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EXHIBIT 10.e
MASCO CORPORATION
1991 LONG TERM STOCK INCENTIVE PLAN
(Amended and Restated April 23, 1997)
SECTION 1. PURPOSES
The purposes of the 1991 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, Dividend Equivalent or Other
Stock-Based Award granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(e) "Committee" shall mean a committee of the Company's directors
designated by the Board of Directors to administer the Plan and composed of not
less than two directors, each of whom is a "non-employee director" within the
meaning of Rule 16b-3.
(f) "Dividend Equivalent" shall mean any right granted under Section
6(e) of the Plan.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) "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.
(i) "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.
(j) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
(k) "Other Stock-Based Award" shall mean any right granted under
Section 6(f) of the Plan.
(l) "Participant" shall mean an employee of or consultant to the
Company or any Affiliate designated to be granted an Award under the Plan.
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(m) "Performance Award" shall mean any right granted under Section 6(d)
of the Plan.
(n) "Restricted Period" shall mean the period of time during which
Awards of Restricted Stock or Restricted Stock Units are subject to
restrictions.
(o) "Restricted Stock" shall mean any Share granted under Section 6(c)
of the Plan.
(p) "Restricted Stock Unit" shall mean any right granted under Section
6(c) of the Plan that is denominated in Shares.
(q) "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.
(r) "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.
(s) "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.
(t) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.
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;
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(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 directors of the Company the authority to
designate Participants and grant Awards, and to amend Awards granted to
Participants;
(xiv) 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):
(i) Initial Authorization. There shall be 8,000,000 Shares
initially available for issuance under the Plan.
(ii) Acquired Shares. In addition to the amount set forth above, up
to 8,000,000 Shares acquired by the Company subsequent to the 1997 Annual
Meeting of Stockholders as full or partial payment for the exercise price
for an Option or any other stock option granted by the Company, or
acquired by the Company, in open market transactions or otherwise, in
connection with the Plan or any Award hereunder or any other employee
stock option or restricted stock issued by the Company may thereafter be
included in the Shares available for Awards. If any Shares covered by an
Award or to which an Award relates are forfeited, or if an Award expires,
terminates or is cancelled, then the Shares covered by such Award, or to
which such Award relates, or the number of Shares otherwise counted
against the aggregate number of Shares available under the Plan by reason
of such Award, to the extent of any such forfeiture, expiration,
termination or cancellation, may thereafter be available for further
granting of Awards and included as acquired Shares for purposes of the
preceding sentence.
(iii) Shares Under Prior Plans. In addition to the amounts set
forth above, shares remaining available for issuance upon any termination
of authority to make further awards under both the Company's 1988
Restricted Stock Incentive Plan and its 1988 Stock Option Plan shall
thereafter be available for issuance hereunder.
(iv) Accounting for Awards. For purposes of this Section 4,
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(A) if an Award (other than a Dividend Equivalent) is
denominated in Shares, the number of Shares covered by such Award,
or to which such Award relates, shall be counted on the date of
grant of such Award against the aggregate number of Shares
available for granting Awards under the Plan to the extent
determinable on such date and insofar as the number of Shares is
not then determinable under procedures adopted by the Committee
consistent with the purposes of the Plan; and
(B) Dividend Equivalents and Awards not denominated in Shares
shall be counted against the aggregate number of Shares available
for granting Awards under the Plan in such amount and at such time
as the Committee shall determine under procedures adopted by the
Committee consistent with the purposes of the Plan;
provided, however, that Awards that operate in tandem with (whether
granted simultaneously with or at a different time from), or that are
substituted for, other Awards or restricted stock awards or stock options
granted under any other plan of the Company may be counted or not counted
under procedures adopted by the Committee in order to avoid double
counting. Any Shares that are delivered by the Company or its Affiliates,
and any Awards that are granted by, or become obligations of, the
Company, through the assumption by the Company of, or in substitution
for, outstanding restricted stock awards or stock options previously
granted by an acquired company shall not, except in the case of Awards
granted to Participants who are directors or officers of the Company for
purposes of Section 16, be counted against the Shares available for
granting Awards under the Plan.
