EXHIBIT 99.1
MASCO CORPORATION
2005 LONG TERM STOCK INCENTIVE PLAN
SECTION 1. PURPOSES.
The purposes of the 2005 Long Term Stock Incentive Plan (the "PLAN") are
to encourage selected employees of and consultants to Masco Corporation (the
"COMPANY") and its Affiliates to acquire a proprietary interest in the Company
in order to create an increased incentive to contribute to the Company's future
success and prosperity, and enhance the ability of the Company and its
Affiliates to attract and retain exceptionally qualified individuals upon whom
the sustained progress, growth and profitability of the Company depend, thus
enhancing the value of the Company for the benefit of its stockholders.
SECTION 2. DEFINITIONS.
As used in the Plan, the following terms shall have the meanings set forth
below:
(a) "AFFILIATE" shall mean any entity in which the Company's direct
or indirect equity interest is at least twenty percent, and any other
entity in which the Company has a significant direct or indirect equity
interest, whether more or less than twenty percent, as determined by the
Committee.
(b) "AWARD" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award, or Dividend
Equivalent granted under the Plan.
(c) "AWARD AGREEMENT" shall mean any agreement, contract or other
instrument or document evidencing any Award granted under the Plan.
(d) "BOARD" shall mean the Board of Directors of the Company.
(e) "CHANGE IN CONTROL" shall mean at any time during a period of
twenty-four consecutive calendar months, the individuals who at the
beginning of such period constitute the Company's Board, and any new
directors (other than Excluded Directors, as hereinafter defined), whose
election by such Board or nomination for election by stockholders was
approved by a vote of at least two-thirds of the members of such Board who
were either directors on such Board at the beginning of the period or
whose election or nomination for election as directors was previously so
approved, for any reason ceasing to constitute at least a majority of the
members thereof. For purposes hereof, "EXCLUDED DIRECTORS" are directors
whose (i) election by the Board or approval by the Board for stockholder
election occurred within one year after any "person" or "group of
persons," as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, commencing a tender offer for, or becoming the beneficial
owner of, voting securities representing 25 percent or more of the
combined voting power of all outstanding voting securities of the Company,
other than pursuant to a tender offer approved by the Board prior to its
commencement or pursuant to stock acquisitions approved by the Board prior
to their representing 25 percent or more of such combined voting power or
(ii) initial assumption of office occurs as a result of either an actual
or threatened election contest (as such terms are used in Rule 14a-11 or
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of an
individual, corporation, partnership, group, associate or other entity or
"person" other than the Board.
(f) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(g) "COMMITTEE" shall mean a committee of the Company's directors
designated by the Board to administer the Plan and composed of not less
than two directors, each of whom is a "non-employee director," an
"independent director" and an "outside director," within the meaning of
and to the extent required respectively by Rule 16b-3, the applicable
rules of the NYSE and Section 162(m) of the Code, and any regulations
issued thereunder.
(h) "DIVIDEND EQUIVALENT" shall mean any right granted under Section
6(g) of the Plan.
(i) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(j) "EXECUTIVE GROUP" shall mean every person who the Committee
believes may be both (i) a "covered employee" as defined in Section 162(m)
of the Code as of the end of the taxable year in which the Company expects
to take a deduction of the Award, and (ii) the recipient of compensation
of more than $1,000,000 (as such amount appearing in Section 162(m) of the
Code may be adjusted by any subsequent legislation) for that taxable year.
(k) "INCENTIVE STOCK OPTION" shall mean an Option granted under
Section 6(a) of the Plan that is intended to meet the requirements of
Section 422 of the Code, or any successor provision thereto.
(l) "NON-QUALIFIED STOCK OPTION" shall mean an Option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.
(m) "NYSE" shall mean the New York Stock Exchange.
(n) "OPTION" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
(o) "PARTICIPANT" shall mean an employee of or consultant to the
Company or any Affiliate or a director of the Company designated to be
granted an Award under the Plan or, for the purpose of granting Substitute
Awards, a holder of options or other equity based awards relating to the
shares of a company acquired by the Company or with which the Company
combines.
(p) "PERFORMANCE AWARD" shall mean any right granted under Section
6(e) of the Plan.
(q) "PRIOR PLAN" shall mean the Company's 1991 Long Term Stock
Incentive Plan.
(r) "RESTRICTED PERIOD" shall mean the period of time during which
Awards of Restricted Stock or Restricted Stock Units are subject to
restrictions.
(s) "RESTRICTED STOCK" shall mean any Share granted under Section
6(d) of the Plan.
