Exhibit 10.1
VF CORPORATION
2004 Mid-Term Incentive Plan, as amended July 14, 2008
1. Purposes. This 2004 Mid-Term Incentive Plan (the Plan) of VF Corporation (the
Company), as amended July 14, 2008, is implemented under the Companys 1996 Stock Compensation
Plan (the 1996 Plan). The Plan, which replaces, for periods beginning on and after January 1,
2004, the Mid-Term Incentive Plan adopted in 1999, is intended to provide an additional means to
attract and retain talented executives, to link a significant element of executives compensation
opportunity to the Companys performance over more than one year, thereby providing an incentive
for successful long-term strategic management of the Company, and otherwise to further the purposes
of the 1996 Plan.
2. Status as Subplan Under the 1996 Plan; Administration. This Plan is a subplan implemented
under the 1996 Plan, and will be administered by the Compensation Committee of the Board of
Directors in accordance with the terms of the 1996 Plan. All of the terms and conditions of the
1996 Plan are hereby incorporated by reference in this Plan, and if any provision of this Plan or
an agreement evidencing an award hereunder conflicts with a provision of the 1996 Plan, the
provision of the 1996 Plan shall govern. Capitalized terms used in this Plan but not defined
herein shall have the same meanings as defined in the 1996 Plan.
3. Certain Definitions. In addition to terms defined above and in the 1996 Plan, the
following are defined terms under this Plan:
(a) Account means the account established for a Participant under Section 7(a).
(b) Administrator means the officers and employees of the Company responsible for the
day-to-day administration of the Plan and to which other authority may be delegated under Section
10(b). Unless otherwise specified by the Committee, the Administrator shall be the VF Corporation
Pension Plan Committee.
(c) Cause means (i), if the Participant has an Employment Agreement defining Cause, the
definition under such Employment Agreement, or (ii), if the Participant has no Employment Agreement
defining Cause, the Participants gross misconduct, meaning (A) the Participants willful and
continued refusal substantially to perform his or her duties with the Company (other than any such
refusal resulting from his or her incapacity due to physical or mental illness), after a demand for
substantial performance is delivered to the Participant by the Board of Directors which
specifically identifies the manner in which the Board believes that the Participant has refused to
perform his or her duties, or (B) the willful engaging by the Participant in gross misconduct
materially and demonstrably injurious to the Company. For purposes of this definition, no act or
failure to act on the Participants part shall be considered willful unless done, or omitted to
be done, by the Participant not in good faith and without reasonable belief that his or her action
or omission was in the best interest of the Company.
(d) Covered Employee means a Participant determined by the Committee to be
likely to be a
named executive officer of the Company in the year compensation under the Plan will become payable
and whose compensation in that year likely could be non-deductible under Section 162(m) of the
Internal Revenue Code, such that the Committee has determined that compensation to such Participant
under the Plan should qualify as performance-based compensation for purposes of Section 162(m).
(e) Disability means (i), if the Participant has an Employment Agreement defining
Disability, the definition under such Employment Agreement, or (ii), if the Participant has no
Employment Agreement defining Disability, the Participants incapacity due to physical or mental
illness resulting in the Participants absence from his or her duties with the Company on a
full-time basis for 26 consecutive weeks, and, within 30 days after written notice of termination
has been given by the Company, the Participant has not returned to the full-time performance of his
or her duties.
(f) Dividend Equivalents means credits in respect of each PRSU representing an amount equal
to the dividends or distributions declared and paid on a share of Common Stock, subject to Section
7(b).
(g) Employment Agreement means a written agreement between the Company and a Participant
securing the Participants services as an employee for a period of time and in effect at the later
of the time of the Participants Designation of Participation (as defined below) or December 31,
2008 or, if no such agreement is then in effect, an agreement providing severance benefits to the
Participant upon termination of employment in effect at the later of the time of the Participants
Designation of Participation or December 31, 2008 (including for this purpose an agreement
providing such benefits only during a period following a defined change in control, whether or not
a change in control in fact has occurred prior to the Participants Termination of Employment).
(h) Good Reason means Good Reason as defined in the Participants Employment Agreement.
If the Participant has no such Employment Agreement, no circumstance will constitute Good Reason
for purpose of this Plan.
(i) Participant means an Employee participating in this Plan.
