As filed with the Securities and Exchange Commission on May __ , 2001 -
Registration No. _______
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
UNIVERSAL FOREST PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-1465835
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2801 East Beltline, N.E., Grand Rapids, Michigan 49525
(Address of Principal Executive Offices) (Zip Code)
Universal Forest Products, Inc. Long-Term Stock Incentive Plan
and
Universal Forest Products, Inc. 1999 Long-Term Incentive Plan
(Full Title of the Plan)
Matthew Missad
2801 East Beltline, N.E., Grand Rapids, Michigan 49525
(616) 364-6161
(Name, address and telephone number, including area code of agent for service)
Copies of Communications to:
Michael G. Wooldridge
Varnum, Riddering, Schmidt & Howlett LLP
333 Bridge Street, N.W., P.O. Box 352
Grand Rapids, Michigan 49501-0352
(616) 336-6000
CALCULATION OF REGISTRATION FEE
====================================================================================================================
Title of Proposed Maximum Proposed Maximum
Securities to be Amount to be Offering Price Aggregate Amount of
Registered Registered(1)(2) Per Share Offering Price(3) Registration Fee
- --------------------------------------------------------------------------------------------------------------------
Common Stock 2,300,000 Shares $16.025 $36,857,500 $9,214.38
(No Par Value)
====================================================================================================================
(1) Represents the number of shares of Common Stock authorized for issuance
under both the Universal Forest Products, Inc. Long-Term Stock Incentive
Plan (1,100,000) and the Universal Forest Products, Inc. 1999 Long-Term
Stock Incentive Plan (1,200,000) which replaces the prior plan.
(2) Universal Forest Products, Inc. will file amendments to this registration
statement for any increase in the number of shares available under the
Plans as provided in the Plans.
(3) For the purpose of computing the registration fee only, the price shown is
based upon the price of $16.025 per share, the average high and low sales
prices for common stock of the Registrant in the NASDAQ National Market on
May 7, 2001, in accordance with Rule 457(h).
Pursuant to Rule 416(a) of the General Rules and Regulations under the
Securities Act of 1933, this Registration Statement shall cover such additional
securities as may be offered or issued to prevent dilution resulting from stock
splits, stock dividends or similar transactions.
S-1
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
Information required by Part I to be contained in Section 10(a) Prospectus
is omitted from this registration statement in accordance with Rule 428 of the
Securities Act of 1933 and the Note to Part I of Form S-8.
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The Company's Annual Report on Form 10-K for the year ended December 30,
2000, which has been filed by the Company with the Commission (SEC File No.
0-22684), is incorporated herein by reference. All other reports filed by the
Company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, since the end of the fiscal year covered by the foregoing Annual Report on
Form 10-K are incorporated herein by reference. All other reports or documents
filed by the Company pursuant to the requirements of Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act, subsequent to the date of this
registration statement and prior to the termination of the offering of the
securities offered hereby shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such reports or documents.
Any statements contained in a document incorporated herein by reference shall be
deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any subsequently filed
document which also is incorporated herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this registration
statement.
The description of the Company's Common Stock, the class of securities
offered pursuant to this registration statement, is contained in the Company's
Registration Statement filed pursuant to Section 12 of the Securities Exchange
Act, and is incorporated herein by reference, including any subsequent
amendments or reports filed for the purpose of updating that description.
Item 4. Description of Securities
The class of securities to be offered is registered under Section 12 of the
Securities Exchange Act.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Sections 561-571 of the Michigan Business Corporation Act, as amended
("MBCA"), grant the Company broad powers to indemnify any person in connection
with legal proceedings brought against him by reason of his present or past
status as an officer or director of the Company, provided that the person acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company, and with respect to any criminal action or
proceeding, has no reasonable cause to believe his conduct was unlawful. The
MBCA also gives the Company broad powers to indemnify any such person against
expenses and reasonable settlement payments in connection with any action by or
in the right of the Company, provided the person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, except that no indemnification may be made if such person is
adjudged to be liable to the Company unless and only to the extent the court in
which such action was brought determines upon application that, despite such
adjudication, but in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for reasonable expenses as the court
deems proper. In addition to the extent that any such person is successful in
the defense of any such legal proceedings, the Company is required by the MBCA
to indemnify him against expenses, including attorneys' fees that are actually
and reasonably incurred by him in connection therewith.
S-2
The Company's Amended and Restated Articles of Incorporation contain
provisions entitling directors and executive officers of the Company to
indemnification against certain liabilities and expenses. The Company has
entered into indemnification agreements with each of its directors providing a
contractual right to indemnity by the Company against certain liabilities and
expenses. In addition to the available indemnification, the Company's Amended
and Restated Articles of Incorporation limit the personal liability of the
members of its Board of Directors for monetary damages with respect to claims by
the Company or its shareholders resulting from certain negligent acts or
omissions.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Reference is made to the Exhibit Index which appears on page S-8.
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
S-3
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
S-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Grand Rapids, State of Michigan, on the 18th day of
April, 2001.
UNIVERSAL FOREST PRODUCTS, INC.
By: /s/ William G. Currie
William G. Currie
President and Chief Executive Officer
By: /s/ Michael R. Cole
Michael R. Cole
Chief Financial Officer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on April 18, 2001, by the following
persons in the capacities indicated.
By: /s/ Peter F. Secchia By: /s/ Philip M. Novell
Peter F. Secchia, Director Philip M. Novell, Director
By: /s/ William G. Currie By: /s/ Louis A. Smith
William G. Currie, Director Louis A. Smith, Director
By: /s/ John C. Canepa By: /s/ Carroll M. Shoffner
John C. Canepa, Director Carroll M. Shoffner, Director
By: /s/ John W. Garside
John W. Garside, Director
S-5
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Universal Forest Products, Inc. on Form S-8 of our report dated January 29,
2001, appearing in and incorporated by reference in the Annual Report on Form
10-K of Universal Forest Products, Inc. for the year ended December 30, 2000.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Grand Rapids, Michigan
May 9, 2001
S-6
May 8, 2001
Universal Forest Products, Inc.
2801 East Beltline, N.E.
Grand Rapids, MI 49525
Re: Registration Statement on Form S-8 Relating to the Universal
Forest Products, Inc. Long-Term Stock Incentive Plan and the
Universal Forest Products, Inc. 1999 Long-Term Stock Incentive
Plan (collectively, the "Plans")
Gentlemen:
With respect to the Registration Statement on Form S-8 (the "Registration
Statement"), filed by Universal Forest Products, Inc., a Michigan corporation
(the "Company"), with the Securities and Exchange Commission for the purpose of
registering under the Securities Act of 1933, as amended, 2,300,000 shares of
the Company's common stock, no par value for issuance pursuant to the Plans, we
have examined such documents and questions of law we consider necessary or
appropriate for the purpose of giving this opinion.
On the basis of such evaluation, we advise you that, in our opinion, the
2,300,000 shares covered by the Registration Statement, upon the exercise of
stock options, at the prices described in the Registration Statement, but not
less than the par value thereof, and upon delivery of such shares and payment
therefor in accordance with the terms stated in the Plans and the Registration
Statement, will be duly and legally authorized, issued and outstanding and will
be fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or under the rules and regulations of
the Securities and Exchange Commission relating thereto.
Sincerely,
VARNUM, RIDDERING, SCHMIDT & HOWLETTLLP
S-7
EXHIBIT INDEX
The following exhibits are filed as a part of the Registration Statement:
Exhibit 4.1 Universal Forest Products, Inc. Long-Term Stock Incentive Plan
Exhibit 4.2 Universal Forest Products, Inc. 1999 Long-Term Stock Incentive
Plan
Exhibit 5 Opinion of Varnum, Riddering, Schmidt & Howlett LLP included
on Page S-7 hereof
Exhibit 23(a) Consent of BDO Seidman LLP included on Page S-6 hereof
Exhibit 23(b) Consent of Varnum, Riddering, Schmidt & Howlett LLP (included
in Exhibit 5)
::ODMA\PCDOCS\GRR\552905\1
S-8
EXHIBIT 4.1
UNIVERSAL FOREST PRODUCTS, INC.
LONG-TERM STOCK INCENTIVE PLAN
ARTICLE 1
ESTABLISHMENT AND PURPOSE OF THE PLAN
1.1 Establishment of the Plan. Universal Forest Product, Inc., a Michigan
corporation (the "Company"), hereby establishes an incentive compensation plan
to be known as the "Universal Forest Products, Inc. Long-Term Stock Incentive
Plan" (the "Plan"), as set forth in this document. The Plan permits the granting
of stock options, stock appreciation rights, restricted stock, and other
stock-based awards to key employees of the Company and its Subsidiaries. Upon
approval by the Board of Directors of the Company, subject to ratification by
the affirmative vote of holders of a majority of shares of the Company's Common
Stock present and entitled to vote at the 1997 Annual Meeting of Shareholders,
the Plan shall become effective as of January 1, 1997 (the "Effective Date").
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
long-term success of the Company for the benefit of the Company's shareholders,
through stock-based compensation, by aligning the personal interests of the
Company's key employees with those of its shareholders. The Plan is also
designed to allow key employees to participate in the Company's future, as well
as to enable the Company to attract, retain and award such employees.
