share of Stock on the Date of Grant of
the Stock Appreciation Right from the Fair Market Value of a
share of Stock on the date of exercise of that Stock
Appreciation Right, by
(ii) The number of shares as to which the Stock
Appreciation Right has been exercised.
6.4 Limitations on Rights. Notwithstanding Subsections 6.2(b) and
6.3(d), the Committee may limit the amount payable upon exercise of a Stock
Appreciation Right. Any such limitation must be determined as of the Date of
Grant and be noted on the Award Agreement evidencing the Holder's Stock
Appreciation Right.
6.5 Payment of Rights. Payment of the amount determined under
Subsection 6.2(b) or 6.3(d) and Subsection 6.4 may be made, in the sole
discretion of the Committee, unless specifically provided otherwise in the
Award Agreement, solely in whole shares of Stock valued at Fair Market Value on
the date of exercise of the Stock Appreciation Right, solely in cash, or in a
combination of cash and whole shares of Stock. If the Committee decides to
make full payment in shares of Stock and the amount payable results in a
fractional share, payment for the fractional share shall be made in cash.
6.6 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's Subsidiary if
the Holder is an employee of a Subsidiary of the Corporation), at the time of
the exercise of a Stock Appreciation Right or thereafter, the amount that the
Committee deems necessary to satisfy the Corporation's or its Subsidiary's
current or future obligation to withhold federal, state, or local income or
other taxes that the Holder incurs by exercising a Stock Appreciation Right.
In connection with the exercise of a Stock Appreciation Right requiring tax
withholding, a Holder may (a) direct the Corporation to withhold from the
shares of Stock to be issued to the Holder the number of shares necessary to
satisfy the Corporation's obligation to withhold taxes, that determination to
be based on the shares' Fair Market Value as of the date of exercise; (b)
deliver to the Corporation sufficient shares of Stock (based upon the Fair
Market Value as of the date of such delivery) to satisfy the Corporation's tax
withholding obligation, which tax withholding obligation is based on the
shares' Fair Market Value as of the later of the date of exercise or the date
as of which the shares of Stock issued in connection with such exercise become
includable in the income of the Holder; or (c) deliver sufficient cash to the
Corporation to satisfy its tax withholding obligation. Holders who elect to
have Stock withheld pursuant to (a) or (b) above must make the election at the
time and in the manner that the Committee prescribes. The Committee may, in
its sole discretion, deny any Holder's request to satisfy withholding
obligation through Stock instead of cash. In the event the Committee
subsequently determines that the aggregate Fair Market Value (as determined
above) of any shares of Stock withheld or delivered as payment of any tax
withholding obligation is insufficient to discharge that tax withholding
obligation, then the Holder shall pay to the Corporation, immediately upon the
Committee's request, the amount of that deficiency in the form of payment
requested by the Committee.
6.7 Other Agreement Provisions. The Award Agreements authorized
relating to Stock Appreciation Rights shall contain such provisions in addition
to those required by the Plan (including, without limitation, restrictions or
the removal of restrictions upon the exercise of the Stock Appreciation Right
and the retention or transfer of shares thereby acquired) as the Committee may
deem advisable.
SECTION 7. RESTRICTED STOCK AWARDS
All Restricted Stock Awards granted under the Plan shall comply with
and be subject to, and the related Award Agreements shall be deemed to include,
the terms and conditions set forth in this Section 7 and also to the terms and
conditions set forth in Sections 9 and 10; provided, however, that the
Committee may authorize an Award
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Agreement related to a Restricted Stock Award that expressly contains terms and
provisions that differ from the terms and provisions set forth in Subsections
9.2, 9.3, and 9.4 and the terms and provisions set forth in Section 10 (other
than Subsections 10.8 and 10.9).
7.1 Restrictions. All shares of Restricted Stock Awards granted
or sold pursuant to the Plan shall be subject to the following conditions:
(a) Transferability. The shares may not be sold,
transferred, or otherwise alienated or hypothecated until the
restrictions are removed or expire.
(b) Conditions to Removal of Restrictions. Conditions to
removal or expiration of the restrictions may include, but are not
required to be limited to, continuing employment or service as a
director, officer, consultant, or advisor or achievement of
performance objectives described in the Award Agreement.
(c) Legend. Each certificate representing Restricted
Stock Awards granted pursuant to the Plan shall bear a legend making
appropriate reference to the restrictions imposed.
(d) Possession. The Committee may require the
Corporation to retain physical custody of the certificates
representing Restricted Stock Awards during the restriction period and
may require a Holder of the Award to execute stock powers in blank for
those certificates and deliver those stock powers to the Corporation,
or the Committee may require the Holder to enter into an escrow
agreement providing that the certificates representing Restricted
Stock Awards granted or sold pursuant to the Plan shall remain in the
physical custody of an escrow holder until all restrictions are
removed or expire.
(e) Other Conditions. The Committee may impose other
conditions on any shares granted or sold as Restricted Stock Awards
pursuant to the Plan as it may deem advisable, including without
limitation (i) restrictions under the Securities Act or Exchange Act,
(ii) the requirements of any securities exchange upon which the shares
or shares of the same class are then listed, and (iii) any state
securities law applicable to the shares.
7.2 Expiration of Restrictions. The restrictions imposed in
Subsection 7.1 on Restricted Stock Awards shall lapse as determined by the
Committee and set forth in the applicable Award Agreement, and the Corporation
shall promptly deliver to the Holder of the Restricted Stock Award a
certificate representing the number of shares for which restrictions have
lapsed, free of any restrictive legend relating to the lapsed restrictions.
Each Restricted Stock Award may have a different restriction period as
determined by the Committee in its sole discretion. The Committee may, in its
discretion, prospectively reduce the restriction period applicable to a
particular Restricted Stock Award.
7.3 Rights as Stockholder. Subject to the provisions of
Subsections 7.1 and 10.9, the Committee may, in its discretion, determine what
rights, if any, a Holder shall have with respect to the Restricted Stock Awards
granted or sold, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto.
7.4 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's Subsidiary if
the Holder is an employee of a Subsidiary of the Corporation) the amount that
the Committee deems necessary to satisfy the Corporation's or its Subsidiary's
current or future obligation to withhold federal, state, or local income or
other taxes that the Holder incurs by reason of the Restricted Stock Award. A
Holder may (a) direct the Corporation to withhold from the shares of Stock to
be issued to the Holder the number of shares necessary to satisfy the
Corporation's obligation to withhold taxes, that determination to be based on
the shares' Fair Market Value as of the date on which tax withholding is to be
made; (b) deliver to the Corporation sufficient shares of Stock (based upon the
Fair Market Value as of the date of such delivery) to satisfy the Corporation's
tax withholding obligation, which tax withholding obligation is based on the
shares' Fair Market Value as of the later of the date of issuance or the date
as of which the shares of Stock issued become
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<PAGE> 15
includable in the income of the Holder; or (c) deliver sufficient cash to the
Corporation to satisfy its tax withholding obligations. Holders who elect to
have Stock withheld pursuant to (a) or (b) above must make the election at the
time and in the manner that the Committee prescribes. The Committee may, in
its sole discretion, deny any Holder's request to satisfy withholding
obligations through Stock instead of cash. In the event the Committee
subsequently determines that the aggregate Fair Market Value (as determined
above) of any shares of Stock withheld or delivered as payment of any tax
withholding obligation is insufficient to discharge that tax withholding
obligation, then the Holder shall pay to the Corporation, immediately upon the
Committee's request, the amount of that deficiency.
