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EXHIBIT (10)
TRINOVA CORPORATION
1989 NON-EMPLOYEE DIRECTORS' EQUITY PLAN
1. General Purpose of the Plan. The purpose of the TRINOVA Corporation
1989 Non-Employee Directors' Equity Plan is to promote the interests
of TRINOVA Corporation and its shareholders by (i) attracting,
retaining and motivating top caliber Directors; (ii) strengthening the
mutuality of interest between Directors and the Company's
shareholders; and (iii) enabling Directors to participate in the
long-term success of the business.
2. Definitions. For purposes of the Plan, the following terms shall have
the defined meanings as set forth below:
2.1 "Award" means an award of Common Shares that (i) is subject to
restrictions under Section 6 below, (ii) consists of such number
of Common Shares as have an aggregate Fair Market Value,
determined without regard to any restrictions, on date of grant
of $25,000 rounded upward to the nearest 10 shares, and (iii) is
made without any cash payment therefore.
2.2 A "Beneficial Owner" of Voting Shares is any Person who would be
deemed to beneficially own such Voting Shares within the meaning
of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or any successor rules or
regulations thereto.
2.3 "Board" means the Board of Directors of the Company.
2.4 A "Change in Control" shall have occurred if any of the
following events occur:
(i) The Company is merged, consolidated or reorganized into
or with another corporation or other legal person, and as
a result of such merger, consolidation or reorganization
less than a majority of the combined voting power of the
then-outstanding securities of such corporation or person
immediately after such transaction are held in the
aggregate by the holders of Voting Shares immediately
prior to such transaction;
(ii) If the Company sells all or substantially all of its
assets to any other corporation or other legal person,
less than a majority of the combined voting power of the
then-outstanding securities of such corporation or person
immediately after such transaction are held in the
aggregate by the holders of Voting Shares immediately
prior to such sale;
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(iii) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as
promulgated pursuant to the Exchange Act, disclosing that
any Person has become the Beneficial Owner of 20% or more
of the Voting Shares;
(iv) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the
Exchange Act disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule, form or report
or item therein) that a change in control of the Company
has or may have occurred or will or may occur in the
future pursuant to any then-existing contract or
transaction; or
(v) If during any period of two consecutive years,
individuals who at the beginning of any such period
constitute the Directors of the Company cease for any
reason to constitute at least a majority thereof, unless
the election, or the nomination for election by the
Company's shareholders, of each Director of the Company
first elected during such period was approved by a vote
of at least two-thirds of the Directors of the Company
then still in office who were Directors of the Company at
the beginning of any such period.
Notwithstanding the foregoing provisions of Section 2.4(iii) or
2.4(iv) hereof, a "Change in Control" shall not be deemed to
have occurred for purposes of the Plan solely because (i) the
Company, (ii) an entity in which the Company directly or
indirectly beneficially owns 50% or more of the voting
securities, or (iii) any Company-sponsored employee stock
ownership plan or any other employee benefit plan of the
Company, either files or becomes obligated to file a report or a
proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form
or report or item therein) under the Exchange Act, disclosing
beneficial ownership by it of Voting Shares, whether in excess
of 20% or otherwise, or because the Company reports that a
change in control of the Company has or may have occurred or
will or may occur in the future by reason of such beneficial
ownership.
2.5 "Code" means the Internal Revenue Code of 1986, as amended, or
any successor thereto.
2.6 "Common Shares" means the Common Shares, $5.00 par value, of the
Company.
2.7 "Company" means TRINOVA Corporation, a corporation organized
under the laws of the State of Ohio (or any successor
corporation).
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2.8 "Disability" means long-term disability as determined under
rules and procedures similar to those that apply in the
Company's Long-Term Disability Plan then in effect.
2.9 "Eligible Director" means a person who is an incumbent,
non-employee member of the Board at the time the Plan is
initially approved by the shareholders or who is elected a
non-employee member of the Board subsequent to that date.
2.10 "Fair Market Value" means the closing price of the Company's
Common Shares on the New York Stock Exchange on the date
specified. The closing price shall be determined from the
"NYSE-Composite Transactions" list printed in The Wall Street
Journal or any equivalent publication.
2.11 "Participant" means a non-employee Director who has been granted
an Award under the Plan.
2.12 "Person" means any "person," as the term "person" is used and
defined in Section 14(d)(2) of the Exchange Act, and any
"affiliate" or "associate" of any such person, as the terms
"affiliate" and "associate" are defined in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act as in
effect on the date of this Plan.
2.13 "Plan" means the TRINOVA Corporation 1989 Non-Employee
Directors' Equity Plan, as may be amended from time to time.
2.14 "Restricted Shares" means Common Shares that are subject to
restrictions under Section 6 below, during the period such
shares remain subject to such restrictions.
2.15 "Restriction Period" means the five-year period, commencing on
the date of the Award, described in Section 6(d)(ii) of the Plan
during which Restricted Shares awarded to a Participant are
subject to the restrictions imposed by and pursuant to the Plan.