(j) Performance Cycle means the period specified by the Committee over which a designated
amount of PRSUs potentially may be earned. Performance Cycles generally will be periods comprising
three consecutive fiscal years of the Company.
(k) Performance Goal means the performance required to be achieved as a condition of earning
of PRSUs under the Plan. As specified in Section 6(a), for each Participant who is a Covered
Employee in a given Performance Cycle, the Performance Goal will include at least two components, a
Pre-Set Goal which must be met in order for any amount to be earned and one or more Challenge
Goals which will then determine the amount of PRSUs such Participant will earn for the Performance
Cycle, and for each Participant who is not a Covered
Employee in a given Performance Cycle, the Performance Goal may but is not required to include
the Pre-Set Goal and will include one or more Challenge Goals which will then
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determine the amount
of PRSUs such Participant will earn for the Performance Cycle.
(l) PRSU or Performance Restricted Stock Unit means a Stock Unit which is potentially
earnable by a Participant hereunder upon achievement of the Performance Goal. PRSUs that have been
earned but deferred at the election of the Participant continue to be referred to as PRSUs under
the Plan, with the understanding that such PRSUs are no longer forfeitable upon Termination of
Employment or based on performance.
(m) Pro Rata Portion means a portion of a specified number of PRSUs potentially earnable in
a given Performance Cycle determined by multiplying such number of PRSUs by a fraction the
numerator of which is the number of calendar days from the beginning of the Performance Cycle until
a specified Proration Date and the denominator of which is the number of calendar days in the
Performance Cycle.
(n) Stock Unit means a bookkeeping unit which represents a right to receive one share of
Common Stock upon settlement, together with a right to accrual of additional Stock Units as a
result of Dividend Equivalents as specified in Section 7(b), subject to the terms and conditions of
this Plan. Stock Units, which constitute an award under Article IX of the 1996 Plan (including
Section 9.6 thereof), are arbitrary accounting measures created and used solely for purposes of
this Plan, and do not represent ownership rights in the Company, shares of Common Stock, or any
asset of the Company.
(o) Target PRSUs means a number of PRSUs designated as a target number that potentially may
be earned by a Participant in a given Performance Cycle.
(p) Termination of Employment means the Participants termination of employment with the
Company or any of its subsidiaries or affiliates in circumstances in which, immediately thereafter,
the Participant is not employed by the Company or any of its subsidiaries or affiliates; provided,
however, that in the case of any PRSUs that constitute a deferral of compensation, Termination of
Employment shall mean a separation from service as defined in Treasury Regulation § 1.409A-1(h).
The date of Termination of Employment will be determined without giving effect to any period
during which severance payments may be made to a Participant, unless otherwise specifically stated
herein.
4. Shares Available Under the Plan. Shares issuable or deliverable in settlement of PRSUs
shall be drawn from the 1996 Plan. The Committee will monitor share usage under this Plan and the
1996 Plan to ensure that shares are available for settlement of PRSUs in compliance with the
requirements of the 1996 Plan.
5. Eligibility. Employees who are eligible to participate in the 1996 Plan may be selected by
the Committee to participate in this Plan.
6. Designation and Earning of PRSUs.
(a) Designation of PRSUs, Pre-Set Goals, Challenge Goals and Related Terms. Not later than 90
days after the beginning of a Performance Cycle (except that this time
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limitation will not apply in
the case of a Participant other than a Covered Employee), the Committee shall (i) select Employees
to participate in the Performance Cycle, (ii) designate the Pre-Set Goal (to the extent applicable)
for the Performance Cycle, and (iii) designate for each Participant the number of Target PRSUs and
the range of PRSUs the Participant shall have the opportunity to earn in such Performance Cycle.
