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SYNAVANT INC.
2000 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to aid the Company and its Subsidiaries
in securing and retaining employees, other service providers and directors of
outstanding ability and to motivate such persons to exert their best efforts
on behalf of the Company and its Subsidiaries by providing incentives through
the granting of Awards. The Company expects that it will benefit from the
added interest which such persons will have in the welfare of the Company as
a result of their proprietary interest in the Company's success.
2. DEFINITIONS
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) ACT: The Securities Exchange Act of 1934, as amended. References to
any provision of the Act or rule thereunder shall include any successor
provision or rule.
(b) ANNUAL LIMIT: The limitation on the amount of certain Awards
intended to qualify as "performance-based compensation" that may be granted
to a given Participant each year.
(c) AWARD: An Option, Stock Appreciation Right or Other Stock-Based
Award granted pursuant to the Plan.
(d) BENEFICIAL OWNER: As such term is defined in Rule 13d-3 under the
Act.
(e) BOARD: The Board of Directors of the Company.
(f) CHANGE IN CONTROL: The occurrence of any of the following events
after the Spinoff Date:
(i) any Person (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of
the Company, or any company owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company),
becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 20% or more of the
combined voting power of the Company's then-outstanding
securities;
(ii) during any period of twenty-four months or less (not including
any period prior to the Spinoff Date), individuals who at the
beginning of such period constitute the Board, and any new
director (other than (A) a director nominated by a Person who
has entered into an agreement with the Company to effect a
transaction described in Sections 2(f)(i), (iii) or (iv) of
the Plan, (B) a director nominated by any Person (including
the Company) who publicly announces an intention to take or to
consider taking actions (including, but not limited to, an
actual or threatened proxy contest) which if consummated would
constitute a Change in Control or (C) a director nominated by
any Person who is the Beneficial Owner, directly or
indirectly, of securities of the Company representing 10% or
more of the combined voting power of the Company's securities)
whose election by the Board
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or nomination for election by the Company's stockholders
was approved in advance by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of the period or who were new
directors (subject to the exclusions set forth above in
this Section 2(f)(ii)) whose election or nomination for
election was previously so approved, cease for any reason
to constitute at least a majority thereof;
(iii) the stockholders of the Company approve any transaction or
series of transactions under which the Company is merged or
consolidated with any other company, other than a merger or
consolidation (A) which would result in the voting securities
of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving
entity) more than 66-2/3% of the combined voting power of the
voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and
(B) after which no Person holds 20% or more of the combined
voting power of the then-outstanding securities of the Company
(if it is the surviving parent) or such surviving entity;
provided, however, that, if consummation of the corporate
transaction referred to in this Section 2(f)(iii) is
subject, at the time of such approval by stockholders, to
the consent of any government or governmental agency or
approval of the stockholders of another entity or other
material contingency, no Change in Control shall occur
until such time as such consent and approval has been
obtained and any other material contingency has been
satisfied
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets; provided, however, that, if consummation
of the transaction referred to in this Section 2(e)(iv) is
subject, at the time of such approval by stockholders, to
the consent of any government or governmental agency or
approval of the stockholders of another entity or other
material contingency, no Change in Control shall occur
until such time as such consent and approval has been
obtained and any other material contingency has been
satisfied; or
(v) the Board determines that a Change in Control shall be deemed
to have occurred for purposes of the Plan, provided that the
Board may impose limitations on the effects of a Change in
Control on any Award or otherwise if the Change in Control has
occurred under this Section 2(f)(v) and not under other
subsections of this Section 2(f).
(g) CODE: The Internal Revenue Code of 1986, as amended. References to
any provision of the Code or regulation thereunder shall include any
successor provision or regulation.
(h) COMMITTEE: A committee of two or more directors designated by the
Board to administer the Plan; provided, however, that, directors appointed
or serving as members of a Board committee designated as the Committee
shall not be employees of the Company or any Subsidiary. In appointing
members of the Committee, the Board will consider whether a member is or
will be a Qualified Member, but such members are not required to be
Qualified Members at the time of appointment or during their term of
service on the Committee. The full Board may perform any function of the
Committee hereunder, in which case the term "Committee" shall refer to the
Board. Upon effectiveness of the Plan, the Board shall perform all
functions of the Committee hereunder until the Board has appointed a
Compensation and Benefits Committee of the Board, at which time the
Compensation and Benefits Committee shall be designated initially as the
Committee hereunder.
(i) COMPANY: Synavant Inc., a Delaware corporation.
(j) DISABILITY: Inability of a Participant to perform the services for
the Company and its Subsidiaries required by his or her employment with or
service to the Company due to any medically determinable physical and/or
mental incapacity or disability which is permanent. The determination
whether a Participant has suffered a Disability shall be made by the
Committee based upon such evidence as it deems necessary and appropriate. A
Participant shall not be considered to have a Disability unless he or she
furnishes such medical or other evidence of the existence of the Disability
as the Committee, in its sole discretion, may require.
