INTERNATIONAL FLAVORS & FRAGRANCES INC.
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2000 SUPPLEMENTAL STOCK AWARD PLAN
AS AMENDED AND RESTATED NOVEMBER 8, 2004
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INTERNATIONAL FLAVORS & FRAGRANCES INC.
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2000 SUPPLEMENTAL STOCK AWARD PLAN
AS AMENDED AND RESTATED NOVEMBER 8, 2004
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Page
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1. Purpose ........................................................ 1
2. Definitions .................................................... 1
3. Administration ................................................. 2
4. Stock Subject to Plan .......................................... 3
5. Eligibility .................................................... 3
6. Specific Terms of Awards ....................................... 4
7. Certain Provisions Applicable to Awards ........................ 7
8. Change in Control .............................................. 7
9. Additional Award Forfeiture Provisions ......................... 10
10. General Provisions ............................................. 12
INTERNATIONAL FLAVORS & FRAGRANCES INC.
2000 SUPPLEMENTAL STOCK AWARD PLAN
AS AMENDED AND RESTATED NOVEMBER 8, 2004
1. PURPOSE. The purpose of this 2000 Supplemental Stock Award Plan (the
"Plan") is to aid International Flavors & Fragrances Inc., a New York
corporation (the "Company"), in attracting, retaining, motivating and rewarding
employees, other than executive officers and directors of the Company, and
certain other persons who provide substantial services to the Company or its
subsidiaries or affiliates, to provide for equitable and competitive
compensation opportunities, to recognize individual contributions and reward
achievement of Company goals, and promote the creation of long-term value for
shareholders by closely aligning the interests of Participants with those of
shareholders. The Plan authorizes stock-based incentives for Participants.
2. DEFINITIONS. In addition to the terms defined in Section 1 above and
elsewhere in the Plan, the following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(a) "Award" means any Option, SAR, Restricted Stock, Deferred
Stock, Stock granted as a bonus or in lieu of another award, Dividend
Equivalent, Other Stock-Based Award, or Performance Award, together with
any related right or interest, granted to a Participant under the Plan.
(b) "Beneficiary" means any family member or members, including by
marriage or adoption, any trust in which the Participant or any family
member or members have more than 50% of the beneficial interest, and any
other entity in which the Participant or any family member or members own
more than 50% of the voting interests, in each case designated by the
Participant in his most recent written Beneficiary designation filed with
the Committee as entitled to exercise rights or receive benefits in
connection with the Award (or any portion thereof), or if there is no
surviving designated Beneficiary, then the person, persons, trust or
trusts entitled by will or the laws of descent and distribution to
exercise rights or receive benefits in connection with the Award on behalf
or in lieu of such non-surviving designated Beneficiary.
(c) "Board" means the Company's Board of Directors.
(d) "Change in Control" and related terms have the meanings
specified in Section 8.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
References to any provision of the Code or regulation (including a
proposed regulation) thereunder shall include any successor provisions and
regulations.
(f) "Committee" means a committee of two or more directors
designated by the Board to administer the Plan; provided, however, that,
directors appointed or serving as members of a Board committee designated
as the Committee shall not be employees of the Company or any subsidiary
or affiliate. The full Board may perform any function of the Committee
hereunder, and the Committee may delegate authority as provided in Section
3(b), in which case the term "Committee" shall refer to the Board or such
delegee.
(g) "Deferred Stock" means a right, granted to a Participant under
Section 6(e), to receive Stock or other Awards or a combination thereof at
the end of a specified deferral period. Such Awards may be denominated as
"Restricted Stock Units" as well.
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(h) "Dividend Equivalent" means a right, granted to a Participant
under Section 6(g), to receive cash, Stock, other Awards or other property
equal in value to all or a specified portion of the dividends paid with
respect to a specified number of shares of Stock.
(i) "Effective Date" means the effective date specified in Section
10(o).
(j) "Eligible Person" has the meaning specified in Section 5.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended. References to any provision of the Exchange Act or rule
(including a proposed rule) thereunder shall include any successor
provisions and rules.
(l) "Fair Market Value" means the fair market value of Stock,
Awards or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined by
the Committee, the Fair Market Value of Stock shall be the closing sale
price reported on the composite tape of the New York Stock Exchange on the
day as of which such value is being determined or, if there is no sale on
that day, then on the last previous day on which a sale was reported.
(m) "Option" means a right, granted to a Participant under Section
6(b), to purchase Stock or other Awards at a specified price during
specified time periods.
(n) "Other Stock-Based Awards" means Awards granted to a
Participant under Section 6(h).
(o) "Participant" means a person who has been granted an Award
under the Plan which remains outstanding, including a person who is no
longer an Eligible Person.
(p) "Performance Award" means a conditional right, granted to a
Participant under Section 6(i), to receive Stock or other Awards or
payments, as determined by the Committee, based upon performance criteria
specified by the Committee.
(q) "Restricted Stock" means Stock granted to a Participant under
Section 6(d) which is subject to certain restrictions and to a risk of
forfeiture.
(r) "Stock" means the Company's Common Stock, and any other equity
securities of the Company that may be substituted or resubstituted for
Stock pursuant to Section 10(c).
(s) "Stock Appreciation Rights" or "SAR" means a right granted to
a Participant under Section 6(c).
