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EXHIBIT 10.8
BUILDING MATERIALS CORPORATION OF AMERICA
2001 LONG-TERM INCENTIVE PLAN
INTRODUCTION
Building Materials Corporation of America, a Delaware corporation
(hereinafter referred to as the "Corporation"), hereby establishes an incentive
compensation plan to be known as the "BUILDING MATERIALS CORPORATION OF AMERICA
2001 LONG-TERM INCENTIVE PLAN" (hereafter referred to as the "Plan"). The Plan,
by permitting the grant of Incentive Units (as hereafter defined) to eligible
employees of the Corporation and the Subsidiaries (as hereafter defined),
provides for a long-term incentive system that supports the Corporation's
business strategy and emphasizes pay-for-performance by tying reward
opportunities to corporate goals.
The Plan shall become effective on December 31, 2000 (the "Effective
Date"), pursuant to the approval by the Board (as hereafter defined) by action
taken by the Board at a meeting duly called and held on March 1, 2001. This Plan
shall terminate five (5) years after the Effective Date (unless sooner
terminated by the Board).
I. DEFINITIONS
For purposes of this Plan, the following terms shall be defined as
follows unless the context clearly indicates otherwise:
(a) "Board of Directors" or "Board" shall mean the Board of Directors
of the Corporation. All determinations by the Board shall be made in good faith
in its sole discretion and shall be binding and conclusive.
(b) "Book Value" shall mean, as of any Valuation Date, the sum of (i)
$268,542,680, (ii) the cumulative consolidated net income or loss of the
Corporation for the period January 1, 2001 through the date of determination and
(iii) $2,480,625 multiplied by the number of full fiscal quarters of the
Corporation that have ended after December 31, 2000 but on or before the date of
determination (such product representing a 15% per annum credit on the aggregate
dividends or distributions made by the Corporation to its stockholders during
the period of October 1, 1997 through December 31, 2000), and excluding, to the
extent occurring after December 31, 2000, the impact of (A) nonrecurring
operating losses, nonrecurring operating gains and extraordinary items, each as
determined in accordance with generally accepted accounting principles, (B) any
charge incurred after December 31, 2000 relating to asbestos-related
liabilities, (C) net after-tax gains or losses in respect of dispositions of
assets by the Corporation other than in the ordinary course of business, (D) any
charges relating to amortization of goodwill and other intangibles arising from
the management buy-out of GAF Corporation in March 1989, and (E) such other
items as the Board of Directors may determine to be extraordinary or unusual and
the impact of which should not be included in consolidated
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net income or loss, as the case may be, for the purposes of computing Book
Value. There shall be deducted from Book Value an amount equal to a 15% per
annum charge on the aggregate capital contributions made to the Corporation by
its stockholders during the period commencing January 1, 2001 and ending with
the date of determination (the "Period"), amounts actually received by the
Corporation during the Period for shares of its capital stock and, to the extent
not actually charged against the net income of the Corporation, on the
outstanding principal amount of loans and other advances made to the Corporation
by affiliates (excluding Subsidiaries of the Corporation) during the Period.
There shall be added to Book Value a 15% per annum credit on the aggregate
dividends or distributions (including redemption of shares of its capital stock)
made by the Corporation to its stockholders during the Period and, to the extent
interest is not actually imputed to the Corporation in respect of such amounts,
on the outstanding principal amount of loans and other advances made by the
Corporation to affiliates (excluding Subsidiaries of the Corporation) during the
Period. Any adjustments to Book Value (including the 15% charge and credit
referred to in the preceding two sentences) shall take into account the tax
effect, if any, associated therewith. If the Corporation's common stock is
converted into or exchanged for other securities or property pursuant to a
recapitalization, stock split, combination, reorganization, merger, exchange or
similar transaction, or if a sale of all or substantially all of, the common
stock of the Corporation shall occur or be pending, Book Value, the Incentive
Units and the terms hereof shall be modified by the Board of Directors in such
manner as is reasonable under the circumstances. All determinations by the Board
of Directors hereunder shall be made in good faith and shall be binding and
conclusive.
