2006 STOCK INCENTIVE PLAN
1. Purposes: The purposes of this plan are (a) to secure for the
Corporation the benefits of incentives inherent in ownership of Capital Stock by
Key Employees, (b) to encourage Key Employees to increase their interest in the
future growth and prosperity of the Corporation and to stimulate and sustain
constructive and imaginative thinking by Key Employees, (c) to further the
identification of interest of those who hold positions of major responsibility
in the Corporation and its Subsidiaries with the interests of the Corporation's
stockholders, (d) to induce the employment or continued employment of Key
Employees and (e) to enable the Corporation to compete with other organizations
offering similar or other incentives in obtaining and retaining the services of
2. Definitions: Unless otherwise required by the context, the following terms
when used in this Plan shall have the meanings set forth in this Section 2.
Board of Directors: The Board of Directors of the Corporation.
Capital Stock: The Capital Stock of the Corporation, par value $1.00 per
share, or such other class of shares or other securities as may be applicable
pursuant to the provisions of Section 8.
Corporation: Chemed Corporation, a Delaware corporation.
Fair Market Value: As applied to any date, the mean between the high and
low sales prices of a share of Capital Stock on the principal stock exchange on
which the Corporation is listed, or, if it is not so listed, the mean between
the bid and the ask prices of a share of Capital Stock in the over-the-counter
market as reported by the National Association of Securities Dealers Automated
Quotation System on such date or, if no such sales or prices were made or quoted
on such date, on the next preceding date on which there were sales or quotes of
Capital Stock on such exchange or market, as the case may be; provided, however,
that, if the Capital Stock is not so listed or quoted, Fair Market Value shall
be determined in accordance with the method approved by the
Compensation/Incentive Committee, and, provided further, if any of the foregoing
methods of determining Fair Market Value shall not be consistent with the
regulations of the Secretary of the Treasury or his delegate at the time
applicable to a Stock Incentive of the type involved, Fair Market Value in the
case of such Stock Incentive shall be determined in accordance with such
regulations and shall mean the value as so determined.
Compensation/Incentive Committee: The Compensation/Incentive Committee
designated to administer this Plan pursuant to the provisions of Section 10.
Incentive Compensation: Bonuses, extra and other compensation payable in
addition to a salary or other base amount, whether contingent or discretionary
or required to be paid pursuant to an agreement, resolution or arrangement, and
whether payable currently or on a deferred basis, in cash, Capital Stock or
other property, awarded by the Corporation or a Subsidiary prior or subsequent
to the date of the approval and adoption of this Plan by the stockholders of the
Key Employee: An employee of the Corporation or of a Subsidiary who in the
opinion of the Compensation/Incentive Committee can contribute significantly to
the growth and successful operations of the Corporation or a Subsidiary. The
grant of a Stock Incentive to an employee by the Compensation/Incentive
Committee shall be deemed a determination by the Compensation/Incentive
Committee that such employee is a Key Employee. For the purposes of this Plan, a
director or officer of the Corporation or of a Subsidiary shall be deemed an
employee regardless of whether such director or officer is on the payroll of, or
otherwise paid for services by, the Corporation or a Subsidiary.
Option: An option to purchase shares of Capital Stock.
Performance Unit: A unit representing a share of Capital Stock, subject to
a Stock Award, the issuance, transfer or retention of which is contingent, in
whole or in part, upon attainment of a specified performance objective or
objectives, including, without limitation, objectives determined by reference to
or changes in (a) the Fair Market Value, book value or earnings per share of
Capital Stock, or (b) sales and revenues, income, profits and losses, return on
capital employed, or net worth of the Corporation (on a consolidated or
unconsolidated basis) or of any one or more of its groups, divisions,
Subsidiaries or departments, or (c) a combination of two or more of the
Plan: The 2006 Stock Incentive Plan herein set forth as the same may from
time to time be amended.
Stock Award: An issuance or transfer of shares of Capital Stock at the time
the Stock Incentive is granted or as soon thereafter as practicable, or an
undertaking to issue or transfer such shares in the future, including, without
limitation, such an issuance, transfer or undertaking with respect to
Stock Incentive: A stock incentive granted under this Plan in one of the
forms provided for in Section 3.
Subsidiary: A corporation or other form of business association of which
shares (or other ownership interests) having 50% or more of the voting power are
owned or controlled, directly or indirectly, by the Corporation.
