EXXON CORPORATION
1993 INCENTIVE PROGRAM
Adopted by Shareholders April 28, 1993
(as amended September 27, 1995)
General Provisions
I. Purpose. The 1993 Incentive Program is intended to help maintain and
develop strong management through ownership of shares of the Corporation by
key employees of the Corporation and certain of its affiliates and through
incentive awards for recognition of efforts and accomplishments which
contribute materially to the success of the Corporation's business
interests.
II. Definitions. In this Program, except where the context otherwise
indicates, the following definitions apply:
(1) 'Affiliate' means any corporation, partnership, or other entity
in which the Corporation, directly or indirectly, owns a 50 percent or
greater equity interest.
(2) 'Award' means a stock option, stock appreciation right ('SAR'),
restricted stock, performance award, incentive share, dividend
equivalent right ('DER'), or other award under this Program.
(3) 'Board' means the Board of Directors of the Corporation.
(4) 'Board Compensation Committee,' hereinafter sometimes called the
'BCC,' means the committee of the Board so designated in accordance with
Section IV.
(5) 'By the grant' means by the action of the granting authority at
the time of the grant of an award hereunder, or at the time of an
amendment of the grant, as the case may be.
(6) 'Code' means the Internal Revenue Code, as in effect from time
to time.
(7) 'Corporation' means Exxon Corporation, a New Jersey corporation.
(8) 'Designated beneficiary' means the person designated by the
grantee of an award hereunder to be entitled, on the death of the
grantee, to any remaining rights arising out of such award. Such
designation must be made in writing and in accordance with such
regulations as the granting authority may establish.
(9) 'Detrimental activity' means activity that is determined in
individual cases, by the appropriate authority pursuant to Section III,
to be detrimental to the interests of the Corporation or any affiliate.
(10) 'Dividend equivalent right,' herein sometimes called a 'DER,'
means the right of the holder thereof to receive, pursuant to the terms
of the DER, credits based on the cash dividends that would be paid on
the shares specified in the DER if such shares were held by the grantee,
as more particularly set forth in Section XIV(1).
(11) 'Effectively granted' means, for purposes of determining the
number of shares subject to an outstanding award under this Program, the
number of shares subject to such award or the number of shares with
respect to which the value of such award is measured, as applicable,
determined in each case according to the standards of Rule 16b-3. An
option that includes an SAR shall be considered a single award for this
purpose.
(12) 'Effectively issued' means the gross number of shares
purchased, issued, delivered, or paid free of restrictions upon the
exercise,
settlement, or payment of an award, or lapse of restrictions thereon, as
the case may be, determined in each case according to the standards of Rule
16b-3.
(13) 'Eligible employee' means an employee who is a director or
officer, or in a managerial, professional, or other key position as
determined by the granting authority.
(14) 'Employee' means a regular employee of the Corporation or one of
its affiliates.
(15) 'Exchange Act' means the Securities Exchange Act of 1934, as
amended from time to time.
(16) 'Fair market value' in relation to a share as of any specific time
shall mean such value as reported for stock exchange transactions
determined in accordance with any applicable regulations of the granting
authority in effect at the relevant time.
(17) 'Grantee' means a recipient of an award under this Program.
(18) 'Granting authority' means the Board or the appropriate committee
acting under the authority of Section V.
(19) 'Incentive shares' means an award of shares granted pursuant to
Section XIII.
(20) 'Incentive Stock Option,' herein sometimes called an 'ISO,' means
a stock option meeting the requirements of Section 422 of the Code or any
successor provision.
(21) 'Performance award' means an award of shares, or of units or
rights based on, payable in, or otherwise related to shares, granted
pursuant to Section XII.
(22) 'Performance period' means any period specified by the grant of a
performance award during which specified performance criteria are to be
measured.
(23) 'Reporting person' means a person subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to equity
securities of the Corporation.
(24) 'Restricted stock' means any share issued with the restriction
that the holder may not sell, transfer, pledge, or assign such share and
such other restrictions (which may include, but are not limited to,
restrictions on the right to vote or receive dividends) which may expire
separately or in combination, at one time or in installments, all as
specified by the grant.
