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Delaware
(State
or other jurisdiction of incorporation)
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000-33395
(Commission
file number)
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42-1406317
(IRS
Employer Identification
No.)
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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•
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The
number of shares available under the 2003 Plan was increased by 800,000
from 5,100,000 to 5,900,000.
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•
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The
maximum number of shares of common stock subject to awards granted
under
the 2003 Plan in any calendar year, excluding any shares granted
to new
employees in connection with an acquisition, may not exceed 4.19%
of the
total number of outstanding shares as of January 1 of such calendar
year.
For purposes of calculating the number of shares granted in a
year, restricted stock awards will count as equivalent to
(1) 1.5 option shares, if our annual stock price volatility is 53% or
higher, (2) two option shares if our annual stock price volatility is
between 25% and 52%, and (3) four option shares if our annual stock
price volatility is less than 25%.
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•
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No
more than 400,000 shares of restricted stock, or shares underlying
restricted stock units, in the aggregate may be granted under the
2003
Plan from and after April 24, 2007.
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Exhibit No.
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Description
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10.1
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2003
Stock Incentive Plan, as amended
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10.2
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2007
Long-Term Incentive Plan
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CENTENE
CORPORATION
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Date:
April 26, 2007
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By:
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/s/
J
.
P
ER
B
RODIN
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J.
Per Brodin
Senior
Vice President, Chief Financial Officer and Treasurer
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Exhibit No.
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Description
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10.1
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2003
Stock Incentive Plan, as amended
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10.2
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2007
Long-Term Incentive Plan
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1.
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Purpose
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2.
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Eligibility
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3.
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Administration
and Delegation
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(a)
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Administration
by Board of Directors
.
The Plan will be administered by the Board. The Board shall have
authority
to grant Awards and to adopt, amend and repeal such administrative
rules,
guidelines and practices relating to the Plan as it shall deem
advisable.
The Board may correct any defect, supply any omission or reconcile
any
inconsistency in the Plan or any Award in the manner and to the
extent it
shall deem expedient to carry the Plan into effect and it shall
be the
sole and final judge of such expediency. All decisions by the Board
shall
be made in the Board’s sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any
Award.
No director or person acting pursuant to the authority delegated
by the
Board shall be liable for any action or determination relating
to or under
the Plan made in good faith.
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(b)
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Appointment
of Committees
.
To the extent permitted by applicable law, the Board may delegate
any or
all of its powers under the Plan to one or more committees or
subcommittees of the Board (a “Committee”). All references in the Plan to
the “Board” shall mean the Board or a Committee of the Board or the
executive officers referred to in Section 3(c) to the extent that the
Board’s powers or authority under the Plan have been delegated to such
Committee or executive officers.
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(c)
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Delegation
to Executive Officers
.
To the extent permitted by applicable law, the Board may delegate
to one
or more executive officers of the Company the power to grant Awards
to
employees or officers of the Company or any of its present or future
subsidiary corporations and to exercise such other powers under
the Plan
as the Board may determine,
provided
that the Board shall fix the terms of the Awards to be granted
by such
executive officers (including the exercise price of such Awards,
which may
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include
a formula by which the exercise price will be determined) and the
maximum
number of shares subject to Awards that the executive officers
may grant;
provided
further
,
however,
that
no executive officer shall be authorized to grant Awards to any
“executive
officer” of the Company, as defined by Rule 3b-7 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or to any “officer”
of the Company (as defined by Rule 16a-1 under the Exchange Act).
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4.
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Stock
Available for Awards
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(a)
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Number
of Shares
.
Subject to adjustment under Section 7, Awards may be made under the
Plan for up to 5,900,000 shares of common stock, $.001 par value
per
share, of the Company (“Common Stock”). For purposes of counting the
number of shares available for the grant of Awards under the Plan,
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(1)
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shares
of Common Stock covered by independent SARs (as hereinafter defined)
shall
be counted against the number of shares available for the grant
of Awards
under the Plan; provided that independent SARs that may be settled
in cash
only shall not be so counted;
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(2)
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if
any Award (A) expires or is terminated, surrendered or canceled
without
having been fully exercised or is forfeited in whole or in part
(including
as the result of shares of Common Stock subject to such Award being
repurchased by the Company at the original issuance price pursuant
to a
contractual repurchase right) or (B) results in any Common Stock
not being
issued (including as a result of an independent SAR that was settleable
either in cash or in stock actually being settled in cash), the
unused
Common Stock covered by such Award shall again be available for
the grant
of Awards under the Plan; provided, however, in the case of Incentive
Stock Options (as hereinafter defined), the foregoing shall be
subject to
any limitations under the Code; and
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(3)
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shares
of Common Stock tendered to the Company by a Participant to (A)
purchase
shares of Common Stock upon the exercise of an Award or (B) satisfy
tax
withholding obligations (including shares retained from the Award
creating
the tax obligation) shall not be added back to the number of shares
available for the future grant of Awards under the Plan. Shares
issued
under the Plan may consist in whole or in part of authorized but
unissued
shares or treasury shares.
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(b)
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Sub-limits
.
Subject to adjustment under Section 8, the following sub-limits on
the number of shares subject to Awards shall apply:
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(1)
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Plan
Limit.
The maximum number of shares of Common Stock with respect to which
Awards
may be granted under the Plan in any fiscal year, commencing in
fiscal
year 2007, shall not exceed 4.19% of the number of shares of the
total outstanding shares of the Company as of January 1 of each
fiscal year. For purposes of calculating the number of shares granted
in a
year, restricted stock Awards will count as equivalent to (1) 1.5
option shares, if the Company's annual stock price volatility is 53%
or higher, (2) two option shares if the Company's annual stock
price volatility is between 25% and 52%, and (3) four option shares
if the Company's annual stock price volatility is less than
25%. Shares Awards granted to new employees in connection with
acquisitions made by the Company are excluded from the foregoing
calculation.
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(2)
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Restricted
Stock Award Limit.
From
and after April 24, 2007, the maximum number of shares of Common
Stock with respect to which Restricted Stock Awards (as hereafter
defined)
may be granted under the Plan shall be 400,000.
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(3)
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Per-Participant
Limit.
The
maximum number of shares of Common Stock with respect to which
Awards may
be granted to any Participant under the Plan shall be 1,500,000
per
calendar year. For purposes of the foregoing limit, the combination
of an
Option in tandem with a SAR shall be treated as a single Award.
The
per-Participant limit described in this Section 4(b)(3) shall be
construed
and applied consistently with Section 162(m) of the Code or any
successor
provision thereto (“Section 162(m)”).
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5.
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Stock
Options
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(a)
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General
.
The Board may grant options to purchase Common Stock (each, an
“Option”)
and determine the number of shares of Common Stock to be covered
by each
Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including
conditions relating to applicable federal or state securities laws,
as it
considers necessary or advisable. An Option that is not intended
to be an
Incentive Stock Option (as hereinafter defined) shall be designated
a
“Nonstatutory Stock Option.”
