Registration of Securities to be Offered to Employees Pursuant to an Employee Benefit Plan — Form S-8 Filing Table of Contents
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1: S-8 Registration of Securities to be Offered to HTML 85K
Employees Pursuant to an Employee
Benefit Plan
2: EX-5.1 Opinion re: Legality HTML 9K
3: EX-15 Letter re: Unaudited Interim Financial Information HTML 8K
4: EX-23.1 Consent of Experts or Counsel HTML 9K
5: EX-99.1 Miscellaneous Exhibit HTML 166K
Surrender
or Exchange of Tandem Stock Appreciation Rights
10
7.05.
Exercise
of Nontandem Stock Appreciation Rights
10
7.06.
Settlement
of Stock Appreciation Rights
11
7.07.
Cash
Settlement
11
ARTICLE
VIII
NONTRANSFERABILITY
OF OPTIONS AND STOCK APPRECIATION RIGHTS
8.01.
Nontransferability
of Options and Stock Appreciation Rights
11
ARTICLE
IX
TERMINATION
OF EMPLOYMENT
9.01.
Exercise
after Termination of Employment
11
9.02.
Total
Disability
12
ARTICLE
X
DEATH OF
PARTICIPANT
10.01.
Death
of Participant While Employed
12
10.02.
Death
of Participant Following Termination of Employment
13
ARTICLE
XI
RESTRICTED
SHARE UNITS (“RSUS”)
11.01.
Grant
of Restricted Share Units
13
11.02.
Restrictions
13
11.03.
[Reserved]
14
11.04.
Rights
of Holders of Restricted Share Units
14
11.05.
Forfeiture
Upon Termination of Employment
14
11.06.
Delivery
of Shares
14
11.07.
Performance-Based
Objectives
14
11.08.
Deferred
Restricted Share Units
15
11.09.
Payment
of Deferred Restricted Share Units
16
ARTICLE
XII
PERFORMANCE
UNITS
12.01.
Award
of Performance Units
17
12.02.
Performance
Period
17
99.1-3
TABLE
OF CONTENTS
Page
12.03
Right
to Payment of Performance Units
17
12.04
Payment
for Performance Units
18
12.05
Voting
and Dividend Rights
18
ARTICLE
XIII
UNRESTRICTED
SHARES
13.01.
Award
of Unrestricted Shares
19
13.02.
Delivery
of Unrestricted Shares
19
13.03.
Deferred
Share Units
19
13.04.
Payment
of Deferred Share Units
19
ARTICLE
XIV
TAX
OFFSET PAYMENTS
14.01.
Tax
Offset Payments
20
ARTICLE
XV
ADJUSTMENTS;
REPRICING
15.01.
Adjustments
20
15.02.
Repricing
21
ARTICLE
XVI
AMENDMENT
AND TERMINATION
16.01.
Amendment
and Termination
21
ARTICLE
XVII
WRITTEN
AGREEMENT
17.01.
Written
Agreements
21
ARTICLE
XVIII
CHANGE IN
CONTROL
18.01.
Definition
of Change in Control
21
18.02.
Effect
of Change in Control
24
ARTICLE
XIX
MISCELLANEOUS
PROVISIONS
19.01.
Definitions: Fair
Market Value and Cause
24
19.02.
Tax
Withholding
24
19.03.
Compliance
With Section 16(b) and Code Section 162(m)
24
99.1-4
TABLE
OF CONTENTS
Page
19.04.
Successors
25
19.05.
General
Creditor Status
25
19.06.
No
Right to Employment
25
19.07.
Notices
25
19.08.
Severability
25
19.09.
Governing
Law
25
19.10.
Term
of Plan
25
99.1-5
LIMITED
BRANDS, INC.
1993
STOCK OPTION AND PERFORMANCE INCENTIVE PLAN
(2009
Restatement)
ARTICLE
I
ESTABLISHMENT
AND PURPOSE
1.01. Establishment and Effective
Date.
Effective on February 26, 1993, Limited Brands, Inc., a Delaware corporation
(the “Company”),
established this stock incentive plan known as the “Limited Brands, Inc. 1993
Stock Option and Performance Incentive Plan.” (the “Plan”). The Plan was
subsequently amended, restated and approved by stockholders on May 17, 2004,
further amended and restated effective on March 15, 2007, on November 6, 2008
and, most recently effective on May 27, 2009.
The 2008
restatement of the Plan included amendments required in order to bring the Plan
into compliance with Section 409A of the Internal Revenue Code of 1986, as
amended (“Code”) and the
Treasury Regulations promulgated thereunder (“Reg.”), and shall apply only
with respect to awards under the Plan (or portions of such awards) that are
earned and vested on and after January 1, 2005. Awards (or portions of such
awards) that were earned and vested on or before December 31, 2004 are intended
to be grandfathered from the application of Code Section 409A, unless such
awards are materially modified with respect to the terms and conditions in place
on October 2, 2004, in which case such awards would become subject to Code
Section 409A and the related provisions of the Plan applicable to awards subject
to Code Section 409A.
The 2009
restatement of the Plan includes the addition of 2,000,000 shares to the shares
available for awards under the Plan pursuant to Section 2.02, amends the
eligibility provisions of Section 4.01 and makes certain other administrative
amendments.
1.02. Purpose. The
Company desires to attract and retain the best available executive and key
management associates, consultants and other advisors, for itself and its
subsidiaries and affiliates and to encourage the highest level of performance by
such associates in order to serve the best interests of the Company and its
stockholders. The Plan is expected to contribute to the attainment of these
objectives by offering eligible associates, consultants and other advisors the
opportunity to acquire stock ownership interests in the Company, and other
rights with respect to stock of the Company, and to thereby provide them with
incentives to put forth maximum effort for the success of the Company and its
subsidiaries.
ARTICLE
II
AWARDS
2.01. Form of
Awards. Awards
under the Plan may be granted in any one or all of the following
forms: (i) incentive stock options (“Incentive Stock Options”)
meeting the requirements of Code Section 422; (ii) nonstatutory stock
options (“Nonstatutory
Stock Options”)
(unless otherwise indicated, references in the Plan to Options shall include
both Incentive Stock Options and Nonstatutory Stock Options); (iii) stock
appreciation rights (“Stock Appreciation Rights”), as
described in Article VII, which may be awarded either in tandem with Options
(“Tandem Stock Appreciation
Rights”) or on a stand-alone basis (“Nontandem Stock Appreciation Rights”);
(iv) units representing shares of common stock of the Company
99.1-6
(“Common Stock”) which are
restricted as provided in Article XI (“Restricted Share Units”); (v)
units representing shares of Common Stock, as described in Article XII (“Performance Units”); (vi)
shares of unrestricted Common Stock (“Unrestricted Shares”); and
(vi) tax offset payments (“Tax
Offset Payments”), as described in Article XIV. In addition, awards may
be granted as “Substitute
Awards”, which are awards granted in assumption of, or in substitution
for, any outstanding awards previously granted by a company acquired by the
Company or with which the Company (or a subsidiary thereof) combines. Substitute
Awards shall be granted in accordance with procedures complying with Section
409A of the Code and regulations thereunder.
2.02. Maximum Shares
Available. The
maximum aggregate number of shares of Common Stock available for award under
this Plan as of the Plan’s effective date is 18,996,252 subject to adjustment
pursuant to Article XV, plus shares of Common Stock issuable upon the exercise
of Substitute Awards; provided, however, that no more than 12,379,939 of shares
of Common Stock may be issued other than pursuant to awards of Options or Stock
Appreciation Rights under the Plan. All shares available for award under the
Plan may be awarded in the form of Incentive Stock Options. In addition, Tax
Offset Payments which may be awarded under the Plan will not exceed the number
of shares available for issuance under the Plan. Shares of Common Stock issued
pursuant to the Plan may be either authorized but unissued shares or issued
shares reacquired by the Company. In the event that prior to the end of the
period during which Options may be granted under the Plan, any Option or any
Nontandem Stock Appreciation Right granted under the Plan or granted and
outstanding under the Plan prior to its 2009 amendment and restatement expires
unexercised or is terminated, surrendered or canceled (other than in connection
with the exercise of a Stock Appreciation Right) without being exercised in
whole or in part for any reason, or any Restricted Share Units or Performance
Units are forfeited, or if such awards are settled in cash in lieu of shares of
Common Stock, then the shares to which any such award relates may, at the
discretion of the Committee (as defined below) to the extent permissible under
Rule 16b-3 under the Securities Exchange Act of 1934 (the “Act”), be made available for
subsequent awards under the Plan, upon such terms as the Committee may
determine; provided, however, that the foregoing shall not apply to or in
respect of Substitute Awards.
