Exhibit No. (10)e
KIMBERLY-CLARK CORPORATION
1992 EQUITY PARTICIPATION PLAN
(AS AMENDED EFFECTIVE NOVEMBER 15, 1999)
1. PURPOSE
This 1992 Equity Participation Plan (the "Plan") of Kimberly-Clark
Corporation (the "Corporation") is intended to aid in attracting and retaining
highly qualified personnel and to encourage those employees who materially
contribute, by managerial, scientific or other innovative means, to the
success of the Corporation or of an Affiliate, to acquire an ownership
interest in the Corporation, thereby increasing their motivation for and
interest in the Corporation's or Affiliate's long-term success.
2. EFFECTIVE DATE
The Plan was originally adopted effective as of April 24, 1992, upon
approval by the stockholders of the Corporation at the 1992 Annual Meeting.
The Plan as hereby amended and restated is effective as of June 9, 1999.
3. DEFINITIONS
"Account" has the meaning set forth in subsection 7(a) of this Plan.
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"Affiliate" means any company in which the Corporation owns 20% or more
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of the equity interest (collectively, the "Affiliates").
"Award" has the meaning set forth in section 6 of this Plan.
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"Award Agreement" means an agreement entered into between the Corporation
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and a Participant setting forth the terms and conditions applicable to the
Award granted to the Participant.
"Base Value" has the meaning set forth in subsection 7(a) of this Plan.
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"Board" means the Board of Directors of the Corporation.
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"Book Value" has the meaning set forth in subsection 7(a) of this Plan.
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"Code" means the Internal Revenue Code of 1986 and the regulations
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thereunder, as amended from time to time.
"Committee" means the Compensation Committee of the Board, provided that
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if the requisite number of members of the Compensation Committee are not
Disinterested Persons, the Plan shall be administered by a committee, all of
whom are Disinterested Persons, appointed by the Board and consisting of two
or more directors with full authority to act in the matter. The term
"Committee" shall mean the Compensation Committee or the committee appointed
by the Board, as the case may be.
"Committee Rules" means the interpretative guidelines approved by the
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Committee providing the foundation for administration of this Plan.
"Common Stock" means the common stock, par value $1.25 per share, of the
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Corporation and shall include both treasury shares and authorized but unissued
shares and shall also include any security of the Corporation issued in
substitution, in exchange for, or in lieu of the Common Stock.
"Disinterested Person" means a person who is a "Non-Employee Director"
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for purposes of rule 16b-3 under the Exchange Act, or any successor provision,
and who is also an "outside director" for purposes of section 162(m) of the
Code or any successor section.
"Dividend Shares" has the meaning set forth in subsection 7(c) of this
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Plan.
"Dividend Share Value" means Dividend Share Value as defined in
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subsection 7(c) of this Plan.
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"Exchange Act" means the Securities Exchange Act of 1934 and the rules
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and regulations thereunder, as amended from time to time.
"Fair Market Value" means the reported closing price of the Common Stock,
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on the relevant date as reported on the composite list used by The Wall Street
Journal for reporting stock prices, or if no such sale shall have been made on
that day, on the last preceding day on which there was such a sale.
"Incentive Stock Option" means an Option which is so defined for purposes
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of section 422 of the Code or any successor section.
"Insider" has the meaning set forth in subsection 15(k) of this Plan.
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"Maturity Date" has the meaning set forth in subsection 7(b) of this
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Plan.
"Maturity Value" has the meaning set forth in subsection 7(c) of this
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Plan.
"Nonqualified Stock Option" means any Option which is not an Incentive
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Stock Option.
"Option" means a right to purchase a specified number of shares of Common
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Stock at a fixed option price equal to no less than 100% of the Fair Market
Value of the Common Stock on the date the Award is granted.
"Option Price" has the meaning set forth in subsection 8(b) of this Plan.
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"Participant" means an employee who the Committee selects to participate
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in and receive Awards under the Plan (collectively, the "Participants").
"Participation Shares" means the right, as described in section 7, to
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receive an amount equal to the increase in Book Value on a specified number of
shares of Common Stock.
"Retirement" and "Retires" means the termination of employment on or
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after the date the Participant is entitled to receive immediate payments under
a qualified retirement plan of the Corporation or an Affiliate; provided,
however, if the Participant is not eligible to participate under a qualified
retirement plan of the Corporation or its Affiliates then such Participant
shall be deemed to have retired if his termination of employment is on or
after the date such Participant has attained age 55.
"Severe Financial Hardship" means a severe financial hardship as defined
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in subsection 15(h) of this Plan.
