Exhibit 10.4
 
2007 Incentive Compensation Plan, as amended
 

1.   Purpose

 
The purpose of this 2007 Incentive Compensation Plan (the “Plan”) is to advance
the long-term interests of OM Group, Inc. (the “Corporation”) by
 
(i) motivating key personnel by means of incentive compensation,
 
(ii) furthering the identity of interests of participants with those of the
stockholders of the Corporation through the ownership and performance of the
common stock of the Corporation, and
 
(iii) permitting the Corporation to attract and retain key personnel and
directors whose judgment is important to the successful conduct of the business
of the Corporation.
 
Toward this objective, the Committee may grant awards to key personnel of the
Corporation and its subsidiaries and to non-employee directors of the
Corporation, on the terms and subject to the conditions set forth in this Plan.
 

2.   Definitions

 
2.1  “Award” means any form of stock option, stock appreciation right,
restricted stock award, phantom stock or restricted stock unit award, or
performance bonus granted pursuant to the provisions of this Plan.
 
2.2  “Award Agreement” means a written document evidencing an Award granted
pursuant to this Plan and establishing the terms, conditions, restrictions and
limitations applicable to such Award. To the extent an Award Agreement is
inconsistent with the terms of this Plan, this Plan shall govern the rights of
the Participant.
 
2.3  “Board” means the Board of Directors of the Corporation.
 
2.4  “Change in Control” means any one or more of the following:
 
(i) The Corporation is merged, consolidated or reorganized into or with another
corporation or other legal person, and immediately after such merger,
consolidation or reorganization less than fifty percent (50%) of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held directly or indirectly in the
aggregate by the holders of voting shares of the Corporation immediately prior
to such transaction;
 
(ii) The Corporation sells all or substantially all of its assets to any other
corporation or other legal person, and less than fifty percent (50%) of the
combined voting power of the then-outstanding securities of such corporation or
person immediately after such sale are held directly or indirectly in the
aggregate by the holders of voting shares of the Corporation immediately prior
to such sale;
 
(iii) Any person or group of persons (as the term “person” is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), becomes the
beneficial owner (as the term “beneficial owner” is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of
securities (a) representing 50% or more of the issued and outstanding shares of
the Corporation or (b) possessing the power to elect a majority of the Board of
the Corporation, except that any acquisition directly from the Corporation, any
acquisition by the Corporation, or any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Corporation or any Subsidiary
shall not constitute a Change in Control;
 
(iv) The Corporation files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response to an
item of Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) that a Change in Control of the Corporation has occurred;

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(v) The stockholders of the Corporation approve the liquidation or dissolution
of the Corporation; or
 
(vi) If during any period of two consecutive years, individuals who at the
beginning of any such period constitute the Board cease for any reason to
constitute at least a majority of the Board, provided that each director who is
first elected, or first nominated for election by the Corporation’s
stockholders, by a vote of at least two-thirds of the directors of the
Corporation (or a committee of the Board) then still in office who were
directors of the Corporation at the beginning of any such period will be deemed
to have been a director of the Corporation at the beginning of such period.
 
Notwithstanding anything else in this Plan, a “Change in Control” shall not
include any change for reasons of bankruptcy, insolvency, or otherwise for the
benefit of the creditors of the Corporation or, if applicable, a Subsidiary of
the Corporation.
 
2.5  “Change in Control Price” means the higher of (i) the mean of the high and
low trading prices for the Corporation’s Common Stock on the Stock Exchange on
the date of the Change in Control or (ii) the highest price per share actually
paid for the Common Stock in connection with the Change in Control of the
Corporation.
 
2.6  “Code” means the Internal Revenue Code of 1986, as amended from time to
time.
 
2.7  “Committee” means the Compensation Committee of the Board, or such other
committee designated by the Board, authorized to administer the Plan, composed
of not fewer than two directors, each of whom shall be “a Non-Employee Director”
under Rule 16b-3 of the Exchange Act or any successor rule or statute and shall
be an “outside director” for purposes of Section 162(m) of the Code or any
successor rule or statute.
 