ARTICLE
III
ADMINISTRATION
3.01. Committee. The
Plan shall be administered by a Committee (the “Committee”) appointed by the
Company’s Board of Directors (the “Board”) and consisting of not
less than two (2) members of the Board. Each member of the Committee shall be an
“outside director” (within the meaning of Code Section 162(m)) and a
“non-employee director” (within the meaning of Rule 16b-3(b)(3)(i) under the
Act).
3.02. Powers of
Committee. Subject
to the express provisions of the Plan, the Committee shall have the power and
authority (i) to grant Options and to determine the purchase price of the Common
Stock covered by each Option, the term of each Option, the number of shares of
Common Stock to be covered by each Option and any performance objectives or
vesting standards applicable to each Option; (ii) to designate Options as
Incentive Stock Options or Nonstatutory Stock Options and to determine which
Options, if any, shall be accompanied by Tandem Stock Appreciation Rights; (iii)
to grant Tandem Stock Appreciation Rights and Nontandem Stock Appreciation
Rights and to determine the terms and conditions of such rights; (iv) to grant
Restricted Share Units and to determine the term of the restricted period and
other conditions and restrictions applicable to such shares; (v) to grant
Performance Units and to determine the performance objectives, performance
periods and other conditions applicable to such units; (vi) to grant
Unrestricted Shares; (vi) to determine the amount of, and to make, Tax
99.1-7
Offset
Payments; and (vii) to determine the associates to whom, and the time or times
at which, Options, Stock Appreciation Rights, Restricted Share Units,
Performance Units, and Unrestricted Shares shall be granted.
3.03. Delegation. The
Committee may delegate to one or more of its members or to any other person or
persons such ministerial duties as it may deem advisable; provided, however,
that the Committee may not delegate any of its responsibilities hereunder if
such delegation will cause (i) transactions under the Plan to fail to comply
with Section 16 of the Act or (ii) the Committee to fail to qualify as “outside
directors” under Code Section 162(m). The Committee may also employ attorneys,
consultants, accountants or other professional advisors and shall be entitled to
rely upon the advice, opinions or valuations of any such advisors.
3.04. Interpretations. The
Committee shall have sole discretionary authority to interpret the terms of the
Plan, to adopt and revise rules, regulations and policies to administer the Plan
and to make any other factual determinations which it believes to be necessary
or advisable for the administration of the Plan. All actions taken and
interpretations and determinations made by the Committee in good faith shall be
final and binding upon the Company, all associates who have received awards
under the Plan and all other interested persons.
3.05. Liability;
Indemnification. No
member of the Committee, nor any person to whom duties have been delegated,
shall be personally liable for any action, interpretation or determination made
with respect to the Plan or awards made thereunder, and each member of the
Committee shall be fully indemnified and protected by the Company with respect
to any liability he or she may incur with respect to any such action,
interpretation or determination, to the extent permitted by applicable law and
to the extent provided in the Company’s Certificate of Incorporation and Bylaws,
as amended from time to time.
ARTICLE
IV
ELIGIBILITY
4.01. Eligibility. Any
associate, consultant or other advisor of, or any other individual who provides
services to (x) the Company or any subsidiary or affiliate or (y) any joint
venture in which the Company or any subsidiary or affiliate holds at least a 40%
interest, shall be eligible to be selected to receive a compensatory award under
or to be a “Participant”
in the Plan. In determining the individuals to whom awards shall be granted and
the number of shares to be covered by each award, the Committee shall take into
account the nature of the services rendered by such individuals, their present
and potential contributions to the success of the Company and its subsidiaries
and such other factors as the Committee in its sole discretion shall deem
relevant. The Committee shall ensure that Common Stock underlying any award
hereunder qualifies as “service recipient stock”, within the meaning of Section
409A of the Code and the regulations thereunder. “Participant” means any
individual granted an award hereunder. No Participant may be granted in any
calendar year awards covering more than 2,000,000 shares of Common
Stock.
ARTICLE
V
STOCK
OPTIONS
5.01. Grant of
Options. Options
may be granted under this Plan for the purchase of shares of Common Stock.
Options shall be granted in such form and upon such terms and conditions,
including the satisfaction of corporate or individual performance objectives and
other vesting standards, as the Committee shall from time to time determine. On
or before the date
99.1-8
of grant
of an Option, the Committee shall designate the number of shares of Common Stock
covered by such Option, the option price of such Option, and the recipient of
the Option.
5.02. Option
Price. The
option price of each Option to purchase Common Stock shall be determined by the
Committee not later than the date of the grant, but (except in the case of
Substitute Awards) shall not be less than 100 percent of the Fair Market Value
(as defined in Section 19.01) of the Common Stock subject to such Option on the
date of grant. The option price so determined shall also be applicable in
connection with the exercise of any Tandem Stock Appreciation Right granted with
respect to such Option.
5.03. Term of
Options. The
term of each Option granted under the Plan shall not exceed ten (10) years from
the date of grant, subject to earlier termination as provided in Articles IX and
X, except as otherwise provided in Section 6.01 with respect to ten (10) percent
stockholders of the Company.
5.04. Exercise of
Options. Subject
to the provisions of Article XIX (“Miscellaneous Provisions”), an Option may be
exercised, in whole or in part, at such time or times as the Committee shall
determine. The Committee may, in its discretion, accelerate the exercisability
of any Option at any time. Options may be exercised by a Participant by giving
notice to the Committee, in writing or in such other manner as the Committee may
permit, stating the number of shares of Common Stock with respect to which the
Option is being exercised and tendering payment therefor. Payment for the Common
Stock issuable upon exercise of the Option shall be made in full in cash or by
certified check or, if the Committee, in its sole discretion, permits, in shares
of Common Stock (valued at Fair Market Value on the date of exercise). As soon
as reasonably practicable following such exercise, a certificate representing
the shares of Common Stock purchased, registered in the name of the Participant,
shall be delivered to the Participant.
5.05. Cancellation of Stock
Appreciation Rights. Upon
exercise of all or a portion of an Option, the related Tandem Stock Appreciation
Rights shall be canceled with respect to an equal number of shares of Common
Stock.
ARTICLE
VI
SPECIAL
RULES APPLICABLE TO INCENTIVE STOCK OPTIONS
6.01. Ten Percent
Stockholder.
Notwithstanding any other provision of this Plan to the contrary, any associates
who are full-time employees of the Company and its present and future
subsidiaries, shall be eligible for awards of Incentive Stock Options. However,
no such associate may receive an Incentive Stock Option under the Plan if such
associate, at the time the award is granted, owns (after application of the
rules contained in Code Section 424(d)) stock possessing more than ten (10)
percent of the total combined voting power of all classes of stock of the
Company or its subsidiaries, unless (i) the option price for such Incentive
Stock Option is at least 110 percent of the Fair Market Value of the Common
Stock subject to such Incentive Stock Option on the date of grant and (ii) such
Option is not exercisable after the date five (5) years from the date such
Incentive Stock Option is granted.
6.02. Limitation on
Grants. The
aggregate Fair Market Value (determined with respect to each Incentive Stock
Option at the time such Incentive Stock Option is granted) of the shares of
Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by an associate during any calendar year (under this Plan or any
other plan of the Company or a subsidiary) shall not exceed
$100,000.
99.1-9
6.03. Limitations on Time of
Grant. No
grant of an Incentive Stock Option shall be made under this Plan more than ten
(10) years after the earlier of the date of adoption of the Plan by the Board or
the date the Plan is approved by stockholders.
