EXHIBIT 10.10
FMC 1995 STOCK OPTION PLAN
--------------------------
(As Amended 4/18/97)
1. PURPOSE OF THE PLAN
-------------------
The purpose of the FMC 1995 Stock Option Plan is to promote the long-term
performance of FMC by (i) providing long-term incentives in 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 an Option.
(b) "Board of Directors" means the Board of Directors of FMC as it may be
constituted from time to time.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Compensation and Organization Committee of the
Board of Directors.
(e) "Common Stock" means the common stock of FMC.
(f) "Date of Grant" means the date which is designated by the Committee as
the date of grant of an Option.
(g) "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.
(h) "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
'95 Stock Option Plan
Page 1
of any such affiliates except as provided in Rule 16b-3(c)(2)(i).
(i) "Employee" means any person employed by the FMC Companies.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(k) "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.
(l) "FMC" means FMC Corporation.
(m) "FMC Company" or "FMC Companies" means FMC and its Subsidiaries.
(n) "Incentive Stock Option" means a stock option granted by the Committee
to a Participant which is an incentive stock option within the meaning of
Section 422 of the Code and is designated by the Committee as an Incentive Stock
Option.
(o) "Nonqualified Stock Option" means a stock option granted by the
Committee to a Participant which is not designated by the Committee as an
Incentive Stock Option.
(p) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
(q) "Option Expiration Date" means the date on which an Option ultimately
becomes unexercisable either by reason of the lapse of time or otherwise.
(r) "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.
(s) "Participant" means an Employee who has received an Award which has not
been exercised, cancelled or forfeited and which has not expired.
(t) "Plan" means the FMC 1995 Stock Option Plan.
(u) "Plan Year" means each calendar year commencing on or after January 1,
1995.
(v) "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
'95 Stock Option Plan
Page 2
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.
(w) "Subsidiary Corporation" means a corporation or other entity which,
with respect to another corporation, is a subsidiary corporation within the
meaning of Section 424(f) of the Code.
(x) "10 Percent Shareholder" means an individual who on the Date of Grant
owns directly or indirectly stock of the FMC Company employing such individual,
or of a corporation which is a Parent Corporation or Subsidiary Corporation with
respect to such FMC Company, possessing more than 10 percent of the total
combined voting power of all classes of stock of such FMC Company, Parent
Corporation, or Subsidiary Corporation.
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.
'95 Stock Option Plan
Page 3
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
------------------------------------------
Subject to adjustment pursuant to Section 7, at no time may (i) the sum of
(a) the number of shares of Common Stock issued upon exercise of Options, and
(b) the number of shares of Common Stock subject to outstanding Options,
together with all shares issued or subject to outstanding awards under the FMC
1995 Management Incentive Plan exceed 3.0 million or (ii) the number of shares
of Common Stock for which Options may be granted during a Plan Year exceed
100,000 for any Participant. In the event that any outstanding Option for any
reason expires, terminates, is cancelled or forfeited, without having been
exercised, the shares of Common Stock allocable to the expired, terminated,
cancelled or forfeited portion of such Option shall (unless the Plan shall have
been terminated) become available for subsequent grants of Options.
6. OPTIONS
-------
(a) Grant of Options. The Committee may, in its sole discretion, at any
time and from time to time grant Options to any Participant. Each Option shall
be evidenced by a written instrument containing such terms and conditions, not
inconsistent with the Plan, as the Committee shall approve.
(b) Nonqualified Stock Options
(i) Exercise Price. The purchase price per share of Common Stock under
each Nonqualified Stock Option shall be as specified by the Committee in
the Option, provided that such purchase price shall be not less than 100
percent of the Fair Market Value on the Date of Grant.
(ii) Exercisability. Each Nonqualified Stock Option shall become fully
exercisable by the grantee at the time designated by the Committee in the
Option.
(iii) Term. The term of each Nonqualified Stock Option shall be as
specified by the Committee in the Option. In the event no term is so
specified, the term for the Nonqualified Stock Option shall be 15 years
from the Date of Grant. The Committee may, from time to time, extend the
Option Expiration Date of any Nonqualified Stock Option upon such terms and
conditions as the Committee shall determine.
