CASTLE & COOKE, INC.
AMENDED AND RESTATED
1995 STOCK OPTION AND AWARD PLAN
(AS AMENDED EFFECTIVE FEBRUARY 9, 1999)
TABLE OF CONTENTS
PAGE
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I. THE PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Administration and Authorization; Power and Procedure. . . . . . . .1
1.3 Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.4 Shares Available for Awards. . . . . . . . . . . . . . . . . . . . .2
1.5 Grant of Awards. . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.6 Award Period . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
1.7 Limitations on Exercise and Vesting of Awards. . . . . . . . . . . .4
1.8 Acceptance of Notes to Finance Exercise. . . . . . . . . . . . . . .4
1.9 No Transferability . . . . . . . . . . . . . . . . . . . . . . . . .5
II. EMPLOYEE OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.2 Option Price . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.3 Limitations on Grant and Terms of Incentive Stock Options. . . . . .6
2.4 Limits on 10% Holders. . . . . . . . . . . . . . . . . . . . . . . .7
2.5 Waiver of Restrictions . . . . . . . . . . . . . . . . . . . . . . .7
2.6 Options and Rights in Substitution for Stock Options Granted by
Other Corporations . . . . . . . . . . . . . . . . . . . . . . . . .7
III. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . .8
3.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.2 Exercise of SARs . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.3 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.4 Limited SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
IV. RESTRICTED STOCK AND STOCK UNIT AWARDS. . . . . . . . . . . . . . . . . .9
4.1 Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
4.2 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Return to the Corporation. . . . . . . . . . . . . . . . . . . . . 10
V. PERFORMANCE AWARDS AND STOCK BONUSES. . . . . . . . . . . . . . . . . . 11
5.1 Grants of Performance Share Awards . . . . . . . . . . . . . . . . 11
5.2 Grants of Stock Bonuses. . . . . . . . . . . . . . . . . . . . . . 11
5.3 Deferred Payments. . . . . . . . . . . . . . . . . . . . . . . . . 11
5.4 Special Performance-Based Share Awards . . . . . . . . . . . . . . 12
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VI. OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.1 Rights of Eligible Employees, Participants and Beneficiaries . . 12
6.2 Adjustments; Acceleration. . . . . . . . . . . . . . . . . . . . 13
6.3 Termination of Employment; Termination of Subsidiary Status;
Discretionary Provisions . . . . . . . . . . . . . . . . . . . . 14
6.4 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . 15
6.5 Tax Withholding. . . . . . . . . . . . . . . . . . . . . . . . . 16
6.6 Plan Amendment, Termination and Suspension . . . . . . . . . . . 16
6.7 Privileges of Stock Ownership. . . . . . . . . . . . . . . . . . 17
6.8 Effective Date of this Plan. . . . . . . . . . . . . . . . . . . 17
6.9 Term of this Plan. . . . . . . . . . . . . . . . . . . . . . . . 17
6.10 Governing Law/Construction/Severability. . . . . . . . . . . . . 17
6.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.12 Non-Exclusivity of Plan. . . . . . . . . . . . . . . . . . . . . 18
VII. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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CASTLE & COOKE, INC.
AMENDED AND RESTATED
1995 STOCK OPTION AND AWARD PLAN
(AS AMENDED EFFECTIVE FEBRUARY 9, 1999)
I. THE PLAN.
1.1 PURPOSE.
The purpose of this Plan is to promote the success of the Company
and the interest of its stockholders by providing an additional means through
the grant of Awards to attract, motivate, retain and reward key employees by
providing them long-term incentives to improve the financial performance of
the Company. "Corporation" means Castle & Cooke, Inc., a Hawaii corporation,
and its successors, and "Company" means the Corporation and its Subsidiaries,
collectively. These terms and other capitalized terms are defined in Article
VII.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE.
(a) COMMITTEE. This Plan shall be administered by and all
Awards to Eligible Employees shall be authorized by the Committee. Action of
the Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its members.
(b) PLAN AWARDS; INTERPRETATION; POWERS OF COMMITTEE. Subject
to the express provisions of this Plan, the Committee shall have the
authority:
(i) to determine the particular Eligible Employees who
will receive Awards;
(ii) to grant Awards to Eligible Employees, determine the
price at which securities will be offered or awarded and the amount of
securities to be offered or awarded to any of such persons, and determine
the other specific terms and conditions of such Awards consistent with the
express limits of this Plan, and establish the installments (if any) in
which such Awards shall become exercisable or shall vest, or determine that
no delayed exercisability or vesting is required, and establish the events
of termination or reversion of such Awards;
(iii) to approve the forms of Award Agreements (which need
not be identical either as to type of award or among Participants);
(iv) to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and Employee
Participants under this Plan, further define the terms used in this Plan,
and prescribe, amend and rescind rules and regulations relating to the
administration of this Plan;
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(v) to cancel, modify, or waive the Corporation's rights
with respect to, or modify, discontinue, suspend, or terminate any or all
outstanding Awards held by Eligible Employees, subject to any required
consent under Section 6.6;
(vi) to accelerate or extend the exercisability or extend
the term of any or all such outstanding Awards, subject to Section 1.6; and
(vii) to make all other determinations and take such other
action as contemplated by this Plan or as may be necessary or advisable for
the administration of this Plan and the effectuation of its purposes.
(c) BINDING DETERMINATIONS. Any action taken by, or inaction
of, the Corporation, any Subsidiary, the Board or the Committee relating or
pursuant to this Plan shall be within the absolute discretion of that entity
or body and shall be conclusive and binding upon all persons. No member of
the Board or Committee, or officer of the Corporation or any Subsidiary,
shall be liable for any such action or inaction of the entity or body, of
another person. Subject only to compliance with the express provisions
hereof, the Board and Committee may act in their absolute discretion in
matters within their authority related to this Plan.
(d) RELIANCE ON EXPERTS. In making any determination or in
taking or not taking any action under this Plan, the Committee or the Board,
as the case may be, may obtain and may rely upon the advice of experts,
including professional advisors to the Corporation. No director, officer or
agent of the Company shall be liable for any such action or determination
taken or made or omitted in good faith.
(e) DELEGATION. The Committee may delegate ministerial,
non-discretionary functions to individuals who are officers or employees of the
Company.
1.3 PARTICIPATION.
Awards may be granted by the Committee only to those persons that
the Committee determines to be Eligible Employees. An Eligible Employee who
has been granted an Award may, if otherwise eligible, be granted additional
Awards if the Committee shall so determine. Non-Employee Directors shall not
be eligible to receive any Awards under this Plan.
1.4 SHARES AVAILABLE FOR AWARDS.
Subject to the provisions of Section 6.2, the capital stock that
may be delivered under this Plan shall be shares of the Corporation's
authorized but unissued Common Stock. The shares may be delivered for any
lawful consideration.
(a) NUMBER OF SHARES. The maximum number of shares of Common
Stock that may be delivered pursuant to Awards granted to Eligible Employees
under this Plan shall not exceed 2,000,000 shares. The maximum number of
shares subject to those options and stock appreciation rights that during any
calendar year are granted to any individual shall be limited to 250,000 and
the maximum number of shares in the aggregate subject to all Awards that
during any calendar year are granted to any individual under this Plan shall
be 300,000. Each of the
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three foregoing numerical limits shall be subject to adjustment as
contemplated by this Section 1.4 and Section 6.2.
