Exhibit 10.9
SAFETY COMPONENTS INTERNATIONAL, INC.
KEY EMPLOYEE SHARE OPTION PLAN
EFFECTIVE DATE OF PLAN: JUNE 17, 2002
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SAFETY COMPONENTS INTERNATIONAL, INC.
KEY EMPLOYEE SHARE OPTION PLAN
TABLE OF CONTENTS
ARTICLE
PAGE
ARTICLE I
PURPOSE
................................................................
1
ARTICLE II
DEFINITIONS
............................................................
1
ARTICLE III
GRANT OF OPTIONS
.......................................................
4
ARTICLE IV
EXERCISE OF
OPTIONS ....................................................
6
ARTICLE V
AMENDMENT OR
TERMINATION ...............................................
8
ARTICLE VI
ADMINISTRATION
.........................................................
9
ARTICLE VII
TRUST PROVISIONS
.......................................................
10
ARTICLE VIII
MISCELLANEOUS
PROVISIONS ...............................................
11
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SAFETY COMPONENTS INTERNATIONAL, INC.
KEY EMPLOYEE SHARE OPTION PLAN
ARTICLE I
PURPOSE
1.1 Purpose.
The purpose of the Plan is to provide benefits to eligible
Employees of the
Employer in a form that will encourage the recipients to
continue in the service of the Employer, and allow the recipients to diversify
their investment portfolios.
1.2 Intent. The
Plan is intended to be a nonqualified option plan governed by
Section 83 of the Code and not an employee benefit plan as defined
under ERISA.
ARTICLE II
DEFINITIONS
As used herein, the following capitalized words and phrases have
the respective
meanings set forth below:
2.1
"Administrative
Committee" means the
group of individuals
consisting of
the Vice President of Human Resources, Manager of Compensation and
Benefits and
the Treasurer of the Company.
2.2
"Beneficiary" means
the person or persons
designated by a
Participant,
pursuant to Section 3.6, to exercise an Option after the
Participant's death.
2.3 "Board"
means the board of directors of the Company.
2.4 "Cause"
means:
(a)
the willful and
continued failure of a
Participant to substantially
perform his duties with the Employer (other than any such failure
resulting from
incapacity due to
physical or mental
illness, and
specifically excluding
any failure by the Participant, after
reasonable efforts,
to meet performance expectations), after a
written demand for
substantial
performance
is delivered to the
Participant by the
president of the Employer or the Board which
specifically
identifies the
manner in which the Board or the
president of the
Employer believes
that the Participant has not
substantially performed his duties and the Participant has failed
to
cure such deficiency to the satisfaction of the Board or the
president of the
Employer, as the case may be, within 20 days of
receipt of such demand for substantial performance;
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(b)
the willful
engaging by a Participant in gross misconduct, fraud, or
misrepresentation which, in any such case, is likely to be
injurious
to the business or reputation of the Employer; or
(c)
any willful or
intentional act on the part of a Participant that is
materially and demonstrably injurious to the Employer.
For purposes of this
Section, any good
faith determination
by the Board that
termination of a
Participant's
employment
is for Cause is binding on all
parties.
2.5 "Company"
means Safety Components International, Inc. and any
successor(s)
thereto.
2.6 "Code"
means the Internal Revenue Code of 1986, as amended, and any
regulations or rulings issued thereunder.
2.7 "Effective
Date" means June 17, 2002.
2.8 "Employee"
means any common-law employee of the Employer.
2.9 "Employer"
means Safety Components International, Inc., its subsidiaries,
and any successor(s) thereto.
2.10 "ERISA"
means the Employee
Retirement
Income Security Act of 1974, as
amended, and any regulations or rulings issued thereunder.
2.11 "Exercise
Date" means the date on which the Administrative Committee
approves a Participant's Option exercise form, which is
completed and submitted
by such Participant to the Administrative Committee with respect to the
Option
being exercised.
2.12 "Exercise Period"
means the period during which a Participant may exercise
an Option, as determined under Section 4.1.
2.13 "Exercise
Price" means the price
to be paid by a Participant to exercise
an Option, as determined under Section 3.3.
2.14 "Fair Market
Value" means the
closing price of a
Share reflected in
the
consolidated trading
tables of The Wall
Street Journal,
or other recognized
market source, as determined by the Administrative Committee, on the applicable
date of reference
hereunder or, if there is no sale of a Share
on such date,
then the closing price on the last previous day on which a sale is
reported.
2.15 "Grant
Date" means, with respect to any Option,
the date on which
the
Option is granted by the Administrative Committee to a Participant
pursuant to
Section 3.2.
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2.16 "Intrinsic
Value" means, as of a
given date, the Fair Market Value of the
Shares subject to an Option on such date minus the Exercise Price
of the Option.
2.17 "Option" means
the right of a Participant, granted by the Administrative
Committee in
accordance with
Section 3.2, to purchase a Share from the Company
at the Exercise Price of such Option.
2.18 "Option
Agreement"
means an agreement
executed on behalf of
the Company
and by a Participant
to whom Options have been granted, acknowledging the
issuance of the Options and setting forth the terms of the
Options.
2.19 "Participant"
means any individual who meets the eligibility requirements
of Section 3.1, who has received a grant of Options in accordance with Section
3.2, and whose Options
have not all been
completely exercised
or lapsed. For
purposes of Section 4.2:
(a)
After a
Participant's death,
his Beneficiary is to
be treated as a
Participant under the
Plan with respect
to any Options that are
outstanding at the time of the Participant's death;
(b)
In the event of
a Participant's legal incapacity, the Participant's
legal representative
is to be treated as a
Participant
under the
Plan with respect to
any Options that are
outstanding at the
time
the Participant incurred the legal incapacity; and
(c)
If a
Participant
has assigned
Options under Section
3.8, then the
assignee of such Options is to be treated as a Participant under
the
Plan with respect to the assigned Options.
