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EXHIBIT 10O
PREMARK INTERNATIONAL, INC.
DIRECTOR STOCK PLAN
Section 1. Purpose
The purposes of the Plan are to assist the Company in (1)
promoting a greater identity of interests between the Company's
non-employee directors and its shareholders, and (2) attracting
and retaining directors by affording them an opportunity to share
in the future successes of the Company.
Section 2. Definitions
"Act" shall mean the Securities Exchange Act of 1934, as amended.
"Award" shall mean the award of Common Stock as contemplated by
Section 7 of this Plan.
"Board" shall mean the Board of Directors of the Company.
"Change of Control" shall mean the happening of any of the
following events:
(i) An acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Act)
(a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Act) of 20% or more of either (1) the
then outstanding shares of Common Stock (the "Outstanding Company
Common Stock") or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); excluding, however, the following: (1) any
acquisition directly from the Company, other than an acquisition
by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired from the Company,
(2) any acquisition by the Company, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company or
(4) any acquisition by any Person pursuant to a transaction which
complies with clauses (1), (2) and (3) of subsection (iii) of
this definition; or
(ii) A change in the composition of the Board such that
the individuals who, as of the effective date of the Plan,
constitute the Board (such Board shall be hereinafter referred to
as the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of
this definition, that any individual who becomes a member of the
Board subsequent to such effective date, whose election, or
nomination for election by the Company's stockholders, was
approved by a vote of at least a majority of those individuals
who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of
the Incumbent Board; but, provided further, that any such
individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board shall
not be so considered as a member of the Incumbent Board; or
(iii) The approval by the stockholders of the Company
of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company ("Corporate Transaction"); excluding, however, such a
Corporate Transaction pursuant to which (1) all or substantially
all of the individuals and entities who are the beneficial
owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding
shares of common stock, and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the company
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no Person (other than the
Company, any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 20%
or more of, respectively, the outstanding shares of common stock
of the corporation resulting from such Corporate Transaction or
the combined voting power of the outstanding voting securities of
such corporation entitled to vote generally in the election of
directors except to the extent that such ownership existed with
respect to the Company prior to the Corporate Transaction and (3)
individuals who were members of the Incumbent Board will
constitute at least a majority of the board of directors of the
corporation resulting from such Corporate Transaction; or
(iv) The approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company.
"Change of Control Price" shall mean the higher of (a) the Fair
Market Value of a share of Common Stock on the day of
cancellation of an Award, and (b) the highest cash purchase price
per share of Common Stock paid in a Corporate Transaction.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations thereunder.
"Common Stock" shall mean the common stock, $1.00 par value, of
the Company.
"Company" shall mean Premark International, Inc., a Delaware
corporation.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
thereunder.
"Fair Market Value" shall mean the composite price of the Common
Stock at the close of business on the New York Stock Exchange
upon the relevant date, adjusted to the next higher five cents if
such price shall not be divisible by five cents.
"Fees" shall mean the annual retainer fee for a Participant in
connection with his or her service on the Board for any fiscal
year of the Company.
"Participant" shall mean each member of the Board who is not an
employee of the Company or any subsidiary of the Company.
"Plan" shall mean the Premark International, Inc. Director
Stock Plan.
"Retirement" shall mean the retirement by a Participant from the
Board in accordance with the Company's stated policy on Director
retirement.
"Rules" shall mean the rules promulgated under the Act from time
to time and the interpretations issued by Securities and Exchange
Commission in respect thereof.
"Stock Option" shall mean a non-qualified stock option, which is
further defined as any right to Common Stock which does not
qualify as an "incentive stock option" as defined under the Code.
Section 3. Eligibility
Each member of the Board who is not an employee of the Company or
any subsidiary of the Company shall be eligible to participate in
the Plan.
Section 4. Shares Subject to the Plan
The number of shares of Common Stock which shall be available for
use under the Plan shall be 300,000, subject to adjustment
pursuant to Section 17 hereunder. The shares issued under the
Plan may be authorized and unissued shares or issued shares
heretofore or hereafter acquired and held as treasury shares.
Section 5. Duration of Plan
Unless earlier terminated pursuant to Section 11 hereof, this
Plan shall automatically terminate on, and no grants, awards or
elections may be made after, the date of the tenth anniversary of
the approval by stockholders of the Plan pursuant to Section 19
hereof.
Section 6. Administration
The Plan shall be administered under the direction of the Board
or any committee thereof so designated by the Board; provided,
however, that the Board or any such committee shall have no
authority to administer the Plan with respect to selection of
Participants under the Plan or the timing, pricing or amounts of
any grants or awards.
Section 7. Initial Awards
Each Participant shall receive one thousand (1,000) shares of
Common Stock, upon serving his or her initial three months as a
member of the Board.