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(b)
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Incentive
Stock Options
.
An Option that the Board intends to be an “incentive stock option” as
defined in Section 422 of the Code (an “Incentive Stock Option”)
shall only be granted to employees of Centene Corporation, any
of Centene
Corporation’s present or future parent or subsidiary corporations as
defined in Sections 424(e) or (f) of the Code, and any other entities
the employees of which are eligible to receive Incentive Stock
Options
under the Code, and shall be subject to and shall be construed
consistently with the requirements of Section 422 of the Code. The
Company shall have no liability to a Participant, or any other
party, if
an Option (or any part thereof) that is intended to be an Incentive
Stock
Option is not an Incentive Stock Option.
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(c)
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Exercise
Price
.
The Board shall establish the exercise price at the time each Option
is
granted and specify it in the applicable option agreement,
provided
,
however,
that the exercise price shall be not less than 100% of the fair
market
value of the Common Stock, as determined by the Board, at the time
the
Option is granted.
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(d)
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Duration
of Options
.
Each Option shall be exercisable at such times and subject to such
terms
and conditions as the Board may specify in the applicable option
agreement,
provided
,
however,
that no Option will be granted for a term in excess of 10 years.
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(e)
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Exercise
of Option
.
Options may be exercised by delivery to the Company of a written
notice of
exercise signed by the proper person or by any other form of notice
(including electronic notice) approved by the Board together with
payment
in full as specified in Section 5(f) for the number of shares for
which the Option is exercised.
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(f)
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Payment
Upon Exercise.
Common Stock purchased upon the exercise of an Option granted under
the
Plan shall be paid for as follows:
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(1)
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in
cash or by check, payable to the order of the Company;
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(2)
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except
as the Board may, in its sole discretion, otherwise provide in
an option
agreement, by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the
Company
sufficient funds to pay the exercise price and any required tax
withholding or (ii) delivery by the Participant to the Company of a
copy of irrevocable and unconditional instructions to a creditworthy
broker to deliver promptly to the Company cash or a check sufficient
to
pay the exercise price and any required tax withholding;
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(3)
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when
the Common Stock is registered under the Exchange Act, by delivery
of
shares of Common Stock owned by the Participant valued at their
fair
market value as determined by (or in a manner approved by) the
Board in
good faith (“Fair Market Value”), provided (i) such method of payment is
then permitted under applicable law and (ii) such Common Stock,
if
acquired directly from the Company was owned by the Participant
at least
six months prior to such delivery;
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(4)
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such
other lawful consideration as the Board may determine in its sole
discretion, provided that (i) at least an amount equal to the par
value of the Common Stock being purchased shall be paid in cash
and (ii)
no such consideration shall consist in whole or in part of a promissory
note or other evidence of indebtedness; or
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(5)
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by
any combination of the above permitted forms of payment.
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(g)
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Substitute
Options
.
In connection with a merger or consolidation of an entity with
the Company
or the acquisition by the Company of property or stock of an entity,
the
Board may grant Options in substitution for any options or other
stock or
stock-based Awards granted by such entity or an affiliate thereof.
Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations
on
Options contained in the other sections of this Section 5 or in
Section 2.
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6.
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Restricted
Stock; Restricted Stock Units
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(a)
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Grants
.
The Board may grant Awards entitling recipients to acquire shares
of
Common Stock (“Restricted Stock”), subject to the right of the Company to
repurchase all or part of such shares at their issue price or other
stated
or formula price (or to require forfeiture of such shares if issued
at no
cost) from the recipient in the event that conditions specified
by the
Board in the applicable Award are not satisfied prior to the end
of the
applicable restriction period or periods established by the Board
for such
Award. Instead of granting Awards for Restricted Stock, the Board
may
grant Awards entitling the recipient to receive shares of Common
Stock to
be delivered in the future (“Restricted Stock Units”) subject to such
terms and conditions on the delivery of the shares of Common Stock
as the
Board shall determine (each Award for Restricted Stock or Restricted
Stock
Units, a “Restricted Stock Award”). The Board may also permit an exchange
of unvested shares of Common Stock that have already been delivered
to a
Participant for an instrument evidencing the right to future delivery
of
Common Stock at such time or times, and on such conditions, as
the Board
shall specify.
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(b)
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Terms
and Conditions
.
The Board shall determine the terms and conditions of any such
Restricted
Stock Award, including the conditions for repurchase (or forfeiture)
and
the issue price, if any.
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(c)
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Stock
Certificates
.
Any stock certificates issued in respect of a Restricted Stock
Award, if
applicable, shall be registered in the name of the Participant
and, unless
otherwise determined by the Board, deposited by the Participant,
together
with a stock power endorsed in blank, with the Company (or its
designee).
At the expiration of the applicable restriction periods, the Company
(or
such designee) shall deliver the certificates no longer subject
to such
restrictions to the Participant or if the Participant has died,
to the
beneficiary designated, in a manner determined by the Board, by
a
Participant to receive amounts due or exercise rights of the Participant
in the event of the Participant’s death (the “Designated Beneficiary”). In
the absence of an effective designation by a Participant, Designated
Beneficiary shall mean the Participant’s estate.
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7.
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Stock
Appreciation Rights
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(a)
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General
.
A
Stock Appreciation Right (“SAR”) is an Award entitling the holder, upon
exercise, to receive an amount in Common Stock determined by reference
to
appreciation, from and after the date of grant, in the fair market
value
of a share of Common Stock. The date as of which such appreciation
or
other measure is determined shall be the exercise date.
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(b)
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Grants
.
SARs may be granted in tandem with, or independently of, Options
granted
under the Plan. The Board shall establish the exercise price at
the time
each SAR is granted and specify it in the applicable SAR agreement,
provided, however, that the exercise price shall be not less than
100% of
the fair market value of the Common Stock, as determined by the
Board, at
the time the SAR is granted.
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(1)
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Tandem
Awards
.
When SARs are expressly granted in tandem with Options, (i) the
SAR will
be exercisable only at such time or times, and to the extent, that
the
related Option is exercisable (except to the extent designated
by the
Board in connection with a Reorganization Event) and will be exercisable
in accordance with the procedure required for exercise of the related
Option; (ii) the
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SAR
will terminate and no longer be exercisable upon the termination
or
exercise of the related Option, except to the extent designated
by the
Board in connection with a Reorganization Event and except that
a SAR
granted with respect to less than the full number of shares covered
by an
Option will not be reduced until the number of shares as to which
the
related Option has been exercised or has terminated exceeds the
number of
shares not covered by the SAR; (iii) the Option will terminate
and no
longer be exercisable upon the exercise of the related SAR; and
(iv) the
SAR will be transferable only with the related Option.
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(2)
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Independent
SARs
.
A
SAR not expressly granted in tandem with an Option will become
exercisable
at such time or times, and on such conditions, as the Board may
specify in
the SAR Award.
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(c)
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Exercise
.
