EXHIBIT 10.11
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
2000 INCENTIVE PLAN
1. ADMINISTRATION
Subject to the express provisions of the Plan, the Administrator has
the authority to interpret the Plan; determine eligibility for and grant Awards;
determine, modify or waive the terms and conditions of any Award; prescribe
forms, rules and procedures (which it may modify or waive); and otherwise do all
things necessary to implement the Plan. Once an Award has been communicated in
writing to a Participant, the Administrator may not, without the Participant's
consent, alter the terms of the Award so as to affect adversely the
Participant's rights under the Award, unless the Administrator has expressly
reserved the right to do so. In the case of any Award intended to be eligible
for the performance-based compensation exception under Section 162(m), the
Administrator shall exercise its discretion consistent with qualifying the Award
for such exception.
2. LIMITS ON AWARD UNDER THE PLAN
a. NUMBER OF SHARES. A maximum of 6,289,000, shares of Stock may be
delivered in satisfaction of Awards under the Plan. For purposes of the
preceding sentence, shares that have been forfeited in accordance with the terms
of the applicable Award and shares held back in satisfaction of the exercise
price or tax withholding requirements from shares that would otherwise have been
delivered pursuant to an Award shall not be considered to have been delivered
under the Plan. Also, the number of shares of Stock delivered under an Award
shall be determined net of any previously acquired Shares tendered by the
Participant in payment of the exercise price or of withholding taxes.
b. TYPE OF SHARES. Stock delivered by the Company under the Plan may be
authorized but unissued Stock or previously issued Stock acquired by the Company
and held in treasury. No fractional shares of Stock will be delivered under the
Plan.
c. CERTAIN SHARE LIMITS. The maximum number of shares of Stock for
which Stock Options may be granted to any person from and after adoption of the
Plan and prior to June 5, 2010, the maximum number of shares of Stock subject to
SARs granted to any person during such period and the aggregate maximum number
of shares of Stock subject to other Awards that may be delivered (or the value
of which may be paid) to any person during such period shall each be 2,000,000.
For purposes of the preceding sentence, the repricing of a Stock Option or SAR
shall be treated as a new grant to the extent required under Section 162(m).
Subject to these limitations, each person eligible to participate in the Plan
shall be eligible to receive Awards covering up to the full number of shares of
Stock then available for Awards under the Plan. No Awards may be granted under
the Plan after June 5, 2010, but previously granted Awards may extend beyond
that date.
d. OTHER AWARD LIMITS. No more than $2,000,000 may be paid to any
individual with respect to any Cash Performance Award (other than an Award
expressed in terms of shares of Stock or units representing Stock, which shall
instead be subject to the limit set forth in Section 2.c. above). In applying
the dollar limitation of the preceding sentence: (A) multiple Cash Performance
Awards to the same individual that are determined by reference to performance
periods of one year or less ending with or within the same fiscal year of the
Company shall be subject in the aggregate to one limit of such amount, and (B)
multiple Cash Performance Awards to the same individual that are determined by
reference to one or more multi-year performance periods ending in the same
fiscal year of the Company shall be subject in the aggregate to a separate limit
of such amount.
3. ELIGIBILITY AND PARTICIPATION
The Administrator will select Participants from among those key
Employees, directors and other individuals or entities providing services to the
Company or its Affiliates who, in the opinion of the Administrator, are in a
position to make a significant contribution to the success of the Company and
its Affiliates. Eligibility for ISOs is further limited to those individuals
whose employment status would qualify them for the tax treatment described in
Sections 421 and 422 of the Code.
4. RULES APPLICABLE TO AWARDS
a. ALL AWARDS
(1) TERMS OF AWARDS. The Administrator shall determine
the terms of all Awards subject to the limitations
provided herein.
(2) PERFORMANCE CRITERIA. Where rights under an Award
depend in whole or in part on satisfaction of
Performance Criteria, actions by the Company that
have an effect, however material, on such Performance
Criteria or on the likelihood that they will be
satisfied will not be deemed an amendment or
alteration of the Award.
(3) ALTERNATIVE SETTLEMENT. The Company may at any time
extinguish rights under an Award in exchange for
payment in cash, Stock (subject to the limitations of
Section 2) or other property on such terms as the
Administrator determines, provided the holder of the
Award consents to such exchange.
(4) TRANSFERABILITY OF AWARDS. Except as the
Administrator otherwise expressly provides, Awards
may not be transferred other than by will or by the
laws of descent and distribution and during a
Participant's lifetime an Award requiring exercise
may be exercised only by the Participant (or in the
event of the Participant's incapacity, the person or
persons legally appointed to act on the Participant's
behalf).
