EXHIBIT 10
LOUISIANA-PACIFIC CORPORATION
1997 INCENTIVE STOCK AWARD PLAN
ARTICLE 1. ESTABLISHMENT AND PURPOSE
1.1 Establishment. LOUISIANA-PACIFIC CORPORATION ("Corporation"),
hereby establishes the Louisiana-Pacific Corporation 1997 Incentive Stock Award
Plan (the "Plan"), effective as of March 1, 1997, subject to stockholder
approval as provided in Article .
1.2 Purpose. The purpose of the Plan is to promote the long-term
interests of Corporation and its stockholders by enabling Corporation to
attract, retain, and reward key employees of Corporation and its subsidiaries
and to strengthen the mutuality of interests between such employees and
Corporation's stockholders. The Plan is designed to serve this purpose by
offering stock options and other equity-based incentive awards and encourage key
employees to acquire an ownership in Corporation.
ARTICLE 2. DEFINITIONS
2.1 Defined Terms. The following definitions are applicable to the
Plan:
"AWARD" means an award or grant made to a Participant pursuant to
the Plan.
"AWARD AGREEMENT" means an agreement as described in Section of the
Plan.
"BOARD" means the Board of Directors of Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, or any successor thereto, together with rules,
regulations, and interpretations promulgated thereunder. Where the context
so requires, any reference to a particular Code section will be construed
to refer to the successor provision to such Code section.
"COMMITTEE" means the Compensation Committee of the Board.
"COMMON STOCK" means the common stock, $1 par value, of Corporation
or any security of Corporation issued in substitution, exchange, or lieu
thereof.
"CORPORATION" means Louisiana-Pacific Corporation, a Delaware
corporation, or any successor corporation thereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FAIR MARKET VALUE" means on any given date, the closing price per
share of Common Stock as reported for such day by the principal exchange
or trading market on which Common Stock is traded (as determined by the
Committee) or, if Common Stock was not traded on such date, on the next
preceding day on which Common Stock was traded. If the Common Stock is not
listed on a stock exchange or if trading activities for Common Stock are
not reported, the Fair Market Value will be determined by the Committee.
"PARTICIPANT" means an employee of Corporation or a Subsidiary who
is granted an Award under the Plan.
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"PLAN" means this Louisiana-Pacific Corporation 1997 Incentive Stock
Award Plan, as set forth herein and as it may be hereafter amended and
from time to time.
"SHARE" means a share of Common Stock.
"SUBSIDIARY" means any corporation in which Corporation directly or
indirectly controls 50 percent or more of the total combined voting power
of all classes of stock having voting power.
"VEST" or "VESTED" means:
(a) In the case of an Award that requires exercise, to be or to
become immediately and fully exercisable and free of all restrictions;
(b) In the case of an Award that is subject to forfeiture, to be or
to become nonforfeitable, freely transferable, and free of all
restrictions;
(c) In the case of an Award that is required to be earned by
attaining specified performance goals, to be or to become earned and
nonforfeitable, freely transferable, and free of all restrictions; or
(d) In the case of any other Award as to which payment is not
dependent solely upon the exercise of a right, election, exercise, or
option, to be or to become immediately payable and free of all
restrictions.
ARTICLE 3. ADMINISTRATION
3.1 General. The Plan will be administered by the Committee. The
Committee will have full power and authority to administer the Plan in its sole
discretion. A majority of the members of the Committee will constitute a quorum
and action approved by a majority will be the act of the Committee.
3.2 Authority of the Committee. Subject to the terms of the Plan,
the Committee:
(a) Will select the Participants, determine the types of Awards to
be granted to Participants, determine the shares or share units subject to
Awards, and determine the terms and conditions of individual Award
Agreements;
(b) Has the authority to interpret the Plan, to establish, amend,
and revoke any rules and regulations relating to the Plan, to make all
other determinations necessary or advisable for the administration of the
Plan; and
(c) May correct any deficit, supply any omission, or reconcile any
inconsistency in the Plan or in any Award Agreement in the manner and to
the extent the Committee deems desirable to carry out the purposes of the
Plan.
Decisions of the Committee, or any delegate as permitted by the Plan, will be
final, conclusive, and binding on all Participants.
3.3 Liability of Committee Members. No member of the Committee will
be liable for any action or determination made in good faith with respect to the
Plan, any Award, or any Participant.
