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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER 1-10716
TRIMAS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 38-2687639
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
315 EAST EISENHOWER PARKWAY 48108
ANN ARBOR, MICHIGAN (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 313-747-7025
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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COMMON STOCK, $.01 PAR VALUE NEW YORK STOCK EXCHANGE, INC.
5% CONVERTIBLE SUBORDINATED DEBENTURES DUE NEW YORK STOCK EXCHANGE, INC.
2003
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
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, AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS
FOR THE PAST 90 DAYS. YES /X/ NO / /
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. /X/
THE AGGREGATE MARKET VALUE OF THE REGISTRANT'S COMMON STOCK HELD BY
NON-AFFILIATES OF THE REGISTRANT ON MARCH 1, 1996 (BASED ON THE CLOSING SALE
PRICE OF $22 3/8 OF THE REGISTRANT'S COMMON STOCK AS REPORTED ON THE NEW YORK
STOCK EXCHANGE COMPOSITE TAPE ON SUCH DATE) WAS APPROXIMATELY $353,497,000.
NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK AT MARCH 1, 1996:
36,651,021 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE
PORTIONS OF THE REGISTRANT'S DEFINITIVE PROXY STATEMENT TO BE FILED FOR ITS 1996
ANNUAL MEETING OF STOCKHOLDERS ARE INCORPORATED BY REFERENCE INTO PART III OF
THIS REPORT.
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TABLE OF CONTENTS
ITEM PAGE
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PART I
1. Business........................................................................ 2
2. Properties...................................................................... 8
3. Legal Proceedings............................................................... 8
4. Submission of Matters to a Vote of Security Holders............................. 8
Supplementary Item. Executive Officers of Registrant............................ 8
PART II
5. Market for Registrant's Common Equity and Related Stockholder Matters........... 9
6. Selected Financial Data......................................................... 10
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations...................................................................... 11
8. Financial Statements and Supplementary Data..................................... 15
9. Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure...................................................................... 31
PART III
10. Directors and Executive Officers of the Registrant.............................. 32
11. Executive Compensation.......................................................... 32
12. Security Ownership of Certain Beneficial Owners and Management.................. 32
13. Certain Relationships and Related Transactions.................................. 32
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K................ 33
Signatures...................................................................... 35
FINANCIAL STATEMENT SCHEDULES
TriMas Corporation and Subsidiaries Financial Statement Schedule................ F-1
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PART I
ITEM 1. BUSINESS.
TriMas Corporation is a diversified proprietary products company with
leadership positions in commercial, industrial and consumer niche markets.
TriMas Corporation's operations are conducted through sixteen operating
businesses principally manufacturing industrial container closures, pressurized
gas cylinders, specialty industrial gaskets, towing systems products, specialty
fasteners, specialty products for fiberglass insulation, specialty tapes and
precision cutting tools. TriMas Corporation's businesses are managed as
decentralized autonomous profit centers which emphasize entrepreneurial
management, high value-added products and services and strong cash flows.
TriMas Corporation was incorporated under the laws of the State of Delaware
in 1986 as Campbell Industries, Inc., and, in October, 1988, adopted the name
TriMas Corporation in connection with the transactions described below.
Immediately prior to such transactions, the Company was principally a
manufacturer of industrial fasteners as a result of an acquisition in December,
1986. Except as the context otherwise indicates, the terms "TriMas" and the
"Company" refer to TriMas Corporation and its consolidated subsidiaries.
Effective October 1, 1988, the Company acquired various businesses and cash
from MascoTech, Inc. ("MascoTech") in exchange for securities of the Company. In
a related transaction, Masco Corporation ("Masco"), which prior to the above
described acquisition had an equity ownership interest in the Company, acquired
additional shares of Company Common Stock, $.01 par value per share (the
"Company Common Stock"), in exchange for cash. The Company became a public
corporation in February, 1989 when approximately 28 percent of the then
outstanding Company Common Stock was distributed by Masco to its stockholders as
a special dividend. MascoTech currently holds approximately 41 percent of
Company Common Stock and Masco currently holds approximately 5 percent of
Company Common Stock.
In January, 1990, the Company acquired three businesses from Masco which
are engaged in the manufacture of trailer hitches, tow bars and accessories,
winches, jacks and couplers as well as flame-retardant facings and jacketings
and pressure-sensitive tapes used in conjunction with insulation products. In
June, 1990, the Company acquired the operating assets and business of Draw-Tite,
Inc. Draw-Tite is engaged in the manufacture and sale of trailer hitches and
other related towing systems products. In October, 1991, the Company acquired
all of the capital stock of Monogram Aerospace Fasteners, Inc., a manufacturer
of highly engineered specialty fasteners for the domestic and international
aerospace industry. In November, 1993, the Company acquired from MascoTech all
of the capital stock of Lamons Metal Gasket Co., a manufacturer and distributor
of specialty industrial gaskets.
INDUSTRY SEGMENTS
While each of the Company's businesses operates as an autonomous entity,
they are grouped into four distinct categories for financial reporting purposes:
Specialty Fasteners, Towing Systems, Specialty Container
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Products and Corporate Companies. The following table details the entities which
compose each of the Company's operating segments.
COMPANY DATE ACQUIRED PRINCIPAL PRODUCTS
- -------------------------------------- -------------- ----------------------------------------
Specialty Fasteners:
Lake Erie Screw Corporation......... December, 1986 Fasteners
Commonwealth Industries............. October, 1988 Heat treating
Eskay Screw Corporation............. October, 1988 Fasteners
Monogram Aerospace Fasteners,
Inc.............................. October, 1991 Fasteners
Towing Systems:
Fulton Performance Products, Inc.... January, 1990 Jacks, winches and couplers
Reese Products, Inc................. January, 1990 Vehicle hitches and related accessories
Draw-Tite, Inc...................... June, 1990 Vehicle hitches and related accessories
Specialty Container Products:
Norris Cylinder Company............. October, 1988 Compressed gas cylinders
Rieke Corporation................... October, 1988 Industrial container closures and
related products
Lamons Metal Gasket Co.............. November, 1993 Specialty industrial gaskets
Corporate Companies:
Kee Services, Inc................... October, 1988 Vacuum heat treating
Keo Cutters, Inc.................... October, 1988 Precision cutting tools
Punchcraft Company.................. October, 1988 Punches and dies
Reska Spline Products, Inc.......... October, 1988 Master gears and gages
Richards Micro-Tool, Inc............ October, 1988 Precision cutting tools
Compac Corporation.................. January, 1990 Insulation facing and specialty tapes
Although all of the businesses have been acquired since the Company was
formed in 1986, each business had a long operating history prior to its
acquisition by the Company.
The following table sets forth net sales and operating profit information
for the past three years for each of the Company's industry segments.
(IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994 1993
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NET SALES:
Specialty Fasteners.................................... $141,050 $138,720 $122,740
Towing Systems......................................... 175,000 163,130 139,790
Specialty Container Products........................... 165,670 163,880 118,970
Corporate Companies.................................... 71,770 69,750 61,730
-------- -------- --------
Total net sales..................................... $553,490 $535,480 $443,230
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OPERATING PROFIT (BEFORE GENERAL CORPORATE EXPENSE):
Specialty Fasteners.................................... $ 27,290 $ 24,280 $ 19,250
Towing Systems......................................... 31,080 25,660 22,150
Specialty Container Products........................... 39,040 39,060 28,820
Corporate Companies.................................... 8,420 9,850 7,110
-------- -------- --------
Total operating profit.............................. $105,830 $ 98,850 $ 77,330
======== ======== ========
For further business segment information see Note 11 of the Notes to
Consolidated Financial Statements of the Company.
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SPECIALTY FASTENERS
Lake Erie Screw Corporation, Eskay Screw Corporation, Monogram Aerospace
Fasteners, Inc. and Commonwealth Industries form the Company's Specialty
Fasteners segment. Lake Erie and Eskay are manufacturers of both standard and
custom-designed ferrous, nonferrous and special alloy fasteners sold to
commercial and industrial markets. Monogram Fasteners manufactures permanent
blind bolt and temporary fasteners used in aircraft construction and assembly.
Commonwealth provides specialized metallurgical services for fastener products
used in a variety of markets.
Lake Erie specializes in manufacturing both standard and custom-designed
large diameter fasteners, generally in sizes 1/4" to 1 1/4". Lake Erie's design
and engineering capabilities enable the company to formulate fastener product
programs to meet demanding metallurgical and performance specifications for a
wide variety of customers. With this emphasis on design and engineering, coupled
with its ability to offer just-in-time delivery, the Company believes that Lake
Erie has established a premier reputation in the industry for product quality
and service. Lake Erie products are sold to distributors and manufacturers in
the agricultural, transportation, construction, fabricated metal products, and
commercial and industrial maintenance markets. Lake Erie is a leading
manufacturer of private brand products for the equipment maintenance
aftermarket, supplying national and regional private brand distributor
organizations.
Eskay manufactures both ferrous and nonferrous standard and
specialty-designed small diameter fasteners, generally in sizes 3/8" and
smaller. Eskay's strategy is to focus on niche markets which require high
value-added products for critical applications. Eskay's ES-Form(R) and
ES-Form(R)II, Plask(R)I and Plask(R)II, Plask H/L(R), and Tri-Plask(R)
self-threading specialty fasteners, for example, are designed for use in
applications where the absence of drilling chip contamination is critical. A
typical application would be electronic or electrical assemblies installed
within metallic or plastic housings and requiring no chip contamination to
qualify for UL or other certification. Eskay products are marketed directly to
distributors and manufacturers in the electrical and electronic equipment,
appliance, fabricated metal products, furniture, transportation and agricultural
markets.
Monogram Fasteners manufactures highly engineered specialty fasteners for
the domestic and international aerospace industry. Monogram Fasteners is the
leader in the development of blind bolt fastener technology for the aerospace
industry. Its Visu-Lok(R), Visu-Lok(R)II and Radial-Lok(TM) blind bolts, which
allow sections of aircraft to be joined together when access is provided to only
one side of the airframe, are lighter in weight and provide certain cost
efficiencies over conventional two-sided fastening devices. Monogram Fasteners'
Composi-Lok(R) and Composi-Lok(R)II blind bolts are designed to solve unique
fastening problems associated with the assembly of composite aircraft
structures, and are therefore particularly well suited to take advantage of the
increasing use of composite materials in aircraft construction.
Commonwealth Industries provides commercial heat treating and specialized
metallurgical and finishing services for fastener products used in the
automotive, industrial, agricultural and construction markets.
The Company's fasteners are sold through its own sales personnel and
independent sales representatives. Although the overall market for fasteners and
metallurgical services is highly competitive, these businesses primarily provide
products and services for specialized market niches, and principally compete as
quality and service oriented suppliers in their respective market segments.
TOWING SYSTEMS
The Towing Systems segment comprises Draw-Tite, Inc., Reese Products, Inc.
and Fulton Performance Products, Inc. These three companies are leading
producers of vehicle hitches, jacks, winches, couplers and related accessories.
Draw-Tite, Reese and Fulton give TriMas the leading position in the design and
manufacture of towing systems products for domestic and imported passenger cars,
light trucks and recreational vehicles. The Company believes that product lines
offered by its Towing Systems companies are the most extensive in the industry,
permitting TriMas to provide custom-designed products for virtually every towing
vehicle and need.
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Each company conducts extensive testing of its products to assure reliable
and safe performance. Engineering, product design and fatigue testing are
performed utilizing computer aided design and finite element analysis. In
addition, on-road performance research is conducted on hitches with
instrumentation equipped trailers and towing vehicles. Extensive product testing
programs have improved product safety and reliability and reduced manufacturing
costs.
The Company believes that Draw-Tite is the largest North American
manufacturer and distributor of premium towing systems products, including
hitches and towing accessories, such as hitch balls, sway controls, wiring
harnesses and brake controls. Draw-Tite has two manufacturing facilities and
seven regional distribution centers in the United States, as well as a sales and
distribution center in Canada. Draw-Tite sales are principally to independent
installers through its own sales organization. Rapid delivery and customer
service are emphasized, with most Draw-Tite orders shipped within twenty-four
hours of receipt.
Reese manufactures premium towing systems products, including
weight-distributing hitches and towing accessories, which are sold to
independent installers, distributors, recreational vehicle manufacturers and
automotive aftermarket retailers. Sales in the United States are made by both
Reese sales personnel and independent sales representatives and are distributed
from five regional distribution centers. Reese also manufactures and distributes
hitches and towing accessories in Canada and Australia, and the Company believes
that Reese is the largest manufacturer of such products in Australia.
Fulton is a major manufacturer of winches, jacks, couplers and accessories
for marine, recreational vehicle, agricultural and industrial markets. These
products are sold by Fulton marketing personnel to distributors, manufacturers
and aftermarket retailers.
Sales by companies which form the Towing Systems segment are stronger
during the spring and summer of the year impacting the Company's net sales and
operating profits primarily in the second quarter.
SPECIALTY CONTAINER PRODUCTS
The Company's Specialty Container Products segment consists of Rieke
Corporation, Norris Cylinder Company and Lamons Metal Gasket Co., leading
suppliers of products for the containment and dispensing of fluids and gases for
the chemical, agricultural, refining, food, petrochemical, health care and other
industries.
The Company believes that Rieke is the largest manufacturer in North
America of steel and plastic industrial container closures and dispensing
products. Rieke's manufacturing and distribution facilities in the United
States, Canada and Mexico, as well as distribution capabilities in Europe and
the Far East, allow Rieke to service most major world markets for its products.
Industrial container closures are manufactured using metal forming and plastic
injection molding technologies, supplemented by automated material handling
systems.
Rieke believes its investment in new product development and manufacturing
programs has enabled it to develop and produce precise quality, high performance
products while maintaining cost-efficient production capabilities. For more than
seventy-five years, Rieke's new product development programs have provided
innovative and attractive proprietary product opportunities, which have been an
integral part of its success. Among these products are the ViseGrip(R) steel
flange and plug closure, the Poly-ViseGrip(R) plastic closure, the all plastic,
environmentally safe, self-venting FlexSpout(R) flexible pouring spout and the
ViseGrip drum closure.
Rieke sells its products through its own sales personnel primarily to
industrial container manufacturers who also utilize Rieke's specialty tooling to
install the closures. A significant portion of Rieke's products are specified by
end-users of industrial containers. Rieke believes it has been successful in
having end-users specify its products because of Rieke's history of new product
development, its product quality and performance characteristics and its
customer service standards.
Norris is one of the world's leading suppliers of a complete line of large
and intermediate size, high-pressure and low-pressure cylinders for the
transportation, storage and dispensing of compressed gases. Norris is one of two
United States manufacturers of large high-pressure seamless compressed gas
cylinders, used
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principally for shipping, storing and dispensing oxygen, nitrogen, argon, helium
and other gases for industrial and health care markets. In addition, Norris
offers a complete line of low-pressure welded cylinders used to contain and
dispense acetylene gas for the welding and cutting industries. The Company
believes that Norris is the largest United States manufacturer of large and
intermediate size high-pressure cylinders and is a major source of acetylene
cylinders.
The Company believes that Norris is the leading product innovator in its
industry. Among Norris' product developments are the Ultrapure(R) seamless
stainless steel cylinder for the semiconductor and pharmaceutical industries,
the Pacesetter cylinder, which was the first asbestos-free acetylene cylinder
available to satisfy increasing concerns about asbestos in the workplace
environment, and the Ultralight high-pressure cylinder designed to hold 30
percent more gas than standard cylinders of similar size, weight and diameter.
In addition, Norris has directed a portion of its research and new product
development efforts to specially-designed cylinders for natural gas powered
vehicles and related refueling facilities.
Norris markets cylinders primarily to major industrial gas producers and
distributors, welding equipment distributors and equipment manufacturers.
Cylinder products are sold by Norris personnel organized in five geographic
sales regions. Sales for export markets and to national accounts are made by
personnel at Norris' corporate office.
Lamons manufactures and distributes metallic and nonmetallic industrial
gaskets for refining, petrochemical and other industrial applications
principally in the United States and, through a wholly owned subsidiary, in
Canada. Gaskets are supplied both for original installations and replacement and
maintenance.
The Company believes that Lamons is the largest gasket supplier to the
United States petroleum refining and petrochemical industries. Sales are made
direct from the factory to major customers, through seven company-owned
distribution facilities in major regional markets, or through a large network of
independent distributors. Lamons has maintained its market leadership position
through superior customer service and delivery and high product quality.
CORPORATE COMPANIES
The Company has six businesses that compose its Corporate Companies
segment. The largest of these companies is Compac Corporation, believed by the
Company to be the leading manufacturer of flame-retardant facings and jacketings
used in conjunction with fiberglass insulation as temperature and vapor
barriers. These products are principally used for commercial and industrial
construction applications, and are sold to most major manufacturers of
fiberglass insulation.
Compac's product line also includes pressure-sensitive specialty tape
products which are marketed to insulation manufacturers as well as to numerous
other customers. Pressure-sensitive products for the insulation industry are
utilized for sealing pipe jacketing, ducts and fiberglass wrappings to increase
the efficiency and cost effectiveness of heating and cooling installations.
Combined with Compac's facing and jacketing products, pressure-sensitive
specialty tapes enable Compac to offer customers the only complete systems
approach to insulation installation. With important product positions in several
specialty tape markets, Compac is pursuing further opportunities to expand its
presence in the industry. Utilizing existing pressure-sensitive adhesive
technologies, Compac continues to develop new product programs to expand its
pressure-sensitive product positions into subsegments of existing markets,
including the medical supply industry.
The other businesses that constitute the Corporate Companies segment
produce a variety of specialty precision tools such as center drills, cutters,
end mills, reamers, master gears, gages and punches and provide specialty metal
finishing services. Principal markets served by these companies include the
automotive, aerospace, appliance, medical and electronics industries, with such
diverse products as miniature precision cutting tools for orthopedic surgery and
ophthalmic surgical products to high volume industrial cutting tools and master
gages.
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GENERAL INFORMATION CONCERNING INDUSTRY SEGMENTS
Except for the Company's businesses which form the Towing Systems segment,
no material portion of the Company's business is seasonal. No material portion
of the Company's business has special working capital requirements. The Company
does not consider backlog orders to be a material factor in its industry
segments, and no material portion of its business is dependent upon any one
customer or subject to renegotiation of profits or termination of contracts at
the election of the federal government. Compliance with federal, state and local
regulations relating to the discharge of materials into the environment, or
otherwise relating to the protection of the environment, is not expected to
result in material capital expenditures by the Company or to have a material
effect on the Company's earnings or competitive position. In general, raw
materials required by the Company are obtainable from various sources and in the
quantities desired. Except for Rieke's facilities in Canada and Mexico, Lamons'
Canadian facilities and the Canadian and Australian operations of Reese, all of
the Company's manufacturing operations are in the United States. Approximately
six percent of the Company's net sales for 1995, approximately five percent of
the Company's net sales for 1994 and approximately seven percent of the
Company's net sales for 1993, were attributable to export sales from the United
States. Further financial information concerning the Company's operations in its
industry segments as of and for each of the three years in the period ended
December 31, 1995 is set forth in the notes to the Company's consolidated
financial statements.
PATENTS AND TRADEMARKS
The Company holds a number of patents, patent applications, licenses,
trademarks and trade names. The Company considers its patents, patent
applications, licenses, trademarks and trade names to be valuable, but does not
believe that there is any reasonable likelihood that the loss of any such rights
would have a material effect on the Company's industry segments or its present
business as a whole.
COMPETITION
The major markets for the Company's products in its industry segments are
highly competitive. Competition is based primarily on performance, quality,
service and price, with the relative importance of such factors varying among
products. Although a number of companies of varying size compete with the
Company in its industry segments, no single competitor is in substantial
competition with the Company with respect to more than a few of its product
lines.
EMPLOYEES
The Company currently employs approximately 3,500 people. Satisfactory
relations have generally prevailed between the Company and its employees.
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ITEM 2. PROPERTIES.
The following table identifies the Company's manufacturing facilities by
location and the industry segments utilizing such facilities:
California.................................. Commerce (a)(a)
Illinois.................................... Wood Dale (a)
Indiana..................................... Auburn (c), Elkhart (b), Frankfort (a), Mongo (b)
Louisiana................................... Baton Rouge (c)
Massachusetts............................... Plymouth (d)
Michigan.................................... Canton (b), Detroit (a), Warren (d)(d)(d)(d)
New Jersey.................................. Edison (d), Netcong (d)
Ohio........................................ Lakewood (a)(a)(a)
Texas....................................... Houston (c)(c)(c), Longview (c)
Wisconsin................................... Mosinee (b)
Australia................................... Hampton Park, Victoria (b)
Canada...................................... Brampton, Ontario (c), Fort Erie, Ontario (c),
Oakville, Ontario (b), Sarnia, Ontario (c)
Mexico...................................... Mexico City (c)
Note: Multiple footnotes to the same municipality denote separate
facilities in that location. Industry segments in the preceding table are
identified as follows: (a) Specialty Fasteners; (b) Towing Systems; (c)
Specialty Container Products; and (d) Corporate Companies.
The Company's largest manufacturing facility, consisting of approximately
430,000 square feet, is located in Lakewood, Ohio. This facility is owned by the
Company and is used to manufacture specialty fasteners. The Company's other
manufacturing facilities range in size from approximately 10,000 to 250,000
square feet. Most of these other facilities are owned by the Company and are not
subject to significant encumbrances. The Company's executive offices are leased
facilities in Ann Arbor, Michigan.
The Company's buildings, machinery and equipment have been generally well
maintained, are in good operating condition, and are adequate for the Company's
current production requirements.
ITEM 3. LEGAL PROCEEDINGS.
The Company is subject to claims and litigation in the ordinary course of
its business, but does not believe any such claim or litigation is material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
SUPPLEMENTARY ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT (PURSUANT TO
INSTRUCTION 3 TO ITEM 401(B) OF REGULATION S-K).
NAME POSITION AGE OFFICER SINCE
- ---------------------------------------------------- ------------------------- --- -------------
Richard A. Manoogian................................ Chairman of the Board 59 1989
Brian P. Campbell................................... President 55 1986
William E. Meyers................................... Vice President-Controller 63 1987
Peter C. DeChants................................... Vice President-Treasurer 43 1990
Each of the officers is elected to a term of one year or less and serves at
the discretion of the Board of Directors. Mr. Manoogian is and has been the
Chairman of the Board and the Chief Executive Officer of each of Masco
Corporation and MascoTech, Inc., affiliates of the Company. Masco Corporation is
a manufacturer of home improvement and building products. MascoTech, Inc.
manufactures products principally for the original equipment and aftermarket
transportation markets. Each of the Company's executive officers has been
employed in the capacity shown for more than five years.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The New York Stock Exchange ("NYSE") is the principal market on which the
Company's Common Stock is traded (under the symbol TMS). The following table
indicates the high and low sale prices for Company Common Stock as reported on
the NYSE Composite Tape and Common Stock dividends declared for the periods
indicated.
MARKET PRICE
------------ DIVIDENDS
HIGH LOW DECLARED
---- ---- ---------
1994
First Quarter...................................................... $28 1/2 $22 3/4 $ .03
Second Quarter..................................................... 27 1/8 21 5/8 .04
Third Quarter...................................................... 24 7/8 21 1/2 .04
Fourth Quarter..................................................... 23 5/8 18 3/8 .04
----
Total........................................................... $ .15
====
1995
First Quarter...................................................... $22 3/4 $19 5/8 $ .04
Second Quarter..................................................... 24 1/4 20 1/4 .05
Third Quarter...................................................... 25 1/2 20 .05
Fourth Quarter..................................................... 22 1/4 18 3/8 .05
----
Total........................................................... $ .19
====
On March 1, 1996 there were approximately 2,770 holders of record of
Company Common Stock.
The Company expects that its practice of paying quarterly dividends on its
Common Stock will continue, although future dividends will continue to depend
upon the Company's earnings, capital requirements, financial condition and other
factors.
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ITEM 6. SELECTED FINANCIAL DATA.
The following table sets forth summary consolidated financial information
for the years and dates indicated:
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1995 1994 1993(A) 1992(B) 1991(C)
-------- -------- -------- -------- --------
Net sales................................. $553,490 $535,480 $443,230 $388,230 $339,440
Operating profit.......................... $ 98,680 $ 91,400 $ 70,020 $ 58,620 $ 53,980
Income before extraordinary charge........ $ 56,020 $ 50,100 $ 38,000 $ 29,780 $ 20,260
Earnings available for common stock before
extraordinary charge.................... $ 56,020 $ 50,100 $ 32,750 $ 22,780 $ 13,260
Earnings per common share before
extraordinary charge:
Primary.............................. $1.51 $1.35 $1.05 $.87 $.67
Fully diluted........................ $1.42 $1.28 $1.01 $.87 $.67
Dividends declared per common share(D).... $.19 $.15 $.115 $.05
At December 31:
Working capital......................... $197,460 $198,770 $163,770 $131,820 $119,120
Total assets............................ $616,360 $615,140 $564,130 $446,620 $448,760
Long-term debt.......................... $187,200 $238,600 $238,890 $178,490 $266,570
Shareholders' equity.................... $338,670 $290,600 $244,850 $215,440 $115,570
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(A) Reflects the acquisition of one business in 1993.
(B) Net income, earnings available for common stock and earnings per common
share in 1992 were $24.0 million, $17.0 million and $.65, respectively,
after being reduced $5.7 million, $5.7 million and $.22, respectively, for
an extraordinary charge related to the early extinguishment of subordinated
debt.
(C) Net income, earnings available for common stock and earnings per common
share in 1991 were $17.8 million, $10.8 million and $.54, respectively,
after being reduced $2.5 million, $2.5 million and $.13, respectively, for
an extraordinary charge related to the early extinguishment of subordinated
debt.
(D) In the third quarter of 1992 the Company initiated a regular quarterly
dividend on its common stock.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
During 1995 TriMas achieved record net sales and operating earnings for the
eighth consecutive year as it continued its focus on operating and financial
strategies to improve operating performance and shareholder returns. These
strategies include internal and external programs to strengthen the Company's
competitive positions in key markets, including increased levels of
manufacturing efficiency and customer service, new product development and
market share initiatives, and the acquisition of selected companies which can
enhance future growth and profitability.
The discussion which follows should be reviewed in conjunction with the
financial statements and related footnotes to assist in understanding the
Company's results of operations, its financial position, cash flows, capital
structure and other relevant financial information.
ANALYSIS OF 1995 OPERATIONS COMPARED TO 1994 OPERATIONS
Record net sales of $553.5 million in 1995 increased 3.4 percent over 1994
net sales of $535.5 million. TriMas' strategic diversification of products and
markets has balanced its operating risk over a broad range of industries,
moderating the cyclical impact of individual markets. As in 1994, the results of
the Company's strategic diversification, including emphasis on niche markets,
manufacturing efficiencies and market share initiatives, played an important
role in 1995's performance.
The Company's gross margin percentage increased to 32.9 percent in 1995, up
from 32.5 percent in 1994. The improvement in 1995's gross margin reflects the
incremental profit impact of increased sales as well as the effects of ongoing
cost reduction and manufacturing efficiency initiatives. Selling, general and
administrative expenses increased less than one percent in 1995 compared to
1994, and as a percentage of net sales declined to 15.1 percent, compared to
15.4 percent for 1994.
Consolidated operating profit, after general corporate expense, equaled
$98.7 million during 1995, compared to $91.4 million in 1994, an increase of 8.0
percent, with operating profit margins of 17.8 percent and 17.1 percent in 1995
and 1994, respectively.
A record year was experienced by the Specialty Fasteners segment in both
sales and operating profit as operating profit increased 12.4 percent to $27.3
million, compared to $24.3 million in 1994, while sales of $141.1 million were
1.7 percent higher than 1994 sales of $138.7 million. Higher levels of demand
for aerospace fasteners and from farm equipment and other off-road vehicle
manufacturers were partially offset by softness in demand from the construction
market and from customers for heat treating services. As a result of higher
sales levels and improved operating efficiencies, the segment operating profit
margin increased to 19.3 percent in 1995, compared to 17.5 percent in 1994. In
1995 inventory turnover was 5.0 times as compared to 5.5 times in 1994. Capital
expenditures during the year, primarily for Lake Erie Screw Corporation and
TriMas Fasteners, Inc., were $10.8 million, compared to 1994's $9.1 million.
Record operating profit of the Towing Systems segment increased 21.1
percent to $31.1 million, compared to $25.7 million in 1994. Record segment
sales increased 7.3 percent to $175.0 million, compared to $163.1 million in
1994. Operating performance of the segment was favorably impacted by market
share initiatives and manufacturing efficiencies resulting from both 1994 and
1995 capital expenditure programs. The segment's 1995 operating profit margin
equaled 17.8 percent, compared to 15.7 percent in 1994. Inventory turnover
during the year was 3.2 times as compared to 3.1 times in 1994. Capital
expenditures decreased to $4.8 million, compared to $6.7 million in 1994.
Sales of the Specialty Container Products segment equaled $165.7 million in
1995, a 1.1 percent increase compared to $163.9 million in 1994. Segment
operating profit totaled $39.0 million, compared to $39.1 million in the prior
year. The segment's operating profit margin in 1995 was 23.6 percent, compared
to 23.8 percent in 1994. The segment's inventory turnover was 6.3 times in both
1995 and 1994. Capital expenditures for the segment, primarily to further
improve manufacturing efficiencies and service capabilities, were $5.8 million,
compared to $5.4 million in 1994.
11
13
The Corporate Companies segment experienced record sales during 1995 of
$71.8 million, an increase of 2.9 percent compared to $69.8 million in 1994.
Operating profit decreased 14.5 percent to $8.4 million, compared to $9.9
million in 1994. Significant price increases for certain raw materials were the
primary cause of the reduced operating profit. Operating profit margin in 1995
equaled 11.7 percent, compared to 14.1 percent in 1994. In 1995 inventory
turnover was 5.4 times as compared to 5.6 times in 1994. Capital expenditures
during the year decreased to $2.0 million, compared to $3.0 million in 1994.
Primary earnings per common share increased 11.9 percent to $1.51 in 1995
based on 37.0 million average common shares and equivalents outstanding,
compared to $1.35 in 1994. Fully diluted earnings per common share in 1995 were
$1.42 based on 42.1 million average common shares and equivalents outstanding,
compared to $1.28 in 1994, an increase of 10.9 percent.
ANALYSIS OF 1994 OPERATIONS COMPARED TO 1993 OPERATIONS
TriMas achieved net sales of $535.5 million in 1994, an increase of 20.8
percent over 1993 net sales of $443.2 million. As in 1993, the results of the
Company's strategic diversification, including emphasis on niche markets,
manufacturing efficiencies and market share initiatives, played an important
role in 1994's sales performance.
The Company's gross margin percentage increased to 32.5 percent in 1994, up
from 32.1 percent in 1993. The improvement in 1994's gross margin reflects the
incremental profit impact of increased sales volumes as well as the effects of
ongoing cost reduction and manufacturing efficiency initiatives. Selling,
general and administrative expenses increased 14.5 percent in 1994 compared to
1993, but as a percentage of net sales decreased to 15.4 percent, compared to
16.3 percent for 1993.
Consolidated operating profit, after general corporate expense, equaled
$91.4 million during 1994, compared to $70.0 million in 1993, an increase of
30.5 percent, with operating profit margins of 17.1 percent and 15.8 percent in
1994 and 1993, respectively.
The Specialty Fasteners segment operating profit increased 26.1 percent to
$24.3 million, compared to $19.3 million in 1993, while sales of $138.7 million
were 13.0 percent higher than 1993 sales of $122.7 million. Higher levels of
economic activity contributed to segment sales increases during 1994, reflected
by increased sales to the heavy-duty truck, distribution and other original
equipment markets. As a result of higher sales levels and improved operating
efficiencies, the segment operating profit margin increased to 17.5 percent in
1994, compared to 15.7 percent in 1993. In 1994 inventory turnover was 5.5 times
as compared to 5.1 times in 1993. Capital expenditures during the year,
primarily for Lake Erie Screw Corporation and TriMas Fasteners, Inc., were $9.1
million, compared to 1993's $9.2 million.
Operating profit of the Towing Systems segment increased 15.8 percent to
$25.7 million, compared to $22.2 million in 1993. Segment sales increased 16.7
percent to $163.1 million, compared to $139.8 million in 1993. Operating
performance of the segment was favorably impacted by higher domestic vehicle
sales, market share initiatives and manufacturing efficiencies resulting from
both 1993 and 1994 capital expenditure programs. The segment's 1994 operating
profit margin equaled 15.7 percent, compared to 15.8 percent in 1993. Inventory
turnover during the year was 3.1 times as compared to 3.0 times in 1993. Capital
expenditures decreased to $6.7 million, compared to $7.9 million in 1993.
In 1994 operating profit of the Specialty Container Products segment
increased 35.5 percent to $39.1 million, compared to $28.8 million in 1993.
Segment sales of $163.9 million were 37.7 percent higher than 1993's $119.0
million. Lamons Metal Gasket Co. was acquired in November 1993 and a full year
of its operations were included in 1994 segment results. The segment's operating
profit margin in 1994 of 23.8 percent was affected by full year acquisition
related expenses at Lamons. Although Lamons' historical operating profit margin
has been lower relative to the combined historical margin of the other two
segment companies, its margins have consistently met or exceeded the high
standards of the Company's acquisition criteria. In 1993 the segment's operating
margin equaled 24.2 percent. The segment's inventory turnover was 6.3 times in
1994, compared to 6.6 times during 1993. Capital expenditures for the segment,
primarily to
12
14
further improve manufacturing efficiencies and service capabilities, were $5.4
million, compared to $7.8 million in 1993.
The Corporate Companies segment operating profit increased 38.5 percent to
$9.9 million, compared to $7.1 million in 1993. Segment sales of $69.8 million
increased 13.0 percent, compared to $61.7 million in 1993. The Precision Cutting
Tools group and Compac Corporation both benefited from the generally stronger
economy. Compac Corporation's continued expansion in specialty industrial tape
niche markets and the cost savings associated with the successful consolidation
of two industrial tape manufacturing facilities during the latter part of the
year also contributed to 1994's sales and earnings increases. All of these
factors contributed to the segment's 1994 operating profit margin of 14.1
percent exceeding that achieved in 1993 of 11.5 percent. In 1994 inventory
turnover was 5.6 times as compared to 5.3 times in 1993. Capital expenditures
during the year increased to $3.0 million, compared to $1.3 million in 1993.
Primary earnings per common share increased 28.6 percent to $1.35 in 1994
based on 37.0 million average common shares and equivalents outstanding,
compared to $1.05 and 31.1 million shares and equivalents outstanding in 1993.
The increase in primary shares outstanding was principally the result of the
conversion of the Company's $100 Convertible Participating Preferred Stock in
December 1993. Fully diluted earnings per common share in 1994 were $1.28, based
on 42.1 million average common shares and equivalents outstanding, compared to
$1.01 and 39.1 million shares and equivalents outstanding in 1993. The increase
in fully diluted shares in 1994 was principally the result of the issuance of
the 5% Convertible Subordinated Debentures Due 2003 in August 1993, which are
convertible into 5.1 million common shares.