7.5 Other Agreement Provisions. The Award Agreements relating to
Restricted Stock Awards shall contain such provisions in addition to those
required by the Plan as the Committee may deem advisable.
SECTION 8. AWARDS TO NON-EMPLOYEE DIRECTORS
Except as otherwise provided in this Section 8 or the applicable Award
Agreement, Awards granted pursuant to this Section 8 shall be subject to the
conditions of Section 5 to the extent permitted under Rule 16b-3.
8.1 Ineligibility for Other Awards. Non-Employee Directors shall
not be eligible to receive any Awards under the Plan other than the Awards
specified in this Section 8.
8.2 Awards of Nonstatutory Options.
(a) Eligibility. Each Non-Employee Director of the
Corporation shall be eligible for Awards as specified in Subsections
8.2(b) or 8.2(c) below.
(b) Awards to Non-Employee Directors at the Closing of
Initial Public Offering. Each Non-Employee Director as of the closing
date of the Initial Public Offering (including persons who are elected
as a Non-Employee Director in conjunction with the closing of the
Initial Public Offering) shall be awarded a Nonstatutory Option to
purchase 5,000 shares of Stock at an Exercise Price per share equal to
the public offering price set forth on the cover page of the
Corporation's final prospectus pursuant to which the Initial Public
Offering is effected.
(c) Awards to Non-Employee Directors Elected or Appointed
After the Closing of the Initial Public Offering. Each Non-Employee
Director who is elected or appointed to the Board of Directors after
the closing date of the Initial Public Offering, and has not served as
a member of the Board of Directors before such date, shall be awarded
a Nonstatutory Option to purchase 5,000 shares of Stock upon the date
of such election or appointment to the Board of Directors at an
Exercise Price per share equal to the average Fair Market Value of a
share of Stock for the five trading days immediately preceding the
Date of Grant.
8.3 Available Stock. The automatic Awards specified in Subsection
8.2 shall be made in the amounts specified in Subsection 8.2 only if the number
of shares of Stock available to be issued, transferred or exercised pursuant to
Awards under this Plan (as calculated in Section 2) is sufficient to make all
automatic grants required to be made by Subsection 8.2 on the Date of Grant of
those automatic Awards. In the event that the number of shares of Stock that
are available to be issued, transferred, or exercised pursuant to Awards under
the Plan on the Date of Grant of the automatic Awards described in Subsection
8.2 is insufficient to permit the grant of the entire number of shares
specified in Subsection 8.2, then the number of available shares shall be
apportioned equally among the automatic Awards made on that date, and the
number of shares apportioned to each automatic Award shall be the amount of
shares automatically subject to that automatic Award.
8.4 Exercisability. Each Nonstatutory Option granted pursuant to
this Section 8 shall become exercisable with respect to 1,000 shares of Stock
on each of the first five anniversaries of the Date of Grant. Each
Nonstatutory Option awarded pursuant to this Section 8 shall expire 10 years
after the Date of Grant.
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SECTION 9. ADJUSTMENT PROVISIONS
9.1 Adjustment of Awards and Authorized Stock. The terms of an
Award and the number of shares of Stock authorized pursuant to Subsection 2.1
for issuance under the Plan shall be subject to adjustment from time to time,
in accordance with the following provisions:
(a) If at any time, or from time to time, the Corporation
shall subdivide as a whole (by reclassification, by a Stock split, by
the issuance of a distribution on Stock payable in Stock, or
otherwise) the number of shares of Stock then outstanding into a
greater number of shares of Stock, then (i) the maximum number of
shares of Stock available for the Plan as provided in Subsection 2.1
shall be increased proportionately, and the kind of shares or other
securities available for the Plan shall be appropriately adjusted,
(ii) the number of shares of Stock (or other kind of shares or
securities) that may be acquired under any Award shall be increased
proportionately, and (iii) the price (including Exercise Price) for
each share of Stock (or other kind of shares or securities) subject to
then outstanding Awards shall be reduced proportionately, without
changing the aggregate purchase price or value as to which outstanding
Awards remain exercisable or subject to restrictions.
(b) If at any time, or from time to time, the Corporation
shall consolidate as a whole (by reclassification, reverse Stock
split, or otherwise) the number of shares of Stock then outstanding
into a lesser number of shares of Stock, (i) the maximum number of
shares of Stock available for the Plan as provided in Subsection 2.1
shall be decreased proportionately, and the kind of shares or other
securities available for the Plan shall be appropriately adjusted,
(ii) the number of shares of Stock (or other kind of shares or
securities) that may be acquired under any Award shall be decreased
proportionately, and (iii) the price (including Exercise Price) for
each share of Stock (or other kind of shares or securities) subject to
then outstanding Awards shall be increased proportionately, without
changing the aggregate purchase price or value as to which outstanding
Awards remain exercisable or subject to restrictions.
(c) Whenever the number of shares of Stock subject to
outstanding Awards and the price for each share of Stock subject to
outstanding Awards are required to be adjusted as provided in this
Subsection 9.1, the Committee shall promptly prepare a notice setting
forth, in reasonable detail, the event requiring adjustment, the
amount of the adjustment, the method by which such adjustment was
calculated, and the change in price and the number of shares of Stock,
other securities, cash, or property purchasable subject to each Award
after giving effect to the adjustments. The Committee shall promptly
give each Holder such a notice.
(d) Adjustments under Subsections 9.1(a) and (b) shall be
made by the Committee, and its determination as to what adjustments
shall be made and the extent thereof shall be final, binding, and
conclusive. No fractional interest shall be issued under the Plan on
account of any such adjustments.
