Exhibit 99.1
AMENDMENT TO THE 2000 INCENTIVE PLAN
OF
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
The Charles River Laboratories International, Inc. 2000 Incentive Plan (the
"Plan") be and hereby is amended by deleting the first sentence of Section 2(a)
thereof in its entirety and inserting in lieu thereof the following:
"A maximum of 3,789,000, shares of Stock may be delivered in satisfaction of
Awards under the Plan."
Adopted by the Board of Directors on March 9, 2001.
Adopted by the Stockholders on May 8, 2001.
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
2000 INCENTIVE PLAN
1. ADMINISTRATION
Subject to the express provisions of the Plan, the Administrator has the
authority to interpret the Plan; determine eligibility for and grant Awards;
determine, modify or waive the terms and conditions of any Award; prescribe
forms, rules and procedures (which it may modify or waive); and otherwise do all
things necessary to implement the Plan. Once an Award has been communicated in
writing to a Participant, the Administrator may not, without the Participant's
consent, alter the terms of the Award so as to affect adversely the
Participant's rights under the Award, unless the Administrator has expressly
reserved the right to do so. In the case of any Award intended to be eligible
for the performance-based compensation exception under Section 162(m), the
Administrator shall exercise its discretion consistent with qualifying the Award
for such exception.
2. LIMITS ON AWARD UNDER THE PLAN
a. NUMBER OF SHARES. A maximum of 1,189,000, shares of Stock may be
delivered in satisfaction of Awards under the Plan. For purposes of the
preceding sentence, shares that have been forfeited in accordance with the terms
of the applicable Award and shares held back in satisfaction of the exercise
price or tax withholding requirements from shares that would otherwise have been
delivered pursuant to an Award shall not be considered to have been delivered
under the Plan. Also, the number of shares of Stock delivered under an Award
shall be determined net of any previously acquired Shares tendered by the
Participant in payment of the exercise price or of withholding taxes.
b. TYPE OF SHARES. Stock delivered by the Company under the Plan may be
authorized but unissued Stock or previously issued Stock acquired by the Company
and held in treasury. No fractional shares of Stock will be delivered under the
Plan.
c. CERTAIN SHARE LIMITS. The maximum number of shares of Stock for which
Stock Options may be granted to any person from and after adoption of the Plan
and prior to June 5, 2010, the maximum number of shares of Stock subject to SARs
granted to any person during such period and the aggregate maximum number of
shares of Stock subject to other Awards that may be delivered (or the value of
which may be paid) to any person during such period shall each be 2,000,000. For
purposes of the preceding sentence, the repricing of a Stock Option or SAR shall
be treated as a new grant to the extent required under Section 162(m). Subject
to these limitations, each person eligible to participate in the Plan shall be
eligible to receive Awards covering up to the full number of shares of
Stock then available for Awards under the Plan. No Awards may be granted under
the Plan after June 5, 2010, but previously granted Awards may extend beyond
that date.
d. OTHER AWARD LIMITS. No more than $2,000,000 may be paid to any
individual with respect to any Cash Performance Award (other than an Award
expressed in terms of shares of Stock or units representing Stock, which shall
instead be subject to the limit set forth in Section 2.c. above). In applying
the dollar limitation of the preceding sentence: (A) multiple Cash Performance
Awards to the same individual that are determined by reference to performance
periods of one year or less ending with or within the same fiscal year of the
Company shall be subject in the aggregate to one limit of such amount, and
(B) multiple Cash Performance Awards to the same individual that are determined
by reference to one or more multi-year performance periods ending in the same
fiscal year of the Company shall be subject in the aggregate to a separate limit
of such amount.
3. ELIGIBILITY AND PARTICIPATION
The Administrator will select Participants from among those key Employees,
directors and other individuals or entities providing services to the Company or
its Affiliates who, in the opinion of the Administrator, are in a position to
make a significant contribution to the success of the Company and its
Affiliates. Eligibility for ISOs is further limited to those individuals whose
employment status would qualify them for the tax treatment described in Sections
421 and 422 of the Code.
4. RULES APPLICABLE TO AWARDS
a. ALL AWARDS
(1) TERMS OF AWARDS. The Administrator shall determine the terms of all
Awards subject to the limitations provided herein.
(2) PERFORMANCE CRITERIA. Where rights under an Award depend in whole or
in part on satisfaction of Performance Criteria, actions by the
Company that have an effect, however material, on such Performance
Criteria or on the likelihood that they will be satisfied will not be
deemed an amendment or alteration of the Award.
