Exhibit 10.7
BUCYRUS INTERNATIONAL,
INC.
1998 MANAGEMENT STOCK OPTION
PLAN
(OCTOBER 2006 AMENDMENT AND
RESTATEMENT)
(Adjusted to reflect 2-for-1
stock split effective May 27, 2008)
This 1998 Management Stock Option
Plan (the “Plan”) was initially adopted by the Board of
Directors of Bucyrus International, Inc. (the
“Company”) on March 5, 1998. The Plan, as amended
and restated herein, is effective October 18, 2006.
ARTICLE I
PURPOSE OF PLAN
The Plan is adopted by the Board for
certain management employees of the Company and its Subsidiaries as
a part of the compensation and incentive arrangements for such
employees. The Plan is intended to advance the best interests of
the Company by allowing such employees to acquire an ownership
interest in the Company, thereby motivating them to contribute to
the success of the Company and to remain in the employ of the
Company and its Subsidiaries. The availability of stock options
under the Plan will also enhance the Company’s ability to
attract and retain individuals of exceptional talent to contribute
to the sustained progress, growth and profitability of the
Company.
ARTICLE II
DEFINITIONS
For purposes of the Plan, except
where the context clearly indicates otherwise, the following terms
shall have the meanings set forth below:
“Affiliate” means, with
respect to any Person, any other Person who, either directly or
through one or more intermediaries, Controls, is Controlled by or
is under common Control with, such first Person.
“Board” means the Board
of Directors of the Company.
“Cause” means
(a) with respect to any Participant with an employment
agreement that defines “Cause,” the definition set
forth in such employment agreement and (b) with respect to any
other Participant, (i) such Participant’s
(1) willful failure to timely comply in all material respects
with the lawful directives of the Board (as set at a meeting of the
Board in accordance with the Company’s bylaws) or such
Participant’s supervisory personnel (provided such directives
are consistent with such Participant’s position with the
Company) or (2) gross negligence or willful misconduct in the
performance of the material duties or responsibilities of his or
her position with the Company or any Subsidiary;
(ii) reasonable evidence to indicate that such Participant has
committed (1) any felony, (2) any other criminal act or
act of material dishonesty, disloyalty, or misconduct (other than
minor traffic offenses and similar acts) or (3) any act of
moral turpitude that is materially injurious to the property,
operations, business or reputation of the Company or any
Subsidiaries (as determined by the Board in its
reasonable
good faith discretion); (iii) the use or
imparting by such Participant of any material confidential or
proprietary information of the Company or any Subsidiary in
violation of any confidentiality or proprietary agreement to which
such Participant is a party; or (iv) such Participant’s
willful failure to comply in any material respect with the terms of
this Plan or the Stockholders Agreement.
“CEO” means the
President and Chief Executive Officer of the Company.
“Closing Date” means
September 26, 1997.
“Code” means the
Internal Revenue Code of 1986, as amended, and any successor
statute.
“Commission” means the
United States Securities and Exchange Commission.
“Committee” means the
Compensation Committee or such other committee of the Board as the
Board may designate to administer the Plan or, if for any reason
the Board has not designated such a committee, the Board. The
Committee, if other than the Board, shall be composed of two or
more directors as appointed from time to time by the Board. At any
time when the Company is subject to the reporting requirements of
Section 13 or Section 15(d) of the Securities Exchange
Act, this Plan shall be administered by a committee consisting
solely of two or more directors who are “Non-Employee
Directors” within the meaning of Rule 16b-3 under the
Securities Exchange Act. In addition, at any time and to the extent
that compensation payable under this Plan is subject to
Section 162(m) of the Code, each director who is a member of
such committee shall also be an “outside director”
within the meaning of Section 162(m) of the Code.
“Common Stock” means the
Company’s common stock, par value $0.01 per share.
“Company” means Bucyrus
International, Inc., a Delaware corporation.
“Company Sale” means a
transaction involving one or more independent third parties
pursuant to which such party or parties (i) acquire (whether
by merger, consolidation or transfer or issuance of capital stock)
capital stock of the Company (or any surviving or resulting
corporation) possessing the voting power to elect a majority of the
board of directors of the Company (or such surviving or resulting
corporation) or (b) acquire all or substantially all of the
Company’s assets determined on a consolidated
basis.