9.2 Changes in Control. Upon the occurrence of a Change in
Control, subject to Subsection 1.7(b) (a) each Holder of an Option shall
immediately be granted corresponding Stock Appreciation Rights; (b) all
outstanding Stock Appreciation Rights and Options shall immediately become
fully vested and exercisable in full, including that portion of any Stock
Appreciation Right or Option that pursuant to the terms and provisions of the
applicable Award Agreement had not yet become exercisable (the total number of
shares of Stock as to which a Stock Appreciation Right or Option is exercisable
upon the occurrence of a Change in Control is referred to herein as the "Total
Shares"); and (c) the restriction period of any Restricted Stock Award shall
immediately be accelerated and the restrictions shall expire. If a Change in
Control involves a Restructuring or occurs in connection with a series of
related transactions involving a Restructuring and if such Restructuring is in
the form of a Non-Surviving Event and as a part of such Restructuring shares of
Stock, other securities, cash, or property shall be issuable or deliverable in
exchange for Stock, then a Holder of an Award shall be entitled to purchase or
receive (in lieu of the Total Shares that the Holder would otherwise be
entitled to purchase or receive), as appropriate for the form of Award, the
number of shares of Stock, other securities, cash, or property to which that
number of Total Shares would have been entitled in connection with such
Restructuring (and, for Options, at an aggregate exercise price equal to the
Exercise Price that would have been payable if that number of Total Shares had
been purchased on the
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<PAGE> 17
exercise of the Option immediately before the consummation of the
Restructuring). Nothing in this Subsection 9.2 shall impose on a Holder the
obligation to exercise any Award immediately before or upon the Change of
Control or cause the Holder to forfeit the right to exercise the Award during
the remainder of the original term of the Award because of a Change in Control.
9.3 Restructuring Without Change in Control. In the event a
Restructuring shall occur at any time while there is any outstanding Award
hereunder and that Restructuring does not occur in connection with a Change in
Control or a series of related transactions involving a Change in Control,
then:
(a) no outstanding Option or Stock Appreciation Right
shall immediately become fully vested and exercisable in full merely
because of the occurrence of the Restructuring;
(b) no Holder of an Option shall automatically be granted
corresponding Stock Appreciation Rights;
(c) the restriction period of any Restricted Stock Award
shall not immediately be accelerated and the restrictions expire
merely because of the occurrence of the Restructuring; and
(d) at the option of the Committee, the Committee may
(but shall not be required to) cause the Corporation to take any one
or more of the following actions with respect to outstanding Awards
other than Awards granted pursuant to Section 8 hereof:
(i) accelerate in whole or in part the time of
the vesting and exercisability of any one or more of the
outstanding Stock Appreciation Rights and Options so as to
provide that those Stock Appreciation Rights and Options shall
be exercisable before, upon, or after the consummation of the
Restructuring;
(ii) grant each Holder of an Option corresponding
Stock Appreciation Rights;
(iii) accelerate in whole or in part the expiration
of some or all of the restrictions on any Restricted Stock
Award;
(iv) if the Restructuring is in the form of a
Non-Surviving Event, cause the surviving entity to assume in
whole or in part any one or more of the outstanding Awards
upon such terms and provisions as the Committee deems
desirable; or
(v) redeem in whole or in part any one or more of
the outstanding Awards (whether or not then exercisable) in
consideration of a cash payment, as such payment may be
reduced for tax withholding obligations as contemplated in
Subsections 5.9, 6.6, or 7.4, as applicable, in an amount
equal to:
(A) for Options and Stock Appreciation
Rights granted in connection with Options, the excess
of (1) the Fair Market Value, determined as of the
date immediately preceding the consummation of the
Restructuring, of the aggregate number of shares of
Stock subject to the Award and as to which the Award
is being redeemed over (2) the Exercise Price for
that number of shares of Stock;
(B) for Stock Appreciation Rights not
granted in connection with an Option, the excess of
(1) the Fair Market Value, determined as of the date
immediately preceding the consummation of the
Restructuring, of the aggregate number of shares of
Stock subject to the Award and as to which the Award
is being redeemed over (2) the Fair Market Value of
the number of shares of Stock on the Date of Grant;
and
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(C) for Restricted Stock Awards, the
Fair Market Value, determined as of the date
immediately preceding the consummation of the
Restructuring, of the aggregate number of shares of
Stock subject to the Award and as to which the Award
is being redeemed.
The Corporation shall promptly notify each Holder of any election or action
taken by the Corporation under this Subsection 9.3. In the event of any
election or action taken by the Corporation pursuant to this Subsection 9.3
that requires the amendment or cancellation of any Award Agreement as may be
specified in any notice to the Holder thereof, that the Holder shall promptly
deliver that Award Agreement to the Corporation in order for that amendment or
cancellation to be implemented by the Corporation and the Committee. The
failure of the Holder to deliver any such Award Agreement to the Corporation as
provided in the preceding sentence shall not in any manner affect the validity
or enforceability of any action taken by the Corporation and the Committee
under this Subsection 9.3, including without limitation any redemption of an
Award as of the consummation of a Restructuring. Any cash payment to be made
by the Corporation pursuant to this Subsection 9.3 in connection with the
redemption of any outstanding Awards shall be paid to the Holder thereof
currently with the delivery to the Corporation of the Award Agreement
evidencing that Award; provided, however, that any such redemption shall be
effective upon the consummation of the Restructuring notwithstanding that the
payment of the redemption price may occur subsequent to the consummation. If
all or any portion of an outstanding Award is to be exercised or accelerated
upon or after the consummation of a Restructuring that does not occur in
connection with a Change in Control and is in the form of a Non-Surviving
Event, and as a part of that Restructuring shares of stock, other securities,
cash, or property shall be issuable or deliverable in exchange for Stock, then
the Holder of the Award shall thereafter be entitled to purchase or receive (in
lieu of the number of shares of Stock that the Holder would otherwise be
entitled to purchase or receive) the number of shares of Stock, other
securities, cash, or property to which such number of shares of Stock would
have been entitled in connection with the Restructuring (and, for Options, upon
payment of the aggregate exercise price equal to the Exercise Price that would
have been payable if that number of Total Shares had been purchased on the
exercise of the Option immediately before the consummation of the
Restructuring) and such Award Agreement shall be subject to adjustments that
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Section 9. Notwithstanding the provisions of this Subsection 9.3,
the Committee shall not have the power or authority to take any action pursuant
to this Subsection 9.3 that causes the Plan not to be in compliance with the
requirements of Rule 16b-3 and any such action purported to be taken by the
Committee shall be null and void and without any force or effect.
9.4 Notice of Restructuring. The Corporation shall attempt to
keep all Holders informed with respect to any Restructuring or of any potential
Restructuring to the same extent that the Corporation's stockholders are
informed by the Corporation of any such event or potential event.
