FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1995
Commission file number 1-10716
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-2687639
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
315 East Eisenhower Parkway, Ann Arbor, Michigan 48108
(Address of principal executive offices) (Zip Code)
(313) 747-7025
(Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding at
Class August 2, 1995
Common Stock, $.01 Par Value 36,624,447
TRIMAS CORPORATION
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
June 30, 1995 and December 31, 1994 1
Consolidated Condensed Statements of
Income for the Three Months and Six
Months Ended June 30, 1995 and 1994 2
Consolidated Condensed Statements of
Cash Flows for the Six Months
Ended June 30, 1995 and 1994 3
Notes to Consolidated Condensed
Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 5
Part II. Other Information and Signature 9
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
June 30, December 31,
1995 1994
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $114,450,000 $107,670,000
Receivables 85,200,000 64,190,000
Inventories 82,510,000 79,560,000
Other current assets 2,360,000 3,590,000
Total current assets 284,520,000 255,010,000
Property and equipment 168,700,000 168,380,000
Excess of cost over net assets
of acquired companies 147,050,000 149,160,000
Notes receivable 9,330,000 9,960,000
Other assets 36,670,000 32,630,000
Total assets $646,270,000 $615,140,000
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 25,990,000 $ 21,590,000
Accrued liabilities 34,230,000 34,370,000
Current portion of long-term
debt 210,000 280,000
Total current
liabilities 60,430,000 56,240,000
Deferred income taxes and other 31,710,000 29,700,000
Long-term debt 238,400,000 238,600,000
Total liabilities 330,540,000 324,540,000
Shareholders' equity:
Common stock, $.01 par value,
authorized 100 million shares,
outstanding 36.6 million shares 370,000 370,000
Paid-in capital 154,900,000 155,210,000
Retained earnings 163,010,000 136,310,000
Cumulative translation adjustments (2,550,000) (1,290,000)
Total shareholders'
equity 315,730,000 290,600,000
Total liabilities
and shareholders'
equity $646,270,000 $615,140,000
The accompanying notes are an integral part of the
consolidated financial statements.
1
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Six Months Ended Three Months Ended
June 30, June 30,
1995 1994 1995 1994
Net sales $299,520,000 $281,400,000 $151,920,000 $146,940,000
Cost of sales (201,390,000) (190,820,000) (101,390,000) (97,620,000)
Selling, general and
administrative expenses (44,230,000) (42,750,000) (21,100,000) (21,890,000)
Operating profit 53,900,000 47,830,000 29,430,000 27,430,000
Interest expense (7,440,000) (5,930,000) (3,700,000) (3,090,000)
Other income (expense),
net 3,130,000 1,410,000 1,650,000 780,000
(4,310,000) (4,520,000) (2,050,000) (2,310,000)
Income before income
taxes 49,590,000 43,310,000 27,380,000 25,120,000
Income taxes 19,590,000 17,540,000 10,820,000 10,180,000
Net income $ 30,000,000 $ 25,770,000 $ 16,560,000 $ 14,940,000
Earnings per common
share:
Primary $.81 $.70 $.45 $.40
Fully diluted $.76 $.66 $.42 $.38
Dividends declared per
common share $.09 $.07 $.05 $.04
Weighted average number
of common and common
equivalent shares
outstanding:
Primary 36,994,000 37,038,000 37,001,000 37,038,000
Fully diluted 42,088,000 42,121,000 42,088,000 42,120,000
The accompanying notes are an integral part of the
consolidated condensed financial statements.
2
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1995 1994
CASH FROM (USED FOR):
OPERATIONS:
Net income $ 30,000,000 $25,770,000
Adjustments to reconcile net income
to net cash from operations:
Depreciation and amortization 10,850,000 10,490,000
Deferred income taxes 1,400,000 600,000
(Increase) decrease in receivables (20,370,000) (23,290,000)
(Increase) decrease in inventories (2,950,000) (1,700,000)
Increase (decrease) in accounts
payable and accrued liabilities 4,090,000 5,510,000
Other, net (3,110,000) (1,330,000)
Net cash from (used for)
operations 19,910,000 16,050,000
INVESTMENTS:
Capital expenditures (9,930,000) (11,030,000)
Net cash from (used for)
investments (9,930,000) (11,030,000)
FINANCING:
Retirement of long-term debt (270,000) (260,000)
Common stock dividends paid (2,930,000) (2,200,000)
Net cash from (used for)
financing (3,200,000) (2,460,000)
CASH AND CASH EQUIVALENTS:
Increase (decrease) for the period 6,780,000 2,560,000
At beginning of period 107,670,000 69,770,000
At end of period $114,450,000 $72,330,000
The accompanying notes are an integral part of the
consolidated condensed financial statements.
