EXHIBIT 10(iii)(a)
EXXON CORPORATION
1993 INCENTIVE PROGRAM
Adopted by shareholders April 28, 1993
(as last amended January 26, 2000)
General Provisions
I. Purpose.
The 1993 Incentive Program is intended to help maintain and develop strong
management through ownership of shares of the Corporation by key employees of
the Corporation and certain of its affiliates and through incentive awards for
recognition of efforts and accomplishments which contribute materially to the
success of the Corporation's business interests.
II. Definitions.
In this Program, except where the context otherwise indicates, the
following definitions apply:
(1) `Administrative authority' means one of the following, as
appropriate in accordance with Section III: the Board; any committee to
which the Board delegates authority to administer this Program; or, in
individual cases, the Chairman of the Board or persons acting under his
direction.
(2) 'Affiliate' means (a) any subsidiary and (b) any other
corporation, partnership, joint venture, or other entity in which the
Corporation, directly or indirectly, owns an equity interest and which the
administrative authority deems to be an affiliate for purposes of this
Program (including, without limitation, for purposes of determining whether
a change of employment constitutes a termination).
(3) 'Award' means a stock option, stock appreciation right ('SAR'),
restricted stock, performance award, incentive share, dividend equivalent
right ('DER'), or other award under this Program.
(4) 'Board' means the Board of Directors of the Corporation.
(5) 'Board Compensation Committee,' hereinafter sometimes called the
'BCC,' means the committee of the Board so designated in accordance with
Section IV.
(6) 'By the grant' means by the action of the granting authority at
the time of the grant of an award hereunder, or at the time of an amendment
of the grant, as the case may be.
(7) 'Code' means the Internal Revenue Code, as in effect from time to
time.
(8) 'Corporation' means Exxon Corporation, a New Jersey corporation.
(9) 'Designated beneficiary' means the person designated by the
grantee of an award hereunder to be entitled, on the death of the grantee,
to any remaining rights arising out of such award. Such designation must be
made in writing and in accordance with such regulations as the
administrative authority may establish.
(10) 'Detrimental activity' means activity that is determined in
individual cases by the administrative authority to be detrimental to the
interests of the Corporation or any affiliate.
(11) 'Dividend equivalent right,' herein sometimes called a 'DER,'
means the right of the holder thereof to receive, pursuant to the terms of
the DER, credits based on the cash dividends that would be paid on the
shares specified in the DER if such shares were held by the grantee, as
more particularly set forth in Section XIV(1).
(12) 'Effectively granted' means, for purposes of determining the
number of shares subject to an outstanding award under this Program, the
number of shares subject to such award or the number of shares with respect
to which the value of such award is measured, as applicable. An option that
includes an SAR shall be considered a single award for this purpose.
(13) 'Effectively issued' means the gross number of shares purchased,
issued, delivered, or paid free of restrictions upon the exercise,
settlement, or payment of an award, or lapse of restrictions thereon, as
the case may be.
(14) 'Eligible employee' means an employee of the Corporation or a
subsidiary who is a director or officer, or in a managerial, professional,
or other key position as determined by the granting authority.
(15) `Employee' means an employee of the Corporation or an affiliate.
(16) 'Exchange Act' means the Securities Exchange Act of 1934, as
amended from time to time.
(17) 'Fair market value' in relation to a share as of any specific
time shall mean such value as reported for stock exchange transactions
determined in accordance with any applicable regulations of the
administrative authority in effect at the relevant time.
(18) 'Grantee' means a recipient of an award under this Program.
(19) `Granting authority" means the Board or any appropriate committee
authorized to grant and amend awards under this Program in accordance with
Section V and to exercise other powers of the granting authority hereunder.
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(20) 'Incentive shares' means an award of shares granted pursuant to
Section XIII.
(21) 'Incentive Stock Option,' herein sometimes called an 'ISO,' means
a stock option meeting the requirements of Section 422 of the Code or any
successor provision.
(22) 'Performance award' means an award of shares, or of units or
rights based on, payable in, or otherwise related to shares, granted
pursuant to Section XII.
(23) 'Performance period' means any period specified by the grant of a
performance award during which specified performance criteria are to be
measured.