SECTION 10. ADDITIONAL PROVISIONS
10.1 Termination of Employment. Except as provided below, if a
Holder is an Eligible Individual because the Holder is an Employee and if that
employment relationship is terminated for any reason other than (a) Normal
Retirement, (b) that Holder's death, or (c) that Holder's Disability
(hereinafter defined), then any and all Awards held by such Holder in such
Holder's capacity as an Employee as of the date of the termination that are not
yet exercisable (or for which restrictions have not lapsed) shall become null
and void as of the date of such termination and the portion, if any, of such
Awards that are exercisable as of the date of termination shall be exercisable
for a period of the lesser of (i) the remainder of the term of the Award or
(ii) the date which is 180 days after the date of termination. If a Holder is
an Eligible Individual because such Holder is an Employee and if that
employment relationship is terminated as a result of (a) Normal Retirement, (b)
that Holder's death, or (c) that Holder's Disability, then any and all Awards
held by such Holder in such Holder's capacity as an Employee as of the date of
termination that are not yet exercisable (or for which restrictions have not
lapsed) shall become exercisable (and the restrictions thereon, if any, shall
lapse) as of the date of termination, and all such Awards held by that Holder
as of the date of termination that are exercisable (either as a result of this
sentence or otherwise) shall be exercisable for a period of the lesser of (i)
the remainder of the term of the Award or (ii) the date which is three years
after the date of termination. Any portion of any such Award not exercised
upon the expiration of the lesser of the periods specified in (i) or (ii) of
the preceding two sentences shall be null and void upon the expiration of
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such period, as applicable. If a Holder is an Eligible Individual because the
Holder is an Employee and if that employment relationship is terminated by the
Corporation for "cause" (hereafter defined), then any and all Awards held by
such Holder in such Holder's capacity as an Employee as of the date of the
termination shall become null and void as of the date of such termination.
"Cause" shall have the meanings given such term in the employment agreement of
the Holder (if any) with the Corporation or a Subsidiary of the Corporation;
provided, however, that if that Holder has no employment agreement, "cause"
shall mean, as determined by the Board of Directors in the sole discretion
exercised in good faith of the Board of Directors, (a) the breach by the Holder
of any nondisclosure, noncompetition, or other agreement to which the Holder
and the Corporation are parties, (b) the commission by the Holder of a felony
or of a misdemeanor involving moral turpitude, (c) the participation by the
Holder in any fraud, (d) dishonesty by the Holder that is detrimental to the
best interest of the Corporation, (e) the willful and continued failure by the
Holder to substantially perform his duties to the Corporation (other than any
such failure resulting from the Holder's incapacity due to physical or mental
illness) after written demand for substantial performance is delivered by the
Corporation specifically identifying the manner in which the Corporation
believes the Holder has not substantially performed his duties, or (f) the
willful engaging by the Holder in misconduct which is materially injurious to
the Corporation, monetarily or otherwise.
10.2 Other Loss of Eligibility. If a Holder is an Eligible
Individual because the Holder is serving in a capacity other than as an
Employee, and:
(a) if that capacity is terminated for any reason other than
the Holder's death or Disability, then that portion, if any, of any
and all Awards held by the Holder that were granted because of that
capacity which are not yet exercisable (or for which restrictions have
not lapsed) as of the date of the termination shall become null and
void as of the date of the termination and, except as provided below,
the portion, if any, of any and all Awards held by the Holder that are
then exercisable as of the date of the termination shall survive the
termination and shall be exercisable for a period of the lesser of (i)
the remainder of the term of the Award or (ii) 180 days following the
date such capacity is terminated;
(b) if that capacity is terminated by reason of the Holder's
death or Disability, then the portion, if any, of any and all Awards
held by the Holder that are not yet exercisable (or for which
restrictions have not lapsed) as of the date of that termination for
death or Disability shall become exercisable (and the restrictions
thereon, if any, shall lapse), and all such Awards held by that Holder
as of the date of termination that are exercisable (either as a result
of this sentence or otherwise) shall be exercisable for the lesser of
(i) the remainder of the term of the Award or (ii) three years after
the date such capacity is terminated;
(c) if that capacity is terminated by reason of the Holder's
resignation or retirement from the position as a member of the Board
of Directors (including as a result of declining to accept a
nomination or otherwise stand for reelection) on or after the date of
the fifth annual meeting of stockholders of the Corporation held after
the date on which such Holder was elected or appointed to the Board of
Directors (other than as a result of Disability), any and all Awards
held by the Holder that are exercisable as of the date of such
resignation or retirement shall be exercisable for the lesser of (i)
the remainder of the term of the Award or (ii) three years after the
date of ceasing to serve as a director; or
(d) if that capacity is terminated by the Corporation for
"cause" (hereafter defined), then any and all Awards held by the
Holder that were granted because of that capacity shall become null
and void as of the date of such termination. "Cause" shall have the
meaning given such term in the contractual agreement of the Holder (if
any) with the Corporation or a Subsidiary of the Corporation;
provided, however, that if that Holder has no contractual agreement,
"cause" shall mean, as determined by the Board of Directors in the
sole discretion exercised in good faith of the Board of Directors, (i)
the breach by the Holder of any other agreement to which the Holder
and the Corporation are parties, (ii) the commission by the Holder of
a felony or of a misdemeanor involving moral turpitude, (iii) the
participation by the Holder in any fraud, (iv) dishonesty by the
Holder that is detrimental to the best interest of the Corporation,
(v) the willful and continued failure by the Holder to substantially
perform his duties to the Corporation (other than any such failure
resulting from the Holder's incapacity due to physical or mental
illness) after written
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demand for substantial performance is delivered by the Corporation
specifically identifying the manner in which the Corporation believes
the Holder has not substantially performed his duties, or (vi) the
willful engaging by the Holder in misconduct which is materially
injurious to the Corporation, monetarily or otherwise.
Any portion of an Award not exercised upon the expiration of the
lesser of the periods specified in clauses (a), (b) or (c) of this Subsection
10.2 shall be null and void upon the expiration of such period, as applicable.
10.3 Death or Disability. Upon the death or Disability of a
Holder, any and all Awards held by the Holder that are not yet exercisable (or
for which restrictions have not lapsed) as of the date of the Holder's death or
Disability may be exercised by, in the case of the Holder's Disability, the
Holder, his guardian or his legal representative or, in the case of the
Holder's death, by the Holder's legal representatives, heirs, legatees, or
distributees, in each case for the periods prescribed in Subsection 10.1 or
Subsection 10.2, as applicable. "Disability" shall have the meaning given it
in the employment agreement of the Holder; provided, however, that if that the
Holder has no employment agreement, "Disability" shall mean, as determined by
the Board of Directors in the sole discretion exercised in good faith of the
Board of Directors, a physical or mental impairment of sufficient severity that
either the Holder is unable to continue performing the duties he performed
before such impairment or the Holder's condition entitles him to disability
benefits under any insurance or employee benefit plan of the Corporation or its
Subsidiaries and that impairment or condition is cited by the Corporation as
the reason for termination of the Holder's employment or participation as a
member of the Board of Directors.
10.4 Leave of Absence. With respect to an Award, the Committee
may, in its sole discretion, determine that any Holder who is on leave of
absence for any reason will be considered to still be in the employ of the
Corporation, provided that rights to that Award during a leave of absence will
be limited to the extent to which those rights were earned, vested, or
exercisable when the leave of absence began.
