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Compensation Committee Report |
The Compensation Committee has reviewed and discussed the CD&A above with our management and, based on this review and discussion, has recommended to the Board that this CD&A be included in this proxy statement and incorporated by reference into the 2022 Form 10-K.
Submitted by the Compensation Committee of the Board of Directors.
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Mark A. Emkes, Chair Vicki L. Avril-Groves Daniel J. Gunsett John W. McNamara Roel Vestjens |
Greif - Proxy Statement 43
EXECUTIVE COMPENSATION TABLES
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Summary Compensation Table |
The following table sets forth the compensation for the fiscal years ended October 31, 2022, 2021, and 2020 for our principal executive officers, principal financial officer and three other most highly compensated executive officers, our NEOs.
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Name and Principal Position | Year |
Salary ($)(1) | Bonus ($)(2) |
Stock Awards ($)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) |
Ole G. Rosgaard President and Chief Executive Officer | 2022 | 826,923 | | — | | 2,224,859 | | — | | 1,437,638 | | 903 | | 134,742 | | 4,625,065 |
2021 | 602,123 | | — | | 178,204 | | — | | 1,190,999 | | — | | 97,822 | | 2,069,148 |
2020 | 550,000 | | — | | 190,989 | | — | | 499,388 | | — | | 18,968 | | 1,259,345 |
Peter G. Watson Executive Chairman of the Board and Former President and Chief Executive Officer | 2022 | 897,506 | | — | | 11,587,974 | | — | | 1,707,613 | | 0 | 14,508 | | 14,207,601 |
2021 | 1,084,231 | | — | | 882,736 | — | | 3,472,833 | | 2,644,444 | | 14,145 | | 8,098,389 |
2020 | 1,060,000 | | — | | 1,037,783 | | — | | 2,116,727 | | 1,293,936 | | 14,018 | | 5,522,464 |
Lawrence A. Hilsheimer Executive Vice President, Chief Financial Officer | 2022 | 779,451 | | — | | 4,273,103 | | — | | 1,333,796 | | 18,871 | | 431,912 | | 6,837,133 |
2021 | 750,377 | | — | | 364,156 | | — | | 1,741,981 | | 33,623 | | 385,214 | | 3,275,351 |
2020 | 731,209 | | — | | 430,499 | | — | | 949,846 | | 9,015 | | 611,672 | | 2,732,241 |
Gary R. Martz Executive Vice President, General Counsel and Secretary | 2022 | 650,944 | | — | | 2,919,795 | | — | | 938,016 | | 0 | 13,890 | | 4,522,645 |
2021 | 626,663 | | — | | 246,148 | | — | | 1,216,686 | | 1,389,001 | | 14,145 | | 3,492,643 |
2020 | 610,655 | | — | | 287,609 | | — | | 646,556 | | 777,343 | | 14,018 | | 2,336,181 |
Timothy L. Bergwall Senior Vice President and Group President, Paper Packaging & Services and Soterra LLC | 2022 | 563,431 | | — | | 1,840,515 | | — | | 761,165 | | 802 | 74,284 | | 3,240,197 |
2021 | — | | — | | — | | — | | — | | — | | — | | — | |
2020 | — | | — | | — | | — | | — | | — | | — | | — | |
Bala V. Sathyanarayanan Executive Vice President, Chief Human Resource Officer
| 2022 | 451,807 | | 25,000 | | 1,348,410 | | — | | 528,985 | | 520 | | 66,091 | | 2,420,813 |
2021 | — | | — | | — | | — | | — | | — | | — | | — | |
2020 | — | | — | | — | | — | | — | | — | | — | | — | |
(1) The amounts of base salary for fiscal 2020, 2021 and 2022 reflect actual amounts paid to the respective NEO for each fiscal year ended October 31. As discussed in “Compensation Discussion and Analysis - Elements of Our Compensation Program - Base Salary” above, we implement base salary increases on a calendar year rather than a fiscal year basis.
(2) Mr. Sathyanarayanan's discretionary cash bonus amount was related to additional responsibilities assisting with the CEO transition process.
(3) Amount for fiscal 2022 represents the value of the RSUs and PSUs awarded under the LTIP. Amounts for fiscal 2020 and 2021 represent the value of the restricted share portion awarded under the 2006 LTIP. See “Compensation Discussion and Analysis - Long-Term Incentive Plan” above, based upon the dollar amount recognized for financial statement reporting purposes during fiscal 2022, 2021, and 2020, respectively, computed in accordance with ASC 718. For a discussion of the relevant ASC 718 valuation assumptions, see Note 7 in the Consolidated Financial Statements included in Item 8 of the 2022 Form 10-K. For fiscal 2022, 2021 and 2020, LTIP award payout amounts in this table were determined by multiplying the closing price of our Class A Common Stock as of December 14, 2022 ($68.99), December 13, 2021 ($59.60), December 31, 2020 ($46.88) respectively, by the number of shares granted or to be granted to each NEO.
(4) Amounts for fiscal 2022 represent the cash awards earned under the STIP. For fiscal 2021 and 2020 the amounts represent the cash awards earned under the STIP and under the 2006 LTIP. Starting in fiscal 2022, awards under the LTIP do not have a cash component. See “Compensation Discussion and Analysis - Elements of Our Compensation Program - Short-Term Incentive Plan” and “ - Long-Term Incentive Plan.”
(5) Amounts represent the change in the pension value for each NEO, including amounts accruing under our pension plans, the SERP, the DC SERP, the NQSP and the NQDCP. During fiscal 2022, the Company accrued above market interest with respect to the DC SERP, a nonqualified defined contribution plan, for Mr. Hilsheimer in the amount of $18,871 which was equal to the difference between the interest accrued at 2.93% and that which would have accrued at 2.09% (120% of the long-term applicable federal rate for October 2021). During fiscal 2022, the Company accrued above market interest with respect to the NQSP, a nonqualified defined contribution plan, for Mr. Rosgaard in the amount of $903, for Mr. Bergwall in the amount of $749 and for Mr. Sathyanarayanan in the amount of $482 which is equal to the difference between the interest accrued at 2.93% and that which would have accrued at 2.09% (120% of the long-term applicable federal rate for October 2021). None of the NEOs who participate in the NQDCP receive preferential or above market earnings. See " Executive Compensation Tables - Pension Benefits and Nonqualified Retirement and Deferred Compensation" for a description of all these plans.
(6) For NEOs based in the U.S., amounts represent our contributions to the 401(k) plan, subject to Internal Revenue Service and ERISA limitations, premiums paid for life insurance and health insurance premiums, the value of the annual wellness physicals, certain credits payable under the DC SERP and NQSP and any other perquisites paid by us to or on behalf of such NEO during fiscal years 2022, 2021 and 2020, as set forth in the table below.
Greif - Proxy Statement 44
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Name | Year | 401(k) Match and Contribution ($)† | Company paid Life Insurance and other Premiums ($)†† | Value of Wellness Physical Exams ($) | DC SERP ($)††† | NQSP ($)†††† | Perquisites and Other Personal Benefits ($)††††† | Total All Other Compensation ($) |
Ole G. Rosgaard
| 2022 | 15,035 | | 1,758 | | — | | — | | 117,740 | | 209 | | 134,742 |
2021 | 16,996 | | 1,758 | | 3,600 | | — | | 75,381 | | 87 | | 97,822 | |
2020 | 17,100 | | 1,868 | | — | | — | | — | | — | | 18,968 | |
Peter G. Watson
| 2022 | 9,150 | | 1,758 | | 3,600 | | — | | — | | — | | 14,508 |
2021 | 8,700 | | 1,758 | | 3,600 | | — | | — | | 87 | | 14,145 | |
2020 | 8,550 | | 1,868 | | 3,600 | | — | | — | | — | | 14,018 | |
Lawrence A. Hilsheimer | 2022 | 17,306 | | 1,758 | | — | | 412,654 | | — | | 194 | 431,912 |
2021 | 17,400 | | 1,758 | | 790 | | 360,514 | | — | | 4,752 | | 385,214 | |
2020 | 17,100 | | 1,868 | | 732 | | 240,260 | | — | | 351,712 | | 611,672 | |
Gary R. Martz
| 2022 | 8,325 | | 1,758 | | 3,600 | | — | | — | | 207 | 13,890 |
2021 | 8,700 | | 1,758 | | 3,600 | | — | | — | | 87 | | 14,145 |
2020 | 8,550 | | 1,868 | | 3,600 | | — | | — | | — | | 14,018 |
Timothy L. Bergwall | 2022 | 8,672 | | 1,758 | | — | | — | | 63,660 | | 194 | 74,284 |
2021 | — | | — | | — | | — | | — | | — | | — | |
2020 | — | | — | | — | | — | | — | | — | | — | |
Bala V. Sathyanarayanan
| 2022 | 18,300 | | 1,758 | | 3,600 | | — | | 42,239 | | 194 | | 66,091 | |
2021 | — | | — | | — | | — | | — | | — | | — | |
2020 | — | | — | | — | | — | | — | | — | | — | |
† This column includes an additional retirement contribution for Messrs. Rosgaard, Hilsheimer and Sathyanarayanan who are U.S. employees not eligible to participate in the U.S. pension plan. This additional employer contribution is equal to three percent of their eligible compensation subject to IRS limitations.
†† This column includes Company paid life insurance, accidental death and disability, and long-term disability.
††† This column includes pay credits and non-above market interest credits accrued with respect to Mr. Hilsheimer's benefits under the DC SERP as of October 31, 2022 in the amount of $412,654. See “Executive Compensation Tables - Nonqualified Retirement and Deferred Compensation - Supplemental Executive Retirement Plan” for a description of the DC SERP.
†††† This column includes pay credits and non-above market interest credits accrued with respect to Messrs. Rosgaard's, Bergwall's, and Sathyanarayanan's benefits under the NQSP as of October, 31, 2022 in the amount of $117,740, $63,660, and $42,239, respectively. See “Executive Compensation Tables - Nonqualified Retirement and Deferred Compensation - Supplemental Executive Retirement Plan” for a description of the NQSP.
††††† The amount for Messrs. Rosgaard, Hilsheimer, Martz, Bergwall and Sathyanarayanan in fiscal 2022 represents the amount of a holiday gift.
Greif - Proxy Statement 45
Grants of Plan-based Awards in Fiscal 2022
The following table summarizes grants of non-equity and stock-based compensation awards made during fiscal 2022 to the NEOs.
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Name | Grant Date (1) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | Estimated Future Payouts Under Equity Incentive Plan Awards (3) | All Other Stock Awards: Number of Shares of Stocks (#)(4) | Grant Date Fair Value of Stock and Option Awards ($)(5) |
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) |
Ole G. Rosgaard (6) | | | | | | | | | |
STIP | 12/16/2021 | 402,110 | | 804,219 | | 1,608,438 | | | | | | |
LTIP - RSUs | 12/16/2021 | | | | | | | 15,332 | 928,199 |
LTIP - PSUs | 12/16/2021 | | | | 11,886 | 36,019 | 72,038 | | 2,164,742 |
Peter G. Watson (7) | | | | | | | | | |
STIP | 12/16/2021 | 477,622 | | 955,244 | | 1,910,488 | | | | | | |
LTIP - RSUs | 12/16/2021 | | | | | | | 4,132 | 250,151 |
LTIP - PSUs | 12/16/2021 | | | | 2,059 | 6,240 | 12,480 | | 375,024 |
Lawrence A. Hilsheimer | | | | | | | | | |
STIP | 12/16/2021 | 373,065 | | 746,129 | | 1,492,258 | | | | | | |
LTIP - RSUs | 12/16/2021 | | | | | | | 10,941 | 662,368 |
LTIP - PSUs | 12/16/2021 | | | | 5,453 | 16,525 | 33,050 | | 993,153 |
Gary R. Martz | | | | | | | | | |
STIP | 12/16/2021 | 262,365 | | 524,729 | | 1,049,458 | | | | | |
LTIP - RSUs | 12/16/2021 | | | | | | | 7,350 | 444,969 |
LTIP - PSUs | 12/16/2021 | | | | 3,663 | 11,100 | 22,200 | | 667,110 |
Timothy L. Bergwall | | | | | | | | | |
STIP | 12/16/2021 | 212,899 | 425,798 | 851,596 | | | | | |
LTIP - RSUs | 12/16/2021 | | | | | | | 5,502 | 333,091 |
LTIP - PSUs | 12/16/2021 | | | | 2,742 | 8,310 | 16,620 | | 499,431 |
Bala V. Sathyanarayanan | | | | | | | | | |
STIP | 12/16/2021 | 147,958 | | 295,916 | | 591,832 | | | | | | |
LTIP - RSUs | 12/16/2021 | | | | | | | 4,274 | 258,748 |
LTIP - PSUs | 12/16/2021 | | | | 2,152 | 6,455 | 12,910 | | 387,946 |
(1) The date the RSUs and PSUs were granted to participants, including our NEOs.
(2) In fiscal 2022, each NEO was selected to participate in the STIP. The amounts represent the threshold (50%), target (100%) and maximum (200%) cash award opportunity under the STIP for the performance period beginning November 1, 2021 and ending October 31, 2022. See “Compensation Discussion and Analysis - Elements of Our Compensation Program - Short-Term Incentive Plan.” The actual payments earned by each NEO in fiscal 2022 and paid in fiscal 2023 are shown in the Summary Compensation Table in the Non-Equity Incentive Plan Compensation column.
(3) In fiscal 2022, each NEO was selected to participate in the LTIP. The amounts represent the threshold (33%), target (100%) and maximum (200%) PSU award opportunity under the LTIP for the three-year performance period beginning November 1, 2021 and ending October 31, 2024 The PSUs granted may vest depending on performance results achieved during the performance period. See “Compensation Discussion and Analysis - Elements of Our Compensation Program - Long-Term Incentive Plan.”