(24) 'Reporting person' means a person subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to equity
securities of the Corporation.
(25) 'Restricted stock' means any share issued with the restriction
that the holder may not sell, transfer, pledge, or assign such share and
such other restrictions (which may include, but are not limited to,
restrictions on the right to vote or receive dividends) which may expire
separately or in combination, at one time or in installments, all as
specified by the grant.
(26) 'Rule 16b-3' means Rule 16b-3 (or any successor thereto) under
the Exchange Act that exempts transactions under employee benefit plans, as
in effect from time to time.
(27) 'Share' means a share of Common Stock of the Corporation issued
and reacquired by the Corporation or previously authorized but unissued.
(28) 'Shareholder-approved plan' means any of the plans constituting
parts of any of the Incentive Programs previously approved by shareholders
of the Corporation.
(29) 'Stock appreciation right,' herein sometimes called an 'SAR,'
means the right of the holder thereof to receive, pursuant to the terms of
the SAR, a number of shares or cash or a combination of shares and cash,
based on the increase in the value of the number of shares specified in the
SAR, as more particularly set forth in Section X.
(30) 'Subsidiary' means a corporation, partnership, joint venture, or
other entity in which the Corporation, directly or indirectly, owns a 50%
or greater equity interest.
(31) 'Terminate' means cease to be an employee for any reason, except
by death, but a change of employment from the Corporation or one affiliate
to another affiliate or to the Corporation shall not be considered a
termination. For purposes of this Program, the administrative authority may
determine that the time or date of termination is the day an
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employee resigns, accepts employment with another employer or otherwise
indicates an intent to resign, which time or date need not necessarily be
the last day on the payroll.
(32) 'Terminate normally' for purposes of this Program means terminate
(a) at normal retirement time for that employee, or
(b) with written approval of the administrative authority given
in the context of recognition that all or a specified portion of the
outstanding awards to that employee will not expire or be forfeited or
annulled because of such termination.
(33) 'Year' means calendar year.
III. Administration.
(1) The Board is the ultimate administrative authority for this Program,
with the power to conclusively interpret its provisions and decide all questions
of fact arising in its application. The Board may delegate its authority
pursuant to any provision of this Program to a committee which, except in the
case of the BCC, need not be a committee of the Board. Subject to the authority
of the Board or an authorized committee and excluding cases involving the
Chairman as grantee, the Chairman of the Board and persons acting under his
direction may serve as the administrative authority under this Program for
purposes of making determinations and interpretations in individual cases.
(2) The Board and any committee acting as the administrative authority
under this Program can act by regulation, by making individual determinations,
or by both. The Chairman of the Board and persons designated by him can act as
the administrative authority under this Program only by making individual
determinations.
(3) All determinations and interpretations pursuant to the provisions of
this Program shall be binding and conclusive upon the individuals involved and
all persons claiming under them.
(4) With respect to reporting persons, transactions under this Program are
intended to comply with all applicable conditions of Rule 16b-3. To the extent
any provision of this Program or any action by an authority under this Program
fails to so comply, such provision or action shall, without further action by
any person, be deemed to be automatically amended to the extent necessary to
effect compliance with Rule 16b-3, provided that if such provision or action
cannot be amended to effect such compliance, such provision or action shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
appropriate authority. Each award to a reporting person under this Program shall
be deemed issued subject to the foregoing qualification.
(5) An award under this Program is not transferable except, as provided in
the award, by will or the laws of descent and distribution, and is not subject
to attachment, execution, or levy of any kind. The designation by a grantee of a
designated beneficiary shall not constitute a transfer.
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(6) Any rights with respect to an award granted under this Program existing
after the grantee dies are exercisable by the grantee's designated beneficiary
or, if there is no designated beneficiary, by the grantee's personal
representative.
(7) Except as otherwise provided herein, a particular form of award may be
granted to an eligible employee either alone or in addition to other awards
hereunder. The provisions of particular forms of award need not be the same with
respect to each recipient.
(8) If the administrative authority believes that a grantee (a) may have
engaged in detrimental activity or (b) may have accepted employment with another
employer or otherwise indicated an intent to resign, the authority may suspend
the exercise, vesting or settlement of all or any specified portion of such
grantee's outstanding awards pending an investigation of the matter.
