WARNER-LAMBERT COMPANY
1992 STOCK PLAN
As Amended to March 25, 1997
WARNER-LAMBERT COMPANY
1992 STOCK PLAN
ARTICLE I
Purpose of Plan
Section 1.1. Purpose.
(a) The purpose of the 1992 Stock Plan is to provide
additional incentive to selected officers and other employees
of the Company (as hereinafter defined), to recognize and
reward their efforts and accomplishments in order to strengthen
the desire of employees to remain with the Company and
stimulate their efforts on behalf of the Company and to attract
and retain persons of competence, and, by encouraging ownership
of a stock interest in the Company, to gain for the Company the
advantages inherent in employees having a sense of
proprietorship.
(b) In addition, the Plan (as hereinafter defined)
will assist in the attraction and retention of non-employee
members of the Board of Directors by providing the opportunity
for such Directors to obtain a proprietary interest in the
Company's success and progress and with increased flexibility
in the timing of the receipt of fees for services on, and
attending meetings of, the Board of Directors and committees
thereof.
ARTICLE II
Definitions
Section 2.1. Definitions. Whenever used herein, unless
the context otherwise indicates, the following terms shall have
the respective meaning set forth below:
Account: A Cash Account or a Stock Account.
Act: The Securities Exchange Act of 1934, as amended.
Affiliate: Any corporation, partnership, association,
joint-stock company, business trust, joint venture or
unincorporated organization controlled, directly or indirectly,
by Warner-Lambert. Warner-Lambert shall be deemed to control
any such entity if Warner-Lambert possesses, directly or
indirectly, the power to direct or cause the direction of its
management and policies, whether through the ownership of
voting securities, by contract or otherwise.
Board of Directors (or Board): The Board of Directors of
Warner-Lambert.
Business Day: A day except for a Saturday, Sunday or a
legal holiday.
Cash Account: The Account which reflects the Compensation
deferred by a Director pursuant to Section 11.3.
Cash Credit: A credit to a Director's Cash Account,
expressed in whole dollars and fractions thereof, pursuant to
Section 11.3.
Closing Price: The closing price of the Common Stock on
the Composite Tape for New York Stock Exchange issues.
Code: The Internal Revenue Code of 1986, as amended.
Committee: The committee appointed to administer the Plan
in accordance with Section 12.1 hereof.
Common Stock: Common Stock, par value $1.00 per share, of
Warner-Lambert.
Company: Warner-Lambert and its Affiliates.
Compensation: All cash remuneration payable to a Director
for services to the Company as a Director or as a consultant,
other than reimbursement for expenses, and shall include
retainer fees for service on, and fees for attendance at
meetings of, the Board and any committees thereof.
Deferred Compensation Account: An account established by
the Company for a Director under a Predecessor Plan.
Director: Any member of the Board of Directors who is not
an employee of the Company or any of its Affiliates.
Effective Date: The date specified in Article XV hereof.
Employee: Officers and other employees of the Company or
any of its Affiliates (including such persons who are also
members of the Board of Directors).
Fair Market Value: As used in the Plan, the term "Fair
Market Value" shall be the mean between the high and low sales
prices for Common Stock on the Composite Tape for New York
Stock Exchange issues on the date the calculation thereof shall
be made. In the event the date of calculation shall be a date
on which the Common Stock shall not trade on the New York Stock
Exchange, determination of Fair Market Value shall be made as
of the first date prior thereto on which the Common Stock shall
have traded on the New York Stock Exchange.
Grantee: A Participant to whom Rights have been granted
in accordance with the provisions of Articles IV and VI hereof.
Option: The grant to Participants of options to purchase
shares of Common Stock in accordance with the provisions of
Articles IV and V hereof.
Optionee: A Participant to whom one or more Options have
been granted in accordance with the provisions of Articles IV
and V hereof.
Option Period: The period of time during which an Option
may be exercised in accordance with the provisions hereof.
Option Price: The price per share payable to the Company
for shares of Common Stock upon the exercise of an Option.
Participant: Each Employee to whom a Stock Award is
granted under the Plan.
Performance Awards: Awards made to Employees in
accordance with the provisions of Article VIII hereof.
Plan: The Warner-Lambert Company 1992 Stock Plan.
Plan Year: The calendar year.
Predecessor Plans: The Warner-Lambert Directors' Fees
Deferral Plan, the Warner-Lambert Consulting Fees Deferral Plan
and the Deferred Compensation Plan for Directors of Warner-
Lambert Company.
Reference Option: An Option, other than an incentive
stock option, to which a Right shall relate.
Reporting Person: A person subject to the reporting
requirements of Section 16(a) of the Act, excluding former
officers and directors whose transactions in Common Stock are
no longer subject to Section 16 of the Act.
Restricted Period: The period of time from the date of
grant of Restricted Stock until the lapse of restrictions
attached thereto.
Restricted Stock: Common Stock granted under the Plan
which is subject to restrictions in accordance with the
provisions of Article VII hereof.
Right: The grant to Participants of rights to acquire
shares of Common Stock in accordance with the provisions of
Articles IV and VI hereof.
Secretary: The Secretary of Warner-Lambert.
Spread: The amount by which the Option Price that would
be payable by the Grantee upon the exercise of the Reference
Option is less than the Fair Market Value of a share of Common
Stock on the date the related Right was granted.
Stock Account: The Account which reflects the
Compensation deferred by a Director pursuant to Section 11.4.
Stock Award: A grant of Options, Rights, Restricted Stock
or Performance Awards in accordance with the provisions hereof.
Stock Credit: A credit to a Director's Stock Account,
expressed in whole shares and fractions thereof, pursuant to
Section 11.4.
Subsidiary: Any corporation (other than Warner-Lambert)
in an unbroken chain of corporations beginning with and
including Warner-Lambert if, at the time of the granting of a
Stock Award, each of the corporations other than the last
corporation in said unbroken chain owns stock possessing 50
percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such
chain.
Valuation Date: The date on which a Right is exercised.
Warner-Lambert: Warner-Lambert Company or any successor
to it in ownership of substantially all of its assets, whether
by merger, consolidation or otherwise.
Article III
Eligibility and Grants
Section 3.1. Eligibility and Grants. The Committee shall
determine the Employees who shall be granted Stock Awards and
the number of shares thereof. The Committee may make more than
one grant to an Employee during the life of the Plan. Each
grant shall be evidenced by a written instrument duly executed
by or on behalf of the Company.
Section 3.2. Share Limitation. Stock Awards may not be
granted in any year which provide for the issuance of more than
1.75% of the shares of Common Stock outstanding (including
issued shares reacquired by the Company) on the January 1 of
the year of grant. Shares of Common Stock issued under the
Plan may be either authorized and unissued shares or issued
shares reacquired by the Company. Notwithstanding the above
limitation, in any year in which Stock Awards are granted which
provide for the issuance of less than the maximum permissible
number of shares, the balance of such unused shares shall be
added to the limitation in subsequent years. In addition, if
any Option granted under the Plan shall expire, terminate or be
cancelled for any reason without having been exercised in full,
the corresponding number of unpurchased shares shall be added
to the limitation in subsequent years; provided, however, that
if such expired, terminated or cancelled Option shall have been
a Reference Option, none of such unpurchased shares shall again
become available for purposes of the Plan to the extent that
the related Right granted under the Plan is exercised.
Further, if any shares of Common Stock granted hereunder are
forfeited or such award otherwise terminates without the
delivery of such shares upon the lapse of restrictions, the
shares subject to such grant, to the extent of such forfeiture
or termination, shall be added to the limitation in subsequent
years so long as the Participant received no "benefits of
ownership" (within the meaning of Section 16 of the Act) in
connection with such grant. To the extent permitted by Section
16 of the Act, any shares of Common Stock issued under the Plan
through the assumption or substitution of outstanding grants
from an acquired company shall not reduce the shares available
under the Plan.