(b) CALCULATION OF AVAILABLE SHARES AND REPLENISHMENT. Shares
subject to outstanding Awards of derivative securities (as defined in Rule
16a-1(c) under the Exchange Act) shall be reserved for issuance. If any
Option or other right to acquire shares of Common Stock under or receive cash
or shares in respect of an Award shall expire or be cancelled or terminated
without having been exercised or paid in full, or any Common Stock subject to
a Restricted Stock Award or other Award shall not vest or be delivered, the
unpurchased, unvested or undelivered shares of Common Stock subject thereto
shall again be available for the purposes of this Plan, subject only to any
applicable limitations under Section 162(m) of the Code as to Awards intended
as performance-based awards thereunder. If the Corporation withholds shares
of Common Stock pursuant to Section 6.5, the number of shares that would have
been deliverable with respect to an Award but that are withheld pursuant to
the provisions of Section 6.5 may in effect not be issued, but the aggregate
number of shares issuable with respect to the applicable Award and under this
Plan shall be reduced by the number of shares withheld and such shares shall
not be available for additional Awards under this Plan. Subject only to the
preceding sentence, Section 1.4(c) and Section 6.10(c), Awards payable solely
in cash, and Awards that do not constitute equity securities as defined in
Rule 16a-1(d), shall not reduce the number of shares available for Awards
under this Plan, (2) any imputed charges to the maximum number of shares
deliverable under this Plan (through reserves or otherwise) shall be reversed
in the case of Awards actually paid in cash, and (3), to the extent any
shares were previously reserved in respect of Awards payable in cash or
shares, the number of shares not delivered shall again be available for
purposes of this Plan.
(c) PROVISIONS FOR CERTAIN CASH AWARDS. The number of Awards
payable solely in cash or actually paid in cash ("CASH AWARDS") shall be
determined by reference to the number of shares by which the value or price
of the Award is measured and shall not, together with the aggregate number of
shares theretofore delivered and subject to then outstanding Awards payable
in shares (or alternatively payable in cash or shares) under this Plan,
exceed the aggregate or individual limits of Section 1.4(a), subject to
adjustments under this Section 1.4 and Section 6.2. Cash Awards that are
forfeited or for any reason are not paid in cash under this Plan may again,
subject to Section 6.10(c), be the subject of and available for subsequent
Awards under the Plan. If an Award under this Plan is payable in cash only
and is not measured by reference to shares of Common Stock, the aggregate
dollar limits of Section 5.4 shall apply. Any cash-only Award that is
measured by reference to shares but not intended as a performance-based award
for purposes of Section 162(m) of the Code need not be counted against the
limits under Section 1.4(a), (b) or (c), if applicable.
(d) RESTRICTED STOCK LIMIT. The maximum number of shares that
may be delivered under Restricted Stock or Stock Unit Awards that are issued
only for services rendered (or for services and nominal consideration), as
distinguished from an Award in payment or settlement of other rights,
deferred compensation or otherwise expressly in lieu of cash compensation of
comparable value, shall not exceed 200,000 shares, plus any shares in respect
of dividend equivalent awards or Units thereon, subject to adjustments under
or contemplated by Sections 1.4 and 6.2.
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1.5 GRANT OF AWARDS.
Subject to the express provisions of this Plan, the Committee has
the authority to determine those individuals who are Eligible Employees,
whether any of them will receive an Award and if so the type of Award, the
number of shares of Common Stock subject to each Award, the price (if any) to
be paid for the shares or the Award, the other terms of the Award, and, in
the case of Performance Share Awards, in addition to the matters addressed in
Section 1.2(b), the specific objectives, goals and performance criteria,
including the years of service before vesting, the relevant job
classification or level of responsibility or other factors that further
define the terms of the Performance Share Award. Each Award shall be
evidenced by an Award Agreement signed by the Corporation and, if required by
the Committee, by the Participant. The Award Agreement shall set forth the
material terms and conditions of the Award established by the Committee
consistent with the specific provisions of this Plan.
1.6 AWARD PERIOD.
Each Award and all executory rights or obligations under the
related Award Agreement shall expire on such date (if any) as shall be
determined by the Committee, but in the case of Options, SARs or other rights
to acquire Common Stock not later than 10 years after the Award Date;
provided, however, that any payment of cash or delivery of shares pursuant to
an Award may be delayed until a future date if specifically authorized by the
Committee pursuant to Article IV or otherwise, by resolution, written consent
or other writing.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS.
(a) PROVISIONS FOR EXERCISE. Unless the Committee otherwise
expressly provides, no Award shall be exercisable or shall vest until at
least six (6) months after the initial Award Date, and once exercisable an
Award shall remain exercisable until the expiration or earlier termination of
the Award.
(b) PROCEDURE. Any exercisable Award shall be deemed to be
exercised when the Corporation receives written notice of such exercise from
the Participant, together with any required payment made in accordance with
Section 2.2.
(c) FRACTIONAL SHARES/MINIMUM ISSUE. Fractional share
interests shall be disregarded, but may be accumulated. The Committee,
however, may determine in the case of Eligible Employees that cash, other
securities, or other property will be paid or transferred in lieu of any
fractional share interests. No fewer than 100 shares may be purchased on
exercise of any Award at one time unless the number purchased is the total
number at the time available for purchase under the Award.
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1.8 ACCEPTANCE OF NOTES TO FINANCE EXERCISE.
The Corporation may, with the Committee's approval, accept one or
more notes from any Eligible Employee in connection with the exercise or
receipt of any outstanding Award; provided that any such note shall be
subject to the following terms and conditions:
(a) The principal of the note shall not exceed the amount
required to be paid to the Corporation upon the exercise or receipt of one or
more Awards under this Plan and the note shall be delivered directly to the
Corporation in consideration of such exercise or receipt.
(b) The initial term of the note shall be determined by the
Committee; provided that the term of the note, including extensions, shall
not exceed a period of 10 years.
(c) The note shall provide for full recourse to the Employee
Participant and shall bear interest at a rate determined by the Committee but
not less than the interest rate necessary to avoid the imputation of interest
under the Code.
(d) If the employment of the Employee Participant terminates,
the unpaid principal balance of the note shall become due and payable on the
10th business day after such termination; provided, however, that if a sale
of such shares would cause the Employee Participant to incur liability under
Section 16(b) of the Exchange Act, the unpaid balance shall become due and
payable on the 10th business day after the first day on which a sale of such
shares could have been made without incurring such liability assuming for
these purposes that there are no other transactions (or deemed transactions
in securities of this Corporation) by the Employee Participant subsequent to
such termination.
(e) If required by the Committee or by applicable law, the
note shall be secured by a pledge of any shares or rights financed thereby in
compliance with applicable law.
(f) The terms, repayment provisions, and collateral release
provisions of the note and the pledge securing the note shall conform with
applicable rules and regulations of the Federal Reserve Board as then in
effect.
1.9 NO TRANSFERABILITY.
(a) LIMIT ON EXERCISE. Except as provided herein and subject
to Section 6.10, Awards may be exercised only by, and amounts payable or
shares issuable pursuant to an Award shall be paid only to (or for the
account of), the Participant or, if the Participant has died, the
Participant's Beneficiary or, if the Participant has suffered a Disability,
the Participant's Personal Representative, if any, or if there is none, the
Participant. Subject to Section 6.4 and 6.10, the Committee may by express
written authorization permit Awards to be exercised by and/or paid to certain
persons or entities related to the Participant who are transferees of the
Participant without consideration, or to such other persons as the Committee
deems appropriate, pursuant to such conditions and procedures as the
Committee in writing may establish and set forth in or by amendment to an
Award Agreement.
