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Church & Dwight Co - Armkel, LLC Equity Appreciation Plan
EXHIBIT 10.15
ARMKEL, LLC
EQUITY APPRECIATION PLAN
ARTICLE I
PURPOSE
The purpose of the Armkel, LLC Equity Appreciation Plan (the "Plan") is to enhance the profitability and value of the Company for the benefit of its members by enabling the Company to offer Equity Appreciation Awards to members of its senior management in order to attract, retain and reward such individuals and to strengthen the mutuality of interests between such individuals and the Company's members.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following meanings:
2.1 "Appreciation" shall have the meaning given to such term in Section 6.1(a) hereof.
2.2 "Affiliate" means each of the following: (i) any corporation, or any trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company or one of its Affiliates; and (ii) any other entity in which the Company or any of its Affiliates has a material equity interest and which is designated as an "Affiliate" by the Committee.
2.3 "Armkel, LLC Agreement" means the Amended and Restated Limited Liability Agreement of Armkel, LLC dated as of August 27, 2001.
2.4 "Award" or "Equity Appreciation Award" shall mean an award under this Plan of an Equity Appreciation Right. All Awards shall be confirmed by, and subject to the terms of, a written agreement executed by the Company and the Participant.
2.5 "Board" shall mean the Board of Directors of Armkel, LLC.
2.6 "Cause" shall mean with respect to a Participant's termination of Continuing Service, unless otherwise determined by the Committee at the time of grant of an Award, or, if no rights of the Participant are reduced, as determined at anytime thereafter: (i) in the case of where there is no employment agreement or similar agreement (other than a change in control agreement) in effect between the Company and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define "cause" (or words of similar import)), termination due to a Participant's dishonesty, fraud, insubordination, willful misconduct, refusal to perform services (for any reason other than illness or incapacity) or materially unsatisfactory
performance of his or her duties for the Employer as determined by the Committee in its sole discretion; or (ii) in the case where there is an employment agreement or similar agreement (other than a change in control agreement) in effect between the Company and the Participant at the time of the grant of the Award that defines "cause" (or words of like import), "cause" as defined under such agreement.
2.7 "Church & Dwight" shall mean Church & Dwight Co., Inc.
2.8 "Committee" shall mean the Committee appointed by the Board to administer the Plan.
2.9 "Company" shall mean Armkel, LLC, a Delaware corporation.
2.10 "Continuing Service" shall mean continuous employment with the Company or Church & Dwight, any of their respective Affiliates, or a successor-in-interest to any of them from the Date of Grant of the applicable Award.
2.11 "Date of Grant" means the effective date of the grant of an Equity Appreciation Award by the Committee under this Plan.
2.12 "Disability" shall mean (i) in the case of where there is no employment agreement or similar agreement (other than a change in control agreement) in effect between the Company and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define "disability" (or words of like import) a physical or mental incapacity that prevents a Participant from performing the individual's responsibilities and duties with the Employer for 180 aggregate days (including weekends and holidays) during any consecutive 12-month period; or (ii) in the case where there is an employment agreement or similar agreement (other than a change in control agreement) in effect between the Company and the Participant at the time of the grant of the Award that defines "disability" (or words of like import), "disability" as defined under such agreement.
2.13 "Effective Date" shall mean September 29, 2001.
2.14 "Eligible Employee" shall mean a senior management executive of the Company who is eligible pursuant to Article V to be granted an Award under this Plan. The names of the Eligible Employees who have been selected for participation in the Plan are listed on Schedule I, attached hereto.
2.15 "Employer" shall mean the Company, Church & Dwight, any of their respective Affiliates or a successor-in-interest to any of them which then employs the Participant.
2.16 "Equity Appreciation Right" shall mean the right pursuant to an Award granted under Article VI.
2.17 "Initial Settlement Date" shall have the meaning given to such term in Section 8.2(b)(i) hereof.
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2.18 "Interest" shall mean an "Interest" of the Company as such term is defined in Section 3.1 of the Armkel, LLC Agreement.
2.19 "Liquidation Event" shall mean the occurrence of any of the following events: (i) the sale, disposition or transfer (collectively, a "Sale") of Interests, after which Kelso & Company no longer holds any Interests or (ii) a Sale to an unaffiliated third party of all or substantially all of the Company's assets.