3
TRIMAS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
A. Basis of Presentation
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been
included, and such adjustments are of a normal recurring
nature. The year-end condensed balance sheet data was derived
from audited financial statements, but does not include all
disclosures required by generally accepted accounting
principles. For further information, refer to the
consolidated financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the
year ended December 31, 1994. Certain amounts in the 1994
financial statements have been reclassified to conform with
the current presentation.
B. Inventories by component are as follows:
June 30, December 31,
1995 1994
Finished goods $42,420,000 $44,860,000
Work in process 11,640,000 10,440,000
Raw material 28,450,000 24,260,000
$82,510,000 $79,560,000
C. Property and equipment reflects accumulated depreciation of
$109.3 million and $103.3 million as of June 30, 1995 and
December 31, 1994, respectively.
4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Consolidated net sales during the first half of 1995 equaled
$299.5 million, an increase of 6.4 percent over the comparable 1994 period and
the highest total in Company history for the first six months. Sales during the
1995 second quarter of $151.9 million, also a record, increased $5.0 million or
3.4 percent over the 1994 quarter.
Sales increases were achieved in all four reporting segments
during both the quarter and first half ended June 30, 1995 compared to the same
periods last year. Sales increases during the second quarter, particularly the
latter half, were more modest than those achieved in the first quarter as a
result of softening in the general economy and in certain markets served by the
Company's products, including the recreational vehicle, marine, commercial
construction, chemical and industrial maintenance markets. The growth in sales
was achieved in part by new product development and market share gains which
continue to be critical elements in the Company's growth strategy.
Sales by the Towing Systems segment were $103.3 million during
the first half of 1995, an increase of 8.2 percent versus last year. The
Specialty Fastener segment achieved sales of $76.1 million, up 7.3 percent from
last year's $71.0 million. First half sales for the Specialty Container
Products and Corporate Companies segments were $84.3 million and $35.8 million,
increases of 3.6 percent and 6.4 percent, respectively, over 1994's performance.
The Company's consolidated gross margin for the first six
months of 1995 was 32.8 percent compared to 32.2 percent for the first half of
1994. For the second quarter of 1995 and 1994 gross margin was 33.3 percent and
33.6
5
percent, respectively. Because of the seasonal factors relating to the Towing
Systems segment and the volume sensitive nature of the Company's operations,
gross margin recorded in the second quarter is typically higher than that which
is realized during the first quarter. Maintaining high gross margins is an
important operating strategy of the Company as it helps maximize earnings growth
as a result of sales increases.
The Company's consolidated operating profit for the first six
months of 1995 increased 12.7 percent to $53.9 million and represented an
operating margin of 18.0 percent compared to 1994's first six months operating
profit of $47.8 million or 17.0 percent of net sales. Operating profit for the
second quarter 1995 of $29.4 million represented a 7.3 percent increase over
operating profit for the second quarter of 1994. The operating margin increased
to 19.4 percent from 18.7 percent achieved in the second quarter of 1994. The
rate of growth in consolidated operating profit during the second quarter,
compared to that achieved during this year's first quarter, was affected by the
relative growth in sales during the respective quarters. The improvements in
profit during both periods were primarily the result of the previously mentioned
increased sales volumes, the Company's volume sensitivity, and successful cost
reduction programs.
Interest expense increased in the three and six month periods
ended June 30, 1995 because of higher prevailing interest rates. Interest
income, the major component of other income, more than doubled in the 1995
periods as a result of higher interest rates and increased average cash and
cash equivalent balances.
Net income for the six months and three months ended June 30,
1995 was $30.0 million and $16.6 million respectively, compared to $25.8 million
and $14.9 million in last year's comparable periods. Primary earnings per
common share increased 15.7 percent to $.81 for the first six months of 1995
compared
6
to 1994's primary earnings per common share of $.70, both based on 37.0 million
shares outstanding. Fully diluted earnings per common share increased 15.2
percent to $.76 versus $.66 last year, both based on 42.1 million shares
outstanding. Primary and fully diluted earnings per common share for the second
quarter of 1995 were $.45 and $.42, compared to $.40 and $.38 last year.