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(b) LIMIT ON TRANSFER. No option, right or other Award
granted under this Plan including, without limitation, any undistributed
performance share or share of Restricted Stock that has not vested, shall be
transferable by the Participant or shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge (other than to the Corporation), except (i) by will or the laws of
descent and distribution, or (ii) pursuant to any other exception to transfer
restrictions expressly permitted by the Committee AND set forth in the Award
Agreement (or an amendment thereto), and (iii) in the case of Awards
comprising Incentive Stock Options, as permitted by the Code. Any attempted
transfer in violation of these provisions shall be void and the Corporation
shall disregard any attempt at transfer, assignment or other alienation so
prohibited.
(c) DESIGNATION OF BENEFICIARY. The designation of a
Beneficiary shall not constitute a transfer prohibited by the foregoing
provisions.
II. EMPLOYEE OPTIONS.
2.1 GRANTS.
One or more Options may be granted under this Article to any
Eligible Employee. Each Option granted shall be designated by the Committee
in the applicable Award Agreement as either a Nonqualified Stock Option or an
Incentive Stock Option.
2.2 OPTION PRICE.
(a) PRICING LIMITS. The purchase price per share of the
Common Stock covered by each Option shall be determined by the Committee at
the time of the Award, but in the case of Incentive Stock Options shall not
be less than 100% (110% in the case of a Participant described in Section
2.4) of the Fair Market Value of the Common Stock on the date of grant.
(b) PAYMENT PROVISIONS. The purchase price of any shares
purchased on exercise of an Option granted under this Article shall be paid
in full at the time of each purchase in one or a combination of the following
methods: (i) in cash or by electronic funds transfer; (ii) by certified or
cashier's check payable to the order of the Corporation; (iii) if authorized
by the Committee or specified in the applicable Award Agreement, by a
promissory note of the Participant consistent with the requirements of
Section 1.8; or (iv) by the delivery of shares of Common Stock of the
Corporation already owned by the Participant, PROVIDED, HOWEVER, that the
Committee may in its absolute discretion limit the Participant's ability to
exercise an Award by delivering such shares, and PROVIDED FURTHER that any
shares delivered which were initially acquired from the Company must have
been owned by the Participant at least six (6) months as of the date of
delivery. Shares of Common Stock used to satisfy the exercise price of an
Option shall be valued at their Fair Market Value on the date of exercise.
In addition to the payment methods described above, the Committee may provide
that the Option can be exercised and payment made by delivering a properly
executed exercise notice together with irrevocable instructions to a broker
to promptly deliver to the Corporation the amount of sale proceeds necessary
to pay the exercise price and, unless otherwise allowed by the Committee, any
applicable tax withholding under Section 6.5. The Corporation shall not be
obligated to deliver
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certificates for the shares unless and until it receives full payment of the
exercise price therefor and any related withholding obligations have been
satisfied.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS.
(a) $100,000 LIMIT. To the extent that the aggregate Fair
Market Value of stock with respect to which incentive stock options first
become exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to Incentive Stock Options
under this Plan and stock subject to incentive stock options under all other
plans of the Company or any parent corporation, such options shall be treated
as nonqualified stock options. For this purpose, the Fair Market Value of
the stock subject to options shall be determined as of the date the options
were awarded. In reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently granted options shall
be reduced first. To the extent a reduction of simultaneously granted
options is necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares of Common
Stock are to be treated as shares acquired pursuant to the exercise of an
Incentive Stock Option.
(b) OPTION PERIOD. Each Option and all exercise rights
thereunder shall expire no later than 10 years after the Award Date, but may
be subject to early termination pursuant to Sections 6.2 and 6.3 and/or
deferred payout elections, as the Committee may permit.
(c) OTHER CODE LIMITS. There shall be imposed in any Award
Agreement relating to Incentive Stock Options such terms and conditions as
from time to time are required in order that the Option be an "incentive
stock option" as that term is defined in Section 422 of the Code.
2.4 LIMITS ON 10% HOLDERS.
No Incentive Stock Option may be granted to any person who, at
the time the Option is granted, owns (or is deemed to own under Section
424(d) of the Code) shares of outstanding Common Stock possessing more than
10% of the total combined voting power of all classes of stock of the
Corporation, unless the exercise price of such Option is at least 110% of the
Fair Market Value of the stock subject to the Option and such Option by its
terms is not exercisable after the expiration of five years from the date
such Option is granted.
2.5 WAIVER OF RESTRICTIONS.
Subject to Section 1.4 and Section 6.6 and the specific
limitations on Awards contained in this Plan, the Committee from time to time
may, generally or in specific cases only, for the benefit of any Eligible
Employee, revise the vesting schedule, extend post-service exercise periods,
or release other restrictions upon or change the number of shares subject to
or the term of, an Award granted under this Article by cancellation of an
outstanding Award and contemporaneous regrant, amendment, substitution,
waiver or other legally valid means. Notwithstanding the foregoing, if such
amendment or other action results in an exercise or purchase price which is
lower than the exercise or purchase price of the original or prior Award,
such action shall require shareholder approval.
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2.6 OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY
OTHER CORPORATIONS. Options and Stock Appreciation Rights may be granted to
Eligible Employees under this Plan in substitution for employee stock options
granted by other entities to persons who are or who become employees of the
Company, in connection with a distribution, merger or reorganization by or with
the granting entity or an affiliated entity, or the acquisition by the Company,
directly or indirectly, of all or a substantial part of the stock or assets of
the employing entity.
III. STOCK APPRECIATION RIGHTS.
3.1 GRANTS.
In its discretion, the Committee may grant to any Eligible
Employee stock appreciation rights ("SARs") concurrently with the grant of
Options or other Awards or in respect of an outstanding Award, in whole or in
part, or independently of any other Award, all on such terms as set forth by
the Committee in the Award Agreement. Any SAR granted in connection with an
Incentive Stock Option shall contain such terms as may be required to comply
with the provisions of Section 422 of the Code and the regulations
promulgated thereunder, unless the holder otherwise agrees.
3.2 EXERCISE OF SARs.
(a) EXERCISABILITY. A Stock Appreciation Right granted
independently of any other Award shall be exercisable pursuant to the terms
of the Award Agreement. Unless the Award Agreement or the Committee
otherwise provides, an SAR related to another Award shall be exercisable at
such time or times, and to the extent, that the related Award shall be
exercisable and only when the Fair Market Value of the stock subject to the
related Award exceeds the base price of the SAR.
(b) EFFECT ON AVAILABLE SHARES. To the extent that a SAR is
exercised, the number of shares of Common Stock subject to any related Award
shall be charged against the maximum amount of Common Stock that may be
delivered pursuant to Awards under this Plan. The number of shares subject
to the SAR and the related Award of the Participant shall also be reduced by
such number of shares, unless the Award Agreement otherwise provides.
(c) PROPORTIONATE REDUCTION. If an SAR extends to less than
all the shares covered by the related Award and if a portion of the related
Award is thereafter exercised, the number of shares subject to the
unexercised SAR shall be reduced only if and to the extent that the remaining
number of shares covered by such related Award is less than the remaining
number of shares subject to such SAR.
3.3 PAYMENT.
(a) AMOUNT. Unless the Committee otherwise provides, upon
exercise of an SAR and surrender of an exercisable portion of any related Award
(to the extent required by Section 3.2), the Participant shall be entitled to
receive subject to Section 6.5 payment of an amount determined by multiplying
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(i) the difference obtained by subtracting the base price
per share of Common Stock under the SAR from the Fair Market Value of a
share of Common Stock on the date of exercise of the SAR, by
(ii) the number of shares with respect to which the SAR shall
have been exercised.