(v) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized but unissued Shares or of Shares reacquired by the Company,
including but not limited to Shares purchased on the open market.
(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 1,000,000
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 Paragraph 4(b) in any prior years that were
not granted in such prior year beginning on or after January 1, 1997. No
provision of this Paragraph 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.
SECTION 5. ELIGIBILITY
Any employee of or consultant to the Company or any Affiliate,
including any officer of the Company (who may also be a director, any person
who serves only as a director of the Company and any consultant to the Company
or an Affiliate who is also a director of the Company and who is not rendering
services pursuant to a written agreement with the entity in question), as may
be selected from time to time by the Committee or by the directors to whom
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authority may be delegated pursuant to Section 3 hereof in its or their
discretion, is eligible to be designated a Participant.
SECTION 6. AWARDS
(a) Options. The Committee is authorized to grant Options to
Participants.
(i) Committee Determinations. Subject to the terms of the Plan, 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;
(B) the term of each Option; and
(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. 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.
Subject to the terms of the Plan, the Committee may impose such conditions
or restrictions on any Option as it deems appropriate.
(ii) Other Terms. Unless otherwise determined by the Committee:
(A) 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 ex-
ercise, 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) At the time of exercise of an Option payment in full in
cash or in Shares (that have been held by the Participant for at
least six months) or any combination thereof, at the option of the
Participant, shall be made for all Shares then being purchased.
(C) The Company shall not be obligated to issue any Shares
unless and until:
(I) 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
(II) 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
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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) If the employment of or consulting arrangement with a
Participant terminates for any reason (including termination by
reason of the fact that an entity is no longer an Affiliate) other
than the Participant's death, the Participant may thereafter
exercise the Option as provided below, except that the Committee
may terminate the unexercised portion of the Option concurrently
with or at any time following termination of the employment or
consulting arrangement (including termination of employment upon a
change of status from employee to consultant) if it shall determine
that the Participant has engaged in any activity detrimental to the
interests of the Company or an Affiliate. If such termination is
voluntary on the part of the Participant, the Option may be
exercised only within ten days after the date of termination. If
such termination is involuntary on the part of the Participant, if
an employee retires on or after normal retirement date or if the
employment or consulting relationship is terminated by reason of
permanent and total disability, the Option may be exercised within
three months after the date of termination or retirement. For
purposes of this Paragraph (D), a Participant's employment or
consulting arrangement shall not be considered ter- minated (i) in
the case of approved sick leave or other bona fide leave of absence
(not to exceed one year), (ii) in the case of a transfer of
employment or the consulting arrangement among the Company and
Affiliates, or (iii) by virtue of a change of status from employee
to consultant or from consultant to employee, except as provided
above.
(E) If a Participant dies at a time when entitled to exercise
an Option, then at any time or times within one year after death
such Option may be exercised, as to all or any of the Shares which
the Participant was entitled to purchase immediately prior to
death. The Company may decline to deliver Shares to a designated
beneficiary until it receives indemnity against claims of third
parties satisfac- tory to the Company. Except as so exercised such
Option shall expire at the end of such period.
(F) An Option may be exercised only if and to the extent such
Option was exercisable at the date of termination of employment or
the consulting arrangement, and an Option may not be exercised at
a time when the Option would not have been exercisable had the
employment or consulting arrangement continued.
(iii) Restoration Options. The Committee may grant a Participant
the right to receive a restoration Option with respect to an Option or
any other stock option granted by the Company. Unless the Committee
shall otherwise determine, a restoration Option shall provide that the
underlying option must be exercised while the Participant is an employee
of or consultant to the Company or an Affiliate and 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 original
option.
(b) 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 grant price of the right as specified by the Committee.
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.
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(c) 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.
