EQUIFAX INC.
2000 STOCK INCENTIVE PLAN
(As amended through November 1, 2004)
1. PURPOSE. The purpose of the 2000 Stock Incentive Plan is to attract
and retain directors, officers and other key employees for Equifax Inc., a
Georgia corporation and its Subsidiaries and to provide those persons with
incentives and rewards for superior performance.
2. DEFINITIONS. As used in this Plan,
"Appreciation Right" means a right granted pursuant to Section 5 of
this Plan, and shall include both Tandem Appreciation Rights and Free-Standing
Appreciation Rights.
"Base Price" means the price to be used as the basis for determining
the Spread upon the exercise of a Free-Standing Appreciation Right and a Tandem
Appreciation Right.
"Board" means the Board of Directors of Equifax Inc.
"Change in Control" shall have the meaning provided in Section 11 of
this Plan.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means the Equifax Inc. Compensation and Human Resources
Committee of the Board, or any successor committee to which the responsibilities
of that Committee are assigned.
"Common Shares" means the Common Shares, par value $1.25 per share,
of the Company or any security into which such Common Shares may be changed by
reason of any transaction or event of the type referred to in Section 10 of this
Plan.
"Company" means Equifax Inc., a Georgia corporation.
"Covered Employee" means a Participant who is, or is determined by
the Board to be likely to become, a "covered employee" within the meaning of
Section 162(m) of the Code (or any successor provision).
"Date of Grant" means the date specified by the Board on which a
grant of Option Rights or Appreciation Rights, or a grant or sale of Restricted
Shares or Deferred Shares shall become effective (which date shall not be
earlier than the date on which the Board takes action with respect thereto).
"Deferral Period" means the period of time during which Deferred
Shares are subject to deferral limitations under Section 7 of this Plan.
"Deferred Shares" means an award made pursuant to Section 7 of this
Plan of the right to receive Common Shares at the end of a specified Deferral
Period.
"Director" means a member of the Board of Directors of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time, including any successor statutes
of similar intent.
"Free-Standing Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in tandem with an
Option Right.
"Immediate Family" has the meaning ascribed thereto in Rule 16a-1(e)
under the Exchange Act (or any successor rule to the same effect).
"Incentive Stock Options" means Option Rights that are intended to
qualify as "incentive stock options" under Section 422 of the Code or any
successor provision.
"Management Objectives" means the measurable performance objective
or objectives established pursuant to this Plan for Participants who have
received grants of Option Rights, Appreciation Rights, Restricted Shares and
dividend credits pursuant to this Plan, which are subject to the achievement of
Management Objectives. Management Objectives may be described in terms of
Company-wide objectives or objectives that are related to the performance of the
individual Participant or of the Subsidiary, division, department, region or
function within the Company or Subsidiary in which the Participant is employed.
The Management Objectives may be made relative to the performance of other
corporations. The Management Objectives applicable to any award to a Covered
Employee shall be based on specified levels of, or growth in, one or more of the
following criteria, as determined for a single year, or cumulatively for a
stated number of years, or as an average over a stated number of years, or
otherwise as determined by the Committee at the time the Management Objective is
established:
1. earnings per share;
2. economic value added;
3. revenue;
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4. operating profit;
5. net income;
6. total return to shareholders;
7. cash flow/net assets ratio;
8. debt/capital ratio;
9. return on total capital;
10. return on equity; and
11. common stock price.
If the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which it conducts its business, or other events or circumstances
render the Management Objectives unsuitable, the Committee may in its discretion
modify such Management Objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Committee deems appropriate and
equitable, except in the case of a Covered Employee where such action would
result in the loss of the otherwise available exemption of the award under
Section 162(m) of the Code. In such case, the Committee shall not make any
modification of the Management Objectives or minimum acceptable level of
achievement unless the Committee specifically acknowledges that effect.
"Market Value per Share" means, (i) the closing sale price per
Common Share as reported on the principal exchange on which Common shares are
then trading, if any, or, if applicable, the NASDAQ National Market System, on
the Date of Grant, or if there are no sales on such day, on the next preceding
trading day during which a sale occurred, or (ii) if clause (i) does not apply,
the fair market value of the Common Shares as determined by the Board.
"Non-Employee Director" means a Director who is not an employee of
the Company or any Subsidiary.
"Optionee" means the optionee named in an agreement evidencing an
outstanding Option Right.
"Option Price" means the purchase price payable on exercise of an
Option Right.
"Option Right" means the right to purchase Common Shares upon
exercise of an option granted pursuant to Section 4 or Section 8 of this Plan.
"Participant" means a person who is selected by the Committee to
receive benefits under this Plan and who is at the time an officer, or other key
employee of the Company or any one or more of its Subsidiaries, or who has
agreed to commence serving in any of such capacities within 60 days of the Date
of Grant, and shall also include each Non-Employee Director who receives an
award of Option Rights, Restricted Shares or Deferred Shares.
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"Plan" means this Equifax Inc. 2000 Stock Incentive Plan, as it may
be amended from time to time.
"Reload Option Rights" means additional Option Rights granted
automatically to an Optionee upon the exercise of Option Rights pursuant to
Section 4(f) of this Plan.
"Restricted Shares" means Common Shares granted or sold pursuant to
Section 6 or Section 8 of this Plan as to which neither the substantial risk of
forfeiture nor the prohibition on transfers referred to in Section 6 has
expired.
"Rule 16b-3" means Rule 16b-3 under the Exchange Act (or any
successor rule to the same effect) as in effect from time to time.