2.16 "Retirement" means retirement from active service as a member of
the Board.
2.17 "Voting Shares" means all outstanding securities of the Company
entitled to vote generally in the election of Directors of the
Company at the time in question.
3. Administration. The Plan, to the extent possible, shall be
self-administering. To the extent necessary, the Plan shall be
administered by the Organization and Compensation Committee, or any
successor committee of the Board appointed by the Board. The
Committee shall also adopt, amend and rescind rules and regulations
for the administration of the Plan; construe and interpret the Plan,
the rules and regulations; and make all other determinations necessary
or desirable for the administration of the Plan.
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4. Common Shares Subject to Plan. The total number of Common Shares
reserved and available for transfer pursuant to Awards made under the
Plan shall be 25,000 shares. Such shares shall consist of treasury
shares. If any Restricted Shares that have been awarded are
forfeited, such shares shall again be available for transfer as
Restricted Shares in connection with future Awards made under the
Plan.
Substitutions or adjustments shall be made in the aggregate number of
shares reserved for issuance under the Plan and in the number of
Restricted Shares outstanding under the Plan in the event of (a) any
stock dividend, stock split, combination of shares, issuance of rights
or warrants to purchase stock, recapitalization or other change in the
capital structure of the Company; or (b) any merger consolidation,
separation, reorganization, partial or complete liquidation; or (c)
any other corporate transaction or event having an effect similar to
the foregoing. Such substitutions or adjustments shall be made by and
to the extent that the Committee, in its sole discretion, exercised in
good faith, determines is necessary or desirable to avoid enlargement
or dilution. The Committee's decision shall be final, binding and
conclusive. No fractional Restricted Share shall be issued or
authorized by reason of any such substitution or adjustment.
5. Eligibility. Only Directors who are not employees of the Company will
be granted Awards under the Plan. Any Director to whom an Award of
Restricted Shares is made who thereafter becomes an employee of the
Company shall cease to be eligible for any further grants of Awards
while an employee, but shall not, by reason of becoming an employee,
cease to be eligible to retain the Restricted Shares theretofore
awarded to him or her subject, however, to the terms and conditions of
the Plan.
6. Terms of Restricted Shares. Awards of Restricted Shares shall be
granted under the Plan as follows, subject to the terms and conditions
set forth below.
(a) Timing of Awards. Subject to shareholder approval of the Plan
and Awards made hereunder to such persons, each person who is an
Eligible Director on the effective date of the Plan, shall
receive an Award on such date. During the term of the Plan, (i)
each person who thereafter becomes an Eligible Director shall
receive an Award on the date of his or her initial election as a
Director, and (ii) additional Awards shall be made on the date
of each Eligible Director's re-election to the Board which most
nearly coincides with the fifth anniversary of his or her prior
Award.
(b) Share per Award. The number of Restricted Shares awarded to
each Eligible Director in accordance with Section 6(a) will be
determined by dividing $25,000 by the Fair Market Value of the
Common Shares on the date of the Award, and rounding the
resultant number upward to the nearest 10 shares. The Fair
Market Value of the Common Shares will be determined without
regard to any restrictions imposed by the Plan.
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(c) Certificates and Restrictions. The prospective recipient of a
Restricted Share Award shall not have any rights with respect to
the Restricted Shares which are the subject of such Award,
unless and until (i) such recipient has executed an agreement,
in form provided by the Committee ("Restricted Share Award
Agreement"), evidencing the Award, and agreeing to the terms and
conditions of the restrictions of the Plan; (ii) has delivered a
fully executed copy of such Agreement to the Company; and (iii)
has otherwise complied with the applicable terms and conditions
of such Award. Each Award shall be subject to the following
terms and conditions:
(i) Awards of Restricted Shares must be accepted within a
period of 30 days after the Award date, by executing a
Restricted Share Award Agreement.
(ii) During the Restriction Period specified in Section
6(d)(ii), beneficial ownership of and legal title to the
Restricted Shares shall be in the Participant, subject,
however, to the risk of forfeiture, specified in Section
6(d)(i). Consequently, except as provided in Section
6(d), the Participant shall have, with respect to the
Restricted Shares, all the rights of a shareholder of the
Company, including the right to vote the shares, and the
right to receive any dividends (cash or other). However,
Common Share dividends issued with respect to Restricted
Shares shall be treated as additional Restricted Shares
that are subject to the same restrictions and other terms
and conditions that apply to the Restricted Shares with
respect to which such dividends are issued, and for the
remaining period applicable to the latter Restricted
Shares.
(iii) Following receipt by the Company of the Restricted Share
Award Agreement duly executed by the Eligible Director,
each such Eligible Director receiving an Award of
Restricted Shares shall be issued a stock certificate in
respect of such Restricted Shares, to thereby evidence
the transfer of ownership in such Restricted Shares by
the Company to the Director as a Participant. Such
certificate shall be registered in the name of such
Participant, and shall bear an appropriate legend
referring to the terms, conditions and restrictions
applicable to such Award.