2.20 "Plan" means the
Safety Components International, Inc. Key Employee Share
Option Plan as adopted by the Company and set forth herein and from
time to time
amended.
2.21 "Share" or
"Shares" means a share or shares of a
registered
investment
company regulated
by the Investment Company Act of 1940, as amended (i.e.,
mutual fund shares),
which share or shares are designated by the Administrative
Committee as subject to purchase through the exercise of a Option.
The Shares so
designated must have been registered by the issuers thereof under
the Securities
Act of 1933 and qualified for sale in those jurisdictions of the United States
where Participants
reside.
2.22 "Termination of
Employment" means the
date on which an Employee ceases to
be an Employee of the Employer for any reason. The Administrative
Committee, in
its discretion,
may determine
whether any leave or
other absence from service
constitutes a Termination of Employment for purposes of the
Plan.
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2.23 "Trust" means the
trust that may be established pursuant to Article VII to
hold the Shares that are subject to purchase through the exercise of Options.
2.24 "Trust
Agreement"
means the agreement setting forth the terms of the
Trust, which may be established pursuant to Article VII.
2.25 "Trust Fund"
means the Shares that are held in the Trust.
2.26 "Trustee" means
the persons or institution acting as trustee of the Trust.
ARTICLE III
GRANT OF OPTIONS
3.1 Eligibility.
Options may be granted to any Employee designated by the
Administrative Committee as eligible to participate in the
Plan.
3.2 Grant of
Options.
(a)
In General.
Options may be granted
by the Administrative
Committee
at any time
on or after the Effective Date and prior to the
termination of the
Plan. Options shall
become effective
upon the
applicable Grant
Date(s) set forth in the Option
Agreement.
The
Option Agreement shall
specify the Shares on which the Option is to
be granted, the number of Shares subject to the Option, the
Exercise
Price as of the Grant Date, and such other terms and in such form
as
the Administrative
Committee may from time to time determine in
accordance with the
Plan. Any terms not specified in the Plan shall
be specified in the Option Agreement. No Administrative Committee
member may take part
in any way in
determining the
amount of any
grant of Options to himself.
(b)
Effect of
Dividends and Distributions with Respect to Shares.
(1) Cash
Dividends and Distributions. Prior to the exercise of an
Option, the Company
agrees to invest all
cash dividends and
distributions
(less any administrative charges deducted
pursuant to the
proviso of Section 4.1 (a)) received in cash
with respect to the Shares in additional property of the same
kind (or as nearly the same kind as feasible, if property of
the same kind is not
available). Any Shares
so acquired will
become subject to Options in favor of the Participant, either
in the form of
additional Shares of
existing Options or as
newly granted
Options, as determined in each case by the
Administrative Committee.
(2) Noncash
Distributions and Similar Transactions. In the event
of a Share dividend,
Share split, reverse Share split, rights
offering,
recapitalization
or similar
transaction
that
materially affects
the Fair
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Market Value
of the Shares underlying an Option, the
Administrative
Committee may, in its discretion, either: (i)
adjust the
Exercise Price or number of Shares subject to
existing Options,
or (ii) grant new
Options in additional
property of the same
kind (or as nearly the same kind as
feasible, if property of the same kind in not available).
3.3 Exercise
Price. The Exercise Price of an Option equals 25% of the Fair
Market Value of the Shares subject to the Option on the Grant
Date. The Option
Agreement will state the Exercise Price required to be paid by the
Participant
in order to exercise an Option.
3.4 Purchase
of Property Subject to Option. Upon the grant of Options to a
Participant, the Company may (but need not) acquire an amount of
Shares having a
Fair Market Value equal to either the aggregate Intrinsic Value of the Options
or 100% of the Fair
Market Value of the
Shares subject to the Options. The
Company may
contribute
such amount of Shares to the Trust established in
accordance with
Article VII. At the time any Shares are
contributed
to the
Trust, and at the time
the Options are
exercised, any Shares
acquired by the
Company pursuant to
the preceding sentence
will not be subject to any security
interest, whether or not perfected, or to any option or contract
under which any
other person may
acquire any interest
in the Shares. At the
time an Option is
exercised, the Trustee
may use proceeds from the Exercise Price to acquire any
additional Shares
required to be delivered at the time of exercise of the
Option. Whenever the
Company acquires
Shares for the purpose of satisfying the
Employer's obligations
to Participants under the Plan: (a) the Company must
acquire the Shares from registered broker-dealers that are not affiliated with
the Company, (b) the
Company must receive no compensation for its distribution
or sale of the Shares,
directly or
indirectly, including
Section 12b-1
fees,
from the issuers or
distributors of the
Shares, and (c) the
Company must not
otherwise engage in a broker-dealer business.
3.5 Substitution
of Option Shares. The Administrative Committee, at the
request of a
Participant,
may, in its sole discretion, cancel outstanding
Options and issue substitute Options on different types of Shares,
provided that
the aggregate
Intrinsic Value of the substitute Options is equal to the
aggregate
Intrinsic Value
of the original Options as of the date of
substitution.
Notwithstanding
anything to
the contrary in the Plan, a
substitution of
Options pursuant to
this Section may be made no more than four
times per calendar year, or at additional times upon special circumstances as
determined
