Exhibit 10e
KIMBERLY-CLARK CORPORATION
1992 EQUITY PARTICIPATION PLAN
(AS AMENDED AND RESTATED EFFECTIVE NOVEMBER 1, 1996)
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 adopted effective as of
November 1, 1996, upon approval by the stockholders of the Corporation at
the 1997 Annual Meeting.
3. DEFINITIONS
"Account" has the meaning set forth in subsection 7(a) of this Plan.
"Affiliate" means any company in which the Corporation owns 20% or
more of the equity interest (collectively, the "Affiliates").
"Award" has the meaning set forth in section 6 of this Plan.
"Award Agreement" means an agreement entered into between the
Corporation 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.
"Board" means the Board of Directors of the Corporation.
"Book Value" has the meaning set forth in subsection 7(a) of this
Plan.
"Code" means the Internal Revenue Code of 1986 and the regulations
thereunder, as amended from time to time.
"Committee" means the Compensation Committee of the Board, provided
that 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
Committee providing the foundation for administration of this Plan.
"Common Stock" means the common stock, par value $1.25 per share, of
the 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' 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
Plan.
"Dividend Share Value" means Dividend Share Value as defined in
subsection 7(c) of this Plan.
"Exchange Act" means the Securities Exchange Act of 1934 and the rules
and regulations thereunder, as amended from time to time.
"Fair Market Value" means the reported closing price of the Common
Stock, 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 of section 422 of the Code or any successor section.
"Insider" has the meaning set forth in subsection 15(k) of this Plan.
"Maturity Date" has the meaning set forth in subsection 7(b) of this
Plan.
"Maturity Value" has the meaning set forth in subsection 7(c) of this
Plan.
"Nonqualified Stock Option" means any Option which is not an Incentive
Stock Option.
"Option" means a right to purchase a specified number of shares of
Common 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.
"Participant" means an employee who the Committee selects to
participate in and receive Awards under the Plan (collectively, the
"Participants").
"Participation Shares" means the right, as described in section 7, to
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
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 in subsection 15(h) of this Plan.
"Stock Appreciation Right (SAR)" has the meaning set forth in
subsection 8(j)(i) of this Plan.
"Total and Permanent Disability" means Totally and Permanently
Disabled 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 $.41 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 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 $.41 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, at the same time as
Nonqualified Stock Options are granted the Committee may also grant to
designated Participants the right to transfer such Options, to the
extent allowed under rule 16b-3 of the Exchange Act, subject to the
terms and conditions of the Committee Rules on the date of grant.
(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 or military 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 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 20,000,000 in the
aggregate, of which not more than 20,000,000 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 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
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, such Participant 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).
(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 15 annual
installments commencing in the year after the termination of
employment by reason of retirement; or (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 and who is required to report to the Securities and Exchange
Commission under section 16(a) of the Exchange Act (an "Insider") may
satisfy the income tax withholding due in respect of such exercise
pursuant to this subsection 15(k) only if the Insider also satisfies
an exemption under section 16(a) of the Exchange Act (or the rules or
regulations promulgated thereunder) for such 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.