EXHIBIT 10D
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CHIQUITA BRANDS INTERNATIONAL, INC.
1986 STOCK OPTION AND INCENTIVE PLAN
(as Amended and Restated Effective May 13, 1998)
SECTION I.
OBJECTIVES
The objectives of this 1986 Stock Option and Incentive Plan (the "Plan"),
as amended and restated, are to enable Chiquita Brands International, Inc. (the
"Company") to compete successfully in retaining and attracting key employees of
outstanding ability, to stimulate the efforts of such employees toward the
Company's objectives and to encourage the identification of their interests with
those of the Company's shareholders.
SECTION II.
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1"ADVISOR" means any person who provides bona fide advisory or
consultation services to the Company or a Subsidiary other than services in
connection with the offer or sale of securities in a capital-raising
transaction.
2.2"AWARD" means any form of Stock Option, Stock Appreciation Right,
Restricted Stock Award, Unrestricted Stock Award or Performance Award granted
under this Plan.
2.3"AWARD AGREEMENT" means a written agreement setting forth the terms of
an Award.
2.4"AWARD DATE" or "GRANT DATE" means the date designated by the Committee
as the date upon which an Award is granted.
2.5"AWARD PERIOD" or "TERM" means the period beginning on an Award Date
and ending on the expiration date of such Award.
2.6"BOARD" means the Board of Directors of the Company.
2.7"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than an Exempt Holder or Exempt Entity, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of 30% or more of the total voting power of
all of the Company's voting securities then outstanding ("Voting Shares"),
PROVIDED, that Exempt Holders "beneficially own" (as so defined), on a
combined basis, a lesser percentage of the Voting Shares than such other
person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
the Company;
(ii) on any date, the individuals who constituted the Company's Board
at the beginning of the two-year period immediately preceding such date
(together with any new directors whose election by the Company's Board, or
whose nomination for election by the Company's shareholders, was approved
by a vote of at least two-thirds of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
to constitute a majority of the directors then in office; or
(iii) immediately after a merger or consolidation of the Company
or any Subsidiary of the Company with or into, or the sale or other
disposition of all or substantially all of the Company's assets to, any
other corporation (where pursuant to the terms of such transaction
outstanding Awards are assumed by the surviving, resulting or acquiring
corporation or new Awards are substituted therefor), (a) the Voting Shares
of the Company outstanding immediately prior to such transaction do not
represent (either by remaining outstanding or by being converted into
voting securities of the surviving or acquiring entity or any parent
thereof) more than 50% of the total voting power of the voting securities
of the Company or surviving or acquiring entity or any parent thereof
outstanding immediately after such merger or consolidation; and (b) either
(x) a person or group (other than an Exempt Entity) beneficially owns a
percentage of the total voting power of the Company or surviving or
acquiring entity or any parent thereof which exceeds both 20% and the
percentage owned, on a combined basis, by the Exempt Holders or (y) the
Exempt Holders beneficially own, on a combined basis, less than 2% of such
voting power.
2.8"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor legislation. Reference to any particular section of the Code includes
any successor amendments or replacements of such section.
2.9"COMMITTEE" means the committee appointed by the Board and consisting
of two or more Directors of the Company, none of whom shall be eligible to
receive any Award pursuant to this Plan except as provided in Section 7.5, and
each of whom shall be a "non-employee director" as defined in Rule 16b-3 and an
"outside director" as defined in Section 162(m) of the Code.
2.10 "COMMON STOCK" means the Company's Common Stock, $.01 par value per
share.
2.11 "COMPANY" means Chiquita Brands International, Inc.
2.12 "CONTROL" means the power to direct or cause the direction of the
management and policies of a corporation or other entity.
2.13 "DIRECTOR" means any person serving on the Board of Directors of
the Company or any of its Subsidiaries who is not an Officer (or officer) or
Employee of the Company or any Subsidiary.
2.14 "DISABILITY" means a "permanent and total disability" within the
meaning of Section 22(e)(3) of the Code, or in the case of an Employee, a
disability which qualifies as a long-term disability under the Company's Long
Term Disability insurance, or any other definition of disability adopted by the
Committee.
2.15 "ELIGIBLE PERSON" means any person who is either an Employee,
Director or Advisor, except that no Director of the Company shall be deemed an
Eligible Person with respect to any Award other than those granted pursuant to
Section 7.5.
2.16 "EMPLOYEE" means (i) any officer or employee of the Company or a
Subsidiary (including those employees on a temporary leave of absence approved
by the Company or a Subsidiary); or (ii) any person who has received and
accepted an offer of employment from the Company or a Subsidiary; or (iii) if
approved by the Committee, a person who at the request of the Company or a
Subsidiary accepts employment with any corporation or partnership in which the
Company has a direct or indirect substantial interest. Solely for purposes of
Section XII, unless otherwise determined by the Committee, a person specified in
clause (iii) above shall be considered an employee of a Subsidiary.
2.17 "EXCHANGE ACT" means the Securities Exchange Act of 1934.
