EXHIBIT 10.1
CHEMED CORPORATION
2006 STOCK INCENTIVE PLAN
1. PURPOSES: The purposes of this plan are (a) to secure for the Corporation
the benefits of incentives inherent in ownership of Capital Stock by Key
Employees, (b) to encourage Key Employees to increase their interest in the
future growth and prosperity of the Corporation and to stimulate and sustain
constructive and imaginative thinking by Key Employees, (c) to further the
identification of interest of those who hold positions of major responsibility
in the Corporation and its Subsidiaries with the interests of the Corporation's
stockholders, (d) to induce the employment or continued employment of Key
Employees and (e) to enable the Corporation to compete with other organizations
offering similar or other incentives in obtaining and retaining the services of
competent executives.
2. DEFINITIONS: Unless otherwise required by the context, the following terms
when used in this Plan shall have the meanings set forth in this Section 2.
BOARD OF DIRECTORS: The Board of Directors of the Corporation.
CAPITAL STOCK: The Capital Stock of the Corporation, par value $1.00 per
share, or such other class of shares or other securities as may be applicable
pursuant to the provisions of Section 8.
CORPORATION: Chemed Corporation, a Delaware corporation.
FAIR MARKET VALUE: As applied to any date, the mean between the high and
low sales prices of a share of Capital Stock on the principal stock exchange on
which the Corporation is listed, or, if it is not so listed, the mean between
the bid and the ask prices of a share of Capital Stock in the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotation System on such date or, if no such sales or prices were made or quoted
on such date, on the next preceding date on which there were sales or quotes of
Capital Stock on such exchange or market, as the case may be; provided, however,
that, if the Capital Stock is not so listed or quoted, Fair Market Value shall
be determined in accordance with the method approved by the
Compensation/Incentive Committee, and, provided further, if any of the foregoing
methods of determining Fair Market Value shall not be consistent with the
regulations of the Secretary of the Treasury or his delegate at the time
applicable to a Stock Incentive of the type involved, Fair Market Value in the
case of such Stock Incentive shall be determined in accordance with such
regulations and shall mean the value as so determined.
COMPENSATION/INCENTIVE COMMITTEE: The Compensation/Incentive Committee
designated to administer this Plan pursuant to the provisions of Section 10.
INCENTIVE COMPENSATION: Bonuses, extra and other compensation payable in
addition to a salary or other base amount, whether contingent or discretionary
or required to be paid pursuant to an agreement, resolution or arrangement, and
whether payable currently or on a deferred basis, in cash, Capital Stock or
other property, awarded by the Corporation or a Subsidiary prior or subsequent
to the date of the approval and adoption of this Plan by the stockholders of the
Corporation.
KEY EMPLOYEE: An employee of the Corporation or of a Subsidiary who in the
opinion of the Compensation/Incentive Committee can contribute significantly to
the growth and successful operations of the Corporation or a Subsidiary. The
grant of a Stock Incentive to an employee by the Compensation/Incentive
Committee shall be deemed a determination by the Compensation/Incentive
Committee that such employee is a Key Employee. For the purposes of this Plan, a
director or officer of the Corporation or of a Subsidiary shall be deemed an
employee regardless of whether such director or officer is on the payroll of, or
otherwise paid for services by, the Corporation or a Subsidiary.
OPTION: An option to purchase shares of Capital Stock.
E-1
PERFORMANCE UNIT: A unit representing a share of Capital Stock, subject to
a Stock Award, the issuance, transfer or retention of which is contingent, in
whole or in part, upon attainment of a specified performance objective or
objectives, including, without limitation, objectives determined by reference to
or changes in (a) the Fair Market Value, book value or earnings per share of
Capital Stock, or (b) sales and revenues, income, profits and losses, return on
capital employed, or net worth of the Corporation (on a consolidated or
unconsolidated basis) or of any one or more of its groups, divisions,
Subsidiaries or departments, or (c) a combination of two or more of the
foregoing factors.
PLAN: The 2006 Stock Incentive Plan herein set forth as the same may from
time to time be amended.
STOCK AWARD: An issuance or transfer of shares of Capital Stock at the
time the Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking to issue or transfer such shares in the future, including, without
limitation, such an issuance, transfer or undertaking with respect to
Performance Units.
