EXHIBIT 10.2METAL MANAGEMENT, INC.2002 INCENTIVE STOCK PLANAmended and Restated as of March 14, 2007
 

 
TABLE OF CONTENTS       SECTION 1. BACKGROUND AND PURPOSE  1        SECTION 2. DEFINITIONS  1        2.1 Affiliate  1 2.2 Award  1 2.3 Board  1 2.4 Cause  1 2.5 Change in Control  1 2.6 Code  2 2.7 Committee  2 2.8 Company  2 2.9 Director  2 2.10 Fair Market Value  2 2.11 ISO  2 2.12 Key Person  3 2.13 1933 Act  3 2.14 1934 Act  3 2.15 Non-ISO  3 2.16 Option  3 2.17 Option Certificate  3 2.18 Option Price  3 2.19 Parent  3 2.20 Plan  3 2.21 Rule 16b-3  3 2.22 Stock  3 2.23 Stock Appreciation Right  3 2.24 Stock Appreciation Right Certificate  3 2.25 SAR Value  3 2.26 Stock Grant  3 2.27 Stock Grant Certificate  3 2.28 Subsidiary  4 2.29 Ten Percent Shareholder  4        SECTION 3. SHARES RESERVED UNDER PLAN  4        SECTION 4. EFFECTIVE DATE  4        SECTION 5. COMMITTEE  5        SECTION 6. ELIGIBILITY AND ANNUAL GRANT CAPS  5        SECTION 7. OPTIONS  5 
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       7.1 Committee Action  5 7.2 $100,000 Limit  6 7.3 Option Price  6 7.4 Payment of Option Price  6 7.5 Exercise Period  6 7.6 Reload Option Grants  7        SECTION 8. GRANTS TO DIRECTORS  7        8.1 Automatic Grants  7 8.2 Exercise of Options  8 8.3 Payment of Option Price  8        SECTION 9. STOCK APPRECIATION RIGHTS  8        9.1 Committee Action  8 9.2 Terms and Conditions  8        SECTION 10. STOCK GRANTS  9        10.1 Committee Action  9 10.2 Conditions  10 10.3 Dividends and Voting Rights  10 10.4 Satisfaction of Forfeiture Conditions  10        SECTION 11. NON-TRANSFERABILITY  11        SECTION 12. SECURITIES REGISTRATION  11        SECTION 13. LIFE OF PLAN  11        SECTION 14. ADJUSTMENT  12        14.1 Capital Structure  12 14.2 Mergers  12 14.3 Fractional Shares  12        SECTION 15. CHANGE IN CONTROL  13        SECTION 16. AMENDMENT OR TERMINATION  13        SECTION 17. MISCELLANEOUS  14        17.1 Performance Goals  14 17.2 Shareholder Rights  14 17.3 No Contract of Employment  14 17.4 Withholding  14 17.5 Construction  14 17.6 Other Conditions  15 17.7 Loans  15 
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**SECTION 1.****BACKGROUND AND PURPOSE**The purpose of this Plan is to provide for the grant of Options, Stock Appreciation Rights andStock to Key Persons and to provide for the grant of Options to Directors in order to (1) attractand retain Key Persons and Directors, (2) provide an additional incentive to each Key Person orDirector to work to increase the value of Stock and promote the success of the business of theCompany, and (3) provide each Key Person or Director with a stake in the future of the Company thatcorresponds to the stake of each of the Company’s stockholders.**SECTION 2.****DEFINITIONS**     2.1 Affiliate — means any organization (other than a Subsidiary) that would betreated as under common control with the Company under § 414(c) of the Code if “50 percent” weresubstituted for “80 percent” in the income tax regulations under § 414(c) of the Code.     2.2 Award — means an Option, a Stock Appreciation Right or a Stock Grant or anycombination of Options, Stock Appreciation Rights and Stock Grants.     2.3 Board — means the Board of Directors of the Company.     2.4 Cause — means the definition of such term in the applicable employment orconsulting agreement, if any, or Option Certificate at the time a determination with respect to“Cause” is made or, in the absence of such an applicable definition, “Cause” means (1) the KeyPerson is convicted of, pleads guilty to, or confesses to any felony or any act of fraud,misappropriation or embezzlement that affects the Company or a Subsidiary or Affiliate, asdetermined by the Committee; (2) the Key Person engages in a fraudulent act that damages orprejudices the Company or any Subsidiary or Affiliate or engages in conduct or activities damagingto the property, business or reputation of the Company or any Subsidiary or Affiliate, all asdetermined by the Committee; (3) any act or omission by the Key Person involving malfeasance ornegligence in the performance of the Key Person’s duties and responsibilities as set forth in anyemployment or consulting agreement between the Key Person and the Company or any Subsidiary orAffiliate to the detriment of the Company or any Subsidiary or Affiliate, as determined by theCommittee; or (4) a failure by the Key Person to comply in any material respect with the terms ofany employment or consulting agreement between the Key Person and the Company or any Subsidiary orAffiliate or any written policiesor directives of the Company or any Subsidiary or Affiliate which failure has not been corrected bythe Key Person within 15 days after written notice from the Committee of such failure.     2.5 Change in Control — means a “change in control” of the Company of a nature thatwould be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14Apromulgated under the 1934 Act as in effect at the time of such “change in control,” provided thatsuch a change in control shall be deemed to have occurred at such time as (1) any “person”
 

 
