EXHIBIT 10.1
CHEMED CORPORATION
2002 EXECUTIVE LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSES: The purposes of the Chemed Corporation 2002 Executive
Long-Term Incentive Plan are to provide a means to attract and retain officers
and other key employees of the Company and its Subsidiaries and to motivate such
individuals to improve the long-term performance of the Company.
SECTION 2. DEFINITIONS: As used in this Plan, unless the context otherwise
requires, each of the following terms shall have the meaning set forth below.
(a) "Award" shall mean, for any Plan Period, a payment made to a
Participant under the terms of this Plan, which can be denominated
in either cash or Capital Stock as determined by the Committee in
its sole discretion
(b) "Board of Directors" or "Board" shall mean the Board of Directors of
the Company.
(c) "CEO" shall mean the Chief Executive Officer of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any references to a particular section of the Code
shall be deemed to include any successor provision thereto.
(e) "Committee" shall mean a committee of the Board of Directors, which
shall consist solely of two or more "outside directors" within the
meaning of Section 162(m) of the Code.
(f) "Capital Stock" shall mean the capital stock of the Company, par
value $1.00 per share.
(g) "Company" shall mean Chemed Corporation, a Delaware corporation.
(h) "Covered Employee" shall mean the CEO and each other executive of
the Company or a Subsidiary who the Committee determines, in its
discretion, is or may be a "covered employee" within the meaning of
Section 162(m) of the Code for the Plan Period to which an Award
hereunder is related.
(i) "Eligible Employee" shall mean all officers and other key employees
of the Company and any of its Subsidiaries, as determined by the
Committee in its sole discretion.
(j) "Maximum Amount" shall mean the product of:
(i) $2,000,000 or 35,000 shares of Capital Stock, depending on
whether an Award is denominated in cash or Capital Stock; and
(ii) The number of full or partial fiscal years in the Plan Period.
(k) "Participant" shall mean an Eligible Employee selected by the
Committee to participate in the Plan pursuant to Section 4.
(l) "Performance Goal(s)" shall mean the goal or goals established for a
Participant for a Plan Period by the Committee pursuant to Section
5.
(m) "Performance Measures" shall mean any of the following performance
criteria, either alone or in any combination, and may be expressed
with respect to the Company or one or more operating units or groups
or Subsidiaries, as the Committee may determine: cash flow; cash
flow from operations; total earnings; earnings per share, diluted or
basic; earnings per share from continuing operations, diluted or
basic; earnings before interest and taxes; earnings before interest,
taxes, depreciation, and amortization; earnings from continuing
operations; net asset turnover; inventory turnover; net earnings or
net income; operating earnings; operating margin; return on equity;
return on net assets; return on total assets; return on capital;
return on investment; return on sales; sales; revenues; market
share; economic value added; expense reduction levels; stock price;
and total shareholder return. For any Plan Period, Performance
Measures may be determined on an absolute basis or relative to
internal goals or relative to levels attained in a year or years
prior to such Plan Period or related to other companies or indices
or as ratios expressing relationships between two or more
Performance Measures. For any Plan Period, the Committee shall
provide how any Performance Measure shall be adjusted to the extent
necessary to prevent dilution or enlargement of any Award as a
result of extraordinary events or circumstances, as determined by
the Committee, or to exclude the effects of extraordinary, unusual,
or non-recurring items; changes in applicable laws, regulations, or
accounting principles; currency fluctuations; discontinued
operations; non-cash items, such as amortization, depreciation, or
reserves; or any recapitalization, restructuring, reorganization,
merger, acquisition, divestiture, consolidation, spin-off, split-up,
combination, liquidation, dissolution, sale of assets, or other
similar corporate transaction, or stock dividend, or stock split or
combination; provided, however, in the case of a Covered Employee,
no such adjustment will be made if the effect of such adjustment
would cause the Award to a Covered Employee to fail to qualify as
"qualified performance-based compensation" within the meaning of
Section 162(m) of the Code.
(n) "Plan" shall mean the Chemed Corporation 2002 Executive Long-Term
Incentive Plan, as amended and restated from time to time.
(o) "Plan Period" shall mean a period longer than one fiscal year, as
determined by the Committee in its sole discretion.
(p) "Subsidiary" shall mean any corporation, the majority of the
outstanding voting stock of which is owned, directly or indirectly,
by the Company, and that is not itself a publicly held corporation
within the meaning of Section 162(m) of the Code.
SECTION 3. ADMINISTRATION: Subject to the express provisions of this Plan, the
Committee shall have authority to interpret the Plan, to prescribe, amend, and
rescind rules and regulations relating to it, and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
In exercising its discretion, the Committee may use such objective or subjective
factors as it determines to be appropriate in its sole discretion. The
determinations of the Committee pursuant to its authority under the Plan shall
be conclusive and binding.
SECTION 4. ELIGIBILITY: The Committee shall designate which Eligible Employees
will be Participants in the Plan for a particular Plan Period. Designation of an
Eligible Employee as a Participant for any Plan Period shall not require
designation of such Eligible Employee for any other Plan Period.
