Exhibit 10(b)
PERRIGO COMPANY
2008 LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE. Perrigo Company
previously adopted the Perrigo Company 2003 Long-Term Incentive
Plan (the “Plan”) to encourage employees, directors and
other persons providing significant services to Perrigo Company and
its subsidiaries to acquire a proprietary and vested interest in
the growth and performance of the Company, to generate an increased
incentive to contribute to the Company’s future success and
prosperity, thus enhancing the value of the Company for the benefit
of share owners, and to enhance the ability of the Company to
attract and retain individuals of exceptional managerial talent
upon whom, in large measure, the sustained progress, growth and
profitability of the Company depends. The following provisions
constitute an amendment and restatement of the Plan, which on and
after the Effective Date shall be known as the “Perrigo
Company 2008 Long-Term Incentive Plan”. The amended and
restated Plan shall apply to Awards granted on or after the
Effective Date.
SECTION 2. DEFINITIONS. As used in
the Plan, the following terms shall have the meanings set forth
below:
(a) “Acquiring Person”
means any person (any individual, firm, corporation or other
entity) who or which, together with all Affiliates and Associates,
has acquired or obtained the right to acquire the beneficial
ownership of fifty percent (50%) or more of the Shares then
outstanding.
(b) “Affiliate” and
“Associate” shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act.
(c) “Award” shall mean
any Option, Stock Appreciation Right, Restricted Share Award,
Performance Share, Performance Unit, Other Stock Unit Award, or any
other right, interest, or option relating to Shares or other
securities of the Company granted pursuant to the provisions of the
Plan.
(d) “Award Agreement”
shall mean any written agreement, contract, or other instrument or
document evidencing any Award granted by the Committee hereunder
and signed by both the Company and the Participant.
(e) “Beneficiary” means
the person or persons to whom an Award is transferred by his or her
will or by the laws of descent and distribution of the state in
which the Participant resided at the time of his or her
death.
(f) “Board” shall mean
the Board of Directors of Perrigo Company.
(g) “Cause” shall mean
any of the following events, as determined by the
Committee:
(1) The commission of an act which,
if proven in a court of law, would constitute a felony violation
under applicable criminal laws;
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(2) A breach of any material duty or
obligation imposed upon the Participant by the Company;
(3) Divulging the Company’s
confidential information, or breaching or causing the breach of any
confidentiality agreement to which the Participant or the Company
is a party;
(4) Engaging or assisting others to
engage in business in competition with the Company;
(5) Refusal to follow a lawful order
of the Participant’s superior or other conduct which the
Board or the Committee determines to represent insubordination on
the part of the Participant; or
(6) Other conduct by the Participant
which the Board or the Committee, in its discretion, deems to be
sufficiently injurious to the interests of the Company to
constitute cause.
(h) A “Change in
Control” shall occur when (i) any Acquiring Person
(other than (A) the Company, (B) any employee benefit
plan of the Company or any Trustee of or fiduciary with respect to
any such plan when acting in such capacity, or (C) any person
who, on the Effective Date of the Plan, is an Affiliate of Perrigo
Company and owning in excess of ten percent (10%) of the
outstanding Shares of Perrigo Company and the respective
successors, executors, legal representatives, heirs and legal
assigns of such person), alone or together with its Affiliates and
Associates, has acquired or obtained the right to acquire the
beneficial ownership of fifty percent (50%) or more of the
Shares then outstanding, or (ii) Continuing Directors no
longer constitute a majority of the Board.
(i) “Code” shall mean
the Internal Revenue Code of 1986, as amended from time to time,
and any successor thereto.
(j) “Committee” shall
mean the Compensation Committee of the Board, composed of no fewer
than three directors, each of whom is a Non-Employee Director, an
“outside director” within the meaning of
Section 162(m) of the Code and an “independent
director” within the meaning of applicable standards of the
National Association of Securities Dealers, Inc.
(“NASD”) or any national securities exchange upon which
the Shares are traded.