10.5 Transferability of Awards.
(a) Permitted Transferees. The Committee may, in its
discretion, permit a Holder to transfer all or any portion of an
Option or Stock Appreciation Right, or authorize all or a portion of
any Option or Stock Appreciation Right to be granted to an Eligible
Individual to be on terms which permit transfer by such Holder, to (i)
the spouse, children or grandchildren of the Holder ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefit of such
Immediate Family Members, or (iii) a partnership in which such
Immediate Family Members are the only partners (collectively,
"Permitted Transferees"); provided that (x) there may be no
consideration for any such transfer and (y) subsequent transfers of
Awards transferred as provided above shall be prohibited except
subsequent transfers back to the original Holder of the Award and
transfers to other Permitted Transferees of the original Holder.
Award Agreements evidencing Options or Stock Appreciation Rights with
respect to which such transferability is authorized at the time of
grant must be approved by the Committee, and must expressly provide
for transferability in a manner consistent with this subsection
10.5(a).
(b) Qualified Domestic Relations Orders. Options and
Stock Appreciation rights may be transferred pursuant to qualified
domestic relations orders entered or approved by a court of competent
jurisdiction upon delivery to the Company of written notice of such
transfer and a certified copy of such order.
(c) Other Transfers. Except as expressly permitted by
subsections 10.5(a) and 10.5(b), Awards requiring exercise shall not
be transferable other than by will or the laws of descent and
distribution.
(d) Effect of Transfer. Following the transfer of any
Award as contemplated by Subsections 10.5(a), 10.5(b) and 10.5(c), (i)
such Award shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, provided
that the term "Holder" shall be deemed to refer to the Permitted
Transferee, the recipient under a qualified domestic relations order,
or
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the estate or heirs of a deceased Holder, as applicable, to the extent
appropriate to enable the Holder to exercise the transferred Award in
accordance with the terms of this Plan and applicable law and (ii) the
provisions of Subsections 10.1, 10.2 and 10.3 hereof shall continue to
be applied with respect to the original Holder and, following the
occurrence of any such events described therein the Awards shall be
exercisable by the Permitted Transferee, the recipient under a
qualified domestic relations order, or the estate or heirs of a
deceased Holder, as applicable, only to the extent and for the periods
specified in Subsections 10.1, 10.2 and 10.3.
(e) Procedures and Restrictions. Any Holder desiring to
transfer an Award as permitted under Subsections 10.5(a) or 10.5(b)
shall make application therefor in the manner and time specified by
the Committee and shall comply with such other requirements as the
Committee may require to assure compliance with all applicable
securities laws. The Committee shall not give permission for such a
transfer if (i) it would give rise to short-swing liability under
Section 16(b) of the Exchange Act, (ii) it may not be made in
compliance with all applicable federal, state and foreign securities
laws or (iii) with respect to any Award granted prior to October 21,
1996 (the effective date of amendments to this Plan to convert this
Plan to be in accordance with Rule 16b-3 as amended effective August
15, 1996), such transfer would occur within six months after the date
of grant of such Award.
(f) Registration. To the extent the issuance to any
Permitted Transferee of any shares of Stock issuable pursuant to
Awards transferred as permitted in this Subsection 10.5 is not
registered pursuant to the effective registration statement of the
Corporation generally covering the shares to be issued pursuant to
this Plan to initial Holders of Awards, the Corporation shall not have
any obligation to register the issuance of any such shares of Stock to
any such transferee.
(g) Option Status. To the extent a permitted transfer of
an Incentive Option under this Section 10.5 would cause an Incentive
Option (or any portion thereof) to fail to constitute an incentive
stock option under Section 422 of the Code, such portion of the
Incentive Option shall be deemed to be a Nonstatutory Option under
this Plan.
10.6 Forfeiture and Restrictions on Transfer. Each Award Agreement
may contain or otherwise provide for conditions giving rise to the forfeiture
of the Stock acquired pursuant to an Award or otherwise and may also provide
for those restrictions on the transferability of shares of the Stock acquired
pursuant to an Award or otherwise that the Committee in its sole and absolute
discretion may deem proper or advisable. The conditions giving rise to
forfeiture may include, but need not be limited to, the requirement that the
Holder render substantial services to the Corporation or its Subsidiaries for a
specified period of time. The restrictions on transferability may include, but
need not be limited to, options and rights of first refusal in favor of the
Corporation and stockholders of the Corporation other than the Holder of such
shares of Stock who is a party to the particular Award Agreement or a
subsequent holder of the shares of Stock who is bound by that Award Agreement.
10.7 Delivery of Certificates of Stock. Subject to Subsection
10.8, the Corporation shall promptly issue and deliver a certificate
representing the number of shares of Stock as to which (a) an Option has been
exercised after the Corporation receives an Exercise Notice and upon receipt by
the Corporation of the Exercise Price and any tax withholding as may be
requested, (b) a Stock Appreciation Right has been exercised (to the extent the
Committee determines to pay such Stock Appreciation Right in shares of Stock
pursuant to Subsection 6.5) and upon receipt by the Corporation of any tax
withholding as may be requested, and (c) restrictions have lapsed with respect
to a Restricted Stock Award and upon receipt by the Corporation of any tax
withholding as may be requested. The value of the shares of Stock or cash
transferable because of an Award under the Plan shall not bear any interest
owing to the passage of time, except as may be otherwise provided in an Award
Agreement. If a Holder is entitled to receive certificates representing Stock
received for more than one form of Award under the Plan, separate Stock
certificates shall be issued with respect to Incentive Options and Nonstatutory
Options.
10.8 Conditions to Delivery of Stock. Nothing herein or in any
Award granted hereunder or any Award Agreement shall require the Corporation to
issue any shares with respect to any Award if that issuance would, in the
opinion of counsel for the Corporation, constitute a violation of the
Securities Act or any similar or superseding
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statute or statutes, any other applicable statute or regulation, or the rules
of any applicable securities exchange or securities association, as then in
effect. At the time of any exercise of an Option or Stock Appreciation Right,
or at the time of any grant of a Restricted Stock Award, the Corporation may,
as a condition precedent to the exercise of such Option or Stock Appreciation
Right or vesting of any Restricted Stock Award, require from the Holder of the
Award (or in the event of his death, his legal representatives, heirs,
legatees, or distributees) such written representations, if any, concerning the
Holder's intentions with regard to the retention or disposition of the shares
of Stock being acquired pursuant to the Award and such written covenants and
agreements, if any, as to the manner of disposal of such shares as, in the
opinion of counsel to the Corporation, may be necessary to ensure that any
disposition by that Holder (or in the event of the Holder's death, his legal
representatives, heirs, legatees, or distributees) will not involve a violation
of the Securities Act or any similar or superseding statute or statutes, any
other applicable state or federal statute or regulation, or any rule of any
applicable securities exchange or securities association, as then in effect.
