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Exhibit 99(e)
R. P. SCHERER CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to attract, retain and motivate
selected employees and directors who are in a position to have an impact on the
results of the operations of the business of the Company or one or more of its
Subsidiaries. The Company expects that it will benefit from the additional
incentive which such employees will have to increase the value of the Company's
Shares as a result of the Plan.
2. DEFINITIONS
The following capitalized terms used in the Plan have the
respective meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or
any successor thereto.
(b) Award: An Option or LSAR granted pursuant to the Plan.
(c) Board: The Board of Directors of the Company.
(d) Cause: The occurrence of any of the following events:
(i) any act or acts of a Participant constituting a
felony (or its equivalent) under the laws of the United
States, any state thereof or any foreign jurisdiction;
(ii) any material breach by a Participant of any
employment agreement with the Company or any Subsidiary
or the policies of the Company or any Subsidiary or the
willful and persistent failure or refusal of a
Participant (after written notice to such Participant)
to perform his or her duties of employment or comply
with any lawful directives of the Board or the board of
directors of any Subsidiary that employ the Participant;
(iii) a course of conduct amounting to gross, willful
misconduct or dishonesty; or
(iv) any misappropriation of material property of the
Company or any Subsidiary by a Participant or any
misappropriation of a corporate or business opportunity
of the Company or any Subsidiary by a Participant.
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(e) Change in Control: The occurrence of any of the
following events;
(i) the Company merges with or into, or consolidates
with, another corporation, person or entity;
(ii) the Company sells, exchanges or otherwise disposes
of all or substantially all of the assets of the
Company;
(iii) 50% or more of the Company's then-outstanding
shares of voting stock is acquired by another
corporation, person or entity;
(iv) the Company liquidates or dissolves, or
(v) the Company recapitalizes or enters into any similar
transaction, and as a result of which the Shares either
(A) are no longer equity voting securities of the
Company or (B) are no longer listed on a national
securities exchange or authorized for quotation on an
inter-dealer quotation system of a national securities
association.
(f) Code: The Internal Revenue Code of 1986, as amended, or
any successor thereto.
(g) Committee: The Compensation Committee of the Board.
(h) Company: R. P. Scherer Corporation, a Delaware
corporation.
(i) Disability: Inability to engage in any substantial
gainful activity by reason of a medically determinable
physical or mental impairment which constitutes a
permanent and total disability, as defined in Section
22(e)(3) of the Code (or any successor section thereto).
The determination whether a Participant has suffered a
Disability shall be made by the Committee based upon
such evidence as it deems necessary and appropriate. A
Participant shall not be considered disabled unless he
or she furnishes such medical or other evidence of the
existence of the Disability as a Committee, in its sole
discretion, may require.
(j) Effective Date: The date on which the stockholders of
the Company approve the Plan.
(k) Fair Market Value: On a given date, the arithmetic mean
of the high and low prices of the Shares as reported on
such date on the Composite Tape of the principal
national securities exchange on which such Shares are
listed or admitted to trading, or, if no
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Composite Tape exists for such national securities
exchange on such date, then on the principal national
securities exchange on which such Shares are listed or
admitted to trading, or, if the Shares are not listed or
admitted on a national securities exchange, the
arithmetic mean of the per Share closing bid price and
per Share closing asked price on such date as quoted on
the National Association of Securities Dealers Automated
Quotation System (or such market in which such prices
are regularly quoted), or, if there is no market on
which the Shares are regularly quoted, the Fair Market
Value shall be the value established by the Committee in
good faith. If no sale of Shares shall have been
reported on such Composite Tape or such national
securities exchange on such date or quoted on the
National Association of Securities Dealers Automated
Quotation System on such date, then the immediately
proceeding date on which sales of the Shares have been
so reported or quoted shall be used.
(l) Good Reason: The occurrence of any of the following
events:
(i) any material reduction by the Company of a
Participant's duties responsibilities or titles;
(ii) any involuntary removal of a Participant from any
position previously held (except in connection with a
promotion or a termination for Cause, death or
disability, or the voluntary termination by the
Participant other than for Good Reason);or
(iii) such other reasons (including non-employment
related reasons) as may be approved by the Committee, in
its sole discretion, from time to time.
(m) ISO: An Option that is also an incentive stock option
granted pursuant to Section 6(d) of the Plan.
(n) LSAR: A limited stock appreciation right granted
pursuant to Section 7 of the Plan.
(o) Option: A stock option granted pursuant to Section 6 of
the Plan.