(9) This Program and all action taken under it shall be governed by the
laws of the State of New York.
(10) Any award which was granted under a shareholder-approved plan and is
still outstanding shall be interpreted and administered in accordance with the
definitions and administrative provisions of this Program, including, without
limitation, Sections II through V hereof.
IV. Board Compensation Committee (BCC).
The Board shall appoint a BCC. The BCC shall consist of two or more members
of the Board, each of whom is a 'nonemployee director' within the meaning of
Rule 16b-3. No award may be granted to a member of the BCC.
V. Right to Grant Awards; Reserved Powers.
The Board is the ultimate granting authority for this Program, with the
power to select eligible employees for participation in this Program and to make
all decisions concerning the grant or amendment of awards. The Board may
delegate such authority in whole or in part (1) in the case of reporting
persons, to the BCC and (2) in the case of eligible employees who are not
reporting persons, to any committee.
VI. Term.
The term of this Program begins on the date shareholder approval of this
Program is obtained and ends on the tenth anniversary of that date.
VII. Awards Grantable.
(1) Subject to the provisions of this Program, an award is grantable if,
should it be granted, the total number of shares effectively granted during the
year of the grant would not exceed seven tenths of one percent (0.7%) of the
total number of shares of Common Stock of the Corporation outstanding (excluding
shares held by the Corporation) on December 31 of the preceding year.
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(2) If the total number of shares effectively issued with respect to an
award is less than, or exceeds, the number of shares deemed effectively granted
with respect to such award, the balance of such shares shall be, respectively,
added to, or subtracted from, the maximum number of shares that may be
effectively granted as awards thereafter.
(3) If the total number of shares effectively granted as awards in any year
is less than the maximum number of shares that could have been so granted
pursuant to the provisions of this Program, the balance of such unused shares
shall be added to the maximum number of shares that may be effectively granted
as awards in the following year.
(4) In addition to the foregoing, shares surrendered to the Corporation in
payment of the exercise price or applicable taxes upon exercise or settlement of
an award may also be used thereafter for additional awards.
(5) Notwithstanding the foregoing provisions of this Section VII, the total
number of shares that may be effectively granted under stock options or stock
appreciation rights to any one grantee in any one calendar year may not exceed
two tenths of one percent (0.2%) of the total number of shares of Common Stock
of the Corporation outstanding (excluding shares held by the Corporation) on
December 31, 1996; provided, that such number of shares is doubled in accordance
with Section VIII to reflect a two-for-one split of the shares on March 14,
1997.
VIII. Adjustments.
Whenever a stock split, stock dividend, or other relevant change in
capitalization which the administrative authority determines to be dilutive to
outstanding awards occurs,
(1) the number of shares that can thereafter be obtained under
outstanding awards and the purchase price per share, if any, under such
awards, and
(2) every number of shares used in determining whether a particular
award is grantable thereafter,
shall be appropriately adjusted.
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IX. Stock Options.
One or more grantable stock options can be granted to any eligible
employee. Each stock option so granted shall be subject to such terms and
conditions as the granting authority shall impose, which shall include the
following:
(1) The exercise price per share shall be specified by the grant, but
shall in no instance be less than 100 percent of fair market value at the
time of grant. Payment of the exercise price shall be made in cash, shares,
or other consideration in accordance with the terms of this Program and any
applicable regulations of the administrative authority in effect at the
time and valued at fair market value on the date of exercise of the stock
option.
(2) A stock option shall become exercisable, if at all, at the time or
times specified by the grant. If the grantee terminates other than normally
before a stock option or portion thereof becomes exercisable, that stock
option or portion thereof shall be forfeited and shall never become
exercisable. Except as otherwise specified by the grant, a stock option
shall become immediately exercisable in full upon the death of the grantee.
(3) Any stock option or portion thereof that is exercisable is
exercisable for the full amount or for any part thereof, except as
otherwise provided by the grant.
(4) Each stock option ceases to be exercisable, as to any share, when
the stock option is exercised to purchase that share, or when a related SAR
is exercised either by the holder or automatically in accordance with its
terms, or when the stock option expires. To the extent an SAR included in a
stock option is exercised, such stock option shall be deemed to have been
exercised and shall not be deemed to have expired.
