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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
_________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 9, 2005
_________________________
NEWELL RUBBERMAID INC.
(Exact name of registrant as specified in its charter)
Delaware 001-09608 363514169
-------- --------- ---------
(State or Other (Commission File (I.R.S. Employer
Jurisdiction Number) Identification No.)
of incorporation)
10 B Glenlake Parkway,
Suite 600,
Atlanta, Georgia 30328
----------------------
(Address of principal
executive offices)
Registrant's telephone number, including area code: 770-407-3800
Not Applicable
--------------------------------------------
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On November 9, 2005, the Board of Directors of Newell Rubbermaid
Inc. (the "Company") approved and ratified, in accordance with the
recommendations of the Organizational Development and Compensation
Committee (the "Committee"), the following actions:
Amendment to the Management Cash Bonus Plan
-------------------------------------------
The Board of Directors approved an amendment to the Company's
Management Cash Bonus Plan (the "Bonus Plan"). The amendment is
effective with respect to bonuses paid to eligible employees in 2007
based on the attainment of 2006 performance goals, and revises the
amounts of cash bonus paid if the target performance goals are
achieved at a 100% level, as follows:
(i) For the CEO of the Company, the bonus as a percentage of
salary is decreased from 134% to 105%.
(ii) For the group of participants that includes all executive
officers other than the CEO, the bonus as a percentage of
salary is decreased from 100.5% to 65%.
This decrease in bonuses is part of the Company's decision to
decrease the cash component, and increase the stock-based component,
of incentive compensation to eligible employees.
Approval of 2006 Performance Goals Under the Bonus Plan
-------------------------------------------------------
The Board of Directors approved performance goals established by
the Committee for the 2006 calendar year. Bonus payments will be
based on a combination of the following business criteria: (i) for
Corporate participants, 100% of the payment is based upon Company
earnings per share, cash flow, sales growth and total shareholder
return; (ii) for Group participants, 50% of the payment is based upon
the same items of Corporate performance (described in (i) above) and
50% of the payment is based upon Group sales growth and Group
operating income; and (iii) for Divisional participants, 25% of the
payment is based upon the same items of Corporate performance
(described in (i) above) and 75% of the payment is based upon Division
sales growth, Division operating income and Division cash flow.
Approval of the 2006 Long Term Incentive Plan
---------------------------------------------
The Board of Directors approved the Company's 2006 Long Term
Incentive Plan (the "2006 LTIP"), a copy of which is attached to this
Report as Exhibit 10.1 and incorporated herein by this reference. The
2006 LTIP establishes a methodology for determining the number of
shares of restricted stock of the Company to be awarded to
2
participants under the Company's 2003 Stock Plan, beginning with
awards to eligible employees in 2007 based on attainment of 2006
performance goals.
The number of shares of restricted stock awarded to participants
is based upon attainment of performance goals relating to the
Company's total shareholder return and cash flow. For 2006, 75% of
the award is based upon the Company's total shareholder return, and
25% of the award is based upon the Company's cash flow. The target,
and maximum, value of the restricted stock award to each executive
officer is 100% of his base salary, and performance below the
specified shareholder return and cash flow levels will result in
smaller or no restricted stock awards. Once awarded, the stock is
subject to a risk of forfeiture and restrictions on transfer which
lapse three years after the date of the award.
Approval of Performance Share Award Agreement
---------------------------------------------
The Board of Directors approved a form of Performance Share Award
Agreement, a copy of which is attached to this Report as Exhibit 10.2
and incorporated herein by this reference. The form of Performance
Share Award Agreement was approved pursuant to the Company's 2003
Stock Plan for use in granting performance shares under the 2003 Stock
Plan to eligible participants in 2006.