(t) "RESTRICTED STOCK UNIT" shall mean any right granted under
Section 6(d) of the Plan that is denominated in Shares.
(u) "RULE 16b-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act, or any successor rule or
regulation.
(v) "SECTION 16" shall mean Section 16 of the Exchange Act, the
rules and regulations promulgated by the Securities and Exchange
Commission thereunder, or any successor provision, rule or regulation.
(w) "SHARES" shall mean the Company's common stock, par value $1.00
per share, and such other securities or property as may become the subject
of Awards, or become subject to Awards, pursuant to an adjustment made
under Section 4(c) of the Plan.
(x) "STOCK APPRECIATION RIGHT" shall mean any right granted under
Section 6(c) of the Plan.
(y) "SUBSTITUTE AWARDS" shall mean Awards granted in assumption of,
or in substitution for, outstanding awards previously granted by a company
acquired by a Company or with which the Company combines.
SECTION 3. ADMINISTRATION.
The Committee shall administer the Plan, and subject to the terms of the
Plan and applicable law, the Committee's authority shall include without
limitation the power to:
(i) designate Participants;
(ii) determine the types of Awards to be granted;
(iii) determine the number of Shares to be covered by Awards and any
payments, rights or other matters to be calculated in connection
therewith;
(iv) determine the terms and conditions of Awards and amend the
terms and conditions of outstanding Awards;
(v) determine how, whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or
suspended;
(vi) determine how, whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property
and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Committee;
(vii) determine the methods or procedures for establishing the fair
market value of any property (including, without limitation, any Shares or
other securities) transferred, exchanged, given or received with respect
to the Plan or any Award;
(viii) prescribe and amend the forms of Award Agreements and other
instruments required under or advisable with respect to the Plan;
(ix) designate Options granted to key employees of the Company or
its subsidiaries as Incentive Stock Options;
(x) interpret and administer the Plan, Award Agreements, Awards and
any contract, document, instrument or agreement relating thereto;
(xi) establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the
administration of the Plan;
(xii) decide all questions and settle all controversies and disputes
which may arise in connection with the Plan, Award Agreements and Awards;
(xiii) delegate to a committee of at least two directors of the
Company the authority to designate Participants and grant Awards, and to
amend Awards granted to Participants;
(xiv) delegate to one or more officers or managers of the Company,
or a committee of such officers and managers, the authority, subject to
such terms and limitations as the Committee shall determine, to cancel,
modify, waive rights with respect to, alter, discontinue, suspend or
terminate Awards held by employees who are not officers or directors of
the Company for purposes of Section 16 of the Exchange Act; provided,
however, that any delegation to management shall conform with the
requirements of the NYSE applicable to the Company and Delaware corporate
law; and
(xv) make any other determination and take any other action that the
Committee deems necessary or desirable for the interpretation, application
and administration of the Plan, Award Agreements and Awards.
All designations, determinations, interpretations and other decisions
under or with respect to the Plan, Award Agreements or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all persons, including the Company,
Affiliates, Participants, beneficiaries of Awards and stockholders of the
Company.
SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) Shares Available. Subject to adjustment as provided in Section
4(c):
The maximum number of Shares available for issuance in respect of
Awards made under the Plan shall be 25,000,000 Shares, provided, however,
that if for any reason any Award under the Plan or under the Prior Plan is
cancelled, forfeited or expires without the delivery of Shares, the number
of Shares available for issuance in respect of Awards under the Plan shall
be increased by the number of Shares that were so cancelled, forfeited or
subject to expiration. The maximum number of Shares that may be issued and
delivered upon vesting of Restricted Stock or Restricted Stock Units is
9,000,000. Subject to the foregoing, Shares may be made available from the
authorized but unissued Shares of the Company or from Shares reacquired by
the Company.
(b) Individual Stock-Based Awards. Subject to adjustment as provided
in Section 4(c), no Participant may receive Options or Stock Appreciation
Rights under the Plan in any calendar year that relate to more than
4,000,000 Shares in the aggregate; provided, however, that such number may
be increased with respect to any Participant by any Shares available for
grant to such Participant in accordance with this Section 4(b)in any prior
years that were not granted in such prior year. No provision of this
Section 4(b) shall be construed as limiting the amount of any other
stock-based or cash-based award which may be granted to any Participant.