(5) A stock option or portion thereof that is exercisable shall expire
in the following situations:
(a) unless clauses (b), (c) or (d) below apply, it shall expire
at the earlier of:
(i) ten years after it is granted, or
(ii) any earlier time specified by the grant;
(b) if the grantee terminates, but does not terminate normally,
it shall expire at the time of termination;
(c) if the grantee is determined to have engaged in detrimental
activity, it shall expire as of the date of such determination; or
(d) if the grantee dies, it shall expire at the earlier of:
(i) five years after the grantee's death, or
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(ii) any earlier time specified by the grant;
but, in any case, no later than ten years after it is granted.
(6) If a grantee terminates other than normally, (a) the
administrative authority may refuse to deliver shares in settlement of any
pending stock option exercise and (b) the granting authority may require
the grantee to repay to the Corporation an amount equal to the spread on
any stock option exercised by the grantee during the six-month period
immediately preceding such termination. For purposes of the foregoing
subsection (6)(b), 'spread' means the difference between the aggregate
stock option exercise price and the fair market value of the underlying
shares on the date such option is exercised.
(7) All stock options granted hereunder are hereby designated as ISOs
except to the extent otherwise specified by the grant and except to the
extent otherwise specified in this Section IX(7). To the extent that the
aggregate fair market value of shares with respect to which stock options
designated as ISOs are exercisable for the first time by any grantee during
any year (under all plans of the Corporation and any affiliate thereof)
exceeds $100,000, such stock options shall be treated as not being ISOs.
The foregoing shall be applied by taking stock options into account in the
order in which they were granted. For the purposes of the foregoing, the
fair market value of any share shall be determined as of the time the stock
option with respect to such share is granted. In the event the foregoing
results in a portion of a stock option designated as an ISO exceeding the
above $100,000 limitation, only such excess shall be treated as not being
an ISO.
For each year in which this Program is in effect, the number of shares
that may be effectively granted as ISOs may not exceed seven tenths of one
percent (0.7%) of the total number of shares of Common Stock of the
Corporation outstanding (excluding shares held by the Corporation) on the
December 31 preceding the date on which shareholder approval of this
Program is obtained; provided, that beginning with the year 1998, the
annual number of shares determined as aforesaid shall be doubled in
accordance with Section VIII to reflect a two-for one split of the shares
on March 14, 1997. If the number of shares effectively granted as ISOs in
any year is less than the number of shares that could have been so granted
pursuant to this paragraph, the balance of such unused shares may be added
to the maximum number of shares that may be effectively granted as ISOs the
following year.
A stock option designated as an ISO, or portion thereof, that fails or
ceases to qualify as such under the Code shall otherwise remain valid
according to its terms as a non-ISO under this Program.
X. Stock Appreciation Rights.
(1) An SAR may be granted to an eligible employee as a separate award
hereunder. Any such SAR shall be subject to such terms and conditions as the
granting authority shall impose, which shall include provisions that (a) such
SAR shall entitle the holder thereof, upon exercise thereof in accordance with
such SAR and the regulations of the administrative authority, to receive
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from the Corporation that number of shares having an aggregate value equal to
the excess of the fair market value, at the time of exercise of such SAR, of one
share over the exercise price per share specified by the grant of such SAR
(which shall in no instance be less than 100 percent of fair market value at the
time of grant) times the number of shares specified in such SAR, or portion
thereof, which is so exercised; and (b) such SAR shall be exercisable, or be
forfeited or expire, upon the same conditions set forth for freestanding options
in Section IX, paragraphs (2), (3), (4), (5), and (6).
(2) Any stock option granted under this Program may include an SAR, either
at the time of grant or by amendment. An SAR included in a stock option shall be
subject to such terms and conditions as the granting authority shall impose,
which shall include provisions that (a) such SAR shall be exercisable to the
extent, and only to the extent, the stock option is exercisable; and (b) such
SAR shall entitle the optionee to surrender to the Corporation unexercised the
stock option in which the SAR is included, or any portion thereof, and to
receive from the Corporation in exchange therefor that number of shares having
an aggregate value equal to the excess of the fair market value, at the time of
exercise of such SAR, of one share over the exercise price specified in such
stock option times the number of shares specified in such stock option, or
portion thereof, which is so surrendered.
