Exhibit (10-7)
THE PROCTER & GAMBLE 1993 NON-EMPLOYEE DIRECTORS'
STOCK PLAN
(as amended July 11, 2000)
ARTICLE A -- PURPOSE.
The purpose of The Procter & Gamble 1993 Non-Employee Directors' Stock Plan
(hereinafter referred to as the "Plan") is to strengthen the alignment of
interests between non-employee Directors (hereinafter referred to as
"Participants") and the shareholders of The Procter & Gamble Company
(hereinafter referred to as the "Company") through the increased ownership of
shares of the Company's Common Stock. This will be accomplished by allowing
Participants to elect voluntarily to convert a portion or all of their cash fees
for services as a Director into Common Stock, by granting Participants a fixed
value of shares of Common Stock restricted until retirement (hereinafter
referred to as "Retirement Shares") and by granting Participants non-qualified
options to purchase shares of Common Stock (hereinafter referred to as "Stock
Options").
ARTICLE B -- ADMINISTRATION.
1. The Plan shall be administered by the Compensation Committee
(hereinafter referred to as the "Committee") of the Board of Directors of the
Company (hereinafter referred to as the "Board"), or such other committee as may
be designated by the Board. The Committee shall consist of not less than three
(3) members of the Board who are "Non-Employee Directors" as defined in Rule
16b-3 under the Securities Exchange Act of 1934, as amended, or any successor
rule or definition adopted by the Securities and Exchange Commission, to be
appointed by the Board from time to time and to serve at the discretion of the
Board.
2. It shall be the duty of the Committee to administer this Plan in
accordance with its provisions and to make such recommendations of amendments or
otherwise as it deems necessary or appropriate. A decision by a majority of the
Committee shall govern all actions of the Committee.
3. Subject to the express provisions of this Plan, the Committee shall have
authority to allow Participants the right to elect to receive fees for services
as a director in either cash or an equivalent amount of whole shares of Common
Stock of the Company, or partly in cash and partly in whole shares of the Common
Stock of the Company, subject to such conditions or restrictions, if any, as the
Committee may determine. The Committee also has the authority to make all other
determinations it deems necessary or advisable for administering this Plan.
4. The Committee may establish from time to time such regulations,
provisions, and procedures within the terms of this Plan as, in its opinion, may
be advisable in the administration of this Plan.
5. The Committee may designate the Secretary of the Company or other
employees of the Company to assist the Committee in the administration of this
Plan and may grant authority to such persons to execute documents on behalf of
the Committee.
ARTICLE C -- PARTICIPATION.
Participation in the Plan shall be limited to all non-employee Directors of
the Company.
ARTICLE D -- LIMITATION ON NUMBER OF SHARES FOR THE PLAN.
The total number of shares of Common Stock of the Company that may be
awarded each year shall not exceed 50,000 shares.
ARTICLE E -- SHARES SUBJECT TO USE UNDER THE PLAN.
Shares of Common Stock to be awarded under the terms of this Plan shall be
treasury shares.
ARTICLE F -- RETIREMENT SHARES.
1. Commencing January 2, 1997 and on the first business day in each January
thereafter, each Participant shall receive Retirement Shares with a fair market
value of $20,000 on the date of grant.
2. All shares awarded under this Article shall be valued as set forth in
Article I.
ARTICLE G -- STOCK OPTIONS.
1. Each Participant shall, on the fifteenth day of September or on the next
preceding business day if such day is not a business day, automatically be
granted a Stock Option to purchase 2,000 shares of Common Stock (with such
amount subject to adjustment as set forth in Article H) having an exercise price
of one hundred percent (100%) of the fair market value of the Common Stock on
the date of grant. On February 26, 1999, each Participant shall receive a
one-time Stock Option grant to purchase 1,000 shares of Common Stock having an
exercise price of one hundred percent (100%) of the fair market value of the
Common Stock on the date of grant.
2. The Stock Options shall have a term of fifteen (15) years from the date
of grant, subject to earlier termination as provided herein, and shall be
exercisable three (3) years from the date of grant, except in the case of death,
in which case the Stock Options shall be immediately exercisable.
3. Stock Options are not transferable other than by will or by the laws of
descent and distribution. Legatees, distributees and duly appointed executors
and administrators of the estate of a deceased Participant shall have the right
to exercise such Stock Options at any time prior to the expiration date of the
Stock Options.
4. If a Participant ceases to be a Director while holding unexercised Stock
Options, such stock options are then void, except in the case of (i) death, (ii)
disability, (iii) retirement at the end of a term, (iv) retirement after
attaining the age of sixty-nine (69) or (v) resignation from the Board for
reasons of the antitrust laws or the conflict of interest, corporate governance
or continued service policies.
5. Upon the exercise of a Stock Option, payment in full of the exercise
price shall be made by the Participant. The exercise price may be paid for by
the Participant either in cash, shares of the Common Stock of the Company to be
valued at their fair market value on the date of exercise, or a combination
thereof.
ARTICLE H -- ADJUSTMENTS.
The amount of shares authorized to be issued annually under this Plan will
be subject to appropriate adjustment in the event of future stock splits, stock
dividends, or other changes in capitalization of the Company to prevent the
dilution or enlargement of rights under this Plan; following any such change,
the term "Common Stock" shall be deemed to refer to such class of shares or
other securities as may be applicable. The number of shares and exercise prices
covered by outstanding Stock Options and the number of shares to be granted as
Stock Options pursuant to Article F, paragraph 1 shall be adjusted to give
effect to any such stock splits, stock dividends, or other changes in the
capitalization.