"Stock Appreciation Right (SAR)" has the meaning set forth in subsection
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8(j)(i) of this Plan.
"Total and Permanent Disability" means Totally and Permanently Disabled
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as defined in the Kimberly-Clark Corporation Salaried Employees' Retirement
Plan.
4. ADMINISTRATION
The Plan and all Awards granted pursuant thereto shall be administered by
the Committee. The Committee, in its absolute discretion, shall have the power
to interpret and construe the Plan and any Award Agreements; provided,
however, that no such action or determination may increase the amount of
compensation payable that would otherwise be due in a manner that would result
in the disallowance of a deduction to the Corporation under section 162(m) of
the Code or any successor section. Any interpretation or construction of any
provisions of this Plan or the Award Agreements by the Committee shall be
final and conclusive upon all persons. No member of the Board or the
Committee shall be liable for any action or determination made in good faith.
Within 60 days following the close of each calendar year that the Plan is
in operation, the Committee shall make a report to the Board. The report
shall specify the employees who received Awards under the Plan during the
prior year, the form and size of the Awards to the individual employees, and
the status of prior Awards.
The Committee shall have the power to promulgate Committee Rules and
other guidelines in connection with the performance of its obligations, powers
and duties under the Plan, including its duty to administer and construe the
Plan and the Award Agreements.
The Committee may authorize persons other than its members to carry out
its policies and directives subject to the limitations and guidelines set by
the Committee, except that: (a) the authority to grant Awards, the selection
of officers and directors for participation and decisions concerning the
timing, pricing and amount of a grant or Award shall not be delegated by the
Committee; (b) the authority to administer Awards with respect to persons who
are subject to section 16 of the Exchange Act shall not be delegated by the
Committee; (c) any delegation shall satisfy all applicable requirements of
rule 16b-3 of the Exchange Act, or any successor provision; and (d) no such
delegation shall result in the disallowance of a deduction to the Corporation
under section 162(m) of the Code or any successor section. Any person to whom
such authority is granted shall continue to be eligible to receive Awards
under the Plan.
5. ELIGIBILITY
The Committee shall from time to time select the Plan Participants from
those employees whom the Committee determines either to be in a position to
contribute materially to the success of the Corporation or Affiliate or to
have in the past so contributed. Only employees (including officers and
directors who are employees) of the Corporation and its Affiliates are
eligible to participate in the Plan.
6. FORMS OF AWARDS
All Awards under the Plan shall be made in the form of Participation
Shares or Options. The Committee may make Awards solely in Options or
Participation Shares, or in any combination of the two. Notwithstanding
anything in this Plan to the contrary, any Awards shall contain the
restriction on assignability in subsection 15(f) of this Plan to the extent
required under rule 16b-3 of the Exchange Act.
7. PARTICIPATION SHARES
The Committee shall from time to time designate those Participants who
shall receive Participation Share awards. The Committee shall advise such
Participants of their Participation Share awards by a letter indicating the
number of Participation Shares awarded and the following terms and conditions
of the award.
(a) Base Value of Participation Shares. The number of
Participation Shares awarded to a Participant shall be entered in such
Participant's memorandum account (the "Account") established for this purpose
as of the date of the award. Each Participation Share shall be assigned a
base value equal to the book value of one share of Common Stock as of the
close of the fiscal year of the Corporation preceding the date of the award
(the "Base Value"). Book value per share shall be defined for purposes of the
Plan as common stockholders' equity, as reported in the year-end audited
consolidated financial statements, or in the quarter-end unaudited
consolidated financial statements, of the Corporation (as the case may be),
divided by the number of shares of Common Stock outstanding as of the date of
such financial statements, as adjusted pursuant to the provisions of the Plan
(the "Book Value"). The term "book value", when used without initial capital
letters, shall be defined as in the preceding sentence without the
adjustments.
(b) Maturation of Participation Shares. An Award of
Participation Shares shall reach maturity at the close of the fiscal year (i)
in which either the fifth or seventh anniversary, as determined by the
Committee when the Award is granted, of the date the Award occurs, (ii) the
Participant who holds such Award dies, Retires, or becomes Totally and
Permanently Disabled, or (iii) the events described in subsection 9(a) occur,
whichever is earlier (the "Maturity Date"). The Book Value at the Maturity
Date shall be the Book Value as of the close of the fiscal year of the
Corporation in which such Maturity Date occurs.
