EXHIBIT 10.23
UNUM CORPORATION
1990 LONG-TERM STOCK INCENTIVE PLAN
SECTION 1. Purpose.
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The purpose of the UNUM Corporation 1990 Long-Term Stock Incentive Plan (the
"Plan") is to promote the interests of UNUM Corporation and its stockholders by
(i) attracting and retaining executive officers, other key employees and
corporation directors of outstanding ability; (ii) motivating such individuals,
by means of performance-related incentives, to achieve longer-range performance
goals; and (iii) enabling such individuals to participate in the long-term
growth and financial success of UNUM Corporation.
SECTION 2. Definitions.
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"Affiliate" shall mean any corporation or other entity which is not a Subsidiary
but as to which the Corporation possesses a direct or indirect ownership
interest and has representation on the board of directors or any similar
governing body.
"Award" shall mean a grant or award under Sections 6 through 10, inclusive, of
the Plan, as evidenced in a written document delivered to a Participant.
"Board" shall mean the Board of Directors of the Corporation.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" shall mean the Compensation Committee of the Board.
"Common Stock" or "Stock" shall mean the common stock, $.10 par value, of the
Corporation.
"Corporation" shall mean UNUM Corporation.
"Employee" shall mean any employee of the Employer.
"Employer" shall mean the Corporation and any Subsidiary or Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Fair Market Value" shall mean the average of the highest and lowest sales
prices reported for consolidated trading of the Stock on the New York Stock
Exchange on the date in question, or, if the Stock shall not have been traded on
such date, the average of such highest and lowest sales prices on the first day
prior thereto on which the Stock was so traded.
"Fiscal Year" shall mean the fiscal year of the Corporation.
"Incentive Stock Option" shall mean a stock option granted under Section 6 which
is intended to meet the requirements of Section 422A of the Code.
"Limited Right" shall mean a limited stock appreciation right granted under
Section 8.
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"Non-Qualified Stock Option" shall mean a stock option granted under Section 6
which is not intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock Option.
"Participant" shall mean an Employee who is selected by the Committee to receive
an Award under the Plan.
"Restricted Period" shall mean the period of years selected by the Committee
during which a grant of Restricted Stock or Restricted Stock Unit Award may be
forfeited to the Corporation.
"Restricted Stock" shall mean shares of Common Stock contingently granted to a
Participant under Section 9 of the Plan.
"Restricted Stock Unit" shall have the meaning provided in 10(a).
"Subsidiary" shall mean any business entity in which the Corporation possesses
directly or indirectly fifty percent (50%) or more of the total combined voting
power.
SECTION 3. Administration.
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Except as provided in Section 10, the Committee shall have full power to
interpret and administer the Plan and full authority to select the individuals
to whom Awards will be granted and to determine the type and amount of Award(s)
to be granted to each Participant, the terms and conditions of Awards granted
under the Plan and the terms and conditions of the agreements which will be
entered into with Participants. As to the selection and grant of Awards to
Participants who are not subject to Sections 16(a) and 16(b) of the Exchange
Act, or any successor sections, the Committee may delegate its responsibilities
to members of the Company's management consistent with applicable law.
The Committee shall have the authority to adopt, alter and repeal such rules,
guidelines and practices governing the Plan as it shall, from time to time, deem
advisable; to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and any agreements relating thereto); to direct employees
of the Corporation and its subsidiaries or other advisors to prepare such
materials or perform such analysis as the Committee deems necessary or
appropriate; and otherwise to supervise the administration of the Plan.
Any interpretation and administration of the Plan by the Committee, and all
actions of the Committee, shall be final, binding and conclusive on the
Corporation, its stockholders, Subsidiaries, Affiliates, all Participants, their
respective legal representatives, successors and assigns and upon all persons
claiming under or through any of them. No member of the Board or of the
Committee shall incur any liability for any action taken or omitted, or any
determination made, in good faith in connection with the Plan.