(c) Adjustments. Upon the occurrence of any dividend or other
distribution (whether in the form of cash, Shares, other securities or
other property), change in the capital or shares of capital stock,
recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, issuance of
warrants or other rights to purchase Shares or other securities of the
Company or extraordinary transaction or event which affects the Shares,
then the Committee shall have the authority to make such adjustment, if
any, in such manner as it deems appropriate, in (i) the number and type of
Shares (or other securities or property) which thereafter may be made the
subject of Awards, (ii) outstanding Awards including without limitation
the number and type of Shares (or other securities or property) subject
thereto, and (iii) the grant, purchase or exercise price with respect to
outstanding Awards and, if deemed appropriate, make provision for cash
payments to the holders of outstanding Awards; provided, however, that the
number of Shares subject to any Award denominated in Shares shall always
be a whole number.
(d) Substitute Awards. Shares underlying Substitute Awards shall not
reduce the number of shares remaining available for issuance under the
Plan for any purpose.
SECTION 5. ELIGIBILITY.
Any employee of or consultant to the Company or any Affiliate, or any
director of the Company, is eligible to be designated a Participant.
SECTION 6. AWARDS.
(a) Options. (i) The Committee is authorized to grant Options to
Participants with the following
terms and conditions and with such other terms and conditions, in either
case not inconsistent with the provisions of the Plan, as the Committee
shall determine:
(A) the purchase price per Share under each Option, provided,
however, that such price shall be not less than 100% of the fair
market value of the Shares underlying such Option on the date of
grant (except in the case of Substitute Awards);
(B) the term of each Option (not to exceed ten years);
(C) the time or times at which an Option may be exercised, in
whole or in part, the method or methods by which and the form or
forms (including, without limitation, cash, Shares, other Awards or
other property, or any combination thereof, having a fair market
value on the exercise date equal to the relevant exercise price) in
which payment of the exercise price with respect thereto may be made
or deemed to have been made; and
(D) The terms of any Incentive Stock Option granted under the
Plan shall comply in all respects with the provisions of Section 422
of the Code, or any successor provision thereto, and any regulations
promulgated thereunder. The maximum number of Shares that may be
awarded as Incentive Stock Options is 16,000,000.
(ii) Other Terms. Notwithstanding the following terms, the Committee
may impose other terms that may be more or less favorable to the Company
as it deems fit. Unless the Committee shall impose such other terms, the
following conditions shall apply:
(A) Exercise. A Participant electing to exercise an Option
shall give written notice to the Company, as may be specified by the
Committee, of exercise of the Option and the number of Shares
elected for exercise, such notice to be accompanied by such
instruments or documents as may be required by the Committee, and
shall tender the purchase price of the Shares elected for exercise.
(B) Payment. At the time of exercise of an Option payment in
full in cash or in Shares or any combination thereof, at the option
of the Participant, shall be made for all Shares then being
purchased.
(C) Issuance. The Company shall not be obligated to issue any
Shares unless and until:
(1) if the class of Shares at the time is listed upon
any stock exchange, the Shares to be issued have been listed,
or authorized to be added to the list upon official notice of
issuance, upon such exchange, and
(2) in the opinion of the Company's counsel there has
been compliance with applicable law in connection with the
issuance and delivery of Shares and such issuance shall have
been approved by the Company's counsel.
Without limiting the generality of the foregoing, the Company may require
from the Participant such investment representation or such agreement, if any,
as the Company's counsel may consider necessary in order to comply with the
Securities Act of 1933 as then in effect, and may require that the Participant
agree that any sale of the Shares will be made only in such manner as shall be
in accordance with law and that the Participant will notify the Company of any
intent to make any disposition of the Shares whether by sale, gift or otherwise.
The Participant shall take any action reasonably requested by the Company in
such connection. A Participant shall have the rights of a stockholder only as
and when Shares have been actually issued to the Participant pursuant to the
Plan.
(D) Minimum Vesting. Options may not become fully exercisable
prior to the third anniversary of the date of grant, except as
provided in Section 6(a)(ii)(E) and Section 7(f) below.
(E) Termination of Employment; Death. If the employment of a
Participant terminates for any reason or if a Participant dies
(whether before or after the normal retirement date), Options shall
be or become exercisable only as provided in (1) through (5) below:
(1) If such termination is voluntary on the part of the
Participant, such Option may be exercised only if and to the
extent such Option was exercisable at the date of termination
and only within thirty days after the date of termination.
Except as so exercised such Option shall expire at the end of
such period.
(2) If such termination is involuntary on the part of
the Participant, such Option may be exercised only if and to
the extent such Option was exercisable at the date of
termination and only within three months after the date of
termination. Except as so exercised such Option shall expire
at the end of such period.