1.3 Term of Plan. No Awards shall be granted pursuant to the Plan on or
after the tenth anniversary of the Effective Date ("Termination Date"), provided
that Awards granted prior to the Termination Date may extend beyond that date,
and Cash Payment Rights and Reload Options may be effected pursuant to the terms
of Awards granted prior to the Termination Date.
ARTICLE 2
DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings set
forth below:
2.1 "Award" shall mean any award under this Plan of any Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares or Other Stock-Based
Award.
2.2 "Award Agreement" shall mean an agreement evidencing the grant of an
Award under this Plan. Awards under the Plan shall be evidenced by Award
Agreements that set forth the details, conditions and limitations for each
Award, as established by the Committee and shall be subject to the terms and
conditions of the Plan.
2.3 "Award Date" shall mean the date that an Award is made, as specified in
an Award Agreement.
2.4 "Board" shall mean the Board of Directors of the Company.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.6 "Committee" shall mean the Committee, as specified in Article 3,
appointed by the Board to administer the Plan.
2.7 "Common Stock" shall mean the Common Stock of the Company.
2.8 "Disability" shall mean permanent and total disability as determined
under the rules and guidelines established by the Committee for purposes of the
Plan.
2.9 "Fair Market Value" shall be the mean between the highest and lowest
sales prices per share of the Common Stock for such date on the National
Association of Securities Dealers Automated Quotation System or any successor
system then in use ("NASDAQ"). If no sale of shares of Common Stock is reflected
on the NASDAQ on a date, "Fair Market Value" shall be determined on the next
preceding day on which there was a sale of shares of Common Stock reflected on
NASDAQ.
2.10 "Incentive Stock Option" or "ISO" shall mean an option to purchase
shares of Common Stock granted under Article 6, which is designated as an
Incentive Stock Option and is intended to meet the requirements of Section 422
of the Code.
2.11 "Insider" shall mean an employee who is an officer (as defined in Rule
16a-1(f) of the Exchange Act) or director of the Company, or holder of more than
ten percent (10%) of its outstanding shares of Common Stock.
2.12 "Nonemployee Director" shall have the meaning set forth in Rule
16b-3(b)(3), as promulgated by the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934 (the "Exchange Act"), or any
successor definition adopted by the SEC.
2.13 "Nonqualified Stock Option" or "NQSO" shall mean an option to purchase
shares of Common Stock, granted under Article 6, which is not an Incentive Stock
Option.
2.14 "Option" means an Incentive Stock Option, a Nonqualified Stock Option,
or a Reload Option.
2.15 "Option Price" shall mean the price at which a share of Common Stock
may be purchased by a Participant pursuant to an Option, as determined by the
Committee.
2.16 "Other Stock-Based Award" shall mean an Award under Article 10 of this
Plan that is valued in whole or in part by reference to, or is payable in or
otherwise based on, Common Stock.
2.17 "Participant" shall mean an employee of the Company or a Subsidiary
who holds an outstanding Award granted under the Plan.
2.18 "Performance Shares" shall mean an Award granted under Article 9 of
this Plan evidencing the right to receive Common Stock or cash of an equivalent
value at the end of a specified performance period.
2.19 "Permitted Transferee" means (i) the spouse, children or grandchildren
of a Participant (each an "Immediate Family Member"), (ii) a trust or trusts for
the exclusive benefit of the Participant and/or one or more Immediate Family
Members, or (iii) a partnership or limited liability company whose only partners
or members are the Participant and/or one or more Immediate Family Members.
2.20 "Reload Option" shall mean an Option that is awarded under the
conditions of Section 6.5 of the Plan.
2.21 "Retirement" shall mean the termination of a Participant's employment
with the Company or a Subsidiary after the Participant attains normal retirement
age as established by the Committee at the time an Award is made.
2.22 "Restricted Stock" shall mean an Award granted to a Participant under
Article 8 of this Plan.
2.23 "Stock Appreciation Right" or "SAR" shall mean an Award granted to a
Participant under Article 7 of this Plan.
2.24 "Subsidiary" shall mean any corporation in which the Company owns
directly, or indirectly through subsidiaries, at least fifty percent (50%) of
the total combined voting power of all classes of stock, or any other entity
(including, but not limited to, partnerships and joint ventures) in which the
Company owns at least fifty percent (50%) of the combined equity thereof.
2
2.25 "Termination of Employment" shall mean the termination of a
Participant's employment with the Company or a Subsidiary. A Participant
employed by a Subsidiary shall also be deemed to incur a Termination of
Employment if the Subsidiary ceases to be a Subsidiary and the Participant does
not immediately thereafter become an employee of the Company or another
Subsidiary.
ARTICLE 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by a Committee designated
by the Board consisting of not less than two (2) directors who shall be
appointed from time to time by the Board, each of whom shall qualify as a
Nonemployee Director.
3.2 Committee Authority. Subject to the Company's Articles of
Incorporation, Bylaws and the provisions of this Plan, the Committee shall have
full authority to grant Awards to key employees of the Company or a Subsidiary.
Awards may be granted singly, in combination, or in tandem. The authority of the
Committee shall include the following:
(a) To select the key employees of the Company or a Subsidiary to whom
Awards may be granted under the Plan;
(b) To determine whether and to what extent Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares and Other
Stock-Based Awards, or any combination thereof are to be granted under the
Plan;
(c) To determine the number of shares of Common Stock to be covered by
each Award;
(d) To determine the terms and conditions of any Award Agreement,
including, but not limited to, the Option Price, any vesting restriction or
limitation, any vesting schedule or acceleration thereof, or any forfeiture
restrictions or waiver thereof, regarding any Award and the shares Common
Stock relating thereto, based on such factors as the Committee shall
determine in its sole discretion;
(e) To determine whether, to what extent and under what circumstances
grants of Awards are to operate on a tandem basis and/or in conjunction
with or apart from other cash compensation arrangement made by Company
other than under the terms of this Plan;
(f) To determine under what circumstances an Award may be settled in
cash, Common Stock, or a combination thereof; and
(g) To determine to what extent and under what circumstances shares of
Common Stock and other amounts payable with respect to an Award shall be
deferred.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (including any Award Agreement) and to
otherwise supervise the administration of the Plan. A majority of the Committee
shall constitute a quorum, and the acts of a majority of a quorum at any
meeting, or acts reduced to or approved in writing by a majority of the members
of the Committee, shall be the valid acts of the Committee. The interpretation
and construction by the Committee of any provisions of the Plan or any Award
granted under the Plan shall be final and binding upon the Company, the Board
and Participants, including their respective heirs, executors and assigns. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or an Award granted
hereunder.
ARTICLE 4
COMMON STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 13.1, the maximum aggregate
number of shares of Common Stock which may be issued under this Plan shall not
exceed 1,100,000 shares, which may be either unauthorized and unissued
3
Common Stock or issued Common Stock reacquired by the Company ("Plan Shares").
Determinations as to the number of Plan Shares that remain available for
issuance under the Plan shall be made in accordance with such rules and
procedures as the Committee shall determine from time to time, which shall be
consistent with the requirements of Rule 16b-3 of the Exchange Act and such
interpretations thereof. If an Award expires unexercised or is forfeited,
cancelled, terminated or settled in cash in lieu of Common Stock, the shares of
Common Stock that were theretofore subject (or potentially subject) to such
Award may again be made subject to an Award Agreement; provided, however, that
any such shares subject to a forfeited or cancelled Award shall not again be
made subject to an Award Agreement to any Participant who received, directly or
indirectly, any of the benefits of ownership of the securities underlying such
Award, excluding the right to vote such shares.
ARTICLE 5
ELIGIBILITY
The persons who shall be eligible to receive Awards under the Plan shall be
such key employees of the Company or a Subsidiary as the Committee shall select
from time to time. In making such selections, the Committee shall consider the
nature of the services rendered by such employees, their present and potential
contribution to the Company's success and the success of the particular
Subsidiary or division of the Company by which they are employed, and such other
factors as the Committee in its discretion shall deem relevant. Participants may
hold more than one Award, but only on the terms and subject to the restrictions
set forth in the Plan and their respective Award Agreements.
ARTICLE 6
STOCK OPTIONS
6.1 Options. Options may be granted alone or in addition to other Awards
granted under this Plan. Each Option granted under this Plan shall be either an
Incentive Stock Option (ISO) or a Nonqualified Stock Option (NQSO).
6.2 Grants. The Committee shall have the authority to grant to any
Participant one or more Incentive Stock Options, Nonqualified Stock Options, or
both types of Options. To the extent that any Option does not qualify as an
Incentive Stock Option (whether because of its provisions or the time or manner
of its exercise or otherwise), such Option or the portion thereof which does not
qualify shall constitute a separate Nonqualified Stock Option.
6.3 Incentive Stock Options. No term of this Plan relating to Incentive
Stock Options shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be so exercised, so as to disqualify the
Plan under Section 422 of the Code, or, without the consent of the Participants
affected, to disqualify any Incentive Stock Option under such Section 422. An
Incentive Stock Option shall not be granted to an individual who, on the date of
grant, owns stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company. The aggregate Fair Market
Value, determined on the Award Date of the shares of Common Stock with respect
to which one or more Incentive Stock Options (or other incentive stock options
within the meaning of Section 422 of the Code, under all other option plans of
the Company) that are exercisable for the first time by a Participant during any
calendar year shall not exceed the $100,000 limitation imposed by Section 422(d)
of the Code.
