Exhibit 10(6)
THE MEAD CORPORATION
RESTRICTED STOCK PLAN
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ARTICLE I. GENERAL PROVISIONS
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Section 1. Purpose. The purpose of The Mead Corporation Restricted Stock
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Plan (the "Plan") is to provide certain compensation to eligible
directors and employees in the form of Common Shares ("Shares") of The
Mead Corporation (the "Company") which are restricted in accordance with
the terms and conditions set forth below and to encourage the continued
high level of performance of such directors and employees by increasing
the identity of interests of such directors and employees with the
shareholders of the Company. The Plan is intended to be an unfunded
program established for the purpose of providing compensation for
eligible directors and a select group of management employees and is
exempt from Parts 1 through 4 of Title I of the Employee Retirement
Income Security Act of 1974, as amended.
Section 2. Definitions. For purposes of the Plan, the following terms
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shall have the following meanings:
(a) "Board of Directors" means the Board of Directors of the
Company.
(b) "Change in Control" means the occurrence of any of the
following: (i) any "person" or "group" within the meaning of Sections
13(d) and 14(d) (2) of the Securities Exchange Act of 1934, as amended
(the "Act"), becomes the "beneficial owner" (as defined in Rule 13d-3
under the Act) of more than 25% of the then outstanding voting shares of
the Company otherwise than through a transaction arranged by, or
consummated with the prior approval of, the Board of Directors, or (ii)
during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors (and any new
director whose election by the Board of Directors or whose nomination
for election by the Company's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
to constitute a majority thereof.
(c) "Committee" means the Compensation Committee of the Board of
Directors.
(d) "Company" means The Mead Corporation; however, when used
with reference to employment, "Company" also includes any corporation,
partnership or other person or entity at least 10% of the voting or
equity interest of which is owned or controlled, directly or indirectly,
by the Company.
(e) "Eligible Director" means any director of the Company who is
not also an employee of the Company.
(f) "Eligible Employee" means any employee of the Company
selected by the Committee.
(g) "Grant Date" means the date on which Restricted Shares are
to be granted pursuant to Article II, Section 1.
(h) "Market Value" means the average of the highest sale price
and the lowest sale price of a Share on the date the value of a Share is
to be determined, as reported on the New York Stock Exchange - Composite
Transactions Tape (or other similar source) or, if no sale is reported
for such date, then on the next preceding date for which a sale is
reported.
(i) "Participant" means any individual who holds Restricted
Shares granted under the Plan.
(j) "Restriction Period" means (i) in the case of Restricted
Shares granted pursuant to Article II. Section 1(a) or (b), the period
of five years from the date the Restricted Shares are granted, (ii) in
the case of Restricted Shares granted pursuant to Article II. Section
1(c), the date the grantee becomes age 55 or six months from the date
the Restricted Shares are granted, whichever is later, and (iii) in the
case of Restricted Shares granted pursuant to Article III, the period of
six months or longer (as determined by the Committee) from the date
Restricted Shares are granted.
(k) "Restricted Shares" means any Shares issued or delivered
pursuant to the Plan which remain subject to the restrictions set forth
in Article I, Section 5 of the Plan.
(l) "Shares" means the Common Shares, without par value, of the
Company.
Section 3. Administration. (a) The Plan shall be administered by the
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Committee. Subject to the express provisions of the Plan, the Committee
and the Board of Directors shall each have authority to construe and
interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, and to make all other determinations
necessary or advisable for administering the Plan. The Committee or the
Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent
it shall deem expedient to carry it into effect. The determination of
the Committee or the Board of Directors on any matters within the scope
of this section shall be conclusive. A majority of the Committee shall
constitute a quorum for meetings of the Committee, and the act of a
majority of the Committee at a meeting, or an act reduced to or approved
in writing by all members of the Committee, shall be the act of the
Committee.
