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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 28, 1996
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W. R. GRACE & CO.
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(Exact name of registrant as specified in its charter)
Delaware 1-12139 65-0654331
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
One Town Center Road, Boca Raton, Florida 33486-1010
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 561/362-2000
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GRACE HOLDING, INC.
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(Former Name)
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Item 5. Other Events.
On September 28, 1996, W. R. Grace & Co. ("Grace New York," renamed
Fresenius National Medical Care Holdings, Inc.), a New York corporation and the
sole stockholder of W. R. Grace & Co. (formerly Grace Holding, Inc.), a
Delaware corporation ("Company"), distributed all of the shares of the
Company's outstanding common stock to the holders of common stock of Grace New
York on a one-for-one basis. As a result of the distribution, Grace New York's
principal remaining asset was 100% of the outstanding capital stock of National
Medical Care, Inc. ("NMC"). On September 29, 1996, a wholly owned subsidiary
of Fresenius Medical Care AG, a German corporation, merged with and into Grace
New York, resulting in the combination of NMC with the worldwide dialysis
business of Fresenius AG, a German health care corporation and the principal
shareholder of Fresenius Medical Care AG. For further information, see the
Joint Proxy Statement-Prospectus dated August 2, 1996 included in a
Registration Statement on Form S-4 (Registration No. 333-9497) filed by Grace
New York.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Pro forma financial information with respect to the Company was
set forth at pages 29-32 of the Company's Prospectus dated August 2, 1996
included in a Registration Statement on Form S-1 (Registration No. 333-9495)
and is incorporated herein by reference.
The following are filed as exhibits to this Report:
-- Amended and Restated Certificate of Incorporation
of W. R. Grace & Co., a Delaware corporation
-- Amended and Restated By-laws of W. R. Grace & Co.
-- Rights Agreement by and between W. R. Grace & Co.
and The Chase Manhattan Bank, as Rights Agent
-- Supplemental Indenture dated as of September 24,
1996, among W. R. Grace & Co.-Conn., W. R. Grace &
Co. (renamed "Fresenius National Medical Care
Holdings, Inc."), Grace Holding, Inc. (renamed "W.
R. Grace & Co."), and Bankers Trust Company, to
Indenture dated as of September 29, 1992
-- Supplemental Indenture dated as of September 24,
1996, among W. R. Grace & Co.-Conn., W. R. Grace &
Co. (renamed "Fresenius National Medical Care
Holdings, Inc."), Grace Holding, Inc. (renamed
"W.R. Grace & Co."), and Bank of New York, to
Indenture dated as of January 28, 1993
-- W. R. Grace & Co. 1996 Stock Incentive Plan
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-- W. R. Grace & Co. 1996 Stock Retainer Plan for
Nonemployee Directors
-- W. R. Grace & Co. 1981 Stock Incentive Plan, as
amended
-- W. R. Grace & Co. 1986 Stock Incentive Plan, as
amended
-- W. R. Grace & Co. 1989 Stock Incentive Plan, as
amended
-- W. R. Grace & Co. 1994 Stock Incentive Plan, as
amended
-- Amendment dated August 9, 1996 to Employment
Agreement, dated as of May 1, 1995, between W. R.
Grace & Co. and Albert J. Costello
-- Option Agreement between W. R. Grace & Co. and
Albert J. Costello dated as of May 1, 1995, as
amended
-- Agreement dated September 23, 1996 between W. R.
Grace & Co. and Donald H. Kohnken
-- "PRO FORMA FINANCIAL INFORMATION" and "NOTES TO
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE
SHEET AND STATEMENT OF OPERATIONS" sections of the
Prospectus dated August 2, 1996 included in a
Registration Statement on Form S-1 (Registration
No. 333-9495) filed by the Company
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
W. R. GRACE & CO.
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(Registrant)
By /s/Robert B. Lamm
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Robert B. Lamm
Vice President and Secretary
Dated: October 10, 1996
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W. R. GRACE & CO.
Current Report on Form 8-K
Exhibit Index
Exhibit No. Description
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4.1 Amended and Restated Certificate of Incorporation
of W. R. Grace & Co., a Delaware corporation
4.2 Amended and Restated By-laws of W. R. Grace & Co.
4.3 Rights Agreement by and between W. R. Grace & Co.
and The Chase Manhattan Bank, as Rights Agent
4.4 Supplemental Indenture dated as of September 24,
1996, among W. R. Grace & Co.-Conn., W. R. Grace & Co.
(renamed "Fresenius National Medical Care Holdings,
Inc."), Grace Holding, Inc. (renamed "W. R. Grace &
Co."), and Bankers Trust Company, to Indenture dated as
of September 29, 1992
4.5 Supplemental Indenture dated as of September 24,
1996, among W. R. Grace & Co.-Conn., W. R. Grace & Co.
(renamed "Fresenius National Medical Care Holdings,
Inc."), Grace Holding, Inc. (renamed "W. R. Grace &
Co."), and Bank of New York, to Indenture dated as of
January 28, 1993
10.1 W. R. Grace & Co. 1996 Stock Incentive Plan
10.2 W. R. Grace & Co. 1996 Stock Retainer Plan for
Nonemployee Directors
10.3 W. R. Grace & Co. 1981 Stock Incentive Plan, as amended
10.4 W. R. Grace & Co. 1986 Stock Incentive Plan, as amended
10.5 W. R. Grace & Co. 1989 Stock Incentive Plan, as amended
10.6 W. R. Grace & Co. 1994 Stock Incentive Plan, as amended
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10.7 Amendment dated August 9, 1996 to Employment Agreement,
dated as of May 1, 1995, between W. R. Grace & Co. and
Albert J. Costello
10.8 Option Agreement between W. R. Grace & Co. and
Albert J. Costello dated as of May 1, 1995, as amended
10.9 Agreement dated September 23, 1996 between W. R. Grace &
Co. and Donald H. Kohnken
99.1 "PRO FORMA FINANCIAL INFORMATION" and "NOTES TO
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE
SHEET AND STATEMENT OF OPERATIONS" sections of the
Prospectus dated August 2, 1996 included in a
Registration Statement on Form S-1 (Registration No.
333-9495) filed by the Company
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EXHIBIT 4.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
W. R. GRACE & CO.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
* * * * * * *
ARTICLE I
The name of the corporation (the "Corporation") is:
W. R. Grace & Co.
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is The Prentice-Hall Corporation System, Inc., 1013 Centre Road,
Wilmington, Delaware, County of New Castle. The name of the Corporation's
registered agent at such address is The Prentice-Hall Corporation System, Inc.
ARTICLE III
The purpose of the Corporation shall be to engage in any lawful act or
activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware (the "GCL").
ARTICLE IV
(a) The total number of shares of stock which the Corporation shall have
authority to issue is Three Hundred and Fifty-Three Million (353,000,000),
consisting of Fifty-Three Million (53,000,000) shares of Preferred Stock, par
value $.01 per share (hereinafter referred to as "Preferred Stock"), and Three
Hundred Million (300,000,000) shares of Common Stock, par value $.01 per share
(hereinafter referred to as "Common Stock").
(b) The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized to provide for the issuance
of shares of Preferred Stock in series and, by filing a certificate pursuant to
the applicable law of the State of Delaware ("Preferred Stock Designation"), to
establish from time to time the number of shares to be included in each such
series, and to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations and restric-
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tions thereof. The authority of the Board of Directors with respect to each
series shall include, but not be limited to, determination of the following:
(1) The designation of the series, which may be by distinguishing
number, letter or title.
(2) The number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the
Preferred Stock Designation) increase or decrease (but not below the
number of shares thereof then outstanding).
(3) Whether dividends, if any, shall be cumulative or noncumulative
and the dividend rate of the series.
(4) The dates on which dividends, if any, shall be payable.
(5) The redemption rights and price or prices, if any, for shares of
the series.
(6) The terms and amount of any sinking fund provided for the purchase
or redemption of shares of the series.
(7) The amounts payable on, and the preferences, if any, of shares of,
the series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation.
(8) Whether the shares of the series shall be convertible into shares
of any other class or series, or any other security, of the Corporation or
any other corporation, and, if so, the specification of such other class
or series of such other security, the conversion price or prices or rate
or rates, any adjustments thereof, the date or dates at which such shares
shall be convertible and all other terms and conditions upon which such
conversion may be made.
(9) Restrictions on the issuance of shares of the same series or of
any other class or series.
(10) The voting rights, if any, of the holders of shares of the series.
(c) The Common Stock shall be subject to the express terms of the
Preferred Stock and any series thereof. Each share of Common Stock shall be
equal to each other share of Common Stock. The holders of shares of Common
Stock shall be entitled to one vote for each such share upon all questions
presented to the stockholders.
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Except as may be provided in this Amended and Restated Certificate of
Incorporation or in a Preferred Stock Designation, or as may be required by
law, the Common Stock shall have the exclusive right to vote for the election
of directors and for all other purposes, and holders of Preferred Stock shall
not be entitled to receive notice of any meeting of stockholders at which they
are not entitled to vote.
(d) The Corporation shall be entitled to treat the person in whose name any
share of its stock is registered as the owner thereof for all purposes and
shall not be bound to recognize any equitable or other claim to, or interest
in, such share on the part of any other person, whether or not the Corporation
shall have notice thereof, except as expressly provided by applicable law.
(e) There shall be designated a series of the Corporation's Preferred
Stock, as follows:
(1) Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 3,000,000. Such number of shares may
be increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of Series A
Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
(2) Dividends and Distributions.
(a) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock, in preference to the holders of
Common Stock, par value $.01 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the
first day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Payment Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a
dividend payable in
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shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share of a fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in subparagraph (a) of this
paragraph (2) immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin
to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared
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thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
(3) Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock,
or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
(4) Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in paragraph (2) are
in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to
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dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock, and all such parity stock
on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock, or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series of classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation could,
under subparagraph (a) of this paragraph (4), purchase or otherwise
acquire such shares at such time and in such manner.
(5) Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or
as otherwise required by law.
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(6) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be
made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of
shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the aggregate
amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by re-classification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
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number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(8) No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
(9) Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock.
(10) Amendment. This Amended and Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together as a
single class.
ARTICLE V
The Board of Directors is hereby authorized to create and issue, whether
or not in connection with the issuance and sale of any of its stock or other
securities or property, rights entitling the holders thereof to purchase from
the Corporation shares of stock or other securities of the Corporation or any
other corporation. The times at which and the terms upon which such rights are
to be issued will be determined by the Board of Directors and set forth in the
contracts or instruments that evidence such rights. The authority of the Board
of Directors with respect to such rights shall include, but not be limited to,
determination of the following:
(1) The initial purchase price per share or other unit of the stock
or other securities or property to be purchased upon exercise of such
rights.
(2) Provisions relating to the times at which and the circumstances
under which such rights may be exercised or sold or otherwise
transferred, either together with or separately from, any other stock or
other securities of the Corporation.
(3) Provisions which adjust the number or exercise price of such
rights or amount or nature of the stock or other securities or property
receivable upon exercise of such rights in the event of a combination,
split or recapitalization of any stock of the Corporation, a change in
ownership of the Corporation's stock or other securities or a
reorganization, merger, consolidation, sale of assets or other occurrence
relating to the Corporation or any stock of the Corporation, and
provisions
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restricting the ability of the Corporation to enter into any such
transaction absent an assumption by the other party or parties thereto of
the obligations of the Corporation under such rights.
(4) Provisions which deny the holder of a specified percentage of the
outstanding stock or other securities of the Corporation the right to
exercise such rights and/or cause the rights held by such holder to
become void.
(5) Provisions which permit the Corporation to redeem or exchange
such rights.
(6) The appointment of a rights agent with respect to such rights.
ARTICLE VI
In furtherance of, and not in limitation of, the powers conferred by law,
the Board of Directors is expressly authorized and empowered:
(1) to adopt, amend or repeal the By-laws of the Corporation;
provided, however, that the By-laws adopted by the Board of Directors
under the powers hereby conferred may be amended or repealed by the Board
of Directors or by the stockholders having voting power with respect
thereto, provided further that in the case of amendments by stockholders,
the affirmative vote of the holders of at least 80 percent of the voting
power of the then outstanding Voting Stock, voting together as a single
class, shall be required to alter, amend or repeal any provision of the
By-laws; and
(2) from time to time to determine whether and to what extent, and at
what times and places, and under what conditions and regulations, the
accounts and books of the Corporation, or any of them, shall be open to
inspection of stockholders; and, except as so determined or as expressly
provided in this Amended and Restated Certificate of Incorporation or in
any Preferred Stock Designation, no stockholder shall have any right to
inspect any account, book or document of the Corporation other than such
rights as may be conferred by applicable law.
The Corporation may in its By-laws confer powers upon the Board of
Directors in addition to the foregoing and in addition to the powers and
authorities expressly conferred upon the Board of Directors by applicable law.
Notwithstanding anything contained in this Amended and Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
80 percent of the voting power of the then outstanding Voting Stock, voting
together as a single class, shall be required to amend, repeal or adopt any
provision
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inconsistent with paragraph (1) of this Article VI. For the purposes of this
Amended and Restated Certificate of Incorporation, "Voting Stock" shall mean
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors.
ARTICLE VII
Subject to the rights of the holders of any series of Preferred Stock or
any other series or class of stock as set forth in this Amended and Restated
Certificate of Incorporation to elect additional directors under specific
circumstances, any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing in lieu of a meeting of such stockholders. Notwithstanding anything
contained in this Amended and Restated Certificate of Incorporation to the
contrary, the affirmative vote of at least 80 percent of the voting power of
the then outstanding Voting Stock, voting together as a single class, shall be
required to amend, repeal or adopt any provision inconsistent with this Article
VII.
ARTICLE VII
Subject to the rights of the holders of any series of Preferred Stock or
any other series or class of stock as set forth in this Amended and Restated
Certificate of to elect additional directors under specified circumstances, the
number of directors of the Corporation shall be fixed, and may be increased or
decreased from time to time, in such manner as may be prescribed by the
By-laws.
Unless and except to the extent that the By-laws of the Corporation shall
so require, the election of directors of the Corporation need not be by written
ballot.
The directors, other than those who may be elected by the holders of any
series of Preferred Stock or any other series or class of stock as set forth in
this Amended and Restated Certificate of Incorporation, shall be divided into
three classes, as nearly equal in number as possible. One class of directors
shall be initially elected for a term expiring at the annual meeting of
stockholders to be held in 1997, another class shall be initially elected for a
term expiring at the annual meeting of stockholders to be held in 1998, and
another class shall be initially elected for a term expiring at the annual
meeting of stockholders to be held in 1999. Members of each class shall hold
office until their successors are elected and qualified. At each succeeding
annual meeting of the stockholders of the Corporation, the successors of the
class of directors whose term expires at that meeting shall be elected by a
plurality vote of all votes cast at such meeting to hold office for a term
expiring at the annual meeting of stockholders held in the third year following
the year of their election.
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Subject to the rights of the holders of any series of Preferred Stock or
any other series or class of stock as set forth in this Amended and Restated
Certificate of Incorporation to elect additional directors under specified
circumstances, any director may be removed from office at any time by the
shareholders, but only for cause.
Notwithstanding anything contained in this Amended and Restated
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 80 percent of the voting power of the then outstanding
Voting Stock, voting together as a single class, shall be required to amend,
repeal or adopt any provision inconsistent with this Article VIII.
ARTICLE IX
Each person who is or was or has agreed to become a director or officer of
the Corporation, or each such person who is or was serving or who has agreed to
serve at the request of the Board of Directors or an officer of the Corporation
as an employee or agent of the Corporation or as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans (including
the heirs, executor, administrators or estate of such person), shall be
indemnified by the Corporation, in accordance with the By-laws of the
Corporation, to the fullest extent permitted from time to time by the GCL as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said law permitted prior to such
amendment) or any other applicable laws as presently or hereafter in effect.
Without limiting the generality or the effect of the foregoing, the Corporation
may enter into one or more agreements with any person which provide for
indemnification greater than or different from that provided in this Article
IX. Any amendment or repeal of this Article IX shall not adversely affect any
right or protection existing hereunder in respect of any act or omission
occurring prior to such amendment or repeal.
ARTICLE X
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (1) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (3) under Section 174 of the GCL, or (4) for any
transaction from which the director derived an improper personal benefit. Any
amendment or repeal of this Article X shall not adversely affect any right or
protection of a director of the Corporation existing hereunder in respect of
any act or omission occurring prior to such amendment or repeal.
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ARTICLE XI
Except as may be expressly provided in this Amended and Restated
Certificate of Incorporation, the Corporation reserves the right at any time
and from time to time to amend, alter, change or repeal any provision contained
in this Amended and Restated Certificate of Incorporation or a Preferred Stock
Designation, and any other provisions authorized by the laws of the State of
Delaware at the time in force may be added or inserted, in the manner now or
hereafter prescribed herein or by applicable law, and all rights, preferences
and privileges of whatsoever nature conferred upon stockholders, directors or
any other persons whomsoever by and pursuant to this Amended and Restated
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the right reserved in this Article XI; provided, however,
that any amendment or repeal of Article IX or Article X of this Amended and
Restated Certificate of Incorporation shall not adversely affect any right or
protection existing hereunder in respect of any act or omission occurring prior
to such amendment or repeal; and provided further that no Preferred Stock
Designation shall be amended after the issuance of any shares of the series of
Preferred Stock created thereby, except in accordance with the terms of such
Preferred Stock Designation and the requirements of applicable law.
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EXHIBIT 4.2
AMENDED AND RESTATED
BY-LAWS
OF
W. R. GRACE & CO.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
ARTICLE I
OFFICES AND RECORDS
Section 1.1. Delaware Office. The principal office of the Corporation in
the State of Delaware shall be located in Wilmington, Delaware, and the name
and address of its registered agent is The Prentice-Hall Corporation System,
Inc., 1013 Centre Road, Wilmington, Delaware.
Section 1.2. Other Offices. The Corporation may have such other offices,
either within or without the State of Delaware, as the Board of Directors may
designate or as the business of the Corporation may from time to time require.
Section 1.3. Books and Records. The books and records of the Corporation
may be kept outside the State of Delaware at such place or places as may from
time to time be designated by the Board of Directors.
ARTICLE II
STOCKHOLDERS
Section 2.1. Annual Meeting. The annual meeting of the stockholders of
the Corporation shall be held annually (a) on the tenth day of May, or (b) if
such day be a Saturday, Sunday or a holiday at the place where the meeting is
to be held, on the last business day preceding or on the first business day
after such tenth day of May, as may be fixed by the Board of Directors, or (c)
on such other date as may be fixed by the Board of Directors.
Section 2.2. Special Meeting. Subject to the rights of the holders of
any series of stock having a preference over the Common Stock of the
Corporation as to dividends or upon liquidation ("Preferred Stock") with
respect to such series of Preferred Stock, special meetings of the stockholders
may be called only by the Chairman, by the President or by the Board of
Directors pursuant to a resolution adopted by a majority of the total number of
directors which the Corporation would have if there were no vacancies (the
"Whole Board").
2
Section 2.3. Place of Meeting. The Chairman, the President or the Board
of Directors, as the case may be, may designate the place of meeting for any
annual meeting or for any special meeting of the stockholders called by the
Chairman, the President or the Board of Directors. If no designation is so
made, the place of meeting shall be the principal office of the Corporation.
Section 2.4. Notice of Meeting. Written or printed notice, stating the
place, date and time of the meeting and the purpose or purposes for which the
meeting is called, shall be delivered by the Corporation not less than ten (10)
days nor more than sixty (60) days before the date of the meeting, either
personally or by mail, to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the U.S. mail with postage thereon prepaid, addressed to the stockholder at
his address as it appears on the stock transfer books of the Corporation. Such
further notice shall be given as may be required by law. Only such business
shall be conducted at a special meeting of stockholders as shall have been
brought before the meeting pursuant to the Corporation's notice of meeting.
Meetings may be held without notice if all stockholders entitled to vote are
present, or if notice is waived by those not present in accordance with Section
6.4 of these By-laws. Any previously scheduled meeting of the stockholders may
be postponed, and (unless the Certificate of Incorporation otherwise provides)
any special meeting of the stockholders may be cancelled, by resolution of the
Board of Directors upon public notice given prior to the date previously
scheduled for such meeting of stockholders.
Section 2.5. Quorum and Adjournment. Except as otherwise provided by law
or by the Certificate of Incorporation, the holders of a majority of the
outstanding shares of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders, except that when
specified business is to be voted on by a class or series of stock voting as a
class, the holders of a majority of the voting power of the shares of such
class or series shall constitute a quorum of such class or series for the
transaction of such business. The chairman of the meeting or a majority of the
shares so represented may adjourn the meeting from time to time, whether or not
there is a quorum. No notice of the time and place of adjourned meetings need
be given except as required by law. The stockholders present at a duly called
meeting at which a quorum is present may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave
less than a quorum.
Section 2.6. Proxies. At all meetings of stockholders, a stockholder may
vote by proxy executed in writing (or in any other manner permitted by law) by
the stockholder, or by his duly authorized attorney-in-fact.
Section 2.7. Notice of Stockholder Business and Nominations. (A)
Annual Meetings of Stockholders. (1) Nominations of persons for election to
the Board of
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Directors of the Corporation and the proposal of business to be considered by
the stockholders may be made at an annual meeting of stockholders (a) pursuant
to the Corporation's notice of meeting, (b) by or at the direction of the Board
of Directors or (c) by any stockholder of the Corporation who was a stockholder
of record at the time of giving of the notice provided for in this Section 2.7,
who is entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 2.7.
(2) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of
this Section 2.7, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation, and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on
the 60th day nor earlier than the close of business on the 90th day prior to
the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is more than 30
days before or more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the close of
business on the 90th day prior to such annual meeting and not later than the
close of business on the later of the 60th day prior to such annual meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made by the Corporation. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a stockholder's notice as described above. Such
stockholder's notice shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or re-election as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors in an election contest, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and Rule 14a-11 thereunder
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); (b) as to any other
business that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest
in such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the stockholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination or proposal is
made (i) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2)
of this Section 2.7 to the contrary, in the event that the number of directors
to be elected to
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the Board of Directors of the Corporation is increased and there is no public
announcement by the Corporation naming all of the nominees for election as
director or specifying the size of the increased Board of Directors at least 70
days prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this Section 2.7 shall also be considered
timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
Corporation.
(B) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of stockholders at which directors are to be elected pursuant
to the Corporation's notice of meeting (a) by or at the direction of the Board
of Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this Section 2.7, who shall be entitled to vote at the meeting
and who complies with the notice procedures set forth in this Section 2.7. In
the event the Corporation calls a special meeting of stockholders for the
purpose of electing one or more directors to the Board of Directors, any such
stockholder may nominate a person or persons (as the case may be), for election
to such position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (A)(2) of this Section 2.7 shall be
delivered to the Secretary at the principal executive offices of the
Corporation not earlier than the close of business on the 90th day prior to
such special meeting and not later than the close of business on the later of
the 60th day prior to such special meeting or the 10th day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected at such
meeting. In no event shall the public announcement of an adjournment of a
special meeting commence a new time period for the giving of a stockholder's
notice as described above.
(C) General. (1) Only such persons who are nominated in accordance with
the procedures set forth in this Section 2.7 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 2.7. Except as otherwise provided by
law, the Certificate of Incorporation or these By-laws, the chairman of the
meeting shall have the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made or proposed, as the
case may be, in accordance with the procedures set forth in this Section 2.7
and, if any proposed nomination or business
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is not in compliance with this Section 2.7, to declare that such defective
proposal or nomination shall be disregarded.
(2) For purposes of this Section 2.7, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or a comparable national news service or in a document
publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 2.7, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this by-law. Nothing in this Section 2.7 shall be deemed to affect
any rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.
Section 2.8. Procedure for Election of Directors; Required Vote.
Election of directors at all meetings of the stockholders at which directors
are to be elected shall be by ballot, and, subject to the rights of the holders
of any series of Preferred Stock to elect directors under specified
circumstances, a plurality of the votes cast thereat shall elect directors.
Except as otherwise provided by law, the Certificate of Incorporation, or these
By-laws, in all matters other than the election of directors, the affirmative
vote of a majority of the shares present in person or represented by proxy at
the meeting and entitled to vote on the matter shall be the act of the
stockholders.
Section 2.9. Inspectors of Elections; Opening and Closing the Polls. The
Board of Directors by resolution shall appoint one or more inspectors, which
inspector or inspectors may include individuals who serve the Corporation in
other capacities, including, without limitation, as officers, employees, agents
or representatives, to act at meetings of stockholders and make written reports
thereof. One or more persons may be designated as alternate inspectors to
replace any inspector who fails to act. If no inspector or alternate has been
appointed to act or is able to act at a meeting of stockholders, the chairman
of the meeting shall appoint one or more inspectors to act at the meeting.
Each inspector, before discharging his or her duties, shall take and sign an
oath faithfully to execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspectors shall have the
duties prescribed by law.
The chairman of the meeting shall fix and announce at the meeting the date
and time of the opening and the closing of the polls for each matter upon which
the stockholders will vote at a meeting.
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ARTICLE III
BOARD OF DIRECTORS
Section 3.1. General Powers. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors. In addition to
the powers and authorities by these By-laws expressly conferred upon them, the
Board of Directors may exercise all such powers of the Corporation and do all
such lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-laws required to be exercised or done by the
stockholders.
Section 3.2. Number, Tenure and Qualifications. Subject to the rights of
the holders of any series of Preferred Stock to elect directors under specified
circumstances, the number of directors shall be fixed from time to time
exclusively pursuant to a resolution adopted by a majority of the Whole Board.
The directors, other than those who may be elected by the holders of any series
of Preferred Stock under specified circumstances, shall be divided, with
respect to the time for which they severally hold office, into three classes,
as nearly equal in number as is reasonably possible, designated Class I, Class
II and Class III, with the initial term of office of the Class I directors to
expire at the 1997 annual meeting of stockholders, the initial term of office
of the Class II directors to expire at the 1998 annual meeting of stockholders
and the initial term of office of the Class III directors to expire at the 1999
annual meeting of stockholders, with each director to hold office until his or
her successor shall have been duly elected and qualified. No person shall be
nominated for election as a director if such person will have attained the age
of 70 prior to the expiration of his or her term of office. At each annual
meeting of stockholders, commencing with the 1997 annual meeting, directors
elected to succeed those directors whose terms then expire shall be elected for
a term of office to expire at the third succeeding annual meeting of
stockholders after their election, with each director to hold office until his
or her successor shall have been duly elected and qualified.
Section 3.3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this Section 3.3 immediately
after, and at the same place as, the Annual Meeting of Stockholders. The Board
of Directors may fix the time and place for the holding of additional regular
meetings without notice.
Section 3.4. Special Meetings. Special meetings of the Board of
Directors shall be called at the request of the Chairman, the President or a
majority of the directors then in office. The person or persons authorized to
call special meetings of the Board of Directors may fix the place and time of
such meetings.
Section 3.5. Notice. Notice of any special meeting or notice of a change
in the time or place of any regular meeting of the Board of Directors shall be
given to each
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director at his or her business or residence in writing by hand delivery,
first-class or overnight mail or courier service, telegram or facsimile
transmission, or orally by telephone. If mailed by first-class mail, such
notice shall be deemed adequately delivered when deposited in the U.S. mails so
addressed, with postage thereon prepaid, at least five (5) days before such
meeting. If by telegram, overnight mail or courier service, such notice shall
be deemed adequately delivered when the telegram is delivered to the telegraph
company or the notice is delivered to the overnight mail or courier service
company at least twenty-four (24) hours before such meeting. If by facsimile
transmission, such notice shall be deemed adequately delivered when the notice
is transmitted at least twelve (12) hours before such meeting. If by
telephone, the notice shall be communicated to the director or his or her
representative or answering machine. If by telephone or by hand delivery, the
notice shall be given at least twenty-four (24) hours prior to the time set for
the meeting. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of such meeting, except for amendments to these By-laws, as provided
under Section 8.1. A meeting may be held at any time without notice if all the
directors are present or if those not present waive notice of the meeting in
accordance with Section 6.4 of these By-laws.
Section 3.6. Action by Consent of Board of Directors. Any action
required or permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if all members of the
Board of Directors or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or committee.
Section 3.7. Conference Telephone Meetings. Members of the Board of
Directors, or any committee thereof, may participate in a meeting of the Board
of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.
Section 3.8. Quorum. Subject to Section 3.9, a number of directors equal
to at least a majority of the Whole Board shall constitute a quorum for the
transaction of business. If at any meeting of the Board of Directors there
shall be less than a quorum present, a majority of the directors present may
adjourn the meeting from time to time without further notice. The act of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors. The directors present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough directors to leave less than a quorum.
Section 3.9. Vacancies. Subject to applicable law and the rights of the
holders of any series of Preferred Stock with respect to such series of
Preferred Stock, and
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unless the Board of Directors otherwise determines, vacancies resulting from
death, resignation, retirement, disqualification, removal from office or other
cause, and newly created directorships resulting from any increase in the
authorized number of directors, may be filled only by the affirmative vote of a
majority of the remaining directors, though less than a quorum of the Board of
Directors, and directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office of the class to
which they have been elected expires and until such director's successor shall
have been duly elected and qualified. No decrease in the number of authorized
directors constituting the Whole Board shall shorten the term of any incumbent
director.
Section 3.10. Committees. The Board of Directors may establish one or
more committees. Each Committee shall consist of two or more directors of the
Corporation designated by the Board of Directors. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Any
such committee may to the extent permitted by law exercise such powers and
shall have such responsibilities as shall be specified in the designating
resolution. In the absence or disqualification of any member of such committee
or committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member. Each committee shall keep
written minutes of its proceedings and shall report such proceedings to the
Board of Directors when requested.
A majority of any committee may determine its action and fix the time and
place of its meetings, unless the Board of Directors shall otherwise provide.
Notice of such meetings shall be given to each member of the committee in the
manner provided for in Section 3.5 of these By-laws. The Board of Directors
shall have the power at any time to fill vacancies in, to change the membership
of, or to dissolve any such committee. Nothing herein shall be deemed to
prevent the Board of Directors from appointing one or more committees
consisting in whole or in part of persons who are not directors of the
Corporation; provided, however, that no such committee shall have or may
exercise any authority of the Board of Directors.
The term of office of a committee member shall be as provided in the
resolution of the Board designating him or her but shall not exceed his or her
term as a director. If prior to the end of his term, a committee member should
cease to be a director, he or she shall cease to be a committee member. Any
member of a committee may resign at any time by giving written notice to the
Board of Directors, the Chairman, the President or the Secretary. Such
resignation shall take effect as provided in Section 6.6 of these By-laws in
the case of resignations by directors. Any member of a committee may be
removed from such committee, either with or without cause, at any
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time, by resolution adopted by a majority of the whole Board. Any vacancy in a
committee shall be filled by the Board of Directors in the manner prescribed by
these By-Laws for the original designation of the members of such committee.