SECTION 4. Eligibility.
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Participation in the Plan shall be limited to those key employees of the
Corporation and any Subsidiary and Affiliate selected at the sole discretion of
the Committee.
SECTION 5. Maximum Amount Available for Awards.
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Subject to adjustment as provided in Section 12(j), the maximum number of shares
of Stock in respect of which Awards may be made under the Plan shall be a total
of 13,600,000 shares of Common Stock.
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Shares of Common Stock may be made available from the authorized but unissued
shares of the Corporation or from shares reacquired by the Corporation,
including shares purchased in the open market. In the event that (i) an Option,
or Stock Appreciation Right, or Limited Right expires or is cancelled
unexercised as to any shares of Common Stock covered thereby, or (ii) any Award
in respect of shares is forfeited for any reason under the Plan, such shares
shall thereafter be again available for award pursuant to the Plan.
SECTION 6. Stock Options.
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(a) Grant. Subject to the provisions of the Plan, the Committee shall have sole
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and complete authority to determine the Employees to whom Options shall be
granted, the number of shares to be covered by each Option, the Option
Price, as defined below, therefor and the conditions and limitations
applicable to the exercise of the Option. The Committee shall have the
authority to grant Incentive Stock Options, or to grant Non-Qualified Stock
Options, or to grant both types of Options. In the case of Incentive Stock
Options, the terms and conditions of such grants shall be subject to and
comply with such rules as may be prescribed by Section 422A of the Code and
any regulations implementing Section 422A.
(b) Option Price. The Committee shall establish the exercise price of the
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Option (the "Option Price") at the time each Option is granted, which Option
Price shall not be less than 100% of the Fair Market Value of the Common
Stock on the date of grant.
(c) Exercise.
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(1) Each Option shall be exercisable at such times and subject to such terms
and conditions as the Committee may, in its sole discretion, specify in
the applicable Award or thereafter; provided, however, that in no event
may any Option granted hereunder be exercisable after the expiration of
ten years from the date of grant. The Committee may impose such
conditions with respect to the exercise of Options, including without
limitation, any relating to the application of federal or state
securities laws, as it may deem necessary or advisable.
(2) The Committee shall determine the methods by which the exercise price of
an Option may be paid, the form of payment, including, without
limitation, cash, shares of stock or other property (including "cashless
exercise" arrangements), and the methods by which shares of stock shall
be delivered or deemed to be delivered to Participants; provided,
however, that if shares of stock are used to pay the exercise price of
an option, such shares must have been held by the Participant for at
least six months. When shares of stock are delivered, such delivery may
be by attestation of ownership or actual delivery of one or more
certificates. Failure by the Committee to specify methods by which the
exercise price of an Option may be paid or the form of payment shall be
deemed to express the Committee's determination that all methods and
forms of payment presented under the Plan are permitted under the grant.
(d) Termination of Employment.
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(1) Except as provided below, if a Participant ceases to be an Employee
other than by reason of death, retirement or disability, any then
outstanding Options may be exercised any time before their expiration
date or within three months after the date of termination, whichever is
earlier, but only to the extent that such Options were exercisable when
employment ceased, absent a determination by the Committee to the
contrary; provided, however, that a
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Participant is terminated for cause the Committee may determine that no
Option may be exercised at any time after the termination date.
(2) If a Participant's employment terminates because of death or disability,
all then outstanding Options previously granted to the Participant will
become exercisable. In the case of death of the Participant, such
Options may be exercised at any time before their expiration date or
within three years after the date of termination, whichever is earlier.
In the case of permanent disability, such Options may be exercised at
any time before their expiration date.
(3) If a Participant's employment terminates because of retirement prior to
January 1, 1995, any then outstanding Options may be exercised any time
before their expiration date or within three years after the date of
termination, whichever is earlier, but only to the extent that such
Options were exercisable when employment ceased absent a determination
by the Committee to the contrary. If a Participant's employment
terminates because of retirement on or after January 1, 1995, any then
outstanding Options may be exercised any time before their expiration
date or within five years after the date of termination, whichever is
earlier, but only to the extent that such Options were exercisable when
employment ceased absent a determination by the Committee to the
contrary.
