Document:

EX-10.1

 

Exhibit 10.1

BLACK BOX CORPORATION

1992 STOCK OPTION PLAN

(As Amended through May 4, 2005)

          I. PURPOSES

          BLACK BOX CORPORATION (the “Company”) desires to afford certain of its key employees and the
key employees of any subsidiary corporation or parent corporation of the Company now existing or
hereafter formed or acquired who are responsible for the continued growth of the Company an
opportunity to acquire a proprietary interest in the Company, and thus to create in such key
employees an increased interest in and a greater concern for the welfare of the Company and its
subsidiaries.

          The Company, by means of this 1992 Stock Option Plan as originally approved on November 11,
1992, and as further amended on May 10, 1994, August 9, 1994, August 7, 1995, August 12, 1996,
August 13, 1997, February 3, 1998, August 10, 1998, August 10, 1999, August 8, 2000, August 23,
2001, August 15, 2002, August 12, 2003, August 10, 2004, March 15, 2005 and May 4, 2005 (the
“Plan”), seeks to retain the services of persons now holding key positions and to secure the
services of persons capable of filling such positions.

          The stock options (“Options”) and stock appreciation rights (“Rights”) offered pursuant to the
Plan are a matter of separate inducement and are not in lieu of any salary or other compensation
for the services of any key employee.

          The Options granted under the Plan are intended to be either incentive stock options
(“Incentive Options”) within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”), or options that do not meet the requirements for Incentive Options
(“Non-Qualified Options”), but the Company makes no warranty as to the qualification of any Option
as an Incentive Option.

          II. AMOUNT OF STOCK SUBJECT TO THE PLAN; PER PERSON LIMITATION

          The total number of shares of common stock of the Company which may be purchased or acquired
pursuant to the exercise of Options or Rights granted under the Plan shall not exceed, in the
aggregate, 8,600,000 shares of the authorized common stock, $.001 par value per share, of the
Company (the “Shares”), such number subject to adjustment as provided in Article XII hereof.
Shares that are the subject of Rights and related Options shall be counted only once in determining
whether the maximum number of Shares that may be purchased or awarded under the Plan has been
exceeded. No person may receive Options or Rights under the Plan for more than 500,000 Shares in
any given fiscal year.

          Shares acquired under the Plan may be either authorized but unissued Shares or Shares of
issued stock held in the Company’s treasury, or both, at the discretion of the Company. If and to
the extent that Options or Rights granted under the Plan expire or terminate without having been
exercised, the Shares covered by such expired or terminated Options or Rights shall again become
available for award under the Plan.

 

 

          Except as provided in Article XIX and subject to Article II, the Company may, from time to
time during the period beginning on the date on which the Company consummates an underwritten
initial public offering of Shares (the “Effective Date”) and originally ending on November 30, 2002
but amended to end on November 30, 2012 (the “Termination Date”), grant to certain key employees of
the Company, or of any subsidiary corporation or parent corporation of the Company now existing or
hereafter formed or acquired, Incentive Options and/or Non-Qualified Options and/or Rights under
the terms hereinafter set forth.

          Provisions of the Plan that pertain to Options or Rights granted to an employee shall apply to
Options, Rights or a combination thereof.

          As used in the Plan, the term “subsidiary corporation” and “parent corporation” shall mean,
respectively, a corporation coming within the definition of such terms contained in Sections 424(f)
and 424(e) of the Code.

          III. ADMINISTRATION

          The board of directors of the Company (the “Board of Directors”) shall designate from among
its members an option committee, which may be the Compensation Committee of the Board of Directors
(the “Committee”), to administer the Plan. The Committee shall consist of no fewer than two
members of the Board of Directors, each of whom shall be a “disinterested person” within the
meaning of Rule 16b-3 (or any successor rule or regulation) promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). A majority of the members of the Committee
shall constitute a quorum, and the act of a majority of the members of the Committee shall be the
act of the Committee. Any member of the Committee may be removed at any time either with or
without cause by resolution adopted by the Board of Directors, and any vacancy on the Committee at
any time may be filled by resolution adopted by the Board of Directors.

          Subject to the express provisions of the Plan, the Committee shall have authority, in its
discretion, to determine the employees to whom Options or Rights shall be granted, the time when
such Options or Rights shall be granted, the number of Shares which shall be subject to each Option
or Right, the purchase price or exercise price of each Option or Right, the period(s) during which
such Options or Rights shall become exercisable (whether in whole or in part) and the other terms
and provisions thereof (which need not be identical).

          Subject to the express provisions of the Plan, the Committee also shall have authority to
construe the Plan and the Options and Rights granted thereunder, to amend the Plan and the Options
and Rights granted thereunder, to prescribe, amend and rescind rules and regulations relating to
the Plan, to determine the terms and provisions of the Options (which need not be identical) and
Rights (which need not be identical) granted thereunder and to make all other determinations
necessary or advisable for administering the Plan. The Committee also shall have the authority to
require, in its discretion, as a condition of the granting of any such Option or Right, that the
employee agree (i) not to sell or otherwise dispose of Shares acquired pursuant to the exercise of
such Option or Right for a period of six (6) months following the date of the acquisition of such
Option or Right and (ii) that in the event of termination of employment of such employee, other
than as a result of dismissal without cause, such employee will not, for a

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period to be fixed at the time of the grant of the Option or Right, enter into any other
employment or participate directly or indirectly in any other business or enterprise which is
competitive with the business of the Company or any subsidiary corporation or parent corporation of
the Company, or enter into any employment in which such employee will be called upon to utilize
special knowledge obtained through employment with the Company or any subsidiary corporation or
parent corporation thereof. In no event will an employee who is subject to the reporting
requirements of Section 16(a) of the Exchange Act be entitled to sell or otherwise dispose of any
Shares acquired pursuant to exercise of any such Options or Rights for a period of six (6) months
from the date of the acquisition of such Options or Rights. Notwithstanding the foregoing, the
Committee shall not have the authority to reprice any outstanding Option or Right without
stockholder approval.

          The determination of the Committee on matters referred to in this Article III shall be
conclusive.