In the case of Restricted Shares granted pursuant to Article III, the
Committee may in its discretion impose additional conditions or
restrictions as to the attainment of specified performance goals during
the Restriction Period for all or a portion of the shares or all or a
portion of the years in the Restriction Period.
(b) The Committee may waive or modify at any time any condition
or restriction (including, without limitation, any of the restrictions
set forth in Article I, Section 5) with respect to any Restricted Shares
issued pursuant to Article III.
Section 4. Shares Subject to the Plan. Subject to adjustment as provided
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in Section 1 of Article IV, the maximum number of Shares which may be
granted as Restricted Shares under the Plan is 500,000; the maximum
number of Shares which may be granted as Restricted Shares to any
individual pursuant to Section 2 of Article II is 20,000; and, the
maximum number of Shares which may be granted as Restricted Shares to
any eligible employee pursuant to Article III is 150,000. Shares
granted as Restricted Shares under the Plan may be authorized and
unissued Shares or Shares held in the Company's treasury. Any Shares
which are granted as Restricted Shares under the Plan and which are
thereafter forfeited by the participant may again be granted under the
Plan as Restricted Shares.
Section 5. Terms and Conditions of Restricted Shares. (a) Subject to the
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provisions of paragraph (b) of this Section 5, Restricted Shares issued
pursuant to the Plan shall be subject to the following restrictions:
(i) the Participant shall not be entitled to receive delivery of
the certificate for such Restricted Shares until the expiration of the
Restriction Period;
(ii) such Restricted Shares shall not be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the
Restriction Period; and
(iii) all such Restricted Shares shall be forfeited and all right
of the Participant to such Restricted Shares shall terminate without
further obligations on the part of the Company if the Participant ceases
to be a director of the Company (in the case of a Participant who
received Restricted Shares as an Eligible Director) or an employee of
the Company (in the case of a Participant who received Restricted Shares
as an Eligible Employee) prior to the end of the Restriction Period.
Upon the forfeiture of Restricted Shares, such Shares shall be returned
to the status of authorized and unissued Shares or treasury Shares, as
determined by the Committee.
(b) Notwithstanding the provisions of paragraph (a) of this
Section 5, in the event a Participant ceases to be a director of the
Company (in the case of a Participant who received Restricted Shares as
an Eligible Director) or an employee of the Company (in the case of a
Participant who received Restricted Shares as an Eligible Employee)
prior to the end of a Restriction Period as a result of such
Participant's death, disability or normal retirement in accordance with
the Company's policies, then the restrictions set forth in paragraph (a)
of this Section 5 shall immediately cease to apply to (and all rights of
the Participant shall immediately vest with respect to):
(i) all of the Restricted Shares, if any, registered in the name
of such Participant which were granted pursuant to Section 1(c) or 2 of
Article II of the Plan or Article III of the Plan;
(ii) a number of the Restricted Shares, if any, registered in the
name of such Participant which were granted pursuant to Section 1(a) of
Article II of the Plan (rounded to the nearest whole share) determined
as if such restrictions had ceased with respect to 20% of such
Restricted Shares on the date on which such
Restricted Shares were granted and on each anniversary of such date
occurring prior to the Participant's death, disability or retirement;
and
(iii) a number of the Restricted Shares, if any, registered in the
name of such Participant which were granted pursuant to Section 1(b) of
Article II of the Plan (rounded to the nearest whole share) equal to the
number of Restricted Shares which on the date such Restricted Shares
were granted had a Market Value equal to the product of $7,500 times the
number of full or partial calendar years expiring since such Restricted
Shares were granted and prior to the Participant's death, disability or
retirement.
In any event, all such Restricted Shares shall be forfeited and all
rights of the Participant to such Restricted Shares shall terminate
without further obligations on the part of the Company if the
Participant, directly or indirectly, individually or as an agent,
officer, director, employee, shareholder (excluding being the holder of
any stock which represents less than 1% interest in a corporation),
partner or in any other capacity whatsoever engages prior to the time
such restrictions cease to apply in any activity competitive with or
adverse to the Company's business or in the sale, distribution,
production or attempted sale or distribution of any goods, products or
services then sold or being developed by the Company.