"Spread" means the excess of the Market Value per Share on the date
when an Appreciation Right is exercised, or on the date when Option Rights are
surrendered in payment of the Option Price of other Option Rights, over the
Option Price or Base Price provided for in the related Option Right or
Free-Standing Appreciation Right, respectively.
"Subsidiary" means a corporation, company or other entity (i) more
than 50 percent of whose outstanding shares or securities (representing the
right to vote for the election of directors or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as may be the case in
a partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company, except that for purposes of determining
whether any person may be a Participant for purposes of any grant of Incentive
Stock Options, "Subsidiary" means any corporation in which, at the time of the
grant, the Company owns or controls, directly or indirectly, more than 50
percent of the total combined voting power represented by all classes of stock
issued by such corporation.
"Tandem Appreciation Right" means an Appreciation Right granted
pursuant to Section 5 of this Plan that is granted in tandem with an Option
Right.
"Voting Power" means at any time, the total votes relating to the
then-outstanding securities entitled to vote generally in the election of
Directors.
3. SHARES AVAILABLE UNDER THE PLAN. (a) Subject to adjustment as
provided in Section 3(b) and Section 10 of this Plan, the number of Common
Shares that may be issued or transferred (i) upon the exercise of Option Rights
or Appreciation Rights, (ii) as Restricted Shares and released from substantial
risks of forfeiture thereof, (iii) as Deferred Shares, (iv) as awards to
Non-Employee Directors or in payment of dividend equivalents paid with respect
to awards made under the Plan shall not exceed in the aggregate 1,500,000 Common
Shares, plus any
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shares described in Section 3(b). Such shares may be shares of original issuance
or treasury shares or a combination of the foregoing.
(b) The number of shares available in Section 3(a) above shall be
adjusted to account for shares relating to awards that expire, are forfeited or
are transferred, surrendered or relinquished upon the payment of any Option
Price by the transfer to the Company of Common Shares or upon satisfaction of
any withholding amount. Upon payment in cash of the benefit provided by any
award granted under this Plan, any shares that were covered by that award shall
again be available for issue or transfer hereunder. In addition to these
adjustments, commencing on January 1, 2001, and on each January 1, thereafter
ending on January 1, 2007, an additional number of Common Shares shall be added
to the total available under Section 3(a), equal to one percent (1%) of the
number of Common Shares issued and outstanding on that date.
(c) Notwithstanding anything in this Section 3, or elsewhere in this
Plan, to the contrary and subject to adjustment as provided in Section 10 of
this Plan, the aggregate number of Common Shares actually issued or transferred
by the Company upon the exercise of Incentive Stock Options shall not exceed
1,000,000 Common Shares per year for each calendar year or portion thereof in
which this Plan exists prior to the date determined according to Section 17, and
Incentive Stock Options shall not be issued for more than 1,000,000 Common
Shares during any such year. No Participant shall be granted Option Rights and
Appreciation Rights, in the aggregate, for more than 750,000 Common Shares
during any period of one calendar year; the number of shares issued as
Restricted Shares shall not in the aggregate exceed 500,000 Common Shares; and
no Non-Employee Director shall be granted Option Rights, Appreciation Rights,,
Restricted Shares and Deferred Shares, in the aggregate, for more than 100,000
Common Shares during any calendar year.
4. OPTION RIGHTS. The Committee may, from time to time and upon such
terms and conditions as it may determine, authorize the granting to Participants
of options to purchase Common Shares. Each such grant may utilize any or all of
the authorizations, and shall be subject to all of the requirements contained in
the following provisions:
(a) Each grant shall specify the number of Common Shares to which it
pertains subject to the limitations set forth in Section 3 of this plan.
(b) Each grant shall specify an Option Price per share, which may
not be less than the Market Value per Share on the Date of Grant.
(c) Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Company, (ii) by the actual or
constructive transfer to the Company of Common Shares owned by the Optionee for
at least 6 months (or other consideration authorized pursuant to Section 4(d))
having
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a value at the time of exercise equal to the total Option Price, or (iii)
by a combination of such methods of payment.
(d) The Committee may determine, at or after the Date of Grant, that
payment of the Option Price of any Option Right (other than an Incentive Stock
Option) may also be made in whole or in part in the form of Restricted Shares or
other Common Shares that are forfeitable or subject to restrictions on transfer,
Deferred Shares, (based, in each case, on the Market Value per Share on the date
of exercise), or other Option Rights (based on the Spread on the date of
exercise). Unless otherwise determined by the Committee at or after the Date of
Grant, whenever any Option Price is paid in whole or in part by means of any of
the forms of consideration specified in this Section 4(d), the Common Shares
received upon the exercise of the Option Rights shall be subject to such risks
of forfeiture or restrictions on transfer as may correspond to any that apply to
the consideration surrendered, but only to the extent, determined with respect
to the consideration surrendered, of (i) the number of shares, or (ii) the
Spread of any unexercisable portion of Option Rights.
(e) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a bank or broker on a date satisfactory to the
Company of some or all of the shares to which such exercise relates.
(f) Any grant may, at or after the Date of Grant, provide for the
automatic grant of Reload Option Rights to an Optionee upon the exercise of
Option Rights (including Reload Option Rights) using Common Shares or other
consideration specified in Section 4(d). Reload Option Rights shall cover up to
the number of Common Shares, Deferred Shares, or Option Rights surrendered to
the Company upon any such exercise in payment of the Option Price or to meet any
withholding obligations. Reload Options may not have an Option Price that is
less than the applicable Market Value per Share at the time of exercise and
shall be on such other terms as may be specified by the Committee, which may be
the same as or different from those of the original Option Rights.