(5) VESTING, ETC. Without limiting the generality of
Section 1, the Administrator may determine the time
or times at which an Award will vest (I.E., become
free of forfeiture restrictions) or become
exercisable and the terms on which an Award requiring
exercise will remain exercisable. Unless the
Administrator expressly provides otherwise:
(A) immediately upon the cessation of a
Participant's employment or other service
relationship with the Company and its
Affiliates, all Awards (other than Stock
Options and SARs) held by the Participant
(or by a permitted transferee under Section
4.a.(4)) immediately prior to such cessation
of employment or other service relationship
will be forfeited if not then vested and,
where exercisability is relevant, will cease
to be exercisable;
(B) except as provided in (C) and (D) below, all
Stock Options and SARs held by a Participant
(or by a permitted transferee under Section
4.a.(4)) immediately prior to the cessation
of the Participant's employment or other
service relationship for reasons other than
death, to the extent then exercisable, will
remain exercisable for the lesser of (i) a
period of three months or (ii) the period
ending on the latest date on which such
Stock Option or SAR could have been
exercised without regard to this Section
4.a.(5), and shall thereupon terminate;
(C) all Stock Options and SARs held by a
Participant (or by a permitted transferee
under Section 4.a.(4)) immediately prior to
the Participant's death, to the extent then
exercisable, will remain exercisable for the
lesser of (i) the one-year period ending
with the first anniversary of the
Participant's death or (ii) the period
ending on the latest date on which such
Stock Option or SAR could have been
exercised without regard to this Section
4.a.(5), and shall thereupon terminate; and
(D) all Stock Options and SARs held by a
Participant (or by a permitted transferee of
the Participant under Section 4.a.(4)) whose
cessation of employment or other service
relationship is determined by the
Administrator in its sole discretion to
result from reasons which cast such
discredit on the Participant as to justify
immediate termination of the Award shall
immediately terminate upon such cessation.
Unless the Administrator expressly provides otherwise, a Participant's
"employment or other service relationship with the Company and its Affiliates"
will be deemed to have ceased, in the case of an employee Participant, upon
termination of the Participant's employment with the Company and its Affiliates
(whether or not the Participant continues in the service of the Company or its
Affiliates in some capacity other than that of an employee of the Company or its
Affiliates), and in the case of any other Participant, when the service
relationship in respect of which the Award was granted terminates (whether or
not the Participant continues in the service of the Company or its Affiliates in
some other capacity).
(6) TAXES. The Administrator will make such provision for
the withholding of taxes as it deems necessary. The
Administrator may, but need not, hold back shares of
Stock from an Award or permit a Participant to tender
previously owned shares of Stock in satisfaction of
tax withholding requirements. In no event shall Stock
be tendered or held back by the Company in excess of
the minimum amount required to be withheld for
Federal, state, and local taxes.
(7) DIVIDEND EQUIVALENTS, ETC. The Administrator may
provide for the payment of amounts in lieu of cash
dividends or other cash distributions with respect to
Stock subject to an Award if and in such manner as it
deems appropriate.
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(8) RIGHTS LIMITED. Nothing in the Plan shall be
construed as giving any person the right to continued
employment or service with the Company or its
Affiliates, or any rights as a shareholder except as
to shares of Stock actually issued under the Plan.
The loss of existing or potential profit in Awards
will not constitute an element of damages in the
event of termination of employment or service for any
reason, even if the termination is in violation of an
obligation of the Company or Affiliate to the
Participant.
(9) SECTION 162(m). The Administrator in its discretion
may grant Performance Awards that are intended to
qualify for the performance-based compensation
exception under Section 162(m) and Performance Awards
that are not intended so to qualify. In the case of
an Award intended to be eligible for the
performance-based compensation exception under
Section 162(m), the Plan and such Award shall be
construed to the maximum extent permitted by law in a
manner consistent with qualifying the Award for such
exception. In the case of a Performance Award
intended to qualify as performance-based for the
purposes of Section 162(m), except as otherwise
permitted by the regulations at Treas. Regs. Section
1.162-27: (i) the Administrator shall preestablish in
writing one or more specific Performance Criteria no
later than 90 days after the commencement of the
period of service to which the performance relates
(or at such earlier time as is required to qualify
the Award as performance-based under Section 162(m));
(ii) payment of the Award shall be conditioned upon
prior certification by the Administrator that the
Performance Criteria have been satisfied; and (iii)
if the Performance Criteria with respect to the Award
are not satisfied, no other Award shall be provided
in substitution of the Performance Award. The
provisions of this Section 6.a.(9) shall be construed
in a manner that is consistent with the regulations
under Section 162(m).
