GEEG HOLDINGS, L.L.C.
2000 OPTION PLAN
ARTICLE I
PURPOSE OF PLAN
The 2000 Option Plan (the "Plan") of GEEG HOLDINGS, L.L.C. (the "Company"), adopted by the Company's Board of Directors effective as of August 1, 2000, is intended to advance the best interests of the Company by providing executives and other key employees of the Company or any Subsidiary (as defined below) who have substantial responsibility for the management and growth of the Company or any Subsidiary with additional incentives by allowing such employees to acquire an ownership interest in the Company. The Plan is a compensatory benefit plan within the meaning of Rule 701 under the Securities Act of 1933, as amended (the "Securities Act") and, unless and until Common Units (as defined below) are publicly traded, the issuance of purchase options ("Options") for Class A and Class B Common Units pursuant to the Plan and the issuance of Class A and Class B Common Units pursuant to such Options is intended to qualify for the exemption from registration under the Securities Act provided by Rule 701 except to the extent that such Options and Class A and Class B Common Units are issued to "accredited investors" (as defined in rule 501(a)(1), (2), (3) and (7) under the Securities Act.)
ARTICLE II
DEFINITIONS
For purposes of the Plan the following terms have the indicated meanings:
"Affiliate" means, when used with reference to a specified Person, any Person that directly or indirectly controls or is controlled by or is under common control with the specified Person. As used in this definition, "control" (including, with its correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). With respect to any Person who is an individual, "Affiliates" shall also include, without limitation, any member of such individual's Family Group.
"Board" means the Company's Board of Directors.
"Braden" means Braden Manufacturing, L.L.C., a Delaware limited liability company.
"Cause" means the occurrence of any one of the following as determined by the Board, (i) a material breach of the Participant's confidentiality, non-competition or non-solicitation covenants under his or her employment or other agreement with the Company or a 2 Subsidiary of the Company or, in the absence of such an agreement, a material breach of the Company's or its Subsidiaries written policies on confidentiality or non-solicitation; (ii) the commission by such Participant of a felony, or any crime involving theft, dishonesty or moral turpitude; (iii) the commission by the Participant of act(s) or omission(s) which are willful and deliberate acts intended to harm or injure the business, operations, financial condition or reputation of the Company, any of the Company's Subsidiaries, any of the Company's equity holders, or any Affiliate of any of the foregoing; (iv) the Participant's disregard of the directives of the Board; (v) drunkenness or use of drugs which interferes with the performance of the Participant's duties for the Company or a Subsidiary of the Company, which drunkenness or use of drugs continues after receipt of notice to the Participant from the Company of his or her violations of this provision; or (vi) any attempt by the Participant to secure personal profit in connection with the business of the Company unless given prior written approval by unanimous consent of the Board.
"Class A Common Units" means the Company's Class A Common Units, as such term is defined in the Operating Agreement.
"Class B Common Units" means each of the Company's Class B Common Units, as such term is defined in the Operating Agreement.
"Closing Date" has the meaning set forth in the Agreement and Plan of Merger between the Company, Saw Mill Investments, LLC, the Parent and GEEG Acquisition, L.L.C., dated July 14, 2000.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute.
"Common Units" means each of the Class A Common Units and Class B Common Units.
"Cost" of any Class A or Class B Common Unit as of any Valuation Date means the exercise price of the Option as a result of the exercise of which such Class A or Class B Common Unit was issued, plus any other contributions or payments made to the Company prior to such Valuation Date, less all distributions made by the Company prior to such Valuation Date (other than Tax Allowance Amounts), in each case, with respect to such Class A or Class B Common Unit, as the case may be.
"Deltak" means Deltak, L.L.C., a Delaware limited liability company.
"Disability" means, with respect to any Participant, the inability, due to illness, accident, injury, physical or mental incapacity or other disability, of such Participant to carry out effectively his or her duties and obligations to the Company or any of its Subsidiaries or to participate effectively and actively as an employee of the Company or any of its Subsidiaries for a period of at least 90 consecutive days or for shorter periods aggregating at least 150 days (whether or not consecutive) during any twelve-month period, as determined in the judgment of the Board.