(3) If an employee retires on or after the normal
retirement date, such Option shall continue to be and become
exercisable in accordance with its terms and the provisions of
this Plan.
(4) If a Participant's employment is terminated by
reason of permanent and total disability, all unexercisable
installments of such Option shall thereupon become exercisable
and shall remain exercisable for the remainder of the Option
term.
(5) If a Participant dies, all unexercisable
installments of such Option shall thereupon become exercisable
and, at any time or times within one year after such death,
the Option may be exercised, as to all or any unexercised
portion of the Option. The Company may decline to deliver
Shares to a designated beneficiary until it receives indemnity
against claims of third parties satisfactory to the Company.
Except as so exercised such Option shall expire at the end of
such period.
(b) Restoration Options. The Committee may grant a Participant a
restoration Option under this Plan with respect to an option granted by
the Company under the Prior Plan, or with respect to a restoration option
resulting from such an option, when the Participant pays the exercise
price by delivering Shares or by attesting to the ownership of such
Shares. The restoration option is equal to the number of Shares delivered
or attested to by the Participant, and the exercise price shall not be
less than 100 percent of the fair market value of the Shares on the date
the restoration option is granted. A restoration option otherwise will
have the same terms as the original option. Unless the Committee shall
otherwise determine, (i) no restoration option shall be granted unless the
recipient is an active employee at the time of grant and (ii) the number
of Shares which are subject to a restoration Option shall not exceed the
number of whole Shares exchanged in payment for the exercise of the
underlying Option. No restoration Options shall otherwise be granted under
this Plan.
(c) Stock Appreciation Rights. The Committee is authorized to grant
Stock Appreciation Rights to Participants. Subject to the terms of the
Plan, a Stock Appreciation Right granted under the Plan shall confer on
the holder thereof a right to receive, upon exercise thereof, the excess
of (i) the fair market value of one Share on the date of exercise or, if
the Committee shall so determine in the case of any such right other than
one related to any Incentive Stock Option, at any time during a specified
period before or after the date of exercise over (ii) the fair market
value on the date of grant. Subject to the terms of the Plan, the
Committee shall determine the grant price, term, methods of exercise and
settlement and any other terms and conditions of any Stock Appreciation
Right and may impose such conditions or restrictions on the exercise of
any Stock Appreciation Right as it may deem appropriate.
(d) Restricted Stock and Restricted Stock Units.
(i) Issuance. The Committee is authorized to grant to
Participants Awards of Restricted Stock, which shall consist of
Shares, and Restricted Stock Units which shall give the Participant
the right to receive cash, other securities, other Awards or other
property, in each case subject to the termination of the Restricted
Period determined by the Committee. Notwithstanding the following
terms, the Committee may impose other terms that may be more or less
favorable to the Company as it deems fit. In the absence of any such
differing provisions, Awards of Restricted Stock and Restricted
Stock Units shall have the provisions described below.
(ii) Restrictions. The Restricted Period may differ among
Participants and may have different expiration dates with respect to
portions of Shares covered by the same Award. Subject to the terms
of the Plan, Awards of Restricted Stock and Restricted Stock Units
shall have such restrictions as the Committee may impose (including,
without limitation, limitations on the right to vote Restricted
Stock or the right to receive any dividend or other right or
property), which restrictions may lapse separately or in combination
at such time or times, in installments or otherwise (including the
achievement of performance measures as set forth in Section 6(e)
hereof), as the Committee may deem appropriate. Any Shares or other
securities distributed with respect to Restricted Stock or which a
Participant is otherwise entitled to receive by reason of such
Shares shall be subject to the restrictions contained in the
applicable Award Agreement. Restricted Stock Awards and Restricted
Stock Units may not fully vest prior to the third anniversary of the
date of grant, except as provided in Sections 6(d)(iv)(B) and 7(f)
below. Subject to the aforementioned restrictions and the provisions
of the Plan, a Participant shall have all of the rights of a
stockholder with respect to Restricted Stock.
(iii) Registration. Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration
or issuance of stock certificates.
(iv) Termination; Death. If a Participant's employment
terminates for any reason, all Shares of Restricted Stock or
Restricted Stock Units theretofore awarded to the Participant which
are still subject to restrictions shall upon such termination be
forfeited and transferred back to the Company, except as provided in
clauses (A) and (B) below.
(A) If an employee ceases to be employed by reason of
retirement on or after normal retirement date, the
restrictions contained in the Award of Restricted Stock or the
Restricted Stock Unit shall continue to lapse in the same
manner as though employment had not terminated, subject to
clause (B) below and Sections 6(d)(v) and 7(f).