The time at which these terms have been designated for a given Participant shall be the
Participants Designation of Participation for the specified Performance Cycle, except that with
respect to any designation made not later than 90 days after the beginning of a Performance Cycle,
the Designation of Participation shall be the commencement date of the Performance Cycle. The
number of PRSUs potentially earnable by each Participant shall range from 0% to a maximum
percentage of a specified number of Target PRSUs, subject to the following provisions:
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(A) |
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In no event may the number of PRSUs that may be potentially earnable by any one
Participant in all Performance Cycles that begin in any one calendar year exceed the
applicable annual per-person limitation set forth in Section 5.3 of the 1996 Plan; and |
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(B) |
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The maximum percentage of the number of Target PRSUs that may be earned shall
be 200% of the number of Target PRSUs, unless the Committee specifies a lesser
percentage. |
The Pre-Set Goal is intended to be a Performance Objective within the meaning of Section 9.3 of
the 1996 Plan, in order to qualify PRSUs as performance-based compensation under Section 162(m)
of the Code. Accordingly, the Pre-Set Goal shall be based on one or more of the performance
criteria specified in Section 9.3 of the 1996 Plan. If the Pre-Set Goal applicable to a
Participant who is a Covered Employee (or if so specified for a Participant who is not a Covered
Employee) for a Performance Cycle is not achieved, no PRSUs may be earned by the Participant for
such Performance Cycle. In addition, the Committee may at any time, in its discretion, specify the
Challenge Goals applicable to one or more years of the Performance Cycle. Challenge Goals may be
specified as a table, grid, or formula that sets forth the amount of PRSUs that will be earned upon
achievement of a specified level of performance during all or part of the Performance Cycle
(subject to the requirement that the Pre-Set Goal has been achieved, in the case of a Participant
who is a Covered Employee or if so specified by the Committee for other Participants). For
purposes of Section 162(m) of the Code, the Committee is authorized to treat the maximum percentage
of PRSUs as earned upon achievement of the Pre-Set Goal, so specification of the Challenge Goals
and related terms represents an exercise of negative discretion by the Committee.
(b) Adjustments to Performance Goal. The Committee may provide for adjustments to the
Performance Goal, to reflect changes in accounting rules, corporate structure or other
circumstances of the Company, for the purpose of preventing dilution or enlargement of
Participants opportunity to earn PRSUs hereunder; provided, however, that no adjustment shall
be authorized if and to the extent that such authorization or adjustment would cause the
Pre-Set Goal applicable to a Participant who is a Covered Employee not to meet the performance
goal requirement set forth in Treasury Regulation 1.162-27(e)(2) under the Code.
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(c) Determination of Number of Earned PRSUs. Not later than 75 days after the end of each
Performance Cycle, the Committee shall determine the extent to which the Performance Goal for the
earning of PRSUs was achieved during such Performance Cycle and the number of PRSUs earned by each
Participant for the Performance Cycle. The Committee shall make written determinations that any
Pre-Set Goal and Challenge Goals and any other material terms relating to the earning of PRSUs were
in fact satisfied. The date at which the Committee makes a final determination of PRSUs earned
with respect to a given Performance Cycle will be the Earning Date for such Performance Cycle.
The Committee may adjust upward or downward the number of PRSUs earned, in its discretion, in light
of such considerations as the Committee may deem relevant (but subject to applicable limitations of
the 1996 Plan, as referenced in Section 6(a) of this Plan), provided that, with respect to a
Participant who is a Covered Employee, no upward adjustment may be made if the Pre-Set Goal has not
been achieved and adjustments otherwise shall comply with applicable requirements of Treasury
Regulation 1.162-27(e) under the Code.
7. Certain Terms of PRSUs.
(a) Accounts. The Company shall maintain a bookkeeping account for each Participant
reflecting the number of PRSUs then credited to the Participant hereunder. The Account may include
subaccounts or other designations showing, with respect to separate Performance Cycles, PRSUs that
remain potentially earnable, PRSUs that have been earned but deferred, and other relevant
information. Fractional PRSUs shall be credited to at least three decimal places for purposes of
this Plan, unless otherwise determined by the Administrator.
