EXHIBIT 4(d)
CORN PRODUCTS INTERNATIONAL, INC.
1998 STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED FEBRUARY 12, 2003)
I. INTRODUCTION
1.1 PURPOSE. The purpose of the Corn Products International, Inc. 1998 Stock
Incentive Plan (the "Plan") of Corn Products International, Inc. (the "Company")
is to promote the long-term financial success of the Company by (i) attracting
and retaining executive personnel of outstanding ability; (ii) strengthening the
Company's capability to develop, maintain and direct a competent management
team; (iii) motivating executive personnel by means of performance-related
incentives to achieve longer-range performance goals; (iv) providing incentive
compensation opportunities which are competitive with those of other major
corporations and (v) enabling such executive personnel to participate in the
long-term growth and financial success of the Company through increased stock
ownership.
1.2 CERTAIN DEFINITIONS. In addition to the defined terms set forth elsewhere in
this Plan, the terms set forth below, shall, when capitalized, have the
following respective meanings.
"BOARD" shall mean the Board of Directors of the Company.
"BONUS STOCK" shall mean shares of Common Stock that are not subject to
a Restriction Period or Performance Measures.
"CAUSE" shall mean the willful and continued failure to substantially
perform the duties assigned by the Company (other than a failure resulting from
the optionee's Disability), the willful engaging in conduct which is
demonstrably injurious to the Company or any Subsidiary, monetarily or
otherwise, including conduct that, in the reasonable judgment of the Committee,
no longer conforms to the standard of the Company's executives, any act of
dishonesty, commission of a felony, or a significant violation of any statutory
or common law duty of loyalty to the Company.
"CHANGE IN CONTROL" shall have the meaning set forth in Section 5.8(b).
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMITTEE" shall mean the Compensation and Nominating Committee
designated by the Board, consisting of two or more members of the Board, each of
whom shall be (i) a "Non-Employee Director" within the meaning of Rule 16b-3
under the Exchange Act and (ii) an "outside director" within the meaning of
Section 162(m) of the Code.
"COMMON STOCK" shall mean the common stock, $.01 par value, of the
Company.
"DISABILITY DATE" shall mean the date on which a Participant becomes a
"Disabled Participant" under the Corn Products International, Inc. Retirement
Savings Plan for Salaried Employees (the "Corn Products Savings Plan") or a
successor to such plan or any such similar plan containing a disability
provision applicable to the Participant. If a Participant is not covered by the
Corn Products Savings Plan or a similar plan containing a disability provision,
the determination of whether the Participant has a "Disability Date" shall be
made by the Committee by applying the provisions of the Corn Products Savings
Plan as if the Participant were a participant of such plan or any similar plan
that the Committee determines to be appropriate.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FAIR MARKET VALUE" shall mean the average of the high and low
transaction prices of a share of Common Stock as reported in the New York Stock
Exchange Composite Transactions on the date as of which such value is being
determined or, if there shall be no reported transactions for such date, on the
next preceding date for which transactions were reported; provided, however,
that, in the case of the exercise of an Incentive Stock Option or Non-Statutory
Stock Option through a broker, Fair Market Value shall mean the sales price
received for a share of Common Stock and, provided further, that Fair Market
Value may be determined by the Committee by whatever other means or method as
the Committee, in the good faith exercise of its discretion, shall at such time
deem appropriate.
"INCENTIVE STOCK OPTION" shall mean an option to purchase shares of
Common Stock which meets the requirements of Section 422 of the Code, or any
successor provision, and which is intended by the Committee to constitute an
Incentive Stock Option.
"MATURE SHARES" shall mean previously-acquired shares of Common Stock
for which the holder thereof has good title, free and clear of all liens and
encumbrances and which such holder either (i) has held for at least six months
or (ii) has purchased on the open market.
"NON-STATUTORY STOCK OPTION" shall mean a stock option that is not an
Incentive Stock Option.
"PARTICIPANT" shall mean an individual who has been granted an
Incentive Stock Option, a Non-Statutory Stock Option, a Bonus Stock Award,
Performance Share Award or Restricted Stock Award.