(4) In fiscal 2022, each NEO was selected to participate in the LTIP. The amounts represent the RSU awards granted to each NEO under the LTIP for the performance period beginning November 1, 2021 and ending October 31, 2024. The RSUs granted are time-based and are scheduled to vest on January 16, 2025 subject to certain forfeiture events. See “Compensation Discussion and Analysis - Elements of Our Compensation Program - Long-Term Incentive Plan.”
(5) The grant date fair market value of the RSUs and PSUs granted in fiscal 2022 were calculated in accordance with FASB ASC Topic 718 (excluding the effect of forfeitures) as of December 16, 2021. For RSUs, the market or payout value has been determined by multiplying the number of RSUs awarded by $60.54, the weighted average fair market value of the RSUs. For PSUs, the market or payout value has been determined by multiplying the number of PSUs awarded at target by $60.10, the weighted average fair market value of the PSUs.
(6) Mr. Rosgaard served as Chief Operating Officer from November 1, 2021 through January 31, 2022. Effective February 1, 2022, Mr. Rosgaard became CEO, and his 2022 STIP target award opportunity increased from $520,000 to $900,000, which was 100% of his base salary and his 2022-2024 LTIP target award opportunity increased from $1,170,000 to $3,375,000, which was 375% of his CEO base salary. The STIP and LTIP award opportunities shown in this table reflect Mr. Rosgaard's prorated award opportunities based upon the time he served as Chief Operating Officer and CEO.
(7) Mr. Watson served as CEO of the Company from November 1, 2021 through January 31, 2022. Effective February 1, 2022, Mr. Watson became Executive Chairman of the Board, and his 2022 STIP target award opportunity changed from $1,362,500 to $818,000, which was 100% of his base salary and his 2022-2024 LTIP target award opportunity changed from $4,240,000 to $1,636,000, which was 200% of his Executive Chairman of the Board base salary. The STIP and LTIP awards opportunities shown in this table reflect Mr. Watson's prorated award opportunities based upon the time he served as CEO and Executive Chairman of the Board.
Greif - Proxy Statement 46
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Equity Compensation Plan Information |
The following table summarizes the number of securities remaining available for future issuance under each approved equity compensation plan as of October 31, 2022.
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Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options | Weighted Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans |
Equity Compensation Plans Approved by Security Holders (1) | — | — | |
2001 Plan (2) | — | — | 3,880,000 |
2005 Outside Directors Equity Award Plan (3) | — | — | 45,486 |
2006 LTIP (4) | — | — | 464,880 |
LTIP (5) | — | — | 5,000,000 |
Equity Compensation Plans Not Approved by Security Holders | — | — | — |
Total: | — | — | — |
(1) Information as of October 31, 2022. See “Compensation Discussion and Analysis - Elements of Our Compensation Program - Long-Term Incentive Plan” for a description of the LTIP and “Director Compensation for Fiscal 2022 - Director Compensation Arrangements” for a description of the 2005 Outside Director Equity Award Plan.
(2) The 2001 Management Equity Incentive and Compensation Plan (the "2001 Plan") provides for the award of incentive and nonqualified stock options and restricted and performance shares of Class A Common Stock to key employees. The 2001 Plan contains a formula for calculating the number of shares available for future issuance. This formula provides that the maximum number of shares which may be issued each calendar year under the 2001 Plan is equal to the sum of (a) 5.0% of the total outstanding shares as of the last day of our immediately preceding fiscal year, plus (b) any shares related to awards under the 2001 Plan that, in whole or in part, expire or are unexercised, forfeited, or otherwise not issued to a participant or returned to the 2001 Plan, plus (c) any unused portion of the shares available under (a), above, for the immediately preceding two fiscal years as a result of not being made subject to a grant or award in such preceding two fiscal years. The approximate number of shares that may be issued under the 2001 Plan in fiscal 2022 is 3,880,000 shares. The maximum number of shares that may be issued under the 2001 Plan with respect to incentive stock options is 5,000,000 shares, with 1,072,311 shares remaining available for future issuance under this limitation. Stock options have not been issued under the 2001 Plan since 2006.
(3) Shares of our Class A Common Stock may be issued under the 2005 Outside Directors Equity Award Plan. See "Proposal 4: Approval of Amended and Restated Outside Directors Equity Award Plan" for a description of a stockholder proposal to add 200,000 shares for issuance under this plan.
(4) Shares of our Class A and/or B Common Stock may be awarded under the 2006 LTIP. At the 2020 annual meeting, stockholders approved adding 750,000 shares to the 2006 LTIP. On December 16, 2021 and on January 18, 2022, 46,518 and 5,075 shares were issued, respectively, for the 2019-2021 performance period. No additional shares will be issued under the 2006 LTIP as this plan has been retired.
(5) Shares of our Class A and/or B Common Stock may be awarded under the LTIP. To date, no shares have been issued under the LTIP. On or after January 17, 2023, 122,337 RSUs and 403,038 PSUs will be converted to restricted shares and issued to participants for the 2020-2022 LTIP performance period. These amounts do not include cash equivalent RSUs and PSUs issued to participants in select countries where impediments exist related to the issuance of stock. Stock units are subject to forfeiture upon termination of employment and for failure to achieve performance targets.
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Outstanding Equity Awards at Fiscal Year-End 2022 |
The following table summarizes the outstanding stock awards held by each NEO as of October 31, 2022. There are no outstanding stock options.
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Name | Stock Awards |
Numbers of Shares or Units of Stock that have not Vested (#) (1) | Market Value of Shares or Units of Stock that have not Vested ($) (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#) (3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units or Other Rights that have not Vested ($) (4) |
Ole G. Rosgaard | 31,352 | 2,075,816 | | 61,886 | | 4,097,472 | |
Peter G. Watson | 52,430 | 3,471,390 | | 127,110 | | 8,415,953 | |
Lawrence A. Hilsheimer | 39,295 | 2,601,722 | | 62,241 | | 4,120,977 | |
Gary R. Martz | 26,724 | 1,769,396 | | 42,338 | | 2,803,199 | |
Timothy L. Bergwall | 18,997 | 1,257,791 | | 30,107 | | 1,993,384 | |
Bala V. Sathyanarayanan | 13,585 | 899,463 | | 21,479 | | 1,422,125 | |
(1) Represents the total number of RSUs granted under the LTIP for the 2020-2022, 2021-2023 and 2022-2024 performance periods. The 2020-2022 RSUs are scheduled to vest on January 17, 2023, 2021-2023 RSUs are scheduled to vest on January 16, 2024 and 2022-2024 RSUs are scheduled to vest on January 17, 2025.
(2) Represents the market or payout value of the RSUs determined by multiplying the closing price of our shares of Class A Common Stock on October 31, 2022 ($66.21) by the number of RSUs granted.
Greif - Proxy Statement 47
(3) Represents the total number of PSUs granted at the target performance level under the LTIP for the 2020-2022, 2021-2023 and 2022-2024 performance periods. The PSU vesting date will be specified by the Compensation Committee following the end applicable performance period. The vesting date for the 2020-2022 PSUs will be no sooner than January 14, 2023 and no later than March 15, 2023 and the vesting date for the 2021-2023 PSUs will be no sooner than January 15, 2024 and no later than March 15, 2024.
(4) Represents the market or payout value of the PSUs determined by multiplying the closing price of our shares of Class A Common Stock on October 31, 2022 ($66.21) by the number of PSUs granted at target performance level.
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Option Exercises and Stock Vested in Fiscal 2022 |
No equity-based compensation awards were exercised or vested during fiscal 2022.
Pension Plans
We have a tax-qualified defined benefit plan that is intended to meet the requirements of Section 401(a) of the Code for our U.S. employees hired prior to November 1, 2007, who have long and continuous service before retirement. Benefits payable under this pension plan are funded entirely through Company contributions to a trust fund. This pension plan provides for a lump sum payment or a monthly benefit for the participant’s lifetime upon reaching the normal retirement age under this pension plan, which is 65. The monthly benefit is calculated by multiplying the participant’s annual average compensation (calculated using the five highest complete years of the last ten years of compensation or the final sixty months of compensation, whichever is higher, capped at Code limits) by 35% and by the participant’s years of service divided by the years the participant could have worked until his or her normal retirement date divided by 12. “Compensation” for purposes of the pension plan includes base salary and payments under the STIP. Participants are 100% vested in this pension plan once they have been credited with five years of service with the Company. Messrs. Watson, Martz and Bergwall are the only NEOs eligible to participate in this pension plan, and each are fully vested in their benefits under this pension plan. Once a participant is fully vested, the participant will have earned a nonforfeitable right to a benefit under this pension plan. Benefits may commence at the later of age 65 or five years vested in this pension plan. This pension plan offers early retirement benefits at age 55 on a reduced basis with a required 15 years of service. Messrs. Watson, Martz and Bergwall are eligible for early retirement benefits under this pension plan.
Supplemental Executive Retirement Plan
Our SERP provides benefits for a select group of executive officers, including our NEOs, who participate in the above described pension plan. The plan is considered to be an “unfunded” arrangement as amounts generally will not be set aside or held by the Company in a trust, escrow, or similar account. The benefit from the pension plan and the SERP is equal to a target percentage (ranging from 40% to 50% depending on job classification) times the executive officer’s highest three-year average compensation of the last five years worked by the executive officer and reduced for less than 20 years of continuous service and for receiving benefits prior to the executive officer’s normal retirement age. “Compensation” for purposes of the SERP includes base salary and payments under the STIP, and benefits are payable quarterly under the SERP for 15 years. “Normal retirement age” under the SERP is 65. Generally, vesting under the SERP requires 10 years of service or the attainment of the normal retirement age. Messrs. Watson and Martz are the only NEOs eligible to participate in the SERP, and both are fully vested in their benefits under the SERP.
Pension Benefits in Fiscal 2022
The table below sets forth the years of service and present value of the accumulated benefit for each of the eligible NEOs under the pension plan and SERP described above as of October 31, 2022. Mr. Bergwall is not eligible to participate in our SERP and Messrs. Rosgaard, Hilsheimer and Sathyanarayanan are not eligible to participate in our pension plan or SERP.
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Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) (1)(2) | Payments During Last FY ($) |
Peter G. Watson | U.S. Pension Plan | 23 | 876,081 | | — | |
SERP | 11 | 8,131,064 | | — | |
Gary R. Martz | U.S. Pension Plan | 21 | 773,529 | | — | |
SERP | 21 | 6,012,714 | | — | |
Timothy L. Bergwall | U.S. Pension Plan | 21 | 531,361 | | — | |
(1) Assumptions for calculations:
(A) Age 65 commencement for Messrs. Watson, Martz and Bergwall;
(B) No decrements for death nor termination prior to age 65;
(C) The mortality assumption for the U.S. pension plan uses Pri-2012 projected forward using the MP-2021 projected scale as of October 31 for both 2022 and 2021, and MP-2020 projected scale as of October 31, 2020.
(2) See Note 9 in the Notes to Consolidated Financial Statements included in Item 8 of the 2022 Form 10-K for a discussion of the valuation method and material assumptions applied in quantifying the present value of the accumulated benefit.
Greif - Proxy Statement 48
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Nonqualified Retirement and Deferred Compensation |
Supplemental Executive Retirement Plan
We have a defined contribution supplement executive retirement plan ("DC SERP") for certain executive officers who are not eligible to participate in the pension plan. We accrue an amount equal to a specified percentage of the executive officer's base salary and annual short-term incentive plan bonus payments. This account is also credited annually with interest based on the discount rate used under the U.S. pension plan. Vesting under the DC SERP requires 10 years of service or the attainment of age 65. Vested executive officers are entitled to the payment of a future benefit upon retirement equal to the accrued amounts and credited interest, which is payable in equal installments quarterly over 15 years.
The table below sets forth certain information concerning Mr. Hilsheimer's benefits under the DC SERP as of October 31, 2022. Mr. Hilsheimer is the only NEO currently participating in the DC SERP. He is fully vested in his accumulated benefit under the DC SERP since he has attained the age of 65.
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Name | Plan Name | Number of Years Credited Service (#) | Value of Pay Credits and Above Market Interest in Last FY ($)(1) | Present Value of Accumulated Benefit ($) (2)(3) | Payments During Last FY ($) |
Lawrence A. Hilsheimer | DC SERP | 8 | 391,735 | | 2,433,582 | | — | |
(1) The amount in this column represents pay credits and above market interest credits accrued during fiscal 2022 under the DC SERP. This amount is also included in Mr. Hilsheimer's fiscal 2022 compensation in the Summary Compensation Table.
(2) The amount in this column represents the total value of pay credits, above market interest and non-above market interest accrued under the DC SERP as of October 31, 2022. This amount is not included in Mr. Hilsheimer's fiscal 2022 compensation in the Summary Compensation Table.
(3) The mortality assumption for the DC SERP uses Pri-2012 projected forward using the MP-2021 projected scale as of October 31, 2022 and a discount rate for the DC SERP of 2.93% as of October 31, 2022.
Nonqualified Supplemental Deferred Compensation Plan
We have a nonqualified supplemental deferred compensation plan ("NQSP") for certain executive officers who do not participate in the SERP or DC SERP described above. This plan credits eligible officers who are employed on December 31 of each calendar year with a contribution equal to the maximum employer contribution rate under the Company's 401(k) Plan, multiplied by the excess, if any, of the sum of the officer's base salary and annual short-term incentive plan bonus payments, over the maximum compensation limit under Code Section 401(a)(17) for the applicable year. This plan also permits discretionary Company contributions, which may vary by eligible executive officer. The Company does not presently intend to make any discretionary contribution. The plan is compliant with the regulations promulgated by the IRS under Code Section 409A. Vesting under the NQSP requires 10 years of service or the attainment of age 65. Vested executive officers are entitled to the payment of the vested deferred balance based on a schedule selected by the executive officer either a lump sum or five annual installments.