(b) Dividend Equivalents and Adjustments. Unless otherwise determined by the Administrator,
Dividend Equivalents shall be paid or credited on PRSUs that have been earned as follows:
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(i) |
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Regular Cash Dividends. At the time of settlement of PRSUs under Section 9,
the Administrator shall determine the aggregate amount of regular cash dividends that
would have been payable to the Participant, based on record dates for dividends since
the beginning of the Performance Cycle (or, if later, the date of the Participants
Designation of Participation ), if the earned PRSUs then to be settled had been
outstanding shares of Common Stock at such record date (without compounding of
dividends but adjusted to account for splits and other extraordinary corporate
transactions). Such aggregate cash amount will be converted to a number of shares by
dividing the amount by the Fair Market Value of a share of Common Stock at the
settlement date. |
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(ii) |
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Common Stock Dividends and Splits. If the Company declares and pays a
dividend or distribution on Common Stock in the form of additional shares of Common
Stock, or there occurs a forward split of Common Stock, then the
number of PRSUs credited to each Participants Account and potentially earnable
hereunder as of the payment date for such dividend or distribution or forward split
shall be automatically adjusted by multiplying the number of PRSUs credited to the
Account or potentially earnable as of the record date for such dividend or
distribution or split by the number of additional shares of Common Stock actually |
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paid as a dividend or distribution or issued in such split in respect of each
outstanding share of Common Stock. |
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(iii) |
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Adjustments. If the Company declares and pays a dividend or distribution on
Common Stock that is not a regular cash dividend and not in the form of additional
shares of Common Stock, of if there occurs any other event referred to in Article XI of
the 1996 Plan, the Committee may determine to adjust the number of PRSUs credited to
each Participants Account and potentially earnable hereunder, in order to prevent
dilution or enlargement of Participants rights with respect to PRSUs. |
(c) Statements. An individual statement relating to a Participants Account will be issued to
the Participant not less frequently than annually. Such statement shall report the amount of PRSUs
potentially earnable and the number of PRSUs earned and remaining credited to Participants Account
(i.e., not yet settled), transactions therein during the period covered by the statement, and other
information deemed relevant by the Administrator. Such statement may be combined with or include
information regarding other plans and compensatory arrangements affecting the Participant. A
Participants statements may evidence the Companys obligations in respect of PRSUs without the
need for the Company to enter into a separate agreement relating to such obligations; provided,
however, that any statement containing an error shall not represent a binding obligation to the
extent of such error.
8. Effect of Termination of Employment.
(a) Termination Prior to Performance Cycle Earning Date. Except to the extent set forth in
subsections (i) through (v) of this Section 8(a), upon a Participants Termination of Employment
prior to the Earning Date with respect to a given Performance Cycle all unearned PRSUs relating to
such Performance Cycle shall cease to be earnable and shall be canceled and forfeited, and
Participant shall have no further rights or opportunities hereunder:
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(i) |
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Retirement. If Termination of Employment is due to the Retirement (as defined
in the 1996 Plan) of the Participant, the Participant shall be entitled to receive
settlement of a Pro Rata Portion of the total number of PRSUs the Participant is deemed
to have earned in accordance with this Section 8(a)(i), with the Proration Date (used
to calculate the Pro Rata Portion) being the date of Retirement, except that PRSUs
relating to any Performance Cycle beginning in 2009 or later that has not completed one
full year as of the date of Termination of Employment will not be earnable and will be
cancelled as of the date of Termination of Employment. The settlement of PRSUs shall
occur promptly (and in any event not later than March 15) following completion of the
fiscal year of the Company in which the
Termination of Employment occurs. Performance for any open Performance Cycle shall
be deemed to be the average performance achieved for the fiscal year(s) completed
prior to the date of settlement. Any deferral election filed by the Participant
shall be effective and apply to the settlement of the PRSUs. |
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(ii) |
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Death or Disability. If Termination of Employment is due to the Participants |
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death or Disability, the Participant in the case of Disability or the Participants
Beneficiary in the case of death shall be entitled to receive settlement of a Pro Rata
Portion of the total number of PRSUs the Participant is deemed to have earned in
accordance with this Section 8(a)(ii), with the Proration Date (used to calculate the
Pro Rata Portion) being the date of death or Termination due to Disability. The
settlement of PRSUs shall occur promptly (and in any event not later than March 15)
following completion of the fiscal year of the Company in which the date of death or
Termination due to Disability occurs. Performance for any open Performance Cycle shall
be deemed to be the average performance achieved for the fiscal year(s) completed prior
to the date of settlement. Any deferral election filed by the Participant shall have
no effect on the settlement of the PRSUs. |
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(iii) |