ARTICLE I -- TRANSFER OF SHARES.
1. The Committee may transfer Common Stock of the Company under the Plan
subject to such conditions or restrictions, if any, as the Committee may
determine. The conditions and restrictions may vary from time to time and may be
set forth in agreements between the Company and the Participant or in the awards
of stock to them, all as the Committee determines.
2. The shares awarded shall be valued at the average of the high and low
quotations for Common Stock of the Company on the New York Stock Exchange on the
day of the transfer to a Participant. All shares awarded shall be full shares,
rounded up to the nearest whole share.
ARTICLE J -- ADDITIONAL PROVISIONS.
1. The Board may, at any time, repeal this Plan or may amend it from time
to time except that no such amendment may amend this paragraph, increase the
annual aggregate number of shares subject to this Plan, or alter the persons
eligible to participate in this Plan. The Participants and the Company shall be
bound by any such amendments as of their effective dates, but if any outstanding
awards are affected, notice thereof shall be given to the holders of such awards
and such amendments shall not be applicable to such holder without his or her
written consent. If this Plan is repealed in its entirety, all theretofore
awarded shares subject to conditions or restrictions transferred pursuant to
this Plan shall continue to be subject to such conditions or restrictions.
2. Every recipient of shares pursuant to this Plan shall be bound by the
terms and provisions of this Plan and of the transfer of shares agreement
referable thereto, and the acceptance of any transfer of shares pursuant to this
Plan shall constitute a binding agreement between the recipient and the Company.
3. Notwithstanding anything to the contrary in the this Plan, stock options
and stock appreciation rights granted hereunder shall vest immediately and any
conditions or restrictions on Common Stock shall lapse upon a "Change in
Control." A "Change in Control" shall mean the occurrence of any of the
following:
(a) An acquisition (other than directly from the Company) of any voting
securities of the Company (the "Voting Securities") by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of
the Exchange Act), immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of twenty percent (20%) or more of the then outstanding
Shares or the combined voting power of the Company's then outstanding
Voting Securities; provided, however, in determining whether a Change
in Control has occurred pursuant to this Section 4(a), Shares or
Voting Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition which
would cause a Change in Control. A "Non-Control Acquisition" shall
mean an acquisition by (i) an employee benefit plan (or a trust
forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or
its voting equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
"Related Entity"), (ii) the Company or any Related Entity, or (iii)
any Person in connection with a "Non-Control Transaction" (as
hereinafter defined);
(b) The individuals who, as of July 11, 2000 are members of the Board (the
"Incumbent Board"), cease for any reason to constitute at least half
of the members of the Board; or, following a Merger (as hereinafter
defined) which results in a Parent Corporation (as hereinafter
defined), the board of directors of the ultimate Parent Corporation;
provided, however, that if the election, or nomination for election by
the Company's common stockholders, of any new director was approved by
a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Plan, be considered as a member
of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a "Proxy
Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or into the
Company or in which securities of the Company are issued (a
"Merger"), unless such Merger is a "Non-Control Transaction." A
"Non-Control Transaction" shall mean a Merger where:
(A) the stockholders of the Company, immediately before such
Merger own directly or indirectly immediately following such
Merger at least fifty percent (50%) of the combined voting
power of the outstanding voting securities of (x) the
corporation resulting from such Merger (the "Surviving
Corporation") if fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of
the Surviving Corporation is not Beneficially Owned,
directly or indirectly by another Person (a "Parent
Corporation"), or (y) if there is one or more Parent
Corporations, the ultimate Parent Corporation;
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement
providing for such Mergerconstitute at least half of the
members of the board of directors of (x) the Surviving
Corporation, if there is no Parent Corporation, or (y) if
there is one or more Parent Corporations, the ultimate
Parent Corporation; and
(C) no Person other than (1) the Company, (2) any Related
Entity, (3) any employee benefit plan (or any trust forming
a part thereof) that, immediately prior to such Merger was
maintained by the Company or any Related Entity, or (4) any
Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of twenty percent
(20%) or more of the then outstanding Voting Securities or
Shares, has Beneficial Ownership of twenty percent (20%) or
more of the combined voting power of the outstanding voting
securities or common stock of (x) the Surviving Corporation
if there is no Parent Corporation, or (y) if there is one or
more Parent Corporations, the ultimate Parent Corporation;
(ii) A complete liquidation or dissolution of the Company; or
(iii) The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a
Related Entity or under conditions that would constitute a
Non-Control Transaction with the disposition of assets being
regarded as a Merger for this purpose or the distribution to the
Company's stockholders of the stock of a Related Entity or any
other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares or
Voting Securities as a result of the acquisition of Shares or Voting Securities
by the Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Persons, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of any additional
Shares or Voting Securities which increases the percentage of the then
outstanding Shares or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.
ARTICLE K -- DURATION OF PLAN.
This Plan shall be effective as of January 1, 1994. This Plan will
terminate on December 31, 2003 unless a different termination date is fixed by
the shareholders or by action of the Board but no such termination shall affect
the prior rights under this Plan of the Company or of anyone to whom shares have
been transferred prior to such termination.
Plan adopted November 9, 1993
Plan Amended January 10, 1995
Plan Amended June 11, 1996
Adjusted for August 22, 1997 stock split
Plan amended January 12, 1999
Plan amended July 11, 2000