3. ADMINISTRATION.
(a) Authority of the Committee. The Plan shall be administered by
the Committee, which shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to select
Eligible Persons to become Participants; to grant Awards; to determine the
type and number of Awards, the dates on which Awards may be exercised and
on which the risk of forfeiture or deferral period relating to Awards
shall lapse or terminate, the acceleration of any such dates, the
expiration date of any Award, whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Stock, other Awards, or other property, and other
terms and conditions of, and all other matters relating to, Awards; to
prescribe documents evidencing or setting terms of Awards (such Award
documents need not be identical for each Participant), amendments thereto,
and rules and regulations for the administration of the Plan and
amendments thereto; to construe and interpret the Plan and Award documents
and correct
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defects, supply omissions or reconcile inconsistencies therein; and to
make all other decisions and determinations as the Committee may deem
necessary or advisable for the administration of the Plan. Decisions of
the Committee with respect to the administration and interpretation of the
Plan shall be final, conclusive, and binding upon all persons interested
in the Plan, including Participants, Beneficiaries, transferees under
Section 10(b) and other persons claiming rights from or through a
Participant, and shareholders.
(b) Manner of Exercise of Committee Authority. The Committee may
delegate to officers or managers of the Company or any subsidiary or
affiliate, or committees thereof, the authority, subject to such terms as
the Committee shall determine, to perform such functions, including
administrative functions, as the Committee may determine. The express
grant of any specific power to the Committee, and the taking of any action
by the Committee, shall not be construed as limiting any power or
authority of the Committee.
(c) Limitation of Liability. The Committee and each member
thereof, and any person acting pursuant to authority delegated by the
Committee, shall be entitled, in good faith, to rely or act upon any
report or other information furnished by any executive officer, other
officer or employee of the Company or a subsidiary or affiliate, the
Company's independent auditors, consultants or any other agents assisting
in the administration of the Plan. Members of the Committee, any person
acting pursuant to authority delegated by the Committee, and any officer
or employee of the Company or a subsidiary or affiliate acting at the
direction or on behalf of the Committee or a delegee shall not be
personally liable for any action or determination taken or made in good
faith with respect to the Plan, and shall, to the extent permitted by law,
be fully indemnified and protected by the Company with respect to any such
action or determination.
4. STOCK SUBJECT TO PLAN.
(a) Overall Number of Shares Available for Delivery. Subject to
adjustment as provided in Section 10(c), the total number of shares of
Stock reserved and available for delivery in connection with Awards under
the Plan shall be 4,500,000 shares; provided, however, that the total
number of shares which may be issued and delivered in connection with
Awards other than Options and SARs shall not exceed 100,000. Any shares of
Stock delivered under the Plan shall consist of authorized and unissued
shares, unless the Company's General Counsel determines that treasury
shares shall be delivered under the Plan.
(b) Share Counting Rules. The Committee may adopt reasonable
counting procedures to ensure appropriate counting, avoid double counting
(as, for example, in the case of tandem or substitute awards) and make
adjustments if the number of shares of Stock actually delivered differs
from the number of shares previously counted in connection with an Award;
provided, however, that shares withheld in payment of taxes upon vesting
of Restricted Stock and shares equal to the number of outstanding shares
surrendered in payment of the exercise price or taxes relating to an Award
shall not become available again under the Plan if the withholding or
surrender transaction occurs more than ten years after the date of
adoption of the Plan, and otherwise shares shall not become available
under this Section 4(b) in an event that would constitute a "material
revision" of the Plan subject to shareholder approval under then
applicable rules of the New York Stock Exchange. Shares subject to an
Award that is canceled, expired, forfeited, settled in cash or otherwise
terminated without a delivery of shares to the Participant will again be
available for Awards, and shares withheld in payment of the exercise price
or taxes relating to an Award and shares equal to the number surrendered
in payment of any exercise price or taxes relating to an Award shall be
deemed to constitute shares not delivered to the Participant and shall be
deemed to again be available for Awards under the Plan. In addition, in
the case of any Award granted in substitution for an award of a company or
business acquired by the Company or a subsidiary or affiliate, shares
issued or issuable in connection with such substitute Award shall not be
counted against the number of shares reserved under the Plan, but shall be
available under the Plan by virtue of the Company's assumption of the
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plan or arrangement of the acquired company or business.
5. ELIGIBILITY. Awards may be granted under the Plan only to Eligible
Persons. For purposes of the Plan, an "Eligible Person" means a person who is
not an executive officer or director of the Company but who is an employee of
the Company or any subsidiary or affiliate, a consultant or other person who
provides substantial services to the Company or a subsidiary or affiliate, or a
person who has been offered employment by the Company or a subsidiary or
affiliate, provided that such prospective employee or consultant or other person
may not receive any payment or exercise any right relating to an Award until
such person has commenced employment with or providing of services to the
Company or a subsidiary or affiliate. An employee on leave of absence may be
considered as still in the employ of the Company or a subsidiary or affiliate
for purposes of eligibility for participation in the Plan. For purposes of the
Plan, a joint venture in which the Company or a subsidiary has a substantial
direct or indirect equity investment shall be deemed an affiliate, if so
determined by the Committee.
6. SPECIFIC TERMS OF AWARDS.
(a) General. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any
Award or the exercise thereof, at the date of grant or thereafter (subject
to Section 10(e)), such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine,
including terms requiring forfeiture of Awards in the event of termination
of employment or service by the Participant and terms permitting a
Participant to make elections relating to his or her Award. The Committee
shall retain full power and discretion with respect to any term or
condition of an Award that is not mandatory under the Plan. The Committee
shall require the payment of lawful consideration for an Award to the
extent necessary to satisfy the requirements of the New York Business
Corporation Law, and may otherwise require payment of consideration for an
Award except as limited by the Plan.