(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. Unless the Committee shall otherwise
determine, 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. Subject to the aforementioned
restrictions and the provisions of the Plan, Participants shall have all
of the rights of a stockholder with respect to Shares of 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 certifi-
cates.
(iv) Forfeiture. Except as otherwise determined by the Committee:
(A) If the employment of or consulting arrangement with a
Participant terminates for any reason (including termination by
reason of the fact that any entity is no longer an Affiliate),
other than the Participant's death or permanent and total
disability or, in the case of an employee, retirement on or after
normal retirement date, all Shares of Restricted Stock theretofore
awarded to the Participant which are still subject to restrictions
shall upon such termination of employment or the consulting
relationship be forfeited and transferred back to the Company.
Notwithstanding the foregoing or Paragraph (C) below, if a
Participant continues to hold an Award of Restricted Stock
following termination of the employment or consulting arrangement
(including retirement and termination of employment upon a change
of status from employee to consultant), the Shares of Restricted
Stock which remain subject to restrictions shall nonetheless be
forfeited and transferred back to the Company if the Committee at
any time thereafter determines that the Participant has engaged in
any activity detrimental to the interests of the Company or an
Affiliate. For purposes of this Paragraph (A), a Participant's
employment or consulting arrangement shall not be considered
terminated (i) in the case of approved sick leave or other bona
fide leave of absence (not to exceed one year), (ii) in the case of
a transfer of employment or the consulting arrangement among the
Company and Affiliates, or (iii) by virtue of a change of status
from employee to consultant or from consultant to employee, except
as provided above.
(B) If a Participant ceases to be employed or retained by the
Company or an Affiliate by reason of death or permanent and total
disability or if following retirement a Participant continues to
have rights under an Award of Restricted Stock and thereafter dies,
the restrictions contained in the Award shall lapse with respect to
such Restricted Stock.
(C) If an employee ceases to be employed by the Company or an
Affiliate by reason of retirement on or after normal retirement
date, the restrictions contained in the Award of Restricted Stock
shall continue to lapse in the same manner as though employment had
not terminated.
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(D) At the expiration of the Restricted Period as to Shares
covered by an Award of Restricted Stock, the Company shall deliver
the Shares as to which the Restricted Period has expired, as
follows:
(1) if an assignment to a trust has been made in
accordance with Section 6(g)(iv)(B)(2)(c), 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.
(d) Performance Awards. The Committee is authorized to grant
Performance Awards to Participants. Subject to the terms of the Plan, a
Performance Award granted under the Plan (i) may be denominated or payable in
cash, Shares (including, without limitation, Restricted Stock), other
securities, other Awards, or other property and (ii) 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, the amount
of any payment or transfer to be made pursuant to any Performance Award and
other terms and conditions shall be determined by the Committee.
(e) 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.
(f) Other Stock-Based Awards. The Committee is authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to or otherwise based on or related to Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purposes of the Plan,
provided, however, that such grants to persons who are subject to Section 16
must comply with the provisions of Rule 16b-3. Subject to the terms of the
Plan, the Committee shall determine the terms and conditions of such Awards.
Shares or other securities delivered pursuant to a purchase right granted under
this Section 6(f) shall be purchased for such consideration, which may be paid
by such method or methods and in such form or forms, including, without
limitation, cash, Shares, other securities, other Awards or other property or
any combination thereof, as the Committee shall determine.
(g) General.
(i) 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.
(ii) 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 un- der 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 any
Affiliate, may be granted either at the same time as or at a different
time from the grant of such other Awards or awards.
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(iii) 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.
(iv) Limits on Transfer of Awards.
(A) Except as the Committee may otherwise determine, 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.
(B) Notwithstanding the provisions of Paragraph (A) above:
(1) An Option may be transferred:
(a) to a beneficiary designated by the Participant
in writing on a form approved by the Committee;
(b) by will or the applicable laws of descent and
distribution to the personal representative, executor or
administrator of the Participant's estate; or
(c) 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 in the Participant.