ARTICLE IV
General Terms of Options and Rights
Section 4.1. Consideration. The Committee shall
determine the consideration to the Company for the granting of
Options and Rights under the Plan, as well as the conditions,
if any, which it may deem appropriate to ensure that such
consideration will be received by, or will accrue to, the
Company, and, in the discretion of the Committee, such
consideration need not be the same, but may vary for Options
and Rights granted under the Plan at the same time or from time
to time.
Section 4.2. Number of Options and Rights.
(a) The Committee may grant more than one Option or
Right to an individual during the life of the Plan and, subject
to the requirements of Section 422 of the Code with respect to
incentive stock options, such Option or Right may be in
addition to, in tandem with, or in substitution for, options or
rights previously granted under the Plan or under another stock
plan of the Company or of another corporation and assumed by
the Company.
(b) The Committee may permit the voluntary surrender
of all or a portion of any Option granted under the Plan or any
prior plan to be conditioned upon the granting to the Employee
of a new Option for the same or a different number of shares as
the Option surrendered, or may require such voluntary surrender
as a condition precedent to a grant of a new Option to such
Employee. Such new Option shall be exercisable at the price,
during the period, and in accordance with any other terms or
conditions specified by the Committee at the time the new
Option is granted.
Section 4.3. Option and Right Agreements. The Company
shall effect the grant of Options and Rights under the Plan, in
accordance with determinations made by the Committee, by
execution of instruments in writing, in a form approved by the
Committee. Each Option and Right shall contain such terms and
conditions (which need not be the same for all Options and
Rights, whether granted at the same time or at different times)
as the Committee shall deem to be appropriate. The Committee
may, in its sole discretion, and subject to such terms and
conditions as it may adopt, accelerate the date or dates on
which some or all outstanding Options and Rights may be
exercised. Except as otherwise provided by the Committee,
Options and Rights shall be exercised by submitting to the
Company a signed copy of a notice of exercise in a form to be
supplied by the Company and the exercise of an Option or Right
shall be effective on the date on which the Company receives
such notice at its principal corporate offices.
Section 4.4. Non-Transferability of Option or Right. No
Option or Right granted under the Plan to an Employee shall be
transferable by the Employee otherwise than by will or by the
laws of descent and distribution or pursuant to a "qualified
domestic relations order" (as defined in the Code), and such
Option and Right shall be exercisable, during the Employee's
lifetime, only by such Employee.
Section 4.5. Optionees and Grantees not Stockholders. An
Optionee or Grantee or legal representative thereof shall have
none of the rights of a stockholder with respect to shares
subject to Options or Rights until such shares shall be issued
upon exercise of the Option or Right.
Section 4.6. Certain Events. (a) As used in the Plan, a
"Change in Control of Warner-Lambert" shall be deemed to have
occurred if (i) any person (as such term is used in Sections
13(d) and 14(d)(2) of the Act is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of Warner-Lambert representing twenty
percent (20%) or more of the combined voting power of Warner-
Lambert's then outstanding securities, (ii) upon the
consummation of a merger, consolidation, sale or disposition of
all or substantially all of Warner-Lambert's assets or plan of
liquidation which is approved by the stockholders of Warner-
Lambert (a "Transaction"), or (iii) the composition of the
Board at any time during any consecutive twenty-four (24) month
period changes such that the Continuity Directors (as
hereinafter defined) cease for any reason to constitute at
least fifty-one percent (51%) of the Board. For purposes of
the foregoing clause (iii), "Continuity Directors" means those
members of the Board who either (a) were directors at the
beginning of such consecutive twenty-four (24) month period, or
(b)(1) filled a vacancy during such twenty-four (24) month
period created by reason of (x) death, (y) a medically
determinable physical or mental impairment which renders the
director substantially unable to function as a director or (z)
retirement at the last mandatory retirement age in effect for
at least two (2) years, and (2) were elected, nominated or
voted for by at least fifty-one percent (51%) of the current
directors who were also directors at the commencement of such
twenty-four (24) month period. Notwithstanding the provisions
of Article II hereof, upon the exercise of a Right during the
30-day period following Warner-Lambert obtaining actual
knowledge of a Change in Control of Warner-Lambert, "Fair
Market Value" of a share of Common Stock on the Valuation Date
shall be equal to the higher of (i) the highest closing sale
price per share of Common Stock of Warner-Lambert on the
Composite Tape for New York Stock Exchange issues during the
period commencing 30 days prior to such Change in Control and
ending immediately prior to such exercise or (ii) if the Change
in Control of Warner-Lambert occurs as a result of a tender or
exchange offer or consummation of a Transaction, then the
highest price per share of Common Stock pursuant thereto. Any
consideration other than cash forming a part or all of the
consideration for Common Stock to be paid pursuant to the
applicable transaction shall be valued at the valuation placed
thereon by the Board. Adjustments, if any, shall be made in
accordance with Section 10.1 hereof.
(b) As used in the Plan, a "Merger of Equals" shall mean
either: (a) a Change in Control of Warner-Lambert Company,
pursuant to the terms of which the stockholders of Warner-
Lambert Company receive consideration, including securities,
with an Aggregate Value (as defined below) not greater than 115
percent of the average closing price of the Common Stock of
Warner-Lambert Company on the Composite Tape for New York Stock
Exchange issues for the twenty business days immediately
preceding the earlier of the execution of the definitive
agreement pertaining to the transaction or the public
announcement of the transaction; or (b) any other Change in
Control of Warner-Lambert Company which the Board of Directors,
in its sole discretion, determines to be a "Merger of Equals"
for the purposes of this provision. For purposes of this
section, "Aggregate Value" shall mean the consideration to be
received by the stockholders of Warner-Lambert Company equal to
the sum of (A) cash, (B) the value of any securities and (C)
the value of any other non-cash consideration. The value of
securities received shall equal the average closing price of
the security on the principal security exchange on which such
security is listed for the twenty business days immediately
preceding the earlier of the execution of the definitive
agreement pertaining to the transaction or the public
announcement of the transaction. For securities not traded on
a security exchange, and for any other non-cash consideration
that is received, the value of such security or such non-cash
consideration shall be determined by the Board of Directors.
ARTICLE V
Terms and Conditions of Options
Section 5.1. Types of Options. Options granted under the
Plan shall be in the form of (i) incentive stock options as
defined in Section 422 of the Code, or (ii) options not
qualifying under such section, or both, in the discretion of
the Committee. The status of each Option shall be identified
in the Option agreement.
Section 5.2. Option Price. The Option Price shall be
such as shall be fixed by the Committee, subject to adjustment
pursuant to Section 10.1 hereof. The date of the granting of
an Option under the Plan shall be the date fixed by the
Committee.
Section 5.3. Period of Option.
(a) No part of an Option may be exercised unless the
Optionee remains in the continuous employ of the Company for
the period of time specified by the Committee, except that upon
the occurrence of a Change in Control of Warner-Lambert all
Options may be exercised without giving effect to the period of
employment limitation and the limitations, if any, which may
have been imposed by the Committee pursuant to Section 5.3(b)
with respect to the percent of the total number of shares to
which the Option relates which may be purchased from time to
time during the Option Period.
(b) Options will be exercisable thereafter over the
Option Period, which, in the case of each Option, shall be a
period determined by the Committee and will be exercisable at
such times and in such amounts as determined by the Committee
at the time each Option is granted. Notwithstanding any other
provision contained in this Plan, no Option shall be
exercisable after the expiration of the Option Period. Except
as provided in Sections 5.4, 5.5 and 5.6 hereof, no Option may
be exercised unless the Optionee is then in the employ of the
Company and shall have been continuously so employed since the
date of the grant of such Option.
