Document:

EX-4.3

 

Exhibit 4.3

THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR NOTES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (“DTC”), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY.

CUSIP NO.: 315405 AJ 9

FERRO CORPORATION

9 1/8% Senior Notes due 2009

			
	 	 	 
	No. 1
	 	$200,000,000

     Ferro Corporation, a corporation duly organized and existing under the laws of Ohio (herein
called the “Company”, which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of Two Hundred Million Dollars ($200,000,000) on January 1, 2009, and to pay interest
thereon from December 20, 2001 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on January 1 and July 1 in each year, commencing July
1, 2002, at the rate of 9 1/8% per annum, until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be December 15 or June 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or
duly provided for will

 

 

forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than
10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the securities of this
series may be listed, and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.

     Payment of the principal of (and premium, if any) and any such interest on this Security will
be made at the office or agency of the Trustee maintained for that purpose in New York, New York or
Cleveland, Ohio, in such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; PROVIDED, HOWEVER, that at the option of
the Company payment of interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or by wire transfer or by transfer
through the Automated Clearing House mechanism to an account maintained by such Person with a bank
in the continental United States (so long as the Paying Agent has received proper transfer
instructions in writing at least five Business Days prior to the Regular Record Date).

     Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.

Dated: December 20, 2001

	 	 	 	 	 
	 	FERRO CORPORATION

 	 
	 	By:  	/s/   Bret W. Wise
 	 
	 	 	 	 
	 	 	 	 
	 

Attest:

	 	 	 
	/s/ Mary Ann Jorgenson
 

	 	 

Face-2

 

 

Reverse of Security.

     This Security is one of a duly authorized issue of securities of the Company (herein called
the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of
March 25, 1998 (herein called the “Indenture”), between the Company and J. P. Morgan Trust Company,
National Association, the successor-in-interest to Chase Manhattan Trust Company, National
Association, as Trustee (herein called the “Trustee”, which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This Security is one of the
series designated on the face hereof. The Company may, without the consent of the Holders of
Securities of this series, increase the initial principal amount of the Securities in the future
(by “reopening” the series and issuing more Securities) on the same terms and conditions and with
the same CUSIP numbers as the Securities.

     The Securities of this series are subject to redemption upon not more than 60 or less than 30
days’ notice by mail, at any time or from time to time, in whole or in part, at the option of the
Company on any date (a “Redemption Date”), at a redemption price equal to the greater of (i) 100%
of the principal amount of the Securities to be redeemed, or (ii) as determined by an Independent
Investment Banker, the sum of the present values of the remaining scheduled payments of principal
and interest thereon (exclusive of interest accrued to such Redemption Date) discounted to such
Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 50 basis points, plus, in either case, accrued and unpaid interest on the
principal amount being redeemed to such Redemption Date; provided that installments of interest on
Securities which are due and payable on an Interest Payment Date falling on or prior to the
relevant Redemption Date shall be payable to the holders of such Securities, registered as such at
the close of business on the relevant Regular Record Date, according to the terms and the
provisions of the Indenture.

     “Treasury Rate” means, with respect to any Redemption Date for the Securities, (i) the yield,
under the heading which represents the average for the immediately preceding week, appearing in the
most recently published statistical release designated “H.15 (519)” or any successor publication
which is published weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months before or after the Maturity Date,
yields for the two published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does not contain such
yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue (as expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption
Date.

     “Comparable Treasury Issue” means the United States security selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of the Securities to be
redeemed that would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the Securities.

Reverse-1

 

 

     “Comparable Treasury Price” means with respect to any Redemption Date for the Securities (i)
the average of five Reference Treasury Dealer Quotations for such Redemption Date, after excluding
the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee is
provided with fewer than five such Reference Treasury Dealer Quotations, the average of all such
quotations.

     “Independent Investment Banker” means Credit Suisse First Boston or, if such firm is unwilling
or unable to select the Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee after consultation with the Company.