"PERFORMANCE MEASURES" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met (i) as a condition
to the exercisability of all or a portion of an option, (ii) as a condition to
the grant of a Stock Award or (iii) during the applicable Restriction Period or
Performance Period as a condition to the holder's receipt of Common Stock
subject to a Restricted Stock Award or a Performance Share Award and/or of
payment with respect to such award. The Committee may amend or adjust the
Performance Measures or other terms and conditions of an outstanding award in
recognition of unusual or nonrecurring events affecting the Company or its
financial statements or changes in law or accounting, but only to the extent
such adjustment would not cause any portion of the award, upon payment, or the
option, upon exercise, to be nondeductible pursuant to section 162(m) of
the Code. Such criteria and objectives may include one or more of the following:
total stockholder return (based on the change in the price of a share of the
Company's Common Stock and dividends paid) earnings per share; operating income;
net income; return on stockholder's equity; return on assets; economic value
added; and cash flows. If the Committee desires that compensation payable
pursuant to any award subject to Performance Measures be "qualified
performance-based compensation" within the meaning of Section 162(m) of the
Code, the Performance Measures (i) shall be established by the Committee no
later than the end of the first quarter of the Performance Period or Restriction
Period, as applicable (or such other time designated by the Internal Revenue
Service) and (ii) shall satisfy all other applicable requirements imposed under
Treasury Regulations promulgated under Section 162(m) of the Code, including the
requirement that such Performance Measures be stated in terms of an objective
formula or standard.
"PERFORMANCE PERIOD" shall mean any period designated by the Committee
during which the Performance Measures applicable to a Performance Share Award
shall be measured.
"PERFORMANCE SHARE" shall mean a right, contingent upon the attainment
of specified Performance Measures within a specified Performance Period, to
receive one share of Common Stock, which may be Restricted Stock, or in lieu of
all or a portion thereof, at the Committee's discretion, the Fair Market Value
of such Performance Share in cash.
"PERFORMANCE SHARE AWARD" shall mean an award of Performance Shares
under this Plan.
"PERMANENT AND TOTAL DISABILITY" shall have the meaning set forth in
Section 22(e)(3) of the Code or any successor thereto.
"RESTRICTED STOCK" shall mean shares of Common Stock that are subject
to a Restriction Period.
"RESTRICTION PERIOD" shall mean any period designated by the Committee
during which the Common Stock subject to a Restricted Stock Award may not be
sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or
disposed of, except as provided in this Plan or the Agreement relating to such
award.
"STOCK AWARD" shall mean a Restricted Stock Award or a Bonus Stock
Award.
1.3 ADMINISTRATION. This Plan shall be administered by the Committee. The
Committee shall have the authority to determine eligibility for awards hereunder
and to determine the form, amount and timing of each award to such persons and,
if applicable, the number of shares of Common Stock, and the number of
Performance Shares subject to such an award, the exercise price associated with
the award, the time and conditions of exercise or settlement of the award and
all other terms and conditions of the award, including, without limitation, the
form of the Agreement evidencing the award. The Committee may, in its sole
discretion and for any reason at any time, subject to the requirements imposed
under Section 162(m) of the Code and regulations promulgated thereunder in the
case of an award intended to be qualified performance-based compensation, take
action such that (i) any or all outstanding options shall
become exercisable in part or in full, (ii) all or a portion of the Restriction
Period applicable to any outstanding Restricted Stock Award shall lapse, (iii)
all or a portion of the Performance Period applicable to any outstanding
Performance Share Award shall lapse, (iv) the Performance Measures applicable to
any outstanding Restricted Stock Award (if any) and to any outstanding
Performance Share Award shall be deemed to be satisfied at the maximum or any
other level.
The Committee shall, subject to the terms of this Plan, interpret this
Plan and the application thereof, establish rules and regulations it deems
necessary or desirable for the administration of this Plan and may impose,
incidental to the grant of an award, conditions with respect to the award, such
as limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be final, binding and
conclusive.
The Committee shall keep minutes of its meetings and of action taken by
it without a meeting. A majority of the Committee shall constitute a quorum. The
acts of the Committee shall be either (i) acts of a majority of the members of
the Committee present at any meeting at which a quorum is present or (ii) acts
approved in writing by all of the members of the Committee without a meeting.
Notwithstanding anything in the Plan to the contrary, in accordance
with Section 157 of the Delaware General Corporation Law, the Committee may, by
resolution, authorize one or more executive officers of the Company to do one or
both of the following: (i) designate non-director and non-executive officer
employees of the Company or any of its Subsidiaries to be recipients of rights
or options entitling the holder thereof to purchase from the Company shares of
its capital stock of any class or other awards hereunder; and (ii) determine the
number of such rights, options, or awards to be received by such non-director
and non-executive officer employees; provided, however, that the resolution so
authorizing such executive officer or officers shall specify the total number of
rights, options, or awards such executive officer or officers may so award. The
Committee may not authorize an executive officer to designate himself or herself
or any director or other executive officer of the Company to be a recipient of
any such rights, options, or awards.