(c) "Change in Control of the Corporation" shall mean the occurrence of
either of the following events: (i) prior to the time that at least 15% of the
then outstanding voting stock of the Corporation or any parent of the
Corporation is publicly traded, the Heyman Group ceases to be the "beneficial
owner," directly or indirectly, of majority voting power of the voting stock of
the Corporation; or (ii) at any other time, any person or entity, other than the
Heyman Group, is or becomes the beneficial owner, directly or indirectly, of
more than 35% of the voting stock of the Corporation or any parent of the
Corporation and the Heyman Group beneficially owns, directly or indirectly, in
the aggregate a lesser percentage of the voting stock of the Corporation or such
parent, as the case may be, than such other person or entity. The "Heyman Group"
shall mean (i) Samuel J. Heyman, his heirs, administrators, executors and
entities of which a majority of the voting stock is owned by Samuel J. Heyman,
his heirs, administrators or executors and (ii) any entity controlled, directly
or indirectly, by Samuel J. Heyman or his heirs, administrators or executors.
"Beneficial ownership" shall be determined in accordance with Rule 13d under the
Securities Exchange Act of 1934, as amended.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Corporation" shall have the meaning set forth in the Introduction.
(f) "Committee" shall have the meaning set forth in Section II(a)
hereof.
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(g) "Effective Date" shall have the meaning set forth in the
Introduction.
(h) "Employee" shall mean a common-law employee at a salary grade of 12
or above of the Corporation or of any Subsidiary.
(i) "Exercise Date" shall have the meaning set forth in Section IV(e)
hereof.
(j) "Final Value" shall have the meaning set forth in Section IV(f)
hereof.
(k) "Good Cause" shall, with respect to any Employee, mean (i) the
Employee's willful or gross misconduct or willful or gross negligence in the
performance of his duties for the Corporation or for any Subsidiary, (ii) the
Employee's intentional or habitual neglect of his duties for the Corporation or
for any Subsidiary, (iii) the Employee's theft or misappropriation of funds of
the Corporation or of any Subsidiary, fraud, criminal misconduct, breach of
fiduciary duty or dishonesty in the performance of his duties on behalf of the
Corporation or any Subsidiary or commission of a felony, or crime of moral
turpitude or any other conduct reflecting adversely upon the Corporation or any
Subsidiary or (iv) the Employee's violation of any covenant not to compete or
not to disclose confidential information with respect to the Corporation or any
Subsidiary.
(l) "Good Reason" shall, with respect to any Employee, mean a change or
changes in the terms of such Employee's employment that are materially adverse
to such Employee, including changes relating to salary and bonus, level of
responsibility or location of employment.
(m) "Incentive Unit" shall mean a bookkeeping item equal in value, as
of any Valuation Date, to (i) the Corporation's Book Value determined as of such
Valuation Date divided by (ii) 1,000,010. The value of each Incentive Unit as of
a Valuation Date and the determination of accumulated comprehensive income and
losses as of a Valuation Date shall each be determined by the Board and may be
adjusted by the Board if the number of outstanding shares of the Corporation's
common stock increases or decreases at any time after the Effective Date.
(n) "Initial Value" shall have the meaning set forth in Section IV(a)
hereof.
(o) "Options" shall mean stock options granted to any Employee under
the Corporation's Series A Cumulative Redeemable Preferred Stock option program
established in 1996.
(p) "Plan" shall have the meaning set forth in the Introduction.
(q) "Retirement" shall mean an Employee's termination of employment
after (i) he attains age fifty-five (55) and (ii) the sum of his age and the
number of his years of service with the Corporation and/or any Subsidiary equals
sixty (60) or more.
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(r) "Subsidiary" shall mean a corporation or other entity of which more
than fifty percent (50%) of the aggregate of its outstanding voting securities
are owned directly or indirectly by the Corporation.
(s) "Valuation Date" shall mean the last day of business of each fiscal
quarter of the Corporation.
II. ADMINISTRATION
(a) Administration; Term of Office; Appointment of Chairperson. The
Plan shall be administered by a committee (the "Committee") appointed by the
Board from among Employees. The Committee shall be comprised, unless otherwise
determined by the Board, of the individuals serving as the Corporation's Chief
Executive Officer, Chief Financial Officer and Vice President-Human Resources.
Each member of the Committee shall hold office until the date that he or she
resigns from the Committee or is removed from membership on the Committee by
action of the Board. In the event an individual for any reason ceases to be a
member of the Committee, the Board shall appoint another qualified individual to
serve on the Committee. The members of the Committee shall choose from among
themselves one such member to serve as chairperson of the Committee.
