1999 Stock Incentive Plan - Jacobs Engineering Group Inc.
JACOBS ENGINEERING GROUP INC.
1999 Stock Incentive Plan
(as Amended)
1. Purpose.
The purpose of the Jacobs Engineering Group Inc. 1999 Stock Incentive
Plan (the "Plan") is to advance the interests of Jacobs Engineering Group Inc.
(the "Company") and its Related Companies (as defined in Section 2) by
encouraging and enabling the acquisition of a financial interest in the Company
by officers and other employees of the Company and its Related Companies. In
addition, the Plan is intended to aid the Company and its Related Companies in
attracting and retaining employees, to stimulate the efforts of such employees
and to strengthen their desire to remain in the employ of the Company and its
Related Companies.
2. Definitions.
Unless the context clearly indicates otherwise, the following terms,
when used in this Plan, shall have the meanings set forth in this Paragraph 2.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means a day on which the New York Stock Exchange is open
for securities trading.
"Change in Control" shall mean, with respect to the Company, a change
in control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A under the Securities Exchange Act of
1934, as amended ("1934 Act"), provided that such a change in control shall be
deemed to have occurred at such time as (i) any "person" (as that term is used
in Sections 13(d) and 14(d)(2) of the 1934 Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
securities representing 25% or more of the combined voting power for election of
directors of the then outstanding securities of the Company or any successor of
the Company; (ii) during any period of two (2) consecutive years or less,
individuals who at the beginning of such period constituted the Board of
Directors of the Company cease, for any reason, to constitute at least a
majority of the Board of Directors of the Company, unless the election or
nomination for election of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period; (iii) the shareholders of the Company approve any
merger or consolidation as a result of which the Jacobs Common Stock (as defined
below) shall be changed, converted or exchanged (other than a merger with a
wholly owned subsidiary of the Company) or any liquidation of the Company or any
sale or other disposition of 50% or more of the assets or earning power of the
Company; or (iv) the shareholders of the Company approve any merger or
consolidation to which the Company is a party as a result of which the
<PAGE>
persons who were shareholders of the Company immediately prior to the effective
date of the merger or consolidation shall have beneficial ownership of less than
50% of the combined voting power for election of directors of the surviving
corporation following the effective date of such merger or consolidation;
provided, however, that no Change in Control shall be deemed to have occurred
if, prior to such time as a Change in Control would otherwise be deemed to have
occurred, the Board of Directors of the Company determines otherwise.
"Committee" means the Compensation Committee of the Board of Directors
of the Company, or any committee appointed by the Board of Directors of the
Company in accordance with the Company's By-Laws from among its members for the
purpose of administering the Plan. Members of the Committee shall be Non
Employee Directors within the meaning of Rule 16b-3 under the 1934 Act, as
amended.
"Disabled" or "Disability" means the employee meets the definition of
"disabled" under the terms of the long term disability plan of the Company or
Related Company by which the employee is employed in effect on the date in
question, whether or not the employee is covered by such plan.
"Employee" means an employee of the Company or a Related Company.
"Fair Market Value" means the closing price of one share of Jacobs
Common Stock as reported by the New York Stock Exchange for the day on which the
value is determined. If such day is not a Business Day, then the fair market
value shall be determined by reference to the closing price on the first
immediately preceding Business Day.
"Incentive Award" means an ISO, an NQSO or Restricted Stock granted or
awarded under this Plan.
"ISO" means an incentive stock option within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended.
"Jacobs Common Stock" means the Common Stock, par value $1.00 per
share, of the Company.
"Majority-Owned Related Company" means a Related Company in which the
Company owns, directly or indirectly, 50% or more of the voting stock on the
date an Incentive Award is granted.
"NQSO" means a stock option that does not constitute an ISO.
"Options" means ISOs and NQSOs granted under this Plan.
"Optionee" means any person to whom an Option is granted under the
Plan.
2
<PAGE>
"Related Company" or "Related Companies" means corporation(s) or other
business organization(s) in which the Company owns, directly or indirectly, 20%
or more of the voting stock or capital at the relevant time.
