SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the second twelve week accounting period ended June 18, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number 1-6024
WOLVERINE WORLD WIDE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 38-1185150
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
9341 Courtland Drive, Rockford, Michigan 49351
(Address of Principal Executive Offices) (Zip Code)
(616) 866-5500
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No ___________
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practical date.
There were 11,246,614 shares of Common Stock, $1 par value,
outstanding as of July 18, 1994, of which 681,817 shares are held as
Treasury Stock.
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
WOLVERINE WORLD WIDE, INC. AND
SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Thousands of dollars)
June 18, Jan. 1, June 19,
1994 1994 1993
(Unaudited) (Audited) (Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 2,215 $ 3,730 $ 1,520
Accounts receivable, less
allowances (June 18, 1994 -
$3,275; Jan. 1, 1994 - $3,411;
June 19, 1993 - $3,290) 61,948 62,362 50,054
Inventories:
Finished products 58,922 39,169 53,922
Raw materials and work
in process 30,936 31,387 31,807
89,858 70,556 85,729
Other current assets 12,374 12,864 19,339
TOTAL CURRENT ASSETS 166,395 149,512 156,642
PROPERTY, PLANT & EQUIPMENT
Gross assets 94,335 90,608 88,519
Allowances for depreciation (60,759) (58,985) (57,641)
33,576 31,623 30,878
OTHER ASSETS 27,140 24,581 26,130
TOTAL ASSETS $227,111 $205,716 $213,650
See notes to consolidated condensed financial statements.
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WOLVERINE WORLD WIDE, INC. AND
SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS - Continued
(Thousands of dollars)
June 18, Jan. 1, June 19,
1994 1994 1993
(Unaudited) (Audited) (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to banks $ 5,225 $ 1,948 $ 4,660
Accounts payable and other
accrued liabilities 38,358 31,626 33,309
Current maturities of long-term
debt 4,719 4,732 4,459
TOTAL CURRENT LIABILITIES 48,302 38,306 42,428
LONG-TERM DEBT (less current maturities) 50,644 44,913 59,654
OTHER NONCURRENT LIABILITIES 9,828 9,747 8,992
STOCKHOLDERS' EQUITY
Common Stock - par value $1, authorized
25,000,000 shares; shares issued
(including shares in treasury):
June 18, 1994 - 11,240,126 shares
Jan. 1, 1994 - 11,042,129 shares
June 19, 1993 - 10,944,688 shares 11,240 7,622 7,557
Additional paid-in-capital 24,561 26,469 25,501
Retained earnings 89,784 86,986 77,826
Accumulated translation adjustments 361 398 400
Cost of shares in treasury:
June 18, 1994 - 681,817 shares
Jan. 1, 1994 - 781,778 shares
June 19, 1993 - 781,282 shares (7,609) (8,725) (8,708)
TOTAL STOCKHOLDERS' EQUITY 118,337 112,750 102,576
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $227,111 $205,716 $213,650
See notes to consolidated condensed financial statements.
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WOLVERINE WORLD WIDE, INC. AND
SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS
OF OPERATIONS
(Thousands of dollars, except per share data)
(Unaudited)
12 Weeks Ended 24 Weeks Ended
June 18, June 19, June 18, June 19,
1994 1993 1994 1993
Net sales and other operating
income $81,353 $65,902 $149,890 $131,761
Cost of products sold 56,120 45,946 102,853 93,006
Gross profit 25,233 19,956 47,037 38,755
Selling and administrative expenses 20,281 17,138 39,291 33,880
Operating profit 4,952 2,818 7,746 4,875
Other expenses (income):
Interest expense 949 1,435 1,757 2,504
Interest income (121) (224) (196) (522)
Other - net 619 55 781 302
1,447 1,266 2,342 2,284
Earnings before income taxes 3,505 1,552 5,404 2,591
Income taxes 1,121 468 1,729 807
NET EARNINGS $ 2,384 $ 1,084 $ 3,675 $ 1,784
Earnings per share:
Primary $ .22 $ .11 $ .34 $ .18
Fully diluted $ .22 $ .11 $ .34 $ .18
Cash dividends per share $ .04 $ .04 $ .12 $ .12
Shares used for net earnings
per share computation:
Primary 10,923,290 10,121,139 10,868,079 10,083,884
Fully diluted 11,023,290 10,163,406 11,039,507 10,163,406
See notes to consolidated condensed financial statements.
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WOLVERINE WORLD WIDE, INC. AND
SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS
OF CASH FLOWS
(Thousands of dollars)
(Unaudited)
Twenty-Four Weeks Ended
June 18, June 19,
1994 1993
OPERATING ACTIVITIES
Net earnings $ 3,675 $ 1,784
Depreciation, amortization and other
non cash items 489 2,376
Changes in operating assets and liabilities:
Accounts receivable 414 1,456
Inventories (19,302) (21,465)
Other current assets 490 10,240
Accounts payable and other accrued
liabilities 6,732 3,096
CASH USED IN OPERATING ACTIVITIES (7,502) (2,513)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 15,981 17,000
Payments of long-term debt (9,013) (1,309)
Payments of short-term borrowings (1,111) (11,717)
Proceeds from short-term borrowings 4,388 ---
Cash dividends (877) (538)
Proceeds from shares issued under employee
stock plans 1,576 1,153
CASH PROVIDED BY FINANCING ACTIVITIES 10,944 4,589
INVESTING ACTIVITIES
Additions to property, plant and equipment (3,727) (2,866)
Other (1,230) (65)
CASH USED IN INVESTING ACTIVITIES (4,957) (2,931)
DECREASE IN CASH (1,515) (855)
Cash at beginning of year 3,730 2,375
CASH AT END OF SECOND QUARTER $ 2,215 $ 1,520
( ) - Denotes reduction in cash.
See notes to consolidated condensed financial statements.
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WOLVERINE WORLD WIDE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 18, 1994
NOTE A - Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q
and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for fair presentation have been included. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's annual report on Form 10-K for the fiscal year
ended January 1, 1994.
NOTE B - Fluctuations
The Company's sales are seasonal, particularly in its major product line,
Hush Puppies shoes, which has two major and two minor introductions of new
styles per year. Seasonal sales patterns and the fact that the fourth
quarter has sixteen or seventeen weeks as compared to twelve weeks in each
of the first three quarters cause significant differences in sales and
earnings from quarter to quarter. These differences, however, have
traditionally followed a consistent pattern each year.
NOTE C - Common Stock
On March 10, 1994, the Company announced a 3-for-2 stock split on shares
outstanding on March 21, 1994. All share and per share data have been
retroactively adjusted for the increased shares resulting from the stock
split.
NOTE D - Earnings Per Share
Primary earnings per share are computed based on the weighted average
shares of common stock outstanding during each period assuming that the
stock split described in Note C had been completed at the beginning of the
earliest period presented. Common stock equivalents (stock options) are
included in the computation of primary earnings per share. Fully diluted
earnings per share are presented reflecting the assumed exercise of stock
options and conversion of subordinated notes into common stock.
-6-
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results Of Operations - Comparisons of Second Quarter 1994 to Second
Quarter 1993
Second quarter 1994 net sales of $81.4 million exceeded 1993 second quarter
net sales by $15.5 million (a 23.5% increase), and 1994 year-to-date sales of
$149.9 million compares to $131.8 million recorded for the comparable period of
1993. Wolverine Footwear Group's shipments continued to be strong and Hush
Puppies shipments significantly improved. These two divisions accounted for
the increase in sales in the second quarter.
Gross margins of 31.0% for the second quarter of 1994 represented a 0.7%
improvement over the same period of 1993. This result increased the 1994
year-to-date margin to 31.4%, which compares to a margin of 29.4% in 1993.
The gross margin improvement was principally the result of increased
manufacturing activity and efficiencies in substantially all divisions of the
Company.
Selling and administrative expenses of $20.3 million (24.9% of net sales)
in the second quarter of 1994 compares to $17.1 million (26.0% of net
sales) for the comparable period of 1993. Selling costs and advertising
expenses associated with the increased volume of the Wolverine Footwear Group
and Hush Puppies accounted for $1.7 million of the increase. Increased costs
in the Hush Puppies distribution system accounted for $0.4 million of the
increase. Year-to-date selling and administrative expenses of $39.3 million
(26.2% of net sales) is comparable to $33.9 million (25.7% of net sales) in
1993.
Interest expense for the second quarter of 1994 totaling $0.9 million
represents a $0.5 million decrease from the second quarter of 1993. Total
year-to-date interest expense of $1.8 million for 1994 compares to $2.5 million
for the respective period of 1993, a 28.0% decrease.
The effective income tax rates on earnings from continuing operations
increased in 1994 from 1993 levels in the second quarter (32.0% versus
30.2%) and on a year-to-date basis (32.0% versus 31.1%). The increases were
caused by a higher proportion of taxable income in 1994. These rates are below
the statutory rate of 34% reflecting the non-taxable net earnings of foreign
subsidiaries.
Net earnings of $2.4 million ($.22 per share) for the twelve weeks ended
June 18, 1994 compares favorably to earnings of $1.1 million ($.11 per
share) for the respective period of 1993. Year-to-date earnings of $3.7
million ($.34 per share) compare with earnings of $1.8 million ($.18 per
share) for the same period of 1993. Increased earnings are a result of the
items noted above.
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ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations - Continued
Financial Condition, Liquidity and Capital Resources
As of June 18, 1994, accounts receivable of $61.9 million and inventories
of $89.9 million reflect increases of $11.9 million and $4.1 million over
the respective balances on June 19, 1993. The increases are generally
related to sales increases and additional inventory required to meet future
demand in both wholesaling and manufacturing operations.