ARTICLE
VII
STOCK
APPRECIATION RIGHTS
7.01. Grants of Stock Appreciation
Rights. Tandem
Stock Appreciation Rights may be awarded by the Committee in connection with any
Option granted under the Plan, at the time the Option is granted, and shall be
subject to the same terms and conditions as the related Option, except that the
medium of payment may differ. Nontandem Stock Appreciation Rights may be granted
by the Committee at any time. On or before the date of grant of a Nontandem
Stock Appreciation Right, the Committee shall specify the number of shares of
Common Stock covered by such right, the base price of shares of Common Stock to
be used in connection with the calculation described in Section 7.04 below, and
the recipient of the award. Except in the case of a Substitute Award, the base
price of a Nontandem Stock Appreciation Right shall be not less than 100 percent
of the Fair Market Value of a share of Common Stock on the date of grant. Stock
Appreciation Rights shall be subject to such terms and conditions not
inconsistent with the other provisions of this Plan as the Committee shall
determine.
7.02. Limitations on
Exercise. Subject
to the provisions of Articles IX, X and XIX, a Tandem Stock Appreciation Right
shall be exercisable only to the extent that the related Option is exercisable
and shall be subject to the same exercise period as the related Option, which
shall be set forth in the applicable agreement on or before the date of grant.
Upon the exercise of all or a portion of Tandem Stock Appreciation Rights, the
related Option shall be canceled with respect to an equal number of shares of
Common Stock. Shares of Common Stock subject to Options, or portions thereof,
surrendered upon exercise of a Tandem Stock Appreciation Right, shall not be
available for subsequent awards under the Plan. Subject to the provisions of
Article XIX, a Nontandem Stock Appreciation Right shall be exercisable during
such period as the Committee shall determine, which shall be set forth in the
applicable agreement on or before the date of grant.
7.03. Term of Stock Appreciation
Rights. The term of each Stock Appreciation Right granted
under the Plan shall not exceed ten (10) years from the date of grant, subject
to earlier termination as provided in Articles IX and X.
7.04.Surrender or Exchange of
Tandem Stock Appreciation Rights. A
Tandem Stock Appreciation Right shall entitle the Participant to surrender to
the Company unexercised the related option, or any portion thereof, and to
receive from the Company in exchange therefor that number of shares of Common
Stock having an aggregate Fair Market Value equal to (A) the excess of (i) the
Fair Market Value of one (1) share of Common Stock as of the date the Tandem
Stock Appreciation Right is exercised over (ii) the option price per share
specified in such Option, multiplied by (B) the number of shares of Common Stock
subject to the Option, or portion thereof, which is surrendered. Cash shall be
delivered in lieu of any fractional shares.
7.05. Exercise of Nontandem Stock
Appreciation Rights. The
exercise of a Nontandem Stock Appreciation Right shall entitle the Participant
to receive from the Company that number of shares of Common Stock having an
aggregate Fair Market Value equal to (A) the excess of (i) the Fair Market Value
of one (1) share of Common Stock as of the date on which the Nontandem Stock
Appreciation Right is exercised over (ii) the base price of the shares covered
by the Nontandem Stock Appreciation Right, multiplied by (B) the number of
shares of Common
99.1-10
Stock
covered by the Nontandem Stock Appreciation Right, or the portion thereof being
exercised. Cash shall be delivered in lieu of any fractional
shares.
7.06. Settlement of Stock
Appreciation Rights. As soon
as is reasonably practicable after the exercise of a Stock Appreciation Right,
the Company shall (i) issue, in the name of the Participant, stock certificates
representing the total number of full shares of Common Stock to which the
Participant is entitled pursuant to Section 7.03 or 7.04 hereof, and cash in an
amount equal to the Fair Market Value, as of the date of exercise, of any
resulting fractional shares, and (ii) if the Committee causes the Company to
elect to settle all or part of its obligations arising out of the exercise of
the Stock Appreciation Right in cash pursuant to Section 7.06, deliver to the
Participant an amount in cash equal to the Fair Market Value, as of the date of
exercise, of the shares of Common Stock it would otherwise be obligated to
deliver.
7.07. Cash
Settlement. The
Committee, in its discretion, may cause the Company to settle all or any part of
its obligation arising out of the exercise of a Stock Appreciation Right by the
payment of cash in lieu of all or part of the shares of Common Stock it would
otherwise be obligated to deliver in an amount equal to the Fair Market Value of
such shares on the date of exercise.
ARTICLE
VIII
NONTRANSFERABILITY
OF OPTIONS AND STOCK APPRECIATION RIGHTS
8.01. Nontransferability of
Options and Stock Appreciation Rights. No
Option or Stock Appreciation Right may be transferred, assigned, pledged or
hypothecated (whether by operation of law or otherwise), except as provided by
will or the applicable laws of descent and distribution, and no Option or Stock
Appreciation Right shall be subject to execution, attachment or similar process.
Any attempted assignment, transfer, pledge, hypothecation or other disposition
of an Option or a Stock Appreciation Right not specifically permitted herein
shall be null and void and without effect. An Option or Stock Appreciation Right
may be exercised by a Participant only during the Participant’s lifetime, or
following the Participant’s death pursuant to Article X.
ARTICLE
IX
TERMINATION
OF EMPLOYMENT
9.01. Exercise after Termination
of Employment. “Termination of Employment” shall mean
“separation from service” as that term is defined in Code Section 409A and the
Treasury Regulations thereunder. Except as the Committee may at any time
provide, in the event that the employment of a Participant shall be terminated
either by the Participant or by the Participant’s employer (for reasons other
than death, disability or Cause), any Option or Stock Appreciation Right granted
to such Participant may be exercised (to the extent that the Participant was
entitled to do so at the time of Participant’s Termination of Employment) at any
time within one (1) year after such Termination of Employment, but in no case
later than the date of expiration of the original term of the Option or Stock
Appreciation Right; provided, however, that if an Incentive Stock Option is not
exercised within three (3) months following Termination of Employment, it shall
be treated as a Nonstatutory Stock Option. Notwithstanding the foregoing, if an
Option or Stock Appreciation Right was granted prior to May 19, 2003 with an
option price equal to or less than $12.50 per share, such Option
or Stock Appreciation Right may be exercised
99.1-11
(to the
extent that the Participant was entitled to do so at the time of the Termination
of Employment) at any time within three (3) months following Termination of
Employment for reasons other than death, disability or Cause, but in no case
later than the date of expiration of the term of the Option or Stock
Appreciation Right. If the Participant’s employment is terminated by the
Participant’s employer for Cause and the Option or Stock Appreciation Right was
granted prior to May 19, 2003, any such Option or Stock Appreciation Right
granted to such Participant may be exercised (to the extent that the Participant
was entitled to do so at the time of his Termination of Employment) at any time
within three (3) months after such Termination of Employment for cause, but in
no case later than the date of expiration of the original term of the Option or
Stock Appreciation Right. If the Option or Stock Appreciation Right was granted
after May 18, 2003, except as the Committee may at any time provide any such
Option or Stock Appreciation Right may be exercised (to the extent that the
Participant was entitled to do so at the time of the Termination of Employment)
at any time within thirty (30) days after such Termination of Employment, but in
no case later than the date of expiration of the original term of the Option or
Stock Appreciation Right. Any Options or Stock Appreciation Rights that are not
exercisable on the date of a Termination of Employment for any reason shall
lapse. In no event may an Option or Stock Appreciation Right be exercised after
the expiration of the original term of the Option or Stock Appreciation
Right.
9.02. Total
Disability. Except
as the Committee may at any time provide, in the event that a Participant to
whom an Option or Stock Appreciation Right has been granted under the Plan shall
become totally disabled, such Option or Stock Appreciation Right may be
exercised at any time within one (1) year after the Participant’s Termination of
Employment due to total disability, to the extent that the Participant was
entitled to do so at the time of his Termination of Employment (it being
understood that such termination occurs after nine (9) months of absence from
work due to the total disability), but in no case later than the date of
expiration of the original term of the Option or Stock Appreciation Right.
Notwithstanding the foregoing, for purposes of exercising Incentive Stock
Options, a Participant shall be deemed to have a Termination of Employment if
the Participant is absent from work for three (3) months due to total
disability, where the date of such Termination of Employment shall be the last
date of active employment before the three (3) month period; in this event, if
such Participant is a Participant and fails to exercise an Incentive Stock
Option within three (3) months following such deemed Termination of Employment,
such Incentive Stock Option shall be treated as a Nonstatutory Stock Option. For
purposes hereof, “total disability” shall have the definition set forth in the
Limited Brands, Inc. Long-Term Disability Plan, which definition is hereby
incorporated by reference.