(10) OPTION AND SAR REPRICING. Options and SARs may not be
repriced without the approval of a majority of shares
voting on the matter.
b. AWARDS REQUIRING EXERCISE
(1) TIME AND MANNER OF EXERCISE. Unless the Administrator
expressly provides otherwise, (a) an Award requiring
exercise by the holder will not be deemed to have
been exercised until the Administrator receives a
written notice of exercise (in form acceptable to the
Administrator) signed by the appropriate person and
accompanied by any payment required under the Award;
and (b) if the Award is exercised by any person other
than the Participant, the Administrator may require
satisfactory evidence that the person exercising the
Award has the right to do so.
(2) EXERCISE PRICE. The Administrator shall determine the
exercise price of each Stock Option; PROVIDED, that
except as otherwise permitted by the regulations at
Treas. Regs. Section 1.162-27, each Stock Option
intended to qualify for the performance-based
exception under Section 162(m) of the Code and each
ISO must have an exercise price that is not less than
the fair market value of the Stock subject to the
Stock Option, determined as of the date of grant. An
ISO granted to an Employee described in Section
422(b)(6) of the Code must have an exercise price
that is not less than 110% of such fair market value.
(3) PAYMENT OF EXERCISE PRICE, IF ANY. Where the exercise
of an Award is to be accompanied by payment, the
Administrator may determine the required or permitted
forms of payment, subject to the following: (a) all
payments will be by cash or check acceptable to the
Administrator, or, if so permitted by the
Administrator (with the consent of the optionee of an
ISO if permitted after the grant), (i) through the
delivery of shares of Stock which have been
outstanding for at least six months (unless the
Administrator approves a shorter period) and which
have a fair market value equal to the exercise price,
(ii) by delivery of a promissory note of the person
exercising the Award to the Company, payable on such
terms as are specified by the Administrator, (iii) if
the Stock is publicly traded, by delivery of an
unconditional and irrevocable undertaking by a broker
to deliver promptly to the Company sufficient funds
to pay the exercise price, or (iv) by any combination
of the foregoing permissible forms of payment; and
(b) where shares of Stock issued under an Award are
part of an original issue of shares, the Award shall
require an exercise price equal to at least the par
value of such shares.
(4) GRANT OF STOCK OPTIONS. Each Stock Option awarded
under the Plan shall be deemed to have been awarded
as a non-ISO (and to have been so designated by its
terms) unless the Administrator expressly provides
for ISO treatment that the Stock Option is to be
treated as an ISO.
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c. AWARDS NOT REQUIRING EXERCISE
Awards of Restricted Stock and Unrestricted Stock may be made in return
for either (i) services determined by the Administrator to have a value not less
than the par value of the Awarded shares of Stock, or (ii) cash or other
property having a value not less than the par value of the Awarded shares of
Stock plus such additional amounts (if any) as the Administrator may determine
payable in such combination and type of cash, other property (of any kind) or
services as the Administrator may determine.
5. EFFECT OF CERTAIN TRANSACTIONS
a. MERGERS, ETC.
Immediately prior to a Covered Transaction (other than an Excluded
Transaction in which the outstanding Awards have been assumed or substituted for
as provided below), all outstanding Awards shall vest and, if relevant, become
exercisable, all Performance Criteria and other conditions to any Award shall be
deemed satisfied, and all deferrals measured by reference to or payable in
shares of Stock shall be accelerated. Upon consummation of a Covered
Transaction, all Awards then outstanding and requiring exercise or delivery
shall terminate unless assumed by an acquiring or surviving entity or its
affiliate as provided below.
In the event of a Covered Transaction, the Administrator may provide
for substitute or replacement Awards from, or the assumption of Awards by, the
acquiring or surviving entity or its affiliates on such terms as the
Administrator determines.
b. CHANGES IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK
(1) BASIC ADJUSTMENT PROVISIONS. In the event of a stock
dividend, stock split or combination of shares,
recapitalization or other change in the Company's
capital structure, the Administrator will make
appropriate adjustments to the maximum number of
shares that may be delivered under the Plan under
Section 2.a. and to the maximum share limits
described in Section 2.c., and will also make
appropriate adjustments to the number and kind of
shares of stock or securities subject to Awards then
outstanding or subsequently granted, any exercise
prices relating to Awards and any other provision of
Awards affected by such change. For the avoidance of
doubt, the 6,289,000 and 2,000,000 share limits
expressed in Section 2 are intended to reflect the
increased number of shares resulting from the share
exchange approved on June 5, 2000; accordingly, no
further adjustment in those limits shall be made
under this Section 5.b. solely to reflect such
exchange.