(c) Participation Share Payments. Each Participant shall be
entitled to receive a payment equal to the sum of the Maturity Value and the
Dividend Share Value for his or her Participation Share award, payable as
provided in subsection 7(g). Such payment shall be payable either in cash, or
partly in cash and up to 50% in Common Stock, as determined by the Committee
when the Award is granted. Such payment in Common Stock shall be payable in
the number of shares of Common Stock that could have been purchased with the
amount equal to the sum of the Maturity Value and the Dividend Share Value for
that portion of his or her Participation Share award which is payable in
Common Stock, at the average of the Fair Market Value of shares of Common
Stock on each business day during the month immediately preceding the month of
such payment. A Participation Share award shall only be paid in Common Stock
as provided above to the extent shares of Common Stock are available under
section 10 hereof, with the remainder settled in cash. To the extent shares
of Common Stock are not fully available under section 10 hereof to fully pay
such portion of the Award in shares of Common Stock then the available shares
of Common Stock shall be paid on a pro rata basis, with the remainder settled
in cash.
The "Maturity Value" of an Award of Participation Shares shall be
equal to the Book Value of the Participation Shares subject to such Award at
the Maturity Date less the Base Value of such Participation Shares.
Participants are not entitled to receive current dividends on their
Participation Shares, but in lieu thereof their Accounts shall be credited
with dividend shares (the "Dividend Shares"). The "Dividend Share Value" of
an award shall be equal to the product of (A) the number of Dividend Shares
credited to a Participant's Account and (B) the Book Value per share of the
Common Stock at the Maturity Date. The amount available for the acquisition
of Dividend Shares for a Participant's Account at the end of each fiscal
quarter of the Corporation shall be determined by multiplying the total cash
dividend declared per share of Common Stock during such quarter (but
subsequent to the date of the award in the case of Participation Shares and
subsequent to the date of crediting in the case of Dividend Shares) by the
total of the Participation Shares and Dividend Shares in the Participant's
Account. The amount so determined shall be divided by the Book Value of one
share of Common Stock as of the close of such fiscal quarter, and the quotient
shall represent the number of full and fractional Dividend Shares credited to
the Participant's Account for that quarter.
(d) Dividend Maintenance. No Dividend Shares shall be credited
to a Participant's Account in any quarter (i) in which the total cash
dividends declared per share of Common Stock are less than $.205 or (ii) in
which the total cash dividends declared per share of Common Stock are less
than the total cash dividends declared per share of Common Stock in the same
quarter of the immediately preceding year, except that the determination of
whether the total cash dividends per share of Common Stock are less than in
the immediately preceding year shall be made after adjustment for the
two-for-one stock split which occurred in 1992 and the two-for-one stock split
which was declared on February 20, 1997, in accordance with generally accepted
accounting principles. When total cash dividends declared per share of Common
Stock are less than total cash dividends declared per share of Common Stock in
the same quarter of the immediately preceding year as described above, the
book value of each Participation Share held by a Participant shall be reduced
by an amount equal to the difference between the cash dividend declared in
such immediately preceding quarter less the cash dividend declared in the
quarter the cash dividend is reduced.
(e) Adjustments. To preserve the benefit to the Participant and
the Corporation contemplated hereby, stock repurchases (other than Common
Stock transferred to the Corporation upon the exercise of an Option pursuant
to subsection 8(f)) or changes in the Corporation's accounting policies during
any fiscal year shall be automatically excluded for purposes of determining
Book Value for purposes of this Plan for such fiscal year and for all future
years with respect to any outstanding Participation Share Awards; provided,
however, that the Committee shall have the discretion to waive any such
exclusion that would have the effect of increasing Book Value (to the extent
that such discretion does not result in the disallowance of a deduction to the
Corporation under section 162(m) of the Code or any successor section). To
further preserve the benefit to the Participant and the Corporation
contemplated hereby, if a cash dividend is declared in any quarter and the
payment date for such cash dividend is later than the immediately subsequent
quarter, then such cash dividend will be deemed to be declared in the quarter
immediately preceding the payment date for all purposes of this Plan, as of
the first date the Board meets in such quarter, or if the Board does not meet
in such quarter, on the first business day of such quarter, including, but not
limited to, the determination of (i) Book Value in subsection 7(a), (ii)
Dividend Shares in subsection 7(c) and (iii) whether the total cash dividends
declared per share of Common Stock in a quarter is less than $.205 or whether
the total cash dividends declared per share of Common Stock are less than the
total cash dividends declared per share of Common Stock in the same quarter of
the immediately preceding year in subsection 7(d).
(f) Absence of Rights as a Stockholder. A Participant shall not
be entitled, on the basis of a Participation Share award, to any of the rights
of a stockholder of the Corporation, including the right to vote and receive
dividends on Common Stock.