"Restricted Stock" means shares of Jacobs Common Stock awarded pursuant
to Section 13 of this Plan.
"Retire" means to enter Retirement.
"Retirement" means the termination of an Optionee's employment with the
Company or a Related Company by reason of an Optionee having either (1) attained
the age of 65, or (2) attained the age of 60 and completed a total of ten (10)
or more consecutive years of employment with the Company, and/or a Related
Company.
3. Incentive Awards.
The Company may grant or award Incentive Awards to those persons
meeting the eligibility requirements in Section 6.
4. Administration.
(a) The Plan shall be administered by the Committee. The Board
of Directors shall fill vacancies on, and from time to time may remove or add
members to, the Committee. The Committee shall act pursuant to a majority vote
or unanimous written consent.
(b) The Committee shall determine the employees of the Company
and its Related Companies (including officers) to whom, and the time or times at
which, Incentive Awards will be granted or awarded; the number of shares to be
subject to each Incentive Award; the duration of each Incentive Award; the time
or times within which Options may be exercised; the cancellation of the
Incentive Award (with the consent of the holder thereof); and the other terms
and conditions of the grant or award of the Incentive Award, at grant or award
or while outstanding, pursuant to the terms of the Plan. The provisions and
conditions of the Incentive Awards need not be the same with respect to each
employee or with respect to each Incentive Award.
(c) The Committee may, subject to the provisions of the Plan,
establish such rules, regulations, policies and procedures as it deems necessary
or advisable for the proper administration of the Plan, and may make
determinations and may take such other action in connection with or in relation
to the Plan as it deems necessary or advisable. Each determination or other
action made or taken pursuant to the Plan, including interpretations of the Plan
and the specific conditions and provisions of the Incentive Awards granted or
awarded hereunder by the Committee, shall be final and conclusive for all
purposes and upon all persons including, but without limitation, the Company,
its Related Companies, the Committee, the Board of Directors of the Company,
officers and the affected employees of the Company and/or its Related Companies,
employees and the respective successors in interest of any of the foregoing.
3
<PAGE>
(d) Notwithstanding the foregoing, with respect to any
Incentive Award that is not intended to satisfy the conditions of Rule 16b-3
under the 1934 Act or Section 162(m)(4)(C) of the Internal Revenue Code of 1986,
as amended, the Committee may appoint one or more separate committees (any such
committee, a "Subcommittee") composed of one or more directors of the Company,
who unlike the members of the Committee, may be employee directors of the
Company. The Committee may delegate to any such Subcommittee(s) the authority to
grant Incentive Awards, to determine all terms of such Incentive Awards and/or
to administer the Plan, pursuant to the terms of the Plan. Subject to the
limitations of the Plan and the limitations of the Committee's delegation, any
such Subcommittee would have the full authority of the Committee pursuant to the
terms of the Plan. Any such Subcommittee shall not, however, grant Incentive
Awards on terms more favorable than Incentive Awards granted by the Committee.
Actions by any such Subcommittee within the scope of delegation shall be deemed
for all purposes to have been taken by the Committee. Any such Subcommittee
shall be required to report to the Committee on any actions that the
Subcommittee has taken.
(e) The Committee may designate the Secretary of the Company
or any other Company employee to assist the Committee in the administration of
the Plan, and may grant authority to such persons to execute agreements
evidencing Incentive Awards made under the Plan or other documents entered into
under the Plan on behalf of the Committee or the Company.
5. Stock.
The Jacobs Common Stock to be issued, transferred and/or sold under the
Plan shall be made available from authorized and unissued Jacobs Common Stock or
from the Company's treasury shares. The total number of shares of Jacobs Common
Stock that may be issued or transferred under the Plan pursuant to Incentive
Awards hereunder may not exceed 2,000,000 shares (subject to adjustment as
described below). Such number of shares shall be subject to adjustment in
accordance with this Section 5 and Section 12. Jacobs Common Stock subject to
any unexercised portion of an Option that expires or is canceled, surrendered or
terminated for any reason may again be subject to Incentive Awards granted under
the Plan.