“Control” (including,
with correlative meaning, all conjugations thereof) means with
respect to any Person, the ability of another Person to control or
direct the actions or policies of such first Person, whether by
ownership of voting securities, by contract or
otherwise.
“Disability” means
(a) with respect to a Participant who is covered by any
long-term disability insurance provided by the Company or any of
its Subsidiaries, the occurrence of those events or the existence
of those conditions that constitute “permanent
disability” under the terms of such insurance policy, and
(b) with respect to any Participant that is not covered by any
long-term disability insurance provided by the Company or any of
its Subsidiaries, illness,
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accident, injury, physical or mental incapacity
or other disability which has existed for at least six months and
which has continuously during such period prevented, and can
reasonably be expected to continue to prevent, such Participant
from carrying out effectively his duties and obligations to the
Company and its Subsidiaries as determined in good faith by the
Board.
“Employee” means
(a) any full-time employee of the Company or any of its
Subsidiaries or (b) any consultant or advisor of the Company
or any of its Subsidiaries.
“Exercise Price” means
the purchase price of an Option Share upon exercise of an
Option.
“Fair Market Value” as
of any date means (a) with respect to publicly traded Common
Stock, the market trading price of such Common Stock, (b) with
respect to non-publicly traded Common Stock, the fair market value
of such Common Stock (expressed on a per-share basis) as of such
date, as determined in good faith by the Committee taking into
consideration the enterprise multiples paid by equity sponsors at
the time of termination utilizing the trailing four quarters EBITDA
less net debt outstanding as of the then-immediately preceding
quarter end, plus such other factors as the Committee may deem
appropriate, and (c) with respect to any Option (or portion
thereof) , the excess of (i) the product of the amount
described in clause (a) or (b) above (as applicable)
multiplied by the number of Option Shares issuable upon exercise of
the Option (or portion thereof) , over (ii) the aggregate
Exercise Price of the Option (or portion thereof).
“Management Agreement”
means the Management Services Agreement, dated as of
September 24, 1997, among the Company, its Subsidiaries and
American Industrial Partners, a Delaware general
partnership.
“Management Stockholder”
means a management Stockholder under the Stockholder
Agreement.
“Option” means any
option to purchase shares of Common Stock under the
Plan.
“Option Shares” means
(a) any shares of Common Stock (or other shares of capital
stock of the Company) issued or issuable by the Company upon
exercise of any Option, and (b) any shares of the capital
stock of the Company issued or issuable in respect of any of the
securities described in clause (a) above, by way of stock
dividend, stock split, merger, consolidation, reorganization or
other recapitalization.
“Participant” means any
Employee who is selected to participate in the Plan in accordance
with Article III of the Plan.
“Performance Vesting
Period” shall mean the period from January 1, 1998
through December 31, 2001, unless a different period is
specified by the Committee in the Option Certificate (as defined in
Section 5.2 below) relating to any Option.
“Person” means an
individual, a partnership, a corporation, an association, a joint
stock company, a trust, a joint venture, an unincorporated
organization or a governmental entity or any department, agency or
political subdivision thereof.
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“Plan” means this 1998
Management Stock Option Plan (October 2006 Amendment and
Restatement), as amended or supplemented from time to time in
accordance with its terms.
“Qualified Public
Offering” means any primary or secondary public offering of
Common Stock pursuant to an effective registration statement under
the Securities Act, other than pursuant to a registration statement
filed in connection with a transaction of the type described in
Rule 145 of the Securities Act or for the purpose of issuing
securities pursuant to an employee benefit plan, having an
aggregate offering value (before underwriters’ discounts and
selling commissions) of at least $30 million.
“Securities Act” means
the Securities Act of 1933, as amended.
“Securities Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“Stockholders Agreement”
means the Stockholders Agreement dated as of March 17, 1998
among the Company and its stockholders.
“Subsidiary” means any
corporation of which the Company owns, directly or through one or
more Subsidiaries, securities possessing the voting power to elect
a majority of the board of directors of such
corporation.
