Exhibit (10)
OWENS-CORNING
1994 CORPORATE INCENTIVE PLAN
GENERAL TERMS - OFFICERS
_____________________________
I. PURPOSE
The Plan's purpose is to provide an opportunity for eligible
employees to earn incentive compensation in addition to their
base salary as a result of attainment of Company Performance
Objectives and as a result of their Business Unit contribution.
Participation in the Plan provides the opportunity, not the
certainty, of receiving an incentive compensation award. If a
Business Unit earns an incentive fund, individual payouts are
based on levels of contribution, as determined by management.
II. PARTICIPATION IN THE PLAN
A. Participants are selected based upon criteria established
from time to time upon the recommendation of Business Unit
Management.
B. Participants will be advised of their incentive
opportunity in terms of their Participating Salary (PS),
expressed as a percentage of actual base earnings.
C. If the employment of any participant terminates because of
job elimination, retirement, disability or death during a
Plan year, the incentive compensation payable to the
participant or the participant's estate will be adjusted,
pro-rata, for the period of time during the Plan year the
participant actually worked.
D. Employees who become participants in the Plan after the
year has begun will have their Participating Salary (PS)
adjusted, pro-rata, for the portion of the period that
they participate.
E. Participants who change Business Units during the plan
year will have their incentive payment determined by
management of each Business Unit in proportion to the time
served in each Business Unit.
F. A Participant whose employment terminates either
voluntarily or involuntarily (excluding job elimination,
retirement, disability, or death) prior to the end of the
Plan shall not be entitled to any incentive compensation
for the period covered by the Plan.
G. Participation in the Plan does not affect the duration of
a participant's employment, which remains "employment at
will". Either the participant or the Company may
terminate employment at any time.
III. INCENTIVE COMPENSATION FUND
A. An Incentive Compensation Fund (the "Fund") will be
created based upon achievement of the Performance
Objectives. The Fund will be credited with at least
25 percent of the aggregate Participating Salaries of the
participants if the minimum (entry) Performance Objectives
are achieved. No Fund will be created if that level of
performance is not achieved.
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B. The Fund has no maximum limit, although only 100% of
aggregate Participating Salaries may be paid as incentive
compensation for the year. Any excess, or any portion of
the Fund not awarded, will carry over to future years.
C. The Compensation Committee may increase or decrease the
total amount of incentive compensation earned to account
for exceptional events that affect the Performance
Objectives.
IV. PERFORMANCE OBJECTIVES
The Performance Objectives for 1994 are Earnings Per Share
(60% weighting), Net Asset Turnover (30% weighting), and Sales
(10% weighting). Charts for each of these Performance
Objectives are attached. The Company's financial records are
used to measure achievement of Performance Objectives.
V. PAYMENT OF INCENTIVE COMPENSATION
The amount of the whole Fund for all Plan Participants is
determined by the Compensation Committee of the Board of
Directors, while the portion of the Fund to be allocated to
each Business Unit is determined by Management. Management
determines individual incentive payouts as soon as possible
following determination of the Incentive Compensation Fund.
The actual incentives awarded are paid to participants in cash
as soon thereafter as possible, less any required withholdings.
However, Participants who have not yet met their stock
ownership targets will receive 25% of their incentive payment
in the form of the company's common stock.
VI. CHANGE OF CONTROL
In the event of a Change of Control of Owens-Corning Fiberglas
during a Plan year, incentive awards shall be paid at the
higher of:
- one half of Participating Salary;
- projected performance for the year, determined at the
time the Change of Control occurs.
VII. GENERAL PROVISIONS
The Company may amend, modify, or terminate this Plan at any
time and will determine whether or not a Plan will be
established for future years, and the terms of any future plan.
A termination or modification shall only become effective 30
days after written notice thereof is given to each participant.
Each participant shall be eligible to receive the incentive
compensation to which he/she would have been otherwise entitled
but for such termination or modifica-tion, pro-rata for the
period of the plan year prior to the termination or
modification.