1.4 ELIGIBILITY. Participants in this Plan shall consist of such directors,
officers, and other employees of the Company and its Subsidiaries from time to
time, and any other entity designated by the Board or the Committee
(individually a "Subsidiary" and collectively the "Subsidiaries") as the
Committee, in its sole discretion, may select from time to time. For purposes of
this Plan, reference to employment by the Company shall also mean employment by
a Subsidiary.
1.5 SHARES AVAILABLE. Subject to adjustment as provided in Section 5.7,
5,700,000 shares of Common Stock shall be available under this Plan, reduced by
the sum of the aggregate number of shares of Common Stock (i) that are issued
upon the grant of a Stock Award and (ii) which become subject to outstanding
options and outstanding Performance Shares. To the extent that shares of Common
Stock subject to an outstanding option, Stock Award or Performance Shares are
not issued or delivered by reason of the expiration, termination, cancellation
or forfeiture of such award or by reason of the delivery or withholding of
shares of Common Stock to pay all or a portion of the exercise price of an
award, if any, or to satisfy all or a portion of the tax
withholding obligations relating to an award, then such shares of Common Stock
shall again be available under this Plan. If an award is made in the form of an
option coupled with a Performance Share Award such that the Participant can
receive the designated number of shares either upon exercise of the option or
upon earning of the Performance Share, but not both, such coupled award shall be
treated as a single award of the designated number of shares for purposes of
this Section 1.5.
Shares of Common Stock shall be made available from authorized and
unissued shares of Common Stock, or authorized and issued shares of Common Stock
reacquired and held as treasury shares or otherwise or a combination thereof.
To the extent required by Section 162(m) of the Code and the rules and
regulations thereunder, the maximum number of shares of Common Stock with
respect to which options or Stock Awards or Performance Share Awards or a
combination thereof may be granted during any calendar year to any person shall
be 250,000, subject to adjustment as provided in Section 5.7.
II. STOCK OPTIONS
2.1 STOCK OPTIONS. Except as is otherwise provided for in Section 1.3, only the
Committee may, in its discretion, grant Incentive Stock Options or Non-Statutory
Stock Options to purchase shares of Common Stock to such eligible persons under
Section 1.4 as may be selected by the Committee.
The Committee may in its sole discretion, either at the time of grant
of an option or thereafter, determine that a Participant who exercises an option
(the "Original Option") shall receive a new option (a "Replacement Option") for
up to the number of shares acquired upon exercise of the Original Option and
with an option price and other terms determined pursuant to Section 2.2 hereof
(treating the date of exercise of the Original Option as the date of the grant
of the Replacement Option) and with the same expiration date as the expiration
date of the Original Option; and the Committee may in its sole discretion impose
conditions in connection with such issuance of Replacement Options consistent
with the goal of encouraging stock ownership by employees, including without
limitation, holding period requirements for shares received upon exercise of the
Original Option or restrictions delaying the exercisability of the Replacement
Option. In no event shall any such Replacement Option include a provision for an
automatic grant of another Replacement Option of the type described in the
preceding sentence.
Options shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the
terms of this Plan, as the Committee shall deem advisable:
(a) Number of Shares and Purchase Price. The number of shares and the
purchase price per share of Common Stock subject to an option shall be
determined by the Committee, provided, however, that the purchase price per
share of Common Stock shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date of grant of such option and provided further,
that if an Incentive Stock Option shall be granted to any person who, at the
time such option is granted, owns capital stock possessing more than ten percent
of the total combined voting power of all classes of capital stock of the
Company (or of any parent or subsidiary as defined in Section 424 of the Code)
(a "Ten Percent Holder"), the purchase price per share of Common Stock shall be
the price (currently 110% of Fair Market Value) required by the Code in order to
constitute an Incentive Stock Option.
(b) Option Period and Exercisability. Each option, by its terms, shall
require the Participant to remain in the continuous employ of the Company for at
least one year following the date of grant of the option before any part of the
option shall be exercisable, except in the case of a Change in Control. The
period during which an option may be exercised shall be determined by the
Committee; provided, however, that no Incentive Stock Option shall be exercised
later than ten years after its date of grant; provided further, that if an
Incentive Stock Option shall be granted to a Ten Percent Holder, such option
shall not be exercised later than five years after its date of grant. Once
determined and stated in an Agreement with respect to an option, the period
during which an option can be exercised shall not be further extended. The
Committee may, in its discretion, establish Performance Measures which shall be
satisfied or met as a condition to the grant of an option or to the
exercisability of all or a portion of an option. The Committee shall determine
whether an option shall become exercisable in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable option, or
portion thereof, may be exercised only for whole shares of Common Stock.
