Exhibit (10)
OWENS CORNING
Long-Term Performance Incentive Plan Terms Applicable to Officers
Other Than Certain Executive Officers
Set forth below are the Rules and Regulations of the Compensation
Committee, promulgated under the Stock Performance Incentive Plan
as amended on June 15, 1995, that constitute the long-term
performance incentive plan terms applicable to those employees of
the Company and its Subsidiaries who are elected or appointed
officers of the Company, including members of the Board of
Directors who are such employees, other than any such employees
who are executive officers of the Company and whose remuneration
for any performance period hereunder the Committee anticipates
would not be deductible by the Company in whole or in part but
for compliance with section 162(m)(4)(C) of the Internal Revenue
Code of 1986 as amended ("162(m) Covered Employee"). Such long-
term performance incentive plan terms are hereafter referred to
as the "LT Plan".
1. All employees of the Company and its Subsidiaries who are
elected or appointed officers of the Company, including
members of the Board of Directors who are such employees,
other than 162(m) Covered Employees, shall be eligible to be
selected to participate in this LT Plan. The Committee may
select the eligible employees who shall participate in this
LT Plan in any performance period at any time before or
during the first half of the performance period. Selection
to participate in this LT Plan in any performance period
does not require the Committee to, or imply that the
Committee will, select the same person to participate in the
LT Plan in any subsequent performance period.
2. Being selected to participate in this LT Plan in any
performance period means, in the case of eligible executive
officers of the Company, that the individual is being
granted the opportunity to earn a cash award equal to the
Fair Market Value of up to a specified number of shares of
Company common stock if the Company attains performance
goals established by the Committee for such performance
period and the participant's employment by the Company, its
Subsidiaries and Affiliates continues without interruption
during that period ("phantom performance shares"). Payment
for each phantom performance share that is earned shall be
based on the Fair Market Value of a share of Company common
stock on the date on which the Committee determines that the
performance goals and any other material terms applicable to
such phantom performance share were in fact satisfied.
If the "target" performance goals designated by the Committee
for any performance period are not attained or exceeded, then, any
provision above of this paragraph 2 to the contrary notwithstanding,
each executive officer who has been granted phantom performance
shares for such performance period shall earn the number of such
phantom performance shares determined in accordance with the next
sentence if such officer's employment by the Company, its
Subsidiaries and Affiliates continues for seven years (or such
shorter period as the Committee may specify) after the close of
such performance period. The number of phantom performance shares
that shall be earned in such event shall be equal to (a) minus
(b) where (a) is the number of phantom performance shares
which the officer would have earned if the "target" performance
goals had been attained but not exceeded in such performance period,
and (b) is the number of phantom performance shares which the officer
in fact earned in such performance period. Payment for each
phantom performance share that is earned in such event shall be
based on the Fair Market Value of a share of Company common stock on
the last day of such seven year (or shorter) period (or, if there is
no such share traded on such day, on the next preceding day on which
such a share was traded).
Phantom performance shares may be redeemed only for cash and
may not be redeemed for equity securities in lieu of cash,
and are not transferable by the participant other than by
will or the laws of descent and distribution (within the
meaning of SEC Rule 16b-3(a)(2)). If (and only if) the
Committee expressly so provides at the time an eligible
executive officer is selected to participate in this LT Plan
in any performance period, the participant's award for such
performance period may be paid in the form of shares of
Company common stock rather than cash, in which case all
provisions of this LT Plan applicable to phantom performance
shares (other than the preceding sentence) shall likewise
apply to the participant's opportunity to earn such shares
of Company common stock. Being selected to participate in
this LT Plan in any performance period means, in the case of
participants other than executive officers of the Company,
that the individual is being granted a combination of
restricted shares of Company common stock and performance
shares. The restricted shares shall entitle the participant
to vote and receive dividends, but shall be non-transferable
by the participant and shall be forfeited to the Company
unless either (a) the Company achieves performance goals
specified for such performance period and the participant's
employment by the Company, its Subsidiaries and Affiliates
continues without interruption during that period, or (b)
the participant's employment by the Company, its
Subsidiaries and Affiliates continues for seven years (or
such shorter period as the Committee may specify) after the
close of the performance period. The performance shares
shall represent the opportunity to earn up to a specified
number of shares of Company common stock in excess of the
number of restricted shares, or their cash value (as the
Committee may determine), if the Company achieves specified
performance goals during the performance period that exceed
the performance goals which must be achieved to earn the
restricted shares and if the participant's employment by the
Company, its Subsidiaries and Affiliates continues without
interruption during that period.