(g) Successive grants may be made to the same Participant whether or
not any Option Rights previously granted to such Participant remain unexercised.
(h) Each grant shall specify the period or periods of continuous
service by the Optionee with the Company or any Subsidiary that is necessary
before the Option Rights or installments thereof will become exercisable and may
provide for the earlier exercise of such Option Rights in the event of a Change
in Control.
(i) Any grant of Option Rights may specify Management Objectives
that must be achieved as a condition to the exercise of such rights.
(j) Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options that are intended to
qualify
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under particular provisions of the Code, (ii) options that are not intended so
to qualify, or (iii) combinations of the foregoing.
(k) The Committee may, at or after the Date of Grant of any Option
Rights (other than Incentive Stock Options), provide for the payment of dividend
equivalents to the Optionee on either a current or deferred or contingent basis
or may provide that such equivalents shall be credited against the Option Price.
(l) The exercise of an Option Right shall result in the cancellation
on a share-for-share basis of any Tandem Appreciation Right authorized under
Section 5 of this Plan.
(m) No Option Right shall be exercisable more than 10 years from the
Date of Grant.
(n) Each grant of Option Rights shall be evidenced by an agreement
or other written notice from the Company by an officer and delivered to the
Optionee and containing such terms and provisions, consistent with this Plan, as
the Committee may approve.
5. APPRECIATION RIGHTS. (a) The Committee may authorize the granting
(i) to any Optionee, of Tandem Appreciation Rights in respect of Option Rights
granted hereunder, and (ii) to any Participant, of Free-Standing Appreciation
Rights. A Tandem Appreciation Right shall be a right of the Optionee,
exercisable by surrender of the related Option Right, to receive from the
Company an amount determined by the Board, which shall be expressed as a
percentage of the Spread (not exceeding 100 percent) at the time of exercise.
Tandem Appreciation Rights may be granted at any time prior to the exercise or
termination of the related Option Rights; provided, however, that a Tandem
Appreciation Right awarded in relation to an Incentive Stock Option must be
granted concurrently with such Incentive Stock Option. A Free-Standing
Appreciation Right shall be a right of the Participant to receive from the
Company an amount determined by the Committee, which shall be expressed as a
percentage of the Spread (not exceeding 100 percent) at the time of exercise.
(b) Each grant of Appreciation Rights may utilize any or all of the
authorizations, and shall be subject to all of the requirements, contained in
the following provisions:
(i) Any grant may specify that the amount payable on
exercise of an Appreciation Right may be paid by the Company in
cash, in Common Shares or in any combination thereof and may either
grant to the Participant or retain in the Committee the right to
elect among those alternatives.
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(ii) Any grant may specify that the amount payable on
exercise of an Appreciation Right may not exceed a maximum specified
by the Committee at the Date of Grant.
(iii) Any grant may specify waiting periods before
exercise and permissible exercise dates or periods.
(iv) Any grant may specify that such Appreciation Right
may be exercised only in the event of, or earlier in the event of, a
Change in Control.
(v) Any grant may provide for the payment to the
Participant of dividend equivalents thereon in cash or Common Shares
on a current, deferred or contingent basis.
(vi) Any grant of Appreciation Rights may specify
Management Objectives that must be achieved as a condition of the
exercise of such Rights.
(vii) Each grant of Appreciation Rights shall be
evidenced by an agreement executed on behalf of the Company by an
officer and delivered to and accepted by the Participant, which
agreement shall describe such Appreciation Rights, identify the
related Option Rights (if applicable), state that such Appreciation
Rights are subject to all the terms and conditions of this Plan, and
contain such other terms and provisions, consistent with this Plan,
as the Committee may approve.
(c) Any grant of Tandem Appreciation Rights shall provide that such
Rights may be exercised only at a time when the related Option Right is also
exercisable and at a time when the Spread is positive, and by surrender of the
related Option Right for cancellation.
(d) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each
Free-standing Appreciation Right a Base Price, which shall be equal
to or greater than the Market Value per Share on the Date of Grant;
(ii) Successive grants may be made to the same
Participant regardless of whether any Free-standing Appreciation
Rights previously granted to the Participant remain unexercised; and
(iii) No Free-standing Appreciation Right granted under
this Plan may be exercised more than 10 years from the Date of
Grant.
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6. RESTRICTED SHARES. The Committee may also authorize the grant or
sale of Restricted Shares to Participants. Each such grant or sale may utilize
any or all of the authorizations, and shall be subject to all of the
requirements, contained in the following provisions:
(a) Each such grant or sale shall constitute an immediate transfer
of the ownership of Common Shares to the Participant in consideration of the
performance of services, entitling such Participant to voting, dividend and
other ownership rights, but subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall provide that the Restricted Shares
covered by such grant or sale shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period of not
less than 2 years to be determined by the Board at the Date of Grant and may
provide for the earlier lapse of such substantial risk of forfeiture in the
event of a Change in Control.
(d) Each such grant or sale shall provide that during the period for
which such substantial risk of forfeiture is to continue, the transferability of
the Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Board at the Date of Grant (which restrictions may
include, without limitation, rights of repurchase or first refusal in the
Company or provisions subjecting the Restricted Shares to a continuing
substantial risk of forfeiture in the hands of any transferee).