PAGE
Exhibit (10)
February 11, 1994
Mr. Larry T. Solari
105 Secor Woods Lane
Perrysburg, Ohio 43551
Dear Larry:
In accordance with our discussions concerning your continuing
employment with and eventual termination from Owens-Corning
Fiberglas Corporation (the "Company"), the following agreement is
proposed:
1. EMPLOYMENT
a. Although you have resigned as an Officer of the Company
effective December 31, 1993, you will continue as a
salaried employee with the title Consultant to the
Chairman, at your current base salary of $25,833.33 per
month through January 2, 1995, at which time you will be
terminated as an employee for other than cause (such date
hereinafter referred to as your "Separation Date").
b. In this capacity, you shall devote such portion of your
business time as is reasonably required to fulfill such
duties and responsibilities as the Chairman shall from time
to time assign to you. The Company acknowledges that such
duties and responsibilities will not require your full
business time and hereby consents to your accepting other
full time employment during the term of this agreement so
long as such employment does not materially interfere with
your duties hereunder.
c. In any event, you agree that you will not, directly or
indirectly (whether as owner, partner, consultant,
employee, officer, member of a board of directors or
otherwise) at any time during the period ending December
31, 1997, engage or participate in any business that is
involved in the manufacture of glass fiber insulation,
including, without limitation, employment or affiliation
with the following companies and each of their subsidiaries
and affiliates:
Compagnie de St. Gobain, Manville Corporation, Knauf,
Guardian Industries and PPG Industries, Inc. The foregoing
provisions of this paragraph c will not preclude you from
owning stock in any corporation listed on a national stock
exchange so long as your ownership does not exceed 1% of
the total issued and outstanding shares in any such
corporation.
d. From the date hereof through January 2, 1995 you will not
attempt to employ anyone then employed by the Company by
initiating any contact with any such person for such
purpose.
e. From the date hereof through your Separation Date, you
shall continue to participate in all employee benefits
comparable in type and amount to benefits provided to those
employees holding positions with the Company similar to
that held by you on December 30, 1993. The Company shall
make available to you during the term of this agreement
such office space and secretarial and other support
services as shall be necessary or appropriate to carry out
your duties hereunder. It is expressly understood that you
may use such office space and support services for such
lawful personal purposes as you shall reasonably determine.
PAGE
f. You will receive an incentive payment pursuant to the terms
of the Company's 1993 Corporate Incentive Plan. This will
be paid in February, 1994, after final performance is
determined, and will be $250,000.
g. In addition, you will be paid a bonus for 1994 of $170,500
(your target amount) on your Separation Date.
2. SEVERANCE BENEFITS
Your employment will terminate on January 2, 1995 and at that
time you will receive all amounts due under the Amended Key
Management Severance Benefits Agreement dated January 27, 1992.
A brief summary of amounts due under that agreement is as
follows:
a. You will receive a payment equal to two (2) years base
salary and two years incentive bonuses (at the higher of
three years average target or actual bonus). This amount
will be $941,666.
b. You will also receive a special severance payment of
$160,320.
c. You will also receive a pension supplement consisting of
the additional benefit you would have earned had you
remained employed for three years following your Separation
Date and had three (3) additional years of pension service.
This amount, based upon 120% of the December, 1993 Pension
Benefit Guaranty Corporation ("PBGC") interest rate of
4.25%, is approximately $904,505. Although your Severance
Agreement calls for this amount to be figured at the time
of your separation (i.e. January 2, 1995), we will compute
it using 120% of the 4.25% PBGC interest rate in effect on
December 31, 1993, and the rate on the date of your
separation and pay you the greater of the two amounts.
d. Your payment on your Separation Date will also include
accrued vacation for 1994 of $29,807.
The payments described in a, b, c and d above will be ordinary
income when you receive them on January 2, 1995.
e. Your participation will continue in the Company's active
Health Care and Long Term Disability programs in effect
from time to time for 36 months following your Separation
Date (if you make the health care contributions as
currently required). Should you die before the expiration
of such 36 month period, your wife will be eligible to
continue in such programs for the balance of such period
and under the same terms and conditions.
3. EFFECT OF SEVERANCE ON EMPLOYEE BENEFITS
a. Savings & Deferral Investment Plan (SDIP)
On your Separation Date all Company contributions will be
vested. You should contact the SDIP Department in Toledo
to discuss your payment options in late 1994.
b. Pension
As an employee with vested rights in the Owens-Corning
Retirement Plan, you will be entitled to a deferred benefit
after your Separation Date, payable on or after age 55.
Your pension earnings for this purpose will not be
increased by compensation paid pursuant to this agreement
other than under paragraph 1(a). We have estimated your
lump sum pension amount as of your age 55 to be $1,124,643,
based on 120% of the December 31, 1993 "PBGC" rate of
4.25%. We will guaranty at least that PBGC rate until your
attainment of age 55.