Other current assets totaling $12.4 million reflect a $0.5 million decrease
from January 1, 1994 and a $7.0 million decrease from June 19, 1993. The
decreases primarily reflect the change in deferred income taxes and
disposition of the assets related to discontinued operations in prior
years.
Total interest bearing debt of $60.6 million on June 18, 1994 compares to
$51.6 million and $68.8 million at January 1, 1994 and June 19, 1993,
respectively. The increase in debt since January 1, 1994 reflects the seasonal
working capital requirements of the Company. The cash flows from future
earnings and present credit facilities are expected to be sufficient to
meet the Company's normal operating requirements.
The Company has reached an agreement in principal to issue $30.0 million of
senior debt with an interest rate of 7.8% to replace $21.4 million of
existing 10.4% senior debt and to reduce balances outstanding under a
revolving credit facility. Additionally, the long-term revolving debt
scheduled to expire in June 1995 has been renegotiated to provide more
favorable terms and conditions and has been extended through June 1998.
The dividend declared of $.04 per share of common stock represents a 50%
increased payout over the prior year due to the stock split. The dividend
is payable August 1, 1994 to stockholders of record on July 1, 1994.
PART II. OTHER INFORMATION
ITEM 2. Changes in Securities.
On April 21, 1994, the Company held its 1994 Annual Meeting of Stockholders.
At the meeting, the stockholders voted to approve an amendment to the Company's
Certificate of Incorporation to increase the Company's authorized capital stock
from 15,000,000 shares of Common Stock, $1.00 par value per share ("Common
Stock"), to 25,000,000 shares of Common Stock.
All of the additional shares resulting from the increase in the Company's
authorized Common Stock are of the same class, with the same dividend, voting
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and liquidation rights, as the shares of Common Stock previously outstanding.
The Company's authorized capital also includes 2,000,000 shares of preferred
stock, none of which is currently outstanding.
The newly authorized shares are unreserved and available for issuance. No
further stockholder authorization is required prior to the issuance of such
shares by the Company. Stockholders have no preemptive rights to acquire
shares issued by the Company under its Certificate of Incorporation, and
stockholders did not acquire any such rights with respect to such additional
shares under the amendment to the Company's Certificate of Incorporation.
Under some circumstances, the issuance of additional shares of Common Stock
could dilute the voting rights, equity and earnings per share of existing
stockholders.
ITEM 4. Submission of Matters to a Vote of Security-Holders.
On April 21, 1994, the Company held its 1994 Annual Meeting of Stockholders.
The purposes of the meeting were: to elect two directors for three-year
terms expiring in 1997; to consider and approve an amendment to the Certificate
of Incorporation to increase the amount of authorized capital stock from
15,000,000 shares of Common Stock to 25,000,000 shares of Common Stock; to
consider and approve the 1994 Directors' Stock Option Plan; and to consider
and ratify the appointment of Ernst & Young as independent auditors for the
current fiscal year.
Two candidates nominated by management were elected by the stockholders to
serve as directors of the Company at the meeting. The following sets forth
the results of the voting with respect to each candidate:
Name of Candidate Shares Voted
Joseph A. Parini For 5,679,813
Authority Withheld 371,337
Broker Non-votes 0
Joan Parker For 5,680,335
Authority Withheld 370,815
Broker Non-votes 0
The stockholders voted to approve the amendment to the Certificate of
Incorporation to increase the amount of authorized capital stock. The
following sets forth the results of the voting with respect to this matter:
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Shares Voted
For 5,329,686
Against 637,123
Abstentions 84,341
Broker Non-votes 0
The stockholders voted to approve the 1994 Directors' Stock Option Plan.
The following sets forth the results of the voting with respect to this
matter:
Shares Voted
For 5,658,451
Against 367,583
Abstentions 25,116
Broker Non-votes 0
The stockholders voted to ratify the appointment of Ernst & Young by the
Board of Directors as independent auditors of the Company for the current
fiscal year. The following sets forth the results of the voting with respect
to this matter:
Shares Voted
For 6,020,691
Against 18,245
Abstentions 12,214
Broker Non-votes 0
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. The following documents are filed as exhibits to this
report on Form 10-Q:
Exhibit
Number Document
4(a) The Articles of Incorporation.
4(b) Preferred Stock Purchase Rights. Previously filed as an
exhibit to Amendment No. 1 to the Company's Form 8-A filed
with the Securities and Exchange Commission on November 13,
1990. Here incorporated by reference.
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4(c) Credit Agreement dated as of March 11, 1993 with NBD Bank,
N.A. as Agent. Previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993. Here incorporated by reference.
4(d) Note Purchase Agreement dated as of August 29, 1988 relating
to 10.4% Senior Notes. Previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988. Here incorporated by reference.
4(e) First, Second, Third and Fourth Amendments to Note Purchase
Agreement. Previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended January
2, 1993. Here incorporated by reference.
4(f) The Registrant has several classes of long-term debt
instruments outstanding in addition to that described in
Exhibit 4(d) above. The amount of none of these classes of
debt outstanding on June 18, 1994 exceeds 10% of the
Registrant's total consolidated assets. The Registrant
agrees to furnish copies of any agreement defining the
rights of holders of any such long-term indebtedness to the
Securities and Exchange Commission upon request.
10(a) Stock Option Plan of 1979 and amendment. Previously filed
as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1988. Here
incorporated by reference.
10(b) 1993 Stock Incentive Plan. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994. Here incorporated by reference.
10(c) 1988 Stock Option Plan. Previously filed as an exhibit to
the Company's registration statement on Form S-8, filed July
21, 1988, Registration No. 33-23196. Here incorporated by
reference.
10(d) Amended and Restated Directors Stock Option Plan.
Previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 1,
1994. Here incorporated by reference.
10(e) Amended and Restated Agreement executed on May 26, 1994 and
dated as of July 24, 1992, between the Registrant and Thomas
D. Gleason.
10(f) Employment Agreement dated April 27, 1993, between the
Registrant and Geoffrey B. Bloom. Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994. Here incorporated by
reference.
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10(g) Executive Short-Term Incentive Plan for 1994. Previously
filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended January 1, 1994. Here
incorporated by reference.
10(h) Management Short-Term Incentive Plan for 1994. Previously
filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended January 1, 1994. Here
incorporated by reference.
10(i) Stock Option Loan Program. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended December 28, 1991. Here incorporated by
reference.
10(j) Deferred Compensation Agreements with Disability Benefits.
The form of agreement was previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993. An updated participant schedule was
filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended January 1, 1994. Here
incorporated by reference.
10(k) Deferred Compensation Agreements without Disability
Benefits. The form of agreement was previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993. An updated participant
schedule was filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 1,
1994. Here incorporated by reference.
10(l) Executive Long-Term Incentive (Three Year) Plans for the
years 1991 to 1993 and 1992 to 1994. Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 1991. Here incorporated by
reference.
10(m) Executive Long-Term Incentive (Three Year) Plan for the
three year period 1993-1995. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994. Here incorporated by reference.
10(n) Executive Long-Term Incentive (Three Year) Plan for the
three-year period 1994-1996. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994. Here incorporated by reference.
10(o) Termination of Employment and Change of Control Agreements.
The form of agreement was previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year
-12-
ended January 2, 1993. An updated participant schedule was
filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended January 1, 1994. Here
incorporated by reference.
10(p) Indemnification Agreements. The form of agreement was
previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 2,
1993. An updated participant schedule was filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994. Here incorporated by
reference.
10(q) Supplemental Retirement Benefits. Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1988. Here incorporated by
reference.
10(r) Benefit Trust Agreement dated May 19, 1987, and Amendments
Number 1, 2 and 3 thereto. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993. Here incorporated by reference.
10(s) Supplemental Director's Fee Arrangement dated April 27,
1993, between the Company and Phillip D. Matthews.
Previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 1,
1994. Here incorporated by reference.
10(t) Retirement Agreement effective December 31, 1993, between
the Company and Peter D. Panter. Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994. Here incorporated by
reference.
10(u) 1984 Executive Incentive Stock Purchase Plan and amendment.
Previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 2,
1988. Here incorporated by reference.
10(v) Asset Purchase Agreement dated January 29, 1993, concerning
the sale of the Brooks Business. Previously filed as an
exhibit to the Company's Form 8-K filed February 1, 1993.
Here incorporated by reference.
10(w) Agreements relating to the sale of the assets of the three
European Subsidiaries associated with the Brooks Business.
Previously filed as exhibits to the Company's Form 8-K filed
July 8, 1993. Here incorporated by reference.
10(x) Deferred Compensation Agreement dated as of April 21, 1994,
between the Company and Charles F. Morgo.
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10(y) Employment Agreement dated April 21, 1994, between the
Company and Charles F. Morgo.
10(z) Restricted Stock Agreement dated April 21, 1994, between the
Company and Charles F. Morgo.
10(aa) 1994 Directors' Stock Option Plan.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during
the quarter for which this report is filed.
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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 thereunto duly authorized.
WOLVERINE WORLD WIDE, INC.
AND SUBSIDIARIES
August 1, 1994 s/ Geoffrey B. Bloom
Date Geoffrey B. Bloom
President and Chief Executive Officer
(Duly Authorized Signatory for
Registrant)
August 1, 1994 s/ Stephen L. Gulis, Jr.
Date Stephen L. Gulis, Jr.