     “Reference Treasury Dealer” means: (i) Credit Suisse First Boston and its successor; provided,
however, that if the foregoing shall cease to be a primary U.S. Government securities dealer in New
York City (a “Primary Treasury Dealer”), the Company will substitute therefore another Primary
Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Independent Investment
Banker after consultation with the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. New York City time,
on the third Business Day preceding such Redemption Date.

     In the event of any Change in Control Triggering Event occurring on or prior to maturity, each
Holder of Securities shall have the right, at the Holder’s option, subject to the terms and
conditions of the Indenture, to require the Company to purchase all or any part (provided that the
principal amount is $1,000 or an integral multiple thereof) of such Holder’s Securities on the date
that is not less than 30 nor more than 60 Business Days after the occurrence of such Change in
Control Triggering Event (the “Change in Control Purchase Date”) at a cash price equal to 101% of
the principal amount thereof plus accrued interest to the Change in Control Purchase Date (the
“Change in Control Purchase Price”).

     Within 15 Business Days after the Change in Control Triggering Event, the Company shall mail
to the Trustee and to all Holders at their addresses shown in the Securities Register (and to
beneficial owners as required by applicable law) a notice regarding the Change in Control
Triggering Event, which notice shall state, among other things: (i) the date by which the Change in
Control Purchase Notice (as defined below) must be given by such Holder, (ii) the Change in Control
Purchase Price, (iii) the Change in Control Purchase Date, (iv) the name and address of the Trustee
and of any other office or agency maintained for the purpose of the surrender of Securities for
purchase, (v) the procedures for withdrawing a Change in Control Purchase Notice and (vi) the
procedures that Holders shall follow to exercise their right to require the Company to repurchase
all or any part of their Securities upon a Change in Control Triggering Event. The Company shall
cause a copy of such notice to be published in a daily newspaper of national circulation.

     The Holder shall deliver written notice (a “Change in Control Purchase Notice”), to the
Trustee or to any other office or agency maintained for such purpose, of the exercise of such
Holder’s right to require the Company to repurchase all or any part of such Holder’s Securities
prior to the close of business on the Business Day immediately prior to the Change in Control
Purchase Date. The Change in Control Purchase Notice shall state (i) the CUSIP number and the
certificate number, if applicable, of the Securities to be delivered by the Holder for purchase by
the Company, (ii) the portion of the principal amount of Securities to be purchased, which portion
must be $1,000 or an integral multiple thereof; and (iii) that such Securities shall be submitted
for purchase by the Company on the Change in Control Purchase Date pursuant to the applicable
provisions of this Security.

Reverse-2

 

 

     Any Change in Control Purchase Notice shall be withdrawn by the Holder by a written notice of
withdrawal delivered to the Trustee or to any other office or agency maintained for such purpose on
the Business Day immediately prior to the Change in Control Purchase Date. The notice of withdrawal
shall state the principal amount of the Securities as to which the withdrawal notice relates and
the principal amount, if any, which remains subject to the original Change in Control Purchase
Notice.

     Payment of the Change in Control Purchase Price for a Security for which a Change in Control
Purchase Notice has been delivered and not withdrawn is conditioned upon delivery of such Security
(together with any endorsements) to the Trustee or to any other office or agency maintained for
such purpose, at any time (whether prior to, on or after the Change in Control Purchase Date) after
delivery of such Change in Control Purchase Notice. Payment of the Change in Control Purchase Price
for such Security will be made promptly following the later of the Change in Control Purchase Date
or the time of delivery of such Security. If the Company shall have deposited with the Trustee, in
accordance with the Indenture, money sufficient to pay the Change in Control Purchase Price of such
Security on the Change in Control Purchase Date, then on and after the Change in Control Purchase
Date, such Security shall cease to be outstanding and interest on such Security will cease to
accrue, whether or not such Security is delivered to the Trustee or to any other office or agency
maintained for such purpose, and all other rights of the Holder shall terminate (other than the
right to receive the Change in Control Purchase Price upon delivery of the Security). In accordance
with the Indenture, no Security may be purchased pursuant to a Change in Control Triggering Event
if there has occurred and is continuing an Event of Default (other than a default in the payment of
the Change in Control Purchase Price with respect to such Security).

