EXHIBIT 10.1
As adopted by Board of Directors
November 9, 2005
2006 LONG TERM INCENTIVE PLAN (LTIP)
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1.1 GRANT OF RESTRICTED STOCK. Under the terms and provisions of the
Newell Rubbermaid Inc. 2003 Stock Plan (the "Stock Plan"), the terms
of which are hereby incorporated by reference, the Committee, at any
time and from time to time, may grant Shares of Restricted Stock to
eligible employees in such amounts, as the Board shall determine.
This Long Term Incentive Plan establishes a methodology for
determining awards of Restricted Stock under the Stock Plan. Awards
made pursuant to this LTIP shall constitute Performance Shares for
purposes of Section 9 of the Stock Plan and are intended to qualify as
performance-based compensation under Section 162(m) of the Internal
Revenue Code. Based on attainment of the performance goals
established pursuant to this LTIP, the Committee will grant shares of
Restricted Stock to eligible Key Employees. A maximum of 250,000
shares of Restricted Stock may be granted to any eligible Key Employee
in any one calendar year pursuant to this LTIP, in each case subject
to adjustment as provided in the Stock Plan.
1.2 GUIDELINES. Each grant of Restricted Stock shall be made based
on the applicable target of an employee's base salary set forth
below:
* Salary Level 6 - 25%
* Salary Level 7 - 50%
* Salary Level 8 and above - 100%
The following criteria will be used to determine the actual level:
* Total Shareholder Return (75%)
* Free Cash Flow (25%)
The total point value will be used as follows:
* Total Shareholder Return will be calculated based on the
following formula:
(Change in Stock Price) + (Dividend)
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(Beginning Stock Price)
o Top 4 of comparator group = 100% of target
o 5 - 8 of comparator group = 75% of target
o 9 - 12 of comparator group = 50% of target
o 13 - 16 of comparator group = 25% of target
o Bottom 4 of comparator group = 0%
NOTE: TARGET IS 75% OF THE TOTAL AWARD PAYOUT FOR SHAREHOLDER RETURN
As adopted by Board of Directors
November 9, 2005
* The Free Cash Flow award will be calculated based on the
following schedule:
o > 110% of FCF target = 100% of target
o 100 - 110% of FCF target = 75% of target
o 90 - 100% of FCF target = 50% of target
o 80 - 90% of FCF target = 25% of target
o <80% of FCF target = 0%
NOTE: TARGET IS 25% OF THE TOTAL AWARD PAYOUT FOR FREE CASH FLOW
The list of eligible employees is determined prior to the beginning of
the fiscal year. For 2006, all employees of Newell Rubbermaid holding
the position of Director (Salary Level 6) or above shall be eligible
to participate in the LTIP.
1.3 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant made
pursuant to this LTIP shall be evidenced by a Stock Award Agreement in
accordance with Section 10 of the Stock Plan that shall specify the
Period of Restriction at a 3 year cliff, the number of Shares of
Restricted Stock granted, and such other provisions as the Committee
shall determine.
1.4 TRANSFERABILITY. Except as provided in this Article, the Shares
of Restricted Stock granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction established by the
Committee in its sole discretion and set forth in the Stock Award
Agreement. All rights with respect to the Restricted Stock granted to
an eligible employee under the LTIP shall be available during his or
her lifetime only to such eligible employee.
1.5 OTHER RESTRICTIONS. The Committee shall impose such other
conditions and/or restrictions on any Shares of Restricted Stock
granted pursuant to the LTIP as it may deem advisable including,
without limitation, continued employment with Newell Rubbermaid,
restrictions based upon the achievement of specific company-wide
performance goals, time-based restrictions on vesting following the
attainment of performance goals, and/or restrictions under applicable
federal or state securities laws. The Committee will establish
performance targets annually in accordance with the standards set
forth in this LTIP.
Except as otherwise provided in this Article or pursuant to the
Stock Plan, Shares of Restricted Stock covered by each award of
Restricted Stock made pursuant to the LTIP shall become freely
transferable by the eligible employee after the last day of the
applicable Period of Restriction.
As adopted by Board of Directors
November 9, 2005
1.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, eligible employees holding Shares of Restricted Stock
granted hereunder will be credited with regular cash dividends paid
with respect to the underlying Shares while they are so held; provided
that the Committee may apply any restrictions to the dividends that
the Committee deems appropriate. Without limiting the generality of
the preceding sentence, if the grant or vesting of Restricted Stock
granted to an eligible employee is intended to qualify as performance-
based compensation, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such
Restricted Stock, such that the dividends and/or the Restricted Stock
maintain eligibility for the Performance-Based Exception.
1.7 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Stock Award
Agreement shall set forth the extent to which the eligible employee
shall have the right to receive unvested Restricted Stock following
termination of the eligible employee's employment or directorship with
Newell Rubbermaid. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Stock Award
Agreement entered into with each eligible employee, need not be
uniform among all Shares of Restricted Stock issued pursuant to the
LTIP, and may reflect distinctions based on the reasons for
termination; provided, however that, except in the cases of
terminations connected with a Change in Control and terminations by
reason or death or Total Disability, and certain terminations without
Cause, the vesting of shares of Restricted Stock which qualify for the
Performance-Based Exception and which are held by eligible employees
shall occur at the time they otherwise would have, but for the
termination.
1.8 PERFORMANCE GOALS. Following the completion of the performance
period, the Committee shall determine, in its sole judgment, the
extent to which such performance goals have been achieved and shall
authorize the issuance of Restricted Stock to participants in
accordance with the terms of this LTIP. No Restricted Stock will be
awarded pursuant to this LTIP except on the basis of the attainment of
such performance criteria and in the amount specified herein; provided
that the Committee retains the discretion to reduce any amount to be
awarded hereunder or to terminate an individual's participation in
this LTIP. No individual who is not employed by the Company or any of
its affiliates on the date of such determination by the Committee
shall be eligible to receive an award of Restricted Stock hereunder.
1.9 CAPITALIZED TERMS. Capitalized terms used but not defined herein
shall have the meanings assigned to such terms pursuant to the Stock
Plan.