The table below sets forth certain information concerning Messrs. Rosgaard's, Bergwall's and Sathyanarayanan's benefits under the NQSP as of October 31, 2022. Messrs. Rosgaard, Bergwall and Sathyanarayanan are the only NEOs currently participating in the NQSP. Only Mr. Bergwall is fully vested in his accumulated benefit under the NQSP.
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Name | Plan Name | Number of Years Credited Service (#)(1) | Value of Pay Credits and Above Market Interest in Last FY ($)(2) | Present Value of Accumulated Benefit ($) (3)(4) | Payments During Last FY ($) |
Ole G. Rosgaard | NQSP | 7 | 116,535 | 221,439 | — | |
Timothy L. Bergwall | NQSP | 20 | 62,678 | 149,046 | — | |
Bala V. Sathyanarayanan | NQSP | 4 | 41,602 | 97,322 | — | |
(1) This number represents the years of credited service under the NQSP which starts from the participant's date of hire. To receive a service credit under the NQSP, the participant must be employed on December 31 of each calendar year.
(2) The amounts in this column represent pay credits and above market interest credits accrued during fiscal 2022 under the NQSP. These amounts are also included in Messrs. Rosgaard's, Bergwall's and Sathyanarayanan's fiscal 2022 compensation in the Summary Compensation Table.
(3) The amount in this column represents the total value of pay credits, above market interest and non-above market interest accrued under the NQSP as of October 31, 2022. This amount is not included in Messrs. Rosgaard's, Bergwall's and Sathyanarayanan's fiscal 2022 compensation in the Summary Compensation Table.
(4) The mortality assumption for the NQSP uses Pri-2012 projected forward using the MP-2021 projected scale as of October 31, 2022 and a discount rate for the NQSP of 2.93% as of October 31, 2022.
Nonqualified Deferred Compensation Plan
We have a NQDCP for our executive officers, including our NEOs, which provides a vehicle for our executive officers to elect to defer their compensation. This plan is intended to meet the requirements of Section 409A of the Code. A participant’s base salary, STIP and LTIP cash payments are all eligible for deferral under this plan, and participants may defer up to 100% of their compensation. We do not
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currently match any compensation deferred by participants or provide any other discretionary contributions under this plan. A participant’s deferred compensation (along with company-match or contributions, if any) is deposited into an account with a rabbi trust to protect and segregate such funds. Deferred funds are invested in a similar range of investment options as are available in our 401(k) plan. The funds in a participant’s account are distributed to a participant upon his or her retirement in a lump sum or in equal annual installments over a five- or ten-year period, as elected by the participant, or in a lump sum upon a participant’s termination of employment, death or disability or a change in control of the Company. Subject to the terms of the plan, participants may also receive a distribution of funds for an “unforeseeable emergency.” A participant is fully vested in his or her own deferral contributions, but the right to Company-matching contributions, if any, is subject to vesting as provided by this plan.
Nonqualified Deferred Compensation Benefits in Fiscal 2022
The table below sets forth certain information concerning Messrs. Rosgaard's and Bergwall's benefits under the NQDCP as of October 31, 2022. Messrs. Rosgaard and Bergwall were the only NEOs that elected to defer compensation under the NQDCP in fiscal 2022. Both Messrs. Rosgaard and Bergwall are fully vested in their aggregate balance under the NQDCP.
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Name | Plan Name | Executive Contributions in Last FY ($)(1)(2) | Company Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at FYE ($) |
Ole G. Rosgaard | NQDCP | 15,100 | | — | | 1,189 | | — | | 216,927 |
Timothy L. Bergwall | NQDCP | 41,695 | — | | (18,433) | | — | | 171,657 |
(1)The amount shown for Mr. Rosgaard includes LTIP cash award deferred during fiscal 2022. The amount shown for Mr. Bergwall includes deferred compensation on base salary and LTIP during fiscal 2022.
(2)The amount shown is also included in Messrs. Rosgaard's and Bergwall's fiscal 2022 compensation in the Summary Compensation Table.
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Potential Payments Upon Termination or Change in Control |
We have no plans, agreements, contracts or other arrangements providing any of our NEOs with severance or change-in-control benefits.
We do not have employment agreements with any of our NEOs. All NEOs, as well as all other participants in the LTIP, have agreed to certain post-employment covenants prohibiting them from becoming involved in any enterprise which competes with any business engaged in by us or our subsidiaries.
Pursuant to Item 402(u) of Regulation S-K, for fiscal 2022, the ratio of the total annual compensation of our CEO to the total annual compensation of the median employee was 88 to 1.
To identify the median employee, we first determined our global employee population consisting of full-time, part-time, seasonal and temporary employees as of October 31, 2022. We excluded all employees in Algeria (41), Chile (67), Colombia (79), Costa Rica (52), Egypt (40), Guatemala (12), Malaysia (70), Mexico (112), Kenya (23), Turkey (61), Ukraine (2) and Vietnam (40) under the de minimus exception, as the aggregate number of employees in those countries (599) represents less than 5% of our total global employee population of 12,300. After determining our global employee population, we then used the annual base salary reflected in our internal payroll system, converted into U.S. dollars, as our consistently applied compensation measure.
Once the median employee was identified, we calculated the median employees' compensation using the same methodology used to calculate the total compensation of our CEO as set forth in the Summary Compensation Table. The average median employee's annual total compensation was $52,730. The annual total compensation of our CEO was $4,625,065 as set forth in the Summary Compensation Table of this proxy statement.
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AUDIT COMMITTEE MATTERS
Certain Relationships and Related Party Transactions
We have a written policy for the approval of a transaction between the Company and one of its directors, executive officers, greater than 5% Class B stockholders, an entity owned or controlled by such persons, or an immediate family member of such persons, which is generally referred to as a related party transaction. This policy provides that the Audit Committee must review, evaluate and approve or disapprove all related party transactions involving an amount equal to or greater than $5,000. This policy also requires that all related party transactions be disclosed in our applicable filings as required by the Securities Act of 1933 and the Securities Exchange Act of 1934 and related rules. In addition, the Nominating Committee, which advises the Board of Directors on corporate governance matters, independently reviews and assesses corporate governance issues related to contemplated related party transactions.
During fiscal 2022, we retained the law firm of Baker & Hostetler LLP to perform certain legal services on our behalf. Frank C. Miller, a partner of that firm, has been nominated by the Board as a director nominee at the Annual Meeting. We anticipate retaining Baker & Hostetler LLP in the 2023 fiscal year. The fees for legal services rendered in fiscal 2022 were less than $400,000. The Board has affirmatively determined that Mr. Miller meets the categorical standards of independence adopted by the Board and is an independent director as defined in the NYSE listing standards. See “Corporate Governance-Director Independence.”
In addition, during fiscal 2022, we donated $25,000 to OhioHealth, which employs Karen Morrison. The Board has affirmatively determined that this donation will not impact the independence of Ms. Morrison, and that after the Annual Meeting, when Mr. Watson is no longer a member of the Board or an employee of the Company, Ms. Morrison will meet the categorical standards of independence adopted by the Board and will be an independent director as defined in the NYSE listing standards. See “Corporate Governance-Director Independence.”
Other Information
The proxy card enclosed with this proxy statement is solicited from Class B stockholders by and on behalf of the Board of Directors of the Company. A person giving the proxy has the power to revoke it.
The expense for soliciting proxies for this Annual Meeting is to be paid by us. Solicitations of proxies also may be made by personal calls upon or telephone communications with stockholders, or their representatives, by not more than five officers or regular employees of the Company who will receive no compensation for doing so other than their regular salaries.
Management knows of no matters to be presented at the Annual Meeting other than the above proposals. However, if any other matters properly come before the Annual Meeting, it is the intention of the persons named in the accompanying form of proxy to vote the proxy in accordance with their judgment on such matters.
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| | /s/ Gary R. Martz |
| | Gary R. Martz |
| | Corporate Secretary |
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January 13, 2023 | | |
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Exhibit A
GREIF, INC.
AMENDED AND RESTATED
OUTSIDE DIRECTORS EQUITY AWARD PLAN
§1. Purpose.
The purpose of the Amended and Restated Outside Directors Equity Award Plan, formerly known as the 2005 Outside Directors Equity Award Plan (the “Plan”), of Greif, Inc., a Delaware corporation (the “Company”), is to assist the Company in attracting and retaining qualified members of its Board of Directors. The Plan provides for equity ownership opportunities to Outside Directors (as defined in §3 of the Plan) in order to encourage and enable them to participate in the Company’s future prosperity and growth and to better match their interests with those of stockholders. The Plan seeks to achieve its purpose by granting to Outside Directors equity-based awards in the form of: (a) stock options to purchase shares of Class A Common Stock, without par value, of the Company (“Shares”), which options are not intended to qualify as incentive stock options (the “Stock Options”) under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”); (b) Shares which may be subject to restrictions on transfer, as further described in §7 of the Plan (the “Restricted Shares”); and (c) stock appreciation rights (“SARs”) subject to §8 of the Plan. The Stock Options, Restricted Shares and SARs are collectively referred to as the “Awards.”
§2. Administration.
The Plan shall be administered by the Compensation Committee (the “Committee”) of the Company’s Board of Directors, which shall have the power and authority to grant Awards to Outside Directors. The Committee shall have the authority to: (a) select Outside Directors as recipients of Awards (such recipients, “Participants”); (b) grant Stock Options, Restricted Shares, SARs, or any combination thereof; (c) determine the number and type of Awards to be granted; (d) determine the terms and conditions, not inconsistent with the terms hereof, of any Award; (e) adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, but subject to §15 of the Plan; (f) interpret the terms and provisions of the Plan and any Award granted and any agreements relating thereto; and (g) take any other actions the Committee considers appropriate in connection with, and otherwise supervise the administration of, the Plan. All decisions made by the Committee pursuant to the provisions hereof shall be made in the Committee’s sole discretion and shall be final and binding on all persons.
§3. Eligibility.
The persons eligible to receive Awards under the Plan shall include only individuals who are directors of the Company and who are not employees of the Company or any subsidiary or affiliate of the Company (each such individual, an “Outside Director”), including members of the Committee who are Outside Directors.
§4. Shares Subject to Plan.
The total number of Shares reserved and available for issuance pursuant to Awards hereunder shall be Six Hundred Thousand (600,000) Shares (“Available Shares”). The Available Shares may consist, in whole or in part, of authorized but unissued Shares, treasury Shares, or previously issued Shares re-acquired by the Company, including Shares purchased on the open market.
§5. Grant of Awards.
Stock Options, Restricted Shares, and SARs may be granted alone or in addition to other Awards granted under the Plan. Any Awards granted under the Plan shall be in such form as the Committee may from time to time approve, consistent with the Plan, and the provisions of Awards need not be the same with respect to each Participant. Awards may be made to any Participant or all Participants, either in conjunction with the Company’s annual meeting of stockholders or at any other time, as determined by the Committee.
Each Award granted under the Plan shall be authorized by the Committee and shall be evidenced by a written Stock Option Award Agreement, Restricted Share Award Agreement, or SAR Unit Award Agreement, as the case may be (collectively, “Award Agreements”), in the form approved by the Committee from time to time, which shall be dated as of the date approved by the Committee in connection with the grant, signed by an officer of the Company authorized by the Committee, and signed by the Participant, and which shall describe the Award and state that the Award is subject to all the terms and provisions of the Plan and such other terms and provisions, not inconsistent with the Plan, as the Committee may approve. The date on which the Committee approves the granting of an Award shall be deemed to be the date on which the Award is granted for all purposes, unless the Committee otherwise specifies in its approval. The granting of an Award under the Plan, however, shall be effective only if and when a written Award Agreement is duly executed and delivered by or on behalf of the Company and the Participant. See §10 of the Plan with respect to the determination of the fair market value of Shares as of a given date.
§6. Stock Options.
Stock Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions not inconsistent with the terms of the Plan as the Committee deems appropriate.
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(a) Exercise Price.
The exercise or purchase price of each Share issuable upon the exercise of a Stock Option shall be the fair market value of one Share at the time such Stock Option is granted, as determined under §10 of the Plan. The exercise price per Share of any Stock Option granted under the Plan shall not be changed or modified after the time such Stock Option is granted unless such change or modification is made with the prior approval of the holders of a majority of the shares of Class B Common Stock of the Company. Notwithstanding the foregoing, in no event will the exercise price as changed or modified be less than the fair market value of a Share at the time such Stock Option is granted, as determined under §10 of the Plan.
(b) Exercise of Stock Options.
Stock Options shall be fully vested and exercisable on the date granted.
(c) Term.
Subject to §6(f) of the Plan, each Stock Option shall be exercisable for ten years from the date of grant.
(d) Method of Exercise.
A Stock Option may be exercised, in whole or in part, by giving written notice to the Secretary of the Company stating the number of Shares (which must be a whole number) to be purchased. Payment of the full purchase price for such Shares shall be made by (i) certified or bank cashier’s check or other form of payment acceptable to the Company, (ii) delivery of unrestricted Shares having a fair market value on the date of such delivery equal to the total exercise price, (iii) surrender of Shares subject to the Stock Option which have a fair market value equal to the total exercise price at the time of exercise, or (iv) a combination of the preceding methods. Upon receipt of payment of the full purchase price for such Shares, and subject to compliance with all other terms and conditions of the Plan and the Stock Option Award Agreement relating to such Stock Option, the Company shall issue, as soon as reasonably practicable after receipt of such payment, such Shares to the person entitled to receive such Shares, or such person’s designated representative. Such Shares may be issued in the form of a certificate, by book entry, or otherwise, in the Company’s sole discretion.