(b) Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee,
provided that such exercise price shall be not less than the Fair
Market Value of a share of Stock on the date of grant of such
Option, subject to Sections 6(f) and 7(a).
(ii) Option Term; Time and Method of Exercise. The Committee
shall determine the term of each Option. The Committee shall
determine the time or times at which or the circumstances under
which an Option may be exercised in whole or in part (including
based on achievement of performance goals and/or future service
requirements), the methods by which such exercise price may be paid
or deemed to be paid and the form of such payment (subject to
Section 10(j)), including, without limitation, cash, Stock, other
Awards or awards granted under other plans of the Company or any
subsidiary or affiliate, or other property (including through
"cashless exercise" arrangements, to the extent permitted by
applicable law, but excluding any exercise method in which a
personal loan would be made from the Company to the Participant),
and the methods by or forms in which Stock will be delivered or
deemed to be delivered in satisfaction of Options to Participants
(including deferred delivery of shares representing the Option
"profit," at the election of the Participant or as mandated by the
Committee, with such deferred shares subject to any vesting,
forfeiture or other terms as the Committee may specify).
(c) Stock Appreciation Rights. The Committee is authorized to
grant SAR's to Participants on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the Participant
to whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the Fair Market Value of one share of Stock on the
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date of exercise (or, in the case of a "Limited SAR," the Fair
Market Value determined by reference to the Change in Control Price,
as defined under Section 8(d) hereof) over (B) the grant price of
the SAR as determined by the Committee.
(ii) Other Terms. The Committee shall determine at the date
of grant or thereafter, the time or times at which and the
circumstances under which a SAR may be exercised in whole or in part
(including based on achievement of performance goals and/or future
service requirements), the method of exercise, method of settlement,
form of consideration payable in settlement, method by or forms in
which Stock will be delivered or deemed to be delivered to
Participants, and whether or not a SAR shall be free-standing or in
tandem or combination with any other Award. Limited SARs that may
only be exercised in connection with a Change in Control or other
event as specified by the Committee may be granted on such terms,
not inconsistent with this Section 6(c), as the Committee may
determine.
(d) Restricted Stock. The Committee is authorized to grant
Restricted Stock to Participants on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be
subject to such restrictions on transferability, risk of forfeiture
and other restrictions, if any, as the Committee may impose, which
restrictions may lapse separately or in combination at such times,
under such circumstances (including based on achievement of
performance goals and/or future service requirements), in such
installments or otherwise and under such other circumstances as the
Committee may determine at the date of grant or thereafter. Except
to the extent restricted under the terms of the Plan and any Award
document relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a shareholder,
including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment or
other requirement imposed by the Committee).
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment or service during the
applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited and reacquired by the
Company; provided that the Committee may provide, by rule or
regulation or in any Award document, or may determine in any
individual case, that restrictions or forfeiture conditions relating
to Restricted Stock will lapse in whole or in part, including in the
event of terminations resulting from specified causes.
(iii) Certificates for Stock. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are
registered in the name of the Participant, the Committee may require
that such certificates bear an appropriate legend referring to the
terms, conditions and restrictions applicable to such Restricted
Stock, that the Company retain physical possession of the
certificates, and that the Participant deliver a stock power to the
Company, endorsed in blank, relating to the Restricted Stock.
(iv) Dividends and Splits. As a condition to the grant of an
Award of Restricted Stock, the Committee may require that any
dividends paid on a share of Restricted Stock shall be either (A)
paid with respect to such Restricted Stock at the dividend payment
date in cash, in kind, or in a number of shares of unrestricted
Stock having a Fair Market Value equal to the amount of such
dividends, or (B) automatically reinvested in additional Restricted
Stock or held in kind, which shall be subject to the same terms as
applied to the original Restricted Stock to which it relates, or (C)
deferred as to payment, either as a cash deferral or with the amount
or value thereof automatically deemed reinvested in shares of
Deferred Stock, other Awards or other investment vehicles, subject
to such terms as the Committee shall determine or permit a
Participant to elect. Unless otherwise determined by the Committee,
Stock distributed in connection with a Stock split or Stock
dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to
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the same extent as the Restricted Stock with respect to which such
Stock or other property has been distributed.
(e) Deferred Stock. The Committee is authorized to grant Deferred
Stock to Participants, which are rights to receive Stock, other Awards, or
a combination thereof at the end of a specified deferral period, subject
to the following terms and conditions:
(i) Award and Restrictions. Issuance of Stock will occur
upon expiration of the deferral period specified for an Award of
Deferred Stock by the Committee (or, if permitted by the Committee,
as elected by the Participant). In addition, Deferred Stock shall be
subject to such restrictions on transferability, risk of forfeiture
and other restrictions, if any, as the Committee may impose, which
restrictions may lapse at the expiration of the deferral period or
at earlier specified times (including based on achievement of
performance goals and/or future service requirements), separately or
in combination, in installments or otherwise, and under such other
circumstances as the Committee may determine at the date of grant or
thereafter. Deferred Stock may be satisfied by delivery of Stock,
other Awards, or a combination thereof (subject to Section 10(j)),
as determined by the Committee at the date of grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment or service during the
applicable deferral period or portion thereof to which forfeiture
conditions apply (as provided in the Award document evidencing the
Deferred Stock), all Deferred Stock that is at that time subject to
such forfeiture conditions shall be forfeited; provided that the
Committee may provide, by rule or regulation or in any Award
document, or may determine in any individual case, that restrictions
or forfeiture conditions relating to Deferred Stock will lapse in
whole or in part, including in the event of terminations resulting
from specified causes.