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Involuntary Termination By the Company Not for Cause Prior to a Change in
Control. If Termination of Employment is an involuntary separation by the Company not
for Cause prior to a Change in Control, the Participant shall be entitled to receive
settlement of a Pro Rata Portion of the total number of PRSUs the Participant is
deemed to have earned in accordance with this Section 8(a)(iii), with the Proration
Date (used to calculate the Pro Rata Portion) being the earlier of (A) the last day of
the payroll period with respect to which a severance payment in the nature of salary
continuation has been made and (B) the last day of the Performance Cycle. If no
severance payments are to be made, the applicable Proration Date shall be the date of
Termination of Employment. In all cases under this Section 8(a)(iii), PRSUs relating
to any Performance Cycle beginning in 2009 or later or, with respect to the 2008 -2010
Performance Cycle, as to which the Participant has been designated a participant after
July 1, 2008, in which the Participant has not participated for twelve months as of
the date of Termination of Employment (i.e., Termination occurs within 12 months after
the Participants Designation of Participation) will not be earnable and will be
cancelled as of the date of Termination of Employment. The settlement of PRSUs shall
occur promptly (and in any event not later than March 15) following completion of the
fiscal year of the Company in which the Proration date occurs. Performance for any
open Performance Cycle shall be deemed to be the average performance achieved for the
fiscal year(s) completed prior to the date of settlement. Any deferral election filed
by the Participant shall have no effect on the settlement of the PRSUs. |
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(iv) |
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At or Following a Change in Control, Involuntary Termination By the Company Not
for Cause or by Participant for Good Reason. If Termination of Employment
occurs at or after a Change in Control and is an involuntary separation by the
Company not for Cause or a Termination by the Participant for Good Reason, the
Participant shall be entitled to receive settlement of the total number of PRSUs the
Participant is deemed to have earned in accordance with this Section 8(a)(iv),
promptly (and in any event within 30 days) following the date of Termination of
Employment. The amount of the settlement shall assume that the Participant has
remained with the Company through the completion of each open Performance |
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Cycle and
that the performance achieved by the Company for each such Performance Cycle is the
average of the performance achieved for the completed year(s) in such Performance
Cycle if greater than 100% (i.e., the performance required to earn at least the
Target PRSUs), or, if such average is less than 100%, the performance achieved shall
be deemed to be the average of the actual performance for the completed year(s) in
such Performance Cycle (if any) together with performance for years not yet complete
being deemed to be 100% of target performance. Any deferral election filed by the
Participant shall have no effect on the settlement of the PRSUs. |
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(v) |
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Termination by the Company for Cause or Voluntary Termination by the
Participant. If Termination of Employment is either by the Company for Cause or
voluntary by the Participant (excluding a Termination for Good Reason following a
Change in Control), PRSUs relating to each Performance Cycle which has not yet ended or
reached its Earning Date will cease to be earnable and will be canceled. |
The foregoing provisions notwithstanding, if any PRSUs constitute a deferral of compensation for
purposes of Code Section 409A, and (i) such PRSUs would be settled at a date related to a
Termination of Employment under this Section 8(a) (or in connection with a permitted elective
deferral of the PRSUs), (ii) such settlement date would be within six months after the Termination
of Employment, (iii) the Company at the date of Termination has any class of securities traded in a
public trading market, and (iv) the Participant is a Specified Employee at the date of
Termination of Employment under Code Section 409A, then the settlement date will be delayed until
the date six months after Termination of Employment. PRSUs for a given Performance Cycle each will
be deemed a separate payment for purposes of Code Section 409A. It is intended that PRSUs that are
not electively deferred hereunder constitute short-term deferrals under Treasury Regulation §
1.409A-1(b)(4), unless otherwise specifically designated by the Company in the case of a specified
Participant.
(b) Termination After Performance Cycle Earning Date. Upon a Participants Termination of
Employment at or after the Earning Date with respect to a given Performance Cycle, all PRSUs
resulting from such Performance Cycle shall be settled in accordance with Section 9(a) as promptly
as practicable after such Termination, except that, if the Participant has timely filed an
irrevocable election to defer settlement of PRSUs following a Termination of Employment due to
Retirement or Disability, such PRSUs shall be settled in accordance with such deferral election.
(c) Release. Any settlement of PRSUs following Termination of Employment may be delayed by
the Committee if the Participants Employment Agreement or any policy of the Committee then in
effect conditions such settlement or severance payments upon the Company receiving a full and valid
release of claims against the Company.
9. Settlement of PRSUs.
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(a) Settlement If PRSUs Not Deferred. Not later than the Earning Date for each Performance
Cycle, the Committee shall settle all PRSUs earned in respect of such Performance Cycle, other than
PRSUs deferred under Section 9(b) or settled as specified in Section 8, by issuing and/or
delivering to the Participant one share of Common Stock for each PRSU being settled. Such issuance
or delivery shall occur as promptly as practicable after the Earning Date for the Performance
Cycle.