(c) Upon the occurrence of a Change in Control, all of the
restrictions set forth in this Section 5 shall immediately cease to
apply to all Restricted Shares issued pursuant to the Plan, except to
the extent that the lapse of such restrictions would, in the opinion of
counsel selected by the Company's independent auditors, constitute
"parachute payments" within the meaning of Section 280G(b)(2)(A) of the
Internal Revenue Code (the "Code") and, when added to any other
"parachute payments" which would be received by the Participant pursuant
to the terms of any other plan, arrangement or agreement with the
Company, any person whose actions result in a change in control of the
Company or any person affiliated with the Company or such person, would
be subject to the tax imposed by Section 4999 of the Code.
(d) At the end of the Restriction Period, or at such earlier
time as it is provided for in paragraphs (b) or (c) of this Section 5,
the restrictions applicable to the Restricted Shares pursuant to this
Section 5 shall cease and a share certificate for the number of
Restricted Shares with respect to which the restrictions have ceased
shall be delivered, free of all such restrictions and all restrictive
legends, to the Participant or the Participant's beneficiary or estate,
as the case may be.
(e) If required by the Committee, each grant of Restricted
Shares shall be evidenced by a written agreement between the Company and
the Participant.
(f) In the event that the restrictions set forth in paragraph
(a) of this Section 5 shall cease to apply to any Restricted Shares
granted to Eligible Employees subject to Section 16 of the Act prior to
the date which is six months after the date of grant of such Restricted
Shares, then, notwithstanding any provision to the contrary in this
Section 5, the restrictions set forth in paragraphs (a)(i) and (a)(ii)
of this Section 5 shall continue in effect until the date which is six
months after the date of such grant.
(g) Notwithstanding any provision to the contrary in this
Section 5, but subject nonetheless to paragraph (c) of this Section 5,
in the case of Restricted Shares granted pursuant to Article III, if the
Participant fails to attain specified performance goals set forth with
respect to such Restricted Shares during the Restriction Period, the
Participant will forfeit such Restricted Shares to the extent specified
in the grant of such Restricted Shares and the right of the Participant
to such Restricted Shares shall terminate to the extent specified in the
grant of such Restricted Shares without any further obligations on the
part of the Company.
Section 6. Rights as a Shareholder.
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(a) Upon the grant of Restricted Shares pursuant to Article II
or Article III of the Plan, the Company shall issue a share registered
in the name of the Participant bearing the following legend and any
other legend required by any federal or state securities laws:
"The transferability of this certificate and the Common Shares
represented hereby are subject to the restrictions, terms and conditions
(including forfeiture and restrictions against sale, assignment,
transfer, pledge, hypothecation and other disposition) set forth in The
Mead Corporation Restricted Stock Plan. Copies of such Plan will be
mailed to any shareholder without charge within five days after receipt
of written request therefor addressed to Secretary, The Mead
Corporation, Mead World Headquarters, Courthouse Plaza Northeast,
Dayton, OH 45463."
Each such share shall be retained by the Company until the restrictions
set forth in Article I, Section 5(a) cease to apply to the Shares.
(b) Upon the issuance of Restricted Shares pursuant to
paragraph (a) of this Section 6, the Participant shall, subject to all
of the terms, conditions and restrictions set forth in the Plan, have
all of the rights of a holder of Shares, including the right to vote and
to receive dividends and other distributions with respect thereto.
ARTICLE II. RESTRICTED SHARES FOR ELIGIBLE DIRECTORS
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Section 1. Grant of Restricted Shares to Eligible Directors. (a) On the
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third business day of January, 1988 and on each fifth anniversary of
such date during the term of the Plan, (each such date is hereinafter
referred to as a "Grant Date"), the Company shall grant a number of
Restricted Shares to each then Eligible Director determined by dividing
$37,500 by the Market Value of a Share on the Grant Date (rounded to the
nearest whole shares).
