EXHIBIT 10.21
THE MEAD CORPORATION COMPOSITE
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RESTRICTED STOCK PLAN 11/09/96
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ARTICLE I. GENERAL PROVISIONS
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Section 1. Purpose. The purpose of The Mead Corporation Restricted Stock
Plan (the "Plan") is to provide certain compensation to eligible directors and
employees in the form of Common Shares ("Shares") of The Mead Corporation (the
"Company") which are restricted in accordance with the terms and conditions set
forth below and to encourage the continued high level of performance of such
directors and employees by increasing the identity of interests of such
directors and employees with the shareholders of the Company. The Plan is
intended to be an unfunded program established for the purpose of providing
compensation for eligible directors and a select group of management employees
and is exempt from Parts 1 through 4 of Title I of the Employee Retirement
Income Security Act of 1974, as amended.
Section 2. Definitions. For purposes of the Plan, the following terms shall
have the following meanings:
(a) "Board of Directors" means the Board of Directors of the Company.
(b) "Change in Control" means the occurrence of any of the following: (i)
any "person" or "group" within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Act"), becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act) of more than 25% of the then
outstanding voting shares of the Company otherwise than through a transaction
arranged by, or consummated with the prior approval of, the Board of Directors,
or (ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors (and any new director
whose election by the Board of Directors or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority thereof.
(c) "Committee" means the Compensation Committee of the Board of Directors.
(d) "Company" means The Mead Corporation; however, when used with
reference to employment, "Company" also includes any corporation, partnership or
other person or entity at least 10% of the voting or equity interest of which is
owned or controlled, directly or indirectly, by the Company.
(e) "Eligible Director" means any director of the Company who is not also
an employee of the Company.
(f) "Eligible Employee" means any employee of the Company selected by the
Committee.
(g) "Grant Date" means the date on which Restricted Shares are to be
granted pursuant to Article II, Section 1.
(h) "Market Value" means the average of the highest sale price and the
lowest sale price of a Share on the date the value of a Share is to be
determined, as reported on the New York Stock Exchange - Composite Transactions
Tape (or other similar source) or, if no sale is reported for such date, then on
the next preceding date for which a sale is reported.
(i) "Participant" means any individual who holds Restricted Shares granted
under the Plan.
(j) "Restriction Period" means (i) in the case of Restricted Shares
granted pursuant to Article II. Section 1(a), (b) or Section 2, the period of
six months from the date the Restricted Shares are granted, (ii) in the case of
Restricted Shares granted pursuant to Article II. Section 1(c), the date the
grantee becomes age 55 or six months from the date the Restricted Shares are
granted, whichever is later, and (iii) in the case of Restricted Shares granted
pursuant to Article III, the period of six months or longer (as determined by
the Committee) from the date Restricted Shares are granted.
(k) "Restricted Shares" means any Shares issued or delivered pursuant to
the Plan which remain subject to the restrictions set forth in Article I,
Section 5 of the Plan.
(l) "Shares" means the Common Shares, without par value, of the Company.
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Section 3. Administration.
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(a) The Plan shall be administered by the Committee. Subject to the
express provisions of the Plan, the Committee and the Board of Directors shall
each have authority to construe and interpret the Plan, to prescribe, amend, and
rescind rules and regulations relating to the Plan, and to make all other
determinations necessary or advisable for administering the Plan. The Committee
or the Board of Directors may correct any defect or supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent it shall
deem expedient to carry it into effect. The determination of the Committee or
the Board of Directors on any matters within the scope of this section shall be
conclusive. A majority of the Committee shall constitute a quorum for meetings
of the Committee, and the act of a majority of the Committee at a meeting, or an
act reduced to or approved in writing by all members of the Committee, shall be
the act of the Committee.
In the case of Restricted Shares granted pursuant to Article III, the
Committee may in its discretion impose additional conditions or restrictions as
to the attainment of specified performance goals during the Restriction Period
for all or a portion of the shares or all or a portion of the years in the
Restriction Period.
(b) The Committee may waive or modify at any time any condition or
restriction (including, without limitation, any of the restrictions set forth in
Article I, Section 5) with respect to any Restricted Shares issued pursuant to
Article III.
Section 4. Shares Subject to the Plan. Subject to adjustment as provided in
Section 1 of Article IV, the maximum number of Shares which may be granted as
Restricted Shares under the Plan is 500,000; the maximum number of Shares which
may be granted as Restricted Shares to any individual pursuant to Section 2 of
Article II is 20,000; and, the maximum number of Shares which may be granted as
Restricted Shares to any eligible employee pursuant to Article III is 150,000.
