Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment No. 1 to Registration Statement 6 50K
2: EX-10.02 Component Supply Agreement 209 615K
3: EX-10.02(A) Amend. No. 1 to Component Supply Agreement 2 11K
4: EX-10.02(B) Amend. No. 2 to Component Supply Agreement 2 11K
5: EX-10.02(C) Letter of Intent Dated Feb. 21, 1996 by G.M.T.G. 5 19K
6: EX-10.02(D) Letter of Intent Dated Feb. 21, 1996 by G.M.T.G. 3 18K
7: EX-10.02(E) Letter Agreement 13 71K
8: EX-10.02(F) Amended and Restated Memorandum of Understanding 39 261K
9: EX-10.02(G) Mou Extension Agreement 1 11K
10: EX-10.03 Gmcl Purchase Order Agreement 29 80K
11: EX-10.04 Am/Gmcl Supply Agreement 24 70K
12: EX-10.04(A) Amending Agreement Dated as of September 5, 1996, 1 10K
Between Aam, Inc. and Gmcl
13: EX-10.04(B) Amending Agreement Dated as of October 7, 1996, 1 11K
Between Aam, Inc. and Gmcl
14: EX-10.04(C) Amendment No. 1 to Aam/Gmcl Supply Agreement 1 10K
Dated February 17, 1994, Between Aam,
Inc. and Gmcl
15: EX-10.05 Agreement 1 10K
16: EX-10.05(A) Letter Dated December 13, 1996, by Aam, Inc. 4 24K
17: EX-10.08 Management Stock Option Plan 14 56K
18: EX-10.10 Indemnification Agreement 11 29K
19: EX-10.16 Aam Master Trust Pooling Agreement 130 425K
20: EX-10.16(A) Aam Master Trust Series 1997-A Supplement to 108 326K
Pooling Agreement
21: EX-10.17 Receivables Sale Agreement 72 317K
22: EX-10.18 Servicing Agreement 40 131K
23: EX-10.19 Agreement for Information Technology Services 106 330K
EX-10.08 — Management Stock Option Plan
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THE AMENDED AND RESTATED
AMERICAN AXLE & MANUFACTURING OF MICHIGAN, INC.
MANAGEMENT STOCK OPTION PLAN
This Management Stock Option Plan is hereby adopted by the Board of Directors
of American Axle & Manufacturing of Michigan, Inc., a corporation organized
under the laws of Michigan (the "Company"), as of November 15, 1997.
ARTICLE I
PURPOSE OF PLAN
The Plan is adopted by the Board for certain management Employees as a part of
the compensation and incentive arrangements for such Employees. The Plan is
intended to advance the Company's best interests by allowing such Employees to
acquire an ownership interest in the Company, thereby motivating them to
contribute to the success of the Company and to remain in the employ of the
Company and its Subsidiaries. It is anticipated that the availability of
Options under the Plan will also enhance the Company's ability to attract and
retain individuals of exceptional talent to contribute to the progress, growth
and profitability of the Company and its Subsidiaries.
ARTICLE II
DEFINITIONS
For purposes of the Plan, except where the context clearly indicates otherwise,
the following terms shall have the meanings set forth below:
"Acceleration Event" shall mean an event with respect to which the Plan
provides for the acceleration of the vesting of Options, as provided in Section
5.3.
"Affiliate" shall mean, with respect to any Person, (i) any other Person that
directly or indirectly Controls, is Controlled by or is under common Control
with, such Person, or (ii) any director, officer, partner, member or employee
of such Person or any Person specified in clause (i) above; provided, that
officers, directors or employees of the Company (or one of its Subsidiaries)
shall be deemed not to be Affiliates of Blackstone for purposes hereof solely
by reason of being officers, directors or employees of the Company (or one of
its Subsidiaries).
"Blackstone" shall mean collectively, Blackstone Capital Partners II Merchant
Banking Fund L.P., Blackstone Offshore Capital Partners II L.P., The Blackstone
Group L.P., Blackstone Family
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Investment Partnership II L.P. and their Affiliates (other than the Company and
its Subsidiaries).