LIQUIDITY, WORKING CAPITAL AND CASH FLOWS
Among the Company's financial strategies are maintaining relatively high
levels of liquidity and cash flow, which continued in 1995. Historically, TriMas
Corporation has generated significant cash flows from operating activities to
fund capital expenditures, debt service, dividends and other operating
requirements. Cash flow generation has been enhanced by the Company's continuing
efforts to improve operating efficiencies, cost reductions and the management of
working capital requirements to support increased sales volumes.
One of the Company's strengths is its ability to generate cash from
operations in excess of requirements for capital investments and dividends.
"Free Cash Flow": Free Cash Flow is cash from operations remaining after
the Company has satisfied its capital investment initiatives to enhance
manufacturing efficiencies, expand productive capacity and avail itself of other
competitive opportunities. As one of its financial strategies, the Company
focuses on maximizing Free Cash Flow to achieve management's primary
objective--maximizing long-term shareholder value. The consolidated statements
of cash flows are summarized as follows (in thousands):
YEAR ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
-------- -------- --------
Cash flows from (used for):
Operations.................................................. $ 66,250 $ 67,670 $ 50,100
Capital expenditures........................................ (23,470) (24,310) (26,280)
-------- -------- --------
"Free Cash Flow".............................................. 42,780 43,360 23,820
Cash flows from (used for):
Acquisitions................................................ (60,280)
Financing................................................... (58,060) (5,460) 41,460
-------- -------- --------
Increase (decrease) in cash and cash equivalents.............. $(15,280) $ 37,900 $ 5,000
======== ======== ========
In 1995 the Company again experienced strong operating cash flows as
operating activities provided $66.3 million. Increased cash flow from income and
noncash charges for depreciation and amortization during 1995 were partially
offset by working capital needs to support 1995's internal sales growth as new
product successes and marketing initiatives contributed to record sales levels
in all four segments. Capital expenditures to reduce
13
15
product costs, improve quality, increase manufacturing efficiencies and expand
productive capacity equaled $23.5 million in 1995, $24.3 million in 1994 and
$26.3 million in 1993. During the three year period approximately $18.6 million
of capital expenditures were for capacity expansion in the Specialty Fasteners
segment at the Company's TriMas Fasteners, Inc. facility in Indiana. The Company
continues its active corporate development efforts to complement internal growth
through significant investments for the acquisition of additional companies
which meet TriMas' selective criteria. In 1993 the Company acquired Lamons Metal
Gasket Co. for $60.3 million cash.
In 1995 the Company used a portion of its significant cash resources to
retire $51.5 million of long-term debt. The majority of this amount, $50.0
million, was the repayment of borrowings under the Company's bank revolving
credit agreement which were originally incurred to finance prior acquisitions.
The Company borrowed $60.0 million in 1993 under its bank revolving credit
agreement to finance the acquisition of Lamons. Also in 1993 the Company issued
$115.0 million of 5% Convertible Subordinated Debentures Due 2003. The net
proceeds of the offering of $112.0 million, together with $3.0 million of
available cash resources, were used to redeem $115.0 million of borrowings under
the Company's bank revolving credit agreement.
Common stock dividends paid in 1995, 1994 and 1993 equaled $6.6 million,
$5.1 million and $3.2 million, respectively. In 1993 the Company paid $12.3
million in preferred stock dividends representing dividends accrued through the
first three quarters of 1993 and the full year 1992.
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.
At December 31, 1995, the Company's current ratio was 4.6 to 1 and working
capital totaled $197.5 million, including $92.4 million of cash and cash
equivalents. At December 31, 1994, the current ratio was 4.5 to 1 and working
capital totaled $198.8 million, including $107.7 million of cash and cash
equivalents.
The Company's working capital turnover was 2.7 times in 1995, compared to
3.0 times in 1994. Excluding cash, the working capital turnover was 5.4 times in
1995 as compared to 5.6 times in 1994. The Company's inventory turned over 4.5
times in 1995, compared to 4.6 times in 1994, while the accounts receivable
days-sales year end balance equaled 52 days in 1995, compared to 51 days in
1994.
The Company has a $350.0 million revolving credit facility, maturing in
2000, with a group of domestic and international banks. The facility permits the
Company to borrow under several different interest rate options. At December 31,
1995, the Company had available credit of $278.0 million under the credit
agreement.
In October 1995 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation. The Company will adopt the disclosure requirements of this
Statement in 1996 and it will not have a material effect on its financial
statements.
CORPORATE DEVELOPMENT
The Company maintains an active acquisition program, which has made
important contributions to the Company's growth. During 1993 the Company
acquired Lamons Metal Gasket Co. from MascoTech, Inc. for $60.3 million cash and
the assumption of certain liabilities, plus contingent payments based upon
Lamons achieving specified levels of future earnings.
The Company utilizes well-disciplined criteria in selecting acquisitions,
including the long-term enhancement of its financial strength and shareholder
value.
The initial earnings benefit of acquisitions to the Company is less than
the corresponding increase in sales since earnings are reduced by acquisition
related costs such as interest and added depreciation and amortization.
Generally, the anticipated earnings improvement for the Company comes from
subsequent growth of acquired companies, since future incremental sales are not
burdened with these fixed acquisition costs.
14
16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
and Shareholders of TriMas Corporation:
We have audited the consolidated financial statements and the financial
statement schedule of TriMas Corporation and subsidiaries listed in Item 14(a)
of this Form 10-K. These financial statements and financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of TriMas
Corporation and subsidiaries as of December 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
February 7, 1996
15
17
TRIMAS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------
1995 1994 1993
------------- ------------- -------------
Net sales....................................... $ 553,490,000 $ 535,480,000 $ 443,230,000
Cost of sales................................... (371,470,000) (361,520,000) (301,130,000)
Selling, general and administrative expenses.... (83,340,000) (82,560,000) (72,080,000)
------------ ------------ ------------
Operating profit.............................. 98,680,000 91,400,000 70,020,000
Interest expense................................ (13,530,000) (12,930,000) (9,420,000)
Other, net (principally interest income)........ 6,690,000 5,030,000 3,270,000
------------ ------------ ------------
Income before income taxes.................... 91,840,000 83,500,000 63,870,000
Income taxes.................................... 35,820,000 33,400,000 25,870,000
------------ ------------ ------------
Net income.................................... $ 56,020,000 $ 50,100,000 $ 38,000,000
============ ============ ============
Preferred stock dividends, MascoTech, Inc....... $ 5,250,000
============
Earnings available for common stock............. $ 56,020,000 $ 50,100,000 $ 32,750,000
============ ============ ============
Earnings per common share:
$1.51 $1.35 $1.05
Primary....................................... ============ ============ ============
$1.42 $1.28 $1.01
Fully diluted................................. ============ ============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
16
18
TRIMAS CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
----------------------------
1995 1994
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents...................................... $ 92,390,000 $107,670,000
Receivables.................................................... 71,200,000 64,190,000
Inventories.................................................... 85,490,000 79,560,000
Other current assets........................................... 2,510,000 3,590,000
------------ ------------
Total current assets................................... 251,590,000 255,010,000
Property and equipment........................................... 173,700,000 168,380,000
Excess of cost over net assets of acquired companies............. 144,860,000 149,160,000
Other assets..................................................... 46,210,000 42,590,000
------------ ------------
Total assets........................................... $616,360,000 $615,140,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................... $ 24,390,000 $ 21,590,000
Other current liabilities...................................... 29,740,000 34,650,000
------------ ------------
Total current liabilities.............................. 54,130,000 56,240,000
Deferred income taxes and other.................................. 36,360,000 29,700,000
Long-term debt................................................... 187,200,000 238,600,000
------------ ------------
Total liabilities...................................... 277,690,000 324,540,000
------------ ------------
Shareholders' equity:
Common stock, $.01 par value, authorized 100 million shares,
outstanding 36.6 million shares............................. 370,000 370,000
Paid-in capital................................................ 155,430,000 155,210,000
Retained earnings.............................................. 185,370,000 136,310,000
Cumulative translation adjustments............................. (2,500,000) (1,290,000)
------------ ------------
Total shareholders' equity............................. 338,670,000 290,600,000
------------ ------------
Total liabilities and shareholders' equity............. $616,360,000 $615,140,000
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
17
19
TRIMAS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------
1995 1994 1993
------------ ------------ -------------
CASH FROM (USED FOR):
OPERATIONS:
Net income................................... $ 56,020,000 $ 50,100,000 $ 38,000,000
Adjustments to reconcile net income to net
cash from operations:
Depreciation and amortization........... 21,480,000 20,580,000 18,470,000
Deferred income taxes................... 5,560,000 3,210,000 500,000
(Increase) decrease in receivables...... (4,670,000) (7,280,000) (4,250,000)
(Increase) decrease in inventories...... (5,930,000) (2,860,000) (8,120,000)
Increase (decrease) in accounts payable
and accrued liabilities............... (2,500,000) 5,110,000 3,770,000
Other, net.............................. (3,710,000) (1,190,000) 1,730,000
------------ ------------ -------------
Net cash from operations.............. 66,250,000 67,670,000 50,100,000
------------ ------------ -------------
INVESTMENTS:
Capital expenditures......................... (23,470,000) (24,310,000) (26,280,000)
Acquisitions, net of cash acquired........... (60,280,000)
------------ ------------ -------------
Net cash from (used for)
investments........................ (23,470,000) (24,310,000) (86,560,000)
------------ ------------ -------------
FINANCING:
Long-term debt:
Issuance................................ 60,000,000
Retirement.............................. (51,470,000) (330,000) (115,150,000)
Issuance of convertible subordinated debt,
net........................................ 112,030,000
Preferred stock dividends paid to MascoTech,
Inc........................................ (12,250,000)
Common stock dividends paid.................. (6,590,000) (5,130,000) (3,170,000)
------------ ------------ -------------
Net cash from (used for) financing.... (58,060,000) (5,460,000) 41,460,000
------------ ------------ -------------
CASH AND CASH EQUIVALENTS:
Increase (decrease) for the year................ (15,280,000) 37,900,000 5,000,000
At beginning of the year........................ 107,670,000 69,770,000 64,770,000
------------ ------------ -------------
At end of the year........................... $ 92,390,000 $107,670,000 $ 69,770,000
============ ============ =============
The accompanying notes are an integral part of the consolidated financial
statements.
18
20
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of TriMas
Corporation and its wholly owned subsidiaries (the "Company"). All significant
intercompany transactions have been eliminated. Certain amounts in prior period
financial statements have been reclassified to conform with current year
presentation.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
AFFILIATES
As of December 31, 1995, MascoTech, Inc.'s common stock ownership in the
Company approximated 41.5 percent, and Masco Corporation's common stock
ownership approximated 5.3 percent. The Company has a corporate services
agreement with Masco Corporation. Under the terms of the agreement, the Company
pays a fee to Masco Corporation for various corporate support staff,
administrative services, and research and development services. Such fee equals
.8 percent of the Company's net sales, subject to certain adjustments.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. At December 31, 1995,
the Company had $79.5 million invested in prime commercial paper of several
United States issuers having the highest rating given by one of the two
principal rating agencies.
RECEIVABLES
Receivables are presented net of an allowance for doubtful accounts of $1.5
million and $2.0 million at December 31, 1995 and 1994.
INVENTORIES
Inventories are stated at the lower of cost or net realizable value, with
cost determined principally by use of the first-in, first-out method.
PROPERTY AND EQUIPMENT
Property and equipment additions, including significant betterments, are
recorded at cost. Upon retirement or disposal of property and equipment, the
cost and accumulated depreciation are removed from the accounts and any gain or
loss is included in income. Maintenance and repair costs are charged to expense
as incurred.
DEPRECIATION AND AMORTIZATION
Depreciation is computed principally using the straight-line method over
the estimated useful lives of the assets. Annual depreciation rates are as
follows: buildings and land improvements, 2 1/2 to 5 percent, and machinery and
equipment, 6 2/3 to 33 1/3 percent. The excess of cost over net assets of
acquired companies is being amortized using the straight-line method over the
periods estimated to be benefited, not exceeding
19
21
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1. ACCOUNTING POLICIES (CONTINUED)
40 years. At December 31, 1995 and 1994, accumulated amortization of the excess
of cost over net assets of acquired companies and other intangible assets was
$31.3 million and $26.8 million. Amortization expense was $5.0 million, $5.3
million and $4.5 million in 1995, 1994 and 1993.
As of each balance sheet date management assesses whether there has been an
impairment in the value of excess of cost over net assets of acquired companies
by comparing anticipated undiscounted future cash flows from the related
operating activities with the carrying value. The factors considered by
management in performing this assessment include current operating results,
trends and prospects, as well as the effects of obsolescence, demand,
competition and other economic factors. Based on this assessment there was no
impairment at December 31, 1995.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of financial instruments classified in the balance
sheet as current assets and current liabilities approximate fair values. The
fair value of notes receivable, portions of which are classified as both
receivables and other assets, based on discounted cash flows using current
interest rates approximates the carrying value of $12.0 million at December 31,
1995.
The carrying amount of borrowings from banks approximates fair value as the
floating rates applicable to this debt reflect changes in overall market
interest rates. The fair value of the Company's Convertible Subordinated
Debentures, based on quoted market prices, was $112.7 million at both December
31, 1995 and 1994, as compared to the carrying value on such dates of $115.0
million.
INCOME TAXES
The Company has not provided for taxes on $15.5 million of undistributed
earnings of foreign subsidiaries at December 31, 1995, because such earnings are
generally considered permanently reinvested.
FOREIGN CURRENCY TRANSLATION
Net assets of the Company's operations outside of the United States are
translated into U.S. dollars using current exchange rates with the effects of
translation adjustments deferred and included as a separate component of
shareholders' equity. Revenues and expenses are translated at the average rates
of exchange during the period.
EARNINGS PER COMMON SHARE
Primary earnings per common share in 1995, 1994 and 1993 were calculated on
the basis of 37.0 million, 37.0 million and 31.1 million weighted average common
and common equivalent shares outstanding. Fully diluted earnings per common
share in 1995, 1994 and 1993 were calculated on the basis of 42.1 million, 42.1
million and 39.1 million weighted average common and common equivalent shares
outstanding.
NOTE 2. ACQUISITION
During 1993 the Company acquired all of the capital stock of Lamons Metal
Gasket Co. ("Lamons") from MascoTech, Inc. for $60.3 million cash and the
assumption of certain liabilities. The acquisition was accounted for as a
purchase. The excess of cost over net assets acquired of approximately $46.6
million is being amortized on a straight-line basis over 40 years. Additional
purchase price amounts, contingent upon the achievement of specified levels of
future profitability by Lamons, may be payable to MascoTech, Inc. beginning in
1997. These payments, if required, will be recorded as additional excess of cost
over net assets of acquired businesses.
20
22
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 3. SUPPLEMENTAL CASH FLOWS INFORMATION
(IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER
31,
-----------------------------
1995 1994 1993
------- ------- -------
Interest paid.................................................... $13,560 $12,110 $ 7,470
======= ======= =======
Income taxes paid................................................ $30,690 $30,440 $21,540
======= ======= =======
Significant noncash transactions:
Common stock dividends declared, payable in subsequent year.... $ 1,830 $ 1,460 $ 1,100
======= ======= =======
Assumption of liabilities as partial consideration for the
assets of companies acquired................................ $ 7,380
=======
NOTE 4. INVENTORIES
(IN THOUSANDS)
AT DECEMBER 31,
------------------
1995 1994
------- -------
Finished goods............................................................ $47,490 $44,860
Work in process........................................................... 14,200 10,440
Raw material.............................................................. 23,800 24,260
------- -------
$85,490 $79,560
======= =======
NOTE 5. PROPERTY AND EQUIPMENT
(IN THOUSANDS)
AT DECEMBER 31,
--------------------
1995 1994
-------- --------
Cost:
Land and land improvements............................................ $ 13,380 $ 13,500
Buildings............................................................. 65,560 63,770
Machinery and equipment............................................... 211,540 194,380
-------- --------
290,480 271,650
Less accumulated depreciation........................................... 116,780 103,270
-------- --------
$173,700 $168,380
======== ========
Depreciation expense was $16.4 million, $15.2 million and $13.9 million in
1995, 1994 and 1993.
21
23
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6. OTHER CURRENT LIABILITIES
(IN THOUSANDS)
AT DECEMBER 31,
------------------
1995 1994
------- -------
Employee wages and benefits............................................... $16,010 $15,320
Interest.................................................................. 2,820 3,180
Property taxes............................................................ 1,890 2,330
Dividends................................................................. 1,830 1,460
Current income taxes...................................................... 1,080 1,540
Other..................................................................... 6,110 10,820
------- -------
$29,740 $34,650
======= =======
NOTE 7. LONG-TERM DEBT
(IN THOUSANDS)
AT DECEMBER 31,
--------------------
1995 1994
-------- --------
Borrowings from banks................................................... $ 72,000 $122,000
5% Convertible Subordinated Debentures Due 2003......................... 115,000 115,000
Other................................................................... 410 1,880
-------- --------
187,410 238,880
Less current maturities................................................. 210 280
-------- --------
$187,200 $238,600
======== ========
Borrowings from banks are owing under the Company's $350.0 million
revolving credit facility, maturing in 2000, with a group of domestic and
international banks. During 1995 the Company repaid $50.0 million of these
borrowings which were originally incurred to finance prior acquisitions. The
facility permits the Company to borrow under several different interest rate
options. At December 31, 1995, the blended interest rate on these borrowings
equaled 6.1 percent. The facility contains certain restrictive covenants, the
most restrictive of which, at December 31, 1995, required $239.4 million of
shareholders' equity. The Company had available credit of $278.0 million under
its revolving credit facility at December 31, 1995.
The 5% Convertible Subordinated Debentures are convertible into Company
common stock at $22 5/8 per share, subject to adjustment for certain events. The
Debentures are redeemable, at a premium, at the Company's option after August 1,
1996.
22
24
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 8. SHAREHOLDERS' EQUITY
(IN THOUSANDS)
CUMULATIVE
PREFERRED COMMON PAID-IN RETAINED TRANSLATION
STOCK STOCK CAPITAL EARNINGS ADJUSTMENTS TOTAL
--------- ------ -------- -------- ----------- --------
Balance, January 1, 1993.......... $ 70 $140 $153,740 $ 62,500 $(1,010) $215,440
Net income...................... 38,000 38,000
Common stock distribution....... 150 (150)
Common stock dividends.......... (3,550) (3,550)
Preferred stock dividends....... (5,250) (5,250)
Preferred stock conversion...... (70) 80 (10)
Other........................... 610 (400) 210
--- ---- -------- -------- ------- --------
Balance, December 31, 1993........ -0- 370 154,190 91,700 (1,410) 244,850
Net income...................... 50,100 50,100
Common stock dividends.......... (5,490) (5,490)
Other........................... 1,020 120 1,140
--- ---- -------- -------- ------- --------
Balance, December 31, 1994........ -0- 370 155,210 136,310 (1,290) 290,600
Net income...................... 56,020 56,020
Common stock dividends.......... (6,960) (6,960)
Other........................... 220 (1,210) (990)
--- ---- -------- -------- ------- --------
Balance, December 31, 1995........ $ -0- $370 $155,430 $185,370 $(2,500) $338,670
=== ==== ======== ======== ======= ========
During 1993 the dividends on the $100 Convertible Participating Preferred
Stock, held by MascoTech, Inc., converted from an annual to a quarterly payment
schedule. Therefore, the Company paid $12.3 million in preferred stock dividends
in 1993 representing dividends accrued through the first three quarters of 1993
and the full year 1992. In December 1993 MascoTech, Inc. converted all of the
preferred stock into 7.8 million shares of Company common stock.
On the basis of amounts paid (declared), cash dividends per common share
were $.18 ($.19) in 1995, $.14 ($.15) in 1994 and $.11 ($.115) in 1993.
23
25
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9. STOCK OPTIONS AND AWARDS
At the Company's Annual Meeting held in May 1995 stockholders approved the
TriMas Corporation 1995 Long Term Stock Incentive Plan which replaced the
Company's 1988 Restricted Stock Incentive Plan and its 1988 Stock Option Plan.
Company common stock available for grant under the 1995 plan includes the
2,000,000 shares initially established, plus additional shares resulting from
certain reacquisitions of shares by the Company.
For the three years ended December 31, 1995, stock option data pertaining
to stock option plans for key employees of the Company are as follows (option
prices are the fair market value at the dates of grant):
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------
1995 1994 1993
--------- ------- -------
Options outstanding, January 1............................. 594,200 604,000 606,000
Options granted............................................ 4,864
Option price per share................................... $19 3/4-$23 1/2
Options exercised.......................................... 23,000 9,800 2,000
Option price per share................................... $8 7/8 $8 7/8 $8 7/8
Options outstanding, December 31........................... 576,064 594,200 604,000
Option price per share................................... $7 1/2-$23 1/2 $7 1/2-$8 7/8 $7 1/2-$8 7/8
Exercisable, December 31................................... 260,464 218,000 167,200
Pursuant to restricted stock incentive plans, the Company granted
long-term incentive awards of Company common stock, net, for 290,588 shares in
1995, 88,118 shares in 1994 and 129,212 shares in 1993, to key employees of
the Company. The unamortized costs of incentive awards, aggregating $12.7
million at December 31, 1995, are being amortized over the ten year vesting
periods.
At December 31, 1995 and 1994, a combined total of 2,055,803 and 331,826
shares of Company common stock were available for the granting of options and
incentive awards under the aforementioned plans.
24
26
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 10. RETIREMENT PLANS
The Company has noncontributory retirement benefit plans, both defined
benefit and profit-sharing plans, and other defined contribution plans for most
of its employees.
The annual expense for all plans was:
(IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER
31,
----------------------------
1995 1994 1993
------ ------ ------
Defined contribution plans....................................... $3,470 $3,320 $2,300
Defined benefit plans............................................ 1,690 890 500
------ ------ ------
$5,160 $4,210 $2,800
====== ====== ======
Contributions to profit-sharing and other defined contribution plans are
generally determined as a percentage of the covered employee's annual salary.
Defined benefit plans provide retirement benefits for salaried employees
based primarily on years of service and average earnings for the five highest
consecutive years of compensation. Defined benefit plans covering hourly
employees generally provide benefits of stated amounts for each year of service.
These plans are funded based on an actuarial evaluation and review of the
assets, liabilities and requirements of each plan. Plan assets are held by a
trustee and invested principally in cash equivalents and marketable equity and
fixed income instruments.
Net periodic pension cost of defined benefit plans includes the following
components:
(IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1995 1994 1993
------- ------- -------
Service cost.................................................. $ 2,000 $ 2,490 $ 2,030
Interest cost................................................. 3,570 3,310 2,920
Actual (return)/loss on assets................................ (5,360) 1,820 (5,900)
Net amortization and deferral................................. 1,480 (6,730) 1,450
------ ------ ------
$ 1,690 $ 890 $ 500
====== ====== ======
Weighted average rate assumptions used were as follows:
1995 1994 1993
----- ----- -----
Discount rate...................................................... 7.3% 8.5% 7.0%
Rate of increase in compensation levels............................ 5.1% 5.1% 5.1%
Expected long-term rate of return on plan assets................... 10.7% 12.5% 12.1%
25
27
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 10. RETIREMENT PLANS (CONTINUED)
The following table sets forth the funded status of the defined benefit
plans:
(IN THOUSANDS)
AT DECEMBER 31,
--------------------------------------------------------
1995 1994
-------------------------- --------------------------
PLANS PLANS PLANS PLANS
WHERE WHERE WHERE WHERE
ASSETS ACCUMULATED ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
BENEFITS ASSETS BENEFITS ASSETS
----------- ----------- ----------- -----------
Actuarial present value of:
Vested benefit obligation.................... $30,680 $11,530 $23,460 $ 8,170
======= ======= ======= =======
Accumulated benefit obligation............... $31,000 $12,960 $23,860 $ 9,540
======= ======= ======= =======
Projected benefit obligation................. $39,900 $13,980 $30,840 $10,310
Plan assets at fair value...................... 33,640 7,790 30,390 7,310
------- ------- ------- -------
Projected benefit obligation (in excess of) or
less than plan assets........................ (6,260) (6,190) (450) (3,000)
Unrecognized net (asset) or obligation......... (1,160) 420 (1,340) 440
Unrecognized prior service cost................ 440 1,670 480 1,750
Unrecognized net (gain) or loss................ 7,910 3,230 2,910 810
Requirement to recognize minimum liability..... (4,300) (2,350)
------- ------- ------- -------
Prepaid pension cost or (pension
liability).............................. $ 930 $(5,170) $ 1,600 $(2,350)
======= ======= ======= =======
The Company provides postretirement health care and life insurance benefits
for certain eligible retired employees under unfunded plans. Some of the plans
have cost-sharing provisions. Net periodic postretirement benefit costs during
1995, 1994 and 1993 were $.8 million, $.8 million and $1.0 million.
The aggregate accumulated postretirement benefit obligation of these
unfunded plans was $7.1 million and $5.4 million at December 31, 1995 and 1994.
The discount rates used in determining the accumulated postretirement benefit
obligations and the net periodic postretirement benefit costs were 7.3 percent,
8.5 percent and 7.0 percent in 1995, 1994 and 1993. The assumed health care cost
trend rate in 1995 was 12.0 percent, decreasing to an ultimate rate in the years
subsequent to 2000 of seven percent. A one percent increase in the assumed
health care cost trend rates would have increased the net periodic
postretirement benefit cost by $.1 million during 1995 and would have increased
the accumulated postretirement benefit obligation at December 31, 1995, by $.9
million. The Company is amortizing the unrecognized transition accumulated
postretirement benefit obligation and subsequent plan net gains and losses in
accordance with Statement of Financial Accounting Standards No. 106. The accrued
postretirement benefit obligation was $3.1 million and $2.8 million at December
31, 1995 and 1994.
26
28
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11. BUSINESS SEGMENT INFORMATION
The Company's operations in its business segments consist principally of
the manufacture and sale of the following:
Specialty Fasteners: Cold formed fasteners and related metallurgical
processing.
Towing Systems: Vehicle hitches, jacks, winches, couplers and related
towing accessories.
Specialty Container Products: Industrial container closures, pressurized
gas cylinders and metallic and nonmetallic gaskets.
Corporate Companies: Specialty drills, cutters and specialized metal
finishing services, and flame-retardant facings and jacketings and
pressure-sensitive tapes.
Corporate assets consist primarily of cash and cash equivalents.
27
29
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11. BUSINESS SEGMENT INFORMATION (CONTINUED)
(IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------
1995 1994 1993
-------- -------- --------
NET SALES
Specialty Fasteners.................................. $141,050 $138,720 $122,740
Towing Systems....................................... 175,000 163,130 139,790
Specialty Container Products......................... 165,670 163,880 118,970
Corporate Companies.................................. 71,770 69,750 61,730
-------- -------- --------
Total net sales................................... $553,490 $535,480 $443,230
======== ======== ========
OPERATING PROFIT
Specialty Fasteners.................................. $ 27,290 $ 24,280 $ 19,250
Towing Systems....................................... 31,080 25,660 22,150
Specialty Container Products......................... 39,040 39,060 28,820
Corporate Companies.................................. 8,420 9,850 7,110
-------- -------- --------
Total operating profit............................ 105,830 98,850 77,330
Other income (expense), net............................ (6,840) (7,900) (6,150)
General corporate expense.............................. (7,150) (7,450) (7,310)
-------- -------- --------
Income before income taxes........................ $ 91,840 $ 83,500 $ 63,870
======== ======== ========
IDENTIFIABLE ASSETS AT DECEMBER 31
Specialty Fasteners.................................. $146,200 $137,190 $131,110
Towing Systems....................................... 151,160 148,890 142,340
Specialty Container Products......................... 149,790 150,360 144,890
Corporate Companies.................................. 56,230 55,210 53,060
Corporate............................................ 112,980 123,490 92,730
-------- -------- --------
Total assets...................................... $616,360 $615,140 $564,130
======== ======== ========
CAPITAL EXPENDITURES
Specialty Fasteners.................................. $ 10,840 $ 9,140 $ 9,170
Towing Systems....................................... 4,790 6,720 7,930
Specialty Container Products......................... 5,780 5,420 14,870
Corporate Companies.................................. 2,030 3,000 1,320
Corporate............................................ 30 30 20
-------- -------- --------
Total capital expenditures........................ $ 23,470 $ 24,310 $ 33,310(A)
======== ======== ========
DEPRECIATION AND AMORTIZATION
Specialty Fasteners.................................. $ 7,230 $ 6,970 $ 6,490
Towing Systems....................................... 5,610 5,390 5,250
Specialty Container Products......................... 6,140 5,790 4,410
Corporate Companies.................................. 2,430 2,360 2,240
Corporate............................................ 70 70 80
-------- -------- --------
Total depreciation and amortization............... $ 21,480 $ 20,580 $ 18,470
======== ======== ========
Operations are located principally in the United States.
Export sales equaled less than ten percent of total sales for each of the three
years presented.
(A) Including $7.0 million from a business acquired.
28
30
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 12. INCOME TAXES
(IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER
31,
-------------------------------
1995 1994 1993
------- ------- -------
Income before income taxes:
Domestic..................................................... $86,900 $79,040 $60,630
Foreign...................................................... 4,940 4,460 3,240
------- ------- -------
$91,840 $83,500 $63,870
======= ======= =======
Provision for income taxes:
Federal...................................................... $23,810 $24,240 $20,980
State and local.............................................. 4,460 4,100 2,870
Foreign...................................................... 1,990 1,850 1,520
Deferred, principally federal................................ 5,560 3,210 500
------- ------- -------
$35,820 $33,400 $25,870
======= ======= =======
The following is a reconciliation of the U.S. federal statutory tax rate to
the effective tax rate:
FOR THE YEARS ENDED
DECEMBER 31,
---------------------------
1995 1994 1993
----- ----- -----
U.S. federal statutory tax rate................................. 35.0% 35.0% 35.0%
State and local taxes, net of federal tax benefit............... 3.1 3.2 2.9
Foreign taxes in excess of U.S. federal tax rate................ .3 .3 .6
Nondeductible amortization of excess of cost over net assets of
acquired companies............................................ .7 .8 1.7
Other, net...................................................... (.1) .7 .3
---- ---- ----
Effective tax rate......................................... 39.0% 40.0% 40.5%
==== ==== ====
Items that gave rise to deferred taxes:
(IN THOUSANDS)
AT DECEMBER 31,
------------------------------------------------------------
1995 1994
---------------------------- ----------------------------
DEFERRED TAX DEFERRED TAX DEFERRED TAX DEFERRED TAX
ASSETS LIABILITIES ASSETS LIABILITIES
------------ ------------ ------------ ------------
Property and equipment......................... $ 21,040 $ 19,620
Intangible assets.............................. 3,840 2,600
Inventory...................................... $1,080 $ 740
Other.......................................... 2,110 4,600 5,500 4,520
------ ------- ------ -------
$3,190 $ 29,480 $6,240 $ 26,740
====== ======= ====== =======
29
31
TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)
NOTE 13. INTERIM FINANCIAL INFORMATION (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
QUARTERS ENDED
---------------------------------------------
DECEMBER SEPTEMBER JUNE MARCH
31ST 30TH 30TH 31ST
-------- --------- -------- --------
1995:
Net sales......................................... $122,090 $ 131,880 $151,920 $147,600
Gross profit...................................... $ 41,370 $ 42,520 $ 50,530 $ 47,600
Net income........................................ $ 12,800 $ 13,220 $ 16,560 $ 13,440
Primary earnings per common share................. $.35 $.36 $.45 $.36
Fully diluted earnings per common share........... $.33 $.34 $.42 $.34
Weighted average common and common equivalent
shares outstanding:
Primary...................................... 36,978 36,998 37,001 36,996
Fully diluted................................ 42,061 42,080 42,088 42,090
1994:
Net sales......................................... $120,490 $ 133,590 $146,940 $134,460
Gross profit...................................... $ 39,800 $ 43,580 $ 49,320 $ 41,260
Net income........................................ $ 11,960 $ 12,370 $ 14,940 $ 10,830
Primary earnings per common share................. $.32 $.33 $.40 $.29
Fully diluted earnings per common share........... $.31 $.32 $.38 $.28
Weighted average common and common equivalent
shares outstanding:
Primary...................................... 37,001 37,022 37,038 37,040
Fully diluted................................ 42,084 42,104 42,120 42,123
Earnings per common share in the fourth quarter of 1995 and 1994 were
improved by $.07 and $.06, net, resulting from various year end adjustments to
accrual estimates recorded earlier in each year.
Quarterly earnings per common share amounts for both 1995 and 1994 do not
total to the full year amounts due to rounding.
QUARTERLY COMMON STOCK PRICE AND DIVIDEND INFORMATION:
MARKET PRICE
1995 -------------- DIVIDENDS
QUARTER HIGH LOW DECLARED
---------------------------------------------- ----- ----- ---------
Fourth........................................ $22 1/4 $18 3/8 $ .05
Third......................................... 25 1/2 20 .05
Second........................................ 24 1/4 20 1/4 .05
First......................................... 22 3/4 19 5/8 .04
MARKET PRICE
1994 -------------- DIVIDENDS
QUARTER HIGH LOW DECLARED
---------------------------------------------- ----- ----- ---------
Fourth........................................ $23 5/8 $18 3/8 $ .04
Third......................................... 24 7/8 21 1/2 .04
Second........................................ 27 1/8 21 5/8 .04
First......................................... 28 1/2 22 3/4 .03
30
32
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
31
33
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding executive officers required by this Item is set forth
as a Supplementary Item at the end of Part I hereof (pursuant to Instruction 3
to Item 401(b) of Regulation S-K). Other information required by this Item will
be contained in the Company's definitive Proxy Statement for its 1996 Annual
Meeting of Stockholders, to be filed on or before April 29, 1996, and such
information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information required by this Item will be contained in the Company's
definitive Proxy Statement for its 1996 Annual Meeting of Stockholders, to be
filed on or before April 29, 1996, and such information is incorporated herein
by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by this Item will be contained in the Company's
definitive Proxy Statement for its 1996 Annual Meeting of Stockholders, to be
filed on or before April 29, 1996, and such information is incorporated herein
by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this Item will be contained in the Company's
definitive Proxy Statement for its 1996 Annual Meeting of Stockholders, to be
filed on or before April 29, 1996, and such information is incorporated herein
by reference.
32
34
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A) LISTING OF DOCUMENTS.
(1) Financial Statements. The Company's Consolidated Financial Statements
included in Item 8 hereof, as required at December 31, 1995 and 1994,
and for the years ended December 31, 1995, 1994 and 1993, consist of
the following:
Consolidated Statements of Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
(2) Financial Statement Schedules.
