Exhibit 10.23

 

 

 

 

 

 

 

 

APPROVAL OF THE AMENDED 1995 DIMON INCORPORATED OMNIBUS STOCK INCENTIVE PLAN

(Proposal 3)

 

           The Board unanimously has approved and recommends amending DIMON's
Omnibus Stock Incentive Plan (the "Incentive Plan") to: (i) increase the number
of shares of DIMON Common Stock issuable under the Incentive Plan from 2,066,229
to 4,266,229; (ii) extend the duration of the Incentive Plan to February 8,
2015; (iii) expand the performance measures for eligibility for certain awards
to include reductions in uncommitted and other inventories and debt; (iv)
provide that non-employee members of the Board of Directors may participate in
the Incentive Plan; and (v) eliminate the requirement that shareholders approve
changes to the Incentive Plan that would increase benefits payable to the
participants, except as would be required by the rules of any stock exchange on
which DIMON Common Stock trades and subject to the overall limit on the number
of shares issuable under the Incentive Plan. The proposed amendments require
approval by vote of a majority of the votes entitled to be cast on the matter at
the annual meeting. Consequently, abstentions and broker non-votes will be
equivalent to votes against the proposed amendments.

General

           The Board adopted the Incentive Plan on February 9, 1995. The purpose
of the Incentive Plan as amended is to assist DIMON in recruiting and retaining
employees and Directors by enabling those employees and Directors to participate
in DIMON's future success and to associate their interests with those of DIMON
and its shareholders. The Incentive Plan permits the grant of options to
purchase shares of DIMON Common Stock ("Options"), which may be incentive
Options qualifying under Section 422 of the Code ("Incentive Options") or
Options not so qualifying ("Nonqualified Options"), stock appreciation rights
("SARs"), restricted stock ("Restricted Stock"), performance shares
("Performance Shares") and incentive awards entitling the recipient to receive a
cash payment ("Incentive Awards"). The principal features of awards that may be
granted under the Incentive Plan are discussed below under the caption "
Awards."

           Under the amended Incentive Plan, a maximum of 4,266,229 shares of
DIMON Common Stock may be issued upon the award of Restricted Stock, the
settlement of Performance Shares or the exercise of Options and SARs. This
maximum number will be increased annually by three percent (the "Replenishment
Percentage") of the amount, if any, by which the total number of shares of DIMON
Common Stock outstanding as of the last day of DIMON's fiscal year exceeds the
total number of shares of DIMON Common Stock outstanding as of the first day of
such fiscal year, excluding for such purposes shares of DIMON Common Stock
issued under the Incentive Plan and shares of DIMON Common Stock issued as a
result of the transactions or events described in the last sentence of the
following paragraph. Pursuant to this provision, the number of shares issuable
under the Plan was increased from the 2,000,000 shares originally authorized on
February 9, 1995, to 2,066,229 shares as of June 30, 1999.

 

 

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           If an Option or SAR is terminated, in whole or in part, for any
reason other than its exercise, the number of shares of DIMON Common Stock
allocated to the Option or SAR or portion thereof may be reallocated to other
Options, SARs, Restricted Stock and Performance Share awards to be granted under
the Incentive Plan. However, under the current Incentive Plan, shares of
Restricted Stock that are forfeited may not be reallocated to other Options,
SARs, Restricted Stock or Performance Shares to be awarded under the Incentive
Plan. This restriction would be eliminated under the proposed amendments and
forfeited Restricted Stock could be reallocated. The maximum number of shares
available for awards under the Incentive Plan, the Replenishment Percentage, the
per individual limits on awards (described below) and the terms of outstanding
awards, will be adjusted as the Committee (defined below) determines equitable
in the event there is (i) a change in the number of outstanding shares of DIMON
Common Stock by reason of a stock dividend, stock split, subdivision or
combination of shares, merger, consolidation, reorganization or similar change
in the capital structure of DIMON or (ii) any other event occurs that, in the
judgment of the Committee, necessitates such action.

