<PAGE>
As filed with the Securities and Exchange Commission on April 20, 1999
Registration No. 333-**
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------
PHARMACIA & UPJOHN, INC.
(Exact name of company as specified in its charter)
Delaware 98-0155411
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation Organization)
95 Corporate Drive
Bridgewater, New Jersey 08807-0995
(Address of principal executive offices) (Zip Code)
Pharmacia & Upjohn, Inc.
Directors Equity Compensation
and Deferral Plan
(Full title of the plan)
Don W. Schmitz
Vice President, Associate General Counsel &
Corporate Secretary
Pharmacia & Upjohn, Inc.
95 Corporate Drive
Bridgewater, New Jersey 08807-0995
(Name and address of agent for service)
(908) 306-4400
(Telephone number, including area code, of agent for service)
---------------------------
Copy of all communications to:
Robert J. Lichtenstein
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103-2921
(215) 963-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered (1) per share (2) offering price (2) registration fee (2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 265,000 $59.69 $15,817,850 $4,397.37
par value
====================================================================================================================================
</TABLE>
(1) This Registration Statement covers shares of Common Stock of Pharmacia
& Upjohn, Inc. which may be offered or sold pursuant to the Pharmacia &
Upjohn, Inc. Directors Equity Compensation and Deferral Plan. Pursuant
to Rule 416 under the Securities Act of 1933, as amended
(the"Securities Act"), this Registration Statement also covers such
additional shares as may hereinafter be offered or issued to prevent
dilution resulting from stock splits, stock dividends,
recapitalizations or certain other capital adjustments.
(2) Estimated pursuant to Paragraphs (c) and (h) of Rule 457 under the
Securities Act, solely for the purpose of calculating the registration
fee, based upon the average of the high and low sales prices of shares
of the Company's Common Stock on April 15, 1999, as reported on the New
York Stock Exchange.
(3) The registration fee of $4,397.37 is included in a wire of $668,150.17
from the Company.
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENTS
Item 3. Incorporation of Documents by Reference.
The following documents filed with the U.S. Securities and
Exchange Commission (the "Commission") by Pharmacia & Upjohn, Inc. (the
"Company") (File No. 1-11557) pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), are incorporated by reference in this Form S-8
Registration Statement (the "Registration Statement") and made a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1998 (the "1998 10-K");
2. The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed on October 24, 1995.
All documents and reports filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such documents or reports. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified shall not be deemed to
constitute a part of the Registration Statement except as so modified and any
statement so superseded shall not be deemed to constitute a part of this
Registration Statement.
Independent Public Accountants
The consolidated balance sheets of the Company as of December 31,
1998 and 1997, and the consolidated statements of earnings, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1998, which have been incorporated by reference in this Prospectus, have been
included and incorporated by reference herein in reliance on the report of
PricewaterhouseCoopers LLP, independent public accountants, given on the
authority of that firm as experts in auditing and accounting.
Item 4. Description of Securities.
Not Applicable
Item 5. Interests of Named Experts and Counsel.
Not Applicable
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes a
court to award, or a corporation's board of directors to grant, indemnity to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act. The
Company's Certificate of Incorporation and By-laws provide for indemnification
of its directors, officers, employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. In addition, the Company has
entered into Indemnification Agreements with its executive officers and
directors. The Company has also purchased and maintained insurance for its
officers, directors, employees or agents against liabilities which an officer, a
director, an employee or an agent may incur in his capacity as such.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.(1)
Exhibit Numbers Exhibit
- --------------------------------------------------------------------------------
4 Restated Certificate of Incorporation and Restated By-laws of
Pharmacia & Upjohn, Inc. (incorporated by reference to Exhibits
4.1 and 4.2 to Pharmacia & Upjohn, Inc.'s Registration Statement
on Form S-8 filed May 3, 1996)
23.1 Consent of PricewaterhouseCoopers LLP
24 Power of Attorney (included as part of the signature page)
99.1 Pharmacia & Upjohn, Inc. Directors Equity Compensation and
Deferral Plan
Item 9. Undertakings.
