EXHIBIT 10(p)
PHANTOM STOCK AGREEMENT
This PHANTOM STOCK Agreement ("Agreement") is made and entered into
effective as of January 15, 2000 by and between CORE MATERIALS CORPORATION, a
Delaware corporation (the "Company"), and Xxxxx X. Xxxxxxxx, an individual (the
"Executive"). The purpose of this Agreement is to provide to the Executive, who
is the President and Chief Executive Officer of the Company and is important to
the success and growth of the business of the Company, with certain benefits and
to help retain the services of the Executive. This Agreement will provide a
means whereby the Executive will be given an opportunity to share in the
appreciation of the Common Stock of the Company.
ARTICLE I
DEFINITIONS
Section 1.01 As used in this Agreement, the following terms shall have the
meanings ascribed to them below:
"Act" means the Securities Act of 1933, as amended.
"Agreement" shall have the meaning set forth in the preamble hereof.
"Base Value" means $2.75 per share of Common Stock.
"Board" means the Board of Directors of the Company.
"Committee" means the Compensation Committee of the Board.
"Common Stock" means shares of the Company's Common Stock, $0.01 par
value.
"Company" shall have the meaning set forth in the preamble hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive" shall have the meaning set forth in the preamble hereof.
"Fair Market Value" means (i) if the Common Stock is then listed on a
national securities exchange, the closing sales price of the Common Stock on the
day such value is determined on the principal securities exchange on which such
stock is then listed, or if there is no reported sale on that day, the average
bid and asked quotations on such exchange on that day, or (ii) if the Common
Stock is then publicly traded in the National Market System of the NASDAQ Stock
Market, the closing sales price of the Common Stock as reported in the National
Market System of the NASDAQ Stock Market on the day such value is determined, or
if there is no reported sale on that day, the average of the bid and asked
quotations on that day, or (iii) if the Common Stock is then publicly traded in
the over-the-counter market on the day such value is determined, the average of
the bid and asked quotations on that day, or if no shares were traded that day,
on the next preceding day on which there was such a trade, or (iv) if the Common
Stock is not then separately quoted or publicly traded, the fair market value on
the date such value is to be determined, as determined in good faith by the
Committee.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
"Subsidiary Corporation" shall have the definition of a subsidiary
corporation contained in section 424 of the Internal Revenue Code.
"Successor" means the legal representative of the estate of the Executive
or the person or persons who shall acquire the right to receive payment for a
Unit by bequest or inheritance or by reason of the death of the Executive.
"Term" means the period during which a particularly Unit may be exercised.
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"Unit" means the right to receive, on the terms set forth in this
Agreement and during the Term, an amount equal to the excess of the Fair Market
Value of a share of the Common Stock on the date upon which the Executive
exercises his right to receive such payment over the Base Value.
ARTICLE II
ADMINISTRATION OF THE AGREEMENT
Section 2.01 This Agreement shall be administered on behalf of the Company
by the Committee; provided, however, that the Board, in lieu of the Committee,
shall have the right to take any action permitted or required hereunder to be
taken by the Committee.
Section 2.02 The Committee shall adopt such rules of procedure as it may
deem proper; provided, however, that it may only take action upon the agreement
of a majority of the whole Committee. Any action which the Committee shall take
through a written instrument signed by all of its members shall be as effective
as though taken at a meeting duly called and held.
Section 2.03 The powers of the Committee shall include plenary authority
to interpret this Agreement.
ARTICLE III
GRANT OF UNITS
Section 3.01 The Company hereby grants to the Executive 150,000 Units
(subject to adjustment as provided in Article X hereof) effective as of the date
hereof.
ARTICLE IV
VESTING OF UNITS
Section 4.01 All Units granted hereunder shall vest on December 31, 2004.
No Units granted hereunder shall vest prior to such date.
Section 4.02 Subsequent to the grant of any Unit, the Committee may
accelerate, at any time before such Unit becomes fully vested, the time or times
at which such Unit may be exercised.