SECTION 7. Stock Appreciation Rights.
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(a) The Committee shall have the authority to grant Stock Appreciation Rights in
tandem with the grant of an Option or freestanding and unrelated to an
Option. Stock Appreciation Rights granted in tandem with an Option may be
granted either at or after the time of the grant of such Option.
Stock Appreciation Rights or any applicable portion thereof granted in
tandem with a given Option shall only be exercisable to the extent that the
related Option is exercisable and shall terminate and no longer be
exercisable upon the expiration or cancellation of the related Option.
The exercise of an Option shall result in an immediate forfeiture of any
Stock Appreciation Right granted in tandem with that Option, and the
exercise of such Stock Appreciation Right shall cause an immediate
forfeiture of its related Option. Stock Appreciation Rights shall not be
exercisable after the expiration of ten years from date of grant. A Stock
Appreciation Right granted in tandem with an Option may be exercised by an
optionee, in accordance with this Section 7, by surrendering the applicable
portion of the related Option. Upon such exercise and surrender, the
optionee shall be entitled to receive an amount determined in the manner
prescribed in this Section 7.
(b) A Stock Appreciation Right shall entitle the Participant to receive from the
Corporation an amount equal to the excess of the Fair Market Value of a
share of Common Stock on the date of the exercise of the Stock Appreciation
Right over the grant price thereof, provided that the Committee may for
administrative convenience determine that, for any Stock Appreciation Right
which is not related to an Incentive Stock Option and can only be exercised
during limited periods of time in order to satisfy the conditions of certain
rules of the Securities and Exchange Commission, the exercise of any such
Stock Appreciation Right for cash during such limited period shall be deemed
to occur for all purposes hereunder on the day during such limited period on
which the Fair Market Value of the Stock is the highest. Any such
determination by the Committee may be changed by the Committee from time to
time and may govern the exercise of Stock Appreciation Rights granted prior
to such determination as well as Stock Appreciation Rights thereafter
granted.
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The Committee shall determine whether Stock Appreciation Rights shall be
settled in cash, shares of Common Stock or a combination of cash and shares
of Common Stock.
SECTION 8. Limited Rights.
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(a) The Committee shall have the authority to grant Limited Rights in tandem
with the grant of an Option or freestanding and unrelated to an Option.
Limited Rights granted in tandem with an Option may be granted either at or
after the time of the grant of such Option.
Limited Rights or any applicable portion thereof granted in tandem with a
given Option shall terminate and no longer be exercisable upon the
expiration or cancellation of the related Option. The exercise of an Option
shall result in an immediate forfeiture of any Limited Right granted in
tandem with that Option, and the exercise of such Limited Right shall cause
an immediate forfeiture of its related Option.
A Limited Right granted in tandem with an Option may be exercised by an
optionee, in accordance with this Section 8, by surrendering the applicable
portion of the related Option. Upon such exercise and surrender, the
optionee shall be entitled to receive an amount determined in the manner
prescribed in this Section 8.
(b) Limited Rights shall only be exercisable during the 30 day period following
a Change in Control as defined in Section 11 and shall not be exercisable
after the expiration of ten years from the date of grant.
(c) Upon the exercise of a Limited Right, an optionee shall be entitled to
receive from the Corporation an amount in cash equal in value to the excess
of (i) the higher of (A) the highest price per share paid in connection with
the Change in Control or (B) the highest Fair Market Value per share as
reported in the Wall Street Journal at any time during the 60 day period
preceding the Change in Control over (ii) in the case of a Limited Right
granted in tandem with an Option, the Option Price per share specified in
the related Option and in the case of all other Limited Rights, the price
per share established in the grant of the Limited Right, such excess to be
multiplied by the number of shares in respect of which the Limited Right
shall have been exercised; provided, however, that upon the exercise of a
Limited Right granted in tandem with an Incentive Stock Option, the amount
set forth in clause (i) shall not exceed the Fair Market Value of a share on
the date of exercise of the Limited Right.