(b) If during the term of the Plan any person becomes an
Eligible Director on a date other than a Grant Date, the Company shall
grant such person a number of Restricted Shares determined by dividing
$37,500 (less the product of $7,500 times the number of full years since
the last Grant Date) by the Market Value of a Share (rounded to the
nearest whole share) on the date of such person's election to the Board
of Directors.
(c) Each Eligible Director shall automatically receive a grant
of a number of Restricted Shares of the Company equal to the quotient
obtained by dividing (i) 5,000, by (ii) the Market Value per Share on
the date the Plan, as amended, is approved by the Shareholders (the
"Initial Grant"). Thereafter, on
the third business day of January, 1997 and on each annual anniversary
of such date during the term of the Plan, the Company shall grant and
each Eligible Director shall automatically receive a number of
Restricted Shares which shall equal the product obtained by multiplying
the Initial Grant by an adjustment factor (the "Factor"). The Factor
shall equal the quotient obtained by dividing (y) the base line number
for average total compensation paid to directors by companies with
annual sales in excess of $4 billion, as published in the Hay Consulting
Group's "Directors Compensation Report" (or comparable successor report)
in the calendar year immediately preceding the year in which such grant
is made, which report covers compensation paid in the year ending
immediately prior to the year of publication, by (z) 36,246. In the
event that such Directors Compensation Report (or comparable successor
report) is not published with respect to any year, the Factor shall
equal one (1).
Section 2. Election to Receive Compensation as Restricted Shares. (a) Not
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later than June 1 of each year during the term of the Plan, the
Committee shall cause each Eligible Director to be furnished with an
appropriate form which enables the director to elect to receive payment
in Restricted Shares of a minimum of 20% up to a maximum of 100% (in
increments of 10%) of the annual retainer fee to be earned by such
director for service on the Board of Directors during the following
calendar year which is paid on or after the first day of such calendar
year. In order to be effective, the election form must be signed by the
director and must be returned to the Committee or its delegate not later
than July 1 of the year prior to the year with respect to which the
election is being made. All such elections are irrevocable.
(b) A new Eligible Director may, by filing the prescribed
election form, elect to receive the annual retainer fee as Restricted
Shares as provided in paragraph (a) of this Section 2 only if the
election form is signed and filed at least six months prior to the date
of payment of the annual retainer fee to such director.
(c) If an Eligible Director has elected to receive all or a
portion of the annual retainer fee as Restricted Shares as provided in
this Section 2, then on the date such fee would otherwise be payable,
the Company shall grant to such director a number of Restricted Shares
determined by dividing the compensation so to be received by the Market
Value of a Share on such date such other compensation would otherwise be
payable (rounded to the nearest whole share).
ARTICLE III. RESTRICTED SHARES FOR ELIGIBLE EMPLOYEES
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Section 1. Grant of Restricted Shares to Eligible Employees. From time
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to time during the term of the Plan, the Committee may determine that
Restricted Shares shall be granted to Eligible Employees either as
payment for all or a portion of the compensation to be paid to any
Eligible Employee pursuant to the Company's incentive compensation
plans, or for any other reason consistent with the purposes of the Plan.
Restricted Shares to be granted as payment for all or a portion of
incentive compensation shall be granted on the date the compensation is
awarded, and the number of Restricted Shares so granted shall be
determined by dividing the amount of such compensation by the Market
Value of a Share on the date the compensation is awarded (rounded to the
nearest whole Share).
ARTICLE IV. MISCELLANEOUS
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Section 1. Adjustments Upon Changes in Capitalization. Upon any change
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in the outstanding Shares by virtue of a share dividend or split,
recapitalization, merger, consolidation, combination or exchange of
shares or other similar change, the number of Restricted Shares which
may be granted under the Plan (or the class of shares which may be
granted as Restricted Shares) shall be adjusted appropriately by the
Committee, whose determination with respect to such adjustment shall be
conclusive. Unless the Committee shall otherwise determine, any
securities and other property received by a Participant in connection
with or as a result of any such change with respect to Restricted Shares
(excluding dividends paid in cash) shall be subject to the restrictions
then applicable to Restricted Shares under the Plan (including
forfeiture), and shall be deposited promptly with the Company to be held
in custody until the restrictions cease to apply to the Restricted
Shares to which such securities or other property relates.