(b) Quorum and Manner of Acting. Except as hereinafter provided, a
majority of the members of the entire Committee shall constitute a quorum for
the transaction of business and the vote of a majority of the Committee members
present at the time of the vote shall be the act of the Committee. In the
absence of a quorum at any meeting of the Committee, a majority of the Committee
members present thereat may adjourn such meeting to another time and place.
Notice of the time and place of any such adjourned meeting shall be given to the
Committee members who were not present at the time of the adjournment and,
unless such time and place were announced at the meeting at which the
adjournment was taken, to the other Committee members. At any adjourned meeting
at which a quorum is present, any business may be transacted which might have
been transacted at the meeting as originally called. In the event any Committee
member is disqualified from acting on a specific matter pursuant to Section
II(f) hereof, such individual shall not be taken into account in determining
whether a quorum of the Committee exists for taking action with respect to such
matter. The Committee members shall act only as a Committee and the individual
Committee members shall have no power as such. All decisions of the Committee
shall be made in good faith in its sole discretion and shall be binding and
conclusive.
(c) Action Without a Meeting. Any action required or permitted to be
taken by the Committee at a meeting may be taken without a meeting if all
members of the Committee consent in writing to the adoption of a resolution
authorizing such action. The resolution and written consents thereto by the
members of the Committee shall be filed with the minutes of the proceedings of
the Committee.
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(d) Telephonic Participation. Any one or more members of the Committee
may participate in a meeting of the Committee by means of a conference telephone
or similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at the meeting.
(e) Compensation. Members of the Committee shall not be compensated for
service as a Committee member.
(f) Disqualification. Each member of the Committee shall be
disqualified from acting as such with respect to all matters that concern such
person individually.
(g) Responsibilities of the Committee. Except to the extent
specifically reserved herein for the Board, the Committee shall have all powers,
responsibilities and duties for controlling and administering the Plan,
including, but not limited to, the following:
(i) to establish and enforce certain rules, regulations, and
procedures as it deems necessary or proper for the efficient
administration of the Plan;
(ii) to interpret the Plan, with its interpretations made in
good faith to be final and conclusive, and to decide all
questions concerning the Plan;
(iii) to determine the ongoing eligibility of any individual
to participate in the Plan, and to require any person to
furnish any information as it may request to properly
administer the Plan as a condition to that person receiving
any benefit under the Plan;
(iv) to compute the amount of benefits that are payable to any
Employee or beneficiary in accordance with the provisions of
the Plan, and to determine the person or persons to whom those
benefits will be paid; and
(v) to authorize the payment of benefits from the Plan.
III. ELIGIBILITY TO PARTICIPATE
Each individual who is an Employee of the Corporation, or of any
Subsidiary, shall be initially eligible to participate in the Plan.
Notwithstanding the above, the identity of the Employees who will be entitled to
receive grants of Incentive Units under this Plan or exchange Options for
Incentive Units shall be determined by the Board. No individual shall
automatically be entitled to receive a grant of Incentive Units or exchange
Options for Incentive Units solely because he is classified as an Employee.
IV. INCENTIVE UNITS
(a) Grant of Incentive Units. The Committee may, in its sole
discretion, grant Incentive Units to any one or more Employees. The number of
Incentive Units granted to each Employee shall be determined by the Committee.
Incentive Units may only be
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granted on a Valuation Date. Unless otherwise determined by the Committee, in
its sole discretion, subject to adjustment as provided in Section IV(c) below
and except for Incentive Units granted in exchange for Options described in
Section IV(b) below, the "Initial Value" of any Incentive Unit granted under the
Plan shall be equal to the value of such Incentive Unit determined (under
Section I(m) hereof) as of the Valuation Date on which such Incentive Unit is
granted. Subject to adjustment as provided in Section IV(c) below, the aggregate
maximum number of Incentive Units that may be granted under this Plan is
1,000,000.
(b) Exchange of Options for Incentive Units. The Committee may permit
any one or more Employees to exchange Options for Incentive Units on a Valuation
Date. The number of Incentive Units to be received by each Employee in exchange
for Options, and the number of Options that can be exchanged for Incentive
Units, shall be determined by the Committee in its sole discretion. In the case
of Incentive Units granted in exchange for Options, the "Initial Value" of any
such Incentive Unit shall be the amount shown on Schedule 1 hereto opposite the
date on which the Option exchanged therefor was originally granted (e.g.,
January 1, 1996 or such other applicable later date) in lieu of the Initial
Value on the Valuation Date coinciding with the date of grant of the Incentive
Unit.