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean (i) neglect of or willful and continuing refusal to perform
one's duties (other than due to Disability), (ii) a breach of any
non-competition/no raid covenants the Participant is subject to, (iii) engaging
in conduct which is demonstrably injurious to the Company, the Company's
Subsidiaries or Affiliates, or Blackstone (including, without limitation, a
breach of any confidentiality covenant the Participant is subject to), or (iv)
a conviction or plea of guilty or nolo contendere to a felony or a misdemeanor
involving moral turpitude, dishonesty or theft, in each case as determined in
the sole discretion of the Board.
"Change of Control" shall mean the purchase or other acquisition by any person,
entity or group of persons, within the meaning of section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions, other than Blackstone,
employees or directors of the Company or their respective Affiliates, of
ownership of fifty percent (50%) or more of the combined voting power of the
Company's then outstanding voting securities entitled to vote generally.
"Class I Performance Options" shall mean the management case performance
options described in Section 5.2(b) hereof.
"Class II Performance Options" shall mean the performance options described in
Section 5.2(c) hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Committee" shall mean the Compensation Committee of the Board.
"Common Stock" shall mean the common shares of the Company.
"Company" shall mean American Axle & Manufacturing of Michigan, Inc., a
corporation organized under the laws of Michigan.
"Control" (including, with correlative meaning, all conjugations thereof) shall
mean with respect to any Person, the ability of another Person to control or
direct the actions or policies of such first Person, whether by ownership of
voting securities, by contract or otherwise.
"Cumulative EBITDA" shall mean with respect to any Performance Option, the sum
of the EBITDA for the period commencing on the January 1 of the year following
the Grant Date and ending on the Determination Date of the Plan Year.
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"Cumulative EBITDA Targets" shall mean with respect to any Performance Option,
the sum of the relevant EBITDA Targets for the period commencing on the
January 1 of the year following the Grant Date and ending on the Determination
Date of the Plan Year.
"Determination Date" shall mean the last day of the Plan Year.
"Disability" shall mean the inability of a Participant to perform in all
material respects his duties and responsibilities to the Company, or any
Subsidiary of the Company, by reason of a physical or mental disability or
infirmity which inability is reasonably expected to be permanent and has
continued (i) for a period of six consecutive months or (ii) such shorter
period as the Board may reasonably determine in good faith. The Disability
determination shall be in the sole discretion of the Board and a Participant
(or his Representative) shall furnish the Board with medical evidence
documenting the Participant's disability or infirmity which is satisfactory to
the Board.
"EBITDA" shall mean, with respect to the Company and its Subsidiaries on a
consolidated basis for any period, the net income of the Company and its
Subsidiaries for such period, plus the following (only to the extent used in
calculating net income for such period): (a) net interest expense; (b) tax
expense; (c) expenses related to Blackstone's monitoring and management fees;
(d) any one time charge or gain relating to the Recapitalization; (e) any gain
or loss on the sale of fixed assets; and (f) depreciation and amortization of
tangible and intangible assets, all as determined in accordance with generally
accepted accounting principles, with appropriate adjustments for non-recurring
events as determined by the Board.
"EBITDA Target" shall mean, with respect to each fiscal year, the EBITDA
amount that must be achieved to become vested as described in Section 5.2.
"EBITDA Target (Class I)" shall mean, with respect to each fiscal year, the
amount set forth in the following table opposite such year:
Fiscal Year Ending EBITDA Target (Class I)
------------------ -----------------------
(in millions)
1998 $253.1
1999 $306.2
2000 $328.2
2001 $339.7
2002 $339.7
and such other targets as are established by the Committee with respect to
subsequent years. The Board shall make equitable adjustments to such targets
in the event (i) the fiscal year is modified or (ii) there are changes in the
Company's accounting policies. The Board may make adjustments to the above
targets to
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the extent that the expenses incurred by the Company, with respect to new
operating leases entered into after October 29, 1997 ("New Operating Leases"),
differ from the expenses projected for New Operating Leases in the Confidential
Information Memorandum relating to the Senior Secured Credit Facilities, dated
October 1997.