STOCK INCENTIVE: A stock incentive granted under this Plan in one of the
forms provided for in Section 3.
SUBSIDIARY: A corporation or other form of business association of which
shares (or other ownership interests) having 50% or more of the voting power are
owned or controlled, directly or indirectly, by the Corporation.
3. GRANTS OF STOCK INCENTIVES:
(a) Subject to the provisions of this Plan, the Compensation/Incentive
Committee may at any time, or from time to time, grant Stock Incentives under
this Plan to, and only to, Key Employees.
(b) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
4. STOCK SUBJECT TO THIS PLAN:
(a) Subject to the provisions of paragraph (c) and (d) of this Section 4
and of Section 8, the aggregate number of shares of Capital Stock which may
be issued or transferred pursuant to Stock Incentives granted under this Plan
shall not exceed 3,000,000 shares; provided, however, that the maximum
aggregate number of shares of Capital Stock which may be issued or
transferred pursuant to Stock Incentives in the form of Stock Awards, shall
not exceed 900,000 shares.
(b) The maximum aggregate number of shares of Capital Stock which may be
issued or transferred under the Plan to directors of the Corporation or of a
Subsidiary shall not exceed 1,200,000 shares.
(c) Authorized but unissued shares of Capital Stock and shares of Capital
Stock held in the treasury, whether acquired by the Corporation specifically
for use under this Plan or otherwise, may be used, as the
Compensation/Incentive Committee may from time to time determine, for
purposes of this Plan, provided, however, that any shares acquired or held by
the Corporation for the purposes of this Plan shall, unless and until
transferred to a Key Employee in accordance with the terms and conditions of
a Stock Incentive, be and at all times remain treasury shares of the
Corporation, irrespective of whether such shares are entered in a special
account for purposes of this Plan, and shall be available for any corporate
purpose.
(d) If any shares of Capital Stock subject to a Stock Incentive shall not
be issued or transferred and shall cease to be issuable or transferable
because of the termination, in whole or in part, of such Stock Incentive or
for any other reason, or if any such shares shall, after issuance or
transfer, be reacquired by the Corporation or a Subsidiary because of an
employee's failure to comply with the terms and conditions of a Stock
Incentive, the shares not so issued or transferred, or the shares so
reacquired by the Corporation or a Subsidiary shall no longer be charged
against any of the limitations provided for in paragraphs (a) or (b) of this
Section 4 and may again be made subject to Stock Incentives.
E-2
5. STOCK AWARDS: Stock Incentives in the form of Stock Awards shall be subject
to the following provisions:
(a) A Stock Award shall be granted only in payment of Incentive
Compensation that has been earned or as Incentive Compensation to be earned,
including, without limitation, Incentive Compensation awarded concurrently
with or prior to the grant of the Stock Award.
(b) For the purposes of this Plan, in determining the value of a Stock
Award, all shares of Capital Stock subject to such Stock Award shall be
valued at not less than 100 percent of the Fair Market Value of such shares
on the date such Stock Award is granted, regardless of whether or when such
shares are issued or transferred to the Key Employee and whether such shares
are subject to restrictions which affect their value.
(c) Shares of Capital Stock subject to a Stock Award may be issued or
transferred to the Key Employee at the time the Stock Award is granted, or at
any time subsequent thereto, or in installments from time to time, as the
Compensation/Incentive Committee shall determine. In the event that any such
issuance or transfer shall not be made to the Key Employee at the time the
Stock Award is granted, the Compensation/Incentive Committee may provide for
payment to such Key Employee, either in cash or in shares of Capital Stock
from time to time or at the time or times such shares shall be issued or
transferred to such Key Employee, of amounts not exceeding the dividends
which would have been payable to such Key Employee in respect of such shares
(as adjusted under Section 8) if they had been issued or transferred to such
Key Employee at the time such Stock Award was granted. Any amount payable in
shares of Capital Stock under the terms of a Stock Award may, at the
discretion of the Corporation, be paid in cash, on each date on which
delivery of shares would otherwise have been made, in an amount equal to the
Fair Market Value on such date of the shares which would otherwise have been
delivered.