     The Company shall make all filings required under and comply with all federal and state
securities laws regulating the purchase of Securities at the option of Holders upon a Change in
Control Triggering Event, including, if applicable, Section 14(e) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and Rule 14e-1 promulgated thereunder and any other
applicable tender offer rules.

     “Change in Control” means, with regard to the Company, the occurrence of (i) any
consolidation, share exchange or merger, other than, in any case, a transaction in which the
Holders of the Company’s voting stock immediately prior to the transaction have more than 50%,
directly or indirectly, of the voting stock of the surviving corporation immediately after the
transaction, (ii) any person, including affiliates of the Company (other than the Company, its
subsidiaries or the employee stock ownership plans or employee benefit plans of the Company or any
of its subsidiaries) filing a Schedule 13D or 14D-1 (or any successor schedule, form or report
under the Exchange Act) disclosing that such person has become the beneficial owner of 50% or more
of the Company’s voting stock, or (iii) the conveyance, transfer or lease of the Company’s
properties and assets substantially as an entirety to any Person.

     “Change in Control Triggering Event” means the occurrence of both a Change in Control and a
Rating Decline.

     “Investment Grade” means a rating of BBB- or higher by S&P and Baa3 or higher by Moody’s or
the equivalent of such ratings by S&P or Moody’s.

     “Moody’s” means Moody’s Investors Services, Inc. and its successors.

     “Rating Agency” means (i) S&P, (ii) Moody’s, or (iii) if S&P or Moody’s or both shall not make
a rating of the notes publicly available, a nationally recognized securities rating agency or
agencies, as the case may be, selected by the Company, which shall be substituted for S&P or
Moody’s or both, as the case may be.

Reverse-3

 

 

     “Rating Category” means (i) with respect to S&P, any of the following categories: BB, B, CCC,
CC, C and D (or equivalent successor categories), (ii) with respect to Moody’s, any of the
following categories: Ba, B, Caa, Ca, C and D (or equivalent successor categories), and (iii) the
equivalent of any such category of S&P or Moody’s used by another Rating Agency. In determining
whether the rating of the Securities has decreased by one or more gradations, gradations within
Rating Categories (+ and — for S&P; 1, 2 and 3 for Moody’s; or the equivalent gradations for
another Rating Agency) shall be taken into account (e.g., with respect to S&P, a decline in rating
from BB+ to BB will constitute a decrease of one gradation).

     “Rating Date” means the date which is 30 days prior to the earliest of (i) a Change in
Control, (ii) public notice of the occurrence of a Change in Control and (iii) public notice of the
intention by the Company to effect a Change in Control.

     “Rating Decline” means the occurrence on or within 30 days after the earlier of the date of
public notice of the occurrence of a Change in Control or the public announcement of the intention
by the Company to effect a Change in Control (which period shall be extended so long as the rating
of the Securities is under publicly announced consideration for possible downgrade by any of the
Rating Agencies) of: (a) in the event the Securities are rated by either Moody’s or S&P on the
Rating Date as Investment Grade, the rating of the Securities by both such Rating Agencies below
Investment Grade, or (b) in the event the Securities are rated below Investment Grade by both such
Rating Agencies on the Rating Date, the rating of the Securities by either Rating Agency is
decreased by one or more gradations (including gradations within Rating Categories as well as
between Rating Categories).

     “S&P” means Standard & Poor’s Ratings Services and its successors.

     In the event of redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.

     If an Event of Default with respect to the Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.