"EBITDA Target (Class II)" shall mean with respect to each fiscal year, the
amount set forth in the following table opposite such year:
Fiscal Year Ending EBITDA Target (Class II)
------------------ ------------------------
(in millions)
1998 $291.1
1999 $352.1
2000 $377.4
2001 $390.7
2002 $390.7
and such other targets as are established by the Committee with respect to
subsequent years. The Board shall make appropriate adjustments to such targets
in the event (i) the fiscal year is modified or (ii) there are changes in the
Company's accounting policies. The Board may make adjustments to the above
targets to the extent that the expenses incurred by the Company, with respect
to new operating leases entered into after October 29, 1997 ("New Operating
Leases"), differ from the expenses projected for New Operating Leases in the
Confidential Information Memorandum relating to the Senior Secured Credit
Facilities, dated October 1997.
"Employee" shall mean any employee of the Company or any of its
Subsidiaries.
"Employment Agreement" shall mean any employment agreement between a
Participant and the Company, as amended from time to time.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exercise Price" shall mean the amount that a Participant must pay to exercise
an Option with respect to one Option Share subject to such Option.
"Fair Market Value" shall mean, with respect to any Common Stock:
(i) prior to an initial Public Offering, the fair market value of the
Common Stock as determined in good faith by the Board based on the
value of the Company as a going concern, but without any discount
with respect to the minority ownership represented by such shares or
the contractual restrictions on the Transfer of the Shares; or
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(ii) on and after an initial Public Offering, the average of its
closing price for the 20 trading days immediately preceding the day
of the valuation.
"Financing Default" shall mean an event which would constitute (or with notice
or lapse of time or both would constitute) an event of default by the Company
or any of its Subsidiaries (which event of default has not been cured or
waived) under any of the following as they may be amended from time to time:
(i) The Credit Agreement (the "Credit Agreement") dated on or about the
Recapitalization Closing Date, among the Company, American Axle &
Manufacturing, Inc ("AAM"), The Chase Manhattan Bank, The Chase Manhattan Bank
Delaware and any other financial institutions party thereto, and any
extensions, renewals, refinancing or refundings thereof in whole or in part;
(ii) any other agreement under which an amount of indebtedness (in excess of
$5,000,000) of the Company or any of its Subsidiaries is outstanding as of the
time of the aforementioned event, and any extensions, renewals, refinancing or
refundings thereof in whole or in part; (iii) any amendment of, supplement to
or other modification of any of the instruments referred to in clauses (i) and
(ii) above; and (iv) any of the securities issued pursuant to or whose terms
are governed by the terms of any of the agreements set forth in clauses (i)
and (ii) above, and any extensions, renewals, refinancing or refundings
thereof in whole or in part.
"Good Reason" shall mean a material reduction in base salary, or a material
reduction in bonus, in either case as determined in the sole discretion of the
Board. The Participant shall be deemed to have voluntarily terminated
employment with Good Reason if he Retires on or after the third anniversary of
the Recapitalization Closing Date. However, if a Participant Retires prior to
the third anniversary, he shall be deemed to have voluntarily terminated
employment without Good Reason.
"Grant Date" shall mean the date an Option is granted pursuant to this Plan.
"Option" shall mean, with respect to any Participant, any Time Option or
Performance Option.
"Option Agreement" shall mean an option agreement between a Participant and
the Company, substantially in the form of one of the agreements attached
hereto as Exhibit A.
"Option Shares" shall mean, with respect to any Participant, any Shares
issuable or issued by the Company upon exercise of any Option by such
Participant, as adjusted as a result of any stock dividend, stock split,
merger, consolidation, reorganization or other recapitalization.
"Participant" shall mean any Employee who holds an outstanding Option granted
under this Plan.
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"Performance Options" shall mean Class I Options and Class II Options,
collectively.
"Person" shall mean an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Plan" shall mean this Management Stock Option Plan, as amended from time to
time.
"Plan Year" shall mean initially the calendar year beginning January 1, 1998
and ending on December 31, 1998, and thereafter each of the calendar years
from 1999 through 2004.
"Public Offering" shall mean the sale of Shares pursuant to an effective
registration statement under the Securities Act, which results in an active
trading market in Common Stock. If the Common Stock is listed on a United
States securities exchange or is quoted on the NASDAQ National Market, it
shall be deemed to be actively traded.