(k) “Company” shall mean
Perrigo Company, its subsidiaries and/or Affiliates.
(l) “Continuing
Director” means any person who was a member of the Board on
the Effective Date of the Plan, and any new director thereafter
elected by the shareholders or appointed by the Board, provided
such new director’s election or nomination for election by
the Company’s shareholders was approved by a majority of
directors who were either directors on the Effective Date or whose
election or nomination for election was previously so
approved.
(m) “Covered Employee”
shall mean a “covered employee” within the meaning of
Section 162(m)(3) of the Code.
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(n) “Disability” means,
with respect to an Employee, disability as defined under the
Company’s long term disability insurance plan under which
such Employee is then covered and, with respect to any other
Participant, has the meaning set forth in Section 22(e)(3) of
the Code, as determined by the Committee in its sole
discretion.
(o) “Effective Date”
shall have the meaning set forth in Section 16
hereof.
(p) “Employee” shall
mean any employee of the Company or of any Affiliate.
(q) “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended from time to
time, and any successor thereto.
(r) “Fair Market Value”
shall mean (i) with respect to a Share, the last reported sale
price of a Share on the date of determination, or on the most
recent date on which the Share is traded prior to that date, as
reported on the Nasdaq National Market, and (ii) with respect
to any other property, the fair market value of such property
determined by such methods or procedures as shall be established
from time to time by the Committee.
(s) “Incentive Stock
Option” shall mean an Option granted under Section 6
hereof that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.
Only Employees may be awarded Incentive Stock Options.
(t) “Involuntary Termination
for Economic Reasons” means that the Participant’s
Termination Date occurs due to involuntary termination of
employment by the Company by reason of a corporate restructuring, a
disposition or acquisition of a business or facility, or a
downsizing or layoff, as determined by the Company’s Chief
Executive Officer, in his sole discretion, or by the Committee in
the case of a Participant subject to Section 16 of the
Exchange Act.
(u) “Non-Employee
Directors” shall mean individuals who qualify as such within
the meaning of Rule 16b-3 under the Exchange Act (or any successor
definition thereto).
(v) “Nonstatutory Stock
Option” shall mean an Option granted under Section 6
hereof that is not intended to be an Incentive Stock
Option.
(w) “Option” shall mean
any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.
(x) “Original Effective
Date” means October 28, 2003.
(y) “Other Stock Unit
Awards” shall mean Awards of Shares and other Awards that are
valued in whole or in part by reference to, or are otherwise based
on, Shares or other property, other than Awards which are Options,
Stock Appreciation Rights, Restricted Share Awards, Performance
Shares or Performance Units.
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(z) “Participant” shall
mean an Employee or director of, or a consultant or other person
providing significant services to, the Company who is selected by
the Committee to receive an Award under the Plan.
(aa) “Performance Award”
shall mean any Award of Performance Shares or Performance Units
pursuant to Section 9 hereof.
(bb) “Performance
Period” shall mean that period established by the Committee
at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the
Committee with respect to such Award are to be measured.
(cc) “Performance Share”
shall mean any grant pursuant to Section 9 hereof of a unit
valued by reference to a designated number of Shares, which value
may be paid to the Participant by delivery of such property as the
Committee shall determine, including, without limitation, cash,
Shares, or any combination thereof, upon achievement of such
performance goals during the Performance Period as the Committee
shall establish at the time of such grant or thereafter.
(dd) “Performance Unit”
shall mean any grant pursuant to Section 9 hereof of a unit
valued by reference to a designated amount of property other than
Shares, which value may be paid to the Participant by delivery of
such property as the Committee shall determine, including, without
limitation, cash, Shares, or any combination thereof, upon
achievement of such performance goals during the Performance Period
as the Committee shall establish at the time of such grant or
thereafter.
(ee) “Person” shall mean
any individual, corporation, partnership, association, joint-stock
company, Company, unincorporated organization, limited liability
company, other entity or government or political subdivision
thereof.