     The Indenture contains provisions for defeasance at any time of the entire indebtedness of
this Security or certain restrictive covenants and Events of Default with respect to this Security,
in each case, upon compliance with certain conditions set forth therein.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities to be effected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at the time Outstanding
to be affected. The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on behalf of the Holders
of all securities, to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of transfer hereof or in
exchange therefore or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

     No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and

Reverse-4

 

 

unconditional, to pay the principal of and any premium and interest on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registerable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Company in any place where the
principal of (and premium, if any) and interest on this security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

     The Securities of this series are issuable only in registered form without coupons in
denominations of $1000 and any integral multiple thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

     All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

Reverse-5

 

 

Trustee’s Certificate of Authentication

     This is one of the Securities of the series designated herein and referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	J. P. MORGAN TRUST COMPANY,

NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 

Reverse-6EX-10.1

 

EXHIBIT
10.1

FERRO CORPORATION

EMPLOYEE STOCK OPTION PLAN

     1. Purpose of Plan. The purpose of this Plan is to advance the interests of Ferro Corporation
(hereinafter called the “Corporation”) and its shareholders by providing a means whereby officers,
non-employee directors and key employees of the Corporation and its subsidiaries may be given an
opportunity to purchase Common Stock, $1.00 par value (hereinafter called “shares”) of the
Corporation under options and stock appreciation rights granted under the Plan, to the end that the
Corporation may retain present personnel upon whose judgment, initiative and efforts the successful
conduct of the business of the Corporation largely depends, and may attract new personnel. Some of
the options granted under this Plan may be options which are intended to qualify as “incentive
stock options” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or
any successor provision and are hereinafter sometimes called “incentive stock options.”

     2. Shares Subject to the Plan. The aggregate number of shares of the Corporation for which
options may be granted under this Plan shall be that number of shares remaining available for grant
under the Plan on the close of business on the date immediately prior to the 2000 Annual Meeting of
Shareholders plus 1,500,000; provided, however, that whatever number of said shares shall remain
reserved for issuance pursuant to this Plan at the time of any stock split, stock dividend or other
change in the Corporation’s capitalization shall be appropriately adjusted to reflect such stock
dividend, stock split or other change in capitalization. Shares issued pursuant to the exercise of
options granted hereunder shall be made available from authorized but unissued shares of the
Corporation or shares held by the Corporation as treasury shares. Any shares for which an option is
granted hereunder that are released from such option for any reason other than the exercise of
stock appreciation rights granted hereunder shall become available for other options to be granted
under this Plan.

     3. Administration of the Plan. Except to the extent the Board of Directors reserves to itself
the authority with respect thereto, this Plan shall be administered under the supervision of a
committee (hereinafter called the “Committee”) composed of not less than three directors of the
Corporation appointed by the Board of Directors. The members of the Committee shall not, pursuant
to the exercise of discretion, be eligible, and shall not have been so eligible for a period of at
least one year prior to their appointment, to participate in this Plan or to have been selected to
participate in any other plan of the Corporation or any affiliate (as defined under the Securities
Exchange Act of 1934) of the Corporation entitling the participants herein to acquire stock, stock
options or stock appreciation rights of the Corporation or any affiliate of the Corporation.
Members of the Committee shall serve at the pleasure of the Board of Directors, and may resign by
written notice filed with the Chairman of the Board or the Secretary of the Corporation. A vacancy
in the membership of the Committee shall be filled by the appointment of a successor member by the
Board of Directors. Until such vacancy is filled, the remaining members shall constitute a quorum
and the action at any meeting of a majority of the entire Committee, or an action unanimously
approved in writing, shall constitute action of the Committee. Subject to the express provisions of
this Plan, the Committee shall have conclusive authority to construe and interpret the Plan, any
stock option agreement entered into hereunder, and any stock appreciation right granted hereunder,
to adopt and amend forms of Option Agreements and Grants of Stock Appreciation Rights and to
establish, amend, and rescind rules and regulations for the administration of this Plan and shall
have such additional authority as the Board of Directors may from time to time determine to be
necessary or desirable.

     In addition, with respect to Key Employees who are foreign nationals or employed outside the
United States, or both, there may be adopted in the manner provided herein such rules and
regulations, policies, subplans or the like as are necessary or advisable in order to effectuate
the purposes of the Plan.

