EXHIBIT 10.9
FMC 1995 MANAGEMENT INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the FMC 1995 Management Incentive Plan is to promote the long-
term performance of FMC by (i) providing long-term incentives in cash and common
stock of FMC to key management employees of FMC and its subsidiaries, (ii)
assisting in attracting and retaining as employees persons whose abilities,
experience and judgment have contributed and will continue to contribute to the
financial success and progress of FMC, and (iii) aligning the identity of
interests of those employees and FMC's shareholders.
2. DEFINITIONS
(a) "Award" means a Three Year Incentive Award or an Incentive Benefit.
(b) "Board of Directors" means the Board of Directors of FMC as it may be
constituted from time to time.
(c) "CEO" means the Chief Executive Officer of FMC.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation and Organization Committee of the Board
of Directors.
(f) "Common Stock" means the common stock of FMC.
(g) "Date of Grant" means the date which is designated by the Committee as the
date of grant of an Award.
(h) "Disability" means complete and permanent inability by reason of illness or
accident to perform the duties of the occupation at which a Participant was
employed when such disability commenced.
(i) "Disinterested Person" means any member of the Board of Directors who, at
the time discretion under the Plan is exercised, has not at any time within one
year prior thereto received grants or awards of equity securities under the Plan
or any other plan of FMC or any of its
affiliates (as that term is used in the Exchange Act) except as provided in Rule
16b-3(c)(2)(i), and is not selected as a person to whom equity securities may be
allocated or granted pursuant to any other plan of FMC or any of its affiliates
(as that term is used in the Exchange Act) entitling the participants therein to
acquire equity securities of FMC or of any such affiliates except as provided in
Rule 16b-3(c)(2)(i).
(j) "Employee" means any person employed by the FMC Companies.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(l) "Fair Market Value" means the closing price of a share of Common Stock on a
specified date as reported in the New York Stock Exchange Composite Transactions
for such date, or such other measurement of value as may be specified by the
Committee from time to time.
(m) "Financial Objective" means Net Contribution.
(n) "FMC" means FMC Corporation.
(o) "FMC Company" or "FMC Companies" means FMC and each Subsidiary Company.
(p) "Incentive Benefit" means an Award granted pursuant to Section 8.
(q) "Net Contribution" means for a business unit, operating profit after tax
less the product of 11.5% (the capital charge) and the unit's Capital Employed
(operating working capital plus net property, plant and equipment).
(r) "Option" means an Incentive Stock Option or a Nonqualified Stock Option.
(s) "Parent Corporation" means a corporation which, with respect to another
corporation, is a parent corporation within the meaning of Section 424(e) of the
Code.
(t) "Participant" means an Employee who has received an Award which has not been
exercised, paid cancelled or forfeited and which has not expired.
(u) "Plan" means the FMC 1995 Management Incentive Plan.
(v) "Plan Year" means each calendar year commencing on or after January 1, 1995.
(w) "Restricted Stock" means Common Stock payable as part of an Award which is
subject to a restriction period before it is paid to a Participant, and such
other restrictions as may be specified by the Committee at the time the Award is
granted.
(x) "Subsidiary Company" means (i) any corporation the majority of the voting
power of all classes of stock entitled to vote or the majority of the total
value of shares of all classes of stock of which is owned, directly or
indirectly, by FMC, or (ii) any trade or business other than a corporation the
majority of the profits interest, capital interest or actuarial interest of
which is owned, directly or indirectly, by FMC.
(y) "Subsidiary Corporation" means a corporation or other entity that, with
respect to another corporation, is a subsidiary corporation within the meaning
of Section 424(f) of the Code.
(z) "Three-Year Incentive Award" means an award payable in cash and either
Common Stock or Restricted Stock based on achievement of a Participant's unit's
Financial Objectives over a Three-Year Period.
(aa) "Three-Year Incentive Target Bonus" means the target bonus established for
each Participant which is the basis for the Participant's Three-Year Incentive
Award.
(ab) "Three-Year Period" means a period of three years commencing on January 1
of each Plan Year.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee, the composition of which shall
consist of not less than two members of the Board of Directors who are
Disinterested Persons, and otherwise satisfy the provisions of Rule 16b-3 of the
General Rules and Regulations under the Exchange Act or any successor to such
rule. Except as limited by the express provisions of the Plan or by resolutions
adopted by the Board of Directors, the Committee shall have the authority and
discretion to interpret the Plan, to establish and revise rules and regulations
relating to the Plan, and to make any other determinations that it believes
necessary or advisable for the administration of the Plan. Decisions and
determinations by the Committee shall be final and binding on all persons.