(d) Limited Rights shall be subject to such other terms and conditions, not
inconsistent with the provisions of the Plan, as shall be determined from
time to time by the Committee. This Section 8 shall be interpreted in
accordance and consistent with the principles set forth in Rule 16b-3 of the
Exchange Act.
SECTION 9. Restricted Stock.
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(a) Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the Employees to whom shares of Restricted
Stock shall be granted, the number of shares of Restricted Stock to be
granted to each Participant, the duration of the Restricted Period during
which, and the conditions under which, the Restricted Stock may be forfeited
to the Corporation, and the other terms and conditions of such Awards. The
Committee may determine that the Restricted Period applicable to a
particular grant may vary depending upon the attainment of particular
conditions, such as corporate earnings, share price or other targets set by
the Committee.
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(b) Shares of Restricted Stock may not be sold, assigned, transferred, pledged
or otherwise encumbered, except as herein provided, during the Restricted
Period. Certificates issued in respect of shares of Restricted Stock shall
be registered in the name of the Participant and deposited by such
Participant, together with a stock power endorsed in blank, with the
Corporation. At the expiration of the Restricted Period, the Corporation
shall deliver such certificates to the Participant or the Participant's
legal representative.
(c) If a Participant's employment terminates by reasons of disability or death,
any Restricted Stock held by such Participant shall thereafter vest and any
restriction lapse, to the extent such Restricted Stock would have become
vested and no longer subject to such restrictions within one year from the
time of termination had the Participant continued to fulfill all of the
conditions of the Restricted Stock during such period (or on such
accelerated basis as the Committee may determine at or after grant). Unless
otherwise determined by the Committee, if a Participant's employment
terminates for any reasons other than permanent disability or death, any
Restricted Stock which is unvested or subject to restriction shall thereupon
be forfeited.
SECTION 10. Restricted Stock Units.
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(a) The Committee may, in its discretion, grant Restricted Stock Units to such
eligible Participants as it may select. Restricted Stock Units shall
entitle the Participant to receive one share of Common Stock per Unit at the
times and subject to the conditions determined by the Committee. The
Committee shall determine the number of Units to be granted to each
Participant, whether or not the Restricted Stock Units are designed to
satisfy the requirements of Section 162(m) of the Code and the regulations
thereunder, the duration of the Restricted Period (if any) during which, and
the conditions under which, the Restricted Stock Units may be forfeited to
the Corporation, the schedule for settlement, and any other terms and
conditions relating to each grant, not inconsistent with the terms of this
Plan, as the Committee shall deem advisable. The Committee may provide that
the holder of a Restricted Stock Unit Award shall receive cash or Common
Stock equal in value to the dividends paid with respect to a specified
number of shares of the Common Stock, as such dividends accrue or upon
settlement of the Restricted Stock Unit Award, in which case dividends may
be deemed to have been reinvested in additional Common Stock or such other
investment vehicles as the Committee may specify.
(b) Restricted Stock Units may not be sold, assigned, transferred, pledged or
otherwise encumbered.
(c) Subject to the renumbered Section 12 of this Plan, all of the provisions
governing the satisfaction of Performance Measures and the termination of
the Restriction Period relating to a Restricted Stock Unit Award, or any
cancellation or forfeiture of shares of Restricted Stock Units upon
termination of employment of the Participant, whether by reason of death,
permanent disability, retirement, or otherwise, shall be set forth in the
Agreement relating to such Restricted Stock Unit Award, or in guidelines
established by the Committee and made applicable to such Restricted Stock
Unit Award.