SARs may be exercised by delivery to the Company of a written notice
of
exercise signed by the proper person or by any other form of notice
(including electronic notice) approved by the Board, together with
any
other documents required by the Board.
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8.
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Adjustments
for Changes in Common Stock and Certain Other Events
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(a)
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Changes
in Capitalization
.
In the event of any stock split, reverse stock split, stock dividend,
recapitalization, combination of shares, reclassification of shares,
spin-off or other similar change in capitalization or event, or
any
distribution to holders of Common Stock other than a normal cash
dividend,
(i) the number and class of securities available under the Plan,
(ii) the per-Participant limit set forth in Section 4(b),
(iii) the number and class of securities and exercise price per share
subject to each outstanding Option, and (iv) the repurchase price per
share subject to each outstanding Restricted Stock Award shall
be
appropriately adjusted by the Company (or substituted Awards may
be made,
if applicable) to the extent the Board shall determine, in good
faith,
that such an adjustment (or substitution) is necessary and appropriate.
If
this Section 8(a) applies and Section 8(c) also applies to any
event, Section 8(c) shall be applicable to such event, and this
Section 8(a) shall not be applicable.
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(b)
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Liquidation
or Dissolution
.
In the event of a proposed liquidation or dissolution of the Company,
the
Board shall upon written notice to the Participants provide that
all then
unexercised Options will (i) become exercisable in full as of a
specified time at least 10 business days prior to the effective
date of
such liquidation or dissolution and (ii) terminate effective upon
such liquidation or dissolution, except to the extent exercised
before
such effective date. The Board may specify the effect of a liquidation
or
dissolution on any Restricted Stock Award granted under the Plan
at the
time of the grant.
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(c)
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Reorganization
Events
.
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(1)
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Definition
.
A
“Reorganization Event” shall mean: (a) any merger or consolidation of
the Company with or into another entity as a result of which all
of the
Common Stock of the Company is converted into or exchanged for
the right
to receive cash, securities or other property or (b) any exchange of
all of the Common Stock of the Company for cash, securities or
other
property pursuant to a share exchange transaction.
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(2)
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Consequences
of a Reorganization Event on Options
.
Upon the occurrence of a Reorganization Event, or the execution
by the
Company of any agreement with respect to a Reorganization Event,
the Board
shall provide that all outstanding Options shall be assumed, or
equivalent
options shall be substituted, by the acquiring or succeeding corporation
(or an affiliate thereof). For purposes hereof, an Option shall
be
considered to be assumed if, following consummation of the Reorganization
Event, the Option confers the right to purchase, for each share
of Common
Stock subject to the Option immediately prior to the consummation
of the
Reorganization Event, the consideration (whether cash, securities
or other
property) received as a result of the
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Reorganization
Event by holders of Common Stock for each share of Common Stock
held
immediately prior to the consummation of the Reorganization Event
(and if
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares of
Common
Stock);
provided
,
however,
that
if the consideration received as a result of the Reorganization
Event is
not solely common stock of the acquiring or succeeding corporation
(or an
affiliate thereof), the Company may, with the consent of the acquiring
or
succeeding corporation, provide for the consideration to be received
upon
the exercise of Options to consist solely of common stock of the
acquiring
or succeeding corporation (or an affiliate thereof) equivalent
in fair
market value to the per share consideration received by holders
of
outstanding shares of Common Stock as a result of the Reorganization
Event.
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(3)
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Consequences
of a Reorganization Event on Restricted Stock Awards
.
Upon the occurrence of a Reorganization Event, the repurchase and
other
rights of the Company under each outstanding Restricted Stock Award
shall
inure to the benefit of the Company’s successor and shall apply to the
cash, securities or other property that the Common Stock was converted
into or exchanged for pursuant to such Reorganization Event in
the same
manner and to the same extent as they applied to the Common Stock
subject
to such Restricted Stock Award.
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9.
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General
Provisions Applicable to Awards
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(a)
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Transferability
of Awards
.
Awards shall not be sold, assigned, transferred, pledged or otherwise
encumbered by the person to whom they are granted, either voluntarily
or
by operation of law, except by will or the laws of descent and
distribution or, other than in the case of an Incentive Stock Option,
pursuant to a qualified domestic relations order, and, during the
life of
the Participant, shall be exercisable only by the Participant;
provided
that
the Board may permit or provide in an Award for the gratuitous
transfer of
the Award by the Participant to or for the benefit of any immediate
family
member, family trust or family partnership established solely for
the
benefit of the Participant and/or an immediate family member thereof
if,
with respect to such proposed transferee, the Company would be
eligible to
use a registration statement on Form S-8 for the registration of
the sale
of the Common Stock subject to such Award under the Securities
Act of
1933, as amended and
provided
further
that the Company shall not be required to recognize any such transfer
until such time as the Participant and such permitted transferee
shall, as
a condition to such transfer, deliver to the Company a written
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instrument
in form and substance satisfactory to the Company confirming that
such
transferee shall be bound by all of the terms and conditions of
the Award.
References to a Participant, to the extent relevant in the context,
shall
include references to authorized transferees.
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(b)
|
Documentation
.
Each Award shall be evidenced in such form (written, electronic
or
otherwise) as the Board shall determine. Each Award may contain
terms and
conditions in addition to those set forth in the Plan.
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(c)
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Board
Discretion
.
Except as otherwise provided by the Plan, each Award may be made
alone or
in addition or in relation to any other Award. The terms of each
Award
need not be identical, and the Board need not treat Participants
uniformly.
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(d)
|
Termination
of Status
.
The Board shall determine the effect on an Award of the disability,
death,
retirement, authorized leave of absence or other change in the
employment
or other status of a Participant and the extent to which, and the
period
during which, the Participant, the Participant’s legal representative,
conservator, guardian or Designated Beneficiary may exercise rights
under
the Award.
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(e)
|
Withholding
.
Each Participant shall pay to the Company, or make provision satisfactory
to the Board for payment of, any taxes required by law to be withheld
in
connection with Awards to such Participant no later than the date
of the
event creating the tax liability. Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under
the
Exchange Act, Participants may satisfy such tax obligations in
whole or in
part by delivery of shares of Common Stock, including shares retained
from
the Award creating the tax obligation, valued at their Fair Market
Value;
provided
,
however,
that the total tax withholding where stock is being used to satisfy
such
tax obligations cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal
and
state tax purposes, including payroll taxes, that are applicable
to such
supplemental taxable income). The Company may, to the extent permitted
by
law, deduct any such tax obligations from any payment of any kind
otherwise due to a Participant.
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(f)
|
Amendment
of Award
.
The Board may amend, modify or terminate any outstanding Award,
including
but not limited to, substituting therefore another Award of the
same or a
different type, changing the date of exercise or realization, and
converting an Incentive Stock Option to a Nonstatutory Stock Option,
provided
that the Participant’s consent to such action shall be required unless the
Board determines that the action, taking into account any related
action,
would not materially and adversely affect the Participant.