(iii) Dividend Equivalents. Unless otherwise determined by the
Committee, Dividend Equivalents on the specified number of shares of
Stock covered by an Award of Deferred Stock shall be either (A) paid
with respect to such Deferred Stock at the dividend payment date in
cash or in shares of unrestricted Stock having a Fair Market Value
equal to the amount of such dividends, or (B) deferred with respect
to such Deferred Stock, either as a cash deferral or with the amount
or value thereof automatically deemed reinvested in additional
Deferred Stock, other Awards or other investment vehicles having a
Fair Market Value equal to the amount of such dividends, as the
Committee shall determine or permit a Participant to elect.
(f) Bonus Stock and Awards in Lieu of Obligations. The Committee
is authorized to grant Stock as a bonus, or to grant Stock or other Awards
in lieu of obligations of the Company or a subsidiary or affiliate to pay
cash or deliver other property under the Plan or under other plans or
compensatory arrangements, subject to such terms as shall be determined by
the Committee.
(g) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to a Participant, entitling the Participant to
receive cash, Stock, other Awards, or other property equivalent to all or
a portion of the dividends paid with respect to a specified number of
shares of Stock. Dividend Equivalents may be awarded on a free-standing
basis or in connection with another Award. The Committee may provide that
Dividend Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional Stock, Awards, or other
investment vehicles, and subject to restrictions on transferability, risks
of forfeiture and such other terms as the Committee may specify.
(h) Other Stock-Based Awards. The Committee is authorized, subject
to limitations under applicable law, to grant to Participants such other
Awards that may be denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, Stock or factors
that may influence the value of Stock, including, without limitation,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into Stock, purchase rights for Stock, Awards with value and
payment contingent upon performance of the Company or business units
thereof or any other factors designated by
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the Committee, and Awards valued by reference to the book value of Stock
or the value of securities of or the performance of specified subsidiaries
or affiliates or other business units. The Committee shall determine the
terms and conditions of such Awards. Stock delivered pursuant to an Award
in the nature of a purchase right granted under this Section 6(h) shall be
purchased for such consideration, paid for at such times, by such methods,
and in such forms, including, without limitation, cash, Stock, other
Awards, notes, or other property, as the Committee shall determine. Cash
awards, as an element of or supplement to any other Award under the Plan,
may also be granted pursuant to this Section 6(h).
(i) Performance Awards. The Committee is authorized to grant
Performance Awards to Participants. Performance Awards may be denominated
as a number of shares of Stock, shares of Stock having a specified cash
value at a future date, or a number of other Awards (or a combination)
which may be earned upon achievement or satisfaction of performance
conditions specified by the Committee. In addition, the Committee may
specify that any other Award shall constitute a Performance Award by
conditioning the right of a Participant to exercise the Award or have it
settled, and the timing thereof, upon achievement or satisfaction of such
performance conditions as may be specified by the Committee. The Committee
may use such business criteria and other measures of performance as it may
deem appropriate in establishing any performance conditions, and may
exercise its discretion to reduce or increase the amounts payable under
any Award subject to performance conditions.
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of
the Company, any subsidiary or affiliate, or any business entity to be
acquired by the Company or a subsidiary or affiliate, or any other right
of a Participant to receive payment from the Company or any subsidiary or
affiliate. Awards granted in addition to or in tandem with other Awards or
awards may be granted either as of the same time as or a different time
from the grant of such other Awards or awards. Subject to Section 10(j),
the Committee may determine that, in granting a new Award, the
in-the-money value or other value of any surrendered Award or award may be
applied to reduce the exercise price of any Option, grant price of any
SAR, or purchase price of any other Award.
(b) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee.
(c) Form and Timing of Payment under Awards; Deferrals. Subject to
the terms of the Plan (including Section 10(j)) and any applicable Award
document, payments to be made by the Company or a subsidiary or affiliate
upon the exercise of an Option or other Award or settlement of an Award
may be made in such forms as the Committee shall determine, including,
without limitation, cash, Stock, other Awards or other property, and may
be made in a single payment or transfer, in installments, or on a deferred
basis. The settlement of any Award may be accelerated, and cash paid in
lieu of Stock in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events (subject to
Section 10(j)). Installment or deferred payments may be required by the
Committee (subject to Section 10(e)) or permitted at the election of the
Participant on terms and conditions established by the Committee. Payments
may include, without limitation, provisions for the payment or crediting
of reasonable interest on installment or deferred payments or the grant or
crediting of Dividend Equivalents or other amounts in respect of
installment or deferred payments denominated in Stock.
8. CHANGE IN CONTROL.
(a) Effect of "Change in Control" on Non-Performance Based Awards.