The undersigned hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
- ----------------
(1)By its terms, the Pharmacia & Upjohn, Inc. Directors Equity Compensation and
Deferral Plan shall distribute only treasury shares and not original issue
shares. Therefore, in accordance with the instructions for Item 8 of Form S-8
there is no requirement for an opinion of counsel as to the legality of the
securities being registered, and no such opinion is presented.
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the information required to be
included in a post-effective amendment by those subparagraphs is
contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the offering.
The undersigned company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bridgewater, State of New Jersey on this 20th day of April, 1999.
PHARMACIA & UPJOHN, INC.
By: /s/ Fred Hassan
---------------------------------------------
Name: Fred Hassan
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by or on behalf of the following persons in the
capacities and on the dates indicated.
Each person, in so signing, also makes, constitutes and appoints Fred
Hassan, Christopher Coughlin and Richard Collier, and each such officer acting
singly, his true and lawful attorney-in-fact, in his name, place and stead to
execute and cause to be filed with the Securities and Exchange Commission any or
all amendments to this Registration Statement, with all exhibits and any and all
documents required to be filed with respect thereto, and to do and perform each
and every act and thing necessary to effectuate the same.
Name Title Date
- ---- ----- ----
/s/ Fred Hassan
- ------------------------ President and Chief Executive April 20, 1999
Fred Hassan Officer
/s/ Christopher Coughlin
- ------------------------ Executive Vice President and April 20, 1999
Christopher Coughlin Chief Financial Officer
(Principal Financial Officer)
/s/ Robert Thompson
- ------------------------ Senior Vice President (Principal April 20, 1999
Robert Thompson Accounting Officer)
/s/ Richard H. Brown
- ------------------------ Director April 20, 1999
Richard H. Brown
- ------------------------ Director April , 1999
Frank C. Carlucci
/s/ Gustaf A.S. Douglas
- ------------------------ Director April 20, 1999
Gustaf A.S. Douglas
/s/ M. Kathryn Eickhoff
- ------------------------ Director April 20, 1999
M. Kathryn Eickhoff
II-4
<PAGE>
/s/ J. Soren Gyll
- --------------------------- Director April 20, 1999
J. Soren Gyll
/s/ R.L. Berthold Lindquist
- --------------------------- Director April 20, 1999
R.L. Berthold Lindquist
/s/ Olf G. Lund
- --------------------------- Director April 20, 1999
Olf G. Lund
/s/ C. Steven McMillan
- --------------------------- Director April 20, 1999
C. Steven McMillan
/s/ William U. Parfet
- --------------------------- Director April 20, 1999
William U. Parfet
/s/ Ulla B. Reinius
- --------------------------- Director April 20, 1999
Ulla B. Reinius
/s/ Bengt Samuelsson
- --------------------------- Director April 20, 1999
Bengt Samuelsson
II-5
<PAGE>
INDEX TO EXHIBITS1
Exhibit Numbers Exhibit
- --------------------------------------------------------------------------------
4 Restated Certificate of Incorporation and Restated By-laws of
Pharmacia & Upjohn, Inc. (incorporated by reference to Exhibits
4.1 and 4.2 to Pharmacia & Upjohn, Inc.'s Registration Statement
of Form S-8 filed May 3, 1996)
23.1 Consent of PricewaterhouseCoopers LLP
24 Power of Attorney (included as part of the signature page)
99.1 Pharmacia & Upjohn, Inc. Directors Equity Compensation and
Deferral Plan
- --------
(1)By its terms, the Pharmacia & Upjohn, Inc. Directors Equity Compensation and
Deferral Plan shall distribute only treasury shares and not original issue
shares. Therefore, in accordance with the instructions for Item 8 of Form S-8
there is no requirement for an opinion of counsel as to the legality of the
securities being registered, and no such opinion is presented.
<PAGE>
EXHIBIT 23.1
Consent of Independent Public Accountants
We consent to the incorporation by reference in this registration statement on
Form S-8 pertaining to the Pharmacia & Upjohn, Inc. Directors Equity
Compensation and Deferral Plan of our report dated February 10, 1999, on our
audits of the consolidated financial statements of Pharmacia & Upjohn, Inc. and
its subsidiaries as of December 31, 1998 and 1997 and for each of the three
years in the period ended December 31, 1998. We also consent to the reference to
our firm under the caption "Independent Public Accountants."