3. At any time before or during the first half of each
performance period, the Committee shall establish the method
for computing the number of phantom performance shares,
restricted shares and performance shares (as applicable)
which each participant in the LT Plan for such performance
period will earn under the LT Plan for such performance
period if the performance goals established by the Committee
for such performance period are attained in whole or in part
and if the participant's employment by the Company, its
Subsidiaries and Affiliates continues without interruption
during that performance period. At any time before or during
the first half of each performance period, the Committee shall
also establish the performance goals for such performance period,
which may be based on any of the following performance criteria,
either alone or in any combination, and on either a consolidated
or business unit level, as the Committee may determine, or on
such other criteria as the Committee may select: sales growth,
earnings per share growth, cash flow, cash flow from operations,
operating profit growth, net income growth, operating margin, net
income margin, return on net assets, return on total assets,
return on common equity, return on total capital, and total
shareholder return. The foregoing criteria shall have any
definitions that the Committee may specify, which may include or
exclude any or all of the following items as the Committee may
specify: extraordinary, unusual or non-recurring items;
effects of accounting changes; effects of currency fluctuations;
effects of financing activities (e.g., effect on earnings per
share of issuance of convertible debt securities); expenses for
restructuring or productivity initiatives; other non-operating
items; spending for acquisitions; effects of divestitures; and
effects of asbestos activities and settlements. Any such
performance criterion or combination of such criteria may apply
to the participant's award opportunity in its entirety or to
designated portion or portions of the award opportunity, as the
Committee may specify.
At any time prior to payment of an award for a performance
period hereunder, the Committee may determine whether
extraordinary items, such as capital gains and losses, which
affect any performance criterion applicable to the award
(including but not limited to the criterion of net income)
shall be excluded or included in determining the extent to
which the corresponding performance goal has been achieved.
4. The first performance period under this LT Plan shall be the
period commencing on July 1, 1995 and ending on December 31,
1997. New performance periods of three years' duration each
shall commence on January 1, 1996 and on each subsequent
anniversary of that date.
5. At any time before or during the first half of each
performance period, the Committee shall establish the number
of phantom performance shares which each eligible executive
officer selected to participate in this LT Plan in such
performance period, and the number of restricted shares and
performance shares which each other eligible officer
selected to participate in this LT Plan in such performance
period, shall be granted the opportunity to earn if the
performance goals applicable to such performance period are
achieved in whole or in part. In no event shall any
participant who is an executive officer be granted the
opportunity to earn more than 50,000 shares (or the cash
equivalent thereof) with respect to any performance period,
and in no event shall any participant who is not an
executive officer be granted the opportunity to earn more
than 8,000 restricted shares and 4,000 performance shares
with respect to any performance period. (The foregoing
amounts represent the highest number of shares (or
equivalent amount of cash) which the participants in
question may be granted the opportunity to earn hereunder if the
maximum performance objectives are achieved with respect to
any performance period). The foregoing amounts shall be
appropriately adjusted to reflect a change in corporate
capitalization, such as a stock split or dividend, or a
corporate transaction, such as any merger, consolidation,
separation (including a spinoff or other distribution of
property), reorganization, or partial or complete
liquidation.
6. Payment of any phantom performance shares shall be
contingent on continued employment by the Company, its
Subsidiaries and Affiliates during the performance period to
which such phantom performance shares relate. The only
exceptions to this rule apply in the event of termination of
employment by reason of death, Disability or Retirement
(within the meaning of the Stock Performance Incentive Plan
as amended by the Board of Directors on June 15, 1995
(SPIP)), or in the event of a Change of Control of the
Company (within the meaning of the SPIP), during a
performance period, in which case the following provisions
shall apply. In the event that the employment of a
participant who has been granted phantom performance shares
with respect to a performance period terminates by reason of
death or Disability during such performance period, the
participant shall be paid the cash value of the number of
phantom performance shares, if any, that the participant would have
earned for such performance period if the participant's
employment had not terminated prior to the end of the
performance period, multiplied by a fraction the numerator
of which shall be the number of full calendar months elapsed
in the performance period prior to the termination of
employment and the denominator of which shall be 30, in the
case of the first performance period, or 36, in the case of
subsequent performance periods. Such fractional amount
shall be paid at the time payment would have been made if the
participant's employment had not terminated prior to the end
of the performance period. In the case of a Change of Control
during a performance period, all phantom performance shares then
outstanding shall become fully vested, earned and payable as
if maximum performance levels were attained and shall be
cashed out by the Company as of the date the Change of Control
occurs, if and to the extent so provided in Article 8 of the SPIP.
In the event that the employment of a participant who has been
granted phantom performance shares with respect to a
performance period terminates by reason of Retirement during
such performance period, the participant may (but need not,
as the Committee may determine) be paid the cash value of
the number of phantom performance shares, if any, that the participant
would have earned for such performance period if the
participant's employment had not terminated prior to the end
of the performance period, multiplied by a fraction the
numerator of which shall be the number of full calendar
months elapsed in the performance period prior to
termination of employment and the denominator of which shall
be 30, in the case of the first performance period, or 36,
in the case of subsequent performance periods. Any such payment
shall be made at the time payment would have been made if the
participant's employment had not terminated prior to the end of the
performance period. A participant whose employment terminates
prior to the end of a performance period for any reason not
excepted above shall not be entitled to any payment for phantom
performance shares granted to such participant for that performance
period.