Vice President and Chief Financial
Officer
(Principal Financial Officer and Duly
Authorized Signatory of Registrant)
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Commission File No. 1-6024
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM 10-Q
For the twelve week accounting period
ended June 18, 1994
Wolverine World Wide, Inc.
9341 Courtland Drive
Rockford, Michigan 49351
EXHIBIT INDEX
Exhibit
Number Document
4(a) The Articles of Incorporation.
4(b) Preferred Stock Purchase Rights. Previously filed as an
exhibit to Amendment No. 1 to the Company's Form 8-A filed
with the Securities and Exchange Commission on November 13,
1990. Here incorporated by reference.
4(c) Credit Agreement dated as of March 11, 1993 with NBD Bank,
N.A. as Agent. Previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993. Here incorporated by reference.
4(d) Note Purchase Agreement dated as of August 29, 1988 relating
to 10.4% Senior Notes. Previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988. Here incorporated by reference.
4(e) First, Second, Third and Fourth Amendments to Note Purchase
Agreement. Previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended January
2, 1993. Here incorporated by reference.
4(f) The Registrant has several classes of long-term debt
instruments outstanding in addition to that described in
Exhibit 4(d) above. The amount of none of these classes of
debt outstanding on June 18, 1994 exceeds 10% of the
Registrant's total consolidated assets. The Registrant
agrees to furnish copies of any agreement defining the
rights of holders of any such long-term indebtedness to the
Securities and Exchange Commission upon request.
10(a) Stock Option Plan of 1979 and amendment. Previously filed
as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended January 2, 1988. Here
incorporated by reference.
10(b) 1993 Stock Incentive Plan. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994. Here incorporated by reference.
10(c) 1988 Stock Option Plan. Previously filed as an exhibit to
the Company's registration statement on Form S-8, filed July
21, 1988, Registration No. 33-23196. Here incorporated by
reference.
10(d) Amended and Restated Directors Stock Option Plan.
Previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 1,
1994. Here incorporated by reference.
10(e) Amended and Restated Agreement executed on May 26, 1994 and
dated as of July 24, 1992, between the Registrant and Thomas
D. Gleason.
10(f) Employment Agreement dated April 27, 1993, between the
Registrant and Geoffrey B. Bloom. Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994. Here incorporated by
reference.
10(g) Executive Short-Term Incentive Plan for 1994. Previously
filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended January 1, 1994. Here
incorporated by reference.
10(h) Management Short-Term Incentive Plan for 1994. Previously
filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended January 1, 1994. Here
incorporated by reference.
10(i) Stock Option Loan Program. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended December 28, 1991. Here incorporated by
reference.
10(j) Deferred Compensation Agreements with Disability Benefits.
The form of agreement was previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993. An updated participant schedule was
filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended January 1, 1994. Here
incorporated by reference.
10(k) Deferred Compensation Agreements without Disability
Benefits. The form of agreement was previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993. An updated participant
schedule was filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 1,
1994. Here incorporated by reference.
10(l) Executive Long-Term Incentive (Three Year) Plans for the
years 1991 to 1993 and 1992 to 1994. Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 1991. Here incorporated by
reference.
10(m) Executive Long-Term Incentive (Three Year) Plan for the
three year period 1993-1995. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994. Here incorporated by reference.
10(n) Executive Long-Term Incentive (Three Year) Plan for the
three-year period 1994-1996. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994. Here incorporated by reference.
10(o) Termination of Employment and Change of Control Agreements.
The form of agreement was previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993. An updated participant schedule was
filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended January 1, 1994. Here
incorporated by reference.
10(p) Indemnification Agreements. The form of agreement was
previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 2,
1993. An updated participant schedule was filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994. Here incorporated by
reference.
10(q) Supplemental Retirement Benefits. Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1988. Here incorporated by
reference.
10(r) Benefit Trust Agreement dated May 19, 1987, and Amendments
Number 1, 2 and 3 thereto. Previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993. Here incorporated by reference.
10(s) Supplemental Director's Fee Arrangement dated April 27,
1993, between the Company and Phillip D. Matthews.
Previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 1,
1994. Here incorporated by reference.
10(t) Retirement Agreement effective December 31, 1993, between
the Company and Peter D. Panter. Previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994. Here incorporated by
reference.
10(u) 1984 Executive Incentive Stock Purchase Plan and amendment.
Previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended January 2,
1988. Here incorporated by reference.
10(v) Asset Purchase Agreement dated January 29, 1993, concerning
the sale of the Brooks Business. Previously filed as an
exhibit to the Company's Form 8-K filed February 1, 1993.
Here incorporated by reference.
10(w) Agreements relating to the sale of the assets of the three
European Subsidiaries associated with the Brooks Business.
Previously filed as exhibits to the Company's Form 8-K filed
July 8, 1993. Here incorporated by reference.
10(x) Deferred Compensation Agreement dated as of April 21, 1994,
between the Company and Charles F. Morgo.
10(y) Employment Agreement dated April 21, 1994, between the
Company and Charles F. Morgo.
10(z) Restricted Stock Agreement dated April 21, 1994, between the
Company and Charles F. Morgo.
10(aa) 1994 Directors' Stock Option Plan.
Exhibit 4(a)
CERTIFICATE OF INCORPORATION
OF
WOLVERINE WORLD WIDE, INC.
FIRST. The name of the corporation is
WOLVERINE WORLD WIDE, INC.
SECOND. The address of its registered office in the State
of Delaware is No. 100 West Tenth Street, in the City of
Wilmington, County of New Castle. The name of its registered
agent at such address is The Corporation Trust Company.
THIRD. The nature of the business or purposes to be
conducted or promoted by the corporation is to engage in any
lawful act or activity for which the corporations may be
organized under the General Corporation Law of the State of
Delaware, as amended from time to time.
FOURTH. The total number of shares which the corporation
shall have authority to issue and have outstanding is Twenty
Seven Million (27,000,000) shares, of which Two Million
(2,000,000) shares shall be Preferred Stock, par value One Dollar
($1) per share, and Twenty Five Million (25,000,000) shares shall
be Common Stock, par value One Dollar ($1) per share.
The Board of Directors is authorized to cause Preferred
Stock, $1 par value, to be issued from time to time in one or
more series, with such voting powers, full or limited, or no
voting powers, and such designations, provisions, and relative,
participating, preferential or other special rights and
qualifications, limitations or restrictions thereof, as shall be
stated and expressed in the resolution or resolutions providing
for the issue of such stock adopted by the Board of Directors.
The Board of Directors is expressly authorized to adopt such
resolution or resolutions and issue such stock from time to time
as may seem desirable.
The authorized shares of Common Stock of the par value
of $1 per share are all of one class with equal voting powers,
and each such share shall be equal to every other such share.
FIFTH. The name and mailing address of the Incorporator are
as follows:
Name Mailing Address
B. J. Consono 100 West Tenth Street
Wilmington, Delaware
SIXTH. The name and mailing address of each person who is
to serve as a director until the first annual meeting of the
stockholders or until a successor is elected and qualified, are
as follows:
Name Mailing Address
Ray R. Eppert 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
E. Vincent Erickson 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
C. Robert Evenson 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
Gordon C. Krause 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
Jack A. Krause 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
Richard H. Krause 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
Louis J. Schaefer 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
Dr. Alfred L. Seelye 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
J. Austen Wood 9341 Courtland Drive, N.E.
Rockford, Michigan 49341
Subsequent elections of directors need not be by ballot
unless the By-Laws of the corporation shall so provide.
SEVENTH. The corporation is to have perpetual existence.
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EIGHTH. The Board of Directors shall have the power, at any
regular or special meeting at which a quorum is present, by the
affirmative vote of a majority of the whole Board:
To make, alter or repeal the By-Laws of the
corporation.
To authorize and cause to be executed mortgages
and liens upon the real and personal property of the
corporation.
To set apart out of any of the funds of the
corporation available for dividends a reserve or
reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
To designate one or more committees, each
committee to consist of two or more of the directors of
the corporation, which, to the extent provided in the
resolution or in the By-Laws of the corporation, shall
have and may exercise the powers of the Board of
Directors in the management of the business and affairs
of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may
require it. Such committee or committees shall have
such name or names as may be stated in the By-Laws of
the corporation or as may be determined from time to
time by resolution adopted by the Board of Directors.
NINTH. (a) Any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, may be
indemnified by the corporation against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith
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and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(b) Any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise may be indemnified by
the corporation against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his
duty to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or the court in which
such action or suit was brought shall determine upon application,
that despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of
Chancery of the State of Delaware or such other court shall deem
proper.
(c) Any indemnification under subsections (a) and (b)
of this section (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has
met the applicable standard of conduct set forth in subsections
(a) and (b) of this section. Such determination shall be made
(1) by the Board of Directors by a majority of a quorum
consisting of directors who were not parties to such action, suit
or proceeding, or (2) if such a quorum is not obtainable, or,
even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel (who may be the regular
counsel of the corporation) in a written opinion, or (3) by the
stockholders.
(d) To the extent that a director, officer, employee
or agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in subsections (a) and (b) of this section, or in defense of
any claim, issue or matter therein, he shall be indemnified
-4-
against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(e) Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in the manner
provided in subsection (c) upon receipt of an undertaking by or
on behalf of the director, officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the corporation as authorized in
this section.
(f) The indemnification provided by this section shall
not be deemed exclusive of any other rights to which those
indemnified may be entitled under any By-Law, agreement, vote of
stockholders or disinterested director or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(g) The corporation may purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under the
provisions of this section.