Section 5.4. Termination of Employment Before Age 55. An
Optionee whose employment terminates before age 55, by reason
other than death, shall be entitled to exercise such Option,
only within the three-month period after the date of such
termination of employment and in no event after the expiration
of the Option Period, and then only if and to the extent that
the Optionee was entitled to exercise the Option at the date of
the termination of employment, giving effect to the
limitations, if any, which may have been imposed by the
Committee pursuant to Section 5.3(b) with respect to the
percent of the total number of shares to which the Option
relates which may be purchased from time to time during the
Option Period and have not been removed pursuant to Section
5.3(a).
Section 5.5. Termination of Employment On or After Age
55. An Optionee whose employment terminates on or after age
55, by reason other than death, shall be entitled to exercise
such Option if the Optionee was entitled to exercise the Option
at the date of the termination, without, however, giving effect
to the limitations, if any, which may have been imposed by the
Committee pursuant to Section 5.3(b) with respect to the
percent of the total number of shares to which the Option
relates which may be purchased from time to time during the
Option Period; provided, however, that such Option shall be
exercisable until the later of (i) the three-year period after
termination of employment, or (ii) the period after termination
of employment which is equal to the number of full months that
the Option has been outstanding prior to such termination, but
in no event after the expiration of the Option Period.
Section 5.6. Death of Optionee. If an Optionee should
die:
(a) while in the employ of the Company, the Option
theretofore granted shall, if the Optionee was entitled to
exercise the Option at the date of death, be exercisable by the
estate of the Optionee, or by a person who acquired the right
to exercise such Option by bequest or inheritance or by reason
of the death of the Optionee, without, however, giving effect
to the limitations, if any, which may have been imposed by the
Committee pursuant to Section 5.3(b) with respect to the
percent of the total number of shares to which the Option
relates which may be purchased from time to time during the
Option Period; provided, however, that such Option shall be
exercisable until the later of (i) the three-year period after
termination of employment, or (ii) the period after termination
of employment which is equal to the number of full months that
the Option has been outstanding prior to such termination, but
in no event after the expiration of the Option Period;
(b) within the three-month period after the date of
the termination of employment before age 55, the Option
theretofore granted shall be exercisable by the estate of the
Optionee, or by a person who acquired the right to exercise
such Option by bequest or inheritance or by reason of the death
of the Optionee, but then only if and to the extent that the
Optionee was entitled to exercise the Option at the date of
death, giving effect to the limitations, if any, which may have
been imposed by the Committee pursuant to Section 5.3(b) with
respect to the percent of the total number of shares to which
the Option relates which may be purchased from time to time
during the Option Period and have not been removed pursuant to
Section 5.3(a); provided, however, that such Option shall be
exercisable only within the twelve-month period next succeeding
the death of the Optionee and in no event after the expiration
of the Option Period; or
(c) after the date of the termination of employment
on or after age 55, the Option theretofore granted shall, if
the Optionee was entitled to exercise the Option at the date of
death, be exercisable by the estate of the Optionee, or by a
person who acquired the right to exercise such Option by
bequest or inheritance or by reason of the death of the
Optionee, without, however, giving effect to the limitations,
if any, which may have been imposed by the Committee pursuant
to Section 5.3(b) with respect to the percent of the total
number of shares to which the Option relates which may be
purchased from time to time during the Option Period; provided,
however, that such Option shall be exercisable until the latest
of (i) the three-year period after termination of employment,
(ii) the period after termination of employment which is equal
to the number of full months that the Option has been
outstanding prior to such termination, or (iii) the twelve-
month period after the death of the Optionee provided such
death occurs before the later of (i) or (ii), but in no event
after the expiration of the Option Period.
Section 5.7. Payment for shares. Payment for shares of
Common Stock shall be made in full at the time of exercise of
the Option. Nothing herein shall be construed to prohibit the
Company from making a loan or advance to the Optionee for the
purpose of financing, in whole or in part, the purchase of
optioned shares. Payment of the Option Price shall be made in
cash or, with the consent of the Committee, in whole or in part
in Common Stock, Stock Awards or other consideration. Payment
may also be made by delivering a properly executed exercise
notice together with irrevocable instructions to a third party
to promptly deliver to the Company the amount of sale or loan
proceeds to pay the exercise price.
Section 5.8. Incentive Stock Options. Options granted in
the form of incentive stock options shall be subject, in
addition to the foregoing provisions, to the following
provisions:
(a) Annual Limit. To the extent that the aggregate
Fair Market Value (determined at the time of grant) of the
Common Stock with respect to which incentive stock options are
exercisable for the first time by any Optionee during any
calendar year (under the Plan or under any other stock plan of
the Company) exceeds $100,000, such options shall be treated as
options which are not incentive stock options.
(b) Ten Percent Shareholder. No incentive stock
option shall be granted to any individual who, at the time of
the proposed grant, owns Common Stock possessing more than ten
percent (10%) of the total combined voting power of all classes
of stock of Warner-Lambert or any Subsidiary.
(c) Option Period. No incentive stock option shall
be exercisable after the expiration of ten years from the date
of grant.
(d) Option Price. The Option Price of an incentive
stock option shall not be less than the Fair Market Value per
share on the date of grant.
(e) Subsidiary. Incentive stock options may only be
granted to employees of Warner-Lambert and its Subsidiaries.
(f) Aggregate Limit. The aggregate number of shares
of Common Stock which may be issued pursuant to the exercise of
incentive stock options shall not exceed the lesser of (i)
10,000,000 shares or (ii) the number of shares determined in
accordance with the share limitation specified in Section 3.2
hereof.
The Company intends that Options designated by the Committee as
incentive stock options shall constitute incentive stock
options under Section 422 of the Code. Should any of the
foregoing provisions not be necessary in order to so comply or
should any additional provisions be required, the Committee may
amend the Plan accordingly, without the necessity of obtaining
the approval of stockholders of Warner-Lambert.
Section 5.9. Rollover Options. Notwithstanding anything
herein to the contrary, in the event of a Merger of Equals all
Options granted hereunder shall become immediately exercisable
by the Optionee and the Options shall be converted into options
to purchase the stock of the company which other shareholders
of Warner-Lambert Company receive in the transaction (the
"Rollover Options"). The Rollover Options shall be subject to
the same terms and conditions as those applicable to the
Options held prior to the Merger of Equals, including, but not
limited to, exercisability and Option Period, except as
hereinafter provided. If the Aggregate Value consists only of
shares of a publicly traded security ("New Security"), each
Rollover Option shall entitle the holder to purchase the number
of shares of New Security which is equal to the product of (a)
the Exchange Ratio (as hereinafter defined) and (b) the number
of shares of Common Stock subject to the Option immediately
prior to the effective date of the Merger of Equals (rounded to
the nearest full number of shares). The exercise price for
each Rollover Option shall be the exercise price per share of
each Option divided by the Exchange Ratio (rounded to the
nearest full cent). For purposes hereof, "Exchange Ratio"
shall mean the ratio for exchanging Common Stock held by the
stockholders of Warner-Lambert Company for shares of New
Security which is set forth in the definitive agreement
pertaining to the transaction. If the Aggregate Value consists
of consideration other than New Securities, the Board shall
make appropriate adjustments to the number of Rollover Options
and the exercise price thereof. In addition, with respect to
Options granted after March 25, 1997, if an optionee who is not
55 years old is terminated within three (3) years following the
Merger of Equals (for a reason other than "Termination for Just
Cause," as defined in the Warner-Lambert Company Enhanced
Severance Plan), such optionee's Options shall remain
exercisable notwithstanding such termination of employment by
the Company or any successor or its affiliates and such Options
shall be exercisable until two years following the termination
of employment, but in no event after the expiration of the
Option Period.