6.4 Terms of Options. Options granted under the Plan shall be evidenced by
Award Agreements in such form as the Committee shall from time to time approve.
Each Agreement shall comply with and be subject to the following terms and
conditions:
(a) Participant's Agreement. Each Participant shall agree to remain in
the continuous employ of the Company for a period of at least twelve (12)
months from the Award Date or until Retirement, if Retirement occurs prior
to twelve (12) months from the date of the Option. Such Agreement shall not
impose upon the Company any obligation to retain the Participant in its
employ for any period.
(b) Option Price. The Option Price per share of Common Stock
purchasable under an Option shall be determined by the Committee at the
time of grant but shall be not less than one hundred percent (100%) of the
Fair Market Value of the Common Stock at the Award Date.
4
(c) Option Term. The term of each Option shall be fixed by the
Committee, but no Option which is designated as an ISO shall be exercisable
more than ten (10) years after the date the ISO is granted, provided that
the term of any Incentive Stock Option granted to an Insider shall not
exceed five (5) years.
(d) Exercisability. Except as provided in Section 13.2, no Option
shall be exercisable in either in whole or in part prior to the first
anniversary of the Award Date. Thereafter, an Option shall be exercisable
at such time or times and subject to such terms and conditions (including
but not limited to vesting provisions) as shall be determined by the
Committee and set forth in the Award Agreement. If the Committee provides
that any Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part,
based on such factors as the Committee may determine.
(e) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (d) above, Options may be
exercised in whole or in part at any time during the term of the Option, by
giving written notice of exercise to the Company specifying the number of
shares to be purchased. Such notice shall be accompanied by payment in full
of the purchase price in such form as the Committee may accept.
Notwithstanding the foregoing, an Option shall not be exercisable with
respect to less than 100 shares of Common Stock unless the remaining shares
covered by an Option are fewer than 100 shares. If and to the extent
determined by the Committee in its sole discretion at or after grant,
payment in full or in part may also be made in the form of Common Stock
owned by the Participant (and for which the Participant has good title free
and clear of any liens and encumbrances) or Restricted Stock, or by
reduction in the number of shares issuable upon such exercise based, in
each case, on the Fair Market Value of the Common Stock on the last trading
date preceding payment as determined by the Committee (without regard to
any forfeiture restrictions applicable to Restricted Stock). No shares of
stock shall be issued until payment has been made. A Participant shall
generally have the rights to dividends or other rights of a shareholder
with respect to shares subject to the Option when the person exercising
such option has given written notice of exercise, has paid for such shares
as provided herein, and, if requested, has given the representation
described in Section 14.1 of the Plan. Notwithstanding the foregoing, if
payment in full or in part has been made in the form of Restricted Stock,
an equivalent number of shares of Common Stock issued on exercise of the
Option shall be subject to the same restrictions and conditions, and during
the remainder of the Restriction Period [as defined in Section 8.3(a)],
applicable to the shares of Restricted Stock surrendered therefor.
(f) Transferability of Options. No Option may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution, provided, however, the
Committee may, in its discretion, authorize all or a portion of a
Nonqualified Stock Option to be granted to an optionee to be on terms which
permit transfer by such optionee to a Permitted Transferee, provided that
(i) there may be no consideration for any such transfer (other than the
receipt of or interest in a family partnership or limited liability
company), (ii) the stock option agreement pursuant to which such options
are granted must be approved by the Committee, and must expressly provide
for transferability in a manner consistent with this Section 6.4(f), and
(iii) subsequent transfers of transferred options shall be prohibited
except those in accordance with Section 6.4(i). Following transfer, any
such options shall continue to be subject to the same terms and conditions
as were applicable immediately prior to transfer. The events of termination
of service of Sections 6.4(g), (h) and (i) hereof, and the tax withholding
obligations of Section 13.3 shall continue to be applied with respect to
the original optionee, following which the options shall be exercisable by
the Permitted Transferee only to the extent, and for the periods specified
in Sections 6(g), (h), and (i). The Company shall not be obligated to
notify Permitted Transferee(s) of the expiration or termination of any
option. Further, all Options shall be exercisable during the Participant's
lifetime only by such Participant and, in the case of a Nonqualified Stock
Option, by a Permitted Transferee. The designation of a person entitled to
exercise an Option after a person's death will not be deemed a transfer.
(g) Termination of Employment for Reasons other than Disability or
Death. Upon Termination of Employment for any reason other than on account
of Disability or death, each Option held by the Participant shall, to the
extent rights to purchase shares under such Option have accrued at the date
of such Termination of Employment and shall not have been fully exercised,
be exercisable, in whole or in part, at any time within a period of three
(3) months following Termination of Employment, subject, however, to prior
expiration of the term of such Options and any other limitations on the
exercise of such Options in effect at the date of
5
exercise. Whether an authorized leave of absence or absence because of
military or governmental service shall constitute Termination of Employment
for such purposes shall be determined by the Committee, which determination
shall be final and conclusive.
(h) Termination of Employment for Disability. Upon Termination of
Employment by reason of Disability, each Option held by such Participant
shall, to the extent rights to purchase shares under the Option have
accrued at the date of such Retirement or Disability and shall not have
been fully exercised, remain exercisable in whole or in part, for a period
of one (1) year following such Termination of Employment, subject, however,
to prior expiration according to its terms and other limitations imposed by
the Plan. If the Participant dies after such Retirement or Disability, the
Participant's Options shall be exercisable in accordance with Section
6.4(i) below.
(i) Termination of Employment for Death. Upon Termination of
Employment due to death, each Option held by such Participant or Permitted
Transferee shall, to the extent rights to purchase shares under the Options
have accrued at the date of death and shall not have been fully exercised,
be exercisable, in whole or in part, by the personal representative of the
estate of the Participant or Permitted Transferee or by any person or
persons who shall have acquired the Option directly from the Participant or
Permitted Transferee by bequest or inheritance only under the following
circumstances and during the following periods: (i) if the Participant dies
while employed by the Company or a Subsidiary, at any time within one (1)
year after his or her death, or (ii) if the Participant dies during the
extended exercise period following Termination of Employment specified in
Section 6.4(h), at any time within the longer of such extended period or
three (3) months after death, subject, however, in any case, to the prior
expiration of the term of the Option and any other limitation on the
exercise of such Option in effect at the date of exercise.
(j) Termination of Options. Any Option that is not exercised within
whichever of the exercise periods specified in Sections 6.4(g), (h) or (i)
is applicable shall terminate upon expiration of such exercise period.
(k) Purchase and Settlement Provisions. The Committee may at any time
offer to purchase an Option previously granted, based on such terms and
conditions as the Committee shall establish and communicate to the
Participant at the time that such offer is made. In addition, if an Award
Agreement so provides at the Award Date or is thereafter amended to so
provide, the Committee may require that all or part of the shares of Common
Stock to be issued with respect to the exercise of an Option, in an amount
not greater than the Fair Market Value of the shares that is in excess of
the aggregate Option Price, take the form of Performance Shares or
Restricted Stock, which shall be valued on the date of exercise on the
basis of the Fair Market Value of such Performance Shares or Restricted
Stock determined without regard to the deferral limitations and/or
forfeiture restrictions involved.
6.5 Reload Options. Without in any way limiting the authority of the
Committee to make grants hereunder, and in order to induce employees to retain
ownership of shares of Common Stock, the Committee shall have the authority (but
not an obligation) to include within any Award Agreement a provision entitling
the Participant to a further Option (a "Reload Option") in the event the
Participant exercises the Option evidenced by the Award Agreement, in whole or
in part, by surrendering shares of Common Stock previously owned by the
Participant, in accordance with this Plan and the terms and conditions of the
Award Agreement. A Reload Option shall entitle a Participant to purchase a
number of shares of Common Stock equal to the number of such shares so delivered
upon exercise of the original Option and, in the discretion of the Committee,
the number of shares, if any, tendered to the Company to satisfy any withholding
tax liability arising in connection with the exercise of the original Option. A
Reload Option shall: (a) have an Option Price of not less than one hundred
percent (100%) of the per share Fair Market Value of the Common Stock on the
date of grant of such Reload Option; (b) have a term not longer than the
remaining term of the original Option at the time of exercise thereof; (c)
become exercisable in the event the shares acquired upon exercise of the
original Option are held for a minimum period of time established by the
Committee; and (d) be subject to such other terms and conditions as the
Committee may determine.
6
ARTICLE 7
STOCK APPRECIATION RIGHTS
7.1 Grant of SARs. The Committee may approve the grant of Stock
Appreciation Rights ("SARs") that are related to Options only. A SAR may be
granted only at the time of grant of the related Option. A SAR will entitle the
holder of the related Option, upon exercise of the SAR, to surrender such
Option, or any portion thereof to the extent unexercised, with respect to the
number of shares as to which such SAR is exercised, and to receive payment of an
amount computed pursuant to Section 7.2. Such Option will, to the extent
surrendered, then cease to be exercisable. A SAR granted hereunder will be
exercisable at such time or times, and only to the extent that a related Option
is exercisable, and will not be transferable except to the extent that such
related Option may be transferable.