6. Eligibility.
Incentive Awards may be granted or awarded to employees of the Company
and its Related Companies.
In no event may Incentive Awards be granted or awarded to any Employee
for more than one million shares in any one calendar year, subject to the
adjustment provisions of Section 12 of the Plan.
7. Grants of Options.
Each Option grant shall be evidenced by a written instrument containing
such terms and conditions, not inconsistent with the Plan, as the Committee may
approve.
4
<PAGE>
Except as otherwise specifically provided in this Plan, Options granted
pursuant to the Plan shall be subject to the following terms and conditions:
(a) Option Price. The option price of all ISOs shall be 100%
------------
of the Fair Market Value of the Jacobs Common Stock on the date of grant. The
option price of all NQSOs shall be not less than 85% of the Fair Market Value of
the Jacobs Common Stock on the date of grant.
(b) Duration of Options. The duration of Options shall be
-------------------
determined by the Committee, but in no event shall the duration exceed ten (10)
years from the date of its grant.
(c) Other Terms and Conditions. Options may contain such other
--------------------------
provisions, not inconsistent with the provisions of the Plan, as the Committee
shall determine appropriate from time to time, including, without limitation,
provisions for accelerated vesting of Options, and provisions relating to the
termination of Options for conduct deemed detrimental to the Company and/or its
Related Companies; provided, however, that, except in the event of a Change in
Control or the Disability or death of the employee, no Option shall be
exercisable in whole or in part for a period of twelve (12) months from the date
on which the Option is granted. The grant of an Option to any employee shall not
affect in any way the right of the Company and any Related Company to terminate
the employment of the holder thereof.
(d) ISOs. The Committee, with respect to each grant of an
----
Option to an employee, shall determine whether such Option shall be an ISO, and,
upon determining that an Option shall be an ISO, shall designate it as such in
the written instrument evidencing such Option. Each written instrument
evidencing an ISO shall contain all terms and conditions required by Section 422
of the Internal Revenue Code of 1986, as amended. If the written instrument
evidencing an Option does not contain a designation that it is an ISO, it shall
not be an ISO.
The Employee to whom an ISO is granted must be eligible to receive an
ISO pursuant to Section 422 of the Internal Revenue Code of 1986, as amended.
The aggregate Fair Market Value (determined in each instance on the
date on which an ISO is granted) of the Jacobs Common Stock with respect to
which ISOs are first exercisable by any employee in any calendar year shall not
exceed $100,000 for such employee. If any Majority-Owned Related Company of the
Company shall adopt a stock option plan under which options constituting ISOs
may be granted, the fair market value of the stock on which any such ISOs are
granted and the times at which such ISOs will first become exercisable shall be
taken into account in determining the maximum amount of ISOs that may be granted
to the employee under this Plan in any calendar year.
5
<PAGE>
8. Exercises of Options.
(a) An exercisable Option may be exercised in whole or in
part. However, an Option may not be exercised in a manner that will result in
fractional shares of Jacobs Common Stock being issued.
(b) All, or any portion, of an exercisable Option shall be
deemed exercised upon delivery to the representative of the Company designated
for such purpose by the Committee of all of the following: (i) notice of
exercise in such form and in such manner as the Committee may authorize; (ii)
payment of the exercise price for such Options being exercised; (iii) such
representations and documents as the Committee may, in its sole discretion, deem
necessary or advisable to effect compliance with all applicable provisions of
the Securities Act of 1933, as amended, and any other federal, state, or foreign
securities laws or regulations; and (iv) in the event that the Option is being
exercised pursuant to Section 9 of the Plan by any person other than the
Employee, proof deemed appropriate by the Committee in its sole discretion of
the right of such person to exercise the Option.
(c) The option price shall be paid in full at the time of
exercise. Payment is to be made in cash or, at the discretion of the Committee
and upon conditions established by it, by the delivery or constructive exchange
of shares of Jacobs Common Stock acceptable to the Committee owned by the
Employee for such period of time as may be established by the Committee.
