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EXHIBIT 10(10)(n)
OIL-DRI CORPORATION OF AMERICA
OUTSIDE DIRECTOR STOCK PLAN
ARTICLE 1. ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1. Establishment of the Plan. Oil-Dri Corporation of America, a
Delaware corporation (the "Company"), hereby establishes its Outside Director
Stock Plan (the "Plan").
1.2. Objectives of the Plan. The objectives of the Plan are to enhance
the ability of the Company to attract and retain the best-qualified directors,
to increase the identity of interest between directors and the Company's
shareholders, and to provide additional incentives for directors to maximize the
long-term success of the Company's business.
1.3. Duration of the Plan. The Plan shall become effective on June 9,
1998 (the "Effective Date") upon its adoption by the Board (which term is
hereinafter defined to include the Executive Committee of the Board). Subject to
the right of the Board to amend or terminate the Plan pursuant to Article 14,
(i) Awards may be granted from time to time on or after the Effective Date so
long as Shares reserved for delivery under Section 4.1 remain available and (ii)
Compensation earned by the Outside Directors from time to time after the
Effective Date may be deferred.
ARTICLE 2. DEFINITIONS
For purposes of the Plan, the following capitalized terms shall have
the meanings set forth below:
2.1. "Account": see Section 8.1.
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2.2. "Award" means, individually or collectively, a grant by the
Committee under this Plan of Options, Restricted Stock, Stock, or Stock Units,
whether formula-based or otherwise.
2.3. "Annual Meeting" means an annual meeting of the shareholders of
the Company.
2.4. "Award Agreement" means an agreement between the Company and an
Outside Director setting forth the terms applicable to an Award. Except as
otherwise provided in the Plan, the terms of an Award Agreement need not be the
same for each Outside Director, nor for each grant, and may reflect distinctions
based on the reasons for termination of Service.
2.5. "Board" means the Board of Directors of the Company or the
Executive Committee of the Board of Directors of the Company.
2.6. "Committee" means the Compensation Committee of the Board, which
shall be comprised entirely of Outside Directors.
2.7. "Company": see Section 1.1.
2.8. "Compensation" means all retainer, meeting, committee and chair
fees payable in cash to an Outside Director for Service.
2.9. "Deferral Election" see Section 10.2.
2.10. "Director" means any member of the Board.
2.11. "Distribution Election" see Section 8.6.
2.12. "Effective Date": see Section 1.3.
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2.13. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.14. "Expiration Date": see Section 5.4.
2.15. "Fair Market Value" means, as of any specified date, the closing
price of the Shares on the New York Stock Exchange, or any other national stock
exchange or national market system on which the Shares are then traded, on the
last preceding trading day on which the Shares were traded.
2.16. "Option" means an option to purchase Shares granted under Article
5.
2.17. "Option Price" means the price at which a Share may be purchased
under an Option.
2.18. "Outside Director" means a Director who is not an employee of the
Company or a Subsidiary.
2.19. "Period of Restriction" means the period established by the
Committee in its discretion during which the transfer of Restricted Stock is
limited in some manner, and the Shares are subject to a substantial risk of
forfeiture, all as provided in Article 6.
2.20. "Restricted Stock" means an Award granted under Article 6.
2.21. "Rule 16b-3" means Rule 16b-3 (or a successor rule) of the
Securities and Exchange Commission under the Exchange Act, as such Rule may be
amended from time to time.
2.22. "Service" means an Outside Director's service on the Board or any
Board committee.
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2.23. "Shares" means shares of Common Stock of the Company.
2.24. "Stock" means an Award of Shares granted under Article 7.
2.25. "Stock Units" means the units in which an Account is denominated.
A Stock Unit is an unsecured obligation of the Company that is intended, subject
to the terms of Article 8, to represent the economic equivalent of one Share.
2.26. "Subsidiary" means any corporation, partnership, joint venture,
limited liability company, or other entity in which the Company owns securities
representing a majority of the aggregate voting power.
ARTICLE 3. ADMINISTRATION
3.1. General. The Plan shall be administered by the Committee. Except
as may be limited by law, the articles of incorporation or bylaws of the
Company, or the Plan, the Committee shall have full power and discretion to
determine the amounts, types and terms of Awards; to determine the terms of any
Award Agreement; to construe and interpret the Plan and any Award Agreement; to
establish, amend, or waive rules for the Plan's administration; to make all
other determinations which may be necessary or advisable for the administration
of the Plan; and (subject to Section 14.3) to amend the terms of any outstanding
Award. To the extent permitted by law, the Committee shall have the authority to
delegate administrative duties to officers or Directors of the Company.