Financial Statement Schedules of the Company appended hereto, as
required for the years ended December 31, 1995, 1994 and 1993, consist
of the following:
II. Valuation and Qualifying Accounts
(3) Exhibits.
3.a Restated Certificate of Incorporation of TriMas Corporation.(4)
3.b Bylaws of TriMas Corporation, as amended.(2)
4.a Indenture dated as of August 1, 1993 between TriMas Corporation and
Continental Bank, National Association (the Corporate Trust and Agency
Business of which is now known as First Trust of Illinois), as Trustee, and
Directors' resolutions establishing TriMas Corporation's 5% Convertible
Subordinated Debentures Due 2003.(4)
4.b Credit Agreement dated February 1, 1993 among TriMas Corporation, Certain
Banks and NationsBank of North Carolina, N.A. (now known as NationsBank, N.A.
(Carolinas)), as Agent(1), and First Amendment dated June 30, 1995.(6)
Note: Other instruments, notes or extracts from agreements defining the rights of
holders of long-term debt of TriMas Corporation or its subsidiaries have not
been filed since (i) in each case the total amount of long-term debt permitted
thereunder does not exceed 10 percent of TriMas Corporation's consolidated
assets, and (ii) such instruments, notes and extracts will be furnished by
TriMas Corporation to the Securities and Exchange Commission upon request.
10.a Assumption and Indemnification Agreement, dated December 27, 1988, between
TriMas Corporation and Masco Industries, Inc. (now known as MascoTech,
Inc.).(1)
10.b Corporate Services Agreement, dated December 27, 1988, between TriMas
Corporation and Masco Corporation.(1)
10.c Corporate Opportunities Agreement, dated December 27, 1988, among TriMas
Corporation, Masco Corporation and Masco Industries, Inc. (now known as
MascoTech, Inc.).(1)
10.d Stock Repurchase Agreement, dated December 27, 1988, among TriMas Corporation,
Masco Corporation and Masco Industries, Inc. (now known as MascoTech,
Inc.).(1)
10.e Registration Agreement, dated December 27, 1988, among TriMas Corporation,
Masco Corporation and Masco Industries, Inc. (now known as MascoTech, Inc.),
and amendment dated as of January 5, 1993(1) and amendment dated as of May 26,
1994.(5)
Note: Exhibits 10.f through 10.s constitute the management contracts and executive
compensatory plans or arrangements in which certain of the executive officers
and directors of the Company participate.
33
35
10.f TriMas Corporation 1995 Long Term Stock Incentive Plan (Restated December 5,
1995).
10.g TriMas Corporation 1988 Stock Option Plan (Restated December 5, 1995).
10.h TriMas Corporation 1988 Restricted Stock Incentive Plan (Restated December 5,
1995).
10.i MascoTech, Inc. 1984 Restricted Stock Incentive Plan (Restated December 6,
1995).
10.j MascoTech, Inc. 1984 Stock Option Plan (Restated December 6, 1995).
10.k Masco Corporation 1988 Restricted Stock Incentive Plan (Restated December 6,
1995).
10.l Masco Corporation 1988 Stock Option Plan (Restated December 6, 1995).
10.m Masco Corporation 1984 Restricted Stock (Industries) Incentive Plan (Restated
December 6, 1995).
10.n Masco Corporation 1984 Stock Option Plan (Restated December 6, 1995).
10.o Masco Corporation Restricted Stock Incentive Plan (Restated December 6, 1995).
10.p Masco Corporation 1991 Long Term Stock Incentive Plan (Restated December 6,
1995).
10.q MascoTech, Inc. 1991 Long Term Stock Incentive Plan (Restated December 6,
1995).
10.r TriMas Corporation Supplemental Executive Retirement and Disability Plan.(5)
10.s TriMas Corporation Benefits Restoration Plan.(5)
10.t Purchase Agreement dated January 26, 1990 between Masco Corporation and TriMas
Corporation.(4)
10.u Purchase Agreement dated November 23, 1993 between MascoTech, Inc. and TriMas
Corporation.(3)
11 Computation of Earnings per Common Share.
12 Computation of Ratios of Earnings to Fixed Charges.
21 List of Subsidiaries.
23 Consent of Coopers & Lybrand L.L.P. relating to TriMas Corporation's Financial
Statements and Financial Statement Schedule.
27 Financial Data Schedule.
- -------------------------
(1) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Annual Report on Form 10-K for the year ended December 31, 1992.
(2) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993.
(3) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Current Report on Form 8-K dated November 23, 1993.
(4) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Annual Report on Form 10-K for the year ended December 31, 1993.
(5) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Annual Report on Form 10-K for the year ended December 31, 1994.
(6) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
THE COMPANY WILL FURNISH TO ANY OF ITS SHAREHOLDERS A COPY OF ANY OF THE
ABOVE EXHIBITS UPON THE WRITTEN REQUEST OF SUCH SHAREHOLDER AND THE PAYMENT TO
THE COMPANY OF THE REASONABLE EXPENSES INCURRED BY THE COMPANY IN FURNISHING
SUCH COPY OR COPIES.
(B) REPORTS ON FORM 8-K.
None.
34
36
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
By /s/ BRIAN P. CAMPBELL
-----------------------------------
Brian P. Campbell
President
March 27, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
PRINCIPAL EXECUTIVE OFFICER:
/s/ RICHARD A. MANOOGIAN Chairman of the Board
- ---------------------------------------------
Richard A. Manoogian
PRINCIPAL FINANCIAL OFFICER:
/s/ WILLIAM E. MEYERS Vice President -- Controller
- ---------------------------------------------
William E. Meyers
PRINCIPAL ACCOUNTING OFFICER:
/s/ WILLIAM E. MEYERS Vice President -- Controller
- ---------------------------------------------
William E. Meyers
/s/ BRIAN P. CAMPBELL President and Director March 27, 1996
- ---------------------------------------------
Brian P. Campbell
/s/ HERBERT S. AMSTER Director
- ---------------------------------------------
Herbert S. Amster
/s/ EUGENE A. GARGARO, JR. Director
- ---------------------------------------------
Eugene A. Gargaro, Jr.
/s/ JOHN A. MORGAN Director
- ---------------------------------------------
John A. Morgan
/s/ HELMUT F. STERN Director
- ---------------------------------------------
Helmut F. Stern
37
TRIMAS CORPORATION
FINANCIAL STATEMENT SCHEDULE
PURSUANT TO ITEM 14(A)(2) OF FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
Schedule, as required, for the years ended December 31, 1995, 1994 and 1993:
PAGES
---
II. Valuation and Qualifying Accounts................................................. F-2
F-1
38
TRIMAS CORPORATION
SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------------------------------- ---------- ------------------------ ---------- ----------
ADDITIONS
------------------------
CHARGED CHARGED
BALANCE AT (CREDITED) (CREDITED) BALANCE
BEGINNING TO COST TO OTHER AT END
DESCRIPTION OF PERIOD AND EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
- -------------------------------- ---------- ------------ ---------- ---------- ----------
(A) (B)
Allowances for doubtful accounts,
deducted from accounts
receivable in the balance
sheet:
1995....................... $2,040,000 $ 270,000 $ -- $780,000 $1,530,000
========= ============ ========== ========== =========
1994....................... $1,800,000 $ 620,000 $ -- $380,000 $2,040,000
========= ============ ========== ========== =========
1993....................... $1,430,000 $ 800,000 $160,000 $590,000 $1,800,000
========= ============ ========== ========== =========
Allowance for doubtful accounts,
deducted from notes receivable
in the balance sheet:
1995....................... $ 650,000 $ (300,000) $ -- $ -- $ 350,000
========= ============ ========== ========== =========
1994....................... $ 650,000 $ -- $ -- $ -- $ 650,000
========= ============ ========== ========== =========
1993....................... $ 650,000 $ -- $ -- $ -- $ 650,000
========= ============ ========== ========== =========
Notes:
(A) Allowance of companies acquired, and other adjustments, net.
(B) Doubtful accounts charged off, less recoveries.
F-2
39
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NO.
------- ------------------------------------------------------------------------ ----
3.a Restated Certificate of Incorporation of TriMas Corporation.(4)
3.b Bylaws of TriMas Corporation, as amended.(2)
4.a Indenture dated as of August 1, 1993 between TriMas Corporation and
Continental Bank, National Association (the Corporate Trust and Agency
Business of which is now known as First Trust of Illinois), as Trustee,
and Directors' resolutions establishing TriMas Corporation's 5%
Convertible Subordinated Debentures Due 2003.(4)
4.b Credit Agreement dated February 1, 1993 among TriMas Corporation,
Certain Banks and NationsBank of North Carolina, N.A. (now known as
NationsBank, N.A. (Carolinas)), as Agent(1), and First Amendment dated
June 30, 1995.(6)
NOTE: Other instruments, notes or extracts from agreements defining the rights
of holders of long-term debt of TriMas Corporation or its subsidiaries
have not been filed since (i) in each case the total amount of long-term
debt permitted thereunder does not exceed 10 percent of TriMas
Corporation's consolidated assets, and (ii) such instruments, notes and
extracts will be furnished by TriMas Corporation to the Securities and
Exchange Commission upon request.
10.a Assumption and Indemnification Agreement, dated December 27, 1988,
between TriMas Corporation and Masco Industries, Inc. (now known as
MascoTech, Inc.).(1)
10.b Corporate Services Agreement, dated December 27, 1988, between TriMas
Corporation and Masco Corporation.(1)
10.c Corporate Opportunities Agreement, dated December 27, 1988, among TriMas
Corporation, Masco Corporation and Masco Industries, Inc. (now known as
MascoTech, Inc.).(1)
10.d Stock Repurchase Agreement, dated December 27, 1988, among TriMas
Corporation, Masco Corporation and Masco Industries, Inc. (now known as
MascoTech, Inc.).(1)
10.e Registration Agreement, dated December 27, 1988, among TriMas
Corporation, Masco Corporation and Masco Industries, Inc. (now known as
MascoTech, Inc.), and amendment dated as of January 5, 1993(1) and
amendment dated as of May 26, 1994.(5)
NOTE: Exhibits 10.f through 10.s constitute the management contracts and
executive compensatory plans or arrangements in which certain of the
executive officers and directors of the Company participate.
10.f TriMas Corporation 1995 Long Term Stock Incentive Plan (Restated
December 5, 1995).
10.g TriMas Corporation 1988 Stock Option Plan (Restated December 5, 1995).
10.h TriMas Corporation 1988 Restricted Stock Incentive Plan (Restated
December 5, 1995).
10.i MascoTech, Inc. 1984 Restricted Stock Incentive Plan (Restated December
6, 1995).
10.j MascoTech, Inc. 1984 Stock Option Plan (Restated December 6, 1995).
10.k Masco Corporation 1988 Restricted Stock Incentive Plan (Restated
December 6, 1995).
10.l Masco Corporation 1988 Stock Option Plan (Restated December 6, 1995).
40
EXHIBIT PAGE
NUMBER DESCRIPTION NO.
------- ------------------------------------------------------------------------ ----
10.m Masco Corporation 1984 Restricted Stock (Industries) Incentive Plan
(Restated December 6, 1995).
10.n Masco Corporation 1984 Stock Option Plan (Restated December 6, 1995).
10.o Masco Corporation Restricted Stock Incentive Plan (Restated December 6,
1995).
10.p Masco Corporation 1991 Long Term Stock Incentive Plan (Restated December
6, 1995).
10.q MascoTech, Inc. 1991 Long Term Stock Incentive Plan (Restated December
6, 1995).
10.r TriMas Corporation Supplemental Executive Retirement and Disability
Plan.(5)
10.s TriMas Corporation Benefits Restoration Plan.(5)
10.t Purchase Agreement dated January 26, 1990 between Masco Corporation and
TriMas Corporation.(4)
10.u Purchase Agreement dated November 23, 1993 between MascoTech, Inc. and
TriMas Corporation.(3)
11 Computation of Earnings per Common Share.
12 Computation of Ratios of Earnings to Fixed Charges.
21 List of Subsidiaries.
23 Consent of Coopers & Lybrand L.L.P. relating to TriMas Corporation's
Financial Statements and Financial Statement Schedule.
27 Financial Data Schedule.
- -------------------------
(1) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Annual Report on Form 10-K for the year ended December 31, 1992.
(2) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1993.
(3) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Current Report on Form 8-K dated November 23, 1993.
(4) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Annual Report on Form 10-K for the year ended December 31, 1993.
(5) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Annual Report on Form 10-K for the year ended December 31, 1994.
(6) Incorporated by reference to the Exhibits filed with TriMas Corporation's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995.
Exhibit 10.f
TRIMAS CORPORATION
1995 LONG TERM STOCK INCENTIVE PLAN
(Restated December 5, 1995)
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.
- 2 -
Section 3. Administration
The Committee shall administer the Plan, and subject to the terms of the
Plan and applicable law, the Committee's authority shall include without
limitation the power to:
(i) designate Participants;
(ii) determine the types of Awards to be granted;
(iii) determine the number of Shares to be covered by Awards and
any payments, rights or other matters to be calculated in connection
therewith;
(iv) determine the terms and conditions of Awards and amend the
terms and conditions of outstanding Awards;
(v) determine how, whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or
suspended;
(vi) determine how, whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other
property and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the holder thereof
or of the Committee;
(vii) determine the methods or procedures for establishing the
fair market value of any property (including, without limitation, any
Shares or other securities) transferred, exchanged, given or received
with respect to the Plan or any Award;
(viii) prescribe and amend the forms of Award Agreements and other
instruments required under or advisable with respect to the Plan;
(ix) designate Options granted to key employees of the Company or
its subsidiaries as Incentive Stock Options;
(x) interpret and administer the Plan, Award Agreements, Awards
and any contract, document, instrument or agreement relating thereto;
(xi) establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the
administration of the Plan;
- 3 -
(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.
- 4 -
(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 avail-
able 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 sub-
stitution 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.
- 5 -
(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; pro-
vided, 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.
- 6 -
(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 exer-
cise price) in which payment of the exercise price with respect
thereto may be made or deemed to have been made. The terms of any
Incentive Stock Option granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, or any
successor provision thereto, and any regulations promulgated
thereunder.
Subject to the terms of the Plan, the Committee may impose such
conditions or restrictions on any Option as it deems appropriate.
(ii) Other Terms. Unless otherwise determined by the Committee:
(A) A Participant electing to exercise an Option shall give
written notice to the Company, as may be specified by the
Committee, of exercise of the Option and the number of Shares
elected for exercise, such notice to be accompanied by such in-
struments 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
- 7 -
(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 de-
termine that the Participant has engaged in any activity
detrimental to the interests of the Company or an Affiliate. If
such termination is voluntary on the part of the Participant, the
option may be exercised only within ten days after the date of
termination. If such termination is involuntary on the part of the
Participant, if an employee retires on or after normal retirement
date or if the employment or consulting relationship is terminated
by reason of permanent and total disability, the Option may be
exercised within three months after the date of termination or
retirement. For purposes of this Paragraph (D), a Participant's
employment or consulting arrangement shall not be considered ter-
minated (i) in the case of approved sick leave or other bona fide
leave of absence (not to exceed one year), (ii) in the case of a
transfer of employment or the consulting arrangement among the
Company and Affiliates, or (iii) by virtue of a change of status
from employee to consultant or from consultant to employee, except
as provided above.
- 8 -
(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 contin-
ued.
(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 under-
lying 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 Appreciation Right and may impose such conditions
or restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.
(c) Restricted Stock and Restricted Stock Units.
(i) Issuance. The Committee is authorized to grant to
Participants Awards of Restricted Stock, which shall consist of Shares,
and Restricted Stock Units which shall give the Participant the right to
receive cash, other securities, other Awards or other property, in each
case subject to the
- 9 -
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 certificates.
(iv) Forfeiture. Except as otherwise determined by the Committee:
(A) If the employment of or consulting arrangement with a
Participant terminates for any reason (including termination by
reason of the fact that any entity is no longer an Affiliate),
other than the Participant's death or permanent and total dis-
ability 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
- 10 -
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 ac-
cordance 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
- 11 -
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
- 12 -
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 at-
tempt to assign rights under such an
- 13 -
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. Not-
withstanding 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 con-
sidered issuance and delivery to the Participant.
(2) The Committee shall not permit directors or offi-
cers 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.
- 14 -
(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) With respect to any Award granted hereunder prior to December
5, 1995, a Change in Control shall occur if:
(1) any "person" or "group of persons" as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, other than
pursuant to a transaction or agreement previously approved by the
Board of Directors of the Company, directly or indirectly pur-
chases 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
- 15 -
power of all outstanding voting securities of (A) the 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.
(C) Notwithstanding the provisions of subparagraph (B), with
respect to Awards granted hereunder on or after December 5, 1995, a
Change in Control shall occur only if the event described in this
subparagraph (C) shall have occurred. With respect to any other Award
granted prior thereto, a Change in Control shall occur if any of the
events described in subparagraphs (B) or (C) shall have occurred, unless
the holder of any such Award shall have consented to the application of
this subparagraph (C) in lieu of the foregoing subparagraph (B). A
Change in Control for purposes of this subparagraph (C) shall occur if,
during any period of twenty-four consecutive calendar months, the
individuals who at the beginning of such period constitute the Company's
Board of Directors, and any new directors (other than Excluded
Directors, as hereinafter defined), whose election by such Board or
nomination for election by stockholders was approved by a vote of at
least two-thirds of the members of such Board who were either directors
on such Board at the beginning of the period or whose election or
nomination for election as directors was previously so approved, for any
reason cease to constitute at least a majority of the members thereof.
For purposes hereof, "Excluded Directors" are directors whose
- 16 -
election by the Board or approval by the Board for stockholder election
occurred within one year of any "person" or "group of persons", as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act,
commencing a tender offer for, or becoming the beneficial owner of,
voting securities representing 25 percent or more of the combined voting
power of all outstanding voting securities of the Company, other than
pursuant to a tender offer approved by the Board prior to its
commencement or pursuant to stock acquisitions approved by the Board
prior to their representing 25 percent or more of such combined voting
power.
(D)(1) In the event that subsequent to a Change in Control it
is determined that any payment or distribution by the Company to or for
the benefit of a Participant, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, other
than any payment pursuant to this subparagraph (D) (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such Participant
shall be entitled to receive from the Company, within 15 days following
the determination described in (2) below, an additional payment ("Excise
Tax Adjustment Payment") in an amount such that after payment by such
Participant of all applicable Federal, state and local taxes (computed
at the maximum marginal rates and including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed
upon the Excise Tax Adjustment Payment, such Participant retains an
amount of the Excise Tax Adjustment Payment equal to the Excise Tax
imposed upon the Payments.
(2) All determinations required to be made under this Section
6(g)(vi)(D), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be
made by Cooper & Lybrand L.L.P., or such other national accounting firm
as the Company, or, subsequent to a Change in Control, the Company and
the Participant jointly, may designate, for purposes of the Excise Tax,
which shall provide detailed supporting calculations to the Company and
the affected Participant within 15 business days of the date of the
applicable Payment. Except as hereinafter provided, any determination
by Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the Participant. As a result of
the uncertainty in the application of Section 4999 of the Code that may
exist at the time of the initial determination hereunder, it is possible
that (x) certain Excise Tax Adjustment Payments will not have been made
by the Company which should have been made (an "Underpayment"), or (y)
- 17 -
certain Excise Tax Adjustment Payments will have been made which should
not have been made (an "Overpayment"), consistent with the calculations
required to be made hereunder. In the event of an Underpayment, such
Underpayment shall be promptly paid by the Company to or for the benefit
of the affected Participant. In the event that the Participant
discovers that an Overpayment shall have occurred, the amount thereof
shall be promptly repaid to the Company.
(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.
(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
- 18 -
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 continu-
ing in effect other or additional compensation arrangements, including the
grant of options and other stock-based awards, and such arrangements may be
either generally applicable or applicable only in specific cases.
(d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or any Affiliate. Further, the Company or an Affiliate may at any
time dismiss a Participant from employment, free from any liability, or any
claim under the Plan, unless otherwise expressly provided in the Plan or in
any Award Agreement or other written agreement with the Participant.
(e) Governing Law. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Michigan and applicable Federal law.
(f) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to applicable laws, or if it cannot
be so construed or deemed amended without, in the determination of the
Committee,
- 19 -
materially altering the intent of the Plan or the Award, such provision shall
be stricken as to such jurisdiction, person or Award, and the remainder of the
Plan and any such Award shall remain in full force and effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant
or any other person. To the extent that any person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares, or whether such fractional Shares or any
rights thereto shall be cancelled, terminated or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 9. Effective Date of the Plan
The Plan shall be effective as of the date of its approval by the
Company's stockholders.
- 20 -
Exhibit 10.g
TRIMAS CORPORATION
1988 STOCK OPTION PLAN
(Restated December 5, 1995)
Article I. Purpose
The purpose of the 1988 Stock Option Plan (the "Plan") is to secure for
TriMas Corporation (the "Company") and its stockholders the benefits inherent
in stock ownership by selected key employees of and consultants to the Company
and its subsidiaries and affiliated companies who in the judgment of the
committee responsible for the administration of the Plan are largely
responsible for the Company's growth and success. The Plan is designed to
accomplish this purpose by offering such employees and consultants an
opportunity to purchase shares of the Common Stock of the Company. For
purposes of the Plan a "subsidiary" is any corporation in which the Company
owns, directly or indirectly, stock possessing more than fifty percent of the
total combined voting power of all classes of stock, and an "affiliated
company" is any other corporation, at least twenty percent of the total
combined voting power of all classes of stock of which is owned by the Company
or by one or more other corporations in a chain of corporations, at least
twenty percent of the stock of each of which is held by the Company or a
subsidiary or another corporation within such chain.
Article II. Administration
The Plan shall be administered by a committee (the "Committee") of three
or more of the Company's directors to be appointed by the Board of Directors.
Upon registration of the Company's Common Stock under Section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act"), members of the Committee
shall be "disinterested persons" as such term is defined in Rule 16b-3(d)
under the Exchange Act or any rule which modifies, amends or replaces Rule
16b-3(d). The Committee shall have authority, consistent with the Plan:
(a) to determine which key employees of and consultants to the
Company, its subsidiaries and affiliated companies shall be granted
options;
(b) to determine the time or times when options shall be granted
and the number of shares of Common Stock subject to each option;
(c) to determine the option price of the stock subject to each
option and the method of payment of such price;
(d) to determine the time or times when each option becomes
exercisable, limitations on exercise, and the duration of the exercise
period;
(e) to prescribe the form or forms of the instruments evidencing
options granted under the Plan and of any other instruments required
under the Plan, and to change such forms from time to time;
(f) to designate options granted to key employees of the Company
or its subsidiaries under the Plan as "incentive stock options"
("ISOs"), as such terms are defined in the Internal Revenue Code of
1986;
(g) to adopt, amend and rescind rules and regulations for the
administration of the Plan and options and for its own acts and
proceedings; and
(h) to decide all questions and settle all controversies and
disputes which may arise in connection with the Plan.
All decisions, determinations and interpretations of the Committee shall
be conclusive and binding on all parties concerned.
Article III. Participants
Key employees of and consultants to the Company, its subsidiaries and
affiliated companies, including officers of the Company (who may also be
directors, but excluding members of the Committee, any person who serves only
as a director of the Company and any consultant to the Company or any of its
subsidiaries or affiliated companies who is also a director of the Company or
who is not rendering services pursuant to a written agreement with the
corporation in question), as may be selected from time to time by the
Committee in its discretion, are eligible to receive options under the Plan.
The grant of an option to an employee or consultant shall not entitle such
individual to other grants or options, nor shall such grant disqualify such
individual from further participation.
Article IV. Limitations
No options shall be granted under the Plan after December 31, 1998, but
options theretofore granted may extend beyond that date. Subject to
adjustment as provided in Article IX, the number of shares of Common Stock of
the Company which may
- 2 -
be issued under the Plan shall not exceed 2,000,000; provided, however, that
such number of shares shall be reduced by the number of shares of the
Company's Common Stock awarded under the Company's 1988 Restricted Stock
Incentive Plan (other than shares awarded under such plan which are later for-
feited to the Company). To the extent that any option granted under the Plan
shall expire or terminate unexercised or for any reason become unexercisable,
any stock theretofore subject to such expired or terminated option shall
thereafter be available for further grants under the Plan. If an option
granted under the Plan shall be accepted for surrender pursuant to Article
VIII, any stock subject to such option shall not thereafter be available for
further grants.
Notwithstanding any provision to the contrary in the Plan, no option may
be designated an ISO unless all of the following conditions are satisfied:
(a) Such option must be granted on or prior to November 1, 1998,
and such option by its terms must not be exercisable after the
expiration of ten years from the date such option is granted;
(b) Either (i) the employee to whom such option is granted does
not, determined at the time such option is granted, own capital stock
representing more than ten percent of the voting power of all classes of
stock of the Company, its parent or any of its subsidiaries, or (ii) the
option price is at least 110 percent of the fair market value,
determined at the time such option is granted, of the stock subject to
such option and such option by its terms is not exercisable more than
five years from the date it is granted; and
(c) The aggregate fair market value of the Common Stock subject
to such option plus the aggregate fair market value of Common Stock
subject to ISOs previously or concurrently granted to the same employee
exercisable in the same calendar year (all determined at the respective
dates of grant of such options) must not exceed $100,000.
Article V. Stock to be Issued
The stock as to which options may be granted is the Company's Common
Stock, par value $.01 per share. Such stock may be authorized but unissued
shares or shares of Common Stock reacquired by the Company, including but not
limited to shares purchased on the open market. The Board of Directors and
the officers of the Company shall take any appropriate action required for
such issuance.
- 3 -
Article VI. Terms and Conditions of Options
All options granted under the Plan shall be subject to the following
terms and conditions (except as otherwise provided in Article VII) and to such
other terms and conditions as the Committee shall deem appropriate.
(a) Option Price. Each option shall have such per share option price
as the Committee may determine, but not less than the fair market value of
Common Stock of the Company on the date the option is granted.
(b) Term of Options. The term of an option shall not exceed eleven
years from the date of grant. The date of grant shall be the date on which
the option is awarded by the Committee.
(c) Exercise of Options.
(i) Each option shall be made exercisable not less than six
months from the date of grant and at such time or times, whether or not
in installments, as the Committee shall prescribe at the time the option
is granted.
(ii) A person 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 of stock elected for exercise,
such notice to be accompanied by such instruments or documents as may be
required by the Committee, and shall tender the purchase price of the
stock elected for exercise unless otherwise directed by the Committee.
(iii) (A) Notwithstanding any of the provisions of this Plan or
instruments evidencing options granted hereunder, in the case of a
Change in Control of the Company, each option then outstanding shall
immediately become exercisable in full. A Change in Control shall occur
if any of the events described below in subparagraphs (1), (2) or (3)
shall have occurred, unless the holder of any such option shall have
consented to the application of subparagraph (3) in lieu of
subparagraphs (1) and (2):
(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 directly or indirectly purchases or otherwise
becomes the "beneficial owner" (as defined in Rule 13d3 under the
Exchange Act) or has the right to acquire such beneficial
ownership (whether or not such
- 4 -
right is exercisable immediately, with the passage of time, or
subject to any condition) of voting securities representing
twenty-five percent or more of the combined voting power of all
outstanding voting securities of (A) the Company, or (B) of an Af-
filiated Party (as hereinafter defined);
(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; or
(3) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
(other than Excluded Directors, as hereinafter defined), whose
election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of
such Board who were either directors on such Board at the
beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason
cease to constitute at least a majority of the members thereof.
For purposes hereof, "Excluded Directors" are directors whose
election by the Board or approval by the Board for stockholder
election occurred within one year of any "person" or "group of
persons", as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act, commencing a tender offer for, or becoming the
beneficial owner of, voting securities representing 25 percent or
more of the combined voting power of all outstanding voting
securities of the Company, other than pursuant to a tender offer
approved by the Board prior to its commencement or pursuant to
stock acquisitions approved by the Board prior to their
representing 25 percent or more of such combined voting power.
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
Corpora-
- 5 -
tion, 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 then owns at least twenty percent
of the combined voting power of all voting securities of the Company.
(B)(1) In the event that subsequent to a Change in Control it is
determined that any payment or distribution by the Company to or for the
benefit of a participant, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, other
than any payment pursuant to this subparagraph (B) (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such participant
shall be entitled to receive from the Company, within 15 days following
the determination described in (2) below, an additional payment ("Excise
Tax Adjustment Payment") in an amount such that after payment by such
participant of all applicable Federal, state and local taxes (computed
at the maximum marginal rates and including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed
upon the Excise Tax Adjustment Payment, such participant retains an
amount of the Excise Tax Adjustment Payment equal to the Excise Tax
imposed upon the Payments.
(2) All determinations required to be made under this Article
VI(c)(iii)(B), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be
made by Cooper & Lybrand L.L.P., or such other national accounting firm
as the Company, or, subsequent to a Change in Control, the Company and
the participant jointly, may designate, for purposes of the Excise Tax,
which shall provide detailed supporting calculations to the Company and
the affected participant within 15 business days of the date of the
applicable Payment. Except as hereinafter provided, any determination
by Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the participant. As a result of
the uncertainty in the application of Section 4999 of the Code that may
exist at the time of the initial determination hereunder, it is possible
that (x) certain Excise Tax Adjustment Payments will not have been made
by the Company which should have been made (an
- 6 -
"Underpayment"), or (y) certain Excise Tax Adjustment Payments will have
been made which should not have been made (an "Overpayment"), consistent
with the calculations required to be made hereunder. In the event of an
Underpayment, such Underpayment shall be promptly paid by the Company to
or for the benefit of the affected participant. In the event that the
participant discovers that an Overpayment shall have occurred, the
amount thereof shall be promptly repaid to the Company.
(3) This Article VI(c)(iii)(B) shall not apply to any option (x)
that was granted prior to February 17, 1993 and (y) the holder of which
is an executive officer of the Company, as determined under the Exchange
Act.
(d) Payment for Issuance of Stock. At the time of exercise of any
option granted pursuant to the Plan, payment in full shall be made for all
stock then being purchased either in cash or, at the discretion of the
Committee, in whole or in part in Common Stock of the Company valued at its
then fair market value. Notwithstanding the foregoing, the Committee may in
its discretion permit the issuance of stock upon such other plan of payment as
it deems reasonable, provided that the then unpaid portion of the purchase
price shall be evidenced by a promissory note at such rate of interest and
upon such other terms and conditions as the Committee shall deem appropriate.
In all cases where stock is issued for less than present full payment of the
purchase price, there shall be placed upon the certificate or certificates
representing such stock a legend setting forth the amount paid at issuance,
and the amount remaining unpaid thereon, and stating that the stock is subject
to call for the remainder and may not be transferred by the holder until the
balance due thereon shall be fully paid.
The Committee, in its discretion and in accordance with its procedures,
may permit a participant to satisfy, in whole or in part, the income tax
withholding obligations in connection with the exercise of a non-qualified
stock option by having shares withheld from the shares to be issued upon the
exercise of the option or by delivering shares of Common Stock of the Company
having a fair market value equal to the amount needed to satisfy such
obligations.
(e) Conditions to Issuance. The Company shall not be obligated to
issue any stock unless and until:
(i) if the Company's outstanding Common Stock is at the time
listed upon any stock exchange, the shares of stock to be issued have
been listed, or authorized to be added to the list upon official notice
of issuance, upon such exchange, and
- 7 -
(ii) in the opinion of the Company's counsel there has been
compliance with applicable law in connection with the issuance and
delivery of stock 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
counsel for the Company may consider necessary in order to comply with the Se-
curities Act of 1933 as then in effect, and may require that the participant
agree that any sale of the stock 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 stock 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 of stock have been actually issued to the
participant pursuant to the Plan.
(f) Nontransferability of Options. No options may be transferred by
the participant other than by designation of beneficiary as provided in
subsection (j) of this Article, or by will or the laws of descent and
distribution, and during the participant's lifetime the option may be
exercised only by the participant.
(g) Consideration for Option. Each person receiving an option must
agree to remain as an employee or consultant upon the terms of employment or
the consulting arrangement then existing (unless different terms are mutually
agreed upon) for at least ninety days from the date the option is granted.
(h) Termination of Employment. If the employment of or consulting
arrangement with a participant terminates for any reason (including
termination by reason of the fact that any corporation is no longer a
subsidiary or affiliated company) 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, unless discharged for misconduct which in the
opinion of the Committee casts such discredit on the participant as to justify
termination of the option, the participant may thereafter exercise the option
as provided below. If such termination is voluntary on the part of the par-
ticipant, the option may be exercised only within ten days after the day of
termination. If such termination is involuntary on the part of the
participant, the option may be exercised within three months after the day of
termination. Except as expressly provided in the Plan or the option, whether
the termination of employment or consulting arrangement is voluntary or
involuntary, options may be exercised only if such options were exercisable at
the date of such termination, and an option may not be exercised at a time
when the option would not
- 8 -
have been exercisable had the employment or consulting arrangement continued.
Notwithstanding the preceding three sentences, the Committee may extend the
time within which or alter the terms and conditions on which the participant
may exercise an option after the termination of employment or the consulting
arrangement, and if the period within which an option may be exercised has
been extended, the Committee may terminate the unexercised portion of the
option if it shall determine that the participant has engaged in any activity
detrimental to the Company's interests. For purposes of this Article VI(h), 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 unless otherwise approved by the Committee),
(ii) in the case of a transfer of employment or the consulting arrangement
among the Company, its subsidiaries and affiliated companies, or (iii) by
virtue of a change of status from employee to consultant or from consultant to
employee.
(i) Retirement; Disability. If prior to the expiration date of an
option the employee shall retire on or after normal retirement date or if the
employment or consulting relationship is terminated by reason of permanent and
total disability, such option may be exercised to the extent exercisable on
the date of retirement or such termination, provided such option shall be
exercised within three months of the date of retirement or such termination.
Notwithstanding the foregoing, in its discretion the Committee may extend the
time within which or alter the terms and conditions on which an option held by
a retired or disabled option holder may be exercised, and if the period within
which an option may be exercised has been extended, the Committee may
terminate the unexercised portion of the option if it shall determine that the
participant has engaged in any activity detrimental to the Company's
interests.
(j) Death. If a participant dies at a time when entitled to exercise
an option, then at any time or times within one year after death (or such
further period as the Committee may allow) such option may be exercised, as to
all or any of the shares which the participant was entitled to purchase im-
mediately prior to death (or such additional shares covered by the option as
the Committee may allow), by the person or persons designated in writing by
the participant in such form of beneficiary designation as may be approved by
the Company, or failing designation by the participant's personal represen-
tative, executor or administrator or the person or persons to whom the option
is transferred by will or the applicable laws of descent and distribution.
The Company may decline to deliver shares to a designated beneficiary until it
receives indemnity against claims of third parties satisfactory to the
- 9 -
Company. Except as so exercised such option shall expire at the end of such
period.