(ff) “Prior Stock Plans”
shall mean the Perrigo Company Employee Stock Option Plan, the
Perrigo Company Non-Qualified Stock Option Plan for Directors, the
Perrigo Company Restricted Stock Plan for Directors, and the
Perrigo Company Restricted Stock Plan for Directors II.
(gg) “Restricted Share”
shall mean any Share issued with the restriction that the holder
may not sell, transfer, pledge, or assign such Share and with such
other restrictions as the Committee, in its sole discretion, may
impose (including, without limitation, any restriction on the right
to vote such Share, and the right to receive any cash dividends),
which restrictions may lapse separately or in combination at such
time or times, in installments or otherwise, as the Committee may
deem appropriate.
(hh) “Restricted Share
Award” shall mean an award of Restricted Shares under
Section 8 hereof.
(ii) “Retirement” means
a Participant’s Termination Date which occurs
(i) pursuant to a voluntary early retirement program approved
by the Board or the Committee, (ii) after attaining age 65, or
(iii) after attaining age 60 with ten or more years of service
with the Company. For this purpose, a year of service shall be a
completed 12-month period of service beginning on the first day of
the Participant’s service with the Company as an employee,
director or consultant, or an anniversary of such date.
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(jj) “Shares” shall mean
shares of common stock, without par value, of Perrigo Company and
such other securities of the Company as the Committee may from time
to time determine.
(kk) “Stock Appreciation
Right” shall mean any right granted to a Participant pursuant
to Section 7 hereof to receive, upon exercise by the
Participant, the excess of (i) the Fair Market Value of one
Share on the date of exercise over (ii) the grant price of the
right on the date of grant, or if granted in connection with an
outstanding Option on the date of grant of the related Option, as
specified by the Committee in its sole discretion, which shall not
be less than the Fair Market Value of one Share on such date of
grant of the right or the related Option, as the case may be. Any
payment by the Company in respect of such right may be made in
cash, Shares, other property, or any combination thereof, as the
Committee, in its sole discretion, shall determine.
(ll) “Ten Percent
Shareholder” means a person who owns (after taking into
account the attribution rules of Section 424(b) of the Code or
any successor provision thereto) more than 10% of the combined
voting power of all classes of shares beneficial interest of the
Company.
(mm) “Termination Date”
means the date that a Participant both ceases to be an Employee or
director and ceases to perform any material services for the
Company, including, but not limited to, advisory or consulting
services or services as a member of the Board. Unless otherwise
determined by the Committee in its sole discretion, for purposes of
the Plan, an Employee shall be considered to have a Termination
Date if his or her employer ceases to be an Affiliate, even if he
or she continues to be employed by such employer.
SECTION 3.
ADMINISTRATION.
(a) AUTHORITY OF COMMITTEE. The Plan
shall be administered by the Committee. The Committee shall have
full power and authority, subject to such orders or resolutions not
inconsistent with the provisions of the Plan as may from time to
time be adopted by the Board, to: (i) select the Participants
to whom Awards may from time to time be granted hereunder;
(ii) determine the type or types of Award to be granted to
each Participant hereunder; (iii) determine the number of
Shares to be covered by each Award granted hereunder;
(iv) determine the terms and conditions, not inconsistent with
the provisions of the Plan, of any Award granted hereunder;
(v) determine whether, to what extent and under what
circumstances Awards may be settled in cash, Shares or other
property or canceled or suspended; (vi) determine whether, to
what extent and under what circumstances cash, Shares and other
property and other amounts payable with respect to an Award under
this Plan shall be deferred either automatically or at the election
of the Participant; (vii) interpret and administer the Plan
and any instrument or agreement entered into under the Plan;
(viii) establish such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration
of the Plan; and (ix) make any other determination and take
any other action that the Committee deems necessary or desirable
for administration of the Plan. Decisions of the Committee shall be
final, conclusive and binding upon all persons, including the
Company, any Participant, and shareholder, and any Employee,
director or consultant of the Company or of any
Affiliate.