     4. Granting of Options. The Committee from time to time shall designate from among the
full-time employees of the Corporation and its subsidiaries and any corporation at least 20% of the
voting securities
of which is owned by the Corporation or a subsidiary of the Corporation to whom options to
purchase

 

 

shares shall be granted under this Plan, the type of option to be granted and the number
of shares which shall be subject to each option so granted; provided however, that incentive stock
options may only be granted to full-time employees of the Corporation and its subsidiaries, as such
term is defined in this Plan. Except to the extent the Board of Directors reserves to itself the
authority with respect thereto, all actions of the Committee under this Paragraph shall be
conclusive; provided, however, that the aggregate fair market value (determined as of the date the
option is granted) of shares for which incentive stock options are exercisable for the first time
by any individual during any calendar year (under this Plan or any other plan of the Corporation
which provides for the granting of incentive stock options) may not exceed $100,000. Any incentive
stock option that is granted to any employee who is, at the time the option is granted, deemed for
purposes of Section 422 of the Code, or any successor provision, to own shares of the Corporation
possessing more than ten percent (10%) of the total combined voting power of all classes of shares
of the Corporation or of a parent or subsidiary of the Corporation, shall have an option price that
is at least 110 percent (110%) of the fair market value of the shares and shall not be exercisable
after the expiration of 5 years from the date it is granted. The maximum number of options granted
to any single executive during any period of eleven consecutive months shall not exceed options for
100,000 shares, subject to adjustment in accordance with Section 2 of the Plan.

     5. Granting of Stock Appreciation Rights. Except to the extent the Board of Directors reserves
to itself the authority with respect thereto, the Committee shall have the discretion to grant to
optionees stock appreciation rights in connection with options to purchase shares on such terms and
conditions as it deems appropriate. A stock appreciation right will allow an optionee to surrender
an option or portion thereof and to receive payment from the Corporation in an amount equal to the
excess of the aggregate fair market value of the shares with respect to which options are
surrendered over the aggregate option price of such shares. A stock appreciation right shall be
exercisable no sooner than six months after it is granted and thereafter at any time prior to its
stated expiration date, but only to the extent the related stock option right may be exercised.
Payment shall be made in shares, cash or a combination of shares and cash, as provided in the Grant
of Stock Appreciation Rights. Shares as to which any option is so surrendered shall not be
available for future option grants hereunder. The Committee may grant stock appreciation rights
concurrently with the grant of an option or, in the case of an option which is not an incentive
stock option, with respect to an outstanding option.

     6. Option Period. No option granted under this Plan may be exercised later than ten years from
the date of grant.

     7. Option Price. The option price shall be set forth in the Option Agreement, which price in
no case shall be less than the per share fair market value of the outstanding shares of the
Corporation on the date that the option is granted. The option price may be fixed in terms of a
formula and one or more officers of the Corporation may be authorized to compute the price in
accordance with that formula. Payment of the option price may be made in cash, shares, or a
combination of cash and shares, as provided in the Option Agreement in effect from time to time.
The date on which the granting of an option is approved shall be deemed the date on which the
option is granted.

     8. Option Agreement. The Option Agreement pursuant to which option rights are granted to an
employee shall be in the applicable form (consistent with this Plan) from time to time approved in
the manner provided herein and shall be signed on behalf of the Corporation by the Chief Executive
Officer or any Vice President of the Corporation, other than the employee who is a party thereto.
The Option Agreement shall set forth the number of shares which are subject to the option to
purchase, the type of option granted, the option price to be paid upon exercise, the manner in
which the option is to be exercised and the option price is to be paid, and the option period, and
may include such other terms not inconsistent with this Plan as are from time to time approved in
the manner provided herein.

     9. Grant of Stock Appreciation Rights. The Grant of Stock Appreciation Rights pursuant to
which stock appreciation rights are granted shall be in the applicable form (consistent with this
Plan) from time to time approved in the manner provided herein and shall be signed on behalf of the
Corporation by the Chief Executive Officer or any Vice President of the Corporation, other than the
employee to whom the grant is
made. The Grant of Stock Appreciation Rights shall set forth the option or options to which
the grant

2

 

relates, the manner in which the stock appreciation rights are exercisable, and may
include such other terms not inconsistent with this Plan as are from time to time approved in the
manner provided herein.