ARTICLE
X
DEATH
OF PARTICIPANT
10.01. Death of Participant While
Employed. If a
Participant to whom an Option or Stock Appreciation Right has been granted under
the Plan shall die while employed by or otherwise providing services to the
Company or one of its subsidiaries or affiliates, such Option or Stock
Appreciation Right shall become fully exercisable by the Participant’s
beneficiary (as indicated on the appropriate form provided by or otherwise
providing services to the Company), or if no beneficiary is so indicated, then
by the estate or person who acquires the right to exercise such Option or Stock
Appreciation Right upon the Participant’s death by bequest or inheritance. Such
exercise may occur at any time within one (1) year after the date of the
Participant’s death (or such other period as the Committee may at any time
provide), but in no case later than the date of expiration of the original term
of the Option or Stock Appreciation Right.
99.1-12
10.02. Death of Participant
Following Termination of Employment. If a
Participant to whom an Option or Stock Appreciation Right has been granted under
the Plan shall die after the date of the Participant’s Termination of
Employment, but before the end of the period provided under the Plan by which a
terminated Participant may exercise such Option or Stock Appreciation Right,
such Option or Stock Appreciation Right may be exercised, to the extent that the
Participant was entitled to do so at the time of the Participant’s death, by the
Participant’s beneficiary (as indicated on the appropriate form provided by the
Company), or if no beneficiary is so indicated, then by the estate or person who
acquires the right to exercise such Option or Stock Appreciation Right upon the
Participant’s death by bequest or inheritance. Such exercise may occur at any
time within the period in which the terminated Participant could have exercised
such Option or Stock Appreciation Right if the Participant had not died, (or
such other period as the Committee may at any time provide), but in no case
later than the date of expiration of the original term of the Option or Stock
Appreciation Right.
ARTICLE
XI
RESTRICTED
SHARE UNITS (“RSUs”)
11.01. Grant of Restricted Share
Units. The
Committee may from time to time cause the Company to grant RSUs under the Plan
to Participants, subject to such restrictions, conditions and other terms as the
Committee may determine. For purposes of clarification, grants under the Plan
made through the end of the 2008 calendar year whose terms and conditions were
entitled “Restricted Stock” and “Restricted Shares” were in fact grants of RSUs
and were treated in a manner consistent with RSUs. RSU awards represent an
unfunded promise to pay the Participant a specified number of shares of Common
Stock (or cash equivalent, as applicable) in the future if the conditions of the
RSU award are satisfied and the RSU award is not otherwise forfeited prior to
the stated date of delivery, under the terms and conditions applicable to such
award.
11.02. Restrictions. At the
time a grant of RSUs is made, the Committee shall establish a period of time
(the “Restricted
Period”) applicable to such RSUs. Each grant of RSUs may be subject to a
different Restricted Period. The Committee may, in its sole discretion, at the
time a grant is made, prescribe restrictions in addition to or other than the
expiration of the Restricted Period, including the satisfaction of corporate or
individual service or performance objectives, which shall be applicable to all
or any portion of the RSUs. Except with respect to grants of RSUs intended to
qualify as performance-based compensation for purposes of Code Section 162(m),
the Committee may also, in its sole discretion, waive any restrictions
applicable to all or a portion of such RSUs, provided that the applicable terms
and conditions are set forth on or before the date of grant of the award to the
extent required to comply with Code Section 409A. None of the RSUs may be sold,
transferred, assigned, pledged or otherwise encumbered or disposed of. Unless
otherwise provided under the terms of the award, upon the death of a
Participant, any conditions applicable to RSUs which have been granted to such
Participant will be deemed to have been satisfied and the Restricted Period, if
any, applicable to Restricted RSUs held by such Participant, will be deemed to
have expired. Unless otherwise provided under the terms of the award, upon the
retirement of a Participant, the restrictions and conditions, if any, applicable
to any RSUs which have been granted to such Participant will be deemed to have
been satisfied with respect to that percentage of the RSUs equal to (i) the
number of complete months between the first day of the Restricted Period and the
date of the Participant’ s retirement, divided by (ii) the number of complete
months in the Restricted Period. Any RSUs granted to a Participant for which the
restrictions and conditions are not deemed to have expired pursuant to the
preceding sentence shall be forfeited in accordance with Section 11.05. For
purposes of this Article XI, “retirement” shall mean a Participant’s Termination
of Employment following the date on which a Participant has attained age 55 and
completed seven years of service with the Company. An award
99.1-13
may also
provide for full or pro-rata vesting upon other events, such as upon a Change in
Control or upon Termination of Employment as a result of total disability, or
for other reasons, provided that any such applicable terms and conditions are
set forth on or before the date of grant of the award.
11.03. [Reserved]
.
11.04. Rights of Holders of
Restricted Share Units. Except
as determined by the Committee not later than the date of grant of RSUs,
Participants to whom RSUs have been granted shall not have the right to vote
such shares or the right to receive any dividends with respect to such shares,
except as provided in Section 11.08 with respect to dividend equivalents. All
distributions, if any, received by a Participant with respect to RSUs as a
result of any stock split-up, stock distribution, a combination of shares, or
other similar transaction shall be subject to the restrictions of this Article
XI and the adjustment provisions of Article XV.
11.05. Forfeiture Upon Termination
of Employment. Except
as provided in Section 11.02 and Article XVIII, and as the Committee may provide
in the terms of any award on or before the date of grant, any RSUs granted to a
Participant pursuant to the Plan shall be forfeited if the Participant
experiences a Termination of Employment either by the Participant or the
Participant’s employer for reasons other than death prior to the expiration of
the Restricted Period and the satisfaction of any other conditions applicable to
such RSUs. In addition, if the Participant’s Termination of Employment occurs as
a result of retirement (as defined in Section 11.02), any RSUs which do not vest
in accordance with Section 11.02 shall be forfeited.
11.06. Delivery of
Shares. Unless
an election is made under Section 11.08 to defer the settlement of RSUs, and
unless otherwise provided in the terms of any award, upon the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Committee, RSUs shall be settled by delivery of a
stock certificate for the number of shares associated with the award with
respect to which the restrictions have expired or the terms and conditions have
been satisfied to the Participant or the Participant’s beneficiary or estate, as
the case may be. Such payment in settlement shall be made promptly, but in any
event not later then (i) the end of the year in which the Restricted Period
ended and the conditions were satisfied or (ii) if later, the 15th day of
the third calendar month following the date on which the Restricted Period
ended, provided that the award holder will not be permitted, directly or
indirectly, to designate the taxable year of settlement. The Participant may be
required to execute a release of claims against the Company and its subsidiaries
in this event. If an election is made under Section 11.08 to defer the
settlement of RSUs, delivery shall occur as described here but upon the date or
dates of delivery in accordance with Section 11.09 and the deferral election.
Notwithstanding the above, if the Participant is a “specified employee,” as that
term is defined in Code Section 409A and the Treasury Regulations thereunder,
and is entitled to receive a payment upon Termination of Employment or on a date
determinable based on the date of Termination of Employment (and not a
pre-determined fixed date or schedule), then, except in the event of the
Participant’s death after such Termination of Employment, such payment shall be
delayed by at least six (6) months after the date of such Participant’s
Termination of Employment to the extent required by Section 409A.
11.07. Performance-Based
Objectives. At the
time of the grant of RSUs to a Participant, and prior to the beginning of the
performance period to which performance objectives relate, the Committee may
establish performance objectives based on any one or more of the following,
which may be expressed with respect to the Company or one or more operating
units or groups, as the Committee may determine: price of Company Common Stock
or the stock of any affiliate, shareholder return, return on equity, return on
investment, return on capital, sales productivity, comparable store sales
growth, economic profit, economic value added, net income, operating income,
gross margin, sales, free cash flow, earnings per share, operating company
99.1-14
contribution
or market share. These factors shall have a minimum performance standard below
which, and a maximum performance standard above which, no payments will be made.
