Tredegar Corporation


 

  Exhibit
    10.5

   

   

  TREDEGAR
    INDUSTRIES, INC.

  1989
    INCENTIVE STOCK OPTION PLAN

   

  ARTICLE
    I

  DEFINITIONS

  1.01.    Affiliate
    means any Subsidiary or “parent corporation” (within the meaning
    of Section 422A of the Code) of the Company. 

  1.02.    Agreement
    means a written agreement (including any amendment or supplement thereto)
    between the Company and a Participant specifying the terms and conditions
    of an Option or SAR granted to such Participant. 



  1.03.    Board means
the Board of Directors of the Company. 


  1.04.    Code
    means the Internal Revenue Code of 1986 as amended, and any successor thereto.
    

  1.05.    Committee
    means a committee, consisting of not less than three members of the Board,
    appointed by the Board to administer the Plan. No member of the Committee
    shall be eligible to participate in the Plan. 


 1.06.    Common           Stock means
the common stock of the Company. 




 1.07.    Company           means
Tredegar Industries, Inc. 


  1.08.    Fair
    Market Value means, on any given date, the fair market
    value of a share of Common Stock determined by the Committee using any reasonable
    method in good faith.

  1.09.    Option
    means a stock option that entitles the holder to purchase from the Company
    a stated number of shares of Common Stock at the price set forth in an Agreement.

  1.10.    Participant
    means an employee of the Company or of a Subsidiary, including an employee
    who is a member of the Board, who satisfies the requirements of Article IV
    and is selected by the Committee to receive an Option. 



  

1.11.    Plan           means the
Tredegar Industries, Inc. 1989 Incentive Stock Option Plan. 



  1.12.    SAR
    means a stock appreciation right (which may be granted only in conjunction
    with an Option) that entitles the holder to receive, with respect to each
    share of Common Stock encompassed by the exercise of such SAR, the lesser
    of (a) the excess of the Fair Market Value at the time of exercise over the
    option price of the related Option or (b) the fair Market Value on the date
    of grant. Such payment shall be made in Common Stock or in cash and Common
    Stock as determined by the Committee in accordance with Section 8.03. 

  1.13.    Subsidiary
    means any corporation (other than the Company) in an unbroken chain of corporations
    beginning with the Company if each of the corporations in the chain (other
    than the last corporation) owns stock possessing at least 50 percent of the
    total combined voting power of all classes of stock in one of the other corporations
    in such chain. 

   

  	
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  ARTICLE
    II

  PURPOSES

  This
    Plan is intended to assist the Company in recruiting and retaining key employees
    with ability and initiative by enabling employees who contribute significantly
    to the Company to participate in its future success and to associate their
    interests with those of the Company. It is further intended that Options granted
    under this Plan (unless otherwise designated by their terms) shall constitute
    “incentive stock options” within the meaning of Section 422A of
    the Code. No Option shall be invalid for failure to qualify as an incentive
    stock option. The proceeds received by the Company from the sale of Common
    Stock pursuant to this Plan shall be used for general corporate purposes.
    

  ARTICLE
    III

  ADMINISTRATION

  This
    Plan shall be administered by the Committee. The Committee shall have authority
    to grant Options and SARs upon such terms (not inconsistent with the provisions
    of this Plan) as the Committee may consider appropriate. Such terms may include
    conditions (in addition to those contained in this Plan) on the exercisability
    of all or any part of an Option or SAR. Notwithstanding any such conditions,
    the Committee may, in its discretion, accelerate the time at which any Option
    or SAR may be exercised. In addition, the Committee shall have complete authority
    to interpret all provisions of this Plan; to prescribe the form of Agreements;
    to adopt, amend, and rescind rules and regulations pertaining to the administration
    of this Plan; and to make all other determinations necessary or advisable
    for the administration of this Plan. The express grant in this Plan of any
    specific power to the Committee shall not be construed as limiting any power
    or authority of the Committee. Any decision made, or action taken, by the
    Committee in or in connection with the administration of this Plan shall be
    final and conclusive. No member of the Committee shall be liable for any act
    done in good faith with respect to this Plan or any Agreement, Option, or
    SAR. All expenses of administering this Plan shall be borne by the Company.
    

  ARTICLE
    IV

  ELIGIBILITY

  4.01.     General.
    Any employee of the Company or of any Subsidiary (including any corporation
    that becomes a Subsidiary after the adoption of this Plan) who, in the judgment
    of the Committee, has contributed or can be expected to contribute to the
    profits or growth of the Company or a Subsidiary may be granted one or more
    Options and SARs. Directors of the Company who are employees and are not members
    of the Committee are eligible to participate in this Plan. 