(iv) No Ordering. Nonqualified Stock Options may be exercised in any
order, regardless of the Date of Grant or the existence of any outstanding
Option.
'95 Stock Option Plan
Page 4
(c) Incentive Stock Options
(i) Date of Grant. In no event shall any Incentive Stock Option be
granted after ten years from the date the Plan is adopted or the date the
Plan is approved by the stockholders of FMC pursuant to Section 16,
whichever is earlier.
(ii) Exercise Price. The purchase price per share of Common Stock
under each Incentive Stock Option shall be not less than 100 percent of the
Fair Market Value on the Date of Grant.
Notwithstanding the foregoing, in the case of a Ten Percent Shareholder,
the purchase price per share of Common Stock under each such Incentive
Stock Option shall be not less than 110 percent of the Fair Market Value on
the Date of Grant.
(iii) Exercisability. Each Incentive Stock Option shall become fully
exercisable by the grantee at the time designated by the Committee in the
Option.
(iv) Term. At or prior to the time an Incentive Stock Option is
granted, the Committee shall fix the term of such Option, which shall be
not more than ten years from the Date of Grant, and such term shall be
stated in the Option. In the event the Committee takes no action to fix the
term, such Option shall contain a provision that it shall expire 10 years
from the Date of Grant.
Notwithstanding the foregoing, the terms of an Option granted to a 10
Percent Shareholder shall not be more than five years from the Date of
Grant.
(v) Maximum Amount. The aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the shares of Common
Stock with respect to which the Incentive Stock Options granted under the
Plan and all other FMC plans become exercisable for the first time by a
Participant during any calendar year shall not exceed $100,000. Options
granted in excess of such limitation shall be Nonqualified Options.
(vi) Notice of Disposition. A Participant or former Participant shall
give prompt notice to FMC of any disposition of shares acquired upon
exercise of an Incentive Stock Option if such disposition occurs within
either two years after the Date of Grant or one year after the receipt of
such shares by the Participant or former Participant.
'95 Stock Option Plan
Page 5
(d) Payment for Stock. Payment for Common Stock purchased upon the exercise
(in whole or in part) of an Option shall be made in cash, in shares of Common
Stock (valued at the then Fair Market Value), or by a combination of cash and
Common Stock. The proceeds received by FMC from the sale or sales pursuant to
the Plan will be used for general corporate purposes.
(e) Termination of Employment.
(i) Nonqualified Stock Options. If a Participant's employment is
terminated for any reason whatsoever, any Nonqualified Stock Option granted
pursuant to the Plan outstanding at the time, whether or not then
exercisable, and all rights thereunder may, unless earlier terminated in
accordance with its terms, be exercised by the Participant or other person
who acquired the right to exercise such Option, until the following date:
(A) Five years after termination or the Option Expiration Date,
whichever is earlier, if termination is due to Disability or
retirement under the terms of any formal retirement plan of any FMC
Company;
(B) One year after the date of termination or the Option
Expiration Date, whichever is earlier, if termination is due to death;
or
(C) Three months after the date of termination or the Option
Expiration Date, whichever is earlier, if employment is terminated for
any reason other than death, Disability or retirement under the terms
of any formal retirement plan of any FMC Company;
provided that no Option may be exercised before it becomes fully
exercisable at the time designated by the Committee in the Option.
(ii) Incentive Stock Options. If a Participant's employment terminates
for any reason (including death) such that the Participant is not employed
by FMC or by any corporation which is a Parent Corporation or Subsidiary
Corporation with respect to FMC, any Incentive Stock Option outstanding at
the time and all rights thereunder may, unless earlier terminated in
accordance with its terms, be exercised by the Participant or other person
who acquired the right to exercise such option until the following date:
(A) the Option Exercise Date if termination is due to death;
'95 Stock Option Plan
Page 6
(B) one year after the date employment terminates if such
termination is by reason of permanent and total disability;
(C) three months after the date employment terminates for any
reason other than death or permanent and total disability or good
cause as provided in Section 14(e), provided that if employment
terminates due to retirement at the normal retirement date or to early
retirement at the request of FMC, the Option shall terminate at the
Option Expiration Date subject to its becoming a Nonqualified Stock
Option if not exercised within three months of such termination of
employment;
(D) immediately upon the date employment is terminated for good
cause as provided in Section 14(e),
but in all events each Incentive Stock Option shall terminate not more than
10 years (five years in the case of an Incentive Stock Option granted to a
10 Percent Shareholder) from the Date of Grant. For purposes of this
section, "permanent and total disability" means the inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than 12 months.