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
April 20, 1999
<PAGE>
EXHIBIT 99.1
PHARMACIA & UPJOHN, INC.
DIRECTORS EQUITY COMPENSATION AND DEFERRAL PLAN
<PAGE>
PHARMACIA & UPJOHN, INC.
DIRECTORS EQUITY COMPENSATION AND DEFERRAL PLAN
The purpose of the Pharmacia & Upjohn, Inc. Directors Equity
Compensation and Deferral Plan (the "Plan") is to provide non-employee members
of the Board of Directors (the "Board") of Pharmacia & Upjohn, Inc. (the
"Company") with the opportunity to receive grants of nonqualified stock options
and stock awards. The Plan also permits non-employee directors to defer payment
of part or all of their directors fees payable by the Company. The Company
believes that the Plan will encourage the participants to contribute materially
to the growth of the Company, thereby benefitting the Company's shareholders,
and will align the economic interests of the participants with those of the
shareholders.
1. Administration
(a) Committee. The Plan shall be administered and interpreted by the
Board or by a committee of "non-employee directors," as defined under Rule 16b-3
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
appointed by the Board. If a committee administers the Plan, references in the
Plan to the "Board," as they relate to Plan administration, shall be deemed to
refer to the committee.
(b) Board Authority. The Board shall have the sole authority to (i)
determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made, (iii) determine the
time when the grants will be made and the duration of any applicable exercise or
restriction period, including the criteria for exercisability and the
acceleration of exercisability, (iv) amend the terms of any previously issued
grant, (v) establish the terms of deferrals and payments under the Plan, and
(vi) deal with any other matters arising under the Plan.
(c) Board Determinations. The Board shall have full power and authority
to administer and interpret the Plan, to make factual determinations and to
adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Board's interpretations of the Plan
and all determinations made by the Board pursuant to the powers vested in it
hereunder shall be conclusive and binding on all persons having any interest in
the Plan or in any awards granted hereunder. All powers of the Board shall be
executed in its sole discretion, in the best interest of the Company, not as a
fiduciary, and in keeping with the objectives of the Plan and need not be
uniform as to similarly situated individuals.
<PAGE>
2.Grants
Awards under the Plan may consist of nonqualified stock options as
described in Section 5 ("Options") and stock awards as described in Section 6
("Stock Awards") (hereinafter collectively referred to as "Grants"). All Grants
shall be subject to the terms and conditions set forth herein and to such other
terms and conditions consistent with this Plan as the Board deems appropriate
and as are specified in writing by the Board to the individual in a grant
instrument or an amendment to the grant instrument (the "Grant Instrument").
Unrestricted Stock Awards may be granted without a Grant Instrument. The Board
shall approve the form and provisions of each Grant Instrument. Grants under a
particular Section of the Plan need not be uniform as among the Directors.
3. Shares Subject to the Plan
(a) Shares Authorized. Subject to adjustment as described below, (i)
the aggregate number of shares of common stock of the Company ("Company Stock")
that may be issued or transferred under the Plan pursuant to Grants of Options
is 165,000 shares and (ii) the aggregate number of shares of Company Stock that
may be issued or transferred under the Plan pursuant to deferrals of directors
fees and Grants of Stock Awards is 100,000 shares. The shares shall all be
treasury shares of Company Stock, and all Grants and other Company Stock
payments under the Plan must be made from treasury shares. If and to the extent
Options granted under the Plan terminate, expire, or are canceled, forfeited,
exchanged or surrendered without having been exercised or if any Stock Awards
are forfeited, the shares subject to such Grants shall again be available for
purposes of the Plan. If shares of Company Stock are used to pay the exercise
price of an Option, only the net number of shares received by the Director
pursuant to such exercise shall be considered to have been issued or transferred
under the Plan with respect to such Option, and the remaining number of shares
subject to the Option shall again be available for purposes of the Plan.
(b) Adjustments. If there is any change in the number or kind of shares
of Company Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation in which the Company is the
surviving corporation, (iii) by reason of a reclassification or change in par
value, or (iv) by reason of any other extraordinary or unusual event affecting
the outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for distribution under the Plan, the number of shares covered by
outstanding Grants and deferrals, the kind of shares issued under the Plan, and
the price per share of outstanding Grants may be appropriately adjusted by the
Board to reflect any increase or decrease in the number of, or change in the
kind or value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits of Plan
participants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Board shall be
final, binding and conclusive.