Liquidity, Working Capital and Cash Flows
The Company's financial strategies include maintaining a
relatively high level of liquidity. Historically, TriMas Corporation has
generated sufficient cash flows from operating activities to fund capital
expenditures, debt service and dividends, while maintaining its strategic level
of liquidity. At June 30, 1995 the current ratio was 4.7 to 1 and working
capital equaled $224.1 million, including $114.5 million of cash and cash
equivalents. The Company had available credit of $228.0 million under its
revolving credit facility at June 30, 1995.
During the second quarter of 1995 the Company amended its
existing $350 million revolving credit facility to extend the maturity date from
February, 1998 to July, 2000, and to reduce the interest rates paid.
Cash flows from operations provided $19.9 million and $16.1
million during the first six months of 1995 and 1994, respectively. These
operating cash flows were net of increases in accounts receivable of $20.4
million in 1995 and $23.3 million in 1994 due mainly to the seasonality of the
Towing Systems segment as well as increased sales by all of the Company's
business segments. Historically, the cash flow provided by the seasonal
increase in receivables is realized later in the year. A corresponding increase
in
7
accounts payable and accrued liabilities provided $4.1 million and $5.5 million
in the first six months of 1995 and 1994, respectively. Capital expenditures
during the first six months equaled $9.9 million in 1995 and $11.0 million in
1994. Common stock dividends totaled $2.9 million in 1995 versus $2.2 million
in 1994.
The Company believes its cash flows from operations, along
with its borrowing capacity and access to financial markets, are adequate to
fund its strategies for future growth, including working capital, expenditures
for manufacturing expansion and efficiencies, market share initiatives, and
corporate development activities.
8
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on May 10,
1995 at which the two nominees for the Company's Board of
Directors, identified in the Company's proxy statement
dated April 7, 1995, were re-elected and a proposal to
approve the Company's 1995 Long Term Stock Incentive Plan
was passed (reference is made to Exhibit 10 of this Form
10-Q for the full text of the Plan). Following is a
tabulation of shares voted:
Election of Directors
Brian P. Campbell John A. Morgan
For 33,427,083 33,364,276
Withheld 96,166 158,973
Proposal to Approve 1995 Long Term Stock Incentive Plan
For 31,199,353
Against 549,770
Abstentions and Broker Non-Voters 1,774,126
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
4 First Amendment dated June 30, 1995 to Credit
Agreement dated February 1, 1993 among TriMas
Corporation, Certain Banks and NationsBank, N.A.
(Carolinas), as Agent
10 TriMas Corporation 1995 Long Term Stock Incentive Plan
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges
27 Financial Data Schedule
(b) Reports on Form 8-K:
None were filed during the quarter ended June 30, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
TRIMAS CORPORATION
Date: August 11, 1995 By: /s/William E. Meyers
William E. Meyers
Vice President - Controller
(Chief accounting officer
and authorized signatory)
9
Exhibit Index
Exhibit
Number Description of Document
4 First Amendment dated June 30, 1995 to Credit
Agreement dated February 1, 1993 among TriMas
Corporation, Certain Banks and NationsBank, N.A.