(g) Date of Payment. Except as provided in subsection 15(h),
the payment provided for in subsection 7(c) shall be payable within 90 days
following the Maturity Date.
(h) Termination of Employment. Except as provided in subsection
9(a), any Participation Shares or Dividend Shares credited to a Participant's
Account shall be forfeited if the Participant is dismissed or leaves the
service of the Corporation or Affiliate prior to the Maturity Date of the
award for any reason other than death, Retirement or Total and Permanent
Disability.
(i) Termination of Award. After the Corporation makes the cash
payment provided for in subsection 7(c), any rights of the Participant (or the
Participant's estate or beneficiaries) in the Participation Share award shall
end.
8. STOCK OPTIONS
The Committee shall determine and designate from time to time those
Participants to whom Options are to be granted and the number of shares of
Common Stock to be optioned to each. Such Options may be in the form of
Incentive Stock Options or in the form of Nonqualified Stock Options. After
granting an Option to a Participant, the Committee shall cause to be delivered
to the Participant an Award Agreement evidencing the granting of the Option.
The Award Agreement shall be in such form as the Committee shall from time to
time approve. The terms and conditions of all Options granted under the Plan
need not be the same, but all Options must meet the applicable terms and
conditions specified in subsections 8(a) through 8(h).
(a) Period of Option. The Period of each Option shall be no
more than 10 years from the date it is granted.
(b) Option Price. The Option price shall be determined by the
Committee, but shall not in any instance be less than the Fair Market Value of
the Common Stock at the time that the Option is granted (the "Option Price").
(c) Limitations on Exercise. The Option shall not be
exercisable until at least one year has expired after the granting of the
Option, during which time the Participant shall have been in the continuous
employ of the Corporation or an Affiliate. At any time during the period of
the Option after the end of the first year, the Participant may purchase up to
30 percent of the shares covered by the Option; after the end of the second
year, an additional 30 percent; and after the end of the third year, the
remaining 40 percent of the total number of shares covered by the Option;
provided, however, that if the Participant's employment is terminated for any
reason other than death, Retirement or Total and Permanent Disability, the
Option shall be exercisable only for three months following such termination
and only for the number of shares of Common Stock which were exercisable on
the date of such termination. In no event, however, may an Option be
exercised more than 10 years after the date of its grant.
(d) Exercise after Death, Retirement, or Disability. If a
Participant dies or becomes Totally and Permanently Disabled, without having
exercised the Option in full, the remaining portion of such Option may be
exercised, without regard to the limitations in subsection 8(c), within (i)
three years from the date of any such event or (ii) the remaining period of
the Option, whichever is earlier. Upon a Participant's death, the Option may
be exercised by the person or persons to whom such Participant's rights under
the Option shall pass by will or by applicable law or, if no such person has
such rights, by his executor or administrator. If a Participant Retires
without having exercised the Option in full, the remaining portion of such
Option may be exercised, without regard to the limitations in subsection 8(c),
within the remaining period of the Option.
(e) Non-transferability. During the Participant's lifetime,
Options shall be exercisable only by such Participant. Options shall not be
transferable other than by will or the laws of descent and distribution upon
the Participant's death. Notwithstanding anything in this subsection 8(e) to
the contrary, the Committee may grant to designated Participants the right to
transfer Nonqualified Stock Options, to the extent allowed under rule 16b-3 of
the Exchange Act, subject to the terms and conditions of the Committee Rules.
(f) Exercise; Notice Thereof. Options shall be exercised by
delivering to the Corporation, at the office of the Treasurer at the World
Headquarters, written notice of the number of shares with respect to which
Option rights are being exercised and by paying in full the Option Price of
the shares at the time being acquired. Payment may be made in cash, a check
payable to the Corporation or in shares of Common Stock transferable to the
Corporation and having a Fair Market Value on the transfer date equal to the
amount payable to the Corporation. The date of exercise shall be deemed to be
the date the Corporation receives the written notice and payment for the
shares being purchased. A Participant shall have none of the rights of a
stockholder with respect to shares covered by such Option until the
Participant becomes the record holder of such shares.
(g) Purchase for Investment. It is contemplated that the
Corporation will register shares sold to Participants pursuant to the Plan
under the Securities Act of 1933. In the absence of an effective
registration, however, a Participant exercising an Option hereunder may be
required to give a representation that he/she is acquiring such shares as an
investment and not with a view to distribution thereof.
(h) Limitations on Incentive Stock Option Grants.
(i) An Incentive Stock Option shall be granted only to an
individual who, at the time the Option is granted, does not own stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Corporation or Affiliates.