SECTION 11. Non-Employee Director Options.
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Notwithstanding any of the other provisions of the Plan to the contrary, the
provisions of this Section 10 shall only apply to a non-employee member of the
Board. The other provisions of the Plan shall apply to grants of Options under
this Section 10 to the extent not inconsistent with the provisions of this
Section.
(a) This Section 11 shall be administered by the Board.
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(b) Each non-employee member of the Board shall receive Non-Qualified Stock
Options in accordance with the provisions of this Section 11.
(c) (i) Recipients of Options under this Section 11 shall enter into a stock
option agreement with the Corporation, which agreement shall set
forth, among other things, the exercise price of the Option, the term
of the Option and provisions regarding exercisability of the Option
granted thereunder.
(ii) On the Effective Date (as defined below) each non-employee member of
the Board of the Corporation shall receive Options to purchase 2,000
shares of Common Stock. Beginning in 1997, on the date after each
annual stockholders meeting of the Corporation each continuing non-
employee member of the Board shall be granted an Option to purchase
4,000 shares of Common Stock and, beginning in 1990, each newly
elected non-employee director shall be granted an Option to purchase
6,000 shares of Common Stock. The Option Price per share of Common
Stock purchasable under such Options shall be equal to the Fair Market
Value of the Common Stock on the date of grant. Such Option shall
remain exercisable until the earlier of ten years from the date of
grant or the termination of any post-directorship consultancy
agreement with the Corporation; provided, however, that if such
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consultancy agreement terminates by reason of death or disability any
then outstanding Options may be exercised (x) at any time before their
expiration date or (y), if such termination is by reason of death,
within three years of the date of death, whichever is earlier. Such
Options shall be exercisable one year from the date of grant by
payment in full in cash or in shares of Common Stock having a Fair
Market Value equal to the Option Price or in a combination of cash and
such shares.
(d) The Board may not amend, alter, or discontinue this Section 11 without the
approval of the stockholders of the Corporation.
SECTION 12. Change of Control.
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Notwithstanding anything to the contrary contained herein, and notwithstanding
any contrary waiting period or installment period in any agreement relating to
an Award or in the Plan, each outstanding Option, Stock Appreciation Right and
Limited Right granted under the Plan shall become exercisable in full for the
aggregate number of shares covered thereby, and any restriction or deferral
limitation applicable to any Restricted Stock or Restricted Stock Units shall
lapse and such shares and Awards shall be deemed fully vested, in the event of a
Change in Control (as hereinafter defined).
For purposes of this Plan, a Change in Control shall be deemed to have occurred
upon the first to occur of the following events:
(i) any "person," as such term is used in Sections 13(d) and 14(d) of the
Exchange Act (other than the Corporation or any corporation owned,
directly or indirectly, by the stockholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
the Corporation representing more than 40% of the number of the
Corporation's then outstanding securities;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Corporation to effect a transaction
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described in Subsection 12(i), (iii) or (iv) of this Section 12) whose
election by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a
majority thereof;
(iii) the stockholders of the Corporation approve a merger or consolidation
of the Corporation with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) more than 60% of the number
of outstanding securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation; or
(iv) the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
SECTION 13. General Provisions.
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(a) Income Tax Withholding. The Corporation shall have the authority and the
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right to deduct or withhold, or require a Participant to remit to the
Corporation, an amount sufficient to satisfy federal, state, and local taxes
(including the participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of the Plan. With
respect to withholding required upon any taxable event under the Plan, the
Committee may, at the time the Award is granted or thereafter, require or
permit that any such withholding requirement be satisfied, in whole or in
part, by withholding from the award shares of stock having a Fair Market
Value on the date of withholding equal to the minimum amount (and not any
greater amount) required to be withheld for tax purposes, all in accordance
with such procedures as the Committee establishes.
(b) Nontransferability. No Award shall be assignable or transferable, and no
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right or interest of any Participant shall be subject to any lien,
obligation or liability of the Participant, except by will or the laws of
descent and distribution.