2.20 "Measurement Value" means, in respect of an Equity Appreciation Award, the value of an Interest underlying an Award as determined by the Committee, in good faith, in its discretion. The Initial Measurement Value of an Interest covered by an Award will be $15.82 (or such higher amount as may be determined by the Committee on the Date of Grant), subject to adjustment for splits and similar events in accordance with Section 4.2 hereof. The Final Measurement Value will be the value of an Interest underlying an Award as determined by the Committee as of the date of the Liquidation Event; provided, however, that in no event shall the Final Measurement Value of an Interest exceed $26.31, subject to adjustment for splits and similar events in accordance with Section 4.2 hereof.
2.21 "Participant" shall mean an Eligible Employee of the Company to whom an Award has been made and is outstanding under this Plan.
2.22 "Retirement" shall mean a termination of Continuing Service (other than a termination by the Employer for Cause) by a Participant who has both (i) attained at least age sixty-five (65) and (ii) been credited with ten (10) or more years of Continuing Service.
2.23 "Settlement Date" shall have the meaning given to such term in Section 8.2(b)(i) hereof.
2.24 "Transfer" or "Transferred" shall mean anticipate, alienate, attach, sell, assign, pledge, encumber, charge or otherwise transfer.
ARTICLE III
ADMINISTRATION
3.1 Plan Administration. The Plan shall be administered and interpreted by the Committee.
3.2 Awards. The Committee shall have full authority to grant, pursuant to the terms of this Plan, Equity Appreciation Awards to Eligible Employees. In particular, the Committee shall have the authority:
(a) to select the Eligible Employees to whom Awards may from time
to time be granted hereunder;
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(b) to determine whether and to what extent Awards are to be
granted hereunder to one or more Eligible Employees;
(c) to determine the number of Interests underlying individual
Awards granted under the Plan;
(d) to determine, subject to the terms of the Plan, the Initial
Measurement Value and the Final Measurement Value of all Awards granted
under the Plan;
(e) to determine all other terms and conditions, not inconsistent
with the terms of this Plan, of any Award granted hereunder to an Eligible
Employee (including, but not limited to, any restriction or limitation,
any vesting schedule or acceleration thereof or any forfeiture
restrictions or waiver thereof, regarding any Award based on such factors,
if any, as the Committee shall determine, in its sole discretion);
(f) to modify, extend or renew an Award, subject to Article IX
herein;
(g) to determine the medium in which Awards shall be settled
following the Liquidation Event pursuant to Section 8.2 hereof; provided
that if the Committee determines that the Awards shall be settled by
issuance of (i) discounted stock options or restricted stock awards with
respect to shares of Church & Dwight common stock or (ii) any other form
of Church & Dwight equity or debt, ("C&D Settlement Medium") then such
determination shall be subject to the approval of Church & Dwight; and
(h) to settle all Awards in the event of the termination of the
Plan pursuant to Section 9.1 hereof.
3.3 Guidelines. Subject to Article IX hereof, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing this Plan and perform all acts, including the delegation of its administrative responsibilities, as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of this Plan and any Award issued under this Plan (and any agreements relating thereto); and to otherwise supervise the administratiocn of this Plan. The Committee may correct any defect, supply any omission or reoncile any inconsistency in this Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary to effectuate this Plan.
3.4 Decisions Final. Any decision, interpretation or other action made or taken in good faith by or at the direction of the Committee (or any of its members) arising out of or in connection with this Plan shall be within the absolute discretion of the Committee, as the case may be, and shall be final, binding and conclusive on the Company and all employees and Participants and their respective heirs, executors, administrators, successors and assigns.
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3.5 Reliance on Counsel. The Committee may consult with legal counsel, who may be counsel for the Company or other counsel, with respect to its obligations or duties hereunder, or with respect to any action or proceeding or any question of law, and the Committee shall not be liable with respect to any action taken or omitted by it in good faith pursuant to the advice of such counsel.
3.6 Designation of Consultant; Liability.
(a) Delegations. The Committee may designate employees of the
Company and professional advisors to assist it in the administration of
this Plan and may grant authority to employees to execute agreements or
other documents on its behalf.
(b) Consultants; Liability. The Committee may employ such legal
counsel, consultants and agents as it may deem desirable for the
administration of this Plan and may rely upon any opinion received from
any such counsel or consultant and any computation received from any such
consultant or agent. Expenses incurred by the Committee in the engagement
of any such counsel, consultant or agent shall be paid by the Company.
