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Exhibit 10.2
7/24/2000
PHARMACIA CORPORATION
MANAGEMENT INCENTIVE PLAN
AMENDED AND RESTATED AS OF JUNE 1, 2000
I. GENERAL PROVISIONS
1. PURPOSES
The Pharmacia Corporation Management Incentive Plan (formerly known as the
Monsanto Management Incentive Plan of 1996) is designed to:
- focus management on business performance that creates stockholder
value,
- encourage innovative approaches to the business of the Company,
- reward for results,
- encourage ownership of Monsanto common stock by management, and
- encourage taking higher risks with an opportunity for higher reward.
This Incentive Plan shall be effective April 15, 1996 ("Effective Date"),
subject to the approval of this Incentive Plan by the stockholders of the
Company. The amended and restated Incentive Plan shall apply to awards made
under this Plan that are effective on or after June 1, 2000.
2. DEFINITIONS
Except where the context otherwise indicates, the following definitions apply:
"Associated Company" means any corporation (or partnership, joint venture, or
other enterprise), of which the Company or a Parent owns or controls, directly
or indirectly, 10% or more, but less than 50% of the outstanding shares of stock
normally entitled to vote for the election of directors (or comparable equity
participation and voting power).
"Award" means any Stock Option, Stock Appreciation Right, Restricted Share,
unrestricted Share, dividend equivalent unit, Performance Share, Deferred Award
or other award granted under this Incentive Plan.
"Board" means Board of Directors of the Company.
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"Committee" means the Compensation Committee of the Board, or its permitted
delegate, consisting of two or more members of the Board as may be appointed by
the Board to administer this Incentive Plan pursuant to Section 3(a) of this
Article I.
"Company" means Pharmacia Corporation, a Delaware corporation.
"Deferred Award" means a deferred award granted in accordance with Section 9 of
Article II of this Incentive Plan.
"Eligible Participant" means any officer or other salaried employee (including a
director who is a salaried employee) of the Company, a Subsidiary, or an
Associated Company.
"Fair Market Value" shall mean, per share of common stock, the average of the
highest and lowest sales price of the common stock on the New York Stock
Exchange(the "NYSE"), or such other national securities exchange as may be
designated by the Board, on the applicable date, or, if there are no sales of
common stock on the NYSE on such date, then the average of the highest and
lowest price of the common stock on the last previous day on which a sale on the
NYSE is reported; provided, that the Committee may determine that the Fair
Market Value price may be based upon the average of the highest and lowest price
of the common stock (or depositary receipts evidencing ownership of such common
stock) on stock exchanges outside the United States with respect to Awards
granted to Participants who are foreign nationals.
"Incentive Plan" means the Pharmacia Corporation Management Incentive Plan, set
forth herein.
"Incentive Stock Option" or "Incentive Option" means an option meeting the
definition of that term as set forth in Section 3 of Article II of this
Incentive Plan.
"1984 Plan" means the Monsanto Management Incentive Plan of 1984, as amended.
"1986 Plan" means the Searle Monsanto Stock Option Plan of 1986, as amended.
"1988/I Plan" means the Monsanto Management Incentive Plan of 1988/I, as
amended.
"1988/II Plan" means the Monsanto Management Incentive Plan of 1988/II, as
amended.
"1991 Plan" means the NutraSweet/Monsanto Stock Plan of 1991, as amended.
"1994 NutraSweet/Monsanto Plan" means the NutraSweet/Monsanto Stock Plan of
1994, as amended.
"1994 Plan" means the Monsanto Management Incentive Plan of 1994, as amended.
"1994 Searle/Monsanto Plan" means the Searle/Monsanto Stock Plan of 1994, as
amended.
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"Non-Qualified Stock Option" or "Non-Qualified Option" means an option referred
to in Section 4 of Article II of this Incentive Plan.
"Parent" means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one or more of the other
corporations in the chain.
"Participant" means an Eligible Participant to whom an Award has been granted
pursuant to this Incentive Plan.
"Performance Share" means Performance Shares granted in accordance with Section
8 of Article II of this Incentive Plan.
"Reporting Person" means a person subject to the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934 (or any law, rule,
regulation or other provision that may replace such statute) with respect to
Shares.
"Restricted Shares" means Shares that were made subject to restrictions in
accordance with Section 6 of Article II of this Incentive Plan.
"Shares" means shares of common stock of the Company and any shares of stock or
other securities received as a result of a Share adjustment as set forth in
Section 4 of this Article I.
"Stock Appreciation Right" means a right referred to in Section 5 of Article II
of this Incentive Plan.
"Stock Appreciation Right Fair Market Value" or "SAR Fair Market Value" shall
mean a value established by the Committee for the exercise of a Stock
Appreciation Right.
"Stock Option" or "Option" means Incentive Stock Options and/or Non-Qualified
Stock Options.
"Subsidiary" means: (i) for the purpose of an Incentive Stock Option, any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, at the time of the granting of the Option, each
of the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain; and (ii) for the
purposes of other types of Awards under this Plan, any corporation (or
partnership, joint venture, or other enterprise) of which the Company or a
Parent owns or controls, directly or indirectly, 50% or more of the outstanding
shares of stock normally entitled to vote for the election of directors (or
comparable equity participation and voting power).