3. Grants of Stock Incentives:
(a) Subject to the provisions of this Plan, the Compensation/Incentive
Committee may at any time, or from time to time, grant Stock Incentives
under this Plan to, and only to, Key Employees.
(b) Stock Incentives may be granted in the following forms:
(i) a Stock Award, or
(ii) an Option, or
(iii) a combination of a Stock Award and an Option.
4. Stock Subject to this Plan:
(a) Subject to the provisions of paragraph (c) and (d) of this Section
4 and of Section 8, the aggregate number of shares of Capital Stock which
may be issued or transferred pursuant to Stock Incentives granted under
this Plan shall not exceed 3,000,000 shares; provided, however, that the
maximum aggregate number of shares of Capital Stock which may be issued or
transferred pursuant to Stock Incentives in the form of Stock Awards, shall
not exceed 900,000 shares.
(b) The maximum aggregate number of shares of Capital Stock which may
be issued or transferred under the Plan to directors of the Corporation or
of a Subsidiary shall not exceed 1,200,000 shares.
(c) Authorized but unissued shares of Capital Stock and shares of
Capital Stock held in the treasury, whether acquired by the Corporation
specifically for use under this Plan or otherwise, may be used, as the
Compensation/Incentive Committee may from time to time determine, for
purposes of this Plan, provided, however, that any shares acquired or held
by the Corporation for the purposes of this Plan shall, unless and until
transferred to a Key Employee in accordance with the terms and conditions
of a Stock Incentive, be and at all times remain treasury shares of the
Corporation, irrespective of whether such shares are entered in a special
account for purposes of this Plan, and shall be available for any corporate
(d) If any shares of Capital Stock subject to a Stock Incentive shall
not be issued or transferred and shall cease to be issuable or transferable
because of the termination, in whole or in part, of such Stock Incentive or
for any other reason, or if any such shares shall, after issuance or
transfer, be reacquired by the Corporation or a Subsidiary because of an
employee's failure to comply with the terms and conditions of a Stock
Incentive, the shares not so issued or transferred, or the shares so
reacquired by the Corporation or a Subsidiary shall no longer be charged
against any of the limitations provided for in paragraphs (a) or (b) of
this Section 4 and may again be made subject to Stock Incentives.
5. Stock Awards: Stock Incentives in the form of Stock Awards shall be subject
to the following provisions:
(a) A Stock Award shall be granted only in payment of Incentive
Compensation that has been earned or as Incentive Compensation to be
earned, including, without limitation, Incentive Compensation awarded
concurrently with or prior to the grant of the Stock Award.
(b) For the purposes of this Plan, in determining the value of a Stock
Award, all shares of Capital Stock subject to such Stock Award shall be
valued at not less than 100 percent of the Fair Market Value of such shares
on the date such Stock Award is granted, regardless of whether or when such
shares are issued or transferred to the Key Employee and whether such
shares are subject to restrictions which affect their value.
(c) Shares of Capital Stock subject to a Stock Award may be issued or
transferred to the Key Employee at the time the Stock Award is granted, or
at any time subsequent thereto, or in installments from time to time, as
the Compensation/Incentive Committee shall determine. In the event that any
such issuance or transfer shall not be made to the Key Employee at the time
the Stock Award is granted, the Compensation/Incentive Committee may
provide for payment to such Key Employee, either in cash or in shares of
Capital Stock from time to time or at the time or times such shares shall
be issued or transferred to such Key Employee, of amounts not exceeding the
dividends which would have been payable to such Key Employee in respect of
such shares (as adjusted under Section 8) if they had been issued or
transferred to such Key Employee at the time such Stock Award was granted.
Any amount payable in shares of Capital Stock under the terms of a Stock
Award may, at the discretion of the Corporation, be paid in cash, on each
date on which delivery of shares would otherwise have been made, in an
amount equal to the Fair Market Value on such date of the shares which
would otherwise have been delivered.
(d) A Stock Award shall be subject to such terms and conditions,
including, without limitation, restrictions on sale or other disposition of
the Stock Award or of the shares issued or transferred pursuant to such
Stock Award, as the Compensation/Incentive Committee may determine; except
that up to 10% of shares of Capital Stock subject to this Plan may be
issued free of restriction. The remaining shares issued as Stock Awards
shall be subject to a one-year restriction period for performance based
Stock Awards or to a three-year restriction period for tenure-based Stock
Awards, which three-year period may lapse ratably on an annual basis over
its term. Provided, however, that upon the issuance or transfer of shares
pursuant to a Stock Award, the recipient shall, with respect to such
shares, be and become a stockholder of the Corporation fully entitled to
receive dividends, to vote and to exercise all other rights of a
stockholder except to the extent otherwise provided in the Stock Award.