These performance goals may be based on an analysis of historical performance
and growth expectations for the business, financial results of other comparable
businesses, and progress towards achieving the long-range strategic plan for the
business. These performance goals and determination of results shall be based
entirely on financial measures. The Committee shall specify how any performance
objectives shall be adjusted to the extent necessary to prevent dilution or
enlargement of any award as a result of extraordinary events or circumstances,
as determined by the Committee, or to exclude the effects of extraordinary,
unusual, or non-recurring items; changes in applicable laws, regulations, or
accounting principles; currency fluctuations; discontinued operations; non-cash
items, such as amortization, depreciation, or reserves; asset impairment; or any
recapitalization, restructuring, reorganization, merger, acquisition,
divestiture, consolidation, spin-off, split-up, combination, liquidation,
dissolution, sale of assets, or other similar corporation transaction; provided,
however, that no such adjustment will be made if the effect of such adjustment
would cause an award to fail to qualify as performance-based compensation within
the meaning of Code Section 162(m). The Committee may not use any discretion to
modify award results except as permitted under Code Section 162(m). In addition,
with respect to any RSUs granted that are intended to be “performance-based” for
purposes of Code Section 162(m) and relate to a performance period that begins
on or after January 1, 2009, such award shall not be payable upon Termination of
Employment for any reason other than due to death, total disability (as defined
in Article IX) or upon a Change in Control (as defined in Article XVIII), unless
the payment is based on achievement of the associated performance objectives. To
the extent that the award is subject to Code Section 409A, payment upon
Termination of Employment in connection with a Change in Control must be made
upon a Change in Control that satisfies the definition of “change in control
event” in Code Section 409A and the Treasury Regulations thereunder, unless
otherwise permitted in satisfaction of the alternative payment rules under Code
Section 409A and the Treasury Regulations thereunder.
11.08. Deferred Restricted Share
Units. The
Committee may permit a Participant who has been designated to receive an RSU
award to elect to defer the receipt of the shares in settlement of such RSU
award as well as the form of payment of such deferred RSUs. For purposes of
clarification, grants under the Plan made through the end of the 2008 calendar
year whose applicable terms and conditions were entitled “Restricted Stock” and
“Restricted Shares” were in fact grants of RSUs and were treated in a manner
consistent with RSUs; in addition, such grants made during the years 2006
through the end of the 2008 calendar year and which indicate that the
“Restricted Stock” or “Restricted Shares” may instead be elected to be
“received” as RSUs, were grants of RSUs where the Participant was permitted to
elect to defer the receipt of the shares associated with the settlement of the
RSU award to a later date, in accordance with the terms and conditions providing
for such election in the terms and conditions accompanying such
awards.
All
elections under this Section 11.08 to defer the settlement of an RSU award must
be made in accordance with the requirements of Code Section 409A. Any election
not in compliance with such requirements shall be treated as invalid and the
deferral election shall be disregarded and distribution of the shares upon
settlement of the awards shall be made as though the Participant did not elect
to defer. For this purpose, an invalid deferral election shall include (but is
not limited to) a deferral election that (i) is not executed (regardless of when
received), (ii) is executed but received after the applicable irrevocable date,
or (iii) cannot otherwise become effective under applicable rules. If a valid
deferral election is incomplete, the deferral election shall be honored and
distribution of the shares attributable to the awards shall be made as though
the Participant elected a deferred lump sum payment For this purpose, a
valid but incomplete deferral election is one that has been received and
executed on or before the applicable irrevocable date, but does not indicate the
form of payment (lump sum versus installments), or indicates an election for
installment payments but not the number of installment payments. Unless the
award agreement
99.1-15
and terms
and conditions accompanying specific awards indicate otherwise, or as otherwise
provided in the Plan, the deferred RSUs shall be subject to the same
restrictions, conditions and forfeiture provisions as the associated nondeferred
RSUs.
Except as
determined otherwise by the Committee on or before grant and as set forth in the
terms and conditions accompanying such awards, during the Restricted Period with
respect to RSUs, Participants shall not have the right to receive any dividends.
After the end of the Restricted Period and prior to the time that shares of
Common Stock are transferred to the Participant, within sixty (60) days after
the date of payment of a dividend by the Company on its shares of Common Stock,
the Participant shall be credited with “dividend equivalents” with respect to
each outstanding RSU in an amount equal to the amount the Participant would have
received as dividends if the RSUs were actual shares of Common Stock. Such
dividend equivalents will be converted into additional RSUs based on the value
of the Common Stock on the dividend payment date, in accordance with the
procedures established by the Committee, and paid at the same time and in the
same manner as the underlying RSUs.
At no
time shall any assets of the Company be segregated for payment of RSUs
hereunder. Participants who have elected to defer the settlement of RSUs shall
at all times have the status of general unsecured creditors of the Company and
shall not have any rights in or against specific assets of the Company. The Plan
constitutes a mere promise by the Company to make payments attributable to RSUs
in the future, in accordance with the applicable terms and
conditions.
11.09. Payment of Deferred
Restricted Share Units. RSUs
are payable solely in shares of unrestricted Common Stock, and shall be paid in
accordance with the terms of delivery under Section 11.06 and this Section
11.09. Shares attributable to deferred RSUs that are vested in accordance with
the terms and conditions applicable to such awards shall be transferred to the
Participant at the time and in the form as elected by the Participant and as set
forth in the terms and conditions applicable to such awards, which shall be
either in a single payment or in up to ten (10) installment
payments.
If a lump
sum distribution is elected, the payment shall be made on the date provided in,
and in accordance with, the terms and conditions applicable to the award. If
installment distributions are elected, the initial installment shall be paid on
the date provided in, and in accordance with, the terms and conditions
applicable to the award. Subsequent installments shall be made on each
anniversary of the initial installment and shall continue for the duration of
the selected distribution period. If the Participant dies prior to the time all
shares have been distributed, distribution shall be made to the Participant’s
beneficiary or estate on the payment date provided in, and in accordance with,
the terms and conditions applicable to the award. If Termination of Employment
occurs during the Restricted Period, the terms and conditions shall set forth
the rights of the Participant to payment, as well as the time and form of
distribution of such awards, if any, to the Participant. A participant shall
have no rights as a shareholder with respect to deferred RSUs until such time,
if any, as shares of Common Stock are transferred to the Participant (or the
Participant’s beneficiary or estate, if applicable). Notwithstanding the above,
if the Participant is a specified employee and is entitled to receive payment
upon Termination of Employment or on a date determinable based on the date of
Termination of Employment (and not a pre-determined fixed date or schedule),
then, except in the event of the Participant’s death after such Termination of
Employment, such payment (or in the case of installments, the first payment)
shall be delayed by at least six (6) months after the date of such Participant’s
Termination of Employment, to the extent required by Section 409A; in this
event, subsequent installment payments shall occur on the anniversary of the
first delayed installment payment.
Provided
that the terms and conditions applicable to a deferred RSU award permit it, a
Participant may change the Participant’s distribution election, provided such
change in distribution election is made not less than 12 months before the date
the payment (or in the case of installments, the first
99.1-16
payment)
is scheduled to be made, and is irrevocable after this date. Such an election
may be made to change payment(s) from a single lump sum payment to installment
payments, from installment payments to a single lump sum payment, or from one
number of installment payments to another number of installment payments, by
submitting such election to the Company; provided, (i) such election does not
become effective until at least twelve (12) months after the date on which the
election is made and (ii) except in the case of payment permissible upon the
Participant’s death, the payment (or in the case of installments the first
payment) must be deferred for a period of not less than five (5) years from the
date such payment would have been made or commenced if there had been no
election to change the form of payment. For this purpose, all installment
payments are treated as a single payment. Any election not made in accordance
with such procedures shall be treated as invalid, and the change in distribution
election shall be disregarded and distribution of the shares attributable to the
awards shall be made as though the Participant did not elect to change the time
and form of distribution. For this purpose, an invalid change in distribution
election shall include (but is not limited to) an election that (i) is not
executed (regardless of when received), (ii) is executed but received after the
applicable irrevocable date, or (iii) cannot otherwise become effective under
applicable rules. If a valid change in distribution election is incomplete, the
change in distribution election shall be honored and distribution of the shares
attributable to the awards shall be made as though the associate elected a
change in distribution to a deferred lump sum payment. For this purpose, a valid
but incomplete change in distribution election is one that has been received and
executed on or before the applicable irrevocable date, but does not indicate the
form of payment (lump sum versus installments), or indicates an election for
installment payments but not the number of installment payments.
ARTICLE
XII
PERFORMANCE
UNITS
12.01. Award of Performance
Units. For
each Performance Period (as defined in Section 12.02), Performance Units may be
granted under the Plan to such Participants as the Committee shall determine.