(d) The Committee may make such provisions as it may deem
appropriate for the withholding or payment by the Employee of any taxes which it
determines are required in connection with an exercise of an Option, and an
Optionee's rights in any Incentive Award are subject to satisfaction of such
conditions. If permitted by the Committee, the Employee may elect to satisfy all
or any portion of such taxes by instructing the Company to withhold shares of
Jacobs Common Stock that would otherwise be issuable to the employee by reason
of the exercise.
If shares of Jacobs Common Stock are delivered or constructively
exchanged to pay the option price, or if shares of Jacobs Common Stock otherwise
issuable to the employee by reason of the exercise are withheld to satisfy tax
liabilities, the value of the shares delivered or exchanged or that are withheld
shall be computed using the Fair Market Value of the Jacobs Common Stock
delivered or exchanged, or withheld, determined as of the date of exercise.
9. Transferability of Incentive Awards.
Except as otherwise provided by the Committee:
(a) Incentive Awards granted or awarded pursuant to the Plan
shall not be transferable other than by will or by the laws of descent and
distribution.
(b) During the lifetime of an employee, an Option shall be
exercisable only by the employee personally, or by the employee's legal
representative.
6
<PAGE>
10. Effect on Options of Termination of Employment, Other Changes of Employment
or Employer Status, Death, Retirement,or a Change in Control.
Schedule A, attached hereto, establishes the effects on outstanding Options
of an Employee's termination of employment, other changes of employment or
employer status, death, Disability, Retirement, or a Change in Control, and is
hereby incorporated by reference. The Committee may approve grants of Options
containing terms and conditions different from, or in addition to, those set
forth in Schedule A.
Notwithstanding the provisions of the foregoing paragraph, no Option may
have a term of more than ten years.
In the case of leaves of absence, employees will not be deemed to have
terminated employment unless the Committee, in its sole discretion, determines
otherwise.
The Committee may, with the consent of the affected employee, modify the
terms and conditions pertaining to the effect of an employee's termination on
the expiration or exercisability of an Option subsequent to the date of grant.
11. No Rights as a Shareholder.
An employee or a transferee of an employee pursuant to Section 9 shall have
no rights as a shareholder with respect to any Jacobs Common Stock covered by an
Option or receivable upon the exercise of an Option until the employee or
transferee shall have become the holder of record of such Jacobs Common Stock,
and no adjustments shall be made for dividends in cash or other property or
other distributions or rights in respect to such Jacobs Common Stock for which
the record date is prior to the date on which the employee or transferee shall
have in fact become the holder of record of the share of Jacobs Common Stock
acquired pursuant to the Incentive Award.
12. Adjustment in the Number of Shares and in Option Price.
In the event there is any change in the shares of Jacobs Common Stock
through the declaration of stock dividends, or stock splits or through
recapitalization or merger or consolidation or combination of shares or
spin-offs or otherwise, the Committee or the Board of Directors of the Company
shall make such adjustment, if any, as it may deem appropriate in the number of
shares of Jacobs Common Stock available for Options as well as the number of
shares of Jacobs Common Stock subject to any outstanding Option and the option
price thereof. Any such adjustment may provide for the elimination of any
fractional shares that might otherwise become subject to any Option without
payment therefor.
13. Awards of Restricted Stock.
(a) An Incentive Award in the form of shares of Restricted Stock may be
awarded under this Section 13 as determined by the Committee. The shares of
7
<PAGE>
Restricted Stock so issued shall not be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of, and in the event of termination of the
Employee's employment with the Company for any reason (including death and
Disability unless the Committee in its sole discretion terminates the Forfeiture
Restrictions following the death or Disability of such Employee), the Employee
shall be obligated, for no consideration, to forfeit and surrender such shares
(to the extent then subject to the Forfeiture Restrictions) to the Company. The
restrictions against disposition and the obligation to forfeit and surrender
shares to the Company are herein referred to as "Forfeiture Restrictions", and
the shares that are then subject to the Forfeiture Restrictions are herein
sometimes referred to as "Restricted Stock." Certificates representing
Restricted Stock shall be appropriately legended to reflect the Forfeiture
Restrictions.