(e) Transferability of Stock Options.
Except as provided in this paragraph, Stock Options shall not be transferable, and any attempted transfer (other than as provided in this paragraph) shall be null and void. Except for Stock Options transferred as provided in this paragraph, all Stock Options shall be exercisable during a Participant’s lifetime only by the Participant or the Participant’s legal representative. Without limiting the generality of the foregoing, (i) Stock Options may be transferred by will or the laws of descent and distribution and, in the case of such a transfer, shall be exercisable only by the transferee or such transferee’s legal representative, and (ii) the Committee may, in its sole discretion and in the manner established by the Committee, provide for the irrevocable transfer, without payment of consideration, of any Stock Options by a Participant to such Participant’s parent(s), spouse, domestic or life partner, children, grandchildren, nieces, nephews or to the trustee of a trust for the principal benefit of one or more such persons or to a partnership whose only partners are one or more such persons, and, in the case of such transfer, such Stock Option shall be exercisable only by the transferee or such transferee’s legal representative.
(f) Termination of Option.
Except as otherwise provided herein, if a Participant ceases to be a director of the Company for any reason, then all Stock Options or any unexercised portion of such Stock Options which otherwise are exercisable by such Participant shall terminate unless such Stock Options are exercised within six months after the date such Participant ceases to be a director (but in no event after expiration of the original term of any such Stock Option); provided, that if such Participant ceases to be a director by reason of such Participant’s death, then the six-month period shall instead be a one-year period.
(g) No rights as a Stockholder.
No Participant or the Participant’s transferee shall have any rights of a stockholder in the Company with respect to the Shares covered by a Stock Option unless and until such Shares have been duly issued to him under §6(d) of the Plan.
(h) No Stock Option Repurchases Without Shareholder Approval.
The Committee shall not purchase Stock Options previously issued pursuant to the Plan from Participants for a share price greater than the current fair market value per share unless such purchase is made with the prior approval of the holders of a majority of the shares of Class B Common Stock of the Company.
§7. Restricted Shares.
Restricted Shares awarded under the Plan shall be subject to the following terms and conditions and such additional terms and conditions not inconsistent with the terms of the Plan as the Committee deems appropriate:
(a) Price.
The purchase price for Restricted Shares shall be any price set by the Committee and may be zero. Payment in full of the purchase price for the Restricted Shares, if any, shall be made by (i) certified or bank cashier’s check or other form of
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payment acceptable to the Company, (ii) delivery of unrestricted Shares having a fair market value on the date of such delivery equal to the total purchase price, or (iii) a combination of the preceding methods.
(b) Vesting; No Risk of Forfeiture.
Restricted Shares shall be fully vested on the date granted and shall not be subject to any risk of forfeiture thereafter.
(c) Restrictions on Transfer.
At the time of the Restricted Share Award, the Committee may determine to restrict the Participant’s ability to sell, pledge, encumber, assign, or otherwise transfer the Restricted Shares (the “Transfer Restrictions”) during the period of time determined by the Committee, in its discretion, and set forth in the applicable Restricted Share Award Agreement (the “Restriction Period”). Subject to §9 of the Plan, the Restriction Period may be zero days. Awards of Restricted Shares must be accepted by the Participant within 30 days (or such other period as the Committee may specify at grant) after the grant date by executing the Restricted Share Award Agreement and paying the price, if any, required under §7(a) of the Plan. The prospective Participant shall not have any rights with respect to the grant of Restricted Shares unless and until the prospective Participant has executed the Restricted Share Award Agreement, delivered a fully executed copy thereof to the Secretary of the Company, and otherwise complied with the applicable terms and conditions of the Award.
(d) Stock Issuances.
Upon execution and delivery of the Restricted Share Award Agreement as described above and receipt of payment of the full purchase price, if any, for the Restricted Shares subject to such Restricted Share Award Agreement, the Company shall, as soon as reasonably practicable thereafter, issue the Restricted Shares to the Participant. Restricted Shares may be issued, whenever issued, in the form of a certificate, by book entry, or otherwise, in the Company’s sole discretion, and shall bear an appropriate legend with respect to the Transfer Restrictions, if any. On and after the issuance of Restricted Shares to a Participant, such Participant shall have, with respect to such Restricted Shares, all of the rights of a stockholder of the Company, including the right to vote such Restricted Shares and the right to receive any dividends or other distributions with respect to such Restricted Shares, but subject, however, to the Transfer Restrictions, if any, placed on such Restricted Shares pursuant to the Plan and as specified by the Committee in the Restricted Share Award Agreement.
(e) Expiration of Restriction Period.
Upon the expiration of the Restriction Period, if any, unrestricted Shares shall be issued and delivered to the Participant.
§8. Stock Appreciation Rights.
SARs granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions not inconsistent with the terms of the Plan as the Committee deems appropriate:
(a) Designation of SAR Units; Right to Payment.
SARs granted under the Plan shall be designated in “SAR Units.” Each SAR Unit shall confer upon the Participant the right to receive, upon exercise thereof, the excess of (i) the fair market value of one Share at the time of exercise, as determined under §10 of the Plan, over (ii) the grant price of the SAR Unit. The grant price of an SAR Unit shall be determined by the Committee at the time of grant of the SAR Unit, which grant price shall be the fair market value of one Share at the time the SAR Unit is granted, as determined under §10 of the Plan. The grant price of an SAR Unit granted under the Plan shall not be changed or modified after the time such SAR Unit is granted unless such change or modification is made with the prior approval of the holders of a majority of the shares of Class B Common Stock of the Company. Notwithstanding the foregoing, in no event will the grant price of an SAR Unit as changed or modified be less than the fair market value of one Share at the time the SAR Unit is granted, as determined under §10 of the Plan.
(b) Exercise of SAR Units.
SAR Units shall be fully vested and exercisable on the date granted.
(c) Term.
Subject to §8(f) of the Plan, each SAR Unit shall be exercisable for ten years from the date of grant.
(d) Method of Exercise.
A SAR Unit may be exercised, in whole or in part, by giving written notice to the Secretary of the Company stating the number of SAR Units being exercised. Within 30 days after the Company’s receipt of such notice, the Company shall pay to the Participant or the Participant’s transferee, as the case may be, by Company check an amount of money equal to the cash value of the SAR Units being exercised, determined in accordance with §8(a) of the Plan.
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(e) Transferability of SAR Units.
Except as provided in this paragraph, SAR Units shall not be transferable, and any attempted transfer (other than as provided in this paragraph) shall be null and void. Except for SAR Units transferred as provided in this paragraph, all SAR Units shall be exercisable during a Participant’s lifetime only by the Participant or the Participant’s legal representative. Without limiting the generality of the foregoing, (i) SAR Units may be transferred by will or the laws of descent and distribution and, in the case of such a transfer, shall be exercisable only by the transferee or such transferee’s legal representative, and (ii) the Committee may, in its sole discretion and in the manner established by the Committee, provide for the irrevocable transfer, without payment of consideration, of any SAR Units by a Participant to such Participant’s parent(s), spouse, domestic or life partner, children, grandchildren, nieces, nephews or to the trustee of a trust for the principal benefit of one or more such persons or to a partnership whose only partners are one or more such persons, and, in the case of such transfer, such SAR Unit shall be exercisable only by the transferee or such transferee’s legal representative.
(f) Termination of SARs.
Except as otherwise provided herein, if a Participant ceases to be a director of the Company for any reason, then all SAR Units or any unexercised portion of such SAR Units which otherwise are exercisable by such Participant shall terminate unless such SAR Units are exercised within six months after the date such Participant ceases to be a director (but in no event after expiration of the original term of any such SAR Unit); provided, that if such Participant ceases to be a director by reason of such Participant’s death, then the six-month period shall instead be a one-year period.
(g) No Rights as a Stockholder.
A SAR Unit shall not confer upon the Participant or the Participant’s transferee any rights of a stockholder of the Company. Without limiting the generality of the foregoing, the holder of any SAR Units shall have no right to vote or to receive any dividends or other distributions with respect to such SAR Units.
§9. Section 16 Compliance.
Unless a Participant could otherwise dispose of equity securities, including derivative securities, acquired under the Plan without incurring liability under Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), equity securities acquired under the Plan must be held for a period of six months following the date of such acquisition, provided that this condition shall be satisfied with respect to a derivative security if at least six months elapse from the date of acquisition of the derivative security to the date of disposition of the derivative security (other than upon exercise or conversion) or its underlying equity security.
§10. Determination of Fair Market Value of Shares.
For purposes of the Plan, the fair market value of the Shares shall mean, as of any given date: (a) the last reported sale price on the New York Stock Exchange on the most recent previous trading day (or if there was no trading in the Shares on that day, then on the next preceding trading day on which there was trading in the Shares); (b) the last reported sale price on the Nasdaq National Market System on the most recent previous trading day (or if there was no trading in the Shares on that day, then on the next preceding trading day on which there was trading in the Shares); (c) the mean between the high and low bid and ask prices, as reported by the National Association of Securities Dealers, Inc., on the most recent previous trading day; or (d) the last reported sale price on any other stock exchange on which the Shares are listed on the most recent previous trading day (or if there was no trading in the Shares on that day, then on the next preceding trading day on which there was trading in the Shares), whichever is applicable; provided that if none of the foregoing is applicable, then the fair market value of the Shares shall be the value determined in good faith by the Committee, in its sole discretion.
§11. Withholding Tax.
The Company, at its option, shall have the right to require the Participant or any other person receiving Shares or Restricted Shares to pay the Company the amount of any taxes which the Company is required to withhold with respect to such Shares or Restricted Shares or, in lieu of such payment, to retain or sell without notice a number of such Shares sufficient to cover the amount required to be so withheld. The Company, at its option, shall have the right to deduct from all payments made with respect to the exercise of SAR Units or dividends paid with respect to Shares or Restricted Shares the amount of any taxes which the Company is required to withhold with respect to such dividend payments. The Company, at its option, shall also have the right to require a Participant to pay to the Company the amount of any taxes which the Company is required to withhold with respect to the receipt by the Participant of Shares pursuant to the exercise of a Stock Option, or, in lieu of such payment, to retain, or sell without notice, a number of Shares sufficient to cover the amount required to be so withheld. The obligations of the Company under the Plan shall be conditional on such payment or other arrangements acceptable to the Company.
§12. Securities Law Restrictions.
No right under the Plan shall be exercisable, no Share shall be delivered under the Plan, and no Award shall be made under the Plan except in compliance with all applicable federal and state securities laws and regulations. The Company shall not be required to deliver any Shares or other securities under the Plan prior to such registration or other qualification of such Shares or other securities under any state or federal law, rule, or regulation as the Committee shall determine to be necessary or advisable.
The Committee may require each person acquiring Shares under the Plan (a) to represent and warrant and agree with the Company, in writing, that such person is acquiring the Shares without a view to the distribution thereof, and (b) to make such additional
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representations, warranties, and agreements with respect to the investment intent of such person or persons as the Committee may reasonably request. Any certificates for such Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer.
All Shares or other securities delivered under the Plan shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon or market in which the Shares are then listed or traded, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any certificates evidencing such Shares to make appropriate reference to such restrictions.
§13. Changes in Capital Structure.
In the event the Company changes its outstanding Shares by reason of stock splits, stock dividends, or any other increase or reduction of the number of outstanding Shares without receiving consideration in the form of money, services, or property deemed appropriate by the Committee, in its discretion, then the aggregate number of Shares reserved for issuance under the Plan, the number and exercise price of Shares subject to outstanding Stock Options, the purchase price for Restricted Shares, the number of Shares granted by a Restricted Share Award, and the number and grant price of outstanding SAR Units shall be proportionately adjusted or substituted, with the objective that the Participant’s proportionate interest in the Company shall reflect equitably the effects of such changes as applicable to the unexercised portion of any then-outstanding Awards, all as determined by the Committee in its sole discretion.
In the event of any other recapitalization, corporate separation or division, or any merger, consolidation, or other reorganization of the Company, the Committee shall make such adjustment, if any, as it may deem appropriate to accurately reflect the number and kind of shares deliverable, and the exercise prices payable, upon subsequent exercise of any then-outstanding Awards, as determined by the Committee in its sole discretion.
The Committee’s determination of the adjustments appropriate to be made under this §13 shall be conclusive upon all Participants under the Plan.
§14. Acceleration of Rights.
The Committee shall have the authority, in its discretion, to accelerate the time at which any Award shall be exercisable whenever it may determine that such action is appropriate by reason of changes in applicable tax or other laws or other changes in circumstances occurring after the grant of the Award.
§15. Interpretation, Amendment, or Termination of the Plan.
The interpretation by the Committee of any provision of the Plan or of any Award Agreement executed pursuant to the grant of an Award under the Plan shall be final and conclusive upon all Participants or transferees under the Plan. The Board, without further action on the part of the stockholders of the Company, may from time to time alter, amend, or suspend the Plan or may at any time terminate the Plan, provided that: (a) no such action shall be take that would impair the rights of a Participant or transferee under any Award theretofore granted, without the Participant’s or transferee’s consent, except for amendments made to cause the Plan to comply with applicable law, applicable stock exchange rules or accounting rules; and (b) except for the adjustments provided for in §13 of the Plan, no amendment may be made by Board action without stockholder approval if the amendment would require stockholder approval under applicable law or applicable stock exchange rules.
The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively; provided, no such amendment shall impair the rights of an optionee, Participant or transferee under any Award theretofore granted, without the Participant’s or transferee’s consent, except for amendments made to cause the Plan to comply with applicable law, stock exchange rules or accounting rules.
§16. Unfunded Status of the Plan.