All participants who participate in the 2006 LTIP will receive an
award of performance shares in 2006, which entitles them to receive a
grant of unrestricted stock of the Company on or before March 31, 2007
upon attainment of the performance goals set forth in the Bonus Plan
for 2006. The number of shares of unrestricted stock awarded to each
participant is determined by multiplying (i) the percentage of the
target cash bonus earned by the participant for 2006, (ii) the
participant's base salary earned during 2006, and (iii) the percentage
of the participant's base salary as indicated in the participant's
award notice. If during 2006 the participant's employment is
terminated due to death, disability or retirement, the performance
share award will vest in full. If during 2006 the participant's
employment is terminated for any reason other than death, disability
or retirement, the performance share award generally will be
forfeited. The value of a participant's award is intended to generally
equate to the reduction in the target cash bonus payment to be made to
the participant in 2007 as described above.
Compensation Arrangement for Mark D. Ketchum
--------------------------------------------
The Board of Directors approved a compensation arrangement for
Mark D. Ketchum, the Company's interim President and CEO. The
material terms include the following:
(i) Base salary of $1 million per year.
3
(ii) A bonus opportunity under the Bonus Plan for 2005 equal to
25% of the bonus that would have been paid to a CEO if
employed for all of 2005, and based on attainment of the
CEO performance criteria and payout levels contained in
the Bonus Plan.
(iii) A bonus opportunity under the Bonus Plan for 2006, equal
to the bonus that would have been paid to him had he
remained employed until December 31, 2006 based on
attainment of the CEO performance criteria and payout
levels in effect for 2006, prorated for the number of days
of employment in 2006 as interim President and CEO.
(iv) Reimbursement of temporary living expenses while residing
in the Atlanta, Georgia area during his employment as
interim President and CEO and the use of a Company
airplane for commuting purposes.
(v) Participation in the Company's 2002 Deferred Compensation
Plan and other benefit plans provided to Company employees
generally.
(vi) A grant on November 9, 2005 of a stock option under the
Company's 2003 Stock Plan to acquire up to 75,000 shares
of Company stock, with an exercise price equal to the
closing price of the Company stock on November 9, 2005.
If his employment with the Company terminates for any
reason (including in connection with the hiring of a new
President and CEO) within one year of the grant date, he
will forfeit a portion of the option based on the number
of full and partial months in such one-year period during
which Mr. Ketchum does not serve as President and CEO.
The option is subject to a vesting schedule whereby 20% of
the option vests on each anniversary of the grant while he
is employed or in continued service on the Board of
Directors. The terms and conditions of the option grant
are set forth in the form of Stock Option Agreement for
Mr. Ketchum, a copy of which is attached to this Report as
Exhibit 10.3 and incorporated herein by this reference.
(vii) An award of performance shares to be granted in 2006 under
the Company's 2003 Stock Plan, entitling him to receive up
to 50,000 shares of unrestricted stock of the Company in
2007. The award will be based upon attainment of the CEO
performance goals set forth in the Bonus Plan for 2006
and/or upon attainment of the individual performance
criteria established by the Board of Directors. Other
terms and conditions of the award will be determined by
the Board of Directors. This award is in lieu of the
award of performance shares made to all other 2006 LTIP
participants as described above.
4
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
10.1 Newell Rubbermaid Inc. 2006 Long Term Incentive Plan.
10.2 Form of Performance Share Award Agreement.
10.3 Form of Stock Option Agreement for Mark D. Ketchum.
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
NEWELL RUBBERMAID INC.
By: /s/ Dale L. Matschullat
----------------------------
Name: Dale L. Matschullat
Date: November 14, 2005 Title: Vice President -
General Counsel
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EXHIBIT INDEX
Exhibit No. Exhibit Description
----------- -------------------
10.1 Newell Rubbermaid Inc. 2006 Long Term
Incentive Plan.
10.2 Form of Performance Share Award
Agreement.
10.3 Form of Stock Option Agreement for Mark
D. Ketchum.
7
EXHIBIT 10.1
As adopted by Board of Directors
November 9, 2005
2006 LONG TERM INCENTIVE PLAN (LTIP)
------------------------------------
1.1 GRANT OF RESTRICTED STOCK. Under the terms and provisions of the
Newell Rubbermaid Inc. 2003 Stock Plan (the "Stock Plan"), the terms
of which are hereby incorporated by reference, the Committee, at any
time and from time to time, may grant Shares of Restricted Stock to
eligible employees in such amounts, as the Board shall determine.