(Carolinas), as Agent
10 TriMas Corporation 1995 Long Term Stock Incentive Plan
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges
27 Financial Data Schedule
Exhibit 11
TRIMAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(In Thousands, Except Per Share Amounts)
Six Months Ended Three Months Ended
June 30, June 30,
1995 1994 1995 1994
Primary:
Net income $30,000 $25,770 $16,560 $14,940
Weighted average common
shares outstanding 36,644 36,644 36,644 36,644
Dilution of stock options 350 394 357 394
Weighted average common
and common equivalent
shares outstanding
after assumed exercise
of options 36,994 37,038 37,001 37,038
Primary earnings per
common share $.81 $.70 $.45 $.40
Fully diluted:
Net income $30,000 $25,770 $16,560 $14,940
Add after tax convertible
debenture related
expenses 1,840 1,840 920 920
Net income as adjusted $31,840 $27,610 $17,480 $15,860
Weighted average common
shares outstanding 36,644 36,644 36,644 36,644
Dilution of stock options 361 394 361 393
Addition from assumed
conversion of convertible
debentures 5,083 5,083 5,083 5,083
Weighted average common
and common equivalent
shares outstanding on
a fully diluted basis 42,088 42,121 42,088 42,120
Fully diluted earnings
per common share $.76 $.66 $.42 $.38
Exhibit 12
TRIMAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Thousands)
Six Months Ended Three Months Ended
June 30, June 30,
1995 1994 1995 1994
Earnings:
Income before income taxes $49,590 $43,310 $27,380 $25,120
Fixed charges 7,950 6,420 3,960 3,330
Earnings before fixed
charges $57,540 $49,730 $31,340 $28,450
Fixed Charges:
Interest $7,540 $6,050 $3,750 $3,150
Portion of rental expense 450 440 230 220
Fixed charges $7,990 $6,490 $3,980 $3,370
Ratios of earnings to fixed charges 7.2 7.7 7.9 8.4
Exhibit 4
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT (the "First Amendment") dated as of June 30, 1995 is
to that Credit Agreement dated as of February 1, 1993 (as amended and modified
hereby and as further amended and modified from time to time hereafter, the
"Credit Agreement"; terms used but not otherwise defined herein shall have the
meanings assigned in the Credit Agreement), by and among TRIMAS CORPORATION, a
Delaware corporation (the "Company"), CERTAIN OF ITS SUBSIDIARIES identified as
a "Additional Borrowers" on the signature pages hereof (the "Additional
Borrowers"), the various banks and lending institutions identified on the
signature pages hereto (the "Banks"), NATIONSBANK, N.A. (CAROLINAS) (formerly
known as NationsBank of North Carolina, N.A.) as agent (in such capacity, the
"Agent").
W I T N E S S E T H
WHEREAS, the Banks have, pursuant to the terms of the Credit Agreement,
made available to the Borrower a $350,000,000 credit facility; and
WHEREAS, the Banks have agreed to amend the Credit Agreement on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
A. The following Banks will withdraw from the credit facility (the
"Withdrawing Banks"):
Citicorp USA, Inc.
Society National Bank
By execution of this First Amendment, the Company, the Additional Borrowers, the
Withdrawing Banks, the other Banks and the Agents hereby agree as follows:
(i) Effective as of June 30, 1995 (the "Effective Date"), (A) the
Commitments of the Banks shall be reallocated among the Banks as set forth
in Schedule 2.1 attached hereto, (B) the Commitments of the Withdrawing
Banks as set forth on Schedule 2.1 attached hereto shall be $0 and the
Withdrawing Banks shall not be obligated to make any Loan on or after the
Effective Date and (C) the Commitments of the Remaining Banks shall be as
set forth on Schedule 2.1 attached hereto;
(ii) The Company agrees to obtain Loans on the Effective Date from
the Remaining Banks (the "New Loans"), the proceeds of which will be used
by the Company to repay all Loans maturing on the Effective Date
(including all
Loans currently held by the Withdrawing Banks which will be paid in full
on the Effective Date). The New Loans will be made in accordance with the
terms of the Credit Agreement and if the New Loans consist of Syndicated
Loans, such Loans shall be made by the Remaining Banks based upon the
reallocated Commitments set forth on Schedule 2.1 attached hereto;
(iii) In addition to the repayment in full on the Effective Date of
all Loans held by the Withdrawing Banks, the Company agrees to pay the
Withdrawing Banks on the Effective Date all interest and fees owing to the
Withdrawing Banks under the Credit Agreement as of the Effective Date;
(iv) Upon the repayment in full on the Effective Date of all Loans,
interest and fees owing to the Withdrawing Banks under the Credit
Agreement, each Withdrawing Bank shall cease to be a "Bank" under the
Credit Agreement and shall be relieved and released from all liabilities
and obligations thereunder; and
(v) The rights and the obligations of the Company, the Additional
Borrowers and the Remaining Banks shall be governed by the terms of the
Credit Agreement as modified by this First Amendment.
B. The Credit Agreement is amended in the following respects:
1. The Commitments of the respective Banks have been reallocated
among the Banks to be as provided in Schedule 2.1 attached hereto.
2. Section 1.01 is amended by adding the following definition in
the alphabetically appropriate place:
"Pricing Ratio" shall mean the ratio of (a) Funded Debt to (b)
Adjusted Operating Profit.