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"Termination of Employment" means the discontinuance of employment of a
Participant for any reason other than a Transfer. In the event a Participant is
an employee of an entity that is a Parent, Subsidiary or Associated Company and
the entity ceases to be a Parent, Subsidiary or Associated Company, the
Participant shall be deemed to incur a Termination of Employment for all
purposes under this Incentive Plan as of the date such entity ceases to be a
Parent, Subsidiary or Associated Company.
"Transfer" means a change of employment of a Participant within the group
consisting of the Company and its Parent, Subsidiaries and Associated Companies,
unless the Committee determines otherwise in the grant instrument.
3. ADMINISTRATION
(a) This Incentive Plan shall be administered by the Compensation
Committee, except to the extent the Compensation Committee delegates
administration pursuant to this paragraph. The Compensation Committee
may delegate all or a portion of the administration of this Incentive
Plan to one or more committees or to one or more senior managers of the
Company or its Parent or Subsidiaries; provided that determinations
regarding the timing, pricing, amount and terms of any Award to a
Reporting Person shall be made only by the Compensation Committee.
(b) The Committee shall have the exclusive right to interpret this
Incentive Plan, to select the persons who are to receive Awards, and to
act in all matters pertaining to the granting of Awards under this
Incentive Plan including, without limitation, the timing, pricing,
amount and terms of any Award and the amendment thereof consistent with
the provisions of this Incentive Plan. No Eligible Participant shall
have any right to be considered for or to receive any Awards. All acts
and decisions of the Committee with respect to any questions arising in
connection with the administration and interpretation of this Incentive
Plan, including the severability of any and all of the provisions
thereof, shall be conclusive, final and binding upon all Eligible
Participants.
(c) The Committee may adopt and amend from time to time rules and
regulations of general application for the administration of this
Incentive Plan.
(d) Without limiting the foregoing Sections 3(a), (b) and (c) of this
Article I (and notwithstanding any other provisions of this Incentive
Plan), the Committee is authorized to take such action as it determines
to be necessary or advisable, and fair and equitable to Participants,
with respect to Awards in the event of: a merger of the Company with,
consolidation of the Company into, or the acquisition of the Company
by, another corporation; a sale or transfer of all or substantially all
of the assets of the Company to another corporation or any other person
or entity; a separation from the Company, including any spin-off or
other distribution to stockholders other than an ordinary cash
dividend; a tender or exchange offer for Shares made by any
corporation, person or entity (other than the Company); or other
reorganization in which the Company will not survive
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as an independent, publicly-owned corporation. Such action may include
(but shall not be limited to) establishing, amending or waiving the
forms, terms, conditions and duration of Stock Options, Stock
Appreciation Rights, Awards of Restricted Shares, Performance Shares,
Deferred Awards and other Awards so as to provide for earlier, later,
extended or additional times for exercise or payments, differing
methods for calculating payments, alternate forms and amounts of
payment, accelerated release of restrictions or other modifications.
The Committee may take such actions pursuant to this Section 3(d) by
adopting rules and regulations of general applicability to all
Participants or to certain categories of Participants, by including,
amending or waiving terms and conditions in Awards (including, without
limitation, agreements with respect to Restricted Shares), or by taking
action with respect to individual Participants. The Committee may take
such actions as part of the Awards, or before or after the public
announcement of any such merger, consolidation, acquisition, sale or
transfer of assets, separation, tender or exchange offer or other
reorganization.
4. SHARE ADJUSTMENTS
In the event that at any time or from time to time a stock dividend, stock
split, recapitalization, merger, consolidation, or other change in
capitalization, or a sale by the Company of all or part of its assets, or a
separation from the Company, including any spin-off or other distribution to
stockholders other than an ordinary cash dividend, results in (a) the
outstanding Shares, or any securities exchanged therefor or received in their
place, being exchanged for a different number or class of shares of stock or
other securities of the Company, or for shares of stock or other securities of
any other corporation; or (b) new, different or additional shares or other
securities of the Company or of any other corporation being received by the
holders of outstanding Shares, then:
(i) the total number of Shares authorized for Awards under this Incentive
Plan;
(ii) the number and class of Shares (A) that may be subject to Stock
Options, Stock Appreciation Rights and other Awards, (B) which have not
been issued or transferred under outstanding Stock Options, Stock
Appreciation Rights or other Awards, and (C) which have been awarded
but are undelivered under this Incentive Plan; and
(iii) the purchase price to be paid per Share under outstanding Stock Options
and the number of Shares to be transferred in settlement of outstanding
Stock Appreciation Rights and other Awards;
shall in each case be appropriately adjusted by the Committee in its discretion;
provided, however, that all adjustments made as the result of the foregoing in
respect of each Stock Option which is granted as an Incentive Stock Option shall
be made so that such Stock Option shall continue to be an Incentive Stock Option
as defined in Section 422 of the Internal Revenue Code of 1986, as may be
amended from time to time.