In the event of a "Change in Control," the following provisions shall
apply to non-performance based Awards, including Awards as to
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which performance conditions previously have been satisfied or are deemed
satisfied under Section 8(b), unless otherwise provided by the Committee
in the Award document:
(i) All deferral of settlement, forfeiture conditions and
other restrictions applicable to Awards granted under the Plan shall
lapse and such Awards shall be fully payable as of the time of the
Change in Control without regard to deferral and vesting conditions,
except to the extent of any waiver by the Participant or other
express election to defer beyond a Change in Control and subject to
applicable restrictions set forth in Section 10(a);
(ii) Any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and
vested as of the time of the Change in Control and shall remain
exercisable and vested for the balance of the stated term of such
Award without regard to any termination of employment or service by
the Participant other than a termination for "cause" (as defined in
any employment or severance agreement between the Company or a
subsidiary or affiliate and the Participant then in effect or, if
none, as defined by the Committee and in effect at the time of the
Change in Control), subject only to applicable restrictions set
forth in Section 10(a); and
(iii) The Committee may, in its discretion, determine to
extend to any Participant who holds an Option the right to elect,
during the 60-day period immediately following the Change in
Control, in lieu of acquiring the shares of Stock covered by such
Option, to receive in cash the excess of the Change in Control Price
over the exercise price of such Option, multiplied by the number of
shares of Stock covered by such Option, and to extend to any
Participant who holds other types of Awards denominated in shares
the right to elect, during the 60-day period immediately following
the Change in Control, in lieu of receiving the shares of Stock
covered by such Award, to receive in cash the Change in Control
Price multiplied by the number of shares of Stock covered by such
Award.
(b) Effect of "Change in Control" on Performance-Based Awards. In
the event of a "Change in Control," with respect to an outstanding Award
subject to achievement of performance goals and conditions, such
performance goals and conditions shall be deemed to be met or exceeded if
and to the extent so provided by the Committee in the Award document
governing such Award or other agreement with the Participant.
(c) Definition of "Change in Control." A "Change in Control" shall
be deemed to have occurred if, after the Effective Date, there shall have
occurred any of the following:
(i) Any "person," as such term is used in Section 13(d) and
14(d) of the Exchange Act (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Company, or any company owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company), acquires voting securities
of the Company and immediately thereafter is a "40% Beneficial
Owner." For purposes of this provision, a "40% Beneficial Owner"
shall mean a person who is the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 40% or more of the combined
voting power of the Company's then-outstanding voting securities;
provided, however, that the term "40% Beneficial Owner" shall not
include any person who was a beneficial owner of outstanding voting
securities of the Company at February 20, 1990, or any person or
persons who was or becomes a fiduciary of any such person or persons
who is, or in the aggregate, are a "40% Beneficial Owner" (an
"Existing Shareholder"), including any group that may be formed
which is comprised solely of Existing Shareholders, unless and until
such time after February 20, 1990 as any such Existing Shareholder
shall have become the beneficial owner (other than by means of a
stock dividend, stock split, gift, inheritance or receipt or
exercise of, or accrual of any right to exercise, a stock option
granted by the Company or receipt or settlement of any other
stock-related award granted by the Company) by purchase of any
additional voting securities of the Company; and provided further,
that the term "40% Beneficial Owner" shall not include any person
who shall become the beneficial owner of 40% or more of the combined
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voting power of the Company's then-outstanding voting securities
solely as a result of an acquisition by the Company of its voting
securities, until such time thereafter as such person shall become
the beneficial owner (other than by means of a stock dividend or
stock split) of any additional voting securities and becomes a 40%
Beneficial Owner in accordance with this Section 8(c)(i);
(ii) Individuals who on September 1, 2000 constitute the
Board, and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened
election consent, including but not limited to a consent
solicitation, relating to the election of directors of the Company)
whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors on September 1, 2000 or whose election or nomination for
election was previously so approved or recommended, cease for any
reason to constitute at least a majority thereof;
(iii) There is consummated a merger, consolidation,
recapitalization, or reorganization of the Company, or a reverse
stock split of any class of voting securities of the Company, if,
immediately following consummation of any of the foregoing, either
(A) individuals who, immediately prior to such consummation,
constitute the Board do not constitute at least a majority of the
members of the board of directors of the Company or the surviving or
parent entity, as the case may be, or (B) the voting securities of
the Company outstanding immediately prior to such recommendation do
not represent (either by remaining outstanding or by being converted
into voting securities of a surviving or parent entity) at least 60%
or more of the combined voting power of the outstanding voting
securities of the Company or such surviving or parent entity; or
(iv) The shareholders of the Company have approved a plan of
complete liquidation of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction have a
similar effect).
(d) Definition of "Change in Control Price." The "Change in
Control Price" means an amount in cash equal to the higher of (i) the
amount of cash and fair market value of property that is the highest price
per share paid (including extraordinary dividends) in any transaction
triggering the Change in Control or any liquidation of shares following a
sale of substantially all assets of the Company, or (ii) the highest Fair
Market Value per share at any time during the 60-day period preceding and
60-day period following the Change in Control.
9. ADDITIONAL AWARD FORFEITURE PROVISIONS.
(a) Forfeiture of Options and Other Awards and Gains Realized Upon
Prior Option Exercises or Award Settlements. Unless otherwise determined
by the Committee, each Award granted hereunder shall be subject to the
following additional forfeiture conditions, to which the Participant, by
accepting an Award hereunder, agrees. If any of the events specified in
Section 9(b)(i), (ii), or (iii) occurs (a "Forfeiture Event"), all of the
following forfeitures will result:
(i) The unexercised portion of the Option, whether or not
vested, and any other Award not then settled (except for an Award
that has not been settled solely due to an elective deferral by the
Participant and otherwise is not forfeitable in the event of any
termination of service of the Participant) will be immediately
forfeited and canceled upon the occurrence of the Forfeiture Event;
and
(ii) The Participant will be obligated to repay to the
Company, in cash, within five business days after demand is made
therefor by the Company, the total amount of Award Gain (as defined
herein) realized by the Participant upon each exercise of an Option
or settlement of an Award (regardless of any elective deferral) that
occurred on or after (A) the date that is six months prior to the
occurrence of the Forfeiture Event, if the Forfeiture Event occurred
while the Participant was employed by the Company or a subsidiary or
affiliate, or (B) the date that is six months prior to the
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date the Participant's employment by the Company or a subsidiary or
affiliate terminated, if the Forfeiture Event occurred after the
Participant ceased to be so employed. For purposes of this Section,
the term "Award Gain" shall mean (i), in respect of a given Option
exercise, the product of (X) the Fair Market Value per share of
Stock at the date of such exercise (without regard to any subsequent
change in the market price of shares) minus the exercise price times
(Y) the number of shares as to which the Option was exercised at
that date, and (ii), in respect of any other settlement of an Award
granted to the Participant, the Fair Market Value of the cash or
Stock paid or payable to Participant (regardless of any elective
deferral) less any cash or the Fair Market Value of any Stock or
property (other than an Award or award which would have itself then
been forfeitable hereunder and excluding any payment of tax
withholding) paid by the Participant to the Company as a condition
of or in connection such settlement.