(ii) The aggregate Fair Market Value of all shares with
respect to which Incentive Stock Options are exercisable by a Participant for
the first time during any year shall not exceed $100,000. The aggregate Fair
Market Value of such shares shall be determined at the time the Option is
granted.
(i) Options for Nonresident Aliens. In the case of any Option
awarded to a Participant who is not a resident of the United States or who is
employed by an Affiliate other than an Affiliate that is incorporated, or
whose place of business is, in a State of the United States, the Committee may
(i) waive or alter the conditions set forth in subsections 8(a) through 8(h)
to the extent that such action is necessary to conform such Option to
applicable foreign law, or (ii) take any action, either before or after the
award of such Option, which it deems advisable to obtain approval of such
Option by an appropriate governmental entity; provided, however, that no
action may be taken hereunder if such action would (1) increase any benefits
accruing to any Participants under the Plan, (2) increase the number of
securities which may be issued under the Plan, (3) modify the requirements for
eligibility to participate in the Plan, (4) result in a failure to comply with
applicable provisions of the Securities Act of 1933, the Exchange Act or the
Code or (5) result in the disallowance of a deduction to the Corporation under
section 162(m) of the Code or any successor section.
(j) Election to Receive Cash Rather than Stock.
(i) At the same time as Nonqualified Stock Options are
granted the Committee may also grant to designated Participants the right to
convert a specified number of shares of Common Stock covered by such
Nonqualified Stock Options to cash, subject to the terms and conditions of
this subsection 8(j). For each such Option so converted, the Participant
shall be entitled to receive cash equal to the difference between the
Participant's Option Price and the Fair Market Value of the Common Stock on
the date of conversion. Such a right shall be referred to herein as a Stock
Appreciation Right ("SAR"). Participants to which an SAR has been granted
shall be notified of such grant and of the Options to which such SAR pertains.
An SAR may be revoked by the Committee, in its sole discretion, at any time,
provided, however, that no such revocation may be taken hereunder if such
action would result in the disallowance of a deduction to the Corporation
under section 162(m) of the Code or any successor section.
(ii) A person who has been granted an SAR may exercise such
SAR during such periods as provided for in the rules promulgated under section
16 of the Exchange Act. The SAR shall expire when the period of the subject
Option expires.
(iii) At the time a Participant converts one or more shares
of Common Stock covered by an Option to cash pursuant to an SAR, such
Participant must exercise one or more Nonqualified Stock Options, which were
granted at the same time as the Option subject to such SAR, for an equal
number of shares of Common Stock. In the event that the number of shares and
the Option Price per share of all shares of Common Stock subject to
outstanding Options is adjusted as provided in the Plan, the above SARs shall
automatically be adjusted in the same ratio which reflects the adjustment to
the number of shares and the Option Price per share of all shares of Common
Stock subject to outstanding Options.
9. GOVERNMENT SERVICE, LEAVES OF ABSENCE AND OTHER TERMINATIONS
(a) A Participation Share award shall be considered to reach
maturity as of the close of the fiscal year in which (i) a Participant's
employment terminates because such Participant enters governmental service or
(ii) the Participant's employment with the Corporation or an Affiliate is
terminated by reason of a shutdown or divestiture of all or a portion of the
Corporation's or its Affiliate's business.
(b) An authorized leave of absence, or qualified military leave in
accordance with section 414(u) of the Code, shall not be deemed to be a
termination of employment for purposes of the Plan. A termination of
employment with the Corporation or an Affiliate to accept immediate
reemployment with the Corporation or an Affiliate likewise shall not be deemed
to be a termination of employment for purposes of the Plan.
10. SHARES SUBJECT TO THE PLAN
The number of shares of Common Stock available with respect to all Awards
granted under this Plan shall not exceed 40,000,000 in the aggregate, of which
not more than 40,000,000 shall be available for option and sale, subject to
the adjustment provision set forth in section 12 hereof. The shares of Common
Stock subject to the Plan may consist in whole or in part of authorized but
unissued shares or of treasury shares, as the Board may from time to time
determine. Participation Shares which are retired through forfeiture or
maturity, other than those Participation Shares which are retired through the
payment of Common Stock, and shares subject to Options which become ineligible
for purchase will be available for Awards under the Plan to the extent
permitted by section 16 of the Exchange Act (or the rules and regulations
promulgated thereunder) and to the extent determined to be appropriate by the
Committee. Shares of Common Stock which are distributed through the payment
of Participation Share Awards pursuant to subsection 7(c) will not be
available for Awards under the Plan.
11. INDIVIDUAL LIMITS
The maximum number of Participation Shares or shares of Common Stock
covered by Options which may be granted to any Participant within any 2
consecutive calendar year period shall not exceed 1,000,000 in the aggregate.