(b) FORM OF PAYMENT. The Committee, in its sole discretion, shall
determine the form in which payment shall be made of the amount determined
under paragraph (a) above, either solely in cash, solely in shares of Common
Stock (valued at Fair Market Value on the date of exercise of the SAR), or
partly in such shares and partly in cash, provided that the Committee shall
have determined that such exercise and payment are consistent with applicable
law. If the Committee permits the Participant to elect to receive cash or
shares (or a combination thereof) on such exercise, any such election shall
be subject to such conditions as the Committee may impose.
3.4 LIMITED SARs.
The Committee may grant to any Eligible Employee SARs exercisable
only upon or in respect of a change in control or any other specified event
("Limited SARs") and such Limited SARs may relate to or operate in tandem or
combination with or substitution for Options, other SARs or other Awards (or any
combination thereof), and may be payable in cash or shares based on the spread
between the base price of the SAR and a price based upon or equal to the Fair
Market Value of the Shares during a specified period (not more than seven
months) or at a specified time within a period of not more than seven months
before, after or including the date of such event.
IV. RESTRICTED STOCK AND STOCK UNIT AWARDS.
4.1 GRANTS.
(a) GENERAL. The Committee may, in its discretion, grant one
or more Restricted Stock or Stock Unit Awards or any combination thereof to
any Eligible Employee, subject to the limits of Section 1.4(d). Each Award
Agreement shall specify the number of shares of Common Stock to be issued to
the Participant, the date of such issuance, the consideration for such shares
(but not less than the minimum lawful consideration under applicable state
law) by the Participant, the extent (if any) to which and the time (if ever)
at which the Participant shall be entitled to dividends, voting and other
rights in respect of the shares prior to vesting, and the restrictions (which
may be based on performance criteria, passage of time or other factors or any
combination thereof) imposed on such shares and the conditions of release or
lapse of such restrictions. Such restrictions shall not lapse earlier than
six (6) months after the Award Date, except to the extent the Committee may
otherwise provide. Stock certificates evidencing shares of Restricted Stock
pending the lapse of the restrictions ("Restricted Shares") shall bear a
legend making the appropriate reference to the restrictions imposed hereunder
and shall be held by the Corporation or by a third party designated by the
Committee until the restrictions on such shares shall have lapsed and the
shares shall have vested in accordance with the provisions of the Award and
Section 1.7. Upon issuance of the Restricted
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Stock Award, the Participant may be required to provide such further
assurance and documents as the Committee may require to enforce the
restrictions.
(b) SPECIAL PROVISIONS FOR STOCK UNITS. Subject to such rules
and procedures as the Committee may establish from time to time, the
Committee may, in its discretion, authorize a Stock Unit Award or the
crediting of Stock Units pursuant to the terms of this Plan and any
applicable deferred compensation plan maintained by the Company, permit an
Eligible Employee to irrevocably elect to defer or receive in Stock Units all
or a portion of any Award hereunder, or may grant Stock Units in lieu of, in
exchange for, in respect of, or in addition to any other Award under this
Plan or any other stock option plan or deferred compensation plan of the
Company. The specific terms, conditions and provisions relating to each
Stock Unit grant or election, including the form of payment to be made at or
following the vesting thereof, shall be set forth in or pursuant to the
applicable agreement or Award and the relevant Company deferred compensation
plan, in form substantially as approved by the Committee.
(c) STOCK UNIT PAYOUTS. The Committee shall determine, among
other terms of a Stock Unit grant or Award, the form of payment of Stock
Units, whether in cash, Common Stock, or other consideration (including any
other Award) or any combination thereof, the valuation of the Stock Units or
any non-cash payment for purposes of the Award, and the applicable vesting
and payout provisions of the Stock Units. The Committee in the applicable
Award Agreement or the relevant Company deferred compensation plan may permit
the Participant to elect the form and time of payout of vested Stock Units on
such conditions or subject to such procedures as the Committee may impose,
and may permit Stock Unit offsets or other provision for payment of any
applicable taxes that may be due on the crediting, vesting or payment in
respect of the Stock Units.
4.2 RESTRICTIONS.
(a) PRE-VESTING RESTRAINTS. Except as provided in Section 4.1
and 1.9, restricted shares comprising any Restricted Stock Award and shares
subject to a Stock Unit Award may not be sold, assigned, transferred, pledged
or otherwise disposed of or encumbered, either voluntarily or involuntarily,
until the restrictions on such shares or units have lapsed and the shares or
units become vested and other conditions to delivery or transfer are
satisfied.
(b) DIVIDEND AND VOTING RIGHTS. Unless otherwise provided in
the applicable Award Agreement, a Participant receiving a Restricted Stock or
Stock Unit Award shall not be entitled to dividends for any of the shares
(which dividends or any right to payment of the dividend equivalent amount
shall be retained in a restricted account until the shares or units have
vested and shall revert to the Corporation if they fail to vest). Restricted
Stock shall be entitled to vote prior to vesting.
(c) CASH PAYMENTS. If the Participant shall have paid or
received cash (including any dividends) in connection with the Restricted Stock
Unit Award, the Award Agreement shall specify whether and to what extent such
cash shall be returned (with or without an earnings factor) as to any restricted
shares or units which cease to be eligible for vesting.
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4.3 RETURN TO THE CORPORATION.
Unless the Committee otherwise expressly provides, Stock Units or
shares of Restricted Stock that are subject to restrictions at the time of
termination of employment or are subject to other conditions to vesting that
have not been satisfied by the time specified in the applicable Award
Agreement shall not vest, and Restricted Stock shall be returned to the
Corporation in such circumstances and in such manner and on such terms as the
Committee shall therein provide.
V. PERFORMANCE AWARDS AND STOCK BONUSES.
5.1 GRANTS OF PERFORMANCE SHARE AWARDS.
The Committee may, in its discretion, grant Performance Share
Awards to Eligible Employees based upon such factors, which in the case of
any Award to a Section 16 Person shall include but not be limited to the
contributions, responsibilities and other compensation of the person as the
Committee shall deem relevant in light of the specific type and terms of the
award. An Award Agreement shall specify the maximum number of shares of
Common Stock (if any) subject to the Performance Share Award, the
consideration (but not less than the minimum lawful consideration) to be paid
for any such shares as may be issuable to the Participant, the duration of
the Award and the conditions upon which delivery of any shares or cash to the
Participant shall be based. The amount of cash or shares or other property
that may be deliverable pursuant to such Award shall be based upon the degree
of attainment over a specified period of not more than ten years (a
"performance cycle") as may be established by the Committee of such
measure(s) of the performance of the Company (or any part thereof) or the
Participant as may be established by the Committee. The Committee may
provide for full or partial credit, prior to completion of such performance
cycle or the attainment of the performance achievement specified in the
Award, in the event of the Participant's death, Retirement, or Total
Disability, a Change in Control Event or in such other circumstances as the
Committee (consistent with Section 6.10(c)(2), if applicable) may determine.
5.2 GRANTS OF STOCK BONUSES.
The Committee may grant a Stock Bonus to any Eligible Employee to
reward exceptional or special services, contributions or achievements in the
manner and on such terms and conditions (including any restrictions on such
shares) as determined from time to time by the Committee. The number of
shares so awarded shall be determined by the Committee. The Award may be
granted independently or in lieu of a cash bonus.