(as thatterm is used in Sections 13(d) and 14(d)(2) of the 1934 Act) becomes after the effective date ofthis Plan the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) directly or indirectlyof securities representing 45% or more of the combined voting power for election of directors ofthe then outstanding securities of the Company or any successor to the Company, (2) during anyperiod of two consecutive years or less, individuals who at the beginning of such period constitutethe Board cease, for any reason, to constitute at least a majority of the Board, unless theelection or nomination for election of each person who was not a director at the beginning of suchperiod was approved by vote of at least two-thirds of the directors then in office who weredirectors at the beginning of such period or who were directors previously so approved, (3) thereis a dissolution or liquidation of the Company or any sale or disposition of 50% or more of theassets or business of the Company, or (4) there is a reorganization, merger, consolidation or shareexchange (other than a reorganization, merger, consolidation, or share exchange with a wholly-ownedsubsidiary of the Company) of the Company unless (A) the persons who were the beneficial owners ofthe outstanding shares of the common stock of the Company immediately before the consummation ofsuch transaction beneficially own more than 50% of the outstanding shares of the common stock ofthe successor or survivor corporation in such transaction immediately following the consummation ofsuch transaction and (B) the shares of the common stock of such successor or survivor corporationbeneficially owned by the persons described in Section 2.5(4)(A) immediately following theconsummation of such transaction are beneficially owned by each such person in substantially thesame proportion that each such person had beneficially owned shares of Company common stockimmediately before the consummation of such transaction.     2.6 Code — means the Internal Revenue Code of 1986, as amended.     2.7 Committee — means a committee of the Board appointed to administer this Plan thatshall have at least two members, each of whom shall be appointed by and shall serve at the pleasureof the Board and shall come within the definition of a “non-employee director” under Rule 16b-3 andan “outside director” under § 162(m) of the Code.     2.8 Company — means Metal Management, Inc. and any successor to Metal Management,Inc.     2.9 Director — means any member of the Board who is not an employee of the Company, aParent, a Subsidiary or an affiliate (as such term is defined in Rule 405 of the 1933 Act) of theCompany.     2.10 Fair Market Value — means for any date (1) the last sales price on any businessday for a share of Stock as reported by The Wall Street Journal or such other reputablereporting service selected by the Committee or, if no such price is so reported, (2) the price thatthe Committee acting in good faith determines through any reasonable valuation method that a shareof Stock might change hands between a willing buyer and a willing seller, neither being under anycompulsion to buy or to sell and both having reasonable knowledge of the relevant facts.     2.11 ISO — means an option granted under Section 7 to purchase Stock that isintended to satisfy the requirements of § 422 of the Code.
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     2.12 Key Person — means an employee or consultant of the Company or any Parent,Subsidiary or Affiliate designated by the Committee who, in the judgment of the Committee acting inits absolute discretion, is key directly or indirectly to the success of the Company.     2.13 1933 Act — means the Securities Act of 1933, as amended.     2.14 1934 Act — means the Securities Exchange Act of 1934, as amended.     2.15 Non-ISO — means an option granted under Section 7 or Section 8 to purchase Stockthat (1) by its terms provides that it will not be treated as an incentive stock option under § 422of the Code or (2) fails in operation or by its terms to satisfy the requirements of § 422 of theCode.     2.16 Option — means an ISO or a Non-ISO.     2.17 Option Certificate — means the document that sets forth the terms and conditionsof an Option (and, if so provided, a Stock Appreciation Right granted in connection with anOption).     2.18 Option Price — means the price that shall be paid to purchase one share of Stockupon the exercise of an Option.     2.19 Parent — means any corporation that is a parent corporation (within the meaningof § 424(e) of the Code) of the Company.     2.20 Plan — means this Metal Management, Inc. 2002 Incentive Stock Plan as effectiveas of the date adopted by the Board in 2002 and as amended from time to time thereafter.     2.21 Rule 16b-3 — means the exemption under Rule 16b-3 to Section 16(b) of the 1934Act or any successor to such rule.     2.22 Stock — means the $.01 par value common stock of the Company.     2.23 Stock Appreciation Right — means a right granted under Section 9 to receive theappreciation in a share of Stock.     2.24 Stock Appreciation Right Certificate — means the document that sets forth theterms and conditions of a Stock Appreciation Right that is not granted as part of an Option.     2.25 SAR Value — means the value assigned by the Committee to a share of Stock inconnection with the grant of a Stock Appreciation Right.     2.26 Stock Grant — means Stock granted under Section 10.     2.27 Stock Grant Certificate — means the document that sets forth the terms and