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(g)
|
Conditions
on Delivery of Stock
.
The Company will not be obligated to deliver any shares of Common
Stock
pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have
been met or removed to the satisfaction of the Company, (ii) in the
opinion of the Company’s counsel, all other legal matters in connection
with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock
exchange
or stock market rules and regulations, and (iii) the Participant has
executed and delivered to the Company such representations or agreements
as the Company may consider appropriate to satisfy the requirements
of any
applicable laws, rules or regulations.
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(h)
|
Vesting
of Awards
.
No Award granted under the Plan after July 19, 2005 to any employee
of the Company may vest or become exercisable in increments greater
than
one-third of the total Award in any period of twelve consecutive
months
following the date of grant.
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(i)
|
Repricing
of Awards
.
Unless such action is approved by the Company’s stockholders: (1) no
outstanding Award granted under the Plan may be amended to provide
for an
exercise price per share that is less than the then-existing exercise
price per share of such outstanding Award (other than
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adjustments
pursuant to Section 8), (2) the Board may not cancel any
outstanding Award (whether or not granted under the Plan) and grant
in
substitution therefore new Awards under the Plan covering the same
or a
different number of shares of Common Stock and having an exercise
price
per share less than the then-existing exercise price per share
of the
cancelled Award, and (3) the Board may not repurchase any outstanding
Award granted under the Plan at a price greater than the current
fair
market value of the existing award.
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10.
|
Miscellaneous
|
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|
(a)
|
No
Right To Employment or Other Status
.
No person shall have any claim or right to be granted an Award,
and the
grant of an Award shall not be construed as giving a Participant
the right
to continued employment or any other relationship with the Company.
The
Company expressly reserves the right at any time to dismiss or
otherwise
terminate its relationship with a Participant free from any liability
or
claim under the Plan, except as expressly provided in the applicable
Award.
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(b)
|
No
Rights As Stockholder
.
Subject to the provisions of the applicable Award, no Participant
or
Designated Beneficiary shall have any rights as a stockholder with
respect
to any shares of Common Stock to be distributed with respect to
an Award
until becoming the record holder of such shares. Notwithstanding
the
foregoing, in the event the Company effects a split of the Common
Stock by
means of a stock dividend and the exercise price of and the number
of
shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date
for such
dividend), then an optionee who exercises an Option between the
record
date and the distribution date for such stock dividend shall be
entitled
to receive, on the distribution date, the stock dividend with respect
to
the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding
as of the
close of business on the record date for such stock dividend.
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(c)
|
Effective
Date and Term of Plan
.
The Plan shall become effective on the date on which it is adopted
by the
Board, but no Award granted to a Participant that is intended to
comply
with Section 162(m) shall become exercisable, vested or realizable,
as applicable to such Award, unless and until the Plan has been
approved
by the Company’s stockholders to the extent stockholder approval is
required by Section 162(m) in the manner required under
Section 162(m), including the vote required under
Section 162(m). No Awards shall be granted under the Plan after the
completion of ten years from the earlier of (i) the date on which the
Plan was adopted by the Board or (ii) the date the Plan was approved
by the Company’s stockholders, but Awards previously granted may extend
beyond that date.
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(d)
|
Amendment
of Plan
.
The Board may amend, suspend or terminate the Plan or any portion
thereof
at any time,
provided
that (i) any “material revision” to the Plan (as defined in the New
York Stock Exchange Listed Company Manual, as in effect as of
July 22, 2005) must be approved by the Company’s stockholders prior
to such revision becoming effective and (ii) to the extent required
by Section 162(m), no Award granted to a Participant that is intended
to comply with Section 162(m) after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such
Award,
unless and until such amendment shall have been approved by the
Company’s
stockholders if required by Section 162(m), including the vote
required under Section 162(m).
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(e)
|
Governing
Law
.
The provisions of the Plan and all Awards made hereunder shall
be governed
by and interpreted in accordance with the laws of the State of
Delaware,
without regard to any applicable conflicts of law.
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|
Article
1. Establishment, Purpose, and Duration
|
|
B-3
|
|
Article
2. Definitions
|
|
B-3
|
|
Article
3. Administration
|
|
B-6
|
|
Article
4. Adjustments in Awards
|
|
B-6
|
|
Article
5. Eligibility and Participation
|
|
B-7
|
|
Article
6. Cash-Based Awards
|
|
B-7
|
|
Article
7. Transferability of Awards
|
|
B-8
|
|
Article
8. Performance Measures
|
|
B-8
|
|
Article
9. Covered Employee Annual Incentive Award
|
|
B-9
|
|
Article
10. Beneficiary Designation
|
|
B-9
|
|
Article
11. Rights of Participants
|
|
B-10
|
|
Article
12. Amendment, Modification, Suspension, and Termination
|
|
B-10
|
|
Article
13. Tax Withholding
|
|
B-10
|
|
Article
14. Successors
|
|
B-11
|
|
Article
15. General Provisions
|
|
B-11
|
|
|
1.1
|
Establishment
.
Centene Corporation, a Delaware corporation (hereinafter referred
to as
the “Company”), establishes an incentive compensation plan to be known as
the Centene Corporation 2007 Long-Term Incentive Plan (hereinafter
referred to as the “Plan”), as set forth in this document.
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|
This
Plan permits the grant of Cash-Based Awards.
|
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|
|
This
Plan shall become effective upon shareholder approval (the “Effective
Date”) and shall remain in effect as provided in Section 1.3 hereof.
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|
1.2
|
Purpose
of this Plan
.
The purpose of this Plan is to provide a means whereby Employees
of the
Company develop a sense of proprietorship and personal involvement
in the
development and financial success of the Company, and to encourage
them to
devote their best efforts to the business of the Company, thereby
advancing the interests of the Company and its shareholders. A further
purpose of this Plan is to provide a means through which the Company
may
attract able individuals to become Employees of the Company and to
retain
key Employees of the Company.
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1.3
|
Duration
of this Plan
.
Unless sooner terminated as provided herein, this Plan shall terminate
ten
(10) years from the Effective Date. After this Plan is terminated, no
Awards may be granted but Awards previously granted shall remain
outstanding in accordance with their applicable terms and conditions
and
this Plan’s terms and conditions.
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2.1
|
“Affiliate”
shall mean any corporation or other entity (including, but not limited
to,
a partnership or a limited liability company), that is affiliated
with the
Company through stock or equity ownership or otherwise, and is designated
as an Affiliate for purposes of this Plan by the Committee.
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2.2
|
“Award”
means, individually or collectively, a grant under this Plan of
Cash-Based Awards or Covered Employee Annual Incentive Awards, subject
to
the terms of this Plan.
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2.3
|
“Award
Agreement”
means either (i) a written agreement entered into by the Company and
a Participant setting forth the terms and provisions applicable to
an
Award granted under this Plan, or (ii) a written or electronic
statement issued by the Company to a Participant describing the terms
and
provisions of such Award, including any amendment or modification
thereof.