Section 8. Stock in Lieu of Retainer
Each Participant who, in any year of the Plan, files with the
Company an irrevocable election concerning the Fees to be earned
in the next fiscal year of the Company, may receive in lieu of
cash an amount of shares of Common Stock equal in value to all or
any portion of the Fees (but only increments of 25% or a multiple
thereof) as so designated by the Participant, which amount shall
be determined by dividing the Fees payable in each fiscal quarter
of the Company by the Fair Market Value of a share of Common
Stock on the last business day of such fiscal quarter (but if
such date is not a day on which the New York Stock Exchange is
open, then on the next preceding day on which the New York Stock
Exchange is open), except that only whole numbers of shares shall
be obtainable pursuant to this Section, and any remainder Fees
which otherwise would have purchased a fractional share shall be
paid in cash.
Section 9. Stock Options
(a) Each Participant who, in any year of the Plan, files with
the Company an irrevocable election concerning the Fees to be
earned in the next fiscal year of the Company, may receive in
lieu of all or any portion of the cash Fees (but only increments
of 25% or a multiple thereof) as so designated by the
Participant, a Stock Option for an amount of shares of Common
Stock in each fiscal year as follows:
Percent of Annual Number of
Retainer Forgone Options Received
100% 2,000
75% 1,500
50% 1,000
25% 500
The exercise price of such shares shall be determined as follows:
Fair Market Value
of a Share - 100% of Fee = Exercise Price
of Common Stock 2,000 Per Share
Fair Market Value
of a Share - 75% of Fee = Exercise Price
of Common Stock 1,500 Per Share
Fair Market Value
of a Share - 50% of Fee = Exercise Price
of Common Stock 1,000 Per Share
Fair Market Value
of a Share - 25% of Fee = Exercise Price
of Common Stock 500 Per Share
In no event, however, shall the exercise price be less than 50%
of the Fair Market Value of a share of Common Stock on the date
of the grant.
(b) The date of grant of a Stock Option pursuant to this Section
9 shall be the date of the annual meeting of stockholders of the
Corporation, provided that such meeting occurs at least six (6)
months and one day after the Participant's election to receive a
Stock Option in lieu of cash Fees; otherwise, the date of grant
shall be six (6) months and one day after the Participant's
election to receive a Stock Option in lieu of cash Fees. If such
day would not be a day on which the New York Stock Exchange is
open, then on the next succeeding day on which the New York Stock
Exchange is open.
(c) A Stock Option granted pursuant to this Section 9 shall vest
and be exercisable on the last day of the fiscal year in which
the Stock Option is granted. In the event that a Participant is
not a member of the board on the last day of the fiscal year in
which the Stock Option is granted, except in the case of a
Participant's Retirement or termination for cause, such
Participant's Stock Option which has not become vested and
exercisable as of such time shall (i) be reduced to an amount
which reflects the amount of Fees earned as of the date of
termination from service on the Board, and (ii) shall continue to
vest. The term of exercisability for a Stock Option granted
under this Section 9 shall be ten (10) years.
(d) The remaining terms and conditions of each such Stock Option
shall be as set forth in this Plan and in the form of Stock
Option Agreement used in connection with this Plan.
Section 10. Transferability
Rights, grants and awards under the Plan may not be assigned,
transferred, pledged or hypothecated, and shall not be subject to
execution, attachment or similar process. Notwithstanding the
foregoing, any such right, grant or award constituting a
"derivative security" under the Rules shall not be transferable
by a Participant other than by will or by operation of applicable
laws of descent and distribution or pursuant to a domestic
relations order or qualified domestic relations order as such
terms are defined by the Code or ERISA.
Section 11. Amendment
The Plan may be amended by the Board; provided, however, that (a)
no amendment shall be made that would impair prior awards or
rights of a Participant without his or her consent; (b) no
amendment shall be made more frequently than once every six
months, unless such amendment is required because of changes in
the Code or ERISA; (c) no such amendment shall be effective
without the approval by the holders of a majority of the shares
of the Common Stock present, or represented, and entitled to vote
at a meeting held for such purpose, if such amendment would (i)
materially increase the benefits accruing to Participants under
the Plan, (ii) materially increase the number of securities which
may be issued under the Plan, or (iii) materially modify the
requirements as to eligibility for participation in the Plan; and
(d) no amendment shall be made which would prevent a
Participant's participation in the Plan from being entitled to an
exemption from Section 16(b) of the Act.
Section 12. Termination
The Plan may be terminated at any time by the Board or by the
approval by the holders of a majority of the shares of the Common
Stock present, or represented, and entitled to vote at a meeting
held for such purpose.
Section 13. Withholding Taxes
No later than the date as of which an amount first becomes
includible in the gross income of the Participant for Federal
income tax purposes with respect to any Award under the Plan or
with respect to any exercise of any Stock Option granted under
the Plan, the Participant shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment
of, any Federal, state, local or foreign taxes of any kind
required by law to be withheld. Such withholding obligations may
be settled with Common Stock, including Common Stock that is part
of the Award or that is received upon the exercise of the Stock
Option that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional
upon such payment or arrangements, and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the Participant. The Company
may establish such procedures as it deems appropriate, including
the making of irrevocable elections or the timing of the use of
Common Stock, for the settlement of its withholding obligations.