(d) A Stock Award shall be subject to such terms and conditions,
including, without limitation, restrictions on sale or other disposition of
the Stock Award or of the shares issued or transferred pursuant to such Stock
Award, as the Compensation/Incentive Committee may determine; provided,
however, that upon the issuance or transfer of shares pursuant to a Stock
Award, the recipient shall, with respect to such shares, be and become a
stockholder of the Corporation fully entitled to receive dividends, to vote
and to exercise all other rights of a stockholder except to the extent
otherwise provided in the Stock Award. Each Stock Award shall be evidenced by
a written instrument in such form as the Compensation/Incentive Committee
shall determine, provided the Stock Award is consistent with this Plan and
incorporates it by reference.
6. OPTIONS: Stock Incentives in the form of Options shall be subject to the
following provisions:
(a) The maximum aggregate number of Stock Incentives in the form of
Options which may be granted to an individual employee of the Corporation or
a Subsidiary in any calendar year shall not exceed 200,000 Options.
(b) Upon the exercise of an Option, the purchase price shall be paid in
cash or, if so provided in the Option or in a resolution adopted by the
Compensation/Incentive Committee (and subject to such terms and conditions as
are specified in the Option or by the Compensation/Incentive Committee), in
shares of Capital Stock or in a combination of cash and such shares. Shares
of Capital Stock thus delivered shall be valued at their Fair Market Value on
the date of exercise. Subject to the provisions of Section 8, the purchase
price per share shall be not less than 100 percent of the Fair Market Value
of a share of Capital Stock on the date the Option is granted.
(c) Each Option shall be exercisable, in full or in part, six months after
the date the Option is granted, or may become exercisable in one or more
installments and at such time or times, as the Compensation/Incentive
Committee shall determine. Unless otherwise provided in the Option, an
Option, to the extent it is or becomes exercisable, may be exercised at any
time, in whole or in part, until the expiration or termination of the Option.
Any term or provision in any outstanding Option specifying when the Option is
exercisable or that it be exercisable in installments may be modified at any
time during the life of the Option by the Compensation/Incentive Committee,
provided, however, no such modification of an outstanding Option shall,
without the consent of the optionee, adversely affect any Option theretofore
granted to him. An Option will become immediately exercisable in full if at
any time during the term of the Option the Corporation obtains actual
knowledge that any of the following events has occurred, irrespective of the
applicability of any limitation on the number of shares then exercisable
under the Option: (1) any person within the meaning of Sections 13(d) and
E-3
14(d) of the Securities Exchange Act of 1934 (the "1934 Act"), other than the
Corporation or any of its subsidiaries, has become the beneficial owner,
within the meaning of Rule 13d-3 under the 1934 Act, of 30 percent or more of
the combined voting power of the Corporation's then outstanding voting
securities; (2) the expiration of a tender offer or exchange offer, other
than an offer by the Corporation, pursuant to which 20 percent or more of the
shares of the Corporation's Capital Stock have been purchased; (3) the
stockholders of the Corporation have approved (i) an agreement to merge or
consolidate with or into another corporation and the Corporation is not the
surviving corporation or (ii) an agreement to sell or otherwise dispose of
all or substantially all of the assets of the Corporation (including a plan
of liquidation); or (4) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors cease for any reason to constitute at least a majority thereof,
unless the nomination for the election by the Corporation's stockholders of
each new director was approved by a vote of at least one-half of the persons
who were directors at the beginning of the two-year period.