(B) If a Participant ceases to be employed by reason of
permanent and total disability or if a Participant dies,
whether before or after the normal retirement date, the
restrictions contained in such Participant's Award of
Restricted Stock or Restricted Stock Unit shall lapse.
(C) At the expiration of the Restricted Period, the
Company shall deliver Shares in the case of an Award of
Restricted Stock or Shares, cash, securities or other
property, in the case of a Restricted Stock Unit, as follows:
(1) if an assignment to a trust has been made in
accordance with Section 7(d)(ii)(B), to such trust; or
(2) if the Restricted Period has expired by reason
of death and a beneficiary has been designated in form
approved by the Company, to the beneficiary so
designated; or
(3) in all other cases, to the Participant or the
legal representative of the Participant's estate.
(v) Acceleration. New Awards granted to a Participant in or
after the calendar year in which such Participant attains age 65
will vest in five equal annual installments or such earlier vesting
as may be specified in the Award Agreement. With respect to an Award
granted to a Participant prior to the calendar year in which the
Participant attains age 65, if in the calendar year in which the
Participant attains age 65 the Restricted Period then remaining
thereunder is longer than five years, the Restricted Period shall be
shortened so that commencing in the calendar year that a Participant
attains age 66, the restrictions contained in the Award shall lapse
in equal annual installments such that the Participant shall be
fully vested not later than the end of the calendar year in which
the Participant attains age 70.
(e) Performance Awards.
(i) The Committee is hereby authorized to grant Performance
Awards to Participants.
(ii) Subject to the terms of the Plan, a Performance Award
granted under the Plan (A) may be denominated or payable in cash,
Shares (including, without limitation, Restricted Stock or
Restricted Stock Units), other securities or other Awards, and (B)
shall confer on the holder thereof rights valued as determined by
the Committee and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of such
performance goals during such performance periods as the Committee
shall establish. Subject to the terms of the Plan, the performance
goals to be achieved during any performance period, the length of
any performance period, the amount of any Performance Award granted
and the amount of any payment or transfer to be made pursuant to any
Performance Award shall be determined by the Committee. Unless the
Committee determines otherwise, the performance period relating to
any Performance Award shall be at least one calendar year commencing
January 1 and ending December 31 (except in circumstances in
connection with a Change in Control, in which event the performance
period may be shorter than one year).
(iii) Every Performance Award to a member of the Executive
Group shall, if the Committee intends that such Award should
constitute "qualified performance-based compensation" for purposes
of Section 162(m) of the Code, include a pre-established formula,
such that payment, retention or vesting of the Award is subject to
the achievement during a performance period or periods, as
determined by the Committee, of a level or levels, as determined by
the Committee, of one or more performance measures with respect to
the Company or any of its Affiliates, including without limitation
the following: (A) net income, (B) return on assets, (C) revenues,
(D) total shareholder return, (E) earnings per share; (F) return on
invested capital, or (G) cash flow; each as determined in accordance
with generally accepted accounting principles, where applicable, as
consistently applied by the Company. The following shall be excluded
in determining whether any performance criterion has been attained:
losses resulting from discontinued operations, extraordinary losses
(in accordance with generally accepted accounting principles, as
currently in effect), the cumulative effect of changes in accounting
principles and other unusual, non-recurring items of loss that are
separately identified and quantified in the Company's audited
financial statements. Performance measures may vary from Performance
Award to Performance Award and from Participant to Participant and
may be established on a stand-alone basis, in tandem or in the
alternative. For any Performance Award, the maximum amount that may
be delivered or earned in settlement of all such Awards granted in
any year shall be (x) if and to the extent that such Awards are
denominated in Shares, 2,000,000 Shares (subject to adjustment as
provided in Section 4(c)) and (y) if and to the extent that such
Awards are denominated in cash, $10,000,000. Notwithstanding any
provision of the Plan to the contrary, the Committee shall not be
authorized to increase the
amount payable under any Award to which this Section 6(e)(iii)
applies upon attainment of such pre-established formula.
(f) Dividend Equivalents. The Committee is authorized to grant to
Participants Awards under which the holders thereof shall be entitled to
receive payments equivalent to dividends or interest with respect to a
number of Shares determined by the Committee, and the Committee may
provide that such amounts (if any) shall be deemed to have been reinvested
in additional Shares or otherwise reinvested. Subject to the terms of the
Plan, such Awards may have such terms and conditions as the Committee
shall determine.