(3) ALTERNATIVE SETTLEMENT. The Company may at any time extinguish rights
under an Award in exchange for payment in cash, Stock (subject to the
limitations of Section 2) or other property on such terms as the
Administrator determines, provided the holder of the Award consents
to such exchange.
(4) TRANSFERABILITY OF AWARDS. Except as the Administrator otherwise
expressly provides, Awards may not be transferred other than by will
or by the laws of descent and distribution and during a Participant's
lifetime an Award requiring exercise may be exercised only by the
Participant (or in the event of the Participant's incapacity, the
person or persons legally appointed to act on the Participant's
behalf).
(5) VESTING, ETC. Without limiting the generality of Section 1, the
Administrator may determine the time or times at which an Award will
vest (I.E., become free of forfeiture restrictions) or become
exercisable and the terms on which an Award requiring exercise will
remain exercisable. Unless the Administrator expressly provides
otherwise:
(A) immediately upon the cessation of a Participant's employment or
other service relationship with the Company and its Affiliates,
all Awards (other than Stock Options and SARs) held by the
Participant (or by a permitted transferee under Section 4.a.(4))
immediately prior to such cessation of employment or other
service relationship will be forfeited if not then vested and,
where exercisability is relevant, will cease to be exercisable;
(B) except as provided in (C) and (D) below, all Stock Options and
SARs held by a Participant (or by a permitted transferee under
Section 4.a.(4)) immediately prior to the cessation of the
Participant's employment or other service relationship for
reasons other than death, to the extent then exercisable, will
remain exercisable for the lesser of (i) a period of three months
or (ii) the period ending on the latest date on which such Stock
Option or SAR could have been exercised without regard to this
Section 4.a.(5), and shall thereupon terminate;
(C) all Stock Options and SARs held by a Participant (or by a
permitted transferee under Section 4.a.(4)) immediately prior to
the Participant's death, to the extent then exercisable, will
remain exercisable for the lesser of (i) the one-year period
ending with the first anniversary of the Participant's death or
(ii) the period ending on the latest date on which such Stock
Option or SAR could have been exercised without regard to this
Section 4.a.(5), and shall thereupon terminate; and
(D) all Stock Options and SARs held by a Participant (or by a
permitted transferee of the Participant under Section 4.a.(4))
whose cessation of employment or other service relationship is
determined by the Administrator in its sole discretion to result
from reasons which cast such discredit on the Participant as to
justify immediate termination of the Award shall immediately
terminate upon such cessation.
Unless the Administrator expressly provides otherwise, a Participant's
"employment or other service relationship with the Company and its Affiliates"
will be deemed to have ceased, in the case of an employee Participant, upon
termination of the Participant's employment with the Company and its Affiliates
(whether or not the Participant continues in the service of the Company or its
Affiliates in some capacity other than that of an employee of the Company or its
Affiliates), and in the case of any other Participant, when the service
relationship in respect of which the Award was granted terminates (whether or
not the Participant continues in the service of the Company or its Affiliates in
some other capacity).
(6) TAXES. The Administrator will make such provision for the withholding
of taxes as it deems necessary. The Administrator may, but need not,
hold back shares of Stock from an Award or permit a Participant to
tender previously owned shares of Stock in satisfaction of tax
withholding requirements. In no event shall Stock be tendered or held
back by the Company in excess of the minimum amount required to be
withheld for Federal, state, and local taxes.
(7) DIVIDEND EQUIVALENTS, ETC. The Administrator may provide for the
payment of amounts in lieu of cash dividends or other cash
distributions with respect to Stock subject to an Award if and in
such manner as it deems appropriate.
(8) RIGHTS LIMITED. Nothing in the Plan shall be construed as giving any
person the right to continued employment or service with the Company
or its Affiliates, or any rights as a shareholder except as to shares
of Stock actually issued under the Plan. The loss of existing or
potential profit in Awards will not constitute an element of damages
in the event of termination of employment or service for any reason,
even if the termination is in violation of an obligation of the
Company or Affiliate to the Participant.
(9) SECTION 162(m). The Administrator in its discretion may grant
Performance Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m) and
Performance Awards that are not intended so to qualify. In the case
of an Award intended to be eligible for the performance-based
compensation exception under Section 162(m), the Plan and such Award
shall be construed to the maximum extent permitted by law in a manner
consistent with qualifying the Award for such
exception. In the case of a Performance Award intended to qualify as
performance-based for the purposes of Section 162(m), except as
otherwise permitted by the regulations at Treas. Regs.