(c) Method of Exercise. An option may be exercised (i) by giving
written notice to the Company specifying the number of whole shares of Common
Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Company's satisfaction) either (A) by
the delivery of cash in the amount of the aggregate purchase price payable by
reason of such exercise, (B) by delivery (either actual delivery or by
attestation procedures established by the Company) of Mature Shares having an
aggregate Fair Market Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise, (C) by the delivery
of cash in the amount of the aggregate purchase price payable by reason of such
exercise by a broker-dealer acceptable to the Company to whom the optionee has
submitted an irrevocable notice of exercise or (D) a combination of (A) and (B),
in each case to the extent set forth in the Agreement relating to the option and
(ii) by executing such documents as the Company may reasonably request. Any
fraction of a share of Common Stock which would be required to pay such purchase
price shall be disregarded and the remaining amount due shall be paid in cash by
the optionee. No certificate representing Common Stock shall be delivered until
the full purchase price therefor has been paid (or arrangement made for such
payment to the Company's satisfaction).
2.2 TERMINATION OF EMPLOYMENT OR SERVICE. (a) Non-Statutory Stock Options.
Unless otherwise specified in the Agreement evidencing an option, but subject to
Section 2.1(b) if the employment with the Company of a holder of an option
(other than an Incentive Stock Option) terminates by reason of (i) death, or
(ii) retirement on or after age 55 with a minimum of 10 years of employment with
or service to the company, or (iii) the occurrence of such individual's
Disability Date, such option shall be exercisable for the remainder of the
option period as stated under the terms of the option, but only to the extent
that such option was exercisable at the date of such termination of employment.
If an optionee's employment is terminated for any other
reason, his option shall remain exercisable to the extent that such option was
exercisable at the date of such termination of employment, for a period of 90
days following such termination of employment. Notwithstanding anything to the
contrary contained in the preceding sentence, if an optionee's employment is
terminated by the Company for Cause, his rights under all options shall
terminate on the effective date of such optionee's termination of employment.
(b) Termination of Employment - Incentive Stock Options. Unless
otherwise specified in the Agreement evidencing an option, but subject to
Section 2.1(b), if the employment with the Company of a holder of an Incentive
Stock Option terminates by reason of permanent and total disability (as defined
in Section 22(e) (3) of the Code), each Incentive Stock Option held by such
optionee shall be exercisable only to the extent that such option was
exercisable on the effective date of such optionee's termination of employment
by reason of permanent and total disability and may thereafter be exercised by
such optionee (or such optionee's legal representative or similar person) until
the date which is one year after the effective date of such optionee's
termination of employment by reason of permanent and total disability.
Unless otherwise specified in the Agreement evidencing an option but
subject to Section 2.1(b), if the employment with the Company of a holder of an
Incentive Stock Option terminates by reason of death, each Incentive Stock
Option held by such optionee shall be exercisable only to the extent that such
option was exercisable on the date of such optionee's death and may thereafter
be exercised by such optionee's executor, administrator, legal representative,
beneficiary or similar person until the date which is three years after the date
of death.
If the employment of a holder of an Incentive Stock Option is
terminated by the Company for Cause, each Incentive Stock Option held by such
optionee shall terminate automatically on the effective date of such optionee's
termination of employment. Unless otherwise specified in the Agreement
evidencing an option, but subject to Section 2.1(b), if the employment with the
Company of a holder of an Incentive Stock Option terminates for any reason other
than permanent and total disability or death or Cause, each Incentive Stock
Option held by such optionee shall be excisable only to the extent such option
was exercisable on the effective date of such optionee's termination of
employment, and may thereafter be exercised by such holder (or such holder's
legal representative or similar person) until the date which is 90 days after
the effective date of such optionee's termination of employment.
If the holder of an Incentive Stock Option dies during the period set
forth in the first paragraph of this Subsection (b) following termination of
employment by reason of Permanent and Total Disability, or if the holder of an
Incentive Stock Option dies during the period set forth in the third paragraph
of this Subsection (b) following termination of employment for any reason other
than Permanent and Total Disability for death or Cause, each Incentive Stock
Option held by such optionee shall be exercisable only to the extent such option
was exercisable on the date of the optionee's death and may thereafter be
exercised by the optionee's executor, administrator, legal representative,
beneficiary or similar person until the date which is three years after the date
of death.
III. STOCK AWARDS
3.1 STOCK AWARDS. Except as is otherwise provided for in Section 1.3, only the
Committee may, in its discretion, grant Stock Awards to such eligible persons
under Section 1.4 as may be selected by the Committee. The Agreement relating to
a Stock Award shall specify whether the Stock Award is a Restricted Stock Award
or Bonus Stock Award.
