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EXHIBIT A
TO
2007 EQUITY INCENTIVE PLAN
EXECUTIVE AND KEY
MANAGER 2007 PERFORMANCE SHARE SUB-PLAN
This
Executive and Key Manager 2007 Performance Share Sub-Plan
(“Sub-Plan”) sets forth rules and regulations adopted
by the Committee for issuance of Performance Share Awards under
Section 10 of the 2007 Equity Incentive Plan
(“Plan”). This Sub-Plan shall apply to Awards granted
effective on and after May 9, 2007. In addition, the rules and
regulations relating to the deferral of Awards set forth in this
Sub-Plan shall apply to any Awards which become vested on or after
January 1, 2005. Capitalized terms used in this Sub-Plan that are
not defined herein shall have the meaning given in the Plan. In the
event of any conflict between this Sub-Plan and the Plan, the terms
and conditions of the Plan shall control. No Award Agreement shall
be required for participation in this Sub-Plan.
Section 1.
Definitions
When used in this Sub-Plan,
the following terms shall have the meanings as set forth below, and
are in addition to the definitions set forth in the Plan.
| 1.1 |
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“ Account ” means the account used to record
and track the number of Performance Shares granted to each
Participant as provided in Section 2.4. |
| 1.2 |
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“ Award ” as used in this Sub-Plan means
each aggregate award of Performance Shares as provided in
Section 2.2. |
| 1.3 |
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“ Early Vesting Event ” with respect to a
Performance Award means the Participant’s death, Retirement,
or termination as a result of a Divestiture, or any of the vesting
events provided in Section 3.2 in connection with a Change in
Control. |
| 1.4 |
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“ Performance Period ” for purposes of this
Sub-Plan means three consecutive Years beginning with the Year in
which an Award is granted. |
| 1.5 |
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“ Performance Schedule ” means Attachment 1
to this Sub-Plan, which sets forth the Performance Measures
applicable to this Sub-Plan. |
| 1.6 |
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“ Performance Share ” for purposes of this
Sub-Plan means each unit of an Award granted to a Participant, the
value of which is equal to the value of Company Stock as
hereinafter provided. |
| 1.7 |
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“ Prorated Total Shareholder Return ” for
purposes of this Sub-Plan means the weighted average of the Total
Shareholder Return over a Performance Period calculated for the
period between the first day of the Performance Period and the date
of the applicable Early Vesting Event (other than Retirement). |
| 1.8 |
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“ Retire ” or “ Retirement
” means Separation from Service on or after: |
(a) becoming 65 years old with at least 5 years of
service;
(b) becoming 55 years old with at least 15 years of
service; or
(c) achieving at least 35 years of service, regardless of
age.
| 1.9 |
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“ Salary ” means the regular base rate of
compensation payable by the Company to a Participant on an annual
basis. Salary does not include bonuses, if any, or incentive
compensation, if any. Such compensation shall not be reduced by any
deferrals made under any other plans or programs maintained by the
Company. |
| 1.10 |
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“ Section 409A ” means
Section 409A of the Code, or any successor section under the
Code, as amended and as interpreted by final or proposed
regulations promulgated thereunder from time to time. |
| 1.11 |
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“ Separation from Service ” means the death,
Retirement or other separation from service with the Company as
defined for purposes of Section 409A of the Code. |
| 1.12 |
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“ Total Shareholder Return ” means the total
percentage return realized by the owner of a share of stock during
a relevant Year or any part thereof. Total Shareholder Return is
equal to the appreciation or depreciation in value of the stock
(which is equal to the average closing value of the stock over the
last ten trading days of the relevant period minus the average
closing value of the stock over the last ten trading days of the
preceding Year) plus the dividends declared during the relevant
period, divided by the average closing value of the stock over the
last ten trading days of the preceding Year. For purposes of this
Plan, Total Shareholder Return is calculated using (i) an
adjusted end-of-period stock price based on a constant price to
earnings ratio, which is equal to the average of the price to
earnings ratio over the last ten trading days of the Year preceding
the Year in which a grant takes place; and (ii) an earnings
amount equal to the Company’s ongoing earnings (excluding
non-core earnings) for the Year preceding the Year in which a grant
takes place. |
| 1.13 |
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“ Year ” means a calendar year. |
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Section 2. Sub-Plan Participation and Awards |
2.1 Participant
Selection . Participants under this Sub-Plan shall be selected
by the Committee in its sole discretion as provided in
Section 4.2 of the Plan.