(c) No Right to Employment. No person shall have any claim or right to be
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granted an Award, and the grant of an Award shall not be construed as giving
a Participant the right to be retained in the employ of the Employer.
Further, the Employer expressly reserves the right at any time to dismiss a
Participant free from any liability, or any claim under the Plan, except as
provided herein or in any agreement entered into with respect to an Award.
(d) No Rights as Stockholder. Subject to the provisions of the applicable
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Award, no Participant or transferee of an Option or Restricted Stock Units
shall have any rights as a stockholder with respect to any shares of Common
Stock to be distributed under the Plan until he or she has become the holder
thereof. Notwithstanding the foregoing, in connection with each grant of
Restricted Stock hereunder, the applicable Award shall specify if and to
what extent the Participant shall not be entitled to the rights of a
stockholder in respect of such Restricted Stock.
(e) Construction of the Plan. The validity, construction, interpretation,
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administration and effect of the Plan and of its rules and regulations, and
rights relating to the Plan, shall be determined solely in accordance with
the laws of the State of Delaware.
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(f) Effective Date. Subject to the approval of the stockholders of the
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Corporation, the Plan shall be effective on February 9, 1990 (the "Effective
Date"). No Options or Awards may be granted under the Plan after February
9, 2000.
(g) Amendment of Plan. The Board may amend, suspend or terminate the Plan or
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any portion thereof at any time, provided that no amendment shall be made
without stockholder approval if such approval is necessary to comply with
any tax or regulatory requirement, including for these purposes any approval
requirement which is a prerequisite for exemptive relief under Section 16(b)
of the Exchange Act. Notwithstanding anything to the contrary contained
herein, the Committee may amend the Plan in such manner as may be necessary
so as to have the Plan conform with local rules and regulations. The Chief
Executive Officer shall be authorized to make minor or administrative
modifications to the Plan as well as modification to the Plan which may be
dictated by requirements of federal or state statutes applicable to the
Corporation or authorized or made desirable by such statutes. No
modification or termination of the Plan shall, without the optionee's
consent, alter or impair any of his or her rights or obligations under any
Option, Stock Appreciation Right or Limited Right theretofore granted to him
or her under the Plan.
(h) Amendment of Award. The Committee may amend, modify or terminate any
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outstanding Award with the Participant's consent at any time prior to
payment or exercise in any manner not inconsistent with the terms of the
Plan, including without limitation, (i) to change the date or dates as of
which (A) an Option, Stock Appreciation Right or Limited Right becomes
exercisable; (B) Restricted Stock or Restricted Stock Units becomes
nonforfeitable; or (ii) to cancel and reissue an Award under such different
terms and conditions as it determines appropriate.
(i) Hardship Distributions. In no event shall any Option granted under this
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Plan be exercisable through payment of the Option Price in cash during the
period of one year following a hardship distribution under the UNUM
Employees Retirement Savings Plan and Trust, as defined therein.
Adjustments and Assumption. In the event of a reorganization,
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recapitalization, stock split, stock dividend, combination of shares,
merger, consolidation, distribution of assets, or any other change in the
corporate structure or shares of the Corporation, the Committee shall make
such adjustments as it deems appropriate in the number and kind of shares
authorized by the Plan, in the number and kind of shares covered by the
Awards granted, and in the purchase price of outstanding Options. In the
event of any merger, consolidation or other reorganization in which the
Corporation is not the surviving or continuing corporation, all Awards
granted hereunder and outstanding on the date of such event shall be assumed
by the surviving or continuing corporation with appropriate adjustment as to
the number and kind of shares and purchase price of the shares.
(k) In addition to the purposes set forth in Section 1, the Committee may grant
Awards to eligible Participants in order to compensate such Participants to
surrender existing rights to receive benefits from the Employer under this
or any other benefit plan or arrangement.
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