(d) Each Option shall be exercisable during the life of the optionee only
by him or a transferee or assignee permitted by paragraph (g) of this Section
6 and, after his death, only by his estate or by a person who acquired the
right to exercise the Option pursuant to one of the provisions of paragraph
(g) of this Section 6. An Option, to the extent that it shall not have been
exercised, shall terminate when the optionee ceases to be an employee of the
Corporation or a Subsidiary, unless he ceases to be an employee because of
his resignation with the consent of the Compensation/Incentive Committee
(which consent may be given before or after resignation), or by reason of his
death, incapacity or retirement under a retirement plan of the Corporation or
a Subsidiary. Except as provided in the next sentence, if the optionee ceases
to be an employee by reason of such resignation, the Option shall terminate
three months after he ceases to be an employee. If the optionee ceases to be
an employee by reason of such death, incapacity or retirement, or if he
should die during the three-month period referred to in the preceding
sentence, the Option shall terminate fifteen months after he ceases to be an
employee. Where an Option is exercised more than three months after the
optionee ceased to be an employee, the Option may be exercised only to the
extent it could have been exercised three months after he ceased to be an
employee. A leave of absence for military or governmental service or for
other purposes shall not, if approved by the Compensation/Incentive
Committee, be deemed a termination of employment within the meaning of this
paragraph (d); provided, however, that an Option may not be exercised during
any such leave of absence. Notwithstanding the foregoing provisions of this
paragraph (d) or any other provision of this Plan, no Option shall be
exercisable after expiration of the term for which the Option was granted,
which shall in no event exceed ten years. Where an Option is granted for a
term of less than ten years, the Compensation/Incentive Committee, may, at
any time prior to the expiration of the Option, extend its term for a period
ending not later than ten years from the date the Option was granted.
(e) Options shall be granted for such lawful consideration as the
Compensation/Incentive Committee shall determine.
(f) Neither the Corporation nor any Subsidiary may directly or indirectly
lend any money to any person for the purpose of assisting him to purchase or
carry shares of Capital Stock issued or transferred upon the exercise of an
Option.
(g) No Option nor any right thereunder may be assigned or transferred by
the optionee except:
(i) by will or the laws of descent and distribution;
E-4
(ii) pursuant to a qualified domestic relations order as defined by
the Internal Revenue Code of 1986, as amended, or by the Employee
Retirement Income Security Act of 1974, as amended, or the rules
thereunder;
(iii) by an optionee who, at the time of the transfer, is not
subject to the provisions of Section 16 of the 1934 Act, provided such
transfer is to, or for the benefit of (including but not limited to trusts
for the benefit of), the optionee's spouse or lineal descendants of the
optionee's parents; or
(iv) by an optionee who, at the time of the transfer, is subject to
the provisions of Section 16 of the 1934 Act, to the extent, if any, such
transfer would be permitted under Securities and Exchange Commission Rule
16b-3 or any successor rule thereto, as such rule or any successor rule
thereto may be in effect at the time of the transfer.
If so provided in the Option or if so authorized by the
Compensation/Incentive Committee and subject to such terms and conditions as
are specified in the Option or by the Compensation/Incentive Committee, the
Corporation may, upon or without the request of the holder of the Option and
at any time or from time to time, cancel all or a portion of the Option then
subject to exercise and either (i) pay the holder an amount of money equal to
the excess, if any, of the Fair Market Value, at such time or times, of the
shares subject to the portion of the Option so canceled over the aggregate
purchase price of such shares, or (ii) issue or transfer shares of Capital
Stock to the holder with a Fair Market Value, at such time or times, equal to
such excess.
(h) Each Option shall be evidenced by a written instrument, which shall
contain such terms and conditions, and shall be in such form, as the
Compensation/Incentive Committee may determine, provided the Option is
consistent with this Plan and incorporates it by reference. Notwithstanding
the preceding sentence, an Option, if so granted by the
Compensation/Incentive Committee, may include restrictions and limitations in
addition to those provided for in this Plan.
(i) Any federal, state or local withholding taxes payable by an optionee
or awardee upon the exercise of an Option or upon the removal of restrictions
of a Stock Award shall be paid in cash or in such other form as the
Compensation/Incentive Committee may authorize from time to time, including
the surrender of shares of Capital Stock or the withholding of shares of
Capital Stock to be issued to the optionee or awardee. All such shares so
surrendered or withheld shall be valued at Fair Market Value on the date such
are surrendered to the Corporation or authorized to be withheld.
7. COMBINATIONS OF STOCK AWARDS AND OPTIONS: Stock Incentives authorized by
paragraph (b) (iii) of Section 3 in the form of combinations of Stock Awards and
Options shall be subject to the following provisions:
(a) A Stock Incentive may be a combination of any form of Stock Award with
any form of Option; provided, however, that the terms and conditions of such
Stock Incentive pertaining to a Stock Award are consistent with Section 5 and
the terms and conditions of such Stock Incentive pertaining to an Option are
consistent with Section 6.