          The Committee may employ such legal counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or computation received from any
such legal counsel, consultant or agent. Expenses incurred by the Committee in the engagement of
such counsel, consultant or agent shall be paid by the Company. No member or former member of the
Committee shall be liable for any action or determination made in good faith with respect to the
Plan or any award of Options or Rights granted hereunder.

          IV. ELIGIBILITY

          Options and Rights may be granted only to key employees of the Company or of any subsidiary
corporation or parent corporation of the Company, except as hereinafter provided, and shall not be
granted to any officer or director who is not also a key employee or to any member of the
Committee. Any person who shall have retired from active employment by the Company or a subsidiary
corporation or parent corporation thereof, although such person shall have entered into a
consulting contract with the Company or a subsidiary corporation or parent corporation thereof,
shall not be eligible to receive an Option or a Right.

          The Plan does not create a right in any employee to participate in the Plan, nor does it
create a right in any employee to have any Options or Rights granted to him or her.

          V. OPTION PRICE AND PAYMENT

          The price for each Share purchasable under any Option granted hereunder shall be such amount
as the Committee shall, in its best judgment, determine to be not less than one hundred percent
(100%) of the fair market value per Share at the date the Option is granted; provided,
however, that in the case of an Incentive Option granted to a person who, at the time such
Option is granted, owns shares of the Company or any subsidiary corporation or parent corporation
of the Company which possesses more than ten percent (10%) of the total combined voting power of
all classes of shares of the Company or of any subsidiary corporation or parent corporation of the
Company, the purchase price for each Share shall be such amount as the Committee in its best
judgment shall determine to be not less than one hundred ten percent (110%) of the fair market
value per Share at the date the Option is granted. In determining stock ownership of an employee
for any purposes under the Plan, the rules of Section 424(d) of the Code shall be

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applied, and the Committee may rely on representations of fact made to it by the employee and
believed by it to be true.

          If the Shares are listed on a national securities exchange in the United States (which, for
purposes of this Article V, shall be deemed to include any last sale reported over-the-counter
market), on any date on which the fair market value per Share is to be determined, the fair market
value per Share shall be deemed to be the average of the high and low quotations at which such
Shares are sold on such national securities exchange on the date such Option is granted. If the
Shares are listed on a national securities exchange in the United States on such date, but the
Shares are not traded on such date, or such national securities exchange is not open for business
on such date, the fair market value per Share shall be determined as of the closest preceding date
on which such exchange shall have been open for business and the Shares shall have been traded. If
the Shares are listed on more than one national securities exchange in the United States on the
date on which the fair market value per Share is to be determined, the Committee shall determine
which national securities exchange shall be used for the purpose of determining the fair market
value per Share.

          If a public market exists for the Shares on any date on which the fair market value per Share
is to be determined but the Shares are not listed on a national securities exchange in the United
States, the fair market value per Share shall be deemed to be the mean between the closing bid and
asked quotations in the over-the-counter market for the Shares on such date. If there are no bid
and asked quotations for the Shares on such date, the fair market value per Share shall be deemed
to be the mean between the closing bid and asked quotations in the over-the-counter market for the
Shares on the closest date preceding such date for which such quotations are available.

          If no public market exists for the Shares on any date on which the fair market value per Share
is to be determined, the Committee shall, in its sole discretion and best judgment, determine the
fair market value of a Share.

          For purposes of this Plan, the determination by the Committee of the fair market value of a
Share shall be conclusive.

          Upon the exercise of an Option granted hereunder, the Company shall cause the purchased Shares
to be issued only when it shall have received the full purchase price for the Shares in cash or by
certified check; provided, however, that in lieu of cash, the holder of an Option
may, if and to the extent the terms of such Option so provide and to the extent permitted by
applicable law, exercise an Option (i) in whole or in part, by delivering to the Company shares of
common stock of the Company (in proper form for transfer and accompanied by all requisite stock
transfer tax stamps or cash in lieu thereof) owned by such holder having a fair market value equal
to the exercise price applicable to that portion of the Option being exercised by the delivery of
such Shares or (ii) in part, by delivering to the Company an executed promissory note on such terms
and conditions as the Committee shall determine, at the time of grant, in its sole discretion;
provided, however, that the principal amount of such note shall not exceed eighty
percent (80%) (or such lesser percentage as would be permitted by applicable margin regulations) of
the aggregate purchase price of the Shares then being purchased pursuant to the exercise of such
Option. The fair market value of the stock so delivered shall be

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determined as of the date immediately preceding the date on which the Option is exercised, or
as may be required in order to comply with or to conform to the requirements of any applicable laws
or regulations.

          VI. USE OF PROCEEDS

          The cash proceeds of the sale of Shares pursuant to the Plan are to be added to the general
funds of the Company and used for its general corporate purposes as the Board of Directors shall
determine.

          VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE

          Any Option shall be exercisable at such times, in such amounts and during such period or
periods as the Committee shall determine at the date of the grant of such Option; provided,
however, that an Incentive Option shall not be exercisable after the expiration of ten (10)
years from the date such Option is granted; and provided further that, in the case
of an Incentive Option granted to a person who, at the time such Option is granted, owns stock of
the Company or any subsidiary corporation or parent corporation of the Company possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of the Company or of
any subsidiary corporation or parent corporation of the Company, such Option shall not be
exercisable after the expiration of five (5) years from the date such Option is granted.

          Except to the extent otherwise provided under the Code, to the extent that the aggregate fair
market value of stock for which Incentive Options are exercisable for the first time by an employee
during any calendar year (under all stock option plans of the Company and of any parent corporation
or subsidiary corporation of the Company) exceeds one hundred thousand dollars ($100,000), such
Options shall be treated as Non-Qualified Options. For purposes of this limitation, (i) the fair
market value of stock is determined as of the time the Option is granted, and (ii) the limitation
will be applied by taking into account Options in the order in which they were granted.

          Subject to the provisions of Article XVIII, the Committee shall have the right to accelerate,
in whole or in part, from time to time, conditionally or unconditionally, rights to exercise any
Option granted hereunder.