This Long Term Incentive Plan establishes a methodology for
determining awards of Restricted Stock under the Stock Plan. Awards
made pursuant to this LTIP shall constitute Performance Shares for
purposes of Section 9 of the Stock Plan and are intended to qualify as
performance-based compensation under Section 162(m) of the Internal
Revenue Code. Based on attainment of the performance goals
established pursuant to this LTIP, the Committee will grant shares of
Restricted Stock to eligible Key Employees. A maximum of 250,000
shares of Restricted Stock may be granted to any eligible Key Employee
in any one calendar year pursuant to this LTIP, in each case subject
to adjustment as provided in the Stock Plan.
1.2 GUIDELINES. Each grant of Restricted Stock shall be made based
on the applicable target of an employee's base salary set forth
below:
* Salary Level 6 - 25%
* Salary Level 7 - 50%
* Salary Level 8 and above - 100%
The following criteria will be used to determine the actual level:
* Total Shareholder Return (75%)
* Free Cash Flow (25%)
The total point value will be used as follows:
* Total Shareholder Return will be calculated based on the
following formula:
(Change in Stock Price) + (Dividend)
-----------------------------------
(Beginning Stock Price)
o Top 4 of comparator group = 100% of target
o 5 - 8 of comparator group = 75% of target
o 9 - 12 of comparator group = 50% of target
o 13 - 16 of comparator group = 25% of target
o Bottom 4 of comparator group = 0%
NOTE: TARGET IS 75% OF THE TOTAL AWARD PAYOUT FOR SHAREHOLDER RETURN
As adopted by Board of Directors
November 9, 2005
* The Free Cash Flow award will be calculated based on the
following schedule:
o > 110% of FCF target = 100% of target
o 100 - 110% of FCF target = 75% of target
o 90 - 100% of FCF target = 50% of target
o 80 - 90% of FCF target = 25% of target
o <80% of FCF target = 0%
NOTE: TARGET IS 25% OF THE TOTAL AWARD PAYOUT FOR FREE CASH FLOW
The list of eligible employees is determined prior to the beginning of
the fiscal year. For 2006, all employees of Newell Rubbermaid holding
the position of Director (Salary Level 6) or above shall be eligible
to participate in the LTIP.
1.3 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant made
pursuant to this LTIP shall be evidenced by a Stock Award Agreement in
accordance with Section 10 of the Stock Plan that shall specify the
Period of Restriction at a 3 year cliff, the number of Shares of
Restricted Stock granted, and such other provisions as the Committee
shall determine.
1.4 TRANSFERABILITY. Except as provided in this Article, the Shares
of Restricted Stock granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction established by the
Committee in its sole discretion and set forth in the Stock Award
Agreement. All rights with respect to the Restricted Stock granted to
an eligible employee under the LTIP shall be available during his or
her lifetime only to such eligible employee.
1.5 OTHER RESTRICTIONS. The Committee shall impose such other
conditions and/or restrictions on any Shares of Restricted Stock
granted pursuant to the LTIP as it may deem advisable including,
without limitation, continued employment with Newell Rubbermaid,
restrictions based upon the achievement of specific company-wide
performance goals, time-based restrictions on vesting following the
attainment of performance goals, and/or restrictions under applicable
federal or state securities laws. The Committee will establish
performance targets annually in accordance with the standards set
forth in this LTIP.
Except as otherwise provided in this Article or pursuant to the
Stock Plan, Shares of Restricted Stock covered by each award of
Restricted Stock made pursuant to the LTIP shall become freely
transferable by the eligible employee after the last day of the
applicable Period of Restriction.