If an Option which had been granted to a Participant is canceled, the shares
of Common Stock which had been subject to such canceled Option shall continue
to be counted against the maximum number of shares for which Options may be
granted to the Participant. In the event that the number of Participation
Shares which may be awarded or Options which may be granted is adjusted as
provided in the Plan, the above limits shall automatically be adjusted in the
same ratio which reflects the adjustment to the number of Participation Shares
or Options available under the Plan.
12. CHANGES IN CAPITALIZATION
In the event there are any changes in the Common Stock or the
capitalization of the Corporation through a corporate transaction, such as any
merger, any acquisition through the issuance of capital stock of the
Corporation, any consolidation, any separation of the Corporation (including a
spin-off or other distribution of stock of the Corporation), any
reorganization of the Corporation (whether or not such reorganization comes
within the definition of such term in section 368 of the Code), or any partial
or complete liquidation by the Corporation, recapitalization, stock dividend,
stock split or other change in the corporate structure, appropriate
adjustments and changes shall be made by the Committee, to the extent
necessary to preserve the benefit to the Participant contemplated hereby, to
reflect such changes in (a) the aggregate number of shares subject to the
Plan, (b) the maximum number of shares for which Options or Participation
Shares may be granted or awarded to any Participant, (c) the number of shares
and the Option Price per share of all shares of Common Stock subject to
outstanding Options, (d) the number of Participation Shares, the Base Value
per Participation Share awarded to Participants, and the number of Dividend
Shares credited to Participants' Accounts, and (e) such other provisions of
the Plan as may be necessary and equitable to carry out the foregoing
purposes, provided, however that no such adjustment or change may be made to
the extent that such adjustment or change will result in the disallowance of a
deduction to the Corporation under section 162(m) of the Code or any successor
section.
13. EFFECT ON OTHER PLANS
All payments and benefits under the Plan shall constitute special
compensation and shall not affect the level of benefits provided to or
received by any Participant (or the Participant's estate or beneficiaries) as
part of any employee benefit plan of the Corporation or an Affiliate. The
Plan shall not be construed to affect in any way a Participant's rights and
obligations under any other plan maintained by the Corporation or an Affiliate
on behalf of employees.
14. TERM OF THE PLAN
The term of the Plan shall be ten years, beginning April 24, 1992, and
ending April 23, 2002, unless the Plan is terminated prior thereto by the
Committee. No Option may be granted or Participation Share awarded after the
termination date of the Plan, but Options and Participation Shares theretofore
granted or awarded shall continue in force beyond that date pursuant to their
terms.
15. GENERAL PROVISIONS
(a) Designated Beneficiary. Each Participant who shall be
granted a Participation Share award under the Plan may designate a beneficiary
or beneficiaries with the Committee on a form to be prescribed by it; provided
that no such designation shall be effective unless so filed prior to the death
of such Participant.
(b) No Right of Continued Employment. Neither the establishment
of the Plan nor the payment of any benefits hereunder nor any action of the
Corporation, its Affiliates, the Board of Directors of the Corporation or its
Affiliates, or the Committee shall be held or construed to confer upon any
person any legal right to be continued in the employ of the Corporation or its
Affiliates, and the Corporation and its Affiliates expressly reserve the right
to discharge any Participant without liability to the Corporation, its
Affiliates, the Board of Directors of the Corporation or its Affiliates or the
Committee, except as to any rights which may be expressly conferred upon a
Participant under the Plan.
(c) Binding Effect. Any decision made or action taken by the
Corporation, the Board or by the Committee arising out of or in connection
with the construction, administration, interpretation and effect of the Plan
shall be conclusive and binding upon all persons.
(d) Modification of Awards.
(1) The Committee may in its sole and absolute discretion, by
written notice to a Participant, (i) limit or eliminate the ability of the
Participant's Participation and Dividend Shares to generate additional
Dividend Shares, and/or (ii) fix the Book Value of all or any portion of the
Participant's existing Participation and existing or future Dividend Shares
for the purposes of any payments that might be made under subsection 7(c) at
their Book Value as of the end of the fiscal year of the Corporation in which
such notice is dated so that no further appreciation occurs in such Book
Value, and/or (iii) limit the period in which an Option may be exercised to a
period ending at least three months following the date of such notice, and/or
(iv) limit or eliminate the number of shares subject to Option after a period
ending at least three months following the date of such notice.
Notwithstanding anything in this subsection 15(d) to the contrary, the
Committee may not take any action to the extent that such action would result
in the disallowance of a deduction to the Corporation under section 162(m) of
the Code or any successor section.