Each Stock Award shall be evidenced by a written instrument in such form as
the Compensation/Incentive Committee shall determine, provided the Stock
Award is consistent with this Plan and incorporates it by reference.
6. Options: Stock Incentives in the form of Options shall be subject to the
(a) The maximum aggregate number of Stock Incentives in the form of
Options which may be granted to an individual employee of the Corporation
or a Subsidiary in any calendar year shall not exceed 200,000 Options.
(b) Upon the exercise of an Option, the purchase price shall be paid
in cash or, if so provided in the Option or in a resolution adopted by the
Compensation/Incentive Committee (and subject to such terms and conditions
as are specified in the Option or by the Compensation/Incentive Committee),
in shares of Capital Stock or in a combination of cash and such shares.
Shares of Capital Stock thus delivered shall be valued at their Fair Market
Value on the date of exercise. Subject to the provisions of Section 8, the
purchase price per share shall be not less than 100 percent of the Fair
Market Value of a share of Capital Stock on the date the Option is granted.
(c) Each Option shall be exercisable, in full or in part, six months
after the date the Option is granted, or may become exercisable in one or
more installments and at such time or times, as the Compensation/Incentive
Committee shall determine. Unless otherwise provided in the Option, an
Option, to the extent it is or becomes exercisable, may be exercised at any
time, in whole or in part, until the expiration or termination of the
Option. Any term or provision in any outstanding Option specifying when the
Option is exercisable or that it be exercisable in installments may be
modified at any time during the life of the Option by the
Compensation/Incentive Committee, provided, however, no such modification
of an outstanding Option shall, without the consent of the optionee,
adversely affect any Option theretofore granted to him. An Option will
become immediately exercisable in full if at any time during the term of
the Option the Corporation obtains actual knowledge that any of the
following events has occurred, irrespective of the applicability of any
limitation on the number of shares then exercisable under the Option: (1)
any person within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the "1934 Act"), other than the Corporation or any of
its subsidiaries, has become the beneficial owner, within the meaning of
Rule 13d-3 under the 1934 Act, of 30 percent or more of the combined voting
power of the Corporation's then outstanding voting securities; (2) the
expiration of a tender offer or exchange offer, other than an offer by the
Corporation, pursuant to which 20 percent or more of the shares of the
Corporation's Capital Stock have been purchased; (3) the stockholders of
the Corporation have approved (i) an agreement to merge or consolidate with
or into another corporation and the Corporation is not the surviving
corporation or (ii) an agreement to sell or otherwise dispose of all or
substantially all of the assets of the Corporation (including a plan of
liquidation); or (4) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors cease for any reason to constitute at least a majority thereof,
unless the nomination for the election by the Corporation's stockholders of
each new director was approved by a vote of at least one-half of the
persons who were directors at the beginning of the two-year period.
(d) Each Option shall be exercisable during the life of the optionee
only by him or a transferee or assignee permitted by paragraph (g) of this
Section 6 and, after his death, only by his estate or by a person who
acquired the right to exercise the Option pursuant to one of the provisions
of paragraph (g) of this Section 6. An Option, to the extent that it shall
not have been exercised, shall terminate when the optionee ceases to be an
employee of the Corporation or a Subsidiary, unless he ceases to be an
employee because of his resignation with the consent of the
Compensation/Incentive Committee (which consent may be given before or
after resignation), or by reason of his death, incapacity or retirement
under a retirement plan of the Corporation or a Subsidiary. Except as
provided in the next sentence, if the optionee ceases to be an employee by
reason of such resignation, the Option shall terminate three months after
he ceases to be an employee. If the optionee ceases to be an employee by
reason of such death, incapacity or retirement, or if he should die during
the three-month period referred to in the preceding sentence, the Option
shall terminate fifteen months after he ceases to be an employee. Where an
Option is exercised more than three months after the optionee ceased to be
an employee, the Option may be exercised only to the extent it could have
been exercised three months after he ceased to be an employee. A leave of
absence for military or governmental service or for other purposes shall
not, if approved by the Compensation/Incentive Committee, be deemed a
termination of employment within the meaning of this paragraph (d);
provided, however, that an Option may not be exercised during any such
leave of absence. Notwithstanding the foregoing provisions of this
paragraph (d) or any other provision of this Plan, no Option shall be
exercisable after expiration of the term for which the Option was granted,
which shall in no event exceed ten years. Where an Option is granted for a
term of less than ten years, the Compensation/Incentive Committee, may, at
any time prior to the expiration of the Option, extend its term for a
period ending not later than ten years from the date the Option was
(e) Options shall be granted for such lawful consideration as the
Compensation/Incentive Committee shall determine.