2.18 "EXEMPT ENTITY" means (i) an institution that is entitled under
Rule 13(d)-1 of the Exchange Act (or any successor rule or regulation) to report
its ownership of equity securities of the Company through the filing of a
statement on Schedule 13G under the Exchange Act, in lieu of Schedule 13D, for
so long as such institution remains so entitled, (ii) an underwriter temporarily
holding securities pursuant to an offering of such securities, and (iii) the
Company, any of its subsidiaries or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its subsidiaries.
2.19 "EXEMPT HOLDER" means American Financial Group, Inc., each of its
subsidiaries and affiliates, Carl H. Lindner, his spouse, his children and their
spouses and his grandchildren (or the legal representative of any such person)
and each trust for the benefit of each such person.
2.20 "FAIR MARKET VALUE" means, as of any date, the average of the
highest and lowest quoted selling prices of a Share as reported on the New York
Stock Exchange Composite Transactions Tape (or such other consolidated
transaction reporting system on which the Shares are primarily traded), or if
the Shares were not traded on such day, then the next preceding day on which the
Shares were traded, all as reported by such source as the Committee may select.
If the Shares are not traded on a national securities exchange or other market
system, Fair Market Value shall be determined in the manner established by the
Committee.
2.21 "IMMEDIATE FAMILY" means any child, stepchild, grandchild, spouse,
son-in-law or daughter-in-law and shall include adoptive relationships;
provided, however, that if the Committee adopts a different definition of
"immediate family" (or similar term) in connection with the transferability of
Stock Options and SARs awarded under this Plan, such definition shall apply,
without further action of the Board.
2.22 "INCENTIVE STOCK OPTION" means any Stock Option awarded under
Section VII of this Plan intended to be and designated as an "Incentive Stock
Option" within the meaning of Section 422 of the Code or any successor
provision.
2.23 "NON-QUALIFIED STOCK OPTION" means any Stock Option awarded under
Section VII of this Plan that is not an Incentive Stock Option.
2.24 "OFFICER" means a person who has been determined to be an officer
of the Company under Rule 6a-1(f) in a resolution adopted by the Board.
2.25 "OPTION PRICE" or "EXERCISE PRICE" means the price per share at
which Common Stock may be purchased upon the exercise of an Option or an Award.
2.26 "PARTICIPANT" means an Eligible Person to whom an Award has been
made pursuant to this Plan.
2.27 "PERFORMANCE AWARD" means an Award granted pursuant to Section X.
2.28 "REFERENCE PRICE" has the meaning set forth in Section 8.4.
2.29 "REPLACEMENT OPTION" means a Non-Qualified Stock Option granted
pursuant to Subsection 7.4, upon the exercise of a Stock Option granted pursuant
to this Plan where the Option Price is paid with previously owned shares of
Common Stock.
2.30 "RESTRICTED STOCK" means those shares of Common Stock issued
pursuant to a Restricted Stock Award which are subject to the restrictions set
forth in the related Award Agreement.
2.31 "RESTRICTED STOCK AWARD" means an award of a fixed number of Shares
to a Participant which is subject to forfeiture provisions and other conditions
set forth in the Award Agreement.
2.32 "RETIREMENT" means any termination of an Employee's employment
with, or a Director's service on the Board of, the Company or a Subsidiary (in
each case other than by death or Disability) by an Employee or a Director who is
(i) at least 65 years of age or (ii) at least 55 years of age with at least 10
years of employment with, or service on the Board of, the Company or a
Subsidiary.
2.33 "RULE 16B-3" AND "RULE 16A-1(F)" mean Rules 16b-3 and 16a-1(f)
under the Exchange Act or any corresponding successor rules or regulations.
2.34 "SHARE" means one share of the Company's Common Stock.
2.35 "STOCK APPRECIATION RIGHT" OR "SAR" means the right to receive,
for each unit of the SAR, cash and/or shares of Common Stock equal in value to
the excess of the Fair Market Value of one Share on the date of exercise of the
SAR over the Reference Price per share of Common Stock established on the date
the SAR was granted.
2.36 "STOCK OPTION" or "OPTION" means the right to purchase shares of
Common Stock (including a Replacement Option) granted pursuant to Section VII of
this Plan.
2.37 "SUBSIDIARY" means any corporation, partnership, joint venture, or
other entity (i) of which the Company owns or controls, directly or indirectly,
25% or more of the outstanding voting stock (or comparable equity participation
and voting power) or (ii) which the Company otherwise controls (by contract or
any other means); except that when the term "Subsidiary" is used in the context
of an award of an Incentive Stock Option, the term shall have the same meaning
given to it in the Code.
2.38 "TRANSFER" means alienation, attachment, sale, assignment, pledge,
encumbrance, charge or other disposition; and the terms "Transferred" or
"Transferable" have corresponding meanings.
2.39 "UNRESTRICTED STOCK AWARD " means an Award granted pursuant to
Section 9.3.
2.40 "VEST" means, in the case of any Award, to become exercisable or
become free of restrictions solely as a result of either (i) the passage of
required time periods specified under the terms of the Award ("Passage of Time
Criteria") or (ii) the inapplicability of Passage of Time Criteria due to a
Change of Control or a termination of employment or service as a Director
pursuant to the provisions of Section XI. For purposes of this Plan, "Vest"
does not refer to an Award becoming exercisable or free of restrictions due to
the attainment of performance criteria or any other criteria not solely related
to the passage of time ("Other Criteria"). An Award whose terms specify Other
Criteria that have not been fully satisfied at the time of a Change of Control
or termination of employment or service will not Vest (unless otherwise
determined by the Committee or specifically provided by such terms) as a result
of such Change of Control or termination (even if the terms of such Award
contain Passage of Time Criteria in addition to, in combination with, or as an
alternative to such Other Criteria).