Neither the Committee, nor any person designated pursuant to Section
3.6(a) shall be liable for any action or determination made in good faith
with respect to this Plan. To the maximum extent permitted by applicable
law, no officer of the Company or member or former member of the Committee
or of the Board shall be liable for any action or determination made in
good faith with respect to this Plan or any Award granted under it. To the
maximum extent permitted by applicable law and the Armkel, LLC Agreement
and to the extent not covered by insurance, each officer (including,
without limitation, the Chairman) and member or former member of the
Committee or of the Board shall be indemnified and held harmless by the
Company against any cost or expense (including reasonable fees of counsel
reasonably acceptable to the Company) or liability (including any sum paid
in settlement of a claim with the approval of the Company), and advanced
amounts necessary to pay the foregoing at the earliest time and to the
fullest extent permitted, arising out of any act or omission to act in
connection with this Plan, except to the extent arising out of such
officer's, member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification the
officers, directors or members or former officers, directors or members
may have under applicable law or under the Armkel, LLC Agreement.
Notwithstanding anything else herein, this indemnification shall not apply
to the actions or determinations made by an individual with regard to
Awards granted to him under this Plan.
ARTICLE IV
CHANGES IN CAPITAL STRUCTURE
4.1 No Restriction on Organizational Changes. The existence of this Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board
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or the members of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference interests ahead of or affecting Interests, the authorization or issuance of additional Interests, the dissolution or liquidation of the Company, any sale or transfer of all or part of its assets or business or any other organizational act or proceeding.
4.2 Adjustment to Awards. In the event of any change in the capital structure or business of the Company or by reason of any split or reverse split, recapitalization, reorganization, merger, consolidation, or exchange of Interests, distribution with respect to outstanding Interests or interests other than Interests, reclassification of Interests, any sale or transfer of all or part of the Company's assets or business, or any similar change affecting the Company's capital structure or business and the Committee determines an adjustment is appropriate under this Plan, the Committee shall make such adjustments to the terms of all then outstanding Awards including, but not limited to, making an adjustment to the number of Interests subject to each then outstanding Award and/or to the dollar amount of the Initial Measurement Value of each such Awards, consistent with such change in such manner as the Committee may deem equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, Participants under this Plan or as otherwise necessary to reflect the change, and any such adjustment determined by the Committee, in good faith, shall be binding and conclusive on the Company and all Participants and employees and their respective heirs, executors, administrators, successors and assigns.
ARTICLE V
ELIGIBILITY
All senior management executives of the Company are eligible to be granted Awards under this Plan. Eligibility under this Plan shall be determined by the Committee in its sole and absolute discretion.
ARTICLE VI
EQUITY APPRECIATION AWARDS
6.1 Terms and Conditions of Equity Appreciation Awards. Each Equity Appreciation Award shall be referenced at the time of grant to one or more Interests. Equity Appreciation Awards shall be subject to such other terms and conditions as shall be determined from time to time by the Committee, not inconsistent with the provisions of this Plan, including the following:
(a) Basic Grant. Each Equity Appreciation Award granted under the
Plan shall constitute a right to receive in cash (or in such other
settlement medium chosen by the Committee, subject in case of C&D
Settlement Medium to the approval of Church & Dwight, in accordance with
Section 8.2 hereof) the appreciation in the Measurement Value of an
Interest, as determined on the date
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of the Liquidation Event, which appreciation will be equal to the
difference between the Initial Measurement Value of the Equity
Appreciation Award and the Final Measurement Value of the Award,
multiplied by the number of Interests subject to the Award to the extent
then vested (the "Appreciation"). The Initial Measurement Value shall be
stated in the individual Award agreement described in Section 6.1(c) below
and shall be subject to adjustment as provided in Section 4.2 hereof.
(b) Number of Interests Subject to Award. The total number of
Interests that may be subject to Awards under the Plan shall be 800,000.
Interests that are forfeited or otherwise expire shall not again be
available for grant pursuant to Awards under the Plan.
(c) Equity Appreciation Award Agreement. As promptly as
practicable after an Eligible Employee is granted an Award, the Company
and the Participant shall enter into a written agreement setting forth all
terms and conditions of the Award. The Committee shall also establish or
cause to be established a bookkeeping account for each Participant and
shall record or cause to be recorded the number of Interests subject to
the Equity Appreciation Award granted to such Participant, the Initial
Measurement Value of the underlying Interests...
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