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(k) EFFECTIVE DATE: The date on which the Plan takes effect, as
specified in Section 12(j) of the Plan.
(l) FAIR MARKET VALUE: With respect to Shares, unless otherwise
determined by the Committee, on a given date, the arithmetic mean of the
high and low sales prices of Shares as reported for such date on the
Composite Tape of the principal national securities exchange on which such
Shares are listed or on the automated quotation system on such shares are
designated for trading, or, if there is no reported sale for that date, for
the latest preceding date on which there was a reported sale.
(m) LSAR: A limited stock appreciation right granted pursuant to
Section 7(d) of the Plan.
(n) OTHER STOCK-BASED AWARDS: Awards granted pursuant to Section 8 of
the Plan, including restricted Shares, restricted Share units, and deferred
stock.
(o) OPTION: A stock option granted pursuant to Section 6 of the Plan.
(p) OPTION PRICE: The purchase price per Share of an Option, as
determined pursuant to Section 6(a) of the Plan.
(q) PARTICIPANT: An individual who is selected by the Committee to
participate in the Plan pursuant to Section 5 of the Plan.
(r) PERFORMANCE-BASED AWARDS: Other Stock-Based Awards granted with
terms as set forth in Section 8(b) of the Plan.
(s) PERSON: As such term is used for purposes of Section 13(d) or 14(d)
of the Act.
(t) PLAN: The 2000 Stock Incentive Plan.
(u) QUALIFIED MEMBER: A member of the Committee who is a "Non-Employee
Director" within the meaning of Rule 16b-3(b)(3) and an "outside director"
within the meaning of Treasury Regulation 1.162-27 under Code Section
162(m).
(v) RETIREMENT: In the case of an employee, termination of employment
with the Company or a Subsidiary after such Participant has attained age 65
or age 55 and 15 years of service with the Company, other than a
termination by the Company or a subsidiary for cause. In the case of a
non-employee director, termination of service after such Participant has
attained age 70 or at an earlier age if the director has served the Company
as such for at least six years. The foregoing notwithstanding, the
Committee may modify this definition in any Award agreement or determine in
its discretion that any other termination shall be deemed a Retirement for
purposes of the Plan.
(w) SHARES: Shares of common stock, par value $0.01 per Share, of the
Company.
(x) SPINOFF DATE: The date on which the Shares that are owned by IMS
Health Incorporated become distributable to the holders of record of shares
of IMS Health Incorporated.
(y) STOCK APPRECIATION RIGHT: A stock appreciation right granted
pursuant to Section 7 of the Plan.
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(z) SUBSIDIARY: A subsidiary corporation, as defined in Section 424(f)
of the Code.
3. SHARES SUBJECT TO THE PLAN
(a) AGGREGATE SHARE LIMITATIONS. Subject to adjustment as provided in
Section 9(a), the total number of Shares which may be issued and/or delivered
under the Plan is 1,600,000 plus the number of Shares reserved for awards under
the Synavant, Inc. Replacement Plan for IMS Health Equity-Based Awards (the
"Replacement Plan") that are not in fact issued or delivered in connection with
such awards. The Shares may consist, in whole or in part, of authorized and
unissued Shares or treasury Shares. Shares subject to an Award under the Plan
that is canceled, expired, forfeited, settled in cash, or otherwise terminated
without a delivery of Shares to the Participant, including the number of Shares
withheld or surrendered in payment of any exercise or purchase price of an Award
or taxes relating to an Award, will become available for Awards under the Plan,
and Shares shall be counted as issued or delivered under the Replacement Plan in
a manner consistent with the counting of Shares under this Section 3. In
addition, in the case of any Award granted in substitution for awards of a
company or business acquired by the Company or a Subsidiary, Shares issued or
issuable in connection with such substitute Award shall not be counted against
the number of Shares reserved under the Plan, but shall be deemed to be
available under the Plan by virtue of the Company's assumption of the plan or
arrangement of the acquired company or business.
(b) ANNUAL PER-PERSON LIMITATIONS. In each calendar year during any
part of which the Plan is in effect, a Participant may be granted Awards under
each of Section 6, Section 7, and Section 8(b) relating to up to the
Participant's Annual Limit (such Annual Limit to apply separately to each
Section). A Participant's Annual Limit, in any year during any part of which the
Participant is then eligible under the Plan, shall equal 750,000 shares plus the
amount of the Participant's unused Annual Limit as of the close of the previous
year, subject to adjustment as provided in Section 9(a). In the case of a
Performance-Based Award which is not valued in a way in which the limitation set
forth in the preceding sentence would operate as an effective limitation
satisfying Treasury Regulation 1.162-27(e)(4), the maximum amount of a
Performance-Based Award that may be earned by a Participant for performance in a
calendar year shall be the Participant's cash Annual Limit, which for this
purpose shall be$5,000,000 plus the amount of the Participant's unused cash
Annual Limit as of the close of the previous year. For purposes of this Section
3(b), (i) "earning" means satisfying performance conditions so that an amount
becomes payable, without regard to whether it is to be paid currently or on a
deferred basis or continues to be subject to any service requirement or other
non-performance condition; and (ii) a Participant's Annual Limit is used if it
may be potentially earned or paid under an Award, regardless of whether it is in
fact earned or paid.