(g) Termination of Employment. Except as otherwise provided in the
Plan or determined by the Committee,
(i) Awards granted to, or otherwise held by, employees will
terminate, expire and be forfeited upon termination of employment,
which shall include a change in status from employee to consultant
and termination by reason of the fact that an entity is no longer an
Affiliate, and
(ii) a Participant's employment shall not be considered to be
terminated (A) in the case of approved sick leave or other approved
leave of absence (not to exceed one year or such other period as the
Committee may determine), or (B) in the case of a transfer among the
Company and its Affiliates.
(h) Termination of Awards. Notwithstanding any of the provisions of
this Plan or instruments evidencing Awards granted hereunder, other than
the provisions of Section 7(f), the Committee may terminate any Award
(including the unexercised portion of any Option and any Award of
Restricted Stock or Restricted Stock Units which remains subject to
restrictions) concurrently with or at any time following termination of
employment regardless of the reason for such termination of employment if
the Committee shall determine that the Participant has engaged in any
activity detrimental to the interests of the Company or an Affiliate.
SECTION 7. GENERAL.
(a) No Cash Consideration for Awards. Awards may be granted for no
cash consideration or for such minimal cash consideration as may be
required by applicable law.
(b) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with or in substitution for any other Award or any award granted
under any other plan of the Company or any Affiliate. Awards granted in
addition to or in tandem with other Awards or in addition to or in tandem
with awards granted under another plan of the Company or an Affiliate, may
be granted either at the same time as or at a different time from the
grant of such other Awards or awards.
(c) Forms of Payment Under Awards. Subject to the terms of the Plan
and of any applicable Award Agreement, payments or transfers to be made by
the Company or an Affiliate upon the grant, exercise, or payment of an
Award may be made in such form or forms as the Committee shall determine,
including, without limitation, cash, Shares, other securities, other
Awards, or other property, or any combination thereof, and may be made in
a single payment or transfer, in installments, or on a deferred basis, in
each case in accordance with rules and procedures established by the
Committee. Such rules and procedures may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments.
(d) Limits on Transfer of Awards. Awards can not be transferred,
except the Committee is hereby authorized to permit the transfer of Awards
with the following terms and conditions and with such
additional terms and conditions, in either case not inconsistent with the
provisions of the Plan, as the Committee shall determine:
(i) No Award or right under any Award may be sold, encumbered,
pledged, alienated, attached, assigned or transferred in any manner
and any attempt to do any of the foregoing shall be void and
unenforceable against the Company.
(ii) Notwithstanding the provisions of Section 7(d)(i) above:
(A) An Option may be transferred:
(1) to a beneficiary designated by the Participant
in writing on a form approved by the Committee;
(2) by will or the applicable laws of descent and
distribution to the personal representative, executor or
administrator of the Participant's estate; or
(3) to a revocable grantor trust established by
the Participant for the sole benefit of the Participant
during the Participant's life, and under the terms of
which the Participant is and remains the sole trustee
until death or physical or mental incapacity. Such
assignment shall be effected by a written instrument in
form and content satisfactory to the Committee, and the
Participant shall deliver to the Committee a true copy
of the agreement or other document evidencing such
trust. If in the judgment of the Committee the trust to
which a Participant may attempt to assign rights under
such an Award does not meet the criteria of a trust to
which an assignment is permitted by the terms hereof, or
if after assignment, because of amendment, by force of
law or any other reason such trust no longer meets such
criteria, such attempted assignment shall be void and
may be disregarded by the Committee and the Company and
all rights to any such Options shall revert to and
remain solely with the Participant. Notwithstanding a
qualified assignment, for the purpose of determining
compensation arising by reason of the Option, the
Participant, and not the trust to which rights under
such an Option may be assigned, shall continue to be
considered an employee or consultant, as the case may
be, of the Company or an Affiliate, but such trust and
the Participant shall be bound by all of the terms and
conditions of the Award Agreement and this Plan. Shares
issued in the name of and delivered to such trust shall
be conclusively considered issuance and delivery to the
Participant.