-2-
<PAGE>
4. Eligibility for Participation; Grant Elections
(a) Eligibility. All members of the Board who are not employees of the
Company or a subsidiary ("Directors") shall be eligible to participate in the
Plan.
(b) Grant Elections. The Board may establish amounts and terms for
Grants as it deems appropriate, pursuant to Sections 5 and 6. Unless the Board
determines otherwise, before the beginning of each Plan Year (as defined below),
each Director may elect to receive, as part of his compensation to be earned as
a director, either (i) a Stock Award for 1,000 shares of Company Stock or (ii)
an Option to purchase 3,000 shares of Company Stock. If a Director makes no
affirmative election, the Director will receive the foregoing Stock Award.
Elections for the first Plan year may be made within a period established by the
Board (not exceeding 30 days) after the initial effective date of the Plan. The
Options and Stock Awards shall be granted on the date of the annual shareholders
meeting as of which the elections are effective or as of such later date as the
Board may determine. Unless the Board determines otherwise, each Option shall
have an exercise price (the "Exercise Price") equal to the Fair Market Value (as
defined below) of a share of Company Stock on the date the Option is granted,
shall be fully exercisable on the date of grant and shall have a ten-year term.
Unless the Board determines otherwise, each Stock Award shall be fully vested on
the date of grant. A Plan Year is each period after the effective date of the
Plan that begins on the date of an annual Company shareholders meeting and ends
on the day before the next annual Company shareholders meeting.
5. Terms of Options
(a) Type of Option and Price. The Board shall establish the terms of
each Option in the Grant Instrument as follows:
(i) All Options granted under the Plan shall be nonqualified stock
options, which are not intended to qualify as "incentive stock options" within
the meaning of section 422 of the Internal Revenue Code of 1986, as amended.
(ii) The Exercise Price shall be determined by the Board and shall
be not less than the Fair Market Value of a share of Company Stock on the date
the Option is granted.
(iii) "Fair Market Value" shall mean, per share of Company Stock,
the average of the highest and lowest prices of the Company 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 Company Stock on the NYSE on such date, then the average of the highest
and lowest prices of the Company Stock on the last previous day on which a sale
on the NYSE is reported.
-3-
<PAGE>
(b) Option Term. The Board shall determine the term of each Option,
which shall not exceed ten years from the date of grant.
(c) Exercisability of Options. Options may become exercisable
immediately upon grant or they may become exercisable over time in accordance
with such terms and conditions as may be determined by the Board and specified
in the Grant Instrument. The Board may accelerate the exercisability of any or
all outstanding Options at any time for any reason.
(d) Termination of Service. The Board shall determine whether and under
what circumstances Options may be exercised after a Director ceases to be a
member of the Board. Unless the Board determines otherwise, if a Director ceases
to be a member of the Board for any reason, the Director's Options that are
exercisable at the date the Director ceases to be a member of the Board shall
continue to be exercisable for three years following the date the Director
ceases to be a member of the Board (but not later than the expiration of the
Option term).
(e) Exercise of Options. A Director may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company with payment of the Exercise Price. The Director shall pay the
Exercise Price for an Option as specified by the Board (i) in cash, (ii) with
the approval of the Board, by delivering shares of Company Stock owned by the
Director (including Company Stock acquired in connection with the exercise of an
Option, subject to such restrictions as the Board deems appropriate) and having
a Fair Market Value on the date of exercise equal to the Exercise Price, or by
attestation (on a form prescribed by the Board) to ownership of shares of
Company Stock having a Fair Market Value on the date of exercise equal to the
Exercise Price, (iii) by payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board or (iv) by such other
method as the Board may approve. Shares of Company Stock used to exercise an
Option shall have been held by the Director for the requisite period of time to
avoid adverse accounting consequences to the Company with respect to the Option.
The Director shall pay the Exercise Price and the amount of any withholding tax
due at the time of exercise.