As adopted by Board of Directors
November 9, 2005
1.6 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, eligible employees holding Shares of Restricted Stock
granted hereunder will be credited with regular cash dividends paid
with respect to the underlying Shares while they are so held; provided
that the Committee may apply any restrictions to the dividends that
the Committee deems appropriate. Without limiting the generality of
the preceding sentence, if the grant or vesting of Restricted Stock
granted to an eligible employee is intended to qualify as performance-
based compensation, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such
Restricted Stock, such that the dividends and/or the Restricted Stock
maintain eligibility for the Performance-Based Exception.
1.7 TERMINATION OF EMPLOYMENT/DIRECTORSHIP. Each Stock Award
Agreement shall set forth the extent to which the eligible employee
shall have the right to receive unvested Restricted Stock following
termination of the eligible employee's employment or directorship with
Newell Rubbermaid. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Stock Award
Agreement entered into with each eligible employee, need not be
uniform among all Shares of Restricted Stock issued pursuant to the
LTIP, and may reflect distinctions based on the reasons for
termination; provided, however that, except in the cases of
terminations connected with a Change in Control and terminations by
reason or death or Total Disability, and certain terminations without
Cause, the vesting of shares of Restricted Stock which qualify for the
Performance-Based Exception and which are held by eligible employees
shall occur at the time they otherwise would have, but for the
termination.
1.8 PERFORMANCE GOALS. Following the completion of the performance
period, the Committee shall determine, in its sole judgment, the
extent to which such performance goals have been achieved and shall
authorize the issuance of Restricted Stock to participants in
accordance with the terms of this LTIP. No Restricted Stock will be
awarded pursuant to this LTIP except on the basis of the attainment of
such performance criteria and in the amount specified herein; provided
that the Committee retains the discretion to reduce any amount to be
awarded hereunder or to terminate an individual's participation in
this LTIP. No individual who is not employed by the Company or any of
its affiliates on the date of such determination by the Committee
shall be eligible to receive an award of Restricted Stock hereunder.
1.9 CAPITALIZED TERMS. Capitalized terms used but not defined herein
shall have the meanings assigned to such terms pursuant to the Stock
Plan.
EXHIBIT 10.2
NEWELL RUBBERMAID INC. 2003 STOCK PLAN
PERFORMANCE SHARE AWARD AGREEMENT
A Performance Share Award (the "Award") granted by Newell
Rubbermaid Inc., a Delaware corporation (the "Company"), to the
employee named in the attached Award letter (the "Grantee"), relating
to the common stock, par value $1.00 per share and related preferred
stock purchase rights (the "Common Stock"), of the Company, shall be
subject to the following terms and conditions and the provisions of
the Newell Rubbermaid Inc. 2003 Stock Plan (the "Plan"), a copy of
which is attached hereto and the terms of which are hereby
incorporated by reference:
1. ACCEPTANCE BY GRANTEE. The receipt of the Award is
conditioned upon its acceptance by the Grantee in the space provided
therefor at the end of the attached Award letter and the return of an
executed copy of such Award letter to the Secretary of the Company no
later than 60 days after the Award Date set forth therein or, if
later, 30 days after the Grantee receives this Agreement.
2. ISSUANCE OF SHARES. On or prior to March 31, 2007, the
Grantee shall be entitled to receive a number of shares of Common
Stock (the "Award Shares") having a Fair Market Value (determined as
of the Payout Date) equal to the product of the Payout Percentage
multiplied by the Target Award. For purposes of this Award, (i)
"Payout Date" shall mean the date on which the Award Shares, if any,
are issued to Grantee pursuant to this Award; (ii) "Payout Percentage"
shall mean the percentage of the target cash bonus earned by Grantee
under the Company's Management Cash Bonus Plan for the 12-month period
ending December 31, 2006; and (iii) "Target Award" shall mean the
value of Grantee's target Performance Share award, which amount shall
be calculated by multiplying the Grantee's base salary earned during
the 12-month period ending December 31, 2006 by the percentage of the
Grantee's base salary indicated as the target Award in the attached
Award letter; provided that transfer of employment to a different
position within the Company or any of its affiliates may result in
adjustment of the percentage of the Grantee's base salary used to
determine the Target Award, in the discretion of the Vice President
Human Resources.
