DLM » Topics » Stock Subject to the Amended 2002 Plan

This excerpt taken from the DLM DEF 14A filed Aug 19, 2009.
Stock Subject to the Amended 2002 Plan
 
A maximum of 42,978,385 shares of common stock are available for issuance under the Amended 2002 Plan, which number, based on award information as of May 3, 2009, consists of 3,197,405 shares of common stock issued under the 2002 Plan (reducing the shares available under the Amended 2002 Plan by 3,319,415 shares due to the 2.79 and 1.94 multiples discussed below), 20,024,425 shares subject to outstanding incentive awards (which, if issued, would reduce the shares available under the Amended 2002 Plan by 26,157,970 shares due to the 2.79 and 1.94 multiples discussed below) and 13,501,000 shares available for future incentive award grants. Prior to the July 28, 2009 amendment and restatement, the maximum number of shares of common stock that were available for issuance under the 2002 Plan was 31,558,740 shares. Shares of common stock issued under the Amended 2002 Plan may be either newly issued shares or treasury shares, as determined by the Committee. As of August 14, 2009, the closing price of our common stock as reported on the NYSE was $10.20 per share.
 
As of May 3, 2009, there were 2,081,355 shares of common stock (plus any shares that might in the future be returned to the 2002 Plan as a result of cancellation or expiration of options or forfeiture or repurchase of other stock awards, which number may not exceed 26,157,970 after applying the applicable share multiples) available for future grant under the 2002 Plan. In addition, as of such date, options covering an aggregate of 17,384,813 shares were outstanding, and awards other than options and stock appreciation rights covering an aggregate of 4,394,497 shares were outstanding. The weighted average exercise price of all options outstanding as of May 3, 2009 was approximately $9.17, and the weighted average remaining term of such options was approximately 6.25 years. A total of 197,778,014 shares of common stock were outstanding as of July 30, 2009.
 
For awards granted on or after May 4, 2009, the number of shares of common stock available for issuance under the Amended 2002 Plan shall be reduced (i) by 1 share for each share of common stock issued pursuant to an option or a stock appreciation right with an exercise price of at least the fair market value of a share of common stock on the grant date and (ii) 1.98 shares for each share of common stock issued pursuant to other stock awards; provided, however, that (a) for such other stock awards granted prior to May 4, 2009 but on or after April 30, 2007, the reduction shall be 2.79 shares instead of 1.98 shares, and (b) for such other stock awards granted prior to April 30, 2007 but on or after May 2, 2005, the reduction shall be 1.94 shares instead


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of 2.79 shares. Furthermore, for all awards granted prior to May 2, 2005, the number of shares of common stock available for issuance under the Amended 2002 Plan shall be reduced by 1 share for each share of common stock issued. By contrast, prior to the July 28, 2009 amendment and restatement, the number of shares of common stock available for issuance under the 2002 Plan was reduced (i) by 1 share for each share of common stock issued pursuant to an option or a stock appreciation right with an exercise price of at least the fair market value of a share of common stock on the grant date and (ii) 2.79 shares for each share of common stock issued pursuant to other stock awards; provided, however, that (a) for such other stock awards granted prior to April 30, 2007 but on or after May 2, 2005, the reduction was 1.94 shares instead of 2.79 shares, and (ii) for all awards granted prior to May 2, 2005, the number of shares of common stock available for issuance under the 2002 Plan was reduced by 1 share for each share of common stock issued.
 
If a stock award granted under the Amended 2002 Plan expires or otherwise terminates without being exercised or settled in full, or if any shares of common stock issued pursuant to a stock award are forfeited to or repurchased by Del Monte, including, but not limited to, any repurchase or forfeiture caused by the failure to meet a contingency or condition required for the vesting of such shares, then the shares of common stock not issued under such stock award, or forfeited to or repurchased by Del Monte shall revert to and again become available for issuance under the Amended 2002 Plan. Awards that are terminated, forfeited or repurchased shall result in an increase in the share reserve of the Amended 2002 Plan corresponding to the reduction originally made in respect of the award.
 
Shares of common stock shall not be considered to have been issued under the Amended 2002 Plan with respect to any portion of a stock award (other than a stock appreciation right that may be settled in shares of common stock or cash) that is settled in cash. Shares withheld in satisfaction of tax withholding obligations shall not again become available for issuance under the Amended 2002 Plan. Upon payment in shares of common stock pursuant to the exercise of a stock appreciation right, the number of shares available for issuance under the Amended 2002 Plan shall be reduced by the gross number of shares for which such stock award is exercised. If the exercise price of an option is paid by shares of common stock owned by the participant, the number of shares available for issuance under the Amended 2002 Plan shall be reduced by the gross number of shares for which the option is exercised. Shares of common stock may be issued pursuant to stock awards in connection with certain corporate acquisitions and mergers, and any such issuance shall not reduce the number of shares of common stock available for issuance under the Amended 2002 Plan.
 
The aggregate maximum number of shares of common stock that may be issued under the Amended 2002 Plan pursuant to the exercise of incentive stock options is 42,978,385 shares.
 
Subject to the overall limitation on the number of shares of common stock that may be issued under the Amended 2002 Plan, the Committee may, in addition to granting stock awards under the Amended 2002 Plan, use available shares of common stock as the form of payment for compensation, grants or rights earned or due under any other compensation plans or arrangements of Del Monte, including those of any entity acquired by Del Monte.
 
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