Section 4.03 Unless the Committee, in its sole discretion, permits
otherwise, Units granted under this Agreement shall be nontransferable other
than by will or by the laws of descent and distribution and a Unit may be
exercised during the lifetime of the Executive only by the Executive.
ARTICLE V
TERMINATION OF A UNIT
Section 5.01 Any Unit granted under this Agreement that has not been
exercised shall automatically and without notice terminate and become null and
void at the time of the earliest to occur of the following:
(a) December 31, 2005;
(b) The expiration of thirty (30) days from the date of
termination (other than a termination described in Section 5.01(c) or on
account of death or disability, as defined in Section 8.01, of the
Executive while employed by the Company) of the Executive's employment
with the Company or its Subsidiary Corporations or if the Executive shall
die during such thirty-day period, the expiration of one (1) year
following the date of the Executive's death; provided that no additional
Units shall vest or become exercisable during the thirty (30) day or one
(1) year period, as the case may be; and
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(c) The date of termination of the Executive's employment with the
Company or its Subsidiary Corporations, if such termination constitutes or
is attributable to a breach by the Executive of an employment agreement
with the Company or its Subsidiary Corporations or if the Executive is
discharged for cause (it being agreed that the Committee shall have the
right to determine whether or not the Executive has been discharged for
cause and the date of such discharge, such determinations of the Committee
to be final and conclusive).
ARTICLE VI
RIGHT TO TERMINATE EMPLOYMENT OR OTHER RELATIONSHIP
Section 6.01 Nothing contained in this Agreement shall obligate the
Company or its Subsidiary Corporations to continue to employ or engage the
Executive as the President and Chief Executive Officer of the Company or in any
other capacity with the Company or its Subsidiary Corporations, nor confer upon
the Executive any right to continue in the employ of or in any other capacity
with the Company or its Subsidiary Corporations, nor limit in any way the right
of the Company or its Subsidiary Corporations to amend, modify or terminate the
Executive's compensation or employment agreement, if any, at any time.
ARTICLE VII
EXERCISE OF UNITS
Section 7.01 The Executive shall have the right and option to elect to be
paid for any then vested Units, at any time or from time to time prior to the
termination thereof, by the Executive timely delivering a written notice signed
by the Executive to the Chief Financial Officer of the Company at its principal
executive office stating therein that he has elected to exercise such right and
option and the number of vested Units for which the Executive is electing to be
paid. The date of exercise shall be the date the written notice is received by
the Company. The Company shall thereafter pay the Executive in complete
satisfaction of each Unit with respect to which such right and option has been
exercised in an amount equal to: (a) the Fair Market Value of a share of Common
Stock on the date of exercise of such right and option minus (b) the Base Value.
Such payment shall be made to the Executive within thirty (30) days after the
exercise of such right and option.
ARTICLE VIII
TERMINATION OF EMPLOYMENT
DUE TO DEATH OR DISABILITY
Section 8.01 Upon the termination of the employment of the Executive due
to the death or disability (within the meaning of Section 22(e)(3) of the
Internal Revenue Code) of the Executive while employed by the Company, (a) the
Company shall pay the Executive or his Successor, as the case may be, in
complete satisfaction of all fully vested and unexercised Units held by the
Executive on the date of termination of his employment, an amount determined in
the manner set forth in Article VII hereof as if the Executive had exercised the
right and option to be paid for all then fully vested and unexercised Units held
by the Executive on the date of such termination of the employment of the
Executive, and (b) all other Units held by the Executive on the date of such
termination of employment of the Executive shall terminate and shall become null
and void. Such payment shall be made by the Company to the Executive or his
Successor, as the case may be, within thirty (30) days after the date of such
termination of employment. The Committee shall have the right to determine
whether the Executive's termination is attributable to a disability of the
Executive within the meaning of Section 22(e)(3) of the Internal Revenue Code,
such determination of the Committee to be final and conclusive.