SECTION III.
ADMINISTRATION
3.1 THE COMMITTEE. This Plan shall be administered and interpreted by
the Committee, except that any function of the Committee also may be performed
by the Board. Actions of the Committee may be taken by a majority of its
members at a meeting or by the unanimous written consent of all of its members
without a meeting.
3.2 POWERS OF THE COMMITTEE. The Committee shall have the power and
authority to operate, manage and administer the Plan on behalf of the Company
which includes, but is not limited to, the power and authority:
(i) to grant to Eligible Persons one or more Awards consisting
of either or a combination of Stock Options, Stock
Appreciation Rights, Restricted Stock, Unrestricted Stock,
and Performance Awards;
(ii) to select the Eligible Persons to whom Awards may be granted;
(iii) to determine the types and combinations of Awards to be
granted to Eligible Persons;
(iv) to determine the number of Shares or monetary units which
may be subject to each Award;
(v) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Award (including, but not
limited to, the term, price, exercisability, method of exercise
and payment, any restriction or limitation on transfer, any
applicable performance measures or contingencies, any
vesting schedule or acceleration, or any forfeiture
provisions or waiver, regarding any Award) and the
related Shares, based on such factors as the Committee
shall determine; and
(vi) to modify or waive any restrictions, contingencies or
limitations contained in, and grant extensions to the terms
or exercise periods of, or accelerate the vesting of, any
outstanding Awards as long as such modifications, waivers,
extensions or accelerations are not inconsistent with the
terms of the Plan, but no such changes shall impair the
rights of any Participant without his or her consent.
3.3 GUIDELINES. The Committee shall have the authority to adopt, alter
and repeal administrative rules, guidelines and practices governing the Plan and
perform all acts, including the delegation of its administrative duties, powers
and responsibilities pursuant to Section 3.4, as it deems advisable; to construe
and interpret the terms and provisions of the Plan and any Award issued under
the Plan; and otherwise to supervise the administration of the Plan. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any related Award Agreement in the manner and to
the extent it deems necessary to carry the Plan into effect.
3.4 DELEGATION OF AUTHORITY. The Committee may delegate to one or more of
the Company's employees (in the case of ministerial duties only) or Officers all
or any portion of the Committee's authority, powers, responsibilities and
administrative duties under the Plan, with such conditions and limitations as
the Committee shall prescribe in writing; provided, however, that only the
Committee is authorized to grant Awards to, or make any decisions with respect
to Awards granted to, Officers. A record of all actions taken by any Officer
to whom the Committee has delegated a portion of its powers or responsibilities
shall be filed with the minutes of the meetings of the Committee and shall be
made available for review by the Committee upon request.
3.5 DECISIONS FINAL. Any action, decision, interpretation or
determination by or at the direction of the Committee (or of any person acting
under a delegation pursuant to Section 3.4) concerning the application or
administration of the Plan shall be final and binding upon all persons and need
not be uniform with respect to its determination of recipients, amount, timing,
form, terms or provisions of Awards.
SECTION IV.
SHARES SUBJECT TO PLAN
4.1 SHARES. Subject to adjustment as provided in Section 4.4, the
aggregate number of Shares which may be issued under this Plan shall not exceed
fifteen million (15,000,000) Shares. If any Award granted under this Plan shall
expire, terminate or be canceled for any reason without having been exercised in
full, the number of unacquired Shares subject to such Award shall again be
available for future grants. The Committee may make such other determinations
regarding the counting of Shares issued pursuant to this Plan as it deems
necessary or advisable, provided that such determinations shall be permitted by
law.
4.2 MAXIMUM SHARES PER PARTICIPANT. Subject to adjustment as provided in
Section 4.4, the maximum number of Shares that may be subject to awards (of any
and all types) granted under this Plan to any Eligible Person during any
consecutive three calendar years shall not exceed 1,500,000 Shares.
4.3 RE-USE OF SHARES. If any Award granted under this Plan shall
expire, terminate or be forfeited or canceled for any reason before it has
vested or been exercised in full, the number of unissued or undelivered Shares
subject to such Award shall again be available for future grants. The Committee
may make such other determinations regarding the counting of Shares issued
pursuant to this Plan as it deems necessary or advisable, provided that such
determinations shall be permitted by law.
4.4 ADJUSTMENT PROVISIONS.
(a) ADJUSTMENT FOR CHANGE IN CAPITALIZATION. If the Company shall at
any time change the number of issued Shares without new consideration to the
Company (such as by stock dividend, stock split, recapitalization,
reorganization, exchange of shares, liquidation, combination or other change in
corporate structure affecting the Shares) or make a distribution to shareholders
of cash or property, which in the Committee's sole judgment, has a substantial
impact on the value of outstanding Shares, the total number of Shares reserved
for issuance under the Plan, the number of Shares covered by each outstanding
Award, and the Option Price or Reference Price for each outstanding Award shall
be proportionately adjusted in such manner as the Committee in its sole judgment
determines to be equitable and appropriate.