3. Section 1.01 is further amended by amending the definition of
"Applicable Margin" in its entirety so that such definition now reads as
follows:
"Applicable Margin" shall mean with respect to:
(a) each Floating Rate Loan, 0% per annum;
(b) each Syndicated Eurodollar Rate Loan,
(i) .325% per annum for any Rate Period if the
Pricing Ratio as of the
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end of the most recently ended fiscal quarter of the
Company prior to such Rate Period is less than 1.5 to
1.0;
(ii) .375% per annum for any Rate Period if the
Pricing Ratio as of the end of the most recently ended
fiscal quarter of the Company prior to such Rate Period
is equal to or greater than 1.5 to 1.0 but less than 2.0
to 1.0; and
(iii) .50% per annum for any Rate Period if the
Pricing Ratio as of the end of the most recently ended
fiscal quarter of the Company prior to such Rate Period
is equal to or greater than 2.0 to 1.0 but less than 3.0
to 1.0;
(iv) .625% per annum for any Rate Period if the
Pricing Ratio as of the end of the most recently ended
fiscal quarter of the Company prior to such Rate Period
is equal to or greater than 3.0 to 1.0 but less than 3.5
to 1.0;
(v) .75% per annum for any Rate Period if the
Pricing Ratio as of the end of the most recently ended
fiscal quarter of the Company prior to such Rate Period
is equal to or greater than 3.5 to 1.0; and
(c) each Negotiated Eurodollar Rate Loan, the percentage
expressed on a per annum basis, offered by the relevant Bank
pursuant to Section 2.4(d) as the Applicable Margin (also referred
to as the Negotiated Eurodollar Margin) with respect to such Loan.
4. Section 1.01 is further amended by amending the definition of
"Maturity Date" in its entirety so that such definition now reads as follows:
"Maturity Date" shall mean the earlier of (a) July 1, 2000 or (b)
the date on which the Commitments shall be terminated pursuant to Section
2.9, 2.10, or 6.2.
5. Section 2.4(b) is amended by amending in its entirety the last
sentence of such Section so that such sentence now reads as follows:
The Company, if it requests any Negotiated Rate Loan, shall do so
pursuant to this Section in such a manner that the aggregate principal
amount of the outstanding Loans never exceeds the aggregate amount of the
Commitments; provided, however, at any time when the Pricing Ratio is
- 3 -
greater than 3.5 to 1.0 but less than 4.0 to 1.0 as of the end of the most
recently completed fiscal quarter of the Company, the Company, if it
requests any Negotiated Rate Loan, shall do so pursuant to this Section in
such a manner that the aggregate principal amount of the outstanding
Negotiated Rate Loans never exceeds fifty percent (50%) of the
Commitments; provided further, at any time when the Pricing Ratio is equal
to or greater than 4.0 to 1.0 as of the end of the most recently completed
fiscal quarter of the Company, the Company shall not be entitled to
request any Negotiated Rate Loan; provided further, the foregoing
restrictions shall have no effect on outstanding Negotiated Rate Loans
made prior to the implementation of such restrictions nor shall the
implementation of such restrictions constitute a Default hereunder.
6. Section 2.8(a) is amended in its entirety so that such Section
now reads as follows:
(a) The Company agrees to pay to the Banks, ratably in
proportion to their Commitments, a commitment fee on the daily average
amount by which the aggregate amount of the Commitments exceeds the
aggregate amount of the Loans during each Rate Period at a rate equal to
(i) .025% per annum if the Pricing Ratio for the fiscal quarter ending
immediately prior to such Rate Period is less than 1.5 to 1.0, (ii) .05%
per annum if the Pricing Ratio for the fiscal quarter ending immediately
prior to such Rate Period is equal to or greater than 1.5 to 1.0 but less
than 2.0 or (iii) .125% per annum if the Pricing Ratio for the fiscal
quarter ending immediately prior to such Rate Period is equal to or
greater than 2.0 to 1.0.
7. Section 2.8(b) is amended in its entirety so that such Section
now reads as follows:
(b) The Company agrees to pay to the Banks, ratably in proportion
to their Commitments, a facility fee on the daily aggregate amount of the
Commitments (regardless of usage) during each Rate Period at a rate equal to (i)
.125% per annum if the Pricing Ratio for the fiscal quarter ending immediately
prior to such Rate Period is less than 3.0 to 1.0, (ii) .15% per annum if the
Pricing Ratio for the fiscal quarter ending immediately prior to such Rate
Period is equal to or greater than 3.0 to 1.0 but less than 3.5 or (iii) .25%
per annum if the Pricing Ratio for the fiscal quarter ending immediately prior
to such Rate Period is equal to or greater than 3.5 to 1.0.