TENTH. No director of the corporation shall be personally
liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty by such director as a
director; provided however, that this Article TENTH shall not
eliminate or limit the liability of a director to the extent
provided by applicable law (i) for any breach of the director's
duty of loyalty to the corporation or its stockholder, (ii) for
acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under section 174
of the General Corporation Law of the State of Delaware, or
(iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this
Article TENTH shall apply to or have any effect on the liability
or alleged liability of any director of the corporation for or
with respect to any acts or omissions of such director occurring
prior to such amendment or repeal.
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EXHIBIT 10(e)
AMENDED AND RESTATED
AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT is made as of
July 24, 1992, between WOLVERINE WORLD WIDE, INC., a Delaware
corporation maintaining its principal executive offices at 9341
Courtland Drive, N.E., Rockford, Michigan, 49351 ("Wolverine"),
and THOMAS D. GLEASON, 656 Manhattan Road, S.E., Grand Rapids,
Michigan 49506 ("Executive").
R E C I T A L S :
Executive has served Wolverine as its Chief Executive
Officer for approximately 20 years and, most recently, as
Chairman of its Board of Directors (the "Board"). As Chief
Executive Officer and as Chairman of the Board, Executive was
instrumental in the development and expansion of Wolverine's
business. It is the opinion and consensus of the Board that
Executive's services to Wolverine have constituted a valuable
contribution to the general welfare, growth and earnings of
Wolverine and evidence his continued ability to contribute to the
success of Wolverine. By virtue of his past experience in the
businesses in which Wolverine competes, and by virtue of his
knowledge of these businesses, the Board believes that it is in
the best interests of Wolverine that Executive's services,
counsel and advice be assured to Wolverine for a future period of
time. Executive will, after a period of several years, take
early retirement to pursue other interests, and the parties wish
to provide for an orderly transition of Executive's
responsibilities, and for his assistance in promoting Wolverine's
business during a transition period and in the search for his
successor. For the foregoing reasons, Wolverine desires to
retain Executive, and Executive desires to serve Wolverine, as a
key employee prior to his early retirement upon the terms and
conditions set forth herein. In addition, Wolverine desires to
protect itself against competitive activities by Executive, and
Executive desires to accept such restrictions upon competitive
activities, upon the terms and conditions set forth herein. The
parties have previously executed and delivered an Agreement,
dated as of July 24, 1992, and now desire to amend and restate
such agreement in its entirety as of such date.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
Section 1. Early Retirement. Executive shall voluntarily
retire from Wolverine and its affiliated companies on January 31,
1996 (the "Retirement Date"). Effective upon his retirement,
Executive shall resign any and all positions, employment, offices
and directorships (excluding any director position with
Wolverine) with or in Wolverine and its affiliated companies.
Nothing in this Agreement shall prevent Executive from being
nominated and/or elected to serve as a director of Wolverine
after January 31, 1996, nor shall anything in this Agreement
require or obligate Wolverine, the Board, or any committee of the
Board to nominate Executive to serve as a director of Wolverine.
Section 2. Transition Period; Position and Duties. The
period between the date of this Agreement and the Retirement Date
shall be referred to as the "Transition Period." During the
Transition Period, Executive shall continue to faithfully serve
Wolverine as an employee pursuant to the terms of this Agreement,
and will use his best business skill and judgment in advancing
the business interests and profits of Wolverine and its
affiliated companies. It is the present intention of the Board
that Executive shall serve as Chief Executive Officer until his
successor is appointed and as Chairman or Vice Chairman of the
Board and on the Board committee charged with finding a new Chief
Executive Officer, and shall also serve as an adviser to the new
Chief Executive Officer reporting only to the Board and/or its
Executive Committee (the "Executive Committee"), and shall have
such other powers and duties consistent with such positions as
may from time to time be reasonably prescribed by the Board and/
or its Executive Committee. Executive shall devote his best
efforts to the business of Wolverine and its affiliated companies
and to the performance of such reasonable duties as may be
reasonably prescribed and specifically assigned to him by the
Board and/or its Executive Committee, and will spend a reasonable
and normal amount of working time and effort to accomplish the
assigned duties; provided that Executive shall be permitted to
serve on a reasonable number of boards of directors of other
companies, or as trustee to other entities, and render occasional
services in connection therewith, in addition to charitable and
civic endeavors. Wolverine shall not require Executive to be
based anywhere other than the greater Grand Rapids metropolitan
area, except for required travel consistent with Executive's
duties hereunder. Wolverine shall provide Executive with a
private outside office and such secretarial staff, reasonably
acceptable to Executive, as may be required for the performance
of Executive's duties. Notwithstanding anything in this
Agreement to the contrary, nothing in this Agreement shall
guarantee to Executive or require or compel Wolverine or the
Board to retain Executive in any particular office, position or
directorship, including the position of Chief Executive Officer
or Chairman or Vice Chairman of the Board, or otherwise infringe
upon the unfettered right of the Board (or any committee of the
Board) or the shareholders of Wolverine to nominate, elect or
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appoint any person to a particular office, position or
directorship.
Section 3. Transition Period Compensation. Subject to the
provisions of this Agreement and provided Executive is either
employed by Wolverine in accordance with the terms of the
Agreement or is unilaterally terminated by Wolverine without
cause during the Transition Period, Executive shall receive the
payments and benefits referenced in Section 13 hereof and those
set forth below:
(a) Base Salary. For the services to be rendered
by Executive during the Transition Period as
hereinbefore provided (or if Executive has been
unilaterally terminated by Wolverine without cause
during the Transition Period) and in consideration of
the covenants contained in this Agreement, Wolverine
agrees to pay Executive, in 13 equal installments
during each year of this Agreement, a base annual
salary of (i) $346,000, effective April 20, 1992,
through December 31, 1994, and (ii) $250,000, effective
January 1, 1995, through January 31, 1996. The
declining base salary payments referenced above are
intended by the parties to reflect Executive's
decreasing role and contribution level over the
Transition Period. No base salary shall be paid
pursuant to Section 3(a) of this Agreement after
January 31, 1996. The base salary payments will be
subject to normal deductions (tax withholdings, etc.),
and Wolverine and Executive shall each be responsible
for those contributions and remittances for which they
have been responsible prior to the date hereof.
(b) Continued Participation in Bonus Programs.
During the Transition Period, Executive shall continue
to participate in the Wolverine World Wide, Inc.
Executive Long-Term Incentive (Three Year) Plan (the
"Long-term Plan"), or any successor or substitute plan,
for each of the 3-year periods ending with fiscal 1992,
1993, 1994, and 1995, and in the Wolverine World Wide,
Inc. Executive Short-Term Incentive Plan (the "Annual
Plan"), or any successor or substitute plan, for fiscal
1992, 1993, 1994 and 1995. Subject to the provisions
of this Agreement, Executive shall continue to
participate in the Long-term Plan and the Annual Plan
for the specified periods in accordance with the rates,
and subject to the limitations, set forth on Exhibit A
hereto if, as expected during the Transition Period,
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Executive continues to contribute to success of
Wolverine as outlined in Section 2 hereof through the
satisfactory performance of his duties (or if Executive
is unilaterally terminated by Wolverine without cause
during the Transition Period); provided that, with
respect to the Executive and other upper echelon
executives of Wolverine considered as a group, the
foregoing shall not prevent the Compensation Committee
of the Board (the "Compensation Committee") or the
Board from amending or changing the percentage mix of
the personal and corporate goal components in the
Annual Plan or otherwise terminating, amending or
changing the terms, provisions, bonus schedules or
formulas of the Annual Plan and the Long-term Plan.
Notwithstanding the foregoing, the Compensation
Committee may decide, in its sole discretion, to
decrease or eliminate Executive's participation in the
Annual Plan and/or the Long-term Plan if Executive
becomes active, beyond the levels of outside activity
generally contemplated by Section 3(d), in other
businesses or ventures or otherwise devotes substantial
time and energy, beyond the levels of outside activity
generally contemplated by Section 3(d), to matters not
involving Wolverine or its affiliated companies
(excluding the outside board, trust, civic or
charitable duties referenced in Section 2 hereof) or is
not generally available to carry out and fulfill his
duties.
(c) Fringe Benefits. Except as otherwise
provided herein, Executive shall be entitled to
reasonable vacations, provided that Executive shall
make himself generally available for up to 36 weeks per
year to render the services and perform the duties (as
reasonably prescribed and specifically assigned by
Wolverine) in accordance with Section 2 hereof.