Administration

           The Executive Compensation Committee (the "Committee") of the Board
administers the Incentive Plan. Under the terms of the Incentive Plan, the
Committee has the authority to award Restricted Stock and Performance Shares,
and to grant Options, SARs and Incentive Awards, upon such terms not
inconsistent with the provisions of the Incentive Plan as the Committee
considers appropriate. Such terms may include conditions, in addition to those
contained in the Incentive Plan, on the exercisability of all or any part of an
Option or SAR or on the transferability of forfeitability of Restricted Stock.
Notwithstanding any such conditions, the Committee may, in its discretion,
accelerate the time at which an Option or SAR may be exercised or the time at
which Restricted Stock may become transferable or nonforfeitable. In addition,
the Committee has complete authority to: interpret all provisions of the
Incentive Plan; prescribe the form of agreements evidencing awards under the
Incentive Plan; adopt, amend and rescind rules and regulations pertaining to the
administration of the Incentive Plan; and make all other determinations
necessary or advisable for the administration of the Incentive Plan. The
Committee, in its discretion, also may delegate to one or more officers of DIMON
all or part of its authority and duties with respect to awards granted to
employees who are not subject to the reporting or other provisions of Section 16
of the Exchange Act.

Eligibility

           Any employee of DIMON or any parent or subsidiary of DIMON and any
member of the Board of DIMON is eligible to participate in the Incentive Plan if
the Committee, in its sole discretion, determines that such person has
contributed to the profits or growth of DIMON or such affiliate.

Awards

           Options granted under the Incentive Plan will entitle the optionee to
purchase from DIMON shares of DIMON Common Stock at a price determined by the
Committee at the time the option is granted. The option price may not be less
than the fair market value of shares of DIMON Common Stock on the date the
Option is granted. The Incentive Plan defines "fair market value" to mean, as of
any given date, the closing price of DIMON Common Stock as reported on an
established stock exchange or, if DIMON Common Stock was not traded on such day,
the next preceding day that DIMON Common Stock so traded. Under the amended
Incentive Plan, the maximum number of

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shares of DIMON Common Stock that may be issued upon the exercise of Incentive
Options is 4,266,229 subject to adjustment by the Committee in the event of a
stock dividend, stock split, subdivision or combination of shares, merger,
consolidation, reorganization or similar change in the capital structure of
DIMON or event which, in the judgment of the Committee, necessitates such
action. No employee may be granted Incentive Options or related SARs that are
first exercisable in any calendar year for stock having an aggregate fair market
value, determined as of the date an Option is granted, exceeding $100,000. In
addition, no employee may be granted Options and SARs that are not related to an
Option in any calendar year for more than 70,000 shares of DIMON Common Stock,
treating for such purposes an Option and related SAR as a single award.

           SARs generally entitle an individual to receive the excess of the
fair market value of a share of DIMON Common Stock on the date of exercise over
the initial value, which will be the fair market value of a share of DIMON
Common Stock on the date of grant. However, the Committee may prescribe that the
individual realize appreciation on a different basis. For example, the Committee
may limit the amount of appreciation that may be realized upon the exercise of
an SAR. SARs may be granted in relation to option grants ("Corresponding SARs")
or independently of option grants. The primary difference between these two
types of SARs is that to exercise a Corresponding SAR, the individual must
surrender, unexercised, that portion of the stock option to which the
Corresponding SAR relates.

           The maximum period during which an Option or SAR may be exercised
will be determined by the Committee on the date of grant, except that no
Incentive Option or its Corresponding SAR may be exercisable 10 years after the
date of grant. All Options and SARs granted under the Incentive Plan will be
nontransferable except by will or by the laws of descent and distribution.
Notwithstanding the preceding sentence, if the agreement evidencing the Option
or SAR provides, an Option or SAR may be transferred without consideration by
the holder to certain of his or her family members. The Committee also may grant
Options or SARs that are transferable on other terms and conditions as may be
permitted by Rule 16b-3 under the Exchange Act. Options or SARs may be exercised
in whole at any time, or in part from time to time, at such times and in
compliance with such requirements as the Committee determines, provided that a
Corresponding SAR that is related to an Incentive Option may be exercised only
to the extent that the related Option is exercisable and only when the fair
market value of DIMON Common Stock exceeds the option price of the related
Option. The exercise of either an Option or Corresponding SAR will result in the
termination of the other to the extent of the number of shares with respect to
which the Option or Corresponding SAR is exercised.