The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments or deliveries of Shares not yet made by the Company to a Participant or transferee nothing contained herein shall give any such Participant or transferee any rights that are greater than those of a general creditor of the Company. The Committee may authorize the creation of trusts or other arrangements to meet obligations created under the Plan to deliver Shares or payments hereunder consistent with the foregoing.
§17. Protection of Board and Committee.
No member of the Board of Directors or the Committee shall have any liability for any determination or other action made or taken in good faith with respect to the Plan or any Award granted under the Plan.
§18. Government Regulations.
Notwithstanding any provision of the Plan or any Award Agreement executed pursuant to the Plan, the Company’s obligations under the Plan and such Award Agreement shall be subject to all applicable laws, rules, and regulations and to such approvals as may be required by any governmental or regulatory agencies, including without limitation, any stock exchange or market on which the Company’s Shares may then be listed or traded.
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§19. Governing Law.
The Plan shall be construed under and governed by the laws of the State of Delaware.
§20. Genders and Numbers.
When permitted by the context, each pronoun used in the Plan shall include the same pronoun in other genders and numbers.
§21. Captions.
The captions of the various sections of the Plan are not part of the context of the Plan, but are only labels to assist in locating those sections, and shall be ignored in construing the Plan.
§22. Term of Plan.
The Plan became effective on February 28, 2005, the date the Plan was approved by stockholders of the Company (the “Effective Date”). No Awards shall be granted pursuant to the Plan unless and until approval of the Plan by the stockholders of the Company. No Awards shall be granted pursuant to the Plan on or after February 28, 2035 (the “Expiration Date”), but Awards granted prior to the Expiration Date may extend beyond the Expiration Date.
§23. Savings Clause.
In case any one or more of the provisions of this Plan or any Award shall be held invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the invalid, illegal, or unenforceable provision shall be deemed null and void; however, to the extent permissible by law, any provision which could be deemed null and void shall first be construed, interpreted, or revised retroactively to permit this Plan or such Award, as applicable, to be construed so as to foster the intent of this Plan.
The Committee may modify the terms of any Award under the Plan granted to a Participant who, at the time of grant or during the term of the Award, is resident or employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order to accommodate differences in local law, regulation, tax policy or custom, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant’s residence or employment abroad, will be comparable to the value of such Award to a Participant who is resident or employed in the United States. Moreover, the Committee may approve such supplements to, or amendments, restatements or alternative versions of this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan as in effect for any other purpose, provided that no such supplements, amendments, restatements or alternative versions shall include any provisions that are inconsistent with the terms of the Plan, as then in effect, unless this Plan could have been amended to eliminate such inconsistency without further approval of stockholders of the Company.
§24. Miscellaneous Provisions.
No person shall have any claim or right to be granted an Award under this Plan and the grant of an Award shall not confer upon any Participant any right to be retained as a director of the Company, nor shall it interfere in any way with the right of the Company to terminate the service as a director of any of the Plan’s Participants at any time.
The Committee may establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts or benefits payable in the event of the Participant’s death are to be paid.
§25. Indemnification.
No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under the Plan. Each person who is or shall have been a member of the Committee or of the Board of Directors shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit or proceeding to which he may be a party or in which he may be involved by reason of any action taken or failure to act under or in connection with this Plan or any Award granted under this Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her, except a judgment based upon a finding of bad faith, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person may be entitled under the Company’s Certificate of Incorporation or By-Laws, contained in any indemnification agreements, as a matter of law, or otherwise, or any power that the Company may have to indemnify him or her or hold him or her harmless.
§26. Internal Revenue Code (“Code”) Section 409A.
The Plan is intended to comply with the requirements of Code Section 409A, to the extent applicable, and shall be interpreted accordingly. Notwithstanding the foregoing, the Company makes no representations or covenants that any compensation paid or awarded under the Plan will comply with Section 409A.
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Exhibit B
GREIF, INC.
COLLEAGUE STOCK PURCHASE PLAN
I.PURPOSE
The Greif, Inc. Colleague Stock Purchase Plan (the “Plan”) is intended to provide eligible employees of Greif, Inc. (the “Company”) and its participating Corporate Affiliates with the opportunity to acquire a proprietary interest in the Company’s Class A common stock through participation in a plan designed to qualify as an employee stock purchase plan under Code Section 423 with respect to United States taxpayers (although the Company makes no undertaking or representation to achieve or maintain such qualification). In addition, the Plan also authorizes the grant of purchase rights or rights similar to purchase rights which are not intended to qualify under Code Section 423 hereunder and pursuant to Addenda adopted by the Plan Administrator designed to achieve desired tax, securities, employment, labor, data privacy, law or other objectives for eligible employees of the Company or one or more of the Company’s Corporate Affiliates or Designated Affiliates in particular locations outside of the United States.
II.DEFINITIONS
For purposes of administration of the Plan, the following terms shall have the meanings indicated:
Addenda means the rules, procedures or sub-plans, if any, adopted by the Plan Administrator as a part of the Sub-Plan, pursuant to which purchase rights that do not satisfy the requirements for “employee stock purchase plans” that are set forth under Code Section 423 may be granted to eligible employees in particular locations outside the United States pursuant to Section V of the Sub-Plan.
Board means the Board of Directors of the Company.
Code means the United States Internal Revenue Code of 1986, as amended and currently in effect, or any successor body of federal tax law. Reference to a specific section of the Code will include such section, any valid regulation or other official applicable guidance promulgated under such section.
Company means Greif, Inc., a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting common shares of Greif, Inc. which shall by appropriate action adopt the Plan.
Corporate Affiliate means any company which is either the parent corporation or a subsidiary corporation of the Company (as determined in accordance with Code Section 424), including any parent or subsidiary corporation which becomes such after the Effective Date.
Designated Affiliate means any corporation, partnership, joint venture or other business entity in which the Company owns, directly or indirectly, shares or a capital or profit interest and with respect to which the Company possesses the power to direct or cause the direction of the management and policies, which shall be designated, in accordance with Section III, as participating in the Plan and the Sub-Plan pursuant to an Addendum that is not intended to qualify under Code Section 423.
Effective Date means July 1, 2023.
Eligible Earnings means (i) the regular base or basic earnings paid to a Participant by one or more Greif Entities, (ii) any salary deferral contributions made on behalf of the Participant to a Code Section 401(k) Plan, Code Section 125 Plan or any nonqualified deferred compensation plan, (iii) overtime payments, plus (iv) for Employees for whom a substantial amount of their pay mix is variable, such bonuses, commissions, other forms of variable or incentive-based pay. There shall be excluded from the calculation of Eligible Earnings: (I) all distributions from profit-sharing, nonqualified deferred compensation, welfare benefits and other employee benefit plans; and (II) all contributions (other than salary deferral contributions made to a Code Section 401(k) Plan, Code Section 125 Plan, or any nonqualified deferred compensation plan) made by the Company or any other Greif Entity for the Participant’s benefit under any employee benefit or welfare plan now or hereafter established. The Plan Administrator, in its discretion, may, on a uniform and non-discriminatory basis, establish a different definition of Eligible Earnings for a subsequent purchase period.
Employee means any person employed by the Company or any other Participating Company within the meaning of Code Section 3401 and United States Treasury Regulation Section 31.3401(c)-1. A Participant shall be considered to be an Employee for so long as such Participant remains in the active employ of the Company or any other Participating Company under the Plan.
Greif Entity means the Company or any person or entity controlling, controlled by or under common control with the Company or any person or entity with which joint enterprises are carried on or in which the Company has an interest.
Participant means any Employee of a Participating Company who is actively participating in the Plan.
Participating Company means the Company and such Corporate Affiliate(s) as may be designated from time to time in accordance with Section III.
Share means a Class A common share of the Company, as adjusted from time to time in accordance with Section VI(b) below.
Sub-Plan means the Greif Colleague Stock Purchase Plan for Foreign Subsidiaries, as amended from time to time.
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III.ADMINISTRATION
The Plan shall be administered by the Compensation Committee of the Board (the “Plan Administrator”); provided, that some or all of the duties of the Plan Administrator may be delegated or redelegated (as the case may be) by the Plan Administrator to a standing committee of the Company. The Plan Administrator shall have full authority to administer the Plan, including authority to interpret and construe any provision of the Plan, to adopt such rules and regulations for administering and enforcing the Plan as it may deem necessary in order to comply with the requirements of Code Section 423, where relevant, and to adopt Addenda designed to achieve desired tax, securities, employment, labor, data privacy, law or other objectives for eligible employees of the Company or one or more of the Company’s Corporate Affiliates or Designated Affiliates in particular countries outside the United States. Decisions of the Plan Administrator (or its designee) shall be final and binding on all parties who have an interest in or under the Plan. Notwithstanding the foregoing, only the Board shall have the authority to extend the Plan to Employees of a Participating Company in the United States, or to a “Foreign Subsidiary” (as such term is defined in the Sub-Plan) after the Effective Date of the Plan.
IV.PURCHASE PERIODS
(a) Shares shall be offered for purchase under the Plan through a series of successive purchase periods until such time as (i) the maximum number of Shares available for issuance under the Plan and the Sub-Plan shall have been purchased or (ii) the Plan shall have been sooner terminated in accordance with Section IX.
(b) Under no circumstances shall any purchase rights granted under the Plan be exercised, nor shall any Shares be issued or delivered hereunder, until such time as (i) the Plan shall have been approved by the Company’s shareholders and (ii) the Company shall have complied with all applicable requirements of the Securities Act of 1933 (as amended), all applicable listing requirements of any securities exchange on which the Shares are listed and all other applicable requirements established by law or regulation. Notwithstanding the preceding sentence, the Company disclaims having any affirmative obligation to register or otherwise list the Company’s securities on any securities exchange maintained outside the United States.
(c) The Plan shall be implemented in a series of consecutive purchase periods, each of such initially to be of six (6) months in duration (or such other period not to exceed twenty-four (24) months per purchase period) as later may be determined by the Plan Administrator prior to the commencement date of the purchase period. Purchase periods may commence at any time as determined by the Plan Administrator, including at quarterly or semi-annual intervals over the term of the Plan. The Plan Administrator will announce the date each purchase period will commence and the duration of that purchase period in advance of the first day of such purchase period.
(d) The Participant shall be granted a separate purchase right for each purchase period in which he/she participates. The purchase right shall be granted on the first day of the purchase period and shall be automatically exercised on the last U.S. business day of that purchase period.
(e) An Employee may participate in only one purchase period at a time. Accordingly, an Employee who wishes to join a new purchase period must withdraw from the current purchase period in which he/she is participating prior to the last day of the current purchase period in which the Employee participates and must also enroll in the new purchase period prior to the start date of that new purchase period at such time and in such manner as the Plan Administrator, in its discretion, requires. The Plan Administrator, in its discretion, may require an Employee who withdraws from one purchase period to wait one full purchase period before re-enrolling in a new purchase period under the Plan.
V.ELIGIBILITY AND PARTICIPATION
(a) Each individual who is an Employee of a Participating Company on the commencement date of any purchase period under the Plan, shall be eligible to participate in the Plan for that purchase period; provided, however, that the Participant shall not be eligible to be granted an option and defer compensation under the Plan until he or she has been an Employee of a Participating Company for at least three (3) months during or prior to such period. The Plan Administrator, in its discretion, from time to time, may exclude Employees whose customary employment is twenty (20) hours per week or less or for not more than five (5) months per calendar year (or, in either case, such lesser period of time as may be determined by the Plan Administrator in its discretion). Any exclusion shall be applied with respect to a purchase right in a manner complying with United States Treasury Regulation Section 1.423-2. Notwithstanding the previous sentence, the exclusions may be applied with respect to a purchase right under any Addenda to the Sub-Plan without regard to the limitations of United States Treasury Regulation Section 1.423-2(e)(1) by reason of the application of United States Treasury Regulation Section 1.423-2(e)(3) to Employees who are also citizens of the United States or resident aliens.
(b) In order to participate in the Plan for a particular purchase period, the Employee must complete the enrollment forms prescribed by the Plan Administrator (including a purchase agreement and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designee) no later than the day designated by the Plan Administrator in its discretion.
(c) The payroll deduction authorized by a Participant for purposes of acquiring Shares under the Plan may be any whole percentage of the Eligible Earnings of the Participant during the period the purchase right remains outstanding, up to a maximum equal to ten (10) percent of the Participant’s Eligible Earnings per purchase right. However, the total payroll deduction so permitted to be authorized by any Participant under the Plan for a calendar year shall be limited to the sum of legal currency equivalent of U.S. $25,000, in value of purchased shares (as determined on the day(s) of actual purchase). The deduction rate so authorized shall continue in effect for the entire period the purchase right remains outstanding, unless the Participant shall, prior to the end of the purchase period for which the purchase right will remain in effect, reduce such rate by filing the appropriate form with the Plan Administrator (or its designee) at least ten (10) business days before such change is to become effective. The reduced rate shall
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become effective as soon as practicable following the filing of such form and the lapse of such ten (10) business days. Payroll deductions, however, will cease upon the termination of the Participant’s purchase right in accordance with Sections VII(d) or (e) below.
VI.SHARES SUBJECT TO PLAN
(a) The Shares purchasable by Participants under the Plan shall be authorized but unissued Shares, treasury Shares, or Shares purchased by the Company in accordance with the Plan in the open market. The total number of Shares which may be issued or delivered to a Participant under the Plan and the Sub-Plan attached hereto as Annex A including any Addenda, in the aggregate shall not exceed 1,500,000 Shares (subject to adjustment under subparagraph (b) below).