(2) A Participant's Participation Share or Dividend Share which
has had its ability to generate additional Dividend Shares limited or
eliminated and for which the Book Value is fixed pursuant to subsection
15(d)(1)(i) of the Plan shall be credited with interest equal to the product
of (i) the number of Interest Credits (determined pursuant to subsection
15(d)(3) below) credited to such Participant's Account as of the Maturity Date
and (ii) the Book Value at which such Participation Share or Dividend Share
has been fixed.
(3) The number of Interest Credits to be credited to a
Participant's Account for each fiscal quarter of the Corporation ending after
the date as of which the Book Value of such Participant's Participation Shares
or Dividend Shares is fixed shall be determined as follows. The total cash
dividend declared per share of Common Stock during such quarter (but
subsequent to the date of the award in the case of Participation Shares and
subsequent to the date of crediting in the case of Dividend Shares) shall be
multiplied by the total of the Participation Shares, Dividend Shares and
Interest Credits in the Participant's Account. The amount so determined shall
be divided by the Book Value of one share of Common Stock as of the close of
such fiscal quarter. The quotient shall represent the number of full and
fractional Interest Credits credited to such Participant's Account for that
quarter.
(e) No Segregation of Cash or Stock. The Accounts established
for Participants are merely a bookkeeping convenience and neither the
Corporation nor its Affiliates shall be required to segregate any cash or
stock which may at any time be represented by Awards. Nor shall anything
provided herein be construed as providing for such segregation. Neither the
Corporation, its Affiliates, the Board nor the Committee shall, by any
provisions of the Plan, be deemed to be a trustee of any property, and the
liability of the Corporation or its Affiliates to any Participant pursuant to
the Plan shall be those of a debtor pursuant to such contract obligations as
are created by the Plan, and no such obligation of the Corporation or its
Affiliates shall be deemed to be secured by any pledge or other encumbrance on
any property of the Corporation or its Affiliates.
(f) Inalienability of Benefits and Interest. Except as provided
in subsections 8(e) and 15(a), no benefit payable under or interest in the
Plan shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, and any such attempted
action shall be void and no such benefit or interest shall be in any manner
liable for or subject to debts, contracts, liabilities, engagements, or torts
of any Participant or beneficiary.
(g) Delaware Law to Govern. All questions pertaining to the
construction, interpretation, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance with the laws of the
State of Delaware.
(h) Election to Defer Receipt.
(1) A Participant may, with the consent of the Committee,
elect to defer the receipt of all or any portion of amounts which may
otherwise become payable under subsection 7(c). A Participant's receipt of
any portion of the amount payable with respect to one or more outstanding
Participation Share awards shall be deferred if, prior to the Maturity Date of
any such award, or if earlier, such Participant's termination of employment,
such Participant irrevocably elects such deferral by written notice to the
Committee signed by the Participant and delivered to the Committee, and the
Committee consents to such deferral. Such notice must clearly specify the
manner of distribution described in paragraph (2) below which shall apply with
respect to such deferred amounts. After adjustment for any resulting
interest, the deferred amount shall be paid at the date or dates specified in
the Participant's letter, and such adjusted amount shall not be subject to
forfeiture as otherwise provided in subsection 7(h). Notwithstanding the
foregoing, with the consent of the Committee, an election made prior to
January 1, 1999 pursuant to this paragraph may be irrevocably modified by a
Participant prior to the earlier of (i) January 1, 1999, (ii) such
Participant's termination of employment or (iii) the payment of the first
installment pursuant to subsection 15(h)(2) below.
(2) Amounts deferred pursuant to this subsection 15(h)
shall be distributed in accordance with clause (i), (ii), or (iii), below, as
elected by the Participant: (i) up to 20 annual installments commencing in
the year after the termination of employment by reason of retirement; (ii) up
to five annual installments, commencing 13 months after the Participant's
repatriation to his home country following a foreign assignment; or (iii) up
to five annual installments, commencing as of a date requested by the
Participant; provided, however, that such date shall not be more than 20 years
after the Maturity Date. The amount of each installment under clause (i),
(ii) or (iii) above shall be equal to the product of the amount which has not
been distributed immediately prior to such installment and a fraction, the
numerator of which is one and the denominator of which is the number of
installments yet to be paid.
(3) (i) Notwithstanding any other provision of this
Plan to the contrary, deferred amounts shall be paid in one lump sum as soon
as practicable after the death of the Participant or the termination of
employment of the Participant with the Corporation for reasons other than
Retirement or Total and Permanent Disability; however, if a Participant is or
has been on foreign assignment in the 12 months immediately prior to the date
of his termination of employment, and if the termination of employment is for
any reason other than Retirement or Total and Permanent Disability, any
remaining amounts shall be paid in one lump sum 13 months following the
earlier of (A) the date of the Participant's repatriation to his home country
following the foreign assignment or (B) the date of such termination of
employment.