(p) Option Price: The purchase price per Share of an Option,
as determined pursuant to Section 6(a) of the Plan.
(q) Participant: An individual who is selected by the
Committee to participate in the Plan pursuant to Section
5 of the Plan.
(r) Plan: The R.P. Scherer Corporation 1997 Stock Option
Plan.
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(s) Retirement: A Participant's termination for employment
with the Company or any Subsidiary at or over the age of
55 (or at any earlier date approved by the Committee).
(t) Shares: Shares of common stock, par value $0.01 per
Share, of the Company.
(u) Subsidiary: A subsidiary corporation of the Corporation,
as defined in Section 424(f) of the Code (or any
successor section thereto).
3. SHARES SUBJECT TO THE PLAN
The total number of Shares that may be issued under the Plan is
5% of the aggregate number of Shares outstanding as of the date of the Plan is
adopted by the Board. The maximum number of Shares for which Awards may be
granted during a calendar year to any Participant shall be 100,000. The Shares
may consist, in whole or in part, of unissued Shares or treasury Shares. The
issuance of Shares of the payment of cash upon the exercise of an Award shall
reduce the total number of Shares available under the Plan, as applicable.
Shares which are subject to Awards which terminate or lapse may be granted again
under the Plan.
4. ADMINISTRATION
The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any subcommittee thereof
consisting solely of at least two individuals who are each (a) "non-employee
directors" within the meaning of Rule 16b-3 under the Act (or any successor rule
thereto) and (b) "outside directors" within the meaning of Section 162 (m) of
the Code (or any successor section thereto). The Committee shall have the
authority to select the Participants to be granted Awards under the Plan, to
determine the size and terms of an Award and to determine the time when grants
of Awards will be made. The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, and
to make any other determinations that it deems necessary or desirable for the
administration of the Plan. Any decision of the Committee shall lie within its
sole and absolute discretion and shall be final, conclusive and binding on all
parties concerned.
5. ELIGIBILITY
The Committee may, in its sole discretion, designate those
person(s) who shall be Participant(s) in the Plan. Participants shall be
selected from among the employees and directors of the Company and any of its
Subsidiaries who are in the position to have an impact on the results of the
operations of the Company or one or more of its Subsidiaries; provided that ISOs
may only be granted to employees of the Company or its Subsidiaries.
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6. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be, as determined by the
Committee, non-qualified, incentive or other stock options for federal income
tax purposes, as evidenced by the related Option agreements. The Committee may,
in its sole discretion, set forth terms in an Option agreement relating to a
Participant's termination from employment due to Retirement, Cause or Good
Reason. Options granted under the Plan shall be subject to the following terms
and conditions:
(a) Option Price. The Option Price per Share shall be determined
by the Committee, but shall not be less than 100% of the Fair Market Value of
the Shares on the date an Option is granted.
(b) Exercisability of Options. Options granted under the Plan
shall be exercisable at such time and upon such terms and conditions as may be
determined by the Committee, but in no event shall an Option be exercisable more
than ten years after the date it is granted.
(c) Method of Exercise. Except as otherwise provided in the Plan
or in an Award agreement, an Option may be exercised for all, or from time to
time any part, of the Shares for which it is then exercisable. For purposes of
this Section 6 of the Plan, the exercise date of an Option shall be the later of
the date a notice of exercise is received by the Company and, if applicable, the
date payment is received by the Company pursuant to clauses (i), (ii), or (iii)
in the following sentence. The purchase price for the Shares as to which an
Option is exercised shall be paid to the Company in full at the time of exercise
at the election of the Participant (i) in cash, (ii) in Shares having a Fair
Market Value equal to the aggregate Option Price for the Shares being purchase
and satisfying such other requirements as may be imposed by the Committee, (iii)
partly in cash and partly in such Shares, (iv) through the withholding of Shares
(which would otherwise be delivered to the Participant) with an aggregate Fair
Market Value on the exercise date equal to the aggregate Option Price or (v)
through the delivery of irrevocable instructions to a broker to deliver promptly
to the Company an amount equal to the aggregate Option price for the Shares
being purchased. No Participant shall have any rights to dividends or other
rights of a stockholder with respect to Shares subject to an Option until the
Shares have been issued to the Participant. A Participant may, if and to the
extent permitted by the Committee, elect to defer payment of an Award.