(c) Recapitalization, Etc. In the event there is any change in the
outstanding common stock of the Corporation by reason of any reorganization,
recapitalization, stock split, stock dividend, combination of shares, increase
or decrease in the number of outstanding shares or otherwise (including that a
sale of all or substantially all of the assets of its common stock shall occur
or be pending), there shall be substituted for, added to or subtracted from each
Incentive Unit then outstanding under the Plan the number of additional or
partial Incentive Units that the Board determines accurately reflects the effect
of such reorganization, recapitalization, stock split, stock dividend, share
combination or other such event. Likewise, the Initial Value of each Incentive
Unit shall also be adjusted by the Board if it determines that such adjustment
is appropriate.
(d) Vesting in Incentive Units. The Incentive Units granted to an
Employee or received by an Employee in exchange for Options shall vest as
determined by the Committee, in its sole discretion. In the absence of any
action by the Committee to select a different vesting schedule, Incentive Units
shall vest cumulatively, in twenty percent (20%) increments, on each anniversary
of the date such Incentive Units were granted to the Employee or received in
exchange for Options and such vesting shall end upon the termination of an
Employee's employment with the Corporation or any Subsidiary for any reason
whatsoever; provided, however, that solely with respect to Incentive Units
granted in exchange for Options as provided in Section IV(b) above, such
Incentive Units shall proportionally retain the vested status and the vesting
schedule of the Options exchanged therefor. Notwithstanding the foregoing, (i)
if, after a Change in Control of the Corporation, an Employee's employment with
the Corporation or any Subsidiary is terminated by the Corporation (or its
applicable Subsidiary) for any reason other than Good Cause, is terminated as a
result of death or permanent disability or is terminated by the Employee for
Good Reason, such Incentive Units will become fully and immediately
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vested and payable in cash (pursuant to the terms of Section IV(f) hereof) and
(ii) such Incentive Units, to the extent not then exercised, shall become
immediately forfeited and totally unexercisable upon the termination of an
Employee's employment with the Corporation or any Subsidiary for Good Cause
(without regard to whether a Change in Control of the Corporation has occurred).
(e) Exercise of Incentive Units. Subject to the following, an Employee
may exercise his vested Incentive Units at such times as are determined by the
Committee in its sole discretion (an "Exercise Date"). Notwithstanding the
preceding sentence, and subject to both the immediate payment and the forfeiture
rules set forth in Section IV(d) hereof, no Incentive Unit may be exercised
after the earlier of (i) the sixth (6th) anniversary of the date the Incentive
Unit is granted or (ii) the later of (A) one year after the Employee's
termination of employment with the Corporation or any Subsidiary due to his (1)
death, (2) permanent disability or (3) Retirement or (B) ninety (90) days after
the Employee's termination of employment for any other reason. Any and all of an
Employee's Incentive Units that are not timely exercised shall become null and
void and totally unexercisable. Except in the case of a termination of
employment following a Change of Control of the Corporation, an Employee shall
exercise his vested Incentive Units by completing a Notice of Exercise Form in
the form of Exhibit A hereto, and delivering such form to the Corporation in
accordance with the notice provisions set forth herein.
(f) Value of Incentive Unit Upon Exercise. Upon the exercise of an
Incentive Unit, the Employee shall receive from the Corporation in cash the
excess, if any, of the "Final Value" of such Incentive Unit (which Final Value
shall equal the value of the Incentive Unit determined under Section I(m) hereof
as of the Valuation Date on or, in the event of an exercise between Valuation
Dates, immediately preceding the Exercise Date) over the Initial Value of such
Incentive Unit. Such cash payment shall be made by the Corporation within 60
days of its receipt of a properly completed Notice of Exercise Form as described
in Section IV(e) above.
V. MISCELLANEOUS PROVISIONS
(a) Assignment or Transfer. No right to any accrued but unpaid
Incentive Unit shall be sold, assigned, redeemed, pledged, transferred or
otherwise encumbered by an Employee except by will or the laws of descent and
distribution.
(b) Withholding Taxes. The Corporation or the appropriate Subsidiary
shall have the right to deduct from all cash payments hereunder any federal,
state, local or foreign income and employment taxes required by law to be
withheld with respect to such payments.
(c) Costs and Expenses. The costs and expenses of administering the
Plan shall be borne by the Corporation and shall not be charged against any
particular award nor to any Employee receiving an Incentive Unit but shall be
included in the Corporation's computation of consolidated net income or loss.