3.2 TERMS OF STOCK AWARDS. Stock Awards shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem advisable.
(a) Number of Shares and Other Terms. The number of shares of Common
Stock subject to a Restricted Stock Award or Bonus Stock Award and the
Performance Measures (if any) and Restriction Period applicable to a Restricted
Stock Award shall be determined by the Committee.
(b) Vesting and Forfeiture. The Agreement relating to a Restricted
Stock Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of the
shares of Common Stock subject to such award (i) if specified Performance
Measures are satisfied or met during the specified Restriction Period or (ii) if
the holder of such award remains continuously in the employment of or service to
the Company during the specified Restriction Period and for the forfeiture of
the shares of Common Stock subject to such award (x) if specified Performance
Measures are not satisfied or met during the specified Restriction Period or (y)
if the holder of such award does not remain continuously in the employment of or
service to the Company during the specified Restriction Period.
Bonus Stock Awards shall not be subject to any Performance Measures or
Restriction Periods.
(c) Share Certificates. During the Restriction Period, a certificate or
certificates representing a Restricted Stock Award may be registered in the
holder's name and may bear a legend, in addition to any legend which may be
required pursuant to Section 5.6, indicating that the ownership of the shares of
Common Stock represented by such certificate is subject to the restrictions,
terms and conditions of this Plan and the Agreement relating to the Restricted
Stock Award. All such certificates shall be deposited with the Company, together
with stock powers or other instruments of assignment (including a power of
attorney), each endorsed in blank with a guarantee of signature if deemed
necessary or appropriate by the Company, which would permit transfer to the
Company of all or a portion of the shares of Common Stock subject to the
Restricted Stock Award in the event such award is forfeited in whole or in part.
Upon termination of any applicable Restriction Period (and the satisfaction or
attainment of applicable Performance Measures), or upon the grant of a Bonus
Stock Award, in each case subject to the Company's right to require payment of
any taxes in accordance with Section 5.5, a certificate or certificates
evidencing ownership of the requisite number of shares of Common Stock shall be
delivered to the holder of such award.
(d) Rights with Respect to Restricted Stock Awards. Unless otherwise
set forth in the Agreement relating to a Restricted Stock Award, and subject to
the terms and conditions of a Restricted Stock Award, the holder of such award
shall have all rights as a stockholder of the Company, including, but not
limited to, voting rights, the right to receive dividends and the right to
participate in any capital adjustment applicable to all holders of Common Stock;
provided, however, that a distribution with respect to shares of Common Stock,
other than a regular cash dividend, shall be deposited with the Company and
shall be subject to the same restrictions as the shares of Common Stock with
respect to which such distribution was made.
3.3 TERMINATION OF EMPLOYMENT OR SERVICE. (a) Disability, Retirement and Death.
Unless otherwise set forth in the Agreement relating to a Restricted Stock
Award, if the employment with or service to the Company of the holder of such
award terminates by reason of (i) death, or (ii) retirement on or after age 55
(with a minimum of 10 years of employment with or service to the Company), or
(iii) the occurrence of such Participant's Disability Date, or (iv) termination
of employment under any other circumstances that the Committee may determine
shall warrant the application of this provision, the restrictions imposed
hereunder shall lapse with respect to such number of shares of Restricted Stock,
if any, as shall be determined by the Committee, and the balance of such shares
of Restricted Stock shall be forfeited to the Company.
(b) Other Termination. Unless otherwise set forth in the Agreement
relating to a Restricted Stock Award, if the employment with or service to the
Company of the holder of a Restricted Stock Award terminates for any other
reason during the Restriction Period, then the portion of such award which is
subject to a Restriction Period on the effective date of such holder's
termination of employment or service shall be forfeited by such holder and such
portion shall be canceled by the Company.
IV. PERFORMANCE SHARE AWARDS
4.1 PERFORMANCE SHARE AWARDS. The Committee may, in its discretion, grant
Performance Share Awards to such eligible persons under Section 1.4 as may be
selected by the Committee.
4.2 TERMS OF PERFORMANCE SHARE AWARDS. Performance Share Awards shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.
(a) Number of Performance Shares and Performance Measures. The number
of Performance Shares subject to any award and the Performance Measures and
Performance Period applicable to such award shall be determined by the
Committee.
(b) Vesting and Forfeiture. The Agreement relating to a Performance
Share Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such
award, if specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of such award, if specified
Performance Measures are not satisfied or met during the specified Performance
Period.