(b) The number of shares of Restricted Stock that may be awarded under
this Plan shall be limited to 10% of the total number of shares authorized to be
made subject to Incentive Awards under this Plan. Any shares of Restricted Stock
awarded under this Plan that are forfeited shall again be available for
reissuance as Restricted Stock.
(c) The Forfeiture Restrictions with respect to Restricted Stock
issued under this Section 13 shall lapse and be of no further force and effect
upon the expiration of the period of time fixed by the Committee upon the
issuance of such Restricted Stock.
(d) Should the Employee's employment with the Company or Related
Company be terminated for any reason upon or within thirty-six (36) months
following a Change in Control, then all remaining Forfeiture Restrictions, if
any, shall be deemed to have lapsed.
(e) In order to enforce the restrictions imposed upon shares of
Restricted Stock, the Committee may require the recipient to enter into an
escrow agreement providing that the certificates representing such shares of
Restricted Stock shall remain in the physical custody of an escrow holder until
any or all of the restrictions imposed pursuant to the Plan expire or shall have
been removed.
(f) The Committee may make such provisions as it may deem appropriate
for the withholding or payment by the Employee of any taxes which it determines
are required in connection the lapse of Forfeiture Restrictions, and an
Employee's rights in any Incentive Award are subject to satisfaction of such
conditions. If permitted by the Committee, the Employee may elect to satisfy all
or any portion of such taxes by instructing the Company to withhold shares of
Jacobs Common Stock as to which the Restrictions have lapsed.
(g) If shares of Jacobs Common Stock are withheld to satisfy tax
liabilities, the value of such shares shall be computed using the Fair Market
Value of the Jacobs Common Stock on the date of Forfeiture Restrictions lapse.
8
<PAGE>
(h) All of the foregoing restrictions, terms and other conditions
regarding shares of Restricted Stock shall be evidenced by a written instrument
executed by the Company and the Employee and containing such terms and
conditions, not inconsistent with the Plan, as the Committee shall approve.
14. Amendments, Modifications and Termination of the Plan.
(a) The Board of Directors of the Company or the Committee may
terminate the Plan at any time. From time to time, the Board of Directors or the
Committee may suspend the Plan, in whole or in part. From time to time, the
Board of Directors or the Committee may amend the Plan, in whole or in part,
including the adoption of amendments deemed necessary or desirable to qualify
the Incentive Awards under the laws (including tax laws) of various countries
and under rules and regulations promulgated by the Securities and Exchange
Commission with respect to employees who are subject to the provisions of
Section 16 of the 1934 Act, or to correct any defect or supply an omission or
reconcile any inconsistency in the Plan or in any Incentive Award granted
hereunder, or for any other purpose or to any effect permitted by applicable
laws and regulations, without the approval of the shareholders of the Company.
However, in no event may additional shares of Jacobs Common Stock be allocated
to the Plan, or may the minimum exercise price for Options be reduced, or may
any outstanding Option be repriced or replaced without shareholder approval.
Without limiting the foregoing, the Board of Directors or the Committee may make
amendments applicable or inapplicable only to employees who are subject to
Section 16 of the 1934 Act.
(b) No amendment or termination or modification of the Plan shall in
any manner affect any Incentive Award theretofore granted without the consent of
the employee, except that the Committee may amend or modify the Plan in a manner
that does affect Incentive Awards theretofore granted upon a finding by the
Committee that such amendment or modification is in the best interest of holders
of outstanding Incentive Awards affected thereby.
(c) Grants of ISOs may be made under this Plan until December
2, 2009 or such earlier date as this Plan is terminated, and grants of NQSOs and
awards of Restricted Stock may be made until all of the shares of Jacobs Common
Stock authorized for issuance hereunder (adjusted as provided in Sections 5 and
12) have been issued or until this Plan is terminated, whichever first occurs.
