This excerpt taken from the GMCR DEF 14A filed Jan 28, 2008.
5. PAYMENT OF AWARDS
5.1. Certification of Performance. As soon as practicable after the close of a Performance Period, the Administrator shall certify (in accordance with the certification requirements under Section 162(m)) whether and if so to what extent the Performance Criteria with respect to each Award granted with respect to such Performance Period have been satisfied, and to the extent the results so certified support payment under the Award shall make payment not later than the fifteenth (15th) day of the third month following the close of the Companys taxable year in which the Performance Period ends or the calendar year in which the Performance Period ends, whichever is later. A Participant who is granted an Award shall be entitled to a payment, if any, under the Award only if all conditions to payment have been satisfied in accordance with the Plan and the terms of the Award. If the Administrator requires, in connection with the grant of the
Award, that the Participant must continue to perform substantial services for the Employer until the payment date, the deadline for payment may extend beyond the deadline specified in the first sentence of this Section 5.1, but only to the extent consistent with treating the Award and payments thereunder as a short-term deferral under Section 409A.
5.2. Determination of Awards. The Administrator shall determine the actual payment, if any, under each Award. Unless it shall have expressly relinquished the discretion described in this Section 5.2, the Administrator may, in its sole and absolute discretion and with or without specifying its reasons for doing so, after determining the amount that would otherwise be payable under an Award for a Performance Period, reduce (including to zero) the actual payment, if any, to be made under such Award. The Administrator may exercise the discretion described in the immediately preceding sentence either in individual cases or in ways that affect more than one Participant.
5.3. Payment Limits; Form of Payment. Award payments shall be paid in cash or shares of Stock, as the Administrator determines. No Participant may be paid more than $2,500,000 (in cash paid or the fair market value of Stock delivered) under the Plan for any fiscal year of the Company or portion thereof. In the case of an Award where payment is deferred pursuant to Section 14, the foregoing limit shall be applied by assuming that payment of the Award was made at the time it would have been paid absent the deferral. Payment of an Award may be made in cash or shares of Stock, in the Administrators discretion, but any shares of Stock delivered under the Plan shall reduce the number of shares available for issuance under the Companys 2006 Incentive Plan, and no shares of Stock shall be delivered hereunder in excess of the number of shares available under the 2006 Incentive Plan.
5.4. Proration. Without limiting the generality of its discretion with respect to the determination of conditions relating to an Award, the Administrator may provide for proration in the case of an Award made to a Participant who first becomes eligible to participate in the Plan during the course of a Performance Period, or who ceases to be eligible to participate in the Plan during the course of a Performance Period.
5.5. Adjustments with Respect to Stock. If the conditions of an Award specify a number of shares of Stock to be delivered assuming satisfaction of the Award conditions, the Administrator will make appropriate adjustments to reflect any stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in the Companys capital structure occurring after establishment of the Award and before payment, if any. References in the Award to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 5.5.