ARTICLE VI
Terms of Rights
Section 6.1. Relation to Option. Each Right shall relate
specifically to a Reference Option, then held by, or
concurrently granted to, the Grantee. Upon exercise of a Right
an amount shall be payable from Warner-Lambert, determined in
accordance with Section 6.3 hereof. The Reference Option shall
terminate to the extent that the related Right is exercised.
Section 6.2. Exercise of Right. A Right shall become
exercisable at such time, and in respect of such number of
shares of Common Stock, as the Reference Option is then
exercisable and such Right shall terminate upon termination of
the Reference Option, provided, however, that no Right shall be
exercisable unless the Grantee shall have remained in the
continuous employ of the Company for the period specified by
the Committee, except that upon the occurrence of a Change in
Control of Warner-Lambert, all Rights may be exercised without
giving effect to the period of employment limitation and the
limitations, if any, which may have been imposed by the
Committee pursuant to Section 5.3(b) with respect to the
percent of the total number of shares to which the Right
relates which may be purchased from time to time during the
Option Period. Except as provided in this Section 6.2, and in
Sections 6.5 and 6.6, no Right shall be exercisable unless at
the time of such exercise the Grantee shall be in the employ of
the Company.
Section 6.3. Amount Payable Upon Exercise of Right. Upon
the exercise of a Right the amount payable shall be equal to:
(i) 100% of the Spread but not exceeding the
difference between the Option Price and the Fair Market
Value of a share of Common Stock on the Valuation Date;
plus
(ii) 125% of the amount, if any, by which the Fair
Market Value of a share of Common Stock on the Valuation
Date exceeds the Fair Market Value on the date the Right
was granted;
multiplied by the number of shares with respect to which the
Right is being exercised; provided, however, that the Committee
may grant Rights which provide that upon exercise the amount
payable shall be equal to 100% of the amount by which the Fair
Market Value of a share of Common Stock on the Valuation Date
exceeds the Fair Market Value on the date the Right was
granted.
Section 6.4. Form of Payment. The amount payable on
exercise of a Right shall be payable in cash, shares of Common
Stock valued at their Fair Market Value as of the Valuation
Date, or in any combination thereof; provided, however, that
the form of payment shall be in the sole discretion of the
Committee. In the event that any payment in the form of both
cash and shares of Common Stock is made to a Reporting Person,
the cash portion of such payment shall be made upon the Grantee
becoming taxable in respect of the Common Stock received upon
exercise of the Right. Notwithstanding the foregoing, a
payment, in whole or in part, of cash may be made to a
Reporting Person upon exercise of a Right only if the Right is
exercised (i) during the period beginning on the third business
day following the date of release for publication of the
quarterly or annual summary statements of sales and earnings of
the Company and ending on the twelfth business day following
such date, or (ii) during any other period permitted under the
provisions of Rule 16b-3 promulgated pursuant to the Act. In
addition, a payment of cash shall be made to a Reporting Person
who has held the Right at least six months from the date of its
grant promptly following a Change in Control of Warner-Lambert
which Change in Control is outside the control of any Reporting
Person within the meaning of the aforesaid Rule 16b-3. The
Company intends that this provision shall comply with the
requirements of Rule 16b-3 under the Act. Should this
provision not be necessary to comply with the requirements of
such Rule or should any additional provision be necessary in
order to comply with the requirements of such Rule, the
Committee may amend the Plan accordingly, without the necessity
of obtaining the approval of stockholders of the Company. Any
fraction of a share resulting from the above calculation shall
be disregarded.
Section 6.5. Termination of Employment. If, prior to the
expiration of a Reference Option, the employment of the Grantee
by the Company should terminate, by reason other than death,
the related Right shall terminate, except that if, after a
Grantee shall have remained in the employ of the Company for
the period specified by the Committee, such Grantee's
employment should terminate on or after age 55, the Right
theretofore granted shall be exercisable until the later of (i)
the three-year period after termination of employment, or (ii)
the period after termination of employment which is equal to
the number of full months that the Reference Option has been
outstanding prior to such termination, but in no event after
the expiration of the Option Period, without, however, giving
effect to the limitations, if any, which may have been imposed
by the Committee pursuant to Section 5.3(b) hereof.
Section 6.6. Death of Grantee. If a Grantee should die
prior to the termination of the Reference Option:
(a) while in the employ of the Company, the Right
theretofore granted shall, if the Grantee was entitled to
exercise the Right at the date of death, be exercisable by the
estate of the Grantee, or by a person who acquired the right to
exercise such Right by bequest or inheritance or by reason of
the death of the Grantee, without, however, giving effect to
the limitations, if any, which may have been imposed by the
Committee pursuant to Section 5.3(b) hereof with respect to the
percent of the total number of shares to which the Right
relates which may be purchased from time to time during the
Option Period; provided, however, that such Right shall be
exercisable until the later of (i) the three-year period after
termination of employment, or (ii) the period after termination
of employment which is equal to the number of full months that
the Reference Option has been outstanding prior to such
termination, but in no event after the expiration of the Option
Period; or
(b) after the date of the termination of employment
on or after age 55, the Right theretofore granted shall, if the
Grantee was entitled to exercise the Right at the date of
death, be exercisable by the estate of the Grantee, or by a
person who acquired the right to exercise such Right by bequest
or inheritance or by reason of the death of the Grantee,
without, however, giving effect to the limitations, if any,
which may have been imposed by the Committee pursuant to
Section 5.3(b) hereof with respect to the percent of the total
number of shares to which the Right relates which may be
purchased from time to time during the Option Period; provided,
however, that such Right shall be exercisable until the latest
of (i) the three-year period after termination of employment,
(ii) the period after termination of employment which is equal
to the number of full months that the Reference Option has been
outstanding prior to such termination, or (iii) the twelve-
month period after the death of the Grantee provided such death
occurs before the later of (i) or (ii), but in no event after
the expiration of the Option Period.
Section 6.7. Limited Rights. Notwithstanding anything
herein to the contrary, Limited Rights may be granted hereunder
by the Committee with respect to the options granted under this
Plan or any other stock option plan of the Company which shall
entitle the holder to receive a payment of cash promptly
following a Change in Control of Warner-Lambert which Change in
Control is outside the control of any Reporting Person within
the meaning of Rule 16b-3 under the Act. Such payment of cash
shall be made to a Reporting Person only if such person has
held such Limited Right at least six months from the date of
its grant. Promptly following any such Change in Control, the
Optionee shall be entitled to receive a cash payment equal to
the excess of the Fair Market Value of a share of Common Stock
on the Valuation Date over the Option Price of the related
Option multiplied by the number of shares with respect to which
the Limited Right relates (in such case the method of
determining the Fair Market Value in the third sentence of
Section 4.6(a) shall apply). Limited Rights shall expire on
the first to occur of their date of payment or expiration of
the Limited Right or the related Option. Further, upon payment
of a Limited Right, the related Option (and any other Right
related thereto) shall be cancelled. Except as otherwise
provided herein, the provisions of the Plan relating to Rights
shall also apply to Limited Rights.
ARTICLE VII
Terms And Conditions Of Restricted Stock
Section 7.1. General. The restrictions set forth in
Section 7.2 shall apply to each grant of Restricted Stock for
the duration of the Restricted Period.