3.2. Decisions Binding. All determinations and decisions made by the
Committee under the Plan shall be final, conclusive and binding on all persons,
including the Company, its shareholders, Outside Directors, and their respective
estates and beneficiaries.
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ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1. Shares Available for Grants. Subject to adjustment as provided in
Section 4.2, the number of Shares reserved for delivery under the Plan is
200,000. If any Shares subject to any Award are forfeited or such Award
otherwise terminates without the delivery of such Shares, the Shares subject to
such Award, to the extent of any such forfeiture or termination, shall again be
available for the delivery under the Plan. Shares delivered pursuant the Plan
may be treasury stock or newly-issued Shares.
4.2. Adjustments in Authorized Shares. In the event of any change in
corporate capitalization (such as a stock split, stock dividend, spin-off, or
other distribution of stock or property of the Company), or any merger,
consolidation, separation, reorganization (whether or not tax-free) or any
partial or complete liquidation of the Company, the Committee may make such
adjustment in the number and class of Shares which may be delivered under
Section 4.1 as it may determine in its discretion to be appropriate.
ARTICLE 5. OPTIONS
5.1. Award of Options. Subject to the terms of the Plan, Options may be
awarded to Outside Directors in such number, upon such terms, and at such time
or times as the Committee shall determine in its discretion.
5.2. Award Agreement. Each Option shall be evidenced by an Award
Agreement that shall specify the Option Price, the Expiration Date of the
Option, the number of Shares subject to the Option, and such other provisions as
the Committee may determine.
5.3. Option Price. The Option Price for each grant of an Option shall
not be less than 100% of the Fair Market Value of a Share on the date the Option
is granted.
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5.4. Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time of grant (the "Expiration Date"), but in
no event after the tenth anniversary of the date of such grant.
5.5. Exercise of Options. Each Option shall be exercisable at such
times prior to the Expiration Date and be subject to such restrictions and
conditions as the Committee shall determine in its discretion, including without
limitation restrictions on the Shares acquired pursuant to the exercise of such
Option.
5.6. Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, and accompanied by full payment
for the Shares. Upon the exercise of any Option, the exercise price shall be
payable by any one or combination of the following means:
(i) cash or its equivalent,
(ii) with the prior approval of the Committee, delivery of Shares
already owned by the Outside Director and valued at the Fair Market
Value thereof at the time of exercise,
(iii) with the prior approval of the Committee, a cashless exercise
through a broker-dealer approved for this purpose by the Company.
5.7. Termination of Service. Each Award Agreement shall set forth the
extent to which the Outside Director shall have the right to exercise an Option
after termination of Service, but in no event shall any Option be exercised
after its Expiration Date.
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5.8. Nontransferability of Options. Except as may otherwise be
specified by the Committee in its discretion, no Option may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than (i) by will, (ii) by the laws of descent and distribution, or (iii)
pursuant to a beneficiary designation in accordance with Article 11.
ARTICLE 6. RESTRICTED STOCK
6.1 Award of Restricted Stock. Subject to the terms of the Plan,
Restricted Stock may be awarded to Outside Directors in such number of Shares,
upon such terms, and at such time or times as the Committee shall determine in
its discretion.
6.2 Restricted Stock Agreement. Each Restricted Stock Award shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares of Restricted Stock granted, and such other provisions as
the Committee may determine.
6.3. Nontransferability. Except may as otherwise be specified by the
Committee in its discretion, Restricted Stock may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until after the end of
the applicable Period of Restriction. Shares of Restricted Stock shall vest and
become freely transferable after the end of the applicable Period of
Restriction.
6.4. Other Restrictions. The Committee may impose such other conditions
and/or restrictions on any Restricted Stock as it deems advisable, including
without limitation a stipulated purchase price for any Share of Restricted
Stock. The Company may retain possession of the certificates representing Shares
of Restricted Stock until all conditions and/or restrictions applicable to such
Shares have been satisfied.
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6.5 Voting Rights. Shares of Restricted Stock shall have the same
voting rights as unrestricted Shares.
