Exhibit 10(a)
EXHIBIT A
TO
2007 EQUITY INCENTIVE PLAN
EXECUTIVE AND KEY MANAGER 2008 PERFORMANCE SHARE
SUB-PLAN
This Executive and Key
Manager 2008 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 March 18,
2008. 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.
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. Defined terms
used in this Sub-Plan and not defined below shall have the
meanings set forth in the Plan.
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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.
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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.
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1.3
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“
Change of
Control ” means a change of control as defined for
purposes of Section 409A of the Code.
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1.4
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“
Disability
” means disability as defined for purposes of Section 409A of
the Code.
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1.5
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“
Early
Retirement ” means Separation from Service after
attaining age 55 and completing at least 10 years of
service.
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1.6
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“
Early
Vesting Event ” with respect to a Performance Award
means the Participant’s death, Disability, Retirement, or
Separation from Service as a result of a Divestiture, or any of the
vesting events provided in Section 3.2 in connection with a Change
in Control.
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1.7
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“
Normal
Retirement ” means Separation from Service on or after
attaining age 65.
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1.8
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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.
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1.9
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“
Performance
Schedule ” means Attachment 1 to this Sub-Plan, which
sets forth the methodology for calculating the
Performance Share Awards applicable to this Sub-Plan.
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1.10
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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.
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1.11
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“
Retire ”
or “ Retirement
” means Early Retirement or Normal Retirement.
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1.12
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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.
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1.13
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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.
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1.14
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“
Separation from
Service ” means separation from service with the
Company as defined for purposes of Section 409A of the
Code.
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1.15
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“
Total
Business Return ” means the average annual percentage
return realized by the owner of a share of Company Stock for each
Year during a relevant Performance Period. The annual
percentage return is equal to the appreciation or depreciation in
value of a share of Company 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
paid on such share 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 the Total
Business Return, the average closing value of the stock shall be a
calculated stock price equal to (i) an earnings amount equal to the
Company’s ongoing earnings (excluding non-core earnings) for
each Year of measurement times (ii) the average price-to-earnings
ratio of the Company’s common stock over the last ten trading
days of the Year preceding the Year of award.
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1.16
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“
Year ”
means a calendar year.
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Section 2. Sub-Plan Participation and
Awards
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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
I
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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
Business 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 Business Return over the
Performance Period, 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 required or 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,
or cash equal to the Fair Market Value of one share of Stock,
or a combination thereof as determined by the Committee, 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 paid no later than April 15 of the
Year immediately following expiration of the Performance
Period. Shares of Stock issued to the Participant
will be delivered 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
beginning of a Performance Period may elect to defer the
payment of his or her Performance Shares for that Performance
Period by executing a deferral election substantially in the
form attached hereto as Attachment 2, and returning it to the
Vice President, Human Resources Department no later than the
end of the first Year of the Performance
Period. Once made, this election shall be
irrevocable except as may be permitted by rules promulgated
under Section 409A and allowed by the Committee.
2.7
Grantor
Trust . In the case of a Change in Control,
the Company shall, subject to the restrictions in this Section
2.7 and Section 13.12 of the Plan, irrevocably set aside
shares of Stock or cash in one or more such grantor trusts in
an amount that is sufficient to pay each Participant employed
by such Company (or Designated Beneficiary), the net present
value as of the date on which the Change in Control occurs, of
the earned benefits to which Participants (or their Designated
Beneficiaries) would be entitled pursuant to the terms of the
Plan if the value of their deferral account (if any)
established pursuant to section 2.6(b) would be paid in a lump
sum upon the Change in Control. Any such trust
shall be subject to the claims of the general creditors of the
Sponsor or Company in the event of bankruptcy or insolvency
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