(b) OTHER EQUITABLE ADJUSTMENTS. Notwithstanding any other provision
of the Plan, and without affecting the number of Shares reserved or available
hereunder, the Committee may authorize the issuance, continuation or assumption
of Awards or provide for equitable adjustments or changes in the terms of
Awards, in connection with any merger, consolidation, sale of assets,
acquisition of property or stock, recapitalization, reorganization or similar
occurrence in which the Company is the continuing or surviving corporation, upon
such terms and conditions as it may deem equitable and appropriate.
SECTION V.
CHANGE OF CONTROL; MERGER, CONSOLIDATION, ETC.
5.1. EFFECT OF CHANGE OF CONTROL ON OUTSTANDING AWARDS. In the event
of, and upon a Change of Control, all Awards outstanding on the date of such
Change of Control shall become fully (100%) Vested.
5.2 TERMINATION OF EMPLOYMENT AFTER CHANGE OF CONTROL. In the event
that an Employee's employment by the Company or a Subsidiary is terminated by
the Company or such Subsidiary for any reason, other than for Cause, within one
(1) year after a Change of Control, all of the outstanding Vested Stock Options
and SAR's held by such Employee on the date of termination of employment shall
be exercisable for a period ending the earlier to occur of the first anniversary
of the date of termination or the Expiration Dates of such Stock Options and
SAR's.
5.3 MERGER, CONSOLIDATION, ETC. In the event that the Company shall,
pursuant to action by its Board of Directors, propose to (i) merge into,
consolidate with, sell or otherwise dispose of all or substantially all of its
assets, to another corporation or other entity and provision is not made
pursuant to the terms of such transaction for the assumption by the surviving,
resulting or acquiring corporation of outstanding Awards under the Plan, or the
substitution of new Awards therefor, or (ii) dissolve or liquidate, then (A) the
Committee shall cause written notice of such proposed transaction to be given to
each Participant not less than 30 days prior to the anticipated date of such
proposed transaction, and (B) all outstanding Awards that are not so assumed or
substituted for shall become fully (100%) Vested immediately prior, but subject,
to actual consummation of the transaction. Prior to a date specified in the
notice, which shall not be more than 3 days prior to the consummation of such
transaction, each Participant shall have the right to exercise all Stock Options
and SAR's held by such Participant that are not so assumed or substituted for on
the following basis: (i) such exercise shall be conditioned on consummation of
such transaction, (ii) such exercise shall be effective immediately prior to the
consummation of such transaction, and (iii) the Option Price for such Stock
Options shall not be required to be paid until 7 days after written notice by
the Company to the Participant that such transaction has been consummated. If
such transaction is consummated, each Option, to the extent not previously
exercised prior to the date specified in the foregoing notice of proposed
transaction, shall terminate upon the consummation of such transaction. If such
transaction is abandoned, (a) any and all conditional exercises of Stock Options
and SAR's in accordance with this Section 4.3 shall be deemed annulled and of no
force or effect and (b) to the extent that any Award shall have Vested solely by
operation of this Section 4.3, such Vesting shall be deemed annulled and of no
force or effect and the Vesting provisions of such Award shall be reinstated.
SECTION VI.
DURATION OF PLAN
This Plan shall continue in effect until December 31, 2015 unless
terminated sooner by the Board pursuant to Section XII.
SECTION VII.
STOCK OPTIONS
7.1 GRANTS. Stock options may be granted alone or in addition to other
Awards granted under this Plan. Each Option granted shall be designated as
either a Non-Qualified Stock Option or an Incentive Stock Option and in each
case such Option may or may not include Stock Appreciation Rights. One or more
Stock Options and/or Stock Appreciation Rights may be granted to any Eligible
Person, except that only Non-Qualified Stock Options may be granted to any
Director of or Advisor to the Company.
7.2 TERMS OF OPTIONS. Except as otherwise required by Sections 7.3,
7.4 and 7.5, Options granted under this Plan shall be subject to the following
terms and conditions and shall be in such form and contain such additional terms
and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem desirable:
(a) OPTION PRICE. The Option Price per share of Common Stock purchas
able under a Stock Option shall be determined by the Committee at the time of
grant, except that no stock option may be granted to an Officer, and no
Incentive Stock Option may be granted to any Eligible Person, for an Option
Price less than 100% of Fair Market Value on the Grant Date.
(b) OPTION TERM. The Term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after its Award Date, and no Non-Qualified Stock Option shall be
exercisable more than 20 years after its Award Date.
(c) EXERCISABILITY. A Stock Option shall be exercisable at such time
or times and subject to such terms and conditions as shall be specified in the
Award Agreement; provided, however, that an Option may not be exercised as to
less than 100 Shares at any time unless the number of Shares for which the
Option is exercised is the total number available for exercise at that time
under the terms of the Option.
(d) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part at any time during the Option Term by giving written notice of exercise to
the Company specifying the number of Shares to be purchased. Such notice shall
be accompanied by payment in full of the Option Price in cash unless some other
form of consideration is approved by the Committee at or after the grant.