NOTE: SHARE FIGURES IN THIS SECTION 3 REFLECT THE 1-FOR 20 REVERSE SPLIT OF
THE COMPANY'S STOCK EFFECTED AT THE SPINOFF DATE.
4. ADMINISTRATION
(a) AUTHORITY OF THE COMMITTEE. The Plan shall be administered by
the Committee. The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan,
and to make any other determinations that it deems necessary or desirable for
the administration of the Plan. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in the Plan in the manner
and to the extent the Committee deems necessary or desirable. Any decision of
the Committee in the interpretation and administration of the Plan, as
described herein, shall lie within its sole and absolute discretion and shall
be final, conclusive and binding on all parties concerned (including, but not
limited to, Participants and their beneficiaries or successors). The
Committee may, in its discretion, grant Awards either alone or in addition
to, in tandem with, or in substitution or exchange for, any other
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Award or any award granted under another plan of the Company, any subsidiary,
or any business entity to be acquired by the Company or a subsidiary, or any
other right of a Participant to receive payment from the Company or any
subsidiary. The foregoing notwithstanding, the Board shall perform the
functions of the Committee for purposes of granting Awards under the Plan to
non-employee directors (authority with respect to other aspects of
non-employee director awards is not exclusive to the Board, however).
(b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. At any time that a
member of the Committee is not a Qualified Member, (i) any action of the
Committee relating to an Award intended by the Committee to qualify as
"performance-based compensation" within the meaning of Code Section 162(m)
and regulations thereunder may be taken by a subcommittee, designated by the
Committee or the Board, composed solely of two or more Qualified Members, and
(ii) any action relating to an Award granted or to be granted to a
Participant who is then subject to Section 16 of the Exchange Act in respect
of the Company may be taken either by such a subcommittee or by the Committee
but with each such member who is not a Qualified Member abstaining or
recusing himself or herself from such action, provided that, upon such
abstention or recusal, the Committee remains composed of two or more
Qualified Members. Such action, authorized by such a subcommittee or by the
Committee upon the abstention or recusal of such non-Qualified Member(s),
shall be the action of the Committee for purposes of the Plan. The express
grant of any specific power to the Committee, and the taking of any action by
the Committee, shall not be construed as limiting any power or authority of
the Committee. The Committee may delegate to officers or managers of the
Company or any Subsidiary or affiliate, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform such
functions, including administrative functions, as the Committee may
determine, to the extent that such delegation will not result in the loss of
an exemption under Rule 16b-3(d) for Awards granted to Participants subject
to Section 16 of the Exchange Act in respect of the Company and will not
cause Awards intended to qualify as "performance-based compensation" under
Code Section 162(m) to fail to so qualify.
(c) LIMITATION OF LIABILITY. The Committee and each member thereof,
and any person acting pursuant to authority delegated by the Committee, shall
be entitled, in good faith, to rely or act upon any report or other
information furnished by any executive officer, other officer or employee of
the Company or a Subsidiary or affiliate, the Company's independent auditors,
consultants or any other agents assisting in the administration of the Plan.
Members of the Committee, any person acting pursuant to authority delegated
by the Committee, and any officer or employee of the Company or a subsidiary
or affiliate acting at the direction or on behalf of the Committee or a
delegee shall not be personally liable for any action or determination taken
or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the Company with
respect to any such action or determination.
(d) LIMITATION ON REPRICING. Without the prior approval of the
Company's stockholders, Awards will not be modified in a transaction that
constitutes "repricing" within the meaning of Interpretation 44 under APB 25.
5. ELIGIBILITY
Employees of the Company and its Subsidiaries, other persons who
provide substantial services to the Company and its Subsidiaries, and
non-employee directors of the Company are eligible to be granted Awards. In
addition, any person who has been offered employment by the Company or a
Subsidiary is eligible to be granted Awards, provided that no such person may
receive any payment or exercise any right relating to an Award until such
person has commenced such employment. Participants shall be selected from
time to time by the Committee, in its sole discretion, from among those
eligible, and the Committee shall determine, in its sole discretion, the
number of Shares to be covered by the Awards granted to each Participant.