5.3 DEFERRED PAYMENTS.
The Committee may authorize for the benefit of any Eligible
Employee the deferral of any payment of cash or shares that may become due or
of cash otherwise payable under this Plan, and provide for accreted benefits
thereon based upon such deferment, at the election or at the request of such
Participant, subject to the other terms of this Plan. Such
11
deferment shall be subject to such further conditions, restrictions or
requirements as the Committee may impose, subject to any then vested rights
of Participants.
5.4 SPECIAL PERFORMANCE-BASED SHARE AWARDS.
(a) GENERAL PROVISIONS. Without limiting the generality of
the foregoing, and in addition to awards granted under other provisions of
this Plan, performance-based awards within the meaning of Section 162(m) of
the Code ("PERFORMANCE-BASED AWARDS") may be granted under this Plan, in the
form of restricted stock, performance stock, stock, units, bonuses, options,
or other rights, whether or not related to stock values or appreciation and
payable in shares or cash or a combination thereof, the vesting of which
depends on the performance of the Company on a consolidated or Business Unit
basis with reference to any one or more of the business criteria set forth on
Exhibit A to this Plan (the "Business Criteria"), incorporated herein by this
reference, relative to preestablished performance goals.
(b) ELIGIBLE CLASS. The eligible class of persons for Awards
under this Section 5.4 shall be officers of the Company.
(c) MAXIMUM AWARD. In no event shall grants made in any
fiscal year to any eligible person under this Section 5.4 relate to more than
300,000 shares or a cash amount of more than $3.75 million payable in respect
of any one fiscal year.
(d) TIMING OF DECISIONS; ADJUSTMENTS; COMMITTEE CERTIFICATION.
The applicable Business Criteria and specific performance goal or goals
("targets") must be approved by the Committee in advance of applicable
deadlines under the Code and while the performance relating to such targets
remains substantially uncertain. The applicable performance measurement
period may be not less than one nor more than 10 years. The Award terms
shall specify whether and in what manner the performance targets will be
adjusted to mitigate the unbudgeted impact of material, unusual or
nonrecurring gains and losses, accounting changes or other extraordinary
events not foreseen at the time the targets were set, to the extent permitted
by Section 162(m) of the Code and applicable regulations and interpretations
thereunder. Before any Performance-Based Award under this Section 5.4 is
paid, the Committee must certify (to the extent required by Section 162(m) of
the Code) that the material terms of the Performance-Based Award were
satisfied.
(e) TERMS AND CONDITIONS OF AWARDS. The Committee will have
discretion to determine the restrictions or other limitations of the
individual Awards under this Section 5.4, including the authority to reduce
Awards, payouts or vesting or to pay no Awards, in its sole discretion, IF
the Committee preserves such authority at the time of grant by language to
this effect in its authorizing resolutions or otherwise.
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VI. OTHER PROVISIONS.
6.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIESH.
(a) EMPLOYMENT STATUS. Status as an Eligible Employee shall not
be construed as a commitment that any Award will be made under this Plan to an
Eligible Employee or to Eligible Employees generally.
(b) NO EMPLOYMENT CONTRACT; NO PARTIAL VESTING. Nothing
contained in this Plan (or in any other documents related to this Plan or to any
Award) shall change an employee's status as an "at will" employee nor confer
upon any Eligible Employee or other Participant any right to continue in the
employ or other service of the Company or constitute any contract or agreement
of employment or other service, nor shall interfere in any way with the right of
the Company to change such person's compensation or other benefits or to
terminate the person's employment. However, neither shall anything contained in
this Plan or any document related hereto adversely affect any independent
contractual right of such person without his or her consent. Service between
specified vesting dates shall provide no basis for partial vesting or pro rata
benefits unless an Award Agreement expressly otherwise provides.
(c) PLAN NOT FUNDED. Awards payable under this Plan shall be
payable in shares or from the general assets of the Corporation, and (except
as provided in Section 1.4(b)) no special or separate reserve, fund or
deposit shall be made to assure payment of such Awards. No Participant,
Beneficiary or other person shall have any right, title or interest in any
fund or in any specific asset (including shares of Common Stock, except as
expressly otherwise provided) of the Company by reason of any Award
hereunder. Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be construed to
create, a trust of any kind or a fiduciary relationship between the Company
and any Participant, Beneficiary or other person. To the extent that a
Participant, Beneficiary or other person acquires a right to receive payment
pursuant to any Award hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Company.
6.2 ADJUSTMENTS; ACCELERATION.
(a) ADJUSTMENTS. If there shall occur any extraordinary dividend
or other extraordinary distribution in respect of the Common Stock (whether in
the form of cash, Common Stock, other securities, or other property), or any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Common Stock or other securities of the Corporation, or there shall
occur any similar extraordinary corporate transaction (or event in respect of
the Common Stock) or a sale of substantially all the assets of the Corporation
as an entirety, then the Committee shall, in such manner and to such extent (if
any) as it deems appropriate and equitable (1) proportionately adjust any or all
of (a) the number and type of shares of Common Stock (or other securities) which
thereafter may be made the subject of Awards (including the specific maxima and
13
numbers of shares set forth elsewhere in this Plan), (b) the number, amount
and type of shares of Common Stock (or other securities or property) subject
to any or all outstanding Awards, (c) the grant, purchase, or exercise price
of any or all outstanding Awards, (d) the securities, cash or other property
deliverable upon exercise of any outstanding Awards, or (e) the performance
standards appropriate to any outstanding Awards, or (2) in the case of an
extraordinary dividend or other distribution, recapitalization,
reclassification, reorganization, merger, consolidation, combination, sale of
assets, split up, exchange, or spin off, make provision for a cash payment or
for the substitution or exchange of any or all outstanding Awards or the
cash, securities or property deliverable to the holder of any or all
outstanding Awards based upon the distribution or consideration payable to
holders of the Common Stock of the Corporation upon or in respect of such
event; PROVIDED, HOWEVER, in each case, that with respect to Awards of
Incentive Stock Options, no such adjustment shall be made which would cause
the Plan to violate Section 424(a) of the Code or any successor provisions
thereto without the written consent of holders materially adversely affected
thereby. In any of such events, the Committee may take such action
sufficiently prior to such event if necessary to permit the Participant to
realize the benefits intended to be conveyed with respect to the underlying
shares in the same manner as is available to shareholders generally.
(b) ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. Unless
prior to a Change in Control Event the Committee determines that, upon its
occurrence, there shall be no acceleration of benefits under Awards or
determines that only certain or limited benefits under Awards shall be
accelerated and the extent to which they shall be accelerated, and/or
establishes a different time in respect of such Event for such acceleration,
then upon the occurrence of a Change in Control Event
(i) each Option and SAR shall become immediately exercisable,
(ii) Restricted Stock shall immediately vest free of
restrictions, and
(iii) the number of shares, cash or other property covered by
each Performance Share or Stock Unit Award shall be issued to the Participant;
The Committee may override the limitations on acceleration in this Section
6.2(b) by express provision in the Award Agreement or otherwise and may
accord any Eligible Employee a right to refuse any acceleration, whether
pursuant to the Award Agreement or otherwise, in such circumstances as the
Committee may approve. Any acceleration of Awards shall comply with
applicable legal requirements.
(c) POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If any
Option or other right to acquire Common Stock under this Plan has been fully
accelerated as permitted by Section 6.2(b) but is not exercised prior to (i)
a dissolution of the Corporation, or (ii) an event described in Section
6.2(a) that the Corporation does not survive, or (iii) the consummation of an
event described in Section 6.2(a) that results in a Change of Control
approved by the Board, such Option or right shall thereupon terminate,
subject to any provision that has been expressly made by the Committee for
the survival, substitution, exchange or other settlement of such Option or
right.