           Payment of the option price generally will be made in cash, a cash
equivalent acceptable to the Committee or, if the agreement evidencing the
Option provides, by surrendering shares of DIMON Common Stock. The agreement
evidencing the Option also may allow payment of the option price in
installments, in which event DIMON will lend the optionee an amount equal to not
more than 90 percent of the option price, and the principal amount of the loan
will be repayable in not more than five annual installments, subject to some
exceptions. Interest on the unpaid principal balance will equal the minimum rate
necessary to avoid imputed interest or original interest discount under the
Internal Revenue Code (the "Code"). At the Committee's discretion, the amount
payable as a result of the exercise of an SAR may be settled in cash, DIMON
Common Stock or a combination of both.

           Individuals may also be awarded shares of Restricted Stock.
Restricted Stock is DIMON Common Stock that may be nontransferable or
forfeitable, or both, unless and until certain conditions are satisfied. These
conditions may include, for example, a requirement that the individual continue
employment or service with DIMON for a specified period or that DIMON or the
individual achieve stated objectives. Under the current Incentive Plan, the
stated objectives may be based on

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performance goals stated with reference to the fair market value of DIMON Common
Stock or on DIMON's return on shareholders' equity, return on employed assets,
cash flow, return on investments, net income or earnings per share. The proposed
amendments also would permit objectives related to uncommitted and other
inventory levels or debt levels. Prior to the forfeiture of Restricted Stock, an
individual will have all rights of a shareholder with respect to the Restricted
Stock, including the right to receive dividends and to vote the shares, but may
not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the
Restricted Stock until any restrictions thereon have been satisfied. Under the
Incentive Plan, no more than 35,000 shares of Restricted Stock may be awarded to
an employee in any calendar year.

           The Committee also may select individuals to receive an award of
Performance Shares. A Performance Share is an award, stated with respect to a
specified number of shares of DIMON Common Stock, that entitles the holder to
receive shares of DIMON Common Stock and cash. The Committee, in its discretion,
will determine whether a Performance Share will be settled with shares of DIMON
Common Stock, cash or a combination of both. A Performance Share will be earned
based on the lowest fair market value of DIMON Common Stock during the five
valuation periods (June 1 through October 31) following the date of the award.
The number of shares of DIMON Common Stock earned under a Performance Share
award as of the end of a valuation period will be equal to the product of (x)
the number of shares covered by the Performance Share award and (y) the
Applicable Percentage (as defined in the next sentence), provided that such
product will be reduced by the number of shares of DIMON Common Stock earned or,
in the case of a cash payment, the number of shares represented by the payment
made in a prior valuation period with respect to the same Performance Share
award. Under the Incentive Plan, Applicable Percentage means the same
percentage, in multiples of five percent, by which the lowest fair market value
of the DIMON Common Stock during a valuation period exceeds the fair market
value of DIMON Common Stock on the date that the Performance Share was granted.
For example, if the lowest closing price of DIMON Common Stock during a
valuation period represents a 10 percent appreciation from the fair market value
on the date of grant, 10 percent of the Performance Shares will be earned. The
Applicable Percentage may not be less than zero but can exceed 100 percent.

           No Performance Shares will be earned, and no DIMON Common Stock will
be issued, unless the lowest closing price of DIMON Common Stock during a
valuation period represents at least five percent appreciation from the fair
market value on the date of grant. No Performance Shares will be earned or cash
settlement made with respect to any valuation period unless the Committee
certifies the number of shares of DIMON Common Stock or the amount of cash
earned by an employee during that period. To the extent that a Performance Share
award is earned, DIMON Common Stock will be issued or a cash payment will be
made as soon as practicable after the end of each valuation period.

           The Incentive Plan provides that an individual's right to earn
additional benefits under a Performance Share award will terminate if the
individual's employment or service with DIMON and its subsidiaries ends for
reasons other than death, disability or retirement. If an individual's
employment or service ends on account of death, disability or retirement, the
employee, or his estate in the case of death, will be entitled to receive shares
of DIMON Common Stock or a cash payment for benefits earned in valuation periods
preceding termination of employment and the next following valuation period.
Under the Incentive Plan, no employee may be awarded more than 35,000
Performance Shares in any calendar year. An individual may not sell, transfer,
pledge, exchange, hypothecate or otherwise dispose of a Performance Share or the
right to receive payment thereunder other than by will or the laws of descent
and distribution. Notwithstanding the preceding sentence, the Committee may
grant Performance Shares that are transferable to the extent allowed by Rule
16b-3 under the Exchange Act.