Article VII. Replacement Options
The Committee may grant options under the Plan on terms and conditions
differing from those provided for in Article VI where such options are granted
in substitution for options held by employees of or consultants to other
entities who concurrently become employees of or consultants to the Company or
a subsidiary or an affiliated company as the result of a merger, consolidation
or other reorganization of such other entity with the Company or a subsidiary
or an affiliated company, or the acquisition by the Company or a subsidiary or
an affiliated company of the business, property or stock of such other entity.
The Committee may direct that the replacement options be granted on such terms
and conditions as the Committee considers appropriate in the circumstances.
Article VIII. Surrender of Options
The Committee may, in its discretion and upon such terms and conditions
as it deems appropriate, accept the surrender by a participant of a presently
exercisable right to purchase stock granted under an option and authorize
payment by the Company in consideration therefor of an amount equal to the
difference obtained by subtracting the option price of the stock from its fair
market value on the date of such surrender, such payment to be in cash or
shares of the Common Stock of the Company valued at fair market value on the
date of such surrender, or partly in such stock and partly in cash, provided
that the Committee determines such settlement is consistent with the purpose
of the Plan.
Article IX. Changes in Stock
The Board of Directors is authorized to make such adjustments, if any,
as it shall deem appropriate in the number and kind of shares which may be
granted under the Plan, the number and kind of shares which are subject to
options then outstanding and the purchase price of shares subject to such
outstanding options, in the event of any change in capital or shares of
capital stock, any special distribution to stockholders or any extraordinary
transaction (including a merger, consolidation or dissolution) to which the
Company is a party. The determination of the Board of Directors as to such
matters shall be conclusive and binding on all persons.
Article X. Employment Rights
The adoption of the Plan, the grant of options hereunder and the
participation by a participant in the Plan do not con-
- 10 -
fer upon any employee of or consultant to the Company or subsidiary or an
affiliated company any right to continue the employment or consulting
relationship with the Company or a subsidiary or an affiliated company, as the
case may be, nor does it in any way impair the right of the Company or a sub-
sidiary or an affiliated company to terminate the employment of any of its
employees or the consulting arrangement with any of its consultants at any
time, with or without cause, unless a written employment or consulting
agreement provides otherwise.
Article XI. Amendments
The Board of Directors may at any time or times amend the Plan or amend
any outstanding option or options for the purpose of satisfying the
requirements of changes in applicable laws or regulations or for any other
purpose which may at the time be permitted by law, provided that except to the
extent permitted under Article IX, without the approval of the stockholders of
the Company no amendment shall increase the maximum number of shares of stock
available under the Plan, alter the class of persons eligible to receive
options under the Plan, or without the consent of the participant void or
diminish options previously granted, nor increase or accelerate the conditions
required for the exercise of the same, except that nothing herein shall limit
the Company's right under Article VI(d) to call stock, issued for deferred
payment which is evidenced by a promissory note, where the participant is in
default of the obligations of such note.
- 11 -
Exhibit 10.h
TRIMAS CORPORATION
1988 RESTRICTED STOCK INCENTIVE PLAN
(Restated December 5, 1995)
1. Purpose of the Plan
The purpose of the Plan is to aid TriMas Corporation (the "Company") and
its subsidiaries and affiliated companies in attracting and retaining key
employees and consultants of outstanding ability. In addition, the Company
expects that it will benefit from the added interest which such individuals
will have in its welfare as a result of their ownership or increased ownership
of the Company's Common Stock. For purposes of the Plan a "subsidiary" is any
corporation in which the Company owns, directly or indirectly, stock
possessing more than fifty percent of the total combined voting power of all
classes of stock, and an "affiliated company" is any other corporation, at
least twenty percent of the total combined voting power of all classes of
stock of which is owned by the Company or by one or more other corporations in
a chain of corporations, at least twenty percent of the stock of each of which
is held by the Company or a subsidiary or another corporation within such
chain.
2. Stock Subject to the Plan
The shares which may be awarded under the Plan are shares of the
Company's Common Stock, par value $.01 per share. Subject to adjustment as
provided in Paragraph 6, the total number of shares of the Company's Common
Stock that may be awarded under the Plan shall not exceed 2,000,000; provided,
however, that such number of shares shall be reduced by the number of shares
of the Company's Common Stock as to which options have been granted under the
Company's 1988 Stock Option Plan (other than shares which are available for
further grants under Article IV of such plan notwithstanding the prior grant
of options with respect to such shares). Such stock may be authorized but
unissued shares or shares reacquired by the Company, including but not limited
to shares purchased on the open market. Shares of stock awarded under the
Plan which are later reacquired by the Company as a result of forfeiture
pursuant to the Plan shall again become available for awards under the Plan.
3. Administration
The Plan shall be administered by a committee (the "Committee") of three
or more of the Company's directors to be appointed by the Board of Directors.
Upon registration of the
Company's Common Stock under Section 12 of the Securities Exchange Act of 1934
(the "Exchange Act"), members of the Committee shall be "disinterested
persons" as such term is defined in Rule 16b-3(d) under the Exchange Act or
any rule which modifies, amends or replaces Rule 16b-3(d). The Committee
shall have the authority, consistent with the Plan, to determine the terms and
conditions of each award, to interpret the Plan and the agreements entered
into pursuant to the Plan, to adopt, amend and rescind rules and regulations
for its administration and the awards, and generally to conduct and administer
the Plan and to make all determinations in connection therewith which may be
necessary or advisable, and all such actions of the Committee shall be
conclusive and binding upon all parties concerned.
4. Eligibility
Key employees of and consultants to the Company and its subsidiaries and
affiliated companies, including officers of the Company (who may also be
directors, but excluding members of the Committee, any person who serves only
as a director of the Company and any consultant to the Company or any of its
subsidiaries or affiliated companies who is also a director of the Company or
who is not rendering services pursuant to a written agreement with the
corporation in question), as may be selected from time to time by the
Committee in its discretion, are eligible to receive awards under the Plan.
The Committee shall determine in its sole discretion the number of shares to
be awarded to each participant.
5. Terms and Conditions of Awards
All shares of Common Stock awarded to participants shall be subject to
the following terms and conditions, and to such other terms and conditions not
inconsistent with the Plan as shall be contained in each Award Agreement
("Agreement") referred to in Paragraph 5(f):
(a) At the time of each award there shall be established for the
shares of each participant a "Restricted Period" which shall be not less
than ninety days. Such Restricted Period may differ among participants
and may have different expiration dates with respect to portions of
shares covered by the same award. The Committee may also determine that
the expiration of any Restricted Period shall be subject to such
additional terms and conditions as it decides in its sole discretion and
as set forth in the participant's Agreement.
(b) Shares of Common Stock awarded to participants may not be
sold, encumbered or otherwise transferred, except as hereinafter
provided, during the Restricted Peri-
- 2 -
od pertaining to such shares. Except for such restrictions on transfer,
the participant shall have all the rights of a stockholder including but
not limited to the right to receive all dividends paid on such shares
(subject to the provisions of Paragraph 6) and the right to vote such
shares.
(c) If a participant ceases to be employed or retained by the
Company or any of its subsidiaries or affiliated companies for any
reason (including termination by reason of the fact that any corporation
is no longer a subsidiary or affiliated company), other than death, per-
manent and total disability, or, in the case of an employee, retirement
on or after normal retirement date, all shares of stock theretofore
awarded to the participant which are still subject to the restrictions
imposed by Paragraph 5(b) shall upon such termination of employment or
the consulting relationship be forfeited and transferred back to the
Company, provided, however, that if such employment or consulting
relationship is terminated by action of the Company or any of its
subsidiaries or affiliated companies without cause or by agreement of
the Company or any of its subsidiaries or affiliated companies and the
participant, the Committee may, but need not, determine that some or all
of the shares shall not be so forfeited, and provided further that the
Committee may remove or modify restrictions on shares which are not
forfeited. For purposes of this Paragraph 5(c), a participant's
employment or consulting arrangement shall not be considered terminated
(i) in the case of transfers of employment or the consulting arrangement
among the Company, its subsidiaries and affiliated companies, (ii) by
virtue of a change of status from employee to consultant or from
consultant to employee, or (iii) in the case of interruption in service,
not exceeding one year in duration unless otherwise approved by the
Committee, for approved sick leave or other bona fide leave of absence.
(d) If a participant ceases to be employed or retained by the
Company or any of its subsidiaries or affiliated companies by reason of
death or permanent and total disability or if an employee ceases to be
employed by the Company or any of its subsidiaries or affiliated
companies by reason of retirement on or after normal retirement date,
the restrictions imposed by Paragraph 5(b) shall lapse with respect to
the shares then subject to restrictions, except to the extent provided
to the contrary in the Agreement.
- 3 -
(e) Shares of Common Stock awarded under the Plan shall not be
evidenced by certificates until restrictions lapse but shall be
registered in the name of the participant in book entry form in the
Company's stock register.
(f) The participant shall enter into an Agreement with the
Company in a form specified by the Committee agreeing to the terms and
conditions of the award, the expiration of the Restricted Period as to
the shares covered by the award, and such other matters, including com-
pliance with applicable federal and state securities laws and methods of
withholding or providing for the payment of required taxes, as the
Committee in its sole discretion shall determine. The Committee may at
any time amend the terms of any Agreement consistent with the terms of
the Plan, except that without the participant's written consent no such
amendment shall adversely affect the rights of the participant.
(g) At the expiration of the Restricted Period as to shares
covered by any award, the Company shall redeliver the stock certificates
deposited with it pursuant to Paragraph 5(e) and as to which the
Restricted Period has expired, as follows:
(1) if an assignment to a trust has been made in accordance
with Paragraph 5(i), to such trust; or
(2) if the Restricted Period has expired by reason of death
and a beneficiary has been designated in form approved by the
Company, to the beneficiary so designated; or
(3) in all other cases, to the participant or the legal
representative of the participant's estate.
Upon written request, the Company will instruct its stock transfer agent
that such certificates may be reissued without legend.
(h) (1) Notwithstanding any of the provisions of this Plan or
instruments evidencing awards granted hereunder, in the case of a Change
in Control of the Company, each award theretofore granted shall immedi-
ately become fully vested and non-forfeitable and shall thereupon be dis-
tributed to participants as soon as practicable, free of all
restrictions. A Change in Control shall occur if any of the events
described below in subparagraphs (A), (B) or (C) shall have occurred,
unless the holder of any such award shall have consented
- 4 -
to the application of subparagraph (C) in lieu of subparagraphs (A) and
(B):
(A) 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 directly or indirectly purchases or otherwise
becomes the "beneficial owner" (as defined in Rule 13d3 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 twenty-five percent or more of the com-
bined voting power of all outstanding voting securities of (A) the
Company, or (B) of an Affiliated Party (as hereinafter defined);
(B) 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; or
(C) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
(other than Excluded Directors, as hereinafter defined), whose
election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of
such Board who were either directors on such Board at the
beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason
cease to constitute at least a majority of the members thereof.
For purposes hereof, "Excluded Directors" are directors whose
election by the Board or approval by the Board for stockholder
election occurred within one year of any "person" or "group of
persons", as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act, commencing a tender offer for, or becoming the
beneficial owner of, voting securities representing 25 percent or
more of the combined voting power of
- 5 -
all outstanding voting securities of the Company, other than
pursuant to a tender offer approved by the Board prior to its
commencement or pursuant to stock acquisitions approved by the
Board prior to their representing 25 percent or more of such
combined voting power.
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 then owns at least twenty
percent of the combined voting power of all voting securities of the Company.
(2)(A) In the event that subsequent to a Change in Control it is
determined that any payment or distribution by the Company to or for the
benefit of a participant, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, other
than any payment pursuant to this subparagraph (2) (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such participant
shall be entitled to receive from the Company, within 15 days following
the determination described in (B) below, an additional payment ("Excise
Tax Adjustment Payment") in an amount such that after payment by such
participant of all applicable Federal, state and local taxes (computed
at the maximum marginal rates and including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed
upon the Excise Tax Adjustment Payment, such participant retains an
amount of the Excise Tax Adjustment Payment equal to the Excise Tax
imposed upon the Payments.
(B) All determinations required to be made under this Section
5(h)(2), including whether an Excise Tax Adjustment Payment is required
and the amount of such Excise Tax Adjustment Payment, shall be made by
Cooper & Lybrand L.L.P., or such other national accounting firm as the
Company, or, subsequent to a Change in Control, the Company and the
participant jointly, may designate, for purposes of the Excise Tax,
which shall provide detailed
- 6 -
supporting calculations to the Company and the affected participant
within 15 business days of the date of the applicable Payment. Except
as hereinafter provided, any determination by Coopers & Lybrand L.L.P.,
or such other national accounting firm, shall be binding upon the
Company and the participant. As a result of the uncertainty in the
application of Section 4999 of the Code that may exist at the time of
the initial determination hereunder, it is possible that (x) certain
Excise Tax Adjustment Payments will not have been made by the Company
which should have been made (an "Underpayment"), or (y) certain Excise
Tax Adjustment Payments will have been made which should not have been
made (an "Overpayment"), consistent with the calculations required to be
made hereunder. In the event of an Underpayment, such Underpayment
shall be promptly paid by the Company to or for the benefit of the
affected participant. In the event that the participant discovers that
an Overpayment shall have occurred, the amount thereof shall be promptly
repaid to the Company.
(C) This Section 5(h)(2) shall not apply to any Award (x) that
was granted prior to February 17, 1993 and (y) the holder of which is an
executive officer of the Company, as determined under the Exchange Act.
(i) Notwithstanding any other provision of this Plan, a
participant may assign all rights under any award to a revocable grantor
trust established by the participant for the sole benefit of the
participant during the life of the participant, 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 an award does not meet the criteria of a trust to which an
assignment is permitted by the terms of this paragraph, 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 awards shall revert to and remain solely in the
participant. Notwithstanding a qualified assignment, the participant,
and not the trust to which rights under 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, a subsidiary or affiliated company, but such
- 7 -
trust and the participant shall be bound by all of the terms and
conditions of the Agreement and this Plan.
The Committee, the Company and its officers, agents and employees
may rely upon any beneficiary designation, assignment or other in-
strument 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, his personal representa-
tives and all persons asserting a claim based on an award granted
pursuant to this Plan. The delivery by a participant of a beneficiary
designation, or an assignment of rights under an award as permitted by
this Paragraph 5(i), 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 in-
curred in defending against claims, of any person (including the
participant) which may be asserted or alleged to be based upon 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.
Issuance of shares as to which restrictions have lapsed in the name of,
and delivery to, the trust to which rights may be assigned shall be con-
clusively considered issuance and delivery to the participant.
(j) The Committee, in its discretion and in accordance with its
procedures, may permit the participant to satisfy, in whole or in part,
the applicable income tax withholding obligations when the restrictions
imposed by Paragraph 5(b) lapse by having shares withheld from the
shares as to which the Restricted Period has expired or by delivering
shares of Common Stock of the Company having a fair market value equal
to the amount needed to satisfy such obligations.
(k) In its sole discretion the Committee may also provide the
participant with the right to receive cash payments in connection with
shares of Common Stock awarded under the Plan (including shares
previously awarded), the amount of which payments are based, in whole or
only in part, on the value of such Common Stock. The right to receive
such payments shall be subject to such other terms and conditions not
inconsistent with the Plan as the Committee may determine.
- 8 -
6. Changes in Capitalization
If there is a change in, reclassification, subdivision or combination
of, stock dividend on, or exchange of stock by the Company for the outstanding
Common Stock of the Company, the maximum aggregate number and class of shares
as to which awards may be granted under the Plan shall be appropriately
adjusted by the Committee whose determination thereof shall be conclusive.
Unless the Committee shall otherwise determine, any shares of stock or other
securities received by a participant with respect to shares still subject to
the restrictions imposed by Paragraph 5(b) will be subject to the same
restrictions and shall be deposited with the Company.
If the Company shall be consolidated or merged with another corporation,
the stock, securities or other property which a participant is entitled to
receive by reason of his ownership of the shares of stock subject to the re-
strictions imposed pursuant to Paragraph 5(b) shall be subject to the same or
equivalent restrictions unless the Committee shall determine otherwise at that
time.
7. Amendment of the Plan
The Board of Directors may from time to time amend or discontinue the
Plan, except that without the approval of the Company's stockholders no
amendment shall increase the number of shares which may be awarded under the
Plan, extend the date for awards of shares under the Plan beyond December 31,
1998 or change the standards of eligibility of employees or consultants
eligible to participate in the Plan. The number of shares awardable under the
Plan may, however, without stockholder approval, be adjusted pursuant to the
adjustment provisions described in Paragraph 6 hereof.
8. Employment Rights
The adoption of the Plan, the award of stock hereunder and the
participation by a participant in the Plan do not confer upon any employee of
or consultant to the Company or a subsidiary or an affiliated company any
right to continue the employment or consulting relationship with the Company
or a subsidiary or an affiliated company, as the case may be, nor does it in
any way impair the right of the Company or a subsidiary or an affiliated
company to terminate the employment of any of its employees or the consulting
arrangement with any of its consultants at any time, with or without cause,
unless a written employment or consulting agreement provides otherwise.
- 9 -
9. Effective Date and Termination of Awards
The Plan shall become effective when approved by the stockholders of the
Company and no shares may be awarded under the Plan after December 31, 1998.
- 10 -
Exhibit 10.i
MASCOTECH, INC.
1984 RESTRICTED STOCK INCENTIVE PLAN
(Restated December 6, 1995)
l. Purpose of the Plan
The purpose of the 1984 Restricted Stock Incentive Plan (the "Plan") is
to aid MascoTech, Inc. (the "Company") and its subsidiaries and affiliated
companies in securing and retaining key employees and consultants of
outstanding ability and to motivate such individuals to exert their best
efforts on behalf of the Company and its subsidiaries and affiliated
companies. In addition, the Company expects that it will benefit from the
added interest which such individuals will have in its welfare as a result of
their ownership or increased ownership of the Company's Common Stock. For
purposes of the Plan a "subsidiary" is any corporation in which the Company
owns, directly or indirectly, stock possessing more than fifty percent of the
total combined voting power of all classes of stock. For purposes of
Paragraph 4 of the Plan, an "affiliated company" is any other corporation (and
its subsidiaries) in which the Company or its subsidiaries own stock
possessing at least twenty percent of the total combined voting power of all
classes of stock, and for all other purposes of the Plan, an "affiliated
company" is any other corporation, at least twenty percent of the total
combined voting power of all classes of stock of which is owned by the Company
or by one or more other corporations in a chain of corporations, at least
twenty percent of the stock of each of which is held by the Company or a
subsidiary or another corporation within such chain.
2. Stock Subject to the Plan
The total number of shares of the Company's Common Stock that may be
awarded under the Plan shall not exceed in the aggregate 8,160,000 shares;
provided, however, that such total amount shall be reduced by the aggregate
number of shares of the Company's Common Stock as to which options have been
granted under the Company's 1984 Stock Option Plan since the original adoption
thereof (other than shares which are available for further grants under
Article IV of such Plan notwithstanding the prior grant of options with
respect to such shares). Such stock may be authorized but unissued shares or
shares of Common Stock reacquired by the Company, including but not limited to
shares purchased on the open market. Shares of stock awarded under the Plan
which are later reacquired by the Company as a result of forfeiture pursuant
to the Plan shall again become available for awards under the Plan.
3. Administration
The Board of Directors of the Company shall appoint a committee (the
"Committee") consisting of two or more members of the Board of Directors who
shall administer the Plan. No director shall become or remain a member of the
Committee unless at the time of his exercise of any discretionary function as
a Committee member such director is not and has not at any time within one
year prior to the exercise of such discretion been eligible for selection as a
person to whom stock may be allocated or to whom stock options or stock
appreciation rights may be granted pursuant to the Plan or any other plan of
the Company or any of its affiliates entitling the participants therein to
acquire stock, stock options or stock appreciation rights of the Company or
any of its affiliates. The Committee shall have the authority, consistent
with the Plan, (a) to determine the terms and conditions of each award, (b) to
interpret the Plan and the agreements under the Plan, (c) to adopt, amend and
rescind rules and regulations for the administration of the Plan and the
awards, (d) to delegate to directors of the Company, who need not be
"disinterested persons" within the meaning of Rule 16b-3 promulgated by the
Securities and Exchange Commission under Section 16 of the Securities Exchange
Act of 1934, the authority to amend awards granted to participants, provided
such participants are not directors or officers of the Company for purposes of
Section 16, and generally to conduct and administer the Plan and to make all
determinations in connection therewith which may be necessary or advisable.
All such actions of the Committee shall be binding upon all participants.
4. Eligibility
Key employees of and consultants to the Company and its subsidiaries and
affiliated companies, including officers of the Company who are also employees
(who may also be directors, but excluding members of the Committee, any person
who serves only as a director or as a non-employee officer of the Company and
any consultant to the Company or any of its subsidiaries or affiliated
companies who is also a director of the Company or who is not rendering
services pursuant to a written agreement with the corporation in question), as
may be selected from time to time by the Committee in its discretion, are eli-
gible to receive awards under the Plan. The Committee shall determine in its
sole discretion the number of shares to be awarded to each such participant.
5. Terms and Conditions of Awards
All shares of Common Stock awarded to participants under the Plan shall
be subject to the following terms and conditions, and to such other terms and
conditions not inconsistent with the Plan as
- 2 -
shall be contained in each Award Agreement ("Agreement") referred to in
Paragraph 5(f):
(a) At the time of each award there shall be established for the
shares of each participant a "Restricted Period" which shall be not less
than 90 days. Such Restricted Period may differ among participants and
may have different expiration dates with respect to portions of shares
covered by the same award. The Committee may also determine that the
expiration of any Restricted Period shall be subject to such additional
terms and conditions as it decides in its sole discretion and as set
forth in the participant's Agreement.
(b) Shares of stock awarded to participants may not be sold,
encumbered or otherwise transferred, except as hereinafter provided,
during the Restricted Period pertaining to such shares. Except for such
restrictions on transfer and the restrictions applicable to non-cash
distributions, the participant shall have all the rights of a
stockholder including but not limited to the right to receive all
dividends paid on such shares (subject to the provisions of Paragraph 6)
and the right to vote such shares.
(c) If a participant ceases to be employed or retained by the
Company or any of its subsidiaries or affiliated companies for any
reason (including termination by reason of the fact that such
corporation is no longer a subsidiary or affiliated company) other than
death, permanent and total disability, or, in the case of an employee,
retirement on or after normal retirement date, all shares of stock
theretofore awarded to the participant which are still subject to the
restrictions imposed by Paragraph 5(b) shall upon such termination be
forfeited and transferred back to the Company, provided, however, that
in the event such employment or consulting relationship is terminated by
action of the Company or any of its subsidiaries or affiliated companies
without cause or by agreement of the Company or any of its subsidiaries
or affiliated companies and the participant, the Committee may, but need
not, determine that some or all of the shares shall be free of
restrictions. For purposes of this Paragraph 5(c), a participant's
employment or consulting agreement shall not be considered terminated
(i) in the case of transfers of employment or the consulting arrangement
among the Company, its subsidiaries and affiliated companies, (ii) by
virtue of a change of status from employee to consultant or from
consultant to employee, or (iii) in the case of interruption in service,
not exceeding one year in duration unless otherwise approved by the
Committee, for approved sick leave or other bona fide leave of absence.
(d) If a participant ceases to be employed or retained by the
Company or any of its subsidiaries or affiliated
- 3 -
companies by reason of death or permanent and total disability or if an
employee ceases to be employed by the Company or any of its subsidiaries
or affiliated companies by reason of retirement on or after normal re-
tirement date, the restrictions imposed by Paragraph 5(b) shall lapse
with respect to the shares then subject to restrictions, except to the
extent provided to the contrary in the Agreement.
(e) Each certificate issued in respect of shares awarded under
the Plan shall be registered in the name of the participant and
deposited by the participant with the Company, together with a stock
power endorsed in blank, and shall bear the following legend:
"The sale, encumbrance, or other transfer of this certificate and
the shares of stock represented hereby are subject to the terms and
conditions (including a contingent transfer obligation) contained in the
Masco Industries, Inc. 1984 Restricted Stock Incentive Plan and an Award
Agreement entered into between the registered owner and MascoTech, Inc.
Copies of such Plan and Award Agreement are on file in the office of the
Secretary of MascoTech, Inc., Taylor, Michigan."
(f) The participant shall enter into an Agreement with the
Company in a form specified by the Committee agreeing to the terms and
conditions of the award, the expiration of the Restricted Period as to
the shares covered by the award, and such other matters, including com-
pliance with applicable federal and state securities laws and methods of
withholding or providing for the payment of required taxes, as the
Committee shall in its sole discretion determine. The Committee may at
any time amend the terms of any Agreement consistent with the terms of
the Plan, except that without the participant's written consent no such
amendment shall adversely affect the rights of the participant who is a
party to such Agreement.
(g) At the expiration of the Restricted Period as to shares
covered by any award, the Company shall redeliver the stock certificates
deposited with it pursuant to Paragraph 5(e) and as to which the
Restricted Period has expired, as follows:
(1) if an assignment to a trust has been made in accordance
with Paragraph 5(i), to such trust; or
(2) if the Restricted Period has expired by reason of death
and a beneficiary has been designated in form approved by the
Company, to the beneficiary so designated; or
- 4 -
(3) in all other cases, to the participant or the legal
representative of the participant's estate.
Upon written request, the Company will instruct its stock transfer agent
that such certificates may be reissued without legend.
(h) (1) Notwithstanding any of the provisions of this Plan or
instruments evidencing awards heretofore or hereafter granted hereunder,
in the case of a Change in Control of the Company, each award
theretofore granted shall immediately become fully vested and non-
forfeitable and shall thereupon be distributed to participants as soon
as practicable, free of all restrictions. A Change in Control shall
occur if any of the events described below in subparagraphs (A), (B) or
(C) shall have occurred, unless the holder of any such award shall have
consented to the application of subparagraph (C) in lieu of
subparagraphs (A) and (B):
(A) any "person" or "group of persons" as such terms are
used in Section 13(d) and 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act") other than pursuant to a transaction or
agreement previously approved by the Board 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 exer-
cisable immediately, with the passage of time, or subject to any
condition), of voting securities representing 25% or more of the
combined voting power of all outstanding voting securities of (A)
the Company or (B) of Masco Corporation, a Delaware corporation
("Masco");
(B) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's or Masco's Board of Directors, and any
new directors whose election by either 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; or
(C) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
(other than Excluded Directors, as hereinafter defined), whose
election by such Board or nomination for election by stockholders
was approved by
- 5 -
a vote of at least two-thirds of the members of such Board who
were either directors on such Board at the beginning of the period
or whose election or nomination for election as directors was
previously so approved, for any reason cease to constitute at
least a majority of the members thereof. For purposes hereof,
"Excluded Directors" are directors whose election by the Board or
approval by the Board for stockholder election occurred within one
year of any "person" or "group of persons", as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act, commencing a
tender offer for, or becoming the beneficial owner of, voting
securities representing 25 percent or more of the combined voting
power of all outstanding voting securities of the Company, other
than pursuant to a tender offer approved by the Board prior to its
commencement or pursuant to stock acquisitions approved by the
Board prior to their representing 25 percent or more of such
combined voting power.
(2)(A) In the event that subsequent to a Change in
Control it is determined that any payment or distribution by the
Company to or for the benefit of a participant, whether paid or
payable or distributed or distributable pursuant to the terms of
this Plan or otherwise, other than any payment pursuant to this
subparagraph (2) (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code"), or any interest or
penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such
participant shall be entitled to receive from the Company, within
15 days following the determination described in (B) below, an
additional payment ("Excise Tax Adjustment Payment") in an amount
such that after payment by such participant of all applicable
Federal, state and local taxes (computed at the maximum marginal
rates and including any interest or penalties imposed with respect
to such taxes), including any Excise Tax, imposed upon the Excise
Tax Adjustment Payment, such participant retains an amount of the
Excise Tax Adjustment Payment equal to the Excise Tax imposed upon
the Payments.
(B) All determinations required to be made under this
Section 5(h)(2), including whether an Excise Tax Adjustment
Payment is required and the amount of such Excise Tax Adjustment
Payment, shall be made by Cooper & Lybrand L.L.P., or such other
national accounting firm as the Company, or, subsequent to a
Change in Control, the Company and the participant jointly, may
designate, for purposes of the Excise Tax, which shall provide
detailed
- 6 -
supporting calculations to the Company and the affected
participant within 15 business days of the date of the applicable
Payment. Except as hereinafter provided, any determination by
Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the participant. As a
result of the uncertainty in the application of Section 4999 of
the Code that may exist at the time of the initial determination
hereunder, it is possible that (x) certain Excise Tax Adjustment
Payments will not have been made by the Company which should have
been made (an "Underpayment"), or (y) certain Excise Tax
Adjustment Payments will have been made which should not have been
made (an "Overpayment"), consistent with the calculations required
to be made hereunder. In the event of an Underpayment, such
Underpayment shall be promptly paid by the Company to or for the
benefit of the affected participant. In the event that the
participant discovers that an Overpayment shall have occurred, the
amount thereof shall be promptly repaid to the Company.
(C) This Section 5(h)(2) shall not apply to any award that
was granted to an executive officer of the Company, as determined
under the Exchange Act.
(i) Notwithstanding any other provision of the Plan, a
participant may assign all rights under any award to a revocable grantor
trust established by the participant for the sole benefit of the
participant during the life of the participant, 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 an award does not meet the criteria of a trust to which an
assignment is permitted by the terms of this Paragraph 5(i) 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 awards shall revert to and remain solely in the
participant. Notwithstanding a qualified assignment, the participant,
and not the trust to which rights under 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, a subsidiary or affiliated company, but such
trust and the participant shall be bound by all of the terms and
conditions of the Agreement and the Plan.
- 7 -
The Committee, the Company and its officers, agents and employees
may rely upon any beneficiary designation, assignment or other in-
strument 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, his personal representa-
tives and all persons asserting a claim based on an award granted
pursuant to the Plan. The delivery by a participant of a beneficiary
designation, or an assignment of rights under an award as permitted by
this Paragraph 5(i), 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 in-
curred in defending against claims, of any person (including the
participant) which may be asserted or alleged to be based upon 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.
Issuance of shares as to which restrictions have lapsed in the name of,
and delivery to, the trust to which rights may be assigned shall be con-
clusively considered issuance and delivery to the participant.
(j) The Committee, in its discretion and in accordance with the
procedures established by the Committee, may permit the participant to
satisfy, in whole or in part, the applicable income tax withholding
obligations when the restrictions imposed by Paragraph 5(b) lapse by
having withheld from the shares as to which the Restricted Period has
expired or by delivering from shares of Common Stock of the Company
owned by the participant such number of shares having a fair market
value equal to the amount needed to satisfy such obligations.
(k) In its sole discretion the Committee may also provide the
participant with the right to receive cash payments in connection with
shares of Common Stock awarded under the Plan (including shares
previously awarded), the amount of which payments are based, in whole or
only in part, on the value of such Common Stock. The right to receive
such payments shall be subject to such other terms and conditions not
inconsistent with the Plan as the Committee may determine.
6. Changes in Capitalization
In the event there is a change in, reclassification, subdivision or
combination of, stock dividend on, or exchange of stock by the Company for the
outstanding Common Stock of the Company, the maximum aggregate number and
class of shares as to which awards may
- 8 -
be granted under the Plan may be appropriately adjusted by the Committee whose
determination thereof shall be conclusive. Unless the Committee shall
otherwise determine, any shares of stock or other securities received by a
participant with respect to shares still subject to the restrictions imposed
by Paragraph 5(b) will be subject to the same restrictions and shall be
deposited with the Company.
If the Company shall be consolidated or merged with another corporation,
the stock, securities or other property which a participant is entitled to
receive by reason of his ownership of the shares of stock subject to the
restrictions imposed pursuant to Paragraph 5(b) will be subject to the same or
equivalent restrictions unless the Committee shall determine otherwise at that
time.
7. Amendment of the Plan
The Board of Directors may from time to time amend or discontinue the
Plan, except that without the approval of stockholders of the Company, no
amendment shall increase the total number of shares which may be awarded under
the Plan, extend the date for awards of shares under the Plan beyond December
31, 1999 or change the standards of eligibility to participate in the Plan.
The total number of shares which may be awarded under the Plan may, however,
be adjusted without stockholder approval, pursuant to the adjustment
provisions described in Paragraph 6.
8. Effective Date and Termination of Plan
The Plan shall become effective when approved by the stockholders of the
Company and no shares may be awarded under the Plan after December 31, 1999.
- 9 -
Exhibit 10.j
MASCOTECH, INC.
1984 STOCK OPTION PLAN
(Restated December 6, 1995)
Article I. Purpose
The purpose of the 1984 Stock Option Plan (the "Plan") is to secure for
MascoTech, Inc. (the "Company") and its stockholders the benefits inherent in
stock ownership by selected key employees of and consultants to the Company
and its subsidiaries and affiliated companies who in the judgment of the
committee responsible for the administration of the Plan are largely
responsible for the Company's growth and success. The Plan is designed to
accomplish this purpose by offering such employees and consultants an
opportunity to purchase shares of the Common Stock of the Company. For
purposes of the Plan a "subsidiary" is any corporation in which the Company
owns, directly or indirectly, stock possessing more than fifty percent of the
total combined voting power of all classes of stock. For purposes of Articles
III and VII of the Plan, an "affiliated company" is any other corporation (and
its subsidiaries) in which the Company or its subsidiaries own stock
possessing at least twenty percent of the total combined voting power of all
classes of stock, and for all other purposes of the Plan, an "affiliated
company" is any other corporation, at least twenty percent of the total
combined voting power of all classes of stock of which is owned by the Company
or by one or more other corporations in a chain of corporations, at least
twenty percent of the stock of each of which is held by the Company or a
subsidiary or another corporation within such chain.
Article II. Administration
The Plan shall be administered by a committee (the "Committee")
consisting of three or more of the Company's directors to be appointed by the
Board of Directors. No director shall become or remain a member of the
Committee unless at the time of his exercise of any discretionary function as
a Committee member such director is not eligible, and has not at any time
within one year prior to the exercise of such discretion been eligible for
selection as a person to whom stock may be allocated or to whom stock options
or stock appreciation rights may be granted pursuant to the Plan or any other
plan of the Company or any of its affiliates entitling the participants
therein to acquire stock, stock options or stock appreciation rights of the
Company or any of its affiliates. The Committee shall have authority,
consistent with the Plan:
(a) to determine which key employees of and consultants to the
Company, its subsidiaries and affiliated companies shall be granted
options;
(b) to determine the time or times when options shall be granted
and the number of shares of Common Stock to be subject to each option;
(c) to determine the option price of the stock subject to each
option and the method of payment of such price;
(d) to determine the time or times when each option becomes
exercisable, limitations on exercise, and the duration of the exercise
period;
(e) to prescribe the form or forms of the instruments evidencing
any options granted under the Plan and of any other instruments required
under the Plan, and to change such forms from time to time;
(f) to designate options granted to key employees of the Company
or its "subsidiaries" under the Plan as "incentive stock options"
("ISOs"), as such terms are defined under the Internal Revenue Code;
(g) to adopt, amend and rescind rules and regulations for the
administration of the Plan and the options and for its own acts and
proceedings; and
(h) to decide all questions and settle all controversies and
disputes which may arise in connection with the Plan.