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conditions of a Stock Grant.     2.28 Subsidiary — means a corporation that is a subsidiary corporation (within themeaning of § 424(f) of the Code) of the Company.     2.29 Ten Percent Shareholder — means a person who owns (after taking into account theattribution rules of § 424(d) of the Code) more than 10% of the total combined voting power of allclasses of stock of either the Company, a Subsidiary or Parent.**SECTION 3.****SHARES RESERVED UNDER PLAN**Subject to Section 14, there shall be 4,000,000 shares of Stock reserved for issuance under thisPlan. Such shares of Stock shall be reserved to the extent that the Company deems appropriate fromauthorized but unissued shares of Stock and from shares of Stock that have been reacquired by theCompany. Any shares of Stock subject to an Option or Stock Grant that remain unissued after thecancellation, expiration or exchange of such Option or Stock Grant or that are forfeited afterissuance thereafter shall again become available for issuance under this Plan. The shares of Stockreserved for issuance under this Plan shall be reduced to the extent that shares are issued aspayment under Section 9.3 upon the exercise of a Stock Appreciation Right, but Stock AppreciationRights otherwise shall not reduce the number of shares available for issuance under this Plan. Anyshares of Stock that would be transferred pursuant to the Plan but that are used to satisfy awithholding obligation shall be treated as transferred under this Plan and shall not again becomeavailable for grants under this Plan.**SECTION 4.****EFFECTIVE DATE**The effective date of this Plan shall be the date of its adoption by the Board, provided theshareholders of the Company (acting at a duly called meeting of such shareholders) approve suchadoption within twelve months of such effective date. Any ISO granted before such shareholderapproval automatically shall be granted subject to such approval.
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**SECTION 5.****COMMITTEE**This Plan shall be administered by the Committee. If there is no Committee (for example, becausethe Board has not appointed a Committee or the members of the appointed committee do not satisfythe requirements of § 2.7), the Board shall administer the Plan (and any reference in the Plan tothe Committee shall mean a reference to the Board). The Committee acting in its absolutediscretion shall exercise such powers and take such action as expressly called for under this Planand, further, the Committee shall have the power to interpret this Plan and (subject to § 15 and §16 and Rule 16b-3) to take such other action in the administration and operation of this Plan asthe Committee deems equitable under the circumstances, which action shall be binding on theCompany, on each affected Key Person or Director and on each other person directly or indirectlyaffected by such action. The Committee, in its discretion, may delegate to one or more of itsmembers or one or more officers of the Company the right to grant Awards to Key Persons who are notofficers of the Company. In addition, the Committee may authorize any of its members or anyofficer of the Company to execute and deliver documents on behalf of the Committee.**SECTION 6.****ELIGIBILITY AND ANNUAL GRANT CAPS**Only Key Persons who are employed by the Company or a Subsidiary or Parent shall be eligible forthe grant of ISOs under this Plan. All Key Persons shall be eligible for the grant of Non-ISOs,Stock Appreciation Rights and Stock Grants. No Key Person, however, shall be granted in anycalendar year Options, Stock Appreciation Rights, or Stock Grants that individually or in theaggregate are based on more than 1,000,000 shares of Stock. Directors shall be eligible for thegrant of Non-ISOs in accordance with the provisions of Section 8.**SECTION 7.****OPTIONS**     7.1 Committee Action. The Committee acting in its absolute discretion shall have theright to grant Options to Key Persons from time to time. The Committee shall have the right togrant new Options in exchange for the cancellation of outstanding Options that have a higher orlower Option Price than the new Options. Each grant of an Option shall be evidenced by an OptionCertificate, and each Option Certificate shall set forth whether the Option is an ISO or a Non-ISOand such other terms and conditions as the Committee acting in its absolute discretion deemsconsistent with the terms of this Plan. If the Committee grants an ISO and a Non-ISO to a KeyPerson on the same date, the right of the Key Person to exercise the ISO shall not be conditionedon his or her failure to exercise the Non-ISO. The Committee, in its sole discretion, at any timemay accelerate the vesting of an Option or waive any conditions or restrictions relating to theOption or the shares of Stock covered thereby.
