Equity Award Policy

Governance

I. Introduction

The Board of Directors (the “Board”) recognizes that granting Equity Awards presents specific legal, tax and accounting issues. An "Equity Award" is an award of one or more shares of common stock or a right to receive one or more shares of common stock in the future (including bonus stock, stock options, restricted stock, stock equivalent units, stock appreciation rights, restricted stock units or performance shares). Accordingly, the Board adopts this policy to be followed for all issuances by the Company of Equity Awards. The Board is also adopting this policy to establish a committee of certain members of management with the authority to grant Equity Awards and certain other awards as described herein.

II. Awards Subject to Board Level Approval

  1. 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.
  2. 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 or February of each year.
  3. Interim Grants
    The Board or the CNG Committee may make additional grants of Equity Awards in amounts as they determine.
  4. 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) or such later date specified by the Board or CNG Committee, as applicable. 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

  1. 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, General Counsel and Senior Vice President – Global Human Resources and Administration 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: provided, however, that any award of stock (and not merely the right or option to receive stock) must be approved by the Chief Executive Officer in his capacity as a member of the Board of Directors (and the Chief Executive Officer shall constitute the Management Award Committee for any such award). The Board hereby eliminates any prior committee of management with authority to make Equity Awards. The Management Award Committee has the authority to grant Equity Awards and rights to receive compensatory cash payments under the plan ("Cash Awards").
  2. Promotional Awards
    1. 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 and Cash Awards to employees who receive promotions at any time during a calendar year after the annual grants of Equity Awards or Cash Awards, as applicable, for that year have been made. These Equity Awards and Cash Awards may only be granted on a pro-rata basis. The Management Award Committee may not, however, grant additional Equity Awards or Cash Rewards to:
      1. any member of the Management Award Committee,
      2. any person whose promotion required the approval of the Board or CNG Committee, or
      3. any person who is an executive officer of the Company or who, after the promotion, is salary grade EICP 5 or above.
    2. Terms
      All Equity Awards and Cash Awards granted under this Section III(B) will:
      1. be effective the later of (A) thedate it is approved as contemplated by Section IV (A)(ii) and (B) such other date as specified by the Management Award Committee,
      2. be subject to the terms and conditions of the Plan, and
      3. have the same terms and conditions as the most recently awarded comparable outstanding Equity Awards or Cash Awards, as the cash may be. 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.
  3. New Hire Awards

   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 and Cash Awards to a newly hired employee.  These Equity Awards and Cash Awards may only be granted on a pro-rata basis.  The Management Award Committee may not, however, grant additional Equity Awards or Cash Awards to any individual who is an executive officer of the Company or who is hired at salary grade EICP 5 or above. 

  ii  Terms.  All Equity Awards and Cash Awards granted under this Section III(C) will:

  • be effective the later of (A) the date it is approved as contemplated by Section IV(A)(ii) and (B) such other date as specified by the Management Award Committee,
  • 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 or Cash Awards, as applicable.  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.

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. The aggregate target cash payout under Cash Awards granted undr this Section III may not exceed $5,000,000, except as the Board otherwise establishes by resolution.

IV. Administration

  1. Approval of Grants
    1. Board Approved
      Equity Awards made under Section II will be approved at a meeting (including telephonic meeting) or by written consent. The actions approved at a meeting will be set forth in written minutes of the meeting, including the individual recipients of Equity Awards granted.
    2. Management Approved
      Equity Awards and Cash Awards made under Section III will be approved at a meeting of the Management Award Committee (including telephonic meeting) or by written consent. The actions approved at a meeting will be set forth in written minutes of the meeting, including the individual recipients of Equity Awards granted.
  2. Determination of Pro Rata
    An Equity Award or Cash Award for a promoted or newly hired employee is on a “pro rata basis” if it equals:
    1. the amount of that Equity Award or Cash 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
    2. 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).
  3. Notification
    The Company’s Global 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.