2.2 Awards . The
Compensation Committee may, in its sole discretion, grant Awards to
some or all of the Participants in the form of a specific number of
Performance Shares. Except as described below, the target and
maximum value of any Award granted to any Participant in any
calendar Year will be based upon the following:
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Participant |
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Target Award |
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Maximum Award |
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CEO*
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233% of Salary |
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291.25% of Salary |
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COO*
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184% of Salary |
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230% of Salary |
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CFO*
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133% of Salary |
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166.25% of Salary |
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Presidents*/Executive
VPs*
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117% of Salary |
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146.25% of Salary |
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Senior VPs*
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100% of Salary |
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125% of Salary |
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VP/Department
Heads**
Level I
Level II
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80% of Salary
67% of Salary |
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100% of Salary
83.75% of Salary |
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Key Managers
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67% of Salary |
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83.75% of Salary |
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* Senior Management Committee level
position
**Levels shall be
determined in the sole discretion of the Committee
2.3 Award Valuation at Grant . In
calculating the value of an Award for purposes of Section 2.2,
the value of each Performance Share shall be equal to the closing
price of a share of Stock on the last trading day of the Year
before the Performance Period begins. The Participant’s
Salary shall be determined as of the January 1 preceding the date
the Award is granted, or such other time as is determined in the
discretion of the Committee. Each Award is deemed to be granted on
the day that it is approved by the Committee.
2.4 Accounting and
Adjustment of Awards . The number of Performance Shares awarded
to a Participant shall be recorded in a separate Account for each
Participant. The number of Performance Shares recorded in a
Participant’s Account shall be adjusted to reflect any splits
or other adjustments in the Stock in accordance with
Section 6.4 of the Plan. If any cash dividends are paid on the
Stock, the number of Performance Shares in each Participant’s
Account shall be increased by a number equal to (i) the
dividend multiplied by the number of Performance Shares in each
Participant’s Account, divided by (ii) the closing price
of a share of Stock on the payment date of the dividend. No
adjustment shall be made to any outstanding Awards of a Retired
Participant for cash dividends paid on Stock during the Performance
Period following the Retirement of the Participant.
2.5 Performance Schedule
and Calculation of Awards .
(a) The Committee shall, as soon as practicable after the end
of the Performance Period, but in no event later than April 15
of the first Year immediately following expiration of the
Performance Period, certify as to (i) the Company’s
average Total Shareholder Return over the Performance Period, and
(ii) the applicable percentage of the Performance Shares
vesting in accordance with the Performance Schedule contained in
Attachment 1 hereto.
(b) Notwithstanding the Company’s average Total
Shareholder Return over the Performance Period, or the Prorated
Total Shareholder Return, as the case may be, the Committee may in
its sole discretion, with respect to any or all Participants, elect
to vest fewer Performance Shares than indicated by the Performance
Schedule. This subsection 2.5(b) shall cease to apply upon the
occurrence of a Change in Control.
(c) Except with respect to the adjustments permitted by
subsection (b) above, the Performance Measures and the
Performance Schedule will not change during any Performance Period
with regard to any Awards that have already been granted. The
Committee reserves the right to modify or adjust the Performance
Measures and/or the Performance Schedule in the Committee’s
sole discretion with regard to future grants.
(d) Except in the case of an Early Vesting Event, each Award
shall become vested on January 1 immediately following the end of
the applicable Performance Period. In no event shall such
“normal” vesting date be construed to be earlier than
January 1 immediately following the end of the applicable
Performance Period.
2.6 Payment of
Awards . Except as provided in Section 3, Awards shall be
paid after expiration of the Performance Period. The Company will
issue one share of Stock in payment for each vested Performance
Share (rounded to the nearest whole Performance Share) credited to
the Account of the Participant. Payment shall be made as
follows:
(a)
Normal Payment . Unless deferred as provided below, 100% of
the vested Performance Shares for a Performance Period shall be
converted to shares of Stock no later than April 15 of the
Year immediately following expiration of the Performance Period and
will be delivered to Participants as soon as practical thereafter,
in certificated or uncertificated form, as the Participant shall
direct.
(b)
Deferred Payment . Any Participant who is employed as a
Department Head or in a higher position as of the
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