  4.02.     Grants.
    The Committee will designate employees to whom Options and SARs are to be
    granted and will specify the number of shares of Common Stock subject to each
    grant. An Option may be granted with or without a related SAR. An SAR may
    be granted only in conjunction with an Option and for a number of shares not
    exceeding the number of shares subject to the related Option. All Options
    and SARs granted under this Plan shall be evidenced by Agreements which shall
    be subject to applicable provisions of this Plan and to such other provisions
    as the Committee may adopt. 

   

  	
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  No
    Participant may be granted incentive stock options (under all incentive stock
    option plans of the Company and Affiliates) which are first exercisable in
    any calendar year for stock having an aggregate fair market value (determined
    as of the date an option is granted) exceeding $100,000. The preceding annual
    limitation shall not apply with respect to Options that are not incentive
    stock options. 

  ARTICLE
    V

  STOCK
    SUBJECT TO OPTIONS OR
    SARS

  Upon
    the exercise of any Option or SAR, the Company may deliver to the Participant
    authorized but unissued stock, or any combination thereof. The maximum aggregate
    number of shares of Common Stock that may be issued pursuant to Options and
    SARs granted under this Plan is 600,000, subject to adjustment as provided
    by Article IX. If an Option is terminated, in whole or in part, for any reason
    other than its exercise or the exercise of a related SAR, the number of shares
    of Common Stock allocated to the Option or portion thereof may be reallocated
    to other Options or SARs to be granted under this Plan. If an SAR is terminated,
    in whole or in part, for any reason other than its exercise or the exercise
    of a related Option, the number of shares of Common Stock allocated to the
    SAR or portion thereof may be reallocated to other SARs or Options to be granted
    under this Plan. 

  ARTICLE
    VI

  OPTION
    PRICE

  The
    price per share for Common Stock purchased on the exercise of any Option granted
    under this Plan shall be not less than the Fair Market Value on the date the
    Option is granted. 

  ARTICLE
    VII

  EXERCISE
    OF OPTIONS AND SARS

  7.01.     Maximum
    Option or SAR Period. No Option or related SAR shall
    be exercisable after the expiration of 10 years from the date the Option was
    granted. The terms of any Option or SAR may provide that it is exercisable
    for a period less than such maximum period. 

  7.02.      Nontransferability.
    Any Option or SAR granted under this Plan shall be nontransferable except
    by will or by the laws of descent and distribution. In the event of any such
    transfer, the Option and related SAR must be transferred to the same person(s).
    During the lifetime of the Participant to whom the Option is granted, the
    Option or SAR may be exercised only by the Participant. No right or interest
    of a Participant in any Option or SAR shall be liable for, or subject to,
    any lien, obligation, or liability of such Participant. 

  7.03.      Employee
    Status. For purposes of determining the applicability
    of Section 422A of the Code (relating to incentive stock options), or in the
    event that the terms of any Option provide that it may be exercised only during
    employment or within a specified period of time after termination of employment,
    the Committee may decide in each case to what extent leaves of absence for
    governmental or military service, illness, temporary disability, or other
    reasons shall not be deemed interruptions of continuous employment. 

  	
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  ARTICLE
    VIII

  METHOD
    OF EXERCISE

  8.01.      Exercise.
    Subject to the provisions of Articles VII and X, an Option or SAR may be exercised
    in whole at any time or in part from time to time at such times and in compliance
    with such requirements as the Committee shall determine; provided, however,
    that an SAR may be exercised only to the extent the related Option is exercisable
    and when the Fair Market Value exceeds the option price of the related Option.
    An Option or SAR granted under this Plan may be exercised with respect to
    any number of whole shares less than the full number for which the Option
    or SAR could be exercised. Such partial exercise of an Option or SAR shall
    not affect the right to exercise the Option or SAR from time to time in accordance
    with this Plan with respect to the remaining shares subject to the Option
    or related to the SAR. The exercise of either an Option or SAR shall result
    in the termination of the other to the extent of the number of shares with
    respect to which the Option or SAR is exercised. 

  8.02.      Payment.
    Unless otherwise provided by the Agreement or permitted by the Committee,
    payment of the Option price shall be made in cash or such cash equivalent
    as shall be acceptable to the Committee. If the Agreement provides or the
    Committee permits, payment of all or a part of the Option price may be made
    by surrendering shares of Common Stock to the Company. If Common Stock is
    used to pay all or part of the Option price, the shares surrendered must have
    a Fair Market Value (as of the day preceding the date of exercise) that is
    not less than such price or part thereof. 

  8.03.      Determination
    of Payment of Cash and/or Common Stock Upon exercise of SAR.
    If the Agreement provides or the Committee so determines, up to one-half of
    the amount payable as a result of the exercise of an SAR may be settled by
    the payment of cash and the remainder by the issuance of Common Stock having
    an aggregate Fair Market Value equal thereto. In the absence of such provision
    or determination, a Participant exercising an SAR shall be entitled to receive
    Common Stock equal in aggregate Fair Market Value to the amount payable as
    a result of the exercise of an SAR. 