ARTICLE IX
STOCKHOLDERS' RIGHTS
Section 9.01 The Executive shall not have any rights of a stockholder by
virtue of the grant, vesting or exercise of a Unit.
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ARTICLE X
ADJUSTMENTS
Section 10.01 In the event that the shares of Common Stock shall be
changed into or exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split-up, combination
of shares, or otherwise) or if the number of such shares of stock shall be
increased solely through the payment of a stock dividend, then there shall be
made an appropriate adjustment in the number of Units then held by the Executive
under this Agreement, in the Base Value (for purposes of Articles VII and VIII
of all then outstanding Units) and to the other terms under this Agreement as
may be necessary to reflect the foregoing events. In the event there shall be
any other change in the number or kind of the outstanding shares of Common Stock
of the Company, then if the Committee, in its sole discretion, determines that
such change equitably requires an adjustment in any Unit theretofore granted
under this Agreement, such adjustments shall be made in accordance with such
determination. The foregoing adjustments shall be made in a manner that will
cause the relationship between the aggregate appreciation in a share of Common
Stock and the increase in value of each Unit granted hereunder to remain
unchanged as a result of the applicable transaction.
The Committee shall have the power, in the event of any merger or
consolidation of the Company with or into any other corporation, the merger of
consolidation of any other corporation into the Company, or the sale of all or
substantially all of the assets and business of the Company to another
corporation, to amend all outstanding Units so as to provide that (i) all Units
not then fully vested and exercisable shall become fully vested and exercisable
immediately prior to the effectiveness of any such merger, consolidation or sale
of assets and to terminate all Units upon the effectiveness of any such merger,
consolidation or sale of assets, and (ii) upon the effectiveness of any such
merger, consolidation or sale of assets, the Executive shall be paid the amount
provided in Article VII for all unexercised Units then held by him in the manner
provided in said Article VII as if the Executive had exercised his right and
option to be paid for all of such Units on the date of such effectiveness. In
such event, the Company shall give written notice of such amendment and
termination to the Executive of such Units prior to the effectiveness of any
such merger, consolidation or sale of assets. If the Committee shall exercise
such power and such merger, consolidation or sale of assets is consummated, all
Units then outstanding and subject to such requirement shall be deemed to have
been amended to provide for the vesting thereof prior to the effectiveness of
such merger, consolidation or sale of assets and such Units shall be deemed to
be exercised in full and shall terminate as of such date.
ARTICLE XI
WITHHOLDING
Section 11.01 The Company shall have the right to deduct from all amounts
payable pursuant to this Agreement any taxes required by law to be withheld with
respect to such payment.
ARTICLE XII
AGREEMENT UNFUNDED
Section 12.01 The obligations of the Company under this Agreement at all
times shall be entirely unfunded and no provision shall at any time be made with
respect to segregating assets of the Company for payment of any benefits
hereunder. The Executive shall not have any interest in any particular asset of
the Company by reason of the right to receive a benefit under this Agreement and
the Executive shall have only the rights of a general unsecured creditor of the
Company with respect to his rights under this Agreement.
ARTICLE XIII
ENTIRE AGREEMENT AND MODIFICATION
Section 13.01 This Agreement supersedes all prior agreements between the
parties with respect to its subject matter and constitutes a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. Except as otherwise provided in Article X hereof,
this Agreement may not be amended except by written agreement executed by the
Company and the Executive.
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Section 13.02 The Units granted to the Executive under this Agreement have
not been granted to the Executive pursuant to the Company's Long-Term Equity
Incentive Plan and the provisions of such plan shall have no application to or
effect on this Agreement or the Units granted hereunder.
ARTICLE XIV
GOVERNING LAW
Section 14.01 This Agreement shall be governed by the laws of the State of
Ohio without regard to conflicts of laws principles.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
COMPANY: EXECUTIVE:
CORE MATERIALS CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxx XXXXX X. XXXXXXXX, individually
Title: Chairman of the Board
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