(c) Settlement of Vested Performance Share Awards. The Agreement
relating to a Performance Share Award (i) shall specify whether such award may
be settled in shares of Common Stock (including shares of Restricted Stock) or
cash or a combination thereof and (ii) may specify whether the holder thereof
shall be entitled to receive, on a current or deferred basis, dividend
equivalents, and, if determined by the Committee, interest on or the deemed
reinvestment of any deferred dividend equivalents, with respect to the number of
shares of Common Stock subject to such award. If a Performance Share Award is
settled in shares of Restricted Stock, a certificate or certificates
representing such Restricted Stock shall be issued in accordance with Section
3.2(c) and the holder of such Restricted Stock shall have such rights of a
stockholder of the Company as determined pursuant to Section 3.2(d). Prior to
the settlement of a Performance Share Award in shares of Common Stock, including
Restricted Stock, the holder of such award shall have no rights as a stockholder
of the Company with respect to the shares of Common Stock subject to such award
and shall have rights as a stockholder of the Company in accordance with Section
5.10. Notwithstanding any other provision of the Plan to the contrary, payments
of cash, shares of Common Stock, or any combination thereof to any Participant
in respect of the settlement of a Performance Share Award for any Performance
Period shall not exceed $5,000,000, with respect to the cash payment for such
award, and shall not exceed 250,000 shares of Common Stock, with respect to the
Common Stock payment for such award.
4.3 TERMINATION OF EMPLOYMENT. (a) Disability, Retirement and Death. Unless
otherwise set forth in the Agreement relating to a Performance Share Award, if
the employment with the Company of the holder of such award terminates prior to
the end of the Performance Period applicable to such award by reason of (i)
death, or (ii) retirement on or after age 55 (with a minimum of 10 years of
employment or service with the Company), (iii) the occurrence of such
Participant's Disability Date or (iv) termination of employment under any other
circumstances that the Committee may determine shall warrant the application of
this provision, the Committee, in its sole discretion and taking into
consideration the performance of such Participant and the performance of the
Company during the Performance Period, may authorize the payment to such
Participant (or his legal representative) at the end of the Performance Period
of all or any portion of the Performance Award which would have been paid to
such Participant for such Performance Period.
(b) Other Termination. Unless otherwise set forth in the Agreement
relating to a Performance Share Award, if the employment with the Company of the
holder of a Performance Share Award terminates for any other reason prior to the
end of a Performance Period, then the portion of such award which is subject to
such Performance Period on the effective date of such holder's termination of
employment shall be forfeited and such portion shall be canceled by the Company.
V. GENERAL
5.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan has been approved by the
stockholders of the Company and became effective as of January 1, 1998. This
Plan shall terminate ten years after its effective date, unless terminated
earlier by the Board. Termination of this Plan shall not affect the terms or
conditions of any award granted prior to termination.
5.2 AMENDMENTS. The Board may amend this Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation, including Section 162(m) and Section 422 of the Code;
provided, however, that no amendment shall be made without stockholder approval
if such amendment would (a) increase the maximum number of shares of Common
Stock available under this Plan (subject to Section 5.7), (b) effect any change
inconsistent with Section 422 of the Code, (c) extend the term of this Plan or
(d) reduce the minimum purchase price of a share of Common Stock subject to an
option. No amendment may impair the rights of a holder of an outstanding award
without the consent of such holder.
5.3 AGREEMENT. Each award under this Plan shall be evidenced by an Agreement
setting forth the terms and conditions applicable to such award. No award shall
be valid until an Agreement is executed by the Company and the recipient of such
award and, upon execution by each party and delivery of the Agreement to the
Company, such award shall be effective as of the effective date set forth in the
Agreement.
5.4 NON-TRANSFERABILITY OF AWARDS. Unless otherwise specified in the Agreement
relating to an award, no award shall be transferable other than by will, the
laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the
foregoing sentence or the Agreement relating to an award, each award may be
exercised or settled during the holder's lifetime only by the holder or the
holder's legal representative or similar person. Except to the extent permitted
by the second preceding sentence or the Agreement relating to an award, no award
may be sold, transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise) or be subject
to execution, attachment or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any such
award, such award and all rights thereunder shall immediately become null and
void.