Executive shall be entitled to all benefits in the way
of "fringes" available to upper echelon officers of
Wolverine including, but not limited to, continuing
participation in all group life, disability,
hospitalization, medical, dental and surgical benefit
plans in effect and available to upper echelon officers
of Wolverine; payment of dues, assessments and other
business related amounts at a country club of
Executive's choosing in the Grand Rapids, Michigan
area; payment of dues and other business related
expenses in connection with Executive's existing
membership and participation in business, civic and
government-related organizations; and participation in
the car benefit package generally available to upper
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echelon officers of Wolverine; provided that in
addition, and not by way of limitation:
(i) Wolverine shall continue Executive and
Executive's wife under Wolverine's medical and
dental plans until each has attained age 65 under
the same terms, conditions and costs as other
upper echelon officers of Wolverine; provided that
in the event and to the extent Wolverine is not
able to include the Executive and/or the
Executive's wife in any of such medical and dental
plans, Wolverine agrees to provide medical and
dental benefits to Executive and/or Executive's
wife at the same cost to Executive as if Executive
remained a full-time employee of Wolverine from
January 31, 1996, through the time Executive or
his wife, if later, attains age 65;
(ii) The Group Replacement Whole Life
Policy covering Executive (NWML #11036733) shall
continue as at present until Executive has
attained age 65 and Wolverine will pay the
equivalent term life share and the Executive will
pay the balance of the annual premium; provided
that if the Group Replacement Whole Life Policy
does not allow Executive's participation unless
employed by Wolverine, and assuming Executive is
either employed by Wolverine in accordance with
the terms of this Agreement through January 31,
1996, or is unilaterally terminated by Wolverine
without cause prior to such date, Wolverine shall,
in either of these events, prepay, prior to
cessation of Executive's employment, the
equivalent Term Life share insurance premiums due
until Executive attains the age of 65;
(iii) Wolverine's current interest in the
cash value of the NWML Policy #8329728 (formerly
described as the "Split Dollar Policy"), shall be
transferred to Executive within eight (8) days
following the execution of this Agreement and
shall be "grossed up" once for tax purposes.
Provided Executive is employed in accordance with
the terms of this Agreement during the Transition
Period, Wolverine shall pay the premiums due on
the policy. Provided Executive is either employed
by Wolverine in accordance with the terms of this
Agreement through January 31, 1996, or is
unilaterally terminated by Wolverine without cause
prior to such date, Wolverine shall, in either of
-5-
these events, prepay, prior to cessation of
Executive's employment, the premiums due until
Executive attains the age of 65, and grossing them
up once for tax purposes as such prepayments of
premium, or any portion thereof, is taxable to
Executive. For the purpose of this Subsection
3(c)(iii), amounts will be grossed up once for tax
purposes by utilizing the marginal state and
federal income tax rates applicable to Executive
at the time any such amount is taxable to
Executive and by adding (a) the state income tax
on the taxable amount, and (b) the federal income
tax on an amount equal to the taxable amount less
the amount of the state tax;
(iv) Executive shall be entitled to continue
to participate in the 1988 Stock Option Plan or
its successor plan, and any awards granted under
such plan or any successor plan, shall be at the
absolute discretion of the Compensation Committee.
Executive shall be vested 100% in his existing
options and the restrictions with respect to his
existing restricted stock (1984 Executive
Incentive Stock Purchase Plan) will lapse if
Executive's employment is unilaterally terminated
by Wolverine without cause or if Executive
unilaterally terminates his employment and this
Agreement prior to January 31, 1996. Restrictions
still extant on January 31, 1996 with respect to
Executive's existing restricted stock (1984
Executive Incentive Stock Purchase Plan) will
lapse on January 31, 1996 if this Agreement is
then in effect and Executive has complied with its
terms through such date. The terms and vesting
schedule of the existing restricted stock,
options, and option agreements shall continue to
govern in the event Executive's employment is
terminated prior to January 31, 1996, other than
unilateral termination by Wolverine without cause
or unilateral termination by Executive;
(v) Wolverine shall continue to pay for the
preparation of Executive's federal, state and
local income tax returns, together with any
related accounting and legal advice as is
presently provided and paid for by Wolverine,
through calendar year 1995 or, if earlier, the
calendar year in which Executive dies, which
expenditures shall be generally consistent with
the amounts previously reimbursed to Executive.
-6-
In addition, Wolverine shall pay Executive's legal
fees and expenses, in an amount not to exceed Two
Thousand Dollars ($2,000.00), relating to the
negotiation and preparation of this Amended and
Restated Agreement; and
(vi) During the Transition Period, Wolverine
shall continue to pay for the individual
disability policies for Executive that are
currently paid for by Wolverine (NWML
Nos. D097519, D571656 and D677185).
(d) Limitation. Notwithstanding any provision or term
of this Agreement to the contrary, Wolverine shall not be
required or obligated to maintain, amend or adopt any
particular fringe benefit plan, bonus plan, or policy,
including any of the existing plans or policies of
Wolverine, or, except as provided in Section 4 or in
accordance with Section 12 and the agreements referenced
therein, to pay, credit or otherwise vest in Executive as a
participant any amount or level of award or grant under any
such plan or policy; provided, however, that the foregoing
shall not apply to any deferred compensation, bonus, payment
or other credit awarded to Executive under any such plan or
policy or (except as otherwise provided herein) to the
insurance policies and arrangements specified in
Subsections 3(c)(ii), (iii) and (vi) hereof. If Executive
earns income from other employment, or net income from self-
employment or consulting, during the Transition Period,
(excluding any amounts earned by Executive in connection
with the outside board, trust or charitable and civic
endeavors referenced in Section 2 above) the parties agree
that the amount of any such earnings or net income
(including the cash value of any fringe benefits) in excess
of Fifteen Thousand Dollars ($15,000) for fiscal 1993, Fifty
Thousand Dollars ($50,000) for fiscal 1994, and One Hundred
Thousand Dollars ($100,000) for fiscal 1995 should be
deducted from the payments and benefits payable under
Section 3. Within forty (40) days following the end of
fiscal 1993, 1994 and 1995, Executive shall certify to
Wolverine the amount of Executive's income from other
employment, or net income from self-employment or
consulting, for the fiscal year then ended. At the written
request of Wolverine, Executive shall also cause to be
provided to Wolverine a certification and certificate from
an independent certified public accountant, in form and
detail reasonably satisfactory to Wolverine, listing and
disclosing the amount of Executive's income from other
employment, or net income from self-employment or
consulting, for the fiscal year then ended.
-7-
Section 4. Pension. Executive shall continue to
participate in the Wolverine World Wide, Inc. Employees Pension
Plan or any successor plan (the "Pension Plan") while an employee
under the terms of this Agreement. Executive's pension under the
Pension Plan, shall, in accordance with the current terms of the
Pension Plan, become payable on January 31, 1996 (the "Pension
Commencement Date"). Executive shall be entitled to receive
payments in accordance with the terms and provisions of the
Pension Plan and the Wolverine Supplemental Retirement Benefit
(ERISA Excess) Plan dated May 4, 1988 ("ERISA Excess Plan") or,
if greater, the payments set forth below. Except as otherwise
provided below and assuming the terms and provisions of the
Pension Plan do not provide for a greater benefit, the parties
agree that the amount of such pension will be $130,000 per annum
after giving effect to and net of (a) the projection/proration
feature of the Pension Plan, (b) the actuarial reduction for
early retirement, (c) the optional equal annuity marital option,
which option Executive hereby irrevocably elects, and (d) the
social security offset provisions of the Plan. Any portion of
such pension payments not permitted or allowed by government or
regulatory guidelines, policies or rules will be paid by
Wolverine pursuant to its existing ERISA Excess Plan. If these
pension payments are subject to the Federal Insurance
Contribution Act tax or similar charges, the parties agree that
Executive will be responsible for his share of any such tax or
charge. The maximum annual pension benefit referenced above
shall be subject to reduction in the event Executive's employment
with Wolverine is terminated (other than unilateral termination
of Executive by Wolverine without cause, termination due to
Executive's disability, or if Executive unilaterally terminates
his employment and this Agreement) prior to January 31, 1996. In
such event, the annual amount of such pension shall be equal to
(a) the amount otherwise payable to Executive in accordance with
the terms of the Pension Plan and the ERISA Excess Plan, plus
(b) an amount equal to (i) the difference between $130,000 and
the amount referenced in subsection (a) above, times (ii) a
fraction the numerator of which is the number of whole calendar
months during the period from August 1, 1992, through January 31,
1996, that Executive is employed by Wolverine and the denominator
of which is 42. Any life insurance policies or other investment
instruments purchased and utilized to fund, in whole or in part,
the benefits payable under the ERISA Excess Plan, will be
transferred to Michigan National Bank ("MNB"), as trustee,
pursuant to the Wolverine World Wide, Inc. Benefit Trust
Agreement between Wolverine and MNB dated May 19, 1987, as
amended ("Benefit Trust Agreement"), and such policies or other
investment instruments will not be materially amended or
cancelled or terminated by Wolverine without the prior consent of
Executive, which consent shall not be unreasonably withheld.
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Section 5. Employee Loan. Executive currently owes
Wolverine certain amounts in accordance with loans issued
pursuant to the Wolverine Stock Option Loan Program. Any
principal installments due and payable in accordance with the
terms of such loans, including any accrued interest, shall be
paid by Executive within eight (8) days following the date of
this Agreement. The remaining loans and amounts owed to
Wolverine by Executive shall continue to be outstanding and shall
be paid in accordance with their respective terms.
Section 6. Termination. The employment of Executive may be
terminated as set forth in this section:
(a) Death. The death of Executive.
(b) Disability. The "disability" of Executive,
as such term is defined in Section 7 of this Agreement.
(c) Termination Upon Notice. Either party may
terminate Executive's employment, with or without
cause, upon notice to the other party.
(d) Cause. Executive may be terminated for
cause. For the purpose of this Agreement, cause is
defined as (i) willful disobedience of reasonable
directives of the Board, the Executive Committee or any
successor Chief Executive Officer of Wolverine; (ii)
dishonesty or commission of a misdemeanor or a felony
injurious to Wolverine; (iii) failure by Executive to
substantially perform the duties described in Section 2
of this Agreement (other than failure resulting from an
illness or disability) after notice of nonperformance
to Executive from the Executive Committee or the Board;
(iv) any default in or breach of Section 9 of this
Agreement; (v) any material default in or breach of
this Agreement other than Sections 2 or 9; or (vi) an
adjudication of a court of competent jurisdiction that
Executive is liable for gross negligence or gross
misconduct in the performance of his duties under this
Agreement.