"Fair Market Value" of any Class A or Class B Common Unit as of any given date shall be as determined in good faith by the Board based on such factors as the members thereof, in
-2- 3 the exercise of their reasonable business judgment, consider relevant; provided that in making such determination the Board shall assume that the Company and its businesses are sold as a going concern and then liquidated and shall not provide for any discounts based on the illiquidity or restrictions on transfer of the applicable Class A or Class B Common Units or the fact that the Class A or Class B Common Units being valued represent a minority interest in the equity of the Company.
"Family Group" means, with respect to any Person who is an individual, (i) such Person's spouse, former spouse and descendants (whether natural or adopted), parents and their descendants and any spouse of the foregoing persons (collectively, "relatives") or (ii) the trustee, fiduciary or personal representative of such Person and any trust solely for the benefit of such Person and/or such Person's relatives.
"Harvest" means Harvest Partners III, L.P.
"Harvest Fund Units" means (i) all of the Common Units and Preferred Units issued to the Parent as of the Closing Date (whether or not held by the Parent after the Closing Date), and (ii) all securities issued with respect to the Common Units or Preferred Units referred to in clause (i) above, by way of unit or distribution, or unit split or in connection with a combination of units or shares, recapitalization, merger, consolidation or other reorganization.
"IRR" means, with respect to a Sale of the Business, a Qualified Public Offering or a Qualified Recapitalization, the aggregate internal rate of return (i.e., the discount rate at which the net present value of the cash flows from the investments are equal to zero) with respect to all of the Harvest Fund Units based solely on (i) the net cash proceeds received by the holder or holders of such Harvest Fund Units as a result of such Sale of the Business, Qualified Public Offering or Qualified Recapitalization, as the case may be; (ii) the management fees received by Harvest Partners, Inc. from the Company and its Subsidiaries (including only the management fees received by Harvest Partners, Inc.) from and including the Closing Date hereof until the consummation of such Sale of the Business, Qualified Public Offering or Qualified Recapitalization (but excluding the $5 million payment Harvest Partners, Inc. will be paid at the Closing) and (iii) distributions received from the Company pursuant to Section 6.1 of the Operating Agreement (other than distributions of Tax Allowance Amounts) with respect to all of the Harvest Fund Units from and including the Closing Date until the consummation of such Sale of the Business, Qualified Public Offering or Qualified Recapitalization, all as determined in good faith by the Board; less (iv) the capital contributions made to the Company (including all capital contributions made to the Company by Harvest Partners, Inc. or its Affiliates on the Closing Date). Notwithstanding the foregoing, the net cash proceeds to be received by the holder or holders of such Harvest Fund Units as a result of such Qualified Public Offering shall include all amounts the then holders of such Harvest Fund Units would have received had such holders sold all of the applicable Harvest Fund Units in such Qualified Public Offering at the price per unit or share offered to the public (less all applicable discounts and commissions).
"Issued Units" means (i) all Class A or Class B Common Units issued upon the proper exercise of an Option and (ii) all equity securities issued with respect to the Class A or Class B Common Units referred to in clause (i) above by way of unit distribution or unit split or in
-3- 4 connection with any conversion, merger, consolidation or recapitalization or other reorganization affecting the Class A or Class B Common Units. Unless provided otherwise herein or in the Participant's Option Agreement (as herein defined), Issued Units will continue to be Issued Units in the hands of any holder other than the Participant (except for the Company, purchasers pursuant to (i) a Public Sale occurring on or after the second anniversary following a Qualified Public Offering or (ii) a Sale of the Business and, in the case of clause (i) or (ii), their respective subsequent transferees), and each such transferee thereof will succeed to the rights and obligations of a holder of Issued Units hereunder.
"Measurement Date" means the date on which any taxable income resulting from the exercise of an Option is determined under applicable federal income tax law.
"Notice of Exercise Date" has the meaning set forth in Section 5.2(b).
"Operating Agreement" means the Limited Liability Company Agreement of the Company, dated as of August 1, 2000, as amended from time to time.
"Option Units" means (i) all Class A or Class B Common Units issuable upon the exercise of an Option and (ii) all units or shares of any other class of Common Units issuable upon the exercise of an Option as a result of an adjustment to such Option pursuant to any provision hereof.
"Options" has the meaning set forth in Article I.
"Parent" means GEEG Acquisition Holdings Corp.