2.8  “Common Stock” means common stock, par value $.01, of the Corporation.
 
2.9  “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
2.10  “Key Employee” means an employee of the Corporation or a Subsidiary who
holds a position of responsibility in a managerial, administrative or
professional capacity and whose performance, as determined by the Committee in
the exercise of its sole and absolute discretion, makes appropriate the grant of
an Award under this Plan.
 
2.11  “Non-Employee Director” means any director of the Corporation who is not
an employee of the Corporation.
 
2.12  “Participant” means any individual to whom an Award has been granted by
the Committee under this Plan.
 
2.13  “Stock Exchange” means the New York Stock Exchange or, if the Common Stock
is no longer traded on the New York Stock Exchange, such other market price
reporting system on which the Common Stock is traded or quoted and is designated
by the Committee after it determines that such other exchange is both reliable
and reasonably accessible.
 
2.14  “Subsidiary” means a corporation or other business entity in which the
Corporation directly or indirectly has an ownership interest of fifty percent or
more.
 

3.   Administration

 
The Plan shall be administered by the Committee except as otherwise expressly
provided in this Plan. Subject to the express provisions of this Plan, the
Committee shall have the conclusive authority to construe and interpret this
Plan and any Award Agreement under this Plan and to establish, amend and rescind
policies and procedures for the administration of this Plan and shall have such
additional authority as the Board may from time to time determine to be
necessary or desirable.
 
In addition, in order to enable employees who are foreign nationals or employed
outside the United States, or both, to receive Awards under this Plan, the
Committee may adopt such policies and subplans as are necessary or advisable, in
the opinion of the Committee, to effectuate the purposes of the Plan.

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4.   Eligibility

 
Any Key Employee or Non-Employee Director is eligible to become a Participant in
this Plan.
 

5.   Available Shares

 
5.1  Aggregate Number of Shares.  The aggregate number of shares of Common Stock
of the Corporation as to which Awards may be made under this Plan (including any
annual stock issuances made to Non-Employee Directors pursuant to
Section 11) shall be 3,000,000, subject to adjustment as provided in this Plan.
Such shares may be made available from authorized and unissued shares of the
Corporation or from shares that have been reacquired by the Corporation and held
as treasury shares.
 
Notwithstanding the foregoing, subject to adjustment as provided in this Plan,
 
(i) the number of shares subject to Awards made to any one person in any
calendar year shall not exceed 250,000; and
 
(ii) the total number of shares subject to Awards that are other than stock
option and stock appreciation rights Awards made under this Plan shall not
exceed 1,500,000.
 
5.2  Shares Covered by Awards.  For purposes of calculating the number of shares
of Common Stock deemed to be granted under this Plan, each Award, in whatever
form, shall be deemed to be a grant of a number of shares of Common Stock equal
to the number of shares represented by the stock options, stock appreciation
rights, shares of restricted stock, shares of phantom stock or restricted stock
units set forth in the Award, except that:
 
(i) in the case of any Award as to which the exercise of one right nullifies the
exercisability of another, the number of shares deemed to have been granted
shall be the maximum number of shares (and/or cash equivalents) that could have
been acquired upon the maximum exercise or settlement of the Award; and
 
(ii) in the case of any performance-based restricted stock Award that provides
for payments in excess of 100% of the number of shares set forth in the Award
Agreement, the number of shares granted shall be deemed to be the maximum number
of shares (and/or the cash equivalent) issuable under the Award at the highest
level of performance.
 
5.3  Use and Re-grant Availability of Shares.  For purposes of calculating the
number of shares of Common Stock available for Awards under this Plan,
 
(i) any Award or portion of an Award that has been settled by the payment of
cash shall be deemed to have used the number of shares covered by the Award; and
 
(ii) any shares subject to any Award that is forfeited or otherwise terminated
without the issuance of shares or payment of other consideration shall again be
available for issuance under this Plan.
 