(b) In the event any change is made to the Shares purchasable under the Plan by reason of (I) any merger, consolidation or reorganization or (II) any share dividend, share split, recapitalization, combination of shares or other change affecting the outstanding Shares as a class without the Company’s receipt of consideration, then unless such change occurs in connection with a Section VII(k) transaction, appropriate adjustments shall be made by the Plan Administrator to (i) the class and maximum number of Shares issuable in the aggregate over the term of the Plan and the Sub-Plan, (ii) the class and maximum number of Shares purchasable per Participant on any one purchase date, and (iii) the class and number of Shares and the price per Share subject to each purchase right at the time outstanding under the Plan.
VII.PURCHASE RIGHTS
An Employee who participates in the Plan for a particular purchase period shall have the right to purchase Shares upon the terms and conditions set forth below and shall execute a purchase agreement embodying such terms and conditions and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable together with any other related administrative forms.
(a) Purchase Price. The U.S. Dollar purchase price per Share shall be at least equal to the lesser of (i) 85% of the fair market value per Share on the date on which the purchase right is granted or (ii) 85% of the fair market value per Share on the date the purchase right is exercised. For purposes of determining such fair market value (and for all other valuation purposes under the Plan), the fair market value per Share on any relevant date shall be the closing selling price per Share on such date, as officially quoted on the New York Stock Exchange – Composite Transactions or the principal exchange on which the Shares are at the time traded. If there are no sales of Shares on such day, then the closing selling price for the Shares on the next preceding day for which there does exist such quotation shall be determinative of fair market value. In the absence of such markets for the fair market value per Share, the fair market value shall be determined by the Plan Administrator (or its designee) in good faith (which determination shall, to the extent applicable, be made in a manner that complies with Code Section 409A), and such determination shall be conclusive and binding for all purposes.
(b) Number of Purchasable Shares. The number of Shares purchasable by a Participant upon the exercise of an outstanding purchase right shall be the number of whole Shares obtained by dividing the amount collected from the Participant through payroll deductions during each purchase period the purchase right remains outstanding by the purchase price in effect for that purchase period. Any remaining amount in the Participant’s account shall be automatically used to purchase fractional shares at such time.
Under no circumstances shall purchase rights be granted under the Plan to any Employee if such Employee would, immediately after the grant, own (within the meaning of Code Section 424(d)), or hold outstanding options or other rights to purchase, shares possessing 5% or more of the total combined voting power or value of all classes of shares of the Company or any of its Corporate Affiliates.
In addition, the accrual limitations of Section VIII shall apply to all purchase rights.
(c) Payment. Payment for Shares purchased under the Plan shall be effected by means of the Participant’s authorized payroll deductions. Such deductions shall begin on the first pay day coincident with or immediately following the commencement date of the relevant purchase period and, unless terminated earlier pursuant to Sections VII(d) or (e) below, shall terminate with the pay day ending with or immediately prior to the last day of the purchase period. The amounts so collected shall be credited to the book account maintained by the Company on the Participant’s behalf under the Plan, but no interest shall be paid on the balance from time to time outstanding in such book account. The amounts collected from a Participant may be commingled with the general assets of the Company and may be used for general corporate purposes.
(d) Withdrawal from Purchase Period.
(i) A Participant may withdraw from a purchase period by filing the prescribed notification form with the Plan Administrator (or its designee) on or prior to the date required by the Plan Administrator in its discretion. No further payroll deductions shall be collected from the Participant with respect to that purchase period, and the Participant shall have the following election with respect to any payroll deductions for the purchase period collected prior to the withdrawal date: (A) have the Company refund, in the currency originally collected, the payroll deductions which the Participant made under the Plan during that purchase period or (B) have such payroll deductions held for the purchase of Shares at the end of such purchase period. If no such election is made, then such payroll deductions shall automatically be refunded at the end of such purchase period, in the currency originally collected.
(ii) The Participant’s withdrawal from a particular purchase period shall be irrevocable and shall also require the Participant to re-enroll in the Plan (by making a timely filing of a new purchase agreement and payroll deduction authorization) if the Participant wishes to resume participation in a subsequent purchase period.
(e) Termination of Employment/Leave of Absence. Except as provided in Section VII(l) below, if a Participant ceases to remain an Employee while his/her purchase right remains outstanding, then such purchase right shall immediately terminate, and all sums previously collected from the Participant during the purchase period in which such termination occurs shall be promptly refunded to the
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Participant. However, should the Participant cease active service by reason of a paid leave of absence, then the Participant shall have the election, exercisable up until the end of the purchase period in which the paid leave of absence commences, to (i) withdraw all the funds in the Participant’s payroll account at the time of his/her cessation of Employee status or the commencement of such paid leave or (ii) have such funds held for the purchase of Shares at the end of such purchase period. If no such election is made, then such funds shall automatically be held for the purchase of Shares at the end of such purchase period. If, pursuant to the foregoing, the funds of a Participant on a paid leave of absence are held (whether by an affirmative election or by default) for the purchase of Shares, then the payroll deductions (at the rate authorized at the time the leave began) may continue in effect through the earlier of (I) the end of the purchase period in which the leave commences or (II) as of any payroll date on which the Participant is no longer paid Eligible Earnings. In no other event, however, shall any further payroll deductions be added to the Participant’s account following his/her cessation of Employee status or the commencement of a leave of absence. Should the Participant return to active service (x) within six (6) months following the commencement of his/her leave of absence or (y) prior to the expiration of any longer period for which such Participant’s right to reemployment with the Company is guaranteed by statute or contract, then his/her payroll deductions under the Plan shall automatically resume (if such deductions are not otherwise being made) upon his/her return at the rate in effect at the time the leave began, and if a new purchase period begins during the period of the leave, then the Participant will automatically be enrolled in that purchase period at the rate of payroll deduction in effect for him/her at the time the leave commenced, but payroll deductions for that purchase period shall not actually begin until the Participant returns to active service. However, an individual who returns to active employment following a leave of absence that exceeds in duration the applicable (x) or (y) time period set forth above will be treated as a new Employee for purposes of subsequent participation in the Plan and must accordingly re-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before the start date of any subsequent purchase period in which he or she wishes to participate.
(f) Share Purchase. The Shares subject to the purchase right of each Participant (other than Participants whose purchase rights have previously terminated in accordance with Sections VII(d) or (e) above) shall be automatically purchased on the Participant’s behalf on the last U.S. business day of the purchase period for which such purchase right remains outstanding. The purchase shall be effected by applying the amount credited to each Participant’s book account, as converted into U.S. Dollars if necessary, on the last U.S. business date of the purchase period to the purchase of whole Shares at the purchase price in effect for such purchase period.
(g) Proration of Purchase Rights. Should the total number of Shares to be purchased pursuant to outstanding purchase rights on any particular date exceed the number of Shares then available for issuance under the Plan and the Sub-Plan, the Plan Administrator shall make a pro-rata allocation of the available Shares on a uniform and nondiscriminatory basis, and any amounts credited to the accounts of Participants shall, to the extent not applied to the purchase of Shares, be refunded to the Participants, in the currency originally collected.
(h) Shareholder Rights. A Participant shall have no rights as a shareholder with respect to Shares covered by the purchase rights granted to the Participant under the Plan, including the right to receive dividends, the until the Shares are actually purchased on the Participant’s behalf in accordance with Section VII(f). No adjustments shall be made for dividends, distributions or other rights for which the record date is prior to the purchase date. Once the Shares are purchased on behalf of a Participant, the Participant shall have certain rights of ownership such as voting and dividend rights, but shall not be able to transfer custody of any such Shares out of the CSPP Account at the designated brokerage firm. No transfers of custody of such Shares shall be permitted until the Shares are sold or assigned. Shares issued under the Plan will carry a restrictive legend to this effect.
(i) CSPP Account. The Shares purchased on behalf of each Participant shall be deposited directly into a brokerage account which the Company shall establish for the Participant at a Company-designated brokerage firm. The account will be known as the “CSPP Account.” Pursuant to this Section VII(h), custody of the Shares purchased under the Plan shall be held in the CSPP Account at all times and may not be transferred to another brokerage account. In order to receive the tax treatment under Code Section 421(a) and Treasury Regulation Section 1.423-(1)(a), Shares purchased under the Plan may not be sold or assigned until after the later of (a) the first anniversary of the date of purchase, or (b) two years after the date of grant. In the event such Shares are not so held and are sold or assigned before the expiration of the applicable period, then such Shares shall not be eligible for the tax treatment under Code Section 421(a) and Treasury Regulation Section 1.423(a)-1. Notwithstanding the foregoing, in the event of a Participant’s death, this one (1) year tax-law holding period requirement for such favorable tax treatment shall not apply to any Shares in the Participant’s CSPP Account. The Plan Administrator may adopt such policies and procedures for the Plan as it determines is appropriate, including additional policies and procedures regarding the transfer of Shares from a Participant’s CSPP Account before those Shares have been held for the requisite period necessary to avoid a disqualifying disposition of such Shares under the U.S. federal tax laws.
(j) Assignability. No purchase rights granted under the Plan shall be assignable or transferable by a Participant other than by will or by the laws of descent and distribution, and during the Participant’s lifetime the purchase rights shall be exercisable only by the Participant.
(k) Merger or Liquidation of Company. In the event the Company or its shareholders enter into an agreement to dispose of all or substantially all of the assets or outstanding capital shares of the Company by means of a sale, merger or reorganization in which the Company will not be the surviving corporation (other than a reorganization effected primarily to change the State in which the Company is incorporated, a merger or consolidation with a wholly-owned Subsidiary, or any other transaction in which there is no substantial change in the shareholders of the Company or their relative share holdings, regardless of whether the Company is the surviving corporation) or in the event the Company is liquidated, then all outstanding purchase rights under the Plan shall be exercised immediately prior to the consummation of such sale, merger, reorganization or liquidation by applying all sums previously collected from Participants during the purchase period of such transaction to the purchase of whole Shares, subject, however, to the applicable limitations of Section VII(b).
(l) Acquisitions and Dispositions. The Plan Administrator may, in its sole and absolute discretion and in accordance with principles under Code Section 423, create special purchase periods for individuals who become Employees solely in connection with
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the acquisition of another company or business by merger, reorganization or purchase of assets and may provide for special purchase dates for Participants who will cease to be Employees solely in connection with the disposition of all or a portion of any Participating Company or a portion of the Company, which purchase periods and purchase rights granted pursuant thereto shall, notwithstanding anything stated herein, be subject to such terms and conditions as the Plan Administrator considers appropriate in the circumstances.
(m) Designation of Beneficiary.
(i) If permitted by the Plan Administrator, a Participant may file a designation of a beneficiary who is to receive any Shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to a date the purchase right is exercised but prior to delivery to such Participant of such Shares and cash. In addition, if permitted by the Plan Administrator, a Participant may file a designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the purchase right. If a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
(ii) Such designation of beneficiary may be changed by the Participant at any time by notice in a form determined by the Plan Administrator. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant's death, the Company will deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
(iii) All beneficiary designations will be in such form and manner as the Plan Administrator may designate from time to time.
VIII.ACCRUAL LIMITATIONS
(a) No Participant shall be entitled to accrue rights to acquire Shares pursuant to any purchase right outstanding under the Plan if and to the extent such accrual, when aggregated with (I) Share rights accrued under other purchase rights outstanding under the Plan and (II) similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423) of the Company or any Corporate Affiliate, would otherwise permit such Participant to purchase more than Twenty-Five Thousand U.S. Dollars (US$25,000) worth of shares of the Company or any Corporate Affiliate (determined on the basis of the fair market value of such shares on the date or dates such rights are granted to the Participant) for each calendar year such rights are at any time outstanding.
(b) For purposes of applying the accrual limitations of Section VIII(a), the right to acquire Shares pursuant to each purchase right outstanding under the Plan shall accrue as follows:
(i) The right to acquire Shares under each such purchase right shall accrue as and when the purchase right first becomes exercisable on the last U.S. business day of each purchase period the right remains outstanding.
(ii) No right to acquire Shares under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Twenty-Five Thousand U.S. Dollars (US$25,000) worth of Shares (determined on the basis of the fair market value on the date or dates of grant) pursuant to one or more purchase rights held by the Participant during such calendar year.
(iii) If by reason of the Section VIII(a) limitations, one or more purchase rights of a Participant do not accrue for a particular purchase period, then the payroll deductions which the Participant made during that purchase period with respect to such purchase rights shall be promptly refunded in the currency originally collected.
(c) In the event there is any conflict between the provisions of this Section VIII and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Section VIII shall be controlling.
IX.AMENDMENT AND TERMINATION
(a) The Board (or, if delegated by the Board to a standing committee of the Board, such committee) may from time to time alter, amend, suspend or discontinue the Plan; provided, however, that no such action shall adversely affect purchase rights at the time outstanding under the Plan unless necessary or desirable to comply with any applicable law, regulation or rule; and provided, further, that no such action may, without the approval of the shareholders of the Company, increase the number of Shares issuable under the Plan (other than adjustments pursuant to Sections VI(b) and VII(b)), alter the purchase price formula so as to reduce the purchase price specified in the Plan, or materially modify the requirements for eligibility to participate in the Plan.
(b) Without shareholder approval and without regard to whether any Participant rights may be considered to have been “adversely affected,” the Plan Administrator shall be entitled to, in addition to, and without limitation with respect to, what is permitted pursuant to Section IX(a), cancel or change the purchase periods, limit the frequency and/or number of changes in the amount withheld during a purchase period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Shares for each Participant properly correspond with amounts withheld from the Participant’s Eligible Earnings, and establish such other limitations or procedures as the Plan Administrator determines in its sole discretion advisable which are consistent with the Plan.
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X.GENERAL PROVISIONS
(a) The Plan shall terminate upon the earlier of (i) ten (10) years, or (ii) the date on which all Shares available for issuance under the Plan and the Sub-Plan shall have been sold pursuant to purchase rights exercised under the Plan and the Sub-Plan.