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     7.2 $100,000 Limit. No Option shall be treated as an ISO to the extent that theaggregate Fair Market Value of the Stock subject to the Option that would first become exercisablein any calendar year exceeds $100,000. Any such excess instead automatically shall be treated as aNon-ISO. The Committee shall interpret and administer the ISO limitation set forth in this Section7.2 in accordance with § 422(d) of the Code, and the Committee shall treat this Section 7.2 as ineffect only for those periods for which § 422(d) of the Code is in effect.     7.3 Option Price. The Option Price for an ISO shall be no less than the Fair MarketValue of a share of Stock on the date the Option is granted; provided, however, if an ISO isgranted to a Key Person who is a Ten Percent Shareholder, the Option Price of such ISO shall be noless than 110% of the Fair Market Value of a share of Stock on the date such ISO is granted. TheOption Price for a Non-ISO may be equal to, greater than or less than the Fair Market Value of ashare of Stock on the date the Option is granted.     7.4 Payment of Option Price. The Option Price shall be payable in full upon theexercise of any Option or the Key Person shall have entered into an agreement with the Company anda broker acceptable to the Committee to the effect that the Company will transfer the shares to thebrokerage account of the Key Person and the broker will transfer the Option Price to the Company onthat same date. At the discretion of the Committee, an Option Certificate may provide for thepayment of the Option Price either in cash, by check or in Stock that has been held by the optioneefor at least six months, or in any combination of cash, check and such Stock, or by such othermeans as the Committee determines appropriate at the time of grant of the Option. Any payment madein Stock shall be treated as equal to the Fair Market Value of such Stock on the date the KeyPerson causes such Stock to be transferred to the account of the Company.     7.5 Exercise Period. Each Option grantedunder this Plan shall be exercisable in whole or in part at such time or times as set forth in therelated Option Certificate, but no Option Certificate shall make an Option exercisable on or afterthe earlier of(1) the date that is the fifth anniversary of the date the Option isgranted, if the Option is an ISO and the Key Person is a Ten PercentShareholder on the date the Option is granted, or(2) the date that is the tenth anniversary of the date the Option isgranted, if the Option is (a) a Non-ISO or (b) an ISO that isgranted to a Key Person who is not a Ten Percent Shareholder on thedate the Option is granted.An Option Certificate may provide for the exercise of an Option after the employment or service ofa Key Person has terminated for any reason whatsoever, and unless an Option Certificate providesotherwise, an Option granted to a Key Person may be exercised by the Key Person (to the extentexercisable) during the period that the Key Person remains an employee or consultant of the Companyor any Parent, Subsidiary or Affiliate and for a period of three months (one year for a Non-ISO inthe case of retirement on or after the age of 65) after the Key Person’s employment or service as aconsultant terminates other than as a result of death, total and
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permanent disability (asdetermined by the Committee), or Cause; provided that in no event shall the Option be exercisablemore than ten years (five years in the case of an ISO granted to a Ten Percent Shareholder) afterthe grant date. Unless an Option Certificate provides otherwise, if the Key Person’s employment orservice as a consultant terminates as a result of death or total and permanent disability (asdetermined by the Committee), the Option will vest immediately and may be exercised thereafter fora period of one year if an ISO or two years if a Non-ISO after the Key Person’s employment orservice as a consultant terminates by the executor or administrator of the Key Person’s estate orby the person or persons to whom the Key Person’s rights under the Option pass by the Key Person’swill or the laws of descent and distribution; provided that in no event shall the Option beexercisable more than ten years (five years in the case of an ISO granted to a Ten PercentShareholder) after the grant date. Unless an Option Certificate provides otherwise, if the KeyPerson is terminated for Cause, the Option will expire immediately and automatically at the time ofsuch termination.     7.6 Reload Option Grants. An Option Certificate may provide for the automatic grantof additional Options as of each date that a Key Person exercises the original Option if the KeyPerson in connection with such exercise uses (in accordance with Section 7.4) Stock to pay all or apart of the Option Price or uses Stock to satisfy all or a part of any related tax withholdingrequirement. As for each such additional Option,(1) the number of shares of Stock subject to the additional Optionshall be no more than the number of shares of Stock used to pay therelated Option Price or to satisfy the related withholdingrequirement,(2) the Option Price shall be no less than the Fair Market Value ofa share of Stock on the date of the grant of the reload Option,(3) the additional Option shall expire no later than the expirationdate for the original Option, and(4) the additional Option shall be subject to such other terms andconditions as the Committee deems appropriate under thecircumstances.**SECTION 8.****GRANTS TO DIRECTORS**     8.1 Automatic Grants. Each Director who is a member of the Board as of the first dayof each fiscal year of the Company, commencing with the fiscal year ending March 31, 2008,automatically shall be granted (without any action on the part of the Committee) on such date anon-ISO to purchase 30,000 shares of Stock at an Option Price equal to the Fair Market Value of ashare of Stock on the date of such grant. If a Director commences service on the Board after thefirst business day of a fiscal year, the Director automatically shall be granted (without anyaction on the part of the Committee) on the date the Director commences service on