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(b) DELEGATION. The Committee may
delegate to the Company’s Chief Executive Officer the
authority to grant Awards to Participants, other than Participants
who are subject to Section 16 of the Exchange Act, and to
determine the terms and conditions of such Awards, subject to the
limitations of the Plan and such other limitations and guidelines
as the Committee may deem appropriate.
SECTION 4. DURATION OF, AND SHARES
SUBJECT TO PLAN.
(a) TERM. The Plan shall remain in
effect until terminated by the Board, provided, however, that no
Award may be granted under the Plan more than ten (10) years
after the Effective Date, but any Award theretofore granted may
extend beyond that date.
(b) SHARES SUBJECT TO THE PLAN. The
maximum number of Shares in respect for which Awards may be granted
under the Plan, subject to adjustment as provided in
Section 4(c) of the Plan, is (i) 3,100,000, plus
(ii) the number of Shares that remained available for issuance
under the Plan as of the Effective Date (including Shares
underlying outstanding awards under the Plan and Prior Stock Plans
that are forfeited, terminated, expire unexercised or are otherwise
settled without the delivery of Shares on and after the Effective
Date). No further awards shall be made under the Prior Stock Plans
after the Original Effective Date. No Participant may be granted
Awards in any one calendar year with respect to more than 400,000
Shares. The maximum amount payable in cash to a Covered Employee
for any calendar year with respect to any Award subject to
Section 13 shall be $6,000,000.
For the purpose of computing the
total number of Shares available for Awards under the Plan, there
shall be counted against the foregoing limitations the number of
Shares subject to issuance upon exercise or settlement of Awards as
of the dates on which such Awards are granted. The Shares which
were previously subject to Awards shall again be available for
Awards under the Plan if any such Awards are forfeited, terminated,
expire unexercised, settled in cash or exchanged for other Awards
(to the extent of such forfeiture or expiration of such Awards), or
if the Shares subject thereto can otherwise no longer be issued.
Further, any Shares which are used as full or partial payment to
the Company by a Participant of the purchase price of Shares or the
tax withholding requirement with respect to any Awards granted
under the Plan shall again be available for Awards under the Plan.
The number of Shares that are forfeited, expire unexercised or are
otherwise settled without the delivery of Shares under the Prior
Stock Plans on and after the Original Effective Date shall again be
available for Awards under this Plan. If a Stock Appreciation Right
is settled in Shares, Shares that are in excess of the net Shares
delivered on exercise of such Stock Appreciation Right shall be
added back to the number of Shares available for future Awards
under the Plan.
Shares which may be issued under the
Plan may be either authorized and unissued shares or issued shares
which have been reacquired by the Company. No fractional shares
shall be issued under the Plan.
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(c) CHANGES IN SHARES. In the event
of any merger, reorganization, consolidation, recapitalization,
stock dividend, stock split, reverse stock split, spin off or
similar transaction or other change in corporate structure
affecting the Shares, the Committee shall make equitable
adjustments and substitutions with respect to (i) the
aggregate number, class and kind of Shares which may be delivered
under the Plan, in the aggregate or to any one Participant,
(ii) the number, class, kind and option or exercise price of
Shares subject to outstanding Options, Stock Appreciation Rights or
other Awards granted under the Plan, and (iii) the number,
class and kind of Shares subject to, Awards granted under the Plan
(including, if the Committee deems appropriate, the substitution of
similar options to purchase the shares of, or other awards
denominated in the shares of, another company). The Committee shall
have the sole discretion to determine the manner of such equitable
adjustment or substitution, provided that the number of Shares or
other securities subject to any Award shall always be a whole
number.
SECTION 5. ELIGIBILITY. Any
Employee, director, consultant or other person providing material
services to the Company shall be eligible to be selected as a
Participant.
SECTION 6. STOCK OPTIONS. Options
may be granted hereunder to Participants either alone or in
addition to other Awards granted under the Plan. Any Option granted
under the Plan shall be evidenced by an Award Agreement in such
form as the Committee may from time to time approve. Any such
Option shall be subject