Section 1.162-27: (i) the Administrator shall preestablish in writing
one or more specific Performance Criteria no later than 90 days after
the commencement of the period of service to which the performance
relates (or at such earlier time as is required to qualify the Award
as performance-based under Section 162(m)); (ii) payment of the Award
shall be conditioned upon prior certification by the Administrator
that the Performance Criteria have been satisfied; and (iii) if the
Performance Criteria with respect to the Award are not satisfied, no
other Award shall be provided in substitution of the Performance
Award. The provisions of this Section 6.a.(9) shall be construed in a
manner that is consistent with the regulations under Section 162(m).
b. AWARDS REQUIRING EXERCISE
(1) TIME AND MANNER OF EXERCISE. Unless the Administrator expressly
provides otherwise, (a) an Award requiring exercise by the holder
will not be deemed to have been exercised until the Administrator
receives a written notice of exercise (in form acceptable to the
Administrator) signed by the appropriate person and accompanied by
any payment required under the Award; and (b) if the Award is
exercised by any person other than the Participant, the Administrator
may require satisfactory evidence that the person exercising the
Award has the right to do so.
(2) EXERCISE PRICE. The Administrator shall determine the exercise price
of each Stock Option; PROVIDED, that except as otherwise permitted by
the regulations at Treas. Regs. Section 1.162-27, each Stock Option
intended to qualify for the performance-based exception under
Section 162(m) of the Code and each ISO must have an exercise price
that is not less than the fair market value of the Stock subject to
the Stock Option, determined as of the date of grant. An ISO granted
to an Employee described in Section 422(b)(6) of the Code must have
an exercise price that is not less than 110% of such fair market
value.
(3) PAYMENT OF EXERCISE PRICE, IF ANY. Where the exercise of an Award is
to be accompanied by payment, the Administrator may determine the
required or permitted forms of payment, subject to the following:
(a) all payments will be by cash or check acceptable to the
Administrator, or, if so permitted by the Administrator (with the
consent of the optionee of an ISO if permitted after the grant),
(i) through the delivery of shares of Stock which have been
outstanding for at least six months (unless the Administrator
approves a shorter period) and which have a fair market value equal
to the exercise price, (ii) by delivery of a promissory note of the
person exercising the Award to the Company, payable on such terms as
are specified by the Administrator, (iii) if the Stock is publicly
traded, by delivery of an unconditional and irrevocable undertaking
by a broker to deliver promptly to the Company sufficient funds to
pay the exercise price, or (iv) by any combination of the foregoing
permissible forms of payment; and (b) where shares of Stock issued
under an Award are part of an original issue of shares, the Award
shall require an exercise price equal to at least the par value of
such shares.
(4) GRANT OF STOCK OPTIONS. Each Stock Option awarded under the Plan
shall be deemed to have been awarded as a non-ISO (and to have been
so designated by its terms) unless the Administrator expressly
provides for ISO treatment that the Stock Option is to be treated as
an ISO.
c. AWARDS NOT REQUIRING EXERCISE
Awards of Restricted Stock and Unrestricted Stock may be made in return for
either (i) services determined by the Administrator to have a value not less
than the par value of the Awarded shares of Stock, or (ii) cash or other
property having a value not less than the par value of the Awarded shares of
Stock plus such additional amounts (if any) as the Administrator may determine
payable in such combination and type of cash, other property (of any kind) or
services as the Administrator may determine.
5. EFFECT OF CERTAIN TRANSACTIONS
a. MERGERS, ETC.
Immediately prior to a Covered Transaction (other than an Excluded
Transaction in which the outstanding Awards have been assumed or substituted for
as provided below), all outstanding Awards shall vest and, if relevant, become
exercisable, all Performance Criteria and other conditions to any Award shall be
deemed satisfied, and all deferrals measured by reference to or payable in
shares of Stock shall be accelerated. Upon consummation of a Covered
Transaction, all Awards then outstanding and requiring exercise or delivery
shall terminate unless assumed by an acquiring or surviving entity or its
affiliate as provided below.
In the event of a Covered Transaction, the Administrator may provide for
substitute or replacement Awards from, or the assumption of Awards by, the
acquiring or surviving entity or its affiliates on such terms as the
Administrator determines.
b. CHANGES IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK
(1) BASIC ADJUSTMENT PROVISIONS. In the event of a stock dividend, stock
split or combination of shares, recapitalization or other change in
the Company's capital structure, the Administrator will make
appropriate adjustments to the maximum number of shares that may be
delivered under the Plan under Section 2.a. and to the maximum share
limits described in Section 2.c., and will also make appropriate
adjustments to the number and kind of shares of stock or securities
subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards
affected by such change. For the avoidance of doubt, the 3,789,000
and 2,000,000 share limits expressed in Section 2 are intended to
reflect the increased number of shares resulting from the share
exchange approved on June 5, 2000; accordingly, no further adjustment
in those limits shall be made under this Section 5.b. solely to
reflect such exchange.