(b) Such combination Stock Incentive shall be subject to such other terms
and conditions as the Compensation/Incentive Committee may determine,
including, without limitation, a provision terminating in whole or in part a
portion thereof upon the exercise in whole or in part of another portion
thereof. Such combination Stock Incentive shall be evidenced by a written
instrument in such form as the Compensation/Incentive Committee shall
determine, provided it is consistent with this Plan and incorporates it by
reference.
8. ADJUSTMENT PROVISIONS: In the event that any recapitalization, or
reclassification, split-up or consolidation of shares of Capital Stock shall be
effected, or the outstanding shares of Capital Stock are, in connection with a
merger or consolidation of the Corporation or a sale by the Corporation of all
or a part of its assets, exchanged for a different number or class of shares of
stock or other securities of the Corporation or for shares of the stock or other
securities of any other corporation, or a record date for determination of
holders of Capital Stock entitled to receive a dividend payable in Capital Stock
shall occur (a) the number and class of shares or other securities that may be
issued or transferred pursuant to Stock Incentives, (b) the number and class of
shares or other securities which have not been issued or transferred under
outstanding Stock Incentives, (c) the purchase price to be paid per share or
other security under outstanding Options, and (d) the price to be paid per share
or other security by the Corporation or a Subsidiary for shares or other
securities issued or transferred pursuant to Stock Incentives which are subject
to a right of the Corporation or a Subsidiary to reacquire such shares or other
securities, shall in each case be equitably adjusted.
E-5
9. TERM: This Plan shall be deemed adopted and shall become effective on the
date it is approved and adopted by the stockholders of the Corporation. No Stock
Incentives shall be granted under this Plan after May 15, 2016.
10. ADMINISTRATION:
(a) The Plan shall be administered by the Compensation/Incentive
Committee, which shall consist of no fewer than three persons
designated by the Board of Directors. Grants of Stock
Incentive may be granted by the Compensation/Incentive
Committee either in or without consultation with employees,
but, anything in this plan to the contrary notwithstanding,
the Compensation/Incentive Committee shall have full authority
to act in the matter of selection of all Key Employees and in
determining the number of Stock Incentives to be granted to
them.
(b) The Compensation/Incentive Committee may establish such rules
and regulations, not inconsistent with the provisions of this
Plan, as it deems necessary to determine eligibility to
participate in this Plan and for the proper administration of
this Plan, and may amend or revoke any rule or regulation so
established. The Compensation/Incentive Committee may make
such determinations and interpretations under or in connection
with this Plan as it deems necessary or advisable. All such
rules, regulations, determinations and interpretations shall
be binding and conclusive upon the Corporation, its
Subsidiaries, its stockholders and all employees, and upon
their respective legal representatives, beneficiaries,
successors and assigns upon all other persons claiming under
or through any of them.
(c) Members of the Board of Directors and members of the
Compensation/Incentive Committee acting under this Plan shall
be fully protected in relying on good faith upon the advice of
counsel and shall incur no liability except for gross
negligence or willful misconduct in the performance of their
duties.
(d) Any awards under the Plan made to members of the Committee
shall be approved by the Board. With respect to awards to such
directors, all rights, powers and authorities vested in the
Committee under the Plan shall instead be exercised by the
Board, and all provisions of the Plan relating to the
Committee shall be interpreted in a manner consistent with the
foregoing by treating any such reference as a reference to the
Board for such purpose.
11. GENERAL PROVISIONS:
(a) Nothing in this Plan nor in any instrument executed pursuant
hereto shall confer upon any employee any right to continue in
the employ of the Corporation or a Subsidiary, or shall affect
the right of the Corporation or of a Subsidiary to terminate
the employment of any employee with or without cause.
(b) No shares of Capital Stock shall be issued or transferred
pursuant to a Stock Incentive unless and until all legal
requirements applicable to the issuance or transfer of such
shares, in the opinion of counsel to the Corporation, have
been complied with. In connection with any such issuance or
transfer, the person acquiring the shares shall, if requested
by the Corporation, give assurances, satisfactory to counsel
to the Corporation, that the shares are being acquired for
investment and not with a view to resale or distribution
thereof and assurances in respect of such other matters as the
Corporation or a Subsidiary may deem desirable to assure
compliance with all applicable legal requirements.