Section 3.11. Committee on Officers' Compensation. Pursuant to Section
3.10 of these By-laws, the Board of Directors shall designate a committee to
evaluate the performance of, and to recommend the appropriate level of
compensation for, officers of the Corporation. Such committee shall have
access to an advisor not otherwise serving the Corporation. Each member of
such committee shall be an "independent director", as that term is defined in
the following sentence. For purposes of this Section 3.11, an "independent
director" shall mean a person who (a) has not been employed by the Corporation
within the past five years; (b) is not, and is not affiliated with, a firm that
is an advisor or consultant to the Corporation; (c) is not affiliated with any
customer or supplier of the Corporation whose purchases from and/or sales to
the Corporation exceed 3% of the sales and revenues of such customer or
supplier for its most recently completed fiscal year; (d) has no personal
services contract with the Corporation; (e) is not affiliated with a tax-exempt
entity, not otherwise affiliated with the Corporation, that receives
contributions from the Corporation that exceed 3% of such entity's gross
contributions for its most recently completed fiscal year; and (f) is not a
member of the "immediate family" (as defined in Item 404(a) of Securities and
Exchange Commission Regulation S-K) of any person described in clauses (a)
through (e).
Section 3.12. Removal. Subject to the rights of the holders of any
series of Preferred Stock with respect to such series of Preferred Stock, any
director, or the entire Board of Directors, may be removed from office at any
time by the shareholders, but only for cause.
Section 3.13. Records. The Board of Directors shall cause to be kept a
record containing the minutes of the proceedings of the meetings of the Board
of Directors and of the stockholders, appropriate stock books and registers and
such books of records and accounts as may be necessary for the proper conduct
of the business of the Corporation.
ARTICLE IV
OFFICERS
Section 4.1. Elected Officers. The elected officers of the Corporation
shall be a Chairman, a President, a Secretary, a Treasurer, and such other
officers (including, without limitation, a Chief Financial Officer) as the
Board of Directors may deem proper from time to time. The Chairman shall be
chosen from among the directors.
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Each officer elected by the Board of Directors shall have such powers and
duties as generally pertain to his or her respective office, subject to the
specific provisions of this ARTICLE IV. Such officers shall also have such
powers and duties as may be conferred from time to time by the Board of
Directors. The Board of Directors may from time to time elect, or the Chairman
or President may appoint, such assistant officers (including one or more
Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and
Assistant Controllers) as may be necessary or desirable for the conduct of the
business of the Corporation. Such assistant officers shall have such duties
and shall hold their offices for such terms as shall be provided in these
By-laws or as may be prescribed by the Board of Directors or by the Chairman or
President, as the case may be.
Section 4.2. Election and Term of Office. The elected officers of the
Corporation shall be elected annually by the Board of Directors at the regular
meeting of the Board of Directors held after the annual meeting of the
stockholders or at any other time as the Board of Directors may deem proper.
Each officer shall hold office until his successor shall have been duly elected
and shall have qualified or until his death or until he shall resign, but any
officer may be removed from office at any time by the affirmative vote of a
majority of the Whole Board or, except in the case of an officer elected by the
Board of Directors, by the Chairman or President. Such removal shall be
without prejudice to the contractual rights, if any, of the person so removed.
Section 4.3. Chairman. The Chairman shall preside at all meetings of the
stockholders and of the Board of Directors and shall be the Chief Executive
Officer of the Company. The Chairman shall be responsible for the general
management of the affairs of the Corporation and shall perform all duties
incidental to his office which may be required by law and all such other duties
as are properly required of him by the Board of Directors. He shall make
reports to the Board of Directors and the stockholders, and shall see that all
orders and resolutions of the Board of Directors and of any committee thereof
are carried into effect. The Chairman may also serve as President, if so
elected by the Board of Directors.
Section 4.4. President. The President shall act in a general executive
capacity and shall assist the Chairman in the administration and operation of
the Corporation's business and the general supervision of its policies and
affairs. In the absence of or the inability to act of the Chairman, the
President shall perform all duties of the Chairman and preside at all meetings
of stockholders and of the Board of Directors.
Section 4.5. Vice Presidents. Each Vice President shall have such powers
and shall perform such duties as shall be assigned to him by the Board of
Directors.
Section 4.6. Chief Financial Officer. The Chief Financial Officer (if
any) shall be a Vice President and act in an executive financial capacity. He
shall assist the
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Chairman and the President in the general supervision of the Corporation's
financial policies and affairs.
Section 4.7. Treasurer. The Treasurer shall exercise general supervision
over the receipt, custody and disbursement of corporate funds. The Treasurer
shall cause the funds of the Corporation to be deposited in such banks as may
be authorized by the Board of Directors, or in such banks as may be designated
as depositaries in the manner provided by resolution of the Board of Directors.
He shall have such further powers and duties and shall be subject to such
directions as may be granted or imposed upon him from time to time by the Board
of Directors, the Chairman or the President.
Section 4.8. Secretary. The Secretary shall keep or cause to be kept in
one or more books provided for that purpose, the minutes of all meetings of the
Board of Directors, the committees of the Board of Directors and the
stockholders; he shall see that all notices are duly given in accordance with
the provisions of these By-laws and as required by law; he shall be custodian
of the records and the seal of the Corporation and affix and attest the seal to
all stock certificates of the Corporation (unless the seal of the Corporation
on such certificates shall be a facsimile, as hereinafter provided) and affix
and attest the seal to all other documents to be executed on behalf of the
Corporation under its seal; and he shall see that the books, reports,
statements, certificates and other documents and records required by law to be
kept and filed are properly kept and filed; and in general, he shall perform
all the duties incident to the office of Secretary and such other duties as
from time to time may be assigned to him by the Board of Directors, the
Chairman or the President.
Section 4.9. Controller. The Controller shall have general control,
charge and supervision of the accounts of the Corporation. He shall see that
proper accounts are maintained and that all accounts are properly credited from
time to time. He shall prepare or cause to be prepared the financial
statements of the Corporation.
Section 4.10. Removal. Any officer elected by the Board of Directors may
be removed by the affirmative vote of a majority of the Whole Board whenever,
in their judgment, the best interests of the Corporation would be served
thereby. Any assistant officer appointed by the Chairman or the President may
be removed by him whenever, in his judgment, the best interests of the
Corporation would be served thereby. No elected officer shall have any
contractual rights against the Corporation for compensation by virtue of such
election beyond the date of the election of his successor, his death, his
resignation or his removal, whichever event shall first occur, except as
otherwise provided in an employment contract or under an employee deferred
compensation plan.
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Section 4.11. Vacancies. A newly created elected office and a vacancy in
any elected office because of death, resignation, or removal may be filled by
the Board of Directors for the unexpired portion of the term at any meeting of
the Board of Directors.
ARTICLE V
STOCK CERTIFICATES AND TRANSFERS
Section 5.1. Stock Certificates and Transfers. The interest of each
stockholder of the Corporation shall be evidenced by certificates for shares of
stock in such form as the appropriate officers of the Corporation may from time
to time prescribe. The shares of the stock of the Corporation shall be
transferred on the books of the Corporation by the holder thereof in person or
by his attorney, upon surrender for cancellation of certificates for at least
the same number of shares, with an assignment and power of transfer endorsed
thereon or attached thereto, duly executed, with such proof of the authenticity
of the signature as the Corporation or its agents may reasonably require.
The certificates of stock shall be signed, countersigned and registered in
such manner as the Board of Directors may by resolution prescribe, which
resolution may permit all or any of the signatures on such certificates to be
in facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate has ceased to
be such officer, transfer agent or registrar before such certificate is issued,
it may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
Section 5.2. Lost, Stolen or Destroyed Certificates. No certificate for
shares of stock in the Corporation shall be issued in place of any certificate
alleged to have been lost, destroyed or stolen, except on production of such
evidence of such loss, destruction or theft and on delivery to the Corporation
of a bond of indemnity in such amount, upon such terms and secured by such
surety, as the Board of Directors or any financial officer may in its or his
discretion require.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. Fiscal Year. The fiscal year of the Corporation shall begin
on the first day of January and end on the thirty-first day of December of each
year.
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Section 6.2. Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and the
Certificate of Incorporation.
Section 6.3. Seal. The corporate seal shall have enscribed thereon the
words "Corporate Seal", the year of incorporation and around the margin thereof
the words "W. R. Grace & Co."
Section 6.4. Waiver of Notice. Whenever any notice is required to be
given to any stockholder or director of the Corporation under the provisions of
the General Corporation Law of the State of Delaware or these By-laws, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. The attendance of any shareholder at a meeting in
person or by proxy, without protesting at the beginning of the meeting the lack
of notice of such meeting, shall constitute a waiver of notice of such
shareholder. Neither the business to be transacted at, nor the purpose of, any
annual or special meeting of the stockholders or the Board of Directors or
committee thereof need be specified in any waiver of notice of such meeting.
Section 6.5. Audits. The accounts, books and records of the Corporation
shall be audited upon the conclusion of each fiscal year by an independent
certified public accountant selected by the Board of Directors, and it shall be
the duty of the Board of Directors to cause such audit to be done annually.
Section 6.6. Resignations. Any director or any officer or assistant
officer, whether elected or appointed, may resign at any time by giving written
notice of such resignation to the Chairman, the President, or the Secretary,
and such resignation shall be deemed to be effective as of the close of
business on the date said notice is received by the Chairman, the President, or
the Secretary, or at such later time as is specified therein. No formal action
shall be required of the Board of Directors or the stockholders to make any
such resignation effective.
Section 6.7. Indemnification and Insurance. (A) Each person who was or
is made a party or is threatened to be made a party to or is involved in any
action, suit, or proceeding, whether civil, criminal, administrative or
investigative (hereinafter, a "proceeding"), by reason of the fact that he or
she or a person of whom he or she is the legal representative is or was a
director or officer of the Corporation or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans maintained or
sponsored by the Corporation, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving
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as a director, officer, employee or agent, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the General
Corporation Law of the State of Delaware as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such amendment),
against all expense, liability and loss (including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith, and such indemnification shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that except as provided in paragraph (C) of this Section 6.7, the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors. The right to
indemnification conferred in this Section 6.7 shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition, such
advances to be paid by the Corporation within 20 days after the receipt by the
Corporation of a statement or statements from the claimant requesting such
advance or advances from time to time; provided, however, that if the General
Corporation Law of the State of Delaware requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Corporation of an
undertaking by or on behalf of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined that such director or officer
is not entitled to be indemnified under this Section 6.7 or otherwise.
(B) To obtain indemnification under this Section 6.7, a claimant shall
submit to the Corporation a written request, including therein or therewith
such documentation and information as is reasonably available to the claimant
and is reasonably necessary to determine whether and to what extent the
claimant is entitled to indemnification. Upon written request by a claimant
for indemnification pursuant to the first sentence of this paragraph (B), a
determination, if required by applicable law, with respect to the claimant's
entitlement thereto shall be made as follows: (1) if requested by the
claimant, by Independent Counsel (as hereinafter defined), or (2) if no request
is made by the claimant for a determination by Independent Counsel, (i) by the
Board of Directors by a majority vote of a quorum consisting of Disinterested
Directors (as hereinafter defined), or (ii) if a quorum of the Board of
Directors consisting of Disinterested Directors is not obtainable or, even if
obtainable, such quorum of Disinterested Directors so directs, by Independent
Counsel in a written opinion to the Board of Directors, a copy of which shall
be delivered to the claimant, or (iii) if a
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quorum of Disinterested Directors so directs, by the stockholders of the
Corporation. In the event the determination of entitlement to indemnification
is to be made by Independent Counsel at the request of the claimant, the
Independent Counsel shall be selected by the Board of Directors unless there
shall have occurred within two years prior to the date of the commencement of
the action, suit or proceeding for which indemnification is claimed a "Change
of Control", as defined below, in which case the Independent Counsel shall be
selected by the claimant unless the claimant shall request that such selection
be made by the Board of Directors. If it is so determined that the claimant is
entitled to indemnification, payment to the claimant shall be made within 10
days after such determination.
(C) If a claim under paragraph (A) of this Section 6.7 is not paid in
full by the Corporation within 30 days after a written claim pursuant to
paragraph (B) of this Section 6.7 has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in defending any proceeding in advance
of its final disposition where the required undertaking, if any is required,
has been tendered to the Corporation) that the claimant has not met the
standard of conduct which makes it permissible under the General Corporation
Law of the State of Delaware for the Corporation to indemnify the claimant for
the amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, Independent Counsel or stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant
is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in the General Corporation Law of the State of
Delaware, nor an actual determination by the Corporation (including its Board
of Directors, Independent Counsel or stockholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
(D) If a determination shall have been made pursuant to paragraph (B) of
this Section 6.7 that the claimant is entitled to indemnification, the
Corporation shall be bound by such determination in any judicial proceeding
commenced pursuant to paragraph (C) of this Section 6.7.
(E) The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to paragraph (C) of this Section 6.7 that the
procedures and presumptions of this Section 6.7 are not valid, binding and
enforceable and shall stipulate in such proceeding that the Corporation is
bound by all the provisions of this Section 6.7.
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(F) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Section 6.7 shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, provision of the Certificate of
Incorporation, these By-laws, agreement, vote of stockholders or Disinterested
Directors or otherwise. No repeal or modification of this Section 6.7 shall in
any way diminish or adversely affect the rights of any director, officer,
employee or agent of the Corporation hereunder in respect of any occurrence or
matter arising prior to any such repeal or modification.
(G) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the General Corporation Law of the State of Delaware. To the extent that
the Corporation maintains any policy or policies providing such insurance, each
such director or officer, and each such agent or employee to which rights to
indemnification have been granted as provided in paragraph (H) of this Section
6.7, shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage thereunder for any such
director, officer, employee or agent.
(H) The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and rights to be paid
by the Corporation the expenses incurred in defending any proceeding in advance
of its final disposition, to any employee or agent of the Corporation to the
fullest extent of the provisions of this Section 6.7 with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
(I) If any provision or provisions of this Section 6.7 shall be held to
be invalid, illegal or unenforceable for any reason whatsoever: (1) the
validity, legality and enforceability of the remaining provisions of this
Section 6.7 (including, without limitation, each portion of any paragraph of
this By-law containing any such provision held to be invalid, illegal or
unenforceable, that is not itself held to be invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (2) to the fullest
extent possible, the provisions of this Section 6.7 (including, without
limitation, each such portion of any paragraph of this By-law containing any
such provision held to be invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
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(J) For purposes of this Section 6.7:
(1) "Disinterested Director" means a director of the Corporation
who is not and was not a party to the matter in respect of which
indemnification is sought by the claimant.
(2) "Independent Counsel" means a law firm, a member of a law firm,
or an independent practitioner, that is experienced in matters of
corporation law and shall include any person who, under the applicable
standards of professional conduct then prevailing, would not have a
conflict of interest in representing either the Corporation or the
claimant in an action to determine the claimant's rights under this
Section 6.7.
(3) "Change of Control" has the meaning given such term in the
Corporation's 1996 Stock Incentive Plan, as the same may be amended or
superseded from time to time.
(K) Any notice, request or other communication required or permitted to
be given to the Corporation under this Section 6.7 shall be in writing and
either delivered in person or sent by telecopy, telex, telegram, overnight mail
or courier service, or certified or registered mail, postage prepaid, return
receipt requested, to the Secretary of the Corporation and shall be effective
only upon receipt by the Secretary.
ARTICLE VII
CONTRACTS, PROXIES, ETC.
Section 7.1. Contracts. Except as otherwise required by law, the
Certificate of Incorporation or these By-laws, any contracts or other
instruments may be executed and delivered in the name and on the behalf of the
Corporation by such officer or officers of the Corporation as the Board of
Directors may from time to time direct. Such authority may be general or
confined to specific instances as the Board may determine. The Chairman, the
President or any Vice President may execute bonds, contracts, deeds, leases and
other instruments to be made or executed for or on behalf of the Corporation.
Subject to any restrictions imposed by the Board of Directors or the Chairman,
the President or any Vice President of the Corporation may delegate contractual
powers to others under his jurisdiction, it being understood, however, that any
such delegation of power shall not relieve such officer of responsibility with
respect to the exercise of such delegated power.
Section 7.2. Proxies. Unless otherwise provided by resolution adopted by
the Board of Directors, the Chairman, the President or any Vice President may
from time
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to time appoint an attorney or attorneys or agent or agents of the Corporation,
in the name and on behalf of the Corporation, to cast the votes which the
Corporation may be entitled to cast as the holder of stock or other securities
in any other corporation, any of whose stock or other securities may be held by
the Corporation, at meetings of the holders of the stock or other securities of
such other corporation, or to consent in writing, in the name of the
Corporation as such holder, to any action by such other corporation, and may
instruct the person or persons so appointed as to the manner of casting such
votes or giving such consent, and may execute or cause to be executed in the
name and on behalf of the Corporation and under its corporate seal or
otherwise, all such written proxies or other instruments as he may deem
necessary or proper in the premises.
ARTICLE VIII
AMENDMENTS
Section 8.1. Amendments. These By-laws may be altered, amended, or
repealed at any meeting of the Board of Directors or of the stockholders,
provided notice of the proposed change was given in the notice of the meeting
and, in the case of a meeting of the Board of Directors, in a notice given not
less than two days prior to the meeting; provided, however, that, in the case
of amendments by stockholders, notwithstanding any other provisions of these
By-laws or any provision of law which might otherwise permit a lesser vote or
no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the capital stock of the Corporation required by
law, the Certificate of Incorporation or these By-laws, the affirmative vote of
the holders of at least 80 percent of the voting power of all the then
outstanding shares of the Voting Stock, voting together as a single class,
shall be required to alter, amend or repeal any provision of these By-laws.
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EXHIBIT 4.3
EXECUTION COPY
GRACE HOLDING, INC.
(TO BE RENAMED W. R. GRACE & CO.)
AND
THE CHASE MANHATTAN BANK, AS
RIGHTS AGENT
* * *
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 25, 1996
2
TABLE OF CONTENTS
PAGE
----
Section 1. Certain Definitions ...................... 1
Section 2. Appointment of Rights Agent .............. 3
Section 3. Issue of Right Certificates .............. 3
Section 4. Form of Right Certificates ............... 4
Section 5. Countersignature and Registration ........ 5
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates ...................... 5
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights ............... 6
Section 8. Cancellation and Destruction of Right
Certificates ............................ 6
Section 9. Availability of Preferred Shares ......... 7
Section 10. Preferred Shares Record Date ............. 7
Section 11. Adjustment of Purchase Price, Number
of Shares or Number of Rights ........... 7
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares ..................... 13
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power ..... 13
Section 14. Fractional Rights and Fractional Shares .. 13
Section 15. Rights of Action ......................... 14
Section 16. Agreement of Right Holders ............... 15
Section 17. Right Certificate Holder Not Deemed a
Stockholder ............................. 15
Section 18. Concerning the Rights Agent .............. 15
Section 19. Merger or Consolidation or Change of
Name of Rights Agent .................... 16
Section 20. Duties of Rights Agent ................... 16
Section 21. Change of Rights Agent ................... 18
Section 22. Issuance of New Right Certificates ....... 18
Section 23. Redemption ............................... 18
Section 24. Exchange ................................. 19
Section 25. Notice of Certain Events ................. 20
Section 26. Notices .................................. 20
Section 27. Supplements and Amendments ............... 21
Section 28. Successors ............................... 21
Section 29. Benefits of this Agreement ............... 21
Section 30. Severability ............................. 21
Section 31. Governing Law ............................ 22
3
Section 32. Counterparts ............................. 22
Section 33. Descriptive Headings ..................... 22
Signatures ............................... 22
Exhibit A Form of Right Certificate
4
AGREEMENT, dated as of September 25, 1996, between Grace
Holding, Inc., a Delaware corporation which, following the Spin-off (as
hereinafter defined), will be renamed W. R. Grace & Co. (the "Company"), and
The Chase Manhattan Bank (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared that a dividend of one preferred share purchase right (a "Right") be
paid in respect of each Common Share (as hereinafter defined) of the Company
outstanding at the moment of consummation of the Spin-off (such moment, the
"Record Date") to the holder of record thereof at such moment, each Right
representing the right to purchase one hundredth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are hereinafter defined).
ACCORDINGLY, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a)" Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall
be the Beneficial Owner (as such term is hereinafter defined) of 20% or
more of the Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary (as such term is hereinafter defined)
of the Company, any employee benefit plan of the Company or any
subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20%
or more of the Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 20% or
more of the Common Shares of the Company then outstanding by reason of
share purchases by the Company and shall, after such share purchases by
the Company, become the Beneficial Owner of any additional Common Shares
of the
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Company, then such Person shall be deemed to be an "". Notwithstanding
the foregoing, if the Board of Directors of the Company determines in
good faith that a Person who would otherwise be an "Acquiring Person", as
defined pursuant to the foregoing provisions of this paragraph (a), has
become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person", as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or (B)
the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, any security if
the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
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6
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso
to Section 1(c)(ii)(B)) or disposing of any securities of the
Company.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding", when used with reference
to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in New York are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M., New
York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $.01 per share, of the
Company. "Common Shares" when used with reference to any Person other
than the Company shall mean the capital stock (or equity interest) with
the greatest voting power of such other Person or, if such other Person
is a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Grace New York" shall mean W. R. Grace & Co. a New York
corporation, which, in connection with the Spin-off, is to be renamed
Fresenius National Medical Care, Inc.
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(j) "Grace New York Common Shares" shall mean the shares of common
stock, par value $1.00 per share, of Grace New York.
(k) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(l) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company
having the rights and preferences set forth in the Amended and Restated
Certificate of Incorporation of the Company.
(m) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(n) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(o) "Spin-off" shall mean the distribution by Grace New York of one
Common Share of the Company in respect of each Grace New York Common
Share.
(p) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. Until the earlier of (i)
the tenth day after the Shares Acquisition Date or (ii) the tenth business day
(or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) of, or of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of
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8
the Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of Common Shares
aggregating 20% or more of the then outstanding Common Shares (including any
such date which is after the date of this Agreement and prior to the issuance
of the Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates, and
(y) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit A hereto (a
"Right Certificate"), evidencing one Right for each Common Share so held. As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) Until the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date, certificates representing Common Shares of the
Company shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement (the "Rights Agreement") between
W. R. Grace & Co. (the "Company"), and The Chase Manhattan Bank (the
"Rights Agent"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the Rights Agreement, as
in effect on the date of mailing without charge promptly after receipt of
a written request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights beneficially owned by an Acquiring Person or
any Affiliates or Associates thereof (as such terms are defined in the
Rights Agreement), or certain transferees therefor, may become null and
void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for
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9
transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event that
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed cancelled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit A hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of hundredths of a
Preferred Share as shall be set forth therein at the price per hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number of
such hundredths of a Preferred Share and the Purchase Price shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as
though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses
of
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10
the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date of each of
the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of hundredths of a
Preferred Share as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon
the Rights Agent shall countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each hundredth of a Preferred
Share as to which the Rights are exercised, at or prior to the earliest of (i)
the close of business on September 27, 2006 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof
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11
(the "Redemption Date"), or (iii) the time at which such Rights are exchanged
as provided in Section 24 hereof.
(b) The Purchase Price for each hundredth of a Preferred Share purchasable
pursuant to the exercise of a Right shall initially be $200, and shall be
subject to adjustment from time to time as provided in Section 11 or 13 hereof
and shall be payable in lawful money of the U.S. of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from the depositary agent
depositary receipts representing such number of hundredths of a Preferred Share
as are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the
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12
Rights Agent shall so cancel and retire, any other Right Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Availability of Preferred Shares. The Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable satisfaction that
no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Preferred Shares transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without
- 9 -
13
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the Record Date
(A) declare a dividend on the Preferred Shares payable in Preferred Shares, (E)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of hundredths of a Preferred Share for which a
Right is then exercisable and dividing that product by (y) 50% of the then
current per share market price of the Company's Common Shares (determined
pursuant to Section 11(d) hereof) on the date of the occurrence of such event.
In the event that any Person shall become an Acquiring Person and the Rights
shall then be outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the Rights.
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14
From and after the occurrence of such event, any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any provision of
this Agreement. No Right Certificate shall be issued pursuant to Section 3
that represents Rights beneficially owned by an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence shall be cancelled.
(iii) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the
Company shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exercise of the Rights. In the event the
Company shall, after good faith effort, be unable to take all such action as
may be necessary to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be issuable upon
exercise of a Right, a number of Preferred Shares or fraction thereof such that
the current per share market price of one Preferred Share multiplied by such
number or fraction is equal to the current per share market price of one Common
Share as of the date of issuance of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same rights, privileges
and preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares at
a price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the then current per share market price
of the Preferred Shares (as defined in Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number
of Preferred
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15
Shares outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such
a record date is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Preferred Shares on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion
of the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current per
share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided,
however, that in the
- 12 -
16
event that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such Security of
(A) a dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the expiration of
30 Trading Days after the ex-dividend date for such dividend or distribution,
or the record date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per share equivalent
of such Security; and provided, further, that in the event that the current per
share market price of the Common Shares is determined as of a date prior to the
expiration of 30 Trading Days following the Record Date, the current per share
market price of the Common Shares shall be deemed to be the average of the
daily closing prices per Common Share for the period of Trading Days commencing
with the Record Date and ending immediately prior to such date. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors of the Company. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share
market price of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by one hundred. If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair value
- 13 -
17
per share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest millionth of a Preferred
Share or ten-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires such adjustment or
(ii) the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of hundredths of a
Preferred Share (calculated to the nearest millionth of a Preferred Share)
obtained by (i) multiplying (x) the number of hundredths of a share covered by
a Right immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of hundredths of a Preferred Share purchasable upon
the exercise of a Right.
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18
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of hundredths of a Preferred Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue
to express the Purchase Price and the number of hundredths of a Preferred Share
which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over
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19
and above the Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
number of hundredths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the number of
hundredths of a Preferred Share so purchasable immediately prior to such event
by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (B) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof.
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20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event, directly or indirectly, at any time after a Person has
become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of hundredths
of a Preferred Share for which a Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
Common Shares of such other Person (including the Company as successor thereto
or as the surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of hundredths of a
Preferred Share for which a Right is then exercisable and dividing that product
by (B) 50% of the then current per share market price of the Common Shares of
such other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall
take such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The
Company shall not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights, warrants,
instruments or securities outstanding or any agreements or arrangements which,
as a result of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the Rights. The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
- 17 -
21
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one hundredth of a
Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one hundredth of a Preferred Share,
the Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For the
purposes of this Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred
- 18 -
22
Share (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than the
Company or the Rights
- 19 -
23
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. In no
case will the Rights Agent be liable for special, indirect, incidental or
consequential loss or damages of any kind whatsoever, even if the Rights Agent
has been advised of the possibility of such damages.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent
- 20 -
24
may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed
by any one of the Chairman, the Chief Executive Officer, the President,
any Vice President, the Treasurer or the
- 21 -
25
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full Authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or
in any Right Certificate; nor shall it be responsible for any change in
the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for
in Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it
by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman, the Chief Executive Officer, the President, any
Vice President, the Secretary or the Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its
duties, and it shall not
- 22 -
26
be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer
agent of the Common Shares or Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation, or an Affiliate of such corporation, organized and
doing business under the laws of the U.S. or of the State of New York (or of
any other state of the U.S. so long as such corporation is authorized to do
business as a banking institution in the State of New York), in good standing,
having an office in the State of New York, which is authorized under such laws
to exercise corporate trust or stock transfer powers and
- 23 -
27
is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares or Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption. The Board of Directors of the Company may, at its
option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
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28
Common Shares. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company shall take all
such
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action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of a Right, a
number of Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one Common Share as of the date
of issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares. In lieu
of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company shall
propose (i) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any reclassification
of its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any
such date is to be
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30
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of the Preferred Shares for purposes of such action, and in
the case of any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall as soon as practicable thereafter give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
W. R. Grace & Co.
One Town Center Road
Boca Raton, FL 33486-1010
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
The Chase Manhattan Bank
Stock Transfer Department
450 West 33rd Street
New York, NY 10001
Attention: Vice President -- Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any holders
- 27 -
31
of Right Certificates in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the thresholds
set forth in Sections l(a) and 3(a) to not less than the greater of (i) the sum
of .001% and the largest percentage of the outstanding Common Shares then known
by the Company to be beneficially owned by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan) and (ii) 10%.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterpart shall for all purposes be deemed
- 28 -
32
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
- 29 -
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
Attest: GRACE HOLDING, INC.
(TO BE RENAMED
W. R. GRACE & CO.)
By By
--------------------------- ------------------------
Title: Title:
Attest: THE CHASE MANHATTAN BANK
By By
--------------------------- ------------------------
Title: Title:
34
Exhibit A
FORM OF RIGHT CERTIFICATE
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 27, 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
W. R. GRACE & CO.
This certifies that ____________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of September 25, 1996 (the "Rights Agreement"),
between W. R. Grace & Co., a Delaware corporation (formerly Grace Holding,
Inc.) (the "Company"), and The Chase Manhattan Bank (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M., New York time, on
September 27, 2006 at the principal office of the Rights Agent, or at the
office of its successor as Rights Agent, one hundredth of a fully paid
nonassessable share of Series A Junior Participating Preferred Stock, without
par value (the "Preferred Shares"), of the Company, at a purchase price of $200
per hundredth of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate (and
the number of hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of __________, 1996, based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of hundredths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain
events.
- 1 -
35
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $.01 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one hundredth of a Preferred Share, which may, at the election of
the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose to be the holder of the Preferred Shares
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a shareholder of the Company or any right to vote with respect to the
election of directors or upon any matter submitted to shareholder at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of any meeting or other action affecting shareholder (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
- 2 -
36
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of ___________________.
ATTEST: W. R. GRACE & CO.
By:
- --------------------------------- ------------------------------------
Countersigned:
THE CHASE MANHATTAN BANK
By:
-----------------------------------------
Authorized Signature
- 3 -
37
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ______________________________ hereby sells, assigns
and transfers unto ___________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________
____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
__________________________________
Signature
- --------------------------------------------------------------------------------
- 4 -
38
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: W. R. Grace & Co.
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Right Certificate to purchase the Preferred
Shares issuable upon the exercise of such Rights and requests that certificates
for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ________________
________________________________
Signature
Signature Guaranteed:
- 5 -
39
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
- 6-
40
Form of Reverse Side of Right Certificate -- continued
- --------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
-----------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to Purchase,
as the case may be, must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
- 7 -
1
EXHIBIT 4.4
================================================================================
W. R. GRACE & CO.-CONN.,
Issuer,
W. R. GRACE & CO.,
Guarantor,
GRACE HOLDING, INC.
AND
BANKERS TRUST COMPANY,
Trustee
-------------
SUPPLEMENTAL INDENTURE
Dated as of September 24, 1996
-------------
GUARANTEED DEBT SECURITIES
-------------
Supplemental to Indenture Dated as of September 29, 1992.
================================================================================
2
SUPPLEMENTAL INDENTURE, dated as of September 24, 1996 (the Supplemental
Indenture"), among W. R. GRACE & CO.-CONN., a Connecticut corporation
(hereinafter called the "Company"), W. R. GRACE & CO., a New York corporation
(hereinafter after called "Grace New York"), GRACE HOLDING, INC., a Delaware
corporation (hereinafter called "Grace Holding"), and BANKERS TRUST COMPANY, a
New York banking corporation (hereinafter called the "Trustee").