(f) Neither the Corporation nor any Subsidiary may directly or
indirectly lend any money to any person for the purpose of assisting him to
purchase or carry shares of Capital Stock issued or transferred upon the
exercise of an Option.
(g) No Option nor any right thereunder may be assigned or transferred
by the optionee except:
(i) by will or the laws of descent and distribution;
(ii) pursuant to a qualified domestic relations order as defined
by the Internal Revenue Code of 1986, as amended, or by the
Employee Retirement Income Security Act of 1974, as amended,
or the rules thereunder;
(iii) by an optionee who, at the time of the transfer, is not
subject to the provisions of Section 16 of the 1934 Act,
provided such transfer is to, or for the benefit of
(including but not limited to trusts for the benefit of),
the optionee's spouse or lineal descendants of the
optionee's parents; or
(iv) by an optionee who, at the time of the transfer, is subject
to the provisions of Section 16 of the 1934 Act, to the
extent, if any, such transfer would be permitted under
Securities and Exchange Commission Rule 16b-3 or any
successor rule thereto, as such rule or any successor rule
thereto may be in effect at the time of the transfer.
If so provided in the Option or if so authorized by the
Compensation/Incentive Committee and subject to such terms and conditions as are
specified in the Option or by the Compensation/Incentive Committee, the
Corporation may, upon or without the request of the holder of the Option and at
any time or from time to time, cancel all or a portion of the Option then
subject to exercise and either (i) pay the holder an amount of money equal to
the excess, if any, of the Fair Market Value, at such time or times, of the
shares subject to the portion of the Option so canceled over the aggregate
purchase price of such shares, or (ii) issue or transfer shares of Capital Stock
to the holder with a Fair Market Value, at such time or times, equal to such
(h) Each Option shall be evidenced by a written instrument, which shall
contain such terms and conditions, and shall be in such form, as the
Compensation/Incentive Committee may determine, provided the Option is
consistent with this Plan and incorporates it by reference.
Notwithstanding the preceding sentence, an Option, if so granted by
the Compensation/Incentive Committee, may include restrictions and
limitations in addition to those provided for in this Plan.
(i) Any federal, state or local withholding taxes payable by an optionee
or awardee upon the exercise of an Option or upon the removal of
restrictions of a Stock Award shall be paid in cash or in such other
form as the Compensation/Incentive Committee may authorize from time
to time, including the surrender of shares of Capital Stock or the
withholding of shares of Capital Stock to be issued to the optionee or
awardee. All such shares so surrendered or withheld shall be valued at
Fair Market Value on the date such are surrendered to the Corporation
or authorized to be withheld.
7. Combinations of Stock Awards and Options: Stock Incentives authorized by
paragraph (b) (iii) of Section 3 in the form of combinations of Stock
Awards and Options shall be subject to the following provisions:
(a) A Stock Incentive may be a combination of any form of Stock Award with
any form of Option; provided, however, that the terms and conditions
of such Stock Incentive pertaining to a Stock Award are consistent
with Section 5 and the terms and conditions of such Stock Incentive
pertaining to an Option are consistent with Section 6.
(b) Such combination Stock Incentive shall be subject to such other terms
and conditions as the Compensation/Incentive Committee may determine,
including, without limitation, a provision terminating in whole or in
part a portion thereof upon the exercise in whole or in part of
another portion thereof. Such combination Stock Incentive shall be
evidenced by a written instrument in such form as the
Compensation/Incentive Committee shall determine, provided it is
consistent with this Plan and incorporates it by reference.