The Committee may provide for the use of electronic, internet or
other
non-paper Award Agreements, and the use of electronic, internet or
other
non-paper means for the acceptance thereof and actions thereunder
by a
Participant.
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2.4
|
“Beneficial
Owner”
or
“Beneficial
Ownership”
shall have the meaning ascribed to such term in Rule 13d-3 of the
General
Rules and Regulations under the Exchange Act.
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2.5
|
“Board”
or
“Board
of Directors”
means the Board of Directors of the Company.
|
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|
2.6
|
“Cash-Based
Award”
means an Award, denominated in cash, granted to a Participant as
described
in Article 6.
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2.7
|
“Cause”
means,
unless otherwise specified in an Award Agreement or in an applicable
employment agreement between the Company and a Participant, with
respect
to any Participant, as determined by the Committee in its sole discretion:
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(a)
|
Willful
failure to substantially perform his or her duties as an Employee
(for
reasons other than physical or mental illness) or Director after
reasonable notice to the Participant of that failure;
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(b)
|
Misconduct
that materially injures the Company or any Subsidiary or Affiliate;
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|
(c)
|
Conviction
of, or entering into a plea of nolo contendere to, a felony; or
|
|
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(d)
|
Breach
of any written covenant or agreement with the Company or any Subsidiary
or
Affiliate.
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|
2.8
|
“Change
of Control”
means any of the following events:
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|
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(a)
|
The
acquisition by any one person, or more than one person acting as
a group
(as defined in paragraph (g)(5)(v)(B) of 26 CFR §1.409A-3), acquires
ownership of stock of the Company that, together with stock held
by such
person or group, constitutes more than fifty (50) percent of the
total fair market value or total voting power of the stock of the
Company.
However, if any one person, or more than one person acting as a group,
is
considered to own more than fifty (50) percent of the total fair
market value or total voting power of the stock of the Company, the
acquisition of additional stock by the same person or persons is
not
considered to cause a Change of Control. An increase in the percentage
of
stock owned by any one person, or persons acting as a group, as a
result
of a transaction in which the Company acquires its stock in exchange
for
property will be treated as an acquisition of stock for purposes
of this
section (a);
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(b)
|
A
majority of members of the Board is replaced during any 12-month
period by
directors whose appointment or election is not endorsed by a majority
of
the members of the Company's Board prior to the date of the appointment
or
election; or
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(c)
|
The
acquisition by any one person, or more than one person acting as
a group
(as defined in paragraph (g)(5)(v)(B) of 26 CFR §1.409A-3), acquires (or
has acquired during the 12- month period ending on the date of the
most
recent acquisition by such person or persons) assets from the Company
that
have a total gross fair market value equal to or more than forty
(40) percent of the total gross fair market value of all of the
assets of the Company immediately prior to such acquisition or
acquisitions. For purposes of this paragraph (c), gross fair market
value
means the value of the assets of the Company, or the value of the
assets
being disposed of, determined without regard to any liabilities associated
with such assets.
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2.9
|
“Code”
means the U.S. Internal Revenue Code of 1986, as amended from time
to
time. For purposes of this Plan, references to sections of the Code
shall
be deemed to include references to any applicable regulations thereunder
and any successor or similar provision.
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2.10
|
“Committee”
means the Compensation Committee of the Board or a subcommittee thereof,
or any other committee designated by the Board to administer this
Plan.
The members of the Committee shall be appointed from time to time
by and
shall serve at the discretion of the Board. If the Committee does
not
exist or cannot function for any reason, the Board may take any action
under the Plan that would otherwise be the responsibility of the
Committee.
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2.11
|
“Company”
means Centene Corporation, a Delaware corporation, and any successor
thereto as provided in Article 14 herein.
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2.12
|
“Consolidated
Operating Earnings”
means the consolidated earnings before income taxes of the Company,
computed in accordance with generally accepted accounting principles,
but
shall exclude the effects of Extraordinary Items.
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2.13
|
“Covered
Employee”
means any Employee who is or may become a “Covered Employee,” as defined
in Code Section 162(m), and who is designated, either as an
individual Employee or class of Employees, by the Committee within
the
shorter of (i) ninety (90) days after the beginning of the
Performance Period, or (ii) twenty-five percent (25%) of the
Performance Period has elapsed, as a “Covered Employee” under this Plan
for such applicable Performance Period.
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|
2.14
|
“Covered
Employee Annual Incentive Award”
means
an Award granted to a Covered Employee as described in Article 9.
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|
2.15
|
“Effective
Date”
has the meaning set forth in Section 1.1.
|
|
|
2.16
|
“Employee”
means any individual performing services for the Company, an Affiliate,
or
a Subsidiary and designated as an employee of the Company, its Affiliates,
and/or its Subsidiaries on the payroll records thereof. An Employee
shall
not include any individual during any period he or she is classified
or
treated by the Company, Affiliate, and/or Subsidiary as an independent
contractor, a consultant, or any employee of an employment, consulting,
or
temporary agency or any other entity other than the Company, Affiliate,
and/or Subsidiary, without regard to whether such individual is
subsequently determined to have been, or is subsequently retroactively
reclassified as a common-law employee of the Company, Affiliate,
and/or
Subsidiary during such period.
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|
2.17
|
“Exchange
Act”
means the Securities Exchange Act of 1934, as amended from time to
time,
or any successor act thereto.
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|
|
2.18
|
“Extraordinary
Items”
means (i) extraordinary, unusual, and/or nonrecurring items of gain
or loss; (ii) gains or losses on the disposition of a business;
(iii) changes in tax or accounting regulations or laws; or
(iv) the effect of a merger or acquisition, all of which must be
identified in the audited financial statements, including footnotes,
or
Management Discussion and Analysis section of the Company’s annual report.
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|
|
2.19
|
“Insider”
shall mean an individual who is, on the relevant date, an officer,
or
Director of the Company, or a more than ten percent
(10%) Beneficial Owner of any class of the Company’s equity
securities that is registered pursuant to Section 12 of the Exchange
Act, as determined by the Board in accordance with Section 16 of the
Exchange Act.
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2.20
|
“Net
Income”
means
the consolidated net income before taxes for the Plan Year, as reported
in
the Company’s annual report to shareholders or as otherwise reported to
shareholders.
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|
2.21
|
“Operating
Cash Flow”
means cash flow from operating activities as defined in Statement
of
Financial Accounting Standard No. 95, “Statement of Cash Flows.”
|
|
|
2.22
|
“Participant”
means any eligible individual as set forth in Article 5 to whom an
Award
is granted.
|
|
|
2.23
|
“Performance-Based
Compensation”
means compensation under an Award that is intended to satisfy the
requirements of Code Section 162(m) for certain performance-based
compensation paid to Covered Employees. Notwithstanding the foregoing,
nothing in this Plan shall be construed to mean that an Award which
does
not satisfy the requirements for performance-based compensation under
Code
Section 162(m) does not constitute performance-based compensation for
other purposes, including Code Section 409A.