6.   Participation

 
The Committee shall select, from time to time, those Key Employees and
Non-Employee Directors who shall be Participants in the Plan and shall determine
the type or types of Awards to be made to each Participant. The terms,
conditions and restrictions of each Award shall be set forth in an Award
Agreement in a form approved by the Committee.
 

7.   Stock Options

 
7.1  Grants.  Awards may be granted in the form of stock options. Stock options
may be incentive stock options within the meaning of Section 422 of the Code or
non-statutory stock options (i.e., stock options that are not incentive stock
options), or a combination of both, or any particular type of tax-advantaged
option authorized by the Code from time to time.

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7.2  Terms and Conditions of Options.  An option shall be exercisable in whole
or in such installments and at such times as may be determined by the Committee,
provided that no stock option shall be exercisable more than ten years after the
date of grant. The exercise price of a stock option shall be established by the
Committee, but such price shall not be less than the per share fair market value
of the Common Stock, as determined by the Committee, on the date of the grant of
the stock option, subject to adjustment as provided in Sections 17 and 18.
 
7.3  Restrictions Relating to Incentive Stock Options.  Stock options issued in
the form of incentive stock options shall, in addition to being subject to all
applicable terms, conditions, restrictions and limitations established by the
Committee, comply with Section 422 of the Code. Incentive stock options shall be
granted only to full-time employees of the Corporation and its Subsidiaries
within the meaning of Section 424 of the Code. The aggregate fair market value
(determined as of the date the option is granted) of shares with respect to
which incentive stock options are exercisable for the first time by an
individual during any calendar year (under this Plan or any other plan of the
Corporation or any Subsidiary that provides for the granting of incentive stock
options) may not exceed $100,000 or such other number as may be applicable under
the Code from time to time. Any incentive stock option that is granted to any
employee who is, at the time the option is granted, deemed for purposes of
Section 422 of the Code or any successor provision, to own shares of the
Corporation possessing more than ten percent of the total combined voting power
of all classes of shares of the Corporation or of a parent or subsidiary of the
Corporation, shall have an option exercise price that is at least 110% of the
fair market value of the shares at the date of grant and shall not be
exercisable after the expiration of five years from the date it is granted.
 
7.4  Additional Terms and Conditions.  The Board may, in the Award Agreement or
otherwise, establish such other terms, conditions, restrictions or limitations
on any stock option Award as it considers appropriate, provided they are not
inconsistent with this Plan, including provisions relating to:
 
(i) the vesting of such option;
 
(ii) payments to be made by the Participant at the time of exercise of such
option relating to any taxes associated with such exercise;
 
(iii) any requirement imposed on the Participant to retain the Common Stock
acquired upon exercise of such option; and
 
(iv) the exercisability of such options upon the cessation of employment or
service as a director.
 
7.5  Payment.  Upon exercise, a participant may pay the exercise price of a
stock option in cash or shares of Common Stock, or a combination of cash and
shares of Common Stock, or such other consideration as the Committee may deem
appropriate. The Committee shall establish appropriate methods for accepting
Common Stock and may impose such conditions as it deems appropriate on the use
of such Common Stock to exercise a stock option.
 

8.   Stock Appreciation Rights

 
8.1  Grants.  Awards may be granted in the form of stock appreciation rights
(“SARs”). SARs shall entitle the recipient to receive a payment equal to the
appreciation in market value of a stated number of shares of Common Stock from
the price stated in the Award Agreement (which price may not be less than the
fair market value of the Common Stock on the date of grant of the SAR) to the
market value of the Common Stock on the date of exercise or surrender. An SAR
may be granted in tandem with all or a portion of a related stock option under
the Plan (“Tandem SARs”) or may be granted separately (“Freestanding SARs”).
 
8.2  Terms and Conditions of Tandem SARs.  Subject to the limitations contained
in the preceding paragraph, a Tandem SAR shall be exercisable to the extent, and
only to the extent, that the related stock option is exercisable. Upon exercise
of a Tandem SAR as to some or all of the shares covered by an Award, the related
stock option shall be cancelled automatically to the extent of the number of
SARs exercised, and such shares shall not be eligible for re-grant under this
Plan.