(2) CERTAIN OTHER ADJUSTMENTS. The Administrator may also
make adjustments of the type described in paragraph
(1) above to take into account distributions to
common stockholders other than those provided for in
Section 5.a. and 5.b.(1), or any other event, if the
Administrator determines that adjustments are
appropriate to avoid distortion in the operation of
the Plan and to preserve the value of Awards made
hereunder; PROVIDED, that no such adjustment shall be
made to the maximum share limits described in Section
2.c., or otherwise to an Award intended to be
eligible for the performance-based exception under
Section 162(m), except to the extent consistent with
that exception, nor shall any change be made to ISOs
except to the extent consistent with their continued
qualification under Section 422 of the Code.
(3) CONTINUING APPLICATION OF PLAN TERMS. References in
the Plan to shares of Stock shall be construed to
include any stock or securities resulting from an
adjustment pursuant to Section 5.b.(1) or 5.b.(2)
above.
6. LEGAL CONDITIONS ON DELIVERY OF STOCK
The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan or to remove any restriction from shares of Stock
previously delivered under the Plan until the Company's counsel has approved all
legal matters in connection with the issuance and delivery of such shares; if
the outstanding Stock is at the time of delivery listed on any stock exchange or
national market system, the shares to be delivered have been listed or
authorized to be listed on such exchange or system upon official notice of
issuance; and all conditions of the Award have been satisfied or waived. If the
sale of Stock has not been registered under the Securities Act of 1933, as
amended, the Company may require, as a condition to exercise of the Award, such
representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act. The Company may require that
certificates evidencing Stock issued under the Plan bear an appropriate legend
reflecting any restriction on transfer applicable to such Stock.
7. AMENDMENT AND TERMINATION
Subject to the last sentence of Section 1, the Administrator may at any
time or times amend the Plan or any outstanding Award for any purpose which may
at the time be permitted by law, or may at any time terminate the Plan as to any
further grants of Awards;
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PROVIDED, that (except to the extent expressly required or permitted by the
Plan) no such amendment will, without the approval of the stockholders of the
Company, effectuate a change for which stockholder approval is required in order
for the Plan to continue to qualify under Section 422 of the Code and for Awards
to be eligible for the performance-based exception under Section 162(m).
8. NON-LIMITATION OF THE COMPANY'S RIGHTS
The existence of the Plan or the grant of any Award shall not in any
way affect the Company's right to Award a person bonuses or other compensation
in addition to Awards under the Plan.
9. GOVERNING LAW
The Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.
10. DEFINED TERMS
The following terms, when used in the Plan, shall have the meanings and
be subject to the provisions set forth below:
"ADMINISTRATOR": The Board or, if one or more has been appointed, the
Committee. With respect to ministerial tasks deemed appropriate by the
Board or Committee, the term "Administrator" shall also include such
persons (including Employees) to whom the Board or Committee shall have
delegated such tasks.
"AFFILIATE": Any corporation or other entity owning, directly or
indirectly, 50% or more of the outstanding Stock of the Company, or in
which the Company or any such corporation or other entity owns,
directly or indirectly, 50% of the outstanding capital stock
(determined by aggregate voting rights) or other voting interests.
"AWARD": Any or a combination of the following:
(i) Stock Options.
(ii) SARs.
(iii) Restricted Stock.
(iv) Unrestricted Stock.
(v) Deferred Stock.
(vi) Cash Performance Awards.
(vii) Other Performance Awards.
(viii) Grants of cash, or loans, made in connection with
other Awards in order to help defray in whole or in
part the economic cost (including tax cost) of the
Award to the Participant.
"BOARD": The Board of Directors of the Company.
"CASH PERFORMANCE AWARD": A Performance Award payable in cash. The
right of the Company under Section 4.a.(3) (subject to the consent of
the holder of the Award as therein provided) to extinguish an Award in
exchange for cash or the exercise by the Company of such right shall
not make an Award otherwise not payable in cash a Cash Performance
Award.
"CODE": The U.S. Internal Revenue Code of 1986 as from time to time
amended and in effect, or any successor statute as from time to time in
effect.
"COMMITTEE": One or more committees of the Board (including any
subcommittee thereof) appointed or authorized to make Awards and
otherwise to administer the Plan. In the case of Awards granted to
officers of the Company, except as otherwise permitted by the
regulations at Treas. Regs. Section 1.162-27, the Committee shall be
comprised solely of two or more outside directors within the meaning of
Section 162(m).