8. Adjustment Provisions: In the event that any recapitalization, or
reclassification, split-up or consolidation of shares of Capital Stock shall be
effected, or the outstanding shares of Capital Stock are, in connection with a
merger or consolidation of the Corporation or a sale by the Corporation of all
or a part of its assets, exchanged for a different number or class of shares of
stock or other securities of the Corporation or for shares of the stock or other
securities of any other corporation, or a record date for determination of
holders of Capital Stock entitled to receive a dividend payable in Capital Stock
shall occur (a) the number and class of shares or other securities that may be
issued or transferred pursuant to Stock Incentives, (b) the number and class of
shares or other securities which have not been issued or transferred under
outstanding Stock Incentives, (c) the purchase price to be paid per share or
other security under outstanding Options, and (d) the price to be paid per share
or other security by the Corporation or a Subsidiary for shares or other
securities issued or transferred pursuant to Stock Incentives which are subject
to a right of the Corporation or a Subsidiary to reacquire such shares or other
securities, shall in each case be equitably adjusted.
9. Term: This Plan shall be deemed adopted and shall become effective on the
date it is approved and adopted by the stockholders of the Corporation. No Stock
Incentives shall be granted under this Plan after May 15, 2016.
(a) The Plan shall be administered by the Compensation/Incentive
Committee, which shall consist of no fewer than three persons
designated by the Board of Directors. Grants of Stock Incentive may be
granted by the Compensation/Incentive Committee either in or without
consultation with employees, but, anything in this plan to the
contrary notwithstanding, the Compensation/Incentive Committee shall
have full authority to act in the matter of selection of all Key
Employees and in determining the number of Stock Incentives to be
granted to them.
(b) The Compensation/Incentive Committee may establish such rules and
regulations, not inconsistent with the provisions of this Plan, as it
deems necessary to determine eligibility to participate in this Plan
and for the proper administration of this Plan, and may amend or
revoke any rule or regulation so established. The
Compensation/Incentive Committee may make such determinations and
interpretations under or in connection with this Plan as it deems
necessary or advisable. All such rules, regulations, determinations
and interpretations shall be binding and conclusive upon the
Corporation, its Subsidiaries, its stockholders and all employees, and
upon their respective legal representatives, beneficiaries, successors
and assigns upon all other persons claiming under or through any of
(c) Members of the Board of Directors and members of the
Compensation/Incentive Committee acting under this Plan shall be fully
protected in relying on good faith upon the advice of counsel and
shall incur no liability except for gross negligence or willful
misconduct in the performance of their duties.
(d) Any awards under the Plan made to members of the Committee shall be
approved by the Board. With respect to awards to such directors, all
rights, powers and authorities vested in the Committee under the Plan
shall instead be exercised by the Board, and all provisions of the
Plan relating to the Committee shall be interpreted in a manner
consistent with the foregoing by treating any such reference as a
reference to the Board for such purpose.
11. General Provisions:
(a) Nothing in this Plan nor in any instrument executed pursuant hereto
shall confer upon any employee any right to continue in the employ of
the Corporation or a Subsidiary, or shall affect the right of the
Corporation or of a Subsidiary to terminate the employment of any
employee with or without cause.
(b) No shares of Capital Stock shall be issued or transferred pursuant to
a Stock Incentive unless and until all legal requirements applicable
to the issuance or transfer of such shares, in the opinion of counsel
to the Corporation, have been complied with. In connection with any
such issuance or transfer, the person acquiring the shares shall, if
requested by the Corporation, give assurances, satisfactory to counsel
to the Corporation, that the shares are being acquired for investment
and not with a view to resale or distribution thereof and assurances
in respect of such other matters as the Corporation or a Subsidiary
may deem desirable to assure compliance with all applicable legal
(c) No employee (individually or as a member of a group), and no
beneficiary or other persons claiming under or through him, shall have
any right, title or interest in or to any shares of Capital Stock
allocated or reserved for the purposes of this Plan or subject to any
Stock Incentive except as to such shares of Capital Stock, if any, as
shall have been issued or transferred to him.
(d) The Corporation or a Subsidiary may, with the approval of the
Compensation/Incentive Committee, enter into an agreement or other
commitment to grant a Stock Incentive in the future to a person who is
or will be a Key Employee at the time of grant, and, notwithstanding
any other provision of this Plan, any such agreement or commitment
shall not be deemed the grant of a Stock Incentive until the date on
which the Company takes action to implement such agreement or
(e) In the case of a grant of a Stock Incentive to an employee of a
Subsidiary, such grant may, if the Compensation/Incentive Committee so
directs, be implemented by the Corporation issuing or transferring the
shares, if any, covered by the Stock Incentive to the Subsidiary, for
such lawful consideration as the Compensation/Incentive Committee may
specify, upon the condition or understanding that the Subsidiary will
transfer the shares to the employee in the accordance with the terms
of the Stock Incentive specified by the Compensation/Incentive
Committee pursuant to the provisions of this Plan. Notwithstanding any
other provisions hereof, such Stock Incentive may be issued by and in
the name of the Subsidiary and shall be deemed granted on the date it
is approved by the Compensation/Incentive Committee, on the date it is
delivered by the Subsidiary or on such other date between said two
dates, as the Compensation/Incentive Committee shall specify.