(e) Any grant of Restricted Shares may specify Management Objectives
that, if achieved, will result in termination or early termination of the
restrictions applicable to such shares. Each grant may specify in respect of
such Management Objectives a minimum acceptable level of achievement and may set
forth a formula for determining the number of Restricted Shares on which
restrictions will terminate if performance is at or above the minimum level, but
falls short of full achievement of the specified Management Objectives.
(f) Any grant or sale of Restricted Shares may require that any or
all dividends or other distributions paid thereon during the period of such
restrictions be automatically deferred and reinvested in additional Restricted
Shares, which may be Subject to the same restrictions as the underlying award.
(g) Each grant or sale of Restricted Shares shall be evidenced by an
agreement executed on behalf of the Company by any officer and delivered to and
accepted by the Participant and shall contain such terms and provisions,
consistent with this Plan, as the Committee may approve. Unless otherwise
directed by the Committee, all certificates representing Restricted Shares shall
be held in custody by
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the Company until all restrictions thereon shall have lapsed, together with a
stock power or powers executed by the Participant in whose name such
certificates are registered, endorsed in blank and covering such Shares.
7. DEFERRED SHARES. The Committee may also authorize the granting or
sale of Deferred Shares to Participants. Each such grant or sale may utilize any
or all of the authorizations, and shall be subject to all of the requirements
contained in the following provisions:
(a) Each such grant or sale shall constitute the agreement by the
Company to deliver Common Shares to the Participant in the future in
consideration of the performance of services, but subject to the fulfillment of
such conditions during the Deferral Period as the Committee may specify.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall be subject to a Deferral Period of
not less than 1 year, as determined by the Committee at the Date of Grant, and
may provide for the earlier lapse or other modification of such Deferral Period
in the event of a Change in Control.
(d) During the Deferral Period, the Participant shall have no right
to transfer any rights under his or her award and shall have no rights of
ownership in the Deferred Shares and shall have no right to vote them, but the
Committee may, at or after the Date of Grant, authorize the payment of dividend
equivalents on such Shares on either a current or deferred or contingent basis,
either in cash or in additional Common Shares.
(e) Each grant or sale of Deferred Shares shall be evidenced by an
agreement executed on behalf of the Company by any officer and delivered to and
accepted by the Participant and shall contain such terms and provisions,
consistent with this Plan, as the Committee may approve.
8. AWARDS TO NON-EMPLOYEE DIRECTORS. The Committee may, from time to
time and upon such terms and conditions as it may determine, authorize the
granting to Non-Employee Directors of Option Rights and may also authorize the
grant or sale of Restricted Shares and Deferred Shares to Non-Employee
Directors.
(a) Each grant of Option Rights awarded pursuant to this Section 8
shall be upon terms and conditions consistent with Section 4 of this Plan and
shall be evidenced by an agreement in such form as shall be approved by the
Committee. Each grant shall specify an Option Price per share, which shall not
be less than the Market Value per Share on the Date of Grant. Each such Option
Right granted under the Plan shall expire not more than 10 years from the Date
of Grant and shall be subject to earlier termination as hereinafter provided.
Unless otherwise determined by the Committee, such Option Rights shall be
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subject to the following additional terms and conditions:
(i) Each grant shall specify the number of Common Shares
to which it pertains subject to the limitations set forth in Section
3 of this plan.
(ii) In the event of the death or disability of the
holder of any such Option Rights, each of the then outstanding
Option Rights of such holder may be exercised at any time within a
stated period after such death or disability, as provided in the
grant, but in no event after the expiration date of the term of such
Option Rights.
(iii) If a Non-Employee Director subsequently becomes an
employee of the Company or a Subsidiary while remaining a member of
the Board, any Option Rights held under the Plan by such individual
at the time of such commencement of employment shall not be affected
thereby.
(iv) Option Rights may be exercised by a Non-Employee
Director only upon payment to the Company in full of the Option
Price of the Common Shares to be delivered. Such payment shall be
made in cash or in Common Shares then owned by the optionee for at
least six months, or in a combination of cash and such Common
Shares.
(v) Any grant may provide for deferred payment of the
Option Price from the proceeds of sale through a bank or broker on a
date satisfactory to the Company of some or all of the shares to
which such exercise relates.
(b) Each grant or sale of Restricted Shares pursuant to this Section
8 shall be upon terms and conditions consistent with Section 6 of this Plan.
(c) Each grant or sale of Deferred Shares pursuant to this Section 8
shall be upon terms and conditions consistent with Section 7 of this Plan.
9. TRANSFERABILITY. (a) Except as otherwise determined by the
Committee, no Option Right, Appreciation Right or other derivative security
granted under the Plan shall be transferable by a Participant other than by will
or the laws of descent and distribution. Except as otherwise determined by the
Committee, Option Rights and Appreciation Rights shall be exercisable during the
Optionee's lifetime only by him or her or by his or her guardian or legal
representative.
(b) The Committee may specify at the Date of Grant that part or all
of the Common Shares that are (i) to be issued or transferred by the Company
upon the exercise of Option Rights or Appreciation Rights, or upon the
termination
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of the Deferral Period applicable to Deferred Shares or (ii) no
longer subject to the substantial risk of forfeiture and restrictions on
transfer referred to in Section 6 of this Plan, shall be subject to further
restrictions on transfer.