"COMPANY": Charles River Laboratories International, Inc.
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"COVERED TRANSACTION": Any of (i) a consolidation or merger in which
the Company is not the surviving corporation or which results in any
individual, entity or "group" (within the meaning of section 13(d) of
the Securities Exchange Act of 1934) acquiring the beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
directly or indirectly of more than 50% of either the then outstanding
shares of common stock of the Company or the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors, (ii) a sale or transfer of all
or substantially all the Company's assets, or (iii) a dissolution or
liquidation of the Company.
"DEFERRED STOCK": A promise to deliver Stock or other securities in the
future on specified terms.
"EMPLOYEE": Any person who is employed by the Company or an Affiliate.
"EXCLUDED TRANSACTION": A Covered Transaction in which
(i) the shares of common stock of the Company or the
voting securities of the Company entitled to vote
generally in the election of directors are acquired
directly from the Company; or
(ii) the shares of common stock of the Company or the
voting securities of the Company entitled to vote
generally in the election of directors are acquired
by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any
corporation controlled by the Company; or
(iii) (a) the beneficial owners of the outstanding shares
of common stock of the Company, and of the securities
of the Company entitled to vote generally in the
election of directors, immediately prior to such
transaction beneficially own, directly or indirectly,
in substantially the same proportions immediately
following such transaction more than 50% of the
outstanding shares of common stock and of the
combined voting power of the then outstanding voting
securities entitled to vote generally in the election
of directors of the corporation (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
through one or more subsidiaries) resulting from such
transaction excluding such ownership as existed prior
to the transaction and (b) at least a majority of the
members of the board of directors of the corporation
resulting from such transaction were members of the
board of directors at the time of the execution of
the initial agreement, or of the action of the Board,
authorizing such transaction.
"ISO": A Stock Option intended to be an "incentive stock option" within
the meaning of Section 422 of the Code.
"PARTICIPANT": An Employee, director or other person providing services
to the Company or its Affiliates who is granted an Award under the
Plan.
"PERFORMANCE AWARD": An Award subject to Performance Criteria.
"PERFORMANCE CRITERIA": Specified criteria the satisfaction of which is
a condition for the exercisability, vesting or full enjoyment of an
Award. For purposes of Performance Awards that are intended to qualify
for the performance-based compensation exception under Section 162(m),
a Performance Criterion shall mean an objectively determinable measure
of performance relating to any of the following (determined either on a
consolidated basis or, as the context permits, on a divisional,
subsidiary, line of business, project or geographical basis or in
combinations thereof): (i) sales; revenues; assets; liabilities; costs;
expenses; earnings before or after deduction for all or any portion of
interest, taxes, depreciation, amortization or other items, whether or
not on a continuing operations or an aggregate or per share basis;
return on equity, investment, capital or assets; one or more operating
ratios; borrowing levels, leverage ratios or credit rating; market
share; capital expenditures; cash flow; working capital requirements;
stock price; stockholder return; sales, contribution or gross margin,
of particular products or services; particular operating or financial
ratios; customer acquisition, expansion and retention; or any
combination of the foregoing; or (ii) acquisitions and divestitures (in
whole or in part); joint ventures and strategic alliances; spin-offs,
split-ups and the like; reorganizations; recapitalizations,
restructurings, financings (issuance of debt or equity) and
refinancings; transactions that would constitute a change of control;
or any combination of the foregoing. A Performance Criterion measure
and targets with respect thereto determined by the Administrator need
not be based upon an increase, a positive or improved result or
avoidance of loss.
"PLAN": The Charles River Laboratories International, Inc. 2000
Incentive Plan as from time to time amended and in effect.
"RESTRICTED STOCK": An Award of Stock subject to restrictions requiring
that such Stock be redelivered to the Company if specified conditions
are not satisfied.
"SECTION 162(m)": Section 162(m) of the Code.
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"SARS": Rights entitling the holder upon exercise to receive cash or
Stock, as the Administrator determines, equal to a function (determined
by the Administrator using such factors as it deems appropriate) of the
amount by which the Stock has appreciated in value since the date of
the Award.
"STOCK": Common Stock of the Company.
"STOCK OPTIONS": Options entitling the recipient to acquire shares of
Stock upon payment of the exercise price.
"UNRESTRICTED STOCK": An Award of Stock not subject to any restrictions
under the Plan.
Adopted by the Compensation Committee on May 2, 2000,
and amended on March 9, 2001 and March 27, 2003.
Adopted by the Stockholders on June 5, 2000 and
amended on May 8, 2001 and May 2, 2003.
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