6.6. Dividends and Other Distributions. Shares of Restricted Stock
shall have the same dividend rights as unrestricted Shares; provided, however,
that (i) the Committee may in its discretion provide that dividends shall be
reinvested in additional Shares of Restricted Stock based on the Fair Market
Value of the Shares on the applicable dividend payment date and on such other
terms as may be determined by the Committee in its discretion and (ii) the
Committee may impose any restrictions it deems appropriate on dividends payable
in any form other than cash.
6.7. Termination of Service. The extent, if any, to which the Outside
Director shall have the right to receive unvested Shares of Restricted Stock
following termination of the Outside Director's Service shall be set forth in
each Restricted Stock Award Agreement and, subject to Section 14.3, may
subsequently be modified by the Committee in its discretion.
ARTICLE 7. STOCK
7.1. Award of Stock. Subject to the provisions of the Plan, Shares of
Stock may be awarded to Outside Directors in such number, upon such terms, and
at such time or times as the Committee shall determine in its discretion.
7.2. Award Agreement. Each Stock Award may, but need not, be evidenced
by an Award Agreement that shall specify the number of Shares to which the Award
pertains, the purchase price (if any), and such other provisions as the
Committee shall determine.
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ARTICLE 8. STOCK UNITS AND ACCOUNTS
8.1. Accounts. One or more accounts (each, an "Account") shall be
created and maintained on the books of the Company for each Outside Director to
which shall be credited all Stock Units that may be attributed to such Outside
Director from time to time in connection with (i) Awards of Stock Units by the
Committee pursuant to Article 9, (ii) deferrals of Compensation by such Outside
Director pursuant to Article 10, or (iii) the automatic reinvestment of dividend
equivalents pursuant to Section 8.3. Accounts shall be maintained solely for
accounting purposes and shall not require a segregation of any assets of the
Company.
8.2. Vesting. Stock Units awarded by the Committee pursuant to Article
9 shall become vested and nonforfeitable upon such terms as the Committee may
determine. Stock Units credited to an Outside Director's Account by reason of
his or her election to defer Compensation pursuant to Article 10 shall at all
times be fully vested and nonforfeitable. Any additional Stock Units resulting
from the crediting of dividend equivalents to an Outside Director's Account or
Accounts pursuant to Section 8.3 shall be vested and nonforfeitable to the same
extent and at the same time or times as the underlying Stock Units on account of
which such dividend equivalents were credited.
8.3. Dividend Equivalents. Dividend equivalents shall be earned on
Stock Units and credited to an Outside Director's Account as of any date (a
"Dividend Payment Date") on which the Company pays any dividend on the
outstanding Shares (a "Dividend"). Such dividend equivalents shall be expressed
as a number of Stock Units equal to:
(i) the number of Stock Units credited to an Outside Director's Account
as of the record date for such Dividend multiplied by the value of the
per Share
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amount of such Dividend (as determined by the Committee in the case of
dividends paid other than in cash),
divided by:
(ii) the Fair Market Value of a Share as of the Dividend Payment Date.
8.4. Amount of Payment. The amount of value payable to an Outside
Director on account of a Stock Unit as of the date of any payment determined in
accordance with Section 8.5 shall equal the Fair Market Value of a Share on such
date.
8.5. Timing and Method of Payment. The value of vested Stock Units
shall be paid to an Outside Director in a lump sum as soon as administratively
possible following the termination of such Outside Director's service as a
Director, except that (i) the Committee may otherwise provide in an Award
Agreement, (ii) an Outside Director may otherwise provide in Distribution
Election, or (iii) the Company may defer such payment on account of any or all
Stock Units for up to six months after the date of such termination of such
service to the extent necessary to ensure the availability of an exemption under
Rule 16b-3. All payments on account of Stock Units shall be made in cash unless
the Committee determines in its discretion to make a payment or payments in
Shares; provided that any fractional Shares shall be paid in cash based on the
Fair Market Value of a Share on the date of such payment.
8.6. Distribution Elections. The Committee may in its discretion permit
the Outside Director to specify in a written notice delivered to the Secretary
of the Company (a "Distribution Election") such Outside Director's election with
respect to (i) when payment to such Outside Director in respect of Stock Units
(whether resulting from an Award under Article 9 or from deferrals pursuant
Article 10) shall commence,
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and (ii) whether such payment shall be in a lump sum or in such number of annual
installments as the Outside Director may designate, subject to a maximum number
of installments that the Committee shall determine from time to time, but not in
excess of ten (10). To the extent the Committee permits Distribution Elections,
an Outside Director may make or change such a Distribution Election as to the
entire balance of his or her Account at any time or from time to time, but only
by a Distribution Election filed with the Company no later than December 31 of
the year next preceding such Outside Director's termination of service as a
Director. Any Distribution Election that is not timely made or changed shall be
disregarded.