7.2 Payment of SAR Amount. Upon the exercise of a SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying (i) the difference between the Fair Market Value of a share of
Common Stock on the date of exercise over the Option Price, by (ii) the number
of shares of Common Stock with respect to which the SAR is exercised. At the
discretion of the Committee, the payment upon SAR exercise may be in cash, in
shares of Common Stock of equivalent value, or in some combination thereof.
ARTICLE 8
RESTRICTED STOCK
8.1 Awards of Restricted Stock. Shares of Restricted Stock may be issued
either alone or in addition to other Awards granted under the Plan. The
Committee shall determine the eligible persons to whom, and the time or times at
which, grants of Restricted Stock will be made, the number of shares to be
awarded, the price (if any) to be paid by the Participant, the time or times
within which such Awards may be subject to forfeiture, the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
Awards. The Committee may condition the grant of Restricted Stock upon the
achievement of specific business objectives, measurements of individual or
business unit or Company performances, or such other factors as the Committee
may determine. The provisions of Restricted Stock awards need not be the same
with respect to each Participant, and such Awards to individual Participants
need not be the same in subsequent years.
8.2 Awards and Certificates. A prospective Participant selected to receive
a Restricted Stock shall not have any rights with respect to such Award, unless
and until such Participant has executed an Award Agreement evidencing the Award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the applicable terms and conditions of such Award.
Further, such Award shall be subject to the following conditions:
(a) Acceptance. Awards of Restricted Stock must be accepted within a
period of 20 days (or such shorter period as the Committee may specify at
grant) after the Award Date, by executing an Award Agreement and by paying
whatever price (if any) the Committee has designated for such shares of
Restricted Stock.
(b) Legend. Each Participant receiving a Restricted Stock Award shall
be issued a stock certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such
Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the Universal Forest Products, Inc.
Long-Term Stock Incentive Plan and related Award Agreement
entered into between the registered owner and the Company, dated
_____________. Copies of such Plan and Agreement are on file in
the offices of the Company, 2801 East Beltline, N.E., Grand
Rapids, Michigan 49505."
(c) Custody. The Committee may require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
7
award of Restricted Stock, the Participant shall have delivered a duly
signed stock power, endorsed in blank, relating to the Common Stock covered
by such Award.
8.3 Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Plan shall be subject to the following restrictions and
conditions:
(a) Restriction Period. Subject to the provisions of this Plan and the
Award Agreement, during a period set by the Committee commencing with the
Award Date and expiring not less than twelve (12) consecutive months
thereafter (the "Restriction Period"), the Participant shall not be
permitted to sell, transfer, pledge, or assign shares of Restricted Stock
awarded under this Plan. Subject to these limits, the Committee, in its
sole discretion, may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in whole or in
part, based on service, performance and/or such other factors or criteria
as the Committee may determine.
(b) Rights as Shareholder. Except as provided in this subsection (b)
and subsection (a) above, the Participant shall have, with respect to the
shares of Restricted Stock, all of the rights of a holder of shares of
Common Stock of the Company including the right to receive any dividends.
The Committee, in its sole discretion, as determined at the time of Award,
may permit or require the payment of dividends to be deferred. If any
dividends or other distributions are paid in shares of Common Stock, such
shares shall be subject to the same restrictions on transferability and
forfeitability as the shares of Restricted Stock with respect to which they
were paid.
(c) Termination of Employment. Subject to the applicable provisions of
the Award Agreement and this Article 8, upon Termination of Employment for
any reason during the Restriction Period, all Restricted Shares still
subject to restriction will vest or be forfeited in accordance with the
terms and conditions established by the Committee as specified in the Award
Agreement.
(d) Lapse of Restrictions. If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock, the certificates for
such shares shall be delivered to the Participant.
ARTICLE 9
PERFORMANCE SHARES
9.1 Award of Performance Shares. Performance Shares may be awarded either
alone or in addition to other Awards granted under this Plan. The Committee
shall determine the eligible persons to whom and the time or times at which
Performance Shares shall be awarded, the number of Performance Shares to be
awarded to any person, the duration of the period (the "Performance Period")
during which, and the conditions under which, receipt of the Performance Shares
will be deferred, and the other terms and conditions of the Award in addition to
those set forth in Section 9.2, as specified in the Award Agreement. The
Committee may condition the grant of Performance Shares upon the achievement of
specific business objectives, measurements of individual or business unit or
Company performance, or such other factors or criteria as the Committee shall
determine. The provisions of the award of Performance Shares need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.
9.2 Terms and Conditions. Performance Shares awarded pursuant to this
Article 9 shall be subject to the following terms and conditions:
(a) Nontransferability. Subject to the provisions of this Plan and the
related Award Agreement, Performance Shares may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Performance Period.
At the expiration of the Performance Period, share certificates or cash of
an equivalent value (as the Committee may determine in its sole discretion)
shall be delivered to the Participant, or his legal representative, in a
number equal to the shares covered by the Award Agreement.
8
(b) Dividends. Unless otherwise determined by the Committee at the
time of Award, amounts equal to any cash dividends declared during the
Performance Period with respect to the number of shares of Common Stock
covered by a Performance Share Award will not be paid to the Participant.
(c) Termination of Employment. Subject to the provisions of the Award
Agreement and this Article 9, upon Termination of Employment for any reason
during the Performance Period for a given Award, the Performance Shares in
question will vest or be forfeited in accordance with the terms and
conditions established by the Committee at or after grant.
(d) Accelerated Vesting. Based on service, performance and/or such
other factors or criteria as the Committee may determine and set forth in
the Award Agreement, the Committee may, at or after grant, accelerate the
vesting of all or any part of any award of Performance Shares and/or waive
the deferral limitations for all or any part of such Award.
ARTICLE 10
OTHER STOCK-BASED AWARDS
10.1 Other Awards. Other Awards of Common Stock and other Awards that are
valued in whole or in part by reference to, or are payable in or otherwise based
on, Common Stock ("Other Stock-Based Awards"), may be granted either alone or in
addition to or in tandem with Options, SARs, Restricted Stock or Performance
Shares. Subject to the provisions of this Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
Awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such awards, and all other conditions of the Awards. The Committee
may also provide for the grant of Common Stock under such Awards upon the
completion of a specified performance period. The provisions of Other
Stock-Based Awards need not be the same with respect to each Participant and
such Awards to individual Participants need not be the same in subsequent years.
10.2 Terms and Conditions. Other Stock-Based Awards made pursuant to this
Article 10 shall be set forth in an Award Agreement and shall be subject to the
following terms and conditions:
(a) Nontransferability. Subject to the provisions of this Plan and the
Award Agreement, shares of Common Stock subject to Awards made under this
Article 10 may not be sold, assigned, transferred, pledged, or otherwise
encumbered prior to the date on which the shares are issued, or, if later,
the date on which any applicable restriction, performance or deferral
period lapses.
(b) Dividends. Unless otherwise determined by the Committee at the
time of Award, subject to the provisions of this Plan and the Award
Agreement, the recipient of an Award under this Article 10 shall be
entitled to receive, currently or on a deferred stock basis, dividends or
other distributions with respect to the number of shares of Common Stock
covered by the Award.
(c) Vesting. Any Award under this Article 10 and any Common Stock
covered by any such Award shall vest or be forfeited to the extent so
provided in the Award Agreement, as determined by the Committee, in its
sole discretion.
(d) Waiver of Limitation. In the event of the Participant's
Retirement, Disability or death, or in cases of special circumstances, the
Committee may, in its sole discretion, waive in whole or in part any or all
of the limitations imposed hereunder (if any) with respect to any or all of
an Award under this Article 10.
(e) Price. Common Stock issued or sold under this Article 10 may be
issued or sold for no cash consideration or such consideration as the
Committee shall determine and specify in the Award Agreement.
9
ARTICLE 11
TERMINATION OR AMENDMENT OF THE PLAN
The Board may at any time amend, discontinue or terminate this Plan or any
part thereof (including any amendment deemed necessary to ensure that the
Company may comply with any applicable regulatory requirement); provided,
however, that, unless otherwise required by law, the rights of a Participant
with respect to Awards granted prior to such amendment, discontinuance or
termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the Company's shareholders, no
amendment may be made which would (i) increase the aggregate number of shares of
Common Stock that may be issued under this Plan (except by operation of Section
13.1); or (ii) decrease the option price of any Option to less than one hundred
percent (100%) of the Fair Market Value on the date of grant for an Option.
Awards may not be granted under the Plan after the Termination Date, but Awards
granted prior to such date shall remain in effect or become exercisable pursuant
to their respective terms and the terms of this Plan.
ARTICLE 12
UNFUNDED PLAN
This Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payment not yet made to a Participant
by the Company, nothing contained herein shall give any such Participant any
rights that are greater than those of a general creditor of the Company.
ARTICLE 13
ADJUSTMENT PROVISIONS
13.1 Antidilution. Subject to the provisions of this Article 13, if the
outstanding shares of Common Stock are increased, decreased, or exchanged for a
different number or kind of shares or other securities, or if additional shares
or new or different shares or other securities are distributed with respect to
such shares of Common Stock or other securities, through merger, consolidation,
sale of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of Common Stock or other
securities, an appropriate and proportionate adjustment may be made in (i) the
maximum number and kind of shares provided in Article 4 of the Plan, (ii) the
number and kind of shares or other securities subject to the then outstanding
Awards, and (iii) the price for each share or other unit of any other securities
subject to the then outstanding Awards.