PAGE
Only part of this benefit will be paid from the Retirement
Plan. The amount above government imposed limits will
either be paid by the Company or has already been paid to
you through the Pension Preservation Trust. Of the
$1,124,643 total amount, our current estimate is that about
$550,000 would be payable outside of the Retirement Plan,
less the pre-tax equivalent of all amounts which have
previously been funded for you through the Pension
Preservation Trust.
4. OTHER CONSIDERATIONS
The Company will also provide you the following benefits:
a. If you should die between now and your attainment of age
55, the normal survivor's benefit then in effect would be
payable from the Retirement Plan. The difference between
$1,124,643 (less the pre-tax equivalent of PPT payment and
the value of the survivor benefit) would be paid to your
survivor in a lump sum.
b. You have 17,000 stock options which were granted in August,
1990; 17,000 stock options granted in June, 1991; 20,000
stock options granted in June, 1992; and 20,000 stock
options granted in June, 1993. Prior to your Separation
Date, the options will continue to vest under their normal
three year vesting schedule. All of your stock awards
(subject to compliance with this agreement) will become
fully vested on your Separation Date. Any options not
exercised before your Separation Date will be exercisable
for three years thereafter.
In addition, you were granted 3,600 restricted shares in
August, 1990; 3,300 restricted shares in June, 1991; 3,000
restricted shares in June, 1992; and 2,400 restricted
shares in June, 1993. The share award from 1990 will vest
in August of 1994. Any restrictions on the remaining
shares will lapse on your Separation Date.
Please call Kathy Iott, extension 6643, for instructions on
exercising your options or any questions relative to the
other stock awards. Before the delivery of any restricted
share certificates or the exercise of the option shares,
appropriate arrangements for the payment of applicable
federal, state and local or other taxes must be arranged
and Kathy can provide you with that information.
c. Following the end of the 36-month period of health
continuation provided in Section 2(e), you and your
dependents will be eligible to participate in the Company's
health care plan for retirees as then in effect upon making
the appropriate contribution. You will be advised of these
benefits shortly before the expiration of the 36-month
period of active health care.
d. The Company will reimburse you for your reasonable expenses
in reviewing this agreement with your legal and financial
advisors.
e. The Company will continue your current umbrella excess
personal liability insurance coverage through December 31,
1994.
f. At your election, outplacement assistance will be offered
through King, Chapman, Broussard & Gallagher in New York or
a local firm in the Toledo area. Any reasonable expenses
incurred to travel to New York City, as necessary to
utilize these services, will be reimbursed. Please contact
John Mallin to make appropriate arrangements.
PAGE
5. EMPLOYEE CONDUCT
In consideration of the benefits provided to you under this
agreement, from the date hereof through December 31, 1996, you
agree to refrain from acting or conducting yourself in any
manner which damages the business reputation of the Company.
If, pursuant to the provisions of paragraph 9 hereof, you are
found to have breached the provisions of this paragraph 5 or
paragraphs 1(c), 1(d) or 7 hereof. The Company will be
entitled to whatever remedy is deemed appropriate under the
provisions of paragraph 9 including, without limitation,
injunctive relief or forfeiture of any amounts that are then
due to you or which may thereafter become due under the terms
of this agreement except to the extent such forfeiture is
prohibited by the Employee Retirement Income Security Act of
1974, as amended.
6. RELEASE AND COMPANY INDEMNITY
a. In consideration of the benefits conveyed to you pursuant
to the terms of this letter agreement, you hereby agree to
release and discharge the Company, and its subsidiaries,
affiliates, officers, directors, employees and agents (the
"Released Persons") from any claim you may now have or may
hereafter have against the Company or such Released Persons
(excluding any claim for the compensation and benefits
described in this letter) arising in connection with your
employment by the Company or any of its subsidiaries or
affiliates by executing the separate release attached
hereto as Exhibit A.
b. The Company also hereby releases you from any causes of
action it may have against you arising out of, or in any
way connected with, or related to your employment with the
Company.
c. The Company agrees to indemnify you and hold you harmless
in accordance with its then current policy or practices for
active officers and employees for any claims made against
you by third parties arising out of the proper performance
of your duties as an officer or employee of the Company or
any of its subsidiaries or affiliates.