          To the extent that an Option is not exercised within the period of exercisability specified
therein, it shall expire as to the then unexercised part.

          In no event shall an Option granted hereunder be exercised for a fraction of a Share.

          VIII. EXERCISE OF OPTIONS

          Options granted under the Plan shall be exercised by the optionee as to all or part of the
Shares covered thereby by the giving of written notice of the exercise thereof to the Corporate
Secretary of the Company at the principal business office of the Company, specifying the number of
Shares to be purchased and specifying a business day not more than fifteen (15) days from the date
such notice is given for the payment of the purchase price against delivery of the Shares being
purchased. Subject to the terms of Articles XIV, XVI, and XVII, the Company

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shall cause certificates for the Shares so purchased to be delivered to the optionee at the
principal business office of the Company, against payment of the full purchase price, on the date
specified in the notice of exercise.

          IX. STOCK APPRECIATION RIGHTS

          In the discretion of the Committee, a Right may be granted (i) alone, (ii) simultaneously with
the grant of an Option (either Incentive or Non-Qualified) and in conjunction therewith or in the
alternative thereto or (iii) subsequent to the grant of a Non-Qualified Option and in conjunction
therewith or in the alternative thereto.

          The exercise price of a Right granted alone shall be determined by the Committee but shall not
be less than one hundred percent (100%) of the fair market value of one Share on the date of grant
of such Right. A Right granted simultaneously with or subsequent to the grant of an Option and in
conjunction therewith or in the alternative thereto shall have the same exercise price as the
related Option, shall be transferable only upon the same terms and conditions as the related
Option, and shall be exercisable only to the same extent as the related Option; provided,
however, that a Right, by its terms, shall be exercisable only when the fair market value
of the Shares subject to the Right and related Option exceeds the exercise price thereof.

          Upon exercise of a Right granted simultaneously with or subsequent to an Option and in the
alternative thereto, the number of Shares for which the related Option shall be exercisable shall
be reduced by the number of Shares for which the Right shall have been exercised. The number of
Shares for which a Right shall be exercisable shall be reduced upon any exercise of a related
Option by the number of Shares for which such Option shall have been exercised.

          Any Right shall be exercisable upon such additional terms and conditions as may from time to
time be prescribed by the Committee.

          A Right shall entitle the holder upon exercise thereof to receive from the Company, upon a
written request filed with the Corporate Secretary of the Company at its principal offices (the
“Request”), a number of Shares (with or without restrictions as to substantial risk of forfeiture
and transferability, as determined by the Committee in its sole discretion), an amount of cash, or
any combination of Shares and cash, as specified in the Request (but subject to the approval of the
Committee in its sole discretion, at any time up to and including the time of payment, as to the
making of any cash payment), having an aggregate fair market value equal to the product of (i) the
excess of the fair market value, on the day of such Request, of one Share over the exercise price
per Share specified in such Right or its related Option, multiplied by (ii) the number of Shares
for which such Right shall be exercised.

          Any election by a holder of a Right to receive cash in full or partial settlement of such
Right, and any exercise of such Right for cash, may be made only by a Request filed with the
Corporate Secretary of the Company during the period beginning on the third business day following
the date of release for publication by the Company of quarterly or annual summary statements of
sales and earnings and ending on the twelfth business day following such date. Within thirty (30)
days of the receipt by the Company of a Request to receive cash in full or partial settlement of a
Right or to exercise such Right for cash, the Committee shall, in its sole discretion, either
consent to or disapprove, in whole or in part, such Request. A Request to

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receive cash in full or partial settlement of a Right or to exercise a Right for cash may
provide that, in the event the Committee shall disapprove such Request, such Request shall be
deemed to be an exercise of such Right for Shares.

          If the Committee disapproves in whole or in part any election by a holder to receive cash in
full or partial settlement of a Right or to exercise such Right for cash, such disapproval shall
not affect such holder’s right to exercise such Right at a later date, to the extent that such
Right shall be otherwise exercisable, or to elect the form of payment at a later date, provided
that an election to receive cash upon such later exercise shall be subject to the approval of the
Committee. Additionally, such disapproval shall not affect such holder’s right to exercise any
related Option or Options granted to such holder under the Plan.

          A holder of a Right shall not be entitled to request or receive cash in full or partial
payment of such Right unless such Right shall have been held for six (6) months from the date of
acquisition to the date of cash settlement thereof; provided, however, that such
prohibition shall not apply if the holder of such Right is not subject to the reporting
requirements of Section 16(a) of the Exchange Act. In no event will a holder of a Right who is
subject to the reporting requirements of Section 16(a) of the Exchange Act be entitled to make such
a request or receive cash in full or partial payment of such Right until the Company shall have
satisfied the informational requirements of Rule 16b-3(e)(1) promulgated under the Exchange Act for
the specified one year period.

          A Right shall be deemed exercised on the last day of its term, if not otherwise exercised by
the holder thereof, provided that the fair market value of the Shares subject to the Right exceeds
the exercise price thereof on such date.

          For all purposes of this Article IX, the fair market value of Shares shall be determined in
accordance with the principles set forth in the Article V.

          X. NON-TRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS 

          Neither an Option nor a Right granted hereunder shall be transferable, whether by operation of
law or otherwise, other than by will or the laws of descent and distribution, and any Option or
Right granted hereunder shall be exercisable during the lifetime of the holder only by such holder.
Except to the extent provided above, Options and Rights may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or otherwise) and shall not be
subject to execution, attachment or similar process.