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           The Incentive Plan provides that the Committee may select individuals
to receive Incentive Awards. An Incentive Award is an opportunity to earn a
bonus, payable in cash, upon the attainment of stated performance objectives.
Under the amended Incentive Plan, the performance objectives may be stated with
reference to the fair market value of DIMON Common Stock or on DIMON's return on
shareholders' equity, return on employed assets, cash flow, return on
investments, net income, earnings per share, uncommitted inventory levels or
debt levels. The period in which the performance will be measured will be at
least one year. Incentive Awards are nontransferable except by will or by the
laws of descent and distribution, except that the Committee may grant Incentive
Awards that are transferable upon such terms and conditions as are allowed by
Rule 16b-3 under the Exchange Act. Under the Incentive Plan, no employee may
receive an Incentive Award payment in any calendar year that exceeds the lesser
of (i) 75 percent of the employee's base salary (prior to any salary reduction
or deferral election) as of the date of grant of the Incentive Award or (ii)
$450,000.

Termination and Amendment

           No awards may be granted under the current Incentive Plan after
February 8, 2005. The proposed amendments would extend this date to February 8,
2015. The Board may, without further action by shareholders, terminate or
suspend the Incentive Plan in whole or in part. Under the current Incentive
Plan, the Board also may amend the Incentive Plan, except that no such amendment
may become effective without shareholder approval if the amendment materially
increases the number of shares of DIMON Common Stock that may be issued under
the Incentive Plan, changes the class of individuals who may be selected to
participate in the Incentive Plan, or increases the benefits that may be payable
to participants. The proposed amendments would eliminate the requirement that
shareholders approve amendments that would increase benefits payable to the
participants under the Incentive Plan, except as would be required by the rules
of any stock exchange on which DIMON Common Stock trades and subject to the
overall limit on the number of shares issuable under the Incentive Plan. This
amendment will increase the flexibility of the Incentive Plan, while preserving
the shareholders rights' under existing stock exchange rules and their
prerogative to approve the aggregate number of shares issuable under the
Incentive Plan.

Federal Tax Consequences

           DIMON has been advised by counsel regarding the federal income tax
consequences of the Incentive Plan. No income will be recognized by an optionee
at the time an Option is granted. If the Option is an Incentive Option, no
income will be recognized upon the optionee's exercise of the Option. Income
will be recognized by an optionee when he disposes of shares acquired under an
Incentive Option. The exercise of a Nonqualified Option generally will be a
taxable event that will require the optionee to recognize, as ordinary income,
the difference between the shares' fair market value and the option price.

           No income will be recognized upon the grant of an SAR. The exercise
of an SAR generally will be a taxable event. The individual generally must
recognize income equal to any cash that is paid and the fair market value of
DIMON Common Stock that is received in settlement of an SAR.

           Income will be recognized when a Performance Share award is earned
and when DIMON Common Stock is transferred or cash is paid to the individual. At
that time the individual will recognize income equal to the sum of the fair
market value of any DIMON Common Stock transferred, and any cash paid, to the
individual.

 

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           Income will be recognized on account of an award of Restricted Stock
when the shares first become transferable or are no longer subject to a
substantial risk of forfeiture. At that time, the individual will recognize
income equal to the fair market value of the Restricted Stock.

           No income will be recognized on account of the grant of an Incentive
Award. Income will be recognized when the Incentive Award is earned and a
payment is made to the individual.

           The employer, either DIMON or a subsidiary, will be entitled to claim
a federal income tax deduction on account of the exercise of a Nonqualified
Option or SAR, the settlement of a Performance Share award, the settlement of an
Incentive Award or the vesting of a Restricted Stock award. The amount of the
deduction will be equal to the ordinary income recognized by the participant.
The employer will not be entitled to a federal income tax deduction on account
of the grant or the exercise of an Incentive Option, except that the employer
may claim a federal income tax deduction on account of certain dispositions of
Incentive Option stock.

                                                                       

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