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the Board, aNon-ISO to purchase a number of shares of Stock determined by multiplying 30,000 by a fraction thenumerator of which is the number of full and partial months remaining in such fiscal year and thedenominator of which is 12, at an Option Price equal to the Fair Market Value of a share of Stockon the date of such grant. Each Option granted to a Director under this Section 8 shall beevidenced by an Option Certificate that sets forth the terms and conditions set forth in thisSection 8.     8.2 Exercise of Options. The shares of Stock subject to an Option granted to aDirector shall become exercisable on the last day of the fiscal year of the Company during whichsuch Option was granted, so long as the Director remains on the Board through that date. The rightto purchase shares of Stock subject to an Option that has become exercisable shall be cumulativeduring the term of the Option. The Option may be exercised by the Director (to the extentexercisable) during the period that the Director remains on the Board and for a period of threemonths after the Director ceases to serve as a member of the Board other than as a result of deathor disability (as determined by the Board); provided that in no event shall the Option beexercisable more than ten years after the grant date. If the Director ceases to serve as a memberof the Board as a result of death or disability (as determined by the Board), the Option may beexercised thereafter (to the extent exercisable) for a period of twelve months after the Directorceases to serve as a member of the Board by the executor or administrator of the Director’s estateor by the person or persons to whom the Director’s rights under the Option pass by the Director’swill or the laws of descent and distribution; provided that in no event shall the Option beexercisable more than ten years after the grant date.     8.3 Payment of Option Price. No shares of Stock shall be issued upon exercise of anOption by a Director until the Company has received full payment of the Option Price or theDirector has entered into an agreement with the Company and a broker acceptable to the Committee tothe effect that the Company will transfer the shares to the brokerage account of the Director andthe broker will transfer the Option Price to the Company on that same date. The Option Price maybe paid either in cash, by check or in Stock that has been held by the Director for at least sixmonths, or in any combination of cash, check and such Stock. Any payment made in Stock shall betreated as equal to the Fair Market Value of such Stock on the date the Director causes such Stockto be transferred to the account of the Company.**SECTION 9.****STOCK APPRECIATION RIGHTS**     9.1 Committee Action. The Committee acting in its absolute discretion may grant StockAppreciation Rights to Key Persons from time to time, and each Stock Appreciation Right grant shallbe evidenced by a Stock Appreciation Right Certificate or, if such Stock Appreciation Right isgranted as part of an Option, shall be evidenced by the Option Certificate for the related Option.     9.2 Terms and Conditions.          (a) Stock Appreciation Right Certificate. Each Stock Appreciation Right
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Certificateshall set forth the number of shares of Stock on which the Key Person’s right to appreciation shallbe based and the SAR Value of each share of Stock. Such SAR Value shall be no less than the FairMarket Value of a share of Stock on the date that the Stock Appreciation Right is granted. TheStock Appreciation Right Certificate shall set forth such other terms and conditions for theexercise of the Stock Appreciation Right as the Committee deems appropriate under thecircumstances, but no Stock Appreciation Right Certificate shall make a Stock Appreciation Rightexercisable on or after the date that is the tenth anniversary of the date such Stock AppreciationRight is granted.          (b) Option Certificate. If a Stock Appreciation Right is evidenced by an OptionCertificate, the number of shares of Stock subject to the Stock Appreciation Right shall be basedshall be the same as the number of shares of Stock subject to the related Option, and the SAR Valuefor each such share of Stock shall be no less than the Option Price under the related Option. Eachsuch Option Certificate shall provide that the exercise of the Stock Appreciation Right withrespect to any share of Stock shall cancel the Key Person’s right to exercise his or her Optionwith respect to such share and, conversely, that the exercise of the Option with respect to anyshare of Stock shall cancel the Key Person’s right to exercise his or her Stock Appreciation Rightwith respect to such share. A Stock Appreciation Right that is granted as part of an Option shallbe exercisable only while the related Option is exercisable. The Option Certificate shall setforth such other terms and conditions for the exercise of the Stock Appreciation Right as theCommittee deems appropriate under the circumstances.          (c) Exercise. A Stock Appreciation Right shall be exercisable only when the FairMarket Value of a share of Stock on which the right to appreciation is based exceeds the SAR Valuefor such share. A Key Person upon the exercise of his or her Stock Appreciation Right shallreceive a payment from the Company in cash or in Stock, or in a combination of cash and Stock,equal to the excess of the Fair Market Value of the shares of Stock to which the exercise relatesover the SAR Value for such shares. If payment is made in whole or in part in Stock, the number ofshares of Stock paid shall be based on the Fair Market Value of a share on the date the StockAppreciation Right is exercised. The Committee acting in its absolute discretion shall have theright to determine the form of payment under this Section 9.3.**SECTION 10.****STOCK GRANTS**     10.1 Committee Action. The Committee acting in its absolute discretion may make StockGrants to Key Persons, including, but not limited to, restricted stock grants. Each Stock Grantshall be evidenced by a Stock Grant Certificate, and each Stock Grant Certificate shall set forththe conditions, if any, under which Stock will be issued under the Stock Grant and the conditionsunder which the Key Person’s interest in any Stock that has been issued will becomenon-forfeitable. The Committee, in its sole discretion, may at the time a Stock Grant is made orat any time thereafter provide for the deemed satisfaction of the conditions to which the StockGrant is subject and the early vesting of the Stock Grant.