ARTICLE 4. DURATION OF THE PLAN AND SHARES SUBJECT TO THE PLAN
4.1 Duration of the Plan. The Plan is effective March 1, 1997,
subject to approval by Corporation's stockholders as provided in Article . The
Plan will remain in effect until Awards have been granted covering all the
available Shares and
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all outstanding Awards have been exercised, settled, or terminated in accordance
with the terms of the applicable Award Agreement, or the Plan is otherwise
terminated by the Board. Termination of the Plan will not affect outstanding
Awards.
4.2 Other Stock Plans. The Plan is separate from the following
existing plans (the "Prior Plans"):
Louisiana-Pacific Corporation 1991 Employee Stock Option Plan;
Louisiana-Pacific Corporation 1984 Employee Stock Option Plan; and
Louisiana-Pacific Corporation Key Employee Restricted Stock Plan.
The Plan will neither affect the operation of the Prior Plans nor be affected by
the Prior Plans, except that no further stock options or restricted stock awards
will be granted under any of the Prior Plans after the date the Plan is approved
by Corporation's stockholders as described in Article .
4.3 General Limitation on Awards. Subject to adjustment pursuant to
Article of the Plan, the maximum number of Shares for which Awards may be
granted under the Plan may not exceed 5,000,000 Shares.
4.4 Cancellation or Expiration of Awards. If an Award under the Plan
is canceled or expires for any reason prior to having been fully vested or
exercised by a Participant or is settled in cash in lieu of Shares or is
exchanged for other Awards, all Shares covered by such Awards will again become
available for additional Awards under the Plan.
ARTICLE 5. ELIGIBILITY
Officers and other key employees of Corporation and its Subsidiaries
(including employees who may also be directors of Corporation or a Subsidiary)
who, in the Committee's judgment, are or will be contributors to the long-term
success of Corporation will be eligible to receive Awards under the Plan.
ARTICLE 6. AWARDS
6.1 Types of Awards. Awards under the Plan may consist of: stock
options (either incentive stock options, within the meaning of Section 422 of
the Code, or nonstatutory stock options), stock appreciation rights, performance
shares, restricted stock grants, and other stock-based awards (as described in
Article of the Plan). Awards of performance shares and restricted stock may
provide the Participant with dividends or dividend equivalents and voting rights
prior to vesting.
6.2 Award Agreements. Each Award will be evidenced by a written
Award Agreement between Corporation and the Participant. Award Agreements may,
subject to the provisions of the Plan, contain any provision approved by the
Committee. Any Award Agreement may make provision for any matter that is within
the discretion of the Committee or may retain the Committee's discretion to
approve or authorize any action with respect to the Award during the term of the
Award Agreement.
6.3 Nonuniform Determinations. The Committee's determinations under
the Plan or under one or more Award Agreements, including without limitation,
(a) the selection of Participants to receive Awards, (b) the type, form, amount,
and timing of Awards, (c) the terms of specific Award Agreements, and (d)
elections and determinations made by the Committee with respect to exercise or
payments of Awards, need not be uniform and may be made by the Committee
selectively among Participants and Awards, whether or not Participants are
similarly situated.
6.4 Provisions Governing All Awards. All Awards will be subject to
the following provisions:
(a) Transferability. Except as otherwise provided in this Section ,
each Award (but not Shares issued following Vesting or exercise of an
Award) will not be transferable other than by will or the laws of descent
and distribution and Awards requiring exercise will be exercisable during
the lifetime of the Participant only by the
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Participant or, in the event the Participant becomes legally incompetent,
by the Participant's guardian or legal representative. Notwithstanding the
foregoing, the Committee, in its discretion, may include in any Award
Agreement a provision that the Award is transferable, without payment of
consideration, to immediate family members of the Participant or to a
trust for the benefit of or a partnership composed solely of such family
members.
(b) Employment Rights. Neither the adoption of the Plan nor the
granting of any Award will confer on any person the right to continued
employment with Corporation or any Subsidiary, nor will it interfere in
any way with the right of Corporation or a Subsidiary to terminate such
person's employment at any time for any reason, with or without cause.
(c) Effect of Change in Control. The Committee may, in its
discretion, include in any Award Agreement a provision that upon the
effective date of a change in control of Corporation (as that term may be
defined in the Award Agreement), all or a specified portion of the Award
(i) will become fully Vested, (ii) will terminate, or (iii) may be
converted into shares of an acquiror. In any such change in control
provision, the Committee may provide whether or to what extent such
acceleration in the Vesting of an Award will be conditioned to avoid
resulting in an "excess parachute payment" within the meaning of Section
280G(b) of the Code.