(f) The Corporation or a Subsidiary may make such provisions as it may
deem appropriate for the withholding of any taxes which the
Corporation or a Subsidiary determines it is required to withhold in
connection with any Stock Incentive.
(g) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other
Plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of
employees, which the Corporation or any Subsidiary or other affiliate
now has or may hereafter lawfully put into effect, including, without
limitation, any retirement, pension, group insurance, stock purchase,
stock bonus or stock option plan.
12. Amendments and Discontinuance:
(a) This Plan may be amended by the Board of Directors upon the
recommendation of the Compensation/Incentive Committee, provided that,
without the approval of the stockholders of the Corporation, no
amendment shall be made which (i) increases the aggregate number of
shares of Capital Stock that may be issued or transferred pursuant to
Stock Incentives as provided in paragraph (a) of Section 4, (ii)
increases the maximum aggregate number of shares of Capital Stock that
may be issued or transferred under the Plan to directors of the
Corporation or of a Subsidiary as provided in paragraph (b) of Section
4, (iii) increases the maximum aggregate number of Stock Incentives,
in the form of Options, which may be granted to an individual employee
as provided in paragraph (a) of Section 6, (iv) withdraws the
administration of this Plan from the Compensation/Incentive Committee,
(v) permits any person who is not at the time a Key Employee of the
Corporation or of a Subsidiary to be granted a Stock Incentive, (vi)
permits any option to be exercised more than ten years after the date
it is granted, (vii) amends Section 9 to extend the date set forth
therein, (viii) reprices Options pursuant to Section 6(b) hereof, or
results in the cancellation of any outstanding Option and grants in
substitution therefor Options with a lower purchase price per share,
(ix) materially modifies the definition of Key Employee in Section 2
hereof, (x) accelerates or shortens the restriction periods under
Section 6(d) hereof, or (xi) amends this Section 12.
(b) Notwithstanding paragraph (a) of this Section 12, the Board of
Directors may amend the Plan to take into account changes in
applicable securities laws, federal income tax laws and other
applicable laws. Should the provisions of Rule 16b-3, or any successor
rule, under the Securities Exchange Act of 1934 be amended, the Board
of Directors may amend the Plan in accordance therewith.
(c) The Board of Directors may by resolution adopted by a majority of the
entire Board of Directors discontinue this Plan.
(d) No amendment or discontinuance of this Plan by the Board of Directors
or the Stockholders of the Corporation shall, without the consent of
the employee, adversely affect any Stock Incentive theretofore granted
2002 EXECUTIVE LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSES: The purposes of the Chemed Corporation 2002 Executive
Long-Term Incentive Plan are to provide a means to attract and retain officers
and other key employees of the Company and its Subsidiaries and to motivate such
individuals to improve the long-term performance of the Company.
SECTION 2. DEFINITIONS: As used in this Plan, unless the context otherwise
requires, each of the following terms shall have the meaning set forth below.
(a) "Award" shall mean, for any Plan Period, a payment made to a
Participant under the terms of this Plan, which can be denominated
in either cash or Capital Stock as determined by the Committee in
its sole discretion
(b) "Board of Directors" or "Board" shall mean the Board of Directors of
(c) "CEO" shall mean the Chief Executive Officer of the Company.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any references to a particular section of the Code
shall be deemed to include any successor provision thereto.
(e) "Committee" shall mean a committee of the Board of Directors, which
shall consist solely of two or more "outside directors" within the
meaning of Section 162(m) of the Code.
(f) "Capital Stock" shall mean the capital stock of the Company, par
value $1.00 per share.
(g) "Company" shall mean Chemed Corporation, a Delaware corporation.
(h) "Covered Employee" shall mean the CEO and each other executive of
the Company or a Subsidiary who the Committee determines, in its
discretion, is or may be a "covered employee" within the meaning of
Section 162(m) of the Code for the Plan Period to which an Award
hereunder is related.
(i) "Eligible Employee" shall mean all officers and other key employees
of the Company and any of its Subsidiaries, as determined by the
Committee in its sole discretion.