(3) In lieu of the right to receive all or any specified portion of such
shares, an SAR may entitle the holder thereof to receive the cash equivalent
thereof as specified by the grant.
(4) An SAR may provide that such SAR shall be deemed to have been exercised
at the close of business on the business day preceding the expiration of such
SAR or the related stock option, if any, if at such time such SAR has positive
value and would have expired in accordance with the conditions set forth in
Section IX(5)(a).
XI. Restricted Stock.
(1) An award of restricted stock may be granted hereunder to an eligible
employee, for no cash consideration, for such minimum consideration as may be
required by applicable law, or for such other consideration as may be specified
by the grant. The terms and conditions of restricted stock shall be specified by
the grant.
(2) Any restricted stock issued hereunder may be evidenced in such manner
as the administrative authority in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of shares of restricted stock awarded hereunder, such certificate shall
bear an appropriate legend with respect to the restrictions applicable to such
award.
(3) Except as otherwise specified by the grant, if a holder of record of
restricted stock terminates, but does not terminate normally, all shares of
restricted stock (whether or not stock certificates have been issued) then held
by such holder and then subject to restriction shall be forfeited by such holder
and reacquired by the Corporation. Except as otherwise specified by the grant,
if a holder of record of restricted stock terminates normally or dies, any and
all remaining restrictions with respect to such restricted stock shall expire.
Notwithstanding the foregoing, if a
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holder of record of restricted stock is determined to have engaged in
detrimental activity, all shares of restricted stock (whether or not stock
certificates have been issued) then held by such holder and then subject to
restriction shall be forfeited by such holder as of the date of such
determination and shall be reacquired by the Corporation.
XII. Performance Awards.
(1) Performance awards may be granted hereunder to an eligible employee,
for no cash consideration, for such minimum consideration as may be required by
applicable law, or for such other consideration as may be specified by the
grant. The terms and conditions of performance awards, which may include
provisions establishing performance periods, performance criteria to be achieved
during a performance period, and maximum or minimum settlement values, shall be
specified by the grant.
(2) Performance awards may be valued by reference to the value of Common
Stock of the Corporation or according to any other formula or method.
Performance awards may be paid in cash, shares, or other consideration, or any
combination thereof. The extent to which any applicable performance criteria
have been achieved shall be conclusively determined by the administrative
authority. Performance awards may be payable in a single payment or in
installments and may be payable at a specified date or dates or upon attaining
performance criteria.
(3) Except as otherwise specified by the grant, if the grantee terminates,
but does not terminate normally, any performance award or installment thereof
not payable prior to the grantee's termination shall be annulled as of the date
of termination. If the grantee is determined to have engaged in detrimental
activity, any performance award or installment thereof not payable prior to the
date of such determination shall be annulled as of such date.
XIII. Incentive Shares.
(1) An incentive award may be granted hereunder in the form of shares.
Incentive shares may be granted to an eligible employee for no cash
consideration, for such minimum consideration as may be required by applicable
law, or for such other consideration as may be specified by the grant. The terms
and conditions of incentive shares shall be specified by the grant.
(2) Incentive shares may be paid to the grantee in a single installment or
in installments and may be paid at the time of grant or deferred to a later date
or dates. Each grant shall specify the time and method of payment as determined
by the granting authority, provided that no such determination shall authorize
delivery of shares to be made later than the tenth anniversary of the grantee's
date of termination. The granting authority, by amendment of the grant prior to
delivery, can modify the method of payment for any incentive shares, provided
that the delivery of any incentive shares shall be completed not later than the
tenth anniversary of the grantee's date of termination.
(3) If any incentive shares are payable after the grantee dies, such shares
shall be payable (a) to the grantee's designated beneficiary or, if there is no
designated beneficiary, to the grantee's
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personal representative, and (b) either in the form specified by the grant or
otherwise, as may be determined by the administrative authority.