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6. TERMS AND CONDITIONS OF OPTIONS
Options granted under the Plan shall be, as determined by the
Committee, non-qualified, incentive or other stock options for federal income
tax purposes, as evidenced by the related Award agreements, and shall be
subject to the foregoing and the following terms and conditions and to such
other terms and conditions, not inconsistent therewith, as the Committee
shall determine:
(a) OPTION PRICE. The Option Price per Share shall be determined by
the Committee, but shall not be less than 100% of the Fair Market Value of
the Shares on the date an Option is granted. The Committee may require the
Participant to pay a portion of the Option Price at the time of grant of the
option, with the remainder of the Option Price payable upon exercise of the
Option. Such prepayment of the Option Price shall be non-refundable except to
the extent set forth in a Participant's original option agreement.
(b) EXERCISABILITY. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be
determined by the Committee, but in no event shall an Option be exercisable
more than ten years after the date it is granted.
(c) EXERCISE OF OPTIONS. Except as otherwise provided in the Plan or
in an Award agreement (subject to Section 11(b)), an Option may be exercised
for all, or from time to time any part, of the Shares for which it is then
exercisable. For purposes of Section 6 of the Plan, the exercise date of an
Option shall be the later of the date a notice of exercise is received by the
Company and, if applicable, (A) the date payment is received by the Company
pursuant to clauses (i), (ii) or (iii) in the following sentence, or (B) the
date of sale by a broker of all or a portion of the Shares being purchased
pursuant to clause (iv) in the following sentence. Unless otherwise
determined by the Committee, the Option Price for the Shares as to which an
Option is exercised shall be paid to the Company in full not later than the
time of exercise at the election of the Participant (i) in cash, (ii) in
Shares having a Fair Market Value equal to the aggregate unpaid Option Price
for the Shares being purchased and satisfying such other requirements as may
be imposed by the Committee, (iii) partly in cash and partly in such Shares,
or (iv) through the delivery of irrevocable instructions to a broker to
deliver promptly to the Company an amount equal to the aggregate Option Price
for the Shares being purchased. The Award agreement shall, unless otherwise
provided by the Committee, permit the Participant to elect, subject to such
terms and conditions as the Committee shall determine, to have the number of
Shares deliverable to the Participant as a result of the exercise reduced by
a number sufficient to pay the amount the Company determines to be necessary
to withhold for federal, state, local or other taxes as a result of the
exercise of the Option. No Participant shall have any rights to dividends or
other rights of a stockholder with respect to Shares subject to an Option
until the Participant has given written notice of exercise of the Option,
paid in full for such Shares and, if applicable, has satisfied any other
conditions imposed by the Committee pursuant to the Plan.
(d) RESTRICTIONS ON SHARES ISSUED UPON EXERCISE; OTHER CONDITIONS.
If and to the extent so determined by the Committee, Shares issued upon
exercise of an Option may be subject to limitations on transferability, risks
of forfeiture, deferral of delivery, or such other terms and conditions as
the Committee may impose, subject to Section 11(b). Such terms and conditions
may include required forfeiture of Options, or gains realized upon exercise
thereof for a specified period after exercise, in the event the Participant
fails to comply with conditions relating to non-competition, non-disclosure,
non-solicitation or non-interference with employees, suppliers, or customers,
and non-disparagement and other conditions specified by the Committee.
(e) EXERCISABILITY UPON TERMINATION OF EMPLOYMENT OR SERVICE BY DEATH
OR DISABILITY. Except as otherwise provided by the Committee (subject to Section
11(b)), if a Participant's employment with or service to the Company and its
Subsidiaries terminates by reason of death or
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Disability after the date of grant of an Option, (i) the unexercised portion
of such Option shall immediately vest in full (i.e., become non-forfeitable)
and (ii) such portion may thereafter be exercised during the shorter of (A)
the remaining stated term of the Option or (B) five years after the date of
death or Disability.
(f) EXERCISABILITY UPON TERMINATION DUE TO RETIREMENT. Except as
otherwise provided by the Committee (subject to Section 11(b)), if a
Participant's employment with or service to the Company and its Subsidiaries
terminates by reason of Retirement after the date of grant of an Option, the
Participant's unexercised Option may thereafter be exercised only during the
period ending at the earlier of five years after such Retirement or the
stated expiration date of such Option (the "Post-Retirement Exercise
Period"), provided that such Option shall be exercisable during such
Post-Retirement Exercise Period only to the extent such Option was
exercisable at the time of such Retirement. The foregoing notwithstanding,
the Committee may, in its sole discretion, vary these terms, including by
accelerating the vesting of the unvested portion of such Option held by a
Participant upon such Participant's Retirement so that the Option shall not
be forfeited but shall thereafter become exercisable to the extent and at
such times as such portion of the Option would have become both vested and
exercisable during the Post-Retirement Exercise Period had the Participant's
employment or service not been terminated; PROVIDED, HOWEVER, that if a
Participant dies within a period of five years after such termination of
employment or service, an unexercised Option (to the extent not previously
forfeited) may thereafter be exercised, during the shorter of (i) the
remaining stated term of the Option or (ii) the period that is the longer of
(A) five years after the date of such termination of employment or service or
(B) one year after the date of death.