(c) Notwithstanding the provisions of Section 9(a), the Committee
may provide that any grant of Option Rights (other than Incentive Stock
Options), Appreciation Rights, Restricted Shares, and Deferred Shares shall be
transferable by a Participant, without payment of consideration therefor by the
transferee, to any one or more members of the Participant's Immediate Family (or
to one or more trusts established solely for the benefit of one or more members
of the Participant's Immediate Family or to one or more partnerships in which
the only partners are members of the Participant's Immediate Family); provided,
however, that (i) no such transfer shall be effective unless reasonable prior
notice thereof is delivered to the Company and such transfer is thereafter
effected in accordance with any terms and conditions that shall have been made
applicable thereto by the Company or the Board and (ii) any such transferee
shall be subject to the same terms and conditions hereunder as the Participant.
10. ADJUSTMENTS. The Committee may make or provide for such adjustments
in the numbers of Common Shares covered by outstanding Option Rights,
Appreciation Rights and Deferred Shares granted hereunder, and in the Option
Price and Base Price, and in the kind of shares covered thereby, as the
Committee, in its sole discretion, exercised in good faith, may determine is
equitably required to prevent dilution or enlargement of the rights of
Participants or Optionees that otherwise would result from (a) any stock
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Company, or (b) any merger, consolidation,
spin-off, split-off, spin-out, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of rights or warrants to
purchase securities, or (c) any other corporate transaction or event having an
effect similar to any of the foregoing. Moreover, in the event of any such
transaction or event, the Committee, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative
consideration as it, in good faith, may determine to be equitable in the
circumstances and may require in connection therewith the surrender of all
awards so replaced. The Committee may also make or provide for such adjustments
in the numbers of shares specified in Section 3 of this Plan as the Committee in
its sole discretion, exercised in good faith, may determine is appropriate to
reflect any transaction or event described in this Section 10; provided,
however, that any such adjustment to the number specified in Section 3(c)(i)
shall be made only if and to the extent that such adjustment would not cause any
Option intended to qualify as an Incentive Stock Option to fail so to qualify,
and the Committee may takes into consideration, as to any award subject to a
proposed adjustment, the potential adverse effect thereof under applicable tax
or other laws, and may adjust such awards inconsistently as a consequence of
those effects.
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11. CHANGE IN CONTROL. For purposes of this Plan, except as may be
otherwise prescribed by the Committee in an agreement evidencing a grant or
award made under the Plan, a "Change in Control" shall mean if at any time any
of the following events shall have occurred:
(a) VOTING STOCK ACCUMULATIONS. The accumulation by any Person of
Beneficial Ownership of twenty percent (20%) or more of the combined voting
power of the Company's Voting Stock; provided that for purposes of this Section
11(a), a Change in Control will not be deemed to have occurred if the
accumulation of twenty percent (20%) or more of the voting power of the
Company's Voting Stock results from any acquisition of Voting Stock (i) directly
from the Company that is approved by the Incumbent Board, (ii) by the Company,
(iii) by any employee benefit plan (or related trust) sponsored or maintained by
the Company or any Subsidiary, or (d) by any Person pursuant to a Business
Combination that complies with clauses (i), (ii) and (iii) of Section 11(b); or
(b) BUSINESS COMBINATIONS. Consummation of a Business Combination,
unless, immediately following that Business Combination, (i) all or
substantially all of the Persons who were the beneficial owners of Voting Stock
of the Company immediately prior to that Business Combination beneficially own,
directly or indirectly, more than sixty-six and two-thirds percent (66 2/3%) of
the then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
Directors of the entity resulting from that Business Combination (including,
without limitation, an entity that as a result of that transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions relative
to each other as their ownership, immediately prior to that Business
Combination, of the Voting Stock of the Company, (ii) no Person (other than the
Company, that entity resulting from that Business Combination, or any employee
benefit plan (or related trust) sponsored or maintained by the Company, any
Eighty Percent (80%) Subsidiary or that entity resulting from that Business
Combination) beneficially owns, directly or indirectly, twenty percent (20%) or
more of the then outstanding shares of common stock of the entity resulting from
that Business Combination or the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of
that entity, and (iii) at least a majority of the members of the Board of
Directors of the entity resulting from that Business Combination were members of
the Incumbent Board at the time of the action of the Board of Directors
providing for that Business Combination; or
(c) SALE OF ASSETS. A sale or other disposition of all or substantially
all of the assets of the Company; or
(d) LIQUIDATIONS OR DISSOLUTIONS. Approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company, except pursuant
to a Business Combination that complies with clauses (i), (ii) and (iii) of
Section 11(b).
13
For purposes of this Section 11, the following definitions will apply:
"Beneficial Ownership" means beneficial ownership as that term is used
in Rule 13d-3 promulgated under the Exchange Act.
"Business Combination" means a reorganization, merger or consolidation
of the Company.
"Eighty Percent (80%) Subsidiary" means an entity in which the Company
directly or indirectly beneficially owns eighty percent (80%) or more of the
outstanding Voting Stock.
"Exchange Act" means the Securities Exchange Act of 1934, including
amendments, or successor statutes of similar intent.
"Incumbent Board" means a Board of Directors at least a majority of
whom consist of individuals who either are (a) members of the Company's Board of
Directors as of January 1, 2000, or (b) members who become members of the
Company's Board of Directors subsequent to January 1, 2000, whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least two-thirds (2/3) of the directors then comprising the Incumbent Board
(either by a specific vote or by approval of the proxy statement of the Company
in which that person is named as a nominee for director, without objection to
that nomination), but excluding, for that purpose, any individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest (within the meaning of Rule 14a-11 of the Exchange Act) with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board of
Directors.