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5. SHARES AUTHORIZED
The total number of Shares for which awards may be granted under this Incentive
Plan shall not exceed 87,605,305 Shares. Notwithstanding the foregoing, the
total number of Shares that shall be available for Awards of Restricted or
unrestricted Shares (which shall include stock distributions pursuant to
Performance Shares, Deferred Awards and other stock-based awards as described in
Section 10 of Article II) shall be 1/2 of 1% of the total number of Shares
outstanding. The limitations in this Section 5 are subject to the adjustments
provided for in Section 4 of this Article I; the provisions of Section 1(b) of
Article II of this Incentive Plan; and the provisions of Section 3(d) of Article
III of this Incentive Plan.
The total number of Shares for which Awards may be granted under this Incentive
Plan to any one Eligible Participant shall not exceed in any three-year period
15% of the total number of Shares for which Awards may be made under this
Incentive Plan, subject to the adjustments provided for in Section 4 of this
Article I.
II. AWARDS
1. SHARES USED FOR AWARDS
(a) The Shares for which Options may be granted under this Option Plan may
be authorized but unissued Shares, or treasury Shares, or both.
(b) In the event that any unexercised Stock Option granted hereunder lapses
or ceases to be exercisable for any reason other than a surrender of
the Option pursuant to Section l(c) of this Article II or the exercise
of a Stock Appreciation Right under Section 5 of this Article II, the
Shares subject to such Option shall again be available for Option
grants under this Option Plan without again being charged against the
authorized Shares set forth in Section 5 of Article I. Any amendment of
any Option or Stock Appreciation Right by the Committee pursuant to
Article I, Section 3 of this Incentive Plan shall not be considered the
grant of a new Option for the purpose of Section 5 of Article I.
(c) In the event of death or total and permanent disability as determined
by the Committee, the Committee may, with the consent of the
Participant, his legal representative, or in the event of death, a
beneficiary designated in writing by the Participant during his
lifetime, authorize payment, in cash or in Shares, or partly in cash
and partly in Shares, as the Committee may direct, of an amount equal
to the difference at the time between the Fair Market Value of the
Shares subject to an Option and the Option price in consideration of
the surrender of the Option. In such an event the Shares subject to the
Option so surrendered shall be charged against the limitations set
forth in Section 5 of Article I.
(d) In the event that any Award or installment thereof ceases to be payable
for any reason, the Shares subject to such Award shall again be
available for Award without again being charged against the limitations
on the number of Shares set forth in Section 5 of Article I.
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2. INCIDENTS OF OPTIONS AND STOCK APPRECIATION RIGHTS
(a) An Award of Stock Options or Stock Appreciation Rights may be made at
such time or times determined by the Committee following the Effective
Date to any Eligible Participant, except that Incentive Options may not
be awarded to employees of Associated Companies. Each Stock Option and
Stock Appreciation Right shall be granted subject to such terms and
conditions, if any, not inconsistent with this Incentive Plan, as shall
be determined by the Committee, including any provisions as to
continued employment as consideration for the grant or exercise of such
Option or Stock Appreciation Right, provisions as to performance
conditions and any provisions which may be advisable to comply with
applicable laws, regulations or rulings of any governmental authority.
(b) An Incentive Stock Option or Stock Appreciation Right shall not be
transferable by the Participant otherwise than by will, by the laws of
descent and distribution, or pursuant to a written beneficiary
designation, and shall be exercisable during the lifetime of the
Participant only by him or by his guardian or legal representative. A
Non-Qualified Stock Option or Stock Appreciation Right shall not be
transferable except by will, by the laws of descent and distribution,
pursuant to a written beneficiary designation, or pursuant to a
qualified domestic relations order as defined by the Internal Revenue
Code of 1986, as amended, or Title I of the Employee Retirement Income
Security Act or the rules thereunder.
(c) Shares purchased upon exercise of a Stock Option shall be paid for in
such amounts, at such times and upon such terms as shall be determined
by the Committee and specified in the grant of the Option. Without
limiting the foregoing, the Committee may establish payment terms for
the exercise of Stock Options which permit the Participant to deliver
Shares (or other evidence of ownership of Shares satisfactory to the
Company), including, at the Committee's option, Restricted Shares, with
a Fair Market Value equal to the Option price as payment.
(d) The Option price per share shall be established by the grant and shall
not be decreased thereafter except pursuant to Section 4 of Article I
of this Incentive Plan.
(e) The Committee, in its discretion, may provide for the escalation of the
Option price per Share over all or part of the term of the Option.
(f) The Committee, in its discretion, may offer Participants the
opportunity to elect to receive an Option grant in lieu of a salary
increase or a bonus or may offer Participants the opportunity to
purchase Options for cash or such other consideration as the Committee
in its discretion determines.
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3. INCENTIVE OPTIONS
An Incentive Option shall be an "Incentive Stock Option" as that term is defined
in Section 422 of the Internal Revenue Code of 1986, as may be amended from time
to time, as in effect at the time of the grant of any such Option, or any
statutory provision that may be enacted to replace such Section. Each provision
of this Incentive Plan and of each Incentive Stock Option granted hereunder
shall be construed so that each such Option shall be an Incentive Stock Option,
and any provision thereof that cannot be so construed shall be disregarded.