(g) EFFECT OF OTHER TERMINATION. Except as otherwise provided by the
Committee (subject to Section 11(b)), if a Participant's employment with or
service to the Company and its Subsidiaries terminates for any reason other
than death, Disability or Retirement after the date of grant of an Option as
described above, the Participant's unexercised Option may thereafter be
exercised during the period ending 90 days after the date of such
termination, but only to the extent such Option was exercisable at the time
of such termination, and in no event may such Option be exercised after its
stated expiration date. The foregoing notwithstanding, the Committee may, in
its sole discretion, vary these terms, including by accelerating the vesting
of unvested Options held by a Participant if such Participant is terminated
from employment or service without "cause" (as such term is defined by the
Committee in its sole discretion) by the Company.
7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
(a) GRANTS. The Committee may grant (i) a Stock Appreciation Right
independent of an Option or (ii) a Stock Appreciation Right in connection
with an Option, or a portion thereof. A Stock Appreciation Right granted
pursuant to clause (ii) of the preceding sentence (A) may be granted at the
time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same Shares covered
by an Option (or such lesser number of Shares as the Committee may determine)
and (C) shall be subject to the same terms and conditions as such Option
except for such additional limitations as are contemplated by this Section 7
(or such additional limitations as may be included in an Award agreement).
(b) TERMS. The exercise price per Share of a Stock Appreciation
Right shall be an amount determined by the Committee but in no event shall
such amount be less than the greater of (i) the Fair Market Value of a Share
on the date the Stock Appreciation Right is granted or, in the case of a
Stock Appreciation Right granted in conjunction with an Option, or a portion
thereof, the Option Price of the related Option and (ii) an amount permitted
by applicable laws, rules, by-laws or policies of regulatory authorities or
stock exchanges. Each Stock Appreciation Right granted independent of an
Option shall entitle a Participant upon exercise to an amount equal to
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(i) the excess of (A) the Fair Market Value on the exercise date of one Share
over (B) the exercise price per Share, times (ii) the number of Shares
covered by the Stock Appreciation Right. Each Stock Appreciation Right
granted in conjunction with an Option, or a portion thereof, shall entitle a
Participant to surrender to the Company the unexercised Option, or any
portion thereof, and to receive from the Company in exchange therefor an
amount equal to (i) the excess of (A) the Fair Market Value on the exercise
date of one Share over (B) the Option Price per Share, times (ii) the number
of Shares covered by the Option, or portion thereof, which is surrendered.
The date a notice of exercise is received by the Company shall be the
exercise date. Payment shall be made in Shares or in cash, or partly in
Shares and partly in cash, valued at such Fair Market Value, all as shall be
determined by the Committee. Stock Appreciation Rights may be exercised from
time to time upon actual receipt by the Company of written notice of exercise
stating the number of Shares subject to an exercisable Option with respect to
which the Stock Appreciation Right is being exercised. No fractional Shares
will be issued in payment for Stock Appreciation Rights, but instead cash
will be paid for a fraction or, if the Committee should so determine, the
number of Shares will be rounded downward to the next whole Share.
(c) LIMITATIONS. The Committee may impose, in its discretion, such
conditions upon the exercisability or transferability of Stock Appreciation
Rights as it may deem fit.
(d) LIMITED STOCK APPRECIATION RIGHTS. The Committee may grant LSARs
that are exercisable upon the occurrence of specified contingent events. Such
LSARs may provide for a different method of determining appreciation, may
specify that payment will be made only in cash and may provide that any related
Awards are not exercisable while such LSARs are exercisable. Unless the context
otherwise requires, whenever the term "Stock Appreciation Right" is used in the
Plan, such term shall include LSARs.
8. OTHER STOCK-BASED AWARDS
(a) GENERALLY. The Committee may grant Awards of Shares, Awards of
restricted Shares and restricted Share units, and Awards that are valued in
whole or in part by reference to, or are otherwise based on, Shares or factors
which influence the value of Shares ("Other Stock-Based Awards"). Such Other
Stock-Based Awards shall be in such form, and dependent on such conditions, as
the Committee shall determine, including, without limitation, the right to
receive one or more Shares (or the equivalent cash value of such Shares) as an
outright bonus or upon the completion of a specified period of service, the
occurrence of an event and/or the attainment of performance objectives. Other
Stock-Based Awards may be granted alone or in addition to any other Awards
granted under the Plan. Subject to the provisions of the Plan, the Committee
shall determine to whom and when Other Stock-Based Awards will be made, the
number of Shares to be awarded under (or otherwise related to) such Other
Stock-Based Awards; whether such Other Stock-Based Awards shall be settled in
cash, Shares or a combination of cash and Shares; and all other terms and
conditions of such Awards (including, without limitation, the vesting provisions
thereof). Cash awards, as an element of or supplement to any other Award under
the Plan, may also be granted pursuant to this Section 8(a). In addition, the
Committee is authorized to grant dividend equivalents to a Participant,
entitling the Participant to receive cash, Shares, other Awards, or other
property equal in value to dividends paid with respect to a specified number of
Shares, or other periodic payments. Dividend equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee may
provide that Dividend equivalents shall be paid or distributed when accrued or
shall be deemed to have been reinvested in additional Shares, Awards, or other
investment vehicles, subject to such restrictions on transferability and risks
of forfeiture as the Committee may specify.
