Exhibit
10.2
EXHIBIT
C
TO
2002 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 2002 Equity Incentive Plan (“Plan”).
This Sub-Plan shall apply to Awards granted effective on and after
January 1, 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.
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.
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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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“
Award ” as used in this Sub-Plan means each aggregate
award of Performance Shares as provided in Section 2.2.
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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.
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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; provided, however that there shall be two
phase-in Performance Periods, one of which is calendar year 2007
only and one of which is calendar years 2007 and 2008.
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“
Performance Schedule ” means Attachment 1 to this
Sub-Plan, which sets forth the Performance Measures applicable to
this Sub-Plan.
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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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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).
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Retire ” or “ Retirement ” means
Separation from Service on or after:
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(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.
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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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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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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.
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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.
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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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233% of Salary
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291.25% of Salary
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184% of Salary
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230% of Salary
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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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100% of Salary
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125% of Salary
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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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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
Notwithstanding
the above limitation, the Committee may grant Awards in an amount
up to three times the Maximum Award in 2007, with vesting to occur
ratably in 2008, 2009 and 2010.
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:
(i) with respect to any Participant holding an
Award for the 2005-2007 Performance Period, the number of
Performance Shares earned by that Participant with respect to his
or her Award for the 2007 Performance Period shall be reduced to
reflect the value of any Performance Shares earned or received with
respect to the 2005-2007 Performance Share Award; and
(ii) with respect to any Participant holding an
Award for the 2006-2008 Performance Period, the number of
Performance Shares earned by that Participant with respect to his
or her Award for the 2007-2008 Performance Period shall be reduced
to reflect the value of any Performance Shares earned or received
with respect to the 2006-2008 Performance Share Award;
and
(iii) 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)(iii) 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 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
. Unle