10.9 Certain Directors and Officers. With respect to Holders who
are directors or officers of the Corporation or any of its Subsidiaries and who
are subject to Section 16(b) of the Exchange Act, Awards granted prior to the
date the stockholders of the Corporation shall have approved the Plan shall be
subject to such stockholder approval, may not be transferred or exercised, as
applicable, until such stockholder approval is obtained, and shall become null
and void on the first anniversary of the Effective Date if such stockholder
approval is not obtained on or before the Effective Date. In addition, no such
officer or director shall have shares of Stock withheld to pay tax withholding
obligations unless permitted under Rule 16b-3 and agreed to by the Committee.
Any election by any such officer or director to have tax withholding
obligations satisfied by the withholding of shares of Stock shall be
irrevocable, shall be communicated in writing to the Committee and shall be
subject to prior approval by Board of Directors, the Committee or the
shareholders of the Corporation as provided by Rule 16b-3. Any election by
such an officer or director to receive cash in full or partial settlement of a
Stock Appreciation Right, as well as any exercise by such individual of a Stock
Appreciation Right for such cash, in either case to the extent permitted under
the applicable Award Agreement or otherwise permitted by the Committee, shall
be subject to prior approval by the Board of Directors, the Committee or the
shareholders of the Corporation as provided by Rule 16b-3.
10.10 Securities Act Legend. Certificates for shares of Stock, when
issued, may have the following legend, or statements of other applicable
restrictions, endorsed thereon and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD,
PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF
PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION
OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION
WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Stock issued pursuant to an
effective registration statement under the Securities Act.
10.11 Legend for Restrictions on Transfer. Each certificate
representing shares issued to a Holder pursuant to an Award granted under the
Plan shall, if such shares are subject to any transfer restriction, including a
right of first refusal, provided for under the Plan or an Award Agreement, bear
a legend that complies with applicable law with respect to the restrictions on
transferability contained in this Subsection 10.11, such as:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY IMPOSED BY THAT CERTAIN INSTRUMENT
ENTITLED "CHASE INDUSTRIES INC. 1994 LONG-TERM INCENTIVE PLAN"
AS ADOPTED BY CHASE INDUSTRIES INC. (THE "CORPORATION"), AND
DATED NOVEMBER 10, 1994, AND AN AGREEMENT THEREUNDER BETWEEN THE
CORPORATION AND THE INITIAL
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<PAGE> 23
HOLDER THEREOF DATED ___________________, 199___, AND MAY NOT BE
TRANSFERRED, SOLD, OR OTHERWISE DISPOSED OF EXCEPT AS THEREIN
PROVIDED. THE CORPORATION WILL FURNISH A COPY OF SUCH INSTRUMENT AND
AGREEMENT TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON
REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR
REGISTERED OFFICE.
10.12 Rights as a Stockholder. A Holder shall have no right as a
stockholder with respect to any shares covered by his Award until a certificate
representing those shares is issued in his name. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash or other property) or
distributions or other rights for which the record date is before the date that
certificate is issued, except as contemplated by Section 9 hereof.
Nevertheless, dividends, dividend equivalent rights and voting rights may be
extended to and made part of any Award (other than Options or Stock
Appreciation Rights) denominated in Stock or units of Stock, subject to such
terms, conditions and restrictions as the Committee may establish. The
Committee may also establish rules and procedures for the crediting of interest
on deferred cash payments and dividend equivalents for deferred payment
denominated in Stock or units of Stock.
10.13 Furnish Information. Each Holder shall furnish to the
Corporation all information requested by the Corporation to enable it to comply
with any reporting or other requirement imposed upon the Corporation by or
under any applicable statute or regulation.
10.14 Obligation to Exercise. The granting of an Award hereunder
shall impose no obligation upon a Holder to exercise the same or any part
thereof.
10.15 Adjustments to Awards. Subject to the general limitations set
forth in Sections 5, 6, and 9, the Committee may make any adjustment in the
exercise price of, the number of shares subject to, or the terms of a
Nonstatutory Option or Stock Appreciation Right by canceling an outstanding
Nonstatutory Option or Stock Appreciation Right and regranting a Nonstatutory
Option or Stock Appreciation Right. Such adjustment shall be made by amending,
substituting, or regranting an outstanding Nonstatutory Option or Stock
Appreciation Right. Such amendment, substitution, or regrant may result in
terms and conditions that differ from the terms and conditions of the original
Nonstatutory Option or Stock Appreciation Right. The Committee may not,
however, impair the rights of any Holder of previously granted Nonstatutory
Options or Stock Appreciation Rights without that Holder's consent. If such
action is effected by amendment, such amendment shall be deemed effective as of
the Date of Grant of the amended Award.
10.16 Remedies. The Corporation shall be entitled to recover from a
Holder reasonable attorneys' fees incurred in connection with the enforcement
of the terms and provisions of the Plan and any Award Agreement whether by an
action to enforce specific performance or for damages for its breach or
otherwise.
10.17 Information Confidential. As partial consideration for the
granting of each Award hereunder, a Holder shall agree with the Corporation
that he will keep confidential all information and knowledge that he has
relating to the manner and amount of his participation in the Plan; provided,
however, that such information may be disclosed as required by law and may be
given in confidence to the Holder's spouse, tax or financial advisors, or to a
financial institution to the extent that such information is necessary to
secure a loan. In the event any breach of this promise comes to the attention
of the Committee, it shall take into consideration that breach in determining
whether to recommend the grant of any future Award to that Holder, as a factor
mitigating against the advisability of granting any such future Award to that
Person.
10.18 Consideration. No Option or Stock Appreciation Right shall be
exercisable and no restriction on any Restricted Stock Award shall lapse with
respect to a Holder unless and until the Holder thereof shall have paid cash or
property to, or performed services for, the Corporation or any of its
Subsidiaries that the Committee believes is equal to or greater in value than
the par value of the Stock subject to such Award.
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<PAGE> 24
SECTION 11. EFFECTIVENESS, DURATION AND AMENDMENT OF PLAN
11.1 Effectiveness; Duration. Notwithstanding the provisions of
the Plan, Awards granted prior to the date the stockholders of the Corporation
approve the Plan shall be subject to such stockholder approval and may not be
transferred or exercised, as applicable, until such stockholder approval is
obtained. No Awards may be granted hereunder after the date that is ten years
after the Effective Date.