(b) PERFORMANCE-BASED AWARDS. Notwithstanding anything to the contrary
herein, Other Stock-Based Awards under this Section 8 may be granted in a manner
which is deductible by the Company without limitation under Section 162(m) of
the Code ("Performance-Based
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Awards"). A Participant's Performance-Based Award shall be determined based
on the attainment of written performance goals approved by the Committee for
a performance period established by the Committee (i) while the outcome for
that performance period is substantially uncertain and (ii) no more than 90
days after the commencement of the performance period to which the
performance goal relates or, if less, the number of days which is equal to 25
percent of the relevant performance period. A performance period may extend
for one year or less or for a period of more than one year. The performance
goals, which must be objective, shall be based upon one or more of the
following criteria: (i) consolidated earnings before or after taxes
(including earnings before interest, taxes, depreciation and amortization);
(ii) net income; (iii) operating income; (iv) earnings per share; (v) book
value per share; (vi) return on stockholders' equity; (vii) return on
investment; (viii) return on capital; (ix) improvements in capital structure;
(x) expense management; (xi) profitability of an identifiable business unit
or product; (xii) maintenance or improvement of profit margins; (xiii) stock
price or total stockholder return; (xiv) market share; (xv) revenues or
sales; (xvi) costs; (xvii) cash flow; (xviii) working capital; (xix) return
on assets, (xx) economic wealth created; (xxi) strategic business criteria,
consisting of one or more objectives based on meeting specified market
penetration, geographic business expansion goals, cost targets, customer
satisfaction, employee satisfaction, management of employment practices and
employee benefits, supervision of litigation and information technology,
goals relating to acquisitions or divestitures of subsidiaries, affiliates or
joint ventures, and execution of pre-approved corporate strategy. The
foregoing criteria may relate to the Company, one or more of its Subsidiaries
or one or more of its divisions, units, partnerships, joint venturers or
minority investments, product lines or products or any combination of the
foregoing. The targeted level or levels of performance with respect to such
business criteria may be established at such levels and in such terms as the
Committee may determine, in its discretion, including on an absolute basis,
in relation to performance in a prior period, and/or relative to one or more
peer group companies or indices, or any combination thereof. In addition, the
performance objectives may be calculated without regard to extraordinary
items, except as may be limited under Section 162(m). The Committee shall
determine whether, with respect to a performance period, the applicable
performance goals have been met with respect to a given Participant and, if
they have, to so certify and ascertain the amount of the applicable
Performance-Based Award. No Performance-Based Awards will be paid for such
performance period until such certification is made by the Committee. The
amount of the Performance-Based Award actually paid to a given Participant
may be less than the amount determined by the applicable performance goal
formula, at the discretion of the Committee. The amount of the
Performance-Based Award determined by the Committee for a performance period
shall be paid to the Participant at such time as determined by the Committee
in its sole discretion after the end of such performance period; PROVIDED,
HOWEVER, that a Participant may, if and to the extent permitted by the
Committee and consistent with the provisions of Section 162(m) of the Code,
elect to defer payment of a Performance-Based Award.
(c) SHARE UNITS IN LIEU OF DIRECTORS' FEES. The Board may authorize the
grant of Other Stock-Based Awards, in the form of non-forfeitable Share units,
in lieu of directors' fees otherwise payable in cash. Such Share units may be
granted on a mandatory basis or at the election of the director.
9. ADJUSTMENTS UPON CERTAIN EVENTS; CHANGE IN CONTROL
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) GENERALLY. In the event of any change in the outstanding Shares
after the Spinoff Date by reason of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or exchange of
Shares or other corporate exchange, or any large, special, and non-recurring
distribution to Stockholders, the Committee in its sole discretion and without
liability to any person may make such substitution or adjustment, if any, as it
deems to
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be equitable, as to (i) the number or kind of Shares or other securities
issued or reserved for issuance pursuant to the Plan or pursuant to
outstanding Awards, (ii) the Option Price, (iii) the number and kind of
Shares by which annual per-person Award limitations are measured under
Section 3 hereof and/or (iv) any other affected terms of such Awards
(including making provision for the payment of cash, other Awards or other
property in respect of any outstanding Award). In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, events described in the preceding sentence,
as well as acquisitions and dispositions of businesses and assets) affecting
the Company, any subsidiary or any business unit, or the financial statements
of the Company or any subsidiary, or in response to changes in applicable
laws, regulations, accounting principles, tax rates and regulations or
business conditions or in view of the Committee's assessment of the business
strategy of the Company, any subsidiary or business unit thereof, performance
of comparable organizations, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed relevant;
provided that no such adjustment shall be authorized to be made if and to the
extent that such authority or the making of such adjustment would cause
Options, Stock Appreciation Rights, or Performance-Based Awards granted under
Section 8(b) hereof intended to qualify as "performance-based compensation"
under Code Section 162(m) and regulations thereunder to fail to so qualify.