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6.3 TERMINATION OF EMPLOYMENT; TERMINATION OF SUBSIDIARY STATUS;
DISCRETIONARY PROVISIONS.
(a) OPTIONS - RESIGNATION OR DISMISSAL. If the Participant's
employment by the Company terminates for any reason other than Retirement,
Total Disability or death, the Participant shall have, subject to earlier
termination pursuant to or as contemplated by Section 1.6, three months from
the date of termination of employment to exercise any Option to the extent it
shall have become exercisable on the date of termination of employment, and
any Option to the extent not exercisable on that date shall terminate.
(b) OPTIONS - RETIREMENT, DEATH OR DISABILITY. If the
Participant's employment by the Company terminates as a result of Retirement,
Total Disability or death, the Participant, Participant's Personal
Representative or his or her Beneficiary, as the case may be, shall have,
subject to earlier termination pursuant to or as contemplated by Section 1.6,
12 months from the date of termination of employment to exercise any Option
to the extent it shall have become exercisable by the date of termination of
employment, and any Option to the extent not exercisable on that date shall
terminate.
(c) CERTAIN SARS. Each SAR granted concurrently or in tandem
with an Option shall have the same post-termination provisions and
exercisability periods as the Option to which it relates, unless the
Committee otherwise provides.
(d) OTHER AWARDS. The Committee shall establish in respect of
each other Award granted hereunder the Participant's rights and benefits (if
any) in the event of a termination of employment and in so doing may make
distinctions based upon the cause of termination and the nature of the Award.
(e) CHANGE IN SUBSIDIARY STATUS. For purposes of this Plan
and any Award hereunder, if an entity ceases to be a Subsidiary, a
termination of employment shall be deemed to have occurred with respect to
each employee of such Subsidiary who does not continue as an employee of
another entity owned, controlled by or under common control with the Company.
(f) STOCK UNITS. Each Award Agreement in respect of Stock
Units shall include the applicable benefit distribution and termination
provisions for the grant or Award and shall specify the form of payment and
may incorporate (to the extent applicable) terms of this Plan, another Award
and/or any other deferred compensation plan under which it is governed.
(g) COMMITTEE DISCRETION. Notwithstanding the foregoing
provisions of this Section 6.3, in the event of, or in anticipation of, a
termination of employment with the Company for any reason, other than
discharge for cause, the Committee may, in its discretion, increase the
portion of the Participant's Award available to the Participant, or
Participant's Beneficiary or Personal Representative, as the case may be, or,
subject to the provisions of Section 1.6, extend the exercisability period
upon such terms as the Committee shall determine and expressly set forth in
or by amendment to the Award Agreement.
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6.4 COMPLIANCE WITH LAWS.
This Plan, the granting and vesting of Awards under this Plan and
the offer, issuance and delivery of shares of Common Stock and/or the payment of
money under this Plan or under Awards granted hereunder are subject to
compliance with all applicable federal and state laws, rules and regulations
(including but not limited to state and federal securities law and federal
margin requirements) and to such approvals by any listing, agency or any
regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Corporation, provide such
assurances and representations to the Corporation as the Corporation may deem
necessary or desirable to assure compliance with all applicable legal
requirements.
6.5 TAX WITHHOLDING.
Upon any exercise, vesting, or payment of any Award (or upon the
disposition of shares of Common Stock acquired pursuant to the exercise of an
Incentive Stock Option prior to satisfaction of the holding period
requirements of Section 422 of the Code), the Company shall have the right at
its option to (i) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of the amount
of any taxes which the Company may be required to withhold with respect to
such Award event or payment or (ii) deduct from any amount payable the amount
of any taxes which the Company may be required to withhold with respect to
such cash payment. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this Plan, the
Committee may in its sole discretion grant (either at the time of the Award
or thereafter) to the Participant the right to elect, pursuant to such rules
and subject to such conditions as the Committee may establish, to have the
Corporation reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares valued at their then Fair Market
Value, to satisfy such withholding obligation.
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION.
(a) BOARD OR COMMITTEE AUTHORIZATION. The Board may, at any
time, terminate or, from time to time, amend, modify or suspend this Plan, in
whole or in part. No Awards may be granted during any suspension of this Plan
or after termination of this Plan, but the Committee shall retain jurisdiction
as to Awards then outstanding or payments deferred in accordance with the terms
of this Plan.
(b) SHAREHOLDER APPROVAL. To the extent then required under
Sections 422 and 424 of the Code or any other applicable law, or deemed
necessary or advisable by the Board, any amendment to this Plan shall be subject
to shareholder approval.
(c) AMENDMENTS TO AWARDS. Without limiting any other express
authority of the Committee under but subject to the express limits of this Plan,
the Committee by agreement or resolution may waive conditions of or limitations
on Awards to Eligible Employees that the Committee in the prior exercise of its
discretion has imposed, without the consent of a Participant, and may make other
changes to the terms and conditions of Awards that do not
16
affect, in any manner materially adverse to the Employee Participant, his or
her rights and benefits under an Award.
(d) LIMITATIONS ON AMENDMENTS TO PLAN AND AWARDS. No
amendment, suspension or termination of this Plan or change of or affecting
any outstanding Award shall, without written consent of the Participant,
affect in any manner materially adverse to the Participant any rights or
benefits of the Participant or obligations of the Corporation under any Award
granted under this Plan prior to the effective date of such change. Changes
contemplated by Section 6.2 shall not be deemed to constitute changes or
amendments requiring a Participant's consent under this Section 6.6 or any
other provision of this Plan or any Award Agreement.
6.7 PRIVILEGES OF STOCK OWNERSHIP.
Except as otherwise expressly authorized by the Committee or this
Plan, a Participant shall not be entitled to any privilege of stock ownership
as to any shares of Common Stock not actually delivered to and held of record
by him or her. No adjustment will be made for dividends or other rights as a
shareholders for which a record date is prior to such date of delivery.
6.8 EFFECTIVE DATE OF THIS PLAN.
The effective date of this Plan was November 1, 1995. Amendments
effective February 9, 1999 were approved by the Board, subject to shareholder
approval.
6.9 TERM OF THIS PLAN.
No Award shall be granted under this Plan after October 31, 2005
(the "termination date"). Unless otherwise expressly provided in this Plan
or in an applicable Award Agreement, any Award granted prior to the
termination date may extend beyond such date, and all authority of the
Committee with respect to Awards hereunder, including the authority to amend
an Award, shall continue during any suspension of this Plan and shall
continue in respect of Awards outstanding on the termination date.
6.10 GOVERNING LAW/CONSTRUCTION/SEVERABILITY.
(a) CHOICE OF LAW. This Plan, the Awards, all documents
evidencing Awards and all other related documents shall be governed by, and
construed in accordance with the laws of the State of California.
(b) SEVERABILITY. If any provision shall be held by a court
of competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan shall continue in effect.
(c) PLAN CONSTRUCTION.
(1) RULE 16b-3. Transactions or events in respect of Awards
hereunder, to the extent approved by the Board or Committee, are intended, in
the case of Participants who are or may be Section 16 Persons, to satisfy the
applicable requirements for exemption under Rule 16b-
17
3 to avoid liability under Section 16 of the Exchange Act. If any provision
of this Plan or of any Award would frustrate or conflict with this intent,
the provision to the extent possible shall be interpreted so as to avoid such
conflict.