W I T N E S S E T H
WHEREAS, the Company, as issuer, Grace New York, as guarantor, and the
Trustee, as trustee, have heretofore entered into an indenture, dated as of
September 29, 1992 (herein called the "Indenture") providing for the issuance
of debt securities in series (herein called the "Notes"), a portion of which
are currently outstanding; and
WHEREAS, Grace Holding is a wholly owned subsidiary formed by Grace New
York for the purpose of becoming sole shareholder of the Company pursuant to
and upon completion of the NMC Separation (as defined in Section 1.02 of this
Supplemental Indenture); and
WHEREAS, Grace Holding hereby desires to assume the obligations of the
Guarantor under the Indenture; and
WHEREAS, pursuant to and upon completion of the NMC Separation, Grace
Holding will change its name to W. R. Grace & Co., and Grace New York will
cease to have any ownership interest in the Company, become a subsidiary of
Fresenius AG and change its name to Fresenius National Medical Care, Inc.; and
3
2
WHEREAS, upon completion of the NMC Separation, Grace Holding desires to
succeed to and be substituted for Grace New York under the Indenture; and
WHEREAS, the Company, Grace New York, Grace Holding and the Trustee desire
to enter into a supplemental indenture pursuant to the terms of Section 801 of
the Indenture.
NOW, THEREFORE, for and in consideration of the sum of one dollar, of the
premises and other valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound hereby, it is hereby
agreed among the Company, Grace New York, Grace Holding and the Trustee, for
the equal and proportionate benefit of the respective holders from time to time
of the Notes, as follows:
ARTICLE ONE
DEFINITIONS OF CERTAIN TERMS
Section 1.01. Capitalized terms used in this Supplemental Indenture that
have not otherwise been defined herein shall have the meanings assigned thereto
in the Indenture.
Section 1.02. For purposes of Section 5.01 of this Supplemental
Indenture, "NMC Separation" shall mean the transaction in which all of the
following occur: (a) National Medical Care, Inc., a wholly owned indirect
subsidiary of the Company ("NMC"), will become a direct subsidiary of the
Company, (b) NMC will enter into new bank borrowings and use a portion of the
proceeds therefrom, together with other available funds, to repay intercompany
debt and make cash distributions to the Company, and will separately refinance
debts and obligations previously reflected on the Company's financial
statements, in an aggregate amount of approximately $2.3 billion, (c) the
Company will distribute the stock
4
3
of NMC to Grace New York, (d) Grace New York will contribute the stock of the
Company to Grace Holding, and (e) Grace New York will distribute to its public
shareholders the stock of Grace Holding.
ARTICLE TWO
ASSUMPTION OF PAYMENT, PERFORMANCE AND OBSERVANCE
Section 2.01. Grace Holding hereby expressly assumes the due and punctual
payment of the Guarantees and the performance of every covenant of the
Indenture on the part of the Guarantor to be performed or observed thereunder.
ARTICLE THREE
PARTICULAR REPRESENTATIONS OF GRACE HOLDING
Section 3.01. Grace Holding represents that it is a corporation duly
organized and existing under the laws of the State of Delaware.
Section 3.02. Grace Holding represents that immediately after the
consummation of the actions contemplated by this Supplemental Indenture, no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing.
ARTICLE FOUR
REPRESENTATION OF THE GUARANTOR
Section 4.01. The Guarantor represents that the NMC Separation shall not
cause any Principal Facility of the Guarantor or any Restricted Securities
owned by the Guarantor immediately prior to the NMC Separation to become or be
subject to any Lien,
5
4
other than a Lien, which could be created pursuant to Section 1008 of the
Indenture, without equally and ratably securing the Notes or the Guarantees.
ARTICLE FIVE
SUCCESSION AND SUBSTITUTION
Section 5.01. Upon the completion of the NMC Separation, and the delivery
to the Trustee of an Officers' Certificate of Grace Holding to such effect,
Grace Holding automatically without further act will succeed to and be
substituted for Grace New York as the "Guarantor" under the Indenture, with the
same effect as if Grace Holding had been named in the Indenture as the
Guarantor, and, as provided in Section 802 of the Indenture, Grace New York
shall be relieved of any further obligation under the Indenture.
Section 5.02. Upon the succession and substitution of Grace Holding
referred to in Section 5.01 hereof, the Indenture shall be deemed to be
modified and amended in accordance with this Supplemental Indenture and the
respective rights, limitation of rights, obligations, duties and immunities
under the Indenture of the Company, Grace Holding, the Trustee, and the holders
of the Notes shall thereafter be determined, exercised and enforced thereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of this Supplemental Indenture shall be and be deemed to be part
of the terms and conditions of the Indenture for any and all purposes.
6
5
ARTICLE SIX
MISCELLANEOUS
Section 6.01. Any request, demand, notice or other communication to Grace
Holding in connection with the Indenture, as supplemented, shall be sufficient
for every purpose hereunder if in writing and mailed, first class postage paid,
to Grace Holding addressed as follows:
Grace Holding, Inc.
One Town Center Road
Boca Raton, Florida 33486-1010
Attention: Treasurer
or to any other address hereafter furnished in writing to the Trustee by Grace
Holding for such purpose.
Section 6.02. This Supplemental Indenture may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
Section 6.03. This Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such state. This
Supplemental Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are required to be part of this Supplemental
Indenture and shall, to the extent applicable, be governed by such provisions.
7
6
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
(CORPORATE SEAL) W. R. GRACE & CO.-CONN.
ATTEST:
By
- ------------------- -----------------------
Assistant Secretary
(CORPORATE SEAL) GRACE HOLDING, INC.
ATTEST:
By
- ------------------- -----------------------
Assistant Secretary
(CORPORATE SEAL) W. R. GRACE & CO.
ATTEST:
By
- ------------------- -----------------------
Assistant Secretary
(CORPORATE SEAL) BANKERS TRUST COMPANY
ATTEST:
By
- ------------------- -----------------------
Trust Officer
1
EXHIBIT 4.5
================================================================================
W. R. GRACE & CO.-CONN.,
Issuer,
W. R. GRACE & CO.,
Guarantor,
GRACE HOLDING, INC.
AND
THE BANK OF NEW YORK,
Trustee
--------------
SUPPLEMENTAL INDENTURE
Dated as of September 24, 1996
--------------
GUARANTEED DEBT SECURITIES
--------------
Supplemental to Indenture Dated as of January 28, 1993.
================================================================================
2
SUPPLEMENTAL INDENTURE, dated as of September 24, 1996 (this "Supplemental
Indenture"), among W. R. GRACE & CO.-CONN., a Connecticut corporation
(hereinafter called the "Company"), W. R. GRACE & CO., a New York corporation
(hereinafter after called "Grace New York"), GRACE HOLDING, INC., a Delaware
corporation (hereinafter called "Grace Holding"), and THE BANK OF NEW YORK, a
New York banking corporation (hereinafter called the "Trustee").
W I T N E S S E T H
WHEREAS, the Company, as issuer, Grace New York, as guarantor, and
NationsBank of Georgia, National Association, predecessor to the Trustee, as
trustee, have heretofore entered into an indenture, dated as of January 28,
1993 (herein called the "Indenture") providing for the issuance of debt
securities in series (herein called the "Notes"), a portion of which are
currently outstanding; and
WHEREAS, Grace Holding is a wholly owned subsidiary formed by Grace New
York for the purpose of becoming sole shareholder of the Company pursuant to
and upon completion of the NMC Separation (as defined in Section 1.02 of this
Supplemental Indenture); and
WHEREAS, Grace Holding hereby desires to assume the obligations of the
Guarantor under the Indenture; and
WHEREAS, pursuant to and upon completion of the NMC Separation, Grace
Holding will change its name to W. R. Grace & Co., and Grace New York will
cease to have any ownership interest in the Company, become a subsidiary of
Fresenius AG and change its name to Fresenius National Medical Care, Inc.; and
3
2
WHEREAS, upon completion of the NMC Separation, Grace Holding desires to
succeed to and be substituted for Grace New York under the Indenture; and
WHEREAS, the Company, Grace New York, Grace Holding and the Trustee desire
to enter into a supplemental indenture pursuant to the terms of Section 801 of
the Indenture.
NOW, THEREFORE, for and in consideration of the sum of one dollar, of the
premises and other valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound hereby, it is hereby
agreed among the Company, Grace New York, Grace Holding and the Trustee, for
the equal and proportionate benefit of the respective holders from time to time
of the Notes, as follows:
ARTICLE ONE
DEFINITIONS OF CERTAIN TERMS
Section 1.01. Capitalized terms used in this Supplemental Indenture that
have not otherwise been defined herein shall have the meanings assigned thereto
in the Indenture.
Section 1.02. For purposes of Section 4.01 of this Supplemental
Indenture, "NMC Separation" shall mean the transaction in which all of the
following occur: (a) National Medical Care, Inc., a wholly owned indirect
subsidiary of the Company ("NMC"), will become a direct subsidiary of the
Company, (b) NMC will enter into new bank borrowings and use a portion of the
proceeds therefrom, together with other available funds, to repay intercompany
debt and make cash distributions to the Company, and will separately refinance
debts and obligations previously reflected on the Company's financial
statements, in an aggregate amount of approximately $2.3 billion, (c) the
Company will distribute the stock
4
3
of NMC to Grace New York, (d) Grace New York will contribute the stock of the
Company to Grace Holding, and (e) Grace New York will distribute to its public
shareholders the stock of Grace Holding.
ARTICLE TWO
ASSUMPTION OF PAYMENT, PERFORMANCE AND OBSERVANCE
Section 2.01. Grace Holding hereby expressly assumes the due and punctual
payment of the Guarantees and the performance of every covenant of the
Indenture on the part of the Guarantor to be performed or observed thereunder.
ARTICLE THREE
PARTICULAR REPRESENTATIONS OF GRACE HOLDING
Section 3.01. Grace Holding represents that it is a corporation duly
organized and existing under the laws of the State of Delaware.
Section 3.02. Grace Holding represents that immediately after the
consummation of the actions contemplated by this Supplemental Indenture, no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing.
ARTICLE FOUR
SUCCESSION AND SUBSTITUTION
Section 4.01. Upon the completion of the NMC Separation, and the delivery
to the Trustee of an Officers' Certificate of Grace Holding to such effect,
Grace Holding automatically without further act will succeed to and be
substituted for Grace New York as the "Guarantor" under the Indenture, with the
same effect as if Grace Holding had been named in
5
4
the Indenture as the Guarantor, and, as provided in Section 802 of the
Indenture, Grace New York shall be relieved of any further obligation under
the Indenture.
Section 4.02. Upon the succession and substitution of Grace Holding
referred to in Section 4.01 hereof, the Indenture shall be deemed to be
modified and amended in accordance with this Supplemental Indenture and the
respective rights, limitation of rights, obligations, duties and immunities
under the Indenture of the Company, Grace Holding, the Trustee, and the holders
of the Notes shall thereafter be determined, exercised and enforced thereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of this Supplemental Indenture shall be and be deemed to be part
of the terms and conditions of the Indenture for any and all purposes.
ARTICLE FIVE
MISCELLANEOUS
Section 5.01. Any request, demand, notice or other communication to Grace
Holding in connection with the Indenture, as supplemented, shall be sufficient
for every purpose hereunder if in writing and mailed, first class postage paid,
or delivered, to Grace Holding addressed as follows:
Grace Holding, Inc.
One Town Center Road
Boca Raton, Florida 33486-1010
Attention: Treasurer
or to any other address hereafter furnished in writing to the Trustee by Grace
Holding for such purpose.
6
5
Section 5.02. This Supplemental Indenture may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
Section 5.03. This Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such state. This
Supplemental Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are required to be part of this Supplemental
Indenture and shall, to the extent applicable, be governed by such provisions.
7
6
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
(CORPORATE SEAL) W. R. GRACE & CO.-CONN.
ATTEST:
By
- ------------------- -----------------------
Assistant Secretary
(CORPORATE SEAL) GRACE HOLDING, INC.
ATTEST:
By
- ------------------- -----------------------
Assistant Secretary
(CORPORATE SEAL) W. R. GRACE & CO.
ATTEST:
By
- ------------------- -----------------------
Assistant Secretary
(CORPORATE SEAL) THE BANK OF NEW YORK
ATTEST:
By
- ------------------- -----------------------
Trust Officer
1
EXHIBIT 10.1
W. R. GRACE & CO., INC.
1996 STOCK INCENTIVE PLAN
1. Purposes. The purposes of this Plan are (a) to enable Key Persons to
have incentives related to Common Stock, (b) to encourage Key Persons to
increase their interest in the growth and prosperity of the Company and to
stimulate and sustain constructive and imaginative thinking by Key Persons, (c)
to further the identity of interests of Key Persons with the interests of the
Company's stockholders, and (d) to induce the service or continued service of
Key Persons and to enable the Company to compete with other organizations
offering similar or other incentives in obtaining and retaining the services of
the most highly qualified individuals.
2. Definitions. When used in this Plan, the following terms shall have
the meanings set forth in this section 2.
Board of Directors: The Board of Directors of the Company.
cessation of service (or words of similar import): When a person ceases
to be an employee of the Company or a Subsidiary. For purposes of this
definition, if an entity that was a Subsidiary ceases to be a Subsidiary,
persons who immediately thereafter remain employees of that entity (and are not
employees of the Company or an entity that is a Subsidiary) shall be deemed to
have ceased service.
Change in Control: Shall be deemed to have occurred if (a) the Company
determines that any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
has become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 20% or more of the outstanding Common Stock of
the Company; (b) individuals who are "Continuing Directors" (as defined below)
cease to constitute a majority of any class of the Board of Directors; (c)
there occurs a reorganization, merger, consolidation or other corporate
transaction involving the Company (a "Corporate Transaction"), in each case,
with respect to which the stockholders of the Company immediately prior to such
Corporate Transaction do not, immediately after the Corporate Transaction, own
more than 60% of the combined voting power of the corporation resulting from
such Corporate Transaction; or (d) the stockholders of the Company approve a
complete liquidation or dissolution of the Company. Notwithstanding any other
provision of this Plan, the distribution of all of the shares of Common Stock
of the Company to the shareholders of W. R. Grace & Co., a New York
corporation, shall not be deemed a Change in Control.
Change in Control Price: The higher of (a) the highest reported sales
price, regular way, as reported in The Wall Street Journal or another newspaper
of general circulation,
2
of a share of Common Stock in any transaction reported on the New York Stock
Exchange Composite Tape or other national exchange on which such shares are
listed or on NASDAQ during the 60-day period prior to and including the date of
a Change in Control or (b) if the Change in Control is the result of a tender
or exchange offer or a Corporate Transaction, the highest price per share of
Common Stock paid in such tender or exchange offer or Corporate Transaction;
provided, however, that in the case of Incentive Stock Options, the Change in
Control Price shall be in all cases the Fair Market Value of the Common Stock
on the date such Incentive Stock Option is exercised. To the extent that the
consideration paid in any Corporate Transaction or other transaction described
above consists in whole or in part of securities or other noncash
consideration, the value of such securities or other noncash consideration
shall be determined in the sole discretion of the Board of Directors.
Code: The Internal Revenue Code of 1986, as amended.
Committee: The Compensation, Employee Benefits and Stock Incentive
Committee of the Board of Directors of the Company or any other committee
designated by the Board of Directors to administer stock incentive and stock
option plans of the Company and the Subsidiaries generally or this Plan
specifically.
Common Stock: The common stock of the Company, par value $.01 per share,
or such other class of shares or other securities or property as may be
applicable pursuant to the provisions of section 8.
Company: W. R. Grace & Co., a Delaware corporation.
Corporate Transaction: The meaning set forth in the definition of "Change
in Control" above.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exercise Period: The meaning set forth in section 14(b) of this Plan.
Fair Market Value: (a) The mean between the high and low sales prices of
a share of Common Stock in New York Stock Exchange composite transactions on
the applicable date, as reported in The Wall Street Journal or another
newspaper of general circulation, or, if no sales of shares of Common Stock
were reported for such date, for the next preceding date for which such sales
were so reported, or (b) the fair market value of a share of Common Stock
determined in accordance with any other reasonable method approved by the
Committee.
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Incentive Stock Option: A stock option that states that it is an
incentive stock option and that is intended to meet the requirements of Section
422 of the Code and the regulations thereunder applicable to incentive stock
options, as in effect from time to time.
issuance (or words of similar import): The issuance of authorized but
unissued Common Stock or the transfer of issued Common Stock held by the
Company or a Subsidiary.
Key Person: An employee of the Company or a Subsidiary who, in the
opinion of the Committee, has contributed or can contribute significantly to
the growth and successful operations of the Company or one or more
Subsidiaries. The grant of a Stock Incentive to an employee shall be deemed a
determination by the Committee that such person is a Key Person.
Nonstatutory Stock Option: An Option that is not an Incentive Stock
Option.
Option: An option granted under this Plan to purchase shares of Common
Stock.
Option Agreement: An agreement setting forth the terms of an Option.
Plan: The 1996 Stock Incentive Plan of the Company herein set forth, as
the same may from time to time be amended.
service: Service to the Company or a Subsidiary as an employee. "To
serve" has a correlative meaning.
Spread: The meaning set forth in section 14(b) of this Plan.
Stock Award: An issuance of shares of Common Stock or an undertaking
(other than an Option) to issue such shares in the future.
Stock Incentive: A stock incentive granted under this Plan in one of the
forms provided for in section 3.
Subsidiary: A corporation (or other form of business association) of
which shares (or other ownership interests) having 50% or more of the voting
power regularly entitled to vote for directors (or equivalent management
rights) are owned, directly or indirectly, by the Company, or any other entity
designated as such by the Board of Directors; provided, however, that in the
case of an Incentive Stock Option, the term "Subsidiary" shall mean a
Subsidiary (as defined by the preceding clause) that is also a "subsidiary
corporation" as defined in section 424(f) of the Code and the regulations
thereunder, as in effect from time to time.
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3. Grants of Stock Incentives. (a) Subject to the provisions of this
Plan, the Committee may at any time and from time to time grant Stock
Incentives under this Plan to, and only to, Key Persons.
(b) The Committee may grant a Stock Incentive to be effective at a
specified future date or upon the future occurrence of a specified event. For
the purposes of this Plan, any such Stock Incentive shall be deemed granted on
the date it becomes effective. An agreement or other commitment to grant a
Stock Incentive that is to be effective in the future shall not be deemed the
grant of a Stock Incentive until the date on which such Stock Incentive becomes
effective.
(c) A Stock Incentive may be granted in the form of:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
4. Stock Subject to this Plan. (a) Subject to the provisions of
paragraph (c) of this section 4 and the provisions of section 8, the maximum
number of shares of Common Stock that may be issued pursuant to Stock
Incentives granted under this Plan shall not exceed seven million (7,000,000).
(b) Authorized but unissued shares of Common Stock and issued shares of
Common Stock held by the Company or a Subsidiary, whether acquired specifically
for use under this Plan or otherwise, may be used for purposes of this Plan.
(c) If any shares of Common Stock subject to a Stock Incentive shall not
be issued and shall cease to be issuable because of the termination, in whole
or in part, of such Stock Incentive or for any other reason, or if any such
shares shall, after issuance, be reacquired by the Company or a Subsidiary from
the recipient of such Stock Incentive, or from the estate of such recipient,
for any reason, such shares shall no longer be charged against the limitation
provided for in paragraph (a) of this section 4 and may again be made subject
to Stock Incentives.
(d) Of the total number of shares specified in paragraph (a) of this
section 4 (subject to adjustment as specified therein), during the term of this
Plan as defined in section 9, (i) no more than 10% may be subject to Options
granted to any one Key Person and (ii) no more than 15% may be subject to Stock
Incentives granted to any one Key Person.
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5. Stock Awards. Except as otherwise provided in section 12, Stock
Incentives in the form of Stock Awards shall be subject to the following
provisions:
(a) For purposes of this Plan, all shares of Common Stock subject to a
Stock Award shall be valued at not less than 100% of the Fair Market Value of
such shares on the date such Stock Award is granted, regardless of whether or
when such shares are issued pursuant to such Stock Award and whether or not
such shares are subject to restrictions affecting their value.
(b) Shares of Common Stock subject to a Stock Award may be issued to a
Key Person at the time the Stock Award is granted, or at any time subsequent
thereto, or in installments from time to time. In the event that any such
issuance shall not be made at the time the Stock Award is granted, the Stock
Award may provide for the payment to such Key Person, either in cash or shares
of Common Stock, of amounts not exceeding the dividends that would have been
payable to such Key Person in respect of the number of shares of Common Stock
subject to such Stock Award (as adjusted under section 8) if such shares had
been issued to such Key Person at the time such Stock Award was granted. Any
Stock Award may provide that the value of any shares of Common Stock subject to
such Stock Award may be paid in cash, on each date on which shares would
otherwise have been issued, in an amount equal to the Fair Market Value on such
date of the shares that would otherwise have been issued.
(c) The material terms of each Stock Award shall be determined by the
Committee. Each Stock Award shall be evidenced by a written instrument
consistent with this Plan. It is intended that a Stock Award would be (i) made
contingent upon the attainment of one or more specified performance objectives
and/or (ii) subject to restrictions on the sale or other disposition of the
Stock Award or the shares subject thereto for a period of three or more years;
provided, however, that (x) a Stock Award may include restrictions and
limitations in addition to those provided for herein and (y) of the total
number of shares specified in paragraph (a) of section 4 (subject to adjustment
as specified therein), up to 3% may be subject to Stock Awards not subject to
clause (i) or clause (ii) of this sentence.
(d) A Stock Award shall be granted for such lawful consideration as may
be provided for therein.
6. Options. Except as otherwise provided in section 12, Stock Incentives
in the form of Options shall be subject to the following provisions:
(a) The purchase price per share of Common Stock shall be not less than
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted. The purchase price and any withholding tax that may be due on the
exercise of an Option may be paid in cash, or, if so provided in the Option
Agreement, (i) in shares of Common Stock (including shares issued
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pursuant to the Option being exercised and shares issued pursuant to a Stock
Award granted subject to restrictions as provided for in paragraph (c) of
section 5), or (ii) in a combination of cash and such shares; provided,
however, that no shares of Common Stock delivered in payment of the purchase
price may be "immature shares," as determined in accordance with generally
accepted accounting principles in effect at the time. Any shares of Common
Stock delivered to the Company in payment of the purchase price or withholding
tax shall be valued at their Fair Market Value on the date of exercise. No
certificate for shares of Common Stock shall be issued upon the exercise of an
Option until the purchase price for such shares has been paid in full.
(b) If so provided in the Option Agreement, the Company shall, upon the
request of the holder of the Option and at any time and from time to time,
cancel all or a portion of the Option then subject to exercise and either (i)
pay the holder an amount of money equal to the excess, if any, of the Fair
Market Value, at such time or times, of the shares subject to the portion of
the Option so canceled over the purchase price for such shares, or (ii) issue
shares of Common Stock to the holder with a Fair Market Value, at such time or
times, equal to such excess, or (iii) pay such excess by a combination of money
and shares.
(c) Each Option may be exercisable in full at the time of grant, or may
become exercisable in one or more installments and at such time or times or
upon the occurrence of such events, as may be specified in the Option
Agreement, as determined by the Committee. Unless otherwise provided in the
Option Agreement, an Option, to the extent it is or becomes exercisable, may
be exercised at any time in whole or in part until the expiration or
termination of such Option.
(d) Each Option shall be exercisable during the life of the holder only
by him and, after his death, only by his estate or by a person who acquires the
right to exercise the Option by will or the laws of descent and distribution.
An Option, to the extent that it shall not have been exercised or canceled,
shall terminate as follows after the holder ceases to serve: (i) if the holder
shall voluntarily cease to serve without the consent of the Committee or shall
have his service terminated for cause, the Option shall terminate immediately
upon cessation of service; (ii) if the holder shall cease to serve by reason of
death, incapacity or retirement under a retirement plan of the Company or a
Subsidiary, the Option shall terminate three years after the date on which he
ceased to serve; and (iii) except as provided in the next sentence, in all
other cases the Option shall terminate three months after the date on which the
holder ceased to serve unless the Committee shall approve a longer period
(which approval may be given before or after cessation of service) not to
exceed three years. If the holder shall die or become incapacitated during the
three-month period (or such longer period as the Committee may approve)
referred to in the preceding clause (iii), the Option shall terminate three
years after the date on which he ceased to serve. A leave of absence for
military or governmental service or other purposes shall not, if approved by
the Committee (which approval may be given before or after the leave of absence
commences), be deemed a cessation of service within the
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meaning of this paragraph (d). Notwithstanding the foregoing provisions of
this paragraph (d) or any other provision of this Plan, no Option shall be
exercisable after expiration of a period of ten years and one month from the
date the Option is granted. Where a Nonstatutory Option granted for a term of
less than ten years and one month, the Committee may, at any time prior to the
expiration of the Option, extend its term for a period ending not later than
ten years and one month from the date the Option was granted. Such an
extension shall not be deemed the grant of a new Option under this Plan.
(e) No Option nor any right thereunder may be assigned or transferred
except by will or the laws of descent and distribution and except, in the case
of a Nonstatutory Option, pursuant to a qualified domestic relations order (as
defined in the Code), unless otherwise provided in the Option Agreement.
(f) An Option may, but need not, be an Incentive Stock Option. All
shares of Common Stock that may be made subject to Stock Incentives under this
Plan may be made subject to Incentive Stock Options; provided, however, that
(i) no Incentive Stock Option may be granted more than ten years after the
effective date of this Plan, as provided in section 9; and (ii) the aggregate
Fair Market Value (determined as of the time an Incentive Stock Option is
granted) of the shares subject to each installment becoming exercisable for the
first time in any calendar year under Incentive Stock Options granted on or
after January 1, 1987 (under all plans, including this Plan, of his employer
corporation and its parent and subsidiary corporations) to the Key Employee to
whom such Incentive Stock Option is granted shall not exceed $100,000.
(g) The material terms of each Option shall be determined by the
Committee. Each Option shall be evidenced by a written instrument consistent
with this Plan, and shall specify whether the Option is an Incentive Stock
Option or a Nonstatutory Option. An Option may include restrictions and
limitations in addition to those provided for in this Plan.
(h) Options shall be granted for such lawful consideration as may be
provided for in the Option.
7. Combination of Stock Awards and Options. Stock Incentives authorized
by paragraph (c)(iii) of section 3 in the form of combinations of Stock Awards
and Options shall be subject to the following provisions: (a) A Stock
Incentive may be a combination of any form of Stock Award and any form of
Option; provided, however, that the terms and conditions of such Stock
Incentive pertaining to a Stock Award are consistent with section 5 and the
terms and conditions of such Stock Incentive pertaining to an Option are
consistent with section 6.
(b) Such combination Stock Incentive shall be subject to such other terms
and conditions as may be specified therein, including without limitation a
provision terminating in
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whole or in part a portion thereof upon the exercise in whole or in part of
another portion thereof.
(c) The material terms of each combination Stock Incentive shall be
determined by the Committee. Each combination Stock Incentive shall be
evidenced by a written instrument consistent with this Plan.
8. Adjustment Provisions. (a) In the event that any reclassification,
split-up or consolidation of the Common Stock shall be effected, or the
outstanding shares of Common Stock are, in connection with a merger or
consolidation of the Company or a sale by the Company of all or a part of its
assets, exchanged for a different number or class of shares of stock or other
securities or property of the Company or for shares of the stock or other
securities or property of any other corporation or person, or a record date for
determination of holders of Common Stock entitled to receive a dividend payable
in Common Stock shall occur, (i) the number, kind and class of shares or other
securities or property that may be issued pursuant to Stock Incentives
thereafter granted, (ii) the number, kind and class of shares or other
securities or property that have not been issued under outstanding Stock
Incentives, (iii) the purchase price to be paid per share or other unit under
outstanding Stock Incentives, and (iv) the price to be paid per share or other
unit by the Company or a Subsidiary for shares or other securities or property
issued pursuant to Stock Incentives that are subject to a right of the Company
or a Subsidiary to re-acquire such shares or other securities or property,
shall in each case be equitably adjusted as determined by the Committee.
(b) In the event that there shall occur any spin-off or other
distribution of assets of the Company to its shareholders (including without
limitation an extraordinary dividend), (i) the number, kind and class of shares
or other securities or property that may be issued pursuant to Stock Incentives
thereafter granted, (ii) the number, kind and class of shares or other
securities or property that have not been issued under outstanding Stock
Incentives, (iii) the purchase price to be paid per share or other unit under
outstanding Stock Incentives, and (iv) the price to be paid per share or other
unit by the Company or a Subsidiary for shares or other securities or property
issued pursuant to Stock Incentives that are subject to a right of the Company
or a Subsidiary to re-acquire such shares or other securities or property,
shall in each case be equitably adjusted as determined by the Committee.
9. Term. This Plan shall be deemed adopted and shall become effective on
the date as of which it is approved by W. R. Grace & Co., a New York
corporation, as sole shareholder of the Company. No Stock Incentives shall be
granted under this Plan after the tenth anniversary of such date.
10. Administration. (a) This Plan shall be administered by the Committee.
No director shall be designated as or continue to be a member of the Committee
unless he
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shall at the time of designation and at all times during service as a member
of the Committee be an "outside director" within the meaning of Section 162(m)
of the Code. The Committee shall have full authority to act in the matter of
selection of Key Persons and in granting Stock Incentives to them and such
other authority as is granted to the Committee by this Plan. Notwithstanding
any other provision of this Plan, the Board of Directors may exercise any and
all powers of the Committee with respect to this Plan, except to the extent
that the possession or exercise of any power by the Board of Directors would
cause any Stock Incentive to become subject to, or to lose an exemption from,
Section 162(m) of the Code or Section 16(b) of the Exchange Act.
(b) The Committee may establish such rules and regulations, not
inconsistent with the provisions of this Plan, as it deems necessary to
determine eligibility to be granted Stock Incentives under this Plan and for
the proper administration of this Plan, and may amend or revoke any rule or
regulation so established. The Committee may make such determinations and
interpretations under or in connection with this Plan as it deems necessary or
advisable. All such rules, regulations, determinations and interpretations
shall be binding and conclusive upon the Company, its Subsidiaries, its
shareholders and its directors, officers and employees, and upon their
respective legal representatives, beneficiaries, successors and assigns, and
upon all other persons claiming under or through any of them.
(c) Members of the Board of Directors and members of the Committee acting
under this Plan shall be fully protected in relying in good faith upon the
advice of counsel and shall incur no liability in the performance of their
duties, except as otherwise provided by applicable law.
11. General Provisions. (a) Nothing in this Plan or in any instrument
executed pursuant hereto shall confer upon any person any right to continue in
the service of the Company or a Subsidiary, or shall affect the right of the
Company or of a Subsidiary to terminate the service of any person with or
without cause.
(b) No shares of Common Stock shall be issued pursuant to a Stock
Incentive unless and until all legal requirements applicable to the issuance of
such shares have, in the opinion of counsel to the Company, been complied with.
In connection with any such issuance, the person acquiring the shares shall,
if requested by the Company, give assurances, satisfactory to counsel to the
Company, in respect of such matters as the Company or a Subsidiary may deem
desirable to assure compliance with all applicable legal requirements.
(c) No person (individually or as a member of a group), and no
beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to
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any Stock Incentive except as to such shares of Common Stock, if any, as
shall have been issued to him.
(d) In the case of a grant of a Stock Incentive to a Key Person who is
employed by a Subsidiary, such grant may provide for the issuance of the shares
covered by the Stock Incentive to the Subsidiary, for such consideration as may
be provided, upon the condition or understanding that the Subsidiary will
transfer the shares to the Key Person in accordance with the terms of the Stock
Incentive.