Section 7.2. Restrictions. A stock certificate
representing the number of shares of Restricted Stock granted
shall be registered in the Participant's name but shall be held
in custody by the Company for the Participant's account. The
Participant shall have all rights and privileges of a
stockholder as to such Restricted Stock, including the right to
receive dividends and the right to vote such shares, except
that, subject to the provisions of Section 7.3, the following
restrictions shall apply: (i) the Participant shall not be
entitled to delivery of the certificate until the expiration of
the Restricted Period; (ii) none of the shares of Restricted
Stock may be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of during the Restricted Period; (iii)
the Participant shall, if requested by the Company, execute and
deliver to the Company, a stock power endorsed in blank; and
(iv) all of the shares of Restricted Stock still subject to
restrictions shall be forfeited and all rights of the
Participant to such shares shall terminate without further
obligation on the part of the Company if the Participant ceases
to be an Employee prior to the expiration of the Restricted
Period applicable to such shares. Upon the forfeiture (in
whole or in part) of shares of Restricted Stock, such forfeited
shares shall become treasury shares of the Company without
further action by the Participant. The Participant shall have
the same rights and privileges, and be subject to the same
restrictions, with respect to any shares received pursuant to
Section 10.1 hereof.
Section 7.3. Terms and Conditions. The Committee shall
establish the terms and conditions, which need not be the same
for all grants made under the Plan, applicable to the
Restricted Stock, and which may include restrictions based upon
periods of time, performance (corporate, group, individual or
otherwise), combinations thereof or such other restrictions as
the Committee shall determine to be appropriate. The Committee
may provide for the restrictions to lapse with respect to a
portion or portions of the Restricted Stock at different times
or upon the occurrence of different events and the Committee
may waive, in whole or in part, any or all restrictions
applicable to a grant of Restricted Stock. Restricted Stock
awards may be issued for no cash consideration or for such
minimum consideration as may be required by applicable law.
Section 7.4. Delivery of Restricted Shares. At the end
of the Restricted Period as herein provided, a stock
certificate for the number of shares of Restricted Stock with
respect to which the restrictions have lapsed shall be
delivered, free of all such restrictions, to the Participant or
the Participant's beneficiary or estate, as the case may be.
The Company shall not be required to deliver any fractional
share of Common Stock but shall pay, in lieu thereof, the fair
market value (measured as of the date the restrictions lapse)
of such fractional share to the Participant or the
Participant's beneficiary or estate, as the case may be.
Notwithstanding the foregoing, the Committee may authorize the
delivery of the Restricted Stock to a Participant during the
Restricted Period, in which event any stock certificates in
respect of shares of Restricted Stock thus delivered to a
Participant during the Restricted Period applicable to such
shares shall bear an appropriate legend referring to the terms
and conditions, including the restrictions, applicable thereto.
Section 7.5. Certain Events.
(a) In the event of a Change in Control of Warner-
Lambert the rights and privileges of Participants hereunder
shall be governed by the following clause (i), clause (ii) or
clause (iii), as appropriate:
(i) Value of Restricted Stock. All shares of
Restricted Stock then outstanding shall be immediately
forfeited and shall revert to the Company as treasury
shares and, in lieu thereof, each Participant shall
receive a cash payment equal to the Value of the
Restricted Stock (as hereinafter defined); provided,
however, that if the Participant is a Reporting Person at
the time of the Change in Control of Warner-Lambert, the
provisions of clause (ii) shall govern the rights and
privileges of such Participant.
(ii) Reporting Persons. All shares of
Restricted Stock previously granted to Participants who
are Reporting Persons at the time of the Change in Control
of Warner-Lambert, which Change in Control is outside the
control of any Reporting Person within the meaning of Rule
16b-3 under the Act, and which are then outstanding and
have been outstanding for a period of at least six (6)
months, shall be immediately forfeited and shall revert to
the Company as treasury shares and, in lieu thereof, such
Participant shall receive a cash payment equal to the
Value of the Restricted Stock.
(iii) Lapse of Restrictions. In the event that
clause (ii) shall not become operational with respect to a
Participant who is a Reporting Person, all restrictions
applicable to shares of Restricted Stock previously
granted to such Participant and then outstanding shall
expire and such shares shall thereupon be delivered to the
Participant free of all restrictions.
(b) As used in the Plan, the "Value of the
Restricted Stock" shall be the higher of (a) the highest
closing price per share of Common Stock on the Composite Tape
for New York Stock Exchange issues during the 30 day period
prior to the Change in Control of Warner-Lambert, or (b) if the
Change in Control of Warner-Lambert occurs as a result of a
tender or exchange offer or consummation of a Transaction, then
the highest price per share of Common Stock pursuant thereto,
multiplied by the total number of shares of Restricted Stock
granted to such Participant and then outstanding, regardless of
whether the restrictions applicable thereto shall have
previously lapsed. Any consideration other than cash forming a
part or all of the consideration for Common Stock to be paid
pursuant to the applicable transaction shall be valued at the
valuation placed thereon by the Board of Directors.
Adjustments, if any, shall be made in accordance with Section
10.1 hereof.
ARTICLE VIII
Terms and Conditions of Performance Awards
Section 8.1. Terms and Conditions. The Committee may
grant Performance Awards, determine the consideration therefor,
which may include prior efforts and accomplishments, and
establish the terms and conditions thereof, which may include
provisions based upon periods of time, performance (corporate,
group, individual or otherwise), combinations thereof or such
other provisions as the Committee may determine to be
appropriate. Performance Awards may consist of shares of
Common Stock or awards that are valued by reference to shares
of Common Stock (e.g., phantom stock or restricted stock
units), cash or such other measure as the Committee shall
determine. Performance Awards may provide for payment in
shares of Common Stock, cash, other property or any combination
thereof as determined by the Committee. Shares of Common Stock
issued pursuant to this Section 8.1 may be issued for no cash
consideration or for such minimum consideration as may be
required by applicable law. The Committee shall determine
whether payment shall be made in a lump sum, installments or
deferred. With respect to Performance Awards which are valued
by reference to shares of Common Stock, the Committee shall
also determine whether the Participant may be entitled to
receive a payment of, or credit equivalent to, any dividends
payable with respect to such shares of Common Stock and the
terms and conditions applicable thereto. Further, if a payment
of cash is to be made on a deferred basis, the Committee shall
establish whether interest shall be credited, the rate thereof
and any other terms and conditions applicable thereto. The
limitations on transfer set forth in Section 4.4 shall be
applicable to all Performance Awards.
ARTICLE IX
Regulatory Compliance and Listing
Section 9.1. Regulatory Compliance and Listing. The
issuance or delivery of any Stock Awards and shares of Common
Stock pursuant thereto may be postponed by the Company for such
periods as may be required to comply with any applicable
requirements under the Federal securities laws, any applicable
listing requirements of any national securities exchange or any
requirements under any other law or regulation applicable
thereto, and the Company shall not be obligated to issue or
deliver any such awards or shares if the issuance or delivery
thereof shall constitute a violation of any provision of any
law or of any regulation of any governmental authority or any
national securities exchange.
ARTICLE X
Adjustment in Event of Changes in Capitalization
Section 10.1. Adjustments. In the event of a
recapitalization, stock split, stock dividend, combination or
exchange of shares, merger, consolidation, rights offering,
reorganization, liquidation, or the sale, conveyance, lease or
other transfer by Warner-Lambert of all or substantially all of
its property, or any other change in the corporate structure or
shares of Warner-Lambert, the Committee may make such equitable
adjustments to prevent dilution or enlargement of rights as it
may deem appropriate, including adjustments (i) in the number
and class of shares authorized to be granted hereunder,
(including adjustment to the share limitation of Section 3.2
hereof), (ii) in the number and kind of shares available under
any outstanding Stock Awards (including substitution of shares
of another corporation), (iii) in the price of any Option, and
(iv) in the number of Stock Credits in each Director's Stock
Account; provided, however, that in no event may any change be
made to an incentive stock option which would constitute a
"modification" within the meaning of Section 425(h)(3) of the
Code. Stock Awards granted under the Plan shall contain such
provisions as are consistent with the foregoing with respect to
adjustments to be made in the number and kind of shares covered
thereby and in the Option Price in the event of any such
change.
ARTICLE XI
Directors' Deferred Compensation
Section 11.1. Election To Participate.