Section 7. Disability. In the event of Executive's
physical or mental illness or other incapacity which prevents
Executive from substantially performing his duties hereunder
("Disability") during the Transition Period, Executive's term of
employment shall not terminate and Executive shall be entitled to
the salary and other benefits provided herein during the period
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of such Disability; provided, however, that such salary and other
benefits (other than the continuing benefits referenced in
Subsections 3(c)(i), (ii) and (iii)), including the vesting of
pension benefits under the Pension Plan and Section 4 hereof,
shall terminate from and after the last day of the twelfth month
of said Disability, whereupon Executive's term of employment
shall automatically terminate notwithstanding any other provision
of this Agreement. Notwithstanding the foregoing, the salary and
other benefits referenced above (other than the continuing
benefits referenced in Subsections 3(c)(i), (ii) and (iii)),
shall terminate prior to the end of the twelve month continuation
period to the extent Executive receives disability benefits
pursuant to Section 6 of the Deferred Compensation Agreement
dated August 29, 1989, between Wolverine and Executive. If there
should be a dispute between the parties as to Executive's
physical or mental disability at any time, such question shall be
settled by the opinion of an impartial and reputable physician
agreed upon for the purpose by the parties or their
representatives, or failing agreement within ten (10) days of a
written request therefor by either party, then one designated by
the then President of the Kent County Medical Association.
Section 8. Knowing and Voluntary Agreement and Right to
Rescind. Executive represents that he has carefully reviewed
this Agreement, that Wolverine has advised him to consult with
his own counsel with regard to this Agreement, that he has done
so, that he fully understands each provision of this Agreement,
and is knowingly and voluntarily agreeing to each provision.
Specifically, and without limitation of the foregoing, Executive
fully understands and agrees to the general release provisions in
Section 10 below, and understands and agrees that he is giving up
any right to make claims covered by Section 10, including
specifically and without limitation, any claims relating to the
termination of his employment under the terms of his existing
Employment Agreement between the Executive and Wolverine dated
August 24, 1989. Executive understands that he has twenty-two
(22) days after receipt of this Agreement to decide whether to
sign it, and if Executive elects to sign the Agreement before
expiration of twenty-two (22) days he does so voluntarily and
with advice of counsel, and represents to Wolverine that he and
his counsel are electing to waive the full period of review
allowed them under the Older Worker's Benefit Protection Act.
Executive may elect to revoke this Agreement by notifying
Wolverine in writing of such revocation within seven (7) days
after signing this Agreement. Executive represents and agrees
that if he elects to revoke this Agreement he will deliver notice
of such revocation within the 7-day period as provided in Section
16 of this Agreement.
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Section 9. Covenants. In consideration of Wolverine's
payments under this Agreement, Executive covenants and agrees to
perform and abide by the following covenants for, except as
otherwise provided in subsection 9(b) below, the Transition
Period or, if longer, for a period of one (1) year following the
termination of Executive's employment with Wolverine (other than
unilateral termination of Executive's employment by Wolverine
without cause):
(a) Covenant Not to Compete. Executive shall
have no investment, involvement or other connection
whatsoever, directly or indirectly, with any
corporation, partnership, proprietorship, individual,
or other business entity ("Competitor"), that, during
all or any part of the period in which Executive has
such investment, involvement, or other connection,
competes with any business which is substantially
similar to the whole or any part of the business
conducted (or to be conducted) by Wolverine, including
any new businesses or ventures which Wolverine
(currently or during the Transition Period)
contemplates (through itself or a controlled
affiliate), as evidenced by action or deliberation of
the Board, the Executive Committee or any other Board
committee or committee specifically designated by the
Board, entering into at some future date, provided,
that the foregoing restriction as to businesses that
Wolverine is contemplating entering into shall not
apply to unrelated businesses or ventures that
Executive invests or is involved in prior to the date
the Board, the Executive Committee, other Board
committee or any other committee specifically
designated by the Board took action or deliberated
entering into such new business or venture. Without
limiting the generality of the foregoing, Executive
agrees that Executive shall not be or become a
shareholder, partner or other investor in, nor an
officer, employee, consultant, adviser, creditor or
director of, nor a sales or other agent (whether
independent or otherwise) or distributor for, a
Competitor. Executive further agrees that Executive
shall not, either for Executive or on behalf of a
Competitor, directly or indirectly, divert or attempt
to divert any business from Wolverine, solicit any
current or past customer of Wolverine, or attempt to
influence any customer of Wolverine to divert business
from any such entity. The geographic scope of the
foregoing covenants shall be worldwide. Nothing
contained in this Agreement shall prohibit Executive
from acquiring not more than five (5) percent of the
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outstanding shares of any publicly traded equity
security of a Competitor listed for trading in the New
York Stock Exchange, the American Stock Exchange, the
Toronto Stock Exchange, or any other recognized foreign
exchange, or quoted on the National Association of
Securities Dealers Automated Quotation System. During
the Transition Period, Executive shall keep Wolverine
informed of any business or venture in which Executive
shall become a shareholder (other than the acquisition
of shares referenced in the foregoing sentence),
partner, investor, officer, employee, consultant,
adviser, creditor, director, sales or other agent
(whether independent or otherwise) or distributor.
Wolverine shall keep Executive reasonably informed of
all new businesses or ventures which Wolverine
contemplates entering into at some future date if
Executive is no longer an officer of Wolverine or a
member of the Board.
(b) Confidential Information. Executive further
covenants and agrees that he shall not, from the date
of this Agreement and forever afterward, without the
prior approval of Wolverine, use or disclose to any
person, firm, corporation or other entity any material
proprietary, secret or confidential information of
Wolverine or its affiliated companies, including, but
not limited to customer names or information, sales and
manufacturing information, operational methods and
business and trade secrets, but excluding information
within the public domain or which comes within the
public domain in the future through no act or fault of
Executive.
(c) Employees. Executive shall not directly or
indirectly solicit or approach any employee of
Wolverine or its affiliated companies (or any successor
or assignee of Wolverine or its affiliated companies)
for the purpose of inducing the employee to terminate
his or her employment.
(d) Limitation. If a final nonappealable
decision of any court of competent jurisdiction shall
at any time deem the foregoing time periods too lengthy
or the scope of the covenants too broad, the
restrictive time period shall thereafter be deemed (in
that jurisdiction) to be the longest period permissible
by law in that jurisdiction, and the scope shall be
deemed to comprise the largest scope permissible by law
under the circumstances. It is the parties' intent to
protect and preserve the business and goodwill of
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Wolverine and its affiliated companies and thus the
parties agree and direct that the time period and scope
of the foregoing covenants shall be the maximum
permissible duration or size.
(e) Remedies. In the event that Executive
defaults in or breaches any of the covenants set forth
in Section 9 of this Agreement, Wolverine shall be
entitled to one or more of the following remedies,
which shall be cumulative: (a) damages in an amount
equal to the greater of (i) actual damages incurred as
a result of such breach, (ii) the profits or
compensation wrongfully earned by Executive as a result
of such breach, or (iii) the amount paid or to be paid
to Executive pursuant to subsection 3(a) of this
Agreement during the period of such default or breach;
(b) injunctive or other equitable relief prohibiting
Executive from continuing to engage in such activities;
(c) rights of set off against any amounts owed
Executive; and (d) other legal and equitable remedies
(including without limitation reimbursement of
reasonable attorney fees) as may be available under
law. Executive recognizes and acknowledges that in the
event of any default in, or breach of any of the terms,
conditions or provisions of this Section 9 (either
actual or threatened) by Executive, Wolverine's
remedies at law shall be inadequate. Accordingly,
Executive agrees that Wolverine shall be entitled to
the remedies of specific performance and injunctive
relief in addition to any and all other remedies and
rights at law or in equity, and those rights and
remedies shall be cumulative. Specifically, and
without limiting the foregoing, if Executive defaults
in or breaches (either actual or threatened) any of the
covenants set forth in Section 9 of this Agreement,
which default or breach (either actual or threatened)
is not cured or remedied as provided below, Wolverine
shall be entitled to terminate Executive's employment
under this Agreement. Executive shall be entitled to
cure or remedy any default in or breach of (either
actual or threatened) the covenants set forth in
Section 9 of this Agreement, excluding any willful,
intentional or conscious default or breach (either
actual or threatened), for a period of thirty (30) days
after such default or breach (either actual or
threatened) is known to Executive. Notice from
Wolverine to Executive in accordance with the terms of
this Agreement of any such default or breach (either
actual or threatened) shall be presumptive proof of
Executive's knowledge of such default or breach.