(e) In the event the laws of a country in which the Company or a
Subsidiary has employees prescribe certain requirements for Stock Incentives to
qualify for advantageous tax treatment under the laws of that country
(including, without limitation, laws establishing options analogous to
Incentive Stock Options), the Committee, may, for the benefit of such
employees, amend, in whole or in part, this Plan and may include in such
amendment additional provisions for the purposes of qualifying the amended plan
and Stock Incentives granted thereunder under such laws; provided, however,
that (i) the terms and conditions of a Stock Incentive granted under such
amended plan may not be more favorable to the recipient than would be permitted
if such Stock Incentive had been granted under this Plan as herein set forth,
(ii) all shares allocated to or utilized for the purposes of such amended plan
shall be subject to the limitations of section 4, and (iii) the provisions of
the amended plan may restrict but may not extend or amplify the provisions of
sections 9 and 13.
(f) The Company or a Subsidiary may make such provisions as either may
deem appropriate for the withholding of any taxes that the Company or a
Subsidiary determines is required to be withheld in connection with any Stock
Incentive.
(g) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan,
practice or arrangement for the payment of compensation or benefits to
directors, officers or employees generally, or to any class or group of such
persons, that the Company or any Subsidiary now has or may hereafter put into
effect, including, without limitation, any incentive compensation, retirement,
pension, group insurance, stock purchase, stock bonus or stock option plan.
12. Acquisitions. If the Company or any Subsidiary should merge or
consolidate with, or purchase stock or assets or otherwise acquire the whole or
part of the business of, another entity, the Company, upon the approval of the
Committee, (a) may assume, in whole or in part and with or without
modifications or conditions, any stock incentives granted by the acquired
entity to its directors, officers, employees or consultants in their capacities
as such, or (b) may grant new Stock Incentives in substitution therefor. Any
such assumed or substitute Stock Incentives may contain terms and conditions
inconsistent with the provisions of this Plan (including the limitations set
forth in paragraph (d) of section 4), including additional benefits for the
recipient; provided, however, that if such assumed or substitute Stock
Incentives are Incentive Stock Options, such terms and
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conditions are permitted under the plan of the acquired entity. For the
purposes of any applicable plan provision involving time or a date, a
substitute Stock Incentive shall be deemed granted as of the date of grant of
the original stock incentive.
13. Amendments and Termination. (a) This Plan may be amended or
terminated by the Board of Directors upon the recommendation of the Committee;
provided, however, that, without the approval of the stockholders of the
Company, no amendment shall be made which (i) causes this Plan to cease to
comply with applicable law, (ii) permits any person who is not a Key Person to
be granted a Stock Incentive (except as otherwise provided in section 12),
(iii) amends the provisions of paragraph (d) of section 4, paragraph (a) of
section 5 or paragraph (a) or paragraph (f) of section 6 to permit shares to be
valued at, or to have a purchase price of, respectively, less than the
percentage of Fair Market Value specified therein, (iv) amends section 9 to
extend the date set forth therein, or (v) amends this section 13.
(b) No amendment or termination of this Plan shall adversely affect any
Stock Incentive theretofore granted, and no amendment of any Stock Incentive
granted pursuant to this Plan shall adversely affect such Stock Incentive,
without the consent of the holder thereof.
14. Change in Control Provisions. (a) Notwithstanding any other
provision of this Plan to the contrary, in the event of a Change in Control:
(i) Any Options outstanding as of the date on which such Change in
Control occurs, and which are not then exercisable and vested, shall become
fully exercisable and vested to the full extent of the original grant; and
(ii) All restrictions and deferral limitations applicable to Stock
Incentives shall lapse, and Stock Incentives shall become free of all
restrictions and become fully vested and transferable to the full extent of the
original grant.
(b) Notwithstanding any other provision of this Plan, during the 60-day
period from and after a Change in Control (the "Exercise Period"), unless the
Committee shall determine otherwise at the time of grant, the holder of an
Option shall have the right, in lieu of the payment of the purchase price for
the shares of Common Stock being purchased under the Option, by giving notice
to the Company, to elect (within the Exercise Period) to surrender all or part
of the Option to the Company and to receive cash, within 30 days after such
notice, in an amount equal to the amount by which the Change in Control Price
per share of Common Stock on the date of such election shall exceed the
purchase price per share of Common Stock under the Option (the "Spread")
multiplied by the number of shares of Common Stock subject to the Option as to
which the right subject to this Section 14(b) shall have been exercised.
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(c) Notwithstanding any other provision of this Plan, if any right
granted pursuant to this Plan to receive cash in respect of a Stock Incentive
would make a Change in Control transaction ineligible for pooling-of-interests
accounting that, but for the nature of such grant, would otherwise be eligible
for such accounting treatment, the Committee shall have ability to substitute
for such cash Common Stock with a Fair Market Value equal to the amount of
such cash.
1
EXHIBIT 10.2
W. R. GRACE & CO.
1996 STOCK RETAINER PLAN FOR NONEMPLOYEE DIRECTORS
1. Purposes: The purposes of this Plan are (a) to further the identity of
interests of nonemployee directors of the Company with the interests of the
Company's shareholders, (b) to stimulate and sustain constructive and
imaginative thinking by such nonemployee directors, and (c) to induce the
service or continued service of the most highly qualified individuals to serve
as nonemployee directors of the Company.
2. Definitions: When used in this Plan, the following terms shall have
the meanings set forth in this section 2.
Board of Directors: The Board of Directors of the Company.
Common Stock: The common stock of the Company, par value $.01 per share,
or such other class of shares or other securities or property as may be
applicable pursuant to the provisions of section 6.
Company: W. R. Grace & Co., a Delaware corporation.
Fair Market Value: (a) The mean between the high and low sales prices of
a share of Common Stock in New York Stock Exchange composite transactions for
the applicable date, as reported in The Wall Street Journal or another
newspaper of general circulation, or, if no sales of shares of Common Stock
were reported for such date, for the next preceding date for which such sales
were so reported, or (b) the fair market value of a share of Common Stock
determined in accordance with any other reasonable method.
issuance (or words of similar import): The issuance of authorized but
unissued Common Stock or the transfer of issued Common Stock held by the
Company or a Subsidiary.
Nonemployee Director: An individual, not employed by the Company or a
Subsidiary, who is serving as a director of the Company.
Plan: The 1996 Stock Retainer Plan for Nonemployee Directors herein set
forth, as the same may from time to time be amended.
service: Service to the Company as a nonemployee director. "To serve"
has a correlative meaning.
Stock Retainer: An issuance of shares of Common Stock in payment of an
annual retainer for service as a nonemployee director.
2
Subsidiary: A corporation (or other form of business association) of
which shares (or other ownership interests) having 50% or more of the voting
power regularly entitled to vote for directors (or equivalent management
rights) are owned, directly or indirectly, by the Company.
3. Eligibility and Participation: All nonemployee directors are eligible
to participate in the Plan and each such director will participate as described
in section 5.
4. Stock Subject to this Plan:
(a) Subject to the provisions of paragraph (c) of this section 4 and the
provisions of section 6, the maximum number of shares of Common Stock that may
be issued pursuant to Stock Retainers under this Plan shall be 75,000 shares of
Common Stock.
(b) Authorized but unissued shares of Common Stock and issued shares of
Common Stock held by the Company or a Subsidiary, whether acquired specifically
for use under this Plan or otherwise, may be used for purposes of this Plan.
(c) If any shares of Common Stock issued pursuant to a Stock Retainer
shall, after issuance, be reacquired by the Company or a Subsidiary from the
recipient of such Stock Retainer, or from the estate of such recipient, for any
reason, such shares shall no longer be charged against the limitation provided
for in paragraph (a) of this section 4 and may be issued pursuant to Stock
Retainers.
5. Stock Retainers. Stock Retainers shall be subject to the following
provisions:
(a) For the purposes of this Plan, all shares of Common Stock issued
pursuant to a Stock Retainer shall be valued at not less than 100% of the Fair
Market Value of such shares on the effective date as of which such Stock
Retainer is paid, regardless of when such shares are actually issued to the
nonemployee director and whether or not such shares are subject to restrictions
that affect their value.
(b) Except as provided in paragraph (c) of this section 5, effective as
of July 1, 1997, and on each following July 1 through July 1, 2002, each person
serving as a nonemployee director on such July 1 will, for service as such, be
paid a Stock Retainer consisting of a whole number of shares of Common Stock
equal to the quotient obtained by dividing (i) $24,000 (the "Retainer Amount")
by (ii) the Fair Market Value of a share of Common Stock on such July 1. To
the extent that such calculation does not result in a whole number of shares,
the fractional share shall be rounded upwards to the next whole number so that
no fractional shares shall be issued.
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(c) (i) In the event that a Stock Retainer is to be paid, effective July
1 of any calendar year, to a person who shall have commenced service as a
nonemployee director to January 1 of such calendar year, the Retainer Amount
shall be proportionately reduced to reflect the percentage of such calendar
year prior to such commencement of service.
(ii) In the event that a Stock Retainer is to be paid, effective
July 1 of any calendar year, to a person who shall have commenced service as a
nonemployee director prior to January 1 of such calendar year but subsequent to
July 1 of the prior calendar year, the Retainer Amount shall be proportionately
increased to reflect the percentage of the prior calendar year during which
such nonemployee director served as such; provided, however, that this
subsection shall not apply with respect to any individual who commenced service
as a nonemployee director in 1996 in connection with the distribution of shares
of Common Stock by W. R. Grace & Co., a New York corporation.
(d) The shares referred to in paragraph (b) of this section 5 shall be
delivered to each nonemployee director as soon as practicable following each
July 1 during the term of this Plan. After the delivery of the shares, each
nonemployee director shall have all the rights of a shareholder with respect to
such shares (including the right to vote such shares and the right to receive
all dividends paid with respect to such shares).
(e) No shares will be issued in a calendar year to a nonemployee director
who, prior to July 1 of such calendar year, is removed for cause or who
voluntarily terminates service prior to retirement under the Company's
Retirement Plan for Outside Directors, as the same may be amended.
6. Adjustment Provisions:
(a) In the event that any reclassification, split-up or consolidation of
the Common Stock shall be effected, or the outstanding shares of Common Stock
are, in connection with a merger or consolidation of the Company or a sale by
Company of all or a part of its assets, exchanged for a different number or
class of shares of stock or other securities or property of the Company or for
shares of the stock or other securities or property of any other corporation or
person, or a record date for determination of holders of Common Stock entitled
to receive a dividend payable in Common Stock shall occur, (i) the number,
class and kind of shares that may be issued pursuant to Stock Retainers
thereafter paid, and (ii) the number, class and kind of shares that have not
been issued under effective Stock Retainers, shall in each case be equitably
adjusted.
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(b) In the event that any spin-off or other distribution of assets of the
Company to its shareholders (including without limitation an extraordinary
dividend) shall occur, the number, class and kind of shares that may be issued
pursuant to Stock Retainers thereafter paid shall be equitably adjusted.
7. Term: This Plan shall be deemed adopted and shall become effective on
the date it is approved by the shareholders of the Company. No Stock Retainers
shall be paid under this Plan with respect to any period beginning after July
1, 2002.
8. General Provisions:
(a) Nothing in this Plan or in any instrument executed pursuant hereto
shall confer upon any person any right to continue to serve as a nonemployee
director of the Company.
(b) No shares of Common Stock shall be issued pursuant to a Stock
Retainer unless and until all legal requirements applicable to the issuance of
such shares have, in the opinion of counsel to the Company, been complied with.
In connection with any such issuance, the person acquiring the shares shall,
if requested by the Company, give assurances, satisfactory to counsel to the
Company, in respect of such matters as the Company or a Subsidiary may deem
desirable to assure compliance with all applicable legal requirements.
(c) No person, individually or as a member of a group, and no beneficiary
or other person claiming under or through him, shall have any right, title or
interest in or to any shares of Common Stock allocated or reserved for the
purposes of this Plan or subject to any Stock Retainer except as to such shares
of Common Stock if any, as shall have been issued to him.
(d) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan,
practice or arrangement for the payment of compensation or benefits to
nonemployee directors that the Company now has or may hereafter put into
effect.
9. Amendments and Termination:
(a) This Plan may be terminated, suspended or amended at any time by the
Board of Directors upon the recommendation of its Compensation, Employee
Benefits and Stock Incentive Committee; provided, however, that no amendment
shall become effective without the approval of the shareholders of the Company
to the extent shareholder approval is required by applicable law.
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(b) No termination, suspension or amendment of this Plan shall adversely
affect any Stock Retainer theretofore paid.
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EXHIBIT 10.3
W. R. GRACE & CO.
1981 STOCK INCENTIVE PLAN
(As amended through September 28, 1996)
2
W. R. GRACE & CO.
1981 STOCK INCENTIVE PLAN
Section 1. PURPOSES: The purposes of this Plan are (a) to secure for
the Company the benefits of incentives inherent in ownership of Common Stock by
Key Employees, (b) to encourage Key Employees to increase their interest in the
future growth and prosperity of the Company and to stimulate and sustain
constructive and imaginative thinking by Key Employees, (c) to further the
identity of interests of those who hold positions of major responsibility in
the Company and its Subsidiaries with the interests of the Company's
shareholders, and (d) to induce the employment or continued employment of Key
Employees and to enable the Company to compete with other organizations
offering similar or other incentives in obtaining and retaining the services of
competent executives.
Section 2. DEFINITIONS: Unless otherwise required by the context, the
following terms when used in this Plan shall have the meanings set forth in
this Section 2.
Board of Directors: The Board of Directors of the Company.
Common Stock: The common stock of the Company, par value $0.01 per
share, or such other class of shares or other securities or property as may be
applicable pursuant to the provisions of section 8.
Company: W. R. Grace & Co., a Delaware corporation.
Fair Market Value: As applied to any date, the mean between the high
and low sales prices of a share of Common Stock as reported on the Consolidated
Transactions Tape for securities listed on the New York Stock Exchange for such
date or, if no such sales were reported for such date, on the next preceding
date for which sales were so reported.
Grace-Connecticut: W. R. Grace & Co.-Conn., a Connecticut corporation
which is a subsidiary of the Company and which was formerly known as "W. R.
Grace & Co."
Grace-New York: Fresenius National Medical Care Holdings, Inc., a New
York corporation which was formerly the sole shareholder of the Company and was
formerly known as "W. R. Grace & Co."
Incentive Committee: The committee designated by the Board of
Directors to administer stock incentive and stock option plans of the Company
and its subsidiaries.
Incentive Compensation: Bonuses, extra and other compensation payable
in addition to a salary or other base amount, whether contingent or not,
whether discretionary or required to be paid pursuant to a plan, agreement,
resolution or arrangement, and whether payable currently or on a deferred
basis, in cash, Common Stock or other
3
property, awarded by the Company or a Subsidiary prior or subsequent to the
date of the approval and adoption of this Plan.
Incentive Stock Option: An option, including an Option as the context
may require, intended to meet the requirements of section 422A of the Internal
Revenue Code and the regulations thereunder applicable to incentive stock
options adopted by the Secretary of the Treasury or his delegate, or any
provisions that may be adopted to amend or replace such section or regulations
or both.
Key Employee: An employee of the Company or of a Subsidiary, including
an officer or director who is an employee, who in the opinion of the Incentive
Committee can contribute significantly to the growth and successful operations
of the Company or a Subsidiary. The grant of a Stock Incentive to an employee
by the Incentive Committee shall be deemed a determination by the Incentive
Committee that such employee is a Key Employee.
Non-Statutory Stock Option: An option, including an Option as the
context may require, which is not an Incentive Stock Option or another form of
statutory stock option (within the meanings of sections 422, 423 and 424 of the
Internal Revenue Code and the regulations thereunder as adopted and amended
from time to time by the Secretary of the Treasury or his delegate).
Option: An option to purchase shares of Common Stock.
Plan: The 1981 Stock Incentive Plan of the Company herein set forth as
the same may from time to time be amended.
Performance Unit: A unit representing a share of Common Stock subject
to a Stock Award, the issuance, transfer or retention of which, in whole or in
part, is contingent upon or measured by the attainment of a specified
performance objective or objectives, including, without limitation, objectives
determined (on a consolidated or unconsolidated basis) by reference to or
changes in (a) the Fair Market Value, book value or earnings per share of
Common Stock, or (b) the sales and revenues, earnings, return on capital
employed, asset values or net worth of the Company or one or more of its
groups, divisions, Subsidiaries or other units, or (c) a combination of two or
more of the foregoing or other factors.
Stock Award: An issuance or transfer of shares of Common Stock at the
time the Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking (other than an Option) to issue or transfer such shares in the
future, including, without limitation, such an issuance, transfer or
undertaking with respect to Performance Units.
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Stock Incentive: A stock incentive granted under this Plan in one of
the forms provided for in section 3.
Subsidiary: A corporation (or other form of business association) of
which shares (or other ownership interests) (a) having 50% or more of the
voting power regularly entitled to vote for directors (or equivalent management
rights) or (b) regularly entitled to receive 50% or more of the dividends (or
their equivalents) paid on the common stock (or its equivalent) are owned,
directly or indirectly, by the Company; provided, however, that in the case of
an Incentive Stock Option, the term "Subsidiary" shall mean a Subsidiary (as
defined by the preceding clause) which is also a "subsidiary corporation" as
defined in section 425(f) of the Internal Revenue Code and the regulations
thereunder adopted by the Secretary of the Treasury or his delegate, or any
provisions that may be adopted to amend or replace such section or regulations
or both.
Section 3. GRANTS OF STOCK INCENTIVES:
(a) Subject to the provisions of this Plan, the Incentive
Committee may at any time, or from time to time, grant Stock Incentives under
this Plan to, and only to, Key Employees.
(b) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
Section 4. STOCK SUBJECT TO THIS PLAN:
(a) Subject to the provisions of paragraphs (c) and (e) of
this section 4 and of section 8, (i) the maximum number of shares of Common
Stock which may be issued or transferred pursuant to Stock Incentives granted
under this Plan shall not exceed 5,000,000 shares of Common Stock, (ii) the
maximum number of shares of Common Stock which may be acquired upon exercise of
Options granted at any time or from time to time under this Plan to any one Key
Employee shall in no event exceed 5% of the maximum number of shares which may
be issued or transferred pursuant to Stock Incentives granted under this Plan,
and (iii) the maximum number of shares of Common Stock which may be acquired
upon exercise of Options granted at any time or from time to time under this
Plan to Key Employees serving as directors of the Company at the time they
recommend this Plan for approval and adoption by the shareholders of the
Company shall in no event exceed 25% of the maximum number of the shares which
may be issued or transferred pursuant to Stock Incentives granted under this
Plan.
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(b) Authorized but unissued shares of Common Stock and shares
of Common Stock held in the treasury, whether acquired by the Company
specifically for use under this Plan or otherwise, may be used, as the
Incentive Committee may from time to time determine, for purposes of this Plan,
provided, however, that any shares acquired or held by the Company for the
purposes of this Plan shall, unless and until transferred to a Key Employee in
accordance with the terms and conditions of a Stock Incentive, be and at all
times remain treasury shares of the Company, irrespective of whether such
shares are entered in a special account for purposes of this Plan, and shall be
available for any corporate purpose.
(c) If any shares of Common Stock subject to a Stock
Incentive shall not be issued or transferred and shall cease to be issuable or
transferable because of the termination, in whole or in part, of such Stock
Incentive or for any other reason, or if any such shares shall, after issuance
or transfers be reacquired by the Company or a Subsidiary because of an
employee's failure to comply with the terms and conditions of a Stock
Incentive, the shares not so issued or transferred, or the shares so reacquired
by the Company or a Subsidiary, shall no longer be charged against any of the
limitations provided for in paragraph (a) of this section 4 and may again be
made subject to Stock Incentives.
(d) For purposes of this section 4, Common Stock shall
include shares of common stock, par value $1.00 per share, of Grace-Connecticut
issued or transferred pursuant to Stock Incentives granted by Grace-Connecticut
under this Plan as in effect prior to its adoption by the Company, except that
in determining, for purposes of this section 4, the number of shares so issued
or transferred by Grace-Connecticut prior to the two-for-one split of the
common stock of Grace-Connecticut which occurred in December 1987, adjustment
shall be made to reflect such stock split.
(e) For purposes of this section 4, Common Stock shall
include shares of common stock, par value $1.00 per share, of Grace-New York
issued or transferred pursuant to Stock Incentives granted under this Plan as
in effect prior to its assumption by the Company; provided that the number of
shares of Common Stock that may be issued or transferred following the
effective date of the adoption and assumption of this Plan by the Company (as
specified in section 9) pursuant to Stock Incentives granted under this Plan
shall not exceed 4,347 shares.
Section 5. STOCK AWARDS: Stock Incentives in the form of Stock Awards
shall be subject to the following provisions:
(a) A Stock Award shall be granted only in payment of
Incentive Compensation that has been earned or as Incentive Compensation to be
earned, including, without limitation, Incentive Compensation awarded
concurrently with or prior to the grant of the Stock Award.
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(b) For the purposes of this Plan, in determining the value
of a Stock Award, all shares of Common Stock subject to such Stock Award shall
be valued at not less than 100% of the Fair Market Value of such shares on the
date such Stock Award is granted, regardless of whether or when such shares are
issued or transferred to the Key Employee and whether or not such shares are
subject to restrictions which affect their value.
(c) Shares of Common Stock subject to a Stock Award may be
issued or transferred to the Key Employee at the time the Stock Award is
granted, or at any time subsequent thereto, or in installments from time to
time, as the Incentive Committee shall determine. In the event that any such
issuance or transfer shall not be made to the Key Employee at the time the
Stock Award is granted, the Incentive Committee may provide for payment to such
Key Employee, either in cash or shares of Common Stock, from time to time or at
the time or times such shares shall be issued or transferred to such Key
Employee, of amounts not exceeding the dividends which would have been payable
to such Key Employee in respect of such shares (as adjusted under section 8) if
such shares had been issued or transferred to such Key Employee at the time
such Stock Award was granted. Any amount payable in shares of Common Stock
under the terms of a Stock Award may, at the discretion of the Company, be paid
in cash, on each date on which delivery of shares would otherwise have been
made, in an amount equal to the Fair Market Value on such date of the shares
which would otherwise have been delivered.
(d) A Stock Award shall be subject to such terms and
conditions, including, without limitation, restrictions on the sale or other
disposition of the Stock Award or of the shares issued or transferred pursuant
to such Stock Award, as the Incentive Committee shall determine; provided,
however, that upon the issuance or transfer of shares pursuant to a Stock
Award, the recipient shall, with respect to such shares, be and become a
shareholder of the Company fully entitled to receive dividends, to vote and to
exercise all other rights of a shareholder except to the extent otherwise
provided in the Stock Award. Each Stock Award shall be evidenced by a written
instrument in such form as the Incentive Committee shall determine provided the
Stock Award is consistent with this Plan and incorporates it by reference.
Section 6. OPTIONS: Except as otherwise provided in section 12, Stock
Incentives in the form of Options shall be subject to the following provisions:
(a) Subject to the provisions of section 8, the purchase
price per share shall be not less than 100% of the Fair Market Value of a share
of Common Stock on the date the Option is granted. The purchase price shall be
paid in cash or, if so provided in the Option or authorized by the Incentive
Committee (and subject to such terms and conditions as are specified in the
Option or by the Incentive Committee), in shares of Common Stock delivered to
the Company or in a combination of cash and such shares. Shares of Common Stock
thus delivered shall be valued at their Fair Market Value on the date of
exercise.
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(b) Each Option may be exercisable in full at the time of
grant, or may become exercisable in one or more installments and at such time
or times, as the Incentive Committee shall determine. Unless otherwise provided
in the Option, an Option, to the extent it is or becomes exercisable, may be
exercised at any time in whole or in part until the expiration or termination
of the Option.
(c) Each Option shall be exercisable during the life of the
optionee only by him, and after his death only by his estate or by a person who
acquired the right to exercise the Option by will or the laws of descent and
distribution. An Option, to the extent that it shall not have been exercised,
shall terminate when the optionee ceases to be an employee of the Company or a
Subsidiary, unless he ceases to be an employee by reason of his resignation
with the consent of the Incentive Committee (which consent may be given before
or after resignation), or by reason of his death, incapacity or retirement
under a retirement plan of the Company or a Subsidiary. Except as provided in
the next sentence, if the optionee ceases to be an employee by reason of such
resignation, the Option shall terminate three months after he ceases to be an
employee. If the optionee ceases to be an employee by reason of such death,
incapacity or retirement, or if he should die during the three-month period
referred to in the preceding sentence, the Option shall terminate 15 months
after he ceases to be an employee. Where an Option is exercised more than three
months after the optionee ceased to be an employee, it may be exercised only to
the extent it could have been exercised three months after he ceased to be an
employee. A leave of absence for military or governmental service or for other
purposes shall not, if approved by the Incentive Committee, be deemed a
termination of employment within the meaning of this paragraph (c), provided,
however, that an Option may not be exercised during any such leave of absence.
Notwithstanding the foregoing provisions of this paragraph (c) or any other
provision of this Plan, no Option shall be exercisable after expiration of a
period of ten years and one month from the date the Option is granted. Where a
Non-Statutory Stock Option is granted for a term of less than ten years and one
month, the Incentive Committee may, at any time prior to the expiration of the
Option, extend its term for a period ending not later than ten years and one
month from the date the Option was granted. Such an extension shall not be
deemed the grant of an Option under this Plan.
(d) Options shall be granted for such lawful consideration as
the Incentive Committee may determine.
(e) Neither the Company nor any Subsidiary may directly or
indirectly lend any money to any person for the purpose of assisting him to
purchase or carry shares of Common Stock issued or transferred upon the
exercise of an Option.
(f) No Option nor any right thereunder may be assigned or
transferred by the optionee except by will or the laws of descent and
distribution. If so provided in the Option or if so authorized by the Incentive
Committee and subject to such terms and conditions
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as are specified in the Option or by the Incentive Committee, the Company
shall, upon or without the request of the holder of the Option and at any time
or from time to time, cancel all or a portion of the Option then subject to
exercise and either (i) pay the holder an amount of money equal to the excess,
if any, of the Fair Market Value, at such time or times, of the shares subject
to the portion of the Option so canceled over the purchase price of such
shares, or (ii) issue or transfer shares of Common Stock to the holder with a
Fair Market Value, at such time or times, equal to such excess.
(g) An Option granted under the Plan may, but need not, be an
Incentive Stock Option. All shares of Common Stock which may be made subject to
Stock Incentives under this Plan may be made subject to Incentive Stock
Options; provided that, the aggregate Fair Market Value (determined as of the
time the option is granted) of the shares subject to each installment becoming
exercisable for the first time in any calendar year under Incentive Stock
Options granted to any employee on or after January 1, 1987 (under all plans,
including this Plan, of his employer corporation and its parent and subsidiary
corporation) shall not exceed $100,000.
(h) Each Option shall be evidenced by a written instrument,
which shall contain such terms and conditions, and shall be in such form, as
the Incentive Committee shall determine, provided the Option is consistent with
this Plan and incorporates it by reference. Notwithstanding the preceding
sentence, an Option, if so approved by the Incentive Committee, may include
restrictions and limitations in addition to those provided for in this Plan.
Section 7. COMBINATIONS OF STOCK AWARDS AND OPTIONS: Stock Incentives
authorized by paragraph (b)(iii) of section 3 in the form of combinations of
Stock Awards and Options shall be subject to the following provisions:
(a) A Stock Incentive may be a combination of any form of
Stock Award with any form of Option; provided, however, that the terms and
conditions of such Stock Incentive pertaining to a Stock Award are consistent
with section 5 and the terms and conditions of such Stock Incentive pertaining
to an Option are consistent with section 6.
(b) Such combination Stock Incentive shall be subject to such
other terms and conditions as the Incentive Committee may determine, including,
without limitation, a provision terminating in whole or in part a portion
thereof upon the exercise in whole or in part of another portion thereof. Such
combination Stock Incentive shall be evidenced by a written instrument in such
form as the Incentive Committee shall determine, provided it is consistent with
this Plan and incorporates it by reference.
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Section 8. ADJUSTMENT PROVISIONS:
(a) In the event that any reclassification, split-up or
consolidation of shares of Common Stock shall be effected, or the outstanding
shares of Common Stock are, in connection with a merger or consolidation of the
Company or a sale by the Company of all or a part of its assets, exchanged for
a different number or class of shares of stock or other securities or property
of the Company or for shares of the stock or other securities or property of
any other corporation or person, or a record date for determination of holders
of Common Stock entitled to receive a dividend payable in Common Stock shall
occur, (i) the number and class of shares or other securities or property that
may be issued or transferred pursuant to Stock Incentives thereafter granted,
(ii) the number and class of shares or other securities or property that have
not been issued or transferred under outstanding Stock Incentives, (iii) the
purchase price to be paid per share or other unit under outstanding Stock
Incentives, and (iv) the price to be paid per share or other unit by the
Company or a Subsidiary for shares or other securities or property issued or
transferred pursuant to Stock Incentives that are subject to a right of the
Company or a Subsidiary to reacquire such shares or other securities or
property, shall in each case be equitably adjusted as determined by the
Incentive Committee.
(b) In the event that there shall occur any spin-off or other
distribution of assets of the Company to its shareholders (including without
limitation an extraordinary dividend), (i) the number and class of shares or
other securities or property that may be issued pursuant to Stock Incentives
thereafter granted, (ii) the number and class of shares or other securities or
property that have not been issued under outstanding Stock Incentives, (iii)
the purchase price to be paid per share or other unit under outstanding Stock
Incentives, and (iv) the price to be paid per share or other unit by the
Company or a Subsidiary for shares or other securities or property issued
pursuant to Stock Incentives that are subject to a right of the Company or a
Subsidiary to reacquire such shares or other securities or property, shall in
each case be equitably adjusted as determined by the Incentive Committee.
Section 9. TERM: This Plan was deemed adopted and became effective on
the date it was approved and adopted by the shareholders of Grace-Connecticut.
This Plan was deemed adopted as to Grace-New York on the date of the adoption
and assumption thereof by Grace-New York's board of directors with the approval
of the shareholders of Grace-Connecticut and became effective as to Grace-New
York on the effective date of the merger of Grace Merger Corp., a subsidiary of
Grace-New York, with and into Grace-Connecticut. This Plan was deemed adopted
as to the Company on the date of the adoption and assumption thereof by the
Board of Directors and became effective as to the Company on September 28,
1996. No Stock Incentives shall be granted under this Plan after April 30,
1991.
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Section 10. ADMINISTRATION:
(a) This Plan shall be administered by the Incentive
Committee. No director shall be designated as or continue to be a member of the
Incentive Committee unless he shall at the time of designation and service be a
"disinterested person" within the meaning of Rule 16b-3 of the Securities and
Exchange Commission (or any successor provision at the time in effect). A
member of the Incentive Committee shall not be eligible to be granted a Stock
Incentive while serving on the Incentive Committee. Grants of Stock Incentives
may be made by the Incentive Committee either in or without consultation with
employees, but in either case the Incentive Committee shall have full authority
to act in the matter of selection of all Key Employees and in granting Stock
Incentives to them.