SECTION 5. AWARDS:
(a) The Committee may make Awards to Participants with respect to each
Plan Period, subject to the terms and conditions set forth in the
Plan. To the extent an Award that is denominated in Capital Stock
results in a payment in Capital Stock or an Award that is
denominated in cash is paid in Capital Stock, such Capital Stock
shall be issued from the authorized reserve of Capital Stock under
the 2004 Stock Incentive Plan or other such plan, if such plan has
been approved by the holders of a majority of the shares of the
Company's Capital Stock actually voting on the matter and has
sufficient shares of capital stock remaining for such issuance.
(b) Within 90 days after the commencement of each Plan Period (or such
other date as required by Section 162(m) of the Code and the
regulations promulgated thereunder), the Committee shall, in
writing, select the length of such Plan Period, select which
Eligible Employees will be Participants for such Plan Period, and
determine for each such Plan Period the following:
(i) The Performance Goal or Performance Goals applicable to each
Participant for the Plan Period based on one or more
Performance Measures; and
(ii) The payment schedule detailing the total amount which may be
available for payment to each Participant as an Award based
upon the relative level of attainment of the Performance Goal
or Performance Goals.
(c) Upon completion of a Plan Period, the Committee shall:
(i) Certify, in writing, prior to payment of any Award, whether
and to what extent the Performance Goal or Performance Goals
for the Plan Period were satisfied;
(ii) Determine the amount available for each Participant's Award
pursuant to the payment schedule established in Section
5(b)(ii);
(iii) Determine any increase or reduction in the amount of a
Participant's available Award, as determined pursuant to
Section 5(c)(ii), (including a reduction to zero) based on any
subjective or objective factors that it determines to be
appropriate in its sole discretion; provided, however, in the
case of a Covered Employee, the Committee may reduce
(including a reduction to zero) but may not increase the
amount of an Award; and provided further that the exercise of
such discretion to reduce an Award with respect to any
Participant shall not have the effect of increasing an Award
that is payable to a Covered Employee; and
(iv) Authorize payment subject to Section 6 of such amounts
determined under Section 5(c)(iii).
(d) Notwithstanding any other provision of this Plan, in no event shall
the Award earned by any Participant for a Plan Period exceed the
Maximum Amount.
(e) Notwithstanding any other provision of this Plan, a Plan Period
shall not commence until any preceding Plan Period has been
completed.
SECTION 6. PAYMENT OF AWARDS: Awards under this Plan shall be made in a lump sum
payment in cash and/or Capital Stock to the Participant or the Participant's
beneficiary, as designated under procedures established by the Committee, as
soon as practicable following the Plan Period or to such deferred plan as the
Company may have established for such purposes. If all or a portion of a
cash-denominated Award is to be paid in Capital Stock or a Capital
Stock-denominated Award is to be paid in cash, the Committee shall determine the
basis on which such a conversion will occur. The Company may deduct from any
payment such amounts as may be required to be withheld under any federal, state,
or local tax laws.
SECTION 7. NO CONTINUED EMPLOYMENT: Nothing in this Plan shall give any person
any right to continue in the employ of the Company or its Subsidiaries or
constitute a contract or agreement of employment or interfere in any way with
the right of the Company or its Subsidiaries to terminate or change the
conditions of employment.
SECTION 8. NONASSIGNABILITY: Except as otherwise required by applicable law, any
rights of a Participant or Participant's beneficiary under this Plan shall not
be anticipated, sold, assigned, transferred, encumbered, hypothecated, or
pledged nor be subject to any levy or charge and shall not be subject in any
manner to the claims of any creditor of a Participant or a Participant's
beneficiary; and any attempt to take such action shall be null and void.
SECTION 9. TERMINATION AND AMENDMENT: The Board may at any time and from time to
time alter, amend, suspend, or terminate the Plan in whole or in part; provided,
however, that no amendment which requires stockholder approval in order for the
Plan to continue to comply with Section 162(m) of the Code shall be effective
unless such amendment is approved by the stockholders of the Company.
Notwithstanding the foregoing, no termination or amendment of the Plan may,
without the consent of the Participant to whom an Award has been determined for
a completed Plan Period but not yet paid, adversely affect the rights of such
Participant in such Award.
SECTION 10. INTERPRETATION: Except with respect to terminations of employment or
in connection with a change in control of the Company, as determined by the
Committee in its sole discretion, it is the intent of the Company that Awards
made to Covered Employees shall constitute "qualified performance-based
compensation" satisfying the requirements of Section 162(m) of the Code.
Accordingly, the provisions of the Plan shall be interpreted in a manner
consistent with Section 162(m) of the Code. If any other provision of the Plan
or an Award is intended to but does not comply or is inconsistent with the
requirements of Section 162(m) of the Code, such provision shall be construed or
deemed amended to the extent necessary to conform to and comply with such
requirements.
SECTION 11. UNFUNDED STATUS: Awards shall be made from the general funds of the
Company, and no special or separate fund shall be established or other
segregation of assets made to assure payment. No Participant or other person
shall have under any circumstances any interest in any particular property or
assets of the Company.
SECTION 12. APPLICABLE LAW: This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
principles of conflict of laws.
SECTION 13. EFFECTIVE DATE: This Plan will become effective as of March 6, 2002;
provided, however, that no Award will be made under the Plan unless prior to
such payment, the holders of a majority of the shares of the Company's Capital
Stock actually voting on the matter approve and adopt this Plan at a meeting of
the stockholders of the Company.