(25) 'Rule 16b-3' means Rule 16b-3 (or any successor thereto) under the
Exchange Act that exempts transactions under employee benefit plans, as in
effect from time to time.
(26) 'Share' means a share of Common Stock of the Corporation issued
and reacquired by the Corporation or previously authorized but unissued.
(27) 'Shareholder-approved plan' means any of the plans constituting
parts of any of the Incentive Programs previously or hereafter approved by
shareholders of the Corporation.
(28) 'Stock appreciation right,' herein sometimes called an 'SAR,'
means the right of the holder thereof to receive, pursuant to the terms of
the SAR, a number of shares or cash or a combination of shares and cash,
based on the increase in the value of the number of shares specified in the
SAR, as more particularly set forth in Section X.
(29) 'Terminate' means cease to be an employee, except by death, but a
change of employment from the Corporation or one affiliate to another
affiliate or to the Corporation shall not be considered a termination. For
purposes of this Program, the appropriate authority under Section III may
determine that the time or date of termination is the day an employee
resigns, accepts employment with another employer or otherwise indicates an
intent to resign, which time or date need not necessarily be the last day
on the payroll.
(30) 'Terminate normally' for an employee participating in this
Program means terminate
(a) at normal retirement time for that employee,
(b) as a result of that employee's becoming incapacitated, or
(c) with written approval of the granting authority or its express
delegate given in the context of recognition that all or a specified
portion of the outstanding awards to that employee will not expire or be
forfeited or annulled because of such termination
and, in each such case, without being terminated for cause.
(31) 'Year' means calendar year.
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III. Administration.
(1) Subject to the provisions of this Section and Sections IV and V, the
Board shall administer this Program, shall conclusively interpret its
provisions, and may decide all questions of fact arising in its application.
The Board may delegate its authority pursuant to any provision of this Program
to a committee which, except in the case of the BCC, need not be a committee of
the Board. Determinations and interpretations with respect to employees who are
reporting persons (including, without limitation, determinations to consent to
or disapprove (a) the election by the holder of an SAR to receive cash in full
or partial settlement of such right and (b) the election by the holder of an
award to have shares otherwise deliverable or payable pursuant to such award
withheld to satisfy taxes pursuant to Section XVIII) may be made only by the
BCC. In addition, insofar as this Program applies to non-reporting persons,
determinations and interpretations in individual cases can be made by, or at
the direction of, the Chairman of the Board.
(2) The Board and any committee having authority to act under this Program
can act by regulation, by making individual determinations, or by both. The
Chairman of the Board and persons designated by him can act under this Program
only by making individual determinations.
(3) All determinations and interpretations pursuant to the provisions of
this Program shall be binding and conclusive upon the individual employees
involved and all persons claiming under them.
(4) With respect to reporting persons, transactions under this Program are
intended to comply with all applicable conditions of Rule 16b-3. To the extent
any provision of this Program or any action by an authority under this Program
fails to so comply, such provision or action shall, without further action by
any person, be deemed to be automatically amended to the extent necessary to
effect compliance with Rule 16b-3, provided that if such provision or action
cannot be amended to effect such compliance, such provision or action shall be
deemed null and void, to the extent permitted by law and deemed advisable by
the appropriate authority. Each award to a reporting person under this Program
shall be deemed issued subject to the foregoing qualification.
(5) An award under this Program is not transferable except, as provided in
the award, by will or the laws of descent and distribution, and is not subject,
in whole or in part, to attachment, execution, or levy of any kind. The
designation by a grantee of a designated beneficiary shall not constitute a
transfer.
(6) Any rights with respect to an award granted under this Program existing
after the grantee dies are exercisable by the grantee's designated beneficiary
or, if there is no designated beneficiary, by the grantee's personal
representative.
(7) Except as otherwise provided herein, a particular form of award may be
granted to an eligible employee either alone or in addition to other awards
hereunder. The provisions of particular forms of award need not be the same
with respect to each recipient.