8. Section 5.7 is amended in its entirety so that such Section
now reads as follows:
5.7 Ratio of Funded Debt to Adjusted Operating Profit. It will
not permit or suffer the ratio of (a) the Consolidated Funded Debt of the
Company and its Consolidated Subsidiaries to (b) the Consolidated Adjusted
Operating
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Profit of the Company and its Consolidated Subsidiaries, at any time to be
greater than 4.0 to 1.0. The above limitation shall not prevent the
Company or any of its Consolidated Subsidiaries from creating, incurring,
issuing, guaranteeing or assuming Debt for the purpose of extending,
renewing or refunding not more than the principal amount of the Debt then
outstanding of the Company or of a Consolidated Subsidiary.
B. The Company hereby represents and warrants that:
(i) any and all representations and warranties made by the Company
and contained in the Credit Agreement (other than those which expressly
relate to a prior period) are true and correct in all material respects as
of the date of this First Amendment; and
(ii) No Default or Event of Default currently exists and is
continuing under the Credit Agreement as of the date of this First
Amendment.
C. This First Amendment shall not be effective until receipt by the
Agent of the following in form and substance satisfactory to the Banks:
1. Executed Documents. Executed copies of this First Amendment
and related documentation.
2. Other Information. Such other information and documents as
the Agent may reasonably request.
D. The Company and the Additional Borrowers will execute such
additional documents as are reasonably requested by the Agent to reflect the
terms and conditions of this First Amendment.
E. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (and Exhibits and Schedules) remain in full force and effect.
F. The Borrower agrees to pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this First Amendment,
including without limitation the reasonable fees and expenses of Moore & Van
Allen, PLLC, special counsel to the Agent.
G. This First Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and it
shall not be necessary in making proof of this First Amendment to produce or
account for more than one such counterpart.
H. This First Amendment and the Credit Agreement, as amended hereby,
shall be deemed to be contracts made under, and
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for all purposes shall be construed in accordance with the laws of the State of
North Carolina.
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this First Amendment to Credit Agreement to be duly executed under seal and
delivered as of the date and year first above written.
BORROWER:
TRIMAS CORPORATION,
a Delaware corporation
By /s/ Peter C. DeChants
Title Vice President/Treasurer
ADDITIONAL BORROWERS:
COMPAC CORPORATION
By /s/ Peter C. DeChants
Title Vice President
NORRIS CYLINDER COMPANY
By /s/ Peter C. DeChants
Title Vice President
LAMONS METAL GASKET COMPANY
By /s/ Peter C. DeChants
Title Vice President/Treasurer
BANKS:
NATIONSBANK, N.A. (CAROLINAS),
individually in its capacity as a
Bank and in its capacity as Agent
(formerly known as NationsBank of
North Carolina, N.A.)
By /s/ Michael S. Zehfuss
Title SVP
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COMERICA BANK
By /s/ Charles L. Weddell
Title Vice President
SOCIETY NATIONAL BANK
By /s/ Richard L. Pohle
Title Vice President
THE BANK OF NOVA SCOTIA
By /s/ P.C.H. Ashby
Title Senior Manager Loan Operations
PNC BANK, NATIONAL ASSOCIATION
By /s/ Jack F. Broeren
Title Assistant Vice President
BANK OF AMERICA ILLINOIS
By /s/ Kathryn W. Robinson
Title Managing Director
THE BANK OF NEW YORK
By /s/ Douglas Ober
Title Vice President
CHEMICAL BANK
By /s/ Rosemary Bradley
Title Vice President
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CITICORP USA, INC.
By /s/ Barbara A. Cohen
Title Vice President
HARRIS TRUST AND SAVINGS BANK
By /s/ Peter J. Dancy
Title Vice President
NATIONAL CITY BANK
By /s/ Andrew J. Walshaw
Title Account Officer
CIBC, INC.
By /s/ Kent S. Davis
Title Vice President
NBD BANK (Formerly NBD Bank, N.A.)
By /s/ Richard H. Huttenlocher
Title Vice President
ROYAL BANK OF CANADA
By /s/ Preston D. Jones
Title Senior Manager
Corporate Banking
THE NORTHERN TRUST COMPANY
By /s/ S. Biff Bowman
Title Vice President
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TRUST COMPANY BANK
By /s/ Donald M. Lynch
Title Vice President
By /s/ Gregory L. Cannon
Title Vice President
Exhibit 10
TRIMAS CORPORATION
1995 LONG TERM STOCK INCENTIVE PLAN
Section 1. Purposes
The purposes of the 1995 Long Term Stock Incentive Plan (the "Plan") are
to encourage selected employees of and consultants to TriMas 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 "disinterested person" 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.