Notwithstanding anything to the contrary contained in the Plan, the Board of
Directors shall also have all power and authority to
perform any act granted to the Committee pursuant to the Plan.
4. PARTICIPATION
Participants shall be determined by the Committee, in its sole discretion, from
Employees who, in the Committee's judgment, have a significant opportunity to
influence the growth of FMC or whose outstanding performance or potential merit
further incentive and reward for continued employment and accomplishment.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Subject to adjustment pursuant to Section 9, at no time may the sum of (a) the
number of shares of Common Stock issued in payment of Awards and subject to
outstanding Awards under this Plan and (b) the number of shares of Common Stock
issued or subject to outstanding options under the FMC 1995 Stock Option Plan
exceed 3.0 million. In the event that any outstanding Award for any reason
expires, terminates, is cancelled or forfeited, without having been exercised or
otherwise realized in full, the shares of Common Stock allocable to the expired,
terminated, cancelled or forfeited portion of such Award shall (unless the Plan
shall have been terminated) become available for subsequent grants of Awards.
6. THREE-YEAR INCENTIVE AWARDS
(a) Financial Objectives. The Committee, after consultation with the CEO, shall
establish the Financial Objective for each unit for each Three-Year Period. A
Three Year Incentive Target Bonus shall be established by the CEO for each
Participant.
(b) Individual Awards. Following the close of each Three-Year Period, the
Committee shall evaluate the performance of each unit against the unit's
Financial Objective for the Three-Year Period, and certify a rating of zero to
three for the unit. A Participant's Three-Year Incentive Award shall be the
product of the rating for the Participant's unit and Three-Year Incentive Target
Bonus.
(c) Form and Time of Payment
(i) Form. Each Three-Year Incentive Award will be paid partly in cash and
partly in either Common Stock that is
not Restricted Stock or Restricted Stock, as elected by the Participant;
provided, however, that if a Participant is covered by FMC's Stock Ownership
Policy and such Participant LOGO does not own a sufficient amount of Common
Stock under the Stock Ownership Policy guidelines, such Participant shall
receive the stock portion of the Three-Year Incentive Award in Restricted
Stock. The number of shares of stock payable shall be equal to (A) the
quotient of the stock portion of the Participant's Three-Year Incentive Award
divided by the Fair Market Value on the last day of the Three-Year Period to
which the award relates plus (B) 20 percent of the quotient in (A) provided
that, if the Participant receives Common Stock that is not restricted, the
number of shares payable shall be reduced by one-sixth. The portion of the
Three-Year Incentive Award to be paid in cash and in stock shall be as
determined by the Committee at the date of grant of the Award.
(ii) Timing. Payment of the portion of each Three-Year Incentive Award
payable in cash or Common Stock that is not Restricted Stock shall be made,
without interest, as soon as practicable after the close of the Three-Year
Period to which such award relates. Payment of any portion of a Three-Year
Incentive Award payable in Restricted Stock will be made as soon as
practicable following the close of three years after the end of the Three-
Year Period to which such award relates.
(d) Special Rules for Transition Period. Each Participant in the 1995 and/or
1996 Plan Years shall receive a draw against the Three-Year Incentive Award
otherwise payable for the Three-Year Periods beginning January 1, 1995 and/or
January 1, 1996. The amount of such draw shall be paid in cash and shall equal
the target bonus amount under the BPF portion of the prior plan. Such
Participant's Three-Year Incentive Award, if any, for the Three-Year Periods
beginning in 1995 and/or in 1996 shall be reduced (but not below zero) by the
amount of such draw.
(e) Transfers Between Units. If a Participant transfers employment from one unit
to another during a Three-Year Period, the Participant's Three-Year Incentive
Award shall be prorated based on the proportion of time spent in each unit in
which the Participant has spent at least six months.
7. TERMINATION OF EMPLOYMENT
(a) During Award Period. Subject to meeting the performance goals, a Participant
shall be entitled to receive payment
of a Three-Year Incentive Award only if employment with the FMC Companies
continues uninterrupted from the first day of participation in the Award to the
earlier of (i) the last day of the applicable period, (ii) normal retirement
under the FMC Salaried Employees' Retirement Plan or any successor plan, (iii)
early retirement at the request of FMC, (iv) death, or (v) Disability. Subject
to meeting the performance goals, earlier termination of employment will result
in automatic cancellation and forfeiture of the Award, provided that the
Committee may, if it believes circumstances warrant such action, authorize
payment of all or a portion of any Award that would otherwise be forfeited
pursuant to this section.