“Transfer” means, with
respect to any Option, the gift, sale, assignment, transfer,
pledge, hypothecation or other disposition (whether for or without
consideration and whether voluntary, involuntary or by operation of
law) of such Option or any interest therein.
ARTICLE III
ADMINISTRATION
The CEO shall be responsible for the
routine administration of the Plan, subject to the review and
approval of the Committee. Subject to the requirements and
limitations of the Plan, the CEO shall have the authority to
recommend to the Committee those Employees who shall be
Participants and the number of Options to be granted to each
Participant. Subject to the requirements and the limitations of the
Plan, the Committee shall have the sole and complete responsibility
and authority to: (a) approve the award of and grant Options
under this Plan; (b) determine the terms and conditions of
Options granted under this Plan; (c) interpret the Plan and
adopt, amend and rescind administrative guidelines and other rules
and regulations relating to the Plan; (d) correct any defect
or omission or reconcile any inconsistency in the Plan or in any
Option granted hereunder; and (e) make all other
determinations and take all other actions necessary or advisable
for the implementation and administration of the Plan. All
authority not expressly granted to the CEO hereunder shall remain
vested in the Committee. The Committee’s determinations on
matters within its authority shall be conclusive and binding upon
the Participants, the Company and all other Persons. All expenses
associated with the administration of the Plan shall be borne by
the Company.
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ARTICLE IV
OPTION SHARES AVAILABLE FOR GRANT
UNDER THE PLAN
4.1 Option Shares . The
aggregate number of shares of Common Stock with respect to which
Options may be granted under the Plan shall not exceed 4,800,000
shares; provided, however, that such number of shares shall be
subject to adjustment in accordance with the provisions of
Section 8.3 below.
4.2 Status of Option Shares .
The shares of Common Stock for which Options may be granted under
the Plan may be either authorized and unissued shares, treasury
shares or a combination thereof, as the Committee shall determine
and shall be reserved by the Company for issuance as provided in
the Plan. To the extent any outstanding Options expire or are
terminated prior to exercise, the Option Shares in respect of which
such Options were issued shall remain available for reissuance to
employees of the Company and its Subsidiaries pursuant to this Plan
or any other plan or agreement approved by the Board.
ARTICLE V
GRANT OF OPTIONS
5.1 Option Terms and
Conditions . The terms and conditions of each Option granted
under this Plan shall be as determined by the Committee in
consultation with the CEO.
5.2 Option Certificate . Each
Option granted hereunder to a Participant shall be evidenced by a
certificate setting forth certain basic terms of the Option. The
certificate shall be substantially in the form attached hereto as
Annex 1 (or in such other form as the Committee may from time to
time adopt) (the “Option Certificate”), and shall be
signed by the CEO or such other officer of the Company as the
Committee shall designate. For purposes of the Plan, no Option
shall be deemed to be outstanding until it has been granted to a
Participant by the Committee and an Option Certificate has been
executed and delivered by the Company, and an Option shall cease to
be outstanding when it is repurchased by the Company, terminates or
is exercised pursuant to the Plan.
5.3 Joinder Agreement . As a
condition to exercising any Options hereunder, each Participant who
is not a Management Stockholder shall be required to execute a
Joinder Agreement substantially in the form attached hereto as
Annex III (the “Joinder”) and thereby become a party to
the Stockholders Agreement with respect to any Option Shares issued
in connection with such exercise.
ARTICLE VI
EXERCISE OF
OPTIONS
6.1 Right to Exercise .
Except as may otherwise be determined by the Committee, Options may
not be Transferred other than by will or the laws of descent and
distribution and, during the lifetime of the Participant, Options
may be exercised only by such Participant (or his legal guardian or
legal representative). Any Transfer or attempted Transfer of an
Option contrary to this Section 6.1 shall be void, and the
Company shall not record such Transfer on its books or treat any
purported transferee of such Option as the owner of such Option for
any purpose. In the event of the death of a Participant, exercise
of Options granted hereunder shall
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be made only by the executor or administrator of
the estate of the deceased Participant or the Person or Persons to
whom the deceased Participant’s rights under the Option shall
pass by will or the laws of descent and distribution.