Payment in full or in part also may be made in the form of Shares of Common
Stock owned by the Participant for at least six (6) months prior to exercise,
which Shares shall be valued at the Fair Market Value of the Common Stock on the
Exercise Date. The Committee may in its sole discretion authorize the payment
of the Option Price, in full or in part, by reducing the number of Shares to be
issued upon the exercise of the Option based upon the Fair Market Value of the
Common Stock on the date of exercise of the Option.
(e) CASHLESS EXERCISE. A Participant may elect to pay the Exercise
Price upon the exercise of an Option by authorizing a broker to sell all or a
portion of the Shares acquired upon exercise of the Option and remit to the
Company a sufficient portion of the sale proceeds to pay the entire Exercise
Price and any tax withholding resulting from such exercise.
(f) NON-TRANSFERABILITY OF OPTIONS. Stock Options shall be
Transferable only to the extent provided in Section 13.3 of this Plan.
(g) TERMINATION. Stock Options shall terminate in accordance with
Section XI of this Plan.
(h) BUYOUT AND SETTLEMENT PROVISIONS. The Committee may at any time
offer to buy out an Option previously granted, based on such terms and
conditions as the Committee shall establish. The Committee may also substitute
new Stock Options for previously granted Stock Options having higher Option
Prices than the new Stock Options being substituted therefor.
7.3 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be subject
to the following terms and conditions:
(a) AWARD AGREEMENT. Any Award Agreement relating to an Incentive
Stock Option shall contain such terms and conditions as are required for the
Option to be an "incentive stock option" as that term is defined in Section 422
of the Code.
(b) TEN PERCENT SHAREHOLDER. An Incentive Stock Option shall not be
awarded to any person who, at the time of the Award, owns Shares possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company and its Subsidiaries.
(c) QUALIFICATION UNDER THE CODE. Notwithstanding anything in this
Plan to the contrary, no term of this Plan relating to Incentive Stock Options
shall be interpreted, amended or altered, nor shall any discretion or authority
granted under this Plan be exercised, so as to disqualify this Plan under
Section 422 of the Code, or, without the consent of an affected Participant, to
disqualify any Incentive Stock Option under Section 422 of the Code, except as
may result in the event of a Change of Control.
(d) NOTIFICATION OF DISQUALIFYING DISPOSITION. Each Award Agreement
with respect to an Incentive Stock Option shall require the Participant to
notify the Company of any disposition of Shares of Common Stock issued pursuant
to the exercise of such Option under the circumstances described in Section
421(b) of the Code (relating to certain disqualifying dispositions), within ten
(10) days of such disposition.
7.4 REPLACEMENT OPTIONS. The Committee may provide either at the time of
grant or subsequently that an Option shall include the right to acquire a
Replacement Option upon the exercise of such Option (in whole or in part) prior
to an Employee's termination of employment if the payment of the Option Price is
paid in Shares. In addition to any other terms and conditions the Committee
deems appropriate, the Replacement Option shall be subject to the following
terms:
(a) NUMBER OF SHARES. The number of Shares subject to the Replacement
Option shall not exceed the number of whole Shares used to satisfy the Option
Price (whether by delivery of Shares to the Company or by reduction of Shares
otherwise deliverable to the Participant on exercise) of the original Option and
the number of whole Shares, if any, used to satisfy the payment for withholding
taxes (whether by such delivery or such reduction) in accordance with Section
13.6.
(b) GRANT DATE. The Replacement Option Grant Date will be the date of
the exercise of the original Option.
(c) OPTION PRICE. The Option Price per share shall be the Fair Market
Value of a Share on the Replacement Option Grant Date.
(d) VESTING. The Replacement Option shall be exercisable no earlier
than one (1) year after the Replacement Option Grant Date.
(e) TERM. The Term of the Replacement Option will not extend beyond
the Term of the original Option.
(f) NON-QUALIFIED. The Replacement Option shall be a Non-Qualified
Stock Option.
(g) WITHDRAWAL OF RIGHT. The Committee may without the consent of the
Employee rescind the right to receive a Replacement Option at any time prior to
an Option being exercised.
7.5 AWARD OF OPTIONS TO DIRECTORS OF THE COMPANY. All Options granted to
Directors of the Company shall be governed by the terms and conditions of this
Section 7.5 and no Director of the Company shall be eligible to receive any
Awards under this Plan except as set forth in this Section 7.5.
(a) AUTOMATIC GRANTS. The Company shall make the following grants of
Non-Qualified Stock Options to Directors:
(i) INITIAL GRANT. On the date on which a person first be
comes a Director of the Company, whether by election or appointment, such
Director shall automatically be granted a Non-Qualified Stock Option for
10,000 Shares.
(ii) ANNUAL GRANT. Each Director who has served on the Board
of the Company for at least six (6) months shall automatically receive an
annual grant of a Non-Qualified Stock Option for 10,000 Shares. The award
shall be made on the same date that the Committee decides the total number
of Shares subject to Awards to be granted to Employees in connection with
the Company's annual total compensation review.