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Section 10. General Releases. In consideration of the
payments by Wolverine under this Agreement, Executive agrees as
follows:
(a) Release of All Claims. Executive hereby
waives, releases and forever discharges Wolverine (and
the additional parties listed in subsection (b) below)
of and from all obligations or liabilities to
Executive, and from any and all claims and causes of
action, known or unknown, accrued or unaccrued, that
Executive has or may have against any of them. This
waiver, release and discharge includes, but is not
limited to, all claims (excluding any claims by
Executive relating to a breach or alleged breach of
this Agreement by Wolverine or a future breach or
alleged breach by Wolverine of the agreements
referenced in Section 12 hereof) arising from
Executive's employment or termination from employment
with Wolverine, all claims for reinstatement or
reemployment, all claims for past or future wages,
bonuses, commissions, benefit or compensation programs
(excluding any vested benefits under the Wolverine
Employees Profit Sharing and Savings Plan, which plan
was terminated in 1976), vacation pay, or any other
payments or benefits, all claims for compensatory,
exemplary, punitive or other damages, and all claims
for attorney fees. This waiver, release and discharge
includes, but is not limited to, all claims (excluding
any claims by Executive relating to a breach or alleged
breach of this Agreement by Wolverine or a future
breach or alleged breach of the agreements referenced
in Section 12 hereof) for violation of any express or
implied contract or agreement, written or oral, or for
violation of any common law duty or public policy, or
any statute or order, including, but not limited to the
National Labor Relations Act, Title VII of the Civil
Rights Act of 1964, 42 USC 1981, 42 USC 1983, 42
USC 1985, 42 USC 1986 and 42 USC 1988, the Age
Discrimination in Employment Act, the Employee
Retirement Income Security Act, the Michigan Civil
Rights Act, the Michigan Handicappers'; Civil Rights
Act, any other federal, state or local civil rights
statute, ordinance or regulation. By signing this
Agreement, Executive gives up any such claims, and
promises never to make any such claims, and promises
never to sue over any such claims. Neither this
release nor any other provision of this Agreement is an
admission of any wrongdoing by either party. The
releases in this Section 10, do not affect Executive's
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rights under this Agreement, under the Deferred
Compensation Agreement dated August 29, 1989, under the
Indemnity Agreement dated February 20, 1987, or under
the Severance Agreement dated June 29, 1989, as amended
by this Agreement.
(b) Other Parties Covered by General Releases and
Covenants. It is agreed that Executive's releases,
waivers, discharges and covenants in Sections 9 and
10(a) will also apply in full to and for the benefit of
all of Wolverine affiliated companies, and to all past,
present and future officers, directors, stockholders,
employees, agents, successors and assigns of Wolverine
or any affiliated company in such capacities.
Section 11. Employment Agreement. The Employment Agreement
dated August 24, 1989, between Wolverine and Executive, is hereby
terminated and canceled without any further responsibility or
obligation of one party to the other.
Section 12. Deferred Compensation Agreement,
Indemnification Agreement, and Severance Agreement. The Deferred
Compensation Agreement dated August 29, 1989, and the
Indemnification Agreement dated February 20, 1987, between
Wolverine and Executive, remain in full force and effect. Any
life insurance policies or other investment instruments purchased
and utilized to fund, in whole or in part, the benefits payable
under the Deferred Compensation Agreement, will be transferred to
MNB pursuant to the Benefit Trust Agreement and such policies or
other investment instruments will not be materially amended or
cancelled or terminated by Wolverine without the prior consent of
the Executive, which consent shall not be unreasonably withheld.
Executive shall participate in any future program Wolverine may
institute to provide security or payment protection for upper
echelon employees under the Deferred Compensation Agreement or
the Indemnification Agreement, whether or not such security or
payment protection is provided before or after Executive's
retirement. Executive shall continue to pay the disability
waiver of premium amounts and assessments with respect to the
life insurance policies (or other investment instruments if
applicable) utilized to fund, in whole or in part, the benefits
payable under the Deferred Compensation Agreement. The Severance
Agreement dated June 29, 1989, between Wolverine and Executive
shall remain in full force and effect until the date Executive no
longer holds the office and position of Chief Executive Officer
of Wolverine, at which time it shall be terminated and canceled
without any further responsibility or obligation of one party to
the other. Except as expressly set forth in this Agreement,
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nothing in this Agreement will affect or alter the rights,
benefits, duties or obligations of Executive or Wolverine under
the agreements referenced in this Section 12.
Section 13. Contingent Payment. Wolverine and its
subsidiary, Brooks Shoe, Inc. ("Brooks"), instituted an action
against Nike, Inc. ("Nike"), in 1992 alleging that Nike infringed
upon certain patent and other intellectual property rights owned
by Wolverine and Brooks. Executive was instrumental in causing
Wolverine and Brooks to investigate and pursue their rights
against Nike with respect to the alleged infringement. In
recognition for this past and continuing effort and in
consideration of the execution of this Amended and Restated
Agreement, Wolverine hereby agrees to pay Executive ten percent
(10%) of the net proceeds that Wolverine and/or Brooks receive
from Nike in connection with the above litigation up to a maximum
aggregate amount of Seven Hundred Fifty Thousand Dollars
($750,000). Net proceeds shall mean all payments, including but
not limited to settlement payments, damages and royalties,
Wolverine and/or Brooks receive from Nike through settlement,
judgment or otherwise, less all costs, expenses, or payments
incurred by or on behalf of Wolverine and/or Brooks (or their
affiliated companies) in prosecuting such action or defending any
counterclaim or retaliatory action by Nike against Wolverine or
its affiliated companies. Costs and expenses shall not include
any wage or salary payments to employees of Wolverine and/or
Brooks. All payments to Executive shall be promptly made after
Wolverine and Brooks have realized and received net proceeds from
Nike in connection with such litigation. The obligation of
Wolverine under this Section 13 shall survive the expiration of
this Agreement or the termination of this Agreement if it is
terminated due to Executive's death or disability or if it is
terminated unilaterally by Wolverine without cause or if
Executive unilaterally terminates his employment and this
Agreement.
Section 14. Successors; Binding Agreement.
(a) Wolverine. Wolverine will require any
successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of
Wolverine, to expressly assume and agree to perform
this Agreement in the same manner and to the same
extent that Wolverine would be required to perform it
if no such succession had taken place. Failure of
Wolverine to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a
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material breach of this Agreement. As used in this
Agreement, "Wolverine" shall mean Wolverine as
hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law or
otherwise.
(b) Successors. This Agreement shall not be
assignable by Executive, but inure to the benefit of
and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees to the
extent of any amounts due and owing under the terms of
this Agreement in the event of Executive's death.
Section 15. Miscellaneous. No provision of this Agreement
may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by
Executive and such officer or director as may be specifically
designated by the Board or the Executive Committee. No waiver by
either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provisions of
this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement and
this Agreement sets forth the entire agreement and understanding
of the parties. The agreement of the parties and the parties'
rights under this Agreement are exclusively set forth in this
Agreement and neither party shall be bound by or rely upon any
oral or written promise or statement, including any made during
discussions or negotiations between the parties. The validity,
interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Michigan as
applicable to contracts made and to be performed in the State of
Michigan.
Section 16. Validity. The invalidity of unenforceability
of any provisions of this Agreement shall not affect the validity
or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
Section 17. Notices. Any and all notices referred to
herein shall be sufficient if furnished in writing and shall be
deemed to have been duly given if mailed by certified or
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registered mail (postage prepaid) or shipped and receipted by
express courier service (charges prepaid) to the respective
parties at the following addresses:
If to Wolverine: Wolverine World Wide, Inc.
9341 Courtland Drive, N.E.
Rockford, Michigan 49351
Attention: Chairman-Compensation
Committee
With a copy to:
Warner, Norcross & Judd
900 Old Kent Building
111 Lyon Street, N.W.
Grand Rapids, Michigan 49503-2489
Attention: Blake W. Krueger, Esq.
If to Executive: Thomas D. Gleason
656 Manhattan Road, S.E.
East Grand Rapids, Michigan 49506
With a copy to:
Borre, Peterson, Fowler & Reens
44 Lafayette, N.E.
P.O. Box 1767
Grand Rapids, Michigan 49501
Attention: Glen V. Borre, Esq.
Mark D. Sevald, Esq.
Section 18. Legal Fees and Expenses. Executive shall pay
or reimburse Wolverine for all reasonable legal fees and related
expenses incurred by Wolverine (and its affiliates) as a result
of any default in or breach of this Agreement by Executive, and
Wolverine shall pay or reimburse Executive for all reasonable
legal fees and related expenses incurred by Executive as a result
of any default in or breach of this Agreement by Wolverine.
Section 19. Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be
an original, but all of which together will constitute one and
the same instrument.
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Section 20. Amended and Restated Agreement. This Amended
and Restated Agreement amends and restates in its entirety the
Agreement, dated as of July 24, 1992, dealing with the subject
matter hereof. The effective date of this Amended and Restated
Agreement shall be July 24, 1992, and the phrases "date hereof,"
"effective date of this Agreement," "Agreement date" or similar
terms shall mean July 24, 1992.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement on May 26, 1994, as of the day and year first above
written.
WOLVERINE WORLD WIDE, INC.
By s/ Daniel T. Carroll
Daniel T. Carroll, Director and
Chairman of the Compensation
Committee of the Board of
Directors
s/ Thomas D. Gleason
Thomas D. Gleason
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EXHIBIT A
BONUS PLAN PARTICIPATION PERCENTAGES AT
BASE SALARY AND AT TARGET
ANNUAL PLAN LONG-TERM PLAN
% Participation % Participation
Year At Target Year At Target
1992 36% 1990-92 50%
1993 33% 1991-93 50%
1994 30% 1992-94 50%
1995 25% 1993-95 40%
Limitations: Notwithstanding the terms, provisions or
conditions of the Long-Term Plan or the Annual
Plan (or any agreement or understanding involving
Executive which relates to such plans), Executive
shall not, on an annual basis, be entitled to be
awarded or receive more than Fifty Thousand
Dollars ($50,000) under each of the following
bonus plans (i) the Long-term Plan for each of the
three-year periods ending with fiscal 1992, 1993,
1994 and 1995, or (ii) the Annual Plan for each of
fiscal 1992, 1993, 1994 and 1995. Executive's
participation in the Annual Plan shall be
determined solely from the corporate goal
component as specified from time-to-time in such
plan. Executive's right to participate in the
Long-Term Plan ending with fiscal 1995 and the
Annual Plan for fiscal 1995, shall survive
Executive's retirement on January 31, 1996, in
accordance with the terms of this Agreement.