          XI. TERMINATION OF EMPLOYMENT

          Upon termination of employment of any employee with the Company and all subsidiary
corporations and parent corporations of the Company, an Option or Right previously granted to the
employee, unless otherwise specified by the Committee in the Option or Right, shall, to the extent
not theretofore exercised, terminate and become null and void, provided that:

     (a) if the employee shall die while in the employ of such corporation or during either
the three (3) month or one (1) year period, whichever is applicable, specified in

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clause (b) below and at a time when such employee was entitled to exercise an Option or
Right as herein provided, the legal representative of such employee, or such person who
acquired such Option or Right by bequest or inheritance or by reason of the death of the
employee, may, not later than one (1) year from the date of death, exercise such Option or
Right, to the extent not theretofore exercised, in respect of any or all of such number of
Shares as specified by the Committee in such Option or Right; and

     (b) if the employment of an employee to whom such Option or Right shall have been
granted shall terminate by reason of the employee’s retirement (at such age or upon such
conditions as shall be specified by the Board of Directors), disability (as described in
Section 22(e)(3) of the Code) or dismissal by the employer other than for cause (as defined
below), and while such employee is entitled to exercise such Option or Right as herein
provided, such employee shall have the right to exercise such Option or Right so granted, to
the extent not theretofore exercised, in respect of any or all of such number of Shares as
specified by the Committee in such Option or Right, at any time up to and including (i)
three (3) months after the date of such termination of employment in the case of termination
by reason of retirement or dismissal other than for cause and (ii) one (1) year after the
date of termination of employment in the case of termination by reason of disability.

          If an employee voluntarily terminates his or her employment, or is discharged for cause, any
Option or Right granted hereunder shall, unless otherwise specified by the Committee in the Option
or Right, forthwith terminate with respect to any unexercised portion thereof.

          If an Option or Right granted hereunder shall be exercised by the legal representative of a
deceased or disabled employee or former employee, or by a person who acquired an Option or Right
granted hereunder by bequest or inheritance or by reason of death of any employee or former
employee, written notice of such exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such legal representative or other person to
exercise such Option or Right.

          For the purposes of the Plan, the term “for cause” shall mean (i) with respect to an employee
who is party to a written agreement with, or, alternatively, participates in a compensation or
benefit plan of the Company or a subsidiary corporation or parent corporation of the Company, which
agreement or plan contains a definition of “for cause” or “cause” (or words of like import) for
purposes of termination of employment thereunder by the Company or such subsidiary corporation or
parent corporation of the Company, “for cause” or “cause” as defined in the most recent of such
agreements or plans, or (ii) in all other cases, (a) the willful commission by an employee of a
criminal or other act that causes substantial economic damage to the Company or a subsidiary
corporation or parent corporation of the Company or substantial injury to the business reputation
of the Company or a subsidiary corporation or parent corporation of the Company; (b) the commission
by an employee of an act of fraud in the performance of such employee’s duties on behalf of the
Company or a subsidiary corporation or parent corporation of the Company; or (c) the continuing
willful failure of an employee to perform the duties of such employee to the Company or a
subsidiary corporation or parent corporation of the Company (other than such failure resulting from
the employee’s incapacity due to physical or mental illness) after written notice thereof
(specifying the particulars thereof in

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reasonable detail) and a reasonable opportunity to be heard and cure such failure are given to
the employee by the Board of Directors or the Committee. For purposes of the Plan, no act, or
failure to act, on the employee’s part shall be considered “willful” unless done or omitted to be
done by the employee not in good faith and without reasonable belief that the employee’s action or
omission was in the best interest of the Company or a subsidiary corporation or parent corporation
of the Company.

          For the purposes of the Plan, an employment relationship shall be deemed to exist between an
individual and a corporation if, at the time of the determination, the individual was an “employee”
of such corporation for purposes of Section 422(a) of the Code. If an individual is on military,
sick leave or other bona fide leave of absence, such individual shall be considered an “employee”
for purposes of the exercise of an Option or Right and shall be entitled to exercise such Option or
Right during such leave if the period of such leave does not exceed ninety (90) days, or, if
longer, so long as the individual’s right to reemployment with the corporation granting the option
(or a related corporation) is guaranteed either by statute or by contract. If the period of leave
exceeds ninety (90) days, the employment relationship shall be deemed to have terminated on the
ninety-first (91st) day of such leave, unless the individual’s right to reemployment is guaranteed
by statute or contract.

          A termination of employment shall not be deemed to occur by reason of (i) the transfer of an
employee from employment by the Company to employment by a subsidiary corporation or a parent
corporation of the Company or (ii) the transfer of an employee from employment by a subsidiary
corporation or a parent corporation of the Company to employment by the Company or by another
subsidiary corporation or parent corporation of the Company. Furthermore, solely for purposes of
determining the rights and obligations under any outstanding Options or Rights theretofore granted,
in the event that the Company ceases to own, directly or indirectly, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock of a subsidiary company by
virtue of a recapitalization, stock dividend, stock split, split-up, spin-off, combination of
shares or other like change in capital structure of the Company, the Committee may determine that
employment by such former subsidiary (or any parent or subsidiary company of such subsidiary) shall
continue to be deemed to be employment by the Company for purposes of the Plan.

          In the event of the complete liquidation or dissolution of a subsidiary corporation, or in the
event that the Company ceases to own, directly or indirectly, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock of such corporation, any
unexercised Options or Rights theretofore granted to any person employed by such subsidiary
corporation will be deemed canceled unless such person is employed by the Company or by any parent
corporation or another subsidiary corporation after the occurrence of such event. In the event an
Option or Right is to be canceled pursuant to the provisions of the previous sentence, notice of
such cancellation will be given to each employee holding unexercised Options or Rights and such
holder will have the right to exercise such Options or Rights in full (without regard to any
limitation set forth or imposed pursuant to Article VII) during the thirty (30) day period
following notice of such cancellation.

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          Notwithstanding anything to the contrary contained in this Article XI, in no event, however,
shall any person be entitled to exercise any Option or Right after the expiration of the period of
exercisability of such Option or Right as specified therein.

          XII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS

          In the event of any change in the outstanding Shares through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, issuance of rights to subscribe for Shares, or other
like change in capital structure of the Company, the Committee shall make such adjustment to each
outstanding Option and Right that it, in its sole discretion, deems appropriate. The term “Shares”
after any such change shall refer to the securities, cash and/or property then receivable upon
exercise of an Option or Right. In addition, in the event of any such change, the Committee shall
make any further adjustments as may be appropriate to the maximum number of Shares which may be
acquired under the Plan pursuant to the exercise of Options and Rights, the maximum number of
Shares which may be so acquired by one employee and the number of Shares and prices per Share
subject to outstanding Options and Rights as shall be equitable to prevent dilution or enlargement
of rights under such Options or Rights, and the determination of the Committee as to these matters
shall be conclusive. Notwithstanding the foregoing, (i) each such adjustment with respect to an
Incentive Option and any related Right shall comply with the rules of Section 424(a) of the Code
and (ii) in no event shall any adjustment be made which would render any Incentive Option granted
hereunder to be other than an “incentive stock option” for purposes of Section 422 of the Code.