(8) If the appropriate authority pursuant to this Section III believes that
a grantee (a) may have engaged in detrimental activity or (b) may have accepted
employment with another employer or otherwise indicated an intent to resign,
the authority may suspend the exercise, vesting or settlement of all or any
specified portion of such grantee's outstanding awards pending an investigation
of the matter.
(9) This Program and all action taken under it shall be governed by the
laws of the State of New York.
IV. Board Compensation Committee (BCC).
The Board shall appoint a BCC. The BCC shall consist of three or more
members of the Board, each of whom is a 'disinterested person' within the
meaning of Rule 16b-3. No award may be granted to a member of the BCC.
V. Right to Grant Awards; Reserved Powers.
(1) The right to select eligible employees who are reporting persons for
participation in this Program and all decisions concerning the timing, pricing,
and amount of a grant or award to any employee who is a reporting person are
reserved exclusively to the BCC.
(2) The right to select eligible employees who are not reporting persons
for participation in this Program and decisions concerning the timing, pricing,
and amount of a grant or award to any employee
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who is not a reporting person are reserved to the Board, but such reserved
rights may be delegated in whole or in part by the Board to a committee.
VI. Term.
The term of this Program begins on the date shareholder approval of this
Program is obtained and ends on the tenth anniversary of that date.
VII. Awards Grantable.
(1) Subject to the provisions of this Program, an award is grantable if,
should it be granted, the total number of shares effectively granted during the
year of the grant would not exceed seven tenths of one percent (0.7%) of the
total number of shares of Common Stock of the Corporation outstanding
(excluding shares held by the Corporation) on December 31 of the preceding
year.
(2) If the total number of shares effectively issued with respect to an
award is less than, or exceeds, the number of shares deemed effectively granted
with respect to such award, the balance of such shares shall be, respectively,
added to, or subtracted from, the maximum number of shares that may be
effectively granted as awards thereafter, except that no share may be added
back to the Program maximum if the grantee received the benefits of ownership
of such share (within the meaning of Rule 16b-3) while the related award was
outstanding.
(3) If the total number of shares effectively granted as awards in any year
is less than the maximum number of shares that could have been so granted
pursuant to the provisions of this Program, the balance of such unused shares
shall be added to the maximum number of shares that may be effectively granted
as awards in the following year.
(4) In addition to the foregoing, shares surrendered to the Corporation by,
or on behalf of, a non-reporting person in payment of the exercise price or
applicable taxes upon exercise or settlement of an award may also be used
thereafter for additional awards to non-reporting persons.
VIII. Adjustments. Whenever a stock split, stock dividend, or other
relevant change in capitalization which the BCC, in the case of reporting
persons, or the Board, in the case of non-reporting persons, determines to be
dilutive to outstanding awards occurs,
(1) the number of shares that can thereafter be obtained under
outstanding awards and the purchase price per share, if any, under such
awards, and
(2) every number of shares used in determining whether a particular
award is grantable thereafter,
shall be adjusted as the BCC or Board determines is appropriate.
IX. Stock Options. One or more grantable stock options can be granted to
any eligible employee. Each stock option so granted shall be subject to such
terms and conditions as the granting authority shall impose, which shall
include the following:
(1) The exercise price per share shall be specified by the grant, but
shall in no instance be less than 100 percent of fair market value at the
time of grant. Payment of the exercise price shall be made in cash, shares,
or other consideration in accordance with the terms of this Program and any
applicable regulations of the granting authority in effect at the time and
valued at fair market value on the date of exercise of the stock option.
(2) If the grantee has not terminated, the stock option shall become
exercisable at the time or times specified by the grant. If the grantee has
terminated before a stock option or portion thereof becomes exercisable,
that stock option or portion thereof shall be forfeited and shall never
become exercisable. Except as otherwise specified by the grant, a stock
option shall become immediately exercisable in full upon the death of the
grantee.
(3) Any stock option or portion thereof that is exercisable is
exercisable for the full amount or for any part thereof, except as
otherwise provided by the grant.