6. Stock Awards
The Board may issue or transfer shares of Company Stock to a Director
under a Stock Award, upon such terms as the Board deems appropriate. The
following provisions are applicable to Stock Awards:
-4-
<PAGE>
(a) General Requirements. The Board shall determine the number of
shares of Company Stock to be issued or transferred pursuant to a Stock Award.
Shares of Company Stock issued or transferred pursuant to Stock Awards may be
issued or transferred for cash consideration or for no cash consideration
(subject to applicable state law), and subject to restrictions or no
restrictions, as determined by the Board. The period of time during which the
Stock Award will remain subject to any restrictions imposed by the Board will be
designated in the Grant Instrument as the "Restriction Period." All restrictions
imposed on Stock Awards shall lapse upon the expiration of the applicable
Restriction Period and the satisfaction of all conditions imposed by the Board.
The Board may determine, as to any or all Stock Awards, that the restrictions
shall lapse without regard to any Restriction Period.
(b) Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, a Director may not sell, assign, transfer, pledge or
otherwise dispose of the shares of a Stock Award except to a successor under
Section 10. Each certificate for a Stock Award shall contain a legend giving
appropriate notice of the restrictions. The Director shall be entitled to have
the legend removed from the stock certificate covering the shares subject to
restrictions when all restrictions on such shares have lapsed. The Board may
determine that the Company will not issue certificates for Stock Awards until
all restrictions on such shares have lapsed, or that the Company will retain
possession of certificates for Stock Awards until all restrictions on such
shares have lapsed.
(c) Right to Vote and to Receive Dividends. During the Restriction
Period, the Director shall have the right to vote shares of Stock Awards and to
receive any dividends or other distributions paid on such shares, subject to any
restrictions deemed appropriate by the Board.
7. Deferral of Directors Compensation.
(a) Terms of Deferral Elections. Directors may elect to defer payment
of their Stock Awards and their fees to be earned for service as a member of the
Board or any committee of the Board, on such terms as the Board may establish.
Unless the Board determines otherwise, deferrals may be made according to the
provisions of subsections (b) through (e) below. The Board may modify the
following terms as it deems appropriate.
(b) Deferral Elections.
(i) Before the date of each annual shareholders meeting of the
Company, each Director shall have the right to defer the payment of the retainer
fees, committee fees and Stock Awards to be earned by the Director for service
as a member of the Board for the next following Plan Year. Elections for the
first Plan year may be made within a period established by the Board (not
exceeding 30 days) after the initial effective date of the Plan. The election
shall be effective for the Plan Year beginning on the date of the shareholders
meeting and for all subsequent Plan Years until a new election form is filed
with the Company. Any new election form shall be effective as of the beginning
of the Plan Year following the Plan Year in which the election is made.
Elections shall be made by delivery of an executed election form to the Company.
-5-
<PAGE>
(ii) Unless the Board determines otherwise, a Director may elect to
defer 25%, 50%, 75% or 100% of the cash fees to be earned by the Director for
the Plan Year and/or 100% of the Stock Awards to be earned by the Director for
the Plan Year.
(iii) If a Director first becomes a Director at a date other than an
annual shareholders meeting, the Director's deferral election may be effective
as of the date of the Director's first Board meeting or such other date as the
Board determines.
(iv) When a Director elects to defer fees or Stock Awards, the
Company shall create an account on the books and records of the Company and
shall credit to the account the Director's deferred fees, deferred Stock Awards
and any interest equivalents and dividend equivalents credited with respect to
the deferred amounts. A Director's deferred cash fees shall be credited to the
Director's account as of the date on which the fees would otherwise have been
paid to the Director. If a Director elects to have cash fees paid in Company
Stock, the fees to be deferred shall be converted into hypothetical shares of
Company Stock as of the date on which the fees would otherwise have been paid,
based on the Fair Market Value of the Company Stock on that date. A Director's
deferred Stock Awards shall be credited to the Director's account on the date of
the annual shareholders meeting as of which they are granted or such later date
as the Board may determine.
(c) Methods of Payment.
(i) A Director who elects to defer fees or Stock Awards shall elect
one of the following methods of payment of the deferred amounts, in his or her
deferral election form:
(x) Payment may be made in up to 10
substantially equal annual installments, commencing in January
of the calendar year following the calendar year in which the
Director resigns, retires or is removed from the Board and
continuing annually until the total amount of all fees subject
to the election shall have been paid.