          In the event of a “change in control” of the Company, all then outstanding Options and Rights
shall immediately become exercisable. For purposes of the Plan, a “change in control” of the
Company occurs if: (a) any “Person” (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act), other than Odyssey Partners, L.P. and its affiliates (which, for purposes of this
Article XII only, is deemed to include E.R. Yost) is or becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly of securities of the Company
representing (i) fifty percent (50%) or more of the combined voting power of the Company’s
then-outstanding securities; or (ii) twenty-five percent (25%) or more but less than fifty percent
(50%) of the combined voting power of the Company’s then-outstanding securities if such
transaction(s) giving rise to such beneficial ownership are not approved by the Company’s Board of
Directors; or (b) at any time a majority of the members of the Board of Directors has been elected
or designated by any Person, other than Odyssey Partners, L.P. and its affiliates (which, for
purposes of this Article XII only, is deemed to include E.R. Yost); or (c) the Board of Directors
shall approve a sale of all or substantially all of the assets of the Company or any merger,
consolidation, issuance of securities or purchase of assets, in all cases other than to or with
Odyssey Partners, L.P. or its affiliates (which, for purposes of this Article XII only, is deemed
to include E.R. Yost), the result of which would be the occurrence of any event described in clause
(a) or (b) above.

          The Committee, in its discretion, may determine that, upon the occurrence of a transaction
described in the preceding paragraph, each Option or Right outstanding hereunder shall terminate
within a specified number of days after notice to the holder, and such holder shall receive, with
respect to each Share subject to such Option or Right, cash in an amount equal to

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the excess of the fair market value of such Shares immediately prior to the occurrence of such
transaction over the exercise price per Share of such Option or Right. The provisions contained in
the preceding sentence shall be inapplicable to an Option or Right granted within six (6) months
before the occurrence of a transaction described above if the holder of such Option or Right is
subject to the reporting requirements of Section 16(a) of the Exchange Act.

          XIII. RIGHT TO TERMINATE EMPLOYMENT

          The Plan shall not impose any obligation on the Company or on any subsidiary corporation or
parent corporation thereof to continue the employment of any holder of Options or Rights and it
shall not impose any obligation on the part of any holder of Options or Rights to remain in the
employ of the Company or of any subsidiary corporation or parent corporation thereof.

          XIV. PURCHASE FOR INVESTMENT

          Except for hereinafter provided, the Committee may require an employee, as a condition upon
exercise of any Option or Right granted hereunder, to execute and deliver to the Company (a) stock
powers with respect to Shares underlying a particular Option or Right and required to be held by a
custodian, and (b) a written statement, in form satisfactory to the Committee in which the employee
represents and warrants that Shares are being acquired for such person’s own account for investment
only and not with a view to the resale or distribution thereof. The employee shall, at the request
of the Committee, be required to represent and warrant in writing that any subsequent resale or
distribution of Shares by the Employee shall be made only pursuant to either (i) a Registration
Statement on an appropriate form under the Securities Act of 1933, as amended (the “Securities
Act”), which Registration Statement has become effective and is current with regard to the Shares
being sold, or (ii) a specific exemption from the registration requirements of the Securities Act,
but in claiming such exemption the employee shall, prior to any offer of sale or sale of such
Shares, obtain a prior favorable written opinion of counsel, in form and substance satisfactory to
counsel for the Company, as to the application of such exemption thereto. The foregoing
restriction shall not apply to (i) issuances by the Company so long as the Shares being issued are
registered under the Securities Act and a prospectus in respect thereof is current or (ii)
re-offerings of Shares by affiliates of the Company (as defined in Rule 405 or any successor rule
or regulation promulgated under the Securities Act) if the Shares being re-offered are registered
under the Securities Act and a prospectus in respect thereof is current.

          XV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES

          Upon any exercise of an Option or Right which may be granted hereunder and, in the case of an
Option, payment of the purchase price, a certificate or certificates for the Shares shall be issued
by the Company in the name of the person exercising the Option or Right and shall be delivered to
or upon the order of such person.

          The Company may endorse such legend or legends upon the certificates for Shares issued
pursuant to the Plan and may issue such “stop transfer” instructions to its transfer agent in
respect of such Shares as, in its discretion, it determines to be necessary or appropriate to (i)
prevent a violation of, or to perfect an exemption from, the registration requirements of the
Securities Act,

11

 

(ii) implement the provisions of the Plan and any agreement between the Company and the
optionee or grantee with respect to such Shares, or (iii) permit the Company to determine the
occurrence of a disqualifying disposition, as described in Section 421(b) of the Code, of Shares
transferred upon exercise of an Incentive Option granted under the Plan.

          The Company shall pay all issue or transfer taxes with respect to the issuance of transfer of
Shares, as well as all fees and expenses necessarily incurred by the Company in connection with
such issuance or transfer, except fees and expenses which may be necessitated by the filing or
amending of a Registration Statement under the Securities Act, which fees and expenses shall be
borne by the recipient of the Shares unless such Registration Statement has been filed by the
Company for its own corporate purposes (and the Company so states) in which event the recipient of
the Shares shall bear only fees and expenses as are attributable solely to the inclusion of the
Shares he or she received in the Registration Statement.

          All Shares issued as provided herein shall be fully paid and non-assessable to the extent
permitted by law.