(4) Each stock option ceases to be exercisable, as to any share, when
the stock option is exercised to purchase that share, or when a related SAR
is exercised either by the holder or automatically in accordance with its
terms, or when the stock option expires. To the extent an SAR
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included in a stock option is exercised, such stock option shall be deemed
to have been exercised and shall not be deemed to have expired.
(5) A stock option or portion thereof that is exercisable shall expire
in the following situations:
(a) if the grantee is then living, it shall expire at the earliest
of:
(i) ten years after it is granted,
(ii) five years after the grantee terminates normally, or (iii)
any earlier time specified by the grant;
(b) if the grantee terminates, but does not terminate normally, it
shall expire at the time of termination;
(c) if the grantee is determined to have engaged in detrimental
activity, it shall expire as of the date of such determination; or
(d) if the grantee dies, it shall expire at the earlier of:
(i) three years after the grantee's death, or (ii) any
earlier time specified by the grant;
but, in any case, no later than ten years after it is granted.
(6) If a grantee terminates other than normally, the appropriate authority
under Section III may (a) refuse to deliver shares in settlement of any pending
stock option exercise and (b) may require the grantee to repay to the
Corporation an amount equal to the spread on any stock option exercised by the
grantee during the six-month period immediately preceding such termination. For
purposes of the foregoing subsection (6)(b), 'spread' means the difference
between the aggregate stock option exercise price and the fair market value of
the underlying shares on the date such option is exercised.
(7) All stock options granted hereunder are hereby designated as ISOs
except to the extent otherwise specified by the grant and except to the extent
otherwise specified in this Section IX(7). To the extent that the aggregate
fair market value of shares with respect to which stock options designated as
ISOs are exercisable for the first time by any grantee during any year (under
all plans of the Corporation and any affiliate thereof) exceeds $100,000, such
stock options shall be treated as not being ISOs. The foregoing shall be
applied by taking stock options into account in the order in which they were
granted. For the purposes of the foregoing, the fair market value of any share
shall be determined as of the time the stock option with respect to such share
is granted. In the event the foregoing results in a portion of a stock option
designated as an ISO exceeding the above $100,000 limitation, only such excess
shall be treated as not being an ISO.
For each year in which this Program is in effect, the number of shares
that may be effectively granted as ISOs may not exceed seven tenths of one
percent (0.7%) of the total number of shares of Common Stock of the Corporation
outstanding (excluding shares held by the Corporation) on the December 31
preceding the date on which shareholder approval of this Program is obtained.
If the number of shares effectively granted as ISOs in any year is less than
the number of shares that could have been so granted pursuant to this
paragraph, the balance of such unused shares may be added to the maximum number
of shares that may be effectively granted as ISOs the following year.
X. Stock Appreciation Rights.
(1) An SAR may be granted to an eligible employee as a separate award
hereunder. Any such SAR shall be subject to such terms and conditions as the
granting authority shall impose, which shall include provisions that (a) such
SAR shall entitle the holder thereof, upon exercise thereof in accordance with
such SAR and the regulations of the granting authority, to receive from the
Corporation that number of shares having an aggregate value equal to the excess
of the fair market value, at the time of exercise of such SAR, of one share
over the exercise price per share specified by the grant of such SAR (which
shall in no instance be less than 100 percent of fair market value at the time
of grant) times the number of shares specified in such SAR, or portion thereof,
which is so exercised; and (b) such SAR shall be exercisable, or be forfeited
or expire, upon the same conditions set forth for freestanding options in
Section IX, paragraphs (2), (3), (4), (5), and (6).
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(2) Any stock option granted under this Program may include an SAR, either
at the time of grant or by amendment. An SAR included in a stock option shall
be subject to such terms and conditions as the granting authority shall impose,
which shall include provisions that (a) such SAR shall be exercisable to the
extent, and only to the extent, the stock option is exercisable; and (b) such
SAR shall entitle the optionee to surrender to the Corporation unexercised the
stock option in which the SAR is included, or any portion thereof, and to
receive from the Corporation in exchange therefor that number of shares having
an aggregate value equal to the excess of the fair market value, at the time of
exercise of such SAR, of one share over the exercise price specified in such
stock option times the number of shares specified in such stock option, or
portion thereof, which is so surrendered.