(b) All costs and expenses incurred in the administration of the Plan shall be paid by the Company.
(c) The Plan does not in any way create any contractual obligations with respect to any employee’s continued employment with the Company or any Corporate Affiliate. Neither the action of the Company in establishing the Plan, nor any action taken in connection with the Plan by the Board or by its delegee, or by the Company or by the Plan Administrator, nor any provision of the Plan itself shall be construed to grant any person the right to remain in the employ of the Company or any Corporate Affiliate for any period of specific duration, and such person’s employment may be terminated at any time, with or without cause.
(d) The provisions of the Plan shall be governed by the laws of the State of Delaware, without resort to that State’s conflicts-of-laws rules.
(e) The Plan is designed to qualify as an employee stock purchase plan under Code Section 423 with respect to United States taxpayers (although the Company makes no undertaking or representation to achieve or maintain such qualification), and if the Plan so qualifies, the Plan is exempt from the application of Code Section 409A and any ambiguities herein will be interpreted to so be exempt from Code Section 409A. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Plan Administrator determines that a purchase right granted under the Plan may be subject to Code Section 409A or that any provision in the Plan would cause a purchase right under the Plan to be subject to Code Section 409A, the Plan Administrator may amend the terms of the Plan and/or of an outstanding purchase right granted under the Plan, or take such other action the Plan Administrator determines is necessary or appropriate, in each case, without the Participant's consent, to exempt any outstanding purchase right or future purchase right that may be granted under the Plan from or to allow any such purchase rights to comply with Code Section 409A, but only to the extent any such amendments or action by the Plan Administrator would not violate Code Section 409A. Notwithstanding the foregoing, the Company shall have no liability to a Participant or any other party if the purchase right to purchase Shares under the Plan that is intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for any action taken by the Plan Administrator with respect thereto. The Company makes no representation that the purchase right to purchase Shares under the Plan is compliant with Code Section 409A.
(f) If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.
(g) The terms of the Plan are intended to comply with all applicable laws and will be construed accordingly.
(h) The Plan Administrator is authorized under and pursuant to this Section X(h) to adopt Addenda to the Sub-Plan which may be treated as self-standing plans in respect of the jurisdiction outside the United States for which such Addenda are adopted. Such Addenda may permit the grant of awards or rights which are similar to the purchase rights that may be granted under the Plan but which shall be governed solely by the provisions of the relevant Addenda; provided that any Shares used for the purpose of satisfying any rights granted under the relevant Addenda shall be counted in the limit on the number of Shares which may be issued or delivered to Participants under the Plan as set out in Section VI(a) hereof.
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Annex A
GREIF, INC.
COLLEAGUE STOCK PURCHASE PLAN FOR FOREIGN SUBSIDIARIES
(Sub-Plan of the Greif, Inc. Colleague Stock Purchase Plan)
I.PURPOSE
The Greif, Inc. Colleague Stock Purchase Plan for Foreign Subsidiaries, a sub-plan of the Greif, Inc. Colleague Stock Purchase Plan (the “Sub-Plan”) is intended to provide eligible employees of the Company’s Foreign Subsidiaries with the opportunity to acquire a proprietary interest in the Company through the purchase of Class A shares of the Company’s common stock at periodic intervals. Purchase rights granted under the Sub-Plan are not necessarily intended to qualify under Code Section 423 and the Company makes no undertaking or representation to achieve or maintain such qualification. If required by local law of any jurisdiction outside of the United States, an Addenda to the Sub-Plan may specify an alternative or particular purpose for purchase rights granted under such Addenda and such purpose shall prevail in relation to such Addenda.
All provisions of this Sub-Plan shall be governed by the U.S. Plan, except as otherwise provided herein or in any Addenda to the Sub-Plan.
The Sub-Plan shall become effective on a date after the Effective Date, as will be designated by either the Plan Administrator or the Foreign Subsidiary.
II.DEFINITIONS
The definitions provided in Section II of the U.S. Plan shall govern the Sub-Plan, except the following terms shall have the meanings indicated:
Effective Date means the date on which the Plan Administrator or any Foreign Subsidiary which is selected to participate in this Sub-Plan after July 1, 2023, shall designate as its Effective Date with respect to its Participants.
Eligible Earnings unless otherwise required by local law, or otherwise specified in any Addenda to the Sub-Plan or the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, means the regular basic gross earnings paid to a Participant by one or more Foreign Subsidiaries or Greif Entities. There shall be excluded from the calculation of Eligible Earnings: (i) all profit-sharing distributions and other incentive-type payments including income from equity incentive awards and (ii) all contributions made by any Foreign Subsidiary or any other Greif Entity for the Participant’s benefit under any employee benefit or welfare plan now or hereafter established. The Plan Administrator, in its discretion, may, on a uniform and non-discriminatory basis, establish a different definition of Eligible Earnings for a subsequent purchase period, and such definition may vary from Foreign Subsidiary to Foreign Subsidiary.
Employee means any person employed by the Company or any Foreign Subsidiary within the meaning of Code Section 3401(c), except as may be provided by any Addenda to the Sub-Plan.
Foreign Subsidiary means any Corporate Affiliate or Designated Affiliate located outside the United States which is selected to participate in this Sub-Plan. Designated Affiliates may participate in the Sub-Plan only pursuant to Addenda to the Sub-Plan.
Participant means any (i) Employee of a Foreign Subsidiary or (ii) an Employee of the Company who is working at or for a Foreign Subsidiary, and who is actively participating in the Sub-Plan.
U.S. Plan means the Greif, Inc. Colleague Stock Purchase Plan, as amended from time to time.
III.ADMINISTRATION
Except as provided in an Addenda, the Sub-Plan shall be administered in accordance with the provisions of Section III of the U.S. Plan.
IV.PURCHASE PERIODS
Except as provided in an Addenda, purchase periods may commence at any time as determined by the Plan Administrator, including at quarterly or semi-annual intervals over the term of the Sub-Plan.
V.ELIGIBILITY AND PARTICIPATION
(a) Except as provided in an Addenda or to the extent the Plan Administrator exercises its discretion under clauses (i), (ii) or (iii) of Section V(a) of the U.S. Plan to limit participation in the Plan or the Sub-Plan, each individual who is an Employee of a Foreign Subsidiary on the commencement date of any purchase period under the Sub-Plan shall be eligible to participate in the Sub-Plan for that purchase period.
(b) Except as provided in an Addenda, in order to participate in the Sub-Plan for a particular purchase period, the Employee must complete the enrollment forms prescribed by the Plan Administrator (including a purchase agreement and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designee) no later than the day designated by the Plan Administrator in its discretion; provided, however that the Participant shall not be eligible to be granted an option and defer
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compensation under the Sub-Plan until he or she has been an Employee of a Participating Company for at least three (3) months during or prior to such period.
(c) Except as otherwise provided in an Addenda, the payroll deduction or other approved contributions authorized by a Participant for purposes of acquiring Shares under the Plan may be any whole percentage or dollar amount of the Eligible Earnings of the Participant during the period the purchase right remains outstanding, up to a maximum equal to ten (10) percent of the Participant’s Eligible Earnings per purchase right. However, the total amount so permitted to be authorized (in the form of payroll deductions or otherwise) by any Participant under the Plan for a calendar year shall (unless further limited by the provisions of any Addenda) be limited to the sum of legal currency equivalent of U.S. $25,000, in value of purchased shares (as determined on the day(s) of actual purchase). Except as otherwise provided in an Addenda, the payroll deduction or contribution rate authorized by the Participant shall continue in effect for the entire period the purchase right remains outstanding, unless the Participant shall, prior to the end of the purchase period for which the purchase right will remain in effect, reduce such rate by filing the appropriate form with the Plan Administrator (or its designee). The reduced rate shall become effective as soon as practicable following the filing of such form. Except as otherwise provided in an Addenda, payroll deductions or other approved contributions, will automatically cease upon the termination of the Participant’s purchase right in accordance with Sections VII(e) or (f) below.
VI.SHARES SUBJECT TO THE SUB-PLAN
The Shares purchasable by Participants under the Sub-Plan (including any Addenda thereto) shall be made available from Shares reserved under the U.S. Plan and any Shares issued or delivered under the Sub-Plan will reduce, on a Share-for-Share basis, the number of Shares available for subsequent issuance or delivery under the U.S. Plan.
VII.PURCHASE RIGHTS
An Employee who participates in the Sub-Plan for a particular purchase period shall, except as otherwise provided in an Addenda, have the right to purchase Shares upon the terms and conditions set forth below and shall, except as otherwise provided in an Addenda, execute a purchase agreement embodying such terms and conditions and such other provisions as the Plan Administrator may deem advisable.
(a) Purchase Price. Except as otherwise provided in an Addenda, the U.S. Dollar purchase price shall be determined in accordance with the provisions of Section VII(a) of the U.S. Plan.
(b) Number of Purchasable Shares. Except as provided in an Addenda, the number of Shares purchasable by a Participant shall be determined in accordance with the provisions of Section VII(b) of the U.S. Plan.
(c) Payment. Except as set forth in an Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, payment for Shares purchased under the Sub-Plan shall be effected in the manner and method prescribed by the Plan Administrator (or its designee) which may include the Participant’s authorized payroll deductions whenever possible (provided that the Participant has given written consent to such deductions where consent is required under applicable law) or other approved contributions. Such deductions or other approved contributions shall begin on the first pay day coincident with or immediately following the commencement date of the relevant purchase period and, unless terminated earlier pursuant to Sections VII (e) or (f) below, shall terminate with the pay day ending with or immediately prior to the last day of the purchase period. The amounts so collected shall be credited to the Participant’s individual book account under the Sub-Plan, initially in the currency in which paid by the Foreign Subsidiary until converted into U.S. Dollars. Notwithstanding the foregoing, instead of a book account, an Addenda to the Sub-Plan (or a purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan) may, at the discretion of the Plan Administrator, provide for alternative structures, including the establishment of a trust or bank account to hold amounts collected by a Foreign Subsidiary, in which case, each reference in the U.S. Plan and the Sub-Plan to amounts credited to an individual book account shall, for purposes of any such Foreign Subsidiary, instead be interpreted as amounts deposited into a trust or bank account, as applicable. All purchases of Shares under the Sub-Plan are to be made with the U.S. Dollars into which the payroll deductions for the purchase period or other approved contributions have been converted. No interest shall be paid on the balance from time to time outstanding in the book account maintained for the Participant, except as otherwise required by law and as set forth in an Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan. The amounts collected from a Participant may be commingled with the general assets of the Company or the Foreign Subsidiary and may be used for general corporate purposes, except as otherwise provided in an Addenda or under purchase rights or for Participants (as set forth in an Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan) for which any applicable laws, regulations or rules require that amounts so collected be segregated from the general assets of the Company or the Foreign Subsidiary and/or deposited with an independent third party.
(d) Conversion into U.S. Dollars. For purposes of determining the number of Shares purchasable by a Participant, except as otherwise provided in an Addenda, the payroll deductions or other approved contributions credited to each Participant’s book account during each purchase period shall be converted into U.S. Dollars on the purchase date for that purchase period on the basis of the exchange rate in effect on such date. Except as otherwise provided in an Addenda, the Plan Administrator shall have the absolute discretion to determine the applicable exchange rate to be in effect for each purchase date by any reasonable method (including, without limitation, the exchange rate actually used by the Company for its intra-Company financial transactions for the month of such transfer). Except as otherwise provided in an Addenda, any changes or fluctuations in the exchange rate at which the payroll deductions or other approved contributions collected on the Participant’s behalf are converted into U.S. Dollars on each purchase date shall be borne solely by the Participant.
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(e) Withdrawal from Purchase Period. Except to the extent provided by any Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, withdrawal from a purchase period shall be governed in accordance with the provisions of Section VII(d) of the U.S. Plan.
(f) Termination of Employment/Leave of Absence. Except as otherwise provided under Sections VII(g) or (o) below or in any Addenda, if a Participant ceases to remain an Employee while his/her purchase right remains outstanding, then such purchase right shall immediately terminate and all sums previously collected from the Participant during the purchase period in which such termination occurs shall be promptly refunded to the Participant in the currency in which paid by the Foreign Subsidiary. However, except as otherwise provided in an Addenda, should the Participant cease active service by reason of a paid leave of absence, then the Participant shall have the election, exercisable up until the end of the purchase period in which the Participant dies or in which the paid leave of absence commences, to (i) withdraw all the funds in the Participant’s payroll account at the time of his/her cessation of Employee status or the commencement of such paid leave, with the withdrawn funds to be paid in the same currency in which paid by the Foreign Subsidiary, or (ii) have such funds held for the purchase of Shares at the end of such purchase period. If no such election is made, then, except as otherwise provided in an Addenda, such funds shall automatically be held for the purchase of Shares at the end of such purchase period. If, pursuant to the foregoing, the funds of a Participant on a paid leave of absence are held (whether by an affirmative election or by default) for the purchase of Shares, then, except as otherwise provided in an Addenda, the payroll deductions or other contributions (at the rate authorized at the time the leave began) may continue in effect through the earlier of (I) the end of the purchase period in which the leave commences or (II) as of any payroll date on which the Participant is no longer paid Eligible Earnings. In no other event, however, shall any further payroll deductions or other contributions be added to the Participant’s account following his/her cessation of Employee status or the commencement of a leave of absence, except as otherwise required by any applicable law, regulation or rule and as set forth in an Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan. Except as otherwise provided in an Addenda, should the Participant return to active service (x) within six (6) months following the commencement of his/her leave of absence or (y) prior to the expiration of any longer period for which such Participant’s right to reemployment with the Foreign Subsidiary is guaranteed by statute or contract, then his/her payroll deductions or other contributions under the Sub-Plan shall automatically resume (if such deductions or contributions are not otherwise being made) upon his/her return at the rate in effect at the time the leave began, and if a new purchase period begins during the period of the leave, then the Participant will automatically be enrolled in that purchase period at the rate of payroll deduction or approved contributions in effect for him/her at the time the leave commenced, but payroll deductions or approved contributions for that purchase period shall not actually begin until the Participant returns to active service. However, except as otherwise provided in an Addenda, an individual who returns to active employment following a leave of absence that exceeds in duration the applicable (x) or (y) time period will be treated as a new Employee for purposes of subsequent participation in the Sub-Plan and must accordingly re-enroll in the Sub-Plan (by making a timely filing of the prescribed enrollment forms) on or before the start date of any subsequent purchase period in which he or she wishes to participate.