(b) The Incentive Committee may establish such rules and
regulations, not inconsistent with the provisions of this Plan, as it deems
necessary to determine eligibility to participate in this Plan and for the
proper administration of this Plan, and may amend or revoke any rule or
regulation so established. The Incentive Committee may make such determinations
and interpretations under or in connection with this Plan as it deems necessary
or advisable. All such rules, regulations, determinations and interpretations,
subject to the provisions of section 3.10 of the By-laws of the Company, shall
be binding and conclusive upon the Company, its Subsidiaries, its shareholders
and all employees, and upon their respective legal representatives,
beneficiaries, successors and assigns and upon all other persons claiming under
or through any of them.
(c) Any action required or permitted to be taken by the
Incentive Committee under this Plan may be taken in accordance with Sections
3.10 and 3.11 of the By-laws of the Company even though, because of a vacancy
or vacancies as a result of resignations or otherwise, the total number of
directors who are then members of the Incentive Committee shall be less than
the number initially designated by the Board of Directors.
(d) Members of the Board of Directors and members of the
Incentive Committee acting under this Plan shall be fully protected in relying
in good faith upon the advice of counsel and shall incur no liability except
for gross negligence or willful misconduct in the performance of their duties.
Section 11. GENERAL PROVISIONS:
(a) Nothing ln this Plan nor in any instrument executed
pursuant hereto shall confer upon any employee any right to continue in the
employ of the Company or a Subsidiary, or shall affect the right of the Company
or of a Subsidiary to terminate the employment of any employee with or without
cause.
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(b) No shares of Common Stock shall be issued or transferred
pursuant to a Stock Incentive unless and until all legal requirements
applicable to the issuance or transfer of such shares have, in the opinion of
counsel to the Company, been compiled with. In connection with any such
issuance or transfer the person acquiring the shares shall, if requested by the
Company, give assurances, satisfactory to counsel to the Company, in respect of
such matters as the Company or a Subsidiary may deem desirable to assure
compliance with all applicable legal requirements.
(c) No employee (individually or as a member of a group), and
no beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to any Stock Incentive except
as to such shares of Common Stock, if any, as shall have been issued or
transferred to him.
(d) The Company or a Subsidiary may, with the approval of the
Incentive Committee, enter into an agreement or other commitment to grant a
Stock Incentive in the future to a person who is or will be a Key Employee at
the time of grant, and, notwithstanding any other provision of this Plan, any
such agreement or commitment shall not be deemed the grant of a Stock Incentive
until the date on which the Incentive Committee takes action to implement such
agreement or commitment.
(e) In the case of a grant of a Stock Incentive to an
employee of a Subsidiary, such grant may, if the Incentive Committee so
directs, be implemented by the Company issuing or transferring the shares, if
any, covered by the Stock Incentive to the Subsidiary, for such consideration
as the Incentive Committee may specify, upon the condition or understanding
that the Subsidiary will transfer the shares to the employee in accordance with
the terms of the Stock Incentive specified by the Incentive Committee pursuant
to the provisions of this Plan. Notwithstanding any other provision hereof,
such Stock Incentive may be issued by and in the name of the Subsidiary and
shall be deemed granted on the date it is approved by the Incentive Committee,
on the date it is delivered by the Subsidiary or on such other date between
said two dates as the Incentive Committee shall specify.
(f) The Company or a Subsidiary may make such provisions as
it may deem appropriate for the withholding of any taxes which the Company or a
Subsidiary determines it is required to withhold in connection with any Stock
Incentive.
(g) Nothing ln this Plan is intended to be a substitute for,
or shall preclude or limit the establishment or continuation of, any other
plan, practice or arrangement for the payment of compensation or fringe
benefits to employees generally, or to any class or group of employees, which
the Company or any Subsidiary now has or may hereafter lawfully put into
effect, including, without limitation, any incentive compensation, retirement,
pension, group insurance, stock purchase, stock bonus or stock option plan.
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Section 12. ACQUISITIONS: If the Company or any Subsidiary should
merge or consolidate with, or purchase stock or assets or otherwise acquire the
whole or part of the business of, another company, the Company in connection
therewith, upon the approval of the Incentive Committee, (a) may assume, in
whole or in part and with or without modifications or conditions, any stock
options granted by the acquired company to its employees in their capacity as
such, or (b) may grant new Options in substitution therefor; provided that the
granting of an option with the terms and conditions of the assumed or
substitute options is permissible under either this Plan or a plan approved by
the shareholders of the acquired company. For the purposes of the preceding
sentence, the permissibility of the granting of an option under a plan shall be
determined as of the date of grant of the original option by the acquired
company and not as of the date of assumption or substitution by the Company.
Section 13. AMENDMENTS AND DISCONTINUANCE:
(a) This Plan may be amended by the Board of Directors upon
the recommendation of the Incentive Committee, provided that, without the
approval of the shareholders of the Company, no amendment shall be made which
(i) increases the maximum number of shares of Common Stock that may be issued
or transferred pursuant to Stock Incentives, the maximum number of shares of
Common Stock that may be acquired upon exercise of Options granted to any one
employee or the maximum number of shares of Common Stock that may be acquired
upon exercise of Options granted to employees serving as directors, in each
case as provided in paragraph (a) of section 4, (ii) except as may be required
to conform this Plan to changes in the federal securities laws and the rules
and regulations of the Securities and Exchange Commission (or any successor
agency), withdraws the administration of this Plan from the Incentive Committee
or amends the provisions of paragraph (a) of section 10 with respect to
eligibility and disinterest of members of the Incentive Committee, (iii)
permits any person who is not at the time a Key Employee to be granted a Stock
Incentive, (iv) amends the provisions of paragraph (b) of section 5 or
paragraph (a) of section 6 to permit shares to be valued at, or to have a
purchase price of, respectively, less than 100% of Fair Market Value, (v)
amends section 9 to extend the date set forth therein, or (vi) amends this
section 13.
(b) The Board of Directors may by resolution adopted by a
majority of the entire Board of Directors discontinue this Plan.
(c) No amendment or discontinuance of this Plan by the Board
of Directors or the shareholders of the Company shall, without the consent of
the employee, adversely affect any Stock Incentive theretofore granted to him,
and no amendment by the Incentive Committee of any such Stock Incentive shall,
without the consent of the employee, adversely affect such Stock Incentive.
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EXHIBIT 10.4
W. R. GRACE & CO.
1986 STOCK INCENTIVE PLAN
(As amended through September 28, 1996)
2
W. R. GRACE & CO.
1986 STOCK INCENTIVE PLAN
1. Purposes: The purposes of this Plan are (a) to secure for Key
Persons the benefits of incentives attributable to Common Stock, (b) to
encourage Key Persons to increase their interest in the future growth and
prosperity of the Company and to stimulate and sustain constructive and
imaginative thinking by Key Persons, (c) to further the identity of interests
of Key Persons with the interests of the Company's shareholders, and (d) to
induce the service or continued service of Key Persons and to enable the
Company to compete with other organizations offering similar or other
incentives in obtaining and retaining the services of competent individuals.
2. Definitions: Unless otherwise required by the context, the
following terms when used in this Plan shall have the meanings set forth in
this Section 2.
Board of Directors: The Board of Directors of the Company.
cessation of service (or words of similar import): When a person
ceases to be, and is no longer, an employee of, or consultant to, the Company
or a Subsidiary; provided, however, in the case of an Incentive Stock Option,
"cessation of service" (or words of similar import) shall mean when a person
ceases to be an employee of the Company or a Subsidiary.
Common Stock: The common stock of the Company, par value $0.01 per
share, or such other class of shares or other securities or property as may be
applicable pursuant to the provisions of section 8.
Company: W. R. Grace & Co., a Delaware corporation.
Fair Market Value: The fair market value of a share of Common Stock
determined in accordance with any reasonable method approved by the Incentive
Committee. In the absence of any such approved method, Fair Market Value, as
applied to any date, shall be the mean between the high and low sales prices of
a share of Common Stock as reported on the Consolidated Transactions Tape for
securities listed on the New York Stock Exchange for such date or, if no such
sales were reported for such date, for the next preceding date for which sales
were so reported.
Grace-Connecticut: W. R. Grace & Co.-Conn., a Connecticut corporation
which is a subsidiary of the Company and which was formerly known as "W. R.
Grace & Co."
Grace-New York: Fresenius National Medical Care Holdings, Inc., a New
York corporation which was formerly the sole shareholder of the Company and was
formerly known as "W. R. Grace & Co."
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Incentive Committee: The committee designated by the Board of
Directors to administer stock incentive and stock option plans of the Company
and its subsidiaries.
Incentive Compensation: Bonuses, extra and other compensation payable
in addition to a salary or other base amount, whether contingent or not,
whether discretionary or required to be paid pursuant to a plan, agreement,
resolution or arrangement, and whether payable currently or on a deferred
basis, in cash, Common Stock or other property, awarded by the Company or a
Subsidiary prior or subsequent to the date of the approval and adoption of this
Plan.
Incentive Stock Option: An option, including an Option as the context
may require, intended to meet the requirements of section 422A of the Internal
Revenue Code and the regulations thereunder applicable to incentive stock
options adopted by the Secretary of the Treasury or his delegate, or any
provisions that may be adopted to amend or replace such section or regulations
or both.
Key Employee: An employee of the Company or a Subsidiary who is a Key
Person.
Key Person: An employee of, or a consultant to, the Company or a
Subsidiary, including an officer or director who is an employee or consultant,
who in the opinion of the Incentive Committee can contribute significantly to
the growth and successful operations of the Company or a Subsidiary. The grant
of a Stock Incentive to an employee or consultant by the Incentive Committee
shall be deemed a determination by the Incentive Committee that such person is
a Key Person.
Non-Statutory Stock Option: An option, including an Option as the
context may require, which is not an Incentive Stock Option or another form of
statutory stock option (within the meanings of sections 422, 423 and 424 of the
Internal Revenue Code and the regulations thereunder as adopted and amended
from time to time by the Secretary of the Treasury or his delegate).
Option: An option granted under this Plan to purchase shares of Common
Stock.
Plan: The 1986 Stock Incentive Plan of the Company herein set forth as
the same may from time to time be amended.
Performance Unit: A unit representing a share of Common Stock subject
to a Stock Award, the issuance, transfer or retention of which, in whole or in
part, is contingent upon or measured by the attainment of a specified
performance objective or objectives, including, without limitation, objectives
determined (on a consolidated or unconsolidated basis) by reference to or
changes in (a) the Fair Market Value, book value or earnings per share of
Common Stock, or (b) the sales and revenues, net income, return on capital
employed, asset values or net worth of the Company or one or more of its
groups,
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divisions, Subsidiaries or other units, or (c) a combination of two or more of
the foregoing or other factors.
service: Service as an employee of, or a consultant to, the Company or
a Subsidiary. "To serve" has a correlative meaning.
Stock Award: An issuance or transfer of shares of Common Stock at the
time the Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking (other than an Option) to issue or transfer such shares in the
future, including, without limitation, such an issuance, transfer or
undertaking with respect to Performance Units.
Stock Incentive: A stock incentive granted under this Plan in one of
the forms provided for in section 3.
Subsidiary: A corporation (or other form of business association) of
which shares (or other ownership interests) (a) having 50% or more of the
voting power regularly entitled to vote for directors (or equivalent management
rights) or (b) regularly entitled to receive 50% or more of the dividends (or
their equivalents) paid on the common stock (or its equivalent) are owned,
directly or indirectly, by the Company; provided, however, that in the case of
an Incentive Stock Option, the term "Subsidiary" shall mean a Subsidiary (as
defined by the preceding clause) which is also a "subsidiary corporation" as
defined in section 425(f) of the Internal Revenue Code and the regulations
thereunder adopted by the Secretary of the Treasury or his delegate, or any
provisions that may be adopted to amend or replace such section or regulations
or both.
3. "Grant" of Stock Incentives:
(a) Subject to the provisions of this Plan, the Incentive Committee
may at any time, or from time to time, grant Stock Incentives under this Plan
to, and only to, Key Persons; provided, however, that Incentive Stock Options
may be granted to, and only to, Key Employees.
(b) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
4. Stock Subject to this Plan:
(a) Subject to the provisions of paragraphs (c) and (e) of this
section 4 and of section 8, (i) the maximum number of shares of Common Stock
which may be issued or transferred pursuant to Stock Incentives granted under
this Plan shall not exceed
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5,000,000 shares of Common Stock, (ii) the maximum number of shares of Common
Stock which may be acquired upon exercise of Options granted at any time or
from time to time under this Plan to any one Key Person shall in no event
exceed 5% of the maximum number of shares which may be issued or transferred
pursuant to Stock Incentives granted under this Plan, and (iii) the maximum
number of shares of Common Stock which may be acquired upon exercise of Options
granted at any time or from time to time under this Plan to Key Persons serving
as directors of the Company at the time they recommend this Plan for approval
and adoption by the shareholders of the Company shall in no event exceed 25% of
the maximum number of the shares which may be issued or transferred pursuant to
Stock Incentives granted under this Plan.
(b) Authorized but unissued shares of Common Stock and shares of
Common Stock held in the treasury, whether acquired by the Company specifically
for use under this Plan or otherwise, may be used, as the Incentive Committee
may from time to time determine, for purposes of this Plan, provided, however,
that any shares acquired or held by the Company for the purposes of this Plan
shall, unless and until transferred to a Key Person in accordance with the
terms and conditions of a Stock Incentive, be and at all times remain treasury
shares of the Company, irrespective of whether such shares are entered in a
special account for purposes of this Plan, and shall be available for any
corporate purpose.
(c) If any shares of Common Stock subject to a Stock Incentive shall
not be issued or transferred and shall cease to be issuable or transferable
because of the termination, in whole or in part, of such Stock Incentive or for
any other reason, or if any such shares shall, after issuance or transfer, be
reacquired by the Company or a Subsidiary because of an employee's failure to
comply with the terms and conditions of a Stock Incentive, the shares not so
issued or transferred, or the shares so reacquired by the Company or a
Subsidiary, shall no longer be charged against any of the limitations provided
for in paragraph (a) of this section 4 and may again be made subject to Stock
Incentives.
(d) For purposes of this section 4, Common Stock shall include shares
of common stock, par value $1.00 per share, of Grace-Connecticut issued or
transferred pursuant to Stock Incentives granted by Grace-Connecticut under
this Plan as in effect prior to its adoption by the Company, except that in
determining, for purposes of this section 4, the number of shares so issued or
transferred by Grace-Connecticut prior to the two-for-one split of the common
stock of Grace-Connecticut which occurred in December 1987, adjustment shall be
made to reflect such stock split.
(e) For purposes of this section 4, Common Stock shall include shares
of common stock, par value $1.00 per share, of Grace-New York issued or
transferred pursuant to Stock Incentives granted under this Plan as in effect
prior to its assumption by the Company; provided that the number of shares of
Common Stock that may be issued or transferred following the effective date of
the adoption and assumption of this Plan by the
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Company (as specified in section 9) pursuant to Stock Incentives granted under
this Plan shall not exceed 624,169 shares.
5. Stock Awards: Except as otherwise provided in section 12 and in
paragraph (f) of section 11, Stock Incentives in the form of Stock Awards shall
be subject to the following provisions:
(a) A Stock Award shall be granted only in payment of Incentive
Compensation that has been earned or as Incentive Compensation to be earned,
including, without limitation, Incentive Compensation awarded concurrently with
or prior to the grant of the Stock Award.
(b) For the purposes of this Plan, in determining the value of a Stock
Award, all shares of Common Stock subject to such Stock Award shall be valued
at not less than 100% of the Fair Market Value of such shares on the date such
Stock Award is granted, regardless of whether or when such shares are issued or
transferred to the Key Person and whether or not such shares are subject to
restrictions which affect their value.
(c) Shares of Common Stock subject to a Stock Award may be issued or
transferred to the Key Person at the time the Stock Award is granted, or at any
time subsequent thereto, or in installments from time to time, as the Incentive
Committee shall determine. In the event that any such issuance or transfer
shall not be made to the Key Person at the time the Stock Award is granted, the
Incentive Committee may provide for payment to such Key Person, either in cash
or shares of Common Stock, from time to time or at the time or times such
shares shall be issued or transferred to such Key Person, of amounts not
exceeding the dividends which would have been payable to such Key Person in
respect of such shares (as adjusted under section 8) if such shares had been
issued or transferred to such Key Person at the time such Stock Award was
granted. Any amount payable in shares of Common Stock under the terms of a
Stock Award may, at the discretion of the Company, be paid in cash, on each
date on which delivery of shares would otherwise have been made, in an amount
equal to the Fair Market Value on such date of the shares which would otherwise
have been delivered.
(d) A Stock Award shall be subject to such terms and conditions,
including, without limitation, restrictions on the sale or other disposition of
the Stock Award or of the shares issued or transferred pursuant to such Stock
Award, as the Incentive Committee shall determine; provided, however, that upon
the issuance or transfer of shares pursuant to a Stock Award, the recipient
shall, with respect to such shares, be and become a shareholder of the Company
fully entitled to receive dividends, to vote and to exercise all other rights
of a shareholder except to the extent otherwise provided in the Stock Award.
Each Stock Award shall be evidenced by a written instrument in such form as the
Incentive Committee shall determine, provided the Stock Award is consistent
with this Plan and incorporates it by reference.
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6. Options: Except as otherwise provided in section 12 and in
paragraph (f) of section 11, Stock Incentives in the form of Options shall be
subject to the following provisions:
(a) Subject to the provisions of section 8, the purchase price per
share shall be not less than 100% of the Fair Market Value of a share of Common
Stock on the date the Option is granted. The purchase price shall be paid in
cash or, if so provided in the Option or authorized by the Incentive Committee
(and subject to such terms and conditions as are specified in the Option or by
the Incentive Committee), in shares of Common Stock delivered to the Company or
in a combination of cash and such shares. Share of Common Stock thus delivered
shall be valued at their Fair Market Value on the date of exercise.
(b) Each Option may be exercisable in full at the time of grant, or
may become exercisable in one or more installments and at such time or times,
as the Incentive Committee shall determine. Unless otherwise provided in the
Option, an Option, to the extent it is or becomes exercisable, may be exercised
at any time in whole or in part until the expiration or termination of the
Option.
(c) Each Option shall be exercisable during the life of the optionee
only by him, and after death only by his estate or by a person who acquired the
right to exercise the Option by will or the laws of descent and distribution.
An Option, to the extent that it shall not have been exercised or canceled,
shall terminate as follows after the optionee ceases to serve: (i) if the
optionee shall voluntarily resign without the consent of the Incentive
Committee or be terminated for cause, the Option shall terminate immediately
upon cessation of service; (ii) if the optionee shall cease to serve by reason
of death, incapacity or retirement under a retirement plan of the Company or a
Subsidiary, the Option shall terminate 15 months after cessation of service if
the optionee has served for less than 15 years, the Option shall terminate two
years after cessation of service if the optionee has served 15 or more years
but less than 25 years, and the Option shall terminate three years after
cessation of service if the optionee has served 25 or more years; and (iii)
except as provided in the next sentence, in all other cases the Option shall
terminate three months after cessation of service unless the Incentive
Committee shall approve a longer period (which approval may be given before or
after cessation of service), not to exceed, however, the period which would
have been applicable if the optionee had died, become incapacitated or retired
under a retirement plan of the Company or a Subsidiary. If the optionee shall
die or become incapacitated during the three-month period (or such longer
period as the Incentive Committee may approve) referred to in the preceding
clause (iii), the Option shall terminate at such time as it would have
terminated had the service of the optionee ceased by reason of his death,
incapacity or retirement under a retirement plan of the Company or Subsidiary.
A leave of absence for military or governmental service or for other purposes
shall not, if approved by the Incentive Committee (which approval may be given
before or after the leave of absence commences), be deemed a termination of
employment within the meaning of this paragraph (c); provided, however, that an
Option
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may not be exercised or canceled during any such leave of absence.
Notwithstanding the foregoing provisions of this paragraph (c) or any other
provision of this Plan, no Option shall be exercisable after expiration of a
period of ten years and one month from the date the Option is granted. Where a
Non-Statutory Stock Option is granted for a term of less than ten years and one
month, the Incentive Committee may, at any time prior to the expiration of the
Option, extend its term for a period ending not later than ten years and one
month from the date the Option was granted. Such an extension shall not be
deemed the grant of an Option under this Plan.
(d) Options shall be granted for such lawful consideration as may be
provided in the Option or as the Incentive Committee may determine.
(e) No Option nor any right thereunder may be assigned or transferred
except by will or the laws of descent and distribution. If so provided in the
Option or if so authorized by the Incentive Committee and subject to such terms
and conditions as are specified in the Option or by the Incentive Committee,
the Company shall, upon or without the request of the holder of the Option and
at any time or from time to time, cancel all or a portion of the Option then
subject to exercise and either (i) pay the holder an amount of money equal to
the excess, if any, of the Fair Market Value, at such time or times, of the
shares subject to the portion of the Option so canceled over the purchase price
of such shares, or (ii) issue or transfer shares of Common Stock to the holder
with a Fair Market Value, at such time or times, equal to such excess.
(f) An Option may, but need not, be an Incentive Stock Option. All
shares of Common Stock which may be made subject to Stock Incentives under this
Plan may be made subject to Incentive Stock Options; provided that the
aggregate Fair Market Value (determined as of the time the option is granted)
of the shares subject to each installment becoming exercisable for the first
time in any calendar year under Incentive Stock Options granted to any employee
on or after January 1, 1987 (under all plans, including this Plan, of his
employer corporation and its parent and subsidiary corporations) shall not
exceed $100,000.
(g) Each Option shall be evidenced by a written instrument, which
shall contain such terms and conditions, and shall be in such form, as the
Incentive Committee shall determine, provided the Option is consistent with
this Plan and incorporates it by reference. Notwithstanding the preceding
sentence, an Option, if so approved by the Incentive Committee, may include
restrictions and limitations in addition to those provided for in this Plan.
7. Combinations of Stock Awards and Options: Stock Incentives
authorized by paragraph (b)(iii) of section 3 in the form of combinations of
Stock Awards and Options shall be subject to the following provisions:
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(a) A Stock Incentive may be a combination of any form of Stock Award
with any form of Option; provided, however, that the terms and conditions of
such Stock Incentive pertaining to a Stock Award are consistent with section 5
and the terms and conditions of such Stock Incentive pertaining to an Option
are consistent with section 6.
(b) Such combination Stock Incentive shall be subject to such other
terms and conditions as the Incentive Committee may determine, including,
without limitation, a provision terminating in whole or in part a portion
thereof upon the exercise in whole or in part of another portion thereof. Such
combination Stock Incentive shall be evidenced by a written instrument in such
form as the Incentive Committee shall determine, provided it is consistent with
this Plan and incorporates it by reference.
8. Adjustment Provisions:
(a) In the event that any reclassification, split-up or consolidation
of shares of Common Stock shall be effected, or the outstanding shares of
Common Stock are, in connection with a merger or consolidation of the Company
or a sale by the Company of all or a part of its assets, exchanged for a
different number or class of shares of stock or other securities or property of
the Company or for shares of the stock or other securities or property of any
other corporation or person, or a record date for determination of holders of
Common Stock entitled to receive a dividend payable in Common Stock shall
occur, (i) the number and class of shares or other securities or property that
may be issued or transferred pursuant to Stock Incentives thereafter granted,
(ii) the number and class of shares or other securities or property that have
not been issued or transferred under outstanding Stock Incentives, (iii) the
purchase price to be paid per share or other unit under outstanding Stock
Incentives, and (iv) the price to be paid per share or other unit by the
Company or a Subsidiary for shares or other securities or property issued or
transferred pursuant to Stock Incentives which are subject to a right of the
Company or a Subsidiary to reacquire such shares or other securities or
property, shall in each case be equitably adjusted as determined by the
Incentive Committee.
(b) In the event that there shall occur any spin-off or other
distribution of assets of the Company to its shareholders (including without
limitation an extraordinary dividend), (i) the number and class of shares or
other securities or property that may be issued pursuant to Stock Incentives
thereafter granted, (ii) the number and class of shares or other securities or
property that have not been issued under outstanding Stock Incentives, (iii)
the purchase price to be paid per share or other unit under outstanding Stock
Incentives, and (iv) the price to be paid per share or other unit by the
Company or a Subsidiary for shares or other securities or property issued
pursuant to Stock Incentives that are subject to a right of the Company or a
Subsidiary to reacquire such shares or other securities or property, shall in
each case be equitably adjusted as determined by the Incentive Committee.
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9. Term: This Plan was deemed adopted and became effective on the date
it was approved and adopted by the shareholders of Grace-Connecticut. This Plan
was deemed adopted as to Grace-New York on the date of the adoption and
assumption thereof by Grace-New York's board of directors with the approval of
the shareholders of Grace-Connecticut and became effective as to Grace-New York
on the effective date of the merger of Grace Merger Corp., a subsidiary of
Grace-New York, with and into Grace-Connecticut. This Plan was deemed adopted
as to the Company on the date of the adoption and assumption thereof by the
Board of Directors and became effective as to the Company on September 28,
1996. No Stock Incentives shall be granted under this Plan after April 30,
1996.
10. Administration:
(a) This Plan shall be administered by the Incentive Committee. No
director shall be designated as or continue to be a member of the Incentive
Committee unless he shall at the time of designation and service be a
"disinterested person" within the meaning of Rule 16b-3 of the Securities and
Exchange Commission (or any successor provision at the time in effect). A
member of the Incentive Committee shall not be eligible to be granted a Stock
Incentive while serving on the Incentive Committee. Grants of Stock Incentives
may be made by the Incentive Committee either in or without consultation with
employees, but in either case the Incentive Committee shall have full authority
to act in the matter of selection of all Key Persons and in granting Stock
Incentives to them.
(b) The Incentive Committee may establish such rules and regulations,
not inconsistent with the provisions of this Plan, as it deems necessary to
determine eligibility to participate in this Plan and for the proper
administration of this Plan, and may amend or revoke any rule or regulation so
established. The Incentive Committee may make such determinations and
interpretations under or in connection with this Plan as it deems necessary or
advisable. All such rules, regulations, determinations and interpretations,
subject to the provisions of section 3.10 of the By-laws of the Company, shall
be binding and conclusive upon the Company, its Subsidiaries, its shareholders,
and its directors, officers, consultants and employees, and upon their
respective legal representatives, beneficiaries, successors and assigns and
upon all other persons claiming under or through any of them.
(c) Any action required or permitted to be taken by the Incentive
Committee under this Plan may be taken in accordance with Sections 3.10 and
3.11 of the By-laws of the Company even though, because of a vacancy or
vacancies as a result of resignations or otherwise, the total number of
directors who are then members of the Incentive Committee shall be less than
the number initially designated by the Board of Directors.
(d) Members of the Board of Directors and members of the Incentive
Committee acting under this Plan shall be fully protected in relying in good
faith upon the advice of
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counsel and shall incur no liability except for gross negligence or willful
misconduct in the performance of their duties.
11. General Provisions:
(a) Nothing in this Plan nor in any instrument executed pursuant
hereto shall confer upon any person any right to continue in the service of the
Company or a Subsidiary, or shall affect the right of the Company or of a
Subsidiary to terminate the service of any person with or without cause.
(b) No shares of Common Stock shall be issued or transferred pursuant
to a Stock Incentive unless and until all legal requirements applicable to the
issuance or transfer of such shares have, in the opinion of counsel to the
Company, been complied with. In connection with any such issuance or transfer
the person acquiring the shares shall, if requested by the Company, give
assurances, satisfactory to counsel to the Company, in respect of such matters
as the Company or a Subsidiary may deem desirable to assure compliance with all
applicable legal requirements.
(c) No person (individually or as a member of a group), and no
beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to any Stock Incentive except
as to such shares of Common Stock, if any, as shall have been issued or
transferred to him.
(d) The Incentive Committee may grant a Stock Incentive to be
effective at a specified future date or upon the future happening of a
specified event, not more than sixty days from the date on which the Incentive
Committee acts. For the purposes of this Plan, any such Stock Incentive shall
be deemed granted on the date it is effective. An agreement or other commitment
to grant a Stock Incentive in the future to a person who is or will be a Key
Person at the time of grant shall not be deemed the grant of a Stock Incentive
until the date on which the Incentive Committee takes action to implement such
agreement or commitment.
(e) In the case of a grant of a Stock Incentive to a Key Person of a
Subsidiary, such grant may, if the Incentive Committee so approves, be
implemented by the Company entering into an agreement with the Subsidiary
containing such terms and provisions as the Incentive Committee may authorize,
including, without limitation, a provision for the issuance or transfer of the
shares covered by the Stock Incentive to the Subsidiary, for such consideration
as the Incentive Committee may approve, upon the condition or understanding
that the Subsidiary will transfer the shares to the Key Person in accordance
with the terms of the Stock Incentive.
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(f) In the event the laws of a foreign country, in which the Company
or a Subsidiary has employees, prescribes certain requirements for stock
incentives to qualify for advantageous tax treatment under the laws of that
country (including, without limitation, laws establishing options analogous to
Incentive Stock Options), the Board of Directors, upon the recommendation of
the Incentive Committee, may restate, in whole or in part, this Plan and may
include in such restatement additional provisions for the purpose of qualifying
the restated plan and Stock Incentives granted thereunder under such laws of
such foreign country; provided, however, that (i) the terms and conditions of a
Stock Incentive granted under such restated plan may not be more favorable to
the recipient than would be permitted if such Stock Incentive had been granted
under this Plan as herein set forth, (ii) all shares allocated to or utilized
for the purposes of such restated plan shall be subject to the limitations of
section 4, and (iii) the provisions of the restated plan may restrict but may
not extend or amplify the provisions of sections 9 and 13.
(g) The Company or a Subsidiary may make such provisions as it may
deem appropriate for the withholding of any taxes which the Company or a
Subsidiary determines it is required to withhold in connection with any Stock
Incentive.
(h) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan,
practice or arrangement for the payment of compensation or fringe benefits to
directors, officers, employees or consultants generally, or to any class or
group of such persons, which the Company or any Subsidiary now has or may
hereafter lawfully put into effect, including, without limitation, any
incentive compensation, retirement, pension, group insurance, stock purchase,
stock bonus or stock option plan.
12. Acquisitions: If the Company or any Subsidiary should merge or
consolidate with, or purchase stock or assets or otherwise acquire the whole or
part of the business of, another company, the Company in connection therewith,
upon the approval of the Incentive Committee, (a) may assume, in whole or in
part and with or without modifications or conditions, any stock incentives
granted by the acquired company to its directors, officers, employees or
consultants in their capacity as such, or (b) may grant new Stock Incentives in
substitution therefor. Such assumed or substitute stock incentives may contain
terms and conditions inconsistent with the provisions of this Plan, including
additional benefits for the recipient; provided that such terms and conditions
are permitted under the plan of the other company and such plan was approved by
the shareholders of such other company. For the purposes of any applicable plan
provision involving time or a date, a substitute stock incentive shall be
deemed granted as of the date of grant of the original stock incentive by the
other company.