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     10.2 Conditions.          (a) Conditions to Issuance of Stock. The Committee acting in its absolute discretionmay make the issuance of Stock under a Stock Grant subject to the satisfaction of one, or more thanone, condition that the Committee deems appropriate under the circumstances for Key Personsgenerally or for a Key Person in particular, and the related Stock Grant Certificate shall setforth each such condition and the deadline for satisfying each such condition. Stock subject to aStock Grant shall be issued in the name of a Key Person only after each such condition, if any, hasbeen timely satisfied, and any Stock that is so issued shall be held by the Company pending thesatisfaction of the forfeiture conditions, if any, under Section 10.2(b) for the related StockGrant.          (b) Forfeiture Conditions. The Committee acting in its absolute discretion may makeStock issued in the name of a Key Person subject to one, or more than one, objective employment,performance or other forfeiture condition (including a performance goal specified in Section 17.1)that the Committee acting in its absolute discretion deems appropriate under the circumstances forKey Persons generally or for a Key Person in particular, and the related StockGrant Certificate shall set forth each such forfeiture condition, if any, and the deadline, if any,for satisfying each such forfeiture condition. A Key Person’s non-forfeitable interest in theshares of Stock underlying a Stock Grant shall depend on the extent to which he or she timelysatisfies each such condition. Each share of Stock underlying a Stock Grant shall be unavailableunder § 3 after such grant is effective unless such share thereafter is forfeited as a result of afailure to timely satisfy a forfeiture condition, in which event such share of Stock shall againbecome available under Section 3 as of the date of such forfeiture.     10.3 Dividends and Voting Rights. Unless the Stock Grant Certificate providesotherwise, if a cash dividend is paid on a share of Stock after such Stock has been issued under aStock Grant but before the first date that a Key Person’s interest in such Stock (1) is forfeitedcompletely or (2) becomes completely non-forfeitable, the Company shall pay such cash dividenddirectly to such Key Person. If a Stock dividend is paid on such a share of Stock during suchperiod, such Stock dividend shall be treated as part of the related Stock Grant, and a Key Person’sinterest in such Stock dividend shall be forfeited or shall become non-forfeitable at the same timeas the Stock with respect to which the Stock dividend was paid is forfeited or becomesnon-forfeitable. The disposition of each other form of dividend that is declared on such a shareof Stock during such period shall be made in accordance with such rules as the Committee shalladopt with respect to each such dividend. A Key Person also shall have the right to vote the Stockissued under his or her Stock Grant during such period.     10.4 Satisfaction of Forfeiture Conditions. A share of Stock shall cease to besubject to a Stock Grant at such time as a Key Person’s interest in such Stock becomesnon-forfeitable under this Plan, and the certificate representing such share shall be transferredto, or registered in the name of, the Key Person as soon as practicable thereafter.