"Person" means any individual, entity or group (within the meaning of
Section 13(d)(3) or 14 (d)(2) of the Exchange Act).
"Voting Stock" means the then outstanding securities of an entity
entitled to vote generally in the election of members of that entity's Board.
12. FRACTIONAL SHARES. The Company shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Committee may provide for
the elimination of fractions or for the settlement of fractions in cash.
13. WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for such withholding are insufficient, it
shall be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory
to the Company for payment of the balance of such taxes required to be withheld,
which arrangements (in the discretion of the Committee) may include
relinquishment of a portion of such benefit. The Company and a Participant or
such other person may also make similar
14
arrangements with respect to the payment of any taxes with respect to which
withholding is not required.
14. FOREIGN EMPLOYEES. In order to facilitate the making of any grant
or combination of grants under this Plan, the Committee may provide for such
special terms for awards to Participants who are foreign nationals or who are
employed by the Company or any Subsidiary outside of the United States of
America as the Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Committee may
approve such supplements to or amendments, restatements or alternative versions
of this Plan as it may consider necessary or appropriate for such purposes,
without thereby affecting the terms of this Plan as in effect for any other
purpose, and the Secretary or other appropriate officer of the Company may
certify any such document as having been approved and adopted in the same manner
as this Plan. No such special terms, supplements, amendments or restatements,
however, shall include any provisions that are inconsistent with the terms of
this Plan as then in effect unless this Plan could have been amended to
eliminate such inconsistency without further approval by the shareholders of the
Company.
15. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by
the Committee. A majority of the Committee shall constitute a quorum, and the
action of the members of the Committee present at any meeting at which a quorum
is present, or acts unanimously approved in writing, shall be the acts of the
Committee.
(b) The Committee, in its discretion, may delegate to one or more
officers of the Company, all or part of the Committee's authority and duties
with respect to Participants who are not subject to the reporting and other
provisions of Section 16 of the Exchange Act or any successor rule to the same
effect. In the event of such delegation, and as to matters encompassed by the
delegation, references in the Plan to the Committee shall be interpreted as a
reference to the Committee's delegate or delegates. The Committee may revoke or
amend the terms of a delegation at any time but such action shall not invalidate
any prior actions of the Committee's delegate or delegates that were consistent
with the terms of the Plan.
(c) The interpretation and construction by the Committee of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights, Restricted Shares, or Deferred
Shares, and any determination by the Committee pursuant to any provision of this
Plan or of any such agreement, notification or document shall be final and
conclusive. No member of the Committee shall be liable for any such action or
determination made in good faith.
16. AMENDMENTS, ETC. (a) The Committee may at any time and from time to
time amend the Plan in whole or in part; provided, however, that any amendment
which must be approved by the shareholders of the Company in order to
15
comply with applicable law or the rules of the New York Stock Exchange or, if
the Common Shares are not traded on the New York Stock Exchange, the principal
national securities exchange upon which the Common Shares are traded or quoted,
shall not be effective unless and until such approval has been obtained.
Presentation of this Plan or any amendment hereof for shareholder approval shall
not be construed to limit the Company's authority to offer similar or dissimilar
benefits under other plans without shareholder approval. No amendment shall,
without a Participant's consent, adversely affect any rights of any Participant
with respect to any award outstanding at the time such amendment is made. No
amendment to this Plan shall become effective until shareholder approval is
obtained if (i) the amendment increases the aggregate number of Common Shares
that may be issued under the Plan, (ii) the amendment changes the class of
individuals eligible to become Participants, or (iii) the amendment extends the
duration of the Plan.
(b) The Committee shall not, without the further approval of the
shareholders of the Company, authorize the amendment of any outstanding Option
Right to reduce the Option Price. Furthermore, no Option Right shall be canceled
and replaced with awards having a lower Option Price without further approval of
the shareholders of the Company. This Section 16(b) is intended to prohibit the
repricing of "underwater" Option Rights and shall not be construed to prohibit
the adjustments provided for in Section 10 of this Plan.
(c) The Committee also may permit Participants to elect to defer the
issuance of Common Shares or the settlement of awards in cash under the Plan
pursuant to such rules, procedures or programs as it may establish for purposes
of this Plan. The Committee also may provide that deferred issuances and
settlements include the payment or crediting of dividend equivalents or interest
on the deferral amounts.
(d) The Committee may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral by
the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Company or a Subsidiary to the
Participant.
(e) In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of hardship or other
special circumstances, of a Participant who holds an Option Right or
Appreciation Right not immediately exercisable in full, or any Restricted Shares
as to which the substantial risk of forfeiture or the prohibition or restriction
on transfer has not lapsed, or any Deferred Shares as to which the Deferral
Period has not been completed, or who holds Common Shares subject to any
transfer restriction imposed pursuant to Section 9(b) of this Plan, the
Committee may, in its sole discretion, accelerate the time at which such Option
Right or Appreciation Right may be exercised or the time at which such
substantial risk of forfeiture or prohibition or restriction on transfer will
lapse or the time when such Deferral Period will end or the time when such
transfer restriction will terminate or may waive any other limitation or
requirement under any such award.
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(f) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any
Subsidiary, nor shall it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such Participant's employment or
other service at any time.
(g) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as an Incentive Stock Option from
qualifying as such, that provision shall be null and void with respect to such
Option Right. Such provision, however, shall remain in effect for other Option
Rights and there shall be no further effect on any provision of this Plan.
