Fill and Sign the Phantom Stock Plan Form

§24.581 Phantom Stock PlanPhantom Stock Plan The Phantom Stock Plan authorizes awards in the form of "phantom units", each of which entities the recipient to a future payment based on a hypothetical investment in a share of Common Stock. Administration of the Plan is by the Committee. Any employee of the Company or any affiliated company to which the Plan has been extended, without regard to length of service, is eligible for awards; however, it is anticipated that recipients will be among the more senior management. A “unit" or "share" of phantom stock does not represent or entitle the recipient to any equity securities of the Company, but instead involves the creation of an unfunded account for the recipient, the value of which is measured by reference to the value of the Common Stock. Units vest and are payable at retirement, death or disability or at the close of the vesting period (which cannot exceed five years) specified at the time of grant. The amount payable at vesting with respect to each credited unit, which may be deferred under several options prior to vesting, is an amount equal to the sum of the fair market value of a share of Common Stock on the vesting date, the equivalent of cash dividends paid on a share of Common Stock (on which the phantom unit is based) during the period from the date of grant to the vesting date and interest calculated on accumulated cash dividend equivalents and credited interest during the vesting period. In general. units are forfeited to the Company if, prior to expiration of the vesting period, the recipient's employment is terminated for any reason other than death, disability or retirement at normal or specified retirement ages. The time or times when units will be granted, the employees to whom units will be awarded and the date or dates on which the units vest and are payable are recommended by the Chief Executive Officer and approved by the Committee. The aggregate number of phantom units awarded to all eligible individuals is approved by the Board of Directors. Future payments from the recipient's account are unfunded obligations of the Company; however, they are covered by trust arrangements that will be funded upon the occurrence of any potential change of control of the Company (as defined in those arrangements). Recipients of units may, at any time during the period the accounts remain unvested, convert al! or any portion of their units to interest-bearing equivalents with a dollar amount equal to the number of units elected for conversion times the fair market value of a share of Common Stock on the date of such election. The interest-bearing equivalents are not credited with dividend equivalents, but accrue interest quarterly. At its discretion, under certain circumstances the Committee may grant phantom units to those participants in the Company's restricted stock plans who elect to exchange some or all of their shares of Common Stock awarded to them under those plans. These units shall have the same vesting date as the exchanged restricted shares, but in all other respects shall be governed by the provisions of the Phantom Stock Plan. Units awarded in 1989 under the Phantom Stock Plan to individuals named in the Cash Compensation Table were as follows: Mr. Buckner, 700 units; Mr. Crittenden, 420 units; Mr. Engebretsen, 500 units; Mr. Gossage, 420 units; and Mr. Hollingsworth, 1,050 units. All Executive Officers as a group were awarded 13,870 units during 1989.Hercules Incorporated 2/20/90