3. TRANSFER RESTRICTIONS. This Award shall not be sold,
assigned, pledged or otherwise transferred, voluntarily or
involuntarily, by the Grantee (or his estate or personal
representative, as the case may be). Award Shares, once issued, shall
be freely transferable and subject to no restrictions on transfer,
other than any such restrictions arising under federal, state or
foreign securities laws.
11/2005
4. DEATH, DISABILITY OR RETIREMENT. In the event that the
Grantee's employment with the Company and all of its affiliates
terminates due to the Grantee's death, disability or retirement, this
Award and the Grantee's right (or the right of his estate or personal
representative, as the case may be) to receive the Award Shares shall
vest in full upon the date of such termination. For purposes of this
Award, (i) "disability" means (as determined by the Committee in its
sole discretion) the inability of the Grantee to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or
disability or which has lasted or can be expected to last for a
continuous period of not less than 12 months; and (ii) "retirement"
means the Grantee's termination from employment with the Company and
all affiliates without cause (as determined by the Committee in its
sole discretion) when the Grantee is 65 or older.
5. NORMAL VESTING; FORFEITURE. Grantee's right to receive the
Award Shares shall vest in full in the event that the Grantee remains
actively employed by the Company or any of its affiliates as of
December 31, 2006. Subject to the next following sentence, the Award
shall be forfeited to the Company in the event that the Grantee's
employment with the Company and all affiliates is terminated,
voluntarily or involuntarily, at any time prior to December 31, 2006
for any reason other than the Grantee's death, disability or
retirement (as described in Section 4 above). For the avoidance of
doubt, any transfer of employment to a different position within the
Company or any of its affiliates shall not result in a forfeiture of
the Award. The foregoing provisions of this Section 5 shall be
subject to the provisions of any written employment security agreement
or severance agreement that has been or may be executed by the Grantee
and the Company, and the provisions in such employment security
agreement or severance agreement concerning the vesting of an Award in
connection with the Grantee's termination of employment shall
supercede any inconsistent or contrary provision of this Section 5.
6. WITHHOLDING TAXES. If applicable, the Grantee shall pay to
the Company an amount sufficient to satisfy all minimum Federal, state
and local withholding tax requirements prior to the delivery of any
certificate for Award Shares. Payment of such taxes may be made by a
method specified in the Plan and approved by the Committee.
7. RIGHTS AS STOCKHOLDER. Prior to the issuance of the Award
Shares, the Grantee shall not possess any rights of a stockholder in
respect of such shares by virtue of this Award. Upon issuance of the
Award Shares, the Grantee shall be entitled to all of the rights of a
stockholder of the Company with respect to the Award Shares, including
the right to vote such shares and to receive dividends and other
distributions payable with respect to such Award Shares from the
Payout Date.
-2- 11/2005
8. SHARE DELIVERY. Delivery of the Award Shares will be by
book-entry credit to an account in the Grantee's name established by
the Company with the Company's transfer agent, or, provided that the
Grantee has complied with all obligations and conditions set forth in
the Plan and this Agreement, the Company shall, upon written request
from the Grantee (or his estate or personal representative, as the
case may be), issue certificates in the name of the Grantee (or his
estate or personal representative) representing such Award Shares.
9. ADMINISTRATION. The Award shall be administered in
accordance with such regulations as the Organizational Development and
Compensation Committee of the Board of Directors of the Company (the
"Committee") shall from time to time adopt.
10. PERFORMANCE GOALS. The Award is intended qualify as
"performance-based compensation" within the meaning of Section 162(m)
of the Code. The parties acknowledge that the issuance of Award
Shares will be determined based on the same performance goals that are
utilized for determining cash awards under the Company's Management
Cash Bonus Plan for the 12-month period ending December 31, 2006, and
that such goals have been established in accordance with Section
9.3(a) of the Plan and Section 162(m) of the Code. Following the
completion of such 12-month period, the Committee shall determine, in
its sole judgment, the extent to which such performance goals have
been achieved and shall authorize the issuance of Award Shares to the
Grantee in accordance with the terms of this Award.