8.7. Nontransferability of Stock Units. Except as may otherwise be
specified by the Committee in its discretion, no Stock Unit may be transferred
in any manner other than (i) by will, (ii) by the laws of descent and
distribution, or (iii) pursuant to a beneficiary designation in accordance with
Article 11.
8.8. Unsecured Obligation. An Outside Director shall be a general
unsecured creditor of the Company with respect to all Stock Units credited to
his or her Account or Accounts. The Committee may, but is not required to,
establish a so-called "rabbi" trust or similar mechanism to fund the Company's
obligations under this Plan; provided, however, that any funds contained therein
shall remain subject to the claims of the Company's general creditors.
ARTICLE 9. AWARD OF STOCk UNITS BY THE COMMITTEE
9.1. Award of Stock Units. Subject to the terms of the Plan, Stock
Units may be awarded to Outside Directors in such number, upon such terms, and
at such time or times as the Committee shall determine in its discretion. Stock
Units may be awarded
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in substitution for, or replacement of, the rights or interests (whether vested
or unvested) of Outside Directors under other plans of the Company.
9.2. Award Agreement. Each Stock Unit Award shall be evidenced by an
Award Agreement that shall specify the number of Stock Units to which the Award
pertains, the vesting of such Stock Units, the extent (if any) to which a
payment is to be made in respect of Stock Units that are unvested upon the
termination of an Outside Director's Service, and such other provisions as the
Committee shall determine.
ARTICLE 10. DEFERRALS BY OUTSIDE DIRECTORS
10.1. Deferral Election. An Outside Director may elect to defer receipt
of all or any specified portion of any Compensation payable to him or her, and
to have such amounts credited to his or her Account in accordance with Section
10.3; provided, however, that the Committee may in its discretion (i) provide
that any such election shall be subject to the prior approval of the Committee
or (ii) suspend the right of all Outside Directors to defer receipt of
Compensation to be received after the date of such suspension.
10.2. Timing of Deferral Election. A deferral election shall be made by
written notice (an "Deferral Election") filed with the Secretary of the Company:
(i) on or before the Effective Date (covering Compensation to be
earned after the Effective Date),
(ii) no more than 30 days after a Outside Director is first elected or
appointed to the Board (covering Compensation to be earned at any time
after the filing of such election),
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(iii) on or before the date of any Annual Meeting (covering
Compensation to be earned after such Annual Meeting), or
(iv) on or before such other date or dates as may be approved in
advance by the Committee (covering Compensation earned for such period
or periods commencing after such other date as may be specified by the
Committee).
Subject to Section 8.6, a Deferral Election may be accompanied by a Distribution
Election. Subject to Section 10.1, any Deferral Election shall continue in
effect (including with respect to the Compensation relating to subsequent
periods) unless and until revoked or modified by a new Deferral Election filed
with the Secretary of the Company. Amounts credited to an Outside Director's
Account prior to the effective date of any such revocation or modification of a
deferral election shall not be affected by such revocation or modification. An
Outside Director who has revoked a Deferral Election may file a new Deferral
Election to defer Compensation relating exclusively to services to be rendered
during the calendar year following the year in which such new Deferral Election
is filed with the Company.
10.3. Deferrals Credited to Account. Any Compensation deferred by an
Outside Director pursuant to this Article 10 shall be allocated to his or her
Account and deemed to be invested in a number of Stock Units equal to (i) the
amount of such Compensation divided by (ii) the Fair Market Value of a Share on
the date Compensation would otherwise have been paid.
ARTICLE 11. BENEFICIARY DESIGNATION
Unless the Committee in its discretion determines otherwise, each
Outside Director may from time to time name any beneficiary or beneficiaries
(who may be named contingently or
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successively) to whom any benefit under the Plan is to be paid in the event of
such Outside Director's death before he or she receives any or all of such
benefit. Each such designation shall revoke all prior designations by such
Outside Director, shall be in a form prescribed by the Company, and will be
effective only when filed by the Outside Director in writing with the Company
during the Outside Director's lifetime. In the absence of any such designation,
benefits remaining unpaid at the Outside Director's death shall be paid to his
or her estate.