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13. Amendments and Termination:
(a) This Plan may be amended or terminated by the Board of Directors
upon the recommendation of the Incentive Committee; provided that, without the
approval of the shareholders of the Company, no amendment shall be made which
(i) increases the maximum number of shares of Common Stock that may be issued
or transferred pursuant to Stock Incentives, the maximum number of shares of
Common Stock that may be acquired upon exercise of Options granted to any one
person or the maximum number of shares of Common Stock that may be acquired
upon exercise of Options granted to persons serving as directors, in each case
as provided in paragraph (a) of section 4, (ii) except as may be required to
conform this Plan to changes in the federal securities laws and the rules and
regulations of the Securities and Exchange Commission (or any successor
agency), withdraws the administration of this Plan from the Incentive Committee
or amends the provisions of paragraph (a) of section 10 with respect to
eligibility and disinterest of members of the Incentive Committee, (iii)
permits any person who is not a Key Person to be granted a Stock Incentive
(except as otherwise provided in section 12), (iv) amends the provisions of
paragraph (b) of section 5 or paragraph (a) of section 6 to permit shares to be
valued at, or to have a purchase price of, respectively, less than 100% of Fair
Market Value, (v) amends section 9 to extend the date set forth therein, or
(vi) amends this section 13.
(b) No amendment or termination of this Plan by the Board of Directors
or the shareholders of the Company shall adversely affect any Stock Incentive
theretofore granted without the consent of the holder thereof, and no amendment
by the Incentive Committee of any such Stock Incentive shall adversely affect
such Stock Incentive without the consent of the holder thereof.
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EXHIBIT 10.5
W. R. GRACE & CO.
----------------
1989 STOCK INCENTIVE PLAN
(As amended through September 28, 1996)
2
W. R. GRACE & CO.
--------------
1989 STOCK INCENTIVE PLAN
---------------
1. Purposes: The purposes of this Plan are (a) to enable Key Persons
to have incentives related to Common Stock, (b) to encourage Key Persons to
increase their interest in the growth and prosperity of the Company and to
stimulate and sustain constructive and imaginative thinking by Key Persons, (c)
to further the identity of interests of Key Persons with the interests of the
Company's shareholders, and (d) to induce the service or continued service of
Key Persons and to enable the Company to compete with other organizations
offering similar or other incentives in obtaining and retaining the services of
competent individuals.
2. Definitions: Unless otherwise required by the context, the
following terms when used in this Plan shall have the meanings set forth in
this section 2.
Board of Directors: The Board of Directors of the Company.
Cessation of service (or words of similar import): When a person
ceases to be an employee of, or consultant to, the Company or a Subsidiary;
provided, however, in the case of an Incentive Stock Option, "cessation of
service" (or words of similar import) shall mean when a person ceases to be an
employee of the Company or a Subsidiary.
Code: The Internal Revenue Code of 1986, as amended.
Common Stock: The common stock of the Company, par value $0.01 per
share, or such other class of shares or other securities or property as may be
applicable pursuant to the provisions of section 8.
Company: W. R. Grace & Co., a Delaware corporation.
Fair Market Value: (a) The mean between the high and low sales prices
of a share of Common Stock as reported on the Consolidated Transactions Tape
for securities listed on the New York Stock Exchange for the applicable date
or, if no sales of shares of Common Stock were reported for such date, for the
next preceding date for which such
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sales were so reported, or (b) the fair market value of a share of Common Stock
determined in accordance with any reasonable method approved by the Incentive
Commit tee.
Grace-New York: Fresenius National Medical Care Holdings, Inc., a New
York corporation which was formerly the sole shareholder of the Company and was
formerly known as "W. R. Grace & Co."
Incentive Committee: The committee designated by the Board of
Directors to administer stock incentive and stock option plans of the Company
and its subsidiaries generally or this Plan specifically.
Incentive Stock Option: A stock option which states that it is an
incentive stock option and which is intended to meet the requirements of
Section 422A of the Code and the regulations thereunder applicable to incentive
stock options, as in effect from time to time.
Issuance (or words of similar import): The issuance of authorized but
unissued Common Stock or the transfer of issued Common Stock held by the
Company or a Subsidiary.
Key Employee: An employee of the Company or a Subsidiary who is a Key
Person.
Key Person: An employee of, or consultant to, the Company or a
Subsidiary who, in the opinion of the Incentive Committee, has contributed or
can contribute significantly to the growth and successful operations of the
Company or a Subsidiary. The grant of a Stock Incentive to an employee or
consultant shall be deemed a determination by the Incentive Committee that such
person is a Key Person.
Non-Statutory Stock Option: An Option which is not an Incentive Stock
Option or another form of statutory stock option (within the meanings of
sections 422, 423 and 424 of the Code and the regulations thereunder, as in
effect from time to time).
Option: An option granted under this Plan to purchase shares of Common
Stock.
Plan: The 1989 Stock Incentive Plan of the Company herein set forth,
as the same may from time to time be amended.
Rule 16b-3: Rule 16b-3 of the Securities and Exchange Commission (or
any successor provision in effect at the applicable time).
Service: Service to the Company or a Subsidiary as an employee or
consultant. "To serve" has a correlative meaning.
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Stock Award: An issuance of shares of Common Stock at the time the
Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking (other than an Option) to issue such shares in the future.
Stock Incentive: A stock incentive granted under this Plan in one of
the forms provided for in section 3.
Subsidiary: A corporation (or other form of business association) of
which shares (or other ownership interests) having 50% or more of the voting
power regularly entitled to vote for directors (or equivalent management
rights) are owned, directly or indirectly, by the Company; provided however,
that in the case of an Incentive Stock Option, the term "Subsidiary" shall mean
a Subsidiary (as defined by the preceding clause) which is also a "subsidiary
corporation" as defined in section 425(f) of the Code and the regulations
thereunder, as in effect from time to time.
3. Grants of Stock Incentives:
(a) Subject to the provisions of this Plan, the Incentive Committee
may at any time, and from time to time, grant Stock Incentives under this Plan
to, and only to, Key Persons; provided, however, that Incentive Stock Options
may be granted to, and only to, Key Employees.
(b) The Incentive Committee may grant a Stock Incentive to be
effective at a specified future date or upon the future occurrence of a
specified event. For the purposes of this Plan, any such Stock Incentive shall
be deemed granted on the date it is effective. An agreement or other commitment
to grant a Stock Incentive in the future to a person who is a Key Person or
will be a Key Person at the time the grant is intended to become effective
shall not be deemed the grant of a Stock Incentive until the date on which the
Incentive Committee makes such grant effective.
(c) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
4. Stock Subject to this Plan:
(a) Subject to the provisions of paragraphs (c) and (d) of this
section 4 and the provisions of section 8, the maximum number of shares of
Common Stock which may be
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issued pursuant to Stock Incentives granted under this Plan shall not exceed
7,500,000 shares of Common Stock.
(b) Authorized but unissued shares of Common Stock and issued shares
of Common Stock held by the Company or a Subsidiary, whether acquired
specifically for use under this Plan or otherwise, may be used for purposes of
this Plan; provided, however, that any shares acquired or held by the Company
or a Subsidiary, or otherwise reserved, for the purposes of this Plan shall,
unless and until issued to a Key Person in accordance with the terms and
conditions of a Stock Incentive, be and at all times remain available for any
corporate purpose.
(c) If any shares of Common Stock subject to a Stock Incentive shall
not be issued and shall cease to be issuable because of the termination, in
whole or in part, of such Stock Incentive or for any other reason, or if any
such shares shall, after issuance, be reacquired by the Company or a Subsidiary
for any reason, such shares shall no longer be charged against the limitation
provided for in paragraph (a) of this section 4 and may again be made subject
to Stock Incentives.
(d) For purposes of this section 4, Common Stock shall include shares
of common stock, par value $1.00 per share, of Grace-New York issued or
transferred pursuant to Stock Incentives granted under this Plan as in effect
prior to its assumption by the Company; provided that the number of shares of
Common Stock that may be issued or transferred following the effective date of
the adoption and assumption of this Plan by the Company (as specified in
section 9) pursuant to Stock Incentives granted under this Plan shall not
exceed 3,359,264 shares.
5. Stock Awards: Except as otherwise provided in section 12, Stock
Incentives in the form of Stock Awards shall be subject to the following
provisions:
(a) For the purposes of this Plan, all shares of Common Stock subject
to a Stock Award shall be valued at not less than 100% of the Fair Market Value
of such shares on the date such Stock Award is granted, regardless of whether
or when such shares are issued to the Key Person and whether or not such shares
are subject to restrictions which affect their value.
(b) Shares of Common Stock subject to a Stock Award may be issued to
the Key Person at the time the Stock Award is granted, or at any time
subsequent thereto, or in installments from time to time. In the event that any
such issuance shall not be made at the time the Stock Award is granted, the
Stock Award may provide for payment to such Key Person, either in cash or
shares of Common Stock, of amounts not exceeding the dividends which would have
been payable to such Key Person in respect of such shares (as adjusted under
section 8) if such shares had been issued to such Key Person at the time such
Stock Award was granted. Any Stock Award may provide that the value of any
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shares of Common Stock to be issued under the terms of such Stock Award may be
paid in cash, on each date on which shares would otherwise have been issued, in
an amount equal to the Fair Market Value on such date of the shares which would
otherwise have been issued.
(c) The material terms of each Stock Award shall be determined by the
Incentive Committee. Each Stock Award shall be evidenced by a written
instrument consistent with this Plan. A Stock Award (i) may be made contingent
upon the attainment of a specified performance objective or objectives, (ii)
may be subject to restrictions on the sale or other disposition of the Stock
Award or of the shares issued pursuant to such Stock Award, and (iii) may
include restrictions and limitations in addition to those provided for in this
Plan.
(d) Stock Awards shall be granted for such lawful consideration as may
be provided for in the Stock Award.
6. Options: Except as otherwise provided in section 12, Stock
Incentives in the form of Options shall be subject to the following provisions:
(a) Subject to the provisions of paragraph (f) of this section 6, the
purchase price per share of Common Stock shall be not less than 85% of the Fair
Market Value of a share of Common Stock on the date the Option is granted. The
Option may provide for the purchase price to be paid (i) in cash, or (ii) in
shares of Common Stock (including shares issued pursuant to a Stock Award
granted subject to restrictions as provided for in paragraph (c) of section 5),
or (iii) in a combination of cash and such shares. Any shares of Common Stock
delivered to the Company in payment of the purchase price shall be valued at
their Fair Market Value on the date of exercise. No certificate for shares of
Common Stock shall be issued upon the exercise of an Option until the purchase
price for such shares has been paid in full.
(b) If so provided in the Option, the Company shall, upon the request
of the holder of the Option and at any time and from time to time, cancel all
or a portion of the Option then subject to exercise and either (i) pay the
holder an amount of money equal to the excess, if any, of the Fair Market
Value, at such time or times, of the shares subject to the portion of the
Option so cancelled over the purchase price of such shares, or (ii) issue
shares of Common Stock to the holder with a Fair Market Value, at such time or
times, equal to such excess, or (iii) pay such excess by a combination of money
and shares.
(c) Each Option may be exercisable in full at the time of grant, or
may become exercisable in one or more installments and at such time or times or
upon the occurrence of such events, as may be specified in the Option. Unless
otherwise provided in the Option, an Option, to the extent it is or becomes
exercisable, may be exercised at any time in whole or in part until the
expiration or termination of the Option.
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(d) Each Option shall be exercisable during the life of the optionee
only by him and, after his death, only by his estate or by a person who
acquired the right to exercise the Option by will or the laws of descent and
distribution. An Option, to the extent that it shall not have been exercised or
cancelled, shall terminate as follows after the optionee ceases to serve: (i)
if the optionee shall voluntarily cease to serve without the consent of the
Incentive Committee or shall have his service terminated for cause, the Option
shall terminate immediately upon cessation of service; (ii) if the optionee
shall cease to serve by reason of death, incapacity or retirement under a
retirement plan of the Company or a Subsidiary, the Option shall terminate
three years after the date on which he ceased to serve, and (iii) except as
provided in the next sentence, in all other cases the Option shall terminate
three months after the date on which the optionee ceased to serve unless the
Incentive Committee shall approve a longer period (which approval may be given
before or after cessation of service), not to exceed, however, three years. If
the optionee shall die or become incapacitated during the three-month period
(or such longer period as the Incentive Committee may approve) referred to in
the preceding clause (iii), the Option shall terminate three years after the
date on which he ceased to serve. A leave of absence for military or
governmental service or other purposes shall not, if approved by the Incentive
Committee (which approval may be given before or after the leave of absence
commences), be deemed a cessation of service within the meaning of this
paragraph (d). Notwithstanding the foregoing provisions of this paragraph (d)
or any other provision of this Plan, no Option shall be exercisable after
expiration of a period of ten years and one month from the date the Option is
granted. Where a Non-Statutory Stock Option is granted for a term of less than
ten years and one month, the Incentive Committee may, at any time prior to the
expiration of the Option, extend its term for a period ending not later than
ten years and one month from the date the Option was granted. Such an extension
shall not be deemed the grant of an Option under this Plan.
(e) No Option nor any right thereunder may be assigned or transferred
except by will or the laws of descent and distribution.
(f) An Option may, but need not, be an Incentive Stock Option. All
shares of Common Stock which may be made subject to Stock Incentives under this
Plan may be made subject to Incentive Stock Options; provided that (i) no
Incentive Stock Option may be granted more than ten years after the effective
date of this Plan as provided in section 9, (ii) the purchase price per share
of Common Stock subject to an Incentive Stock Option shall be not less than
100% of the Fair Market Value of a share of Common Stock on the date such
Incentive Stock Option is granted, and (iii) the aggregate Fair Market Value
(determined as of the time an Incentive Stock Option is granted) of the shares
subject to each installment becoming exercisable for the first time in any
calendar year under Incentive Stock Options granted, on or after January 1,
1987 (under all plans, including this Plan, of his employer corporation and its
parent and subsidiary corporations), to the Key Employee to whom such Incentive
Stock Option is granted, shall not exceed $100,000.
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(g) The material terms of each Option shall be determined by the
Incentive Committee. Each Option shall be evidenced by a written instrument
consistent with this Plan. An Option may include restrictions and limitations
in addition to those provided for in this Plan.
(h) Options shall be granted for such lawful consideration as may be
provided for in the Option.
7. Combinations of Stock Awards and Options: Stock Incentives
authorized by paragraph (b)(iii) of section 3 in the form of combinations of
Stock Awards and Options shall be subject to the following provisions:
(a) A Stock Incentive may be a combination of any form of Stock Award
with any form of Option, provided, however, that the terms and conditions of
such Stock Incentive pertaining to a Stock Award are consistent with section 5
and the terms and conditions of such Stock Incentive pertaining to an Option
are consistent with section 6.
(b) Such combination Stock Incentive shall be subject to such other
terms and conditions as may be specified therein including, without limitation,
a provision terminating in whole or in part a portion thereof upon the exercise
in whole or in part of another portion thereof.
(c) The material terms of each combination Stock Incentive shall be
determined by the Incentive Committee. Each combination Stock Incentive shall
be evidenced by a written instrument consistent with this Plan.
8. Adjustment Provisions:
(a) In the event that any reclassification, split-up or consolidation
of shares of Common Stock shall be effected, or the outstanding shares of
Common Stock are, in connection with a merger or consolidation of the Company
or a sale by the Company of all or a part of its assets, exchanged for a
different number or class of shares of stock or other securities or property of
the Company or for shares of the stock or other securities or property of any
other corporation or person, or a record date for determination of holders of
Common Stock entitled to receive a dividend payable in Common Stock shall
occur, (i) the number and class of shares or other securities or property that
may be issued pursuant to Stock Incentives thereafter granted, (ii) the number
and class of shares or other securities or property which have not been issued
under outstanding Stock Incentives, (iii) the purchase price to be paid per
share or other unit under outstanding Stock Incentives, and (iv) the price to
be paid per share or other unit by the Company or a Subsidiary for shares or
other securities or property issued pursuant to Stock Incentives which are
subject to a right of the Company or a Subsidiary to reacquire such shares or
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other securities or property, shall in each case be equitably adjusted as
determined by the Incentive Committee.
(b) In the event that there shall occur any spin-off or other
distribution of assets of the Company to its shareholders (including without
limitation an extraordinary dividend), (i) the number and class of shares or
other securities or property that may be issued pursuant to Stock Incentives
thereafter granted, (ii) the number and class of shares or other securities or
property which have not been issued under outstanding Stock Incentives, (iii)
the purchase price to be paid per share or other unit under outstanding Stock
Incentives, and (iv) the price to be paid per share or other unit by the
Company or a Subsidiary for shares or other securities or property issued
pursuant to Stock Incentives which are subject to a right of the Company or a
Subsidiary to reacquire such shares or other securities or property, shall in
each case be equitably adjusted as determined by the Incentive Committee.
9. Term: This Plan was deemed adopted and became effective on the date
it was approved by the shareholders of Grace-New York. This Plan was deemed
adopted as to the Company on the date of the adoption and assumption thereof by
the Board of Directors and became effective as to the Company on September 28,
1996. No Stock Incentives shall be granted under this Plan after the effective
date of the adoption and assumption thereof by the Company.
10. Administration:
(a) This Plan shall be administered by the Incentive Committee. No
director shall be designated as or continue to be a member of the Incentive
Committee unless he shall at the time of designation and at all times during
service as a member of the Incentive Committee be a "disinterested person"
within the meaning of Rule 16b-3. The Incentive Committee shall have full
authority to act in the matter of selection of Key Persons and in granting
Stock Incentives to them and such other authority as is granted to the
Incentive Committee by this Plan.
(b) The Incentive Committee may establish such rules and regulations,
not inconsistent with the provisions of this Plan, as it deems necessary to
determine eligibility to be granted Stock Incentives under this Plan and for
the proper administration of this Plan, and may amend or revoke any rule or
regulation so established. The Incentive Committee may make such determinations
and interpretations under or in connection with this Plan as it deems necessary
or advisable. All such rules, regulations, determinations and interpretations
shall be binding and conclusive upon the Company, its Subsidiaries, its
shareholders and its directors, officers, consultants and employees, and upon
their respective legal representatives, beneficiaries, successors and assigns,
and upon all other persons claiming under or through any of them.
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(c) Members of the Board of Directors and members of the Incentive
Committee acting under this Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability in the
performance of their duties except as otherwise provided by applicable law.
11. General Provisions:
(a) Nothing in this Plan or in any instrument executed pursuant hereto
shall confer upon any person any right to continue in the service of the
Company or a Subsidiary, or shall affect the right of the Company or of a
Subsidiary to terminate the service of any person with or without cause.
(b) No shares of Common Stock shall be issued pursuant to a Stock
Incentive unless and until all legal requirements applicable to the issuance of
such shares have, in the opinion of counsel to the Company, been complied with.
In connection with any such issuance the person acquiring the shares shall, if
requested by the Company, give assurances, satisfactory to counsel to the
Company, in respect of such matters as the Company or a Subsidiary may deem
desirable to assure compliance with all applicable legal requirements.
(c) No person (individually or as a member of a group), and no
beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any shares of Common Stock allocated or
reserved for the purposes of this Plan or subject to any Stock Incentive except
as to such shares of Common Stock, if any, as shall have been issued to him.
(d) In the case of a grant of a Stock Incentive to a Key Person of a
Subsidiary, such grant may provide for the issuance of the shares covered by
the Stock Incentive to the Subsidiary, for such consideration as may be
provided, upon the condition or understanding that the Subsidiary will transfer
the shares to the Key Person in accordance with the terms of the Stock
Incentive.
(e) In the event the laws of a foreign country, in which the Company
or a Subsidiary has employees, prescribe certain requirements for stock
incentives to qualify for advantageous tax treatment under the laws of that
country (including, without limitation, laws establishing options analogous to
Incentive Stock Options), the Board of Directors, upon the recommendation of
the Incentive Committee, may, for the benefit of such employees, amend, in
whole or in part, this Plan and may include in such amendment additional
provisions for the purposes of qualifying the amended plan and Stock Incentives
granted thereunder under such laws of such foreign country; provided, however,
that (i) the terms and conditions of a Stock Incentive granted under such
amended plan may not be more favorable to the recipient than would be permitted
if such Stock Incentive had been granted under this Plan as herein set forth,
(ii) all shares allocated to or utilized for
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the purposes of such amended plan shall be subject to the limitations of
section 4, and (iii) the provisions of the amended plan may restrict but may
not extend or amplify the provisions of sections 9 and 13.
(f) The Company or a Subsidiary may make such provisions as it may
deem appropriate for the withholding of any taxes which the Company or a
Subsidiary determines it is required to withhold in connection with any Stock
Incentive.
(g) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other plan,
practice or arrangement for the payment of compensation or benefits to
directors, officers, employees or consultants generally, or to any class or
group of such persons, which the Company or any Subsidiary now has or may
hereafter put into effect, including, without limitation, any incentive
compensation, retirement, pension, group insurance, stock purchase, stock bonus
or stock option plan.
12. Acquisitions: If the Company or any Subsidiary should merge or
consolidate with, or purchase stock or assets or otherwise acquire the whole or
part of the business of, another company, the Company, upon the approval of the
Incentive Com mittee, (a) may assume, in whole or in part and with or without
modifications or conditions, any stock incentives granted by the acquired
company to its directors, officers, employees or consultants in their capacity
as such, or (b) may grant new Stock Incentives in substitution therefor. Such
assumed or substitute stock incentives may contain terms and conditions
inconsistent with the provisions of this Plan, including additional benefits
for the recipient, provided that, if such assumed or substitute stock
incentives are Incentive Stock Options, such terms and conditions are permitted
under the plan of the other company. For the purposes of any applicable plan
provision involving time or a date, a substitute stock incentive shall be
deemed granted as of the date of grant of the original stock incentive by the
other company.
13. Amendments and Termination:
(a) This Plan may be amended or terminated by the Board of Directors
upon the recommendation of the Incentive Committee; provided that, without the
approval of the shareholders of the Company, no amendment shall be made which
(i) causes this Plan to no longer comply with Rule 16b-3 or applicable law,
(ii) permits any person who is not a Key Person to be granted a Stock Incentive
(except as otherwise provided in section 12), (iii) amends the provisions of
paragraph (a) of section 5 or paragraph (a) or paragraph (f) of section 6 to
permit shares to be valued at, or to have a purchase price of, respectively,
less than the respective percentages of Fair Market Value specified therein,
(iv) amends section 9 to extend the date set forth therein, or (v) amends this
section 13.
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(b) No amendment or termination of this Plan shall adversely affect
any Stock Incentive theretofore granted, and no amendment of any Stock
Incentive granted pursuant to this Plan shall adversely affect such Stock
Incentive, without the consent of the holder thereof.
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EXHIBIT 10.6
W. R. GRACE & CO.
____________
1994 STOCK INCENTIVE PLAN
(AS AMENDED THROUGH SEPTEMBER 28, 1996)
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.
2
W. R. GRACE & CO.
_____________
1994 STOCK INCENTIVE PLAN
1. PURPOSES: THE PURPOSES OF THIS PLAN ARE (A) TO ENABLE KEY PERSONS TO
HAVE INCENTIVES RELATED TO COMMON STOCK, (B) TO ENCOURAGE KEY PERSONS TO
INCREASE THEIR INTEREST IN THE GROWTH AND PROSPERITY OF THE COMPANY AND TO
STIMULATE AND SUSTAIN CONSTRUCTIVE AND IMAGINATIVE THINKING BY KEY PERSONS, (C)
TO FURTHER THE IDENTITY OF INTERESTS OF KEY PERSONS WITH THE INTERESTS OF THE
COMPANY'S SHAREHOLDERS, AND (D) TO INDUCE THE SERVICE OR CONTINUED SERVICE OF
KEY PERSONS AND TO ENABLE THE COMPANY TO COMPETE WITH OTHER ORGANIZATIONS
OFFERING SIMILAR OR OTHER INCENTIVES IN OBTAINING AND RETAINING THE SERVICES OF
THE MOST HIGHLY QUALIFIED INDIVIDUALS.
2. DEFINITIONS: WHEN USED IN THIS PLAN, THE FOLLOWING TERMS SHALL HAVE
THE MEANINGS SET FORTH IN THIS SECTION 2.
BOARD OF DIRECTORS: THE BOARD OF DIRECTORS OF THE COMPANY.
CESSATION OF SERVICE (OR WORDS OF SIMILAR IMPORT): WHEN A PERSON CEASES
TO BE AN EMPLOYEE OF, OR CONSULTANT TO, THE COMPANY OR A SUBSIDIARY; PROVIDED,
HOWEVER, IN THE CASE OF AN INCENTIVE STOCK OPTION, "CESSATION OF SERVICE" (OR
WORDS OF SIMILAR IMPORT) SHALL MEAN WHEN A PERSON CEASES TO BE AN EMPLOYEE OF
THE COMPANY OR A SUBSIDIARY.
CODE: THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
COMMITTEE: THE COMPENSATION, EMPLOYEE BENEFITS AND STOCK INCENTIVE
COMMITTEE OF THE BOARD OF DIRECTORS OF THE COMPANY OR ANY OTHER COMMITTEE
DESIGNATED BY SUCH BOARD OF DIRECTORS TO ADMINISTER STOCK INCENTIVE AND STOCK
OPTION PLANS OF THE COMPANY AND ITS SUBSIDIARIES GENERALLY OR THIS PLAN
SPECIFICALLY.
COMMON STOCK: THE COMMON STOCK OF THE COMPANY, PAR VALUE $0.01 PER SHARE,
OR SUCH OTHER CLASS OF SHARES OR OTHER SECURITIES OR PROPERTY AS MAY BE
APPLICABLE PURSUANT TO THE PROVISIONS OF SECTION 8.
COMPANY: W. R. GRACE & CO., A DELAWARE CORPORATION.
FAIR MARKET VALUE: (A) THE MEAN BETWEEN THE HIGH AND LOW SALES PRICES OF
A SHARE OF COMMON STOCK IN NEW YORK STOCK EXCHANGE COMPOSITE TRANSACTIONS ON
THE APPLICABLE DATE, AS REPORTED IN THE WALL STREET JOURNAL OR ANOTHER
NEWSPAPER OF GENERAL CIRCULATION, OR, IF NO SALES OF SHARES OF COMMON STOCK
WERE REPORTED FOR SUCH DATE, FOR THE NEXT PRECEDING DATE FOR WHICH SUCH SALES
WERE SO REPORTED, OR (B) THE FAIR MARKET
3
VALUE OF A SHARE OF COMMON STOCK DETERMINED IN ACCORDANCE WITH ANY
OTHER REASONABLE METHOD APPROVED BY THE COMMITTEE.
GRACE-NEW YORK: FRESENIUS NATIONAL MEDICAL CARE HOLDINGS, INC., A NEW
YORK CORPORATION WHICH WAS FORMERLY THE SOLE SHAREHOLDER OF THE COMPANY AND WAS
FORMERLY KNOWN AS "W. R. GRACE & CO."
INCENTIVE STOCK OPTION: A STOCK OPTION THAT STATES THAT IT IS AN
INCENTIVE STOCK OPTION AND THAT IS INTENDED TO MEET THE REQUIREMENTS OF SECTION
422A OF THE CODE AND THE REGULATIONS THEREUNDER APPLICABLE TO INCENTIVE STOCK
OPTIONS, AS IN EFFECT FROM TIME TO TIME.
ISSUANCE (OR WORDS OF SIMILAR IMPORT): THE ISSUANCE OF AUTHORIZED BUT
UNISSUED COMMON STOCK OR THE TRANSFER OF ISSUED COMMON STOCK HELD BY THE
COMPANY OR A SUBSIDIARY.
KEY EMPLOYEE: AN EMPLOYEE OF THE COMPANY OR A SUBSIDIARY WHO IS A KEY
PERSON.
KEY PERSON: AN EMPLOYEE OF, OR CONSULTANT TO, THE COMPANY OR A SUBSIDIARY
WHO, IN THE OPINION OF THE COMMITTEE, HAS CONTRIBUTED OR CAN CONTRIBUTE
SIGNIFICANTLY TO THE GROWTH AND SUCCESSFUL OPERATIONS OF THE COMPANY OR ONE OR
MORE SUBSIDIARIES. THE GRANT OF A STOCK INCENTIVE TO AN EMPLOYEE OR CONSULTANT
SHALL BE DEEMED A DETERMINATION BY THE COMMITTEE THAT SUCH PERSON IS A KEY
PERSON.
NON-STATUTORY STOCK OPTION: AN OPTION THAT IS NOT AN INCENTIVE STOCK
OPTION OR ANOTHER FORM OF STATUTORY STOCK OPTION (WITHIN THE MEANINGS OF
SECTIONS 422, 423 AND 424 OF THE CODE AND THE REGULATIONS THEREUNDER, AS IN
EFFECT FROM TIME TO TIME).
OPTION: AN OPTION GRANTED UNDER THIS PLAN TO PURCHASE SHARES OF COMMON
STOCK.
PLAN: THE 1994 STOCK INCENTIVE PLAN OF THE COMPANY HEREIN SET FORTH, AS
THE SAME MAY FROM TIME TO TIME BE AMENDED.
RULE 16B-3: RULE 16B-3 OF THE SECURITIES AND EXCHANGE COMMISSION (OR ANY
SUCCESSOR PROVISION IN EFFECT AT THE APPLICABLE TIME).
SERVICE: SERVICE TO THE COMPANY OR A SUBSIDIARY AS AN EMPLOYEE OR
CONSULTANT. "TO SERVE" HAS A CORRELATIVE MEANING.
STOCK AWARD: AN ISSUANCE OF SHARES OF COMMON STOCK OR AN UNDERTAKING
(OTHER THAN AN OPTION) TO ISSUE SUCH SHARES IN THE FUTURE.
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STOCK INCENTIVE: A STOCK INCENTIVE GRANTED UNDER THIS PLAN IN ONE OF THE
FORMS PROVIDED FOR IN SECTION 3.
SUBSIDIARY: A CORPORATION (OR OTHER FORM OF BUSINESS ASSOCIATION) OF
WHICH SHARES (OR OTHER OWNERSHIP INTERESTS) HAVING 50% OR MORE OF THE VOTING
POWER REGULARLY ENTITLED TO VOTE FOR DIRECTORS (OR EQUIVALENT MANAGEMENT
RIGHTS) ARE OWNED, DIRECTLY OR INDIRECTLY, BY THE COMPANY; PROVIDED, HOWEVER,
THAT IN THE CASE OF AN INCENTIVE STOCK OPTION, THE TERM "SUBSIDIARY" SHALL MEAN
A SUBSIDIARY (AS DEFINED BY THE PRECEDING CLAUSE) THAT IS ALSO A "SUBSIDIARY
CORPORATION" AS DEFINED IN SECTION 425(F) OF THE CODE AND THE REGULATIONS
THEREUNDER, AS IN EFFECT FROM TIME TO TIME.
3. GRANTS OF STOCK INCENTIVES:
(A) SUBJECT TO THE PROVISIONS OF THIS PLAN, THE COMMITTEE MAY AT ANY TIME
AND FROM TIME TO TIME GRANT STOCK INCENTIVES UNDER THIS PLAN TO, AND ONLY TO,
KEY PERSONS; PROVIDED, HOWEVER, THAT INCENTIVE STOCK OPTIONS MAY BE GRANTED TO,
AND ONLY TO, KEY EMPLOYEES.