5.5 TAX WITHHOLDING. The Company shall have the right to require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
pursuant to an award made hereunder, payment by the holder of such award of any
Federal, state, local or other taxes which may be required to be withheld or
paid in connection with such award. An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as of
the date the obligation to withhold or pay taxes arises in connection with an
award (the "Tax Date"), or withhold an amount of cash which would otherwise be
payable to a holder, in the amount necessary to satisfy any such obligation or
(ii) the holder may satisfy any such obligation by any of the following means:
(A) a cash payment to the Company in the amount necessary to satisfy any such
obligation, (B) delivery (either actual delivery or by attestation procedures
established by the Company) to the Company of shares of Common Stock having an
aggregate Fair Market Value, determined as of the Tax Date, equal to the amount
necessary to satisfy any such obligation, (C) authorizing the Company to
withhold whole shares of Common Stock which would otherwise be delivered having
an aggregate Fair Market Value, determined as of the Tax Date, or withhold an
amount of cash which would otherwise be payable to a holder, equal to the amount
necessary to satisfy any such obligation, (D) in the case of the exercise of an
Incentive Stock Option or Non-Statutory Stock Option, a cash payment in the
amount necessary to satisfy any such obligation by a broker-dealer acceptable to
the Company to whom the optionee has
submitted an irrevocable notice of exercise or (E) any combination of (A), (B)
and (C), in each case to the extent set forth in the Agreement relating to the
award; provided, however, that the Company shall have sole discretion to
disapprove of an election pursuant to any of clauses (B)-(E). Any fraction of a
share of Common Stock which would be required to satisfy such an obligation
shall be disregarded and the remaining amount due shall be paid in cash by the
holder.
5.6 RESTRICTIONS ON SHARES. Each award made hereunder shall be subject to the
requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the exercise or settlement
of such award or the delivery of shares thereunder, such award shall not be
exercised or settled and such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any award made hereunder bear a legend indicating that the
sale, transfer or other disposition thereof by the holder is prohibited except
in compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
5.7 ADJUSTMENT. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Common Stock other than a regular cash
dividend, the number and class of securities available under this Plan, the
number and class of securities subject to each outstanding option and the
purchase price per security, the number and class of securities subject to each
outstanding Stock Award, and the terms of each outstanding Performance Share
shall be appropriately adjusted by the Committee, such adjustments to be made in
the case of outstanding options without an increase in the aggregate purchase
price. The decision of the Committee regarding any such adjustment shall be
final, binding and conclusive. If any such adjustment would result in a
fractional security being (a) available under this Plan, such fractional
security shall be disregarded, or (b) subject to an award under this Plan, the
Company shall pay the holder of such award, in connection with the first
vesting, exercise or settlement of such award in whole or in part occurring
after such adjustment, an amount in cash determined by multiplying (i) the
fraction of such security (rounded to the nearest hundredth) by (ii) the excess,
if any, of (A) the Fair Market Value on the vesting, exercise or settlement date
over (B) the exercise price, if any, of such award.
5.8 CHANGE IN CONTROL.
(a) (1) Notwithstanding any provision in this Plan or any Agreement, in
the event of a Change in Control pursuant to Section (b)(3) or (4) below in
connection with which the holders of Common Stock receive shares of common stock
that are registered under Section 12 of the Exchange Act, (i) all outstanding
options shall immediately become exercisable in full, (ii) the Restriction
Period applicable to any outstanding Restricted Stock Award shall lapse, (iii)
the Performance Period applicable to any outstanding Performance Share shall
lapse, (iv) the Performance Measures applicable to any outstanding Restricted
Stock Award (if any) and to any outstanding Performance Share shall be deemed to
be satisfied at the maximum level and (v)
there shall be substituted for each share of Common Stock available under this
Plan, whether or not then subject to an outstanding award, the number and class
of shares into which each outstanding share of Common Stock shall be converted
pursuant to such Change in Control. In the event of any such substitution, the
purchase price per share of an option shall be appropriately adjusted by the
Committee, such adjustments to be made in the case of outstanding options
without an increase in the aggregate purchase price.
(2) Notwithstanding any provision in this Plan or any
Agreement, in the event of a Change in Control pursuant to Section (b)(1) or (2)
below, or in the event of a Change in Control pursuant to Section (b)(3) or (4)
below in connection with which the holders of Common Stock receive consideration
other than shares of common stock that are registered under Section 12 of the
Exchange Act, each outstanding award shall be surrendered to the Company by the
holder thereof, and each such award shall immediately be canceled by the
Company, and the holder shall receive, within ten days of the occurrence of a
Change in Control pursuant to Section (b)(1) or (2) below or within ten days of
the approval of the stockholders of the Company contemplated by Section (b)(3)
or (4) below, a cash payment from the Company in an amount equal to (i) in the
case of an option, the number of shares of Common Stock then subject to such
option, multiplied by the excess, if any, of the greater of (A) the highest per
share price offered to stockholders of the Company in any transaction whereby
the Change in Control takes place and (B) the Fair Market Value of a share of
Common Stock on the date of occurrence of the Change in Control, over the
purchase price per share of Common Stock subject to the option, (ii) in the case
of a Restricted Stock Award, the number of shares of Common Stock then subject
to such award, multiplied by the greater of (A) the highest per share price
offered to stockholders of the Company in any transaction whereby the Change in
Control takes place and (B) the Fair Market Value of a share of Common Stock on
the date of occurrence of the Change in Control or (iii) in the case of a
Performance Share Award, the number of Performance Shares then subject to such
award, multiplied by the greater of (A) the highest per share price offered to
stockholders of the Company in any transaction whereby the Change in Control
takes place and (B) the highest Fair Market Value of a share of Common Stock
during the 90-day period immediately preceding the date of the Change in
Control. The Company may, but is not required to, cooperate with any person who
is subject to Section 16 of the Exchange Act to assure that any cash payment in
accordance with the foregoing to such person is made in compliance with Section
16 and the rules and regulations thereunder.