"Recapitalization" shall be given the same meaning as in the Recapitalization
Agreement.
"Recapitalization Agreement" shall mean the agreement dated as of September 19,
1997 among the Company, American Axle & Manufacturing, Inc. ("AAM"), Jupiter
Capital Corporation, Mr. Richard E. Dauch, Mr. Morton E. Harris and AAM
Acquisition, Inc.
"Recapitalization Closing Date" shall mean the date of the closing of the
Recapitalization.
"Recapitalization Price" shall mean $16,811.78 per share.
"Representative" shall mean (i) in the case of death, the executor, liquidator
or administrator of the deceased Participant's estate or the Person or Persons
to whom the deceased Participant's rights under the Option shall pass by will
or the laws of descent and distribution and (ii) in the case of Disability,
his or her legal guardian or legal representative.
"Retire" shall mean, with respect to any Participant, such Participant's
voluntary resignation at any time after attaining age 65 (or at any earlier
date with the advanced permission of the Company).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean any shares of Common Stock issuable or issued by the
Company.
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"Subsidiary" shall mean any corporation of which the Company owns, directly or
through one or more subsidiaries, securities having a majority of the ordinary
voting power in electing the board of directors of such corporation.
"Time Options" shall mean the options described in Section 5.1 hereof.
"Transfer" shall mean, with respect to any Option, the gift, sale, assignment,
transfer, pledge, hypothecation or other disposition (whether for or without
consideration and whether voluntary, involuntary or by operation of law), or
any act thereof, of such Option or any interest therein.
ARTICLE III
LIMITATION ON AVAILABLE OPTION SHARES
3.1 Option Shares. The aggregate number of Shares with respect to which
Options may be granted under the Plan shall not exceed 1,425 Shares, which
represents 12% of the Common Stock outstanding on a fully diluted basis as of
the Recapitalization Closing Date (to be divided equally among Time Options,
Class I Performance Options and Class II Performance Options); provided,
however, that the aggregate number of Shares with respect to which Options may
be granted shall be subject to adjustment in accordance with the provisions of
Section 9.2 below.
3.2 Status of Option Shares. The Shares of Common Stock for which Options may
be granted under the Plan may be either authorized and unissued shares,
treasury shares or a combination thereof, as the Committee shall determine and
shall be reserved by the Committee for issuance under this Plan. To the extent
any Options are forfeited, expire or are terminated prior to exercise, the
Option Shares in respect of which such Options were issued shall become
available for reissuance to Employees pursuant to this Plan or any other plan
or agreement approved by the Board.
ARTICLE IV
GRANT OF OPTIONS
4.1 Options. Options granted on the Recapitalization Closing Date (the
"Initial Grant") shall be granted by the Board. Thereafter, the Committee
shall grant Options to such Employees as the Committee may determine. Each
Participant granted Options must execute an Option Agreement.
4.2 Exercise Price. The Exercise Price of Options granted hereunder shall be
the Fair Market Value of the Shares subject to the Option, determined as of
the Grant Date. For purposes of the
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Initial Grant, the Exercise Price of Options shall be the Recapitalization
Price.
4.3 Form of Option. Options granted under this Plan shall be non-qualified
stock options and are not intended to be "incentive stock options" within the
meaning of Section 422 of the Code or any successor provisions. Options shall
be exercisable with respect to the number of Shares covered by the Option to
the extent they become both vested and exercisable (as determined below) and
shall thereafter be exercisable until they expire or are terminated (as
determined below).
4.4 Dilution of Options. Participants shall be subject to the same dilution as
the non-Participant holders of Common Stock, and shall not have any preemptive
or other special rights.
4.5 Regulatory Approvals. The grant of any Options hereunder following a
Public Offering shall be subject to the receipt by the Company of all
necessary regulatory approvals.