(y) Payment may be made in one lump sum
payment equal to the full amount of the fees subject to such
election, payable in January of the calendar year following
the calendar year in which the Director resigns, retires or is
removed from the Board.
-6-
<PAGE>
(ii) A Director's deferred Stock Awards shall be paid in the form of
Company Stock. A Director's deferred cash fees shall be paid in cash or in
shares of Company Stock, as the Director shall elect in his or her deferral
election form.
(iii) The Company shall pay a Director's deferred amounts to the
Director in the manner and at the times elected by the Director in his or her
deferral election form, except that if, after a Director has become entitled to
payment of deferred amounts, the remaining deferred amounts are less than $5,000
or 100 shares of Company Stock, payment of all remaining deferred amounts shall
be accelerated and paid in January of the following calendar year.
(iv) If a Director dies before or after commencement of payment of
his or her deferred amounts, the then remaining unpaid portion shall be paid to
the Director's beneficiary designated in the designation of beneficiary form
delivered by the Director to the Company. In the event no such beneficiary shall
have been designated by the Director, the executor or administrator of the
Director's estate shall be entitled to receive any remaining unpaid portion of
his deferred amounts. Payment shall be made in a single payment as soon as
practicable after the Director's death, in cash or shares of Company Stock
according to the Director's initial election.
(v) If, at the time of payment, the aggregate number of shares of
Company Stock payable to a Director shall not be divisible into whole shares by
the applicable number of remaining installments, each remaining installment,
except the last, shall consist of the nearest number of whole shares into which
such number shall be divisible by the number of installments, and the last
installment shall consist of the remainder. Any fractional shares shall be paid
in cash based on the Fair Market Value of Company Stock on the business day
prior to the final payment date.
(d) Dividend Equivalents. Dividend equivalents shall be credited on
any deferred amounts that are payable in shares of Company Stock as and when a
cash dividend is paid on shares of Company Stock, based on the Fair Market Value
of Company Stock on the date on which the dividend is paid. Dividend equivalents
shall be credited subsequently on the additional shares so credited. The
additional shares shall be distributed at the times provided for payment of the
deferred amounts.
(e) Interest Equivalents. Interest equivalents shall be credited and
compounded annually on any deferred fees which are payable in cash. Calculation
of the interest equivalents shall be based on the average of the prime rate
published in the Wall Street Journal as of the end of each of the prior four
quarters, unless the Board determines otherwise. Interest equivalents shall be
paid to Directors at the times provided for payment of the deferred amounts.
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8. Persons Subject to Taxation Outside the United States
With respect to Directors who are subject to taxation in countries
other than the United States, the Board may make Grants or allow deferrals on
such terms and conditions as may in the judgment of the Board be necessary or
desirable to foster and promote achievement of the purposes of the Plan, and, in
furtherance of such purposes, the Board may make such modifications, amendments,
procedures and subplans as may be necessary or advisable to comply with the laws
of countries in which Directors are subject to taxation.
9. Withholding of Taxes
Amounts payable under the Plan shall be subject to any applicable tax
withholding requirements. Tax withholding requirements may be satisfied in any
of the following ways: (i) the Company may deduct from any amounts payable in
cash (under the Plan or otherwise) any taxes required by law to be withheld;
(ii) the Director may elect to have shares withheld up to an amount that does
not exceed the Director's minimum applicable withholding tax rate; (iii) the
Director may tender shares of Company Stock owned by the Director; or (iv) the
Director may satisfy the Company's withholding tax obligations by such other
method as the Board may approve.
10. Transferability of Grants
Only the Director may exercise rights under a Grant during the
Director's lifetime, and a Director may not transfer rights with respect to
Grants or deferrals except by will, by the laws of descent and distribution or
pursuant to a written beneficiary designation filed with the Company. When a
Director dies, the personal representative or other person entitled to succeed
to the rights of the Director may exercise such rights. A successor must furnish
proof satisfactory to the Company of his or her right to receive the Grant or
deferrals under the Director's will, under the applicable laws of descent and
distribution or under the applicable beneficiary designation.