13.2 Change in Control. Notwithstanding Section 13.1, upon dissolution or
liquidation of the Company, or upon a reorganization, merger, or consolidation
of the Company with one or more corporations as a result of which the Company is
not the surviving corporation, or upon the sale of all or substantially all the
assets of the Company, all Awards then outstanding under the Plan will be fully
vested and exercisable and all restrictions will immediately cease, unless
provisions are made in connection with such transaction for the continuance of
the Plan and the assumption of or the substitution for such Awards of new Awards
covering the stock of a successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices.
13.3 Adjustments by Committee. Any adjustments pursuant to this Article 13
will be made by the Committee, whose determination as to what adjustments will
be made and the extent thereof will be final, binding, and conclusive. No
fractional interest will be issued under the Plan on account of any such
adjustments. Only cash payments will be made in lieu of fractional shares.
ARTICLE 14
GENERAL PROVISIONS
14.1 Legend. The Committee may require each person purchasing shares
pursuant to an Award under the Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
10
All certificates for shares of Common Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, any applicable Federal or state securities law, and any applicable
corporate law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
14.2 No Right to Employment. Neither this Plan nor the grant of any Award
hereunder shall give any Participant or other employee any right with respect to
continuance of employment by the Company or any Subsidiary, nor shall there be a
limitation in any way on the right of the Company or any Subsidiary by which an
employee is employed to terminate his or her employment at any time.
14.3 Withholding of Taxes. The Company shall have the right to deduct from
any payment to be made pursuant to this Plan, or to otherwise require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld. Unless otherwise prohibited by the Committee,
each Participant may satisfy any such withholding tax obligation by any of the
following means or by a combination of such means: (a) tendering a cash payment;
(b) authorizing the Company to withhold from the shares otherwise issuable to
the Participant a number of shares having a Fair Market Value as of the "Tax
Date", less than or equal to the amount of the withholding tax obligation; or
(c) delivering to the Company unencumbered shares owned by the Participant
having a Fair Market Value, as of the Tax Date, less than or equal to the amount
of the withholding tax obligation. The "Tax Date" shall be the date that the
amount of tax to be withheld is determined.
14.4 No Assignment of Benefits. No Option, Award or other benefit payable
under this Plan shall, except as otherwise specifically transfer, provided by
law, be subject in any manner to anticipation, alienation, attachment, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt to
anticipate, alienate, attach, sell, transfer, assign, pledge, encumber or
charge, any such benefits shall be void, and any such benefit shall not in any
manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such benefit, nor
shall it be subject to attachment or legal process for or against such person.
14.5 Governing Law. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws and in the courts of
the state of Michigan.
14.6 Application of Funds. The proceeds received by the Company from the
sale of shares of Common Stock pursuant to Awards granted under this Plan will
be used for general corporate purposes.
14.7 Rights as a Shareholder. Except as otherwise provided in an Award
Agreement, a Participant shall have no rights as a shareholder of the Company
until he or she becomes the holder of record of Common Stock.
11
EXHIBIT 4.2
UNIVERSAL FOREST PRODUCTS, INC.
1999 LONG TERM STOCK INCENTIVE PLAN
ARTICLE 1
ESTABLISHMENT AND PURPOSE OF THE PLAN
1.1 Establishment of the Plan. Universal Forest Product, Inc., a Michigan
corporation (the "Company"), hereby establishes an incentive compensation plan
to be known as the "Universal Forest Products, Inc. 1999 Long Term Stock
Incentive Plan" (the "Plan"), as set forth in this document. The Plan permits
the granting of stock options, stock appreciation rights, restricted stock, and
other stock-based awards to key employees of the Company and its Subsidiaries.
Upon approval by the Board of Directors of the Company, subject to ratification
by the affirmative vote of holders of a majority of shares of the Company's
Common Stock present and entitled to vote at the 1999 Annual Meeting of
Shareholders, the Plan shall become effective as of April 28, 1999 (the
"Effective Date").
1.2 Purpose of the Plan. The purpose of the Plan is to promote the
long-term success of the Company for the benefit of the Company's shareholders,
through stock-based compensation, by aligning the personal interests of the
Company's key employees with those of its shareholders. The Plan is also
designed to allow key employees to participate in the Company's future, as well
as to enable the Company to attract, retain and award such employees. The Plan
supersedes and replaces the Company's Long Term Inventive Plan, adopted by the
Company's shareholders in 1997.
1.3 Term of Plan. No Awards shall be granted pursuant to the Plan on or
after the tenth anniversary of the Effective Date ("Termination Date"), provided
that Awards granted prior to the Termination Date may extend beyond that date,
and Cash Payment Rights and Reload Options may be effected pursuant to the terms
of Awards granted prior to the Termination Date.
ARTICLE 2
DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings set
forth below:
2.1 "Award" shall mean any award under this Plan of any Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares or Other Stock-Based
Award.
2.2 "Award Agreement" shall mean an agreement evidencing the grant of an
Award under this Plan. Awards under the Plan shall be evidenced by Award
Agreements that set forth the details, conditions and limitations for each
Award, as established by the Committee and shall be subject to the terms and
conditions of the Plan.
2.3 "Award Date" shall mean the date that an Award is made, as specified in
an Award Agreement.
2.4 "Board" shall mean the Board of Directors of the Company.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.6 "Committee" shall mean the Committee, as specified in Article 3,
appointed by the Board to administer the Plan.
2.7 "Common Stock" shall mean the Common Stock of the Company.
2.8 "Disability" shall mean permanent and total disability as determined
under the rules and guidelines established by the Committee for purposes of the
Plan.
2.9 "Fair Market Value" shall be the mean between the highest and lowest
sales prices per share of the Common Stock for such date on the National
Association of Securities Dealers Automated Quotation System or any
successor system then in use ("NASDAQ"). If no sale of shares of Common Stock is
reflected on the NASDAQ on a date, "Fair Market Value" shall be determined on
the next preceding day on which there was a sale of shares of Common Stock
reflected on NASDAQ.
2.10 "Incentive Stock Option" or "ISO" shall mean an option to purchase
shares of Common Stock granted under Article 6, which is designated as an
Incentive Stock Option and is intended to meet the requirements of Section 422
of the Code.
2.11 "Insider" shall mean an employee who is an officer (as defined in Rule
16a-1(f) of the Exchange Act) or director of the Company, or holder of more than
ten percent (10%) of its outstanding shares of Common Stock.
2.12 "Nonemployee Director" shall have the meaning set forth in Rule
16b-3(b)(3), as promulgated by the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934 (the "Exchange Act"), or any
successor definition adopted by the SEC.
2.13 "Nonqualified Stock Option" or "NQSO" shall mean an option to purchase
shares of Common Stock, granted under Article 6, which is not an Incentive Stock
Option.
2.14 "Option" means an Incentive Stock Option, a Nonqualified Stock Option,
or a Reload Option.
2.15 "Option Price" shall mean the price at which a share of Common Stock
may be purchased by a Participant pursuant to an Option, as determined by the
Committee.
2.16 "Other Stock-Based Award" shall mean an Award under Article 10 of this
Plan that is valued in whole or in part by reference to, or is payable in or
otherwise based on, Common Stock.
2.17 "Participant" shall mean an employee of the Company or a Subsidiary
who holds an outstanding Award granted under the Plan.
2.18 "Performance Shares" shall mean an Award granted under Article 9 of
this Plan evidencing the right to receive Common Stock or cash of an equivalent
value at the end of a specified performance period.
2.19 "Permitted Transferee" means (i) the spouse, children or grandchildren
of a Participant (each an "Immediate Family Member"), (ii) a trust or trusts for
the exclusive benefit of the Participant and/or one or more Immediate Family
Members, or (iii) a partnership or limited liability company whose only partners
or members are the Participant and/or one or more Immediate Family Members.
2.20 "Reload Option" shall mean an Option that is awarded under the
conditions of Section 6.5 of the Plan.
2.21 "Retirement" shall mean the termination of a Participant's employment
with the Company or a Subsidiary after the Participant attains normal retirement
age as established by the Committee at the time an Award is made.
2.22 "Restricted Stock" shall mean an Award granted to a Participant under
Article 8 of this Plan.
2.23 "Stock Appreciation Right" or "SAR" shall mean an Award granted to a
Participant under Article 7 of this Plan.
2.24 "Subsidiary" shall mean any corporation in which the Company owns
directly, or indirectly through subsidiaries, at least fifty percent (50%) of
the total combined voting power of all classes of stock, or any other entity
(including, but not limited to, partnerships and joint ventures) in which the
Company owns at least fifty percent (50%) of the combined equity thereof.
2.25 "Termination of Employment" shall mean the termination of a
Participant's employment with the Company or a Subsidiary. A Participant
employed by a Subsidiary shall also be deemed to incur a Termination of
2
Employment if the Subsidiary ceases to be a Subsidiary and the Participant does
not immediately thereafter become an employee of the Company or another
Subsidiary.
