1993 Non-Employee Directors' Stock Plan - Procter & Gamble Co.
The Procter & Gamble 1993 Non-Employee Directors' Stock Plan
THE PROCTER & GAMBLE 1993 NON-EMPLOYEE DIRECTORS'
(AS AMENDED DECEMBER 12, 2000)
ARTICLE A -- PURPOSE.
The purpose of The Procter & Gamble 1993 Non-Employee Directors' Stock
Plan (hereinafter referred to as the "Plan") is to strengthen the
alignment of interests between non-employee Directors (hereinafter
referred to as "Participants") and the shareholders of The Procter & Gamble Company (hereinafter referred to as the "Company") through the
increased ownership of shares of the Company's Common Stock. This will
be accomplished by allowing Participants to elect voluntarily to
convert a portion or all of their cash fees for services as a Director
into Common Stock, by granting Participants a fixed value of shares of
Common Stock restricted until retirement (hereinafter referred to as
"Retirement Shares") and by granting Participants non-qualified
options to purchase shares of Common Stock (hereinafter referred to
as "Stock Options").
ARTICLE B -- ADMINISTRATION.
1. The Plan shall be administered by the Compensation Committee
(hereinafter referred to as the "Committee") of the Board of Directors
of the Company (hereinafter referred to as the "Board"), or such other
committee as may be designated by the Board. The Committee shall
consist of not less than three (3) members of the Board who are
"Non-Employee Directors" as defined in Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, or any successor rule or definition
adopted by the Securities and Exchange Commission, to be appointed by
the Board from time to time and to serve at the discretion of the
2. It shall be the duty of the Committee to administer this Plan in
accordance with its provisions and to make such recommendations of
amendments or otherwise as it deems necessary or appropriate. A
decision by a majority of the Committee shall govern all actions of
3. Subject to the express provisions of this Plan, the Committee shall
have authority to allow Participants the right to elect to receive
fees for services as a director in either cash or an equivalent amount
of whole shares of Common Stock of the Company, or partly in cash and
partly in whole shares of the Common Stock of the Company, subject to
such conditions or restrictions, if any, as the Committee may
determine. The Committee also has the authority to make all other
determinations it deems necessary or advisable for administering this
4. The Committee may establish from time to time such regulations,
provisions, and procedures within the terms of this Plan as, in its
opinion, may be advisable in the administration of this Plan.
5. The Committee may designate the Secretary of the Company or other
employees of the Company to assist the Committee in the administration
of this Plan and may grant authority to such persons to execute
documents on behalf of the Committee.
ARTICLE C -- PARTICIPATION.
Participation in the Plan shall be limited to all non-employee
Directors of the Company.
ARTICLE D -- LIMITATION ON NUMBER OF SHARES FOR THE PLAN.
The total number of shares of Common Stock of the Company that may be
awarded each year shall not exceed 50,000 shares.
ARTICLE E -- SHARES SUBJECT TO USE UNDER THE PLAN.
Shares of Common Stock to be awarded under the terms of this Plan shall
be treasury shares.
ARTICLE F -- RETIREMENT SHARES
1. Commencing January 2, 1997 and on the first business day in each
January thereafter, each Participant shall receive Retirement Shares with a fair
market value of $20,000 on the date of grant.
2. All shares awarded under this Article shall be valued as set forth
in Article I.
ARTICLE G -- STOCK OPTIONS.
1. The Committee may, from time to time, grant Participants a Stock
Option to purchase shares of Common Stock having an exercise price of one
hundred percent (100%) of the fair market value of the Common Stock on the date
of the grant.
2. The Stock Options shall have a term of fifteen (15) years from the
date of grant, subject to earlier termination as provided herein, and shall be
exercisable three (3) years from the date of grant, except in the case of death,
in which case the Stock Options shall be immediately exercisable.
3. Stock Options are not transferable other than by will or by the laws
of descent and distribution. Legatees, distributees and duly appointed executors
and administrators of the estate of a deceased Participant shall have the right
to exercise such Stock Options at any time prior to the expiration date of the
4. If a Participant ceases to be a Director while holding unexercised
Stock Options, such stock options are then void, except in the case of (i)
death, (ii) disability, (iii) retirement at the end of a term, (iv) retirement
after attaining the age of sixty-nine (69) or (v) resignation from the Board for
reasons of the antitrust laws or the conflict of interest, corporate governance
or continued service policies.
5. Upon the exercise of a Stock Option, payment in full of the exercise
price shall be made by the Participant. The exercise price may be paid for by
the Participant either in cash, shares of the Common Stock of the Company to be
valued at their fair market value on the date of exercise, or a combination
ARTICLE H -- ADJUSTMENTS.
The amount of shares authorized to be issued annually under this Plan
will be subject to appropriate adjustment in the event of future stock splits,
stock dividends, or other changes in capitalization of the Company to prevent
the dilution or enlargement of rights under this Plan; following any such
change, the term "Common Stock" shall be deemed to refer to such class of shares
or other securities as may be applicable. The number of shares and exercise
prices covered by outstanding Stock Options and the number of shares to be
granted as Stock Options pursuant to Article F, paragraph 1 shall be adjusted to
give effect to any such stock splits, stock dividends, or other changes in the
ARTICLE I -- TRANSFER OF SHARES.
1. The Committee may transfer Common Stock of the Company under the
Plan subject to such conditions or restrictions, if any, as the Committee may
determine. The conditions and restrictions may vary from time to time and may be
set forth in agreements between the Company and the Participant or in the awards
of stock to them, all as the Committee determines.