(B) A Participant may assign or transfer rights under an
Award of Restricted Stock or Restricted Stock Units:
(1) to a beneficiary designated by the Participant
in writing on a form approved by the Committee;
(2) by will or the applicable laws of descent and
distribution to the personal representative, executor or
administrator of the Participant's estate; or
(3) to a revocable grantor trust established by
the Participant for the sole benefit of the Participant
during the Participant's life, and under the terms of
which the Participant is and remains the sole trustee
until death or physical or mental incapacity. Such
assignment shall be effected by a written instrument in
form and content satisfactory to the Committee, and the
Participant shall deliver to the Committee a true copy
of the agreement or other document evidencing such
trust. If in the judgment of the Committee the trust to
which a Participant may attempt to assign rights under
such an Award does not meet the criteria of a trust to
which an assignment is permitted by the terms hereof, or
if after assignment,
because of amendment, by force of law or any other
reason such trust no longer meets such criteria, such
attempted assignment shall be void and may be
disregarded by the Committee and the Company and all
rights to any such Awards shall revert to and remain
solely with the Participant. Notwithstanding a qualified
assignment, for the purpose of determining compensation
arising by reason of the Award, the Participant, and not
the trust to which rights under such an Award may be
assigned, shall continue to be considered an employee or
consultant, as the case may be, of the Company or an
Affiliate, but such trust and the Participant shall be
bound by all of the terms and conditions of the Award
Agreement and this Plan. Shares issued in the name of
and delivered to such trust shall be conclusively
considered issuance and delivery to the Participant.
(C) The Committee shall not permit directors or officers
of the Company for purposes of Section 16 to transfer or
assign Awards except as permitted under Rule 16b-3.
(iii) The Committee, the Company and its officers, agents and
employees may rely upon any beneficiary designation, assignment or
other instrument of transfer, copies of trust agreements and any
other documents delivered to them by or on behalf of the Participant
which they believe genuine and any action taken by them in reliance
thereon shall be conclusive and binding upon the Participant, the
personal representatives of the Participant's estate and all persons
asserting a claim based on an Award. The delivery by a Participant
of a beneficiary designation, or an assignment of rights under an
Award as permitted hereunder, shall constitute the Participant's
irrevocable undertaking to hold the Committee, the Company and its
officers, agents and employees harmless against claims, including
any cost or expense incurred in defending against claims, of any
person (including the Participant) which may be asserted or alleged
to be based on an Award subject to a beneficiary designation or an
assignment. In addition, the Company may decline to deliver Shares
to a beneficiary until it receives indemnity against claims of third
parties satisfactory to the Company.
(e) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares or other securities
are then listed and any applicable Federal or state securities laws, and
the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(f) Change in Control.
(i) Notwithstanding any of the provisions of this Plan or
instruments evidencing Awards granted hereunder, upon a Change in
Control of the Company the vesting of all rights of Participants
under outstanding Awards shall be accelerated and all restrictions
thereon shall terminate in order that Participants may fully realize
the benefits thereunder. Such acceleration shall include, without
limitation, the immediate exercisability in full of all Options and
the termination of restrictions on Restricted Stock and Restricted
Stock Units. Further, in addition to the Committee's authority set
forth in Section 4(c), the Committee, as constituted before such
Change in Control, is authorized, and has sole discretion, as to any
Award, either at the time such Award is made hereunder or any time
thereafter, to take any one or more of the following actions: (A)
provide for the purchase of any such Award, upon the Participant's
request, for an amount of cash equal to the amount that could have
been attained upon the exercise of such Award or realization of the
Participant's rights had such Award been currently exercisable or
payable; (B) make such adjustment to any such Award then outstanding
as the Committee deems appropriate to reflect such Change in
Control; and (C) cause any such Award then outstanding to be
assumed, or new rights substituted therefor, by the acquiring or
surviving corporation after such Change in Control.
(ii) (A) In the event that subsequent to a Change in Control
it is determined that any payment or distribution by the Company to
or for the benefit of a Participant, whether paid or payable or
distributed or distributable pursuant to the terms of this Plan or
otherwise, other than any payment pursuant to this Section
7(f)(ii)(A) (a "PAYMENT"), would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties
with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred
to as the "EXCISE TAX"), then such Participant shall be entitled to
receive from the Company, within 15 days following the determination
described in (2) below, an additional payment ("EXCISE TAX
ADJUSTMENT PAYMENT") in an amount such that after payment by such
Participant of all applicable Federal, state and local taxes
(computed at the maximum marginal rates and including any interest
or penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Excise Tax Adjustment Payment, such
Participant retains an amount of the Excise Tax Adjustment Payment
equal to the Excise Tax imposed upon the Payments.