Incentive Stock Options shall be granted only to purchase unrestricted Shares
and only to Eligible Participants, each of whom may be granted one or more such
Options at such time or times determined by the Committee following the
Effective Date until April 14, 2006, subject to the following conditions:
(a) The Option price per Share shall be set by the grant but shall not be
less than 100% of the Fair Market Value at the time of the grant.
(b) The Option and its related Stock Appreciation Right, if any, may be
exercised in full or in part from time to time within ten (10) years
from the date of the grant, or such shorter period as may be specified
by the Committee in the grant, provided that in any event each shall
lapse and cease to be exercisable upon, or within such period
following, Termination of Employment as shall have been determined by
the Committee and as specified in the Option or Stock Appreciation
Right. The Committee may establish such terms for exercise of Options
and Stock Appreciation Rights after Termination of Employment as it
deems appropriate. Unless the Committee determines otherwise, such
period following Termination of Employment shall not exceed twelve
months unless employment shall have terminated:
(i) as a result of retirement as defined by the Committee or total
and permanent disability as determined by the Committee, in
which event such period shall not exceed--
(A) in the case of an Option, the original term of the
Option; and
(B) in the case of a Stock Appreciation Right, one year
after such retirement or disability or after
resignation as an officer or director of the Company,
whichever shall last occur (unless earlier terminated
pursuant to Section 5(b) of this Article II);
or
(ii) as a result of death, or death shall have occurred following
Termination of Employment and while the Option or Stock
Appreciation Right was still exercisable; and
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provided, further, that such period following Termination of Employment
shall in no event extend the original exercise period of the Option or
related Stock Appreciation Right.
(c) The aggregate Fair Market Value (determined at the time the Option is
granted) of the Shares with respect to which Incentive Stock Options
are first exercisable during any calendar year by any Eligible
Participant shall not exceed $100,000; however, if the Fair Market
Value of Incentive Stock Option Shares (at date of grant) exceeds
$100,000 in the calendar year in which Incentive Stock Options are
first exercisable, Shares with a Fair Market Value at date of grant
exceeding $100,000 shall not be deemed to be Incentive Stock Options.
(d) Incentive Stock Options shall be granted only to an Eligible
Participant who, at the time the Option is granted, does not own stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company.
(e) Any other terms and conditions which the Committee determines, upon
advice of counsel, should be imposed for the Option to qualify as an
Incentive Stock Option and any other terms and conditions not
inconsistent with this Incentive Plan as determined by the Committee;
including provisions making the Shares subject to such Option
Restricted Shares or provisions making vesting or the ability to
exercise subject to performance conditions.
4. NON-QUALIFIED OPTIONS
One or more Options may be granted as Non-Qualified Options to purchase
unrestricted Shares or Restricted Shares to an Eligible Participant at such time
or times determined by the Committee, following the Effective Date, subject to
the following terms and conditions:
(a) The Option price per Share shall be established by the grant but shall
not be less than 100% of the Fair Market Value at the time of the grant
(or such later date as the Committee shall determine to be the grant
date).
(b) The Option and its related Stock Appreciation Right, if any, may be
exercised in full or in part from time to time within ten (10) years
from the date of the grant, or such shorter period as may be specified
by the Committee in the grant, provided that in any event each shall
lapse and cease to be exercisable upon, or within such period following
Termination of Employment as shall have been determined by the
Committee and as specified in the Option or Stock Appreciation Right.
The Committee may establish such terms for exercise of Options and
Stock Appreciation Rights after Termination of Employment as it deems
appropriate. Unless the Committee determines otherwise, that such
period following Termination of Employment shall not exceed twelve
months unless employment shall have terminated:
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(i) as a result of retirement as defined by the Committee or total
and permanent disability as determined by the Committee, in
which event such period shall not exceed--
(A) in the case of an Option, the original term of the
Option; and
(B) in the case of a Stock Appreciation Right, one year
after such retirement or disability or after
resignation as an officer or director of the Company,
whichever shall last occur (unless earlier terminated
pursuant to Section 5(b) of this Article II);
or
(ii) as a result of death, or death shall have occurred following
Termination of Employment and while the Option or Stock
Appreciation Right was still exercisable; and
provided, further, that such period following Termination of Employment
shall in no event extend the original exercise period of the Option or
related Stock Appreciation Right, if any.
(c) The Option grant may include any other terms and conditions not
inconsistent with this Incentive Plan as determined by the Committee,
including provisions making the Shares subject to such Option
Restricted Shares or provisions making vesting or the ability to
exercise subject to the satisfaction of performance conditions.
5. STOCK APPRECIATION RIGHTS
A Stock Appreciation Right may be granted to an Eligible Participant in
connection with (and only in connection with) an Incentive Stock Option or a
Non-Qualified Option granted under this Incentive Plan, or under any other
incentive plan of the Company or its Subsidiaries which was approved by the
stockholders, subject to the following terms and conditions:
(a) Such Stock Appreciation Right shall entitle a holder of an Option
within the period specified for the exercise of the Option in the
related Option grant to surrender the unexercised Option (or a portion
thereof) and to receive in exchange therefor a payment in cash or
Shares having an aggregate value equal to the product of (i) the amount
by which (A) the SAR Fair Market Value of each Share exceeds (B) the
Option price per Share, times (ii) the number of Shares under the
Option, or portion thereof, which is surrendered.