ARTICLE 7. STOCK OPTIONS
The option price for each stock option may not be less than 100
percent of the Fair Market Value of the Common Stock on the date of grant. Stock
options will be exercisable for such period as specified by the Committee in the
applicable Award Agreement, but in no event may options be exercisable for a
period of more than ten years after their date of grant. The option price of
each Share as to which a stock option is exercised must be paid in full at the
time of exercise. The Committee may, in its discretion, provide in any Award
Agreement for a stock option that payment of the option price may be made in
cash, by tender of Shares owned by the Participant valued at Fair Market Value
as of the date of exercise, subject to such guidelines for the tender of Shares
as the Committee may establish, in such other consideration as the Committee
deems appropriate, or a combination of cash, shares of Common Stock, and such
other consideration. The number of Shares subject to options and stock
appreciation rights granted under the Plan to any individual Participant during
any one-year period may not exceed 300,000 Shares.
In the case of an Option designated as an incentive stock option,
the terms of the option and the Award Agreement must conform with the statutory
and regulatory requirements specified pursuant to Section 422 of the Code, as in
effect on the date such incentive stock option is granted.
The Committee may, in its discretion, include in an Award Agreement
for any option a provision that in the event previously acquired Shares are
surrendered by a Participant in payment of all or a portion of either (a) the
option exercise price or (b) the Participant's federal, state, or local tax
withholding obligation with respect to such exercise, the Participant will
automatically be granted a replacement or reload option (with an option price
equal to the Fair Market Value of a Share on the date of such exercise) for a
number of Shares equal to all or a portion of the number of Shares surrendered.
Such replacement option will be subject to such terms and conditions as the
Committee determines.
ARTICLE 8. STOCK APPRECIATION RIGHTS
Stock appreciation rights may be granted in tandem with a stock
option, in addition to a stock option, or may be freestanding and unrelated to a
stock option. Stock appreciation rights granted in tandem or in addition to a
stock option may be granted either at the same time as the stock option or at a
later time. No stock appreciation right may be exercisable earlier than six
months after grant, except in the event of the Participant's death or
disability. A stock appreciation right will
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entitle the Participant to receive from Corporation an amount equal to the
increase in the Fair Market Value of a Share on the exercise of the stock
appreciation right over the grant price. The Committee may determine in its
discretion whether the stock appreciation right may be settled in cash, shares,
or a combination of cash and shares.
ARTICLE 9. PERFORMANCE SHARES
9.1 General. Performance shares may be granted in the form of actual
Shares or Share units having a value equal to Shares. An Award of performance
shares will be granted to a Participant subject to such terms and conditions set
forth in the Award Agreement as the Committee deems appropriate, including,
without limitation, the condition that the performance shares or a portion
thereof will Vest only in the event specified performance goals are met within a
specified performance period, as set forth in the Award Agreement. An Award
Agreement for a performance share Award may also, in addition to specifying
performance goals, condition Vesting of such Award on continued employment for a
period specified in the Award Agreement. In the event that a stock certificate
is issued in respect of performance shares, the certificate will be registered
in the name of the Participant but will be held by Corporation until the time
the performance shares become Vested. The performance conditions and the length
of the performance period will be determined by the Committee. The Committee
may, in its discretion, reduce or eliminate the Vesting of performance shares
if, in the Committee's judgment, it determines that the Vesting of the
performance share Award is not appropriate given actual performance over the
applicable performance period. The maximum number of Shares issuable to any
individual Participant with respect to performance share Awards in any one-year
period may not exceed 100,000 Shares. The Committee, in its sole discretion, may
provide in an Award Agreement whether performance shares granted in the form of
share units will be paid in cash, shares, or a combination of cash and shares.
9.2 Performance Goals for Executive Officers. The performance goals
for performance share awards granted to executive officers of Corporation may
relate to corporate performance, business unit performance, or a combination of
both.
Corporate performance goals will be based on financial performance
goals related to the performance of Corporation as a whole and may include one
or more measures related to earnings, profitability, efficiency, or return to
stockholders such as earnings per share, operating profit, stock price, costs of
production, or other measures.
Business unit performance goals will be based on a combination of
financial goals and strategic goals related to the performance of an identified
business unit for which a Participant has responsibility. Strategic goals for a
business unit may include one or a combination of objective factors relating to
success in implementing strategic plans or initiatives, introductory products,
constructing facilities, or other identifiable objectives. Financial goals for a
business unit may include the degree to which the business unit achieves one or
more objective measures related to its revenues, earnings, profitability,
efficiency, operating profit, costs of production, or other measures.
Any corporate or business unit goals may be expressed as absolute
amounts or as ratios or percentages. Success may be measured against various
standards, including budget targets, improvement over prior periods, and
performance relative to other companies, business units, or industry groups.