(b) During Restriction Period For Restricted Stock. Notwithstanding paragraph
(a) of this section, if a Participant receives Restricted Stock and employment
with the FMC Companies is terminated for any reason other than the reasons
contained in (ii), (iii), (iv) or (v) of paragraph (a) prior to the conclusion
of the three-year restriction period for such Restricted Stock, the Participant
shall receive a number of shares equal to the product of (i) five-sixths of the
number of shares of Restricted Stock payable under Section 7(c)(i)(B) and (ii) a
fraction the numerator of which is the number of days between the end of the
applicable Three-Year Period and the termination of employment and the
denominator of which is 1,095, and the balance of the stock portion of the Award
shall be forfeited.
8. INCENTIVE BENEFITS
In addition to Three-Year Incentive Awards, the Committee may, at its
discretion, create and grant such Incentive Benefits as it believes are
desirable (including by way of illustration and not by way of limitation, stock
appreciation rights, stock bonus and restricted stock awards), provided that:
(a) any Incentive Benefits shall be governed by the terms of the Plan as in
effect on the Date of Grant of such Incentive Benefits, and for such purpose,
notwithstanding the provisions of Section 15, the Committee may amend the
Plan to create and describe Incentive Benefits and the governing terms
thereof;
(b) the creation of Incentive Benefits may not, without stockholder approval,
(i) increase the total number of shares of Common Stock issuable under the
Plan, or (ii) materially modify the requirements as to eligibility for
participation in the Plan;
(c) the Committee shall not have the power to create and grant Incentive
Benefits that would result in the grant of a prohibited tandem stock option
or other prohibited tandem arrangement, with respect to any Incentive Stock
Options, as described in applicable regulations under Section 422 of the
Code, and
(d) with respect to grants and awards to persons subject to Section 16(b) of
the Exchange Act, Incentive Benefits granted or awarded shall have such terms
and conditions as will comply with Rule 16b-3 or other similar rules.
9. DILUTION AND OTHER ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock by reason
of any stock dividend or split, recapitalization, merger, consolidation,
spinoff, reorganization, combination or exchange of shares or other similar
corporate change, the Committee shall make such adjustments, if any, as it in
its sole discretion deems equitable (a) in the number of shares of Common Stock
that may be issued under the Plan in payment of any Award, or (b) in the
Financial Objectives during any Three Year Period from which the requisite
performance levels are calculated, such adjustments to be conclusive and binding
upon all parties concerned. The Committee may also make adjustments, to the
extent it deems appropriate, in a unit's performance goals during and after any
Three-Year Period to compensate for or reflect any significant changes that may
have occurred during such Three-Year Period in accounting practices, tax laws or
other laws or regulations which alter or affect the unit's performance, actual
economic conditions, such as inflation, when contrasted with the assumptions
underlying the unit's performance goals or changes resulting from corporate
restructuring including without limitation, acquisitions and divestitures.
10. CHANGE OF CONTROL
If, while any Awards remain outstanding under the Plan_
(a) the "beneficial ownership" (as defined in Rule 13d-3 under the Exchange
Act) of securities representing more than 20 percent of the combined voting
power of FMC is acquired by a "person" as defined in Sections 13(d) and 14(d)
of the Exchange Act (other than FMC, any trustee or other fiduciary holding
securities under an employee
benefit plan of FMC or an affiliate thereof, or any corporation owned,
directly or indirectly, by the stockholders of FMC in substantially the same
proportions as their ownership of stock of FMC), or
(b) the stockholders of FMC approve a definitive agreement to merge or
consolidate FMC with or into another company (other than a merger or
consolidation which would result in the voting securities of FMC outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 80 percent of the combined voting power of the voting
securities of FMC or such surviving entity outstanding immediately after such
merger or consolidation), or to sell or otherwise dispose of all or
substantially all of its assets, or adopt a plan of liquidation, or
(c) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors any new director
(other than a director designated by a person who has entered into an
agreement with FMC to effect a transaction described in paragraph (a) or (b)
of this section) whose election by the Board of Directors or nomination for
election by FMC's stockholders was approved by a vote of at least two-thirds
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 a majority
thereof,
then from and after the date on which public announcement of the acquisition of
such percentage shall have been made, or the date of any such stockholder
approval or adoption, or the date on which the change in the composition of the
Board of Directors set forth above shall have occurred, whichever is applicable,
the full value of each outstanding Award shall become exercisable and/or fully
vested and shall be paid in full to the Participant as soon as practicable
following the date of such event.