(a) Each Director may elect to defer payment of all
or any portion of his or her Compensation that is payable
during the immediately succeeding Plan Year. Such election
must be made with respect to all Compensation payable in such
succeeding Plan Year by the date established by the Secretary
of the Company but in no event later than December 31 of such
preceding Plan Year.
(b) An election to defer any Compensation shall be:
(i) in writing, (ii) delivered to the Secretary, and (iii)
irrevocable. A Director may file a new election each Plan Year
applicable to the immediately succeeding Plan Year. If no
election or revocation of a prior election is received by such
date as may be permissible under the preceding paragraph, the
election, if any, in effect for such Plan Year will continue to
be effective for the immediately succeeding Plan Year. If a
Director does not elect to defer Compensation payable during a
Plan Year, all such Compensation shall be paid directly to such
Director in accordance with resolutions adopted by the Board
from time to time.
Section 11.2. Mode of Deferral. A Director who has
elected to defer all or a portion of his or her Compensation as
provided in Section 11.1 hereof may further elect to have such
deferred amounts credited to a Cash Account, a Stock Account,
or a combination of both such Accounts. The Secretary shall
maintain such Accounts in the name of the Director. The
election referred to in this Section 11.2 may be made once per
year and shall become effective on the January 1st which
follows such election; provided, however, that no election to
defer amounts into the Stock Account shall become effective
unless the transaction qualifies as exempt under Rule 16b-3(d)
under the Act. Any such election shall be specified in a
writing delivered by the Director to the Secretary and shall be
irrevocable. If a Director fails to elect the Account to which
deferral shall be made or if any such election would result in
a transaction which would not qualify as exempt under Rule 16b-
3(d) under the Act, he or she shall be deemed to have elected
deferral to the Cash Account. In addition, a Director may
cease deferring amounts into the Stock Account at any time by
written notice delivered to the Secretary and thereafter such
amounts shall be credited to the Cash Account. Compensation
deferred to a Cash Account or Stock Account shall result in
Cash Credits or Stock Credits, respectively.
Section 11.3. Cash Account. The Cash Account of a
Director shall be credited, as of the day the deferred
Compensation otherwise would have been payable to such
Director, with Cash Credits equal to the dollar amount of such
deferred Compensation. The Cash Account shall be adjusted and
increased each year, as if interest was credited thereon, at
the rate utilized for adjusting deferred bonus accounts under
the Warner-Lambert Company Incentive Compensation Plan.
Section 11.4. Stock Account. The Stock Account of a
Director shall be credited, as of the day the deferred
Compensation otherwise would have been payable to such
Director, with Stock Credits equal to the number of shares of
Common Stock (including fractions of a share) that could have
been purchased with the amount of such deferred Compensation at
the Closing Price of shares of Common Stock on the day the
deferred Compensation otherwise would have been payable to such
Director. As of the date of any dividend record date for the
Common Stock, the Director's Stock Account shall be credited
with additional Stock Credits equal to the number of shares of
Common Stock (including fractions of a share) that could have
been purchased, at the Closing Price of shares of Common Stock
on such date, with the amount which would have been paid as
dividends on that number of shares (including fractions of a
share) of Common Stock which is equal to the number of Stock
Credits then attributed to the Director's Stock Account;
provided, however, that in the event that there is not then in
effect an election under Section 11.2 hereof to have any of
such Director's Compensation credited to a Stock Account and,
further, that the Director has elected under Section 11.5(a)
hereof to transfer his or her Stock Account to a Cash Account
then the amount which would have been credited to the Stock
Account in accordance with this sentence but for this proviso
shall instead be credited to such Director's Cash Account. In
the case of dividends paid in property other than cash, the
amount of the dividend shall be deemed to be the fair market
value of the property at the time of the payment of the
dividend, as determined in good faith by the Committee.
Section 11.5. Conversions.
(a) Stock Account to Cash Account. A Director may
elect to convert all or any portion of his or her Stock Account
to his or her Cash Account; provided, however, that no such
election shall become effective unless the transaction
qualifies as exempt under Rule 16b-3(f) under the Act. The
amount to be credited to such Director's Cash Account shall be
obtained by multiplying the number of Stock Credits credited to
his or her Stock Account as of the last day of the month in
which such election is made by the Closing Price of shares of
Common Stock on such date.
(b) Cash Account to Stock Account. A Director may
elect to convert all or any portion of his or her Cash Account
to his or her Stock Account; provided, however, that no such
election shall become effective unless the transaction
qualifies as exempt under Rule 16b-3(f) under the Act. The
number of Stock Credits to be credited to such Director's Stock
Account shall be obtained by dividing the number of Cash
Credits credited to his or her Cash Account as of the last day
of the month in which such election is made by the Closing
Price of shares of Common Stock on such date.
(c) An election under this Section 11.5 shall be in
a writing delivered to the Secretary and may be revoked or
revised at any time prior to the last day of the month in which
the election is made.
Section 11.6. Distribution of Cash Account or Stock
Account.
(a) Distributions in respect of a Director's Cash
Account and Stock Account shall become payable in full to such
Director, annually, over a period of ten (10) years, except as
otherwise agreed to by the Committee and the Director,
beginning with the first day of the calendar year following the
year in which the individual ceases to be a member of the Board
of Directors.
(b) Distributions in respect of a Director's Cash
Account and Stock Account shall be made only in cash.
Section 11.7. Installment Amount.
(a) The amount of each distribution with respect to
a Director's Cash Account shall be the amount obtained by
multiplying the balance in such Account by a fraction, the
numerator of which is one (1) and the denominator of which is
the number of years in which distributions remain to be made
(including the current distribution).
(b) The amount of each distribution with respect to
a Director's Stock Account shall be the amount obtained by
multiplying the number of Stock Credits attributable to such
installment (determined as hereinafter provided) by the average
of the Closing Prices of shares of Common Stock on each
Business Day in the month immediately prior to the month in
which such installment is to be paid. The number of Stock
Credits attributable to an installment shall be equal to the
amount obtained by multiplying the current number of Stock
Credits in such Stock Account by a fraction, the numerator of
which is one (1) and the denominator of which is the number of
years in which distributions remain to be made (including the
current distribution).
Section 11.8. Financial Hardship. Notwithstanding any
other provision hereof, at the written request of a Director or
a Director's legal representative, the Committee, in its sole
discretion, upon a finding that continued deferral will result
in financial hardship to the Director, may authorize (i) the
payment of all or a part of a Director's Accounts in a single
installment prior to his or her ceasing to be a Director or
(ii) the acceleration of payment of any multiple installments
thereof; provided, however, that Directors may not receive
distributions under this Section 11.8 if such distribution
would result in liability of the Director under Section 16 of
the Act.
Section 11.9. Distribution upon Death. Upon the death of
a Director, the Committee shall pay all of such Director's Cash
Account and Stock Account in a single installment to the
beneficiary designated by the Director. All such designations
shall be made in writing and delivered to the Secretary. A
Director may from time to time revoke or change any such
designation by written notice to the Secretary. If there is no
designation on file with the Secretary at the time of the
Director's death, or if the beneficiary designated therein
shall have predeceased the Director, such distributions shall
be made to the executor or administrator of the Director's
estate. Any distribution under this Section 11.9 shall be made
as soon as practicable following notification to the Committee
of the Director's death and the value of the Stock Account for
the purpose of such distribution shall be based upon the
Closing Price of shares of Common Stock on the date of the
Director's death.