(b) Except as expressly provided herein, each Stock Appreciation Right
granted hereunder shall be subject to the same terms and conditions as
the related Option. It shall be exercisable only to the extent such
Option is exercisable and shall terminate or lapse and
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cease to be exercisable when the related Option terminates or lapses.
The Committee may grant Stock Appreciation Rights concurrently with
grants of Options or in connection with previously granted Options
under this Incentive Plan, or under any other incentive plan of the
Company or its Subsidiaries which was approved by the stockholders,
which are unexercised and have not terminated or lapsed. With respect
to Stock Appreciation Rights granted in connection with such previously
granted Options, the Committee shall provide that such Stock
Appreciation Rights shall not be exercisable until the holder completes
six (6) months (or such longer period as the Committee shall determine)
of service with the Company, a Subsidiary, or an Associated Company
immediately following the date of the grant of such Stock Appreciation
Rights.
(c) The Committee shall have sole discretion to determine in each case
whether the payment will be in the form of all cash, all Shares (which
may, at the Committee's discretion, be Restricted Shares), or any
combination thereof. If payment is to be made in Shares, the number of
Shares shall be determined as follows: the amount payable in Shares
shall be divided by the SAR Fair Market Value of Shares.
(d) Upon exercise of a Stock Appreciation Right, the number of Shares
subject to exercise under the related Option shall automatically be
reduced by the number of Shares represented by the Option or portion
thereof which is surrendered. To the extent that a Stock Appreciation
Right shall be exercised, any Shares transferred upon such exercise
shall not be charged against the maximum limitations upon the grant of
Options set forth in this Incentive Plan under which such Option shall
have been granted but the Option in connection with which a Stock
Appreciation Right shall have been granted shall be deemed to have been
exercised for the purpose of such maximum limitations.
(e) The Committee shall have sole discretion as to the timing of any
payment made in cash, Shares, or a combination thereof upon exercise of
Stock Appreciation Rights hereunder, whether in a lump sum, in annual
installments or otherwise deferred and the Committee shall have sole
discretion to determine whether such payments may bear amounts
equivalent to interest or cash dividends.
(f) For purposes of this paragraph 5(f) of Article II:
(i) "Unrelated Party" means any party or group of parties acting
together other than (A) the Company, its directors and
officers, or (B) any nominee holder for any stock exchange;
(ii) "Offer" means any tender or exchange offer made by an
Unrelated Party for the Shares and shall be deemed to occur
upon the first purchase or exchange of such Shares;
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(iii) "Change of Control" means any acquisition, beneficially or
otherwise, by any Unrelated Party of 25% or more of the
combined voting power of the common and preferred stock of the
Company and shall be deemed to occur upon the date that the
Unrelated Party attains control of said 25% or more of the
combined voting power;
(iv) "Change of Control Market Value" of the Shares means the
higher of --
(A) the value for which such Shares may be exchanged or
offered under any Offer pursuant to which Shares are
actually exchanged or purchased; or
(B) the Fair Market Value of such Shares on the date of
exercise of a Stock Appreciation Right.
Notwithstanding the foregoing provisions of this Section 5 of Article
II and without limiting the provisions of Section 3 of Article I of
this Incentive Plan, in the event of an Offer or Change of Control, a
Participant holding an unexercised Stock Appreciation Right may
exercise such Stock Appreciation Right and elect to be paid solely in
cash in an amount equal to the difference between the Option price and
the Change of Control Market Value of the Shares, unless within five
(5) business days after receipt of notification of such election by the
Secretary of the Company, the Committee acts to disapprove the cash
election. Unless it acts to disapprove, the Committee's consent shall
be deemed to be given at the close of business on the fifth business
day after the Secretary's receipt of notification of such election and
payment shall be made as soon as practicable after expiration of such
five (5) business day period. The election provided herein shall apply
only: (x) during the thirty (30) day period following the first
exchange or purchase of Shares pursuant to an Offer; or (y) during the
thirty (30) day period following the date on which sufficient Shares
are acquired to constitute a Change of Control.
(g) For purposes of this paragraph 5(g) of Article II:
(i) "Unrelated Party" means any party or group of parties acting
together other than (A) the Company, its directors and
officers, or (B) any nominee holder for any stock exchange;
(ii) "Alternate Change of Control" means any acquisition,
beneficially or otherwise, by any Unrelated Party of a
percentage of the combined voting power of the common and
preferred stock of the Company specified by the Committee (but
not less than 10%) and shall be deemed to occur upon the date
that the Unrelated Party attains control of said percentage of
the combined voting power;
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(iii) "Change of Control Termination of Employment" means the
termination of employment of a Participant by the Company, the
Subsidiaries or the Associated Companies without cause (as
defined by the Committee) or by the Participant for good
reason (as defined by the Committee) within a period of time
specified by the Committee following an Alternate Change of
Control;
(iv) "Alternate Change of Control Market Value" of the Shares means
the Fair Market Value of such Shares on the date of exercise
of a Stock Appreciation Right.