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2.24
|
“Performance
Measures”
means measures as described in Article 8 on which the performance
goals
are based and which are approved by the Company’s shareholders pursuant to
this Plan in order to qualify Awards as Performance-Based Compensation.
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|
|
2.25
|
“Performance
Period”
means the period of time during which the performance goals must
be met in
order to determine the degree of payout and/or vesting with respect
to an
Award.
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|
|
2.26
|
“Plan”
means the Centene Corporation 2007 Long-Term Incentive Plan.
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|
|
2.27
|
“Plan
Year”
means
the respective calendar year.
|
|
|
2.28
|
“Subsidiary”
means any corporation or other entity, whether domestic or foreign,
in
which the Company has or obtains, directly or indirectly, a proprietary
interest of more than fifty percent (50%) by reason of stock
ownership or otherwise.
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3.1
|
General
.
The Committee shall be responsible for administering this Plan, subject
to
this Article 3 and the other provisions of this Plan. The Committee
may
employ attorneys, consultants, accountants, agents, and other individuals,
any of whom may be an Employee, and the Committee, the Company, and
its
officers and Directors shall be entitled to rely upon the advice,
opinions, or valuations of any such individuals. All actions taken
and all
interpretations and determinations made by the Committee shall be
final
and binding upon the Participants, the Company, and all other interested
individuals.
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3.2
|
Authority
of the Committee
.
The Committee shall have full and exclusive discretionary power to
interpret the terms and the intent of this Plan and any Award Agreement
or
other agreement or document ancillary to or in connection with this
Plan,
to determine eligibility for Awards and to adopt such rules, regulations,
forms, instruments, and guidelines for administering this Plan as
the
Committee may deem necessary or proper. Such authority shall include,
but
not be limited to, selecting Award recipients, establishing all Award
terms and conditions, including the terms and conditions set forth
in
Award Agreements, granting Awards as an alternative to or as the
form of
payment for grants or rights earned or due under compensation plans
or
arrangements of the Company, construing any ambiguous provision of
the
Plan or any Award Agreement, and, subject to Article 12 adopting
modifications and amendments to this Plan or any Award Agreement,
including without limitation, any that are necessary to comply with
the
laws of the countries and other jurisdictions in which the Company,
its
Affiliates, and/or its Subsidiaries operate.
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|
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3.3
|
Delegation.
The Committee may delegate to one or more of its members or to one
or more
officers of the Company, and/or its Subsidiaries and Affiliates or
to one
or more agents or advisors such administrative duties or powers as
it may
deem advisable, and the Committee or any individuals to whom it has
delegated duties or powers as aforesaid may employ one or more individuals
to render advice with respect to any responsibility the Committee
or such
individuals may have under this Plan. The Committee may, by resolution,
authorize one or more officers of the Company to do one or both of
the
following on the same basis as can the Committee: (a) designate
Employees to be recipients of Awards; determine the size of any such
Awards; provided, however, (i) the Committee shall not delegate such
responsibilities to any such officer for Awards granted to an Employee
who
is considered an Insider; (ii) the resolution providing such
authorization sets forth the total number of Awards such officer(s)
may
grant; and (iii) the officer(s) shall report periodically to the
Committee regarding the nature and scope of the Awards granted pursuant
to
the authority delegated.
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|
5.1
|
Eligibility
.
Individuals eligible to participate in this Plan include all Employees.
|
|
|
5.2
|
Actual
Participation
.
Subject to the provisions of this Plan, the Committee may, from time
to
time, select from all eligible individuals, those individuals to
whom
Awards shall be granted and shall determine, in its sole discretion,
the
nature of, any and all terms permissible by law, and the amount of
each
Award.
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|
|
6.1
|
Grant
of Cash-Based Awards.
Subject to the terms and provisions of the Plan, the Committee, at
any time and from time to time, may grant Cash-Based Awards to
Participants in such amounts and upon such terms as the Committee
may
determine.
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|
|
6.2
|
Value
of Cash-Based Awards
.
Each Cash-Based Award shall specify a payment amount or payment range
as
determined by the Committee. The Committee may establish performance
goals
in its discretion. If the Committee exercises its discretion to establish
performance goals, the number and/or value of Cash-Based Awards that
will
be paid out to the Participant will depend on the extent to which
the
performance goals are met.
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|
|
6.3
|
Payment
of Cash-Based Awards
.
Payment, if any, with respect to a Cash-Based Award shall be made
in
accordance with the terms of the Award, in cash or Shares as the
Committee
determines.
|
|
|
6.4
|
Termination
of Employment
.
The Committee shall determine the extent to which the Participant
shall
have the right to receive Cash-Based Awards following termination
of the
Participant’s employment with or provision of services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions
shall be determined in the sole discretion of the Committee, such
provisions may be included in an agreement entered into with each
Participant, but need not be uniform among all Awards of Cash-Based
Awards
issued pursuant to the Plan, and may reflect distinctions based on
the
reasons for termination.
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|
|
6.5
|
Change
of Control.
The
Committee shall determine the extent to which the Participant shall
have
the right to receive Cash-Based Awards following a Change of Control.
Such
provisions shall be determined in the sole discretion of the Committee,
such provisions may be included in an agreement entered into with
each
Participant, but need not be uniform among all Awards of Cash-Based
Awards
issued pursuant to the Plan.
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8.1
|
Performance
Measures.
The performance goals upon which the payment or vesting of an Award
to a
Covered Employee (other than a Covered Employee Annual Incentive
Award
awarded or credited pursuant to Article 9) that is intended to qualify
as
Performance-Based Compensation shall be limited to the following
Performance Measures:
|
|
|
(a)
|
Net
earnings or net income (before or after taxes);
|
|
|
(b)
|
Earnings
per share;
|
|
|
(c)
|
Net
sales or revenue growth;
|
|
|
(d)
|
Net
operating profit;
|
|
|
(e)
|
Return
measures (including, but not limited to, return on assets, capital,
invested capital, equity, sales, or revenue);
|
|
|
(f)
|
Cash
flow (including, but not limited to, operating cash flow, free cash
flow,
cash flow return on equity, and cash flow return on investment);
|
|
|
(g)
|
Earnings
before or after taxes, interest, depreciation, and/or amortization;
|
|
|
(h)
|
Gross
or operating margins;
|
|
|
(i)
|
Productivity
ratios;
|
|
|
(j)
|
Share
price (including, but not limited to, growth measures and total
shareholder return);
|
|
|
(k)
|
Expense
targets;
|
|
|
(l)
|
Margins;
|
|
|
(m)
|
Operating
efficiency;
|
|
|
(n)
|
Market
share;
|
|
|
(o)
|
Customer
satisfaction;
|
|
|
(p)
|
Working
capital targets; and
|
|
|
(q)
|
Economic
value added or EVA
®
(net operating profit after tax minus the sum of capital multiplied
by the
cost of capital).
|
|
|
|
Any
Performance Measure(s) may be used to measure the performance of
the
Company, Subsidiary, and/or Affiliate as a whole or any business
unit of
the Company, Subsidiary, and/or Affiliate or any combination thereof,
as
the Committee may deem appropriate, or any of the above Performance
Measures as compared to the performance of a group of comparator
companies, or published or special index that the Committee, in its
sole
discretion, deems appropriate, or the Company may select Performance
Measure (j) above as compared to various stock market indices. The
Committee also has the authority to provide for accelerated vesting
of any
Award based on the achievement of performance goals pursuant to the
Performance Measures specified in this Article 8.