(iii) Whole or Partial Exercise. If an Option may be exercised by a
Participant after his employment terminates, such Option may be exercised
in whole or in part.
(iv) Beneficiaries. In the event of the death of a Participant, the
person or persons to whom any Option shall have been transferred by will or
the laws of descent and distribution shall have the right (during the
appropriate period determined under this section) to exercise such Option
in whole or in part.
(v) Committee Discretion. Notwithstanding the foregoing, the Committee
may, if it believes circumstances warrant such action, authorize the
exercise of an Option that would otherwise have terminated provided that
the Committee may not exercise such discretion if it would cause the
disallowance of FMC's tax deduction under Section 162(m) of the Code with
respect to the Plan or an Award.
'95 Stock Option Plan
Page 7
7. 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 in the number of shares of Common Stock
subject to an Option held by any Participant and the exercise price thereof,
such adjustments to be conclusive and binding upon all parties concerned.
8. CHANGE OF CONTROL
-----------------
If, while any Options 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 and 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
'95 Stock Option Plan
Page 8
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, all Options shall become exercisable on the
date of such event.
9. CANCELLATION OF AWARDS
----------------------
The Committee may cancel all or any part of an Option with the written
consent of the Participant holding such Option. In the event of any
cancellation, all rights of the former Participant in respect of such cancelled
Option shall terminate.
10. MISCELLANEOUS PROVISIONS
------------------------
(a) Assignment and Transfer. Options shall not be transferable other than
by will or the laws of descent and distribution and 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 Options or Employment. No Employee or other person shall
have any claim or right to be granted an Option. 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 shares of Common Stock issued upon the
exercise of an Option, 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 Option shall be subject to the condition that
such Option may not be exercised if the Committee determines that the sale of
securities upon exercise of such Option 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 Option to have any obligation to
register the shares subject to such Option 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.
'95 Stock Option Plan
Page 9
(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
Option if the Committee shall determine that (i) the employment of the holder of
such Option with any FMC Company shall have been terminated for good cause, or
(ii) the holder of such Option 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 Option shall have no right under any such
Option (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 Option 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 Option shall be interpreted in such manner as to be effective and valid
under applicable law (including, in the case of an Incentive Stock Option,
interpretation in such manner as to not prevent such Option from meeting the
requirements of Section 422 of the Code and of other provisions applicable with
respect to incentive stock options as defined in such Section 422 (collectively,
the "ISO Requirements"), but if any provision of this Plan or any Option shall
be held to be prohibited by or invalid under applicable law, or, where
applicable, to fail to meet any ISO Requirements, 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 Option 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 Option 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 Option prior to the issuance of any
Common Stock pursuant to such Option.
(i) Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the United States of
'95 Stock Option Plan
Page 10
America and, to the extent not inconsistent therewith, by the laws of the State
of Illinois.
11. 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 Option theretofore granted or change the objectives or other
measure of performance applicable to an Option in a manner adverse to
Participants in accordance with Section 7. No amendment may, without stockholder
approval in accordance with this Section, increase the total number of shares of
Common Stock issuable under the Plan.
(b) Termination. The right to grant further Options shall terminate
automatically upon the granting of such Options which, together with shares of
Common Stock previously issued and/or subject to outstanding Options, equals the
maximum authorized under the Plan, subject to additional shares of Common Stock
becoming available for Options by reason of forfeitures or cancellations of
earlier Options or Awards under the Plan or the FMC 1995 Management Incentive
Plan.
12. 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.
'95 Stock Option Plan
Page 11