Exhibit (10)m
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KIMBERLY-CLARK CORPORATION
2001 EQUITY PARTICIPATION PLAN
(AS ADOPTED EFFECTIVE APRIL 26, 2001)
1. PURPOSE
This 2001 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 is effective as of April 26, 2001 upon (a) approval of the Board
and (b) approval by the stockholders of the Corporation at the 2001 Annual
Meeting of Stockholders.
3. DEFINITIONS
"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.
"Board" means the Board of Directors of the Corporation.
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"Cause" means any of the following: (i) the commission by the
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Participant of a felony; (ii) the Participant's dishonesty, habitual neglect
or incompetence in the management of the affairs of the Corporation; or (iii)
the refusal or failure by the Participant to act in accordance with any lawful
directive or order of the Corporation, or an act or failure to act by the
Participant which is in bad faith and which is detrimental to the Corporation.
"Change of Control" means an event deemed to have taken place if: (i) a
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third person, including a "group" as defined in section 13(d)(3) of the
Securities Exchange Act of 1934, acquires shares of the Corporation having 20%
or more of the total number of votes that may be cast for the election of
directors of the Corporation; or (ii) as the result of any cash tender or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Corporation before the
Transaction shall cease to constitute a majority of the Board of the
Corporation or any successor to the Corporation.
"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.
Furthermore, the term "Committee" shall include any delegate to the extent
authority is delegated pursuant to Section 4 hereunder.
"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.
"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
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Journal for reporting stock prices, or if no such sale shall have been made on
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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.
"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 7(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").
"Qualified Termination of Employment" means the termination of a
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Participant's employment with the Corporation and/or its Affiliates within the
two (2) year period following a Change of Control of the Corporation for any
reason (whether voluntary or involuntary) unless such termination is by reason
of death or disability or unless such termination is (i) by the Corporation
for Cause or (ii) by the Participant without Good Reason. Subject to the
definition of "Termination by the Participant for Good Reason," transfers of
employment for administrative purposes among the Corporation and its
Affiliates shall not be deemed a Qualified Termination of Employment.
"Restricted Period" shall mean the period of time during which the
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Transferability Restrictions applicable to Awards will be in force.
"Restricted Share" shall mean a share of Common Stock which may not be
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traded or sold, until the date the Transferability Restrictions expire.
"Restricted Share Unit" means the right, as described in Section 9, to
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receive an amount, payable in either cash or shares of Common Stock, equal to
the value of a specified number of shares of Common Stock. No certificates
shall be issued with respect to such Restricted Share Unit, except as provided
in subsection 9(d), and the Corporation shall maintain a bookkeeping account
in the name of the Participant to which the Restricted Share Unit shall
relate.
"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.
"Stock Appreciation Right (SAR)" has the meaning set forth in subsection
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7(i)(i) of this Plan.
"Termination by the Participant for Good Reason" shall mean the
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occurrence (without the Participant's express written consent) of any one of
the following acts by the Corporation, or failures by the Corporation to act,
unless, in the case of any act or failure to act described below, such act or
failure to act is corrected prior to the Participant's termination date:
(a) the assignment to the Participant of any duties inconsistent
with the Participant's status with the Corporation or a substantial
adverse alteration in the nature or status of the Participant's
responsibilities from those in effect immediately prior to the Change of
Control other than such alteration primarily attributable to the fact
that the Corporation may no longer be a public company;
(b) a reduction by the Corporation of the Participant's annual
base salary by five percent or more as in effect immediately prior to the
Change of Control, except for across-the-board salary reductions similarly
affecting all similarly situated employees of the Corporation;
(c) the Corporation requiring the Participant to be based at a
location more than 50 miles from the location of the Participant's office
as of the date of the Change of Control except for required travel on the
Corporation's business to an extent substantially consistent with the
Participant's business travel obligations as of the date of the Change of
Control;
(d) the failure of the Corporation to pay as soon as
administratively feasible, after notice from the Participant, any portion
of the Participant's current compensation;
(e) the failure of the Corporation to continue in effect any
compensation plan in which the Participant participates immediately prior
to the Change of Control which is material to the Participant's total
compensation, including but not limited to the Corporation's stock option,
incentive compensation, and bonus plans, or any substitute plans adopted
prior to the Change of Control, unless an equitable arrangement (which is
embodied in an ongoing substitute or alternative plan but which need not
provide the Participant with equity-based incentives) has been made with
respect to such plan, or the failure by the Corporation to continue
the Participant's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable than the
benefits provided to other participants; or
(f) the failure by the Corporation to continue to provide the
Participant with benefits substantially similar to those enjoyed by the
Participant under any of the Corporation's pension, life insurance,
medical, health and accident, or disability plans in which the
Participant was
participating at the time of the Change of Control, the taking of any
action by the Corporation which would directly or indirectly materially
reduce any of such benefits or deprive the Participant of any material
fringe benefit enjoyed by the Participant at the time of the Change
of Control, or the failure by the Corporation to provide the Participant
with the number of paid vacation days to which the Participant is
entitled on the basis of years of service with the Corporation in
accordance with the Corporation's normal vacation policy in effect
at the time of the Change of Control.
