Exhibit 10.1
CHARLES RIVER LABORATORIES
INTERNATIONAL, INC.
2007 INCENTIVE
PLAN
Originally adopted by the Board
of Directors on March 22, 2007;
approved by the shareholders on
May 8, 2007;
amended by the Board of Directors
on February 13, 2009;
amended by the Compensation
Committee of the Board of Directors on March 18,
2009
1.
ADMINISTRATION
Subject to the express provisions of
the Plan, the Administrator has the authority to interpret the
Plan; determine eligibility for and grant Awards; determine, modify
or waive the terms and conditions of any Award; prescribe forms,
rules and procedures (which it may modify or waive); and
otherwise do all things necessary to implement the Plan. Once an
Award has been communicated in writing to a Participant, the
Administrator may not, without the Participant’s consent,
alter the terms of the Award so as to affect adversely the
Participant’s rights under the Award, unless the
Administrator has expressly reserved the right to do so. In the
case of any Award intended to be eligible for the performance-based
compensation exception under Section 162(m), the Administrator
shall exercise its discretion consistent with qualifying the Award
for such exception.
2.
LIMITS ON AWARDS UNDER THE
PLAN
a.
NUMBER OF SHARES.
Subject to adjustments as
provided in Section 5, the total number of shares of Stock
subject to Awards granted under the Plan, in the aggregate, may not
exceed 8,800,000 (the “Fungible Pool Limit”). Each
share of Stock issued or to be issued in connection with any
Full-Value Award shall be counted against the Fungible Pool Limit
as 2.3 Fungible Pool Units. Stock Options, SARs and other Awards
that do not deliver the full value at grant thereof of the
underlying shares of Stock and that expire no more than seven
(7) years from the date of grant shall be counted
against the Fungible Pool Limit as one (1.0) Fungible Pool Unit.
(For these purposes, the number of shares of Stock taken into
account with respect to a SAR shall be the number of shares of
Stock underlying the SAR at grant (i.e., not the final number of
shares of Stock delivered upon exercise of the SAR)). For purposes
of the preceding sentence, shares that have been forfeited or
cancelled in accordance with the terms of the applicable Award
shall not be considered to have been delivered under the Plan, but
shares held back in satisfaction of the exercise price or tax
withholding requirements from shares that would otherwise have been
delivered pursuant to an Award will be considered to have been
delivered under the Plan. Any shares of Stock that again become
available for grant pursuant to this Section 2(a) shall
be added back to the pool of available shares. For purposes
of clarity, in calculating the number of shares of stock remaining
under the Fungible Pool Limit, the Administrator will not increase
the number of available Fungible Pool Units for shares of Stock
delivered under an Award (i.e. previously acquired Shares tendered
by the Participant in payment of the exercise price or of
withholding taxes). The Administrator shall determine the
appropriate methodology for calculating
the number of shares of Stock issued
pursuant to the Plan.
b.
TYPE OF SHARES.
Stock delivered by the
Company under the Plan may be authorized but unissued Stock or
previously issued Stock acquired by the Company and held in
treasury. No fractional shares of Stock will be delivered under the
Plan.
c.
CERTAIN SHARE LIMITS.
The maximum number of shares
of Stock for which Stock Options may be granted to any person
annually from and after adoption of the Plan and prior to
March 22, 2017, the maximum number of shares of Stock subject
to SARs granted to any person annually during such period and the
aggregate maximum number of shares of Stock subject to other Awards
that may be delivered (or the value of which may be paid) to any
person annually during such period shall each be 2,000,000. For
purposes of the preceding sentence, the repricing of a Stock Option
or SAR shall be treated as a new grant to the extent required under
Section 162(m), PROVIDED, no such repricing shall be permitted
except in accordance with Section 4.a.(10) of this Plan.
Each person eligible to participate in the Plan shall be eligible
to receive Awards covering up to the full number of shares of Stock
then available for Awards under the Plan. No Awards may be granted
under the Plan after March 22 2017, but previously granted
Awards may extend beyond that date.
d.
OTHER AWARD LIMITS.
No more than $3,000,000 may
be paid to any individual with respect to any Cash Performance
Award (other than an Award expressed in terms of shares of Stock or
units representing Stock, which shall instead be subject to the
limit set forth in Section 2.c. above). In applying the dollar
limitation of the preceding sentence: (A) multiple Cash
Performance Awards to the same individual that are determined by
reference to performance periods of one year with or within the
same fiscal year of the Company shall be subject in the aggregate
to one limit of such amount, and (B) multiple Cash Performance
Awards to the same individual that are determined by reference to
one or more multi-year performance periods ending in the same
fiscal year of the Company shall be subject in the aggregate to a
separate limit of such amount.