(b) TERMS AND CONDITIONS OF OPTIONS GRANTED TO DIRECTORS OF THE
COMPANY. All Stock Options granted to Directors of the Company shall be subject
to the following terms and conditions:
(i) TERM. The Term of all Options shall be twenty (20) years
from the Award Date of the Option.
(ii) OPTION PRICE. The Option Price of all Options shall be the
Fair Market Value of a Share on the Award Date.
(iii) VESTING. All Options shall Vest over a ten (10) year period
with nine percent (9%) of the Option Shares being immediately exercisable
on the Award Date and an additional nine percent (9%) becoming exercisable
on each anniversary of the Award Date thereafter until the tenth
anniversary when the remaining ten percent (10%) of the Option Shares
shall become exercisable.
(iv) METHOD OF EXERCISE. All Options shall be exercisable in
the manner provided in Subsection 7.2(d) and such Directors shall
also be entitled to make payments for withholding taxes in accordance
with the provisions of Section 13.6.
(v) NON-TRANSFERABILITY AND TERMINATION. All Options shall be
Transferable only to the extent provided in Section 13.3 of this Plan and
shall terminate in accordance with Section XI of this Plan, except that
the timing provisions of Subsections 11.1(a) and 11.1(c) may not be varied
by Committee determination.
SECTION VIII.
STOCK APPRECIATION RIGHTS
8.1 GRANT. A Stock Appreciation Right may be granted either with or
without reference to all or any part of a Stock Option. A "Tandem SAR" means an
SAR granted with reference to a Stock Option (the "Reference Option"). A "Non-
Tandem SAR" means an SAR granted without reference to a Stock Option. If the
Reference Option is a Non-Qualified Stock Option, a Tandem SAR may be granted at
or after the date of the Reference Option; if the Reference Option is an
Incentive Stock Option, the Grant Date of a Tandem SAR must be the same as the
Grant Date of the Reference Option. Any SAR shall have such terms and
conditions, not inconsistent with this Plan, as are established by the Committee
in connection with the Award.
8.2 TERM. A Tandem SAR shall terminate and no longer be exercisable upon
the termination of its Reference Option. A Non-Tandem SAR may have a term no
longer than 20 years from its Grant Date.
8.3 EXERCISE. A Tandem SAR may only be exercisable at the times and, in
whole or in part, to the extent that its Reference Option is exercisable. The
exercise of a Tandem SAR shall automatically result in the surrender of the
applicable portion of its Reference Option. A Non-Tandem SAR shall be
exercisable in whole or in part as provided in its Award Agreement. Written
notice of any exercise must be given in the form prescribed by the Committee.
8.4 PAYMENT. For purposes of payment of an SAR, the Reference Price per
Share shall be the Option Price of the Reference Option in the case of a Tandem
SAR, and shall be the Fair Market Value of a Share on the Grant Date in the case
of a Non-Tandem SAR. The Committee shall determine the form of payment.
8.5 NON-TRANSFERABILITY AND TERMINATION. Stock Appreciation Rights shall
be Transferable only to the extent provided in Section 13.3 of this Plan and
shall terminate in accordance with Section XI of this Plan.
SECTION IX.
RESTRICTED AND UNRESTRICTED STOCK AWARDS
9.1 GRANTS OF RESTRICTED STOCK AWARDS. The Committee may, in its
discretion, grant one or more Restricted Stock Awards to any Eligible Person.
Each Restricted Stock Award shall specify the number of Shares to be issued to
the Participant, the date of such issuance, the price, if any, to be paid for
such Shares by the Participant and the restrictions imposed on such Shares. The
Committee may grant Awards of Restricted Stock subject to the attainment of
specified performance goals, continued employment or such other limitations or
restrictions as the Committee may determine.
9.2 TERMS AND CONDITIONS OF RESTRICTED AWARDS. Restricted Stock Awards
shall be subject to the following provisions:
(a) ISSUANCE OF SHARES. Shares of Restricted Stock may be issued
immediately upon grant or upon vesting as determined by the Committee.
(b) STOCK POWERS AND CUSTODY. If shares of Restricted Stock are issued
immediately upon grant, the Committee may require the Participant to deliver a
duly signed stock power, endorsed in blank, relating to the Restricted Stock
covered by such an Award. The Committee may also require that the stock
certificates evidencing such Shares be held in custody by the Company until the
restrictions on them shall have lapsed.
(c) SHAREHOLDER RIGHTS. Unless otherwise determined by the Committee at
the time of grant, Participants receiving Restricted Stock Awards shall not be
entitled to dividend or voting rights for the Restricted Shares until they are
fully vested.
9.3 UNRESTRICTED STOCK AWARDS. The Committee may make Awards of
unrestricted Common Stock to key Eligible Persons in recognition of outstanding
achievements or contributions by such persons. Unrestricted Shares issued on a
bonus basis under this Section 9.3 may be issued for no cash consideration.
Each certificate for unrestricted Common Stock shall be registered in the name
of the Participant and delivered immediately to the Participant.
SECTION X.