(d) ISOs. The Committee may grant Options under the Plan that are
intended to be ISOs. Such ISOs shall comply with the requirements of Section 422
of the Code (or any successor section thereto). No ISO may be granted to any
Participant who, at the time of such grant, owns more than ten percent of the
total combined voting power of all classes of stock of the Company or of any
Subsidiary, unless (i) the Option Price for such ISO is at lease 110% of the
Fair Market Value of a Share on the date the ISO is granted and (ii) the date on
which such ISO terminates is a date not later than the day
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preceding the fifth anniversary of the date on which the ISO is granted. Any
Participant who disposes of Shares acquired upon the exercise of an ISO either
(i) within two years after the date of grant of such ISO or (ii) within one year
after the transfer of such Shares to the Participant, shall notify the Company
of such disposition and the amount realized upon such disposition.
(e) Deferral. The Committee may develop procedures for a
Participant to defer receipt of Shares otherwise subject to Options granted
hereunder.
7. TERMS AND CONDITIONS OF LSARS
LSARs granted under the Plan shall be exercisable upon the
occurrence of specified contingent events, and such LSARs may be exercised by a
Participant whether or not such Participant is employed by the Company at the
time of exercise. Unless otherwise specified by the Committee, each LSAR shall
entitle a Participant to receive, upon exercise, an amount in cash equal to the
excess of (a) a price per Share determined in connection with specified
contingent events, both as specified in the LSAR grant document, over (b) the
exercise price of such LSAR (which shall be no less than the Fair Market Value
of one Share on the date of grant of such LSAR).
8. TAX WITHHOLDING
The Committee shall have the right to require payment of any
federal, state, local or foreign income or other taxes required to be withheld
with respect to the exercise of an Award. Unless the Committee specifies
otherwise, the Participant may elect to pay a portion or all of such withholding
taxes by (a) delivery in Shares or (b) having Shares withheld by the Company
from any Shares that would have otherwise been received by the Participant. The
number of Shares so delivered or withheld shall have an aggregate Fair Market
Value sufficient to satisfy the applicable withholding taxes.
9. AMENDMENTS OR TERMINATION
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which (a) without the
approval of the stockholders of the Company, would (except as is provided in
Section 13 of the Plan), (i) increase the total number of Share reserved for the
purposes of the Plan, (ii) change in the maximum number of Shares for which
Awards may be granted to any Participant, (iii) materially increase the benefits
accruing to Participants under the Plan or (iv) materially modify the
eligibility requirements for participation in the Plan, or (b) without the
consent of a Participant, would impair any of the rights or obligations under
any Award theretofore granted to such Participant under the Plan; provided,
however, that the Committee may amend the Plan in such manner as it deems
necessary to permit the granting of Awards meeting the requirements of the Code
or other applicable (United States or foreign) laws.
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10. NO RIGHT TO EMPLOYMENT
The granting of an Award under the Plan shall impose no
obligation on the Company or any Subsidiary to continue the employment of a
Participant or to make any additional Awards to the Participant and shall not
lessen or affect the Company's or Subsidiary's right to terminate the employment
of such Participant.
11. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of the
Company any a Participant, including, without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.
12. NONTRANSFERABILITY OF AWARDS
Unless otherwise so provided by the Committee, an Award shall not
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect.
13. ADJUSTMENTS UPON CERTAIN EVENTS
Notwithstanding any provision in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding
Shares by reason of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or exchange of
Shares or other corporate exchange, or any distribution to stockholders of
Shares other than regular cash dividends, the Committee in its sole discretion
and without liability to any person may make such substitution or adjustment, if
any, as it deems to be equitable, as to (i) the number or kind of Shares or
other securities issued or reserved for issuance pursuant to the Plan or
pursuant to outstanding Awards, (ii) the Option Price and/or (iii) any other
affected terms of such Awards.
(b) Change in Control. Except as otherwise provided in an Award
agreement, in the event of a Change in Control, the Committee in its sole
discretion and without liability to any person may take such actions, if any, as
it deems necessary or desirable with respect to any Award (including, without
limitation, (i) the acceleration of an Award, (ii) the payment of a cash amount
in exchange for the cancellation of an Award and/or (iii) the requiring of the
issuance of substitute Awards that will
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substantially preserve the value, rights and benefits of any affected Awards
previously granted hereunder) as of the date of the consummation of the Change
in Control.
14. CHOICE OF LAW
The Plan shall be governed by and construed in accordance with
the laws of the State of Michigan, without regard to the choice of law
provisions thereof.
15. TERM OF THE PLAN
The Plan shall be effective as of the Effective Date. No Award
may be granted under the Plan after the tenth anniversary of the date of the
Plan is adopted by the Board, but Awards theretofore granted may extend beyond
that date.