(iv) The stock certificates shall be held in escrow by the
Company until the restrictions thereon lapse, or the
Restricted Shares are forfeited by the Participant under
the terms and conditions of the Plan. The retention by
the Company of the stock certificate in escrow shall be
as security to protect its contingent residual rights in
the event of a forfeiture of the Restricted Shares by the
Participant.
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(v) Upon termination of the Participant's membership on the
Board that results in forfeiture of the Restricted
Shares, ownership by the Participant of the Restricted
Shares that is forfeited shall immediately terminate
without any further action by the Company or the
Committee, and without further action, ownership of all
right, title and interest in the Restricted Shares shall
revert to the Company.
(d) Restrictions and Conditions. The Restricted Shares awarded
pursuant to Section 6 shall be subject to the following
restrictions and conditions:
(i) Except as otherwise provided in, and subject to the
applicable provisions of the Restricted Share Award
Agreement and the provisions in this Section 6, all
shares still subject to restrictions shall be forfeited
upon termination of a Participant's service as a member
of the Board during the Restriction Period.
(ii) Commencing with the date of any Award made under the
Plan, all Common Shares shall be subject to restrictions
for a five-year period ("Restriction Period"). However,
restrictions on one-fifth of the Restricted Shares which
were the subject of an Award shall lapse on each
subsequent annual anniversary of the date of the Award,
provided that prior to such anniversary, the Participant
has not forfeited such Restricted Shares.
Notwithstanding the above, restrictions on all Restricted
Shares owned by a Participant shall automatically lapse
in the event of (A) death, Disability or Retirement of
such Participant; (B) failure of a Participant to be
re-elected as a member of the Board other than at the
Participant's own request; or (C) Change in Control of
the Company.
(iii) If to the extent that such restrictions lapse with
respect to any Restricted Shares, a stock certificate for
the appropriate number of unrestricted Common Shares
shall be promptly delivered to the Participant, subject,
however, to the provisions of Section 8(a) of the Plan.
(e) Prohibition Against Transfers, Assignments or Encumbrances.
During the period any Restricted Share remains subject to the
risk of forfeiture, no transfer, assignment or encumbrance of
such share shall be made by the Participant. Any attempt to
make any transfer, assignment or any encumbrance during the
period the Restricted Share remains subject to the risk of
forfeiture, shall be null and void; and no transferee, assignee
or beneficiary of any encumbrance shall acquire, by reason
thereof, any right, title or interest in any such Restricted
Share.
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7. Amendments and Termination. The Board may amend or terminate the
Plan, but no amendment or termination shall be made which would impair
the rights of a Participant without the Participant's consent, or
which would, without further approval by the Company's shareholders,
cause transactions under the Plan to cease to qualify as exempt
transactions under Rule 16b-3 of the Securities and Exchange
Commission or any similar rule promulgated under the Exchange Act,
increase the maximum number of shares subject to this Plan, or change
the class of Directors eligible for participation under this Plan.
8. General Provisions.
(a) The Company may require each person acquiring Common Shares
pursuant to the Plan to represent to and agree with the Company
in writing that such person is acquiring the Common Shares
without a view to distribution thereof. The certificates for
any Common Shares acquired under the Plan may include any legend
which the Company deems appropriate to reflect any restrictions
on transfer. All certificates for Common Shares delivered under
the Plan shall be subject to such stock-transfer orders and
other restrictions as the Company may deem advisable under the
rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Common
Shares are then listed, and any applicable Federal or state
securities law; and the Company may cause a legend or legends to
be put on any such certificates to make appropriate reference to
such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject
to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable
only in specific cases. The adoption of the Plan shall not
confer upon any Director any right to continue to be a Director.
(c) No member of the Board, nor any officer or employee of the
Company acting on behalf of the Board or the Company, shall be
personally liable for any action, determination or
interpretation taken or made in good faith with respect to the
Plan; and all members of the Board and each and any officer or
employee of the Company acting on their behalf shall, to the
extent permitted by law, be fully indemnified and protected by
the Company in respect of any such action, determination or
interpretation.
9. Effective Date. The Plan shall become effective on April 20, 1989 if
the Plan is approved on that date by the affirmative vote of the
holders of the majority of outstanding Common Shares.
10. Term of Plan. No Awards shall be granted pursuant to the Plan on or
after April 20, 1999, but Awards theretofore granted may extend beyond
that date.
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11. Tax Withholding. Any compensation income realized or recognized by a
Participant with respect to (a) Restricted Shares transferred under
this Plan or (b) the lapse of any restrictions, shall be subject to
withholding by the Company of income or other taxes required by
Federal, state, local or foreign law. The Committee may require the
Participant to make arrangements satisfactory to the Committee to
satisfy the Company's obligation, if any, to withhold any tax with
respect to the compensation income realized by the Participant.