(2) SECTION 162(m). It is the further intent of the Company
that Options or SARs with an exercise or base price not less than Fair Market
Value on the date of grant and Performance-Based Awards under Section 5.4 of
this Plan that are granted to or held by a Section 16 Person shall (if so
designated by the Committee) qualify as performance-based compensation under
Section 162(m) of the Code, and this Plan shall be interpreted consistent
with such intent.
(3) BIFURCATION. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS PLAN, the provisions of this Plan may at any time be bifurcated by the
Board or the Committee in any manner so that certain provisions of any Award
Agreement (or this Plan) intended (or required in order) to satisfy the
applicable requirements of Rule 16b-3 or Section 162(m) of the Code (to the
extent permitted thereby) are applicable only to persons subject to those
provisions and to those Awards to those persons intended to satisfy the
requirements of those rules.
6.11 CAPTIONS.
Captions and headings are given to the sections and subsections
of this Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
6.12 NON-EXCLUSIVITY OF PLAN.
Nothing in this Plan shall limit or be deemed to limit the
authority of the Board or the Committee to grant awards or authorize any
other compensation, with or without reference to the Common Stock, under any
other plan or authority.
VII. DEFINITIONS.
7.1 DEFINITIONS.
(a) "AWARD" shall mean an award of any Option, SAR, Restricted
Stock, Stock Bonus, Stock Unit, Performance Share, or Performance-Based
Award, or any dividend equivalent rights in respect of any thereof, or any
deferred payment right or other right or security in respect of any thereof,
and may include as an incident thereto any other Award, or any combination of
the foregoing, whether alternative or cumulative, authorized by and granted
under this Plan.
(b) "AWARD AGREEMENT" shall mean any writing setting forth the
terms of an Award that has been authorized by the Committee.
(c) "AWARD DATE" shall mean the date upon which the Committee
took the action granting an Award or such later date as the Committee
designates as the Award Date.
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(d) "AWARD PERIOD" shall mean the period beginning on an Award
Date and ending on the expiration date of such Award.
(e) "BENEFICIARY" shall mean the person, persons, trust or
trusts designated by a Participant or, in the absence of a designation,
entitled by will or the laws of descent and distribution, to receive the
benefits specified in the Award Agreement and under this Plan in the event of
a Participant's death, and shall mean the Participant's executor or
administrator if no other Beneficiary is designated and able to act under the
circumstances.
(f) "BOARD" shall mean the Board of Directors of the
Corporation.
(g) "CHANGE IN CONTROL EVENT" shall mean any of the following:
(1) Approval by the shareholders of the Corporation of the
dissolution or liquidation of the Corporation;
(2) Approval by the shareholders of the Corporation of an
agreement to merge or consolidate, or otherwise reorganize, with or into one
or more entities that are not Subsidiaries or other affiliates, as a result
of which less than 50% of the outstanding voting securities of the surviving
or resulting entity immediately after the reorganization are, or will be,
owned, directly or indirectly, by shareholders of the Corporation immediately
before such reorganization (assuming for purposes of such determination that
there is no change in the record ownership of the Corporation's securities
from the record date for such approval until such reorganization and that
such record owners hold no securities of the other parties to such
reorganization, but including in such determination any securities of the
other parties to such reorganization held by affiliates of the Corporation);
(3) Approval by the shareholders of the Corporation of the
sale of substantially all of the Corporation's business and/or assets to a
person or entity which is not a Subsidiary or other affiliate; or
(4) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act but excluding any person described in and
satisfying the conditions of Rule 13d-1(b)(1) thereunder), other than a
person who is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of more than 20% of the outstanding Shares of Common Stock at
the time of adoption of this Plan (or an affiliate, successor, heir,
descendent or related party of or to any such person), becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing more than 50% of
the combined voting power of the Corporation's then outstanding securities
entitled to then vote generally in the election of directors of the
Corporation.
(h) "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(i) "COMMISSION" shall mean the Securities and Exchange
Commission.
(j) "COMMITTEE" shall mean a committee appointed by the Board
to administer this Plan, which committee shall be comprised of at least two
Board members, at least
19
a majority of whom, during such time as one or more Participants may be
subject to Section 16 of the Exchange Act, should be Disinterested Directors,
PROVIDED, HOWEVER, that the fact that one or more Directors acting in the
matter are not Disinterested Directors shall not affect the validity of any
action taken by them or the Committee.
(k) "COMMON STOCK" shall mean the Common Stock of the
Corporation and such other securities or property as may become the subject
of Awards, or become subject to Awards, pursuant to an adjustment made under
Section 6.2 of this Plan.
(l) "COMPANY" shall mean, collectively, the Corporation and
its Subsidiaries.
(m) "CORPORATION" shall mean Castle & Cooke, Inc., a Hawaii
corporation, and its successors.
(n) "DISINTERESTED DIRECTOR" means (unless the Board otherwise
determines) a member of the Board who is a Non-Employee Director as defined
in Rule 16b-3 and an "outside director" as defined in regulations under
Section 162(m) of the Code, as each may be amended from time to time.
(o) "ELIGIBLE EMPLOYEE" shall mean an officer (whether or not
a director) or employee of the Company, or any Other Eligible Person, as
determined by the Committee in its discretion.
(p) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
(q) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(r) "FAIR MARKET VALUE" on any date shall mean (i) if the
stock is listed or admitted to trade on a national securities exchange, the
closing price of the stock on the Composite Tape, as published in the Western
Edition of The Wall Street Journal, of the principal national securities
exchange on which the stock is so listed or admitted to trade, on such date,
or, if there is no trading of the stock on such date, then the closing price
of the stock as quoted on such Composite Tape on the next preceding date on
which there was trading in such shares; (ii) if the stock is not listed or
admitted to trade on a national securities exchange, the last price for the
stock on such date, as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the NASDAQ National Market Reporting System or
a similar organization if the NASD is no longer reporting such information;
(iii) if the stock is not listed or admitted to trade on a national
securities exchange and is not reported on the National Market Reporting
System, the mean between the bid and asked price for the stock on such date,
as furnished by the NASD or a similar organization; or (iv) if the stock is
not listed or admitted to trade on a national securities exchange, is not
reported on the National Market Reporting System and if bid and asked prices
for the stock are not furnished by the NASD or a similar organization, the
value as established by the Committee at such time for purposes of this Plan.
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(s) "INCENTIVE STOCK OPTION" shall mean an Option which is
designated and intended as an incentive stock option within the meaning of
Section 422 of the Code, the award of which contains such provisions
(including but not limited to the receipt of shareholder approval of this
Plan, if the award is made prior to such approval) and is made under such
circumstances and to such persons as may be necessary to comply with that
section.
(t) "NONQUALIFIED STOCK OPTION" shall mean an Option that is
designated as a Nonqualified Stock Option and shall include any Option
intended as an Incentive Stock Option that fails to meet the applicable legal
requirements thereof. Any Option granted hereunder that is not designated as
an incentive stock option shall be deemed to be designated a nonqualified
stock option under this Plan and not an incentive stock option under the
Code.
(u) "OPTION" shall mean an option to purchase Common Stock
under this Plan. The Committee shall designate any Option granted to an
Eligible Employee as a Nonqualified Stock Option or an Incentive Stock
Option.
(v) "OTHER ELIGIBLE PERSON" shall mean any individual
consultant or advisor, or (to the extent provided in the next sentence)
agent, who renders or has rendered BONA FIDE services (other than services in
connection with the offering or sale of securities of the Company in a
capital raising transaction) to the Company, and who is selected to
participate in this Plan by the Committee. A non-employee agent providing
BONA FIDE services to the Company (other than as an eligible advisor or
consultant) may also be selected as an Other Eligible Person if such agent's
participation in this Plan would not adversely affect (x) the Corporation's
eligibility to use Form S-8 to register under the Securities Act the offer
and sale by the Company of shares issuable under this Plan or (y) the
Corporation's compliance with any other applicable laws.