(b) Events Triggering Forfeiture. The forfeitures specified in
Section 9(a) will be triggered upon the occurrence of any one of the
following Forfeiture Events at any time during the Participant's
employment by the Company or a subsidiary or affiliate or during the
one-year period following termination of such employment:
(i) The Participant, acting alone or with others, directly
or indirectly, prior to a Change in Control, (A) engages, either as
employee, employer, consultant, advisor, or director, or as an
owner, investor, partner, or shareholder unless the Participant's
interest is insubstantial, in any business in an area or region in
which the Company conducts business at the date the event occurs,
which is directly in competition with a business then conducted by
the Company or a subsidiary or affiliate; (B) induces any customer
or supplier of the Company or a subsidiary or affiliate, or other
company with which the Company or a subsidiary or affiliate has a
business relationship, to curtail, cancel, not renew, or not
continue his or her or its business with the Company or any
subsidiary or affiliate; or (C) induces, or attempts to influence,
any employee of or service provider to the Company or a subsidiary
or affiliate to terminate such employment or service. The Committee
shall, in its discretion, determine which lines of business the
Company conducts on any particular date and which third parties may
reasonably be deemed to be in competition with the Company. For
purposes of this Section 9(b)(i), a Participant's interest as a
shareholder is insubstantial if it represents beneficial ownership
of less than five percent of the outstanding class of stock, and a
Participant's interest as an owner, investor, or partner is
insubstantial if it represents ownership, as determined by the
Committee in its discretion, of less than five percent of the
outstanding equity of the entity;
(ii) The Participant discloses, uses, sells, or otherwise
transfers, except in the course of employment with or other service
to the Company or any subsidiary or affiliate, any confidential or
proprietary information of the Company or any subsidiary or
affiliate, including but not limited to information regarding the
Company's current and potential customers, organization, employees,
finances, and methods of operations and investments, so long as such
information has not otherwise been disclosed to the public or is not
otherwise in the public domain, except as required by law or
pursuant to legal process, or the Participant makes statements or
representations, or otherwise communicates, directly or indirectly,
in writing, orally, or otherwise, or takes any other action which
may, directly or indirectly, disparage or be damaging to the Company
or any of its subsidiaries or affiliates or their respective
officers, directors, employees, advisors, businesses or reputations,
except as required by law or pursuant to legal process; or
(iii) The Participant fails to cooperate with the Company or
any subsidiary or affiliate by making himself or herself available
to testify on behalf of the Company or such subsidiary or affiliate
in any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, or otherwise fails to assist the
Company or any subsidiary or affiliate in any such action, suit, or
proceeding by providing information and meeting and consulting with
members of management of, other representatives of, or counsel to,
the Company or such subsidiary or affiliate, as reasonably
requested.
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(c) Agreement Does Not Prohibit Competition or Other Participant
Activities. Although the conditions set forth in this Section 9 shall be
deemed to be incorporated into an Award, a Participant is not thereby
prohibited from engaging in any activity, including but not limited to
competition with the Company and its subsidiaries and affiliates. Rather,
the non-occurrence of the Forfeiture Events set forth in Section 9(b) is a
condition to the Participant's right to realize and retain value from his
or her compensatory Options and Awards, and the consequence under the Plan
if the Participant engages in an activity giving rise to any such
Forfeiture Event are the forfeitures specified herein. The Company and the
Participant shall not be precluded by this provision or otherwise from
entering into other agreements concerning the subject matter of Section
9(a) and 9(b).
(d) Committee Discretion. The Committee may, in its discretion,
waive in whole or in part the Company's right to forfeiture under this
Section, but no such waiver shall be effective unless evidenced by a
writing signed by a duly authorized officer of the Company. In addition,
the Committee may impose additional conditions on Awards, by inclusion of
appropriate provisions in the document evidencing or governing any such
Award.
10. GENERAL PROVISIONS.
(a) Compliance with Legal and Other Requirements. The Company may,
to the extent deemed necessary or advisable by the Committee, postpone the
issuance or delivery of Stock or payment of other benefits under any Award
until completion of such registration or qualification of such Stock or
other required action under any federal or state law, rule or regulation,
listing or other required action with respect to any stock exchange or
automated quotation system upon which the Stock or other securities of the
Company are listed or quoted, or compliance with any other obligation of
the Company, as the Committee may consider appropriate, and may require
any Participant to make such representations, furnish such information and
comply with or be subject to such other conditions as it may consider
appropriate in connection with the issuance or delivery of Stock or
payment of other benefits in compliance with applicable laws, rules, and
regulations, listing requirements, or other obligations. The foregoing
notwithstanding, in connection with a Change in Control, the Company shall
take or cause to be taken no action, and shall undertake or permit to
arise no legal or contractual obligation, that results or would result in
any postponement of the issuance or delivery of Stock or payment of
benefits under any Award or the imposition of any other conditions on such
issuance, delivery or payment, to the extent that such postponement or
other condition would represent a greater burden on a Participant than
existed on the 90th day preceding the Change in Control.