11. Change of Control of the Company
As used herein, a "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group ("Person"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, of beneficial ownership, within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 33% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
the following acquisitions of Outstanding Company Common Stock or Outstanding
Company Voting Securities shall not constitute a Change in Control: (A) any
acquisition by the Company, (B) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (C) any acquisition by any corporation pursuant to
a reorganization, merger or consolidation involving the Company, if, immediately
after such reorganization, merger or consolidation, each of the conditions
described in clauses (i), (ii) and (iii) of subsection (c) of this Section 11
shall be satisfied; and provided further that, for purposes of clause (A), if
any Person (other than the Company or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company) shall become the beneficial owner of 33% or more of the Outstanding
Company Common Stock or 33% or more of the Outstanding Company Voting Securities
by reason of any acquisition of Outstanding Company Common Stock or Outstanding
Company Voting Securities by the Company and such Person shall, after such
acquisition by the Company, become the beneficial owner of any additional shares
of the Outstanding Company Common Stock or any additional Outstanding Voting
Securities and such beneficial ownership is publicly announced, such additional
beneficial ownership shall constitute a Change of Control;
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(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; provided, however, that any individual who becomes a director of the
Company subsequent to the date hereof whose election, or nomination for election
by the Company's stockholders, was approved by the vote of at least
three-quarters of the directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without objection to such nomination)
shall be deemed to have been a member of the Incumbent Board; and provided
further, that no individual who was initially elected as a director of the
Company as a result of an actual or threatened election contest, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or
any other actual or threatened solicitation of proxies or consents by or on
behalf of any Person other than the Board shall be deemed to have been a member
of the Incumbent Board;
(c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation involving the Company unless, in any such case,
immediately after such reorganization, merger or consolidation, (i) more than
50% of the then outstanding shares of common stock of the corporation resulting
from such reorganization, merger or consolidation and more than 50% of the
combined voting power of the then outstanding securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals or
entities who were the beneficial owners, directly or indirectly, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation and in
substantially the same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (ii) no Person (other than the Company, any employee benefit
plan (or related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or consolidation (or any
corporation controlled by the Company), or any Person which beneficially owned,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, 33% or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 33% or more of the then outstanding shares of common
stock of such corporation or 33% or more of the combined voting power of the
then outstanding securities of such corporation entitled to vote generally in
the election of directors and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board providing for such
reorganization, merger or consolidation; or
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(d) (i) Approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company other than
to a corporation with respect to which, immediately after such sale or other
disposition, (A) more than 50% of the then outstanding shares of common stock
thereof and more than 50% of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(B) no Person (other than the Company, any employee benefit plan (or related
trust) sponsored or maintained by the Company or such corporation (or any
corporation controlled by the Company), or any Person which beneficially owned,
immediately prior to such sale or other disposition, directly or indirectly, 33%
or more of the Outstanding Company Common Stock or the Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 33% or more of the then outstanding shares of common stock thereof
or 33% or more of the combined voting power of the then outstanding securities
thereof entitled to vote generally in the election of directors and (C) at least
a majority of the members of the board of directors thereof were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition (or were approved
directly or indirectly by the Incumbent Board).
12. Consequences of a Change of Control
(a) Notice and Acceleration. Upon a Change of Control, unless the Board
determines otherwise, (i) all outstanding Options shall automatically accelerate
and become fully exercisable and (ii) the restrictions and conditions on all
outstanding Stock Awards shall immediately lapse.
(b) Assumption of Grants. Upon a Change of Control where the Company is
not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Board determines otherwise, all outstanding Options
that are not exercised shall be assumed by, or replaced with comparable options
by, the surviving corporation.
(c) Other Alternatives. Notwithstanding the foregoing, subject to
subsection (d) below, in the event of a Change of Control, the Board may take
one or both of the following actions: the Board may (i) require that Directors
surrender their outstanding Options in exchange for a payment by the Company, in
cash or Company Stock as determined by the Board, in an amount equal to the
amount by which the then Fair Market Value of the shares of Company Stock
subject to the Director's unexercised Options exceeds the Exercise Price of the
Options, or (ii) after giving Directors an opportunity to exercise their
outstanding Options, terminate any or all unexercised Options at such time as
the Board deems appropriate. Such surrender or termination shall take place as
of the date of the Change of Control or such other date as the Board may
specify.
