| I. |
Introduction |
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The Board of Directors (the “Board”) recognizes that granting compensatory awards in the form of the Company’s common stock or any derivative of the common stock, including stock options, restricted stock, stock equivalent units, stock appreciation rights, restricted stock units or performance shares (“Equity Awards”), presents specific legal, tax and accounting issues. Accordingly, the Board adopts this policy to be followed for all issuances by the Company of Equity Awards |
| II. |
Awards Subject to Board Level Approval |
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A. |
General
The Board has determined that its Compensation/Nominating/ Governance Committee (together with any subcommittee thereof, the “CNG Committee”) is best suited to review and approve Equity Awards. Accordingly, except as otherwise provided in this policy, any Equity Awards (including the individual recipients of any Equity Awards) must be approved by the CNG Committee or the full Board. |
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B. |
Annual Grants
Except as otherwise provided in this policy or as the Board or CNG Committee determines in its discretion, it is the policy of the Company that directors and eligible employees will receive an annual grant of Equity Awards under the Company’s 2006 Long-Term Incentive Plan (or any successor or similar plan) (the “Plan”) in amounts determined by the Board or the CNG Committee (the “Annual Grants”). Any Annual Grants will be awarded at the regularly scheduled meeting of the CNG Committee held in January of each year. |
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C. |
Interim Grants
The Board or the CNG Committee may make additional grants of Equity Awards in amounts as they determine. |
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D. |
Terms
An Equity Award made under this Section II will be effective on the date is it approved as determined under Section IV(A)(i). Each Equity Award made under this Section II will have the terms and conditions that the Board or CNG Committee approves. However, the exercise or strike price of any option or stock appreciation right will, in all cases, be the fair market value (as determined under the Plan) of the Company’s common stock on its effective date. If the Board or CNG Committee does not specify the other terms and conditions applicable to any Equity Award granted under this Section II, then the Equity Award have the same terms and conditions as the most recently awarded comparable outstanding Equity Awards. |
| III. |
Awards for New Hires and Promotions |
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A. |
Management Committee
Under Section 157(e) of the Delaware General Corporation Law, the Board hereby establishes a committee of officers named the “Management Award Committee”, consisting of the Company’s Chief Executive Officer (or his or her designee), General Counsel (or his or her designee) and Senior Vice President – Global Human Resources (or his or her designee) or such other officers as the Board appoints by resolution. Any act of the Management Award Committee must be approved by a majority of its members. The Board hereby eliminates any prior committee of management with authority to make Equity Awards. |
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B. |
Promotional Awards |
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(i) |
Authority. The Management Award Committee has the authority to approve, on behalf of the Board and the CNG Committee, the granting of additional Equity Awards to employees who receive promotions at any time during a calendar year after the Annual Grants for that year have been made. These Equity Awards may only be granted on a pro-rata basis. The Management Award Committee may not, however, grant additional Equity Awards to:
- any member of the Management Award Committee,
- any person whose promotion required the approval of the Board or CNG Committee, or
- any person who is an executive officer of the Company or who, after the promotion, is salary grade EICP 5 or above.
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(ii) |
Terms. All Equity Awards granted under this Section III(B) will:
- be effective the later of (A) the first business day of the quarter after the quarter in which the promotion occurred, and (B) the date it is approved as contemplated by Section IV(A)(ii),
- be subject to the terms and conditions of the Plan, and
- have the same terms and conditions as the most recently awarded comparable outstanding Equity Awards. However, the exercise or strike price of any option or stock appreciation right will, in all cases, be the fair market value (as determined under the Plan) of the Company’s common stock on its effective date.
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C. |
New Hire Awards |
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(i) |
Authority. The Management Award Committee has the authority to approve, on behalf of the Board and the CNG Committee, the granting of Equity Awards to a newly hired employee. These Equity Awards may only be granted on a pro-rata basis. The Management Award Committee may not, however, grant additional Equity Awards to any individual who is an executive officer of the Company or who is hired at salary grade EICP 5 or above. |
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(ii) |
Terms. All Equity Awards granted under this Section III(C) will:
- be effective the later of (A) the first business day of the quarter following the quarter in which the date of hire occurred, and (B) the date it is approved as contemplated by Section IV(A)(ii),
- be subject to the terms and conditions of the Plan, and
- have the same terms and conditions as the most recently awarded comparable outstanding Equity Awards. However, the exercise or strike price of any option or stock appreciation right will in all cases be the fair market value (as determined under the Plan) of the Company’s common stock on its effective date.
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D. |
Overall Limit
The aggregate amount of shares of common stock that may be issued in respect of Equity Awards granted under this Section III may not exceed 100,000, except as the Board otherwise establishes by resolution. |
| IV. |
Administration |
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A. |
Approval of Grants |
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(i) |
Board-Approved. Except as otherwise determined by the Board or CNG Committee, all Equity Awards made under Section II will be approved at a meeting (including telephonic meeting) and not by written consent. The actions approved at the meeting will be set forth in written minutes of the meeting, including the individual recipients of Equity Awards granted. |
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(ii) |
Management-Approved. Except as otherwise determined by the Management Award Committee, all Equity Awards made under Section III will be approved at a meeting of the Management Award Committee (including telephonic meeting) and not by written consent. The actions approved at the meeting will be set forth in written minutes of the meeting, including the individual recipients of Equity Awards granted. |
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B. |
Determination of Pro Rata
An Equity Award for a promoted or newly hired employee is on a “pro rata basis” if it equals:
- the amount of that Equity Award he or she would have received at the date of the most recent Annual Grants had his or her promotion or hiring been effective at the time (or, if a particular award covers a multiple-year period, at the date on which the award was most recently granted), multiplied by
- X/Y, where:
X = the number of days during the year in which he or she receives the promotion or is employed that includes the period following the effective date of the related award (or, if a particular award was granted to cover a multiple-year period, the number of days in the multiple-year period that includes the period following the effective date), and
Y = 365 (or, if a particular award was granted to cover a multiple-year period, the number of days in that multiple-year period). |
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C. |
Notification
The Company’s Human Resources department will promptly notify any employee who receives an Equity Award and will promptly forward to that employee a grant award package with information regarding the Equity Award. |