ARTICLE 10. RESTRICTED STOCK
Restricted stock may be granted in the form of actual Shares or
Share units having a value equal to Shares. A restricted stock Award will be
subject to such terms and conditions set forth in the Award Agreement as the
Committee deems appropriate, including, without limitation, restrictions on the
sale, assignment, transfer, or other disposition of such restricted stock and
provisions that such restricted stock or stock units be forfeited upon
termination of the Participant's employment for specified reasons within a
specified period of time or upon other conditions, as set forth in the Award
Agreement. The Award Agreement for a restricted
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stock Award may also, in addition to conditioning Vesting of the Award on
continued employment, further condition Vesting on attainment of performance
goals. In the event that a stock certificate is issued in respect of restricted
stock, such certificate will be registered in the name of the Participant but
will be held by the Corporation until the end of the restricted period. The
employment conditions and the length of the period for vesting of restricted
stock will be established by the Committee at the time of grant and set forth in
the Award Agreement. The Committee, in its sole discretion, may provide in an
Award Agreement whether restricted stock granted in the form of Share units will
be paid in cash, Shares, or a combination of cash and Shares. The aggregate
number of shares or share units that may be subject to restricted stock Awards
may not exceed 1,000,000 Shares.
ARTICLE 11. OTHER STOCK-BASED AND COMBINATION AWARDS
The Committee may grant other Awards under the Plan pursuant to
which Shares are or may in the future be acquired, or Awards denominated in or
measured by Share equivalent units, including Awards valued using measures other
than the market value of Shares. For such other stock-based awards that are
granted to executive officers of Corporation and that condition Vesting of such
Awards, in whole or in part, on attaining performance goals, such Awards will be
subject to the same limitations on types of performance goals and the same
limitation on the maximum number of Shares issuable to any individual
Participant as provided in Article 9 of the Plan. The Committee may also grant
Awards under the Plan in tandem or combination with other Awards or in exchange
for Awards, or in tandem or combination with, or as alternatives to, grants or
rights under any other employee plan of Corporation.
ARTICLE 12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any change in capitalization affecting the Common
Stock of Corporation, such as a stock dividend, stock split, recapitalization,
merger, consolidation, split-up, spinoff, combination or exchange of shares, or
other form of reorganization, or corporate change, or any distribution with
respect to Common Stock other than regular cash dividends, the Committee may
make such substitution or adjustment, if any, that it deems to be equitable as
to the number and kind of Shares or other securities issued or reserved for
issuance pursuant to the Plan, to the limits on Awards to Participants, and to
outstanding Awards.
ARTICLE 13. AMENDMENT AND TERMINATION
The Board may amend, suspend, or terminate the Plan or any portion
of the Plan at any time, provided no amendment may be made without stockholder
approval if such approval is required by applicable law or the requirements of
an applicable stock exchange.
ARTICLE 14. MISCELLANEOUS
14.1 Tax Withholding. Corporation will have the right to deduct from
any settlement of any Award under the Plan, including the delivery or vesting of
Shares, any federal, state, or local taxes of any kind required by law to be
withheld with respect to such payments or to take such other action as may be
necessary in the opinion of Corporation to satisfy all obligations for the
payment of such taxes. The recipient of any payment or distribution under the
Plan must make arrangements satisfactory to Corporation for the satisfaction of
any such withholding tax obligations. Corporation will not be required to make
any such payment or distribution under the Plan until such obligations are
satisfied. The Committee, in its discretion, may permit a Participant to satisfy
the Participant's federal, state, or local tax, or tax withholding obligations
with respect to an Award by having Corporation retain the number of Shares
having a Fair Market Value equal to the amount of taxes or withholding taxes.
14.2 Securities Law Restrictions. No Shares will be issued under the
Plan unless counsel for Corporation is satisfied that such issuance will be in
compliance with applicable federal and state securities laws. Certificates for
Shares delivered under the Plan may be subject to such stop-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and
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other requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, and any applicable federal or state
securities law. The Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
14.3 Governing Law. Except with respect to references to the Code or
federal securities laws, the Plan and all actions taken thereunder will be
governed by and construed in accordance with the laws of the state of Oregon.
ARTICLE 15. STOCKHOLDER APPROVAL
The adoption of the Plan and the grant of Awards under the Plan are
expressly subject to the approval of the Plan by the affirmative vote of at
least a majority of the stockholders of Corporation present, or represented by
proxy, and entitled to vote at Corporation's 1997 annual meeting of
stockholders.
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