The Participant's right to terminate the Participant's employment for
Good Reason shall not be affected by the Participant's incapacity due to
physical or mental illness. The Participant's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.
"Total and Permanent Disability" means Totally and Permanently Disabled
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as defined in the Kimberly-Clark Corporation Pension Plan.
"Transferability Restrictions" means the restrictions on transferability
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imposed on Awards of Restricted Shares or Restricted Share Units.
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, and may delegate its authority under the Plan, provided,
however, the delegation of authority to grant Awards shall be limited to
grants by the Chief Executive Officer to newly hired employees, or to respond
to special recognition or retention needs, and any such grants shall be
limited to eligible Participants who are not subject to section 16 of the
Exchange Act. The delegation of authority shall be limited as follows: (a)
with respect to persons who are subject to section 16 of the Exchange Act, the
authority to grant Awards, the selection for participation, decisions
concerning the timing, pricing and amount of a grant or Award and authority to
administer Awards shall not be delegated by the Committee; (b) the maximum
number of shares of Common Stock covered by Awards which may be granted by the
Chief Executive Officer within any calendar year period shall not exceed
200,000; (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 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. FORM OF GRANTS
All Awards under the Plan shall be made in the form of Options,
Restricted Shares or Restricted Share Units, or any combination thereof.
Notwithstanding anything in this Plan to the contrary, any Awards shall
contain the restriction on assignability in subsection 16(g) of this Plan to
the extent required under rule 16b-3 of the Exchange Act.
7. STOCK OPTIONS
The Committee or its delegate 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 and the periods the Option shall
be exercisable. Such Options may be in the form of Incentive Stock Options or
in the form of Nonqualified Stock Options. The Committee in its discretion at
the time of grant may establish performance goals that may affect the grant,
exercise and/or settlement of an Option. 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 7(a) through 7(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; provided,
however, that the Option shall become exercisable immediately in the
event of a Qualified Termination of Employment of a Participant, without
regard to the limitations set forth below in this subsection 7(c).
Unless otherwise determined by the Committee or its delegate at the
time of grant, 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. Unless
otherwise determined by the Committee or its delegate at the time of
grant, if a Participant dies, becomes Totally and Permanently Disabled,
or Retires without having exercised the Option in full, the remaining
portion of such Option may be exercised, without regard to the limitations
in subsection 7(c), as follows. If a Participant dies or becomes Totally
and Permanently Disabled the remaining portion of such Option may be
exercised 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 the remaining portion of such
Option may be exercised within (i) five years from the date of any such
event or (ii) the remaining period of the Option, whichever is
earlier.
(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 7(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) 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 7(i). 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 whom 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.
(j) Deferral of Award Payment. The Committee may establish one
or more programs under the Plan to permit selected Participants the
opportunity to elect to defer receipt of consideration upon exercise of an
Award or other event that absent the election would entitle the
Participant to payment or receipt of Common Stock or other consideration
under an Option. The Committee may establish the election procedures,
the timing of such elections, the mechanisms for payments of, and accrual
of interest or other earnings, if any, on amounts of Common Stock so
deferred, and such other terms, conditions, rules and procedures that the
Committee deems advisable for the administration of any such deferral
program.
8. RESTRICTED SHARES
The Committee or its delegate may from time to time designate those
Participants who shall receive Restricted Share Awards. Each grant of
Restricted Shares under the Plan shall be evidenced by an agreement which
shall be executed by the Corporation and the Participant. The agreement shall
contain such terms and conditions, not inconsistent with the Plan, as shall be
determined by the Committee and shall indicate the number of Restricted Shares
awarded and the following terms and conditions of the award.
(a) Grant of Restricted Shares. The Committee shall determine
the number of Restricted Shares to be included in the grant and the
period or periods during which the Transferability Restrictions
applicable to the Restricted Shares will be in force (the "Restricted
Period"). Unless otherwise determined by the Committee at the time of
grant, the Restricted Period shall be for a minimum of three years and
shall not exceed ten years from the date of grant, as determined by the
Committee at the time of grant. The Restricted Period may be the same for
all Restricted Shares granted at a particular time to any one
Participant or may be different with respect to different Participants
or with respect to various of the Restricted Shares granted to the
same Participant, all as determined by the Committee at the time of grant.