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**SECTION 11.****NON-TRANSFERABILITY**No Award shall (absent the Committee’s consent) be transferable by a Key Person or a Director otherthan by will or by the laws of descent and distribution, and any Award shall (absent theCommittee’s consent) be exercisable during a Key Person’s or Director’s lifetime only by the KeyPerson or Director. Notwithstanding the foregoing, an Award (other than an ISO) may permit thetransfer of the Award by the Key Person or Director pursuant to a qualified domestic relationsorder (as defined in Code Section 414(p)), provided the transfer of such Award would not adverselyaffect the qualification of such Award or the underlying shares of Stock for registration on aRegistration Statement on Form S-8. The person or persons to whom an Award is transferred by willor by the laws of descent and distribution or pursuant to a qualified domestic relations order (orwith the Committee’s consent) thereafter shall be treated as the Key Person or Director.**SECTION 12.****SECURITIES REGISTRATION**As a condition to the receipt of shares of Stock under this Plan, the Key Person or Director shall,if so requested by the Company, agree to hold such shares of Stock for investment and not with aview of resale or distribution to the public and, if so requested by the Company, shall deliver tothe Company a written statement satisfactory to the Company to that effect. Furthermore, if sorequested by the Company, the Key Person or Director shall make a written representation to theCompany that he or she will not sell or offer for sale any of such Stock unless a registrationstatement shall be in effect with respect to such Stock under the 1933 Act and any applicable statesecurities law or he or she shall have furnished to the Company an opinion in form and substancesatisfactory to the Company of legal counsel satisfactory to the Company that such registration isnot required. Certificates representing the Stock transferred upon the exercise of an Option orStock Appreciation Right or upon the lapse of the forfeiture conditions, if any, on any Stock Grantmay at the discretion of the Company bear a legend to the effect that such Stock has not beenregistered under the 1933 Act or any applicable state securities law and that such Stock cannot besold or offered for sale in the absence of an effective registration statement as to such Stockunder the 1933 Act and any applicable state securities law or an opinion in form and substancesatisfactory to the Company of legal counsel satisfactory to the Company that such registration isnot required.**SECTION 13.****LIFE OF PLAN**No Award shall be granted under this Plan on or after the earlier of     (1) the tenth anniversary of the effective date of this Plan(as determined under Section 4), in which event this Plan
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otherwisethereafter shall continue in effect until all outstanding Optionsand Stock Appreciation Rights have been exercised in full or nolonger are exercisable and all Stock issued under any Stock Grantsunder this Plan has been forfeited or has become non-forfeitable, or     (2) the date on which all of the Stock reserved under Section 3has (as a result of the exercise of Options or Stock AppreciationRights or the satisfaction of the forfeiture conditions, if any, onStock Grants) been issued or no longer is available for use underthis Plan, in which event this Plan also shall terminate on suchdate.**SECTION 14.****ADJUSTMENT**     14.1 Capital Structure. The number, kind or class (or any combination thereof) ofshares of Stock reserved under Section 3, the annual grant caps described in Section 6, the annualDirector grants described in Section 8, the number, kind or class (or any combination thereof) ofshares of Stock subject to an Award, and the Option Price or SAR Value of an Award shall beadjusted by the Committee in an equitable manner to reflect any change in the capitalization of theCompany, including, but not limited to, such changes as stock dividends or stock splits, effectedwithout receipt of consideration by the Company.     14.2 Mergers. The Committee as part of any corporate transaction described in §424(a) of the Code shall have the right to adjust (in any manner that the Committee in itsdiscretion deems consistent with § 424(a) of the Code) the number, kind or class (or anycombination thereof) of shares of Stock reserved under Section 3, the annual grant caps describedin Section 6, and the annual Director grants described in Section 8. The Committee as part of anycorporate transaction described in § 424(a) of the Code also shall have the right to adjust (in anymanner that the Committee in its discretion deems consistent with § 424(a) of the Code) the number,kind or class (or any combination thereof) of shares of Stock subject to an Award, the Option Priceor SAR Value of an Award, and any grant and forfeiture conditions of an Award. Furthermore, theCommittee shall have the right (in any manner that the Committee in its discretion deems consistentwith § 424(a) of the Code and without regard to the annual grant caps described in Section 6) tomake any Award to effect the assumption of, or the substitution for, stock grants and option andstock appreciation right grants previously made by any other entity to the extent that suchcorporate transaction calls for such substitution or assumption of such stock grants and stockoption and stock appreciation right grants.     14.3 Fractional Shares. If any adjustment under this Section 14 would create afractional share of Stock or a right to acquire a fractional share of Stock, such fractional shareshall be disregarded and the number of shares of Stock reserved under this Plan and the numbersubject to an Award shall be the next lower number of shares of Stock, rounding all fractionsdownward. An adjustment made under this Section 14 by the Committee shall be conclusive and
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binding on all affected persons.**SECTION 15.****CHANGE IN CONTROL**If there is a Change in Control, then any and all conditions to the exercise of all thenoutstanding Options and Stock Appreciation Rights and any and all issuance and forfeitureconditions on all then outstanding Stock Grants automatically shall be deemed satisfied in full,and the Board shall have the right to cancel such Options, Stock Appreciation Rights and StockGrants if (1) the Company transfers to the Key Person or Director shares of Stock, the number ofwhich shall be determined by the Company by dividing the excess of (a) the fair market value of thenumber of shares which remain subject to the exercise of such Option or SAR over the total OptionPrice or SAR Value (as the case may be) for such shares by (b) the fair market value of a share ofStock on such date, which number shall be rounded down to the nearest whole number, or (2) theCompany transfers to the Key Person or Director the same consideration which the Key Person orDirector otherwise would receive as a shareholder of the Company in connection with such Change inControl if the Key Person or Director held the number of shares of Stock which would have beentransferable to him or to her under (1) above if such number had been determined immediately beforesuch Change in Control.**SECTION 16.****AMENDMENT OR TERMINATION**This Plan may be amended by the Board from time to time to the extent that the Board deemsnecessary or appropriate; provided, however, (1) no amendment (including an amendment to increasethe number of shares of Stock available for issuance of ISOs) shall be made absent the approval ofthe shareholders of the Company to the extent such approval is required under applicable law and(2) no amendment shall adversely affect any rights under an Award previously made unless the KeyPerson or Director consents in writing. The Board also may suspend granting Awards at any time andmay terminate this Plan at any time; provided, however, the Board or the Committee shall not havethe right unilaterally to modify, amend or cancel any Award granted before such suspension ortermination unless (x) the modification or amendment does not adversely affect any rights under theAward, (y) the Key Person or Director consents in writing to such modification, amendment orcancellation, or (z) there is a transaction described in Section 14 or Section 15 (in which casethe Committee may act as provided in such Sections).