11.2 Amendment. The Committee may, insofar as permitted by law and
subject to ratification of the Board of Directors, with respect to any shares
which, at the time, are not subject to Awards, suspend or discontinue the Plan
or revise or amend it in any respect whatsoever and may amend any provision of
the Plan or any Award Agreement to make the Plan or the Award Agreement, or
both, comply with Section 16(b) of the Exchange Act and the exemptions from
those sections in the regulations thereunder. The Committee may also, subject
to ratification of the Board of Directors, amend, modify, suspend, or terminate
the Plan for the purpose of meeting or addressing any changes in other legal
requirements applicable to the Corporation or the Plan or for any other purpose
permitted by law. The Plan may not be amended without the consent of the
holders of a majority of the shares of Stock then outstanding to (a) increase
materially the aggregate number of shares of Stock that may be issued under the
Plan (except for adjustments pursuant to Section 9 hereof), (b) increase
materially the benefits accruing to Eligible Individuals under the Plan, or (c)
modify materially the requirements about eligibility for participation in the
Plan; provided, however, that such amendments may be made without the consent
of stockholders of the Corporation to the extent applicable law and other legal
requirements (including Rule 16b-3 or Section 162(m)) permit such changes
without shareholder approval. Notwithstanding the provisions of this
Subsection 11.2, the Committee specifically shall have the authority, subject
to ratification by the Board of Directors, to amend the Plan (without approval
of the holders of the shares of Stock then outstanding) to the extent required
to cause the Plan, as it relates to Options and Stock Appreciation Rights
granted to Eligible Individuals subject to Section 162(m), to comply with the
requirements for classification of Awards as "performance-based compensation"
under Section 162(m)(4)(C), except for such amendments that require such
stockholder approval under Section 162(m).
SECTION 12. GENERAL
12.1 Application of Funds. The proceeds received by the
Corporation from the sale of shares pursuant to Awards may be used for any
general corporate purpose.
12.2 Right of the Corporation and Subsidiaries to Terminate
Employment. Nothing contained in the Plan, or in any Award Agreement, shall
confer upon any Holder the right to continue in the employ of the Corporation
or any Subsidiary or interfere in any way with the rights of the Corporation or
any Subsidiary to terminate the Holder's employment at any time.
12.3 No Liability for Good Faith Determinations. Neither the
members of the Board of Directors nor any member of the Committee shall be
liable for any act, omission or determination taken or made in good faith with
respect to the Plan or any Award granted under it; and members of the Board of
Directors and the Committee shall be entitled to indemnification and
reimbursement by the Corporation in respect of any claim, loss, damage, or
expense (including attorneys' fees, the costs of settling any suit, provided
such settlement is approved by independent legal counsel selected by the
Corporation, and amounts paid in satisfaction of a judgment, except a judgment
based on a finding of bad faith) arising therefrom to the full extent permitted
by law and under any directors' and officers' liability or similar insurance
coverage that may from time to time be in effect. This right to
indemnification shall be in addition to, and not a limitation on, any other
indemnification rights any member of the Board of Directors or the Committee
may have.
12.4 Other Benefits. Participation in the Plan shall not preclude
a Holder from eligibility in any other stock or stock option plan of the
Corporation or any Subsidiary or any old age benefit, insurance, pension,
profit sharing, retirement, bonus, or other extra compensation plans that the
Corporation or any Subsidiary has adopted, or may, at any time, adopt for the
benefit of its Employees. Neither the adoption of the Plan by the Board of
Directors nor the submission of the Plan to the stockholders of the Corporation
for approval shall be construed as creating any limitations on the power of the
Board of Directors to adopt such other incentive arrangements as it may
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<PAGE> 25
deem desirable, including, without limitation, the granting of stock options
and the awarding of stock and cash otherwise than under the Plan and such
arrangements may be either generally applicable or applicable only in specific
cases.
12.5 Exclusion from Pension and Profit-Sharing Compensation. By
acceptance of an Award (regardless of form), as applicable, each Holder shall
be deemed to have agreed that the Award is special incentive compensation that
will not be taken into account in any manner as salary, compensation, or bonus
in determining the amount of any payment under any pension, retirement, or
other employee benefit plan of the Corporation or any Subsidiary unless any
pension, retirement, or other employee benefit plan of the Corporation or any
Subsidiary expressly provides that such Award shall be so considered for
purposes of determining the amount of any payment under any such plan. In
addition, each beneficiary of a deceased Holder shall be deemed to have agreed
that the Award will not affect the amount of any life insurance coverage, if
any, provided by the Corporation or a Subsidiary on the life of a Holder that
is payable to the beneficiary under any life insurance plan covering employees
of the Corporation or any Subsidiary.
12.6 Execution of Receipts and Releases. Any payment of cash or
any issuance or transfer of shares of Stock to a Holder, or to his legal
representative, heir, legatee, or distributee, in accordance with the
provisions hereof, shall, to the extent thereof, be in full satisfaction of all
claims of such persons hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
12.7 Unfunded Plan. Insofar as it provides for Awards of cash and
Stock, the Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Holders who are entitled to cash, Stock, or rights
thereto under the Plan, any such accounts shall be used merely as a bookkeeping
convenience. The Corporation shall not be required to segregate any assets
that may at any time be represented by cash, Stock, or rights thereto, nor
shall the Plan be construed as providing for such segregation, nor shall the
Corporation nor the Board of Directors nor the Committee be deemed to be a
trustee of any cash, Stock, or rights thereto to be granted under the Plan.
Any liability of the Corporation to any Holder with respect to a grant of cash,
Stock, or rights thereto under the Plan shall be based solely upon any
contractual obligations that may be created by the Plan and any Award
Agreement; no such obligation of the Corporation shall be deemed to be secured
by any pledge or other encumbrance on any property of the Corporation. Neither
the Corporation nor the Board of Directors nor the Committee shall be required
to give any security or bond for the performance of any obligation that may be
created by the Plan.
12.8 No Guarantee of Interests. Neither the Committee nor the
Corporation guarantees the Stock of the Corporation from loss or depreciation.
12.9 Payment of Expenses. All expenses incident to the
administration, termination, or protection of the Plan, including, but not
limited to, legal and accounting fees, shall be paid by the Corporation or its
Subsidiaries.
12.10 Corporation Records. Records of the Corporation or its
Subsidiaries regarding a Holder's period of employment, termination of
employment and the reason therefor, leaves of absence, re-employment, and other
matters shall be conclusive for all purposes hereunder, unless determined by
the Committee to be incorrect.
12.11 Information. The Corporation and its Subsidiaries shall, upon
request or as may be specifically required hereunder, furnish or cause to be
furnished all of the information or documentation which is necessary or
required by the Committee to perform its duties and functions under the Plan.
12.12 No Liability of Corporation. The Corporation assumes no
obligation or responsibility to a Holder or his legal representatives, heirs,
legatees, or distributees for any act of, or failure to act on the part of, the
Committee.
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<PAGE> 26
12.13 Corporation Action. Any action required of the Corporation
shall be by resolution of its Board of Directors or by a person authorized to
act by resolution of the Board of Directors.
12.14 Severability. If any provision of this Plan is held to be
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions hereof, but such provision shall be fully
severable and the Plan shall be construed and enforced as if the illegal or
invalid provision had never been included herein. If any of the terms or
provisions of this Plan or any Award Agreement conflict with the requirements
of Rule 16b-3 (as those terms or provisions are applied to Eligible Individuals
who are subject to Section 16(b) of the Exchange Act) or Section 422 of the
Code (with respect to Incentive Options), then those conflicting terms or
provisions shall be deemed inoperative to the extent they so conflict with the
requirements of Rule 16b-3 (unless the Board of Directors or the Committee, as
appropriate, has expressly determined that the Plan or such Award should not
comply with Rule 16b-3) or Section 422 of the Code. With respect to Incentive
Options, if this Plan does not contain any provision required to be included
herein under Section 422 of the Code, that provision shall be deemed to be
incorporated herein with the same force and effect as if that provision had
been set out at length herein; provided, further, that, to the extent any
Option that is intended to qualify as an Incentive Option cannot so qualify,
that Option (to that extent) shall be deemed a Nonstatutory Option for all
purposes of the Plan.