7. In the event that the employment of a participant who has
been granted restricted shares and performance shares with
respect to a performance period terminates by reason of
death or Disability during such performance period, the
participant shall vest in that number of the restricted
shares, if any, and shall be issued that number of
performance shares, if any, that the participant would have
vested in or been issued at the end of the performance period if the
participant's employment had not terminated prior to the end
of the performance period, multiplied by a fraction the
numerator of which shall be the number of full calendar
months elapsed in the performance period prior to the
termination of employment and the denominator of which shall
be 30, in the case of the first performance period, or 36,
in the case of subsequent performance periods. Such
fractional number of shares shall be issued free of
restrictions at the time shares would have vested or been issued
if the participant's employment had not terminated prior to the
end of the performance period. In the case of a Change of Control
during a performance period, all restricted shares and performance
shares granted with respect to such performance period that
are then outstanding shall become fully vested, earned and
distributable as if maximum performance levels were attained
and shall be cashed out by the Company as of the date the Change of
Control occurs, if and to the extent so provided in Article 8 of the
SPIP. In the event that the employment of a participant
who has been granted restricted shares and performance
shares with respect to a performance period terminates by
reason of Retirement during such performance period, the
participant may (but need not, as the Committee may
determine) vest in the number of restricted shares and be
issued the number of performance shares, if any, that
the participant would have earned for such performance period
if the participant's employment had not terminated prior to the end
of the performance period, multiplied by a fraction the
numerator of which shall be the number of full calendar
months elapsed in the performance period prior to
termination of employment and the denominator of which shall
be 30, in the case of the first performance period, or 36,
in the case of subsequent performance periods. Any such shares
shall be issued free of restrictions at the time shares would have
vested or been issued if the participant's employment had not
terminated prior the end of the performance period. A
participant whose employment terminates prior to the end of
a performance period for any reason not excepted above shall
not be entitled to vest in any restricted shares or be
issued any performance shares granted to such participant
for that performance period. In the case of a Change of
Control after a performance period, vesting of any
restricted shares granted with respect to such performance
period that are then outstanding shall continue to be
contingent on the participant's continued employment for
seven years (or such shorter period as the Committee may
specify) after the close of such performance period, in
accordance with paragraph 2 above. If any termination of
employment (whether by reason of death, Disability,
Retirement or otherwise) occurs at any time after the
conclusion of a performance period, any restricted shares
that were granted with respect to such performance period
and that are outstanding on the date of such termination of
employment shall be forfeited.
8. Payment and vesting of any awards granted under this LT Plan
shall be contingent upon stockholder approval at the 1996
Annual Meeting of Stockholders of the amendments to the Stock
Performance Incentive Plan that were adopted by the Board of
Directors on June 15, 1995. Unless and until such stockholder
approval is obtained, no LT Plan award shall vest or be paid.
9. Except as provided otherwise in this LT Plan or by the
Committee, payment and vesting of any award granted under
this LT Plan shall be contingent upon satisfaction of the
performance goals and employment conditions applicable to
such award.
10. At any time during a performance period, and without the
consent of any participant, the Committee may change the
performance criteria and/or performance goals applicable to
phantom performance shares, restricted shares and
performance shares granted under this LT Plan for such
performance period. Any such change may operate to the
detriment or advantage of the affected participants.
11. All awards granted under this LT Plan, whether phantom
performance shares, restricted shares or performance shares,
are intended to constitute Stock Bonus Awards within the
meaning of the SPIP, and are granted under and subject to
the terms and conditions of the SPIP, which shall control in
the event of any conflict. All such awards shall be
documented by a written instrument issued to the participant
and signed by a duly authorized representative of the
Company. This LT Plan is not intended to confer any rights
upon any individual to any award or with respect to any
award. All such rights, if any, shall be governed by and
determined exclusively in accordance with the written
instrument issued to the participant in accordance with the
foregoing provisions of this paragraph.
12. Capitalized terms which are used but not defined in this LT
Plan shall have the meanings ascribed to such terms in the
SPIP, unless the context requires otherwise.
13. The Committee may amend or terminate this LT Plan at any
time, provided that no such amendment or termination shall
adversely affect any outstanding award without the written
consent of the participant.
14. Any provision of this LT Plan to the contrary
notwithstanding, (a) no provision of this LT Plan shall
apply to any 162(m) Covered Employee, and (b) any provision
of this LT Plan that would prevent an award to any 162(m)
Covered Employee under any plan or arrangement other than this LT
Plan from qualifying as "performance-based compensation" under section
162(m)(4)(C) of the Code shall be administered, interpreted
and construed to enable such award to so qualify and any
provision that cannot be so administered, interpreted and
construed shall to that extent be disregarded.