(ii) Upon written application by a Participant or his
legal representative stating that severe financial hardship will result from
continued deferral, the Committee in its sole discretion may authorize payment
of such Participant's deferred amounts prior to the date specified in the
written notice described in subparagraph (h)(1) above. For purposes of this
Plan, a "severe financial hardship" is an unanticipated emergency that is
caused by an event beyond the control of the Participant and that would result
in severe financial hardship to the individual if the emergency distribution
were not permitted. Cash needs arising from foreseeable events, such as the
purchase of a residence or education expenses for children shall not be
considered the result of a severe financial hardship. For purposes of this
Plan, a "severe financial hardship" is limited to an event described in
Treasury Regulation section 1.401(k)-1(d)(2)(iv)(A)(1) or (4). For purposes
of this Plan, a distribution is in "the amount necessary to satisfy the
emergency" only if the requirements of Treasury Regulation section
1.401(k)-1(d)(2)(iv)(B) are satisfied. A Participant must provide the
Committee with substantiation of any such claim of severe financial hardship.
(4) Amounts deferred hereunder shall be credited with
interest, compounded quarterly, from the date such amount otherwise would have
been paid at a rate yielding interest equivalent to the per annum market
discount rate for six-month U.S. Treasury Bills as published by the Federal
Reserve Board for the seven calendar days prior to January 1 (for interest to
be credited for the subsequent fiscal quarters ending March 31 and June 30)
and prior to July 1 (for interest to be credited for the subsequent fiscal
quarters ending on September 30 and December 31).
(i) Purchase of Common Stock. The Corporation and its
Affiliates may purchase from time to time shares of Common Stock in such
amounts as they may determine for purposes of the Plan. The Corporation and
its Affiliates shall have no obligation to retain, and shall have the
unlimited right to sell or otherwise deal with for their own account, any
shares of Common Stock purchased pursuant to this paragraph.
(j) Use of Proceeds. The proceeds received by the Corporation
from the sale of Common Stock pursuant to the exercise of Options shall be
used for general corporate purposes.
(k) Withholding. The Committee shall require the withholding of
all taxes as required by law. In the case of payments of Awards in shares of
Common Stock or other securities, withholding shall be as required by law and
in the Committee Rules. A Participant may elect to have any portion of the
federal, state or local income tax withholding required with respect to an
exercise of a Nonqualified Stock Option satisfied by tendering to the
Corporation shares of Common Stock, which, in the absence of such an election,
would have been issued to such Participant in connection with such exercise.
In the event that the value of the shares of Common Stock tendered to satisfy
the withholding tax required with respect to an exercise exceeds the amount of
such tax, the excess of such market value over the amount of such tax shall be
returned to the Participant, to the extent possible, in whole shares of Common
Stock, and the remainder in cash. The value of a share of Common Stock
tendered pursuant to this subsection 15(k) shall be the Fair Market Value of
the Common Stock on the date on which such shares are tendered to the
Corporation. An election pursuant to this subsection 15(k) shall be made in
writing and signed by the Participant. An election pursuant to this
subsection 15(k) is irrevocable. A Participant who exercises an option may
satisfy the income tax withholding due in respect of such exercise pursuant to
this subsection 15(k) only to meet required tax withholding. Shares of Common
Stock cannot be withheld in excess of the minimum number required for tax
withholding.
(l) Amendments. The Committee may at any time amend, suspend,
or discontinue the Plan or alter or amend any or all Awards and Award
Agreements under the Plan to the extent (1) permitted by law, (2) permitted by
the rules of any stock exchange on which the Common Stock or any other
security of the Corporation is listed, (3) permitted under applicable
provisions of the Securities Act of 1933, as amended, the Exchange Act
(including rule 16b-3 thereof) and (4) that such action would not result in
the disallowance of a deduction to the Corporation under section 162(m) of the
Code or any successor section (including the rules and regulations promulgated
thereunder); provided, however, that if any of the foregoing requires the
approval by stockholders of any such amendment, suspension or discontinuance,
then the Committee may take such action subject to the approval of the
stockholders. Except as provided in subsections 8(i) and 15(d) no such
amendment, suspension, or termination of the Plan shall, without the consent
of the Participant, adversely alter or change any of the rights or obligations
under any Awards or other rights previously granted the Participant under the
Plan.