E-6
(c) No employee (individually or as a member of a group), and no
beneficiary or other persons claiming under or through him,
shall have any right, title or interest in or to any shares of
Capital Stock allocated or reserved for the purposes of this
Plan or subject to any Stock Incentive except as to such
shares of Capital Stock, if any, as shall have been issued or
transferred to him.
(d) The Corporation or a Subsidiary may, with the approval of the
Compensation/Incentive Committee, enter into an agreement or
other commitment to grant a Stock Incentive in the future to a
person who is or will be a Key Employee at the time of grant,
and, notwithstanding any other provision of this Plan, any
such agreement or commitment shall not be deemed the grant of
a Stock Incentive until the date on which the Company takes
action to implement such agreement or commitment.
(e) In the case of a grant of a Stock Incentive to an employee of
a Subsidiary, such grant may, if the Compensation/Incentive
Committee so directs, be implemented by the Corporation
issuing or transferring the shares, if any, covered by the
Stock Incentive to the Subsidiary, for such lawful
consideration as the Compensation/Incentive Committee may
specify, upon the condition or understanding that the
Subsidiary will transfer the shares to the employee in
accordance with the terms of the Stock Incentive specified by
the Compensation/Incentive Committee pursuant to the
provisions of this Plan. Notwithstanding any other provisions
hereof, such Stock Incentive may be issued by and in the name
of the Subsidiary and shall be deemed granted on the date it
is approved by the Compensation/Incentive Committee, on the
date it is delivered by the Subsidiary or on such other date
between said two dates, as the Compensation/Incentive
Committee shall specify.
(f) The Corporation or a Subsidiary may make such provisions as it
may deem appropriate for the withholding of any taxes which
the Corporation or a Subsidiary determines it is required to
withhold in connection with any Stock Incentive.
(g) Nothing in this Plan is intended to be a substitute for, or
shall preclude or limit the establishment or continuation of,
any other Plan, practice or arrangement for the payment of
compensation or fringe benefits to employees generally, or to
any class or group of employees, which the Corporation or any
Subsidiary or other affiliate now has or may hereafter
lawfully put into effect, including, without limitation, any
retirement, pension, group insurance, stock purchase, stock
bonus or stock option plan.
12. AMENDMENTS AND DISCONTINUANCE:
(a) This Plan may be amended by the Board of Directors upon the
recommendation of the Compensation/Incentive Committee,
provided that, without the approval of the stockholders of the
Corporation, no amendment shall be made which (i) increases
the aggregate number of shares of Capital Stock that may be
issued or transferred pursuant to Stock Incentives as provided
in paragraph (a) of Section 4, (ii) increases the maximum
aggregate number of shares of Capital Stock that may be issued
or transferred under the Plan to directors of the Corporation
or of a Subsidiary as provided in paragraph (b) of Section 4,
(iii) increases the maximum aggregate number of Stock
Incentives, in the form of Options, which may be granted to an
individual employee as provided in paragraph (a) of Section 6,
(iv) withdraws the administration of this Plan from the
Compensation/Incentive Committee, (v) permits any person who
is not at the time a Key Employee of the Corporation or of a
Subsidiary to be granted a Stock Incentive, (vi) permits any
option to be exercised more than ten years after the date it
is granted, (vii) amends Section 9 to extend the date set
forth therein or (viii) amends this Section 12.
E-7
(b) Notwithstanding paragraph (a) of this Section 12, the Board of
Directors may amend the Plan to take into account changes in
applicable securities laws, federal income tax laws and other
applicable laws. Should the provisions of Rule 16b-3, or any
successor rule, under the Securities Exchange Act of 1934 be
amended, the Board of Directors may amend the Plan in
accordance therewith.
(c) The Board of Directors may by resolution adopted by a majority
of the entire Board of Directors discontinue this Plan.
(d) No amendment or discontinuance of this Plan by the Board of
Directors or the Stockholders of the Corporation shall,
without the consent of the employee, adversely affect any
Stock Incentive theretofore granted to him.
E-8