17. TERMINATION. No grant shall be made under this Plan more than 10
years after the date on which this Plan is first approved by the shareholders of
the Company, but all grants made on or prior to such date shall continue in
effect thereafter subject to the terms thereof and of this Plan. The Committee
may terminate the Plan at any time.
18. UNITED KINGDOM AWARDS.
(a) UK PROVISIONS. The terms and conditions used in this Section 18
shall apply exclusively to Participants who are resident in the United Kingdom
("UK Participants") and shall not apply to Participants residing anywhere else.
(b) OVERRIDING NATURE. The Plan terms and conditions shall govern
all Option Rights granted to Optionholders, subject to the modifications set out
in this Section 18. If the provisions contained in this Section 18 conflict with
those contained in other Sections of the Plan, the provisions set forth in this
Section 18 shall, subject to Section 18 (y), govern as they relate to Option
Rights granted to Optionholders.
(c) INTERPRETATION. The following definitions shall apply in this
Section 18:
"Appropriate Period" has the meaning given in Paragraph
15 (2) of Schedule 9;
"Associated Company" has the meaning given in section
187 (2) of the Taxes Act;
"Control" has the meaning given by section 187 (2) of
the Taxes Act;
"Date of UK Grant" means, in relation to any Option
Rights, the date upon which the Committee resolves to grant the
Option Rights;
"Employee" means a UK Participant who is an employee of
any Group Company and any director of any Group Company, who is
required to
17
devote not less than 25 hours per week (exclusive of meal breaks) to
his duties to the Group;
"Group" means the Company and any companies of which the
Company has Control and "Group Company" means any such Company;
"Market Value" has the meaning given in part VIII of the
Taxation of Chargeable Gains Act 1992;
"Optionholder" means the holder of an Option Right
granted subject to the terms and conditions contained in this
Section 18. A person shall not, however, be an Optionholder in
relation to Option Rights which are restricted in whole or in part
under Section 18 (y);
"Schedule 9" means Schedule 9 to the Taxes Act;
"Shares" means Common Shares satisfying the conditions
specified in paragraphs 10-14 (inclusive) of Schedule 9;
"Taxes Act" means the UK Income and Corporation Taxes
Act 1988;
(d) STATUTORY INTERPRETATION. Where the context so admits, any
reference in this Section 18:
(i) to the singular number shall be construed as if it
referred also to the plural number and vice versa;
(ii) to the masculine gender shall be construed as
though it referred also to the feminine gender;
(iii) to a statute or statutory provision as for the
time being amended or reenacted; and
(iv) to the Act or any provision of the Act shall be
construed as including a reference to the Act or provision repealed
by and corresponding to the Act.
(e) ELIGIBILITY. Subject to the following provisions of this Section
18, the Committee may grant Option Rights to any Employee in any case where the
Committee so determines provided that no Option Right shall be granted to any
Employee unless the company by which that Employee is employed has first been
nominated by the Committee to participate in the Plan.
(f) RESTRICTIONS ON ELIGIBILITY. The Committee may not grant an
Option Right to any individual who is not an Employee at the Date of UK Grant or
who is otherwise required by paragraph 8 of Schedule 9 to be precluded from
having an Option Right granted to him on that date.
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(g) LIMIT ON INDIVIDUAL GRANTS. Irrespective of the number of Shares
over which an Option Right is expressed to have been granted, an Option Right
shall take effect and, if necessary, be limited, so that the total Market Value
of the Shares which the Optionholder may acquire on the exercise of all Approved
Options held by him shall not exceed the amount specified in paragraph 28 of
Schedule 9 (which is, currently, (pound)30,000). For this purpose "Approved
Options" shall include all options granted under a share option scheme approved
by the United Kingdom Board of the Inland Revenue under Schedule 9 and
established by the Company or any Associated Company of the Company but
excluding any savings related share option scheme.
(h) RESTRICTION ON EXERCISES FOR CERTAIN PEOPLE. An Optionholder may
not exercise an Option Right at the time when he must be precluded from doing so
in order to satisfy the requirements of paragraph 8 of Schedule 9 and neither
may the personal representatives of an Optionholder exercise such an option if,
in order to satisfy those requirements, he was so precluded at the date of his
death.
(i) RESTRICTIONS ON TYPES OF SHARES. The Committee may not grant an
Option Right over Shares which do not satisfy the conditions in paragraphs 10-14
(inclusive) of Schedule 9. An Optionholder may not exercise an Option Right if
the Shares to be delivered would not satisfy the conditions of paragraphs 10-14
(inclusive) of Schedule 9.
(j) OPTION AGREEMENTS. Where the Committee determines to grant an
Option Right to a UK Participant, the UK Participant shall enter into an
agreement as referred to in section 4 (n) of the Plan within thirty (30) days of
such determination failing which the Option Rights will be deemed not to have
been granted.
(k) INLAND REVENUE APPROVAL OF OPTION AGREEMENTS. The Committee
shall ensure that the provisions of any such agreements evidencing option grants
are approved in advance by the United Kingdom Board of the Inland Revenue and no
amendment or adjustment shall be made to such agreements after option grants
which they evidence have been granted.
(l) PERFORMANCE CONDITIONS. The Committee may grant an Option Right
on the terms that it shall be subject to additional objective conditions. Such
conditions must be set out in the option agreement. If the conditions are or
include a performance target, then upon the occurrence of such event or events
as a result of which the Committee considers it fair and reasonable to adjust
the performance target, the Committee may vary the performance target provided
that the effect of such variation is not to make the target more onerous.