(b) CHANGE IN CONTROL. The Committee may, in its sole discretion and
without liability to any person, determine that, in the event of a Change in
Control, an Award shall be subject to such terms and conditions as the Committee
may specify in the Award agreement or other agreement or document, which terms
and conditions may include, without limitation, (i) the acceleration of an
Award, (ii) the payment of a cash amount in exchange for the cancellation of an
Award and/or (iii) the requiring of the issuance of substitute Awards that will
substantially preserve the value, rights and benefits of any affected Awards
previously granted hereunder. In furtherance of the foregoing, except as
otherwise determined by the Committee and specified in the applicable agreement
relating to an Option (and subject to Section 11(b)), upon a Change in Control
each Option then outstanding shall automatically become fully vested and
exercisable, and, in the event of the Participant's employment or service to the
Company and its Subsidiaries terminates within 36 months after the Change in
Control for any reason other than death, Disability, Retirement, or termination
by the Company for cause, an Option that was outstanding at the date of the
Change in Control shall remain outstanding for 36 months after such termination
(but in no event past the stated expiration date of the Option).
10. NONTRANSFERABILITY OF AWARDS
An Award shall not be transferable or assignable by the Participant
otherwise than by will or by the laws of descent and distribution and, during
the lifetime of a Participant, an Award shall be exercisable only by such
Participant; except that (i) Awards and related rights shall be transferred to a
Participant's beneficiaries upon the death of the Participant, and (ii) Awards
and other rights (other than incentive stock options and Stock Appreciation
Rights in tandem therewith) may be transferred to one or more transferees during
the lifetime of the Participant, and rights thereunder may be exercised by such
transferees in accordance with the terms of such Award, but only if and to the
extent such transfers are then permitted by the Committee, subject to any terms
and conditions which the Committee may impose thereon (including limitations the
Committee may deem appropriate in order that offers and sales under the Plan
will meet applicable requirements of registration forms under the Securities Act
of 1933 specified by the Securities and Exchange Commission). An Award
exercisable after the death of a Participant may be exercised by the
beneficiaries, legatees, personal representatives or distributees of the
Participant.
11. AMENDMENTS OR TERMINATION
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(a) CHANGES TO THE PLAN. The Board may amend, alter or discontinue
the Plan, except that (i) any amendment or alteration shall be subject to the
approval of the Company's stockholders at or before the next annual meeting
of stockholders for which the record date is after the date of such Board
action if (x) such stockholder approval is required by any federal or state
law or regulation or the rules of any stock exchange or automated quotation
system on which the Shares may then be listed or quoted, and the Board may
otherwise, in its discretion, determine to submit amendments or alterations
to stockholders for approval, or (y) such amendment or alteration would
materially increase the number of shares reserved for the purposes of the
Plan, materially broaden the class of persons eligible to receive Awards
under the Plan or materially increase benefits accruing to Participants in
the Plan; (ii) without the consent of a Participant, no amendment or
alteration shall materially impair any of the Participant's rights under an
Award theretofore granted to such Participant; and (iii) the Committee may
amend or alter the Plan in such manner as it deems necessary to permit the
granting of Awards meeting requirements of the Code or other applicable laws.
Notwithstanding anything to the contrary herein, the Board may not amend,
alter or discontinue the provisions relating to Section 9(b) of the Plan
after the occurrence of a Change in Control without the consent of any
affected Participant.
(b) CHANGES TO OUTSTANDING AWARDS. The Committee may waive any
conditions or rights under, or amend, alter, suspend, discontinue, or
terminate any Award theretofore granted and any Award agreement relating
thereto, except as otherwise provided in the Plan and except that the
Committee may not amend or alter an Award theretofore granted if such action
would result in an Award having terms that would not have been authorized or
permitted for a new grant or Award under the Plan; provided that, without the
consent of an affected Participant, no such Committee action may materially
and adversely affect the rights of such Participant under such Award.
12. MISCELLANEOUS PROVISIONS
(a) TAX WITHHOLDING. The Committee shall require payment of any
amount it may determine to be necessary to withhold for minimum statutory
withholding requirements for federal, state, local or other taxes as a result
of the exercise or settlement of an Award. Unless the Committee specifies
otherwise, the Participant may elect to pay a portion or all of such
withholding taxes by (a) delivery in Shares or (b) having Shares withheld by
the Company from any Shares that would have otherwise been received by the
Participant.