          XVI. WITHHOLDING TAXES

          The Company may require an employee exercising a Right or Non-Qualified Option granted
hereunder, or disposing of Shares acquired pursuant to the exercise of an Incentive Option in a
disqualifying disposition (within the meaning of Section 421(b) of the Code), to reimburse the
corporation that employs such employee for any taxes required by any government to be withheld or
otherwise deducted and paid by such corporation in respect of the issuance or disposition of such
Shares. In lieu thereof, the corporation that employs such employee shall have the right to
withhold the amount of such taxes from any other sums due or to become due from such corporation to
the employee upon such terms and conditions as the Committee shall prescribe. The corporation that
employs such employee may, in its discretion, hold the stock certificate to which such employee is
entitled upon the exercise of an Option as security for the payment of such withholding tax
liability, until cash sufficient to pay that liability has been accumulated. In addition, at any
time that the Company becomes subject to a withholding obligation under applicable law with respect
to the exercise of a Right or Non-Qualified Option (the “Tax Date”), except as set forth below, a
holder of a Right or Non-Qualified Option may elect to satisfy, in whole or in part, the holder’s
related personal tax liabilities (an “Election”) by (i) directing the Company to withhold from
Shares issuable in the related exercise either a specified number of Shares or Shares having a
specified value (in each case not in excess of the related personal tax liabilities), (ii)
tendering Shares previously issued pursuant to the exercise of an Option or Right or other Shares
of the Company’s common stock owned by the holder or (iii) combining any or all of the foregoing
options in any fashion. An Election shall be irrevocable. The withheld Shares and other Shares
tendered in payment shall be valued at their fair market value (determined in accordance with the
principles set forth in Article V of the Plan) on the Tax Date. The Committee may disapprove of
any Election, suspend or terminate the right to make Elections or provide that the right to make
Elections shall not apply to particular Shares or exercises. The Committee may prescribe
additional rules, in its discretion, to permit a holder of an Option or Right who is subject to the
reporting requirements of Section 16(a) of the Exchange Act to effect such tax withholding in
compliance with the Rules promulgated under Section 16 of

12

 

the Exchange Act and the positions of the staff of the Securities and Exchange Commission
expressed in no-action or interpretative letters exempting such tax withholding transactions from
liability under Section 16(b) of the Exchange Act. The Committee may also impose any additional
conditions or restrictions on the right to make an Election as it shall deem appropriate.

          XVII. LISTING OF SHARES AND RELATED MATTERS

          The Committee may delay any award, issuance or delivery of Shares if it determines that
listing, registration or qualification of Shares or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares under the Plan, until such listing, registration, qualification, consent or
approval shall have been effected or obtained, or otherwise provided for, free of any conditions
not acceptable to the Committee.

          XVIII. AMENDMENT OF THE PLAN

          The Board of Directors or the Committee, as the case may be, may, from time to time, amend the
Plan, provided that no amendment shall be made, without the approval of the stockholders of the
Company, that will (i) increase the total number of Shares reserved for Options under the Plan
(other than an increase resulting from an adjustment provided for in Article XII), (ii) reduce the
exercise price of any Incentive Option granted hereunder below the price required by Article V,
(iii) modify the provisions of the Plan relating to eligibility, or (iv) materially increase the
benefits accruing to participants under the Plan. The Board of Directors or the Committee, as the
case may be, shall be authorized to amend the Plan and the Options granted thereunder to permit the
Incentive Options granted thereunder to qualify as incentive stock options within the meaning of
Section 422 of the Code. The rights and obligations under any Option or Right granted before
amendment of the Plan or any unexercised portion of such Option or Right shall not be adversely
affected by amendment of the Plan, Option or Right without the consent of the holder of such Option
or Right.

          XIX. TERMINATION OR SUSPENSION OF THE PLAN

          The Board of Directors may at any time suspend or terminate the Plan. The Plan, unless sooner
terminated by action of the Board of Directors, shall terminate at the close of business on the
Termination Date. Options and Rights may not be granted while the Plan is suspended or after it is
terminated. Rights and obligations under any Option or Right granted while the Plan is in effect
shall not be altered or impaired by suspension or termination of the Plan, except upon the consent
of the person to whom the Option or Right was granted. The power of the Committee to construe and
administer any Options or Rights granted prior to the termination or suspension of the Plan under
Article III nevertheless shall continue after such termination or during such suspension.

          XX. GOVERNING LAW

          The Plan, such Options and Rights as may be granted thereunder and all related matters shall
be governed by, and construed and enforced in accordance with, the laws of the State of Delaware
from time to time obtaining.

13

 

          XXI. PARTIAL INVALIDITY

          The invalidity or illegibility of any provision hereof shall not be deemed to affect the
validity of any other provision.

          XXII. EFFECTIVE DATE

          This Plan became effective at 5:30 P.M., New York City Time, on the Effective Date.

14Exhibit 10.12

 

Exhibit 10.12

MILACRON INC.

DIRECTOR DEFERRED COMPENSATION PLAN

     Milacron Inc. (the “Company”) hereby establishes, effective as of May 4, 2005, the
Milacron Inc. Director Deferred Compensation Plan (the “Plan”) on the terms and conditions
hereinafter set forth. Such Plan provides certain members of the Company’s Board of Directors the
opportunity to receive deferred compensation in accordance with the provisions of the Plan.

     1. Definitions. For the purposes hereof, the following words and phrases shall have
the meanings set forth below, unless their context clearly requires a different meaning:

          “Account” means the bookkeeping account maintained by the Company on behalf of each
Participant as provided herein. The sum of each Participant’s Deferral Sub-Account and Restricted
Sub-Account, in the aggregate, shall constitute his Account.

          “Beneficiary” means the Participant’s estate.

          “Board” means the board of directors of the Company.

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Company” means Milacron Inc. and its successors, including, without limitation, the surviving
corporation resulting from any merger or consolidation of Milacron Inc. with any other corporation,
limited liability company, joint venture, partnership or other entity or entities.

          “Common Stock” means the common stock of the Company or any security into which such Common
Stock may be changed by reason of any transaction or event of the type referred to in Section 5
hereof.

          “Deferral Sub-Account” means the bookkeeping sub-account maintained by the Company on behalf
of each Participant pursuant to Section 2 hereof.

          “Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations
thereunder, as such law, rules and regulations may be amended from time to time.