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8.3  Terms and Conditions of Freestanding SARs.  Freestanding SARs shall be
exercisable in whole or in such installments and at such times as may be
determined by the Committee, provided that no Freestanding SAR shall be
exercisable more than ten years after the date of grant. The base price of a
Freestanding SAR also shall be determined by the Committee, provided that such
price shall not be less that the fair market value of the Common Stock, as
determined by the Committee, on the date of the grant of the Freestanding SAR.
 
8.4  Deemed Exercise.  The Committee may provide that an SAR shall be deemed to
be exercised at the close of business on the scheduled expiration date of such
SAR, if at such time the SAR by its terms is otherwise exercisable and, if so
exercised, would result in a payment to the Participant.
 
8.5  Additional Terms and Conditions.  The Committee may, in the Award Agreement
or otherwise, establish such other terms, conditions, restrictions or
limitations on any SAR Award as it considers appropriate, provided that they are
not inconsistent with this Plan.
 

9.   Restricted Stock Awards

 
9.1  Grants.  Awards may be granted in the form of restricted stock Awards, in
such numbers and at such times as the Committee shall determine.
 
9.2  Award Restrictions.  Restricted stock Awards shall be subject to such
terms, conditions, restrictions or limitations as the Committee deems
appropriate, provided they are not inconsistent with this Plan, including
restrictions on vesting and transferability, forfeiture provisions, requirements
of continued employment or service as a director, individual performance or the
financial performance of the Corporation or a segment or identified business of
the Corporation. Notwithstanding the foregoing, the vesting schedule for
restricted stock Awards must at a minimum be (i) for three years for shares that
vest based upon continued employment or service as a director, and (ii) for one
year for shares that vest based upon the financial performance of the
Corporation or a segment or identified business of the Corporation in accordance
with performance criteria established by the Committee as described in
Section 9.5 of this Plan.
 
9.3  Rights as Shareholders.  During the period in which any shares of Common
Stock are subject to any of the conditions, restrictions or limitations
referenced in the preceding paragraph, the Committee may, in its discretion,
grant to the Participant to whom such restricted shares have been awarded all or
any of the rights of a stockholder with respect to such shares, including the
right to vote such shares and to receive dividends paid on shares of Common
Stock.
 
9.4  Evidence of Award.  Any restricted stock Award granted under this Plan may
be evidenced in such manner as the Committee deems appropriate, including
book-entry registration or issuance of a stock certificate or certificates.
 
9.5  Performance Criteria.  In the event that restricted stock Awards are
granted subject to the financial performance of the Corporation, such restricted
stock Awards shall be earned upon the satisfaction of such performance targets
related to such performance periods as are established by the Committee at the
time of grant. The Committee may establish performance targets in terms of any
or all of the following:  sales, sales growth, gross margins, operating profit,
operating profit growth, net income, net income growth, earnings per share,
growth in earnings per share, EBITDA, cash flow per share, total stockholder
returns, return on equity, return on invested capital, return on net assets
employed, common stock price or common stock price appreciation. Performance
targets may utilize various combinations of or changes in any of the above
measures, or may utilize any one or more of the above measures as relates to an
identified business or segment of the Corporation’s operations or as relates to
the performance of the Corporation as compared to other entities. Performance
targets applicable to restricted stock Awards may vary from Award to Award and
from Participant to Participant. When determining whether performance targets
have been attained, the Committee shall have the discretion to make adjustments
to take into account extraordinary or nonrecurring items or events, or unusual
nonrecurring gains or losses identified in the Corporation’s financial
statements, provided such adjustments are made in a manner consistent with
Section 162(m) of the Code (to the extent applicable). To the extent
appropriate, restricted stock Awards that are made to Participants subject to
Section 162(m) of

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the Code are intended to qualify under Section 162(m) and the Committee shall
interpret the terms of such Awards in a manner consistent with that intent.
 