(b) Deferral of PRSUs. If and to the extent authorized by the Committee, at any time on or
before such date as may be specified by the Administrator, the Participant may elect to defer
settlement of PRSUs to a date (i) later than the Earning Date for the Performance Cycle to which
the PRSUs relate or (ii) later than Termination of Employment due to Retirement or Disability, as
specified by the Participant; provided, however, that an optional deferral shall be subject to such
additional restrictions and limitations as the Committee or Administrator may from time to time
specify, including for purposes of ensuring that the Participant will not be deemed to have
constructively received compensation in connection with such deferral. Dividend equivalents shall
accrue on deferred PRSUs and shall be paid in cash annually to the Participant at an annual payment
date set by the Administrator, without interest or compounding. Other provisions of the Plan
notwithstanding, if any legislation or regulation imposes requirements on elective non-qualified
deferred compensation that are inconsistent with the Plan and procedures hereunder, if Participants
are not afforded an opportunity under such legislation or regulation to withdraw or modify their
prior elections or deferred compensation resulting therefrom, then (i) if the prior deferrals can
be automatically modified to conform to the requirements of the legislation or regulation with the
Participant being deemed not to be in constructive receipt of the deferred compensation, then such
modification automatically shall be in effect, and (ii) if not, then such deferral will immediately
end and the deferred PRSUs shall be promptly settled in accordance with the Plan; provided,
however, that if a Participant would be deemed to be in constructive receipt of any deferred
amounts solely because of this provision, the provision shall be void and of no effect.
(c) Creation of Rabbi Trust. If and to the extent authorized by the Committee, the Company
may create one or more trusts and deposit therein Common Stock or other property for delivery to
the Participant in satisfaction of the Companys obligations hereunder. Any such trust shall be a
rabbi trust that shall not jeopardize the status of the Participants rights hereunder as
unfunded deferred compensation for federal income tax purposes. If so provided by the Committee,
upon the deposit by the Committee of Common Stock in such a trust, there shall be substituted for
the rights of the Participant to receive settlement by issuance and/or delivery of Common Stock
under this Agreement a right to receive property of the same type as and equal in
value to the assets of the trust (to the extent that such assets represent the full amount of
the Companys obligation at the date of deposit). The trustee of the trust shall not be permitted
to diversify trust assets by voluntarily disposing of shares of Common Stock in the trust and
reinvesting proceeds, but such trustee may be authorized to dispose of other trust assets and
reinvest the proceeds in alternative investments, subject to such terms, conditions, and
limitations as the Committee may specify, including for the purpose of avoiding adverse accounting
consequences to the Company, and in accordance with applicable law.
(d) Settlement of PRSUs at the End of the Deferral Period. Not later than 15 days
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after the
end of any elective period of deferral or immediately in the case of a deferral period ending upon
a Change in Control, the Company will settle all PRSUs then credited to a Participants Account by
issuing and/or delivering to the Participant one share of Common Stock for each PRSU being settled.
Any deferral period will end on an accelerated basis immediately prior to a Change in Control,
except as limited under Section 9(b).
(e) Manner of Settlement. The Committee or Administrator may, in its or his or her sole
discretion, determine the manner in which shares of Common Stock shall be delivered by the Company,
including the manner in which fractional shares shall be dealt with; provided, however, that no
certificate shall be issued representing a fractional share. In furtherance of this authority,
PRSUs may be settled by the Company issuing and delivering the requisite number of shares of Common
Stock to a member firm of the New York Stock Exchange which is also a member of the National
Association of Securities Dealers, as selected by the Company from time to time, which shares shall
be deposited by such member firm in separate brokerage accounts for each Participant. If there
occurs any delay between the settlement date and the date shares are issued or delivered to the
Participant, a cash amount equal to any dividends or distributions the record date for which fell
between the settlement date and the date of issuance or delivery of the shares shall be paid to the
Participant together with the delivery of the shares.
