Summary
This Form 8-K filing from Kraft Foods Inc. (the predecessor to Mondelez International) on May 21, 2009, primarily concerns the shareholder approval of an Amended and Restated 2005 Performance Incentive Plan. The key takeaway for investors is the reinforcement of a pay-for-performance philosophy and sound corporate governance practices through specific limitations and provisions within the incentive plan. These include no evergreen provisions, conservative share-counting, limits on dividends and dividend equivalents, restricted terms for awards, prohibition of stock option repricing without shareholder approval, minimum vesting periods, no discounted stock options, and a limited change in control definition. Additionally, the filing notes an increase in the share reserve under the plan by 18,000,000 shares, approved by shareholders.
Key Highlights
- 1Shareholders approved the Amended and Restated 2005 Performance Incentive Plan, signaling a commitment to pay-for-performance.
- 2The Amended Plan includes a fixed share reserve with no automatic annual increases (no evergreen provision).
- 3Conservative share-counting rules are in place, preventing the re-issuance of shares used for exercise price or tax payments.
- 4Restrictions on dividends and dividend equivalents are implemented, including on unearned performance shares.
- 5Maximum term for options and SARs is set at 10 years, with the plan terminating in 2019.
- 6Stock option repricing is prohibited without shareholder approval.
- 7A 'double trigger' mechanism is used for awards upon a change in control, requiring both a change in control and a termination of employment or unassumed awards.
- 8The shareholder approval allows for an increase of 18,000,000 shares available under the incentive plan.