11. GOVERNING LAW. This Agreement, and the Award, shall be
construed, administered and governed in all respects under and by the
laws of the State of Delaware.
IN WITNESS WHEREOF, this Agreement is executed by the Company
this __th day of ________, _____, effective as of the ___day of
________, _____.
NEWELL RUBBERMAID INC.
By: _______________________________
-3- 11/2005
EXHIBIT 10.3
NEWELL RUBBERMAID INC. 2003 STOCK PLANSTOCK OPTION AGREEMENT
A Stock Option (the "Option") granted by Newell Rubbermaid Inc.,
a Delaware corporation (the "Company"), to Mark D. Ketchum (the
"Optionee"), for common stock, par value $1.00 per share and related
preferred stock purchase rights (the "Common Stock"), of the Company,
shall be subject to the following terms and conditions:
1. STOCK OPTION GRANT. Subject to the provisions set forth
herein and the terms and conditions of the Newell Rubbermaid Inc. 2003
Stock Plan (the "Plan"), a copy of which is attached hereto and the
terms of which are hereby incorporated by reference, and in
consideration of the agreements of the Optionee herein provided, the
Company hereby grants to the Optionee an Option to purchase from the
Company 75,000 shares of Common Stock, at the purchase price per
share, and on other terms and conditions, set forth in the attached
Option letter. Any incentive stock option is intended to be an
incentive stock option within the meaning of Section 422A of the
Internal Revenue Code of 1986.
2. ACCEPTANCE BY OPTIONEE. The exercise of the Option is
conditioned upon its acceptance by the Optionee in the space provided
therefor at the end of the attached Option letter and the return of an
executed copy of such Option letter to the Secretary of the Company no
later than 60 days after the Date of Grant set forth therein or, if
later, 30 days after the Optionee receives this Agreement.
3. EXERCISE OF OPTION. Written notice of an election to
exercise any portion of the Option shall be given by the Optionee, or
his personal representative in the event of the Optionee's death, in
accordance with procedures established by the Organizational
Development and Compensation Committee of the Board of Directors of
the Company (the "Committee"), as in effect at the time of such
exercise.
At the time of exercise of the Option, payment of the purchase
price for the shares of Common Stock with respect to which the Option
is exercised must be made by one or more of the following methods:
(i) in cash, (ii) in cash received from a broker-dealer to whom the
Optionee has submitted an exercise notice and irrevocable instructions
to deliver the purchase price to the Company from the proceeds of the
sale of shares subject to the Option, (iii) by delivery to the Company
of other Common Stock owned by the Optionee that is acceptable to the
Company, valued at its fair market value on the date of exercise, or
(iv) by certifying to ownership by attestation of such previously
owned Common Stock.
If applicable, an amount sufficient to satisfy all minimum
Federal, state and local withholding tax requirements prior to
delivery of any certificate for shares of Common Stock must also
accompany the exercise. Payment of such taxes can be made by a method
11/2005
specified above, and/or by directing the Company to withhold such
number of shares of Common Stock otherwise issuable upon exercise of
the Option with a fair market value equal to the amount of tax to be
withheld.
4. FORFEITURE AND VESTING OF OPTION.
(a) In the event the Optionee's employment with the Company
terminates on or before November 8, 2006 for any reason, a portion of
the Option will be forfeited as of the date of such termination. The
forfeited portion of the Option shall be with respect to a number of
shares of Common Stock equal to 75,000 shares, multiplied by a
fraction, the numerator of which is the number of full and partial
months from the date of termination of employment through November 8,
2006 and the denominator of which is 12. Any fractional shares shall
be rounded down for purposes of determining the number of shares
forfeited.
If the Optionee remains employed with the Company from the Grant
Date until November 9, 2006, no portion of the Option will be
forfeited. Any portion of the Option that is not forfeited pursuant
to this Section 4(a) shall be subject to the vesting schedule set
forth in Section 4(b).