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**SECTION 17.****MISCELLANEOUS**     17.1 Performance Goals. As a condition to the grant of an Award, or the issuance ofshares subject to an Award, the Committee may prescribe corporate, divisional and/or individualperformance goals applicable to all or any portion of the shares subject to the Award. Performancegoals may be based on achieving a certain level of revenue, earnings, earnings per share, netincome, return on equity, return on capital, return on assets, total shareholder return, return onsales or cash flow, or any combination thereof, of the Company or the Company and its Subsidiariesand Affiliates, or any division thereof, or on the extent of changes in such criteria.     17.2 Shareholder Rights. No Key Person or Director shall have any rights as ashareholder of the Company as a result of the grant of an Option or a Stock Appreciation Rightpending the actual delivery of the Stock subject to such Award to such Key Person or Director.Subject to Section 10.3, a Key Person’s rights as a shareholder in the shares of Stock underlying aStock Grant that is effective shall be set forth in the related Stock Grant Certificate.     17.3 No Contract of Employment. The grant of an Option or a Stock Appreciation Rightor a Stock Grant to a Key Person under this Plan shall not constitute a contract of employment andshall not confer on a Key Person any rights upon his or her termination of employment or service inaddition to those rights, if any, expressly set forth in the related Option Certificate, StockAppreciation Right Certificate or Stock Grant Certificate.     17.4 Withholding. Each Award shall be made subject to the condition that the KeyPerson or Director consents to whatever action the Committee directs to satisfy the minimumstatutory federal and state tax withholding requirements, if any, that the Committee in itsdiscretion deems applicable to the exercise of the Option, or, in the case of a Key Person, StockAppreciation Right, or the satisfaction of any forfeiture conditions with respect to Stock subjectto a Stock Grant issued in the name of a Key Person, including requiring the Key Person or Directorto remit to the Company in cash the required withholding amount. The Committee also shall have theright to provide in an Option Certificate, Stock Appreciation Right Certificate or Stock GrantCertificate that a Key Person or Director may elect to satisfy such minimum statutory federal andstate tax withholding requirements through a reduction in the cash or the number of shares of Stockactually transferred to him or to her under this Plan. No withholding shall be effected under thisPlan that exceeds the minimum statutory federal and state withholding requirements. The Committeeacting in its absolute discretion shall have the power to authorize and direct the Company to pay acash bonus (or to provide in the terms of an Award for the Company to make such payment) to a KeyPerson or Director to pay all, or any portion of, his or her federal, state and local income taxliability that the Committee deems attributable to his or her Award and, further, to pay anysuch tax liability attributable to such cash bonus.     17.5 Construction. All references to sections are to sections of this Plan unlessotherwise indicated. This Plan shall be construed under the laws of the State of Delaware.Finally, each term set forth in Section 2 shall have the meaning set forth opposite such term forpurposes of this Plan and, for purposes of such definitions, the singular shall include the plural
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and the plural shall include the singular.     17.6 Other Conditions. Each Option Certificate, Stock Appreciation Right Certificateor Stock Grant Certificate may require that a Key Person (as a condition to the exercise of anOption or a Stock Appreciation Right or the issuance of Stock subject to a Stock Grant) or Director(as a condition to the exercise of an Option) enter into any agreement or make such representationsprepared by the Company, including (without limitation) any agreement that restricts the transferof Stock acquired pursuant to the exercise of an Option or a Stock Appreciation Right or a StockGrant or provides for the repurchase of such Stock by the Company.     17.7 Loans. If approved by the Committee, the Company may lend money to, or guaranteeloans made by a third party to, any Key Person or Director to finance all or a part of the exerciseof any Option granted under this Plan, or, in the case of a Key Person, the purchase of any Stocksubject to a Stock Grant under this Plan, and the exercise of an Option or the purchase of any suchStock with the proceeds of any such loan shall be treated as an exercise or purchase for cash underthis Plan.
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