Notwithstanding the foregoing provisions of this Section 5 of Article
II and without limiting the provisions of Section 3 of Article I of
this Incentive Plan, in the event of an Alternate Change of Control and
a Change of Control Termination of Employment, a Participant holding an
unexercised Stock Appreciation Right who is selected by the Committee
may exercise such Stock Appreciation Right and elect to be paid solely
in cash in an amount equal to the difference between the Option price
and the Alternate Change of Control Market Value of the Shares, unless
within five (5) business days after receipt of notification of such
election by the Secretary of the Company, the Committee acts to
disapprove the cash election. Unless it acts to disapprove, the
Committee's consent shall be deemed to be given at the close of
business on the fifth business day after the Secretary's receipt of
notification of such election and payment shall be made as soon as
practicable after expiration of such five (5) business day period. The
election provided herein shall apply only during the thirty (30) day
period following a Change of Control Termination of Employment.
6. BONUS SHARES AND RESTRICTED SHARES
(a) An Award of Shares or Restricted Shares may be made at such time or
times determined by the Committee following the Effective Date to any
person who is an Eligible Participant. The Committee shall have full
discretion to determine the terms and conditions of payment of any
Award, including without limitation, what part of such Award shall be
paid in unrestricted Shares or Restricted Shares, the time or times of
payment of any Award, and the time or times of the lapse of the
restrictions on Restricted Shares.
(b) For the purpose of determining the number of Shares to be used in
payment of an Award, the amount of the Award payable in Shares shall be
divided by the Fair Market Value of the Shares on the date of the
determination of the amount of the Award by the Committee, or if the
Committee so directs, the date immediately preceding the date the Award
is paid.
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(c) The portion of an Award payable in Restricted Shares shall be paid at
the time of the Award either by book-entry registration or by
delivering to the Participant, or a custodian or escrow designated by
the Committee and the Participant, a certificate or certificates for
such Restricted Shares, registered in the name of such Participant. The
Participant shall have all of the rights of a stockholder with respect
to such Shares, subject to such terms and conditions, including
withholding of dividends, forfeitures or resale to the Company, if any,
as may be determined by the Committee. The Committee and the
Participant may designate the Company or one or more of its employees
to act as custodian or escrow for the certificates.
(d) Restricted Shares shall be subject to such terms and conditions,
including forfeiture, if any, and to such restrictions against sale,
transfer or other disposition as may be determined by the Committee at
the time a Non-Qualified Option for the purchase of Restricted Shares
is granted, at the time a Stock Appreciation Right to be settled with
Restricted Shares is granted or at the time of making a bonus award of
Restricted Shares. Any new or additional or different Shares or other
securities resulting from any adjustment of such Shares of the type
described in Section 4 of Article I shall be subject to the same terms,
conditions, and restrictions as the Restricted Shares prior to such
adjustment. The Committee may, in its discretion, remove, modify or
accelerate the release of restrictions on any Restricted Shares in the
event of hardship or disability of the Participant while employed, in
the event that the Participant ceases to be an employee of the Company,
a Subsidiary or Associated Company, as the result of death or
otherwise, in the event of a relocation of a Participant to another
country or for such other reasons as the Committee may deem
appropriate. In the event of the death of a Participant following the
transfer of Restricted Shares to him, the legal representative of the
Participant, the beneficiary designated in writing by the Participant
during his lifetime, or the person receiving such Shares under his will
or under the laws of descent and distribution shall take such Shares
subject to the same restrictions, conditions and provisions in effect
at the time of his death, to the extent applicable.
7. DIVIDENDS, DIVIDEND EQUIVALENTS AND INTEREST EQUIVALENTS
(a) No cash dividends shall be paid on Shares which have been awarded but
not registered or delivered. The Committee may provide, however, that a
Participant to whom an Option has been awarded which is exercisable in
whole or in part at a future time for Shares or a Participant who has
been awarded Shares payable in whole or in part at a future time, shall
be entitled to receive an amount per Share, equal in value to the cash
dividends, if any, paid per Share on issued and outstanding Shares, as
of the dividend record dates occurring during the period between the
date of the award and the time each such Share is delivered. Such
amounts (herein called "dividend equivalents") may, in the discretion
of the Committee, be:
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(i) paid in cash or Shares either from time to time prior to or at
the time of the delivery of such Shares or upon expiration of
the Option if it shall not have been fully exercised (except
that payment of the dividend equivalents on Incentive Options
may not be made prior to exercise); or
(ii) converted into contingently credited Shares (with respect to
which dividend equivalents shall accrue) in such manner, at
such value, and deliverable at such time or times, as may be
determined by the Committee.
Such Shares (whether delivered or contingently credited) shall be
charged against the limitations set forth in Section 5 of Article I.
(b) The Committee, in its discretion, may authorize payment of interest
equivalents on any portion of any Award payable at a future time in
cash, and interest equivalents on dividend equivalents which are
payable in cash at a future time.