Shares granted as Restricted Shares under the Plan may be authorized and
unissued Shares or Shares held in the Company's treasury. Any Shares which are
granted as Restricted Shares under the Plan and which are thereafter forfeited
by the participant may again be granted under the Plan as Restricted Shares.
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Section 5. Terms and Conditions of Restricted Shares.
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(a) Subject to the provisions of paragraph (b) of this Section 5,
Restricted Shares issued pursuant to the Plan shall be subject to the following
restrictions:
(i) the Participant shall not be entitled to receive delivery of the
certificate for such Restricted Shares until the expiration of the Restriction
Period;
(ii) such Restricted Shares shall not be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the Restriction Period;
and
(iii) all such Restricted Shares shall be forfeited and all right of the
Participant to such Restricted Shares shall terminate without further
obligations on the part of the Company if the Participant ceases to be a
director of the Company (in the case of a Participant who received Restricted
Shares as an Eligible Director) or an employee of the Company (in the case of a
Participant who received Restricted Shares as an Eligible Employee) prior to the
end of the Restriction Period.
Upon the forfeiture of Restricted Shares, such Shares shall be returned to
the status of authorized and unissued Shares or treasury Shares, as determined
by the Committee.
(b) Notwithstanding the provisions of paragraph (a) of this Section 5, in
the event a Participant ceases to be a director of the Company (in the case of a
Participant who received Restricted Shares as an Eligible Director) or an
employee of the Company (in the case of a Participant who received Restricted
Shares as an Eligible Employee) prior to the end of a Restriction Period as a
result of such Participant's death, disability or normal retirement in
accordance with the Company's policies, then the restrictions set forth in
paragraph (a) of this Section 5 shall immediately cease to apply to (and all
rights of the Participant shall immediately vest with respect to) all of the
Restricted Shares.
In any event, all such Restricted Shares shall be forfeited and all rights
of the Participant to such Restricted Shares shall terminate without further
obligations on the part of the Company if the Participant, directly or
indirectly, individually or as an
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agent, officer, director, employee, shareholder (excluding being the holder of
any stock which represents less than 1% interest in a corporation), partner or
in any other capacity whatsoever engages prior to the time such restrictions
cease to apply in any activity competitive with or adverse to the Company's
business or in the sale, distribution, production or attempted sale or
distribution of any goods, products or services then sold or being developed by
the Company.
(c) Upon the occurrence of a Change in Control, all of the restrictions set
forth in this Section 5 shall immediately cease to apply to all Restricted
Shares issued pursuant to the Plan, except to the extent that the lapse of such
restrictions would, in the opinion of counsel selected by the Company's
independent auditors, constitute "parachute payments" within the meaning of
Section 280G(b)(2)(A) of the Internal Revenue Code (the "Code") and, when added
to any other "parachute payments" which would be received by the Participant
pursuant to the terms of any other plan, arrangement or agreement with the
Company, any person whose actions result in a change in control of the Company
or any person affiliated with the Company or such person, would be subject to
the tax imposed by Section 4999 of the Code.
(d) At the end of the Restriction Period, or at such earlier time as it is
provided for in Paragraphs (b) or (c) of this Section 5, the restrictions
applicable to the Restricted Shares pursuant to this Section 5 shall cease and a
share certificate for the number of Restricted Shares with respect to which the
restrictions have ceased shall be delivered, free of all such restrictions and
all restrictive legends, to the Participant or the Participant's beneficiary or
estate, as the case may be.
(e) If required by the Committee, each grant of Restricted Shares shall be
evidenced by a written agreement between the Company and the Participant.
(f) In the event that the restrictions set forth in Paragraph (a) of this
Section 5 shall cease to apply to any Restricted Shares granted to Eligible
Employees subject to Section 16 of the Act prior to the date which is six months
after the date of grant of such Restricted Shares, then, notwithstanding any
provision to the contrary in this Section 5, the restrictions set forth in
paragraphs (a)(i) and (a)(ii) of
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this Section 5 shall continue in effect until the date which is six months after
the date of such grant.
(g) Notwithstanding any provision to the contrary in this Section 5, but
subject nonetheless to Paragraph (c) of this Section 5, in the case of
Restricted Shares granted pursuant to Article III, if the Participant fails to
attain specified performance goals set forth with respect to such Restricted
Shares during the Restriction Period, the Participant will forfeit such
Restricted Shares to the extent specified in the grant of such Restricted Shares
and the right of the Participant to such Restricted Shares shall terminate to
the extent specified in the grant of such Restricted Shares without any further
obligations on the part of the Company.