10.   Phantom Stock and Restricted Stock Units

 
10.1  Grants.  Awards may be granted in the form of phantom stock or restricted
stock unit Awards. Such Awards shall entitle the Participant to receive the
market value or the appreciation in value of an equivalent number of shares of
Common Stock on a settlement date determined by the Committee.
 
10.2  Additional Terms and Conditions.  The Committee may, in the Award
Agreement or otherwise, establish such other terms, conditions, restrictions or
limitations on any Award of phantom stock or restricted stock units as it
considers appropriate, provided they are not inconsistent with this Plan,
including restrictions on vesting and transferability, forfeiture provisions,
requirements of continued employment or service as a director, individual
performance or the financial performance of the Corporation or a segment or
identified business of the Corporation. Notwithstanding the foregoing, the
minimum vesting schedule requirements set forth in Section 9.2 of this Plan
shall apply to any time-based or performance-based phantom stock or restricted
stock unit Awards. The provisions of Section 9.5 of this Plan shall be
applicable to phantom stock or restricted stock unit Awards that are subject to
the financial performance of the Corporation or a segment or identified business
of the Corporation.
 

11.   Annual Stock Issuance to Non-Employee Directors

 
Each Non-Employee Director may receive all or any portion of his or her annual
compensation as a Non-Employee Director in the form of Common Stock, as
determined annually by the Board. The Board shall have the absolute discretion
to determine the amount, if any, of Non-Employee Director annual compensation
that shall be paid in the form of Common Stock in any year, which may vary from
year to year. Any shares of Common Stock that are determined by the Board to be
issuable pursuant to this Section shall be issued to Non-Employee Directors as
promptly as practicable following the measurement date for any installment(s) of
such annual compensation being paid in whole or in part in Common Stock, as
determined by the Board. The measurement date should be the last business day of
the relevant quarter for which compensation is being paid in Common Stock, and
for purposes of determining the number of shares of Common Stock to be issued,
shares shall be valued at the average of the high and low sale price of Common
Stock on the New York Stock Exchange on the applicable measurement date for such
installment or installments. No fractional shares of Common Stock shall be
issued, and any fractional shares so calculated shall be paid in cash. No Award
Agreement need be executed with respect to any stock issuances to Non-Employee
Directors pursuant to this Section.
 

12.   Annual Incentive Awards

 
The Committee is responsible for administering the annual incentive program of
the Corporation, which provides annual bonus opportunities to certain employees
of the Corporation and its Subsidiaries. The Committee shall select, from time
to time, those employees of the Corporation and its Subsidiaries who shall
participate in the annual incentive program for a particular year and shall
determine the annual bonus opportunity available for each employee so selected.
Annual bonus opportunities shall be based upon such factors and subject to such
terms and conditions as shall be provided in the annual incentive program for a
particular year, which may include satisfaction of corporate performance goals,
segment or identified business performance goals and individual objectives. To
the extent that annual bonus opportunities are determined for any employee to be
subject to the financial performance of the Corporation or a segment or
identified business of the Corporation (a “performance bonus”), such performance
bonus shall be earned upon the satisfaction of such performance targets as are
established by the Committee in its administration of the annual incentive
program, which performance targets shall be one or more of the performance
targets set forth in Section 9.5 of this Plan. The provisions of Section 9.5 of
this Plan shall be applicable to annual bonus opportunities that are subject to
the financial performance of the Corporation or a segment or identified business
of the Corporation, such that performance bonus awards made to employees subject
to Section 162(m) of the Code are intended to qualify under Section 162(m) to
the extent appropriate. The Committee shall interpret the terms of such

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awards in a manner consistent with that intent to the extent appropriate. The
maximum dollar amount of any performance bonus payable to an employee in any
calendar year is $10,000,000.
 