The award agreement covering such Performance Units shall specify a value for
each Performance Unit or shall set forth a formula for determining the value of
each Performance Unit at the time of payment (the “Ending Value”). If necessary
to make the calculation of the amount to be paid to the Participant pursuant to
Sections 12.03 and 12.04, the Committee shall also state in the award agreement
the initial value of each Performance Unit (the “Initial Value”). The award
agreement may also specify that each Performance Unit is deemed to be equivalent
to one (1) share of Common Stock. Performance Units granted to a Participant
shall be credited to an account (a “Performance Unit Account”) established and
maintained for such Participant.
12.02. Performance
Period.
“Performance Period” shall mean such period of time as shall be determined by
the Committee in its sole discretion. Different Performance Periods may be
established for different Participants receiving Performance Units. Performance
Periods may run consecutively or concurrently.
12.03. Right to Payment of
Performance Units. All
applicable terms and conditions shall be set forth in the award agreement and/or
in accompanying terms and conditions on or before the date of grant of
Performance Units. With respect to each award of Performance Units under this
Plan, the Committee shall specify performance objectives (the “Performance Objectives”) which
must be satisfied in order for the Participant to vest in the Performance Units
which have been awarded to the Participant for the Performance Period. If the
Performance Objectives established for a Participant for the Performance Period
are partially but not fully met, the Committee may, nonetheless, in its sole
discretion, determine that all or a portion of the Performance Units have vested
but such determination shall not change the date of payment of the
99.1-17
awards.
If the Performance Objectives for a Performance Period are exceeded, the
Committee may, in its sole discretion, grant additional, fully vested
Performance Units to the Participant. On or before the date of grant, the
Committee may also determine, in its sole discretion, that Performance Units
awarded to a Participant shall become partially or fully vested upon the
Participant’s death, total disability (as defined in Article IX) or retirement
(as defined in Section 11.02), or upon the Participant’s Termination of
Employment prior to the end of the Performance Period but such determination
shall not change the date of payment of the awards. Performance Unit awards
represent an unfunded promise to pay the Participant the value specified in the
award agreement and/or applicable terms and conditions in the future if the
conditions associated with the Performance Unit award are satisfied and the
Performance Units are not otherwise forfeited prior to the stated date of
payment, under the terms and conditions applicable to such award. The provisions
of Section 11.07 shall apply to any Performance Units that are intended to
qualify as performance-based in accordance with Code Section 162(m) and the
Treasury Regulations thereunder.
12.04. Payment for Performance
Units. As soon
as practicable following the end of a Performance Period but not later than 90
days after the end of a Performance Period, the Committee shall determine
whether the Performance Objectives for the Performance Period have been achieved
(or partially achieved to the extent necessary to permit partial vesting at the
discretion of the Committee pursuant to Section 12.03). If the Performance
Objectives for the Performance Period have been exceeded, the Committee shall
determine whether additional Performance Units shall be granted to the
Participant pursuant to Section 12.03. Within 90 days after the end of a
Performance Period, provided the Committee determines the Performance Objectives
have been achieved or partially achieved pursuant to Section 12.03, if the award
agreement specifies that each Performance Unit is deemed to be equivalent to one
(1) share of Common Stock, the Company shall pay to the Participant an amount
with respect to each vested Performance Unit equal to the Fair Market Value of a
share of Common Stock on such payment date or, if the Committee shall so specify
at the time of grant, an amount equal to (i) the Fair Market Value of a share of
Common Stock on the payment date less (ii) the Fair Market Value of a share of
Common Stock on the date of grant of the Performance Unit. Payment shall be made
entirely in cash, entirely in Common Stock or in such combination of cash and
Common Stock as the Committee shall determine. If the award agreement specifies
a value for each Performance Unit or sets forth a formula for determining the
value of each Performance Unit at the time of payment, then within 90 days after
the end of a Performance Period, provided the Committee determines the
Performance Objectives have been achieved or partially achieved pursuant to
Section 12.03, the Company shall pay to the Participant an amount with respect
to each vested Performance Unit equal to the Ending Value of the Performance
Unit or, if the Committee shall so specify at the time of grant, an amount equal
to (i) the Ending Value of the Performance Unit less (ii) the Initial Value of
the Performance Unit. Payment shall be made entirely in cash, entirely in Common
Stock or in such combination of cash and Common Stock as the Committee shall
determine.
12.05. Voting and Dividend
Rights. Except
as the Committee may otherwise provide, no Participant shall be entitled to any
voting rights, to receive any dividends, or to have his or her Performance Unit
Account credited or increased as a result of any dividends or other distribution
with respect to Common Stock. Notwithstanding the foregoing, to the extent
provided or set forth in the award agreement and/or applicable terms and
conditions on or before the date of grant of a Performance Unit award, within
sixty (60) days after the date of payment of a dividend by the Company on its
shares of Common Stock, a Participant’s Performance Unit Account may
be credited with additional Performance Units having an aggregate Fair Market
Value equal to the dividend per share paid on the Common Stock multiplied by the
number of Performance Units credited to the Participant’s account at the time
the dividend was declared. Payment of such additional Performance Units shall be
made at the same time and in the same manner as the Performance Units to which
they relate.
99.1-18
ARTICLE
XIII
UNRESTRICTED
SHARES
13.01. Award of Unrestricted
Shares. The
Committee may cause the Company to grant Unrestricted Shares to associates at
such time or times, in such amounts and for such reasons as the Committee, in
its sole discretion, shall determine. No payment shall be required for
Unrestricted Shares.
13.02. Delivery of Unrestricted
Shares. The
Company shall issue, in the name of each Participant to whom Unrestricted Shares
have been granted, stock certificates representing the total number of
Unrestricted Shares granted to the associate, and shall deliver such
certificates to the Participant on a fixed or objectively determinable date of
payment, which shall be set forth at the time of grant.
13.03. Deferred Share
Units. For
Plan Years beginning after 2005, the Committee may permit a Participant who has
been designated to receive an Unrestricted Share award to elect to receive such
Unrestricted Share award in the form of Deferred Share Units.
Any such
election must be made on or before December 31 of the calendar year prior to the
year the compensation attributable to such award (or any portion of such award)
is earned, and shall be irrevocable after such date, and further shall comply
with the rules set forth in Section 11.08, which apply to deferral elections,
including such rules relating to invalid and valid but incomplete deferral
elections. Each “Deferred Share Unit” represents the right to receive a share of
Common Stock in the future. At no time shall any assets of the Company be
segregated for payment of Deferred Share Units hereunder. Participants who have
elected to receive Unrestricted Shares in the form of Deferred Share Units shall
at all times have the status of general unsecured creditors of the Company and
shall not have any rights in or against specific assets of the Company. The Plan
constitutes a mere promise by the Company to make payments on Deferred Share
Units in the future.
After the
award of Deferred Share Units to the Participant and prior to the time that
shares of Common Stock are transferred to the Participant pursuant to Section
13.04, within sixty (60) days after the date of payment of a dividend by the
Company on its shares of Common Stock, the Participant shall be credited with
“dividend equivalents” with respect to each outstanding Deferred Share Unit in
an amount equal to the amount the Participant would have received as dividends
if the Deferred Share Units were actual shares of Common Stock. Such dividend
equivalents will be converted into additional Deferred Share Units based on the
value of the Common Stock on the dividend payment date, in accordance with the
procedures established by the Committee, and paid at the same time and in the
same manner as the underlying Deferred Share Units.
13.04. Payment of Deferred Share
Units.
Deferred Share Units are payable solely in shares of unrestricted Common Stock,
and shall be paid in accordance with the terms of delivery under Section 13.03
and this Section 13.04. Shares applicable to such awards shall be transferred to
the Participant at the time and in the form as elected by the Participant and as
set forth in the terms and conditions applicable to such awards, which shall be
either in a single payment or in up to ten (10) installment
payments.
If a lump
sum distribution is elected, the payment shall be made on the date provided in,
and in accordance with, the terms and conditions applicable to the award. If
installment distributions are elected, the initial installment shall be paid on
the date provided in, and in accordance with, the terms and conditions
applicable to the award. Subsequent installments shall be made on each
anniversary of the initial installment and shall continue for the duration of
the selected distribution period. If the Participant dies prior to the time all
shares have been distributed, distribution shall
99.1-19
be made
to the Participant’s beneficiary or estate on the payment date provided in, and
in accordance with, the terms and conditions applicable to the award. A
Participant shall have no rights as a shareholder with respect to Deferred Share
Units until such time, if any, as shares of Common Stock are transferred to the
Participant (or the Participant’s beneficiary or estate, if applicable).