(2) CERTAIN OTHER ADJUSTMENTS. The Administrator may also make
adjustments of the type described in paragraph (1) above to take into
account distributions to common stockholders other than those
provided for in Section 5.a. and 5.b.(1), or any other event, if the
Administrator determines that adjustments are appropriate to avoid
distortion in the operation of the Plan and to preserve the value of
Awards made hereunder; PROVIDED, that no such adjustment shall be
made to the maximum share limits described in Section 2.c., or
otherwise to an Award intended to be eligible for the
performance-based exception under Section 162(m), except to the
extent consistent with that exception, nor shall any change be made
to ISOs except to the extent consistent with their continued
qualification under Section 422 of the Code.
(3) CONTINUING APPLICATION OF PLAN TERMS. References in the Plan to
shares of Stock shall be construed to include any stock or securities
resulting from an adjustment pursuant to Section 5.b.(1) or 5.b.(2)
above.
6. LEGAL CONDITIONS ON DELIVERY OF STOCK
The Company will not be obligated to deliver any shares of Stock pursuant to
the Plan or to remove any restriction from shares of Stock previously delivered
under the Plan until the Company's counsel has approved all legal matters in
connection with the issuance and delivery of such shares; if the outstanding
Stock is at the time of delivery listed on any stock exchange or national market
system, the shares to be delivered have been listed or authorized to be listed
on such exchange or system upon official notice of issuance; and all conditions
of the Award have been satisfied or waived. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the Award, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of such Act. The Company may require that certificates evidencing
Stock issued under the Plan bear an appropriate legend reflecting any
restriction on transfer applicable to such Stock.
7. AMENDMENT AND TERMINATION
Subject to the last sentence of Section 1, the Administrator may at any time
or times amend the Plan or any outstanding Award for any purpose which may at
the time be permitted by law, or may at any time terminate the Plan as to any
further grants of Awards; PROVIDED, that (except to the extent expressly
required or permitted by the Plan) no such amendment will, without the approval
of the stockholders of the Company, effectuate a change for which stockholder
approval is required in order for the Plan to continue to qualify under
Section 422 of the Code and for Awards to be eligible for the performance-based
exception under Section 162(m).
8. NON-LIMITATION OF THE COMPANY'S RIGHTS
The existence of the Plan or the grant of any Award shall not in any way
affect the Company's right to Award a person bonuses or other compensation in
addition to Awards under the Plan.
9. GOVERNING LAW
The Plan shall be construed in accordance with the laws of The Commonwealth
of Massachusetts.
10. DEFINED TERMS.
The following terms, when used in the Plan, shall have the meanings and be
subject to the provisions set forth below:
"ADMINISTRATOR": The Board or, if one or more has been appointed, the
Committee. With respect to ministerial tasks deemed appropriate by the Board
or Committee, the term "Administrator" shall also include such persons
(including Employees) to whom the Board or Committee shall have delegated
such tasks.
"AFFILIATE": Any corporation or other entity owning, directly or indirectly,
50% or more of the outstanding Stock of the Company, or in which the Company
or any such corporation or other entity owns, directly or indirectly, 50% of
the outstanding capital stock (determined by aggregate voting rights) or
other voting interests.
"AWARD": Any or a combination of the following:
(i) Stock Options.
(ii) SARs.
(iii) Restricted Stock.
(iv) Unrestricted Stock.
(v) Deferred Stock.
(vi) Cash Performance Awards.
(vii) Other Performance Awards.
(viii) Grants of cash, or loans, made in connection with other Awards in
order to help defray in whole or in part the economic cost
(including tax cost) of the Award to the Participant.
"BOARD": The Board of Directors of the Company.
"CASH PERFORMANCE AWARD": A Performance Award payable in cash. The right of
the Company under Section 4.a.(3) (subject to the consent of the holder of
the Award as therein provided) to extinguish an Award in exchange for cash
or the exercise by the Company of such right shall not make an Award
otherwise not payable in cash a Cash Performance Award.
"CODE": The U.S. Internal Revenue Code of 1986 as from time to time amended
and in effect, or any successor statute as from time to time in effect.