(B) THE COMMITTEE MAY GRANT A STOCK INCENTIVE TO BE EFFECTIVE AT A
SPECIFIED FUTURE DATE OR UPON THE FUTURE OCCURRENCE OF A SPECIFIED EVENT. FOR
THE PURPOSES OF THIS PLAN, ANY SUCH STOCK INCENTIVE SHALL BE DEEMED GRANTED ON
THE DATE IT BECOMES EFFECTIVE. AN AGREEMENT OR OTHER COMMITMENT TO GRANT A
STOCK INCENTIVE THAT IS TO BE EFFECTIVE IN THE FUTURE SHALL NOT BE DEEMED THE
GRANT OF A STOCK INCENTIVE UNTIL THE DATE ON WHICH SUCH STOCK INCENTIVE BECOMES
EFFECTIVE.
(C) STOCK INCENTIVES MAY BE GRANTED IN THE FORM OF:
(I) A STOCK AWARD, OR
(II) AN OPTION, OR
(III) A COMBINATION OF A STOCK AWARD AND AN OPTION.
4. STOCK SUBJECT TO THIS PLAN:
(A) SUBJECT TO THE PROVISIONS OF PARAGRAPH (C) AND (E) OF THIS SECTION 4
AND THE PROVISIONS OF SECTION 8, THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK
THAT MAY BE ISSUED PURSUANT TO STOCK INCENTIVES GRANTED UNDER THIS PLAN SHALL
NOT EXCEED 3,000,000 SHARES OF COMMON STOCK.
(B) AUTHORIZED BUT UNISSUED SHARES OF COMMON STOCK AND ISSUED SHARES OF
COMMON STOCK HELD BY THE COMPANY OR A SUBSIDIARY, WHETHER ACQUIRED SPECIFICALLY
FOR USE UNDER THIS PLAN OR OTHERWISE, MAY BE USED FOR PURPOSES OF THIS PLAN.
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5
(C) IF ANY SHARES OF COMMON STOCK SUBJECT TO A STOCK INCENTIVE SHALL
NOT BE ISSUED AND SHALL CEASE TO BE ISSUABLE BECAUSE OF THE TERMINATION, IN
WHOLE OR IN PART, OF SUCH STOCK INCENTIVE OR FOR ANY OTHER REASON, OR IF ANY
SUCH SHARES SHALL, AFTER ISSUANCE, BE REACQUIRED BY THE COMPANY OR A SUBSIDIARY
FOR ANY REASON, SUCH SHARES SHALL NO LONGER BE CHARGED AGAINST THE LIMITATION
PROVIDED FOR IN PARAGRAPH (A) OF THIS SECTION 4 AND MAY AGAIN BE MADE SUBJECT
TO STOCK INCENTIVES.
(D) OF THE TOTAL NUMBER OF SHARES SPECIFIED IN PARAGRAPH (A) OF THIS
SECTION 4 (SUBJECT TO ADJUSTMENT AS SPECIFIED THEREIN), DURING THE TERM OF THIS
PLAN AS DEFINED IN SECTION 9, (I) NO MORE THAN 10% MAY BE SUBJECT TO OPTIONS
GRANTED TO ANY ONE KEY PERSON, (II) NO MORE THAN 15% MAY BE SUBJECT TO STOCK
INCENTIVES GRANTED TO ANY ONE KEY PERSON, AND (III) NO MORE THAN 3% IN THE
AGGREGATE MAY BE SUBJECT TO STOCK INCENTIVES GRANTED TO ALL KEY PERSONS WHO ARE
CONSULTANTS TO THE COMPANY AND/OR ONE OR MORE SUBSIDIARIES AT THE DATE THE
RELEVANT STOCK INCENTIVE IS GRANTED.
(E) FOR PURPOSES OF THIS SECTION 4, COMMON STOCK SHALL INCLUDE SHARES OF
COMMON STOCK, PAR VALUE $1.00 PER SHARE, OF GRACE-NEW YORK ISSUED OR
TRANSFERRED PURSUANT TO STOCK INCENTIVES GRANTED UNDER THIS PLAN AS IN EFFECT
PRIOR TO ITS ASSUMPTION BY THE COMPANY; PROVIDED THAT THE NUMBER OF SHARES OF
COMMON STOCK THAT MAY BE ISSUED OR TRANSFERRED FOLLOWING THE EFFECTIVE DATE OF
THE ADOPTION AND ASSUMPTION OF THIS PLAN BY THE COMPANY (AS SPECIFIED IN
SECTION 9) PURSUANT TO STOCK INCENTIVES GRANTED UNDER THIS PLAN SHALL NOT
EXCEED 2,791,121 SHARES.
5. STOCK AWARDS:
EXCEPT AS OTHERWISE PROVIDED IN SECTION 12, STOCK INCENTIVES IN THE FORM
OF STOCK AWARDS SHALL BE SUBJECT TO THE FOLLOWING PROVISIONS:
(A) FOR PURPOSES OF THIS PLAN, ALL SHARES OF COMMON STOCK SUBJECT TO A
STOCK AWARD SHALL BE VALUED AT NOT LESS THAN 100% OF THE FAIR MARKET VALUE OF
SUCH SHARES ON THE DATE SUCH STOCK AWARD IS GRANTED, REGARDLESS OF WHETHER OR
WHEN SUCH SHARES ARE ISSUED PURSUANT TO SUCH STOCK AWARD AND WHETHER OR NOT
SUCH SHARES ARE SUBJECT TO RESTRICTIONS AFFECTING THEIR VALUE.
(B) SHARES OF COMMON STOCK SUBJECT TO A STOCK AWARD MAY BE ISSUED TO A KEY
PERSON AT THE TIME THE STOCK AWARD IS GRANTED, OR AT ANY TIME SUBSEQUENT
THERETO, OR IN INSTALLMENTS FROM TIME TO TIME. IN THE EVENT THAT ANY SUCH
ISSUANCE SHALL NOT BE MADE AT THE TIME THE STOCK AWARD IS GRANTED, THE STOCK
AWARD MAY PROVIDE FOR THE PAYMENT TO SUCH KEY PERSON, EITHER IN CASH OR SHARES
OF COMMON STOCK, OF AMOUNTS NOT EXCEEDING THE DIVIDENDS THAT WOULD HAVE BEEN
PAYABLE TO SUCH KEY PERSON IN RESPECT OF THE NUMBER OF SHARES OF COMMON STOCK
SUBJECT TO SUCH STOCK AWARD (AS ADJUSTED UNDER SECTION 8) IF SUCH SHARES HAD
BEEN ISSUED TO SUCH KEY PERSON AT THE TIME SUCH STOCK AWARD WAS GRANTED. ANY
STOCK AWARD MAY PROVIDE THAT THE VALUE OF ANY SHARES OF COMMON STOCK SUBJECT TO
SUCH STOCK AWARD MAY BE PAID IN CASH, ON EACH DATE ON WHICH SHARES WOULD
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6
OTHERWISE HAVE BEEN ISSUED, IN AN AMOUNT EQUAL TO THE FAIR MARKET VALUE ON SUCH
DATE OF THE SHARES THAT WOULD OTHERWISE HAVE BEEN ISSUED.
(C) THE MATERIAL TERMS OF EACH STOCK AWARD SHALL BE DETERMINED BY THE
COMMITTEE. EACH STOCK AWARD MAY BE EVIDENCED BY A WRITTEN INSTRUMENT
CONSISTENT WITH THIS PLAN. IT IS INTENDED THAT A STOCK AWARD WOULD BE (I)
MADE CONTINGENT UPON THE ATTAINMENT OF ONE OR MORE SPECIFIED PERFORMANCE
OBJECTIVES AND/OR (II) SUBJECT TO RESTRICTIONS ON THE SALE OR OTHER DISPOSITION
FOR A PERIOD OF THREE OR MORE YEARS OF THE STOCK AWARD OR THE SHARES SUBJECT
THERETO; PROVIDED THAT (X) A STOCK AWARD MAY INCLUDE RESTRICTIONS AND
LIMITATIONS IN ADDITION TO THOSE PROVIDED FOR HEREIN AND (Y) OF THE TOTAL
NUMBER OF SHARES SPECIFIED IN PARAGRAPH (A) OF SECTION 4 (SUBJECT TO ADJUSTMENT
AS SPECIFIED THEREIN), UP TO 3% MAY BE SUBJECT TO STOCK AWARDS NOT SUBJECT TO
CLAUSE (I) OR CLAUSE (II) OF THIS SENTENCE.
(D) A STOCK AWARD SHALL BE GRANTED FOR SUCH LAWFUL CONSIDERATION AS MAY BE
PROVIDED FOR THEREIN.
6. OPTIONS: EXCEPT AS OTHERWISE PROVIDED IN SECTION 12, STOCK INCENTIVES
IN THE FORM OF OPTIONS SHALL BE SUBJECT TO THE FOLLOWING PROVISIONS:
(A) SUBJECT TO THE PROVISIONS OF PARAGRAPH (F) OF THIS SECTION 6, THE
PURCHASE PRICE PER SHARE OF COMMON STOCK SHALL BE NOT LESS THAN 100% OF THE
FAIR MARKET VALUE OF A SHARE OF COMMON STOCK ON THE DATE THE OPTION IS GRANTED.
THE OPTION MAY PROVIDE FOR THE PURCHASE PRICE TO BE PAID (I) IN CASH, OR (II)
IN SHARES OF COMMON STOCK (INCLUDING SHARES ISSUED PURSUANT TO A STOCK AWARD
GRANTED SUBJECT TO RESTRICTIONS AS PROVIDED FOR IN PARAGRAPH (C) OF SECTION 5),
OR (III) IN A COMBINATION OF CASH AND SUCH SHARES. ANY SHARES OF COMMON STOCK
DELIVERED TO THE COMPANY IN PAYMENT OF THE PURCHASE PRICE SHALL BE VALUED AT
THEIR FAIR MARKET VALUE ON THE DATE OF EXERCISE. NO CERTIFICATE FOR SHARES OF
COMMON STOCK SHALL BE ISSUED UPON THE EXERCISE OF AN OPTION UNTIL THE PURCHASE
PRICE FOR SUCH SHARES HAS BEEN PAID IN FULL.
(B) IF SO PROVIDED IN THE OPTION, THE COMPANY SHALL, UPON THE REQUEST OF
THE HOLDER OF THE OPTION AND AT ANY TIME AND FROM TIME TO TIME, CANCEL ALL OR A
PORTION OF THE OPTION THEN SUBJECT TO EXERCISE AND EITHER (I) PAY THE HOLDER AN
AMOUNT OF MONEY EQUAL TO THE EXCESS, IF ANY, OF THE FAIR MARKET VALUE, AT SUCH
TIME OR TIMES, OF THE SHARES SUBJECT TO THE PORTION OF THE OPTION SO CANCELED
OVER THE PURCHASE PRICE FOR SUCH SHARES, OR (II) ISSUE SHARES OF COMMON STOCK
TO THE HOLDER WITH A FAIR MARKET VALUE, AT SUCH TIME OR TIMES, EQUAL TO SUCH
EXCESS, OR (III) PAY SUCH EXCESS BY A COMBINATION OF MONEY AND SHARES.
(C) EACH OPTION MAY BE EXERCISABLE IN FULL AT THE TIME OF GRANT, OR MAY
BECOME EXERCISABLE IN ONE OR MORE INSTALLMENTS AND AT SUCH TIME OR TIMES OR
UPON THE OCCURRENCE OF SUCH EVENTS, AS MAY BE SPECIFIED IN THE OPTION, AS
DETERMINED BY THE COMMITTEE. UNLESS OTHERWISE PROVIDED IN THE WRITTEN
INSTRUMENT PROVIDED IN PARAGRAPH (G) OF THIS SECTION 6, AN OPTION, TO THE
EXTENT IT IS OR BECOMES EXERCISABLE, MAY BE
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EXERCISED AT ANY TIME IN WHOLE OR IN PART UNTIL THE EXPIRATION OR
TERMINATION OF SUCH OPTION.
(D) EACH OPTION SHALL BE EXERCISABLE DURING THE LIFE OF THE HOLDER ONLY
BY HIM AND, AFTER HIS DEATH, ONLY BY HIS ESTATE OR BY A PERSON WHO ACQUIRES THE
RIGHT TO EXERCISE THE OPTION BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION.
AN OPTION, TO THE EXTENT THAT IT SHALL NOT HAVE BEEN EXERCISED OR CANCELED,
SHALL TERMINATE AS FOLLOWS AFTER THE HOLDER CEASES TO SERVE: (I) IF THE HOLDER
SHALL VOLUNTARILY CEASE TO SERVE WITHOUT THE CONSENT OF THE COMMITTEE OR SHALL
HAVE HIS SERVICE TERMINATED FOR CAUSE, THE OPTION SHALL TERMINATE IMMEDIATELY
UPON CESSATION OF SERVICE; (II) IF THE HOLDER SHALL CEASE TO SERVE BY REASON OF
DEATH, INCAPACITY OR RETIREMENT UNDER A RETIREMENT PLAN OF THE COMPANY OR A
SUBSIDIARY, THE OPTION SHALL TERMINATE THREE YEARS AFTER THE DATE ON WHICH HE
CEASED TO SERVE; AND (III) EXCEPT AS PROVIDED IN THE NEXT SENTENCE, IN ALL
OTHER CASES THE OPTION SHALL TERMINATE THREE MONTHS AFTER THE DATE ON WHICH THE
HOLDER CEASED TO SERVE UNLESS THE COMMITTEE SHALL APPROVE A LONGER PERIOD
(WHICH APPROVAL MAY BE GIVEN BEFORE OR AFTER CESSATION OF SERVICE) NOT TO
EXCEED THREE YEARS. IF THE HOLDER SHALL DIE OR BECOME INCAPACITATED DURING THE
THREE-MONTH PERIOD (OR SUCH LONGER PERIOD AS THE COMMITTEE MAY APPROVE)
REFERRED TO IN THE PRECEDING CLAUSE (III), THE OPTION SHALL TERMINATE THREE
YEARS AFTER THE DATE ON WHICH HE CEASED TO SERVE. A LEAVE OF ABSENCE FOR
MILITARY OR GOVERNMENTAL SERVICE OR OTHER PURPOSES SHALL NOT, IF APPROVED BY
THE COMMITTEE (WHICH APPROVAL MAY BE GIVEN BEFORE OR AFTER THE LEAVE OF ABSENCE
COMMENCES), BE DEEMED A CESSATION OF SERVICE WITHIN THE MEANING OF THIS
PARAGRAPH (D). NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS PARAGRAPH (D)
OR ANY OTHER PROVISION OF THIS PLAN, NO OPTION SHALL BE EXERCISABLE AFTER
EXPIRATION OF A PERIOD OF TEN YEARS AND ONE MONTH FROM THE DATE THE OPTION IS
GRANTED. WHERE A NON-STATUTORY STOCK OPTION IS GRANTED FOR A TERM OF LESS THAN
TEN YEARS AND ONE MONTH, THE COMMITTEE MAY, AT ANY TIME PRIOR TO THE EXPIRATION
OF THE OPTION, EXTEND ITS TERM FOR A PERIOD ENDING NOT LATER THAN TEN YEARS AND
ONE MONTH FROM THE DATE THE OPTION WAS GRANTED. SUCH AN EXTENSION SHALL NOT BE
DEEMED THE GRANT OF A NEW OPTION UNDER THIS PLAN.
(E) NO OPTION NOR ANY RIGHT THEREUNDER MAY BE ASSIGNED OR TRANSFERRED
EXCEPT BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION, UNLESS OTHERWISE
PROVIDED IN THE OPTION.
(F) AN OPTION MAY, BUT NEED NOT, BE AN INCENTIVE STOCK OPTION. ALL SHARES
OF COMMON STOCK THAT MAY BE MADE SUBJECT TO STOCK INCENTIVES UNDER THIS PLAN
MAY BE MADE SUBJECT TO INCENTIVE STOCK OPTIONS; PROVIDED THAT (I) NO INCENTIVE
STOCK OPTION MAY BE GRANTED MORE THAN TEN YEARS AFTER THE EFFECTIVE DATE OF
THIS PLAN, AS PROVIDED IN SECTION 9, (II) THE PURCHASE PRICE PER SHARE OF
COMMON STOCK SUBJECT TO AN INCENTIVE STOCK OPTION SHALL BE NOT LESS THAN 100%
OF THE FAIR MARKET VALUE OF A SHARE OF COMMON STOCK ON THE DATE SUCH INCENTIVE
STOCK OPTION IS GRANTED, AND (III) THE AGGREGATE FAIR MARKET VALUE (DETERMINED
AS OF THE TIME AN INCENTIVE STOCK OPTION IS GRANTED) OF THE SHARES SUBJECT TO
EACH INSTALLMENT BECOMING EXERCISABLE FOR THE FIRST TIME IN ANY CALENDAR YEAR
UNDER INCENTIVE STOCK OPTIONS GRANTED, ON OR AFTER JANUARY 1, 1987 (UNDER ALL
PLANS, INCLUDING THIS PLAN, OF HIS EMPLOYER CORPORATION AND ITS PARENT AND
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SUBSIDIARY CORPORATIONS), TO THE KEY EMPLOYEE TO WHOM SUCH INCENTIVE STOCK
OPTION IS GRANTED, SHALL NOT EXCEED $100,000.
(G) THE MATERIAL TERMS OF EACH OPTION SHALL BE DETERMINED BY THE
COMMITTEE. EACH OPTION SHALL BE EVIDENCED BY A WRITTEN INSTRUMENT CONSISTENT
WITH THIS PLAN. AN OPTION MAY INCLUDE RESTRICTIONS AND LIMITATIONS IN ADDITION
TO THOSE PROVIDED FOR IN THIS PLAN.
(H) OPTIONS SHALL BE GRANTED FOR SUCH LAWFUL CONSIDERATION AS MAY BE
PROVIDED FOR IN THE OPTION.
7. COMBINATION OF STOCK AWARDS AND OPTIONS: STOCK INCENTIVES AUTHORIZED
BY PARAGRAPH (C)(III) OF SECTION 3 IN THE FORM OF COMBINATIONS OF STOCK AWARDS
AND OPTIONS SHALL BE SUBJECT TO THE FOLLOWING PROVISIONS:
(A) A STOCK INCENTIVE MAY BE A COMBINATION OF ANY FORM OF STOCK AWARD AND
ANY FORM OF OPTION, PROVIDED, HOWEVER, THAT THE TERMS AND CONDITIONS OF SUCH
STOCK INCENTIVE PERTAINING TO A STOCK AWARD ARE CONSISTENT WITH SECTION 5 AND
THE TERMS AND CONDITIONS OF SUCH STOCK INCENTIVE PERTAINING TO AN OPTION ARE
CONSISTENT WITH SECTION 6.
(B) SUCH COMBINATION STOCK INCENTIVE SHALL BE SUBJECT TO SUCH OTHER TERMS
AND CONDITIONS AS MAY BE SPECIFIED THEREIN INCLUDING, WITHOUT LIMITATION, A
PROVISION TERMINATING IN WHOLE OR IN PART A PORTION THEREOF UPON THE EXERCISE
IN WHOLE OR IN PART OF ANOTHER PORTION THEREOF.
(C) THE MATERIAL TERMS OF EACH COMBINATION STOCK INCENTIVE SHALL BE
DETERMINED BY THE COMMITTEE. EACH COMBINATION STOCK INCENTIVE SHALL BE
EVIDENCED BY A WRITTEN INSTRUMENT CONSISTENT WITH THIS PLAN.
8. ADJUSTMENT PROVISIONS:
(A) IN THE EVENT THAT ANY RECLASSIFICATION, SPLIT-UP OR CONSOLIDATION OF
THE COMMON STOCK SHALL BE EFFECTED, OR THE OUTSTANDING SHARES OF COMMON STOCK
ARE, IN CONNECTION WITH A MERGER OR CONSOLIDATION OF THE COMPANY OR A SALE BY
THE COMPANY OF ALL OR A PART OF ITS ASSETS, EXCHANGED FOR A DIFFERENT NUMBER OR
CLASS OF SHARES OF STOCK OR OTHER SECURITIES OR PROPERTY OF THE COMPANY OR FOR
SHARES OF THE STOCK OR OTHER SECURITIES OR PROPERTY OF ANY OTHER CORPORATION OR
PERSON, OR A RECORD DATE FOR DETERMINATION OF HOLDERS OF COMMON STOCK ENTITLED
TO RECEIVE A DIVIDEND PAYABLE IN COMMON STOCK SHALL OCCUR, (I) THE NUMBER AND
CLASS OF SHARES OR OTHER SECURITIES OR PROPERTY THAT MAY BE ISSUED PURSUANT TO
STOCK INCENTIVES THEREAFTER GRANTED, (II) THE NUMBER AND CLASS OF SHARES OR
OTHER SECURITIES OR PROPERTY THAT HAVE NOT BEEN ISSUED UNDER OUTSTANDING STOCK
INCENTIVES, (III) THE PURCHASE PRICE TO BE PAID PER SHARE OR OTHER UNIT UNDER
OUTSTANDING STOCK INCENTIVES, AND (IV) THE PRICE TO BE PAID PER SHARE OR OTHER
UNIT BY THE COMPANY OR A SUBSIDIARY FOR SHARES OR OTHER SECURITIES OR PROPERTY
ISSUED PURSUANT TO STOCK INCENTIVES THAT ARE SUBJECT TO A RIGHT OF THE COMPANY
OR A SUBSIDIARY TO RE-ACQUIRE SUCH SHARES OR
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9
OTHER SECURITIES OR PROPERTY, SHALL IN EACH CASE BE EQUITABLY ADJUSTED
AS DETERMINED BY THE COMMITTEE.
(B) IN THE EVENT THAT THERE SHALL OCCUR ANY SPIN-OFF OR OTHER
DISTRIBUTION OF ASSETS OF THE COMPANY TO ITS SHAREHOLDERS (INCLUDING WITHOUT
LIMITATION AN EXTRAORDINARY DIVIDEND), (I) THE NUMBER AND CLASS OF SHARES OR
OTHER SECURITIES OR PROPERTY THAT MAY BE ISSUED PURSUANT TO STOCK INCENTIVES
THEREAFTER GRANTED, (II) THE NUMBER AND CLASS OF SHARES OR OTHER SECURITIES OR
PROPERTY THAT HAVE NOT BEEN ISSUED UNDER OUTSTANDING STOCK INCENTIVES, (III)
THE PURCHASE PRICE TO BE PAID PER SHARE OR OTHER UNIT UNDER OUTSTANDING STOCK
INCENTIVES, AND (IV) THE PRICE TO BE PAID PER SHARE OR OTHER UNIT BY THE
COMPANY OR A SUBSIDIARY FOR SHARES OR OTHER SECURITIES OR PROPERTY ISSUED
PURSUANT TO STOCK INCENTIVES THAT ARE SUBJECT TO A RIGHT OF THE COMPANY OR A
SUBSIDIARY TO RE-ACQUIRE SUCH SHARES OR OTHER SECURITIES OR PROPERTY, SHALL IN
EACH CASE BE EQUITABLY ADJUSTED AS DETERMINED BY THE COMMITTEE.
(C) IN THE EVENT OF A MERGER OR CONSOLIDATION OF THE COMPANY IN WHICH THE
COMMON STOCK IS CONVERTED INTO THE RIGHT TO RECEIVE A SPECIFIED AMOUNT OF CASH
PER SHARE (THE "MERGER PRICE"), THEN EACH OPTION OUTSTANDING IMMEDIATELY PRIOR
TO THE EFFECTIVE TIME OF SUCH MERGER OR CONSOLIDATION (THE "EFFECTIVE TIME")
SHALL BE TREATED AS FOLLOWS: (I) EACH SUCH OPTION HAVING A PER SHARE PURCHASE
PRICE EQUAL TO OR GREATER THAN THE MERGER PRICE SHALL TERMINATE AT THE
EFFECTIVE TIME AND BE OF NO FURTHER FORCE AND EFFECT, WITHOUT THE MAKING OF ANY
PAYMENT TO THE HOLDER OF SUCH OPTION; AND (II) EACH SUCH OPTION HAVING A PER
SHARE PURCHASE PRICE LESS THAN THE MERGER PRICE SHALL TERMINATE AT THE
EFFECTIVE TIME AND BE OF NO FURTHER FORCE AND EFFECT, AND THE HOLDER OF SUCH
OPTION SHALL BE PAID IN CASH, AS PROMPTLY AS PRACTICABLE FOLLOWING THE
EFFECTIVE TIME, AN AMOUNT EQUAL TO THE PRODUCT OF (A) THE EXCESS OF THE MERGER
PRICE OVER THE PER SHARE PURCHASE PRICE OF SUCH OPTION TIMES (B) THE NUMBER OF
SHARES COVERED BY SUCH OPTION IMMEDIATELY PRIOR TO THE EFFECTIVE TIME.
9. TERM:
THIS PLAN WAS DEEMED ADOPTED AND BECAME EFFECTIVE ON THE DATE IT WAS
APPROVED BY THE SHAREHOLDERS OF GRACE-NEW YORK. THIS PLAN WAS DEEMED ADOPTED
AS TO THE COMPANY ON THE DATE OF THE ADOPTION AND ASSUMPTION THEREOF BY THE
BOARD OF DIRECTORS AND BECAME EFFECTIVE AS TO THE COMPANY ON SEPTEMBER 28, 1996
NO STOCK INCENTIVES SHALL BE GRANTED UNDER THIS PLAN AFTER THE EFFECTIVE DATE
OF THE ADOPTION AND ASSUMPTION THEREOF BY THE COMPANY.
10. ADMINISTRATION:
(A) THIS PLAN SHALL BE ADMINISTERED BY THE COMMITTEE. NO DIRECTOR SHALL
BE DESIGNATED AS OR CONTINUE TO BE A MEMBER OF THE COMMITTEE UNLESS HE SHALL AT
THE TIME OF DESIGNATION AND AT ALL TIMES DURING SERVICE AS A MEMBER OF THE
COMMITTEE BE A "DISINTERESTED PERSON" WITHIN THE MEANING OF RULE 16B-3. THE
COMMITTEE SHALL HAVE FULL
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AUTHORITY TO ACT IN THE MATTER OF SELECTION OF KEY PERSONS AND IN
GRANTING STOCK INCENTIVES TO THEM AND SUCH OTHER AUTHORITY AS IS GRANTED TO THE
COMMITTEE BY THIS PLAN.
(B) THE COMMITTEE MAY ESTABLISH SUCH RULES AND REGULATIONS, NOT
INCONSISTENT WITH THE PROVISIONS OF THIS PLAN, AS IT DEEMS NECESSARY TO
DETERMINE ELIGIBILITY TO BE GRANTED STOCK INCENTIVES UNDER THIS PLAN AND FOR
THE PROPER ADMINISTRATION OF THIS PLAN, AND MAY AMEND OR REVOKE ANY RULE OR
REGULATION SO ESTABLISHED. THE COMMITTEE MAY MAKE SUCH DETERMINATIONS AND
INTERPRETATIONS UNDER OR IN CONNECTION WITH THIS PLAN AS IT DEEMS NECESSARY OR
ADVISABLE. ALL SUCH RULES, REGULATIONS, DETERMINATIONS AND INTERPRETATIONS
SHALL BE BINDING AND CONCLUSIVE UPON THE COMPANY, THE SUBSIDIARIES, ITS
SHAREHOLDERS AND ITS DIRECTORS, OFFICERS, CONSULTANTS AND EMPLOYEES, AND UPON
THEIR RESPECTIVE LEGAL REPRESENTATIVES, BENEFICIARIES, SUCCESSORS AND ASSIGNS,
AND UPON ALL OTHER PERSONS CLAIMING UNDER OR THROUGH ANY OF THEM.
(C) MEMBERS OF THE BOARD OF DIRECTORS AND MEMBERS OF THE COMMITTEE ACTING
UNDER THIS PLAN SHALL BE FULLY PROTECTED IN RELYING IN GOOD FAITH UPON THE
ADVICE OF COUNSEL AND SHALL INCUR NO LIABILITY IN THE PERFORMANCE OF THEIR
DUTIES EXCEPT AS OTHERWISE PROVIDED BY APPLICABLE LAW.
11. GENERAL PROVISIONS:
(A) NOTHING IN THIS PLAN OR IN ANY INSTRUMENT EXECUTED PURSUANT HERETO
SHALL CONFER UPON ANY PERSON ANY RIGHT TO CONTINUE IN THE SERVICE OF THE
COMPANY OR A SUBSIDIARY, OR SHALL AFFECT THE RIGHT OF THE COMPANY OR OF A
SUBSIDIARY TO TERMINATE THE SERVICE OF ANY PERSON WITH OR WITHOUT CAUSE.
(B) NO SHARES OF COMMON STOCK SHALL BE ISSUED PURSUANT TO A STOCK
INCENTIVE UNLESS AND UNTIL ALL LEGAL REQUIREMENTS APPLICABLE TO THE ISSUANCE OF
SUCH SHARES HAVE, IN THE OPINION OF COUNSEL TO THE COMPANY, BEEN COMPLIED WITH.
IN CONNECTION WITH ANY SUCH ISSUANCE THE PERSON ACQUIRING THE SHARES SHALL, IF
REQUESTED BY THE COMPANY, GIVE ASSURANCES, SATISFACTORY TO COUNSEL TO THE
COMPANY, IN RESPECT OF SUCH MATTERS AS THE COMPANY OR A SUBSIDIARY MAY DEEM
DESIRABLE TO ASSURE COMPLIANCE WITH ALL APPLICABLE LEGAL REQUIREMENTS.
(C) NO PERSON (INDIVIDUALLY OR AS A MEMBER OF A GROUP), AND NO BENEFICIARY
OR OTHER PERSON CLAIMING UNDER OR THROUGH HIM, SHALL HAVE ANY RIGHT, TITLE OR
INTEREST IN OR TO ANY SHARES OF COMMON STOCK ALLOCATED OR RESERVED FOR THE
PURPOSES OF THIS PLAN OR SUBJECT TO ANY STOCK INCENTIVE EXCEPT AS TO SUCH
SHARES OF COMMON STOCK, IF ANY, AS SHALL HAVE BEEN ISSUED TO HIM.
(D) IN THE CASE OF A GRANT OF A STOCK INCENTIVE TO A KEY PERSON OF A
SUBSIDIARY, SUCH GRANT MAY PROVIDE FOR THE ISSUANCE OF THE SHARES COVERED BY
THE STOCK INCENTIVE TO THE SUBSIDIARY, FOR SUCH CONSIDERATION AS MAY BE
PROVIDED, UPON THE CONDITION OR UNDERSTANDING THAT THE SUBSIDIARY WILL TRANSFER
THE SHARES TO THE KEY PERSON IN ACCORDANCE WITH THE TERMS OF THE STOCK
INCENTIVE.