PERFORMANCE AWARDS
10.1 PERFORMANCE AWARDS. The Committee may, in its discretion, grant
Performance Awards to Eligible Persons in accordance with the following terms
and conditions:
(a) GRANT. A Performance Award shall consist of the right to receive
either (i) Common Stock or cash of an equivalent value, or a combination of
both, at the end of a specified Performance Period (defined below) or (ii) a
fixed-dollar amount payable in cash or Shares, or a combination of both, at the
end of a specified Performance Period. The Committee shall determine the
Eligible Persons to whom and the time or times at which Performance Awards shall
be granted, the number of Shares or the amount of cash to be awarded to any
person, the duration of the period (the "Performance Period") during which, and
the conditions under which, a Participant's Performance Award will vest, and the
other terms and conditions of the Performance Award in addition to those set
forth in Section 10.2.
(b) CRITERIA FOR AWARDS. The Committee may condition the grant or
vesting of a Performance Award upon the attainment of specified performance
goals, including, but not limited to, appreciation in the Fair Market Value,
book value or other measure of value of the Common Stock, the performance of the
Company based on earnings or cash flow, or such other factors or criteria as the
Committee shall determine.
10.2 TERMS AND CONDITIONS OF PERFORMANCE AWARDS. Performance Awards
granted pursuant to this Section X shall be subject to the following terms and
conditions:
(a) DIVIDENDS. Unless otherwise determined by the Committee at the time
of the grant of the Award, amounts equal to any dividends declared during the
Performance Period with respect to any Shares covered by a Performance Award
will not be paid to the Participant.
(b) PAYMENT. Subject to the provisions of the Award Agreement and this
Plan, at the expiration of the Performance Period, share certificates, cash or
both (as the Committee may determine) shall be delivered to the Participant, or
his or her legal representative or guardian, in a number or an amount equal to
the vested portion of the Performance Award.
(c) NON-TRANSFERABILITY. Performance Awards shall not be Transferable
except in accordance with the provisions of Section 13.3 of this Plan.
(d) TERMINATION OF EMPLOYMENT. Subject to the applicable provisions of
the Award Agreement and this Plan, upon termination of a Participant's
employment with the Company or a Subsidiary for any reason during the
Performance Period for a given Award, the Performance Award in question will
vest or be forfeited in accordance with the terms and conditions established by
the Committee.
SECTION XI.
TERMINATION OF AWARDS
11.1 TERMINATION OF AWARDS TO EMPLOYEES AND DIRECTORS. All Awards issued
to Employees and Directors under this Plan shall terminate as follows:
(a) TERMINATION BY DEATH, DISABILITY OR RETIREMENT. If an Employee's
employment by, or a Director's service on the board of, the Company or a
Subsidiary terminates by reason of death, Disability or Retirement, any Awards
held by such Participant, unless otherwise determined by the Committee at grant,
shall become fully Vested and, in the case of Stock Options and SAR's, may
thereafter be exercised by the Participant or by the Participant's beneficiary
or legal representative, for a period of one (1) year (or such longer period as
the Committee or the President of the Company may specify at or after grant)
after the date of such death, Disability or Retirement or until the expiration
of the stated term of such Award, whichever period is shorter.
(b) OTHER TERMINATION. Unless otherwise determined by the Committee at
or after grant, if an Employee's employment by, or a Director's service on the
board of, the Company or a Subsidiary terminates for any reason other than
death, Disability or Retirement, all of such Participant's Vested or otherwise
exercisable Stock Options and SAR's will terminate on the earlier to occur of
the stated expiration date of the Awards or ninety (90) calendar days after
termination of such employment or directorship. If a Participant dies during
the ninety (90) day period following the termination of the employment or
directorship, any unexercised Award held by the Participant shall be
exercisable, to the full extent that such Award was exercisable at the time of
death, for a period of one (1) year from the date of death or until the
expiration of the stated term of the Award, whichever occurs first.
11.2 ACCELERATION OF VESTING AND EXTENSION OF EXERCISE PERIOD UPON
TERMINATION. Notwithstanding anything contained in this Section XI, upon the
termination of a Participant's employment or directorship with the Company or
any of the Company's Subsidiaries, excluding, however, any Participant who is
either an Officer or a Director of the Company at the time of termination,
either the Committee or the President, in its or his sole discretion:
(a) ACCELERATE THE VESTING of, or otherwise cause to be exercisable or
free of restrictions, all or part of any Awards held by such terminated
Participant so that such Awards will be fully or partially exercisable as of the
date of termination of employment or such other date as the Committee or
President may choose; and
(b) EXTEND THE EXERCISE PERIOD of all or part of any Stock Options or
SAR's held by such terminated Participant for up to five years from the date of
termination (whether such termination was because of death, Disability,
Retirement or otherwise) but in no event longer than the original expiration
date of such Award.
(c) OFFICERS. No person or entity shall have the authority or discretion
to accelerate the Vesting of, otherwise cause to be exercisable or free of
restrictions, or extend the exercise period of, any Award granted to an Officer
of the Company other than the Committee.
(d) DIRECTORS OF THE COMPANY. No person or entity shall have the
authority to accelerate the Vesting of, or otherwise cause to be exercisable or
free of restrictions, or extend the exercise period of, any Award granted to a
Director of the Company.
11.3 BUYOUT AND SETTLEMENT OF AWARDS. The Committee may at any time offer
to buy out an Award (of any type or kind) previously granted, based on such
terms and conditions as the Committee shall establish. The Committee may also
substitute new Awards for previously granted Awards with the new Awards
containing different terms and conditions, including different exercise prices,
than those contained in the Awards being replaced.