(c) The Committee, in its discretion, may provide that dividends paid on
restricted Shares shall, during the applicable restricted period, be
held by the Company to be paid upon the lapse of restrictions or to be
forfeited upon forfeiture of the Shares.
8. PERFORMANCE SHARES.
Performance Shares may be granted under the Incentive Plan in such form as the
Committee may from time to time approve pursuant to the terms set forth in a
performance share agreement.
(a) Performance Shares may be granted in the form of actual Shares or Share
units having a value equal to an identical number of Shares.
(b) The performance conditions and the length of the performance period
shall be determined by the Committee, but in no event may a performance
period be less than 12 months, except upon a change in control of the
Company.
(c) The Committee shall determine in its sole discretion whether
Performance Shares granted in the form of Share units shall be paid in
cash, Shares, or a combination of cash and Shares (based upon Fair
Market Value of the Shares as of the date of exercise or the end of the
performance period, as the case may be).
(d) Except as otherwise determined by the Committee at or subsequent to
grant, a Participant must be employed as of the end of the relevant
performance period to be entitled to receive payment with respect to a
Performance Share Award.
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9. DEFERRED AWARDS
The Committee shall have the discretion to grant Awards of the right to receive
Shares that are not to be distributed until after a specified deferral period.
Such Awards may be made either alone or in addition to other Awards granted
under the Incentive Plan. If the attainment of performance goals are specified,
the Committee shall certify attainment of such performance goals prior to any
delivery of deferred Shares. Prior to completion of the deferral period, a
Participant may elect to further defer receipt of an Award for a specified
period or until a specified event, subject in each case to the approval of the
Committee and under such terms as are determined by the Committee in its sole
discretion. The Committee shall determine in its sole discretion whether such
Deferred Awards shall be paid in cash, Shares or a combination of cash and
Shares.
10. OTHER STOCK-BASED AWARDS
The Committee may grant other Awards of Shares and Awards that are valued in
whole or in part by reference to, or are otherwise based on, Shares, including
(without limitation) dividend equivalents and convertible debentures, either
alone or in addition to other Awards granted under the Plan. Any Awards under
this Section 10 and any Shares covered by any such Award may be forfeited to the
extent so provided in the Award agreement, as determined by the Committee.
III. MISCELLANEOUS PROVISIONS
1. No Award shall be transferable except as provided for herein.
If any Participant makes such a transfer in violation hereof,
any obligation of the Company with respect to such Award shall
forthwith terminate.
2. Nothing in this Incentive Plan or any booklet or other
document describing or referring to this Incentive Plan shall
be deemed to confer on any employee or Participant the right
to continue in the employ of his employer or affect the right
of his employer to terminate the employment of any such person
with or without cause.
3. Nothing contained herein shall require the Company to
segregate any monies from its general funds, or to create any
trusts, or to make any special deposits for any immediate or
deferred amounts payable to any Participant.
4. This Incentive Plan and all actions taken hereunder shall be
governed by the laws of the State of Delaware.
5. The Company may make such provisions and take such steps as it
may deem necessary or appropriate for the withholding of any
taxes which the Company is required by any law or regulation
of any governmental authority, whether federal, state or
local, domestic or foreign, to withhold in connection with any
Stock
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Option or the exercise thereof, any Stock Appreciation Right
or the exercise thereof, or the payment of any other Award,
including, but not limited to, the withholding of cash or
Shares which would be paid or delivered pursuant to such
exercise or award or another exercise or award under this
Incentive Plan until the Participant reimburses the Company
for the amount the Company is required to withhold with
respect to such taxes, or cancelling any portion of such award
or another award under this Incentive Plan in an amount
sufficient to reimburse itself for the amount it is required
to so withhold, or selling any property contingently credited
by the Company for the purpose of paying such award or another
award under this Incentive Plan, in order to withhold or
reimburse itself for the amount it is required to so withhold.
The Committee may permit a Participant (or any beneficiary or
other person authorized to act) to elect to pay a portion or
all of any amounts required to be withheld to satisfy federal,
state, local or foreign tax obligations by directing the
Company to withhold a number of whole Shares which would
otherwise be distributed and which have a fair market value
sufficient to cover the amount of such required withholding
taxes (in an amount not exceeding the minimum applicable tax
withholding amount required to satisfy federal (including
FICA), state, local and foreign tax withholding requirements).
6. The Committee may grant Stock Options to Eligible Participants
who are foreign nationals or who are employed by the Company,
a Subsidiary, or an Associated Company outside of the United
States of America. In order to facilitate the granting of
Stock Options, the Committee may provide for special terms and
conditions for grants to employees who are foreign nationals
or who are employed by the Company, a Parent, a Subsidiary, or
an Associated Company 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 in
other countries in which the Company, a Parent, a Subsidiary,
or an Associated Company operates or has employees. Such
special terms may include, without limitation, granting Stock
Options with a term longer than ten years if appropriate to
assure favorable tax treatment. The Committee may also provide
for such substitutes for the Stock Options for employees who
are foreign nationals or who are employed by the Company, a
Parent, a Subsidiary, or an Associated Company outside of the
United States of America as may be deemed necessary or
appropriate by the Committee.