All decisions, determinations and interpretations of the Committee shall
be binding on all parties concerned.
Article III. Participants
Key employees of and consultants to the Company, its subsidiaries or
affiliated companies, including officers of the Company who are also employees
(who may also be directors, but excluding members of the Committee, any person
who serves only as a director or a non-employee officer of the Company and any
consultant to the Company or any of its subsidiaries or affiliated companies
who is not rendering services pursuant to a written agreement with the
corporation in question), as may be selected from time to time by the
Committee in its discretion, are eligible to receive options under the Plan.
The grant of an option to an employee or consultant shall not entitle such
individual to other grants or options, nor shall such grant disqualify such
individual from further participation.
- 2 -
Article IV. Limitations
No options shall be granted under the Plan after December 31, 1999, but
options theretofore granted may extend beyond that date. Subject to
adjustment as provided in Article IX, the number of shares of Common Stock of
the Company which may be issued under the Plan shall not exceed in the
aggregate 8,160,000 shares; provided, however, that such total amount shall be
reduced by the aggregate number of shares of the Company's Common Stock
awarded under the Company's 1984 Restricted Stock Incentive Plan since the
original adoption thereof (other than shares forfeited to the Company which
are thereby available for further awards under Paragraph 2 of such Plan). To
the extent that any option granted under the Plan shall expire or terminate
unexercised or for any reason become unexercisable as to any stock subject
thereto, such stock shall thereafter be available for further grants under the
Plan, within the limit specified above. If an option granted under the Plan
shall be accepted for surrender pursuant to Article VIII, any stock covered by
options so accepted shall not thereafter be available for the granting of
other options under the Plan.
Notwithstanding any provision to the contrary in the Plan, no option may
be designated an ISO unless all of the following conditions are satisfied with
respect to such option:
(a) Such option must be granted on or prior to May 1, 1994, and
such option by its terms is not exercisable after the expiration of ten
years from the date such option is granted;
(b) Either (i) the employee to whom such option is granted does
not, determined at the time such option is granted, own capital stock
representing more than ten percent of the voting power of all classes of
stock of the Company, its parent or any of its subsidiaries, or (ii)
the option price is at least 110 percent of the fair market value,
determined at the time such option is granted, of the stock subject to
such option and such option by its terms is not exercisable more than
five years from the date it is granted;
(c) Such option by its terms is not exercisable while there is
outstanding an ISO which was granted to the same employee at an earlier
time. For purposes of this clause (c), an ISO which has not been
exercised in full shall be deemed to be outstanding, notwithstanding any
cancellation or termination thereof, until the expiration of the period
during which it could have been exercised under its original terms; and
- 3 -
(d) The aggregate fair market value of the Common Stock subject
to such option plus the aggregate fair market value of Common Stock
subject to ISOs previously or concurrently granted to the same employee
in the same calendar year (all determined at the respective dates of
grant of such options) must not exceed $100,000 (the "Basic Amount")
plus the sum of the "Carry-Over Amounts" for each of the three calendar
years immediately preceding the year in which such option is granted.
The "Carry-Over Amount", as used in this clause (d) for any calendar
year, shall mean (i) fifty percent of the amount by which $100,000
exceeds the fair market value, determined at the time of grant, of
Common Stock subject to ISOs which were granted during such calendar
year to the employee for whom the Carry-Over Amount is being determined,
or (ii) $50,000 in the case such employee has not in such calendar year
been granted any ISO. No amount shall be included in a Carry-Over
Amount for any year to the extent such amount was theretofore
necessarily included as a Carry-Over Amount to permit the qualification
of an ISO under this clause (d), and Carry-Over Amounts shall only be
utilized to permit the qualification of an ISO under this clause (d) in
the order in which they first arose and then only if the Basic Amount
has not theretofore been utilized to permit such qualification.
Article V. Stock to be Issued
The stock as to which options may be granted is the Company's Common
Stock, $1 par value. Such Stock may be authorized but unissued shares or
shares of Common Stock reacquired by the Company, including but not limited to
shares purchased on the open market. The Board of Directors and the officers
of the Company shall take any appropriate action required for such issuance.
Article VI. Terms and Conditions of Options
All options granted under the Plan shall be subject to the following
terms and conditions (except as otherwise provided in Article VII) and to such
other terms and condition as the Committee shall deem appropriate.
(a) Option Price. Each option granted hereunder shall have such per
share option price as the Committee may determine, but not less than the fair
market value of Common Stock of the Company on the date the option is granted.
(b) Terms of Options. The term of an option shall not exceed eleven
years from the date of grant. The date of grant shall be the date on which
the option is awarded by the Committee.
- 4 -
(c) Exercise of Options.
(i) Each option shall be made exercisable not less than six
months from the date of grant and at such time or times, whether or not
in installments, as the Committee shall prescribe at the time the option
is granted.
(ii) A person 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 of the number of shares of stock elected for exercise,
such notice to be accompanied by such instruments or documents as may be
required by the Committee, and such person shall at the time of such
exercise tender the purchase price of the stock elected for exercise
unless otherwise directed by the Committee.
(iii) (A) Notwithstanding any of the provisions of this Plan or
instruments evidencing options heretofore or hereafter granted
hereunder, in the case of a Change in Control of the Company, each
Option then outstanding shall immediately become exercisable in full. A
Change in Control shall occur if any of the events described below in
subparagraphs (1), (2) or (3) shall have occurred, unless the holder of
any such option shall have consented to the application of subparagraph
(3) in lieu of subparagraphs (1) and (2):
(1) any "person" or "group of persons" as such terms are
used in Section 13(d) and 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act") other than pursuant to a transaction or
agreement previously approved by the Board 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% or more of
the combined voting power of all outstanding voting securities of
(A) the Company or (B) of Masco Corporation, a Delaware
corporation ("Masco");
(2) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's or Masco's Board of Directors, and any
new directors whose election by either 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
- 5 -
approved, for any reason cease to constitute at least a majority
of the members thereof; or
(3) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
(other than Excluded Directors, as hereinafter defined), whose
election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of
such Board who were either directors on such Board at the
beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason
cease to constitute at least a majority of the members thereof.
For purposes hereof, "Excluded Directors" are directors whose
election by the Board or approval by the Board for stockholder
election occurred within one year of any "person" or "group of
persons", as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act, commencing a tender offer for, or becoming the
beneficial owner of, voting securities representing 25 percent or
more of the combined voting power of all outstanding voting
securities of the Company, other than pursuant to a tender offer
approved by the Board prior to its commencement or pursuant to
stock acquisitions approved by the Board prior to their
representing 25 percent or more of such combined voting power.
(B)(1) In the event that subsequent to a Change in Control it
is determined that any payment or distribution by the Company to or for
the benefit of a participant, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, other
than any payment pursuant to this subparagraph (B) (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such participant
shall be entitled to receive from the Company, within 15 days following
the determination described in (2) below, an additional payment ("Excise
Tax Adjustment Payment") in an amount such that after payment by such
participant of all applicable Federal, state and local taxes (computed
at the maximum marginal rates and including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed
upon the Excise Tax Adjustment Payment, such participant retains an
amount of the Excise Tax Adjustment Payment equal to the Excise Tax
imposed upon the Payments.
- 6 -
(2) All determinations required to be made under this Article
VI(c)(iii)(B), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be
made by Cooper & Lybrand L.L.P., or such other national accounting firm
as the Company, or, subsequent to a Change in Control, the Company and
the participant jointly, may designate, for purposes of the Excise Tax,
which shall provide detailed supporting calculations to the Company and
the affected participant within 15 business days of the date of the
applicable Payment. Except as hereinafter provided, any determination
by Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the participant. As a result of
the uncertainty in the application of Section 4999 of the Code that may
exist at the time of the initial determination hereunder, it is possible
that (x) certain Excise Tax Adjustment Payments will not have been made
by the Company which should have been made (an "Underpayment"), or (y)
certain Excise Tax Adjustment Payments will have been made which should
not have been made (an "Overpayment"), consistent with the calculations
required to be made hereunder. In the event of an Underpayment, such
Underpayment shall be promptly paid by the Company to or for the benefit
of the affected participant. In the event that the participant
discovers that an Overpayment shall have occurred, the amount thereof
shall be promptly repaid to the Company.
(3) This Article VI(c)(iii)(B) shall not apply to any option
that was granted to an executive officer of the Company, as determined
under the Exchange Act.
(d) Payment for Issuance of Stock. Upon and at the time of exercise of
any option granted pursuant to the Plan, payment in full shall be made for all
such stock then being purchased either in cash or, at the discretion of the
Committee, in whole or in part in Common Stock of the Company valued at its
then fair market value. Notwithstanding the foregoing, the Committee may in
its discretion permit the issuance of stock upon such other plan of payment as
it deems reasonable, provided that the then unpaid portion of the purchase
price shall be evidenced by a promissory note at such rate of interest and
upon such other terms and conditions as the Committee shall deem appropriate.
In all cases where stock is issued for less than present full payment of the
purchase price, there shall be placed upon the certificate or certificates
representing such stock a legend setting forth the amount paid at issuance,
and the amount remaining unpaid thereon, and stating that the stock is subject
to call for the remainder and may not be transferred by the holder until the
balance due thereon shall be fully paid.
The Committee, in its discretion and in accordance with the procedures
established by the Committee, may permit a participant
- 7 -
to satisfy, in whole or in part, the applicable income tax withholding
obligations in connection with the exercise of a non-qualified stock option
under the Plan by having withheld from the shares to be issued upon the
exercise of the option or by delivering from shares of Common Stock of the
Company owned by the participant such number of shares having a fair market
value equal to the amount needed to satisfy such obligations.
(e) Conditions to Issuance. The Company shall not be obligated to issue
any stock unless and until:
(i) in the event of the Company's outstanding Common Stock is at
the time listed upon any stock exchange, the shares of stock to be
issued have been listed, or authorized to be added to the list upon
official notice of issuance, upon such exchange, and
(ii) in the opinion of the Company's counsel there has been
compliance with applicable law in connection with the issuance and
delivery of stock 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
counsel for the Company 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 stock 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 stock 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 of stock have been actually issued to the
participant pursuant to the Plan.
(f) Nontransferability of Options. No option may be transferred by the
participant other than by designation of beneficiary as provided in subsection
(j) of this Article, or by will or the laws of descent and distribution, and
during the participant's lifetime the option may be exercised only by the
participant.
(g) Consideration for Option. Each person receiving an option must
agree to remain as an employee or consultant upon the terms of employment or
the consulting arrangement then existing (unless different terms are mutually
agreed upon) for at least one year from the date of the granting of the
option, subject to the right of the Company, its subsidiary or affiliated
company to terminate the participant's employment or consulting arrangement at
any time.
- 8 -
(h) Termination of Employment. If the employment of or consulting
arrangement with a participant terminates for any reason (including
termination by reason of the fact that such corporation is no longer a
subsidiary of affiliated company) 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, unless discharged for misconduct which in the
opinion of the Committee casts such discredit on the participant as to justify
termination of the option, the participant may thereafter exercise the option
as provided below. 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 unless a longer period is permitted by the Committee in its
discretion. If such termination is involuntary on the part of the
participant, the option may be exercised within three months after the day of
termination. Except as expressly provided in the Plan, in no event may a
participant whose employment or consulting agreement has been terminated
voluntarily or involuntarily exercise an option at a time when the option
would not have been exercisable had the employment or consulting arrangement
continued. Notwithstanding the foregoing, the Committee may by the express
terms of the grant of the option extend the aforesaid periods of time within
which the participant may exercise an option after the termination of
employment or the consulting arrangement. For purposes of this Article VI(h),
a participant's employment or consulting arrangement shall not be considered
terminated (i) in the case of sick leave or other bona fide leave of absence
(not to exceed one year unless otherwise approved by the Committee), (ii) in
the case of a transfer of employment or the consulting arrangement among the
Company, its subsidiaries and affiliated companies, or (iii) by virtue of a
change of status from employee to consultant or from consultant to employee.
Unless otherwise expressly provided in the Plan or the grant of the option, an
option may be exercised only to the extent exercisable on the date of
termination of employment or of the consulting arrangement by reason of death,
permanent and total disability, retirement or otherwise.
(i) Retirement; Disability. If prior to the expiration date of an
option the employee shall retire on or after normal retirement date or if the
employment or consulting relationship is terminated by reason of permanent and
total disability, such option may be exercised to the extent exercisable on
the date of retirement or such termination, provided such option shall be
exercised within three months of the date of retirement or such termination.
Notwithstanding the foregoing, in its discretion the Committee may permit the
exercise of an option held by a retired or disabled option holder upon other
terms and conditions as it deems advisable under the circumstances, and if the
period within which an option may be exercised has been extended the Committee
may terminate all unexercised options if it shall determine that the
participant has engaged in any activity detrimental to the Company's
interests.
- 9 -
(j) Death. If a participant dies at a time when entitled to exercise an
option, then at any time or times within one year after death (or such further
period as the Committee may allow) such option may be exercised, as to all or
any of the shares which the participant was entitled to purchase immediately
prior to death (unless the Committee shall have provided in the instrument
evidencing such option that all shares covered by the option are subject to
purchase upon death), by the person or persons designated in writing by the
participant in such form of beneficiary designation as may be approved by the
Company, or failing designation by the participant's personal representative,
executor or administrator or the person or persons to whom the option is
transferred by will or the applicable laws of descent and distribution. 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.
Article VII. Replacement Options
The Committee may grant options under the Plan on terms differing from
those provided for in Article VI where such options are granted in
substitution for options held by employees of or consultants who have written
agreement to render services to other entities who concurrently become
employees of or consultants to the Company or a subsidiary or an affiliated
company as the result of a merger, consolidation or other reorganization of
such other entity with the Company or a subsidiary or an affiliated company,
or the acquisition by the Company or a subsidiary or an affiliated company of
the business, property or stock of such other entity. The Committee may
direct that the substitute options be granted on such terms and conditions as
the Committee considers appropriate in the circumstances.
Article VIII. Surrender of Options
The Committee may, in its discretion and under such terms and conditions
as it deems appropriate, accept the surrender by a participant of a presently
exercisable right to purchase stock granted under an option and authorize
payment by the Company in consideration therefor of an amount equal to the
difference obtained by subtracting the option price of the stock from its fair
market value on the date of such surrender, such payment to be in cash or
shares of the Common Stock of the Company valued at fair market value on the
date of such surrender, or partly in such stock and partly in cash, provided
that the Committee determines such settlement is consistent with the purpose
of the Plan.
- 10 -
Article IX. Changes in Stock
The Board of Directors is authorized to make such adjustments, if any,
as it shall deem appropriate in the number and kind of shares which may be
granted under the Plan, the number and kind of shares which are subject to
options then outstanding and the purchase price of shares subject to such
outstanding options, in the event of any change in capital or shares of
capital stock, any special distribution to stockholders or any extraordinary
transaction (including a merger, consolidation or dissolution) to which the
Company is a party. The determination of the Board of Directors as to such
matters shall be binding on all persons.
Article X. Employment Rights
The adoption of the Plan does not confer upon any employee of or
consultant to the Company or a subsidiary or an affiliated company any right
to continue the employment or consulting relationship with the Company or a
subsidiary or an affiliated company, as the case may be, nor does it in any
way impair the right of the Company or a subsidiary or an affiliated company
to terminate the employment of any of its employees or the consulting
arrangement with any of its consultants at any time.
Article XI. Amendments
The Committee may at any time discontinue granting options under the
Plan. The Board of Directors may at any time or times amend the Plan or amend
any outstanding option or options for the purpose of satisfying the
requirements of any changes in applicable laws or regulations or for any other
purpose which may at the time be permitted by law, provided that except to the
extent permitted under Article IX, without the approval of the stockholders of
the Company no such amendment shall increase the maximum number of shares of
stock available under the Plan, or alter the class of persons eligible to
receive options under the Plan, or without the consent of the participant void
or diminish options previously granted, nor increase or accelerate the
conditions and actions required for the exercise of the same, except that
nothing herein shall limit the Company's right to call stock, issued for
deferred payment which is evidenced by promissory note where the participant
is in default of the obligations on such note.
- 11 -
Exhibit 10.k
MASCO CORPORATION
1988 RESTRICTED STOCK INCENTIVE PLAN
(Restated December 6, 1995)
1. Purpose of the Plan
The purpose of the Plan is to aid Masco Corporation (the "Company") and
its subsidiaries and affiliated companies in attracting and retaining key
employees and consultants of outstanding ability. In addition, the Company
expects that it will benefit from the added interest which such individuals
will have in its welfare as a result of their ownership or increased ownership
of the Company's Common Stock. For purposes of the Plan a "subsidiary" is any
corporation in which the Company owns, directly or indirectly, stock
possessing more than fifty percent of the total combined voting power of all
classes of stock, and an "affiliated company" is any other corporation, at
least twenty percent of the total combined voting power of all classes of
stock of which is owned by the Company or by one or more other corporations in
a chain of corporations, at least twenty percent of the stock of each of which
is held by the Company or a subsidiary or another corporation within such
chain.
2. Stock Subject to the Plan
The shares which may be awarded under the Plan are shares of the
Company's Common Stock, $1 par value. Subject to adjustment as provided in
Paragraph 6, the total number of shares of the Company's Common Stock that may
be awarded under the Plan shall not exceed 8,000,000; provided, however, that
such number of shares shall be reduced by the number of shares of the
Company's Common Stock as to which options have been granted under the
Company's 1988 Stock Option Plan (other than shares which are available for
further grants under Article IV of such plan notwithstanding the prior grant
of options with respect to such shares). Such stock may be authorized but
unissued shares or shares reacquired by the Company, including but not limited
to shares purchased on the open market. Shares of stock awarded under the
Plan which are later reacquired by the Company as a result of forfeiture
pursuant to the Plan shall again become available for awards under the Plan.
3. Administration
The Plan shall be administered by a committee (the "Committee") of three
or more of the Company's directors to be appointed by the Board of Directors.
Members of the Committee shall be "disinterested persons" as such term is
defined in Rule 16b-3(d) under the Securities Exchange Act of 1934 (the
"Exchange Act") or any rule which modifies, amends or replaces Rule 16b-3(d).
The Committee shall have the authority, consistent with the Plan, (a) to
determine the terms and conditions of each award, (b) to interpret the Plan
and the agreements entered into pursuant to the Plan, (c) to adopt, amend and
rescind rules and regulations for its administration and the awards, (d) to
delegate to directors of the Company, who need not be "disinterested persons"
within the meaning of Rule 16b-3 promulgated by the Securities and Exchange
Commission under Section 16 of the Securities Exchange Act of 1934, the
authority to amend awards granted to participants, provided such participants
are not directors or officers of the Company for purposes of Section 16, and
generally to conduct and administer the Plan and to make all determinations in
connection therewith which may be necessary or advisable, and all such actions
of the Committee shall be conclusive and binding upon all parties concerned.
4. Eligibility
Key employees of and consultants to the Company and its subsidiaries and
affiliated companies, including officers of the Company (who may also be
directors, but excluding members of the Committee, any person who serves only
as a director of the Company and any consultant to the Company or any of its
subsidiaries or affiliated companies who is also a director of the Company or
who is not rendering services pursuant to a written agreement with the
corporation in question), as may be selected from time to time by the
Committee in its discretion, are eligible to receive awards under the Plan.
The Committee shall determine in its sole discretion the number of shares to
be awarded to each participant.
5. Terms and Conditions of Awards
All shares of Common Stock awarded to participants shall be subject to
the following terms and conditions, and to such other terms and conditions not
inconsistent with the Plan as shall be contained in each Award Agreement
("Agreement") referred to in Paragraph 5(f):
-2-
(a) At the time of each award there shall be established for the
shares of each participant a "Restricted Period" which shall be not less
than ninety days. Such Restricted Period may differ among participants
and may have different expiration dates with respect to portions of
shares covered by the same award. The Committee may also determine that
the expiration of any Restricted Period shall be subject to such
additional terms and conditions as it decides in its sole discretion and
as set forth in the participant's Agreement.
(b) Shares of Common Stock awarded to participants may not be
sold, encumbered or otherwise transferred, except as hereinafter
provided, during the Restricted Period pertaining to such shares.
Except for such restrictions on transfer, the participant shall have all
the rights of a stockholder including but not limited to the right to
receive all dividends paid on such shares (subject to the provisions of
Paragraph 6) and the right to vote such shares.
(c) If a participant ceases to be employed or retained by the
Company or any of its subsidiaries or affiliated companies for any
reason (including termination by reason of the fact that any corporation
is no longer a subsidiary or affiliated company), other than death,
permanent and total disability, or, in the case of an employee,
retirement on or after normal retirement date, all shares of stock
theretofore awarded to the participant which are still subject to the
restrictions imposed by Paragraph 5(b) shall upon such termination of
employment or the consulting relationship be forfeited and transferred
back to the Company, provided, however, that if such employment or
consulting relationship is terminated by action of the Company or any of
its subsidiaries or affiliated companies without cause or by agreement
of the Company or any of its subsidiaries or affiliated companies and
the participant, the Committee may, but need not, determine that some or
all of the shares shall not be so forfeited, and provided further that
the Committee may remove or modify restrictions on shares which are not
forfeited. For purposes of this Paragraph 5(c), a participant's
employment or consulting arrangement shall not be considered terminated
(i) in the case of transfers of employment or the consulting arrangement
among the Company, its subsidiaries and affiliated companies, (ii) by
virtue of a change of status from employee to consultant or from
consultant to employee, or (iii) in the case of interruption in service,
-3-
not exceeding one year in duration unless otherwise approved by the
Committee, for approved sick leave or other bona fide leave of absence.
(d) If a participant ceases to be employed or retained by the
Company or any of its subsidiaries or affiliated companies by reason of
death or permanent and total disability or if an employee ceases to be
employed by the Company or any of its subsidiaries or affiliated
companies by reason of retirement on or after normal retirement date,
the restrictions imposed by Paragraph 5(b) shall lapse with respect to
the shares then subject to restrictions, except to the extent provided
to the contrary in the Agreement.
(e) Each certificate or other evidence of ownership issued in
respect of shares awarded under the Plan shall be registered in the name
of the participant and deposited on behalf of the participant with the
Company, together with a stock power endorsed in blank, and shall bear
the following legend:
"The sale, encumbrance, or other transfer of this
certificate and the shares of stock represented hereby are subject
to the terms and conditions (including a contingent transfer ob-
ligation) contained in the Masco Corporation 1988 Restricted Stock
Incentive Plan and an award agreement entered into between the
registered owner and Masco Corporation. Copies of such Plan and
Agreement are on file in the office of the Secretary of Masco
Corporation, Taylor, Michigan."
(f) The participant shall enter into an Agreement with the
Company in a form specified by the Committee agreeing to the terms and
conditions of the award, the expiration of the Restricted Period as to
the shares covered by the award, and such other matters, including
compliance with applicable federal and state securities laws and methods
of withholding or providing for the payment of required taxes, as the
Committee in its sole discretion shall determine. The Committee may at
any time amend the terms of any Agreement consistent with the terms of
the Plan, except that without the participant's written consent no such
amendment shall adversely affect the rights of the participant.
-4-
(g) At the expiration of the Restricted Period as to shares
covered by any award, the Company shall deliver the stock certificates
deposited with it pursuant to Paragraph 5(e) and as to which the
Restricted Period has expired, as follows:
(1) if an assignment to a trust has been made in accordance
with Paragraph 5(i), to such trust; or
(2) if the Restricted Period has expired by reason of death
and a beneficiary has been designated in form approved by the
Company, to the beneficiary so designated; or
(3) in all other cases, to the participant or the legal
representative of the participant's estate.
Upon written request, the Company will instruct its stock transfer agent
that such certificates may be reissued without legend.
(h) (1) Notwithstanding any of the provisions of this Plan or
instruments evidencing awards granted hereunder, in the case of a Change
in Control of the Company, each award theretofore granted shall immedi-
ately become fully vested and non-forfeitable and shall thereupon be
distributed to participants as soon as practicable, free of all
restrictions. A Change in Control shall occur if any of the events
described below in subparagraphs (A), (B) or (C) shall have occurred,
unless the holder of any such award shall have consented to the
application of subparagraph (C) in lieu of subparagraphs (A) and (B):
(A) 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 directly or indirectly purchases or otherwise
becomes the "beneficial owner" (as defined in Rule 13d3 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% or more of the combined voting power
of all outstanding voting se-
-5-
curities of the Company;
(B) 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; or
(C) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
(other than Excluded Directors, as hereinafter defined), whose
election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of
such Board who were either directors on such Board at the
beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason
cease to constitute at least a majority of the members thereof.
For purposes hereof, "Excluded Directors" are directors whose
election by the Board or approval by the Board for stockholder
election occurred within one year of any "person" or "group of
persons", as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act, commencing a tender offer for, or becoming the
beneficial owner of, voting securities representing 25 percent or
more of the combined voting power of all outstanding voting
securities of the Company, other than pursuant to a tender offer
approved by the Board prior to its commencement or pursuant to
stock acquisitions approved by the Board prior to their
representing 25 percent or more of such combined voting power.
(2)(A) In the event that subsequent to a Change in Control
it is determined that any payment or distribution by the Company
to or for the benefit of a participant, whether paid or
-6-
payable or distributed or distributable pursuant to the terms of
this Plan or otherwise, other than any payment pursuant to this
subparagraph (2) (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code"), or any interest or
penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such
participant shall be entitled to receive from the Company, within
15 days following the determination described in (B) below, an
additional payment ("Excise Tax Adjustment Payment") in an amount
such that after payment by such participant of all applicable
Federal, state and local taxes (computed at the maximum marginal
rates and including any interest or penalties imposed with respect
to such taxes), including any Excise Tax, imposed upon the Excise
Tax Adjustment Payment, such participant retains an amount of the
Excise Tax Adjustment Payment equal to the Excise Tax imposed upon
the Payments.
(B) All determinations required to be made under this
Section 5(h)(2), including whether an Excise Tax Adjustment
Payment is required and the amount of such Excise Tax Adjustment
Payment, shall be made by Cooper & Lybrand L.L.P., or such other
national accounting firm as the Company, or, subsequent to a
Change in Control, the Company and the participant jointly, may
designate, for purposes of the Excise Tax, which shall provide
detailed supporting calculations to the Company and the affected
participant within 15 business days of the date of the applicable
Payment. Except as hereinafter provided, any determination by
Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the participant. As a
result of the uncertainty in the application of Section 4999 of
the Code that may exist at the time of the initial determination
hereunder, it is possible that (x) certain Excise Tax Adjustment
Payments will not have been made by the Company which should have
been made (an "Underpayment"), or (y) certain Excise Tax
Adjustment Payments will have been made which should not have been
made (an "Overpayment"), consistent with the
-7-
calculations required to be made hereunder. In the event of an
Underpayment, such Underpayment shall be promptly paid by the
Company to or for the benefit of the affected participant. In the
event that the participant discovers that an Overpayment shall
have occurred, the amount thereof shall be promptly repaid to the
Company.
(C) This Section 5(h)(2) shall not apply to any award that
was granted to an executive officer of the Company, as determined
under the Exchange Act.
(i) Notwithstanding any other provision of this Plan, a
participant may assign all rights under any award to a revocable grantor
trust established by the participant for the sole benefit of the
participant during the life of the participant, 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 an award does not meet the criteria of a trust to which an
assignment is permitted by the terms of this paragraph, 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 awards shall revert to and remain solely in the
participant. Notwithstanding a qualified assignment, the participant,
and not the trust to which rights under 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, a subsidiary or affiliated company, but such
trust and the participant shall be bound by all of the terms and
conditions of the Agreement and this Plan.
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 docu-
ments delivered to them by or on behalf of the participant which they
believe genuine and any action
-8-
taken by them in reliance thereon shall be conclusive and binding upon
the participant, his personal representatives and all persons asserting
a claim based on an award granted pursuant to this Plan. The delivery
by a participant of a beneficiary designation, or an assignment of
rights under an award as permitted by this Paragraph 5(i), 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 upon 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. Issuance of shares
as to which restrictions have lapsed in the name of, and delivery to,
the trust to which rights may be assigned shall be conclusively
considered issuance and delivery to the participant.
(j) The Committee, in its discretion and in accordance with its
procedures, may permit the participant to satisfy, in whole or in part,
the applicable income tax withholding obligations when the restrictions
imposed by Paragraph 5(b) lapse by having shares withheld from the
shares as to which the Restricted Period has expired or by delivering
shares of Common Stock of the Company having a fair market value equal
to the amount needed to satisfy such obligations.
(k) In its sole discretion the Committee may also provide the
participant with the right to receive cash payments in connection with
shares of Common Stock awarded under the Plan (including shares
previously awarded), the amount of which payments are based, in whole or
only in part, on the value of such Common Stock. The right to receive
such payments shall be subject to such other terms and conditions not
inconsistent with the Plan as the Committee may determine.
6. Changes in Capitalization
If there is a change in, reclassification, subdivision or combination
of, stock dividend on, or exchange of stock by the Company for the outstanding
Common Stock of the Company, the maximum aggregate number and class of shares
as to which awards may be granted under the Plan
-9-
shall be appropriately adjusted by the Committee whose determination thereof
shall be conclusive. Unless the Committee shall otherwise determine, any
shares of stock or other securities received by a participant with respect to
shares still subject to the restrictions imposed by Paragraph 5(b) will be
subject to the same restrictions and shall be deposited with the Company.
If the Company shall be consolidated or merged with another corporation,
the stock, securities or other property which a participant is entitled to
receive by reason of his ownership of the shares of stock subject to the re-
strictions imposed pursuant to Paragraph 5(b) shall be subject to the same or
equivalent restrictions unless the Committee shall determine otherwise at that
time.
7. Amendment of the Plan
The Board of Directors may from time to time amend or discontinue the
Plan, except that without the approval of the Company's stockholders no
amendment shall increase the number of shares which may be awarded under the
Plan, extend the date for awards of shares under the Plan beyond December 31,
1998 or change the standards of eligibility of employees or consultants
eligible to participate in the Plan. The number of shares awardable under the
Plan may, however, without stockholder approval, be adjusted pursuant to the
adjustment provisions described in Paragraph 6 hereof.
8. Employment Rights
The adoption of the Plan, the award of stock hereunder and the
participation by a participant in the Plan do not confer upon any employee of
or consultant to the Company or a subsidiary or an affiliated company any
right to continue the employment or consulting relationship with the Company
or a subsidiary or an affiliated company, as the case may be, nor does it in
any way impair the right of the Company or a subsidiary or an affiliated
company to terminate the employment of any of its employees or the consulting
arrangement with any of its consultants at any time, with or without cause,
unless a written employment or consulting agreement provides otherwise.
9. Effective Date and Termination of Awards
The Plan shall become effective when approved by the stockholders of the
Company and no shares may be awarded under the Plan after December 31, 1998.
-10-
Exhibit 10.l
MASCO CORPORATION
1988 STOCK OPTION PLAN
(Restated December 6, 1995)
Article I. Purpose
The purpose of the 1988 Stock Option Plan (the "Plan") is to secure for
Masco Corporation (the "Company") and its stockholders the benefits inherent
in stock ownership by selected key employees of and consultants to the Company
and its subsidiaries and affiliated companies who in the judgment of the
committee responsible for the administration of the Plan are largely
responsible for the Company's growth and success. The Plan is designed to
accomplish this purpose by offering such employees and consultants an
opportunity to purchase shares of the Common Stock of the Company. For
purposes of the Plan a "subsidiary" is any corporation in which the Company
owns, directly or indirectly, stock possessing more than fifty percent of the
total combined voting power of all classes of stock, and an "affiliated
company" is any other corporation, at least twenty percent of the total
combined voting power of all classes of stock of which is owned by the Company
or by one or more other corporations in a chain of corporations, at least
twenty percent of the stock of each of which is held by the Company or a
subsidiary or another corporation within such chain.
Article II. Administration
The Plan shall be administered by a committee (the "Committee") of three
or more of the Company's directors to be appointed by the Board of Directors.
Members of the Committee shall be "disinterested persons" as such term is
defined in Rule 16b-3(d) under the Securities Exchange Act of 1934 (the
"Exchange Act") or any rule which modifies, amends or replaces Rule 16b-3(d).
The Committee shall have authority, consistent with the Plan:
(a) to determine which key employees of and consultants to the
Company, its subsidiaries and affiliated companies shall be granted
options;
(b) to determine the time or times when options shall be granted
and the number of shares of Common Stock subject to each option;
(c) to determine the option price of the stock subject to each
option and the method of payment of such price;
(d) to determine the time or times when each option becomes
exercisable, limitations on exercise, and the duration of the exercise
period;
(e) to prescribe the form or forms of the instruments evidencing
options granted under the Plan and of any other instruments required
under the Plan, and to change such forms from time to time;
(f) to designate options granted to key employees of the Company
or its subsidiaries under the Plan as "incentive stock options"
("ISOs"), as such terms are defined in the Internal Revenue Code of
1986;
(g) to adopt, amend and rescind rules and regulations for the
administration of the Plan and options and for its own acts and
proceedings; and
(h) to decide all questions and settle all controversies and
disputes which may arise in connection with the Plan.
All decisions, determinations and interpretations of the Committee shall
be conclusive and binding on all parties concerned.
Article III. Participants
Key employees of and consultants to the Company, its subsidiaries and
affiliated companies, including officers of the Company (who may also be
directors, but excluding members of the Committee, any person who serves only
as a director of the Company and any consultant to the Company or any of its
subsidiaries or affiliated companies who is also a director of the Company or
who is not rendering services pursuant to a written agreement with the
corporation in question), as may be selected from time to time by the
Committee in its discretion, are eligible to receive options under the Plan.
The grant of an option to an employee or consultant shall not entitle such
individual to other grants or options, nor shall such grant disqualify such
individual from further participation.
Article IV. Limitations
No options shall be granted under the Plan after December 31, 1998, but
options theretofore granted may extend beyond that date. Subject to
adjustment as provided in Article IX, the number of shares of Common Stock of
the Company which may be issued under the Plan shall not exceed 8,000,000;
provided, however, that such number of shares shall be reduced by the number
of shares of the Company's Common Stock awarded under the Company's 1988
Restricted Stock Incentive Plan (other than shares awarded under such plan
which are later forfeited to the Company). To the extent that any option
granted under the Plan shall expire or terminate unexercised or for any reason
become unexercisable, any stock theretofore subject to such expired or
terminated option shall thereafter be available for further grants under the
Plan. If an option granted under the Plan shall be accepted for surrender
pursuant to Article VIII, any stock subject to such option shall not
thereafter be available for further grants.