(3) In lieu of the right to receive all or any specified portion of such
shares, an SAR may entitle the holder thereof to receive the cash equivalent
thereof as specified by the grant.
(4) An SAR may provide that such SAR shall be deemed to have been exercised
at the close of business on the business day preceding the expiration of such
SAR or the related stock option, if any, if at such time such SAR has positive
value and would have expired in accordance with the conditions set forth in
Section IX(5)(a).
XI. Restricted Stock.
(1) An award of restricted stock may be granted hereunder to an eligible
employee, for no cash consideration, for such minimum consideration as may be
required by applicable law, or for such other consideration as may be specified
by the grant. The terms and conditions of restricted stock shall be specified
by the grant.
(2) Any restricted stock issued hereunder may be evidenced in such manner
as the granting authority in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of shares of restricted stock awarded hereunder, such certificate shall
bear an appropriate legend with respect to the restrictions applicable to such
award.
(3) Except as otherwise specified by the grant, if a holder of record of
restricted stock terminates, but does not terminate normally, all shares of
restricted stock (whether or not stock certificates have been issued) then held
by such holder and then subject to restriction shall be forfeited by such
holder and reacquired by the Corporation. Except as otherwise specified by the
grant, if a holder of record of restricted stock terminates normally or dies,
any and all remaining restrictions with respect to such restricted stock shall
expire. Notwithstanding the foregoing, if a holder of record of restricted
stock is determined to have engaged in detrimental activity, all shares of
restricted stock (whether or not stock certificates have been issued) then held
by such holder and then subject to restriction shall be forfeited by such
holder as of the date of such determination and shall be reacquired by the
Corporation.
XII. Performance Awards.
(1) Performance awards may be granted hereunder to an eligible employee,
for no cash consideration, for such minimum consideration as may be required by
applicable law, or for such other consideration as may be specified by the
grant. The terms and conditions of performance awards, which may include
provisions establishing performance periods, performance criteria to be
achieved during a performance period, and maximum or minimum settlement values,
shall be specified by the grant.
(2) Performance awards may be valued by reference to the value of Common
Stock of the Corporation or according to any other formula or method.
Performance awards may be paid in cash, shares, or other consideration, or any
combination thereof. The extent to which any applicable performance criteria
have been achieved shall be conclusively determined by the granting authority.
Performance awards may be payable in a single payment or in installments and
may be payable at a specified date or dates or upon attaining performance
criteria.
(3) Except as otherwise specified by the grant, if the grantee terminates,
but does not terminate normally, any performance award or installment thereof
not payable prior to the grantee's termination shall be annulled as of the date
of termination. If the grantee is determined to have engaged in detrimental
activity, any performance award or installment thereof not payable prior to the
date of such determination shall be annulled as of such date.
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XIII. Incentive Shares.
(1) An incentive award may be granted hereunder in the form of shares.
Incentive shares may be granted to an eligible employee for no cash
consideration, for such minimum consideration as may be required by applicable
law, or for such other consideration as may be specified by the grant. The
terms and conditions of incentive shares shall be specified by the grant.
(2) Incentive shares may be paid to the grantee in a single installment or
in installments and may be paid at the time of grant or deferred to a later
date or dates. Each grant shall specify the time and method of payment as
determined by the granting authority, provided that no such determination shall
authorize delivery of shares to be made later than the tenth anniversary of the
grantee's date of termination. The granting authority, by amendment of the
grant prior to delivery, can modify the method of payment for any incentive
shares, provided that the delivery of any incentive shares shall be completed
not later than the tenth anniversary of the grantee's date of termination.
(3) If any incentive shares are payable after the grantee dies, such shares
shall be payable (a) to the grantee's designated beneficiary or, if there is no
designated beneficiary, to the grantee's personal representative, and (b)
either in the form specified by the grant or otherwise, as may be determined in
the individual case by the appropriate authority under this Program.