  8.04.      Shareholder
    Rights.  No
    Participant shall, as a result of receiving any Option or SAR, have any rights
    as a shareholder until the date he exercises such Option or SAR. 

  ARTICLE
    IX

  ADJUSTMENT
    UPON CHANGE IN COMMON STOCK

  The
    maximum number of shares as to which Options and SARs may be granted under
    this Plan shall be proportionately adjusted and the terms of Options and SARs
    shall be adjusted as the Committee shall determine to be equitably required
    in the event that (a) the Company (i) effects one or more stock dividends,
    stock split-ups, subdivisions or consolidations of shares or (ii) engages
    in a transaction to which Section 425 of the Code applies, or (b) there
    occurs any other event which, in the judgment of the Committee, necessitates
    such action. Any determination made under this Article IX by the Committee
    shall be final and conclusive. 

  The
    issuance by the Company of shares of stock of any class, or securities convertible
    into shares of stock of any class, for cash or property, or for labor or services,
    either upon direct sale or upon the exercise of rights or warrants to subscribe
    therefor, or upon conversion of shares or obligations of the Company convertible
    into such shares or other securities, shall not affect, and no adjustment
    by reason thereof shall be made with respect to, Options or SARs. 

  	
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  ARTICLE
    X

  COMPLIANCE
    WITH LAW AND APPROVAL OF REGULATORY BODIES

  No
    Option or SAR shall be exercisable, no Common Stock shall be issued, no certificate
    for shares of Common Stock shall be delivered, and no payment shall be made
    under this Plan except in compliance with all applicable federal and state
    laws and regulations (including, without limitation, withholding tax requirements)
    and the rules of all domestic stock exchanges on which the Company’s
    shares may be listed. The Company shall have the right to rely on an opinion
    of its counsel as to such compliance. Any share certificate issued to evidence
    Common Stock for which an Option or SAR is exercised may bear such legends
    and statements as the Committee may deem advisable to assure compliance with
    federal and state laws and regulations. No Option or SAR shall be exercisable,
    no Common Stock shall be issued, no certificate for shares shall be delivered,
    and no payment shall be made under this Plan until the Company has obtained
    such consent or approval as the Committee may deem advisable from regulatory
    bodies having jurisdiction over such matters. 

  ARTICLE
    XI

  GENERAL
    PROVISIONS

  11.01.   
     Effect on Employment.
    Neither the adoption of this Plan, its operation, nor any documents describing
    or referring to this Plan (or any part thereof) shall confer upon any employee
    any right to continue in the employ of the Company or a Subsidiary or in any
    way affect any right and power of the Company or a Subsidiary to terminate
    the employment of any employee at any time with or without assigning a reason
    therefor. 

   

  11.02.     Unfunded
    Plan. This Plan, insofar as it provides for grants,
    shall be unfunded, and the Company shall not be required to segregate any
    assets that may at any time be represented by grants under the Plan. Any liability
    of the Company to any person with respect to any grant under this Plan shall
    he based solely upon any contractual obligations which may be created pursuant
    to this Plan. No such obligation of the Company shall be deemed to be secured
    by any pledge of, or other encumbrance on, any property of the Company. 

  11.03.  
      Rules of Construction.
    Headings are given to the articles and sections of this Plan solely as a convenience
    to facilitate reference. The reference to any statute, regulation, or other
    provision of law shall be construed to refer to any amendment to or successor
    of such provision of law. 

  ARTICLE
    XII

  AMENDMENT

  The
    Board may amend or terminate this Plan from time to time; provided, however,
    that no amendment may become effective until shareholder approval is obtained
    if (i) the amendment increases the aggregate number of shares that may
    be issued pursuant to Options and SARs, (ii) the amendment reduces the
    option price, or (iii) the amendment changes the class of employees eligible
    to become Participants. No amendment shall, without a Participant’s consent,
    adversely affect any rights of such Participant under any Option or SAR outstanding
    at the time such amendment is made. 

  	
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  ARTICLE
    XIII

  DURATION
    OF PLAN

  No
    Option or SAR may be granted under this Plan more than ten years after the
    earlier of (i) the date this Plan is adopted by the Board or (ii) the
    date this Plan is approved (at a duly held shareholders’ meeting) by
    shareholders holding a majority of the Company’s outstanding voting stock
    or the effective date of a unanimous consent of shareholders approving the
    Plan. Options and SARs granted before that date shall remain valid in accordance
    with their terms. 

  ARTICLE
    XIV

  EFFECTIVE
    DATE OF PLAN

  Options
    and SARs may be granted under this Plan upon its adoption by the Board, provided
    that no Option or SAR will be effective unless this Plan is approved (at a
    duly held shareholders’ meeting) by shareholders holding a majority of
    the Company’s outstanding voting stock or by the unanimous consent of
    shareholders within twelve months of such adoption. 

  	
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