Section 6. Rights as a Shareholder.
(a) Upon the grant of Restricted Shares pursuant to Article II or Article
III of the plan, the company shall issue a share registered in the name of the
Participant bearing the following legend and any other legend required by any
federal or state securities laws:
"the transferability of this certificate and the Common Shares represented
hereby are subject to the restrictions, terms and conditions (including
forfeiture and restrictions against sale, assignment, transfer, pledge,
hypothecation and other disposition) set forth in The Mead Corporation
Restricted Stock Plan. Copies of such Plan will be mailed to any shareholder
without charge within five days after receipt of written request therefor
address to Secretary, The Mead Corporation, Mead World Headquarters, Courthouse
Plaza Northeast, Dayton, OH 45463."
Each such share shall be retained by the Company until the restrictions set
forth in Article I, Section 5(a) cease to apply to the Shares.
(b) Upon the issuance of Restricted Shares pursuant to paragraph (a) of
this Section 6, the Participant shall, subject to all of the terms, conditions
and restrictions set forth in the Plan, have all of the rights of a holder of
Shares, including the right to vote and to receive dividends and other
distributions with respect thereto.
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ARTICLE II. RESTRICTED SHARES FOR ELIGIBLE DIRECTORS
Section 1. Grant of Restricted Shares to Eligible Directors.
(a) On the third business day of January, 1998 and on each annual
anniversary of such date during the term of the Plan, (each such date is
hereinafter referred to as a "Grant Date"), the Company shall grant a number of
Restricted Shares to each then Eligible Director determined by dividing $7,500
by the Market Value of a Share on the Grant Date (rounded to the nearest whole
shares).
(b) If during the term of the Plan any person becomes an Eligible Director
on a date other than a Grant Date, the Company shall grant such person a number
of Restricted Shares determined by dividing $7,500 by the Market Value of a
Share (rounded to the nearest whole share) on the date of such person's election
to the Board Of Directors.
(c) Each Eligible Director shall automatically receive a grant of a number
of Restricted Shares of the Company equal to the quotient obtained by dividing
(i) 5,000, by (ii) the Market Value per Share on the date the Plan, as amended,
is approved by the Shareholders (the "Initial Grant"). Thereafter, on the third
Business day of January, 1997 and on each annual anniversary of such date during
the term of the Plan, the company shall grant and each Eligible Director shall
automatically reeceive a number of Restricted Shares which shall equal the
product obtained by multiplying the Initial Grant by an adjustment factor (the
"Factor"). The Factor shall equal the quotient obtained by dividing (y) the base
line number for average total compensation paid to directors by companies with
annual sales in excess of $4 billion, as published in the Hay Consulting Group's
"Directors Compensation Report" (or comparable successor report) in the calendar
year immediately preceding the year in which such grant is made, which report
covers compensation paid in the year ending immediately prior to the year of
publication, by (z) 36,246. In the event that such Directors Compensation Report
(or comparable successor report) is not published with respect to any year, the
Factor shall equal one (1).
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Section 2. Election to Receive Compensation as Restricted Shares.
(a) Not later than June 1 of each year during the term of the Plan, the
Committee shall cause each Eligible Director to be furnished with an appropriate
form which enables the director to elect to receive payment in Restricted Shares
of a minimum of 20% up to a maximum of 100% (in increments of 10%) of the annual
retainer fee to be earned by such director for service on the Board of Directors
during the following calendar year which is paid on or after the first day of
such calendar year. In order to be effective, the election form must be signed
by the director and must be returned to the Committee or its delegate not later
than July 1 of the year prior to the year with respect to which the election is
being made. All such elections are irrevocable.
(b) A new Eligible Director may, by filing the prescribed election form,
elect to receive the annual retainer fee as Restricted Shares as provided in
paragraph (a) of this Section 2 only if the election form is signed and filed at
least six months prior to the date of payment of the annual retainer fee to such
director.
(c) If an Eligible Director has elected to receive all or a portion of the
annual retainer fee as Restricted Shares as provided in this Section 2, then on
the date such fee would otherwise be payable, the Company shall grant to such
director a number of Restricted Shares determined by dividing the compensation
so to be received by the Market Value of a Share on such date such other
compensation would otherwise be payable (rounded to the nearest whole share).