ARTICLE V
VESTING, EXERCISABILITY AND
EXPIRATION OF OPTIONS; PUTS AND CALLS
5.1 Time Options. Except as otherwise provided in the Option Agreement, all
Time Options granted pursuant to this Plan as part of the Initial Grant shall
become completely exercisable in accordance with the following schedule:
Exercisable
Percentage
Prior to December 31, 1998 0%
On or after December 31, 1998 20%
On or after December 31, 1999 40%
On or after December 31, 2000 60%
On or after December 31, 2001 80%
On or after December 31, 2002 100%
For Participants granted Time Options after December 31, 1997, such Options
shall become exercisable, with respect to 20% of the Shares subject to such
Options, on each of the first five anniversaries of the Grant Date.
5.2 Performance Options.
(a) Except as otherwise provided in the Option Agreement, all
Performance Options granted pursuant to this Plan shall become exercisable in
accordance with this Section 5.2.
(b) Class I Performance Options. The Class I Performance Options
shall become exercisable with respect to 100% of the
9
Shares on the seventh anniversary of the Grant Date. Notwithstanding the
foregoing, Class I Performance Options shall become exercisable with respect
to 20% of the Shares subject to such Option, on each of the first five
Determination Dates following the Grant Date that the Company's EBITDA for a
Plan Year equals or exceeds the EBITDA Target (Class I) for that Plan Year.
(c) Class II Performance Options. The Class II Performance Options
shall become exercisable with respect to 100% of the Shares on the seventh
anniversary of the Grant Date. Notwithstanding the foregoing, Class II
Performance Options shall become exercisable with respect to 20% of the Shares
subject to such Option, on each of the first five Determination Dates
following the Grant Date that the Company's EBITDA for a Plan Year equals or
exceeds the EBITDA Target (Class II) for that Plan Year.
(d) Catch-Up. If, beginning January 1 after the Grant Date of a
Performance Option, the Company's EBITDA for a Plan Year is less than 100% of
the applicable EBITDA Target for such Plan Year (a "Missed Year"), no such
Performance Option shall become vested with respect to any additional Shares
(the "Missed Shares") on the Determination Date for such Plan Year. If, in any
Plan Year subsequent to a Missed Year EBITDA exceeds the applicable EBITDA
Target for such Plan Year and Cumulative EBITDA exceeds the applicable
Cumulative EBITDA Targets, then Performance Options shall become vested with
respect to the Missed Shares attributable to such Missed Year (but only to the
extent such Option has not otherwise terminated).
5.3 Acceleration Events. Notwithstanding anything in this Article V to the
contrary, Time Options shall become completely exercisable upon the first to
occur of the following Acceleration Events: (i) a Change of Control during a
Participant's period of employment, and (ii) to the extent provided in a
Participant's Option Agreement, a Participant's termination without Cause or
voluntary termination for Good Reason.
5.4 Exercisability in the Event Employment is Terminated. A Participant's
unvested Time Options and unvested Performance Options shall expire upon the
Participant's termination of employment unless an applicable Acceleration
Event has occurred.
5.5 Reallocation of Options. Options that are terminated or forfeited may be
reallocated to other Employees as determined by the Board or Committee, in
consultation with the Chief Executive Officer.
5.6 Expiration Date. Options shall expire at 5:00 p.m. Eastern Standard Time
on the day prior to the 12th anniversary of the Grant Date (the "Expiration
Date").
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5.7 Earlier Expiration Date. Notwithstanding Section 5.5, in the event of
termination of employment, Options shall expire prior to the Expiration Date
as follows:
(a) A Participant's Options shall expire immediately, without any
payment, upon the Participant's termination of employment if the Participant's
employment is terminated for Cause or if the Participant voluntarily
terminates employment without Good Reason;
(b) If the Participant voluntarily terminates employment with Good
Reason or if the Participant's employment is terminated without Cause, the
Participant's Options shall expire on the later of (i) six months after the
Participant's termination of employment or (ii) six months following a Public
Offering or Change of Control.
5.8 Calls. The Company shall have the rights specified in Section 5.8(a) to
purchase Options and Option Shares from a Participant ("Call") However, there
shall be no Calls after the consummation of an initial Public Offering.
(a) Call.
(i) Option Shares. On or after the date a Participant
exercises all or a portion of an Option granted hereunder,
the Company shall have the right and option to purchase for
a period of 90 days from the date of the Participant's
termination of employment for any reason (or, if later, for
a period of 200 days from the last date the Participant
exercised an Option), and if the Company exercises such
right, each Participant shall be required to sell to the
Company, any or all of his or her owned Option Shares at a
price per share equal to the Fair Market Value (as of the
date the Company exercises such right).