ARTICLE 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by a Committee designated
by the Board consisting of not less than two (2) directors who shall be
appointed from time to time by the Board, each of whom shall qualify as a
Nonemployee Director.
3.2 Committee Authority. Subject to the Company's Articles of
Incorporation, Bylaws and the provisions of this Plan, the Committee shall have
full authority to grant Awards to key employees of the Company or a Subsidiary.
Awards may be granted singly, in combination, or in tandem. The authority of the
Committee shall include the following:
(a) To select the key employees of the Company or a Subsidiary to whom
Awards may be granted under the Plan;
(b) To determine whether and to what extent Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares and Other
Stock-Based Awards, or any combination thereof are to be granted under the
Plan;
(c) To determine the number of shares of Common Stock to be covered by
each Award;
(d) To determine the terms and conditions of any Award Agreement,
including, but not limited to, the Option Price, any vesting restriction or
limitation, any vesting schedule or acceleration thereof, or any forfeiture
restrictions or waiver thereof, regarding any Award and the shares of
Common Stock relating thereto, based on such factors as the Committee shall
determine in its sole discretion;
(e) To determine whether, to what extent and under what circumstances
grants of Awards are to operate on a tandem basis and/or in conjunction
with or apart from other cash compensation arrangement made by the Company
other than under the terms of this Plan;
(f) To determine under what circumstances an Award may be settled in
cash, Common Stock, or a combination thereof; and
(g) To determine to what extent and under what circumstances shares of
Common Stock and other amounts payable with respect to an Award shall be
deferred.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (including any Award Agreement) and to
otherwise supervise the administration of the Plan. A majority of the Committee
shall constitute a quorum, and the acts of a majority of a quorum at any
meeting, or acts reduced to or approved in writing by a majority of the members
of the Committee, shall be the valid acts of the Committee. The interpretation
and construction by the Committee of any provisions of the Plan or any Award
granted under the Plan shall be final and binding upon the Company, the Board
and Participants, including their respective heirs, executors and assigns. No
member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or an Award granted
hereunder.
ARTICLE 4
COMMON STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 13.1, the maximum aggregate
number of shares of Common Stock which may be issued under this Plan, which may
be either unauthorized and unissued Common Stock or issued Common Stock
reacquired by the Company ("Plan Shares"), shall be:
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(a) 1,000,000 Shares; plus
(b) shares approved but not covered by options or other stock rights
granted under the 1997 Long Term Incentive Plan.
(c) an annual increase in the number of Shares determined and to be
effective on the date of each annual meeting of the Company's shareholders
(commencing with the annual meeting in the year 2000), equal to the lesser
of (i) 200,000 Shares, (ii) one percent (1.0%) of the sum of (1) the
outstanding Shares, plus (2) the number of Shares subject to outstanding
options issues under the Plan on such date, or (iii) such number of Shares
as determined by the Board.
Determinations as to the number of Plan Shares that remain available for
issuance under the Plan shall be made in accordance with such rules and
procedures as the Committee shall determine from time to time. If an Award
expires unexercised or is forfeited, canceled, terminated or settled in cash in
lieu of Common Stock, the shares of Common Stock that were theretofore subject
(or potentially subject) to such Award may again be made subject to an Award
Agreement. In addition, Shares from the following sources shall be added to the
number of Plan Shares available for issuance under the Plan: (1) any Shares of
the Company's Common Stock surrendered in payment of the exercise price of
Options or to pay the tax withholding obligations incurred upon the exercise of
Options; and (2) Options withheld to pay the exercise price or tax withholding
obligations incurred upon the exercise of Options.
ARTICLE 5
ELIGIBILITY
The persons who shall be eligible to receive Awards under the Plan shall be
such key employees of the Company or a Subsidiary as the Committee shall select
from time to time. In making such selections, the Committee shall consider the
nature of the services rendered by such employees, their present and potential
contribution to the Company's success and the success of the particular
Subsidiary or division of the Company by which they are employed, and such other
factors as the Committee in its discretion shall deem relevant. Participants may
hold more than one Award, but only on the terms and subject to the restrictions
set forth in the Plan and their respective Award Agreements. No participant may
receive Awards under the Plan covering more than twenty-five percent (25%) of
Plan Shares.
ARTICLE 6
STOCK OPTIONS
6.1 Options. Options may be granted alone or in addition to other Awards
granted under this Plan. Each Option granted under this Plan shall be either an
Incentive Stock Option (ISO) or a Nonqualified Stock Option (NQSO).
6.2 Grants. The Committee shall have the authority to grant to any
Participant one or more Incentive Stock Options, Nonqualified Stock Options, or
both types of Options. To the extent that any Option does not qualify as an
Incentive Stock Option (whether because of its provisions or the time or manner
of its exercise or otherwise), such Option or the portion thereof which does not
qualify shall constitute a separate Nonqualified Stock Option.
6.3 Incentive Stock Options. No term of this Plan relating to Incentive
Stock Options shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be so exercised, so as to disqualify the
Plan under Section 422 of the Code, or, without the consent of the Participants
affected, to disqualify any Incentive Stock Option under such Section 422. The
aggregate Fair Market Value, determined on the Award Date of the shares of
Common Stock with respect to which one or more Incentive Stock Options (or other
incentive stock options within the meaning of Section 422 of the Code, under all
other option plans of the Company) that are exercisable for the first time by a
Participant during any calendar year shall not exceed the $100,000 limitation
imposed by Section 422(d) of the Code.
6.4 Terms of Options. Options granted under the Plan shall be evidenced by
Award Agreements in such form as the Committee shall from time to time approve.
Each Agreement shall comply with and be subject to the following terms and
conditions:
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(a) Participant's Agreement. Each Participant shall agree to remain in
the continuous employ of the Company for a period of at least twelve (12)
months from the Award Date or until Retirement, if Retirement occurs prior
to twelve (12) months from the date of the Option. Such Agreement shall not
impose upon the Company any obligation to retain the Participant in its
employ for any period.
(b) Option Price. The Option Price per share of Common Stock
purchasable under an Option shall be determined by the Committee at the
time of grant but shall be not less than one hundred percent (100%) of the
Fair Market Value of the Common Stock at the Award Date, provided that the
Option Price per share of Common Stock subject to an Incentive Stock Option
granted to an Insider shall be no less than 110 percent of the Fair Market
Value of the shares of Common Stock on the Award Date.
(c) Option Term. The term of each Option shall be fixed by the
Committee, but no Option which is designated as an ISO shall be exercisable
more than ten (10) years after the date the ISO is granted, provided that
the term of any Incentive Stock Option granted to an Insider shall not
exceed five (5) years.
(d) Exercisability. Except as provided in Section 13.2, no Option
shall be exercisable either in whole or in part prior to the first
anniversary of the Award Date. Thereafter, an Option shall be exercisable
at such time or times and subject to such terms and conditions (including
but not limited to vesting provisions) as shall be determined by the
Committee and set forth in the Award Agreement. If the Committee provides
that any Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part,
based on such factors as the Committee may determine.
(e) Method of Exercise. Subject to whatever installment exercise and
waiting period provisions apply under subsection (d) above, Options may be
exercised in whole or in part at any time during the term of the Option, by
giving written notice of exercise to the Company specifying the number of
shares to be purchased. Such notice shall be accompanied by payment in full
of the purchase price in such form as the Committee may accept.
Notwithstanding the foregoing, an Option shall not be exercisable with
respect to less than 100 shares of Common Stock unless the remaining shares
covered by an Option are fewer than 100 shares. If and to the extent
determined by the Committee in its sole discretion at or after grant,
payment in full or in part may also be made in the form of Common Stock
owned by the Participant (and for which the Participant has good title free
and clear of any liens and encumbrances and with respect to any shares of
Common Stock acquired upon the exercise of an Option, has been held by the
Optionee for a period of at least six (6) consecutive months) or Restricted
Stock, or by reduction in the number of shares issuable upon such exercise
based, in each case, on the Fair Market Value of the Common Stock on the
last trading date preceding payment as determined by the Committee (without
regard to any forfeiture restrictions applicable to Restricted Stock). No
shares of stock shall be issued until payment has been made. A Participant
shall generally have the rights to dividends or other rights of a
shareholder with respect to shares subject to the Option when the person
exercising such option has given written notice of exercise, has paid for
such shares as provided herein, and, if requested, has given the
representation described in Section 14.1 of the Plan. Notwithstanding the
foregoing, if payment in full or in part has been made in the form of
Restricted Stock, an equivalent number of shares of Common Stock issued on
exercise of the Option shall be subject to the same restrictions and
conditions, and during the remainder of the Restriction Period [as defined
in Section 8.3(a)], applicable to the shares of Restricted Stock
surrendered therefor.