11. CANCELLATION OF AWARDS
The Committee may cancel all or any part of an Award with the written consent of
the Participant holding such Award. In the event of any cancellation, all rights
of the former Participant in respect of such cancelled Award shall terminate.
12. MISCELLANEOUS PROVISIONS
(a) Assignment and Transfer. Awards shall not be transferable other than by will
or the laws of descent and distribution and Awards may be exercised or otherwise
realized, during the lifetime of the grantee, only by the grantee or by his or
her guardian or legal representative.
(b) No Right to Awards or Employment. No Employee or other person shall have any
claim or right to be granted an Award, nor shall any Participant have a right to
receive payment of an Award in any form other than as the Committee shall
approve. Neither the Plan nor any action taken hereunder shall be construed as
giving any Employee or Participant any right to be retained in the employ of any
FMC Company.
(c) Taxes. The FMC Companies shall have the right to deduct from payment of an
Award any taxes required by law to be withheld from an Employee with respect to
such payment and, in the case of Awards paid in Common Stock the Employee or
other person receiving such stock shall be required to pay to the FMC Companies
the amount of any taxes required to be withheld from an Employee with respect to
such stock.
(d) Securities Laws. Each Award shall be subject to the condition that such
Award may not be exercised or paid if the Committee determines that the sale of
securities upon exercise or payment of such Award may violate the Securities Act
of 1933 or any other law or requirement of any governmental authority. FMC shall
not be deemed by any reason of the granting of any Award to have any obligation
to register the shares subject to such Award under the Securities Act of 1933 or
to maintain in effect any registration of such shares which may be made at any
time under the Securities Act of 1933.
(e) Premature Termination. FMC shall not be obligated to make any payment of
cash or Common Stock (or have any other obligation or liability) under any Award
if the Committee shall determine that (i) the employment of the holder of such
Award with any FMC Company shall have been terminated for good cause, or (ii)
the holder of such Award shall have engaged or may engage in employment or
activities competitive with the FMC Companies or contrary, in the opinion of the
Committee, to the best interests of the FMC Companies. After any such
determination the holder of such Award shall have no right under any such Award
(regardless of whether such holder shall have delivered a notice of exercise
prior to the making of such determination) to receive any payment or purchase
any shares at any time
unless such determination shall be rescinded by the Committee. Any Award may be
terminated entirely by the Committee at the time of or any time subsequent to a
determination by the Committee under this section which has the effect of
eliminating FMC's obligation to pay such Award or sell or deliver shares under
such Option.
(f) Severability. Whenever possible, each provision in the Plan and in every
Award shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Plan or any Award shall be held to
be prohibited by or invalid under applicable law then (i) such provision shall
be deemed amended to, and to have contained from the outset such language shall
be necessary to, accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (ii) all other provisions of
the Plan and every Award shall remain in full force and effect.
(g) No Strict Construction. No rule of strict construction shall be applied
against FMC, the Committee or any other person in the interpretation of any of
the terms of the Plan, any Award or any rule or procedure established by the
Committee.
(h) Stockholder Rights. A Participant shall not have any dividend, voting or
other stockholder rights by reason of an Award prior to the issuance of any
Common Stock pursuant to such Award.
(i) Governing Law. The Plan shall be governed by and construed in accordance
with the laws of the United States of America and, to the extent not
inconsistent therewith, by the laws of the State of Illinois.
13. AMENDMENT AND TERMINATION
(a) Amendment. The Board of Directors may at any time amend, suspend or
terminate the Plan, provided that no such action shall adversely affect any
rights under any Award theretofore granted or change the objectives or other
measure of performance applicable to an Award in a manner adverse to
Participants in accordance with Section 9. No amendment may, without stockholder
approval in accordance with Section 14, increase the total number of shares of
Common Stock issuable under the Plan.
(b) Termination. The right to grant further Awards shall terminate automatically
upon the granting of such Awards which, together with shares of Common Stock
previously issued and/or subject to outstanding Awards, equals the
maximum authorized under the Plan, subject to additional shares of Common Stock
becoming available for Awards by reason of forfeitures or cancellations of
earlier Awards.
14. EFFECTIVE DATE OF THE PLAN
The Plan shall become effective as of January 1, 1995, subject to approval by
the affirmative vote of the holders of a majority of the securities of FMC
present, or represented, and entitled to vote at the next annual meeting of the
stockholders of FMC.