2. The shares awarded shall be valued at the average of the high and
low quotations for Common Stock of the Company on the New York Stock Exchange on
the day of the transfer to a Participant. All shares awarded shall be full
shares, rounded up to the nearest whole share.
ARTICLE J -- ADDITIONAL PROVISIONS.
1. The Board may, at any time, repeal this Plan or may amend it from
time to time except that no such amendment may amend this paragraph, increase
the annual aggregate number of shares subject to this Plan, or alter the persons
eligible to participate in this Plan. The Participants and the Company shall be
bound by any such amendments as of their effective dates, but if any outstanding
awards are affected, notice thereof shall be given to the holders of such awards
and such amendments shall not be applicable to such holder without his or her
written consent. If this Plan is repealed in its entirety, all theretofore
awarded shares subject to conditions or restrictions transferred pursuant to
this Plan shall continue to be subject to such conditions or restrictions.
2. Every recipient of shares pursuant to this Plan shall be bound by
the terms and provisions of this Plan and of the transfer of shares agreement
referable thereto, and the acceptance of any transfer of shares pursuant to this
Plan shall constitute a binding agreement between the recipient and the Company.
3. Notwithstanding anything to the contrary in the this Plan, stock
options and stock appreciation rights granted hereunder shall vest immediately
and any conditions or restrictions on Common Stock shall lapse upon a "Change in
Control." A "Change in Control" shall mean the occurrence of any of the
(a) An acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any
"Person" (as the term person is used for purposes of Section
13(d) or 14(d) of the Exchange Act), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of twenty percent (20%)
or more of the then
outstanding Shares or the combined voting power of the Company's
then outstanding Voting Securities; provided, however, in
determining whether a Change in Control has occurred pursuant to
this Section 4(a), Shares or Voting Securities which are acquired
in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control.
A "Non-Control Acquisition" shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof)
maintained by (A) the Company or (B) any corporation or other
Person of which a majority of its voting power or its voting
equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
"Related Entity"), (ii) the Company or any Related Entity, or
(iii) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined);
(b) The individuals who, as of July 11, 2000 are members of the Board
(the "Incumbent Board"), cease for any reason to constitute at
least half of the members of the Board; or, following a Merger
(as hereinafter defined) which results in a Parent Corporation
(as hereinafter defined), the board of directors of the ultimate
Parent Corporation; provided, however, that if the election, or
nomination for election by the Company's common stockholders, of
any new director was approved by a vote of at least two-thirds of
the Incumbent Board, such new director shall, for purposes of
this Plan, be considered as a member of the Incumbent Board;
provided further, however, that no individual shall be considered
a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under
the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy
(c) The consummation of:
(i) A merger, consolidation or reorganization with or into the
Company or in which securities of the Company are issued (a
"Merger"), unless such Merger is a "Non-Control
Transaction." A "Non-Control Transaction" shall mean a
(A) the stockholders of the Company, immediately before
such Merger own directly or indirectly immediately
following such Merger at least fifty percent (50%) of
the combined voting power of the outstanding voting
securities of (x) the corporation resulting from such
Merger (the "Surviving Corporation") if fifty percent
(50%) or more of the combined voting power of the then
outstanding voting securities of the Surviving
Corporation is not Beneficially Owned, directly or
indirectly by another Person (a "Parent Corporation"),
or (y) if there is one or more Parent Corporations, the
ultimate Parent Corporation;
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement
providing for such Mergerconstitute at least half of
the members of the board of directors of (x) the
Surviving Corporation, if there is no Parent
Corporation, or (y) if
there is one or more Parent Corporations, the ultimate
Parent Corporation; and
(C) no Person other than (1) the Company, (2) any Related
Entity, (3) any employee benefit plan (or any trust
forming a part thereof) that, immediately prior to such
Merger was maintained by the Company or any Related
Entity, or (4) any Person who, immediately prior to
such merger, consolidation or reorganization had
Beneficial Ownership of twenty percent (20%) or more of
the then outstanding Voting Securities or Shares, has
Beneficial Ownership of twenty percent (20%) or more of
the combined voting power of the outstanding voting
securities or common stock of (x) the Surviving
Corporation if there is no Parent Corporation, or (y)
if there is one or more Parent Corporations, the
ultimate Parent Corporation;
(ii) A complete liquidation or dissolution of the Company; or
(iii) The sale or other disposition of all or substantially all of
the assets of the Company to any Person (other than a
transfer to a Related Entity or under conditions that would
constitute a Non-Control Transaction with the disposition of
assets being regarded as a Merger for this purpose or the
distribution to the Company's stockholders of the stock of a
Related Entity or any other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares or
Voting Securities as a result of the acquisition of Shares or Voting Securities
by the Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Persons, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of any additional
Shares or Voting Securities which increases the percentage of the then
outstanding Shares or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.
ARTICLE K -- DURATION OF PLAN.
This Plan shall be effective as of January 1, 1994. This Plan will
terminate on December 31, 2003 unless a different termination date is fixed by
the shareholders or by action of the Board but no such termination shall affect
the prior rights under this Plan of the Company or of anyone to whom shares have
been transferred prior to such termination.
Plan adopted November 9, 1993
Plan Amended January 10, 1995
Plan Amended June 11, 1996
Adjusted for August 22, 1997 stock split
Plan amended January 12, 1999
Plan amended July 11, 2000
Plan amended December 12, 2000