(f) Transferability of Options. No Option may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution, provided, however, the
Committee may, in its discretion, authorize all or a portion of a
Nonqualified Stock Option to be granted to an optionee to be on terms which
permit transfer by such optionee to a Permitted Transferee, provided that
(i) there may be no consideration for any such transfer (other than the
receipt of or interest in a family partnership or limited liability
company), (ii) the stock option agreement pursuant to which such options
are granted must be approved by the Committee, and must expressly provide
for transferability in a manner consistent with this Section 6.4(f), and
(iii) subsequent transfers of transferred options shall be prohibited
except those in accordance with Section 6.4(i). Following transfer, any
such options shall continue to be subject to the same terms and conditions
as were applicable immediately prior to transfer. The events of termination
of service of Sections 6.4(g), (h) and (i) hereof, and the tax withholding
obligations of Section 13.3 shall continue
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to be applied with respect to the original optionee, following which the
options shall be exercisable by the Permitted Transferee only to the
extent, and for the periods specified in Sections 6(g), (h), and (i). The
Company shall not be obligated to notify Permitted Transferee(s) of the
expiration or termination of any option. Further, all Options shall be
exercisable during the Participant's lifetime only by such Participant and,
in the case of a Nonqualified Stock Option, by a Permitted Transferee. The
designation of a person entitled to exercise an Option after a person's
death will not be deemed a transfer.
(g) Termination of Employment for Reasons other than Disability or
Death. Upon Termination of Employment for any reason other than on account
of Disability or death, each Option held by the Participant shall, to the
extent rights to purchase shares under such Option have accrued at the date
of such Termination of Employment and shall not have been fully exercised,
be exercisable, in whole or in part, at any time within a period of three
(3) months following Termination of Employment, subject, however, to prior
expiration of the term of such Options and any other limitations on the
exercise of such Options in effect at the date of exercise. Whether an
authorized leave of absence or absence because of military or governmental
service shall constitute Termination of Employment for such purposes shall
be determined by the Committee, which determination shall be final and
conclusive.
(h) Termination of Employment for Disability. Upon Termination of
Employment by reason of Disability, each Option held by such Participant
shall, to the extent rights to purchase shares under the Option have
accrued at the date of such Retirement or Disability and shall not have
been fully exercised, remain exercisable in whole or in part, for a period
of one (1) year following such Termination of Employment, subject, however,
to prior expiration according to its terms and other limitations imposed by
the Plan. If the Participant dies after such Retirement or Disability, the
Participant's Options shall be exercisable in accordance with Section
6.4(i) below.
(i) Termination of Employment for Death. Upon Termination of
Employment due to death, each Option held by such Participant or Permitted
Transferee shall, to the extent rights to purchase shares under the Options
have accrued at the date of death and shall not have been fully exercised,
be exercisable, in whole or in part, by the personal representative of the
estate of the Participant or Permitted Transferee or by any person or
persons who shall have acquired the Option directly from the Participant or
Permitted Transferee by bequest or inheritance only under the following
circumstances and during the following periods: (i) if the Participant dies
while employed by the Company or a Subsidiary, at any time within one (1)
year after his or her death, or (ii) if the Participant dies during the
extended exercise period following Termination of Employment specified in
Section 6.4(h), at any time within the longer of such extended period or
three (3) months after death, subject, however, in any case, to the prior
expiration of the term of the Option and any other limitation on the
exercise of such Option in effect at the date of exercise.
(j) Termination of Options. Any Option that is not exercised within
whichever of the exercise periods specified in Sections 6.4(g), (h) or (i)
is applicable shall terminate upon expiration of such exercise period.
(k) Purchase and Settlement Provisions. The Committee may at any time
offer to purchase an Option previously granted, based on such terms and
conditions as the Committee shall establish and communicate to the
Participant at the time that such offer is made. In addition, if an Award
Agreement so provides at the Award Date or is thereafter amended to so
provide, the Committee may require that all or part of the shares of Common
Stock to be issued with respect to the exercise of an Option, in an amount
not greater than the Fair Market Value of the shares that is in excess of
the aggregate Option Price, take the form of Performance Shares or
Restricted Stock, which shall be valued on the date of exercise on the
basis of the Fair Market Value of such Performance Shares or Restricted
Stock determined without regard to the deferral limitations and/or
forfeiture restrictions involved.
6.5 Reload Options. Without in any way limiting the authority of the
Committee to make grants hereunder, and in order to induce employees to retain
ownership of shares of Common Stock, the Committee shall have the authority (but
not an obligation) to include within any Award Agreement a provision entitling
the Participant to a further Option (a "Reload Option") in the event the
Participant exercises the Option evidenced by the Award Agreement, in whole or
6
in part, by surrendering shares of Common Stock previously owned by the
Participant, in accordance with this Plan and the terms and conditions of the
Award Agreement. A Reload Option shall entitle a Participant to purchase a
number of shares of Common Stock equal to the number of such shares so delivered
upon exercise of the original Option and, in the discretion of the Committee,
the number of shares, if any, tendered to the Company to satisfy any withholding
tax liability arising in connection with the exercise of the original Option. A
Reload Option shall: (a) have an Option Price of not less than one hundred
percent (100%) of the per share Fair Market Value of the Common Stock on the
date of grant of such Reload Option; (b) have a term not longer than the
remaining term of the original Option at the time of exercise thereof; (c)
become exercisable in the event the shares acquired upon exercise of the
original Option are held for a minimum period of time established by the
Committee; and (d) be subject to such other terms and conditions as the
Committee may determine.
ARTICLE 7
STOCK APPRECIATION RIGHTS
7.1 Grant of SARs. The Committee may approve the grant of Stock
Appreciation Rights ("SARs") that are related to Options only. A SAR may be
granted only at the time of grant of the related Option. A SAR will entitle the
holder of the related Option, upon exercise of the SAR, to surrender such
Option, or any portion thereof to the extent unexercised, with respect to the
number of shares as to which such SAR is exercised, and to receive payment of an
amount computed pursuant to Section 7.2. Such Option will, to the extent
surrendered, then cease to be exercisable. A SAR granted hereunder will be
exercisable at such time or times, and only to the extent that a related Option
is exercisable, and will not be transferable except to the extent that such
related Option may be transferable.
7.2 Payment of SAR Amount. Upon the exercise of a SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying (i) the difference between the Fair Market Value of a share of
Common Stock on the date of exercise over the Option Price, by (ii) the number
of shares of Common Stock with respect to which the SAR is exercised. At the
discretion of the Committee, the payment upon SAR exercise may be in cash, in
shares of Common Stock of equivalent value, or in some combination thereof.
ARTICLE 8
RESTRICTED STOCK
8.1 Awards of Restricted Stock. Shares of Restricted Stock may be issued
either alone or in addition to other Awards granted under the Plan. The
Committee shall determine the eligible persons to whom, and the time or times at
which, grants of Restricted Stock will be made, the number of shares to be
awarded, the price (if any) to be paid by the Participant, the time or times
within which such Awards may be subject to forfeiture, the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
Awards. The Committee may condition the grant of Restricted Stock upon the
achievement of specific business objectives, measurements of individual or
business unit or Company performances, or such other factors as the Committee
may determine. The provisions of Restricted Stock awards need not be the same
with respect to each Participant, and such Awards to individual Participants
need not be the same in subsequent years.
8.2 Awards and Certificates. A prospective Participant selected to receive
a Restricted Stock shall not have any rights with respect to such Award, unless
and until such Participant has executed an Award Agreement evidencing the Award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the applicable terms and conditions of such Award.
Further, such Award shall be subject to the following conditions:
(a) Acceptance. Awards of Restricted Stock must be accepted within a
period of 20 days (or such shorter period as the Committee may specify at
grant) after the Award Date, by executing an Award Agreement and by paying
whatever price (if any) the Committee has designated for such shares of
Restricted Stock.
(b) Legend. Each Participant receiving a Restricted Stock Award shall
be issued a stock certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such
Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
7
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) of the Universal Forest
Products, Inc. Long Term Stock Incentive Plan and related
Award Agreement entered into between the registered owner
and the Company, dated _____________. Copies of such Plan
and Agreement are on file in the offices of the Company,
2801 East Beltline NE, Grand Rapids, Michigan 49525."
(c) Custody. The Committee may require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
award of Restricted Stock, the Participant shall have delivered a duly
signed stock power, endorsed in blank, relating to the Common Stock covered
by such Award.
8.3 Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to this Plan shall be subject to the following restrictions and
conditions:
(a) Restriction Period. Subject to the provisions of this Plan and the
Award Agreement, during a period set by the Committee commencing with the
Award Date and expiring not less than twelve (12) consecutive months
thereafter (the "Restriction Period"), the Participant shall not be
permitted to sell, transfer, pledge, or assign shares of Restricted Stock
awarded under this Plan. Subject to these limits, the Committee, in its
sole discretion, may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions in whole or in
part, based on service, performance and/or such other factors or criteria
as the Committee may determine.
(b) Rights as Shareholder. Except as provided in this subsection (b)
and subsection (a) above, the Participant shall have, with respect to the
shares of Restricted Stock, all of the rights of a holder of shares of
Common Stock of the Company including the right to receive any dividends.
The Committee, in its sole discretion, as determined at the time of Award,
may permit or require the payment of dividends to be deferred. If any
dividends or other distributions are paid in shares of Common Stock, such
shares shall be subject to the same restrictions on transferability and
forfeitability as the shares of Restricted Stock with respect to which they
were paid.
(c) Termination of Employment. Subject to the applicable provisions of
the Award Agreement and this Article 8, upon Termination of Employment for
any reason during the Restriction Period, all Restricted Shares still
subject to restriction will vest or be forfeited in accordance with the
terms and conditions established by the Committee as specified in the Award
Agreement.