"Participant" means any executive, key employee or director of the Company or any Subsidiary who has been selected to participate in the Plan by the Board.
"Permitted Transferee" has the meaning set forth in Section 5.9.
"Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity or any department, agency or political subdivision thereof or any other entity or organization.
"Public Offering" means an underwritten public offering and sale of Common Units pursuant to an effective registration statement under the Securities Act; provided that a Public Offering shall not include an offering made in connection with a business acquisition or combination or an employee benefit plan.
"Public Sale" means the sale of Issued Units to the public pursuant to an offering registered under the Securities Act or, after the consummation of an initial Public Offering, to the public pursuant to the provisions of Rule 144 (or any similar rule or rules then in effect) under the Securities Act.
-4- 5
"Qualified Public Offering" means any underwritten public offering and sale by the Company of its common equity securities to the public pursuant to an effective registration statement under the Securities Act (other than an offering made in connection with a business acquisition or combination pursuant to a registration statement on Form S-4 or any similar form, or an employee benefit plan pursuant to a registration statement on Form S-8 or any similar form), but only if the aggregate gross proceeds received by the Company and/or its equityholders (before the deduction of underwriting discounts and expenses) in such underwritten public offering and sale or series of such sales in the aggregate are in excess of $100 million.
"Qualified Recapitalization" means (i) any recapitalization or reorganization of the Company or any dividend or other distribution to holders of equity securities of the Company, in each case, pursuant to which the equity holders of the Company receive in the aggregate in excess of $75,000,000 cash in any one year period (other than distributions of Tax Allowance Amounts), (ii) any Sale of Braden or (iii) any Sale of Deltak.
"Qualified Transaction" means any Sale of the Business, Qualified Public Offering or Qualified Recapitalization.
"Repurchase Notice" has the meaning set forth in Section 5.7(c).
"Repurchase Option" has the meaning set forth in Section 5.7(a).
"Sale of Braden" means any sale by the Company or any of its Subsidiaries of all or substantially all of the equity or assets of Braden (or any successor entity) to an Independent Third Party or affiliated group of Independent Third Parties.
"Sale of Deltak" means any sale by the Company or any of its Subsidiaries of all or substantially all of the equity or assets of Deltak (or any successor entity) to an Independent Third Party or affiliated-group of Independent Third Parties.
"Sale of the Business" shall mean any transaction or series of transactions (whether structured as a sale of Common Units and Preferred Units of the Company, merger, consolidation, reorganization, recapitalization, asset sale or otherwise), which, directly or indirectly, results in (i) the sale or transfer of all or substantially all of the assets (determined based on value on a consolidated basis) of the Company and its Subsidiaries to a Person or Persons other than Harvest or any of its Affiliates or (ii) the sale or transfer of a majority of the outstanding equity securities entitled to vote generally in the election of the Board of Directors of Parent and/or a majority of the outstanding equity securities entitled to vote generally in the election of the Board of Directors of the Company to a Person or Persons other than Harvest or any of its Affiliates.
"Senior Credit Agreement" means the Credit Agreement dated August 1, 2000 by and among Global Energy Equipment Group, L.L.C., the Company, DLJ Capital Funding, Inc., Bankers Trust Company, and the other parties thereto.
"Subordinated Debt Agreement" means the Senior Subordinated Loan Agreement dated August 1, 2000 by and among Global Energy Equipment Group, L.L.C. and the Lenders Parties thereto.
-5- 6
"Subsidiary" means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity if such Person or Persons shall be allocated a majority of partnership, limited liability company, association or other business entity gains or losses or shall be or control the managing director, managing member, manager or a general partner of such partnership, limited liability company, association or other business entity. Where not otherwise indicated, the term "Subsidiary" refers to a Subsidiary of the Company.
"Tax Allowance Amount" has the meaning set forth in the Operating Agreement.
"Termination Date" means, with respect to any Participant, the date that such Participant ceases to be employed by the Company or any of its Subsidiaries for any reason.
"Valuation Date" means, (i) with respect to any Repurchase Option, the date, if any, that the Company delivers a Repurchase Notice to a holder of Issued Units or (ii) with respect to any Put Right, the date, if any, that the holder(s) of Issued Units deliver a Put Notice to t ...
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