(w) "PARTICIPANT" shall mean an Eligible Employee who has been
granted an Award under this Plan.
(x) "PERFORMANCE SHARE AWARD" shall mean an award of a right
to receive shares of Common Stock under Section 5.1, or to receive shares of
Common Stock or other compensation (including cash) under Section 5.4, the
issuance or payment of which is contingent upon, among other conditions, the
attainment of performance objectives specified by the Committee.
(y) "PERSONAL REPRESENTATIVE" shall mean the person or persons
who, upon the disability or incompetence of a Participant, shall have
acquired on behalf of the Participant, by legal proceeding or otherwise, the
power to exercise the rights or receive benefits under this Plan by virtue of
having become the legal representative of the Participant.
(z) "PLAN" shall mean this Castle & Cooke, Inc. Amended and
Restated 1995 Stock Option and Award Plan, as from time to time amended.
(aa) "RESTRICTED STOCK" shall mean shares of Common Stock
awarded to a Participant subject to payment of such consideration, if any,
and such conditions on vesting (which may include, among others, the passage
of time, specified performance objectives or other factors) and such transfer
and other restrictions as are established in or pursuant to this Plan
21
and the related Award Agreement, for so long as such shares remain unvested
under the terms of the applicable Award Agreement.
(bb) "RETIREMENT" shall mean retirement with the consent of the
Company or, from active service as an employee or officer of the Company on
or after attaining age 55 with ten or more years of service or age 65.
(cc) "RULE 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission pursuant to the Exchange Act effective on November 1, 1996, or any
successor provision, as amended from time to time.
(dd) "SECTION 16 PERSON" shall mean a person subject to Section
16(a) of the Exchange Act.
(ee) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
(ff) "STOCK APPRECIATION RIGHT" or "SAR" shall mean a right
authorized under this Plan to receive a number of shares of Common Stock or
an amount of cash, or a combination of shares and cash, the aggregate amount
or value of which is determined by reference to a change in the Fair Market
Value of the Common Stock.
(gg) "STOCK BONUS" shall mean an Award of shares of Common
Stock for no consideration other than past services and without restriction
other than such transfer or other restrictions as the Committee may deem
advisable to assure compliance with law.
(hh) "STOCK UNIT" shall mean a non-voting unit of measurement
which is deemed for bookkeeping purposes to be equivalent to one outstanding
share of Common Stock of the Company (subject to adjustment) solely for
purposes of this Plan.
(ii) "STOCK UNIT ACCOUNT" shall mean the bookkeeping account
maintained by the Company on behalf of each Participant who is credited with
Stock Units in accordance with this Plan, which account may be payable in
cash, stock and/or other consideration, as the Committee may determine.
(jj) "SUBSIDIARY" shall mean any corporation or other entity a
majority of whose outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Corporation.
(kk) "TOTAL DISABILITY" shall mean a "permanent and total
disability" within the meaning of Section 22(e)(3) of the Code and such other
disabilities, infirmities, afflictions or conditions as the Committee by rule
may include.
22
EXHIBIT A
BUSINESS CRITERIA
Business Criteria means any one or more of: Total Stockholder Return,
Earnings Per Share, Net Income, Earnings Before Taxes, Return on Average
Common Equity, Return On Average Assets, EBT-ROI, Net Income, Net Income-ROI,
Net Cash Flow, Stock Appreciation, Funds From Operations, Occupancy Gains,
EBITDA, Overall Square Footage Growth, Entitlement Gains and Cost Reduction,
determined on either a Business Unit or Company (consolidated) basis. The
following provisions further define these and related terms.
"Applicable Period" means a period of time within or coincident to a
Performance Cycle with respect to which Performance Target(s) are established
for any one or more of the Business Criteria.
"Business Unit" means a region, subsidiary, division or other
organizational unit of the Company, or segment of its operations for
accounting purposes, which maintains or which is the subject of a separate
accounting of its financial performance.
"Company" means Castle & Cooke, Inc. and its subsidiaries on a
consolidated basis, unless the context otherwise requires.
"Cost Reduction" for any Applicable Period means a reduction in cost of
goods sold, selling, marketing, and general and administrative expenses
during the Applicable Period as compared to a prior Applicable Period or
average of more than one Applicable Period, expressed as an absolute dollar
amount or as a percentage of a specific amount.
"Earnings Before Taxes" or "EBT" for any Applicable Period means the
consolidated net income of the Company for the Applicable Period before
income taxes.
"Earnings Per Share" means per share net income of the Company, as
determined on either a "basic" or "diluted" basis under FAS 128 (or its
successor), as specified and established by the Committee in connection with
the grant of the Award.
"EBITDA" means earnings before interest, taxes, depreciation and
amortization for the Applicable Period.
"EBT-ROI" means EBT for the Applicable Period divided by the periodic
average of the Net Investment for the Applicable Period.
"Entitlement Gains" means obtaining entitlements (i.e., receipt of all
necessary land use and zoning approvals for development from applicable
governmental agencies, except for plat maps, subdivision approvals, grading
and building permits and other secondary approvals) for land previously
unentitled, measured in units or acres as specified by the Committee, during
the Applicable Period as reflected in the Company's reports for the
Applicable Period.
A-1
"Funds From Operations" means Funds from Operations, as defined by The
National Association of Real Estate Investment Trusts (or its successor) at
the time of the grant of an Award, for the Applicable Period.
"Net Cash Flow" means EBITDA plus the non-cash cost of sales, minus
developmental expenditures and capital expenditures, adjusted for other cash
flow items in accordance with GAAP.
"Net Income" means net income for the Applicable Period.
"Net Income-ROI" means the Net Income for the Applicable Period divided
by the periodic average of the Net Investment for the Applicable Period.
"Net Investment" means total assets less the sum of cash and cash
equivalents (short-term investments), investments in consolidated
subsidiaries, accounts payable and accrued liabilities, and minority
interests and deferred credits.
"Occupancy Gains" means increases in the occupancy level of specified
property or properties (owned at both the beginning and end of the Applicable
Period) during the Applicable Period, measured as a percentage of the gross
leasable/occupiable area in the case of commercial properties and as a
percentage of the number of rooms available in the case of hotel properties.
"Overall Square Footage Growth" means the increase, between the
beginning and end of the Applicable Period, in the total square feet of gross
leasable area.
"Performance Cycle" means the period of time not less than one fiscal
year nor more than 10 fiscal years over which performance is measured for
determining the amount of any payment opportunity from Awards granted under
the Plan.
"Return On Average Common Equity" means the consolidated net income to
common stockholders for the Applicable Period divided by the periodic average
of total common stockholders equity during the Applicable Period.
"Return on Average Assets" means consolidated net income divided by the
periodic average of total assets for the Applicable Period.
"Stock Appreciation" means an increase in the price or value of the
Common Stock of the Corporation after the date of grant of an Award and
during the Applicable Period with respect to the Corporation's Common Stock
on stand alone basis, or on a basis relative to the performance of a
specified peer group.
Except as otherwise expressly provided, all financial terms are used as
defined or used under generally accepted accounting principles (GAAP) and,
where applicable, all determinations shall be made in accordance with GAAP
and as made or applied by the Company in, or in the preparation of, its
periodic reports to stockholders or other financial reports, as the case may
be.
A-2