ARTICLE III. RESTRICTED SHARES FOR ELIGIBLE EMPLOYEES
Section 1. Grant of Restricted Shares to Eligible Employees. From time to
time during the term of the Plan, the Committee may determine that Restricted
Shares shall be granted to Eligible Employees either as payment for all or a
portion of the compensation to be paid to any Eligible Employee pursuant to the
Company's incentive compensation plans, or for any other reason consistent with
the purposes of the Plan. Restricted Shares to be granted as payment for all or
a portion of incentive compensation shall be granted on the date the
compensation is
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awarded, and the number of Restricted Shares so granted shall be determined by
dividing the amount of such compensation by the Market Value of a share on the
date the compensation is awarded (rounded to the nearest whole share).
ARTICLE IV. MISCELLANEOUS
Section 1. Adjustments Upon Changes in Capitalization.
Upon any change in the outstanding Shares by virtue of a share dividend or
split, recapitalization, merger, consolidation, combination or exchange of
shares or other similar change, the number of Restricted Shares which may be
granted under the Plan (or the class of shares which may be granted as
Restricted Shares) shall be adjusted appropriately by the Committee, whose
determination with respect to such adjustment shall be conclusive. Unless the
Committee shall otherwise determine, any securities and other property received
by a Participant in connection with or as a result of any such change with
respect to Restricted Shares (excluding dividends paid in cash) shall be subject
to the restrictions then applicable to Restricted Shares under the Plan
(including forfeiture), and shall be deposited promptly with the Company to be
held in custody until the restrictions cease to apply to the Restricted Shares
to which such securities or other property relates.
Notwithstanding the foregoing, however, in the event any rights to purchase
Shares are issued pursuant to the Company's Shareholder Rights Plan (or any
successor plan) with respect to Restricted Shares, such rights shall cease to be
subject to the restrictions applicable to the underlying Restricted Shares at
such time, if any, as such rights become exercisable.
Section 2. Compliance with Laws. The issuance or delivery of Shares
pursuant to the Plan shall be subject to, and shall comply with, any applicable
requirements of federal and state securities laws, rules and regulations
(including, without limitation, the provisions of the Securities Act of 1933,
the Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder), any securities exchange upon which the Shares may be listed and any
other law or regulation applicable thereto, and the Company shall not be
obligated to issue or deliver any Shares pursuant to the Plan if such issuance
or delivery would violate any such requirements. The foregoing
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shall not, however, be deemed to require the Company to effect any registration
of shares under any such law or regulation.
Section 3. Amendment and Termination.
(a) The Board of Directors may from time to time amend the Plan, or any
provision thereof, in such respects as the Board of Directors may deem
advisable; provided, however, that any such amendment must be approved by the
holders of Shares entitling them to exercise a majority of the voting power of
the Company if such amendment would:
(i) materially increase the benefits accruing to participants under the
Plan;
(ii) materially increase the aggregate number of Shares which may be issued
and/or delivered or the number of Shares which may be granted to any individual
under the Plan;
(iii) materially modify the requirements as to eligibility for
participation in the Plan.
(b) The Plan shall terminate and no additional Restricted Shares shall be
granted under the Plan after September 30, 2005; provided, however, that the
Board of Directors may earlier terminate the Plan at any time.
(c) No amendment to or termination or expiration of the Plan shall
adversely affect any Restricted Shares previously granted under the Plan without
the consent of the holder thereof.
(d) Notwithstanding paragraph (a) of this Section 3, the provisions of
Section 1 of Article II may not be amended more than once every six months other
than to comport with changes in the Code, ERISA or the rules thereunder.
Section 4. Notices. Each notice relating to the Plan shall be in writing
and delivered in person or by mail to the proper address. Each notice shall be
deemed to have been given on the date it is delivered or mailed except that an
election to receive compensation as Restricted Shares pursuant to Article II,
Section 2 shall be deemed to have been given on the date it is received by the
Committee. Each notice to the committee shall be addressed as follows: The
Mead Corporation, Mead World
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Headquarters, Courthouse Plaza Northeast, Dayton, Ohio 45463, Attention:
Secretary. Each notice to a Participant shall be addressed to the Participant's
address as set forth in the records of the Company. Anyone to whom a notice may
be given under this Plan may designate a new address by written notice to the
Company or to the Participants, as the case may be.
Section 5. Benefits Of Plan. The Plan shall inure to the benefit of, and
shall be binding upon, each successor and assign of the Company. All rights and
obligations imposed upon a Participant and all rights granted to the Company
under this Plan shall be binding upon such Participant's heirs, legal
representatives and successors. Nothing in the Plan shall be deemed to create
any obligation on the part of the Company to nominate any director for re-
election or to continue the employment of any employee.