(j) "Maximum Amount" shall mean the product of:
(i) $2,000,000 or 35,000 shares of Capital Stock, depending on
whether an Award is denominated in cash or Capital Stock; and
(ii) The number of full or partial fiscal years in the Plan Period.
(k) "Participant" shall mean an Eligible Employee selected by the
Committee to participate in the Plan pursuant to Section 4.
(l) "Performance Goal(s)" shall mean the goal or goals established for a
Participant for a Plan Period by the Committee pursuant to Section
(m) "Performance Measures" shall mean any of the following performance
criteria, either alone or in any combination, and may be expressed
with respect to the Company or one or more operating units or groups
or Subsidiaries, as the Committee may determine: cash flow; cash
flow from operations; total earnings; earnings per share, diluted or
basic; earnings per share from continuing operations, diluted or
basic; earnings before interest and taxes; earnings before interest,
taxes, depreciation, and amortization; earnings from continuing
operations; net asset turnover; inventory turnover; net earnings or
net income; operating earnings; operating margin; return on equity;
return on net assets; return on total assets; return on capital;
return on investment; return on sales; sales; revenues; market
share; economic value added; expense reduction levels; stock price;
and total shareholder return. For any Plan Period, Performance
Measures may be determined on an absolute basis or relative to
internal goals or relative to levels attained in a year or years
prior to such Plan Period or related to other companies or indices
or as ratios expressing relationships between two or more
Performance Measures. For any Plan Period, the Committee shall
provide how any Performance Measure shall be adjusted to the extent
necessary to prevent dilution or enlargement of any Award as a
result of extraordinary events or circumstances, as determined by
the Committee, or to exclude the effects of extraordinary, unusual,
or non-recurring items; changes in applicable laws, regulations, or
accounting principles; currency fluctuations; discontinued
operations; non-cash items, such as amortization, depreciation, or
reserves; or any recapitalization, restructuring, reorganization,
merger, acquisition, divestiture, consolidation, spin-off, split-up,
combination, liquidation, dissolution, sale of assets, or other
similar corporate transaction, or stock dividend, or stock split or
combination; provided, however, in the case of a Covered Employee,
no such adjustment will be made if the effect of such adjustment
would cause the Award to a Covered Employee to fail to qualify as
"qualified performance-based compensation" within the meaning of
Section 162(m) of the Code.
(n) "Plan" shall mean the Chemed Corporation 2002 Executive Long-Term
Incentive Plan, as amended and restated from time to time.
(o) "Plan Period" shall mean a period longer than one fiscal year, as
determined by the Committee in its sole discretion.
(p) "Subsidiary" shall mean any corporation, the majority of the
outstanding voting stock of which is owned, directly or indirectly,
by the Company, and that is not itself a publicly held corporation
within the meaning of Section 162(m) of the Code.
SECTION 3. ADMINISTRATION: Subject to the express provisions of this Plan, the
Committee shall have authority to interpret the Plan, to prescribe, amend, and
rescind rules and regulations relating to it, and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
In exercising its discretion, the Committee may use such objective or subjective
factors as it determines to be appropriate in its sole discretion. The
determinations of the Committee pursuant to its authority under the Plan shall
be conclusive and binding.
SECTION 4. ELIGIBILITY: The Committee shall designate which Eligible Employees
will be Participants in the Plan for a particular Plan Period. Designation of an
Eligible Employee as a Participant for any Plan Period shall not require
designation of such Eligible Employee for any other Plan Period.
SECTION 5. AWARDS:
(a) The Committee may make Awards to Participants with respect to each
Plan Period, subject to the terms and conditions set forth in the
Plan. To the extent an Award that is denominated in Capital Stock
results in a payment in Capital Stock or an Award that is
denominated in cash is paid in Capital Stock, such Capital Stock
shall be issued from the authorized reserve of Capital Stock under
the 2004 Stock Incentive Plan or other such plan, if such plan has
been approved by the holders of a majority of the shares of the
Company's Capital Stock actually voting on the matter and has
sufficient shares of capital stock remaining for such issuance.
(b) Within 90 days after the commencement of each Plan Period (or such
other date as required by Section 162(m) of the Code and the
regulations promulgated thereunder), the Committee shall, in
writing, select the length of such Plan Period, select which
Eligible Employees will be Participants for such Plan Period, and
determine for each such Plan Period the following:
(i) The Performance Goal or Performance Goals applicable to each
Participant for the Plan Period based on one or more
Performance Measures; and
(ii) The payment schedule detailing the total amount which may be
available for payment to each Participant as an Award based
upon the relative level of attainment of the Performance Goal
or Performance Goals.