-2-
Notwithstanding any provision to the contrary in the Plan, no option may
be designated an ISO unless all of the following conditions are satisfied:
(a) Such option must be granted on or prior to April 1, 1998, and
such option by its terms must not be exercisable after the expiration of
ten years from the date such option is granted;
(b) Either (i) the employee to whom such option is granted does
not, determined at the time such option is granted, own capital stock
representing more than ten percent of the voting power of all classes of
stock of the Company, its parent or any of its subsidiaries, or (ii) the
option price is at least 110 percent of the fair market value,
determined at the time such option is granted, of the stock subject to
such option and such option by its terms is not exercisable more than
five years from the date it is granted; and
(c) The aggregate fair market value of the Common Stock subject
to such option plus the aggregate fair market value of Common Stock
subject to ISOs previously or concurrently granted to the same employee
exercisable in the same calendar year (all determined at the respective
dates of grant of such options) must not exceed $100,000.
Article V. Stock to be Issued
The stock as to which options may be granted is the Company's Common
Stock, $1 par value. Such stock may be authorized but unissued shares or
shares of Common Stock reacquired by the Company, including but not limited to
shares purchased on the open market. The Board of Directors and the officers
of the Company shall take any appropriate action required for such issuance.
Article VI. Terms and Conditions of Options
All options granted under the Plan shall be subject to the following
terms and conditions (except as otherwise provided in Article VII) and to such
other terms and conditions as the Committee shall deem appropriate.
(a) Option Price. Each option shall have such per share option price
as the Committee may determine, but not less than the fair market value of
Common Stock of the Company on the date the option is granted.
(b) Term of Options. The term of an option shall not exceed eleven
years from the date of grant. The date of grant shall be the date on which
the option is awarded by the Committee.
(c) Exercise of Options.
-3-
(i) Each option shall be made exercisable not less than six
months from the date of grant and at such time or times, whether or not
in installments, as the Committee shall prescribe at the time the option
is granted."
(ii) A person 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 of stock elected for exercise,
such notice to be accompanied by such instruments or documents as may be
required by the Committee, and shall tender the purchase price of the
stock elected for exercise unless otherwise directed by the Committee.
(iii) (A) Notwithstanding any of the provisions of this Plan or
instruments evidencing options granted hereunder, in the case of a
Change in Control of the Company, each option then outstanding shall
immediately become exercisable in full. A Change in Control shall occur
if any of the events described below in subparagraphs (1), (2) or (3)
shall have occurred, unless the holder of any such option shall have
consented to the application of subparagraph (3) in lieu of
subparagraphs (1) and (2):
(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 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% or more of the combined voting power
of all outstanding voting securities of the Company;
(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; or
(3) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
(other than Excluded Directors, as hereinafter defined), whose
election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of
such Board who were either directors on such Board at the
beginning of the period or whose election or nomination for
election as
-4-
directors was previously so approved, for any reason cease to
constitute at least a majority of the members thereof. For
purposes hereof, "Excluded Directors" are directors whose election
by the Board or approval by the Board for stockholder election
occurred within one year of any "person" or "group of persons", as
such terms are used in Sections 13(d) and 14(d) of the Exchange
Act, commencing a tender offer for, or becoming the beneficial
owner of, voting securities representing 25 percent or more of the
combined voting power of all outstanding voting securities of the
Company, other than pursuant to a tender offer approved by the
Board prior to its commencement or pursuant to stock acquisitions
approved by the Board prior to their representing 25 percent or
more of such combined voting power.
(B)(1) In the event that subsequent to a Change in Control it is
determined that any payment or distribution by the Company to or for the
benefit of a participant, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, other
than any payment pursuant to this subparagraph (B) (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such participant
shall be entitled to receive from the Company, within 15 days following
the determination described in (2) below, an additional payment ("Excise
Tax Adjustment Payment") in an amount such that after payment by such
participant of all applicable Federal, state and local taxes (computed
at the maximum marginal rates and including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed
upon the Excise Tax Adjustment Payment, such participant retains an
amount of the Excise Tax Adjustment Payment equal to the Excise Tax
imposed upon the Payments.
(2) All determinations required to be made under this Article
VI(c)(iii)(B), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be
made by Cooper & Lybrand L.L.P., or such other national accounting firm
as the Company, or, subsequent to a Change in Control, the Company and
the participant jointly, may designate, for purposes of the Excise Tax,
which shall provide detailed supporting calculations to the Company and
the affected participant within 15 business days of the date of the
applicable Payment. Except as hereinafter provided, any determination
by Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the participant. As a result of
the uncertainty in the application of Section 4999 of the Code that may
exist at the time of the initial determination hereunder, it is possible
that (x) certain Excise Tax Adjustment Payments will not have been made
by the Company which should have been made (an "Underpayment"), or
-5-
(y) certain Excise Tax Adjustment Payments will have been made which
should not have been made (an "Overpayment"), consistent with the
calculations required to be made hereunder. In the event of an
Underpayment, such Underpayment shall be promptly paid by the Company to
or for the benefit of the affected participant. In the event that the
participant discovers that an Overpayment shall have occurred, the
amount thereof shall be promptly repaid to the Company.
(3) This Article VI(c)(iii)(B) shall not apply to any option that
was granted to an executive officer of the Company, as determined under
the Exchange Act.
(d) Payment for Issuance of Stock. At the time of exercise of any
option granted pursuant to the Plan, payment in full shall be made for all
stock then being purchased either in cash or, at the discretion of the
Committee, in whole or in part in Common Stock of the Company valued at its
then fair market value. Notwithstanding the foregoing, the Committee may in
its discretion permit the issuance of stock upon such other plan of payment as
it deems reasonable, provided that the then unpaid portion of the purchase
price shall be evidenced by a promissory note at such rate of interest and
upon such other terms and conditions as the Committee shall deem appropriate.
In all cases where stock is issued for less than present full payment of the
purchase price, there shall be placed upon the certificate or certificates
representing such stock a legend setting forth the amount paid at issuance,
and the amount remaining unpaid thereon, and stating that the stock is subject
to call for the remainder and may not be transferred by the holder until the
balance due thereon shall be fully paid.
The Committee, in its discretion and in accordance with its procedures,
may permit a participant to satisfy, in whole or in part, the income tax
withholding obligations in connection with the exercise of a non-qualified
stock option by having shares withheld from the shares to be issued upon the
exercise of the option or by delivering shares of Common Stock of the Company
having a fair market value equal to the amount needed to satisfy such
obligations.
(e) Conditions to Issuance. The Company shall not be obligated to
issue any stock unless and until:
(i) if the Company's outstanding Common Stock is at the time
listed upon any stock exchange, the shares of stock to be issued have
been listed, or authorized to be added to the list upon official notice
of issuance, upon such exchange, and
(ii) in the opinion of the Company's counsel there has been
compliance with applicable law in connection with the issuance and
delivery of stock and such issuance shall have been approved by the
Company's counsel.
-6-
Without limiting the generality of the foregoing, the Company may require from
the participant such investment representation or such agreement, if any, as
counsel for the Company 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 stock 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 stock 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 of stock have been actually issued to the
participant pursuant to the Plan.
(f) Nontransferability of Options. No options may be transferred by
the participant other than by designation of beneficiary as provided in
subsection (j) of this Article, or by will or the laws of descent and
distribution, and during the participant's lifetime the option may be
exercised only by the participant.
(g) Consideration for Option. Each person receiving an option must
agree to remain as an employee or consultant upon the terms of employment or
the consulting arrangement then existing (unless different terms are mutually
agreed upon) for at least ninety days from the date the option is granted.
(h) Termination of Employment. If the employment of or consulting
arrangement with a participant terminates for any reason (including
termination by reason of the fact that any corporation is no longer a
subsidiary or affiliated company) 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, unless discharged for misconduct which in the
opinion of the Committee casts such discredit on the participant as to justify
termination of the option, the participant may thereafter exercise the option
as provided below. If such termination is voluntary on the part of the par-
ticipant, the option may be exercised only within ten days after the day of
termination. If such termination is involuntary on the part of the
participant, the option may be exercised within three months after the day of
termination. Except as expressly provided in the Plan or the option, whether
the termination of employment or consulting arrangement is voluntary or
involuntary, options may be exercised only if such options were exercisable at
the date of such termination, 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. Notwithstanding the preceding three sen-
tences, the Committee may extend the time within which or alter the terms and
conditions on which the participant may exercise an option after the termi-
nation of employment or the consulting arrangement, and if the period within
which an option may be exercised has been extended, the Committee may
terminate the unexercised portion of the option if it shall determine that the
participant has engaged in any activity detrimental to the Company's
interests. For purposes of this Article VI(h), 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 unless otherwise approved by the Com-
-7-
mittee), (ii) in the case of a transfer of employment or the consulting ar-
rangement among the Company, its subsidiaries and affiliated companies, or
(iii) by virtue of a change of status from employee to consultant or from
consultant to employee.
(i) Retirement; Disability. If prior to the expiration date of an
option the employee shall retire on or after normal retirement date or if the
employment or consulting relationship is terminated by reason of permanent and
total disability, such option may be exercised to the extent exercisable on
the date of retirement or such termination, provided such option shall be
exercised within three months of the date of retirement or such termination.
Notwithstanding the foregoing, in its discretion the Committee may extend the
time within which or alter the terms and conditions on which an option held by
a retired or disabled option holder may be exercised, and if the period within
which an option may be exercised has been extended, the Committee may
terminate the unexercised portion of the option if it shall determine that the
participant has engaged in any activity detrimental to the Company's
interests.
(j) Death. If a participant dies at a time when entitled to exercise
an option, then at any time or times within one year after death (or such
further period as the Committee may allow) such option may be exercised, as to
all or any of the shares which the participant was entitled to purchase im-
mediately prior to death (or such additional shares covered by the option as
the Committee may allow), by the person or persons designated in writing by
the participant in such form of beneficiary designation as may be approved by
the Company, or failing designation by the participant's personal representa-
tive, executor or administrator or the person or persons to whom the option is
transferred by will or the applicable laws of descent and distribution. 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.
Article VII. Replacement Options
The Committee may grant options under the Plan on terms and conditions
differing from those provided for in Article VI where such options are granted
in substitution for options held by employees of or consultants to other
entities who concurrently become employees of or consultants to the Company or
a subsidiary or an affiliated company as the result of a merger, consolidation
or other reorganization of such other entity with the Company or a subsidiary
or an affiliated company, or the acquisition by the Company or a subsidiary or
an affiliated company of the business, property or stock of such other entity.
The Committee may direct that the replacement options be granted on such terms
and conditions as the Committee considers appropriate in the circumstances.
-8-
Article VIII. Surrender of Options
The Committee may, in its discretion and upon such terms and conditions
as it deems appropriate, accept the surrender by a participant of a presently
exercisable right to purchase stock granted under an option and authorize
payment by the Company in consideration therefor of an amount equal to the
difference obtained by subtracting the option price of the stock from its fair
market value on the date of such surrender, such payment to be in cash or
shares of the Common Stock of the Company valued at fair market value on the
date of such surrender, or partly in such stock and partly in cash, provided
that the Committee determines such settlement is consistent with the purpose
of the Plan.
Article IX. Changes in Stock
The Board of Directors is authorized to make such adjustments, if any,
as it shall deem appropriate in the number and kind of shares which may be
granted under the Plan, the number and kind of shares which are subject to
options then outstanding and the purchase price of shares subject to such
outstanding options, in the event of any change in capital or shares of
capital stock, any special distribution to stockholders or any extraordinary
transaction (including a merger, consolidation or dissolution) to which the
Company is a party. The determination of the Board of Directors as to such
matters shall be conclusive and binding on all persons.
Article X. Employment Rights
The adoption of the Plan, the grant of options hereunder and the
participation by a participant in the Plan do not confer upon any employee of
or consultant to the Company or subsidiary or an affiliated company any right
to continue the employment or consulting relationship with the Company or a
subsidiary or an affiliated company, as the case may be, nor does it in any
way impair the right of the Company or a subsidiary or an affiliated company
to terminate the employment of any of its employees or the consulting
arrangement with any of its consultants at any time, with or without cause,
unless a written employment or consulting agreement provides otherwise.
Article XI. Amendments
The Board of Directors may at any time or times amend the Plan or amend
any outstanding option or options for the purpose of satisfying the
requirements of changes in applicable laws or regulations or for any other
purpose which may at the time be permitted by law, provided that except to the
extent permitted under Article IX, without the approval of the stockholders of
the Company no amendment shall increase the maximum number of shares of stock
available under the Plan, alter the class of persons eligible to receive
options under the Plan, or without the consent of the participant void or
diminish options previously granted, nor increase or accelerate the conditions
required for the exercise of the same, except that nothing herein shall limit
the Company's right
-9-
under Article VI(d) to call stock, issued for deferred payment which is evi-
denced by a promissory note, where the participant is in default of the
obligations of such note.
-10-
Exhibit 10.m
MASCO CORPORATION
1984 RESTRICTED STOCK (INDUSTRIES) INCENTIVE PLAN
(Restated December 6, 1995)
1. Purpose of the Plan
The purpose of the 1984 Restricted Stock (Industries) Incentive Plan
(the "Plan") is to aid Masco Corporation (the "Company") and its subsidiaries
and affiliated companies in securing and retaining key employees and
consultants of outstanding ability and to motivate such individuals to exert
their best efforts on behalf of the Company and its subsidiaries and
affiliated companies. In addition, the Company expects that it will benefit
from the added interest which such individuals will have in its welfare as a
result of their ownership or increased ownership in common stock of an
affiliated Company, MascoTech, Inc., a Delaware corporation (formerly Masco
Industries, Inc. and referred to herein as "Industries"). For purposes of
this Plan a "subsidiary" is any corporation in which the Company owns,
directly or indirectly, stock possessing more than fifty percent of the total
combined voting power of all classes of stock. For purposes of Paragraph 4 of
the Plan, an "affiliated company" is any other corporation (and its
subsidiaries) in which the Company or its subsidiaries own stock possessing at
least twenty percent of the total combined voting power of all classes of
stock, and for all other purposes of the Plan, an "affiliated company" is any
other corporation, at least twenty percent of the total combined voting power
of all classes of stock of which is owned by the Company or by one or more
other corporations in a chain of corporations, at least twenty percent of the
stock of each of which is held by the Company or a subsidiary or another
corporation within such chain.
2. Stock Subject to the Plan
The total number of shares of stock that may be awarded under the Plan
is 12,000,000 shares of Common Stock of Industries, $1.00 par value. Such
stock may be any shares of Industries Common Stock owned by the Company.
Shares of stock awarded under the Plan which are later reacquired by the Com-
pany as a result of forfeiture pursuant to the Plan shall again become
available for awards under the Plan.
3. Administration
The Board of Directors of the Company shall appoint a committee (the
"Committee") consisting of three or more members of the Board of Directors who
shall administer the Plan. No director
shall become or remain a member of the Committee unless at the time of his
exercise of any discretionary function as a Committee member such director is
not eligible and has not at any time within one year prior to the exercise of
such discretion been eligible for selection as a person to whom stock may be
allocated or to whom stock options or stock appreciation rights may be granted
pursuant to the Plan or any other plan of the Company or any of its affiliates
entitling the participants therein to acquire stock, stock options or stock
appreciation rights of the Company or any of its affiliates. The Committee
shall have the authority, consistent with the Plan, (a) to determine the terms
and conditions of each award, (b) to interpret the Plan and the agreements
under the Plan, (c) to adopt, amend and rescind rules and regulations for the
administration of the Plan and the awards, (d) to delegate to directors of the
Company, who need not be "disinterested persons" within the meaning of Rule
16b-3 promulgated by the Securities and Exchange Commission under Section 16
of the Securities Exchange Act of 1934, the authority to amend awards granted
to participants, provided such participants are not directors or officers of
the Company for purposes of Section 16, and generally to conduct and adminis-
ter the Plan and to make all determinations in connection therewith which may
be necessary or advisable. All such actions of the Committee shall be binding
upon all participants.
4. Eligibility
Key employees of and consultants to the Company and its subsidiaries and
affiliated companies, including officers of the Company (who may also be
directors, but excluding members of the Committee, any person who serves only
as a director of the Company and any consultant to the Company or any of its
subsidiaries or affiliated companies who is also a director of the Company),
as may be selected from time to time by the Committee in its discretion, are
eligible to receive awards under the Plan. The Committee shall determine in
its sole discretion the number of shares to be awarded to each such partici-
pant.
5. Terms and Conditions of Awards
All shares of Industries' Common Stock awarded to participants under
this Plan shall be subject to the following terms and conditions, and to such
other terms and conditions not inconsistent with the Plan as shall be
contained in each Award Agreement ("Agreement") referred to in Paragraph 5(f):
(a) At the time of each award there shall be established for the
shares of each participant a "Restricted Period" of transfer which shall
be not less than one year. Such Restricted Period may differ among
participants and may have different expiration dates with respect to
portions of shares
- 2 -
covered by the same award. The Committee may also determine that the
expiration of any Restricted Period shall be subject to such additional
terms and conditions as it decides in its sole discretion and as set
forth in the participant's Agreement.
(b) Shares of stock awarded to participants may not be sold,
encumbered or otherwise transferred, except as hereinafter provided,
during the Restricted Period pertaining to such shares. Except for such
restrictions on transfer, the participant shall have all the rights of a
stockholder including but not limited to the right to receive all
dividends paid on such shares (subject to the provisions of Paragraph 6)
and the right to vote such shares.
(c) If a participant ceases to be employed or retained by the
Company or any of its subsidiaries or affiliated companies for any
reason (including termination by reason of the fact that any corporation
is no longer a subsidiary or affiliated company), other than death, per-
manent and total disability, or, in the case of an employee, retirement
on or after normal retirement date, all shares of stock theretofore
awarded to the participant which are still subject to the restrictions
imposed by Paragraph 5(b) shall upon such termination be forfeited and
transferred back to the Company, provided, however, that in the event
such employment or consulting relationship is terminated by action of
the Company or any of its subsidiaries or affiliated companies without
cause or by agreement of the Company or any of its subsidiaries or
affiliated companies and the participant, the Committee may, but need
not, determine that some or all of such shares shall not be forfeited
but instead shall be subject to such restrictions as the Committee may
establish or that some or all of such shares shall be free of restric-
tions. For purposes of this Paragraph 5(c), a participant's employment
or consulting arrangement shall not be considered terminated (i) in the
case of transfers of employment or the consulting arrangement among the
Company, its subsidiaries and affiliated companies, (ii) by virtue of a
change of status from employee to consultant or from consultant to
employee, or (iii) in the case of interruption in service, not exceeding
one year in duration unless otherwise approved by the Committee, for ap-
proved sick leave or other bona fide leave of absence.
(d) If a participant ceases to be employed or retained by the
Company or any of its subsidiaries or affiliated companies by reason of
death or permanent and total disability or if any employee ceases to be
employed by the Company or any of its subsidiaries or affiliated
companies by reason of retirement on or after normal retirement date,
the restrictions imposed by Paragraph 5(b) shall lapse with respect to
the shares
- 3 -
then subject to restrictions, except to the extent provided to the con-
trary in the Agreement.
(e) Each certificate issued in respect of shares awarded under
the Plan shall be registered in the name of the participant and
deposited by the participant with the Company, together with a stock
power endorsed in blank, and shall bear the following legend:
"The sale, encumbrance, or other transfer of this certificate and
the shares of stock represented hereby are subject to the terms and
conditions (including a contingent transfer obligation) contained in the
Masco Corporation's 1984 Restricted Stock (Industries) Incentive Plan
and an Award Agreement entered into between the registered owner and
Masco Corporation. Copies of such Plan and Award Agreement are on file
in the office of the Secretary of Masco Corporation, Taylor, Michigan."
(f) The participant shall enter into an Agreement with the
Company in a form specified by the Committee agreeing to the terms and
conditions of the award, the expiration of the Restricted Period as to
the shares covered by the award, and such other matters, including com-
pliance with applicable federal and state securities laws and methods of
withholding or providing for the payment of required taxes, as the
Committee shall in its sole discretion determine. The Committee may at
any time amend the terms of any Agreement consistent with the terms of
the Plan, except that without the participant's written consent no such
amendment shall adversely affect the rights of the participant who is a
party to such Agreement.
(g) At the expiration of the Restricted Period as to shares
covered by any award, the Company shall redeliver the stock certificates
deposited with it pursuant to Paragraph 5(e) and as to which the
Restricted Period has expired, as follows:
(1) if an assignment to a trust has been made in accordance
with Paragraph 5(i), to such trust; or
(2) if the Restricted Period has expired by reason of death
and a beneficiary has been designated in form approved by the
Company, to the beneficiary so designated; or
(3) in all other cases, to the participant or the legal
representative of the participant's estate.
Upon written request, the Company will instruct its stock transfer agent
that such certificates may be reissued without legend.
- 4 -
(h) (1) Notwithstanding any of the provisions of this Plan or
instruments evidencing awards heretofore or hereafter granted hereunder,
in the case of a Change in Control of the Company, each award granted at
least one year prior thereto shall immediately become fully vested and
non-forfeitable and shall thereupon be distributed to participants as
soon as practicable, free of all restrictions.
(2) With respect to any award granted hereunder prior to December
6, 1995, a Change in Control shall occur if:
(A) any "person" or "group of persons" as such terms are
used in Section 13(d) and 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act") other than pursuant to a transaction or
agreement previously approved by the Board 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 exer-
cisable immediately, with the passage of time, or subject to any
condition), of voting securities representing 25% or more of the
combined voting power of all outstanding voting securities of the
Company; or
(B) 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.
(3) Notwithstanding the provisions of subparagraph (2),
with respect to awards granted hereunder on or after December 6,
1995, a Change in Control shall occur only if the event described
in this subparagraph (3) shall have occurred. With respect to any
other Award granted prior thereto, a Change in Control shall occur
if any of the events described in subparagraphs (2) or (3) shall
have occurred, unless the holder of any such Award shall have
consented to the application of this subparagraph (3) in lieu of
the foregoing subparagraph (2). A Change in Control for purposes
of this subparagraph (3) shall occur if, during any period of
twenty-four consecutive calendar months, the individuals who at
the beginning of such period constitute the Company's Board of
Directors, and any new directors (other than Excluded Directors,
as hereinafter defined), whose election by such Board or
- 5 -
nomination for election by stockholders was approved by a vote of at
least two-thirds of the members of such Board who were either directors
on such Board at the beginning of the period or whose election or
nomination for election as directors was previously so approved, for any
reason cease to constitute at least a majority of the members thereof.
For purposes hereof, "Excluded Directors" are directors whose election
by the Board or approval by the Board for stockholder election occurred
within one year of any "person" or "group of persons", as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, commencing a
tender offer for, or becoming the beneficial owner of, voting securities
representing 25 percent or more of the combined voting power of all
outstanding voting securities of the Company, other than pursuant to a
tender offer approved by the Board prior to its commencement or pursuant
to stock acquisitions approved by the Board prior to their representing
25 percent or more of such combined voting power.
(4)(A) In the event that subsequent to a Change in
Control it is determined that any payment or distribution by the
Company to or for the benefit of a participant, whether paid or
payable or distributed or distributable pursuant to the terms of
this Plan or otherwise, other than any payment pursuant to this
subparagraph (4) (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code"), or any interest or
penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such
participant shall be entitled to receive from the Company, within
15 days following the determination described in (B) below, an
additional payment ("Excise Tax Adjustment Payment") in an amount
such that after payment by such participant of all applicable
Federal, state and local taxes (computed at the maximum marginal
rates and including any interest or penalties imposed with respect
to such taxes), including any Excise Tax, imposed upon the Excise
Tax Adjustment Payment, such participant retains an amount of the
Excise Tax Adjustment Payment equal to the Excise Tax imposed upon
the Payments.
(B) All determinations required to be made under this
Section 5(h)(4) , including whether an Excise Tax Adjustment
Payment is required and the amount of such Excise Tax Adjustment
Payment, shall be made by Cooper & Lybrand L.L.P., or such other
national accounting firm as the Company, or, subsequent to a
Change in Control, the Company and the participant jointly, may
designate, for
- 6 -
purposes of the Excise Tax, which shall provide detailed
supporting calculations to the Company and the affected
participant within 15 business days of the date of the applicable
Payment. Except as hereinafter provided, any determination by
Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the participant. As a
result of the uncertainty in the application of Section 4999 of
the Code that may exist at the time of the initial determination
hereunder, it is possible that (x) certain Excise Tax Adjustment
Payments will not have been made by the Company which should have
been made (an "Underpayment"), or (y) certain Excise Tax
Adjustment Payments will have been made which should not have been
made (an "Overpayment"), consistent with the calculations required
to be made hereunder. In the event of an Underpayment, such
Underpayment shall be promptly paid by the Company to or for the
benefit of the affected participant. In the event that the
participant discovers that an Overpayment shall have occurred, the
amount thereof shall be promptly repaid to the Company.
(C) This Section 5(h)(4)shall not apply to any Award (x)
that was granted prior to February 17, 1993 and (y) the holder of
which is an executive officer of the Company, as determined under
the Exchange Act.
(i) Notwithstanding any other provision of this Plan, a
participant may assign all rights under any award to a revocable grantor
trust established by the participant for the sole benefit of the
participant during the life of the participant, 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 agree-
ment 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 an award does not meet the criteria of a trust to which an
assignment is permitted by the terms of this paragraph, 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 awards shall revert to and remain solely in the
participant. Notwithstanding a qualified assignment, the participant,
and not the trust to which rights under 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, a subsidiary or affiliated company, but such
- 7 -
trust and the participant shall be bound by all of the terms and
conditions of the Award Agreement and this Plan.
The Committee, the Company and its officers, agents and employees
may rely upon any beneficiary designation, assignment or other in-
strument 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, his personal representa-
tives and all persons asserting a claim based on an award granted
pursuant to this Plan. The delivery by a participant of a beneficiary
designation, or an assignment of rights under an award as permitted by
this Paragraph 5(i), 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 in-
curred in defending against claims, of any person (including the
participant) which may be asserted or alleged to be based upon 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.
Issuance of shares as to which restrictions have lapsed in the name of,
and delivery to, the trust to which rights may be assigned shall be con-
clusively considered issuance and delivery to the participant.
(j) The Committee, in its discretion and in accordance with the
procedures established by the Committee, may permit the participant to
satisfy, in whole or in part, the applicable income tax withholding
obligations when the restrictions imposed by Paragraph 5(b) lapse: (1)
in the case of participants who are employees of or consultants to
Industries or any of its subsidiaries, by having withheld from the
shares as to which the Restricted Period has expired or by delivering
from shares of Common Stock of Industries owned by the participant such
number of shares having a fair market value equal to the amount needed
to satisfy such obligations; or (2) in the case of all other
participants, by having withheld from the shares as to which the
Restricted Period has expired or by delivering from shares of Common
Stock of Industries or common stock of the Company owned by the partic-
ipant such number of shares having a fair market value equal to the
amount needed to satisfy such obligations.
6. Changes in Capitalization
In the event there is a change in, reclassification, subdivision or
combination of, stock dividend on, or exchange of stock by Industries for its
outstanding Common Stock, the maximum
- 8 -
aggregate number and class of shares as to which awards may be granted under
the Plan may be appropriately adjusted by the Committee whose determination
thereof shall be conclusive. Unless the Committee shall determine otherwise,
any shares of stock or other securities received by a participant with respect
to shares still subject to the restrictions imposed by Paragraph 5(b) will be
subject to the same restrictions and shall be deposited with the Company.
If Industries shall be consolidated or merged with another corporation,
the stock, securities or other property which a participant is entitled to
receive by reason of his ownership of the shares of stock subject to the
restrictions imposed pursuant to Paragraph 5(b) shall be subject to the same
or equivalent restrictions unless the Committee shall determine otherwise.
7. Amendment of the Plan
The Board of Directors may from time to time amend or discontinue the
Plan, except that without the approval of Stockholders of the Company no
amendment shall increase the total number of shares which may be awarded under
the Plan, extend the date for awards of shares under the Plan beyond December
31, 1999 or change the standard of eligibility to participate in the Plan.
The total number of shares which may be awarded under the Plan may, however,
be adjusted without stockholder approval pursuant to the adjustment provisions
described in Paragraph 6 hereof.
8. Effective Date and Termination of Plan
The Plan shall become effective when approved by the stockholders of the
Company and no shares may be awarded under the Plan after December 31, 1999.
- 9 -
Exhibit 10.n
MASCO CORPORATION
1984 STOCK OPTION PLAN
(Restated December 6, 1995)
Article I. Purpose
The purpose of the 1984 Stock Option Plan (the "Plan") is to secure for
Masco Corporation (the "Company") and its stockholders the benefits inherent
in stock ownership by selected key employees of and consultants to the Company
and its subsidiaries and affiliated companies who in the judgment of the
committee responsible for the administration of the Plan are largely
responsible for the Company's growth and success. The Plan is designed to
accomplish this purpose by offering such employees and consultants an
opportunity to purchase shares of the Common Stock of the Company. For
purposes of the Plan a "subsidiary" is any corporation in which the Company
owns, directly or indirectly, stock possessing more than fifty percent of the
total combined voting power of all classes of stock. For purposes of Articles
III and VII of the Plan, an "affiliated company" is any other corporation (and
its subsidiaries) in which the Company or its subsidiaries own stock
possessing at least twenty percent of the total combined voting power of all
classes of stock, and for all other purposes of the Plan, an "affiliated
company" is any other corporation, at least twenty percent of the total
combined voting power of all classes of stock of which is owned by the Company
or by one or more other corporations in a chain of corporations, at least
twenty percent of the stock of each of which is held by the Company or a
subsidiary or another corporation within such chain.
Article II. Administration
The Plan shall be administered by a committee (the "Committee") of three
or more of the Company's directors to be appointed by the Board of Directors.
No director shall become or remain a member of the Committee unless at the
time of exercise of any discretionary function as a Committee member such
director is not eligible, and has not at any time within one year prior to the
exercise of such discretion been eligible for selection as a person to whom
stock may be allocated or to whom stock options or stock appreciation rights
may be granted pursuant to the Plan or any other plan of the Company or any of
its affiliates entitling the participants therein to acquire stock, stock
options or stock appreciation rights of the Company or any of its affiliates.
The Committee shall have authority, consistent with the Plan:
(a) to determine which key employees of and consultants to the
Company, its subsidiaries and affiliated companies shall be granted
options;
(b) to determine the time or times when options shall be granted
and the number of shares of Common Stock to be subject to each option;
(c) to determine the option price of the stock subject to each
option and the method of payment of such price;
(d) to determine the time or times when each option becomes
exercisable, limitations on exercise, and the duration of the exercise
period;
(e) to prescribe the form or forms of the instruments evidencing
any options granted under the Plan and of any other instruments required
under the Plan, and to change such forms from time to time;
(f) to designate options granted to key employees of the Company
or its "subsidiaries" under the Plan as "incentive stock options"
("ISOs"), as such terms are defined under the Internal Revenue Code;
(g) to adopt, amend and rescind rules and regulations for the
administration of the Plan and the options and for its own acts and
proceedings; and
(h) to decide all questions and settle all controversies and
disputes which may arise in connection with the Plan.
All decisions, determinations and interpretations of the Committee shall
be binding on all parties concerned.
Article III. Participants
Key employees of and consultants to the Company, its subsidiaries or
affiliated companies, including officers of the Company (who may also be
directors, but excluding members of the Committee, any person who serves only
as a director of the Company and any consultant to the Company or any of its
subsidiaries or affiliated companies who is also a director of the Company),
as may be selected from time to time by the Committee in its discretion, are
eligible to receive options under the Plan. The grant of an option to an
employee or consultant shall not entitle such individual to other grants or
options, nor shall such grant disqualify such individual from further
participation.
- 2 -
Article IV. Limitations
No options shall be granted under the Plan after December 31, 1999, but
options theretofore granted may extend beyond that date. The number of shares
of Common Stock of the Company which may be issued under the Plan shall not
exceed 4,000,000 in the aggregate, subject to adjustment as provided in
Article IX. To the extent that any option granted under the Plan shall expire
or terminate unexercised or for any reason become unexercisable as to any
stock subject thereto, such stock shall thereafter be available for further
grants under the Plan, within the limit specified above. If an option granted
under the Plan shall be accepted for surrender pursuant to Article VIII, any
stock covered by options so accepted shall not thereafter be available for the
granting of other options under the Plan.
Notwithstanding any provision to the contrary in the Plan, no option may
be designated an ISO unless all of the following conditions are satisfied with
respect to such option:
(a) Such option must be granted on or prior to April 24, 1994, and
such option by its terms is not exercisable after the expiration of ten
years from the date such option is granted;
(b) Either (i) the employee to whom such option is granted does
not, determined at the time such option is granted, own capital stock
representing more than ten percent of the voting power of all classes of
stock of the Company, its parent or any of its subsidiaries, or (ii) the
option price is at least 110 percent of the fair market value,
determined at the time such option is granted, of the stock subject to
such option and such option by its terms is not exercisable more than
five years from the date it is granted;
(c) Such option by its terms is not exercisable while there is
outstanding an ISO which was granted to the same employee at an earlier
time. For purposes of this clause (c), an ISO which has not been
exercised in full shall be deemed to be outstanding, notwithstanding any
cancellation or termination thereof, until the expiration of the period
during which it could have been exercised under its original terms; and
(d) The aggregate fair market value of the Common Stock subject to
such option plus the aggregate fair market value of Common Stock subject
to ISOs previously or concurrently granted to the same employee in the
same calendar year (all determined at the respective dates of grant of
such options) must not exceed $100,000 (the "Basic Amount") plus the sum
of the "Carry-Over Amounts" for each of the three calendar years
immediately preceding the year in which such option is
- 3 -
granted. The "Carry-Over Amount", as used in this clause (d) for any
calendar year, shall mean (i) fifty percent of the amount by which
$100,000 exceeds the fair market value, determined at the time of grant,
of Common Stock subject to ISOs which were granted during such calendar
year to the employee for whom the Carry-Over Amount is being determined,
or (ii) $50,000 in the case such employee has not in such calendar year
been granted any ISO. No amount shall be included in a Carry-Over
Amount for any year to the extent such amount was theretofore necessari-
ly included as a Carry-Over Amount to permit the qualification of an ISO
under this clause (d), and Carry-Over Amounts shall only be utilized to
permit the qualification of an ISO under this clause (d) in the order in
which they first arose and then only if the Basic Amount has not
theretofore been utilized to permit such qualification.
Article V. Stock to be Issued
The stock as to which options may be granted is the Company's Common
Stock, $1 par value. Such stock may be authorized but unissued shares or
shares of Common Stock reacquired by the Company, including but not limited to
shares purchased on the open market. The Board of Directors and the officers
of the Company shall take any appropriate action required for such issuance.
Article VI. Terms and Conditions of Options
All options granted under the Plan shall be subject to the following
terms and conditions (except as otherwise provided in Article VII) and to such
other terms and conditions as the Committee shall deem appropriate.