          “Fair Market Value per Share” means, as of any particular date, (i) the average of the high
and low prices of Common Stock on the date on which it is to be valued hereunder as reported on the
New York Stock Exchange, or if there are no sales on such day, on the next preceding trading day
during which a sale occurred, or (ii) if the shares of Common Stock are not traded on an exchange,
the fair market value of the Common Stock as determined by the Board.

          “Participant” means any member of the Board who is not an employee of the Company or any of
its subsidiaries or affiliates.

          “Plan” means this Milacron Inc. Director Deferred Compensation Plan.

          “Restricted Sub-Account” means the bookkeeping sub-account maintained by the Company on behalf
of each Participant pursuant to Section 2 hereof.

     2. Accounts. The Company shall establish a Deferral Sub-Account and Restricted
Sub-Account for each Participant. The Balance in each such sub-account shall reflect the shares of
Common Stock, if any, credited by the Company under Section 3 hereof, and adjustments thereto,
including dividend equivalents, in accordance with Section 5 hereof. The Company may, in its sole
discretion, establish and name such additional sub-accounts as may be
appropriate or necessary to facilitate proper recordkeeping, provided that the terms of such
additional sub-accounts are consistent with the Plan.

54

 

Exhibit 10.12

     3. Credits of Common Stock

(a) On May 4, 2005, each Participant serving on the Board as of the preceding day shall
receive a credit to his Deferral Sub-Account of a number of shares of Common Stock equal to
(i) $10,000 divided by (ii) the Fair Market Value per Share as of January 1, 2005. Each
Participant joining the Board during 2005 but after May 3 shall receive, on the fifth
business day after such Participant becomes a member of the Board, a number of credits to
his Deferral Sub-Account calculated in accordance with the prior sentence, but prorated for
the amount of the calendar year 2005 during which the Participant is expected to be a
member of the Board. On January 5, 2006, and on each January 5th thereafter (unless such
day is not a business day, in which event on the next succeeding business day), each
Participant serving on the Board as of such date shall receive a credit to his Deferral
Sub-Account of a number of shares of Common Stock equal to (i) $10,000 divided by (ii) the
Fair Market Value per Share as of the immediately preceding January 1. Each Participant
joining the Board after January 1 of 2006 or after the first day of any subsequent calendar
year shall receive, on the fifth business day after such Participant becomes a member of
the Board, a number of credits to his Deferral Sub-Account calculated in accordance with
the prior sentence, but prorated for the amount of such calendar year during which the
Participant is expected to be a member of the Board.

(b) The Company may from time to time, in its discretion, credit shares of Common Stock to
the Restricted Sub-Account of one or more Participants. The amount of such credits, if
any, shall be determined by the Board in its sole discretion.

     4. Vesting. Credits to a Participant’s Deferral Sub-Account shall vest daily in equal
increments during the period beginning on January 1 of the calendar year in which such credits are
made pursuant to Section 3 and ending on December 31 of such year. Notwithstanding the previous
sentence, for those Participants joining the Board after January 1 of a given calendar year, daily
vesting shall begin the day the Participant joins the Board, and for those Participants who cease
to be members of the Board prior to December 31 of a given calendar year, daily vesting shall end
on the date the Participant ceases to be a member of the Board. Thus, if a Participant joins the
Board after January 1 or ceases to be a member of the Board prior to December 31 of a given year,
the amount payable from Participant’s Deferral Sub-Account during such calendar year shall be
prorated for the number of days during the calendar year in which the Participant served as a
member of the Board. Credits, if any, to a Participant’s Restricted Sub-Account shall be subject
to such vesting schedule as may be determined by the Board at the time such credits are approved.

     5. Adjustments. The amount credited to the Accounts in accordance with Section 3
hereof, plus dividend equivalents thereon, shall be deemed to be invested at all times in shares of
Common Stock, in accordance with procedures established from time to time by the Board.
Notwithstanding the preceding sentence, the Company is not and shall not be required to make any
investment in shares of Common Stock in connection with this Plan. The Board may make or provide
for such adjustments in the number of shares of Common Stock credited to the Accounts as the Board,
in its sole discretion exercised in good faith, may determine is equitably required in order to
prevent dilution or enlargement of a Participant’s rights that otherwise would result from (i) any
stock dividend, stock split, combination of shares, recapitalization, or other change in the
capital structure of the Company, (ii) any merger, consolidation, spin-off, split-off, spin-out,
split-up, reorganization, partial or complete liquidation, or other distribution of assets or
issuance of rights or warrants to purchase securities, or (iii) any other corporate transaction or
event having an effect similar to any of the foregoing. In the event of any such transaction or
event, the Board, in its sole discretion exercised in good faith, may provide, in substitution for
the shares of Common Stock credited to the Accounts, such alternative consideration as it may
determine to be equitable in the circumstances.

     6. Distribution of Accounts

(a) The vested amounts then-credited to a Participant’s Deferral Sub-Account and Restricted
Sub-Account shall be distributed to him or his Beneficiary within 20 days following the
date on which the Participant ceases to be a member of the Board. Such distribution shall
discharge all obligations of the Company (and any affiliates) to the Participant or
Beneficiary under this Plan with respect to such sub-accounts. Notwithstanding
the preceding sentence, the Board may, at the time that an amount is credited to a
Participant’s Restricted Sub-Account, provide that such amount shall be distributed to him
or his Beneficiary within 20 days following the date on which such amount becomes vested.

          (b) Subject to Section 14 hereof, a Participant may elect, on a form provided by the
Company, to receive distributions from his Deferral Sub-Account or Restricted Sub-Account
in cash, shares of Common Stock, or a

55

 

Exhibit 10.12

combination of the foregoing. Notice of the election
shall be delivered to the Secretary of the Company no less than 10 days prior to the
distribution. To the extent that an amount is to be distributed in the form of cash, the
amount of cash shall be calculated based on the Fair Market Value per Share as of the date
of the event that gave rise to the distribution. Any shares of Common Stock distributed
under the Plan may be shares of original issuance, treasury shares or a combination of the
foregoing. The Company shall not be required to issue any fractional shares of Common
Stock pursuant to this Plan and may provide for the elimination of fractions. In the event
that a Participant does not file a distribution election as provided in this Section 6(b),
the distribution shall be made in the form of cash. Any distribution shall be made in a
single lump sum.