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(d) Funding of Plan. The Plan shall be unfunded. The Corporation shall
not be required to segregate any of its assets to assure the payment of any
Incentive Unit under the Plan. Neither the Employees nor any other persons shall
have any interest in any fund or in any specific asset or assets of the
Corporation or any other entity by reason of any accrued but unpaid Incentive
Unit. The interests of each Employee hereunder are unsecured and shall be
subject to the general creditors of the Corporation and the applicable
Subsidiaries.
(e) Other Incentive Plans. The adoption of the Plan does not preclude
the adoption by appropriate means of any other incentive plan for Employees of
the Corporation or any Subsidiary.
(f) Plurals and Gender. Where appearing in this Plan, masculine gender
shall include the feminine and neuter genders, and the singular shall include
the plural, and vice versa, unless the context clearly indicates a different
meaning.
(g) Headings. The headings and sub-headings in this Plan are inserted
for the convenience of reference only and are to be ignored in any construction
of the provisions hereof.
(h) Severability. In case any provision of this Plan shall be held
illegal or void, such illegality or invalidity shall not affect the remaining
provisions of this Plan, but shall be fully severable, and the Plan shall be
construed and enforced as if said illegal or invalid provisions had never been
inserted herein.
(i) Limitations on Liability. Neither the Corporation nor any
Subsidiary shall be responsible in any way for any action or omission of the
Board, the Committee, or any other fiduciaries in the performance of their
duties and obligations as set forth in this Plan. Furthermore, neither the
Corporation nor any Subsidiary shall be responsible for any act or omission of
any of their agents, or with respect to reliance upon advice of their counsel,
provided that the Corporation and/or the appropriate Subsidiary relied in good
faith upon the action of such agent or the advice of such counsel. Neither the
Corporation, any Subsidiary, the Board, the Committee, nor any agents,
employees, officers, directors or stockholders of any of them, nor any other
person, shall have any liability or responsibility with respect to this Plan,
except as expressly provided herein.
(j) Incapacity. If the Committee shall receive evidence satisfactory to
it that a person entitled to receive payment of, or exercise, any Incentive Unit
is, at the time when such benefit becomes payable, a minor, or is physically or
mentally incompetent to receive such Incentive Unit and to give a valid release
thereof, and that another person or an institution is then maintaining or has
custody of such person and that no guardian, committee or other representative
of the estate of such person shall have been duly appointed, the Committee may
make payment of such Incentive Unit otherwise payable to such person to such
other person or institution, including a custodian under a Uniform Gifts to
Minors Act, or corresponding legislation (who shall be an adult, a guardian of
the
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minor or a trust company), and the release by such other person or institution
shall be a valid and complete discharge for the payment or exercise of such
Incentive Unit.
(k) Cooperation of Parties. All parties to this Plan and any person
claiming any interest hereunder agree to perform any and all acts and execute
any and all documents and papers which are necessary or desirable for carrying
out this Plan or any of its provisions.
(l) Governing Law. All questions pertaining to the validity,
construction and administration of the Plan shall be determined in accordance
with the laws of the State of New Jersey, without giving effect to conflict of
law principles.
(m) Nonguarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between the Corporation or any Subsidiary
and any Employee, as a right of any Employee to be continued in the employment
of the Corporation or any Subsidiary, or as a limitation on the right of the
Corporation or any Subsidiary to discharge any of its Employees, at any time,
with or without cause.
(n) Notices. Each notice relating to this Plan shall be in writing and
delivered in person, by recognized overnight courier or by certified mail to the
proper address. Except as otherwise provided in any Incentive Unit award
agreement with respect to the exercise thereunder, all notices to the
Corporation or the Committee shall be addressed to it at l361 Alps Road, Wayne,
New Jersey 07470, Attn: Vice President-Human Resources. All notices to
Employees, former Employees, beneficiaries or other persons acting for or on
behalf of such persons shall be addressed to such person at the last address for
such person maintained in the Corporation's records.
VI. AMENDMENT OR TERMINATION OF PLAN
The Board may amend the Plan from time to time or suspend or terminate
the Plan at any time. In the event the Plan is terminated for any reason, the
vesting, exercise, and expiration provisions, as described in this Plan, for all
Incentive Units granted up to and including the date of the termination of the
Plan, will remain in effect.
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