Notwithstanding the above, if the Participant is a specified employee and is
entitled to receive payment upon Termination of Employment or on a date
determinable based on the date of Termination of Employment (and not a
pre-determined fixed date or schedule), then, except in the event of the
Participant’s death after such Termination of Employment, such payment (or in
the case of installments, the first payment) shall be delayed by at least six
(6) months after the date of such Participant’s Termination of Employment, to
the extent required by Section 409A; in this event, subsequent installment
payments shall occur on the anniversary of the first delayed installment
payment.
Provided
that the terms and conditions applicable to a Deferred Share Unit award permit
it, a Participant may change the Participant’s distribution election, provided
such change in distribution election shall comply with the procedures and rules
set forth in Section 11.09 which apply to change in distribution elections,
including such rules relating to invalid and valid but incomplete change in
distribution elections.
ARTICLE
XIV
TAX
OFFSET PAYMENTS
14.01. Tax Offset
Payments. The
Committee shall have the authority at the time of any award under this Plan or
anytime thereafter to make Tax Offset Payments to assist Participants in paying
income taxes incurred as a result of their participation in this Plan, provided
that such payments are made by the end of the calendar year after the year in
which the Participant remits the related taxes. The Tax Offset Payments shall be
determined by multiplying a percentage established by the Committee by all or a
portion (as the Committee shall determine) of the taxable income recognized by a
Participant upon (i) the exercise of a Nonstatutory Stock Option or a Stock
Appreciation Right, (ii) the disposition of shares received upon exercise of an
Incentive Stock Option, (iii) the lapse of restrictions on RSUs, (iv) the award
of Unrestricted Shares, or (v) payments for Performance Units. The percentage
shall be established, from time to time, by the Committee at that rate which the
Committee, in its sole discretion, determines to be appropriate and in the best
interests of the Company to assist Participants in paying income taxes incurred
as a result of the events described in the preceding sentence. However, such
percentage rate shall not be negotiable with Participants or otherwise, and the
percentage rate determined to be used shall be uniformly applied to
Participants. Tax Offset Payments shall be subject to the restrictions on
transferability applicable to Options and Stock Appreciation Rights under
Article VIII.
ARTICLE
XV
ADJUSTMENTS;
REPRICING
15.01. Adjustments.
Notwithstanding any other provision of the Plan, the Committee shall make or
provide for such adjustments to the Plan, to the number and class of shares
available thereunder or to any outstanding Options, Stock Appreciation Rights,
RSUs Performance Units or other awards as it shall deem appropriate to prevent
dilution or enlargement of rights, including adjustments in the event of changes
in the number of shares of outstanding Common Stock by reason of stock
dividends, extraordinary cash dividends, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations, liquidations and the like. However, any such adjustment with
respect to Options
99.1-20
and Stock
Appreciation Rights shall satisfy the requirements of Reg. §1.409A-1(b)(5)(v)(D)
and shall otherwise ensure that such awards continue to be exempt from Code
Section 409A, and any such adjustment to awards that are subject to Code Section
409A, including RSUs and Performance Units, shall be made to the extent
compliant with Code Section 409A and the Treasury Regulations
thereunder.
15.02.Repricing. Except
as provided above in connection with a corporate transaction involving the
Company (including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, or exchange of shares), the
terms of outstanding awards may not be amended to reduce the exercise price of
outstanding Options or SARs or cancel outstanding Options or SARs in exchange
for cash, other awards or Options or SARs with an exercise price that is less
than the exercise price of the original Options or SARs without stockholder
approval.
ARTICLE
XVI
AMENDMENT
AND TERMINATION
16.01. Amendment and
Termination. The
Board may suspend, terminate, modify or amend the Plan, provided that any
amendment that would constitute a “material revision” of the Plan within the
meaning of New York Stock Exchange Rule 303A(8) shall be subject to the approval
of the Company’s stockholders. If the Plan is terminated, the terms of the Plan
shall, notwithstanding such termination, continue to apply to awards granted
prior to such termination. No suspension, termination, modification or amendment
of the Plan may, without the consent of the Participant to whom an award shall
theretofore have been granted, adversely affect the rights of such Participant
under such award.
ARTICLE
XVII
WRITTEN
AGREEMENT
17.01. Written
Agreements. Each
award of Options, Stock Appreciation Rights, RSUs, Performance Units,
Unrestricted Shares and Tax Offset Payments shall be evidenced by a written
agreement, executed by the Participant and the Company, and containing such
restrictions, terms and conditions, if any, as the Committee may require. In the
event of any conflict between a written agreement and the Plan, the terms of the
Plan shall govern.
ARTICLE
XVIII
CHANGE
IN CONTROL
18.01. Definition of Change in
Control. For
purposes of this Plan, a “Change in Control” means, and
shall be deemed to have occurred upon, the occurrence of any of the following
events:
(a)
Any Person (other than an
Excluded Person) becomes, together with all “affiliates” and “associates”
(each as defined under Rule 12b-2 of the Exchange Act) “beneficial owner”
(as defined under Rule 13d-3 of the Exchange Act) of securities
representing 33% or more of the combined voting power of the Voting Stock
of Limited Brands, Inc. then outstanding, unless such Person becomes
“beneficial owner” of 33% or
99.1-21
more
of the combined voting power of such Voting Stock then outstanding solely
as a result of an acquisition of such Voting Stock by Limited Brands, Inc.
which, by reducing the Voting Stock of Limited Brands, Inc. outstanding,
increases the proportionate Voting Stock beneficially owned by such Person
(together with all “affiliates” and “associates” of such Person) to 33% or
more of the combined voting power of the Voting Stock of Limited Brands,
Inc. then outstanding; provided, that if a Person shall become the
“beneficial owner” of 33% or more of the combined voting power of the
Voting Stock of Limited Brands, Inc. then outstanding by reason of such
Voting Stock acquisition by Limited Brands, Inc. and shall thereafter
become the “beneficial owner” of any additional Voting Stock of Limited
Brands, Inc. which causes the proportionate voting power of Voting Stock
beneficially owned by such Person to increase to 33% or more of the
combined voting power of the Voting Stock of Limited Brands, Inc. then
outstanding, such Person shall, upon becoming the “beneficial owner” of
such additional Voting Stock of Limited Brands, Inc., be deemed to have
become the “beneficial owner” of 33% or more of the combined voting power
of the Voting Stock then outstanding other than solely as a result of such
Voting Stock acquisition by Limited Brands,
Inc.;
(b)
During
any period of 24 consecutive months, individuals who at the beginning of
such period constitute the Board of Directors of Limited Brands, Inc. (and
any new Director, whose election by such Board or nomination for election
by the stockholders of Limited Brands, Inc. was approved by a vote of at
least two-thirds of the Directors then still in office who either were
Directors at the beginning of the period or whose election or nomination
for election was so approved), cease for any reason to constitute a
majority of Directors then constituting such
Board;
(c)
A
reorganization, merger or consolidation of Limited Brands, Inc. is
consummated, in each case, unless, immediately following such
reorganization, merger or consolidation, (i) more than 50% of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation
and the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the “beneficial
owners” of the Voting Stock of Limited Brands, Inc. outstanding
immediately prior to such reorganization, merger or consolidation, (ii) no
Person (but excluding for this purpose any Excluded Person and any Person
beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 33% or more of the voting power of
the outstanding Voting Stock of Limited Brands, Inc.) beneficially owns,
directly or indirectly, 33% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of
the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (iii) at least a majority
of the members of the board of directors of the corporation resulting from
such reorganization, merger or
99.1-22
consolidation
were members of the Board of Directors of Limited Brands, Inc. at the time
of the execution of the initial agreement providing for such
reorganization, merger or consolidation;
or
(d)
The
consummation of (i) a complete liquidation or dissolution of Limited
Brands, Inc. or (ii) the sale or other disposition of all or substantially
all of the assets of Limited Brands, Inc., other than to any corporation
with respect to which, immediately following such sale or other
disposition, (A) more than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power
of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the “beneficial owners” of the Voting Stock of Limited
Brands, Inc. outstanding immediately prior to such sale or other
disposition of assets, (B) no Person (but excluding for this purpose any
Excluded Person and any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly, 33% or more of the
voting power of the outstanding Voting Stock of Limited Brands, Inc.)
beneficially owns, directly or indirectly, 33% or more of, respectively,
the then outstanding shares of common stock of such corporation or the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors and
(C) at least a majority of the members of the board of directors of such
corporation were members of the Board of Directors of Limited Brands, Inc.
at the time of the execution of the initial agreement or action of the
Board providing for such sale or other disposition of assets of Limited
Brands, Inc.