(b) COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS. The Company may,
to the extent deemed necessary or advisable by the Committee, postpone the
issuance or delivery of Shares or payment of other amounts relating to an
Award until completion of such registration or qualification of such Shares
or other required action under any federal or state law, rule or regulation,
listing or other required action with respect to any stock exchange or
automated quotation system upon which the Shares or other securities of the
Company are listed or quoted, or compliance with any other obligation of the
Company, as the Committee may consider appropriate, and may require any
Participant to make such representations, furnish such information and comply
with or be subject to such other conditions as it may consider appropriate in
connection with the issuance or delivery of Shares or payment of other
benefits in compliance with applicable laws, rules, and regulations, listing
requirements, or other obligations.
(c) COMPLIANCE WITH CODE SECTION 162(m). The Company intends that
Options and SARs granted to Participants who are likely to be "covered
employees" as defined under Code Section 162(m) and other Awards designated
as Performance-Based Awards to such Participants shall constitute qualified
"performance-based compensation" within the meaning of Code Section 162(m)
and regulations thereunder, unless otherwise determined by the Committee at
the time of grant of the Award. Accordingly, the terms of Section 8(b) and
other terms used herein shall be
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interpreted in a manner consistent with Code Section 162(m) and regulations
thereunder. If any provision of the Plan or any Award document relating to an
Option or Performance-Based Award that is designated as intended to comply
with Code Section 162(m) does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder, such provision
shall be construed or deemed amended to the extent necessary to conform to
such requirements, and no provision shall be deemed to confer upon the
Committee or any other person discretion to increase the amount of
compensation otherwise payable in connection with any such Award upon
attainment of the applicable performance objectives.
(d) CERTAIN LIMITATIONS RELATING TO ACCOUNTING TREATMENT OF AWARDS.
Other provisions of the Plan notwithstanding, the Committee's authority under
the Plan is limited to the extent necessary to ensure that any Option or
other Award of a type that the Committee has intended to be subject to fixed
accounting with a measurement date at the date of grant or the date
performance conditions are satisfied under APB 25 shall not become subject to
"variable" accounting solely due to the existence of such authority, unless
the Committee specifically determines that the authority shall remain in
force and the Award shall be subject to such "variable" accounting. In
addition, other provisions of the Plan notwithstanding, (i) if any right
under this Plan would cause a transaction to be ineligible for
pooling-of-interests accounting that would, but for the right hereunder, be
eligible for such accounting treatment, such right shall be automatically
adjusted so that pooling-of-interests accounting shall be available,
including by substituting Stock or cash having a Fair Market Value equal to
any cash or Stock otherwise payable in respect of any right to cash which
would cause the transaction to be ineligible for pooling-of-interests
accounting, and (ii) if any authority retained with respect to a Change in
Control would cause a transaction to be ineligible for pooling-of-interests
accounting that would, but for such authority, be eligible for such
accounting treatment, such authority shall be limited to the extent necessary
so that such transaction would be eligible for pooling-of-interests
accounting.
(e) NO RIGHT TO EMPLOYMENT OR SERVICE. The granting of an Award
under the Plan shall impose no obligation on the Company or any Subsidiary to
continue the employment of a Participant or retain the services of a
Participant and shall not lessen or affect the Company's or Subsidiary's
right to terminate the employment or service of such Participant.
(f) SUCCESSORS AND ASSIGNS. The Plan shall be binding on all
successors and assigns of the Company and a Participant, including without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the Participant's creditors.
(g) INTERNATIONAL PARTICIPANTS. With respect to Participants who
reside or work outside the United States of America and either who are not
(and who are not expected to be) "covered employees" within the meaning of
Section 162(m) of the Code or who are granted Awards not intended to qualify
as "performance-based compensation" under Section 162(m), the Committee may,
in its sole discretion, amend the terms of the Plan or Awards with respect to
such Participants in order to conform such terms with local laws,
regulations, or customs or otherwise to meet the objectives of the Plan, and
may, where appropriate, establish one or more sub-plans to reflect such
amended provisions.
(h) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board nor any submission of the Plan, specific Plan terms, or amendments
thereto to a vote of stockholders of the Company shall be construed as
creating any limitations on the power of the Board to adopt such other
compensatory arrangements as it may deem desirable, including, without
limitation, the granting of awards otherwise than under the Plan, and such
other arrangements may be either applicable generally or only in specific
cases.
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(i) CHOICE OF LAW. The Plan shall be governed by and construed in
accordance with the Delaware General Corporation Law, the laws of the State
of Georgia applicable to contracts made and to be performed therein, without
regard to principles of conflicts of law, and applicable federal law.
(j) EFFECTIVENESS AND TERMINATION OF THE PLAN. The Plan shall be
effective as of the date on which it has been approved by the Board and the
stockholder of the Company. The Plan shall terminate at such time as no
Shares remain available for Awards under the Plan and the Company has no
remaining obligations with respect to outstanding Awards under the Plan.
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