6.2 Procedure for Exercise .
Any Participant may exercise all or any portion of any of such
Participant’s outstanding Options, to the extent such Options
have vested as provided in the Option Certificate, at any time and
from time to time prior to the expiration of such Options, by
completing, signing and delivering to the Company (to the attention
of the Company’s Secretary) the Option Certificate together
with a notice of exercise substantially in the form attached hereto
as Annex II (or in such other form as the Committee may from time
to time adopt and provide to the Participant) (the “Exercise
Notice”), accompanied (in the case of a Participant who is
not a Management Stockholder) by a Joinder to the Stockholder
Agreement in the form attached as Annex III together with the
related Option Certificate(s) and payment in full of the Exercise
Price. Payment of the Exercise Price shall be made in cash
(including check, bank draft or money order); provided, that a
Participant may, in lieu of paying the Exercise Price in cash,
deliver an Exercise Notice with respect to a specified number of
Option Shares (the “Specified Option Shares”) and
indicate in the Exercise Notice that such Participant intends to
effect a cashless exercise thereof and be entitled to receive in
respect of the exercise of the Option therefor, Option Shares with
an aggregate Fair Market Value equal to the excess of (i) the
aggregate Fair Market Value of the Specified Option Shares, over
(ii) the aggregate Exercise Price that otherwise would be
payable hereunder in cash upon exercise of the Option for the
Specified Option Shares. Notwithstanding anything in this
Section 6.2 to the contrary, in the event that any Option
Certificate granted to a Participant is lost, stolen or destroyed,
the Participant may, in lieu of delivering such Option Certificate
at the time of exercise, deliver an affidavit as to its loss, theft
or destruction and any indemnity that the Company may reasonably
request. A Participant’s right to exercise the Option shall
be subject to the satisfaction of all conditions set forth in the
Exercise Notice. If a Participant exercises any Options for less
than all of the Option Shares covered by the relevant Option
Certificate, the Company shall issue a new Option Certificate to
such Participant in respect of the portion of such Option remaining
unexercised.
6.3 Securities Laws Restrictions
on Transfer of Option Shares . Each Participant exercising an
Option will be required to represent to the Company in the Exercise
Notice that when such Participant exercises his or her Option such
Participant will be purchasing Option Shares for his or her own
account for investment and not on behalf of others or otherwise
with a view toward distributing them. Each Participant is advised
that federal and state securities laws govern and restrict each
Participant’s right to Transfer, or offer to Transfer, any
Option Shares unless such Participant’s Transfer, or offer to
Transfer, is registered under the Securities Act and state
securities laws, or such Transfer, or offer to Transfer, is exempt
from registration or qualification thereunder. Each Participant is
further advised that the Stockholders Agreement, to which each
Participant will become a party upon exercise of such
Participant’s Options, imposes additional restrictions on the
transfer of Option Shares, and that the stock certificates for any
Option Shares issued in connection with such exercise will bear
such legends as the Company deems necessary or desirable in
connection with the Securities Act or other rules, regulations or
laws.
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6.4 Withholding of Taxes .
The Company shall be entitled, if necessary or desirable, to
withhold from any amounts due and payable by the Company to such
Participant (or secure payment from such Participant in lieu of
withholding) the amount of any withholding or other tax due from
the Company with respect to any Option Shares issuable under the
Plan, and the Company may defer such issuance unless indemnified to
its satisfaction.
6.5 Listing, Registration and
Compliance with Laws and Regulations . Options granted under
the Plan shall be subject to the requirement that if at any time
the Committee shall make a good faith determination that the
listing, registration or qualification of Option Shares upon any
securities exchange or under any state or federal securities or
other law or regulation, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a
condition to or in connection with the granting of the Options or
the issuance or purchase of Option Shares thereunder, no Options
may be exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not reasonably
acceptable to the Committee. The Company shall in good faith, and
to the extent consistent with its reasonable business judgment,
exercise all reasonable efforts to obtain any such listing,
registration, qualification or approval. The holders of such
Options shall supply the Company with such certificates,
representations and information as the Company shall request and
shall otherwise cooperate with the Company in obtaining such
listing, registration, qualification, consent or approval. Any
period of time during which a