(a) Option Price. Each option granted hereunder shall have such per
share option price as the Committee may determine, but not less than the fair
market value of Common Stock of the Company on the date the option is granted.
(b) Term of Options. The term of an option shall not exceed eleven
years from the date of grant. The date of grant shall be the date on which
the option is awarded by the Committee.
(c) Exercise of Options.
(i) Each option shall be made exercisable at such time or times,
whether or not in installments, as the Committee shall prescribe at the
time the option is granted.
(ii) A person 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 of the number of
- 4 -
shares of stock elected for exercise, such notice to be accompanied by
such instruments or documents as may be required by the Committee, and
such person shall at the time of such exercise tender the purchase price
of the stock elected for exercise unless otherwise directed by the
Committee.
(iii) (A) Notwithstanding any of the provisions of this Plan or
instruments evidencing options heretofore or hereafter granted
hereunder, in the case of a Change in Control of the Company, each
option then outstanding shall immediately become exercisable in full. A
Change in Control shall occur if any of the events described below in
subparagraphs (1), (2) or (3) shall have occurred, unless the holder of
any such option shall have consented to the application of subparagraph
(3) in lieu of subparagraphs (1) and (2):
(1) any "person" or "group of persons" as such terms are
used in Section 13(d) and 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act") other than pursuant to a transaction or
agreement previously approved by the Board 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 exer-
cisable immediately, with the passage of time, or subject to any
condition), of voting securities representing 25% or more of the
combined voting power of all outstanding voting securities of the
Company;
(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; or
(3) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
(other than Excluded Directors, as hereinafter defined), whose
election by such Board or nomination for election by stockholders
was approved by a vote of at least two-thirds of the members of
such Board who were either directors on such Board at the
beginning of the period or whose election or nomination for
election as directors was previously so approved, for
- 5 -
any reason cease to constitute at least a majority of the members
thereof. For purposes hereof, "Excluded Directors" are directors
whose election by the Board or approval by the Board for
stockholder election occurred within one year of any "person" or
"group of persons", as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, commencing a tender offer for, or
becoming the beneficial owner of, voting securities representing
25 percent or more of the combined voting power of all outstanding
voting securities of the Company, other than pursuant to a tender
offer approved by the Board prior to its commencement or pursuant
to stock acquisitions approved by the Board prior to their
representing 25 percent or more of such combined voting power.
(B)(1) In the event that subsequent to a Change in Control it
is determined that any payment or distribution by the Company to or for
the benefit of a participant, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, other
than any payment pursuant to this subparagraph (B) (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such participant
shall be entitled to receive from the Company, within 15 days following
the determination described in (2) below, an additional payment ("Excise
Tax Adjustment Payment") in an amount such that after payment by such
participant of all applicable Federal, state and local taxes (computed
at the maximum marginal rates and including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed
upon the Excise Tax Adjustment Payment, such participant retains an
amount of the Excise Tax Adjustment Payment equal to the Excise Tax
imposed upon the Payments.
(2) All determinations required to be made under this Article
VI(c)(iii)(B), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be
made by Cooper & Lybrand L.L.P., or such other national accounting firm
as the Company, or, subsequent to a Change in Control, the Company and
the participant jointly, may designate, for purposes of the Excise Tax,
which shall provide detailed supporting calculations to the Company and
the affected participant within 15 business days of the date of the
applicable Payment. Except as hereinafter provided, any determination
by Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the participant. As a result of
the uncertainty in the application of Section 4999 of the Code
-6-
that may exist at the time of the initial determination hereunder, it is
possible that (x) certain Excise Tax Adjustment Payments will not have
been made by the Company which should have been made (an
"Underpayment"), or (y) certain Excise Tax Adjustment Payments will have
been made which should not have been made (an "Overpayment"), consistent
with the calculations required to be made hereunder. In the event of an
Underpayment, such Underpayment shall be promptly paid by the Company to
or for the benefit of the affected participant. In the event that the
participant discovers that an Overpayment shall have occurred, the
amount thereof shall be promptly repaid to the Company.
(3) This Article VI(c)(iii)(B) shall not apply to any option
that was granted to an executive officer of the Company, as determined
under the Exchange Act.
(d) Payment for Issuance of Stock. Upon and at the time of exercise of
any option granted pursuant to the Plan, payment in full shall be made for all
such stock then being purchased either in cash or, at the discretion of the
Committee, in whole or in part in Common Stock of the Company valued at its
then fair market value. Notwithstanding the foregoing, the Committee may in
its discretion permit the issuance of stock upon such other plan of payment as
it deems reasonable, provided that the then unpaid portion of the purchase
price shall be evidenced by a promissory note at such rate of interest and
upon such other terms and conditions as the Committee shall deem appropriate.
In all cases where stock is issued for less than present full payment of the
purchase price, there shall be placed upon the certificate or certificates
representing such stock a legend setting forth the amount paid at issuance,
and the amount remaining unpaid thereon, and stating that the stock is subject
to call for the remainder and may not be transferred by the holder until the
balance due thereon shall be fully paid.
The Committee, in its discretion and in accordance with the procedures
established by the Committee, may permit a participant to satisfy, in whole or
in part, the applicable income tax withholding obligations in connection with
the exercise of a non-qualified stock option under the Plan: (1) in the case
of participants who are employees of or consultants to MascoTech, Inc. or any
of its subsidiaries, by delivering from shares of common stock of MascoTech,
Inc. owned by the participant such number of shares having a fair market value
equal to the amount needed to satisfy such obligations; or (2) in the case of
all other participants, by having withheld from the shares to be issued upon
the exercise of the option or by delivering from shares of Common Stock of the
Company owned by the participant such number of shares having a fair market
value equal to the amount needed to satisfy such obligations.
- 7 -
(e) Conditions to Issuance. The Company shall not be obligated to
issue any stock unless and until:
(i) in the event the Company's outstanding Common Stock is at the
time listed upon any stock exchange, the shares of stock to be issued
have been listed, or authorized to be added to the list upon official
notice of issuance, upon such exchange, and
(ii) in the opinion of the Company's counsel there has been
compliance with applicable law in connection with the issuance and
delivery of stock 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
counsel for the Company 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 stock 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 stock 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 of stock have been actually issued to the
participant pursuant to the Plan.
(f) Nontransferability of Options. No option may be transferred by the
participant other than by designation of beneficiary as provided in subsection
(j) of this Article, or by will or by the laws of descent and distribution,
and during the participant's lifetime the option may be exercised only by the
participant.
(g) Consideration for Option. Each person receiving an option must
agree to remain as an employee or consultant upon the terms of employment or
the consulting arrangement then existing (unless different terms are mutually
agreed upon) for at least one year from the date of the granting of the
option, subject to the right of the Company, its subsidiary or affiliated
company to terminate the participant's employment or consulting arrangement at
any time.
(h) Termination of Employment. If the employment of or consulting
arrangement with a participant terminates for any reason (including
termination by reason of the fact that any corporation is no longer a
subsidiary or affiliated company) 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, unless discharged for misconduct which in the
opinion of the Committee casts such discredit on the participant as to justify
termination of the option, the participant may thereafter exercise
- 8 -
the option as provided below. If such termination is voluntary on the part of
the participant, the option may be exercised only within ten days after the
day of termination unless a longer period is permitted by the Committee in its
discretion. If such termination is involuntary on the part of the
participant, the option may be exercised within three months after the day of
termination. Except as expressly provided in the Plan, in no event may a par-
ticipant whose employment or consulting arrangement has been terminated
voluntarily or involuntarily exercise an option at a time when the option
would not have been exercisable had the employment or consulting arrangement
continued. Notwithstanding the foregoing, the Committee may by the express
terms of the grant of the option extend the aforesaid periods of time within
which the participant may exercise an option after the termination of
employment or the consulting arrangement. For purposes of this Article VI(h),
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 unless otherwise approved by the Committee),
(ii) in the case of a transfer of employment or the consulting arrangement
among the Company, its subsidiaries and affiliated companies, or (iii) by
virtue of a change of status from employee to consultant or from consultant to
employee. Unless otherwise expressly provided in the Plan or the grant of an
option, an option may be exercised only to the extent exercisable on the date
of termination of employment or of the consulting arrangement by reason of
death, permanent and total disability, retirement or otherwise.
(i) Retirement; Disability. If prior to the expiration date of an
option the employee shall retire on or after normal retirement date or if the
employment or consulting relationship is terminated by reason of permanent and
total disability, such option may be exercised to the extent exercisable on
the date of retirement or such termination, provided such option shall be
exercised within three months of the date of retirement or such termination.
Notwithstanding the foregoing, in its discretion the Committee may permit the
exercise of an option held by a retired or disabled option holder upon other
terms and conditions as it deems advisable under the circumstances, and if the
period within which an option may be exercised has been extended the Committee
may terminate all unexercised options if it shall determine that the partic-
ipant has engaged in any activity detrimental to the Company's interests.
(j) Death. If a participant dies at a time when entitled to exercise an
option, then at any time or times within one year after death (or such further
period as the Committee may allow) such option may be exercised as to all or
any of the shares which the participant was entitled to purchase immediately
prior to death (unless the Committee shall have provided in the instrument
evidencing such option that all shares covered by the option are subject to
purchase upon death), by the person or persons
- 9 -
designated in writing by the participant in such form of beneficiary
designation as may be approved by the Company, or failing designation by the
participant's personal representative, executor or administrator or the person
or persons to whom the option is transferred by will or the applicable laws of
descent and distribution. 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.
Article VII. Replacement Options
The Committee may grant options under the Plan on terms differing from
those provided for in Article VI where such options are granted in
substitution for options held by employees of or consultants to other entities
who concurrently become employees of or consultants to the Company or a
subsidiary or an affiliated company as the result of a merger, consolidation
or other reorganization of such other entity with the Company or a subsidiary
or an affiliated company, or the acquisition by the Company or a subsidiary or
an affiliated company of the business, property or stock of such other entity.
The Committee may direct that the substitute options be granted on such terms
and conditions as the Committee considers appropriate in the circumstances.
Article VIII. Surrender of Options
The Committee may, in its discretion and upon such terms and conditions
as it deems appropriate, accept the surrender by a participant of a presently
exercisable right to purchase stock granted under an option and authorize
payment by the Company in consideration therefor of an amount equal to the
difference obtained by subtracting the option price of the stock from its fair
market value on the date of such surrender, such payment to be in cash or
shares of the Common Stock of the Company valued at fair market value on the
date of such surrender, or partly in such stock and partly in cash, provided
that the Committee determines such settlement is consistent with the purpose
of the Plan.
Article IX. Changes in Stock
The Board of Directors is authorized to make such adjustments, if any,
as it shall deem appropriate in the number and kind of shares which may be
granted under the Plan, the number and kind of shares which are subject to
options then outstanding and the purchase price of shares subject to such
outstanding options, in the event of any change in capital or shares of
capital stock, any special distribution to stockholders or any extraordinary
transaction (including a merger, consolidation or dissolution) to
- 10 -
which the Company is a party. The determination of the Board of Directors as
to such matters shall be binding on all persons.
Article X. Employment Rights
The adoption of the Plan does not confer upon any employee of or
consultant to the Company or a subsidiary or an affiliated company any right
to continue the employment or consulting relationship with the Company or a
subsidiary or an affiliated company, as the case may be, nor does it in any
way impair the right of the Company or a subsidiary or an affiliated company
to terminate the employment of any of its employees or the consulting
arrangement with any of its consultants at any time.
Article XI. Amendments
The Committee may at any time discontinue granting options under the
Plan. The Board of Directors may at any time or times amend the Plan or amend
any outstanding option or options for the purpose of satisfying the
requirements of any changes in applicable laws or regulations or for any other
purpose which may at the time be permitted by law, provided that except to the
extent permitted under Article IX, without the approval of the stockholders of
the Company no such amendment shall increase the maximum number of shares of
stock available under the Plan, or alter the class of persons eligible to re-
ceive options under the Plan, or without the consent of the participant void
or diminish options previously granted, nor increase or accelerate the
conditions and actions required for the exercise of the same, except that
nothing herein shall limit the Company's right to call stock, issued for
deferred payment which is evidenced by a promissory note, where the par-
ticipant is in default of the obligations of such note.
- 11 -
Exhibit 10.o
MASCO CORPORATION
RESTRICTED STOCK INCENTIVE PLAN
(Restated December 6, 1995)
1. Purpose of the Plan
The purpose of the Plan is to aid Masco Corporation (the "Company") and
its subsidiaries and affiliated companies in securing and retaining key
employees and consultants of outstanding ability and to motivate such
individuals to exert their best efforts on behalf of the Company and its
subsidiaries and affiliated companies. In addition, the Company expects that it
will benefit from the added interest which such individuals will have in its
welfare as a result of their ownership or increased ownership of the Company's
Common Stock. For purposes of the Plan a "subsidiary" is any corporation in
which the Company owns, directly or indirectly, stock possessing more than fifty
percent of the total combined voting power of all classes of stock. For
purposes of Paragraph 4 of the Plan, an "affiliated company" is any other
corporation (and its subsidiaries) in which the Company or its subsidiaries own
stock possessing at least twenty percent of the total combined voting power of
all classes of stock, and for all other purposes of the Plan, an "affiliated
company" is any other corporation, at least twenty percent of the total combined
voting power of all classes of stock of which is owned by the Company or by one
or more other corporations in a chain of corporations, at least twenty percent
of the stock of each of which is held by the Company or a subsidiary or another
corporation within such chain.
2. Stock Subject to the Plan
The total number of shares of stock that may be awarded under the Plan is
4,000,000 shares of the Company's Common Stock, $1.00 par value. Such stock may
be authorized but unissued shares or shares of Common Stock reacquired by the
Company, including but not limited to shares purchased on the open market.
Shares of stock awarded under the Plan which are later reacquired by the Company
as a result of forfeiture pursuant to the Plan shall again become available for
awards under the Plan.
3. Administration
The Board of Directors of the Company shall appoint a committee (the
"Committee") consisting of three or more members of the Board of Directors who
shall administer the Plan. Members of the Committee shall not be eligible while
a member to participate in the Plan and shall not have at any time within one
year prior to appointment been eligible for selection as a person to whom stock
may have been allocated or to whom stock options of the Company may have been
granted pursuant to the Plan or any other plan of the Company. The Committee
shall have the authority, consistent with the Plan, (a) to determine the terms
and conditions of each award, (b) to interpret the Plan and the agreements under
the Plan, (c) to adopt, amend and rescind rules and regulations for the
administration of the Plan and the awards, (d) to delegate to directors of the
Company, who need not be "disinterested persons" within the meaning of Rule 16b-
3 promulgated by the Securities and Exchange Commission under Section 16 of the
Securities Exchange Act of 1934, the authority to amend awards granted to
participants, provided such participants are not directors or officers of the
Company for purposes of Section 16, and (e) generally to conduct and administer
the Plan and to make all determinations in connection therewith which may be
necessary or advisable, and all such actions of the Committee shall be binding
upon all participants.
4. Eligibility
Key employees of and consultants to the Company and its subsidiaries and
affiliated companies, including officers of the Company (who may also be
directors, but excluding members of the Committee, any person who serves only as
a director of the Company and any consultant to the Company or any of its
subsidiaries or affiliated companies who is also a director of the Company), as
may be selected from time to time by the Committee in its discretion, are
eligible to receive awards under the Plan. The Committee shall determine in its
sole discretion the number of shares to be awarded to each such participant.
5. Terms and Conditions of Awards
All shares of Common Stock awarded to participants under this Plan shall
be subject to the following terms and conditions, and to such other terms and
conditions not inconsistent with the Plan as shall be contained in each Award
Agreement ("Agreement") referred to in Paragraph 5(f):
(a) At the time of each award there shall be established for the shares
of each participant a "Restricted Period" which shall be not less than one
year. Such Restricted Period may differ between and among participants and may
have different expiration dates with respect to portions of shares covered by
the same award. The Committee may also determine that the expiration of any
Restricted Period shall be subject to such additional terms and conditions as
it decides in its sole discretion and as set forth in the participant's
Agreement.
- 2 -
(b) Shares of stock awarded to participants may not be sold, encumbered
or otherwise transferred, except as hereinafter provided, during the Restricted
Period pertaining to such shares. Except for such restrictions on transfer, the
participant shall have all the rights of a stockholder including but not limited
to the right to receive all dividends paid on such shares (subject to the
provisions of Paragraph 6) and the right to vote such shares.
(c) If a participant ceases to be employed or retained by the Company or
any of its subsidiaries or affiliated companies for any reason (including
termination by reason of the fact that any corporation is no longer a subsidiary
or affiliated company), other than death, permanent and total disability, or, in
the case of an employee, retirement on or after normal retirement date, all
shares of stock theretofore awarded to the participant which are still subject
to the restrictions imposed by Paragraph 5(b) shall upon such termination of
employment or the consulting relationship be forfeited and transferred back to
the Company, provided, however, that in the event such employment or consulting
relationship is terminated by action of the Company or any of its subsidiaries
or affiliated companies without cause or by agreement of the Company or any of
its subsidiaries or affiliated companies and the participant, the Committee may,
but need not, determine that some or all of the shares shall be free of
restrictions. For purposes of this Paragraph 5(c), a participant's employment
or consulting arrangement shall not be considered terminated (i) in the case of
transfers of employment or the consulting arrangement among the Company, its
subsidiaries and affiliated companies, (ii) by virtue of a change of status from
employee to consultant or from consultant to employee, or (iii) in the case of
interruption in service, not exceeding one year in duration unless otherwise ap-
proved by the Committee, for approved sick leave or other bona fide leave of
absence.
(d) If a participant ceases to be employed or retained by the Company or
any of its subsidiaries or affiliated companies by reason of death or permanent
and total disability or if an employee ceases to be employed by the Company or
any of its subsidiaries or affiliated companies by reason of retirement on or
after normal retirement date, the restrictions imposed by Paragraph 5(b) shall
lapse with respect to the shares then subject to restrictions, except to the
extent provided to the contrary in the Agreement.
(e) Each certificate issued in respect of shares awarded under the Plan
shall be registered in the name of the participant and deposited by the
participant with the Company, together with a stock power endorsed in blank, and
shall bear the following legend:
"The sale, encumbrance, or other transfer of this certificate and
the shares of stock represented hereby are subject to the terms and
conditions (including a contingent transfer obligation) contained in the
Masco Corporation Restricted
- 3 -
Stock Incentive Plan and an agreement entered into between the registered
owner and Masco Corporation. Copies of such Plan and Agreement are on
file in the office of the Secretary of Masco Corporation, Taylor,
Michigan."
(f) The participant shall enter into an Agreement with the Company in a
form specified by the Committee agreeing to the terms and conditions of the
award, the expiration of the Restricted Period as to the shares covered by the
award, and such other matters, including compliance with applicable federal and
state securities laws and methods of withholding or providing for the payment of
required taxes, as the Committee shall in its sole discretion determine. The
Committee may at any time amend the terms of any Agreement consistent with the
terms of the Plan, except that without the participant's written consent no such
amendment shall adversely affect the rights of the participant who is a party to
such Agreement.
(g) At the expiration of the Restricted Period as to shares covered by
any award, the Company shall redeliver the stock certificates deposited with it
pursuant to Paragraph 5(e) and as to which the Restricted Period has expired, as
follows:
(1) if an assignment to a trust has been made in accordance with
Paragraph 5(i), to such trust; or
(2) if the Restricted Period has expired by reason of death and a
beneficiary has been designated in form approved by the Company, to the
beneficiary so designated; or
(3) in all other cases, to the participant or the legal
representative of the participant's estate.
Upon written request, the Company will instruct its stock transfer agent that
such certificates may be reissued without legend.
(h) (1) Notwithstanding any of the provisions of this Plan or instruments
evidencing awards heretofore or hereafter granted hereunder, in the case of a
Change in Control of the Company, each award granted at least one year prior
thereto shall immediately become fully vested and non-forfeitable and shall
thereupon be distributed to participants as soon as practicable, free of all
restrictions. A Change in Control shall occur if any of the events described
below in subparagraphs (A), (B) or (C) shall have occurred, unless the holder of
any such award shall have consented to the application of subparagraph (C) in
lieu of subparagraphs (A) and (B):
(A) any "person" or "group of persons" as such terms are used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") other than pursuant to a transaction or agreement
previously approved by the Board
- 4 -
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 exer-
cisable immediately, with the passage of time, or subject to any condi-
tion), of voting securities representing 25% or more of the combined
voting power of all outstanding voting securities of the Company;
(B) 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 nomina-
tion for election as directors was previously so approved, for any reason
cease to constitute at least a majority of the members thereof; or
(C) during any period of twenty-four consecutive calendar months,
the individuals who at the beginning of such period constitute the
Company's Board of Directors, and any new directors (other than Excluded
Directors, as hereinafter defined), whose election by such Board or
nomination for election by stockholders was approved by a vote of at least
two-thirds of the members of such Board who were either directors on such
Board at the beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason cease to
constitute at least a majority of the members thereof. For purposes
hereof, "Excluded Directors" are directors whose election by the Board or
approval by the Board for stockholder election occurred within one year of
any "person" or "group of persons", as such terms are used in Sections
13(d) and 14(d) of the Exchange Act, commencing a tender offer for, or
becoming the beneficial owner of, voting securities representing 25
percent or more of the combined voting power of all outstanding voting
securities of the Company, other than pursuant to a tender offer approved
by the Board prior to its commencement or pursuant to stock acquisitions
approved by the Board prior to their representing 25 percent or more of
such combined voting power.
(2)(A) In the event that subsequent to a Change in Control it
is determined that any payment or distribution by the Company to or for
the benefit of a participant, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, other than
any payment pursuant to this subparagraph (2) (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended from time to time (the "Code"), or any interest
or penalties with respect to
- 5 -
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"),
then such participant shall be entitled to receive from the Company,
within 15 days following the determination described in (B) below, an
additional payment ("Excise Tax Adjustment Payment") in an amount such
that after payment by such participant of all applicable Federal, state
and local taxes (computed at the maximum marginal rates and including any
interest or penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Excise Tax Adjustment Payment, such
participant retains an amount of the Excise Tax Adjustment Payment equal
to the Excise Tax imposed upon the Payments.
(B) All determinations required to be made under this Section
5(h)(2), including whether an Excise Tax Adjustment Payment is required
and the amount of such Excise Tax Adjustment Payment, shall be made by
Cooper & Lybrand L.L.P., or such other national accounting firm as the
Company, or, subsequent to a Change in Control, the Company and the
participant jointly, may designate, for purposes of the Excise Tax, which
shall provide detailed supporting calculations to the Company and the
affected participant within 15 business days of the date of the applicable
Payment. Except as hereinafter provided, any determination by Coopers &
Lybrand L.L.P., or such other national accounting firm, shall be binding
upon the Company and the participant. As a result of the uncertainty in
the application of Section 4999 of the Code that may exist at the time of
the initial determination hereunder, it is possible that (x) certain
Excise Tax Adjustment Payments will not have been made by the Company
which should have been made (an "Underpayment"), or (y) certain Excise Tax
Adjustment Payments will have been made which should not have been made
(an "Overpayment"), consistent with the calculations required to be made
hereunder. In the event of an Underpayment, such Underpayment shall be
promptly paid by the Company to or for the benefit of the affected
participant. In the event that the participant discovers that Overpayment
shall have occurred, the amount thereof shall be promptly repaid to the
Company.
(C) This Section 5(h)(2) shall not apply to any award that was
granted to an executive officer of the Company, as determined under the
Exchange Act.
(i) Notwithstanding any other provision of this Plan, a participant may
assign all rights under any award to a revocable grantor trust established by
the participant for the sole benefit of the participant during the life of the
participant, 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
- 6 -
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 an award does not meet the criteria of a trust to which an
assignment is permitted by the terms of this paragraph, 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 awards shall
revert to and remain solely in the participant. Notwithstanding a qualified
assignment, the participant, and not the trust to which rights under 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, a subsidiary or affiliated company, but such trust
and the participant shall be bound by all of the terms and conditions of the
Award Agreement and this Plan.
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,
his personal representatives and all persons asserting a claim based on an award
granted pursuant to this Plan. The delivery by a participant of a beneficiary
designation, or an assignment of rights under an award as permitted by this
Paragraph 5(i), 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 upon 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 satis-
factory to the Company. Issuance of shares as to which restrictions have lapsed
in the name of, and delivery to, the trust to which rights may be assigned shall
be conclusively considered issuance and delivery to the participant.
(j) The Committee, in its discretion and in accordance with the
procedures established by the Committee, may permit the participant to satisfy,
in whole or in part, the applicable income tax withholding obligations when the
restrictions imposed by Paragraph 5(b) lapse: (1) in the case of participants
who are employees of or consultants to MascoTech, Inc. or any of its sub-
sidiaries, by delivering from shares of common stock of MascoTech, Inc. owned by
the participant such number of shares having a fair market value equal to the
amount needed to satisfy such obligations; or (2) in the case of all other
participants, by
- 7 -
having withheld from the shares as to which the Restricted Period has expired or
by delivering from shares of Common Stock of the Company owned by the
participant such number of shares having a fair market value equal to the amount
needed to satisfy such obligations.
6. Changes in Capitalization
In the event there is a change in, reclassification, subdivision or
combination of, stock dividend on, or exchange of stock by the Company for the
outstanding Common Stock of the Company, the maximum aggregate number and class
of shares as to which awards may be granted under the Plan shall be appro-
priately adjusted by the Committee whose determination thereof shall be
conclusive. Unless the Committee shall otherwise determine, any shares of stock
or other securities received by a participant with respect to shares still
subject to the restrictions imposed by Paragraph 5(b) will be subject to the
same restrictions and shall be deposited with the Company.
If the Company shall be consolidated or merged with another corporation,
the stock, securities or other property which a participant is entitled to
receive by reason of his ownership of the shares of stock subject to the
restrictions imposed pursuant to Paragraph 5(b) shall be subject to the same or
equivalent restrictions unless the Committee shall determine otherwise at that
time.
7. Amendment of the Plan
The Board of Directors may from time to time amend or discontinue the
Plan, except that without the approval of Stockholders no amendment shall
increase the total number of shares which may be awarded under the Plan, extend
the date for awards of shares under the Plan beyond December 31, 1991 or change
the standards of eligibility of employees eligible to participate in the Plan.
The total number of shares awardable under the Plan may, however, without
stockholder approval, be adjusted pursuant to the adjustment provisions
described in Paragraph 6 hereof.
8. Effective Date and Termination of Plan
The Plan shall become effective when approved by the stockholders of the
Company and no shares may be awarded under the Plan after December 31, 1991.
- 8 -
Exhibit 10.p
MASCO CORPORATION
1991 LONG TERM STOCK INCENTIVE PLAN
(Restated December 6, 1995)
Section 1. Purposes
The purposes of the 1991 Long Term Stock Incentive Plan (the "Plan") are
to encourage selected employees of and consultants to Masco Corporation (the
"Company") and its Affiliates to acquire a proprietary interest in the Company
in order to create an increased incentive to contribute to the Company's
future success and prosperity, and enhance the ability of the Company and its
Affiliates to attract and retain exceptionally qualified individuals upon whom
the sustained progress, growth and profitability of the Company depend, thus
enhancing the value of the Company for the benefit of its stockholders.
Section 2. Definitions
As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Affiliate" shall mean any entity in which the Company's direct or
indirect equity interest is at least twenty percent, and any other entity in
which the Company has a significant direct or indirect equity interest,
whether more or less than twenty percent, as determined by the Committee.
(b) "Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent or Other
Stock-Based Award granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract or
other instrument or document evidencing any Award granted under the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(e) "Committee" shall mean a committee of the Company's directors
designated by the Board of Directors to administer the Plan and composed of
not less than two directors, each of whom is a "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 $1.00 per
share, and such other securities or property as may become the subject of
Awards, or become subject to Awards, pursuant to an adjustment made under
Section 4(b) of the Plan.
(t) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.
- 2 -
Section 3. Administration
The Committee shall administer the Plan, and subject to the terms of the
Plan and applicable law, the Committee's authority shall include without
limitation the power to:
(i) designate Participants;
(ii) determine the types of Awards to be granted;
(iii) determine the number of Shares to be covered by Awards and
any payments, rights or other matters to be calculated in connection
therewith;
(iv) determine the terms and conditions of Awards and amend the
terms and conditions of outstanding Awards;
(v) determine how, whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or
suspended;
(vi) determine how, whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other
property and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the holder thereof
or of the Committee;
(vii) determine the methods or procedures for establishing the
fair market value of any property (including, without limitation, any
Shares or other securities) transferred, exchanged, given or received
with respect to the Plan or any Award;
(viii) prescribe and amend the forms of Award Agreements and other
instruments required under or advisable with respect to the Plan;
(ix) designate Options granted to key employees of the Company or
its subsidiaries as Incentive Stock Options;
(x) interpret and administer the Plan, Award Agreements, Awards
and any contract, document, instrument or agreement relating thereto;
(xi) establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the
administration of the Plan;
- 3 -
(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, and to amend Awards granted
to Participants, provided such Participants are not directors or
officers of the Company for purposes of Section 16;
(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(b):
(i) Initial Authorization. There shall be 8,000,000 Shares
initially available for issuance under the Plan.
(ii) Acquired Shares. In addition to the amount set forth above,
up to 8,000,000 Shares acquired by the Company subsequent to the
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.
- 4 -
(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) Shares Under Prior Plans. In addition to the amounts set
forth above, shares remaining available for issuance upon any
termination of authority to make further awards under both the Company's
1988 Restricted Stock Incentive Plan and its 1988 Stock Option Plan
shall thereafter be available for issuance hereunder.
(v) 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 avail-
able 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 sub-
stitution 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.
(vi) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or
- 5 -
in part, of authorized but unissued Shares or of Shares reacquired by
the Company, including but not limited to Shares purchased on the open
market.
(b) 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; pro-
vided, 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.
(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
- 6 -
(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 exer-
cise price) in which payment of the exercise price with respect
thereto may be made or deemed to have been made. The terms of any
Incentive Stock Option granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, or any
successor provision thereto, and any regulations promulgated
thereunder.
Subject to the terms of the Plan, the Committee may impose such
conditions or restrictions on any Option as it deems appropriate.
(ii) Other Terms. Unless otherwise determined by the Committee:
(A) A Participant electing to exercise an Option shall give
written notice to the Company, as may be specified by the
Committee, of exercise of the Option and the number of Shares
elected for exercise, such notice to be accompanied by such in-
struments 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
(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
- 7 -
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 de-
termine that the Participant has engaged in any activity
detrimental to the interests of the Company or an Affiliate. If
such termination is voluntary on the part of the Participant, the
option may be exercised only within ten days after the date of
termination. If such termination is involuntary on the part of the
Participant, if an employee retires on or after normal retirement
date or if the employment or consulting relationship is terminated
by reason of permanent and total disability, the Option may be
exercised within three months after the date of termination or
retirement. For purposes of this Paragraph (D), a Participant's
employment or consulting arrangement shall not be considered ter-
minated (i) in the case of approved sick leave or other bona fide
leave of absence (not to exceed one year), (ii) in the case of a
transfer of employment or the consulting arrangement among the
Company and Affiliates, or (iii) by virtue of a change of status
from employee to consultant or from consultant to employee, except
as provided above.
(E) If a Participant dies at a time when entitled to
exercise an Option, then at any time or times within one year
after death such Option may be exercised, as to all or any of the
Shares which the Participant was entitled to purchase immediately
prior to death. The Company may decline to deliver Shares to a
designated beneficiary until it receives indemnity against claims
of third parties satisfactory to the Company. Except as so
- 8 -
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 contin-
ued.
(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 under-
lying 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 Appreciation Right and may impose such conditions
or restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.
(c) Restricted Stock and Restricted Stock Units.
(i) Issuance. The Committee is authorized to grant to
Participants Awards of Restricted Stock, which shall consist of Shares,
and Restricted Stock Units which shall give the Participant the right to
receive cash, other securities, other Awards or other property, in each
case subject to the termination of the Restricted Period determined by
the Committee.
(ii) Restrictions. The Restricted Period may differ among
Participants and may have different 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
- 9 -
Committee may impose (including, without limitation, limitations on the
right to vote Restricted Stock or the right to receive any dividend or
other right or property), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise. Unless
the Committee shall otherwise determine, any Shares or other securities
distributed with respect to Restricted Stock or which a Participant is
otherwise entitled to receive by reason of such Shares shall be subject
to the restrictions contained in the applicable Award Agreement. Subject
to the aforementioned restrictions and the provisions of the Plan,
Participants shall have all of the rights of a stockholder with respect
to Shares of Restricted Stock.
(iii) Registration. Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee may deem appropriate,
including, without limitation, book-entry registration or issuance of
stock certificates.
(iv) Forfeiture. Except as otherwise determined by the Committee:
(A) If the employment of or consulting arrangement with a
Participant terminates for any reason (including termination by
reason of the fact that any entity is no longer an Affiliate),
other than the Participant's death or permanent and total dis-
ability 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-
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.
- 10 -
(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 ac-
cordance with Section 6(g)(iv)(B)(2)(c), to such trust; or
(2) if the Restricted Period has expired by reason of
death and a beneficiary has been designated in form approved
by the Company, to the beneficiary so designated; or
(3) in all other cases, to the Participant or the legal
representative of the Participant's estate.
(d) Performance Awards. The Committee is authorized to grant
Performance Awards to Participants. Subject to the terms of the Plan, a
Performance Award granted under the Plan (i) may be denominated or payable in
cash, Shares (including, without limitation, Restricted Stock), other
securities, other Awards, or other property and (ii) shall confer on the
holder thereof rights valued as determined by the Committee and payable to, or
exercisable by, the holder of the Performance Award, in whole or in part, upon
the achievement of such performance goals during such performance periods as
the Committee shall establish. Subject to the terms of the Plan, the
performance goals to be achieved during any performance period, the length of
any performance period, the amount of any Performance Award granted, the
amount of any payment or transfer to be made pursuant to any Performance Award
and other terms and conditions shall be determined by the Committee.
(e) Dividend Equivalents. The Committee is authorized to grant to
Participants Awards under which the holders thereof shall be entitled to
receive payments equivalent to dividends or interest
- 11 -
with respect to a number of Shares determined by the Committee, and the
Committee may provide that such amounts (if any) shall be deemed to have been
reinvested in additional Shares or otherwise reinvested. Subject to the terms
of the Plan, such Awards may have such terms and conditions as the Committee
shall determine.
(f) Other Stock-Based Awards. The Committee is authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to or otherwise based on or related to Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purposes of the Plan,
provided, however, that such grants to persons who are subject to Section 16
must comply with the provisions of Rule 16b-3. Subject to the terms of the
Plan, the Committee shall determine the terms and conditions of such Awards.
Shares or other securities delivered pursuant to a purchase right granted
under this Section 6(f) shall be purchased for such consideration, which may
be paid by such method or methods and in such form or forms, including,
without limitation, cash, Shares, other securities, other Awards or other
property or any combination thereof, as the Committee shall determine.