     10. Transferability. No option or stock appreciation right shall be transferable by the
optionee except by will or the laws of descent and distribution, and options and stock appreciation
rights may be exercised during the employee’s lifetime only by him or his guardian or legal
representative. Notwithstanding the foregoing, the Committee may, in its discretion, authorize the
transfer of all or a portion of options granted to an optionee (a) to the optionee’s spouse,
children, grandchildren, parents, siblings and to other family members approved by the Committee
(“Family Members”); (b) to trust(s) for the exclusive benefit of such Family Members; or (c) to
partnerships in which such Family Members are at all times the only partners. Any transfer to or
for the benefit of Family Members permitted hereunder may be made subject to such conditions or
limitations as the Committee may establish to ensure compliance under the federal securities laws,
or for other purposes. Options transferred to or for the benefit of Family Members may be exercised
by the transferee during or after the employee’s lifetime.

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

     As used herein, the term “Extraordinary Distribution” means any dividend or other distribution
of:

(a) cash, where the aggregate amount of such cash dividend or distribution
together with the amount of all cash dividends and distributions made during the
preceding twelve months, when combined with the aggregate amount of all Pro-Rata
Repurchases (for this purpose, including only that portion of the aggregate
purchase price of such Pro Rata Repurchases which is in excess of the Fair Market
Value of the Common Stock repurchased during such twelve month period), exceeds
ten percent (10%) of the aggregate Fair Market Value of all shares of Common Stock
outstanding on the record date for determining the shareholders entitled to
receive such Extraordinary Distribution, or

(b) any shares of capital stock of the Corporation (other than shares of
Common Stock), other securities of the Corporation, evidences of indebtedness of
the Corporation or any other person or any other property (including shares of any
subsidiary of the Corporation), or any combination thereof.

     As used herein “Pro Rata Repurchase” means any purchase of shares of Common Stock by the
Corporation or any subsidiary thereof, pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Exchange Act or any successor provision of law, or pursuant to any other offer
available to substantially all holders of Common Stock; provided, however, that no purchase of
shares of the Corporation or a subsidiary thereof made in open market transactions shall be deemed
a Pro Rata Repurchase.

     12. Amendment and Termination of the Plan. The Corporation, by action of its Board of
Directors, reserves the right to amend, modify or terminate at any time this Plan, or, by action of
the Committee with the consent of the optionee, to amend, modify or terminate any outstanding
Option Agreement or Grant of Stock Appreciation Rights, except that the Corporation may not,
without further shareholder approval, increase the total number of shares as to which options may
be granted under this Plan (except increases attributable to the adjustments authorized in
Paragraph 2 hereof), change the employees or class of employees eligible to receive options, adjust
or amend the exercise price of options or stock appreciation rights previously granted to any
optionee, whether through amendment, cancellation, replacement grants or
any other means, or materially increase the benefits accruing to participants under this Plan.

3

 

Notwithstanding the foregoing, the provisions of Section 17 shall not be amended more than once
every six months other than to comport with changes in the Code or the Employee Retirement Income
Security Act or the rules and regulations thereunder. Moreover, no action shall be taken by the
Corporation which will impair the validity of any option or stock appreciation right then
outstanding, or which will prevent the options issued and stock appreciation rights granted
pursuant to this Plan from meeting the requirements for exemption from Section 16(b) of the
Securities Exchange Act of 1934, or subsequent comparable statute, as set forth in Rule 16b-3 under
said Act or subsequent comparable rule, or which will prevent any incentive stock option issued or
to be issued under this Plan from being an “incentive stock option” under Section 422 of the Code,
or any successor provision.

     13. Subsidiary. The term “subsidiary” as used herein shall mean any corporation in an unbroken
chain of corporations beginning with the Corporation and ending with the employer corporation if,
at the time of the granting of the option, each of the corporations other than the employer
corporation owns stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

     Settlement of stock options or stock appreciation rights exercised by employees of
subsidiaries shall be made by and at the expense of such subsidiary. Except as prohibited by law,
the Corporation shall sell and transfer to the subsidiary, and the subsidiary shall purchase, the
number of shares necessary to settle any stock option that is exercised.