ARTICLE 12. TAX WITHHOLDING
If any federal, state, and local tax withholding may from time to time
be required in respect of the grant, vesting or exercise of any Award or the
settlement of any Stock Unit (any such event, "Taxable Event"), the Company
shall have the authority to withhold, or require an Outside Director to remit to
the Company, an amount sufficient to satisfy such tax withholding. The Company
may defer the payment of cash or delivery of Shares in connection with a Taxable
Event until such withholding requirements have been satisfied. The Committee
may, in its discretion, permit an Outside Director to elect, subject to such
conditions as the Committee may require, to have the Company withhold Shares
otherwise deliverable pursuant to the Plan and having a Fair Market Value
sufficient to satisfy all or part of any Outside Director's estimated total
federal, state, and local tax obligation associated with a Taxable Event.
ARTICLE 13. RIGHTS OF DIRECTORS
Nothing in the Plan shall interfere with or limit in any way the right
of the Company's shareholders to terminate any Outside Director's Service at any
time, nor confer upon any Outside Director any right to continue in Service.
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ARTICLE 14. AMENDMENT, MODIFICATIONS, AND TERMINATION
14.1. Amendment, Modification, and Termination. Subject to the terms of
the Plan, the Board may at any time and from time to time, alter, amend, suspend
or terminate the Plan in whole or in part without the approval of the Company's
shareholders, except that no such amendment shall increase the number of Shares
available for delivery under the Plan, change the minimum Option Price or
maximum term of an option, or change the requirements relating to the
composition of the Committee.
14.2. Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. In connection with any unusual or nonrecurring events
(including, without limitation, the events described in Section 4.2) affecting
the Company or of changes in applicable laws, regulations, or accounting
principles, the Committee may in its discretion adjust:
(i) the terms of Options, Restricted Stock, Stock and Stock Units
(including without limitation in the number, class and/or price of
Shares or Stock Units subject to, or to be distributed in connection
with, outstanding Awards or Stock Units) and
(ii) the criteria specified in the Award Agreements related to
outstanding Awards,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits intended to be made available
under the Plan.
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14.3. Awards Previously Granted. Notwithstanding any other provision of
the Plan to the contrary, no termination, amendment, or modification of the Plan
shall adversely affect in any material way any previously granted Award, without
the written consent of the Outside Director holding such Award.
ARTICLE 15. NONALIENABILITY
Except as may otherwise be specified by the Committee in its
discretion, no Award, Stock Unit, nor any right to a payment of Stock Units
pursuant to Section 8.5 shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of the Outside Director or the Outside Director's
beneficiary, other than (i) by will, (ii) by the laws of descent and
distribution, or (iii) pursuant to a beneficiary designation in accordance with
Article 11.
ARTICLE 16. SUCCESSORS
All obligations of the Company under the Plan shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company. The Company and
such successor shall be jointly and severally liable for all of the Company's
obligations under the Plan.
ARTICLE 17. LEGAL CONSTRUCTION
17.1. Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
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17.2. Articles and Sections. Except where otherwise indicated by the
context, any reference to an "Article" or "Section" shall be to an Article or
Section of this Plan.
17.3. Severability. If any part of the Plan is declared to be unlawful
or invalid, such unlawfulness or invalidity shall not invalidate any other part
of the Plan. Any part of the Plan so declared to be unlawful or invalid shall,
if possible, be construed in a manner which will give effect to the terms of
such part to the fullest extent possible while remaining lawful and valid.
17.4. Legal Compliance. If the Company determines that the exercise or
nonforfeitability of, or delivery of benefits pursuant to, any Award or Deferral
Election would violate any applicable provision of (i) federal or state
securities laws or (ii) the listing requirements of any national securities
exchange or national market system on which are then listed any of the Company's
equity securities, then the Company may postpone any such exercise,
nonforfeitability or delivery, as applicable, but the Company shall use all
reasonable efforts to cause such exercise, nonforfeitability or delivery to
comply with all such provisions at the earliest practicable date. If the Company
deems necessary to comply with any applicable securities law, the Company may
require a written investment intent representation by an Outside Director and
may require that a restrictive legend be affixed to certificates for Shares
delivered pursuant to the Plan.
17.5. Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of Illinois,
without regard to the conflict of laws principles thereof.
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