Notwithstanding a qualified assignment, the
Participant, and not the trust to which rights under
such an Option may be as signed, for the purpose of
determining compensation arising by reason of the
Option 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.
(2) A Participant may assign or transfer rights under an
Award of Restricted Stock or Restricted Stock Units:
(a) to a beneficiary designated by the Participant
in writing on a form approved by the Committee;
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(b) by will or the applicable laws of descent and
distribution to the personal representative, executor or
administrator of the Participant's estate; or
(c) 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 in the Participant.
Notwithstanding a qualified assignment, the
Participant, and not the trust to which rights under
such an Award may be assigned, for the purpose of
determining compensation arising by reason of the Award
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.
(3) 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.
(C) 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.
(v) 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.
(vi) Change in Control. (A) Notwithstanding any of the provisions
of this Plan or instruments evidencing Awards granted hereunder, upon a
Change in Control of the Company (as hereinafter defined) 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
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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: (i) 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; (ii) make such
adjustment to any such Award then outstanding as the Committee deems
appropriate to reflect such Change in Control; and (iii) 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.
(B) With respect to any Award granted hereunder prior to December
6, 1995, a Change in Control shall occur if:
(1) any "person" or "group of persons" as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act, other than
pursuant to a transaction or agreement previously approved by the
Board of Directors of the Company, directly or indirectly purchases
or otherwise becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) or has the right to acquire such
beneficial ownership (whether or not such right is exercisable
immediately, with the passage of time, or subject to any condition)
of voting securities representing 25 percent or more of the
combined voting power of all outstanding voting securities of the
Company; or
(2) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
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
cease to constitute at least a majority of the members thereof.
(C) Notwithstanding the provisions of subparagraph (B), with
respect to Awards granted hereunder on or after December 6, 1995, a
Change in Control shall occur only if the event described in this
subparagraph (C) shall have occurred. With respect to any other Award
granted prior thereto, a Change in Control shall occur if any of the
events described in subparagraphs (B) or (C) shall have occurred, unless
the holder of any such Award shall have consented to the application of
this subparagraph (C) in lieu of the foregoing subparagraph (B). A
Change in Control for purposes of this subparagraph (C) shall occur if,
during any period of twenty-four consecutive calendar months, the
individuals who at the beginning of such period constitute the Company's
Board of Directors, 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 cease to constitute
at least a majority of the members thereof. For purposes hereof,
"Excluded Directors" are directors whose election by the Board or
approval by the Board for stockholder election occurred within one year
of 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.
(D) (1) 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
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distributable pursuant to the terms of this Plan or otherwise, other than
any payment pursuant to this subparagraph (D) (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.
(2) All determinations required to be made under this Section
6(g)(vi)(D), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be
made by Coopers & Lybrand L.L.P., 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
Coopers & Lybrand L.L.P., 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
repaid to the Company.
(3) This Section 6(g)(vi)(D) shall not apply to any Award (x) that
was granted prior to February 17, 1993 and (y) the holder of which is an
executive officer of the Company, as determined under the Exchange Act.
(vii) 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.
SECTION 7. 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 of Directors of the Company may
amend the Plan and the Board of Directors or the Committee may amend any out-
standing Award; provided, however, that (i) no Plan amendment shall be
effective until approved by stockholders of the Company insofar as stockholder
approval thereof is required in order for the Plan to continue to satisfy the
conditions of Rule 16b-3, 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.
(b) Waivers. The Committee may waive any conditions or rights under
any Award theretofore granted, prospectively or retroactively, without the
consent of any Participant.
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(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.
(d) 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 8. 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 uni- formity 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
op- tions and other stock-based awards, and such arrangements may be either
generally applicable or applicable only in specific cases.
(d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement or other written agreement with the Participant.
(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.
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(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 9. EFFECTIVE DATE OF THE PLAN
The Plan shall be effective as of the date of its approval by the
Company's stockholders.
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