(B) All determinations required to be made under this Section
7(f)(ii), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall
be made by PricewaterhouseCoopers LLP, or such other national
accounting firm as the Company, or, subsequent to a Change in
Control, the Company and the Participant jointly, may designate, for
purposes of the Excise Tax, which shall provide detailed supporting
calculations to the Company and the affected Participant within 15
business days of the date of the applicable Payment. Except as
hereinafter provided, any determination by PricewaterhouseCoopers
LLP, or such other national accounting firm, shall be binding upon
the Company and the Participant. As a result of the uncertainty in
the application of Section 4999 of the Code that may exist at the
time of the initial determination hereunder, it is possible that (x)
certain Excise Tax Adjustment Payments will not have been made by
the Company which should have been made (an "UNDERPAYMENT"), or (y)
certain Excise Tax Adjustment Payments will have been made which
should not have been made (an "OVERPAYMENT"), consistent with the
calculations required to be made hereunder. In the event of an
Underpayment, such Underpayment shall be promptly paid by the
Company to or for the benefit of the affected Participant. In the
event that the Participant discovers that an Overpayment shall have
occurred, the amount thereof shall be promptly restored to the
Company.
(g) Cash Settlement. Notwithstanding any provision of this Plan or
of any Award Agreement to the contrary, any Award outstanding hereunder
may at any time be cancelled in the Committee's sole discretion upon
payment of the value of such Award to the holder thereof in cash or in
another Award hereunder, such value to be determined by the Committee in
its sole discretion.
(h) Option Repricing. Except as provided in Section 4(c) and in
connection with the granting of a Substitute Award, no outstanding Option
may be cancelled and replaced with an Option having a lower exercise
price.
SECTION 8. AMENDMENT AND TERMINATION.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board may amend the Plan and the
Board or the Committee may amend any outstanding Award; provided, however,
that (i) no Plan amendment shall be effective until approved by
stockholders of the Company if any stockholder approval thereof is
required in order for the Plan to continue to satisfy the conditions of
the applicable rules and regulations that the Committee has determined to
be necessary to comply with, and (ii) without the consent of affected
Participants no amendment of the Plan or of any Award may impair the
rights of Participants under outstanding Awards, and (iii) no Option may
be amended to reduce its initial exercise price other than in connection
with an event described in Section 4(c) hereof or the granting of a
Substitute Award.
(b) Waivers. The Committee may waive any conditions to the Company's
obligations or rights of the Company under any Award theretofore granted,
prospectively or retroactively, without the consent of any Participant.
(c) Adjustments of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee shall be authorized to make adjustments
in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4(c) hereof) affecting the
Company, any Affiliate, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits to be made available under the Plan; provided, however,
no such adjustment shall be made to an Award granted under Section
6(e)(iii) if the Committee intends such Award to constitute "qualified
performance-based compensation" unless such adjustment is permitted under
Section 162(m) of the Code.
SECTION 9. CORRECTION OF DEFECTS, OMISSIONS, AND INCONSISTENCIES. The Committee
may correct any defect, supply any omission or reconcile any inconsistency in
the Plan or any Award in the manner and to the extent it shall deem desirable to
effectuate the Plan.
SECTION 10. General Provisions.
(a) No Rights to Awards. No Participant or other person shall have
any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants or holders or
beneficiaries of Awards under the Plan. The terms and conditions of Awards
of the same type and the determination of the Committee to grant a waiver
or modification of any Award and the terms and conditions thereof need not
be the same with respect to each Participant.
(b) Withholding. The Company or any Affiliate shall be authorized to
withhold from any Award granted or any payment due or transfer made under
any Award or under the Plan the amount (in cash, Shares, other securities,
other Awards or other property) of withholding taxes due in respect of an
Award, its exercise or any payment or transfer under such Award or under
the Plan and to take such other action as may be necessary in the opinion
of the Company or Affiliate to satisfy all obligations for the payment of
such taxes.
(c) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements,
including the grant of options and other stock-based awards, and such
arrangements may be either generally applicable or applicable only in
specific cases.
(d) No Right to Employment or Service. The grant of an Award shall
not be construed as giving a Participant the right to be retained in the
employ or service of the Company or any Affiliate. Further, the Company or
an Affiliate may at any time dismiss a Participant from employment or
service, free from any liability, or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement or in
any other agreement binding the parties.
(e) Governing Law. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Michigan and applicable Federal
law.
(f) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any person or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or
deemed amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award, and
the remainder of the Plan and any such Award shall remain in full force
and effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a
Participant or any other person. To the extent that any person acquires a
right to receive payments from the Company or any Affiliate pursuant to an
Award, such right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities, or other property shall be paid
or transferred in lieu of any fractional Shares, or whether such
fractional Shares or any rights thereto shall be cancelled, terminated or
otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 11. TERM.
The Plan shall be effective as of the date of its approval by the
Company's stockholders and no Awards shall be made under the Plan after May 10,
2015.