13.   Payment of Awards

 
Except as otherwise provided in this Plan, Award Agreements may provide that, at
the discretion of the Committee, payment of Awards may be made in cash, Common
Stock, a combination of cash and Common Stock, or any other form of property as
the Committee shall determine. Further, the terms of Award Agreements may
provide for payment of Awards in the form of a lump sum or installments, as
determined by the Committee. All payments of Awards shall be made in a manner
consistent with the requirements of Section 409A of the Code.
 

14.   Dividends and Dividend Equivalents

 
If an Award is granted in the form of a restricted stock Award or a phantom
stock or restricted stock unit Award, the Committee may choose, at the time of
the grant of the Award, to include as part of such Award an entitlement to
receive dividends or dividend equivalents, subject to such terms, conditions,
restrictions or limitations as the Committee may establish. Dividends and
dividend equivalents shall be paid in such form and manner and at such times as
the Committee shall determine. All dividends or dividend equivalents that are
not paid currently may, at the Committee’s discretion, accrue interest or be
reinvested into additional shares of Common Stock.
 

15.   Termination of Employment or Service as Director

 
The Committee may adopt administrative policies and procedures and/or provide in
Award Agreements with respect to the rights under an Award of a Participant who
ceases to be employed by either the Corporation or a Subsidiary or ceases to be
a director of the Corporation, whether because of death, disability,
resignation, termination or retirement pursuant to an established retirement
plan or policy of the Corporation or of the applicable Subsidiary. All such
administrative policies and procedures shall comply with the requirements of
Section 409A of the Code.
 

16.   Assignment and Transfer

 
The rights and interests of a Participant under the Plan or an Award may not be
assigned, encumbered or transferred other than, in the event of the death of a
Participant, by will or the laws of descent and distribution, or other than in
accordance with a domestic relations order or comparable order that is issued
and is applicable to the Participant.
 

17.   Adjustments Upon Changes in Capitalization

 
In the event of any change in the outstanding shares of Common Stock by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan (as well as
the limitations upon the number of shares that may be the subject of Awards to
any individual in a calendar year and the aggregate number of shares subject to
Awards other than stock options and SARs) and the number and class of shares
issuable pursuant to then-outstanding Awards (together with the exercise price
of any outstanding stock option or SAR) shall be appropriately adjusted by the
Committee, whose determination shall be final.
 

18.   Extraordinary Distributions and Pro Rata Repurchases

 
In the event the Corporation shall at any time when an Award is outstanding make
an Extraordinary Distribution (as defined below) in respect of Common Stock or
effect a Pro Rata Repurchase of Common Stock (as defined below), the Committee
shall consider the economic impact of the Extraordinary Distribution or Pro Rata
Repurchase on Participants and make such adjustments as it deems equitable under
the circumstances. The determination of the Committee shall, subject to revision
by the Board, be final and binding upon all Participants.

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As used in this Plan, the term “Extraordinary Distribution” means any dividend
or other distribution of
 
(i) cash, where the aggregate amount of such cash dividend or distribution
together with the amount of all cash dividends and distributions made during the
preceding twelve months, when combined with the aggregate amount of all Pro Rata
Repurchases (for this purpose, including only that portion of the aggregate
purchase price of such Pro Rata Repurchases that is in excess of the fair market
value of the Common Stock repurchased during such twelve-month period), exceeds
ten percent of the aggregate fair market value of all shares of Common Stock
outstanding on the record date for determining the stockholders entitled to
receive such Extraordinary Distribution, or
 
(ii) any shares of capital stock of the Corporation (other than shares of Common
Stock), other securities of the Corporation, evidences of indebtedness of the
Corporation or any other person or any other property (including shares of any
Subsidiary of the Corporation), or any combination of such items.
 
As used in this Plan, “Pro Rata Repurchase” means any purchase of shares of
Common Stock by the Corporation or any Subsidiary pursuant to any tender offer
or exchange offer, whether or not subject to Section 13(e) of the Exchange Act
or any successor provision of law, or pursuant to any other offer available to
substantially all holders of Common Stock, provided that no purchase of shares
of Common Stock made by the Corporation or any Subsidiary in open market
transactions shall be deemed to be a Pro Rata Repurchase.
 