(4) Any grant of incentive shares is provisional, as to any share, until
delivery of the certificate representing such share. If, while the grant is
provisional,
(a) the grantee terminates, but does not terminate normally, or
(b) the grantee is determined to have engaged in detrimental activity,
the grant shall be annulled as of the date of termination, or the date of such
determination, as the case may be.
XIV. Dividend Equivalent Rights; Interest Equivalents.
(1) A DER may be granted hereunder to an eligible employee, as a component
of another award or as a separate award. The terms and conditions of DERs shall
be specified by the grant. Dividend equivalents credited to the holder of a DER
may be paid currently or may be deemed to be reinvested in additional shares
(which may thereafter accrue additional dividend equivalents). Any such
reinvestment shall be at fair market value at the time thereof. DERs may be
settled in cash or shares or a combination thereof, in a single installment or
installments. A DER granted as a component of another award may provide that
such DER shall be settled upon exercise, settlement, or payment of, or lapse of
restrictions on, such other award, and that such DER shall expire or be
forfeited or annulled under the same conditions as such other award. A DER
granted as a component of another award may also contain terms and conditions
different from such other award.
(2) Any award under this Program that is settled in whole or in part in
cash on a deferred basis may provide by the grant for interest equivalents to
be credited with respect to such cash payment. Interest equivalents may be
compounded and shall be paid upon such terms and conditions as may be specified
by the grant.
XV. Other Awards. Other forms of award based on, payable in or otherwise
related in whole or in part to shares may be granted to an eligible employee
under this Program if the granting authority determines that such awards are
consistent with the purposes and restrictions of this Program. The terms and
conditions of such awards shall be specified by the grant. Such awards shall be
granted for no cash consideration, for such minimum consideration as may be
required by applicable law, or for such other consideration as may be specified
by the grant.
XVI. Amendments to This Program. The Board can from time to time amend or
terminate this Program, or any provision hereof, except that approval of the
shareholders of the Corporation shall be required for any amendment (1) to
increase the maximum number of shares that may be effectively granted as awards
hereunder; (2) to decrease the minimum exercise price per share of a stock
option or SAR; or (3) for which such approval is otherwise necessary to comply
with Rule 16b-3 or any other applicable law, regulation, or listing
requirement, or to qualify for an exemption or characterization that is deemed
desirable by the Board.
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XVII. Amendments to Awards. Any award which was granted under a shareholder-
approved plan and is still outstanding may, subject to any requirements of
applicable law or regulation, be amended by action of the appropriate authority
so as to incorporate in that award any terms that might have been incorporated
in an award under this Program.
XVIII. Withholding Taxes. The Corporation shall have the right to deduct
from any cash payment made under this Program any federal, state or local
income or other taxes required by law to be withheld with respect to such
payment. It shall be a condition to the obligation of the Corporation to
deliver shares or securities of the Corporation upon exercise of a stock option
or SAR, upon settlement of a performance award or DER, upon delivery of
restricted stock or incentive shares, or upon exercise, settlement, or payment
of any other award under this Program, that the grantee of such award pay to
the Corporation such amount as may be requested by the Corporation for the
purpose of satisfying any liability for such withholding taxes. Any award under
this Program may provide by the grant that the grantee of such award may elect,
in accordance with any applicable regulations of the granting authority, to pay
a portion or all of the amount of such minimum required or
additional permitted withholding taxes in shares. The grantee shall authorize
the Corporation to withhold, or shall agree to surrender back to the
Corporation, on or about the date such withholding tax liability is
determinable, shares previously owned by such grantee or a portion of the
shares that were or otherwise would be distributed to such grantee pursuant to
such award having a fair market value equal to the amount of such required or
permitted withholding taxes to be paid in shares.
XIX. Grant of Awards to Employees Who are Foreign Nationals. Without
amending this Program, but subject to the limitations specified in Sections
III(4) and XVI, the granting authority can grant, amend, administer, annul, or
terminate awards to eligible employees who are foreign nationals on such terms
and conditions different from those specified in this Program as may in the
judgment of the granting authority be necessary or desirable to foster and
promote achievement of the purposes of this Program.
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