(m) MARKET VALUE OF SHARES. The Market Value of Shares over which an
Option Grant has been or is to be granted shall be calculated at the time or
times as may have been agreed by the United Kingdom Board of Inland Revenue
pursuant to paragraph 29 of Schedule 9 and, where relevant, shall be converted
into
19
sterling at the rate of exchange ruling in London after about 11am at such
time or times. The Option Price shall not be manifestly less than the Market
Value of the Shares over which an Option Right is to be exercised as shall be
determined at the Date of UK Grant or such earlier date as may be agreed in
writing with the United Kingdom Board of the Inland Revenue.
(n) LATEST DATE FOR EXERCISE. The last date for the exercise of an
Option Right shall be determined by the Committee but shall not, except where
Section 18 (q) below applies, be later than the date preceding the 10th
anniversary of the Date of UK Grant.
(o) DATE OF EXERCISE. The date or dates after which an Option Right
may be exercised in whole or in part shall be determined at the Date of UK Grant
and shall not be altered thereafter.
(p) EXERCISE RESTRICTIONS. An Option Right may only be exercised by
the Optionholder or his legal personal representatives and accordingly where an
Optionholder transfers, assigns, charges, encumbers or otherwise alienates his
Option Right or creates in favor of any third party any interest therein or, in
any case, attempts so to do or is adjudicated bankrupt, that Option Right shall
lapse.
(q) DEATH OF OPTIONHOLDER. The personal representatives of an
Optionholder may not exercise his Option Right more than twelve months after the
date of the Optionholder's death.
(r) CURRENCY OF EXERCISE. The payment upon the exercise of an Option
Right may only be made in cash in US dollars.
(s) DELIVERY RESTRICTIONS. Unless prohibited by federal tax laws and
regulations or the rules of any domestic stock exchange on which Shares may be
listed, Shares shall be delivered upon the exercise of an Option Right within 30
days of the exercise of the Option Right and any new shares issued shall rank
PARI PASSU in all respects with any other shares of the same class in issue save
as regards any rights attaching to shares by reference to a record date prior to
the date of issue.
(t) NO RESTRICTIONS ON SHARES. The Committee shall not impose any
restrictions and conditions on the disposition of Shares delivered upon the
exercise of an Option Right.
(u) TAKEOVERS. If any company ("the Acquiring Company") obtains
Control of the Company as a result of a general offer to acquire all the Shares
not owned by it or any person acting in concert with it or by virtue of a
compromise or arrangement sanctioned by the court under section 425 of the UK
Companies Act 1985 or becomes bound or entitled to acquire Shares under sections
428 to 430 of that act then an Optionholder may at any time within the
Appropriate Period with the agreement of the Acquiring Company release any
Option Right in consideration of the grant to him of rights ("New Option") which
satisfy the following conditions:
20
(i) the New Option shall be over shares in the
Acquiring Company or another company which
satisfies paragraph (b) or (c) of Paragraph
10 of Schedule 9 in relation to the
Acquiring Company and shall otherwise
satisfy the conditions specified in
paragraphs 10 to 14 inclusive of Schedule 9;
(ii) the New Option shall be a right to acquire
such number of such shares in the Acquiring
Company (or such other company) as shall
have immediately after the grant of the New
Option an aggregate market value equal to
the aggregate market value of the Shares
subject to the Option Right immediately
before its release;
(iii) the New Option shall have an Option Price
such that the aggregate price payable on its
exercise in full shall equal the aggregate
price which would have been payable on
exercise in full of the Option Right; and
(iv) the New Option shall be otherwise identical
in terms to the Option Right.
The New Option shall be deemed for all purposes to have been granted at the same
time as the released Option Right and the Plan and this Section 18 shall apply
to the New Option so that "Company" shall mean the company over whose share
capital the New Option is granted and "Shares" shall mean shares in that
company.
(v) ADJUSTMENTS. The Committee may adjust, in such manner as it
deems appropriate and the United Kingdom Board of Inland Revenue shall approve,
the class and number of shares covered by an Option Right and the Option Price
of the Option Right only in the event of any capitalization or rights issue by
the Company, or any consolidation, subdivision or reduction of its share
capital.
(w) APPRECIATION RIGHTS AND RESTRICTED SHARES. The Committee shall
not grant Option Rights, comprising Appreciation Rights or Restricted Shares to
UK Participants. Where an Option Right is granted to an Optionholder, a
corresponding Tandem Appreciation Right shall not be granted in relation to the
Option Right.
(x) AMENDMENTS. No amendments to the provisions of this Section 18
shall have effect unless such amendment has been approved by the United Kingdom
Board of the Inland Revenue. No amendments to the provision of the Plan shall
have effect in relation to Option Rights granted to Optionholders unless such
amendments have been approved by the United Kingdom Board of Inland Revenue.
(y) NON-APPROVED OPTIONS. If the grant or exercise of any Option
Right is inconsistent with the terms of this Section 18 or the provisions of
Schedule
21
9, the Option Right shall in whole or in part be deemed to have been
granted or exercised pursuant to the other Sections of this Plan. The UK
Participant shall not be an Optionholder in respect of all or any of such Option
Rights. In particular, any Option Right granted to a UK Participant under this
Section 18 shall be limited to take effect so that the limits specified in
Section 18 (g) are not exceeded. Any Option Rights in excess of those limits
will be deemed to have been granted under the other sections of the Plan.