(4) Any grant of incentive shares is provisional, as to any share, until
delivery of the certificate representing such share. If, while the grant is
provisional,
(a) the grantee terminates, but does not terminate normally, or
(b) the grantee is determined to have engaged in detrimental activity,
the grant shall be annulled as of the date of termination, or the date of such
determination, as the case may be.
XIV. Dividend Equivalent Rights; Interest Equivalents.
(1) A DER may be granted hereunder to an eligible employee, as a component
of another award or as a separate award. The terms and conditions of DERs shall
be specified by the grant. Dividend equivalents credited to the holder of a DER
may be paid currently or may be deemed to be reinvested in additional shares
(which may thereafter accrue additional dividend equivalents). Any such
reinvestment shall be at fair market value at the time thereof. DERs may be
settled in cash or shares or a combination thereof, in a single installment or
installments. A DER granted as a component of another award may provide that
such DER shall be settled upon exercise, settlement, or payment of, or lapse of
restrictions on, such other award, and that such DER shall expire or be
forfeited or annulled under the same conditions as such other award. A DER
granted as a component of another award may also contain terms and conditions
different from such other award.
(2) Any award under this Program that is settled in whole or in part in
cash on a deferred basis may provide by the grant for interest equivalents to be
credited with respect to such cash payment. Interest equivalents may be
compounded and shall be paid upon such terms and conditions as may be specified
by the grant.
XV. Other Awards.
Other forms of award based on, payable in or otherwise related in whole or
in part to shares may be granted to an eligible employee under this Program if
the granting authority determines that such awards are consistent with the
purposes and restrictions of this Program. The terms and conditions of such
awards shall be specified by the grant. Such awards shall be granted for no cash
consideration, for such minimum consideration as may be required by applicable
law, or for such other consideration as may be specified by the grant.
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XVI. Amendments to This Program.
The Board can from time to time amend or terminate this Program, or any
provision hereof, except that approval of the shareholders of the Corporation
shall be required for any amendment (1) to increase the maximum number of shares
that may be effectively granted as awards hereunder; (2) to decrease the minimum
exercise price per share of a stock option or SAR; or (3) for which such
approval is otherwise necessary to comply with any applicable law, regulation,
or listing requirement, or to qualify for an exemption or characterization that
is deemed desirable by the Board. An amendment of this Program shall, unless
the amendment provides otherwise, be effective for all outstanding awards.
XVII. Amendments to Individual Awards.
Without amending this Program, but subject to any requirements of
applicable law or regulation, the granting authority may amend any one or more
outstanding awards under this Program or any other shareholder-approved plan to
incorporate in those awards any terms that could then be incorporated in a new
award under this Program.
XVIII. Withholding Taxes.
The Corporation shall have the right to deduct from any cash payment made
under this Program any federal, state or local income or other taxes required by
law to be withheld with respect to such payment. It shall be a condition to the
obligation of the Corporation to deliver shares or securities of the Corporation
upon exercise of a stock option or SAR, upon settlement of a performance award
or DER, upon delivery of restricted stock or incentive shares, or upon exercise,
settlement, or payment of any other award under this Program, that the grantee
of such award pay to the Corporation such amount as may be requested by the
Corporation for the purpose of satisfying any liability for such withholding
taxes. Any award under this Program may provide by the grant that the grantee of
such award may elect, in accordance with any applicable regulations of the
administrative authority, to pay a portion or all of the amount of such minimum
required or additional permitted withholding taxes in shares. The grantee shall
authorize the Corporation to withhold, or shall agree to surrender back to the
Corporation, on or about the date such withholding tax liability is
determinable, shares previously owned by such grantee or a portion of the shares
that were or otherwise would be distributed to such grantee pursuant to such
award having a fair market value equal to the amount of such required or
permitted withholding taxes to be paid in shares.
XIX. Grant of Awards to Employees Who are Foreign Nationals.
Without amending this Program, but subject to the limitations specified in
Sections III(4) and XVI, the granting authority can grant or amend, and the
administrative authority can administer, annul, or terminate, awards to eligible
employees who are foreign nationals on such terms and conditions different from
those specified in this Program as may in its judgment be necessary or desirable
to foster and promote achievement of the purposes of this Program.
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