(f) Settlement of PRSUs Held by Non-US Residents. Other provisions of the Plan (including
Section 9(e)) notwithstanding, PRSUs credited to the Account of a Participant who resides in or is
subject to income tax laws of a country other than the United States may be settled in cash, in the
discretion of the Committee. The cash amount payable in settlement of each PRSU shall equal the
Fair Market Value of a share at the date of not more than five business days before the date of
settlement. The Committee is authorized to vary the terms of participation of such foreign
Participants in any other respect (including in ways not consistent with the express provisions of
the Plan) in order to conform to the laws, regulations, and business customs of a foreign
jurisdiction.
(g) Tax Withholding. The Company shall deduct from any settlement of a Participants PRSUs
and cash dividends paid in respect of any deferred PRSUs any Federal, state, or local withholding
or other tax or charge which the Company is then required to deduct under applicable law. In
furtherance of this requirement, the Company shall withhold from the shares of Common Stock
issuable or deliverable in settlement of a Participants PRSUs the number of shares having an
aggregate Fair Market Value equal to any Federal, state, and local withholding or other tax or
charge which the Company is required to withhold under applicable law, unless
the Participant has otherwise elected and has made other arrangements satisfactory to the
Company to pay such withholding amounts.
(h) Non-Transferability. Unless otherwise determined by the Committee, neither a Participant
nor any beneficiary shall have the right to, directly or indirectly, alienate, assign, transfer,
pledge, anticipate, or encumber (except by reason of death) any PRSU, Account or Account balance,
or other right hereunder, nor shall any such PRSU, Account or Account balance, or other right be
subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment,
or garnishment by creditors of the Participant or any beneficiary, or to the debts, contracts,
liabilities, engagements, or torts of the Participant or any Beneficiary or
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transfer by operation
of law in the event of bankruptcy or insolvency of the Participant or any beneficiary, or any legal
process.
10. General Provisions.
(a) Changes to this Plan. The Committee may at any time amend, alter, suspend, discontinue,
or terminate this Plan, and such action shall not be subject to the approval of the Companys
shareholders; provided, however, that, without the consent of an affected Participant, no such
action may materially impair the rights of such Participant under this Plan. The foregoing
notwithstanding, the Committee may, in its discretion, accelerate the termination of any
Performance Cycle or any deferral period and the resulting settlement of PRSUs with respect to an
individual Participant or all Participants.
(b) Delegation of Administrative Authority. The Committee may, in writing, delegate some or
all of its power and responsibilities under the Plan to the Administrator or any other officer of
the Company or committee of officers and employees, except such delegation may not include (i)
authority to amend the Plan under Section 10(a), (ii), with respect to any executive officer of the
Company, authority under Section 6 or other authority required to be exercised by the Committee in
order that compensation under the Plan will qualify as performance-based compensation under Section
162(m) of the Code, or (iii) authority that otherwise may not be delegated under the terms of the
1996 Plan, this Plan, or applicable law. In furtherance of this authority, the Committee hereby
delegates to the Administrator, as from time to time designated, authority to administer the Plan
and act on behalf of the Committee to the fullest extent permitted under this Section 10(b). This
delegation of authority to the Administrator shall remain in effect until terminated or modified by
resolution of the Committee (without a requirement that the Plan be amended further). The
authority delegated to the Administrator hereunder shall include:
|
(i) |
|
Authority to adopt such rules for the administration of the Plan as the
Administrator considers desirable, provided they do not conflict with the Plan; and |
|
|
(ii) |
|
Authority under Section 9(b) to impose restrictions or limitations on
Participant deferrals under the Plan, including in order to promote cost-effective
administration of the Plan; no restriction or limitation on deferrals shall be
deemed to conflict with the Plan. |
No individual acting as Administrator (including any member of the committee serving as
Administrator) shall participate in a decision directly affecting his or her own rights or
obligations under the Plan, although participation in a decision affecting all Participants shall
not be prohibited by this provision.
(c) Nonexclusivity of the Plan. The adoption of this Plan shall not be construed as creating
any limitations on the power of the Board or Committee to adopt such other compensation
arrangements as it may deem desirable for any Participant.
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(d) Effective Date and Plan Termination. This Plan became effective on January 1, 2004,
following its approval by the Committee. This Plan was most recently amended by the Committee on
July 14, 2008. This Plan will remain in effect until such time as the Company and Participants
have no further rights or obligations under this Plan in respect of PRSUs not yet settled or the
Committee otherwise terminates this Plan.
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