(b) Limits on Transferability; Beneficiaries. No Award or other
right or interest of a Participant under the Plan shall be pledged,
hypothecated or otherwise encumbered or subject to any lien, obligation or
liability of such Participant to any party (other than the Company or a
subsidiary or affiliate thereof), or assigned or transferred by such
Participant, and such Awards or rights that may be exercisable shall be
exercised during the lifetime of the Participant only by the Participant
or his or her guardian or legal representative, except that (i) Awards and
related rights shall be transferred to a Participant's Beneficiary or
Beneficiaries upon the death of the Participant, and (ii) Awards and other
rights may be transferred to one or more Beneficiaries during the lifetime
of the Participant, and rights thereunder may be exercised by such
transferees in accordance with the terms of such Award, but only if and to
the extent such transfers are then permitted by the Committee, subject to
any terms and conditions which the Committee may impose thereon (including
limitations the Committee may deem appropriate in order that offers and
sales under the Plan will meet applicable requirements of registration
forms under the Securities Act of 1933 specified by the Securities and
Exchange Commission). A Beneficiary or other person claiming any rights
under the Plan from or through any Participant shall be subject to all
terms and conditions of the Plan and any Award document applicable to such
Participant, except as otherwise determined by the Committee, and to any
additional terms and conditions deemed necessary or appropriate by the
Committee.
(c) Adjustments. In the event that any large, special and
non-recurring dividend or other distribution (whether in the form of cash
or property other than Stock), recapitalization, forward or reverse
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split, Stock dividend, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other
similar corporate transaction or event affects the Stock such that an
adjustment is determined by the Committee to be appropriate under the
Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of shares of Stock which may
be delivered in connection with Awards granted thereafter, including al
applicable limitations specified in Section 4(a), (ii) the number and kind
of shares of Stock subject to or deliverable in respect of outstanding
Awards, (iii) any fixed market price of Common Stock referred to in a
performance condition or otherwise incorporated as a term of an Award, and
(iv) the exercise price, grant price or purchase price relating to any
Award or, if deemed appropriate, the Committee may make provision for a
payment of cash or property to the holder of an outstanding Option
(subject to Section 10(j)). In addition, the Committee is authorized to
make adjustments in the terms and conditions of, and the criteria included
in, Awards (including Performance Awards and performance goals relating
thereto) in recognition of unusual or nonrecurring events (including,
without limitation, events described in the preceding sentence, as well as
acquisitions and dispositions of businesses and assets) affecting the
Company, any subsidiary or affiliate or other business unit, or the
financial statements of the Company or any subsidiary or affiliate, or in
response to changes in applicable laws, regulations, accounting
principles, tax rates and regulations or business conditions or in view of
the Committee's assessment of the business strategy of the Company, any
subsidiary or affiliate or business unit thereof, performance of
comparable organizations, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed relevant.
(d) Tax Provisions.
(i) Withholding. The Company and any subsidiary or affiliate
is authorized to withhold from any Award granted, any payment
relating to an Award under the Plan, including from a distribution
of Stock, or any payroll or other payment to a Participant, amounts
of withholding and other taxes due or potentially payable in
connection with any transaction involving an Award, and to take such
other action as the Committee may deem advisable to enable the
Company and Participants to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to any Award.
This authority shall include authority to withhold or receive Stock
or other property and to make cash payments in respect thereof in
satisfaction of a Participant's withholding obligations, either on a
mandatory or elective basis in the discretion of the Committee.
Other provisions of the Plan notwithstanding, only the minimum
amount of Stock deliverable in connection with an Award necessary to
satisfy statutory withholding requirements will be withheld.
(ii) Required Consent to and Notification of Code Section
83(b) Election. No election under Section 83(b) of the Code (to
include in gross income in the year of transfer the amounts
specified in Code Section 83(b)) or under a similar provision of the
laws of a jurisdiction outside the United States may be made unless
expressly permitted by the terms of the Award document or by action
of the Committee in writing prior to the making of such election. In
any case in which a Participant is permitted to make such an
election in connection with an Award, the Participant shall notify
the Company of such election within ten days of filing notice of the
election with the Internal Revenue Service or other governmental
authority, in addition to any filing and notification required
pursuant to regulations issued under Code Section 83(b) or other
applicable provision.
(e) Changes to the Plan. The Board may amend, suspend or terminate
the Plan or the Committee's authority to grant Awards under the Plan
without the consent of shareholders or Participants; provided, however,
that, without the consent of an affected Participant, no such Board action
may materially and adversely affect the rights of such Participant under
any outstanding Award. The Committee shall have no authority to waive or
modify any other Award term after the Award has been granted to the extent
that the waived or modified term was mandatory under the Plan.
(f) Right of Setoff. The Company or any subsidiary or affiliate
may, to the extent permitted by applicable law, deduct from and set off
against any amounts the Company or a subsidiary or affiliate may owe to
the Participant from time to time, including amounts payable in connection
with any Award, owed as
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wages, fringe benefits, or other compensation owed to the Participant,
such amounts as may be owed by the Participant to the Company, including
but not limited to amounts owed under Section 9(a), although the
Participant shall remain liable for any part of the Participant's payment
obligation not satisfied through such deduction and setoff. By accepting
any Award granted hereunder, the Participant agrees to any deduction or
setoff under this Section 10(f).