7. CONFIDENTIALITY
You shall hold in strict confidence and not disclose to any
other person any confidential, non-public information relating
to the business, research and development, employees and
customers of the Company and its subsidiaries and affiliates,
except (a) to the extent required by law, or (b) with the
written consent of the Company. Except to the extent that the
Chairman expressly otherwise provides in writing, you shall
immediately deliver to the Company all files containing data,
correspondence, books, notes and other written or graphic
records under your control related to the Company or its
subsidiaries or affiliates, regardless of the media in which
they are embodied or contained.
8. MISCELLANEOUS
Except to the extent that your rights to the benefits are
governed by the terms of the company's employee benefit plans,
programs or arrangements, or by an agreement issued in
accordance with the terms of such a plan, program or
arrangement, or by the Amended Key Management Severance
Benefits Agreement signed by you February 5, 1992, this
agreement embodies the entire agreement and understanding
between you and the Company and supersedes all prior
understandings or agreements between you and the Company
relating to your employment by, and eventual termination from,
the Company. Neither this agreement nor any term hereof may be
changed, waived or terminated except by an instrument in
writing signed by the party against which enforcement of the
change, waiver or termination is sought. This agreement shall
be governed by, and construed in accordance with, the laws of
the State of Ohio.
PAGE
9. ARBITRATION
Any dispute arising out of or related to this Agreement (that
cannot be settled through negotiation between the parties or
their representatives within 15 days) shall, upon written
demand of either of the parties, be resolved by binding
arbitration, administered by the arbitrator, under the
Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator shall be selected by the parties
and if within five days they cannot agree upon an arbitrator,
the selection shall be made by the President of the Toledo Bar
Association within 15 days of the request to the President to
make the selection. The arbitrators fees will be negotiated
with and agreed upon by the parties. The extent of any
schedule for discovery will be determined by the arbitrator.
The arbitration hearing will be held as soon as possible after
the arbitrator is selected, and the arbitrator's binding award
will be rendered within 10 days after the hearing is concluded.
In the award, the arbitrator may allocate the payment of costs
and the fees of the attorneys and arbitrator as he sees fit.
The award shall be enforceable and subject to appeal under
Section 2711 of the Ohio Revised Code.
If the foregoing is entirely satisfactory to you, please sign the
attached Release, one copy of this letter in the place provided for
your signature and return them to me, whereupon this letter will be
effective.
Sincerely,
OWENS-CORNING FIBERGLAS CORPORATION
/s/R. D. Heddens
Robert D. Heddens
Senior Vice President
Human Resources
ACCEPTED AND AGREED TO:
/s/Larry Solari 2-16-94
___________________ ___________
Larry T. Solari Date
DLJ001.4
PAGE
GENERAL RELEASE OF
OWENS-CORNING FIBERGLAS CORPORATION
BY LARRY T. SOLARI
___________________________________
In exchange for the understandings of Owens-Corning Fiberglas
Corporation (the "Company") described in a letter agreement dated
February 11, 1994, (including salary continuation, bonus payments
and accelerated vesting of stock options and stock awards), I, my
heirs, personal representatives, successors and assigns, hereby
release and discharge the Company, its successors, subsidiaries,
officers, directors and employees from all claims, liabilities,
demands or causes of action, known or unknown, arising out of or in
any way connected with or related to my employment and the
termination thereof. This includes, but is not limited to, claims
of wrongful discharge, breach of any implied or express contract,
whether oral or written, intentional or negligent infliction of
emotional harm, defamation, or any other tort. This also includes
any claims based on any local, state, or federal statute relating to
age, sex, race, or other form of discrimination such as, but not
limited to, the Age Discrimination in Employment Act, Title VII of
the Civil Rights Act of 1964, and any breach of any implied or
express contract not part of this General Release.
I understand I have seven days after signing to rescind this release
agreement and this release and the letter agreement of even date
herewith between the Company and me (the "Letter Agreement") shall
not be effective until after such period has expired. In the event
that I rescind this release, I understand that the Letter Agreement
shall be rendered void and without effect and that I shall be
obligated to return to the Company any consideration previously paid
to me by the Company pursuant to the terms of such Letter Agreement.
I acknowledge that the Company has advised me that I should consult
an attorney prior to executing this Release and the Letter
Agreement, and that I have had 21 days to consider the terms set
forth in the Letter Agreement and the conditions set forth in this
Release.
_________________________ February ___, 1994
Larry T. Solari
Received by Senior Vice President, Human Resources:
February ___, 1994
_________________________
Robert D. Heddens
DLJ002.4