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EXHIBIT 10.e
MASCO CORPORATION
1991 LONG TERM STOCK INCENTIVE PLAN
(Restated July 10, 1998)
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 pro vision 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 NonQualified 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.
(m) "Performance Award" shall mean any right granted under Section 6(d) of the
Plan.
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(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 16,000,000
Shares initially available for issuance under the Plan.
(ii) Acquired Shares. In addition to the amount set forth above, up to
16,000,000 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 here under 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,
(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
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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 2,000,000 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 authority may be
delegated pursuant to Section 3 hereof in its or their discretion, is eligible
to be designated a Participant.
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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 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) 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 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.
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(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 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.
(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 satisfactory 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 ex tent 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 deter mine, 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.
(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
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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
certificates.
(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
bonafide 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.
(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.
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(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 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 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.
(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.
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(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;
(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 at tempt 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
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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 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
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(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
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
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
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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 outstanding
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.
(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
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.
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(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. 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.
(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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