Section 11.10. Certain Events. Notwithstanding any other
provision hereof, in the event of a Change in Control of
Warner-Lambert which is outside of the control of any Reporting
Person within the meaning of Rule 16b-3 under the Act, the
balance in the Stock Account of each Director shall be
converted to the Cash Account. For this purpose, the balance
in the Stock Account shall be determined by multiplying the
number of Stock Credits by the higher of (i) the highest
Closing Price during the period commencing 30 days prior to
such Change in Control or (ii) if the Change in Control of
Warner-Lambert occurs as a result of a tender or exchange offer
or consummation of a Transaction, then the highest price per
share of Common Stock pursuant thereto. Any consideration
other than cash forming a part or all of the consideration for
Common Stock to be paid pursuant to the applicable transaction
shall be valued at the valuation placed thereon by the Board of
Directors. Adjustments, if any, shall be made in accordance
with Article X hereof. Within 30 days after a Change in
Control of Warner-Lambert, each Director may designate a
distribution schedule which may provide for a lump sum payment
or installment payments over a period of up to 15 years,
provided, however, that no payment shall be made for a period
of one year after the Change in Control. In the event that a
Director shall not make a designation in accordance with the
preceding sentence, the balance in the Cash Account shall be
distributed in a lump sum one year after the Change in Control.
Section 11.11. Valuations. Notwithstanding any other
provision hereof, in any instance in which a Director's Stock
Account is to be valued by reference to the Closing Price of
shares of Common Stock on a single day, the Committee may
declare such price to be unrepresentative of the market value
of such Common Stock and, in lieu thereof, shall base such
valuation on the average of the Closing Prices of shares of
Common Stock on each Business Day during the calendar quarter
ending coincident with or immediately preceding the day which
would otherwise serve as the basis for the valuation.
Section 11.12. Funding. The Company's sole obligation to
a Director or any person claiming under or through any Director
in respect of the payment of any balance in an Account shall be
solely a contractual obligation in accordance with the terms of
the Plan. No promise hereunder shall be secured by any
specific assets of the Company, nor shall any assets of the
Company be designated as attributable or allocated to the
satisfaction of such promises.
Section 11.13. Status of Stock Credits. Stock Credits
are not, and do not constitute, shares of Common Stock, and no
right as a holder of shares of Common Stock shall devolve upon
a Director by reason of his or her participation in the Plan.
Section 11.14. Non-Trading Date. In the event that the
date of the determination of a Closing Price hereunder shall be
a date which shall not be a date on which the Common Stock is
traded on the New York Stock Exchange, determination of such
Closing Price shall be made as of the first date thereafter on
which the Common Stock is so traded.
Section 11.15. No Right To Reelection. Nothing in the
Plan shall be deemed to create any obligation on the part of
the Board to nominate any Director for reelection by the
Company's stockholders, nor confer upon any Director the right
to remain a member of the Board of Directors.
Section 11.16. Predecessor Plans. Upon the Effective
Date of the Plan, no further benefits shall accrue under any
Predecessor Plans, except as provided in Section 11.18 hereof.
Section 11.17. Deferred Compensation Accounts. Upon the
Effective Date of the Plan, all Deferred Compensation Accounts
shall become subject to the terms and conditions of this Plan
in lieu of the terms and conditions of the Predecessor Plans,
except as provided in Section 11.18 hereof.
Section 11.18. Retired Directors. Benefits accrued under
Predecessor Plans which are in pay status on the Effective Date
shall continue to be paid in accordance with the provisions of
the Predecessor Plans.
Section 11.19. Federal Securities Law. The Company
intends that the provisions of this Article XI, and all
transactions effected in accordance with this Article XI, shall
comply with Rule 16b-3 under the Act. In the event that any
provision of this Article XI is not necessary to so comply or
any additional provision is necessary to obtain or maintain
such compliance, the Committee is authorized to revise the Plan
accordingly without obtaining approval of the stockholders of
Warner-Lambert. By way of illustration, and not limitation,
the Committee may bifurcate the provisions of this Article XI,
and such other provisions as it shall deem necessary, into a
separate plan (which plan shall be recognized as having
received approval of the stockholders of Warner-Lambert), if
the Committee shall deem such action necessary to maintain
qualification of Article XI (and transactions thereunder) under
Rule 16b-3 under the Act and the qualification of the
provisions of the Plan affecting Employees (and transactions
thereunder) under Rule 16b-3 under the Act.
ARTICLE XII
Administration
Section 12.1. Administration.
(a) The Plan shall be administered by a committee
consisting of not less than three members of the Board of
Directors, who shall be appointed by, and shall serve at the
pleasure of, the Board of Directors. No person who is or,
within one year prior thereto, has been eligible to receive an
award under the Plan or any other plan of the Company which
would result in loss of "disinterested person" status within
the meaning of Section 16 of the Act may be a member of the
Committee, and no person may be granted a Stock Award while a
member of the Committee. A majority of the Committee shall
constitute a quorum and the acts of a majority of the members
present at any meeting at which a quorum is present, expressed
from time to time by a vote at a meeting (including a meeting
held by telephone conference call or in which one or more
members of the Committee participate by telephone), or acts
approved in writing by a majority of the Committee, shall be
the acts of the Committee.
(b) In addition to the Committee's discretionary
authority set forth in other Articles hereof, the Committee has
discretionary authority to construe and interpret the Plan and
is authorized to establish such rules and regulations for the
proper administration of the Plan as it may deem advisable and
not inconsistent with the provisions of the Plan. All
questions arising under the Plan or under any rule or
regulation with respect to the Plan adopted by the Committee,
whether such questions involve an interpretation of the Plan or
otherwise, shall be decided by the Committee, and its decisions
shall be conclusive and binding in all cases.
(c) The Committee has discretionary authority to
determine the Employees to whom Stock Awards under the Plan are
to be granted, the terms and conditions applicable thereto and
the number of shares to be covered by each award. In selecting
the individuals to whom Stock Awards shall be granted, as well
as in determining the terms and conditions applicable thereto
and the number of shares subject to each grant, the Committee
shall consider the positions and responsibilities of the
Employees being considered, the nature of the services and
accomplishments of each, the value to the Company of their
services, their present and potential contribution to the
success of the Company, the anticipated number of years of
service remaining and such other factors as the Committee may
deem relevant. The Committee may obtain such advice or
assistance as it deems appropriate from persons not serving on
the Committee.
Section 12.2. Stock Awards Committee. In addition, and not
in limitation of the authority of the Committee, the Stock Awards
Committee (as hereinafter constituted) may grant Stock Awards, in
accordance with the provisions of the Plan, including the
establishment of the terms and conditions thereof and the
consideration to the Company therefor, to Employees who, at the
time of the grant, are not Reporting Persons. The Stock Awards
Committee, whose members need not serve on the Board of
Directors, shall be appointed by, and shall serve at the pleasure
of, the Committee. A majority of the Stock Awards Committee
shall constitute a quorum and the acts of a majority of the
members present at any meeting at which a quorum is present,
expressed from time to time by a vote at a meeting (including a
meeting held by telephone conference call or in which one or more
members of the Stock Awards Committee participate by telephone),
or acts approved in writing by a majority of the Stock Awards
Committee, shall be the acts of the Stock Awards Committee.
Notwithstanding the foregoing, the Stock Awards Committee may not
undertake any action which the provisions of Rule 16b-3,
promulgated pursuant to the Act, require to be undertaken by
"Non-Employee Directors" (as defined in said Rule) as a condition
of the continued qualification of the Plan (and transactions
thereunder) under Rule 16b-3.
ARTICLE XIII
Termination or Amendment of the Plan
Section 13.1. Termination or Amendment.
(a) The Board may at any time terminate the Plan and
may from time to time alter or amend the Plan or any part thereof
(including any amendment deemed necessary to ensure that the
Company may comply with any regulatory requirement referred to in
Article IX); provided, however, that, unless otherwise required
by law, the rights of a Participant with respect to Stock Awards
granted or the rights of a Director with respect to his or her
Accounts prior to such termination, alteration or amendment may
not be impaired without the consent of such Participant or
Director, as the case may be, and, provided further, without the
approval of the Company's stockholders, no alteration or
amendment may be made which would require approval of such
stockholders as a condition of compliance with Rule 16b-3 under
the Act. The Company intends that the Plan (and transactions
thereunder) shall comply with the requirements of Rule 16b-3
promulgated pursuant to the Act. Should any provisions hereof
not be necessary in order to comply with the requirements of such
Rule or should any additional provisions be necessary in order to
so comply, the Committee may amend the Plan accordingly, without
the necessity of obtaining approval of the stockholders of
Warner-Lambert.