3.
ELIGIBILITY AND
PARTICIPATION
The Administrator will select
Participants from among those key Employees, directors and other
individuals or entities providing services to the Company or its
Affiliates who, in the opinion of the Administrator, are in a
position to make a significant contribution to the success of the
Company and its Affiliates. Eligibility for ISOs is further limited
to those individuals whose employment status would qualify them for
the tax treatment described in Sections 421 and 422 of the
Code.
4.
RULES APPLICABLE TO
AWARDS
a.
ALL AWARDS
(1)
TERMS OF AWARDS. All Awards of Stock
Options and SARs granted hereunder shall have a term of not to
exceed seven years from the date of grant. The Administrator
shall determine all other terms of all Awards
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subject to the limitations provided
herein.
(2)
PERFORMANCE CRITERIA. Where rights
under an Award depend in whole or in part on satisfaction of
Performance Criteria, actions by the Company that have an effect,
however material, on such Performance Criteria or on the likelihood
that they will be satisfied will not be deemed an amendment or
alteration of the Award.
(3)
ALTERNATIVE SETTLEMENT. The Company
may at any time extinguish rights under an Award in exchange for
payment in cash, Stock (subject to the limitations of
Section 2) or other property on such terms as the
Administrator determines, PROVIDED the holder of the Award consents
to such exchange, PROVIDED FURTHER, no such exchange will be made
where the cash, Stock or property to be received has a fair market
value greater than the Award being extinguished, or where any such
exchange would violate Section 4.a.(10) of this
Plan.
(4)
TRANSFERABILITY OF AWARDS. Awards
may not be transferred other than by will or by the laws of descent
and distribution and during a Participant’s lifetime an Award
requiring exercise may be exercised only by the Participant (or in
the event of the Participant’s incapacity, the person or
persons legally appointed to act on the Participant’s
behalf).
(5)
VESTING, ETC. Without limiting the
generality of Section 1, the Administrator may determine the
time or times at which an Award will vest (i.e., become free of
forfeiture restrictions) or become exercisable and the terms on
which an Award requiring exercise will remain exercisable. Unless
otherwise provided by Section 4.e with respect to Performance
Awards or if the Administrator expressly provides
otherwise:
(A)
immediately upon the cessation of a
Participant’s employment or other service relationship with
the Company and its Affiliates, all Awards (other than Stock
Options and SARs) held by the Participant (or by a permitted
transferee under Section 4.a.(4)) immediately prior to such
cessation of employment or other service relationship will be
forfeited if not then vested and, where exercisability is relevant,
will cease to be exercisable;
(B)
except as provided in (C) and
(D) below, all Stock Options and SARs held by a Participant
(or by a permitted transferee under Section 4.a.(4))
immediately prior to the cessation of the Participant’s
employment or other service relationship for reasons other than
death, to the extent then exercisable, will remain exercisable for
the lesser of (i) a period of three months or (ii) the
period ending on the latest date on which such Stock Option or SAR
could have been exercised without regard to this
Section 4.a.(5), and shall thereupon
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terminate;
(C)
all Stock Options and SARs held by a
Participant (or by a permitted transferee under
Section 4.a.(4)) immediately prior to the Participant’s
death, to the extent then exercisable, will remain exercisable for
the lesser of (i) the one-year period ending with the first
anniversary of the Participant’s death or (ii) the
period ending on the latest date on which such Stock Option or SAR
could have been exercised without regard to this
Section 4.a.(5), and shall thereupon terminate; and
(D)
all Stock Options and SARs held by a
Participant (or by a permitted transferee of the Participant under
Section 4.a.(4)) whose cessation of employment or other
service relationship is determined by the Administrator in its sole
discretion to result from reasons which cast such discredit on the
Participant as to justify immediate termination of the Award shall
immediately terminate upon such cessation.
Unless the Administrator expressly
provides otherwise, a Participant’s “employment or
other service relationship with the Company and its
Affiliates” will be deemed to have ceased, in the case of an
employee Participant, upon termination of the Participant’s
employment with the Company and its Affiliates (whether or not the
Participant continues in the service of the Company or its
Affiliates in some capacity other than that of an employee of the
Company or its Affiliates), and in the case of any other
Participant, when the service relationship in respect of which the
Award was granted terminates (whether or not the Participant
continues in the service of the Company or its Affiliates in some
other capacity).
(6)
TAXES. The Administrator will make
such provision for the withholding of taxes as it deems necessary.
The Administrator may, but need not, hold back shares of Stock from
an Award or permit a Participant to tender previously owned shares
of Stock in satisfaction of tax withholding requirements. In no
event shall Stock be tendered or held back by the Company in excess
of the minimum amount required to be withheld for Federal, state,
and local taxes. As provided in Section 2(a) of this
Plan, in the event shares of Stock are held back from an Award in
satisfaction of tax withholding requirements, such shares will
nonetheless be considered to have been delivered under the
Plan.