Section 6. Taxes.
(A) The Company shall have the right to require, prior to the issuance or
delivery of any Restricted Shares, payment by the Participant of any taxes
required by law with respect to the issuance or delivery of such Restricted
Shares.
(B) On any date on or after January 1, 1994 that restrictions applicable to
Restricted Shares granted (or to be granted) hereunder shall have ceased
pursuant to Article I, Section 5 (the "Lapse Date"), and with respect to persons
subject to Section 16 of the Securities Exchange Act of 1934, as amended (the
"1934 Act") on any date thereafter through the end of the next following period
(the "Window Period") specified in Rule 16b-3(e)(3) (or any successor rule)
under the 1934 Act, the Participant to whom such Restricted Shares were granted
may elect to have the Company retain, from the Restricted Shares to be delivered
at the end of the Restriction Period, Shares having a Market Value on the date
of delivery equal to all or any part of the federal, state and local withholding
tax payments (whether mandatory or permissive) to be made by the Participant
with respect to ceasing of the restrictions (up to the maximum amount determined
by the Participant's top marginal tax rate) in lieu of making such payments in
cash; provided that such election may also be made in advance of the Lapse Date
and will be effective on the date specified in the notice of election (subject,
as applicable, to Section 16 of the 1934 Act), and further provided
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that, with respect to a Lapse Date that has occurred or will occur between
January 1, 1994 and October 28, 1994, the election may be made by persons
subject to and in accordance with Section 16 of the 1934 Act through the end of
the first Window Period which commences on, includes or follows October 28,
1994. The Committee may establish from time to time rules or limitations with
respect to the right of a Participant to elect to have the Company retain
Restricted Shares in satisfaction of withholding payments; provided, however,
that, in any event, any such rules or limitations must be in accordance with
Section 16 of the 1934 Act and any applicable rules established under such
Section.
Section 7. Governing Law. All grants of Restricted Shares shall be made
and accepted in the State of Ohio. The laws of the State of Ohio shall control
the interpretation and performance of the provisions of the Plan.
Section 8. Effective Date of the Plan. The effective date of the Plan
shall be December 10, 1987; provided, however, that if the Plan is not approved
at the 1988 Annual Meeting of Shareholders by the holders of at least a majority
of the outstanding voting power of the Company, the Plan shall immediately
terminate. No dividends shall be paid prior to the 1988 Annual Meeting of
Shareholders with respect to any Restricted Shares granted prior to such
meeting. If the Plan is not approved at such meeting, all Restricted Shares
granted prior thereto shall be retained by the Company, and the Company shall
pay to the Participant in whose name such Restricted Shares were registered an
amount equal to the Market Value on the date of grant of a number of Shares
equal to such number of Restricted Shares.
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NOTES:
(1) Adopted by the Board of Directors of the Company on December 11, 1987.
(2) Approved by the shareholders of the Company on April 28, 1988.
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(3) Addition of Article II, Section 2, subsection (d) adopted by the Board
of Directors of the Company on December 15, 1989 (deleted February 28, 1991).
(4) Amendment to Article I, Section 2, subsection (h) adopted by the Board
of Directors of the Company on January 25, 1990.
(5) Amendments to Article I, Section 2, subsections (d) and (j); Article I,
Section 3, subsection (a); and Article III, Section 1; and addition of Article
2, Section 5, subsection (g), adopted by the Board of Directors of the Company
on January 24, 1991, and approved by the shareholders of the Company on April
25, 1991.
(6) Amendments to Article II, Section 2, subsections (a) and (b); and
addition of Article I, Section 5, subsection (f) and Article IV, Section 3,
subsection (d) adopted by the Board of Directors of the Company on February 28,
1991.
(7) Amendments to Article I, Section 5, subsection (b); and addition of
Article I, Section 5, subsection (b)(iii), adopted by the Board of Directors of
the Company on July 23, 1992.
(8) Amendment to Article IV, Section 6, subsection (b) adopted by the Board
of Directors of the Company on April 28, 1994.
(9) Amendments to Article I, Section 2(j), Section 4, Section 5(b)(i),
Section 6, Article II, Section 1(c), Article IV, Section 3(b) adopted by the
Board of Directors of the Company on October 28, 1995, and approved by the
shareholders of the Company on April 25, 1996.
(10) Amendments to Article I, Section 2(j) and 5(b); Article II, Section
1(a) and (b) adopted by the Board of Directors of the Company on November 09,
1996.
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