(b) The Committee may at any time adopt any amendment
to the Plan which (i)(A) does not increase Plan liabilities by an
amount in excess of five million dollars ($5,000,000) and does
not increase Plan expense by an amount in excess of five hundred
thousand dollars ($500,000) or (B) is required by an applicable
law, regulation or ruling, (ii) can be undertaken by the Board of
Directors under the terms of the Plan, (iii) does not involve a
termination of the Plan, (iv) does not affect the limitations
contained in this sentence, and (v) does not affect the
composition or compensation of the Committee.
(c) The Committee shall have the power to cancel all
Rights theretofore granted pursuant to the Plan in the event that
it shall determine that the accounting effects of the grant or
exercise of Rights under the Plan would not be in the best
interests of the Company.
(d) Any action which may be undertaken by the
Committee pursuant to the terms hereof may be undertaken by the
Board, except as provided in Rule 16b-3 promulgated pursuant to
the Act.
ARTICLE XIV
Miscellaneous
Section 14.1. No Right To Employment. Nothing in the Plan
shall be deemed to confer upon any Participant the right to
remain in the employ of the Company.
Section 14.2. Withholding of Taxes.
(a) The Company shall have the right to require, prior
to the issuance or delivery of any shares of Common Stock or the
payment of any cash hereunder, payment by the Participant or the
Director, as the case may be, of any taxes required by law with
respect thereto.
(b) The Committee may permit any such withholding
obligation to be satisfied by reducing the number of shares of
Common Stock otherwise deliverable. A Reporting Person may elect
to have a sufficient number of shares of Common Stock withheld to
fulfill such tax obligations (hereinafter a "Withholding
Election") only if the election complies with the following
conditions: (x) the Withholding Election shall be subject to the
disapproval of the Committee and (y) the Withholding Election is
made (i) during the period beginning on the third business day
following the date of release for publication of the quarterly or
annual summary statements of sales and earnings of the Company
and ending on the twelfth business day following such date, or
(ii) during any other period in which a Withholding Election may
be made under the provisions of Rule 16b-3 promulgated pursuant
to the Act. Any fraction of a share of Common Stock required to
satisfy such tax obligations shall be disregarded and the amount
due shall be paid instead in cash by the Participant.
Section 14.3. No Assignment of Benefits. No benefit
payable under the Plan shall, except as otherwise specifically
provided by law, be subject in any manner to anticipation,
alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate,
attach, sell, transfer, assign, pledge, encumber or charge any
such benefit shall be void, and any such benefit shall not in any
manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person who shall be
entitled to such benefit, nor shall it be subject to attachment
or legal process for or against such person. If any person
entitled to a benefit hereunder shall be adjudicated a bankrupt
or shall attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge such benefit, or if any attempt is
made to subject any such benefit to the debts, contracts,
liabilities, engagements or torts of any person entitled to such
benefit, then such benefit shall, in the discretion of the
Committee, cease and terminate, and in that event the Committee
may cause such benefit, or any part thereof, to be held or
applied for the benefit of such person, his or her spouse,
children or other dependents, or any of them, in such manner and
in such proportion as the Committee shall determine.
Section 14.4. Death; Disability; Termination. The
Committee shall establish the provisions which shall govern in
the event of the death, disability, or termination (including
layoff) of a Participant or a Director, which provisions may be
different than the provisions otherwise described herein with
respect to death, disability, and termination. If, for any
reason, the Committee shall determine that it is not desirable
because of the incapacity of the person who shall be entitled to
receive any payments hereunder, to make such payments directly to
such person, the Committee may apply such payment for the benefit
of such person in any way that the Committee shall deem advisable
or may make any such payment to any third person who, in the
judgment of the Committee, will apply such payment for the
benefit of the person entitled thereto. In the event of such
payment, the Company, the Board of Directors and the Committee
shall be discharged from all further liability therefor. The
employment of an Employee who becomes disabled shall be deemed
terminated for purposes of the Plan as of the date benefit
payments would have commenced under the Warner-Lambert Long Term
Disability Benefits Plan had the Participant been enrolled in
such plan, except as otherwise provided herein. Absence on leave
approved by the Company shall not be considered an interruption
of employment for any purpose of the Plan.
Section 14.5. Listing and Other Conditions.
(a) As long as the Common Stock is listed on the New
York Stock Exchange, the issue of any shares of stock pursuant to
a Stock Award shall be conditioned upon the shares so to be
issued being listed on such Exchange. Warner-Lambert shall make
application for listing on such Exchange unlisted shares subject
to Stock Awards, but shall have no obligation to issue such
shares unless and until such shares are so listed, and the right
to exercise any Option or Right with respect to such shares shall
be suspended until such listing has been effected.
(b) If at any time counsel to Warner-Lambert shall be
of the opinion that any sale or delivery of shares of Common
Stock pursuant to a Stock Award is or may in the circumstances be
unlawful under the statutes, rules or regulations of any
applicable jurisdiction, Warner-Lambert shall have no obligation
to make such sale or delivery, or to make any application or to
effect or to maintain any qualification or registration under the
Securities Act of 1933, as amended, or otherwise with respect to
shares of Common Stock or Stock Awards, and the right to exercise
any Option or Right shall be suspended until, in the opinion of
said counsel, such sale or delivery shall be lawful.
(c) Upon termination of any period of suspension under
this Section 14.5, any Stock Award affected by such suspension
which shall not then have expired or terminated shall be
reinstated as to all shares available before such suspension and
as to shares which would otherwise have become available during
the period of such suspension, but no such suspension shall
extend any Option Period.
Section 14.6. Governing Law. This Plan shall be governed
by the law of the State of New Jersey (regardless of the law that
might otherwise govern under applicable New Jersey principles of
conflict of laws).
Section 14.7. Construction. Wherever any words are used
herein in the masculine gender they shall be construed as though
they were also used in the feminine gender in all cases where
they would so apply, and wherever any words are used herein in
the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so
apply.
Section 14.8. Laws of Foreign Jurisdictions. Without
amending the Plan, but subject to the limitations specified in
Article XIII hereof, the Committee may grant, amend, administer,
annul or terminate Stock Awards on such terms and conditions,
which may be different from those specified in the Plan, as it
may deem necessary or desirable to make available tax or other
benefits of the laws of any foreign jurisdiction.
Section 14.9. Other Plans. Nothing contained herein shall
prevent the Company from adopting additional compensation plans
or arrangements.
Section 14.10. Federal Securities Law. Notwithstanding any
other provision of the Plan, no transaction shall be given effect
on any date which would, in the opinion of counsel to the
Company, result in liability under Section 16(b) of the Act.ARTICLE
XV
Effective Date; Term of Plan
Section 15.1. Effective Date. The Plan shall be submitted
to the stockholders of Warner-Lambert for their approval at the
Annual Meeting of Stockholders to be held in 1992. The Plan
shall become effective upon the affirmative vote of the holders
of a majority of the shares of Common Stock present, or
represented, and entitled to vote at the meeting.
Section 15.2. Term of Plan. No Stock Awards may be granted
hereunder after April 28, 1997. This Section 15.2 shall not
affect any Stock Award granted prior to such date. Further, the
provisions of Article XI hereof (as amended from time to time)
are ongoing and shall continue until terminated by the Board.
WARNER-LAMBERT COMPANY