(c) Upon completion of a Plan Period, the Committee shall:
(i) Certify, in writing, prior to payment of any Award, whether
and to what extent the Performance Goal or Performance Goals
for the Plan Period were satisfied;
(ii) Determine the amount available for each Participant's Award
pursuant to the payment schedule established in Section
(iii) Determine any increase or reduction in the amount of a
Participant's available Award, as determined pursuant to
Section 5(c)(ii), (including a reduction to zero) based on any
subjective or objective factors that it determines to be
appropriate in its sole discretion; provided, however, in the
case of a Covered Employee, the Committee may reduce
(including a reduction to zero) but may not increase the
amount of an Award; and provided further that the exercise of
such discretion to reduce an Award with respect to any
Participant shall not have the effect of increasing an Award
that is payable to a Covered Employee; and
(iv) Authorize payment subject to Section 6 of such amounts
determined under Section 5(c)(iii).
(d) Notwithstanding any other provision of this Plan, in no event shall
the Award earned by any Participant for a Plan Period exceed the
(e) Notwithstanding any other provision of this Plan, a Plan Period
shall not commence until any preceding Plan Period has been
SECTION 6. PAYMENT OF AWARDS: Awards under this Plan shall be made in a lump sum
payment in cash and/or Capital Stock to the Participant or the Participant's
beneficiary, as designated under procedures established by the Committee, as
soon as practicable following the Plan Period or to such deferred plan as the
Company may have established for such purposes. If all or a portion of a
cash-denominated Award is to be paid in Capital Stock or a Capital
Stock-denominated Award is to be paid in cash, the Committee shall determine the
basis on which such a conversion will occur. The Company may deduct from any
payment such amounts as may be required to be withheld under any federal, state,
or local tax laws.
SECTION 7. NO CONTINUED EMPLOYMENT: Nothing in this Plan shall give any person
any right to continue in the employ of the Company or its Subsidiaries or
constitute a contract or agreement of employment or interfere in any way with
the right of the Company or its Subsidiaries to terminate or change the
conditions of employment.
SECTION 8. NONASSIGNABILITY: Except as otherwise required by applicable law, any
rights of a Participant or Participant's beneficiary under this Plan shall not
be anticipated, sold, assigned, transferred, encumbered, hypothecated, or
pledged nor be subject to any levy or charge and shall not be subject in any
manner to the claims of any creditor of a Participant or a Participant's
beneficiary; and any attempt to take such action shall be null and void.
SECTION 9. TERMINATION AND AMENDMENT: The Board may at any time and from time to
time alter, amend, suspend, or terminate the Plan in whole or in part; provided,
however, that no amendment which requires stockholder approval in order for the
Plan to continue to comply with Section 162(m) of the Code shall be effective
unless such amendment is approved by the stockholders of the Company.
Notwithstanding the foregoing, no termination or amendment of the Plan may,
without the consent of the Participant to whom an Award has been determined for
a completed Plan Period but not yet paid, adversely affect the rights of such
Participant in such Award.
SECTION 10. INTERPRETATION: Except with respect to terminations of employment or
in connection with a change in control of the Company, as determined by the
Committee in its sole discretion, it is the intent of the Company that Awards
made to Covered Employees shall constitute "qualified performance-based
compensation" satisfying the requirements of Section 162(m) of the Code.
Accordingly, the provisions of the Plan shall be interpreted in a manner
consistent with Section 162(m) of the Code. If any other provision of the Plan
or an Award is intended to but does not comply or is inconsistent with the
requirements of Section 162(m) of the Code, such provision shall be construed or
deemed amended to the extent necessary to conform to and comply with such
SECTION 11. UNFUNDED STATUS: Awards shall be made from the general funds of the
Company, and no special or separate fund shall be established or other
segregation of assets made to assure payment. No Participant or other person
shall have under any circumstances any interest in any particular property or
assets of the Company.
SECTION 12. APPLICABLE LAW: This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
principles of conflict of laws.
SECTION 13. EFFECTIVE DATE: This Plan will become effective as of March 6, 2002;
provided, however, that no Award will be made under the Plan unless prior to
such payment, the holders of a majority of the shares of the Company's Capital
Stock actually voting on the matter approve and adopt this Plan at a meeting of
the stockholders of the Company.