12.15 Notices. Whenever any notice is required or permitted
hereunder, such notice must be in writing and personally delivered or sent by
mail. Any notice required or permitted to be delivered hereunder shall be
deemed to be delivered on the date on which it is actually received, addressed
to the applicable party as specified in the applicable Award Agreement. The
Corporation or a Holder may change, at any time and from time to time, by
written notice to the other, the address which it or he had previously
specified for receiving notices. Until changed in accordance herewith, the
Corporation and each Holder shall specify as its and his address for receiving
notices the address set forth in the Award Agreement pertaining to the shares
to which such notice relates. Any person entitled to notice hereunder may
waive such notice.
12.16 Successors. The Plan shall be binding upon the Holder, his
legal representatives, heirs, legatees, and distributees, upon the Corporation,
its successors and assigns and upon the Committee and its successors.
12.17 Headings. The titles and headings of Sections and Subsections
are included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
12.18 Governing Law. All questions arising with respect to the
provisions of the Plan shall be determined by application of the laws of the
State of Delaware, without giving effect to any conflict of law provisions
thereof, except to the extent Delaware law is preempted by federal law.
Questions arising with respect to the provisions of an Award Agreement that are
matters of contract law shall be governed by the laws of the state specified in
the Award Agreement, except to the extent Delaware corporate law conflicts with
the contract law of such state, in which event Delaware corporate law, without
giving effect to any conflict of law provisions thereof, shall govern. The
obligation of the Corporation to sell and deliver Stock hereunder is subject to
applicable federal and state laws and to the approval of any governmental
authority required in connection with the authorization, issuance, sale, or
delivery of such Stock.
12.19 Availability of Exempt Transactions. Notwithstanding the
provisions of the Plan, nothing contained in the Plan shall prohibit any
transactions permitted by Rule 16a-2(d) promulgated under the Exchange Act to
the extent such transactions are approved by the Committee and are not in
violation of, and do not otherwise cause the Plan not to be in compliance with,
Rule 16b-3.
12.20 Word Usage. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of the Plan dictates, the
plural shall be read as the singular and the singular as the plural.
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<PAGE> 27
IN WITNESS WHEREOF, Chase Industries Inc., acting by and
through its officer hereunto duly authorized, has executed this instrument, to
be effective as of April 1, 1997, subject, with respect to the provisions of
Section 2.1 set forth herein, to approval by the stockholders of the
Corporation.
CHASE INDUSTRIES INC.
By: /s/ MICHAEL T. SEGREAVES
---------------------------
Michael T. Segraves,
Vice President and Secretary
Approved by the stockholders of the
Corporation as of May 14, 1997.
ATTEST: /s/ MICHAEL T. SEGRAVES
---------------------------------
Michael T. Segraves
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<PAGE> 1
EXHIBIT 5
[FULBRIGHT & JAWORSKI L.L.P LETTERHEAD]
June 3, 1997
Chase Industries Inc.
P.O. Box 152
14212 County Road M-50
Montpelier, Ohio 43543
Re: Chase Industries Inc.
Common Stock, $.01 par value
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Chase Industries Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), on the Company's
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission (the "Commission") on or about June 3, 1997 (the "Registration
Statement"), of the offer and sale of up to 500,000 shares (as such number may
be adjusted from time to time pursuant to the provisions of the Plan
(hereinafter defined)) of its common stock, par value $.01 per share (the
"Common Stock"), that may be issued pursuant to the Chase Industries Inc. 1994
Long-Term Incentive Plan (the "Plan").
In reaching the opinions set forth herein, we have reviewed those
agreements, certificates of public officials, officers of the Company and other
persons, records, documents, and matters of law that we deemed relevant,
including but not limited to (a) the Registration Statement, (b) the Restated
Certificate of Incorporation, as amended, and the By-Laws of the Company, (c)
resolutions previously adopted by the Board of Directors of the Company and (d)
the Plan.
Based on and subject to the foregoing and subject further to the
assumptions, exceptions and qualifications hereinafter stated, we are of the
opinion that the Common Stock registered pursuant to the Registration
Statement, when issued in accordance with the terms of the Plan, will be
legally issued, fully paid and non-assessable.
The opinions expressed above are subject in all respects to the
following assumptions, exceptions and qualifications:
a. We have assumed that (i) all signatures on all
documents reviewed by us are genuine, (ii) all documents submitted to
us as originals are true and complete, (iii) all documents submitted
to us as copies are true and complete copies of the originals thereof,
(iv) all information submitted to us in the preparation of the
Registration Statement is true and complete as of the date hereof, (v)
each natural person signing any document reviewed by us had the legal
capacity to do so, and (vi) each person signing in a representative
capacity any document reviewed by us had authority to sign in that
capacity.
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<PAGE> 2
Chase Industries Inc.
June 3, 1997
Page 2
b. The opinions expressed above are limited to the
General Corporation Law of the State of Delaware and the federal laws
of the United States of America. You should be aware that no partner
or associate of this firm who reviewed documents relevant to this
opinion is admitted to the practice of law in the State of Delaware
and the opinions expressed herein as to the laws of the State of
Delaware are based solely upon the latest unofficial compilation of
the General Corporation Law of the State of Delaware publicly
available.
c. The opinions expressed above speak as of the date
hereof and are limited to the matters expressly set forth herein, and
no opinion is to be implied or inferred beyond such matters.
This opinion may be filed as an exhibit to the Registration Statement.
In giving this consent, we do not admit that we come into the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission promulgated thereunder.
This firm disclaims any duty to advise you regarding any changes in,
or otherwise communicate with you with respect to, the matters addressed
herein.
Respectfully submitted,
FULBRIGHT & JAWORSKI L.L.P.
By: /s/ RODNEY L. MOORE
------------------------
Rodney L. Moore
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<PAGE> 1
[COOPERS & LYBRAND L.L.P. LETTERHEAD]
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Chase Industries Inc. on Form S-8 of our report dated February 3, 1997, on our
audits of the consolidated financial statements and financial statement
schedules of Chase Industries Inc. (formerly Chase Brass Industries, Inc.) as
of December 31, 1996 and 1995, and for each of the three years in the period
ended December 31, 1996 which report is included in the Chase Industries Inc.
annual report on Form 10-K, filed on March 18, 1997.
/s/ COOPERS & LYBRAND L.L.P.
-------------------------------
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
May 29, 1997