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11
(E) IN THE EVENT THE LAWS OF A COUNTRY IN WHICH THE COMPANY OR A
SUBSIDIARY HAS EMPLOYEES PRESCRIBE CERTAIN REQUIREMENTS FOR STOCK INCENTIVES TO
QUALIFY FOR ADVANTAGEOUS TAX TREATMENT UNDER THE LAWS OF THAT COUNTRY
(INCLUDING, WITHOUT LIMITATION, LAWS ESTABLISHING OPTIONS ANALOGOUS TO
INCENTIVE STOCK OPTIONS), THE COMMITTEE, MAY, FOR THE BENEFIT OF SUCH
EMPLOYEES, AMEND, IN WHOLE OR IN PART, THIS PLAN AND MAY INCLUDE IN SUCH
AMENDMENT ADDITIONAL PROVISIONS FOR THE PURPOSES OF QUALIFYING THE AMENDED PLAN
AND STOCK INCENTIVES GRANTED THEREUNDER UNDER SUCH LAWS; PROVIDED, HOWEVER,
THAT (I) THE TERMS AND CONDITIONS OF A STOCK INCENTIVE GRANTED UNDER SUCH
AMENDED PLAN MAY NOT BE MORE FAVORABLE TO THE RECIPIENT THAN WOULD BE PERMITTED
IF SUCH STOCK INCENTIVE HAD BEEN GRANTED UNDER THIS PLAN AS HEREIN SET FORTH,
(II) ALL SHARES ALLOCATED TO OR UTILIZED FOR THE PURPOSES OF SUCH AMENDED PLAN
SHALL BE SUBJECT TO THE LIMITATIONS OF SECTION 4, AND (III) THE PROVISIONS OF
THE AMENDED PLAN MAY RESTRICT BUT MAY NOT EXTEND OR AMPLIFY THE PROVISIONS OF
SECTIONS 9 AND 13.
(F) THE COMPANY OR A SUBSIDIARY MAY MAKE SUCH PROVISIONS AS IT MAY DEEM
APPROPRIATE FOR THE WITHHOLDING OF ANY TAXES THAT THE COMPANY OR A SUBSIDIARY
DETERMINES IT IS REQUIRED TO WITHHOLD IN CONNECTION WITH ANY STOCK INCENTIVE.
(G) NOTHING IN THIS PLAN IS INTENDED TO BE A SUBSTITUTE FOR, OR SHALL
PRECLUDE OR LIMIT THE ESTABLISHMENT OR CONTINUATION OF, ANY OTHER PLAN,
PRACTICE OR ARRANGEMENT FOR THE PAYMENT OF COMPENSATION OR BENEFITS TO
DIRECTORS, OFFICERS, EMPLOYEES OR CONSULTANTS GENERALLY, OR TO ANY CLASS OR
GROUP OF SUCH PERSONS, THAT THE COMPANY OR ANY SUBSIDIARY NOW HAS OR MAY
HEREAFTER PUT INTO EFFECT, INCLUDING, WITHOUT LIMITATION, ANY INCENTIVE
COMPENSATION, RETIREMENT, PENSION, GROUP INSURANCE, STOCK PURCHASE, STOCK BONUS
OR STOCK OPTION PLAN.
12. ACQUISITIONS: IF THE COMPANY OR ANY SUBSIDIARY SHOULD MERGE OR
CONSOLIDATE WITH, OR PURCHASE STOCK OR ASSETS OR OTHERWISE ACQUIRE THE WHOLE OR
PART OF THE BUSINESS OF, ANOTHER ENTITY, THE COMPANY, UPON THE APPROVAL OF THE
COMMITTEE, (A) MAY ASSUME, IN WHOLE OR IN PART AND WITH OR WITHOUT
MODIFICATIONS OR CONDITIONS, ANY STOCK INCENTIVES GRANTED BY THE ACQUIRED
ENTITY TO ITS DIRECTORS, OFFICERS, EMPLOYEES OR CONSULTANTS IN THEIR CAPACITIES
AS SUCH, OR (B) MAY GRANT NEW STOCK INCENTIVES IN SUBSTITUTION THEREFOR. SUCH
ASSUMED OR SUBSTITUTE STOCK INCENTIVES MAY CONTAIN TERMS AND CONDITIONS
INCONSISTENT WITH THE PROVISIONS OF THIS PLAN (INCLUDING THE LIMITATIONS SET
FORTH IN PARAGRAPH (D) OF SECTION 4), INCLUDING ADDITIONAL BENEFITS FOR THE
RECIPIENT, PROVIDED THAT, IF SUCH ASSUMED OR SUBSTITUTE STOCK INCENTIVES ARE
INCENTIVE STOCK OPTIONS, SUCH TERMS AND CONDITIONS ARE PERMITTED UNDER THE PLAN
OF THE ACQUIRED ENTITY. FOR THE PURPOSES OF ANY APPLICABLE PLAN PROVISION
INVOLVING TIME OR A DATE, A SUBSTITUTE STOCK INCENTIVE SHALL BE DEEMED GRANTED
AS OF THE DATE OF GRANT OF THE ORIGINAL STOCK INCENTIVE BY THE ACQUIRED
ENTITY.
- 10 -
12
13. AMENDMENTS AND TERMINATION:
(A) THIS PLAN MAY BE AMENDED OR TERMINATED BY THE BOARD OF DIRECTORS
UPON THE RECOMMENDATION OF THE COMMITTEE; PROVIDED THAT, WITHOUT THE APPROVAL
OF THE SHAREHOLDERS OF THE COMPANY, NO AMENDMENT SHALL BE MADE WHICH (I)
CAUSES THIS PLAN TO CEASE TO COMPLY WITH RULE 16B-3 OR APPLICABLE LAW, (II)
PERMITS ANY PERSON WHO IS NOT A KEY PERSON TO BE GRANTED A STOCK INCENTIVE
(EXCEPT AS OTHERWISE PROVIDED IN SECTION 12), (III) AMENDS THE PROVISIONS OF
PARAGRAPH (D) OF SECTION 4, PARAGRAPH (A) OF SECTION 5 OR PARAGRAPH (A) OR
PARAGRAPH (F) OF SECTION 6 TO PERMIT SHARES TO BE VALUED AT, OR TO HAVE A
PURCHASE PRICE OF, RESPECTIVELY, LESS THAN THE PERCENTAGE OF FAIR MARKET
VALUE SPECIFIED THEREIN, (IV) AMENDS SECTION 9 TO EXTEND THE DATE SET FORTH
THEREIN, OR (V) AMENDS THIS SECTION 13.
(B) NO AMENDMENT OR TERMINATION OF THIS PLAN SHALL ADVERSELY AFFECT ANY
STOCK INCENTIVE THERETOFORE GRANTED, AND NO AMENDMENT OF ANY STOCK INCENTIVE
GRANTED PURSUANT TO THIS PLAN SHALL ADVERSELY AFFECT SUCH STOCK INCENTIVE,
WITHOUT THE CONSENT OF THE HOLDER THEREOF.
- 11 -
1
EXHIBIT 10.7
August 9, 1996
Mr. Albert J. Costello
W. R. Grace & Co.
One Town Center Road
Boca Raton, Florida 33486-1010
Dear Al:
This letter specifies certain amendments to your employment agreement with
W. R. Grace & Co., dated May 1, 1995 (the "Employment Agreement"), including
those previously authorized by the Board of Directors on the recommendation of
its Compensation, Employee Benefits and Stock Incentive Committee.
1. As of the date of this letter, Section 6(e)(i) of the Employment Agreement
is amended to read as follows:
"(e) Certain Definitions. (i) "Change in Control of the Company" means
and shall be deemed to have occurred if (i) the Company determines that any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of stock
of the Company, has become the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of 20% or more of the
outstanding common stock of the Company; (ii) individuals who are Continuing
Directors cease to constitute a majority of any class of directors of the
Board; or (iii) there occurs a reorganization, merger, consolidation or other
corporate transaction involving the Company (a "Transaction"), in each case,
with respect to which the stockholders of the Company immediately prior to such
Transaction do not, immediately after the Transaction, own more than 60 percent
of the combined voting power of the corporation resulting from such
Transaction; or (iv) the shareholders of the Company approve a complete
liquidation or dissolution of the Company. Notwithstanding any other provision
of this Agreement, the "NMC Disposition" (as
2
defined below) shall not be deemed a "Change in Control of the Company" for
purposes of this Agreement.
"The "NMC Disposition" means a transaction or series of transactions
whereby control of the business presently conducted by the Company's National
Medical Care, Inc. subsidiary is separated from control of substantially all of
the other businesses presently conducted by the Company and its affiliates (the
"Non-NMC Businesses"), regardless of the structure of such transaction, and
which may include (among other actions by the Company) a distribution by the
Company, with respect to each share of its common stock, of one share of a
newly formed corporation that directly or indirectly owns or controls the
Non-NMC Businesses."
2. As of the effective date (the "Effective Date") of the NMC Disposition, the
Employment Agreement will be assigned to, and assumed by, Grace Holding, Inc.
(to be renamed W. R. Grace & Co.) ("New Grace"), the Delaware corporation that
will constitute the parent company of the Non-NMC Businesses.
3. As of the Effective Date, all references to "Company" in the Employment
Agreement shall refer to New Grace and any successor thereto.
4. Except as expressly set forth above, the Employment Agreement shall remain
in full force and effect.
Please confirm your agreement with the foregoing by signing the
accompanying copy of this letter and returning it to Bob Lamm.
Very truly yours,
W. R. GRACE & CO.
By_____________________________
Chairman of the Compensation,
Employee Benefits and Stock
Incentive Committee
Agreed to:
______________________
Albert J. Costello
- 2 -
1
EXHIBIT 10.8
W. R. GRACE & CO.
NON-STATUTORY STOCK OPTION
Under the W. R. Grace & Co. 1994 Stock Incentive Plan (the "Plan")
Granted To: ALBERT J. COSTELLO
Date of Grant: May 1, 1995
Expiration Date: April 30, 2005
In accordance with the Plan (a copy of which is attached hereto as
Annex A), you are hereby granted an Option to purchase 300,000 shares of Common
Stock upon the following terms and conditions:
(1) The purchase price shall be $52.3750 per share.
(2) Subject to the other provisions hereof, this Option shall become
exercisable as follows:
100,000 shares on May 2, 1996
100,000 shares on May 2, 1997
100,000 shares on April 30, 1998,
except that it shall become exercisable in full upon the occurrence of any of
the events specified in section 3(g)(iii) of the Employment Agreement dated May
1, 1995 between you and the Company, as such Agreement may be amended from time
to time.
Once exercisable, an installment may be exercised (together with any other
installments that have become exercisable) at any time in whole or in part
until the expiration or termination of this Option.
(3) This Option shall not be treated as an Incentive Stock Option (as
such term is defined in the Plan.)
(4) This Option may be exercised only by serving written notice on the
Treasurer of the Company. The purchase price shall be paid in cash or, with
the permission of the Company, in shares of Common Stock or in a combination of
cash and such shares (see section 6(a) of the Plan). Any shares of Common
Stock applied toward the purchase price payable upon exercise of this Option
must have been owned by you for at least six months prior to such exercise, and
if such shares were granted to you by the Company subject to restrictions, such
restrictions must have lapsed at least six months prior to such exercise.
(5) This Option and any right thereunder is nonassignable and
nontransferable except by will or the laws of descent and distribution, and is
exercisable during your lifetime only by you. If you cease to serve the
Company or a Subsidiary, this Option shall terminate as provided in section
6(d) of the Plan, subject, however, to the following:
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.
2
- 2 -
(a) In the event you should become incapacitated or die and
neither you nor your legal representative(s) or other person(s)
entitled to exercise this Option exercise this Option to the
fullest extent possible on or before its termination, the Company
shall pay you, your legal representative(s) or such other
person(s), as the case may be, an amount of money equal to the
Fair Market Value of any shares remaining subject to this Option
on the last date it could have been exercised, less the aggregate
purchase price of such shares.
(b) Notwithstanding any provision of the Plan, in the event
(i) you voluntarily retire under a retirement plan of the Company
or a Subsidiary prior to the date on which the first installment
of this Option becomes exercisable and (ii) you do not continue
to serve the Company or a Subsidiary until such date, this Option
shall terminate as of the date you cease to serve.
(c) In the event you cease to serve as an employee but
immediately thereafter commence to serve as a consultant and
subsequently you cease to serve as a consultant for reasons other
than those described in clause (i) of section 6(d) of the Plan,
this Option shall terminate three years after the cessation of
your service as a consultant, but subject to the limitation set
forth in the fifth sentence of such section 6(d).
(6) If you are or become an employee of, or a consultant to, a Subsidiary,
the Company's obligations hereunder shall be contingent on the approval of the
Plan and this Option by the Subsidiary and the Subsidiary's agreement that (a)
the Company may administer this Plan on its behalf and, (b) upon the exercise
of this Option, the Subsidiary will purchase from the Company the shares
subject to the exercise at their Fair Market Value on the date of exercise,
such shares to be then transferred by the Subsidiary to the holder of this
Option upon payment by the holder of the purchase price to the Subsidiary.
Where appropriate, such approval and agreement of the Subsidiary shall be
indicated by its signature below. The provisions of this paragraph and the
obligations of the Subsidiary so undertaken may be waived, in whole or in part,
from time to time by the Company.
3
- 3 -
(7) The Plan is hereby incorporated by reference. Terms defined in the
Plan shall have the same meaning herein. This Option is granted subject to the
Plan and shall be construed in conformity with the Plan.
W. R. GRACE & CO.
/s/ Donald H. Kohnken
Executive Vice President
Approved and Agreed to:*
_______________________________
(Name of Subsidiary)
By_____________________________
(Authorized Officer)
RECEIPT ACKNOWLEDGED:
_____________________
_________________
* This will be completed only if you are or become an employee of, or a
consultant to, a Subsidiary.
1
EXHIBIT 10.9
Albert J. Costello
Chairman, President and
Chief Executive Officer
W. R. Grace & Co.
One Town Center Road
Boca Raton, FL 33486-1010
September 23, 1996
Mr. Donald H. Kohnken
W. R. Grace & Co.
One Town Center Road
Boca Raton, FL 33486
Dear Don:
This letter outlines the arrangements relating to your resignation and
retirement as Executive Vice President of W. R. Grace & Co. ("Company") and
your resignation from all positions you hold with the subsidiaries and
affiliates of the Company.
1. You will resign your position as Executive Vice President of the Company
on September 30, 1996, and retire effective that date.
2. Following your retirement on September 30, 1996, you will be entitled to
the compensation and benefits set forth below in accordance with and
subject to the following terms:
A. You will receive severance pay, equal to $493,553 (a total of 65.155
weeks' severance pay) paid in the form of a lump sum in October 1996.
B. Incentive Compensation
You will be considered for a prorated annual incentive compensation award
for 1996 based on the financial performance of the Company and your
individual performance. Your 1996 award, which is subject to Board
approval, will be paid to you in March 1997.
C. Executive Salary Protection Plan and Split-Dollar Life Insurance Plan
Your death benefit coverage under the Executive Salary Protection Plan
shall cease on October 31, 1996, while your disability coverage under that
Plan will cease on September 30, 1996, in accordance with the terms of
that Plan. Your participation in the Split-Dollar Life Insurance Plan
will cease on November 30, 1996, although you may purchase the policy by
reimbursing the Company for the premiums paid by the Company for that
policy on your behalf through the date of your retirement. Estimated
premiums paid by the Company through November 30, 1996 are expected to
total approximately $323,000 for five policy years with estimated cash
value of approximately $270,000. Your death benefit coverage is
$1,000,000 under the split dollar policy and $560,000 under the
Company-paid group basic life plan.
D. Long-Term Incentive Plan
Your participation in the Company's Long-Term Incentive Plan for the
1994-96, 1995-97 and 1996 -98 Performance Periods will vest and be paid to
you at the same time as other
2
- 2 -
participants. Your awards for 1994-96, 1995-97 and 1996-98 will be
prorated as of your September 30, 1996 retirement date.
E. Stock Options
Your November 5, 1987, October 4, 1990, December 5, 1991, December 3, 1992,
November 4, 1993, April 7, 1994 and March 2, 1995 stock option grants are
fully vested. Subject to SEC requirements and restrictions (as to which
you should consult Bob Lamm), you will be free to exercise your stock
options and to sell the shares acquired on exercise following your
resignation as an officer of the Company on September 30, 1996. After your
retirement, you will have a three-year grace period during which you may
exercise your options, except for the November 5, 1987 grant which will
expire on its existing expiration date of November 4, 1997.
F. Stock Swap Arrangement
The 12,676 shares of restricted stock granted to you under the August 1,
1991 "Stock Swap Arrangement" are scheduled to have the restrictions lapse
in five equal installments during the five-year period beginning January
31, 1997 and ending with the restrictions lapsing on the last installment
on January 31, 2001. The 49,000 stock options you received under that
arrangement are scheduled to vest in five equal annual installments
beginning January 31, 1997 through January 31, 2001. Notwithstanding this
schedule, as a result of your retirement on September 30, 1996, all such
stock options will vest, to the extent not already vested, on March 31,
1999 (30 months following your retirement) and you will have until
September 30, 1999 to exercise such options during the six month remainder
of the three-year grace period following your retirement. The Compensation
Committee of the Board at its May 1996 meeting consented to your retirement
so that the restrictions on the restricted shares will be lifted upon your
retirement, and so that the 30-month waiting period will be eliminated with
respect to the stock options.
G. Savings and Investment Plan
Following your retirement, you may elect to take a lump sum distribution
under the Savings and Investment Plan, defer your distribution until age 70
1/2 or elect to begin receiving installment payments over a period of up to
10 years, in accordance with the terms of the Plan. Your S&I balance as of
September 17, 1996 was $981,675. In March 1997 you will be eligible to
receive your Savings & Investment Replacement payment for 1996 in an amount
estimated to be $16,183.
H. Deferred Compensation
Your deferred compensation balances, estimated at $1,062,763 as of August
31, 1996, will be paid to you in accordance with the distribution elections
you have previously made.
I. Post-Retirement Life and Medical Coverage
You may participate in the Company's post-retirement life (with reinstated
coverage of $5,000 if you do not purchase your split dollar policy) and
medical plans in accordance with their terms following your retirement on
September 30, 1996. Of course, should the Company amend or terminate these
plans for all other similarly situated employees, such amendment or
termination would apply to you.
3
- 3 -
J. Pensions
Under the Company's Retirement Plan for Salaried Employees and the
Supplemental Retirement Plan, assuming continuous service through September
30, 1996, your estimated annual benefit, on a straight life basis, would be
$267,694 beginning October 1, 1996. You may, of course, elect any other
payment option that is available under the Plans. Of course, should the
Company amend or terminate these plans for all other similarly situated
retirees, such amendment or termination would apply to you.
K. Perquisites
You may continue to use your Company-provided leased car and Company
provided financial counseling through September 30, 1996. The Company will
arrange for you to purchase your leased car on September 30, 1996 at the
then "fair market value."
L. Unused Vacation Payment
You are entitled to paid vacation aggregating not less than five weeks
during 1996. You will be entitled to payment for any unused vacation time
in accordance with Company policy at the time you retire on September 30,
1996.
This letter sets forth the entire agreement and understanding between you
and the Company concerning the compensation and benefit arrangements covered by
this letter, and it supersedes all prior agreements and understandings, if any,
concerning such subject matter between you and the Company. No representation
or promise concerning such subject matter has been made by the Company that is
not set forth in this letter.
Also, this letter supersedes the letter that I previously sent to you
regarding the matters addressed herein, dated June 3, 1996, and the amendment
to that letter, dated June 14, 1996 (collectively, the "Prior Letters"), and
the Prior Letters shall be of no effect.
Please confirm your agreement with the foregoing by signing a copy of this
letter where indicated below and returning it to me.
Sincerely,
Accepted and agreed to
this ___ day of September 1996
_________________________
Donald H. Kohnken
1
EXHIBIT 99.1
PRO FORMA FINANCIAL INFORMATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
The unaudited pro forma condensed consolidated balance sheet of New Grace
has been derived from the historical consolidated balance sheet of Grace New
York, adjusted for the disposition of NMC and for certain costs and expenses to
be incurred in connection with the Reorganization. The pro forma condensed
consolidated balance sheet has been prepared on the assumption that the
Reorganization occurred on March 31, 1996.
The pro forma condensed consolidated balance sheet should be read in
conjunction with the Consolidated Financial Statements and the First Quarter
Financial Statements. The pro forma condensed consolidated balance sheet is not
necessarily indicative of the financial position of New Grace that would
actually have resulted had the Reorganization occurred on March 31, 1996.
PRO FORMA ADJUSTMENTS
GRACE NEW YORK ----------------------- NEW GRACE
HISTORICAL DEBIT CREDIT PRO FORMA
-------------- -------- -------- ---------
(DOLLARS IN MILLIONS)
ASSETS
Current Assets
Cash and cash equivalents...................... $ 56.5 $2,247.8(a) $1,187.8(b)
60.0(a) $1,056.5
Notes and accounts receivable, net............. 666.8 666.8
Other current assets........................... 1,024.6 1,024.6
-------- --------
Total Current Assets...................... 1,747.9 2,747.9
Properties and equipment, net.................. 1,810.0 1,810.0
Net assets of discontinued operations -- health
care......................................... 1,540.5 366.3(b) 1,842.6(c) 64.2
Other assets................................... 1,387.1 1,387.1
-------- --------
Total Assets.............................. $6,485.5 $6,009.2
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt................................ $ 895.2 821.5(b) $ 73.7
Other current liabilities...................... 1,494.0 1,494.0
-------- --------
Total Current Liabilities................. 2,389.2 1,567.7
Long-term debt................................. 1,265.4 1,265.4
Other liabilities.............................. 807.6 807.6
Noncurrent liability for asbestos-related
litigation................................... 692.4 692.4
-------- --------
Total Liabilities......................... 5,154.6 4,333.1
-------- --------
Commitments and Contingencies
Shareholders' Equity
Preferred stocks............................... 7.4 7.4(e) --
Common stock................................... 98.5 97.5(d) 1.0
Paid in capital................................ 503.1 95.1(d) 598.2
Retained earnings.............................. 760.2 60.0(a) 2,247.8(a)
1,842.6(c) 7.4(e) 1,112.8
Cumulative translation adjustments............. (35.9) (35.9)
Treasury stock, at cost........................ (2.4) 2.4(d) --
-------- --------
Total Shareholders' Equity................ 1,330.9 1,676.1
-------- --------
Total Liabilities and Shareholders'
Equity.................................. $6,485.5 $6,009.2
======== ========
THE NOTES TO THIS UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
ARE AN INTEGRAL PART OF THE PRO FORMA FINANCIAL INFORMATION PRESENTED.
29
2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
The unaudited pro forma condensed consolidated statement of operations of
New Grace has been derived from the historical consolidated statement of
operations of Grace New York, adjusted to reflect the reduction in interest
expense expected to result from the Reorganization. The pro forma condensed
consolidated statement of operations has been prepared on the assumption that
the Reorganization occurred on January 1, 1995.
The pro forma condensed consolidated statement of operations should be read
in conjunction with the Consolidated Financial Statements and the First Quarter
Financial Statements. The pro forma condensed consolidated statement of
operations is not necessarily indicative of the results of operations of New
Grace that would actually have resulted had the Reorganization occurred on
January 1, 1995.
YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------
PRO FORMA
GRACE ADJUSTMENTS NEW
NEW YORK ---------------- GRACE
HISTORICAL DEBIT CREDIT PRO FORMA
--------- ----- ------ -----------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Sales and revenues..................................................... $3,665.5 $ 3,665.5
Other income........................................................... 41.9 41.9
------- -------
Total......................................................... 3,707.4 3,707.4
------- -------
Cost of goods sold and operating expenses.............................. 2,243.7 2,243.7
Selling, general and administrative expenses........................... 905.6 905.6
Depreciation and amortization.......................................... 186.3 186.3
Interest expense and related financing costs........................... 71.3 $0.7(f) 70.6
Research and development expenses...................................... 120.6 120.6
Corporate expenses previously allocated to health care operations...... 37.8 37.8
Restructuring costs and asset impairments.............................. 179.5 179.5
Provision relating to asbestos-related liabilities and insurance
coverage............................................................. 275.0 275.0
------- -------
Total......................................................... 4,019.8 4,019.1
------- -------
Loss from continuing operations before income taxes.................... (312.4) (311.7)
Benefit from income taxes.............................................. (115.8) 0.3(f) (115.5)
------- -------
Loss from continuing operations........................................ $ (196.6) $ (196.2)
======= =======
Loss per share:
Continuing operations................................................ $ (2.05) $ (2.05)
Fully diluted loss per share:
Continuing operations................................................ $ -- (1) $ --(1)
Weighted average shares of Common Stock outstanding (in thousands)..... 95,822 95,822
- ---------------
(1) Not presented as the effect is anti-dilutive.
THREE MONTHS ENDED MARCH 31, 1996
----------------------------------------------
PRO FORMA
GRACE ADJUSTMENTS NEW
NEW YORK ---------------- GRACE
HISTORICAL DEBIT CREDIT PRO FORMA
--------- ----- ------ ----------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE
AMOUNTS)
Sales and revenues..................................................... $ 886.0 $ 886.0
Other income........................................................... 3.8 3.8
------- --------
Total......................................................... 889.8 889.8
------- --------
Cost of goods sold and operating expenses.............................. 531.8 531.8
Selling, general and administrative expenses........................... 199.3 199.3
Depreciation and amortization.......................................... 45.5 45.5
Interest expense and related financing costs........................... 18.4 $5.6(f) 24.0
Research and development expenses...................................... 28.8 28.8
------- --------
Total......................................................... 823.8 829.4
------- --------
Income from continuing operations before income taxes.................. 66.0 60.4
Provision for income taxes............................................. 24.4 $2.2(f) 22.2
------- --------
Income from continuing operations...................................... $ 41.6 $ 38.2
======= ========
Earnings per share:
Continuing operations................................................ $ .42 $ .39
Fully diluted earnings per share:
Continuing operations................................................ $ .41 $ .38
Weighted average shares of Common Stock outstanding (in thousands)..... 97,888 97,888
THE NOTES TO THIS UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS ARE AN INTEGRAL PART OF THE PRO FORMA FINANCIAL INFORMATION
PRESENTED.
30
3
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AND
STATEMENT OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
(a) The Reorganization Agreement provides that, prior to the Reorganization, NMC
will borrow and/or will assume debt of Grace Chemicals in an aggregate
amount of approximately $2,263 (as adjusted pursuant to the Reorganization
Agreement), and will distribute the net cash proceeds to Grace Chemicals; it
is currently estimated that such aggregate amount will be approximately
$2,247.8. A portion of such net cash proceeds will be applied to further
reduce Grace Chemicals' debt, resulting in an aggregate reduction of
$1,187.8 in Grace Chemicals' debt (see note (b) below). In addition, Grace
will incur expenses totaling approximately $60.0 (net of applicable tax
benefit) in connection with the Reorganization. The remaining net cash
proceeds received from NMC (estimated at $1,000.0) are expected to be used
to purchase shares of New Grace Common Stock, which would result in a
decrease in current assets and a commensurate decrease in shareholders'
equity.
(b) As discussed in note (a) above, the assumption of Grace Chemicals' debt by
NMC and the application of a portion of the net cash proceeds distributed to
Grace Chemicals by NMC to the reduction of Grace Chemicals' debt is expected
to result in an aggregate reduction of $1,187.8 in Grace Chemicals' debt,
consisting of (i) $179.8 of borrowings under NMC receivables financing
arrangements; (ii) $186.5 of other NMC debt; and (iii) $821.5 of short-term
debt (consisting of $527.3 of commercial paper and bank borrowings and
$294.2 of other short-term borrowings).
(c) Reflects the disposition of NMC's net assets of $1,842.6. Subsequent to the
disposition of NMC, New Grace will retain as discontinued operations certain
health care assets, primarily a bioseparation sciences business, a health
care services company and other assets (including NMC's cash and marketable
securities). The resulting gain of $405.2 (reflecting net cash proceeds of
$2,247.8, as described in note (a) above, less the disposition of NMC's net
assets of $1,842.6) is not reflected in the pro forma condensed consolidated
statement of operations.
(d) As part of the Reorganization, Grace New York will distribute, on a
one-share-for-one-share basis, all of the issued and outstanding New Grace
Common Stock (which has a par value of $.01 per share) to the holders of
shares of Grace New York Common Stock (which has a par value of $1.00 per
share) at the Time of Distribution. The treasury stock held by Grace New
York at the Time of Distribution will not be transferred to New Grace and is
therefore eliminated in the pro forma adjustments. As a result of the
retirement of the treasury stock and the difference in the par values, (i)
the $2.4 of treasury stock will be eliminated, (ii) Common stock will
decrease by $97.5 and (iii) paid in capital will increase by $95.1.
(e) The currently issued and outstanding shares of Grace New York Preferred
Stock will remain issued and outstanding following the Reorganization and
the Distribution, and no New Grace preferred stock will be issued. The
resulting reduction in outstanding Preferred stock is presented as an
increase in retained earnings within the shareholders' equity section of the
pro forma balance sheet.
(f) Grace Chemicals has allocated interest expense to discontinued operations
(including NMC), based on the ratio of the net assets of the businesses
classified as discontinued operations as compared to Grace Chemicals' total
capital. Excluding amounts allocated to discontinued operations, interest
expense and related financing costs were $71.3 for the year ended December
31, 1995 and $18.4 for the three months ended March 31, 1996. For the year
ended December 31, 1995, the assumed reduction in debt as of January 1, 1995
would have the pro forma effect of reducing total interest expense and
related financing costs by $94.2 (of which $0.7 was attributable to
continuing operations and $93.5 was attributable to discontinued
operations). For the three months ended March 31, 1996, the assumed
reduction in debt as of January 1, 1995 would have the pro forma effect of
reducing total interest expense and related financing costs by $21.2
(increasing interest expense and related financing costs attributable to
continuing operations by $5.6 and reducing interest expense and related
financing costs attributable to discontinued operations by $26.8).
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4
The above adjustments to interest expense and related financing costs would
have the pro forma effect of increasing tax expense by $0.3 for the year
ended December 31, 1995 and reducing tax expense by $2.2 for the
three-month period ended March 31, 1996. The tax effects were calculated
using an effective tax rate of approximately 40%, which represents the U.S.
federal corporate tax rate of 35%, plus state and local income taxes, net
of U.S. federal income tax benefit.
------------------------
For accounting purposes, Grace Chemicals will receive the Distribution
Payment and will be deemed to receive a 44.8% common equity interest in FMC and
to immediately distribute such interest to the holders of Grace New York Common
Stock; however, the receipt and distribution of the interest in FMC Ordinary
Shares are not reflected in the pro forma condensed consolidated balance sheet
and statement of operations.
In March 1996, Grace Chemicals entered into a definitive agreement to sell
its Grace Dearborn water treatment and process chemicals business to Betz
Laboratories, Inc. for $632 million. The transaction was completed in June 1996.
Grace Dearborn's sales and revenues were $398.5 million for the year ended
December 31, 1995; its financial position and results of operations were not
significant to Grace Chemicals. Also, in May 1996 Grace Chemicals completed the
sale of the transgenic plant business of its Agracetus, Inc. subsidiary (which
had previously been classified as a discontinued operation) to the Monsanto
Company for $150 million; the revenues and net assets of Agracetus, Inc. were
immaterial to Grace Chemicals. The after-tax cash proceeds generated by these
transactions have been applied to the further reduction of borrowings and the
repurchase of stock. These transactions are not reflected in the pro forma
financial information included herein.
In May 1996, Grace Chemicals entered into a new credit agreement providing
for total borrowings of $1.85 billion, and three previous agreements providing
for total borrowings of $850 million were terminated. The new credit agreement
is intended to provide liquidity to finance the repurchase of stock and
potential acquisitions. The borrowings under the new credit agreement have been
guaranteed by New Grace and Grace New York. Upon the completion of the
transactions described above (including the Reorganization), the total
borrowings available under the new credit agreement will be reduced to $650
million and the guarantee by Grace New York will be terminated.
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