(ii) Options. The Company shall, after a Participant's
employment has terminated, have the right and option to
purchase and if the Company exercises such right each
Participant shall be required to sell to the Company, any or
all of his or her then outstanding Options at a price per
Option equal to the Fair Market Value minus the Exercise
Price.
(iii) Notice. If the Company desires to exercise its option
to purchase any Options or Option Shares pursuant to this
Section 5.8(a), the Company shall, not later than 60 days
after the date of the Participant's termination of
employment (or, with respect to Section 5.8(a)(i), if later,
170 days from the last date an Option, or a portion of an
Option, was exercised), send written notice of its intention
to purchase such Shares or Options. The closing of the
purchase shall take
11
place at the principal office of the Company on the 30th day
after the giving of notice by the Company of its exercise of
its option to purchase (the "Closing").
(iv) If the Company is prohibited by applicable law from
exercising a right pursuant to this Section 5.8(a), then the
Company may assign such right to its stockholders on a pro
rata basis. In the event that a stockholder does not wish to
exercise its assigned right, Blackstone shall have the right
(but not the obligation) to exercise such assigned right.
(b) Deferral of Purchases.
(i) The Company shall not be obligated to purchase any
Options or Option Shares at any time pursuant to Section
5.8(a), (A) to the extent that the purchase of such Options
or Option Shares would result, after giving effect thereto,
in a Financing Default, or (B) if doing so would constitute
a Financing Default or if immediately prior to such purchase
there exists a Financing Default which prohibits such
purchase. The Company shall within 20 days of learning of
any of the foregoing facts notify the Participant that it is
not obligated to purchase the Options or Option Shares
pursuant to Section 5.8(a)
(c) Payment. If at any time the Company elects to purchase any
Options or Option Shares pursuant to Section 5.8(a), the Company shall, at the
Closing, pay the purchase price for such Options or Option Shares by delivery
of a bank cashier's check or certified check for the purchase price.
ARTICLE VI
EXERCISE OF OPTIONS
6.1 Right to Exercise. During the lifetime of a Participant, vested and
exercisable Options may be exercised only by such Participant (except that, in
the event of his or her death or Disability, Options may be exercised by his
or her Representative).
6.2 Procedure for Exercise. Options may be exercised in whole or in part with
respect to any portion that is vested and exercisable. To exercise an Option a
Participant (or such other Person who shall be permitted to exercise the
Option as set forth in Section 6.1) must complete, sign and deliver to the
Company (to the attention of the Company's Secretary) a notice of exercise
substantially in the form attached hereto as Annex I (or in such other similar
form as the Committee may from time to time adopt and provide to a
Participant) (the "Exercise Notice"), together with payment in full of the
Exercise Price multiplied by
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the number of Shares with respect to which the Option is exercised. Payment of
the Exercise Price shall be made (i) in cash (including certified check, bank
draft or money order) or (ii) at the discretion of the Committee, with shares
of Common Stock with a Fair Market Value equal to the Exercise Price;
provided, that such shares of Common Stock have been held by the Participant
for no less than six months. Immediately prior to the exercise of any of the
Options, the Participant shall enter into a stockholders' agreement in a form
to be determined by the Board in its sole discretion. The execution of such
stockholders' agreement shall be a condition to the exercise of such Options.
A Participant's right to exercise the Option shall be subject to the
satisfaction of all conditions set forth in the Exercise Notice.
6.3 Withholding of Taxes. The Company shall withhold from any Participant from
any amounts due and payable by the Company to such Participant (or secure
payment from such Participant in lieu of withholding) the amount of any
withholding or other tax due from the Company with respect to any Option
Shares issuable under the Plan, and the Company may defer such issuance unless
indemnified to its satisfaction.
ARTICLE VII
RIGHTS AND LIMITATIONS
7.1 Registration of Option Shares. Promptly following the first Public
Offering, the Company shall file, at its own expense, a registration statement
on Form S-8 to register the Option Shares, which Option Shares shall be subject
to applicable stockholder agreements.