(b) "Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act, of beneficial ownership within the meaning of Rule
13d-3 promulgated under the Exchange Act, of 15% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding Common
Stock") or (ii) the combined voting power of the then outstanding securities of
the Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition resulting from
the exercise of an exercise, conversion or exchange privilege unless the
security being so exercised, converted or exchanged was acquired directly from
the Company), (B) any acquisition by the Company, (C) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (3) of this Section 5.8(b); provided further, that for
purposes of clause (B), if any Person (other than the Company or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the beneficial owner of 15%
or more of the Outstanding Common Stock or 15% or more of the Outstanding Voting
Securities by reason of an acquisition by the Company, and such Person shall,
after such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Common Stock or any additional Outstanding
Voting Securities and such beneficial ownership is publicly announced, such
additional beneficial ownership shall constitute a Change in Control;
(2) individuals who, as of the beginning of any consecutive
two-year period constitute the Board of Directors (the "Incumbent Board") cease
for any reason to constitute at least a majority of such Board; provided that
any individual who subsequently becomes a director of the Company and whose
election, or nomination for election by the Company's stockholders, was approved
by the vote of at least a majority of the directors then comprising the
Incumbent Board shall be deemed a member of the Incumbent Board; and provided
further, that any individual who was initially elected as a director of the
Company as a result of an actual or threatened election contest, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall not be deemed a member of the
Incumbent Board;
(3) the consummation of a reorganization, merger or
consolidation of the Company or sale or other disposition of all or
substantially all of the assets of the Company (a "Corporate Transaction");
excluding, however, a Corporate Transaction pursuant to which (i) all or
substantially all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Common Stock and the Outstanding Voting
Securities immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than 60% of, respectively, the outstanding
shares of common stock, and the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company's
assets either directly or indirectly) in substantially the same proportions
relative to each other as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Common Stock and the Outstanding Voting
Securities, as the case may be, (ii) no Person (other than: the Company; any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company; the corporation resulting from
such Corporate Transaction; and any Person which beneficially owned, immediately
prior to such Corporate Transaction, directly or indirectly, 15% or more of the
Outstanding Common Stock or the Outstanding Voting Securities, as the case may
be) will beneficially own, directly or indirectly, 25% or more of, respectively,
the outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding securities
of such corporation entitled to vote generally in the election of directors and
(iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or
(4) the consummation of a plan of complete liquidation or
dissolution of the Company.
5.9 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any right to
participate in this Plan. The Committee's selection of a person to participate
in this Plan at any time shall not require the Committee to select such person
to participate in this Plan at any other time. Neither this Plan nor any award
made hereunder shall confer upon any person any right to continued employment by
the Company, any Subsidiary or any affiliate of the Company or affect in any
manner the right of the Company, any Subsidiary or any affiliate of the Company
to terminate the employment of any person at any time without liability
hereunder.
5.10 RIGHTS AS STOCKHOLDER. No person shall have any right as a stockholder of
the Company with respect to any shares of Common Stock or other equity security
of the Company which is subject to an award hereunder unless and until such
person becomes a stockholder of record with respect to such shares of Common
Stock or equity security.
5.11 GOVERNING LAW. This Plan, each award hereunder and the related Agreement,
and all determinations made and actions taken pursuant thereto, to the extent
not otherwise governed by the Code or the laws of the United States, shall be
governed by the laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of laws.
5.12 FOREIGN EMPLOYEES. Without amending this Plan, the Committee may grant
awards to eligible persons who are foreign nationals on such terms and
conditions different from those specified in this Plan as may in the judgment of
the Committee be necessary or desirable to foster and promote achievement of the
purpose of this Plan and, in furtherance of such purpose, the Committee may make
such modifications, amendments, procedures, subplans and the like as may be
necessary or advisable to comply with provisions of laws in other countries or
jurisdictions in which the Company or any of its Subsidiaries operates or has
employees.