(d) Lapse of Restrictions. If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock, the certificates for
such shares shall be delivered to the Participant.
ARTICLE 9
PERFORMANCE SHARES
9.1 Award of Performance Shares. Performance Shares may be awarded either
alone or in addition to other Awards granted under this Plan. The Committee
shall determine the eligible persons to whom and the time or times at which
Performance Shares shall be awarded, the number of Performance Shares to be
awarded to any person, the duration of the period (the "Performance Period")
during which, and the conditions under which, receipt of the Performance Shares
will be deferred, and the other terms and conditions of the Award in addition to
those set forth in Section 9.2, as specified in the Award Agreement. The
Committee may condition the grant of Performance Shares upon the achievement of
specific business objectives, measurements of individual or business unit or
Company performance, or such other factors or criteria as the Committee shall
determine. The provisions of the award of Performance Shares need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.
8
9.2 Terms and Conditions. Performance Shares awarded pursuant to this
Article 9 shall be subject to the following terms and conditions:
(a) Nontransferability. Subject to the provisions of this Plan and the
related Award Agreement, Performance Shares may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Performance Period.
At the expiration of the Performance Period, share certificates or cash of
an equivalent value (as the Committee may determine in its sole discretion)
shall be delivered to the Participant, or his legal representative, in a
number equal to the shares covered by the Award Agreement.
(b) Dividends. Unless otherwise determined by the Committee at the
time of Award, amounts equal to any cash dividends declared during the
Performance Period with respect to the number of shares of Common Stock
covered by a Performance Share Award will not be paid to the Participant.
(c) Termination of Employment. Subject to the provisions of the Award
Agreement and this Article 9, upon Termination of Employment for any reason
during the Performance Period for a given Award, the Performance Shares in
question will vest or be forfeited in accordance with the terms and
conditions established by the Committee at or after grant.
(d) Accelerated Vesting. Based on service, performance and/or such
other factors or criteria as the Committee may determine and set forth in
the Award Agreement, the Committee may, at or after grant, accelerate the
vesting of all or any part of any award of Performance Shares and/or waive
the deferral limitations for all or any part of such Award.
ARTICLE 10
OTHER STOCK-BASED AWARDS
10.1 Other Awards. Other Awards of Common Stock and other Awards that are
valued in whole or in part by reference to, or are payable in or otherwise based
on, Common Stock ("Other Stock-Based Awards"), may be granted either alone or in
addition to or in tandem with Options, SARs, Restricted Stock or Performance
Shares. Subject to the provisions of this Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
Awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such awards, and all other conditions of the Awards. The Committee
may also provide for the grant of Common Stock under such Awards upon the
completion of a specified performance period. The provisions of Other
Stock-Based Awards need not be the same with respect to each Participant and
such Awards to individual Participants need not be the same in subsequent years.
10.2 Terms and Conditions. Other Stock-Based Awards made pursuant to this
Article 10 shall be set forth in an Award Agreement and shall be subject to the
following terms and conditions:
(a) Nontransferability. Subject to the provisions of this Plan and the
Award Agreement, shares of Common Stock subject to Awards made under this
Article 10 may not be sold, assigned, transferred, pledged, or otherwise
encumbered prior to the date on which the shares are issued, or, if later,
the date on which any applicable restriction, performance or deferral
period lapses.
(b) Dividends. Unless otherwise determined by the Committee at the
time of Award, subject to the provisions of this Plan and the Award
Agreement, the recipient of an Award under this Article 10 shall be
entitled to receive, currently or on a deferred stock basis, dividends or
other distributions with respect to the number of shares of Common Stock
covered by the Award.
(c) Vesting. Any Award under this Article 10 and any Common Stock
covered by any such Award shall vest or be forfeited to the extent so
provided in the Award Agreement, as determined by the Committee, in its
sole discretion.
9
(d) Waiver of Limitation. In the event of the Participant's
Retirement, Disability or death, or in cases of special circumstances, the
Committee may, in its sole discretion, waive in whole or in part any or all
of the limitations imposed hereunder (if any) with respect to any or all of
an Award under this Article 10.
(e) Price. Common Stock issued or sold under this Article 10 may be
issued or sold for no cash consideration or such consideration as the
Committee shall determine and specify in the Award Agreement.
ARTICLE 11
TERMINATION OR AMENDMENT OF THE PLAN
The Board may at any time amend, discontinue or terminate this Plan or any
part thereof (including any amendment deemed necessary to ensure that the
Company may comply with any applicable regulatory requirement); provided,
however, that, unless otherwise required by law, the rights of a Participant
with respect to Awards granted prior to such amendment, discontinuance or
termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the Company's shareholders, no
amendment may be made which would (i) increase the aggregate number of shares of
Common Stock that may be issued under this Plan (except by operation of Article
4 or by Section 13.1); or (ii) decrease the option price of any Option to less
than one hundred percent (100%) of the Fair Market Value on the date of grant
for an Option. Awards may not be granted under the Plan after the Termination
Date, but Awards granted prior to such date shall remain in effect or become
exercisable pursuant to their respective terms and the terms of this Plan.
ARTICLE 12
UNFUNDED PLAN
This Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payment not yet made to a Participant
by the Company, nothing contained herein shall give any such Participant any
rights that are greater than those of a general creditor of the Company.
ARTICLE 13
ADJUSTMENT PROVISIONS
13.1 Antidilution. Subject to the provisions of this Article 13, if the
outstanding shares of Common Stock are increased, decreased, or exchanged for a
different number or kind of shares or other securities, or if additional shares
or new or different shares or other securities are distributed with respect to
such shares of Common Stock or other securities, through merger, consolidation,
sale of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of Common Stock or other
securities, an appropriate and proportionate adjustment may be made in (i) the
maximum number and kind of shares provided in Article 4 of the Plan, (ii) the
number and kind of shares or other securities subject to the then outstanding
Awards, and (iii) the price for each share or other unit of any other securities
subject to the then outstanding Awards.
13.2 Change in Control. Notwithstanding Section 13.1, upon dissolution or
liquidation of the Company, or upon a reorganization, merger, or consolidation
of the Company with one or more corporations as a result of which the Company is
not the surviving corporation, or upon the sale of all or substantially all the
assets of the Company, all Awards then outstanding under the Plan will be fully
vested and exercisable and all restrictions will immediately cease, unless
provisions are made in connection with such transaction for the continuance of
the Plan and the assumption of or the substitution for such Awards of new Awards
covering the stock of a successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices.
13.3 Adjustments by Committee. Any adjustments pursuant to this Article 13
will be made by the Committee, whose determination as to what adjustments will
be made and the extent thereof will be final, binding, and conclusive. No
fractional interest will be issued under the Plan on account of any such
adjustments. Only cash payments will be made in lieu of fractional shares.
10
ARTICLE 14
GENERAL PROVISIONS
14.1 Legend. The Committee may require each person purchasing shares
pursuant to an Award under the Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.
All certificates for shares of Common Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, any applicable Federal or state securities law, and any applicable
corporate law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
14.2 No Right to Employment. Neither this Plan nor the grant of any Award
hereunder shall give any Participant or other employee any right with respect to
continuance of employment by the Company or any Subsidiary, nor shall there be a
limitation in any way on the right of the Company or any Subsidiary by which an
employee is employed to terminate his or her employment at any time.
14.3 Withholding of Taxes. The Company shall have the right to deduct from
any payment to be made pursuant to this Plan, or to otherwise require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld. Unless otherwise prohibited by the Committee,
each Participant may satisfy any such withholding tax obligation by any of the
following means or by a combination of such means: (a) tendering a cash payment;
(b) authorizing the Company to withhold from the shares otherwise issuable to
the Participant a number of shares having a Fair Market Value as of the "Tax
Date", less than or equal to the amount of the withholding tax obligation; or
(c) delivering to the Company unencumbered shares owned by the Participant
having a Fair Market Value, as of the Tax Date, less than or equal to the amount
of the withholding tax obligation. The "Tax Date" shall be the date that the
amount of tax to be withheld is determined.
14.4 No Assignment of Benefits. No Option, Award or other benefit payable
under this Plan shall, except as otherwise specifically transfer, provided by
law, be subject in any manner to anticipation, alienation, attachment, sale,
transfer, assignment, pledge, encumbrance or charge, and any attempt to
anticipate, alienate, attach, sell, transfer, assign, pledge, encumber or
charge, any such benefits shall be void, and any such benefit shall not in any
manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such benefit, nor
shall it be subject to attachment or legal process for or against such person.
14.5 Governing Law. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws and in the courts of
the state of Michigan.
14.6 Application of Funds. The proceeds received by the Company from the
sale of shares of Common Stock pursuant to Awards granted under this Plan will
be used for general corporate purposes.
14.7 Rights as a Shareholder. Except as otherwise provided in an Award
Agreement, a Participant shall have no rights as a shareholder of the Company
until he or she becomes the holder of record of Common Stock.
CERTIFICATION
The foregoing Plan was duly adopted by the Board of Directors on the 20th
day of January, 1999, subject to approval by the Company's shareholders.
_______________________________________
Secretary
Universal Forest Products, Inc.
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