(g) General.
(i) No Cash Consideration for Awards. Awards may be granted for
no cash consideration or for such minimal cash consideration as may be
required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may, in
the discretion of the Committee, be granted either alone or in addition
to, in tandem with or in substitution for any other Award or any award
granted under any other plan of the Company or any Affiliate. Awards
granted in addition to or in tandem with other Awards or in addition to
or in tandem with awards granted under another plan of the Company or
any Affiliate, may be granted either at the same time as or at a
different time from the grant of such other Awards or awards.
(iii) Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise, or payment
of an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other
securities, other Awards, or other property, or any combination thereof,
and may be made in a single payment or transfer, in installments, or on
a deferred basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the
- 12 -
grant or crediting of Dividend Equivalents in respect of installment or
deferred payments.
(iv) Limits on Transfer of Awards.
(A) Except as the Committee may otherwise determine, no
Award or right under any Award may be sold, encumbered, pledged,
alienated, attached, assigned or transferred in any manner and any
attempt to do any of the foregoing shall be void and unenforceable
against the Company.
(B) Notwithstanding the provisions of Paragraph (A) above:
(1) An Option may be transferred:
(a) to a beneficiary designated by the
Participant in writing on a form approved by the
Committee; or
(b) by will or the applicable laws of descent and
distribution to the personal representative, executor
or administrator of the Participant's estate.
(2) A Participant may assign or transfer rights under
an Award of Restricted Stock or Restricted Stock Units:
(a) to a beneficiary designated by the
Participant in writing on a form approved by the
Committee;
(b) by will or the applicable laws of descent and
distribution to the personal representative, executor
or administrator of the Participant's estate; or
(c) to a revocable grantor trust established by
the Participant for the sole benefit of the
Participant during the Participant's life, and under
the terms of which the Participant is and remains the
sole trustee until death or physical or mental
incapacity. Such assignment shall be effected by a
written instrument in form and content satisfactory to
the Committee, and the Participant shall deliver to
the Committee a true copy of the agreement or other
document evidencing such trust. If in the judgment of
the Committee the trust to which a Participant
- 13 -
may attempt to assign rights under such an Award does
not meet the criteria of a trust to which an
assignment is permitted by the terms hereof, or if
after assignment, because of amendment, by force of
law or any other reason such trust no longer meets
such criteria, such attempted assignment shall be void
and may be disregarded by the Committee and the
Company and all rights to any such Awards shall revert
to and remain solely in the Participant. Not-
withstanding 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 con-
sidered issuance and delivery to the Participant.
(3) The Committee shall not permit directors or offi-
cers 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.
- 14 -
(v) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares or other
securities are then listed and any applicable Federal or state
securities laws, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such
restrictions.
(vi) Change in Control. (A) Notwithstanding any of the provisions
of this Plan or instruments evidencing Awards granted hereunder, upon a
Change in Control of the Company (as hereinafter defined) the vesting of
all rights of Participants under outstanding Awards shall be accelerated
and all restrictions thereon shall terminate in order that Participants
may fully realize the benefits thereunder. Such acceleration shall
include, without limitation, the immediate exercisability in full of all
Options and the termination of restrictions on Restricted Stock and
Restricted Stock Units. Further, in addition to the Committee's
authority set forth in Section 4(b), 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 Partici-
pant's rights had such Award been currently exercisable or payable; (ii)
make such adjustment to any such Award then outstanding as the Committee
deems appropriate to reflect such Change in Control; and (iii) cause any
such Award then outstanding to be assumed, or new rights substituted
therefor, by the acquiring or surviving corporation after such Change in
Control.
(B) With respect to any Award granted hereunder prior to
December 6, 1995, a Change in Control shall occur if:
(1) any "person" or "group of persons" as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, other than
pursuant to a transaction or agreement previously approved by the
Board of Directors of the Company, directly or indirectly pur-
chases 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
- 15 -
power of all outstanding voting securities of the Company; or
(2) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's Board of Directors, and any new directors
whose election by such Board or nomination for election by
stockholders was approved by a vote of at least two-thirds of the
members of such Board who were either directors on such Board at
the beginning of the period or whose election or nomination for
election as directors was previously so approved, for any reason
cease to constitute at least a majority of the members thereof.
(C) Notwithstanding the provisions of subparagraph (B), with
respect to Awards granted hereunder on or after December 6, 1995, a
Change in Control shall occur only if the event described in this
subparagraph (C) shall have occurred. With respect to any other Award
granted prior thereto, a Change in Control shall occur if any of the
events described in subparagraphs (B) or (C) shall have occurred, unless
the holder of any such Award shall have consented to the application of
this subparagraph (C) in lieu of the foregoing subparagraph (B). A
Change in Control for purposes of this subparagraph (C) shall occur if,
during any period of twenty-four consecutive calendar months, the
individuals who at the beginning of such period constitute the Company's
Board of Directors, and any new directors (other than Excluded
Directors, as hereinafter defined), whose election by such Board or
nomination for election by stockholders was approved by a vote of at
least two-thirds of the members of such Board who were either directors
on such Board at the beginning of the period or whose election or
nomination for election as directors was previously so approved, for any
reason cease to constitute at least a majority of the members thereof.
For purposes hereof, "Excluded Directors" are directors whose election
by the Board or approval by the Board for stockholder election occurred
within one year of any "person" or "group of persons", as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, commencing a
tender offer for, or becoming the beneficial owner of, voting securities
representing 25 percent or more of the combined voting power of all
outstanding voting securities of the Company, other than pursuant to a
tender offer approved by the Board prior to its commencement or pursuant
to stock acquisitions approved by the Board prior to their representing
25 percent or more of such combined voting power.
(D)(1) In the event that subsequent to a Change in Control it
is determined that any payment or distribution by the Company to or for
the benefit of a Participant, whether
- 16 -
paid or payable or distributed or distributable pursuant to the terms of
this Plan or otherwise, other than any payment pursuant to this
subparagraph (D) (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then such Participant shall be entitled to receive from
the Company, within 15 days following the determination described in (2)
below, an additional payment ("Excise Tax Adjustment Payment") in an
amount such that after payment by such Participant of all applicable
Federal, state and local taxes (computed at the maximum marginal rates
and including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Excise Tax Adjustment
Payment, such Participant retains an amount of the Excise Tax Adjustment
Payment equal to the Excise Tax imposed upon the Payments.
(2) All determinations required to be made under this Section
6(g)(vi)(D), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be
made by Cooper & Lybrand L.L.P., or such other national accounting firm
as the Company, or, subsequent to a Change in Control, the Company and
the Participant jointly, may designate, for purposes of the Excise Tax,
which shall provide detailed supporting calculations to the Company and
the affected Participant within 15 business days of the date of the
applicable Payment. Except as hereinafter provided, any determination
by Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the Participant. As a result of
the uncertainty in the application of Section 4999 of the Code that may
exist at the time of the initial determination hereunder, it is possible
that (x) certain Excise Tax Adjustment Payments will not have been made
by the Company which should have been made (an "Underpayment"), or (y)
certain Excise Tax Adjustment Payments will have been made which should
not have been made (an "Overpayment"), consistent with the calculations
required to be made hereunder. In the event of an Underpayment, such
Underpayment shall be promptly paid by the Company to or for the benefit
of the affected Participant. In the event that the Participant
discovers that an Overpayment shall have occurred, the amount thereof
shall be promptly repaid to the Company.
(3) This Section 6(g)(vi)(D) shall not apply to any Award (x)
that was granted prior to February 17, 1993 and (y) the holder of which
is an executive officer of the Company, as determined under the Exchange
Act.
- 17 -
(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.
(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(b) 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
- 18 -
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 continu-
ing in effect other or additional compensation arrangements, including the
grant of options and other stock-based awards, and such arrangements may be
either generally applicable or applicable only in specific cases.
(d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or any Affiliate. Further, the Company or an Affiliate may at any
time dismiss a Participant from employment, free from any liability, or any
claim under the Plan, unless otherwise expressly provided in the Plan or in
any Award Agreement or other written agreement with the Participant.
(e) Governing Law. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Michigan and applicable Federal law.
(f) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to applicable laws, or if it cannot
be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award, and the
remainder of the Plan and any such Award shall remain in full force and
effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant
or any other person. To the extent that
- 19 -
any person acquires a right to receive payments from the Company or any
Affiliate pursuant to an Award, such right shall be no greater than the right
of any unsecured general creditor of the Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares, or whether such fractional Shares or any
rights thereto shall be cancelled, terminated or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 9. Effective Date of the Plan
The Plan shall be effective as of the date of its approval by the
Company's stockholders.
- 20 -
Exhibit 10.q
MASCOTECH, INC.
1991 LONG TERM STOCK INCENTIVE PLAN
(Restated December 6, 1995)
Section 1. Purposes
The purposes of the 1991 Long Term Stock Incentive Plan (the "Plan") are
to encourage selected employees of and consultants to MascoTech, Inc. (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 thereun-
der, or any successor provision, rule or regulation.
(s) "Shares" shall mean the Company's common stock, par value $1.00 per
share, and such other securities or property as may become the subject of
Awards, or become subject to Awards, pursuant to an adjustment made under
Section 4(b) of the Plan.
(t) "Stock Appreciation Right" shall mean any right granted under
Section 6(b) of the Plan.
- 2 -
Section 3. Administration
The Committee shall administer the Plan, and subject to the terms of the
Plan and applicable law, the Committee's authority shall include without
limitation the power to:
(i) designate Participants;
(ii) determine the types of Awards to be granted;
(iii) determine the number of Shares to be covered by Awards and
any payments, rights or other matters to be calculated in connection
therewith;
(iv) determine the terms and conditions of Awards and amend the
terms and conditions of outstanding Awards;
(v) determine how, whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or
suspended;
(vi) determine how, whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other
property and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the holder thereof
or of the Committee;
(vii) determine the methods or procedures for establishing the
fair market value of any property (including, without limitation, any
Shares or other securities) transferred, exchanged, given or received
with respect to the Plan or any Award;
(viii) prescribe and amend the forms of Award Agreements and other
instruments required under or advisable with respect to the Plan;
(ix) designate Options granted to key employees of the Company or
its subsidiaries as Incentive Stock Options;
(x) interpret and administer the Plan, Award Agreements, Awards
and any contract, document, instrument or agreement relating thereto;
(xi) establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the
administration of the Plan;
(xii) decide all questions and settle all controversies and
disputes which may arise in connection with the Plan, Award Agreements
and Awards;
- 3 -
(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, and to amend Awards granted
to Participants, provided such Participants are not directors or
officers of the Company for purposes of Section 16;
(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(b):
(i) Initial Authorization. There shall be 6,000,000 Shares
initially available for issuance under the Plan.
(ii) Acquired Shares. In addition to the amount set forth above,
up to 6,000,000 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.
(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
- 4 -
purposes of allowing the Plan to continue to satisfy the conditions of
Rule 16b-3.
(iv) Shares Under Prior Plans. In addition to the amount set
forth above, shares remaining available for issuance upon any
termination of authority to make further awards under both the Company's
1984 Restricted Stock Incentive Plan and its 1984 Stock Option Plan
shall thereafter be available for issuance hereunder.
(v) 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 avail-
able for granting Awards under the Plan.
(vi) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized but unissued Shares or of Shares reacquired by the Company,
including but not limited to Shares purchased on the open market.
(b) 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,
- 5 -
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.
(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
- 6 -
any successor provision thereto, and any regulations promulgated
thereunder.
Subject to the terms of the Plan, the Committee may impose such
conditions or restrictions on any Option as it deems appropriate.
(ii) Other Terms. Unless otherwise determined by the Committee:
(A) A Participant electing to exercise an Option shall give
written notice to the Company, as may be specified by the
Committee, of exercise of the Option and the number of Shares
elected for exercise, such notice to be accompanied by such
instruments or documents as may be required by the Committee, and
shall tender the purchase price of the Shares elected for
exercise.
(B) At the time of exercise of an Option payment in full in
cash shall be made for all Shares then being purchased.
(C) The Company shall not be obligated to issue any Shares
unless and until:
(I) if the class of Shares at the time is listed upon
any stock exchange, the Shares to be issued have been
listed, or authorized to be added to the list upon official
notice of issuance, upon such exchange, and
(II) in the opinion of the Company's counsel there has
been compliance with applicable law in connection with the
issuance and delivery of Shares and such issuance shall have
been approved by the Company's counsel.
Without limiting the generality of the foregoing, the
Company may require from the Participant such investment
representation or such agreement, if any, as the Company's counsel
may consider necessary in order to comply with the Securities Act
of 1933 as then in effect, and may require that the Participant
agree that any sale of the Shares will be made only in such manner
as shall be in accordance with law and that the Participant will
notify the Company of any intent to make any disposition of the
Shares whether by sale, gift or otherwise. The Participant shall
take any action reasonably requested by the Company in such
connection. A Participant shall have the rights of a stockholder
only as and when Shares have been actually issued to the
Participant pursuant to the Plan.
(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
- 7 -
an Affiliate) other than the Participant's death, the Participant
may thereafter exercise the Option as provided below, except that
the Committee may terminate the unexercised portion of the Option
concurrently with or at any time following termination of the
employment or consulting arrangement (including termination of
employment upon a change of status from employee to consultant) if
it shall determine that the Participant has engaged in any
activity detrimental to the interests of the Company or an
Affiliate. If such termination is voluntary on the part of the
Participant, the option may be exercised only within ten days
after the date of termination. If such termination is involuntary
on the part of the Participant, if an employee retires on or after
normal retirement date or if the employment or consulting
relationship is terminated by reason of permanent and total
disability, the Option may be exercised within three months after
the date of termination or retirement. For purposes of this
Paragraph (D), a Participant's employment or consulting
arrangement shall not be considered terminated (i) in the case of
approved sick leave or other bona fide leave of absence (not to
exceed one year), (ii) in the case of a transfer of employment or
the consulting arrangement among the Company and Affiliates, or
(iii) by virtue of a change of status from employee to consultant
or from consultant to employee, except as provided above.
(E) If a Participant dies at a time when entitled to
exercise an Option, then at any time or times within one year
after death such Option may be exercised, as to all or any of the
Shares which the Participant was entitled to purchase immediately
prior to death. The Company may decline to deliver Shares to a
designated beneficiary until it receives indemnity against claims
of third parties satisfactory to the Company. Except as so
exercised such Option shall expire at the end of such period.
(F) An Option may be exercised only if and to the 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 contin-
ued.
(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
- 8 -
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 Appreciation Right and may impose such conditions
or restrictions on the exercise of any Stock Appreciation Right as it may deem
appropriate.
(c) Restricted Stock and Restricted Stock Units.
(i) Issuance. The Committee is authorized to grant to
Participants Awards of Restricted Stock, which shall consist of Shares,
and Restricted Stock Units which shall give the Participant the right to
receive cash, other securities, other Awards or other property, in each
case subject to the termination of the Restricted Period determined by
the Committee.
(ii) Restrictions. The Restricted Period may differ among
Participants and may have different expiration dates with respect to
portions of Shares covered by the same Award. Subject to the terms of
the Plan, Awards of Restricted Stock and Restricted Stock Units shall
have such restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or the
right to receive any dividend or other right or property), which
restrictions may lapse separately or in combination at such time or
times, in installments or otherwise. Unless the Committee shall
otherwise determine, any Shares or other securities distributed with
respect to Restricted Stock or which a Participant is otherwise entitled
to receive by reason of such Shares shall be subject to the restrictions
contained in the applicable Award Agreement. Subject to the
aforementioned restrictions and the provisions of the Plan, Participants
shall have all of the rights of a stockholder with respect to Shares of
Restricted Stock.
(iii) Registration. Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee may deem appropriate,
including, without limitation, book-entry registration or issuance of
stock certificates.
(iv) Forfeiture. Except as otherwise determined by the
Committee:
- 9 -
(A) If the employment of or consulting arrangement with a
Participant terminates for any reason (including termination by
reason of the fact that any entity is no longer an Affiliate),
other than the Participant's death or permanent and total
disability or, in the case of an employee, retirement on or after
normal retirement date, all Shares of Restricted Stock theretofore
awarded to the Participant which are still subject to restrictions
shall upon such termination of employment or the consulting
relationship be forfeited and transferred back to the Company.
Notwithstanding the foregoing or Paragraph (C) below, if a
Participant continues to hold an Award of Restricted Stock
following termination of the employment or consulting arrangement
(including retirement and termination of employment upon a change
of status from employee to consultant), the Shares of Restricted
Stock which remain subject to restrictions shall nonetheless be
forfeited and transferred back to the Company if the Committee at
any time thereafter determines that the Participant has engaged in
any activity detrimental to the interests of the Company or an
Affiliate. For purposes of this Paragraph (A), a Participant's
employment or consulting arrangement shall not be considered
terminated (i) in the case of approved sick leave or other bona
fide leave of absence (not to exceed one year), (ii) in the case
of a transfer of employment or the consulting arrangement among
the Company and Affiliates, or (iii) by virtue of a change of
status from employee to consultant or from consultant to employee,
except as provided above.
(B) If a Participant ceases to be employed or retained by
the Company or an Affiliate by reason of death or permanent and
total disability or if following retirement a Participant
continues to have rights under an Award of Restricted Stock and
thereafter dies, the restrictions contained in the Award shall
lapse with respect to such Restricted Stock.
(C) If an employee ceases to be employed by the Company or
an Affiliate by reason of retirement on or after normal retirement
date, the restrictions contained in the Award of Restricted Stock
shall continue to lapse in the same manner as though employment
had not terminated.
(D) At the expiration of the Restricted Period as to Shares
covered by an Award of Restricted Stock, the Company shall deliver
the Shares as to which the Restricted Period has expired, as
follows:
(1) if an assignment to a trust has been made in
accordance with Section 6(g)(iv)(B)(2)(c), to such trust; or
- 10 -
(2) if the Restricted Period has expired by reason of
death and a beneficiary has been designated in form approved
by the Company, to the beneficiary so designated; or
(3) in all other cases, to the Participant or the
legal representative of the Participant's estate.
(d) Performance Awards. The Committee is authorized to grant
Performance Awards to Participants. Subject to the terms of the Plan, a
Performance Award granted under the Plan (i) may be denominated or payable in
cash, Shares (including, without limitation, Restricted Stock), other
securities, other Awards, or other property and (ii) shall confer on the
holder thereof rights valued as determined by the Committee and payable to, or
exercisable by, the holder of the Performance Award, in whole or in part, upon
the achievement of such performance goals during such performance periods as
the Committee shall establish. Subject to the terms of the Plan, the
performance goals to be achieved during any performance period, the length of
any performance period, the amount of any Performance Award granted, the
amount of any payment or transfer to be made pursuant to any Performance Award
and other terms and conditions shall be determined by the Committee.
(e) Dividend Equivalents. The Committee is authorized to grant to
Participants Awards under which the holders thereof shall be entitled to
receive payments equivalent to dividends or interest with respect to a number
of Shares determined by the Committee, and the Committee may provide that such
amounts (if any) shall be deemed to have been reinvested in additional Shares
or otherwise reinvested. Subject to the terms of the Plan, such Awards may
have such terms and conditions as the Committee shall determine.
(f) Other Stock-Based Awards. The Committee is authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to or otherwise based on or related to Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purposes of the Plan,
provided, however, that such grants to persons who are subject to Section 16
must comply with the provisions of Rule 16b-3. Subject to the terms of the
Plan, the Committee shall determine the terms and conditions of such Awards.
Shares or other securities delivered pursuant to a purchase right granted
under this Section 6(f) shall be purchased for such consideration, which may
be paid by such method or methods and in such form or forms, including,
without limitation, cash, Shares, other securities, other Awards or other
property or any combination thereof, as the Committee shall determine.
- 11 -
(g) General.
(i) No Cash Consideration for Awards. Awards may be granted for
no cash consideration or for such minimal cash consideration as may be
required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may,
in the discretion of the Committee, be granted either alone or in
addition to, in tandem with or in substitution for any other Award or
any award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or in
addition to or in tandem with awards granted under another plan of the
Company or any Affiliate, may be granted either at the same time as or
at a different time from the grant of such other Awards or awards.
(iii) Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise, or payment
of an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other
securities, other Awards, or other property, or any combination thereof,
and may be made in a single payment or transfer, in installments, or on
a deferred basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of Dividend Equivalents in respect of installment or deferred
payments.
(iv) Limits on Transfer of Awards.
(A) Except as the Committee may otherwise determine, no
Award or right under any Award may be sold, encumbered, pledged,
alienated, attached, assigned or transferred in any manner and any
attempt to do any of the foregoing shall be void and unenforceable
against the Company.
(B) Notwithstanding the provisions of Paragraph (A) above:
(1) An Option may be transferred:
(a) to a beneficiary designated by the
Participant in writing on a form approved by the
Committee; or
(b) by will or the applicable laws of descent and
distribution to the personal representative, executor
or administrator of the Participant's estate.
- 12 -
(2) A Participant may assign or transfer rights under
an Award of Restricted Stock or Restricted Stock Units:
(a) to a beneficiary designated by the
Participant in writing on a form approved by the
Committee;
(b) by will or the applicable laws of descent and
distribution to the personal representative, executor
or administrator of the Participant's estate; or
(c) to a revocable grantor trust established by
the Participant for the sole benefit of the
Participant during the Participant's life, and under
the terms of which the Participant is and remains the
sole trustee until death or physical or mental
incapacity. Such assignment shall be effected by a
written instrument in form and content satisfactory to
the Committee, and the Participant shall deliver to
the Committee a true copy of the agreement or other
document evidencing such trust. If in the judgment of
the Committee the trust to which a Participant may
attempt to assign rights under such an Award does not
meet the criteria of a trust to which an assignment is
permitted by the terms hereof, or if after assignment,
because of amendment, by force of law or any other
reason such trust no longer meets such criteria, such
attempted assignment shall be void and may be
disregarded by the Committee and the Company and all
rights to any such Awards shall revert to and remain
solely in the Participant. Notwithstanding a qualified
assignment, the Participant, and not the trust to
which rights under such an Award may be assigned, for
the purpose of determining compensation arising by
reason of the Award shall continue to be considered an
employee or consultant, as the case may be, of the
Company or an Affiliate, but such trust and the
Participant shall be bound by all of the terms and
conditions of the Award Agreement and this Plan.
Shares issued in the name of and delivered to such
trust shall be conclusively considered issuance and
delivery to the Participant.
(3) The Committee shall not permit directors or
officers of the Company for purposes of Section 16 to
transfer or assign Awards except as permitted under Rule
16b-3.
- 13 -
(C) The Committee, the Company and its officers, agents and
employees may rely upon any beneficiary designation, assignment or
other instrument of transfer, copies of trust agreements and any
other documents delivered to them by or on behalf of the
Participant which they believe genuine and any action taken by
them in reliance thereon shall be conclusive and binding upon the
Participant, the personal representatives of the Participant's
estate and all persons asserting a claim based on an Award. The
delivery by a Participant of a beneficiary designation, or an
assignment of rights under an Award as permitted hereunder, shall
constitute the Participant's irrevocable undertaking to hold the
Committee, the Company and its officers, agents and employees
harmless against claims, including any cost or expense incurred in
defending against claims, of any person (including the
Participant) which may be asserted or alleged to be based on an
Award subject to a beneficiary designation or an assignment. In
addition, the Company may decline to deliver Shares to a
beneficiary until it receives indemnity against claims of third
parties satisfactory to the Company.
(v) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares or other
securities are then listed and any applicable Federal or state
securities laws, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such
restrictions.
(vi) Change in Control. (A) Notwithstanding any of the
provisions of this Plan or instruments evidencing Awards granted
hereunder, upon a Change in Control of the Company (as hereinafter
defined) the vesting of all rights of Participants under outstanding
Awards shall be accelerated and all restrictions thereon shall terminate
in order that Participants may fully realize the benefits thereunder.
Such acceleration shall include, without limitation, the immediate
exercisability in full of all Options and the termination of
restrictions on Restricted Stock and Restricted Stock Units. Further, in
addition to the Committee's authority set forth in Section 4(b), 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
- 14 -
deems appropriate to reflect such Change in Control; and (iii) cause any
such Award then outstanding to be assumed, or new rights substituted
therefor, by the acquiring or surviving corporation after such Change in
Control.
(B) With respect to any Award granted hereunder prior to
December 6, 1995, a Change in Control shall occur if:
(1) any "person" or "group of persons" as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act, other than
pursuant to a transaction or agreement previously approved by the
Board of Directors of the Company, directly or indirectly
purchases or otherwise becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) or has the right to acquire
such beneficial ownership (whether or not such right is
exercisable immediately, with the passage of time, or subject to
any condition) of voting securities representing 25 percent or
more of the combined voting power of all outstanding voting
securities of (A) the Company or (B) of Masco Corporation, a
Delaware corporation ("Masco"); or
(2) during any period of twenty-four consecutive calendar
months, the individuals who at the beginning of such period
constitute the Company's or Masco's Board of Directors, and any
new directors whose election by such Board or nomination for
election by stockholders was approved by a vote of at least two-
thirds of the members of such Board who were either directors on
such Board at the beginning of the period or whose election or
nomination for election as directors was previously so approved,
for any reason cease to constitute at least a majority of the
members thereof.
(C) Notwithstanding the provisions of subparagraph (B),
with respect to Awards granted hereunder on or after December 6,
1995, a Change in Control shall occur only if the event described
in this subparagraph (C) shall have occurred. With respect to any
other Award granted prior thereto, a Change in Control shall occur
if any of the events described in subparagraphs (B) or (C) shall
have occurred, unless the holder of any such Award shall have
consented to the application of this subparagraph (C) in lieu of
the foregoing subparagraph (B). A Change in Control for purposes
of this subparagraph (C) shall occur if, during any period of
twenty-four consecutive calendar months, the individuals who at
the beginning of such period constitute the Company's Board of
Directors, and any new directors (other than Excluded Directors,
as hereinafter defined), whose election by such Board or
nomination for election by stockholders was approved by a vote of
at least two-thirds of the members of such Board who were either
directors on such Board at the beginning of
- 15 -
the period or whose election or nomination for election as directors was
previously so approved, for any reason cease to constitute at least a
majority of the members thereof. For purposes hereof, "Excluded
Directors" are directors whose election by the Board or approval by the
Board for stockholder election occurred within one year of any "person"
or "group of persons", as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, commencing a tender offer for, or becoming
the beneficial owner of, voting securities representing 25 percent or
more of the combined voting power of all outstanding voting securities
of the Company, other than pursuant to a tender offer approved by the
Board prior to its commencement or pursuant to stock acquisitions
approved by the Board prior to their representing 25 percent or more of
such combined voting power.
(D)(1) In the event that subsequent to a Change in Control it
is determined that any payment or distribution by the Company to or for
the benefit of a Participant, whether paid or payable or distributed or
distributable pursuant to the terms of this Plan or otherwise, other
than any payment pursuant to this subparagraph (D) (a "Payment"), would
be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then such Participant
shall be entitled to receive from the Company, within 15 days following
the determination described in (2) below, an additional payment ("Excise
Tax Adjustment Payment") in an amount such that after payment by such
Participant of all applicable Federal, state and local taxes (computed
at the maximum marginal rates and including any interest or penalties
imposed with respect to such taxes), including any Excise Tax, imposed
upon the Excise Tax Adjustment Payment, such Participant retains an
amount of the Excise Tax Adjustment Payment equal to the Excise Tax
imposed upon the Payments.
(2) All determinations required to be made under this Section
6(g)(vi)(D), including whether an Excise Tax Adjustment Payment is
required and the amount of such Excise Tax Adjustment Payment, shall be
made by Cooper & Lybrand L.L.P., or such other national accounting firm
as the Company, or, subsequent to a Change in Control, the Company and
the Participant jointly, may designate, for purposes of the Excise Tax,
which shall provide detailed supporting calculations to the Company and
the affected Participant within 15 business days of the date of the
applicable Payment. Except as hereinafter provided, any determination
by Coopers & Lybrand L.L.P., or such other national accounting firm,
shall be binding upon the Company and the Participant. As a result of
the uncertainty in the application of Section 4999 of the Code that may
exist at the time of the initial determination
- 16 -
hereunder, it is possible that (x) certain Excise Tax Adjustment
Payments will not have been made by the Company which should have been
made (an "Underpayment"), or (y) certain Excise Tax Adjustment Payments
will have been made which should not have been made (an "Overpayment"),
consistent with the calculations required to be made hereunder. In the
event of an Underpayment, such Underpayment shall be promptly paid by
the Company to or for the benefit of the affected Participant. In the
event that the Participant discovers that an Overpayment shall have
occurred, the amount thereof shall be promptly repaid to the Company.
(3) This Section 6(g)(vi)(D) shall not apply to any Award (x)
that was granted prior to February 17, 1993 and (y) the holder of which
is an executive officer of the Company, as determined under the Exchange
Act.
(vii) Cash Settlement. Notwithstanding any provision of this
Plan or of any Award Agreement to the contrary, any Award outstanding
hereunder may at any time be cancelled in the Committee's sole
discretion upon payment of the value of such Award to the holder thereof
in cash or in another Award hereunder, such value to be determined by
the Committee in its sole discretion.
Section 7. Amendment and Termination
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board of Directors of the Company may
amend the Plan and the Board of Directors or the Committee may amend any
outstanding Award; provided, however, that (i) no Plan amendment shall be
effective until approved by stockholders of the Company insofar as stockholder
approval thereof is required in order for the Plan to continue to satisfy the
conditions of Rule 16b-3, and (ii) without the consent of affected
Participants no amendment of the Plan or of any Award may impair the rights of
Participants under outstanding Awards.
(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(b) 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
- 17 -
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 continu-
ing in effect other or additional compensation arrangements, including the
grant of options and other stock-based awards, and such arrangements may be
either generally applicable or applicable only in specific cases.
(d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or any Affiliate. Further, the Company or an Affiliate may at any
time dismiss a Participant from employment, free from any liability, or any
claim under the Plan, unless otherwise expressly provided in the Plan or in
any Award Agreement or other written agreement with the Participant.
(e) Governing Law. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Michigan and applicable Federal law.
(f) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any person or Award, or would disqualify the Plan
- 18 -
or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award, and the
remainder of the Plan and any such Award shall remain in full force and
effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant
or any other person. To the extent that any person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares, or whether such fractional Shares or any
rights thereto shall be cancelled, terminated or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
Section 9. Effective Date of the Plan
The Plan shall be effective as of the date of its approval by the
Company's stockholders.
- 19 -
Exhibit 11
TRIMAS CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(In Thousands, Except Per Share Amounts)
Twelve Months Ended Three Months Ended
December 31, December 31,
1995 1994 1995 1994
Primary:
Net income $56,020 $50,100 $12,800 $11,960
Weighted average common
shares outstanding 36,644 36,644 36,644 36,644
Dilution of stock options 347 382 334 357
Weighted average common
and common equivalent
shares outstanding
after assumed exercise
of options 36,991 37,026 36,978 37,001
Primary earnings per
common share $1.51 $1.35 $.35 $.32
Fully diluted:
Net income $56,020 $50,100 $12,800 $11,960
Add after tax convertible
debenture related
expenses 3,680 3,680 920 920
Net income as adjusted $59,700 $53,780 $13,720 $12,880
Weighted average common
shares outstanding 36,644 36,644 36,644 36,644
Dilution of stock options 347 382 334 357
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 42,074 42,109 42,061 42,084
Fully diluted earnings
per common share $1.42 $1.28 $.33 $.31
Exhibit 12
TRIMAS CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Thousands)
For the years ended December 31,
1995 1994 1993
Earnings:
Income before income taxes $ 91,840 $83,500 $63,870
Fixed charges 14,570 13,900 10,250
Earnings before fixed charges $106,410 $97,400 $74,120
Fixed charges:
Interest $ 13,870 $13,170 $ 9,650
Portion of rental expense 900 870 730
Fixed charges $ 14,770 $14,040 $10,380
Ratios of earnings to fixed charges 7.2 6.9 7.1
Exhibit 21
TRIMAS CORPORATION
(a Delaware Corporation)
Subsidiaries
Jurisdiction of
Incorporation
Name or Organization
Compac Corporation Delaware
Netcong Investments, Inc. New Jersey
Di-Rite Company Ohio
Draw-Tite, Inc. Delaware
Mongo Electronics, Inc. Delaware
Draw-Tite (Canada) Ltd. Ontario
Eskay Screw Corporation Delaware
Fulton Performance Products, Inc. Delaware
Spar Marine Manufacturing Ltd. British Columbia
Hitch 'N Post, Inc. Delaware
Kee Services, Inc. Michigan
Keo Cutters, Inc. Delaware
Lake Erie Screw Corporation Ohio
Lamons Metal Gasket Co. Delaware
Canadian Gasket & Supply Inc. Canada
Louisiana Hose & Rubber Co. Louisiana
Monogram Aerospace Fasteners, Inc. Delaware
Norris Cylinder Company Delaware
Punchcraft Company Michigan
Reese Products, Inc. Indiana
Hayman-Reese Pty. Ltd. Australia
Reese Products of Canada Ltd. Ontario
Reska Spline Products, Inc. Michigan
Richards Micro-Tool, Inc. Delaware
Rieke Corporation Indiana
Rieke Canada Limited Canada
Rieke of Mexico, Inc. Delaware
Jurisdiction of
Incorporation
Name or Organization
Rieke de Mexico, S.A. de C.V. Mexico
Rieke Leasing Co., Incorporated Delaware
TriMas Corporation Nevada
TriMas Export, Inc. Barbados
TriMas Fasteners Corp. Delaware
TriMas Services Corp. Delaware
Directly owned subsidiaries appear at the left hand margin, first tier and
second tier subsidiaries are indicated by single and double indentation,
respectively, and are listed under the names of their respective parent
companies. Unless otherwise indicated, all subsidiaries are wholly-owned.
Certain of these companies may also use tradenames or other assumed names in
the conduct of their business.
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the prospectuses
included in the registration statements of TriMas Corporation and
subsidiaries on Form S-8 (Registration Nos. 33-31030 and 033-59243) and on
Form S-3 (Registration Nos. 33-56372, 33-72462, 33-53889 and 33-59014) of our
report dated February 7, 1996, on our audits of the consolidated financial
statements and financial statement schedule of TriMas Corporation and
subsidiaries as of December 31, 1995 and 1994, and for each of the three years
in the period ended December 31, 1995, which report is included in this Annual
Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
March 25, 1996
5
YEAR
DEC-31-1995
DEC-31-1995
92,390,000
0
72,730,000
1,530,000
85,490,000
251,590,000
290,480,000
116,780,000
616,360,000
54,130,000
187,200,000
370,000
0
0
338,300,000
616,360,000
553,490,000
553,490,000
371,470,000
371,470,000
0
0
13,530,000
91,840,000
35,820,000
56,020,000
0
0
0
56,020,000
1.51
1.42