SECTION XII.
TERMINATION OR AMENDMENT OF THIS PLAN
12.1 TERMINATION OR AMENDMENT. The Board may at any time, amend, in whole
or in part, any or all of the provisions of this Plan, or suspend or terminate
it entirely; provided, however, that, unless otherwise required by law, the
rights of a Participant with respect to any Awards granted prior to such
amendment, suspension or termination may not be impaired without the consent of
such Participant. In addition, no amendment may be made without first obtaining
shareholder approval if such amendment would increase the maximum number of
Shares which may be granted to any individual Participant, or increase the
total number of Shares available for issuance under this Plan.
SECTION XIII.
GENERAL PROVISIONS
13.1 NO RIGHT TO CONTINUED EMPLOYMENT . The adoption of this Plan and the
granting of Awards hereunder shall not confer upon any Employee the right to
continued employment nor shall it interfere in any way with the right of the
Company or any Subsidiary to terminate the employment or directorship,
respectively, of any Employee at any time.
13.2 AWARDS TO PERSONS OUTSIDE THE UNITED STATES. To the extent necessary
or appropriate to comply with foreign law or practice, the Committee may,
without amending this Plan: (i) establish special rules applicable to Awards
granted to Eligible Persons who are either or both foreign nationals or employed
outside the United States, including rules that differ from those set forth in
this Plan, and (ii) grant Awards to such Eligible Persons in accordance with
those rules.
13.3 NON-TRANSFERABILITY OF AWARDS. Except as otherwise provided by the
Committee at or after grant, no Award or benefit payable under this Plan shall
be Transferable by the Participant during his or her lifetime, nor may it be
assigned, exchanged, pledged, transferred or otherwise encumbered or disposed of
except by a domestic relations order pursuant to Section 414(p)(1)(B) of the
Code, or by will or the laws of descent and distribution; and no Award shall be
exercisable by anyone other than the Participant or the Participant's guardian
or legal representative during such Participant's lifetime. The Committee may
in its sole discretion permit a Participant to transfer a Non-Qualified Stock
Option or SAR for no consideration to or for the benefit of the Participant's
Immediate Family (including, without limitation, to a trust for the benefit of
the Participant's Immediate Family or to a partnership or limited liability
company for one or more members of the Participant's Immediate Family), subject
to such limits as the Committee may establish, and the transferee shall remain
subject to all the terms and conditions applicable to such Award.
13.4 OTHER PLANS. In no event shall the value of, or income arising from,
any Awards issued under this Plan be treated as compensation for purposes of any
pension, profit sharing, life insurance, disability or other retirement or
welfare benefit plan now maintained or hereafter adopted by the Company or any
Subsidiary, unless such plan specifically provides to the contrary.
13.5 UNFUNDED PLAN. This Plan is not a "Retirement Plan" or "Welfare
Plan" under the Employee Retirement Income Security Act of 1974, as amended.
This Plan shall be unfunded and shall not create (or be construed to create) a
trust or a separate fund or funds. This Plan shall not establish any fiduciary
relationship between the Company and any Participant or any other person. To
the extent any person holds any rights by virtue of an Award granted under this
Plan, such rights shall be no greater than the rights of an unsecured general
creditor of the Company.
13.6 WITHHOLDING OF TAXES. The Company shall have the right to deduct
from any payment to be made pursuant to this Plan, or to otherwise require,
prior to the issuance or delivery of any Shares or the payment of any cash to a
Participant, payment by the Participant of any Federal, state, local or foreign
taxes which the Company reasonably believes are required by law to be withheld.
The Committee may permit any such withholding obligation to be satisfied by
reducing the number of Shares otherwise deliverable or by accepting the delivery
of Shares previously owned by the Participant, which Shares shall be valued at
the Fair Market Value of the Common Stock on the exercise date. Any fraction of
a Share required to satisfy such tax obligations shall be disregarded and the
amount due shall be paid instead in cash by the Participant. The Company may
also withhold from any future earnings of salary, bonus or any other payment due
to the Participant the amount necessary to satisfy any outstanding tax
obligations related to the grant or exercise of any Award granted pursuant to
this Plan.
13.7 REIMBURSEMENT OF TAXES. The Committee may provide in its discretion
that the Company may reimburse a Participant for Federal, state, local and
foreign tax obligations incurred as a result of the grant or exercise of an
Award issued under this Plan.
13.8 GOVERNING LAW. This Plan and all actions taken in connection with it
shall be governed by the laws of the State of Ohio, without regard to the
principles of conflict of laws.
13.9 LIABILITY. No employee of the Company nor member of the Committee or
the Board shall be liable for any action or determination taken or made in good
faith with respect to the Plan or any Award granted hereunder and, to the
fullest extent permitted by law, all employees and members of the Committee and
the Board shall be indemnified by the Company for any liability and expenses
which they may incur through any claim or cause of action arising under or in
connection with this Plan or any Awards granted under this Plan.
13.10 SUCCESSORS. All obligations of the Company under this Plan shall
be binding upon and inure to the benefit of any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business, stock, and/or assets of the Company.