(b) Transferability Restrictions. During the Restricted Period,
Restricted Shares may not be sold, assigned, transferred or otherwise
disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore,
a Participant's right, if any, to receive Common Stock upon termination
of the Restricted Period may not be assigned or transferred except by will
or by the laws of descent and distribution. In order to enforce the
limitations imposed upon the Restricted Shares the Committee may (i)
cause a legend or legends to be placed on any such certificates, and/or
(ii) issue "stop transfer" instructions as it deems necessary or
appropriate. Holders of Restricted Shares limited as to sale under
this subsection 8(b) shall have rights as a shareholder with respect to
such shares to receive dividends in cash or other property or other
distribution or rights in respect of such shares, and to vote such shares
as the record owner thereof. With respect to each grant of Restricted
Shares, the Committee shall determine the Transferability Restrictions
which will apply to the Restricted Shares for all or part of the
Restricted Period. By way of illustration but not by way of limitation,
the Committee may provide (i) that the Participant will not be entitled to
receive any shares of Common Stock unless he or she is still employed by
the Corporation or its Affiliates at the end of the Restricted Period,
(ii) that the Participant will become vested in Restricted Shares
according to a schedule determined by the Committee, or under other
terms and conditions determined by the Committee, and (iii) how any
Transferability Restrictions will be applied, modified or accelerated
in the case of the Participant's death or Total and Permanent Disability.
(c) Manner of Holding and Delivering Restricted Shares. Each
certificate issued for Restricted Shares shall be registered in the name
of the Participant and deposited with the Corporation or its designee.
These certificates shall remain in the possession of the Corporation or
its designee until the end of the applicable Restricted Period or, if
the Committee has provided for earlier termination of the Transferability
Restrictions following a Participant's death, Total and Permanent
Disability or earlier vesting of the shares of Common Stock, such earlier
termination of the Transferability Restrictions. At whichever time is
applicable, certificates representing the number of shares to which the
Participant is then entitled shall be delivered to the Participant free
and clear of the Transferability Restrictions; provided that in the
case of a Participant who is not entitled to receive the full number of
Shares evidenced by the certificates then being released from escrow
because of the application of the Transferability Restrictions, those
certificates shall be returned to the Corporation and canceled and a new
certificate representing the shares of Common Stock, if any, to which the
Participant is entitled pursuant to the Transferability Restrictions shall
be issued and delivered to the Participant, free and clear of the
Transferability Restrictions.
9. RESTRICTED SHARE UNITS
The Committee or its delegate shall from time to time designate those
Participants who shall receive Restricted Share Unit Awards. The Committee
shall advise such Participants of their Awards by a letter indicating the
number of Restricted Share Units awarded and the following terms and
conditions of the award.
(a) Restricted Share Units may be granted to Participants as of the
first day of a Restricted Period. The number of Restricted Share Units to be
granted to each Participant and the Restricted Period shall be determined by
the Committee in its sole discretion.
(b) Transferability Restrictions. During the Restricted Period,
Restricted Share Units may not be sold, assigned, transferred or otherwise
disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore, a
Participant's right, if any, to receive cash or Common Stock upon
termination of the Restricted Period may not be assigned or transferred
except by will or by the laws of descent and distribution. With
respect to each grant of Restricted Share Units, the Committee hall
determine the Transferability Restrictions which will apply to the
Restricted Share Units for all or part of the Restricted Period.
By way of illustration but not by way of limitation, the Committee may
provide (i) that the Participant will forfeit any Restricted Share Units
unless he or she is still employed by the Corporation or its
Subsidiaries at the end of the Restricted Period, (ii) that the Participant
will become vested in Restricted Share Units according to a schedule
determined by the Committee, or under other terms and conditions determined
by the Committee, and (iii) how any Transferability Restrictions will be
applied, modified or accelerated in the case of the Participant's death
or Total and Permanent Disability.
(c) During the Restricted Period, Participants will be credited with
dividends, equivalent in value to those declared and paid on shares of
Common Stock, on all Restricted Share Units granted to them. These
dividends will be regarded as having been reinvested in Restricted Share
Units on the date of the Common Stock dividend payments based on the then
Fair Market Value of the Common Stock thereby increasing the number of
Restricted Share Units held by a Participant. Holders of Restricted Share
Units under this subsection 9(c) shall have none of the rights of a
shareholder with respect to such shares. Holders of Restricted Share
Units are not entitled to receive dividends in cash or other property,
nor other distribution of rights in respect of such shares, nor to vote
such shares as the record owner thereof.
(d) Payment of Restricted Share Units. The payment of Restricted
Share Units shall be made in cash or shares of Common Stock, or a
combination of both, as determined by the Committee at the time of grant.
The payment of Restricted Share Units shall be made within 90 days
following the end of the Restricted Period.
10. GOVERNMENT SERVICE, LEAVES OF ABSENCE AND OTHER TERMINATIONS
(a) In the event 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, a
proportion of the Restricted Shares or Restricted Share Unit Award shall
be considered to vest as of the Participant's termination of employment.