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|
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8.2
|
Evaluation
of Performance.
The Committee may provide in any such Award that any evaluation of
performance may include or exclude any of the following events that
occurs
during a Performance Period: (a) asset write-downs,
(b) litigation or claim judgments or settlements, (c) the effect
of changes in tax laws, accounting principles, or other laws or provisions
affecting reported results, (d) any reorganization and restructuring
programs, (e) extraordinary nonrecurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management’s
discussion and analysis of financial condition and results of operations
appearing in the Company’s annual report to shareholders for the
applicable year, (f) acquisitions or divestitures, and
(g) foreign exchange gains
|
|
|
and
losses. To the extent such inclusions or exclusions affect Awards
to
Covered Employees, they shall be prescribed in a form that meets
the
requirements of Code Section 162(m) for deductibility.
|
|
|
8.3
|
Adjustment
of Performance-Based Compensation.
Awards that are intended to qualify as Performance-Based Compensation
may
not be adjusted upward. The Committee shall retain the discretion
to
adjust such Awards downward, either on a formula or discretionary
basis or
any combination, as the Committee determines.
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|
|
8.4
|
Committee
Discretion.
In
the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing Performance Measures
without
obtaining shareholder approval of such changes, the Committee shall
have
sole discretion to make such changes without obtaining shareholder
approval, provided the exercise of such discretion does not violate
Code
Section 409A. In addition, in the event that the Committee determines
that it is advisable to grant Awards that shall not qualify as
Performance-Based Compensation, the Committee may make such grants
without
satisfying the requirements of Code Section 162(m) and base vesting
on Performance Measures other than those set forth in Section 8.1.
|
|
|
9.1
|
Establishment
of Incentive Pool.
The Committee may designate Covered Employees who are eligible to
receive
a monetary payment in any Plan Year based on a percentage of an incentive
pool equal to the greater of: (i) five percent (5%) of the
Company’s Consolidated Net Earnings before income taxes for this Plan
Year, (ii) three percent (3%) of the Company’s Operating Cash
Flow for this Plan Year, or (iii) eight percent (8%) of the
Company’s Net Income for this Plan Year. The Committee shall allocate an
incentive pool percentage to each designated Covered Employee for
each
Plan Year. In no event may (1) the incentive pool percentage for any
one Covered Employee exceed fifty percent (50%) of the total pool and
(2) the sum of the incentive pool percentages for all Covered
Employees cannot exceed one hundred percent (100%) of the total pool.
|
|
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9.2
|
Determination
of Covered Employees’ Portions.
As
soon as possible after the determination of the incentive pool for
a Plan
Year, the Committee shall calculate each Covered Employee’s allocated
portion of the incentive pool based upon the percentage established
at the
beginning of this Plan Year. Each Covered Employee’s incentive Award then
shall be determined by the Committee based on the Covered Employee’s
allocated portion of the incentive pool subject to adjustment in
the sole
discretion of the Committee. In no event may the portion of the incentive
pool allocated to a Covered Employee be increased in any way, including
as
a result of the reduction of any other Covered Employee’s allocated
portion. The Committee shall retain the discretion to adjust such
Awards
downward.
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9.3
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Change
of Control.
The
Committee shall determine the extent to which the Participant shall
have
the right to receive Covered Employee Annual Incentive Award following
a
Change of Control. Such provisions shall be determined in the sole
discretion of the Committee, such provisions may be included in an
agreement entered into with each Participant, but need not be uniform
among all Covered Employee Annual Incentive Awards issued pursuant
to the
Plan.
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11.1
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Employment
.
Nothing in this Plan or an Award Agreement shall interfere with or
limit
in any way the right of the Company, its Affiliates, and/or its
Subsidiaries, to terminate any Participant’s employment at any time or for
any reason not prohibited by law, nor confer upon any Participant
any
right to continue his employment for any specified period of time.
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Neither
an Award nor any benefits arising under this Plan shall constitute
an
employment contract with the Company, its Affiliates, and/or its
Subsidiaries and, accordingly, subject to Articles 3 and 12 this
Plan and
the benefits hereunder may be terminated at any time in the sole
and
exclusive discretion of the Committee without giving rise to any
liability
on the part of the Company, its Affiliates, and/or its Subsidiaries.
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11.2
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Participation
.
No individual shall have the right to be selected to receive an Award
under this Plan, or, having been so selected, to be selected to receive
a
future Award.
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12.1
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Amendment,
Modification, Suspension, and Termination
.
Subject to Section 12.3, the Committee may, at any time and from
time to time, alter, amend, modify, suspend, or terminate this Plan
and
any Award Agreement in whole or in part; provided, however, that, no
amendment of this Plan shall be made without shareholder approval
if
shareholder approval is required by law, regulation, or stock exchange
rule, including, but not limited to, the Securities Exchange Act
of 1934,
as amended, the Internal Revenue Code of 1986, as amended, and, if
applicable, the New York Stock Exchange Listed Company Manual/the
Nasdaq
issuer rules.
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12.2
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Adjustment
of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events
.
The Committee may make adjustments in the terms and conditions of,
and the
criteria included in, Awards in recognition of unusual or nonrecurring
events affecting the Company or the financial statements of the Company
or
of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate
in
order to prevent unintended dilution or enlargement of the benefits
or
potential benefits intended to be made available under this Plan.
The
determination of the Committee as to the foregoing adjustments, if
any,
shall be conclusive and binding on Participants under this Plan.
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12.3
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Awards
Previously Granted
.
Notwithstanding any other provision of this Plan to the contrary
(other
than Section 12.4), no termination, amendment, suspension, or
modification of this Plan or an Award Agreement shall adversely affect
in any material way any Award previously granted under this Plan,
without the written consent of the Participant holding such Award.
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12.4
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Amendment
to Conform to Law.
Notwithstanding any other provision of this Plan to the contrary,
the
Board of Directors may amend the Plan or an Award Agreement, to take
effect retroactively or otherwise, as deemed necessary or advisable
for
the purpose of conforming the Plan or an Award Agreement to any present
or
future law relating to plans of this or similar nature (including,
but not
limited to, Code Section 409A), and to the administrative regulations
and rulings promulgated thereunder. By accepting an Award under this
Plan,
a Participant agrees to any amendment made pursuant to this
Section 12.4 to any Award granted under the Plan without further
consideration or action.