Section 14. Effect of Change of Control
Notwithstanding any other provision of the Plan to the contrary,
in the event of a Change of Control, any Stock Options
outstanding and not then exercisable and vested as of the date
such Change of Control is determined to have occurred, shall
become fully exercisable and vested to the full extent of the
original grant. During the 60-day period from and after a Change
of Control, (the "Exercise Period"), a Participant who holds a
Stock Option shall have the right, in lieu of the payment of the
exercise price for the shares of Common Stock being purchased
under the Stock Option and by giving notice to the Company, to
elect (within the Exercise Period) to surrender all or part of a
Stock Option to the Company and to receive cash, within 30 days
of such notice, in an amount equal to the amount by which the
Change of Control Price per share of Common Stock on the date of
such election shall exceed the exercise price per share of Common
Stock under the Stock Option (the "Spread") multiplied by the
number of shares of Common Stock granted under the Stock Option
as to which the right granted under this Section shall have been
exercised; provided, however, that if the Change of Control is
within six (6) months of the date of grant of a particular Stock
Option held by a Participant no such election shall be made by
such Participant with respect to such Stock Option prior to six
(6) months from the date of grant. If the end of such 60-day
period from and after a Change of Control is within six (6)
months from the date of grant of a Stock Option or the date of an
Award, such Stock Option or Award shall be cancelled in exchange
for a cash payment to the Participant, effected on the day which
is six (6) months and one day after the date of grant of such
Stock Option or Award, as the case may be, equal to (a) in the
case of a Stock Option, the Spread multiplied by the number of
shares of Common Stock granted under the Stock Option, or (b) in
the case of an Award, the Change of Control Price multiplied by
the number of shares of Common Stock comprising an outstanding
Award.
Section 15. Death, Disability, Termination or Retirement of
Participant
(a) Death While A Director. Notwithstanding any other provision
of the Plan to the contrary, in the event of the death of a
Participant while a member of the Board, any Stock Options
outstanding as of the date of death and not then exercisable
shall become immediately exercisable, and all outstanding Stock
Options held by such Participant shall remain exercisable by the
person to whom the Stock Option is transferred by will or by the
laws of descent and distribution for a period of the lesser of
(i) the remaining term of the Stock Option, or (ii) three (3)
years after the date of death.
(b) Disability, Retirement or Other Termination. Except as
otherwise provided by the Plan, in the event of a Participant's
termination of membership on the Board as a result of the
Participant's disability or Retirement or for another reason
other than cause, any Stock Options outstanding as of the date of
such termination and not then exercisable shall (i) be adjusted
in amount to reflect the proportion of Fees earned in the final
year of such Participant's service in such year (in accordance
with the operation of Section 8 and 9 of this Plan and in
consideration of such Participant's elections for such year), and
(ii) become exercisable on the last day of the Company's then-
current fiscal year. All outstanding Stock Options held by such
Participant shall remain exercisable for the full period
contemplated by the terms of such Stock Option. In the event of
the death of a Participant subsequent to termination of
membership from the Board as a result of circumstances described
in this Section 15(b), any Stock Options outstanding as of the
date of death and not then exercisable shall become immediately
exercisable, and all outstanding Stock Options held by such
Participant shall remain exercisable by the person to whom the
Stock Option is transferred by will or by the laws of descent and
distribution for a period of the lesser of (i) the remaining term
of the Stock Option, or (ii) three (3) years after the date of
death.
Section 16. Effect of Termination for Cause
If a Participant incurs a termination of membership on the Board
for cause, such Participant's Stock Options which are not then
exercisable shall be deemed automatically cancelled immediately.
Unless otherwise determined by the Board, for purposes of the
Plan "cause" shall mean (i) the conviction of the Participant for
commission of a felony under Federal law or the law in the state
in which such action occurred, or (ii) dishonesty in the course
of fulfilling the Participant's duties as a director.
Section 17. Adjustments Upon Changes in Capitalization
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary
distribution with respect to the Common Stock or other change in
corporate structure affecting the Common Stock, the Board may
make such substitution or adjustments in the aggregate number and
kind of shares reserved for issuance under the Plan, in the
number, kind and option price of shares subject to outstanding
Stock Options, in the number and kind of shares as Awards to be
granted under the Plan and/or such other substitution or
adjustments in the consideration receivable upon exercise as it
may determine to be appropriate in its sole discretion; provided,
however, that the number of shares subject to any Award shall
always be a whole number.
Section 18. Regulatory Matters
The Plan is intended to be construed so that participation in the
Plan will be exempt from Section 16(b) of the Act, pursuant to
Rule 16b-3 as promulgated thereunder, as may be further amended
or interpreted by the Securities and Exchange Commission. In the
event that any provision of the Plan shall be deemed not to be in
compliance with the Rules in order to enjoy the exemption from
the Act, such provision shall be deemed of no force or effect and
the remaining provisions of the Plan shall remain in effect.
Section 19. Effectiveness of Plan
The Plan shall become effective as of the date its adoption by
the Board is approved by the holders of a majority of the shares
of the Common Stock present, or represented, and entitled to vote
at a meeting held for such purpose.
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