For purposes of the Sub-Plan, except as otherwise provided in an Addenda, a Participant shall be considered to be an Employee for so long as such Participant remains in the active employ of a Foreign Subsidiary (and will not be extended by any notice period mandated under the employment laws in the applicable jurisdiction or the terms of an employment agreement, if any).
(g) Transfer of Employment. Except as otherwise provided in an Addenda, in the event that, during a purchase period, (i) a Participant who is an Employee of a Foreign Subsidiary is transferred and becomes an employee of the Company or Corporate Affiliate; or (ii) a Participant who is an Employee of a Foreign Subsidiary participating in an Addenda to the Sub-Plan is transferred and becomes an Employee of a Foreign Subsidiary participating in the Sub-Plan (absent any Addenda thereto), such individual shall remain a Participant in the Sub-Plan or the Addenda to the Sub-Plan, as applicable, and payroll deductions or other approved contributions shall continue to be collected until the next purchase date as if the Participant had remained an Employee of the Foreign Subsidiary employing such Participant at the commencement of the purchase period in which the Participant’s transfer of employment occurred.
Except as otherwise provided in an Addenda, in the event that, during a purchase period, (i) an employee of the Company who is a participant in the U.S. Plan is transferred and becomes an Employee of a Foreign Subsidiary; or (ii) a Participant who is an Employee of a Foreign Subsidiary participating in the Sub-Plan is transferred and becomes an Employee of a Foreign Subsidiary participating in an Addenda to the Sub-Plan, such individual shall automatically become a Participant under the Sub-Plan or the Addenda to the Sub-Plan applicable to the Foreign Subsidiary to which he or she has transferred for the duration of the purchase period in effect at that time under the Sub-Plan or the Addenda, as applicable, and the balance in such individual’s book account maintained under the U.S. Plan or the Sub-Plan prior to the transfer of employment shall be transferred as a balance to a book account opened for such individual under the Sub-Plan or the Addenda, as applicable. Such balance, together with all other payroll deductions or other approved contributions collected from such individual by the Foreign Subsidiary to which the Participant has transferred for the remainder of the purchase period under the Sub-Plan or Addenda, as applicable, (as converted into U.S. Dollars), shall, except as otherwise provided in an Addenda, be applied on the next purchase date to the purchase of Shares under the Sub-Plan or Addenda, as applicable.
Any Employee of the Company who transfers into or out of a location outside of the United States during a purchase period shall, except as otherwise provided in an Addenda, be treated as consistently as possible with the concepts set forth above, as determined in the sole discretion of the Company or Company Affiliate, as applicable.
(h) Share Purchase. Except to the extent provided by any Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, the purchase of Shares shall be governed by the provisions of Section VII(f) of the U.S. Plan.
(i) Proration of Purchase Rights. Except to the extent provided by any Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, the proration of purchase rights shall be governed by Section VII(g) of the U.S. Plan.
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(j) Shareholder Rights. Except to the extent provided by any Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, Shareholder rights shall be governed by Section VII(h) of the U.S. Plan.
(k) CSPP Broker Account. Except to the extent provided by any Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, the CSPP Account shall be governed by Section VII(i) of the U.S. Plan.
(l) Additional Restrictions on Transfer/Sale of Shares to Comply with Local Law. In order to comply with local law (including, without limitation, local securities and foreign exchange laws), provided that this does not conflict with the provisions of an Addenda, the Company may require a Participant to retain the Shares purchased on his or her behalf in the Participant’s ESPP Broker Account until the sale of such Shares. Any Addenda to the Sub-Plan (or purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan) may also provide for the immediate sale of Shares acquired by a Participant on the purchase date.
(m) Assignability. Except to the extent provided by any Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, the assignability of purchase rights shall be governed by Section VII(j) of the U.S. Plan.
(n) Merger or Liquidation of Company. In the event the Company or its shareholders enter into an agreement to dispose of all or substantially all of the assets or outstanding capital shares of the Company by means of a sale, merger or reorganization in which the Company will not be the surviving corporation (other than a reorganization effected primarily to change the State in which the Company is incorporated, a merger or consolidation with a wholly-owned subsidiary, or any other transaction in which there is no substantial change in the shareholders of the Company or their relative share holdings, regardless of whether the Company is the surviving corporation) or in the event the Company is liquidated, then all outstanding purchase rights under the Sub-Plan shall, subject to the provisions of any Addenda, automatically be exercised immediately prior to the consummation of such sale, merger, reorganization or liquidation by applying all sums previously collected from Participants during the purchase period of such transaction, as converted into U.S. Dollars, to the purchase of whole Shares, subject, however, to the applicable limitations of Section VII(b). Payroll deductions or other approved contributions not yet converted into U.S. Dollars at the time of such transaction shall, subject to the provisions of any Addenda, be converted from the currency in which paid by the Foreign Subsidiary into U.S. Dollars on the basis of the exchange rate in effect at the time of such transaction, and the applicable limitation on the number of Shares purchasable per Participant shall, subject to the provisions of any Addenda, continue to apply to each purchase. Should the Company sell or otherwise dispose of its ownership interest in any Foreign Subsidiary participating in the Sub-Plan, whether through merger or sale of all or substantially all of the assets or outstanding capital shares of that Foreign Subsidiary, then a similar exercise of outstanding purchase rights shall, subject to the provisions of any Addenda, be effected immediately prior to the effective date of such disposition, but only to the extent those purchase rights are attributable to the Employees of such Foreign Subsidiary.
(o) Acquisitions and Dispositions. Subject to the provisions of any Addenda, the Plan Administrator may, in its sole and absolute discretion, create special purchase periods for individuals who become Employees solely in connection with the acquisition of another company or business by merger, reorganization or purchase of assets and may provide for special purchase dates for Participants who cease to be Employees solely in connection with the disposition of a portion of any Foreign Subsidiary, which purchase periods and purchase rights granted pursuant thereto shall, notwithstanding anything stated herein, be subject to such terms and conditions as the Plan Administrator considers appropriate in the circumstances.
(p) Tax, Withholding and Other Required Deductions. Except as otherwise provided in an Addenda, at the time a Participant’s purchase right or the Shares acquired pursuant to such purchase right is subject to tax or any other mandatory deduction (including, but not limited to, deductions in respect of social security or national insurance), the Participant shall make adequate provision for, or consent to, all of his or her applicable tax obligations, withholding obligations or other mandatory deductions, if any. The Company and/or the Foreign Subsidiary may (except as otherwise provided in an Addenda), but shall not be obligated to, withhold from the Participant’s compensation or any other payments due to the Participant the amount necessary to meet such tax obligations, withholding obligations or mandatory deductions or withhold from the proceeds of the sale of Shares or any other method of withholding the Company and/or the Foreign Subsidiary deems appropriate. The Company and/or the Foreign Subsidiary shall, except as otherwise provided in an Addenda, have the right to take such other action as may be necessary in the opinion of the Company or the Foreign Subsidiary to satisfy such tax obligations, withholding obligations or mandatory deductions including, but not limited to, demanding payment from a Participant of any amount in respect of tax, withholding obligations or mandatory deductions for which the Company and/or the Foreign Subsidiary is liable to account to any fiscal authority for and on behalf of the Participant and the Participant shall comply with any such demand (provided that doing so is not prohibited by applicable local law) within seven (7) days of such demand being made.
(q) Designation of Beneficiary.
(i) If permitted by the Plan Administrator and applicable law and the terms of any relevant Addenda, a Participant may file a designation of a beneficiary who is to receive any Shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to a date the purchase right is exercised but prior to delivery to such Participant of such Shares and cash. In addition, if permitted by the Plan Administrator and the terms of any relevant Addenda, a Participant may file a designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the purchase right. Except as otherwise provided in an Addenda, if a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
(ii) Such designation of beneficiary may be changed by the Participant at any time by notice in a form determined by the Plan Administrator. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who
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is living at the time of such Participant's death, the Company will, except as otherwise provided in an Addenda, deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may, except as otherwise provided in an Addenda, deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
(iii) All beneficiary designations will be in such form and manner as the Plan Administrator may designate from time to time.
VIII.ACCRUAL LIMITATIONS
Except to the extent provided by any Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, which document shall constitute an Addenda to the Sub-Plan, accrual limitations are governed by Section VIII of the U.S. Plan.
IX.AMENDMENT AND TERMINATION
The amendment and termination of the Sub-Plan are governed by Section IX of the U.S. Plan; provided, however, an Addenda may be altered, amended, suspended or discontinued by the Board (or, where delegated by the Board to a standing committee of the Board, such committee) unless otherwise specified by the relevant Addenda.
X.GENERAL PROVISIONS
(a) All costs and expenses incurred in the administration of the Sub-Plan shall be paid by the Company or the Foreign Subsidiary.
(b) The Plan does not in any way create any contractual obligations with respect to any employee’s continued employment with the Company or any Corporate Affiliate. Neither the action of the Company in establishing the Sub-Plan, nor any action taken in connection with the Sub-Plan by the Board or by its delegee, or by the Company or by the Plan Administrator, nor any provision of the Sub-Plan itself shall be construed to grant any person the right to remain in the employ of the Company or any Foreign Subsidiary for any period of specific duration, and such person’s employment may be terminated at any time, with or without cause.
(c) Additional or different provisions for individual Foreign Subsidiaries may be incorporated in one or more Addenda to the Sub-Plan or in the purchase agreement or appendix thereto, in which case such documents shall constitute Addenda to the Sub-Plan. Such Addenda shall have full force and effect with respect to the Foreign Subsidiaries to which they apply. In the event of a conflict between the provisions of such an Addenda and one or more other provisions of the Sub-Plan and/or the U.S. Plan, the provisions of the Addenda shall be controlling. Except as otherwise indicated in the Sub-Plan or an Addenda, purchase rights that are subject to Addenda will operate and be administered in the same manner as all other purchase rights granted under the Sub-Plan.
(d) The provisions of the Sub-Plan and any Addenda thereto shall, unless expressly stated otherwise in any such Addenda, be governed by the laws of the United States, and where relevant, the laws of the State of Delaware without resort to that State’s conflicts-of-laws rules, or unless provided otherwise by the Plan Administrator.
(e) If any other written document related to the Sub-Plan is translated into a language other than English, and the meaning of the translated version is different than the English version, the English version will control, subject to applicable laws.
(f) Subject to any applicable laws which render the following provisions of this Section X(f) of the Sub-Plan unenforceable in respect of a particular Participant or Employee or as otherwise provided by any Addenda:
(i) neither the U.S. Plan nor the Sub-Plan shall form any part of any contract of employment between the Company or any Foreign Subsidiary and any Employees of any of those companies, and it shall not confer on any such Employees any legal or equitable rights (other than those constituting the purchase rights themselves granted under the Sub-Plan and/or the U.S. Plan) against the Company or any Foreign Subsidiary, directly or indirectly, or give rise to any cause of action in law or in equity against the Company or any Foreign Subsidiary;
(ii) the benefits to Employees and/or Participants under the Sub-Plan and/or U.S. Plan shall not form any part of their wages or remuneration or count as pay or remuneration for pension fund or other purposes; and
(iii) in no circumstances shall any Employee or Participant, on ceasing to hold the office or employment by virtue of which he/she is or may be eligible to participate in the Sub-Plan and/or U.S. Plan, be entitled to any compensation for any loss of any right or benefit or prospective right or benefit under the Sub-Plan and/or U.S. Plan which he/she might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise.
(g) Notwithstanding the provisions of Section V(c) of the Sub-Plan, the following provisions of this Section X(g) shall apply to any Employee who acquires purchase rights (as described in Section VII of the U.S. Plan) or rights similar in nature to such purchase rights pursuant to the provisions of any Addenda:
(i) the maximum of ten (10) percent of the Participant’s Eligible Earnings which may be authorized by the Participant to be deducted (or otherwise contributed) from his/her Eligible Earnings for the purpose of acquiring Shares stated therein, shall, for the purpose of any purchase rights granted under the Sub-Plan to such Participant, be reduced so as to take into account any amount
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which the Participant has authorized, or may authorize, to be deducted (or otherwise contributed) from his/her Eligible Earnings for the purpose of acquiring Shares pursuant to any Addenda, with the effect that in no circumstances shall the maximum of ten (10) percent as stated in Section V(c) of the Sub-Plan be exceeded when taking into account all deductions or contributions, as applicable, made or to be made from the Participant’s Eligible Earnings under any Addenda and this Sub-Plan; and
(ii) the maximum of the legal currency equivalent of U.S. $25,000 specified therein as the limit on the payroll deduction (or other approved contributions) which may be authorized by any Participant in a calendar year shall, for the purpose of the Sub-Plan, be reduced so as to take into account any amount which the Participant has authorized, or may authorize, to be deducted or contributed, as applicable, under any Addenda, with the effect that in no circumstances shall the maximum of the legal currency equivalent of U.S. $25,000 as stated in Section V(c) of the Sub-Plan be exceeded in any calendar year when taking into account deductions or contributions, as applicable, which the Participant has authorized or may authorize under any Addenda and this Sub-Plan in the calendar year in question.
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