     14. Noncompetition Provision. Unless the Option Agreement specifies otherwise, an optionee
shall forfeit all unexercised stock options and stock appreciation rights if, (i) in the opinion of
the Committee, such optionee, without the written consent of the Corporation, engages directly or
indirectly in any manner or capacity as principal, agent, partner, officer, director, employee, or
otherwise, in any business or activity competitive with the business conducted by the Corporation
or any subsidiary; or (ii) the optionee performs any act or engages in any activity which in the
opinion of the Committee is inimical to the best interests of the Corporation.

     15. Effective Date of Plan. The Amended and Restated Plan shall be effective upon approval by
the shareholders at the 1991 annual meeting.

     16. Expiration of Plan. Options may be granted under this Plan at any time prior to April 26,
2010, on which date the Plan shall expire but without affecting any options then outstanding.

     17. Directors’ Stock Options.

     (a) Grants. Stock options may be granted to non-employee Directors only in accordance with the
requirements of this Section 17. During each year of service on the Board of Directors, there shall
automatically be granted to each non-employee Director an option to purchase 2,500 shares of Common
Stock on such date as the Committee or the Board shall determine; provided, however that in the
case of a newly appointed or elected director such director shall be granted his or her initial
option on the date of appointment or election if such date is at least six months prior to the
annual grant date determined by the Committee or the Board. Notwithstanding the foregoing, no stock
options shall be granted to a director whose normal retirement under a plan or policy of the
Corporation would occur prior to six months from the date of granting such option.

     (b) Option Price. The option exercise price shall be the per share fair market value of the
outstanding shares of the Common Stock on the date such options are granted. The Committee shall be
authorized to determine such price per share. Payment of the option price may be made in cash or in
shares of Common Stock or any combination of cash and Common Stock.

     (c) Administration. Subject to the express provisions of this Section 17, the Committee shall
have conclusive authority to construe and interpret any stock option granted under this Section 17
and to adopt administrative policies with respect thereto; provided, however, that no action shall
be taken which would
prevent the options granted under this Section 17 from meeting the requirements for exemption
from

4

 

Section 16(b) of the Exchange Act, or subsequent comparable statute, as set forth in Rule
16(b)-3 of the Exchange Act or any subsequent comparable rule.

     (d) Option Agreement. The options granted hereunder shall be evidenced by an option agreement,
dated as of the date of the grant, which agreement shall be in such form, consistent with the terms
and requirements of this Section 17, as shall be approved by the Committee from time to time and
executed on behalf of the Corporation by the Chief Executive Officer.

     (e) Option Period. Options granted under this Section 17 shall not be exercisable later than
10 years from the date of grant.

     (f) Transferability. No option shall be transferable by the non-employee Director except by
will or the laws of descent and distribution and, during the Director’s lifetime, options may be
exercised only by such director or his or her guardian or legal representative.

     (g) Limitations on Exercise. Directors’ stock options shall become exercisable to the extent
of 25% of the optioned shares after the first anniversary of the date of grant, 50% after the
second anniversary, 75% after the third anniversary and 100% after the fourth anniversary of the
date of grant. To the extent an option is not otherwise exercisable at the date of the Director’s
retirement under a retirement plan or policy of the Corporation, it shall become fully exercisable
upon such retirement; provided, however, that Director stock options shall not become exercisable
under this sentence prior to the expiration of six months from the date of grant. Options not
otherwise exercisable at the time of the death of a Director during continued service with the
Corporation shall become fully exercisable upon his death. Upon the death of a Director, such
options shall remain exercisable for a period of one year after the date of death. To the extent an
option is exercisable on the date a Director ceases to be a Director (other than by reason of death
or retirement as described above), the option shall continue to be exercisable (subject to the
original term of the option) for a period of ninety (90) days thereafter.

5

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