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
or obligation to deliver Stock pursuant to an Award, nothing contained in
the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company; provided that the
Committee may authorize the creation of trusts and deposit therein cash,
Stock, other Awards or other property, or make other arrangements to meet
the Company's obligations under the Plan. Such trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan
unless the Committee otherwise determines with the consent of each
affected Participant.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan
by the Board nor its submission to the shareholders of the Company for
approval shall be construed as creating any limitations on the power of
the Board or a committee thereof to adopt such other incentive
arrangements, apart from the Plan, as it may deem desirable, and such
other arrangements may be either applicable generally or only in specific
cases.
(i) Payments in the Event of Forfeitures; Fractional Shares.
Unless otherwise determined by the Committee, in the event of a forfeiture
of an Award with respect to which a Participant paid cash consideration,
the Participant shall be repaid the amount of such cash consideration. No
fractional shares of Stock shall be issued or delivered pursuant to the
Plan or any Award. The Committee shall determine whether cash, other
Awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j) Certain Limitations Relating to Accounting Treatment of
Awards. Other provisions of the Plan notwithstanding, the Committee's
authority under the Plan (including under Sections 7(c), 7(d), 10(c) and
10(d)) is limited to the extent necessary to ensure that any Option or
other Award of a type that the Committee has intended to be subject to
fixed accounting with a measurement date at the date of grant or the date
performance conditions are satisfied under APB 25 shall not become subject
to "variable" accounting solely due to the existence of such authority,
unless the Committee specifically determines that the Award shall remain
outstanding despite such "variable" accounting. In addition, other
provisions of the Plan notwithstanding, (i) if any right under this Plan
would cause a transaction to be ineligible for pooling-of-interests
accounting that would, but for the right hereunder, be eligible for such
accounting treatment, such right shall be automatically adjusted so that
pooling-of-interests accounting shall be available, including by
substituting Stock or cash having a Fair Market Value equal to any cash or
Stock otherwise payable in respect of any right to cash which would cause
the transaction to be ineligible for pooling-of-interests accounting, and
(ii) if any authority under Section 8(c) would cause a transaction to be
ineligible for pooling-of-interests accounting that would, but for such
authority, be eligible for such accounting treatment, such authority shall
be limited to the extent necessary so that such transaction would be
eligible for pooling-of-interests accounting.
(k) Governing Law. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan and any Award
document shall be determined in accordance with the laws of the State of
New York, without giving effect to principles of conflicts of laws, and
applicable provisions of federal law.
(l) Awards to Participants Outside the United States. The
Committee may modify the terms of any Award under the Plan made to or held
by a Participant who is then resident or primarily employed outside of the
United States in any manner deemed by the Committee to be necessary or
appropriate in order that such Award shall conform to laws, regulations,
and customs of the country in which the Participant is then resident or
primarily employed, or so that the value and other benefits of the Award
to
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the Participant, as affected by foreign tax laws and other restrictions
applicable as a result of the Participant's residence or employment abroad
shall be comparable to the value of such an Award to a Participant who is
resident or primarily employed in the United States. An Award may be
modified under this Section 10(l) in a manner that is inconsistent with
the express terms of the Plan, so long as such modifications will not
contravene any applicable law or regulation.
(m) Limitation on Rights Conferred under Plan. Neither the Plan
nor any action taken hereunder shall be construed as (i) giving any
Eligible Person or Participant the right to continue as an Eligible Person
or Participant or in the employ or service of the Company or a subsidiary
or affiliate, (ii) interfering in any way with the right of the Company or
a subsidiary or affiliate to terminate any Eligible Person's or
Participant's employment or service at any time, (iii) giving an Eligible
Person or Participant any claim to be granted any Award under the Plan or
to be treated uniformly with other Participants and employees, or (iv)
conferring on a Participant any of the rights of a shareholder of the
Company unless and until the Participant is duly issued or transferred
shares of Stock in accordance with the terms of an Award or an Option is
duly exercised. Except as expressly provided in the Plan and an Award
document, neither the Plan nor any Award document shall confer on any
person other than the Company and the Participant any rights or remedies
thereunder.
(n) Severability; Entire Agreement. If any of the provisions of
this Plan or any Award document is finally held to be invalid, illegal or
unenforceable (whether in whole or in part), such provision shall be
deemed modified to the extent, but only to the extent, of such invalidity,
illegality or unenforceability, and the remaining provisions shall not be
affected thereby; provided, that, if any of such provision is finally held
to be invalid, illegal, or unenforceable because it exceeds the maximum
scope determined to be acceptable to permit such provision to be
enforceable, such provision shall be deemed to be modified to the minimum
extent necessary to modify such scope in order to make such provision
enforceable hereunder. The Plan and any Award documents contain the entire
agreement of the parties with respect to the subject matter thereof and
supersede all prior agreements, promises, covenants, arrangements,
communications, representations and warranties between them, whether
written or oral with respect to the subject matter thereof.
(o) Plan Effective Date and Termination. The Plan shall become
effective at November 14, 2000. Unless earlier terminated by action of the
Board of Directors, the Plan will remain in effect until such time as no
Stock remains available for delivery under the Plan and the Company has no
further rights or obligations under the Plan with respect to outstanding
Awards under the Plan.
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