The number of shares that shall vest shall be prorated for the number of
full years of employment during the Restricted Period prior to the
Participant's termination of employment.
(b) In the event of a Qualified Termination of Employment of a
Participant, all of the Options, Restricted Shares or Restricted Share
Unit Awards shall be considered to vest immediately.
(c) 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. A
Participant who is classified as an
intermittent employee shall be deemed to have a termination of employment
for purposes of the Plan.
11. 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 30,000,000 in the aggregate, of which
not more than 30,000,000 shall be available for option and sale, and of which
not more than 3,000,000 shall be available for grant as Restricted Shares and
Restricted Share Units, subject to the adjustment provision set forth in
Section 13 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. Shares subject to Options which
become ineligible for purchase, Restricted Share Units which are retired
through forfeiture or maturity, other than those Restricted Share Units which
are retired through the payment of Common Stock, and Restricted Shares which
are forfeited during the Restricted Period due to any applicable
Transferability Restrictions 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.
12. INDIVIDUAL LIMITS
The maximum number of shares of Common Stock covered by Awards which may
be granted to any Participant within any two consecutive calendar year period
shall not exceed 1,500,000 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 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 Options available
under the Plan.
13. 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 subject to the Plan, (c) the maximum
number of shares for which Awards may be granted to any Participant, (d) the
number of shares and the Option Price per share of all shares of Common Stock
subject to outstanding Options, (e) the maximum number of shares of Common
Stock covered by Awards which may be granted by the Chief Executive Officer
within any calendar year period, (f) the maximum number of shares of Common
Stock available for option and sale and available for grant as Restricted
Shares and Restricted Share Units, (g) the number of Restricted Shares and
Restricted Share Units awarded to Participants, and (h) 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.
14. 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.
15. TERM OF THE PLAN
The term of the Plan shall be ten years, beginning April 26, 2001, and
ending April 25, 2011, unless the Plan is terminated prior thereto by the
Committee. No Award may be granted or awarded after the termination
date of the Plan, but Awards theretofore granted or awarded shall continue
in force beyond that date pursuant to their terms.
16. GENERAL PROVISIONS
(a) Designated Beneficiary. Each Participant who shall be granted
Restricted Shares and/or Restricted Share Units under the Plan may
designate a beneficiary or beneficiaries with the Committee; 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. The Committee may in its sole and
absolute discretion, by written notice to a Participant, (i) limit the
period in which an Option may be exercised to a period ending at least
three months following the date of such notice, (ii) limit or
eliminate the number of shares subject to Option after a period ending at
least three months following the date of such notice, and/or (iii)
accelerate the Restricted Period with respect to the Restricted Share and
Restricted Share Unit Awards granted under this Plan. Notwithstanding
anything in this subsection 16(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.
(e) Nonresident Aliens. In the case of any Award granted 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 terms and conditions
of any Awards to the extent that such action is necessary to conform such
Award to applicable foreign law, (ii) determine which Participants,
countries and Affiliates are eligible to participate in the Plan, (iii)
modify the terms and conditions of any Awards granted to Participants
who are employed outside the United States, (iv) establish subplans,
each of which shall be attached as an appendix hereto, modify Option
exercise procedures and other terms and procedures to the extent such
actions may be necessary or advisable, and (v) take any action, either
before or after the Award is made, which is deems advisable to obtain
approval of such Award by an appropriate governmental entity; provided,
however, that no action may be taken hereunder if such action would (i)
materially increase any benefits accruing to any Participants under the
Plan, (ii) increase the number of securities which may be issued under the
Plan, (iii) modify the requirements for eligibility to participate n the
Plan, (iv) result in a failure to comply with applicable provisions of the
Securities Act of 1933, the Exchange Act or the Code or (v) result in
the disallowance of a deduction to the Corporation under section 162(m) of
the Code or any successor section.
(f) No Segregation of Cash or Stock. The Restricted Share Unit
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.
(g) Inalienability of Benefits and Interest. Except as
otherwise provided in this Plan, 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.
(h) 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.
(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 etain, and hall 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 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 shall be made in writing and signed by the Participant.
An election pursuant to this subsection is irrevocable. A Participant who
exercises an Option may satisfy the income tax withholding due in respect
of such exercise pursuant to this subsection only to meet required tax
withholding and shares of Common Stock cannot be withheld in excess of the
minimum number required for tax withholding. Notwithstanding any
other provision of the Plan, the number of shares of Common Stock or the
amount of cash to be delivered may, in the discretion of the Corporation,
be net of the number of shares of Common Stock or the amount of cash
required to be withheld to meet all applicable tax withholding
requirements.
(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 16(d) and 16(e) 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.