19.   Withholding Taxes

 
The Corporation or the applicable Subsidiary shall be entitled to deduct from
any payment under this Plan, regardless of the form of such payment, the amount
of all applicable income and employment taxes required by law to be withheld
with respect to such payment or may require the Participant to pay to it such
taxes prior to and as a condition of the making of such payment. The Committee
may allow a Participant to pay the amount of taxes required by law to be
withheld from an Award by withholding from any payment of Common Stock due as a
result of such Award, or by permitting the Participant to deliver to the
Corporation, shares of Common Stock having a fair market value, as determined by
the Committee, equal to the amount of such required withholding taxes.
 

20.   Noncompetition Provision

 
Unless the Award Agreement specifies otherwise, a Participant shall forfeit all
unexercised, unearned or unvested Awards if
 
(i) in the opinion of the Committee, the Participant, without the written
consent of the Corporation, engages directly or indirectly in any manner or
capacity as principal, agent, partner, officer, director, employee or otherwise
in any business or activity competitive with the business conducted by the
Corporation or any Subsidiary; or
 
(ii) the Participant performs any act or engages in any activity that in the
opinion of the Committee is detrimental to the best interests of the
Corporation.
 

21.   Regulatory Approvals and Listings

 
Notwithstanding anything contained in this Plan to the contrary, the Corporation
shall have no obligation to issue or deliver certificates of Common Stock
evidencing restricted stock Awards or any other Award payable in Common Stock
prior to
 
(i) the obtaining of any approval from any governmental agency that the
Corporation shall, in its sole discretion, determine to be necessary or
advisable,
 
(ii) the admission of such shares to listing on the Stock Exchange, and
 
(iii) the completion of any registration or other qualification of such shares
under any state or federal law or ruling of any governmental body that the
Corporation shall, in its sole discretion, determine to be necessary or
advisable.

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22.   No Right to Continued Employment or Grants

 
Participation in this Plan shall not give any Key Employee any right to remain
in the employ of the Corporation or any Subsidiary. The Corporation or, in the
case of employment with a Subsidiary, the Subsidiary, reserves the right to
terminate the employment of any Key Employee at any time. The adoption of this
Plan shall not be deemed to give any Key Employee or any other individual any
right to be selected as a Participant, to be granted any Awards under this Plan
or if granted an Award in any year, to receive Awards in any subsequent year.
 

23.   Amendment

 
The Board reserves the right to amend, suspend or terminate this Plan at any
time, subject to any applicable requirements for stockholder approval imposed by
the Stock Exchange or any law or regulation. The Committee may amend the terms
of any outstanding Award, but no such amendment may impair the rights of any
Participant without his or her consent or amend the terms of any Award that is
intended to qualify as performance-based compensation under Section 162(m) of
the Code so as to increase the amount otherwise payable under the Award.
 

24.   Governing Law

 
The Plan shall be governed by and construed in accordance with the laws of the
State of Ohio.
 

25.   Change in Control

 
25.1  Stock Options.  In the event of a Change in Control, stock options not
otherwise exercisable at the time of the Change in Control shall become fully
exercisable upon such Change in Control.
 
25.2  Stock Appreciation Rights.  In the event of a Change in Control, Tandem
SARs not otherwise exercisable at the time of the Change in Control shall become
exercisable to the extent that the related Stock Option is exercisable.
Freestanding SARs not otherwise exercisable at the time of a Change in Control
also shall become fully exercisable upon such Change in Control. In the event of
a Change in Control:
 
(i) the Corporation shall make payment to Participants with respect to SARs in
cash in an amount equal to the appreciation in the value of the SAR from the
base price specified in the Award Agreement to the Change in Control Price;
 
(ii) such cash payments to Participants shall be due and payable, and shall be
paid by the Corporation, immediately upon the occurrence of such Change in
Control; and
 
(iii) after the payment provided for in (ii) above, Participants shall have no
further rights under SARs outstanding at the time of such Change in Control.
 