The Plan shall terminate when there are no longer Options outstanding under the
Plan, or when there are no longer shares of Restricted Stock outstanding that
are subject to Forfeiture Restrictions, unless earlier terminated by the Board
or by the Committee.
15. Non-U.S. Employees.
The Committee may determine, in its sole discretion, whether it is
desirable or feasible under local law, custom or practice to grant or award
Incentive Awards to Employees in countries other than the United States. In
order to facilitate any such grants or awards, the Committee may provide for
such modifications and additional
9
<PAGE>
terms and conditions ("special terms") in the grant and award agreements to
Employees who are employed outside the United States (or who are foreign
nationals temporarily within the United States) as the Committee may consider
necessary, appropriate or desirable to accommodate differences in, or otherwise
comply with, local law, policy or custom or to facilitate administration of the
Plan. The Committee may adopt or approve sub- plans, appendices or supplements
to, or amendments, restatements or alternative versions of, the Plan as it may
consider necessary, appropriate or desirable for purposes of implementing any
special terms or facilitating the grant or award of an Incentive Award, without
thereby affecting the terms of the Plan as in effect for any other purpose. The
special terms and any appendices, supplements, amendments, restatements or
alternative versions, however, shall not include any provisions that are
inconsistent with the terms of the Plan as then in effect, unless the Plan could
have been amended to eliminate such inconsistency without further approval by
the Board of Directors of the Company.
16. Governing Law.
The Plan shall be governed by and shall construed and enforced in
accordance with the laws of the State of Delaware without giving effect to its
choice of law rules.
17. Adoption of the Plan.
The Plan shall become effective upon its approval by the Board of Directors
of the Company and a majority of the shares present at a duly called meeting of
the shareholders of the Company held within twelve months of approval by the
Board. However, Incentive Awards may be granted at any time following the
approval of the Plan by the Board, but no shares may be issued pursuant to any
Incentive Awards until the Plan has been approved by the shareholders, and all
listing requirements of all securities exchanges on which the Jacobs Common
Stock is listed have been satisfied.
10
<PAGE>
SCHEDULE A
to the
JACOBS ENGINEERING GROUP INC.
1999 Stock Incentive Plan
<TABLE>
<CAPTION>
<S> <C> <C>
Event Impact on Vesting Impact on Exercise Period
Employment terminates due to Unvested Options are Option expiration date provided in the
Retirement forfeited grant agreement continues to apply
Employment terminates due to All Options become Option expiration date provided in the
Disability or death immediately vested grant agreement continues to apply
Employment terminates upon, or All Options become Option expiration date provided in the
within 36 months following, a immediately vested grant agreement continues to apply
Change in Control
Employment terminates for Unvested Options are Expires on the earlier to occur of
reasons other than a Change in forfeited (1) the Option expiration date provided
Control, Disability, Retirement, or in the grant agreement, or (2) three
death (for purposes of this months from the date of termination
section, the receipt of severance
pay or similar compensation by
the Optionee does not extend his
or her termination date)
Optionee is an employee of a Unvested Options are Expires on the earlier to occur of
Related Company, and the forfeited (1) the Option expiration date provided
Company's investment in the in the grant agreement, or (2) three
Related Company falls below months from the date of termination
20% (this constitutes a
termination of employment
under the Plan)
Employee becomes an employee Unvested Options are Expires on the earlier to occur of
of an entity in which the forfeited (1) the Option expiration date
Company's ownership interest is provided in the grant agreement,
less than 20% (this constitutes a or (2) three months from the date
termination of employment under of termination
the Plan)
Employment transferred to a Vesting continues after Option expiration date provided in
Related Company transfer the grant agreement, continues to
apply
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C>
Event Impact on Vesting Impact on Exercise Period
Death after termination of Not applicable Right of executor or administrator
employment but before Option of estate (or other transferee
has expired permitted by Section 9)
terminates on the earlier to occur
of (1) the Option expiration date
provided in the grant agreement,
or (2) the Option expiration date
that applied immediately prior to
the death of the Optionee
</TABLE>
12