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15.1
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Forfeiture
Events
.
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(a)
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The
Committee may specify in an Award Agreement that the Participant’s rights,
payments, and benefits with respect to an Award shall be subject
to
reduction, cancellation, forfeiture, or recoupment upon the occurrence
of
certain specified events, in addition to any otherwise applicable
vesting
or performance conditions of an Award. Such events may include, but
shall
not be limited to, termination of employment for cause, termination
of the
Participant’s provision of services to the Company, Affiliate, and/or
Subsidiary, violation of material Company, Affiliate, and/or Subsidiary
policies, breach of noncompetition, confidentiality, or other restrictive
covenants that may apply to the Participant, or other conduct by
the
Participant that is detrimental to the business or reputation of
the
Company, its Affiliates, and/or its Subsidiaries.
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(b)
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If
the Company is required to prepare an accounting restatement due
to the
material noncompliance of the Company, as a result of misconduct,
with any
financial reporting requirement under the securities laws, if the
Participant is one of the individuals subject to automatic forfeiture
under Section 304 of the Sarbanes-Oxley Act of 2002, the Board may
require
the Participant to reimburse the Company the amount of any payment
in
settlement of an Award earned or accrued during the twelve- (12-)
month
period following the first public issuance or filing with the United
States Securities and Exchange Commission (whichever just occurred)
of the
financial document embodying such financial reporting requirement.
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15.2
|
Gender
and Number
.
Except where otherwise indicated by the context, any masculine term
used
herein also shall include the feminine, the plural shall include
the
singular, and the singular shall include the plural.
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15.3
|
Severability
.
In the event any provision of this Plan shall be held illegal or
invalid
for any reason, the illegality or invalidity shall not affect the
remaining parts of this Plan, and this Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
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15.4
|
Requirements
of Law
.
The granting of Awards under this Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required.
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15.5
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Employees
Based Outside of the United States
.
Notwithstanding any provision of this Plan to the contrary, in order
to
comply with the laws in other countries in which the Company, its
Affiliates, and/or its Subsidiaries operate or have Employees, the
Committee, in its sole discretion, shall have the power and authority
to:
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(a)
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Determine
which Affiliates and Subsidiaries shall be covered by this Plan;
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(b)
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Determine
which Employees outside the United States are eligible to participate
in
this Plan;
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(c)
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Modify
the terms and conditions of any Award granted to Employees outside
the
United States to comply with applicable foreign laws;
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(d)
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Establish
subplans and modify exercise procedures and other terms and procedures,
to
the extent such actions may be necessary or advisable. Any subplans
and
modifications to Plan terms and procedures established under this
Section 15.5 by the Committee shall be attached to this Plan document
as appendices; and
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(e)
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Take
any action, before or after an Award is made, that it deems advisable
to
obtain approval or comply with any necessary local government regulatory
exemptions or approvals.
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Notwithstanding
the above, the Committee may not take any actions hereunder, and
no Awards
shall be granted, that would violate applicable law.
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15.6
|
Unfunded
Plan
.
Participants shall have no right, title, or interest whatsoever in
or to
any investments that the Company, and/or its Subsidiaries, and/or
its
Affiliates may make to aid it in meeting its obligations under this
Plan.
Nothing contained in this 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,
beneficiary, legal representative, or any other individual. To the
extent
that any individual acquires a right to receive payments from the
Company,
its Subsidiaries, and/or its Affiliates under this Plan, such right
shall
be no greater than the right of an unsecured general creditor of
the
Company, a Subsidiary, or an Affiliate, as the case may be. All payments
to be made hereunder shall be paid from the general funds of the
Company,
a Subsidiary, or an Affiliate, as the case may be 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
this Plan.
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15.7
|
Retirement
and Welfare Plans
.
Neither Awards made under this Plan nor cash paid pursuant to such
Awards
except pursuant to Covered Employee Annual Incentive Awards, may
be
included as “compensation” for purposes of computing the benefits payable
to any Participant under the Company’s or any Subsidiary’s or Affiliate’s
retirement plans (both qualified and non-qualified) or welfare benefit
plans unless such other plan expressly provides that such compensation
shall be taken into account in computing a Participant’s benefit.
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15.8
|
Deferred
Compensation.
It
is intended that any Award made under this Plan that results in the
deferral of compensation (as defined under Code Section 409A)
complies with the requirements of Code Section 409A.
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15.9
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Nonexclusivity
of this Plan
.
The adoption of this Plan shall not be construed as creating any
limitations on the power of the Board or Committee to adopt such
other
compensation arrangements as it may deem desirable for any Participant.
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15.10
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No
Constraint on Corporate Action.
Nothing in this Plan shall be construed to: (i) limit, impair, or
otherwise affect the Company’s or a Subsidiary’s or an Affiliate’s right
or power to make adjustments, reclassifications, reorganizations,
or
changes of its capital or business structure, or to merge or consolidate,
or dissolve, liquidate, sell, or transfer all or any part of its
business
or assets; or, (ii) limit the right or power of the Company or a
Subsidiary or an Affiliate to take any action which such entity deems
to
be necessary or appropriate.
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15.11
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Governing
Law
.
The Plan and each Award Agreement shall be governed by the laws of
the
State of Delaware, excluding any conflicts or choice of law rule
or
principle that might otherwise refer construction or interpretation
of
this Plan to the substantive law of another jurisdiction. Unless
otherwise
provided in the Award Agreement, recipients of an Award under this
Plan
are deemed to submit to the exclusive jurisdiction and venue of the
federal or state courts of Delaware, to resolve any and all issues
that
may arise out of or relate to this Plan or any related Award Agreement.
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15.12
|
Indemnification.
Subject
to requirements of Delaware law, each individual who is or shall
have been
a member of the Board, or a Committee appointed by the Board, or
an
officer of the Company to whom authority was delegated in accordance
with
Article 3, shall be indemnified and held harmless by the Company
against
and from any loss, cost, liability, or expense that may be imposed
upon or
reasonably incurred by him or her in connection with or resulting
from any
claim, action, suit, or proceeding to which he or she may be a party
or in
which he or she may be involved by reason of any action taken or
failure
to act under this Plan and against and from any and all amounts paid
by
him or her in settlement thereof, with the Company’s approval, or paid by
him or her in satisfaction of any judgment in any such action, suit,
or
proceeding against him or her, provided he or she shall give the
Company
an opportunity, at its own expense, to handle and defend the same
before
he or she undertakes to handle and defend it on his/her own behalf,
unless
such loss, cost, liability, or expense is a result of his/her own
willful
misconduct or except as expressly provided by statute.
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The
foregoing right of indemnification shall not be exclusive of any
other
rights of indemnification to which such individuals may be entitled
under
the Company’s Certificate of Incorporation or Bylaws, as a matter of law,
or otherwise, or any power that the Company may have to indemnify
them or
hold them harmless.
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