25.3  Restricted Stock Awards.  In the event of a Change in Control, all
restrictions and conditions (including performance targets, at the target level)
previously established with respect to restricted stock Awards shall
conclusively be deemed to have been satisfied. Participants shall be entitled to
have issued to them the shares of Common Stock described in the applicable Award
Agreements, free and clear of any restriction or restrictive legend, except that
if upon the advice of counsel to the Corporation, shares of Common Stock cannot
lawfully be issued without restriction, then the Corporation shall make payment
to Participants in cash in an amount equal to the Change in Control Price of the
Common Stock that otherwise would have been issued. In such event:
 
(i) such cash payments to Participants shall be due and payable, and shall be
paid by the Corporation, immediately upon the occurrence of such Change in
Control; and
 
(ii) after the payment provided for in (i) above, Participants shall have no
further rights under restricted stock Awards outstanding at the time of such
Change in Control.

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25.4  Phantom Stock or Restricted Stock Units.  In the event of a Change in
Control:
 
(i) all restrictions and conditions (including any performance targets, at the
target level) previously established with respect to phantom stock or restricted
stock unit Awards shall conclusively be deemed to have been satisfied and
Participants shall be entitled to receive cash in satisfaction of their rights
under phantom stock or restricted stock unit Awards in accordance with the
amounts otherwise payable by the Corporation pursuant to the Award Agreement;
 
(ii) such cash payments to Participants shall be due and payable, and shall be
paid by the Corporation, immediately upon the occurrence of such Change in
Control; and
 
(iii) after the payment provided for in (ii) above, Participants shall have no
further rights under phantom stock or restricted stock unit Awards outstanding
at the time of such Change in Control.
 
25.5  Annual Incentive Awards.  To the extent that the Committee has determined
bonus opportunities for employees under the annual incentive program of the
Corporation based upon the financial performance of the Corporation or a segment
or identified business of the Corporation, in the event of a Change in Control,
all performance targets shall conclusively be deemed to have been satisfied at
the target level. In addition, all individual objectives related to bonus
opportunities shall conclusively be deemed to have been satisfied. In the event
of a Change in Control:
 
(i) employees participating in the annual incentive program shall be entitled to
receive payment of bonuses on the basis described above, and such bonuses shall
be paid by the Corporation immediately upon the occurrence of such Change in
Control; and
 
(ii) after the payment provided for in (i) above, such employees shall have no
further rights to bonus payments under such annual incentive plan.
 
25.6  Miscellaneous.  Upon a Change in Control, no action shall be taken that
would adversely affect the rights of any Participant or the operation of this
Plan with respect to any Award to which the Participant may have become entitled
under this Plan on or prior to the date of the Change in Control or to which the
Participant may become entitled as a result of such Change in Control.
 

26.   No Rights as Stockholder or Interest in Corporation Assets

 
No Participant shall have any rights as a stockholder as a result of
participation in this Plan except as provided in this Plan. To the extent any
person acquires a right to receive payments from the Corporation under this
Plan, such rights shall be no greater than the rights of an unsecured creditor
of the Corporation.
 

27.   Payment by Subsidiaries

 
Settlement of Awards to employees of Subsidiaries shall be made by and at the
expense of such Subsidiary. Except as prohibited by law, if any portion of an
Award is to be settled in shares of Common Stock, the Corporation shall sell and
transfer to the Subsidiary, and the Subsidiary shall purchase, the number of
shares necessary to settle that portion of the Award.
 

28.   Term of Plan

 
This Plan shall become effective upon adoption of the Plan by the Board,
provided that such effectiveness shall be subject to the approval of the
stockholders of the Corporation. Awards may be granted under this Plan at any
time prior to ten years from the adoption of the Plan by the Board, at which
time the Plan shall expire but without affecting any Awards then outstanding.

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