Available Information: Each Malaysian Participant may request
copies of the Company's most recent audited financial
statements available.
7. Notwithstanding any other provision of this Incentive Plan,
for purposes of any Award that is outstanding as of the date
that the Company spins off the Company's chemical businesses
into a new publicly traded company ("Chemicals") and is held
by a Participant who in connection with such spinoff becomes
an employee of Chemicals (or a subsidiary or associated
company of
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Chemicals) rather than an employee of the Company (or a
Subsidiary or Associated Company of the Company), such change
of employment shall not constitute a Termination of
Employment. With respect to any such Award held by such a
Participant, Termination of Employment shall mean such
Participant's termination of employment with Chemicals other
than a Transfer, with Transfer defined as a change of
employment of a Participant within the group consisting of
Chemicals and its subsidiaries, or, if the Committee so
determines, a change of employment of a Participant within the
group consisting of Chemicals, its subsidiaries, and its
associated companies. For purposes of this section, a
subsidiary of Chemicals means any corporation (or partnership,
joint venture, or other enterprise) of which Chemicals owns or
controls, directly or indirectly, 50% or more of the
outstanding shares of stock normally entitled to vote for the
election of directors (or comparable equity participation and
voting power) and an associated company of Chemicals means any
corporation (or partnership, joint venture, or other
enterprise), of which Chemicals owns or controls, directly or
indirectly, 10% or more, but less than 50% of the outstanding
shares of stock normally entitled to vote for the election of
directors (or comparable equity participation and voting
power).
IV. AMENDMENTS
1. The Board, upon recommendation of the Committee but not
otherwise, may from time to time amend or modify this
Incentive Plan, including, but not limited to, an amendment
which would authorize the Committee to make Awards payable in
other securities or other forms of property of a kind to be
determined by the Committee, and such other amendments as may
be necessary or desirable to implement such Awards, or
discontinue this Incentive Plan or any provision thereof,
provided that no amendments or modifications to this Incentive
Plan shall, without the prior approval of the stockholders
normally entitled to vote for the election of directors of the
Company:
(a) permit the Company to decrease the Option price on
any outstanding Option;
(b) permit any change which would require the approval of
stockholders under [Section 16 of the Securities
Exchange Act of 1934 or the rules thereunder or]
under Section 422 of the Internal Revenue Code of
1986, or the rules thereunder (or any law, rule,
regulation or other provision that may replace such
statutes or rules); or
(c) change any of the provisions of this Article IV.
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2. No amendment to or discontinuance of this Incentive Plan or
any provision thereof by the Board or the stockholders of the
Company shall, without the written consent of the Participant,
adversely affect any Stock Option or Stock Appreciation Right
theretofore granted or bonus commitment or bonus award
theretofore made to such Participant under this Incentive
Plan.
V. INTERPRETATION
1. This Incentive Plan is not intended to and shall not affect
any option or stock appreciation right grant or bonus
commitment or award under the 1984 Plan, the 1986 Plan, the
1988/I Plan, the 1988/II Plan, the 1991 Plan, the 1994 Plan,
the 1994 Searle/Monsanto Plan, or the 1994 NutraSweet/Monsanto
Plan (or any other incentive plan of the Company, its
Subsidiaries, and Associated Companies). No stock options or
stock appreciation rights or Awards of Restricted or
unrestricted Shares shall be granted under the 1994 Plan, the
1994 Searle/Monsanto Plan, or the 1994 NutraSweet/Monsanto
Plan after April 14, 1996.
2. This Incentive Plan is not intended to and shall not preclude
the establishment or operation by the Company or any
Subsidiary of (a) any thrift, savings and investment,
achievement award, stock purchase, employee recognition or
other benefit plan or arrangement for any group of employees,
or (b) any other incentive or bonus plan or arrangement for
any employees (hereinafter "Other Plan"), and any such Other
Plan may be authorized and payments made thereunder
independently of this Incentive Plan; provided, however, that
no such Other Plan shall provide for the granting of options
or stock appreciation rights to purchase or receive the
appreciation on the shares of any class of stock of the
Company, or the making of bonus commitments or bonus awards
payable in any class of stock of the Company, which in either
form or substance are comparable to those authorized under
this Incentive Plan, unless (i) such Other Plan is established
or operated in connection with the assumption by the Company
or a Subsidiary of the plans, options, stock appreciation
rights, bonus commitments or bonus awards of another
corporation, or the substitution of an Other Plan or options,
stock appreciation rights, bonus commitments or bonus awards
under such Other Plan in lieu of the plans, options, stock
appreciation rights, bonus commitments or bonus awards of such
other corporation, arising out of a merger or consolidation
with, or the acquisition of assets or stock of, such other
corporation, or other transaction described in Section 424(a)
of the Internal Revenue Code of 1986, as may be amended from
time to time, as in effect at the time, or (ii) such Other
Plan provides for grants of options, stock appreciation
rights, bonus commitments or bonus awards to employees
substantially all of whom are not Participants.
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