7.2 Transfer of Options. Unless otherwise provided by the Committee, Options
may not be Transferred (other than by will or the laws of descent or
distribution).
ARTICLE VIII
ADMINISTRATION
8.1 Plan Administrator. This Plan shall be administered by the Committee;
provided, however, that the Committee may delegate responsibility for the
routine administration of the Plan to an officer or officers of the Company.
8.2 Committee Option Grants. The Committee shall have the authority to select
Employees to receive Options and to grant Options (except for the Options
granted as part of the Initial Grant, which shall be granted by the Board) to
Employees in such amounts as it shall determine, in its full discretion.
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8.3 Committee Authority. The Committee shall have the sole and complete
responsibility and authority to (a) interpret and construe the terms of this
Plan; (b) correct any defect, error or omission or reconcile any inconsistency
in the Plan or in any Option granted hereunder; and (c) make all other
determinations and take all other actions necessary or advisable for the
implementation and administration of the Plan. The Committee's determinations
on matters within its authority, or the Board's determinations on matters
within its authority, as the case may be, shall be conclusive and binding upon
the Participants, the Company and all other Persons. The Committee may, in its
discretion, accelerate the vesting of Options at any time and for any reason.
8.4 Composition of Committee. At any time when the Company is subject to the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act, the
Committee shall consist of two or more directors who are "non-employee
directors," within the meaning of Rule 16b-3 of the Exchange Act. At any time
when the Company has a class of common equity securities required to be
registered under Section 12 of the Exchange Act, the Committee shall consist
of at least two outside directors, within the meaning of Section 162(m)(4)(C)
of the Code.
ARTICLE IX
MISCELLANEOUS
9.1 Amendment, Suspension and Termination of Plan. The Board, at any time and
from time to time, may suspend, terminate or amend the Plan. However, no
suspension, termination or amendment of or to the Plan shall affect adversely
the rights of any Participant with respect to Options issued hereunder prior
to the date of such suspension, termination or amendment without the consent
of such Participant. Unless terminated earlier, the Plan shall terminate on
December 31, 2004.
9.2 Adjustments. In the event of a merger, recapitalization, stock dividend,
reorganization, stock split, share consolidation or combination, or other
similar event, the Committee shall make such adjustments in the number and
type of Shares authorized by the Plan, the number and type of Shares covered
by outstanding Options and the Exercise Prices specified therein and other
amendments to the Plan as the Board, in good faith, determines to be
appropriate and equitable.
9.3 Future Acquisitions or Dispositions. The EBITDA Targets are based upon
certain revenue and expense assumptions about the future business of the
Company and its Subsidiaries as of the Recapitalization Closing Date.
Accordingly, if the Company or any Subsidiary acquires, by purchase or
otherwise, or disposes of, by sale of stock or assets, the business, property,
or fixed
14
assets, of another Person, which acquisition or disposition, either singly or
together with one or more other such transactions, will, in the Board's good
faith determination, materially affect the Company's EBITDA, the Committee
shall, in good faith, adjust the EBITDA Targets to reflect the projected
effect of such transaction or transactions.
9.4 No Right to Participate. Except as otherwise agreed to by the Company, no
Employee shall have a right to be selected as a Participant or, having been so
selected, to be selected again to receive a grant of Options.
9.5 No Employment Contract. Nothing in this Plan shall interfere with or limit
in any way the right of the Company or any of its Subsidiaries to terminate
any Participant's employment at any time (with or without Cause), nor confer
upon any Participant any right to continued employment by the Company or any
of its Subsidiaries for any period of time or to continue such employee's
present (or any other) rate of compensation.
9.6 Construction of Plan. The terms of this Plan shall be administered in
accordance with the laws (excluding conflict of interest laws) of the State of
New York. Any dispute arising out of or relating to this Plan or its
interpretation, termination or validity shall be resolved by arbitration in
New York, New York pursuant to the Rules of the American Arbitration
Association for commercial arbitrations.
9.7 Effective Date. This Plan shall be effective as of November
15, 1997.
Dates Referenced Herein and Documents Incorporated by Reference
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