(c) Notwithstanding anything in this Section 6 to the contrary, (i) the date on which a
Participant ceases to be a member of the Board shall be deemed to have not occurred for
purposes of this Plan unless such cessation constitutes a “separation from service” within
the meaning of Section 409A of the Code, and (ii) if a Participant is a “specified
employee” within the meaning of Section 409A of the Code, then any distribution on account
of his separation from service may not commence before the date that is 6 months after the
date of such separation from service (or, if earlier, the date of death).

7. Administration

(a) This Plan shall be administered by the Board, which may from time to time delegate all
or any part of its authority under this Plan to a committee of the Board (or subcommittee
thereof), consisting of not less than two directors appointed by the Board, each of whom
shall be a “non-employee director” as defined in Rule 16b-3 of the Exchange Act. To the
extent of any such delegation, references in this Plan to the Board shall be deemed to be
references to any such committee or subcommittee. A majority of the committee (or
subcommittee) shall constitute a quorum, and the action of the members of the committee (or
subcommittee) present at any meeting at which a quorum is present, or acts unanimously
approved in writing, shall be the acts of the committee (or subcommittee).

(b) The Board shall have all such powers as may be necessary to carry out the provisions of
the Plan, including the power to (i) resolve all questions pertaining to claims for
benefits and procedures for claim review, (ii) resolve all other questions arising under
the Plan, including any factual questions and questions of construction, and (iii) take
such further action as the Company shall deem advisable in the administration of the Plan.
The actions taken and the decisions made by the Board hereunder shall be final and binding
upon all interested parties.

(c) Notwithstanding any other provision herein, it is intended that the Plan comply with
the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income
of any amounts deferred hereunder in a taxable year that is prior to the taxable year or
years in which such amounts would otherwise actually be distributed or made available to
Participants or Beneficiaries. This Plan shall be construed, administered, and governed in
a manner that effects such intent, and the Board shall not take any action that would be
inconsistent with such intent. Any provisions that would cause any amount deferred or
payable under the Plan to be includible in the gross income of any Participant or
Beneficiary under Section 409A(a)(1) of the Code shall have no force and effect unless and
until amended to cause such amount to not be so includible (which amendment may be
retroactive to the extent permitted by Section 409A of the Code and may be made by the
Board without the consent of the Participant or Beneficiary).

     8. Interest of Participants. The obligation of the Company under the Plan to make
payment of amounts reflected in an Account merely constitutes the unsecured promise of the Company
to make payments from its general assets and no Participant or Beneficiary shall have any interest
in, or a lien or prior claim upon, any property of the Company. This Plan shall not confer upon
any Participant any right with respect to continuance of service with the
Company or any affiliate, nor shall it interfere in any way with any right the Company or any
affiliate would otherwise have to terminate such Participant’s service at any time.

     9. Nonassignment of Benefits. No right or interest under the Plan of any Participant
or Beneficiary shall, without the written consent of the Company, be (i) assignable or transferable
in any manner, (ii) subject to alienation, anticipation, sale, pledge, encumbrance, attachment,
garnishment or other legal process or (iii) in any manner liable for or subject to the debts or
liabilities of the Participant or Beneficiary. Notwithstanding the foregoing, to the extent
permitted by Section 409A of the Code, the Board shall honor a judgment, order or decree from a
state domestic

56

 

Exhibit 10.12

relations court which requires the payment of part or all of a Participants’ or
Beneficiary’s interest under this Plan to an “alternate payee” as defined in Section 414(p) of the
Code.

     10. Amendment and Termination. The Company reserves the right to amend or terminate
the Plan at any time by action of the Board, except that no such action shall reduce the Account
balance of any Participant or his Beneficiary who has an Account, without the consent of the
Participant or Beneficiary. Notwithstanding the foregoing, in the event that the Plan is
terminated, the vested amounts allocated to a Participant’s Account shall be distributed to the
Participant or his Beneficiary on the dates on which the Participant or his Beneficiary would
otherwise receive benefits hereunder without regard to the termination of the Plan;
provided, however, that to the extent permitted by Section 409A of the Code, the
Board may direct that the Participant or his Beneficiary receive an immediate lump sum payment
equal to the vested amount credited to his Account.

     11. Governing Law. Except to the extent preempted by federal law, the provisions of
the Plan shall be governed and construed in accordance with the laws of the State of Delaware.

     12. Successors. This Plan shall be binding upon and inure to the benefit of the
Company and any successor of or to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business and/or assets of the Company
whether by sale, merger, consolidation, reorganization or otherwise (and such successor shall
thereafter be deemed the “Company” for the purposes of this Plan), and the heirs, beneficiaries,
executors and administrators of each Participant.

     13. No Funding Required. The Company may create a trust to hold funds to be used in
payment of its obligations under the Plan, and may fund such trust; provided,
however, that any funds contained therein shall remain liable for the claims of the
Company’s general creditors.

     14. Compliance with Law. The Company shall make reasonable efforts to comply with all
applicable federal and state securities laws in connection with the Plan; provided,
however, notwithstanding any other provision of this Plan, the Company shall not be
obligated to issue any Common Stock pursuant to this Plan if the issuance thereof would result in a
violation of any such law, in which case the Company shall satisfy its obligations under Section 6
hereof in cash rather than shares of Common Stock.

     15. Headings; Interpretation

(a) Headings in this Plan are inserted for convenience of reference only and are not to be
considered in the construction of the provisions hereof. Unless the context clearly
requires otherwise, the masculine pronoun wherever used herein shall be construed to
include the feminine pronoun.

(b) Any reference in this Plan to Section 409A of the Code will also include any proposed,
temporary or final regulations, or any other guidance, promulgated with respect to such
Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

(c) For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or words
or phrases of similar import, shall mean that the event or circumstance shall only be
permitted to the extent it would not cause an amount deferred or payable under the Plan to
be includible in the gross income of a Participant or Beneficiary under Section 409A(a)(1)
of the Code.

[END OF DOCUMENT]

57

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