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(d) Limitations. Notwithstanding anything in the Plan to the contrary,
in the event of a Change of Control, the Board shall not have the right to take
any actions described in the Plan (including without limitation actions
described in Subsection (c) above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right, the Change of Control would qualify for such treatment and the
Company intends to use such treatment with respect to the Change of Control.
13.Requirements for Issuance or Transfer of Shares
No Company Stock shall be issued or transferred hereunder unless and
until all legal requirements applicable to the issuance or transfer of such
Company Stock have been complied with to the satisfaction of the Board. The
Board shall have the right to condition any Grant or deferral hereunder on the
Director's undertaking in writing to comply with such restrictions on his or her
subsequent disposition of such shares of Company Stock as the Board shall deem
necessary or advisable, and certificates representing such shares may be
legended to reflect any such restrictions. Certificates representing shares of
Company Stock issued or transferred under the Plan will be subject to such
stop-transfer orders and other restrictions as may be required by applicable
laws, regulations and interpretations, including any requirement that a legend
be placed thereon.
14. Amendment and Termination of the Plan
(a) Amendment. The Board may amend or terminate the Plan at any time.
(b) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board.
(c) Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan shall not materially impair the rights of Directors under
then outstanding Grants or deferrals unless the Director consents or unless the
Board acts under Section 20(a). The termination of the Plan shall not impair the
power and authority of the Board with respect to outstanding Grants or
deferrals. Whether or not the Plan has terminated, an outstanding Grant or
deferral may be terminated or amended under Section 20(a) or may be amended by
agreement of the Company and the Director consistent with the Plan.
(d) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
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15. Funding of the Plan
(a) This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund with respect to the Plan or to make any
segregation of assets to assure the payment of any Grants or deferrals under
this Plan. The Directors shall in all respects be general creditors of the
Company with respect to amounts not yet paid or distributed under the Plan.
(b) The Company may establish a trust (the "Trust") and may make
contributions to the Trust from time to time to provide itself with a source of
funds to assist it in meeting its liabilities under this Plan. The assets held
in the Trust shall be subject to the claims of the Company's creditors in the
event the Company becomes insolvent. The Company may vote any shares of Company
Stock held by the Trust as directed by the Directors in proportion to their
deferred amounts which are payable in shares of Company Stock.
(c) Grants, deferred amounts, interest equivalents and dividend
equivalents hereunder shall not be subject to the debts or liabilities of any
Director, nor shall such amounts be subject to sale, transfer, assignment,
pledge, levy, claim, garnishment, attachment or encumbrance of any kind by the
Director, whether voluntary or involuntary.
16. Rights of Participants
Nothing in this Plan shall entitle any Director or other
person to any claim or right to be granted a Grant under this Plan. Neither this
Plan nor any action taken hereunder shall be construed as giving any individual
any rights to be retained by or in the service of the Company or any employment
rights.
17. No Fractional Shares
No fractional shares of Company Stock shall be issued or
delivered pursuant to the Plan or any Grant. The Board shall determine whether
cash, other awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
18. Headings
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
19. Effective Date of the Plan
The Plan shall be effective as of April 20, 1999.
20. Miscellaneous
(a) Compliance with Law. The Plan, the exercise of Options and the
obligations of the Company to issue or transfer shares of Company Stock under
the Plan be subject to all applicable laws and to approvals by any governmental
or regulatory agency as may be required. It is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. To the extent
that any legal requirement of section 16 of the Exchange Act as set forth in the
Plan ceases to be required under section 16 of the Exchange Act, that Plan
provision shall cease to apply. The Board may revoke any Grant or deferral if it
is contrary to law or modify a Grant or deferral to bring it into compliance
with any valid and mandatory government regulation. The Board may, in its sole
discretion, agree to limit its authority under this Section.
(b) Governing Law. The validity, construction, interpretation and
effect of the Plan, Grant Instruments and election forms issued under the Plan
shall be governed and construed by and determined in accordance with the laws of
the State of Delaware, without giving effect to the conflict of laws provisions
thereof.
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