"COMMITTEE": One or more committees of the Board (including any subcommittee
thereof) appointed or authorized to make Awards and otherwise to administer
the Plan. In the case of Awards granted to officers of the Company, except
as otherwise permitted by the regulations at Treas. Regs. Section 1.162-27,
the Committee shall be comprised solely of two or more outside directors
within the meaning of Section 162(m).
"COMPANY": Charles River Laboratories International, Inc.
"COVERED TRANSACTION": Any of (i) a consolidation or merger in which the
Company is not the surviving corporation or which results in any individual,
entity or "group" (within the meaning of section 13(d) of the Securities
Exchange Act of 1934) acquiring the beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) directly or indirectly of
more than 50% of either the then outstanding shares of common stock of the
Company or the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors, (ii) a sale or transfer of all or substantially all the Company's
assets, or (iii) a dissolution or liquidation of the Company.
"DEFERRED STOCK": A promise to deliver Stock or other securities in the
future on specified terms.
"EMPLOYEE": Any person who is employed by the Company or an Affiliate.
"EXCLUDED TRANSACTION": A Covered Transaction in which
(i) the shares of common stock of the Company or the voting securities
of the Company entitled to vote generally in the election of
directors are acquired directly from the Company; or
(ii) the shares of common stock of the Company or the voting securities
of the Company entitled to vote generally in the election of
directors are acquired by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or
(iii) (a) the beneficial owners of the outstanding shares of common stock
of the Company, and of the securities of the Company entitled to
vote generally in the election of directors, immediately prior to
such transaction beneficially own, directly or indirectly, in
substantially the same proportions immediately following such
transaction more than 50% of the outstanding shares of common stock
and of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors
of the
corporation (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) resulting from such transaction
excluding such ownership as existed prior to the transaction and
(b) at least a majority of the members of the board of directors of
the corporation resulting from such transaction were members of the
board of directors at the time of the execution of the initial
agreement, or of the action of the Board, authorizing such
transaction.
"ISO": A Stock Option intended to be an "incentive stock option" within the
meaning of Section 422 of the Code.
"PARTICIPANT": An Employee, director or other person providing services to
the Company or its Affiliates who is granted an Award under the Plan.
"PERFORMANCE AWARD": An Award subject to Performance Criteria.
"PERFORMANCE CRITERIA": Specified criteria the satisfaction of which is a
condition for the exercisability, vesting or full enjoyment of an Award. For
purposes of Performance Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance
Criterion shall mean an objectively determinable measure of performance
relating to any of the following (determined either on a consolidated basis
or, as the context permits, on a divisional, subsidiary, line of business,
project or geographical basis or in combinations thereof): (i) sales;
revenues; assets; liabilities; costs; expenses; earnings before or after
deduction for all or any portion of interest, taxes, depreciation,
amortization or other items, whether or not on a continuing operations or an
aggregate or per share basis; return on equity, investment, capital or
assets; one or more operating ratios; borrowing levels, leverage ratios or
credit rating; market share; capital expenditures; cash flow; working
capital requirements; stock price; stockholder return; sales, contribution
or gross margin, of particular products or services; particular operating or
financial ratios; customer acquisition, expansion and retention; or any
combination of the foregoing; or (ii) acquisitions and divestitures (in
whole or in part); joint ventures and strategic alliances; spin-offs,
split-ups and the like; reorganizations; recapitalizations, restructurings,
financings (issuance of debt or equity) and refinancings; transactions that
would constitute a change of control; or any combination of the foregoing. A
Performance Criterion measure and targets with respect thereto determined by
the Administrator need not be based upon an increase, a positive or improved
result or avoidance of loss.
"PLAN": The Charles River Laboratories International, Inc. 2000 Incentive
Plan as from time to time amended and in effect.
"RESTRICTED STOCK": An Award of Stock subject to restrictions requiring that
such Stock be redelivered to the Company if specified conditions are not
satisfied.
"SECTION 162(m)": Section 162(m) of the Code.
"SARS": Rights entitling the holder upon exercise to receive cash or Stock,
as the Administrator determines, equal to a function (determined by the
Administrator using such factors as it deems appropriate) of the amount by
which the Stock has appreciated in value since the date of the Award.
"STOCK": Common Stock of the Company.
"STOCK OPTIONS": Options entitling the recipient to acquire shares of Stock
upon payment of the exercise price.
"UNRESTRICTED STOCK": An Award of Stock not subject to any restrictions
under the Plan.