Notwithstanding the foregoing, however, in the event any rights to
purchase Shares are issued pursuant to the Company's Shareholder Rights
Plan (or any successor plan) with respect to Restricted Shares, such
rights shall cease to be subject to the restrictions applicable to the
underlying Restricted Shares at such time, if any, as such rights become
exercisable.
Section 2. Compliance with Laws. The issuance or delivery of Shares
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pursuant to the Plan shall be subject to, and shall comply with, any
applicable requirements of federal and state securities laws, rules and
regulations (including, without limitation, the provisions of the
Securities Act of 1933, the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder), any securities exchange
upon which the Shares may be listed and any other law or regulation
applicable thereto, and the Company shall not be obligated to issue or
deliver any Shares pursuant to the Plan if such issuance or delivery
would violate any such requirements. The foregoing shall not, however,
be deemed to require the Company to effect any registration of Shares
under any such law or regulation.
Section 3. Amendment and Termination. (a) The Board of Directors may from
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time to time amend the Plan, or any provision thereof, in such respects
as the Board of Directors may deem advisable; provided, however, that
any such amendment must be approved by the holders of Shares entitling
them to exercise a majority of the voting power of the Company if such
amendment would:
(i) materially increase the benefits accruing to
participants under the Plan;
(ii) materially increase the aggregate number of Shares
which may be issued and/or delivered or the number of Shares which may
be granted to any individual under the Plan;
(iii) materially modify the requirements as to eligibility
for participation in the Plan.
(b) The Plan shall terminate and no additional Restricted
Shares shall be granted under the Plan after September 30, 2005;
provided, however, that the Board of Directors may earlier terminate the
Plan at any time.
(c) No amendment to or termination or expiration of the
Plan shall adversely affect any Restricted Shares previously granted
under the Plan without the consent of the holder thereof.
(d) Notwithstanding paragraph (a) of this Section 3, the
provisions of Section 1 of Article II may not be amended more than once
every six months other than to comport with changes in the Code, ERISA
or the rules thereunder.
Section 4. Notices. Each notice relating to the Plan shall be in writing
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and delivered in person or by mail to the proper address. Each notice
shall be deemed to have been given on the date it is delivered or mailed
except that an election to receive compensation as Restricted Shares
pursuant to Article II, Section 2 shall be deemed to have been given on
the date it is received by the Committee. Each notice to the Committee
shall be addressed as follows: The Mead Corporation, Mead World
Headquarters, Courthouse Plaza Northeast, Dayton, Ohio 45463, Attention:
Secretary. Each notice to a Participant shall be addressed to the
Participant's address as set forth in the records of the Company.
Anyone to whom a notice may be given under this Plan may designate a new
address by written notice to the Company or to the Participants, as the
case may be.
Section 5. Benefits of Plan. The Plan shall inure to the benefit of, and
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shall be binding upon, each successor and assign of the Company. All
rights and obligations imposed upon a Participant and all rights granted
to the Company under this Plan shall be binding upon such Participant's
heirs, legal representatives and successors. Nothing in the Plan shall
be deemed to create any obligation on the part of the Company to
nominate any director for re-election or to continue the employment of
any employee.
Section 6. Taxes. (a) The Company shall have the right to require, prior
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to the issuance or delivery of any Restricted Shares, payment by the
Participant of any taxes required by law with respect to the issuance or
delivery of such Restricted Shares.