(7)
DIVIDEND EQUIVALENTS, ETC. The
Administrator may provide for the payment of amounts in lieu of
cash dividends or other cash distributions with respect to Stock
subject to any Full Value Award if and in such manner as it deems
appropriate.
(8)
RIGHTS LIMITED. Nothing in the Plan
shall be construed as giving any
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person the right to continued
employment or service with the Company or its Affiliates, or any
rights as a shareholder except as to shares of Stock actually
issued under the Plan. The loss of existing or potential profit in
Awards will not constitute an element of damages in the event of
termination of employment or service for any reason, even if the
termination is in violation of an obligation of the Company or
Affiliate to the Participant.
(9)
SECTION 162(m). The
Administrator in its discretion may grant Performance Awards that
are intended to qualify for the performance-based compensation
exception under Section 162(m) and Performance Awards
that are not intended so to qualify. In the case of an Award
intended to be eligible for the performance-based compensation
exception under Section 162(m), the Plan and such Award shall
be construed to the maximum extent permitted by law in a manner
consistent with qualifying the Award for such exception. In the
case of a Performance Award intended to qualify as
performance-based for the purposes of Section 162(m), except
as otherwise permitted by the regulations at Treas. Regs.
Section 1.162-27: (i) the Administrator shall
pre-establish in writing one or more specific Performance Criteria
no later than 90 days after the commencement of the period of
service to which the performance relates (or at such earlier time
as is required to qualify the Award as performance-based under
Section 162(m)); (ii) payment of the Award shall be
conditioned upon prior certification by the Administrator that the
Performance Criteria have been satisfied; and (iii) if the
Performance Criteria with respect to the Award are not satisfied,
no other Award shall be provided in substitution of the Performance
Award. The provisions of this Section 6.a.(9) shall be
construed in a manner that is consistent with the regulations under
Section 162(m).
(10)
OPTION AND SAR REPRICING. Options
and SARs may not be repriced, or replaced or repurchased for cash,
without the approval of the shareholders of the Company.
b.
AWARDS REQUIRING EXERCISE
(1)
TIME AND MANNER OF EXERCISE. Unless
the Administrator expressly provides otherwise, (a) an Award
requiring exercise by the holder will not be deemed to have been
exercised until the Administrator receives a written notice of
exercise (in form acceptable to the Administrator) signed by the
appropriate person and accompanied by any payment required under
the Award or adequate provision therefore, as set forth in
Section 4(b)(3); and (b) if the Award is exercised by any
person other than the Participant, the Administrator may require
satisfactory evidence that the person exercising the Award has the
right to do so.
(2)
EXERCISE PRICE. The Administrator
shall determine the exercise price of
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each Stock Option and SAR; PROVIDED,
that each Stock Option and SAR must have an exercise price that is
not less than the fair market value of the Stock subject to the
Stock Option and SAR, determined as of the date of grant. An ISO
granted to an Employee described in Section 422(b)(6) of the Code
must have an exercise price that is not less than 110% of such fair
market value.
(3)
PAYMENT OF EXERCISE PRICE, IF ANY.
Where the exercise of an Award is to be accompanied by payment, the
Administrator may determine the required or permitted forms of
payment, subject to the following: (a) all payments will be by
cash or check acceptable to the Administrator, or, if so permitted
by the Administrator (with the consent of the optionee of an ISO if
permitted after the grant), (i) through the delivery of shares
of Stock which have been outstanding for at least six months
(unless the Administrator approves a shorter period) and which have
a fair market value equal to the exercise price, (ii) by
delivery of a promissory note of the person exercising the Award to
the Company, payable on such terms as are specified by the
Administrator, (iii) if the Stock is publicly traded, by
delivery of an unconditional and irrevocable undertaking by a
broker to deliver promptly to the Company sufficient funds to pay
the exercise price, or (iv) by any combination of the
foregoing permissible forms of payment; and (b) where shares
of Stock issued under an Award are part of an original issue of
shares, the Award shall require an exercise price equal to at least
the par value of such shares.
(4)
GRANT OF STOCK OPTIONS. Each Stock
Option awarded under the Plan shall be deemed to have been awarded
as a non-ISO (and to have been so designated by its terms) unless
the Administrator expressly provides for ISO treatment that the
Stock Option is to be treated as an ISO.
c.
AWARDS NOT REQUIRING
EXERCISE
Awards of Restricted Stock and
Unrestricted Stock may be made in return for either
(1) services determined by the Administrator to have a value
not less than the