(b) Any portion of the Option that is not forfeited pursuant to
Section 4(a) shall vest and be exercisable at a rate equal to 20%
thereof as of each anniversary of the Grant Date while the Optionee's
employment with the Company, and/or service on the Board, continues,
except as described in Section 5 below.
5. EXERCISE UPON TERMINATION OF EMPLOYMENT.
In the event the Optionee's employment with the Company
terminates for any reason other than death or disability (as defined
below), and in connection therewith the Optionee's service on the
Board terminates, the Option shall expire on the date of such
termination of employment, and no portion shall be exercisable after
the date of such termination.
In the event of the Optionee's death or disability during
employment with the Company, the outstanding portion of the Option
that is not forfeited pursuant to Section 4(a) above shall become
fully vested on such date and shall continue to be exercisable until
the earlier of the first anniversary of the date of the Optionee's
death or disability, or the date the Option expires by its terms.
In the event the Optionee's employment with the Company terminates for
any reason other than death or disability, and the Optionee's service
on the Board continues thereafter, the outstanding portion of the
Option that is not forfeited pursuant to Section 4(a) above shall
continue to vest and remain exercisable in accordance with Section
4(b). If the Optionee's service on the Board subsequently terminates,
then (a) if the termination of service is due to retirement, the
-2- 11/2005
outstanding portion of the Option that is not forfeited pursuant to
Section 4(a) above shall continue to vest and remain exercisable in
the same manner and to the same extent as if the Optionee had
continued his service on the Board, (b) if the termination of service
is due to death or disability, the outstanding portion of the Option
that is not forfeited pursuant to Section 4(a) above shall become
fully vested on such date and shall continue to be exercisable until
the earlier of the first anniversary of the date of the Optionee's
death or disability, or the date the Option expires by its terms, and
(c) if the termination of service is for any reason other than death
or disability, the Option shall expire on the date of such termination
of service, and no portion shall be exercisable after the date of such
termination.
For purposes of this Section 5, (i) "disability" means (as
determined by the Committee in its sole discretion) the inability of
the Optionee to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which is
expected to result in death or disability or which has lasted or can
be expected to last for a continuous period of not less than 12
months, and (ii) retirement means retirement in accordance with the
Company's retirement policy for Directors.
The foregoing provisions of this Section 5 shall be subject to
the provisions of any written employment security agreement or
severance agreement that has been or may be executed by the Optionee
and the Company, and the provisions in such employment security
agreement or severance agreement concerning exercise of an Option
shall supercede any inconsistent or contrary provisions of this
Section 4.
6. OPTION NOT TRANSFERABLE. The Option may be exercised only
by the Optionee during his lifetime and may not be transferred other
than by will or the applicable laws of descent or distribution or
pursuant to a qualified domestic relations order. The Option shall not
otherwise be assigned, transferred, or pledged for any purpose
whatsoever and is not subject, in whole or in part, to attachment,
execution or levy of any kind. Any attempted assignment, transfer,
pledge, or encumbrance of the Option, other than in accordance with
its terms, shall be void and of no effect.
7. SURRENDER OF OR CHANGES TO AGREEMENT. In the event the
Option shall be exercised in whole, this Agreement shall be
surrendered to the Company for cancellation. In the event this Option
shall be exercised in part or a change in the number of designation of
the shares of Common Stock shall be made, this Agreement shall be
delivered by the Optionee to the Company for the purpose of making
appropriate notation thereon, or of otherwise reflecting, in such
manner as the Company shall determine, the change in the number or
designation of such shares.
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8. ADMINISTRATION. The Option shall be exercised in accordance
with such administrative regulations as the Organizational Development
and Compensation Committee of the Board of Directors of the Company
(the "Committee") shall from time to time adopt.
9. GOVERNING LAW. This Agreement, and the Option, shall be
construed, administered and governed in all respects under and by the
laws of the State of Delaware.
IN WITNESS WHEREOF, this Agreement is executed by the Company this
____ day of November, 2005, effective as of the 9th day of November,
2005.
NEWELL RUBBERMAID INC.
By: _____________________________
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