(b) On any date on or after January 1, 1994 that
restrictions applicable to Restricted Shares granted (or to be granted)
hereunder shall have ceased pursuant to Article I, Section 5 (the "Lapse
Date"), and with respect to persons subject to Section 16 of the
Securities Exchange Act of 1934, as amended (the "1934 Act") on any date
thereafter through the end of the next following period (the "Window
Period") specified in Rule 16b-3(e)(3) (or any successor rule) under the
1934 Act, the Participant to whom such Restricted Shares were granted
may elect to have the Company retain, from the Restricted Shares to be
delivered at the end of the Restriction Period, Shares having a Market
Value on the date of delivery equal to all or any part of the federal,
state and local withholding tax payments (whether mandatory or
permissive) to be made by the Participant with respect to ceasing of the
restrictions (up to the maximum amount determined by the Participant's
top marginal tax rate) in lieu of making such payments in cash; provided
that such election may also be made in advance of the Lapse Date and
will be effective on the date specified in the notice of election
(subject, as applicable, to Section 16 of the 1934 Act), and further
provided that, with respect to a Lapse Date that has occurred or will
occur between January 1, 1994 and October 28, 1994, the election may be
made by persons subject to and in accordance with Section 16 of the 1934
Act through the end of the first Window Period which commences on,
includes or follows October 28, 1994. The Committee may establish from
time to time rules or limitations with respect to the right of a
Participant to elect to have the Company retain Restricted Shares
in satisfaction of withholding payments; provided, however, that, in any
event, any such rules or limitations must be in accordance with Section
16 of the 1934 Act and any applicable rules established under such
Section.
Section 7. Governing Law. All grants of Restricted Shares shall be made
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and accepted in the State of Ohio. The laws of the State of Ohio shall
control the interpretation and performance of the provisions of the
Plan.
Section 8. Effective Date of the Plan. The effective date of the Plan
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shall be December 10, 1987; provided, however, that if the Plan is not
approved at the 1988 Annual Meeting of Shareholders by the holders of at
least a majority of the outstanding voting power of of the Company, the
Plan shall immediately terminate. No dividends shall be paid prior to
the 1988 Annual Meeting of Shareholders with respect to any Restricted
Shares granted prior to such meeting. If the Plan is not approved at
such meeting, all Restricted Shares granted prior thereto shall be
retained by the Company, and the Company shall pay to the Participant in
whose name such Restricted Shares were registered an amount equal to the
Market Value on the date of grant of a number of Shares equal to such
number of Restricted Shares.
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NOTE:
(1) Adopted by the Board of Directors of the Company on December
11, 1987.
(2) Approved by the shareholders of the Company on April 28,
1988.
(3) Addition of Article II, Section 2, subsection (d) adopted by
the Board of Directors of the Company on December 15, 1989 (deleted
February 28, 1991).
(4) Amendment to Article I, Section 2, subsection (h) adopted by
the Board of Directors of the Company on January 25, 1990.
(5) Amendments to Article I, Section 2, subsections (d) and (j);
Article I, Section 3, subsection (a); and Article III, Section 1; and
addition of Article 2, Section 5, subsection (g), adopted by the Board
of Directors of the Company on January 24, 1991, and approved by the
shareholders of the Company on April 25, 1991.
(6) Amendments to Article II, Section 2, subsections (a) and
(b); and addition of Article I, Section 5, subsection (f) and Article
IV, Section 3, subsection (d) adopted by the Board of Directors of the
Company on February 28, 1991.
(7) Amendments to Article I, Section 5, subsection (b); and
addition of Article I, Section 5, subsection (b)(iii), adopted by the
Board of Directors of the Company on July 23, 1992.
(8) Amendment to Article IV, Section 6, subsection (b) adopted
by the Board of Directors of the Company on April 28, 1994.
(9) Amendments to Article I, Section 2(j), Section 4, Section
5(b)(i), Section 6, Article II, Section 1(c), Article IV, Section 3(b)
adopted by the Board of Directors of the Company on October 28, 1995,
and approved by the shareholders of the Company on April 25, 1996.