(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 $.01 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.
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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 limita-
tion the power to:
(i) designate Participants;
(ii) determine the types of Awards to be granted;
(iii) determine the number of Shares to be covered by Awards and any
payments, rights or other matters to be calculated in connection
therewith;
(iv) determine the terms and conditions of Awards and amend the
terms and conditions of outstanding Awards;
(v) determine how, whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or
suspended;
(vi) determine how, whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property
and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the holder thereof or of the
Committee;
(vii) determine the methods or procedures for establishing the fair
market value of any property (including, without limitation, any Shares or
other securities) transferred, exchanged, given or received with respect
to the Plan or any Award;
(viii) prescribe and amend the forms of Award Agreements and other
instruments required under or advisable with respect to the Plan;
(ix) designate Options granted to key employees of the Company or
its subsidiaries as Incentive Stock Options;
(x) interpret and administer the Plan, Award Agreements, Awards and
any contract, document, instrument or agreement relating thereto;
(xi) establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the
administration of the Plan;
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(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 who need not be
"disinterested persons" within the meaning of Rule 16b-3 the authority to
designate Participants and grant Awards, provided such Participants are
not directors or officers of the Company for purposes of Section 16; and
(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 2,000,000 Shares
initially available for issuance under the Plan.
(ii) Acquired Shares. In addition to the amount set forth above, up
to 2,000,000 Shares acquired by the Company subsequent to the
effectiveness of the Plan 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.
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(iii) Additional Shares. Shares acquired by the Company in the
circumstances set forth in (ii) above in excess of the amount set forth
therein may thereafter be included in the Shares available for Awards to
the extent permissible for purposes of allowing the Plan to continue to
satisfy the conditions of Rule 16b-3.
(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 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.
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(b) Individual Stock-Based Awards. Subject to adjustment as
provided in Section 4(c), no Participant may receive stock-based Awards under
the Plan in any calendar year that relate to more than 400,000 Shares; 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 years. No
provision of this Paragraph 4(b) shall be construed as limiting the amount of
any 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, but excluding a member
of the Committee, 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.
Section 6. Awards
(a) Options. The Committee is authorized to grant Options to
Participants.
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(i) Committee Determinations. Subject to the terms of the Plan, the
Committee shall determine:
(A) the purchase price per Share under each Option;
(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 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
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(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.
(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.
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(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 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 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 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 Ap-
preciation 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
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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 em-
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ployment 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.
(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)(1)(c), to such trust; or
(2) if the Restricted Period has expired by reason of
death and a beneficiary has been designated in a 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
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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
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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) Except as set forth in Paragraph (2) below, a
Participant may assign or transfer an Option or 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 attempt to assign rights under
such an
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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.
(2) 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.
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(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 (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) 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 (A) the
- 15 -
Company or (B) an Affiliated Party (as hereinafter defined); 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.
An "Affiliated Party" shall mean (x) MascoTech, Inc., a Delaware
corporation ("MascoTech"), provided MascoTech then owns at least twenty percent
of the combined voting power of all voting securities of the Company, or (y)
Masco Corporation, a Delaware corporation ("Masco"), provided Masco then owns
(i) at least twenty percent of the combined voting power of all voting
securities of the Company, or (ii) at least twenty percent of the combined
voting power of all voting securities of MascoTech and MascoTech and Masco
Corporation together then own an aggregate of at least twenty percent of the
combined voting power of all voting securities of the Company.
(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.
- 16 -
(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.
(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.
- 17 -
(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.
- 18 -
Section 9. Effective Date of the Plan
The Plan shall be effective as of the date of its approval by the
Company's stockholders.
- 19 -
5
6-MOS
DEC-31-1995
JUN-30-1995
114,450,000
0
87,140,000
1,940,000
82,510,000
284,520,000
278,040,000
109,340,000
646,270,000
60,430,000
238,400,000
370,000
0
0
315,360,000
646,270,000
299,520,000
299,520,000
201,390,000
201,390,000
0
0
7,440,000
49,590,000
19,590,000
30,000,000
0
0
0
30,000,000
.81
.76