Notwithstanding
the foregoing, in no event shall a “Change in Control” be deemed to have
occurred (i) as a result of the formation of a Holding Company, or (ii) with
respect to a Participant, if the Participant is part of a “group,” within the
meaning of Section 13(d)(3) of the Exchange Act as in effect on the Effective
Date, which consummates the Change in Control transaction. In addition, for
purposes of the definition of “Change in Control” a Person engaged in business
as an underwriter of securities shall not be deemed to be the “beneficial owner”
of, or to “beneficially own,” any securities acquired through such Person’s
participation in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition. “Excluded
Person” shall mean (i) Limited Brands, Inc.; (ii) any of Limited Brands, Inc.’s
Subsidiaries; (iii) any Holding Company; (iv) any employee benefit plan of
Limited Brands, Inc., any of its Subsidiaries or a Holding Company; or (v) any
Person organized, appointed or established by Limited Brands, Inc., any of its
Subsidiaries or a Holding Company for or pursuant to the terms of any plan
described in clause (iv). “Person” shall mean any
individual composition, partnership, limited liability company, associations,
trust or other entity or organization. “Holding Company” shall mean an entity
that becomes a holding company for Limited Brands, Inc. or its businesses as a
part of any reorganization, merger, consolidation or other transaction, provided
that the outstanding shares of common stock of such entity and the combined
voting power of the then outstanding voting securities of such entity entitled
to vote generally in the election of directors is, immediately after such
reorganization, merger, consolidation or other transaction, beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the “beneficial owners”, respectively, of the Voting Stock of
Limited Brands, Inc. outstanding immediately prior to such reorganization,
merger, consolidation or other transaction in substantially the same proportions
as their
99.1-23
ownership,
immediately prior to such reorganization, merger, consolidation or other
transaction, of such outstanding Voting Stock of Limited Brands, Inc. “Voting Stock” shall mean
securities of the Company entitled to vote generally in the election of the
Company’s Board of Directors.
18.02. Effect of Change in
Control. Unless
otherwise provided under the terms of any award, immediately upon a Change in
Control with respect to a Participant, (i) Options and Stock Appreciation Rights
granted to such Participant which are not yet exercisable shall become fully
exercisable; and (ii) any restrictions applicable to any RSUs awarded to such
Participant shall be deemed to have been satisfied and the Restricted Period, if
any, applicable to such RSUs held by such Participant shall be deemed to have
expired. Notwithstanding the foregoing, or the provisions of Section 11.06, if
the accelerated settlement of any RSU would cause the application of additional
taxes under Section 409A of the Code, such RSU will be settled on the date it
would otherwise have been settled in the absence of a Change in Control, unless
the transaction constituting the Change in Control falls within the definition
of a “change in control event” within the meaning of Code Section 409A and the
Treasury Regulations thereunder.
ARTICLE
XIX
MISCELLANEOUS
PROVISIONS
19.01. Definitions: Fair
Market Value and Cause. “Fair Market Value,” for
purposes of this Plan, shall be the closing price of the Common Stock as
reported on the principal exchange on which the shares are listed for the date
on which the grant, exercise or other transaction occurs, or if there were no
sales on such date, the most recent prior date on which there were sales. “Cause,” for purposes of this
Plan, shall mean that the Participant (1) was grossly negligent in the
performance of the Participant’s duties with the Company (other than a failure
resulting from the Participant’s incapacity due to physical or mental illness);
or (2) has plead “guilty” or “no contest” to or has been convicted of an act
which is defined as a felony under federal or state law; or (3) engaged in
misconduct in bad faith which could reasonably be expected to materially harm
the Company’s business or its reputation. The Participant shall be given written
notice by the Company of a termination for Cause, which shall state in detail
the particular act or acts or failures to act that constitute the grounds on
which the termination for Cause is based.
19.02. Tax
Withholding. The
Company shall have the right to require Participants or their beneficiaries or
legal representatives to remit to the Company an amount sufficient to satisfy
federal, state and local withholding tax requirements, or to deduct from all
payments under this Plan, including Tax Offset Payments, amounts sufficient to
satisfy all withholding tax requirements. Whenever payments under the Plan are
to be made to a Participant in cash, such payments shall be net of any amounts
sufficient to satisfy all federal, state and local withholding tax requirements.
The Committee may, in its discretion, permit a Participant to satisfy the
Participant’s tax withholding obligation either by (i) surrendering shares owned
by the Participant or (ii) having the Company withhold from shares otherwise
deliverable to the Participant. Shares surrendered or withheld shall be valued
at their Fair Market Value as of the date on which income is required to be
recognized for income tax purposes. In the case of an award of Incentive Stock
Options, the foregoing right shall be deemed to be provided to the Participant
at the time of such award.
19.03. Compliance With Section
16(b) and Code Section 162(m). In the
case of Participants who are or may be subject to Section 16 of the Act, it is
the intent of the Company that the Plan and any award granted hereunder satisfy
and be interpreted in a manner that satisfies the applicable requirements of
Rule 16b-3, so that such persons will be entitled to the benefits of Rule 16b-3
or other exemptive rules under Section 16 of the Act and will not be subjected
to
99.1-24
liability
thereunder. If any provision of the Plan or any award would otherwise conflict
with the intent expressed herein, that provision, to the extent possible, shall
be interpreted and deemed amended so as to avoid such conflict. To the extent of
any remaining irreconcilable conflict with such intent, such provision shall be
deemed void as applicable to Participants who are or may be subject to Section
16 of the Act. If any award hereunder is intended to qualify as
performance-based for purposes of Code Section 162(m), the Committee shall not
exercise any discretion to increase the payment under such award except to the
extent permitted by Code Section 162(m) and the Treasury Regulations
thereunder.
19.04. Successors. The
obligations of the Company under the Plan shall be binding upon any successor
corporation or organization resulting from the merger, consolidation or other
reorganization of the Company, or upon any successor corporation or organization
succeeding to substantially all of the assets and businesses of the Company. In
the event of any of the foregoing, the Committee may, at its discretion prior to
the consummation of the transaction, cancel, offer to purchase, exchange, adjust
or modify any outstanding awards, at such time and in such manner as the
Committee deems appropriate and in accordance with applicable law and the
provisions of Article XV.
19.05. General Creditor
Status.
Participants shall have no right, title, or interest whatsoever in or to any
investments which the Participant may make to aid it in meeting its obligations
under the Plan. Nothing contained in the Plan, and no action taken pursuant to
its provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant or beneficiary or
legal representative of such Participant. To the extent that any person acquires
a right to receive payments from the Company under the Plan, such right shall be
no greater than the right of an unsecured general creditor of the Company. All
payments to be made hereunder shall be paid from the general funds of the
Company and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts except as expressly
set forth in the Plan.
19.06.No Right to
Employment. Nothing
in the Plan or in any written agreement entered into pursuant to Article XVII,
nor the grant of any award, shall confer upon any Participant any right to
continue in the employ of the Company or a subsidiary or to be entitled to any
remuneration or benefits not set forth in the Plan or such written agreement or
interfere with or limit the right of the Company or a subsidiary to modify the
terms of or terminate such Participant’s employment at any time.
19.07. Notices. Notices
required or permitted to be made under the Plan shall be sufficiently made if
sent by registered or certified mail addressed (a) to the Participant at the
Participant’s address set forth in the books and records of the Company or its
subsidiaries, or (b) to the Company or the Committee at the principal office of
the Company.
19.08. Severability. In the
event that any provision of the Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
19.09. Governing
Law. To the
extent not preempted by federal law, the Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State of
Delaware.
19.10. Term of
Plan. Unless
earlier terminated pursuant to Article XVI hereof, the Plan shall terminate on
May 28, 2014.
99.1-25
Dates Referenced Herein and Documents Incorporated by Reference