Exhibit 10(x)
DEFERRED COMPENSATION AGREEMENT
This AGREEMENT, made as of the 21st day of April, 1994,
between WOLVERINE WORLD WIDE, INC. (hereinafter called the
"Company"), and Charles F. Morgo (hereinafter called the
"Employee");
W I T N E S S E T H :
WHEREAS, Employee is employed by the Company in a
position of trust and confidence resulting in the acquisition of
peculiar and confidential knowledge of the Company's business
such as trade secrets, operational methods, the names of its
customers and suppliers, and other equally important and
confidential information, which both parties acknowledge to be of
present and future business and financial importance to the
Company and which should be prevented from becoming the
information of or subject to use by competitive interests; and
WHEREAS, the Company is desirous of instituting a
security program to assist in providing Employee with family
benefits in the event of his premature death and a program for
continuing compensation on a deferred basis and as a supplemental
pension for Employee after his retirement as an inducement for
Employee to remain with the Company and devote his highest skill
and energy to the discharge of his employment duties, but neither
party wishes to be committed by this Agreement to an employment
relationship for any fixed interval;
NOW, THEREFORE, the parties hereto, each in
consideration of the promises of the other hereinafter contained,
agree as follows:
1. Confidentiality and Relationship.
(a) Employee agrees to refrain from divulging any
information of a confidential nature including, but not
restricted to, trade secrets, operational methods, the names of
the Company's customers and suppliers and the relations of the
Company with such customers and suppliers, or other confidential
information; and to refrain from using or permitting the use of
such information or confidences by any interests competitive with
the Company, irrespective of whether or not Employee is then
employed by the Company, and to refrain from inducing, and from
causing inducements to be made to, the Company's employees to
terminate employment with the Company or undertake employment
with its competitors. The obligations herein assumed by Employee
shall endure whether or not the remaining promises by either
party hereunder remain to be performed or shall be only partially
performed.
(b) This Agreement does not constitute a contract on the
part of the Company to employ Employee until age 65 or to
continue his employment for any given period of time, either
fixed or contingent. Moreover, Employee does not by this writing
agree to continue in the employment of the Company for any
specified interval of time. The employment relationship,
therefore, shall continue for so long as, but only for so long
as, such employment is mutually satisfactory to both parties.
The Company does not promise that Employee's employment will be
continued for such interval as to enable Employee to obtain all
or any part of the benefits under this Agreement.
2. Payments Upon and During Retirement. If at the
Employee's retirement he shall have faithfully performed all
covenants to be performed by him, including those specified in
the Employment Agreement of even date herewith between the
Company and the Employee ("Employment Agreement"), upon the
retirement of the Employee from the employ of the Company on
January 1, 1997 in accordance with the terms of the Employment
Agreement, the Company shall pay to him from its general assets a
deferred compensation retirement payment at the rate of Fifty
Thousand Dollars ($50,000.00) per annum, in substantially equal
consecutive monthly installments commencing on the date the
Employee attains the age of 60 years (or on such later date as
Employee retires), and on the same day of each month thereafter
for 180 months. If after retirement under this paragraph the
Employee shall die prior to the payment of the last monthly
installment as provided above, the Company shall continue to make
payments of the remaining monthly installments as they become
due, pursuant to the provisions of Paragraph 4 hereof.
3. Death or Disability Before Retirement. If the Employee
shall die or become disabled while in the employ of the Company
prior to his retirement and he shall have faithfully performed
all covenants to be performed by him, including those specified
in the Employment Agreement, the Company shall pay from its
general assets, to the beneficiary identified pursuant to the
provisions of Paragraph 4 hereof, at the rate per annum of Fifty
Thousand Dollars ($50,000.00) in substantially equal consecutive
monthly installments for 180 months, the first installment being
due and payable on the 10th day after death or disability and
subsequent installments being payable on the same day of each
month thereafter. If the conditions for such payments are
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satisfied, the initial payments aggregating Five Thousand Dollars
($5,000) are intended to qualify for exclusion from gross income
of the beneficiaries or the estate of the Employee under Section
101(b) of the Internal Revenue Code, as presently or hereafter
amended, or as the benefits of such section of the Code
(irrespective of subsequent designation) may be substantially
afforded.
4. Death After Retirement or Cessation of Employment. If
the Employee shall die after becoming eligible for a benefit
under Paragraph 2, and after retirement or other cessation of
employment, but prior to receiving the last monthly installment
as provided under Paragraph 2 hereof, the remaining monthly
installments payable under Paragraph 2 hereof shall be paid as
they become due to the person or persons whom the Employee shall
have last designated in a writing filed with the Treasurer of the
Company and in form accepted by such Treasurer. The Employee's
Last Will shall not be sufficient to designate a beneficiary
hereunder. The Employee shall have the right to change or amend
such designations from time to time by a writing similarly filed
and in form accepted by such Treasurer. If the Employee shall
fail to make such designations prior to the time a monthly
installment shall become so payable, such installment and all
remaining monthly installments shall be paid, as they become due,
to the duly appointed executor, administrator, or other personal
representative of the estate of the Employee.
5. Limitations on Death Payments. Notwithstanding
anything herein to the contrary, if within 1 year of the date
Employee first entered into a Deferred Compensation Agreement
with the Company, the Employee should die by suicide, whether
while sane or insane, no payments shall be thereafter made by the
Company. In addition, should the Company in its discretion
determine to carry insurance on the Employee's life to fund in
whole or in part its obligations hereunder, and if the Employee
dies or becomes totally disabled within 2 years of the date
Employee first entered into a Deferred Compensation Agreement
with the Company, under circumstances resulting in a successful
disclaimer of liability by the insurance company due to
statements made, or omissions by, the Employee at the time of
obtaining such insurance, then no payments will be due hereunder
from the Company and its obligations hereunder shall cease.
6. Accelerated Vesting after Change in Control.
(a) Subject to the limitations of Paragraph 6(c) hereof,
but notwithstanding any other provision of this Agreement,
including, without limitation, the age and service vesting
-3-
requirements of Paragraph 2 hereof, the Employee's right to the
deferred compensation retirement payment described in Paragraph 2
(without any reduction for early payment) shall become 100
percent vested upon the termination of the Employee's employment
under the circumstances described in Paragraph 7 hereof within
the 5 years immediately following the occurrence of any Change in
Control (as defined in Paragraph 6(b) hereof). Upon any such
qualifying termination of employment, the Company shall pay to
the Employee, within 30 days of such termination, the sum of (i)
the present value of the benefit to which the Employee would be
entitled under Paragraph 2 hereof if the Employee retired at age
65 (without any reduction described therein for early payment);
plus (ii) an amount equal to 25 percent of such present value.
Payment shall be made, to the extent possible, by distribution of
any insurance policy or policies purchased by the Company in
connection with this Agreement, valued for distribution purposes
at their cash surrender value. Any remaining balance of the
distribution sum shall be paid in cash.
(b) For purposes of this Agreement, a "Change in Control"
shall mean a Change in Control of the Company of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended ("Exchange Act"); provided that,
without limitation, such a Change in Control shall be deemed to
have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes
the beneficial owner (as defined in Rule 13(d)-3 under the
Exchange Act), directly or indirectly, of securities of the
Company representing 25 percent or more of the combined voting
power of the Company's then-outstanding securities; or (ii)
during any period of 2 consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the
Company (the "Board") cease for any reason to constitute at least
a majority thereof unless the election, or the nomination for
election by the Company's shareholders, of each new director was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the
period.
(c) In the event that any payment or benefit received
or to be received by Employee in connection with the termination
of his employment (whether payable pursuant to the terms of this
Agreement or any other plan, arrangement, or agreement with the
Company or any corporation ("Affiliate") affiliated with the
Company within the meaning of Section 1504 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code")
(collectively with the payments under this Paragraph 6, "Total
Payments") would not be deductible (in whole or in part) by the
Company or an Affiliate as a result of Section 280G of the Code
-4-
(after taking into account any reduction of any portion of the
Total Payments pursuant to the terms of the appropriate governing
instrument), the payments to be made under this Paragraph 6 shall
be reduced until no portion of the Total Payments is not
deductible as a result of Section 280G of the Code, or the
payments under this Paragraph 6 are reduced to zero. For
purposes of this limitation, (i) no portion of the Total Payments
the receipt or enjoyment of which Employee shall have effectively
waived in writing prior to the date of payment of the payments to
be made under this Paragraph 6 shall be taken into account; (ii)
no portion of the Total Payments shall be taken into account
which in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to Employee does not
constitute a "parachute payment" within the meaning of Section
280G(b)(2) of the Code; (iii) the payments to be made under this
Paragraph 6 shall be reduced only to the extent necessary so that
the Total Payments (other than those referred to in clause (ii))
in their entirety constitute reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4) of the
Code, in the opinion of the tax counsel referred to in clause
(ii); and (iv) the value of any noncash benefit or any deferred
cash payment included in the total Payments shall be determined
by the Company's independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
7. Qualification for Accelerated Vesting. If a Change in
Control of the Company shall have occurred, the Employee shall be
entitled to the accelerated vesting and benefits provided in
Paragraph 6 hereof upon the subsequent termination of the
Employee's employment within the 5 years immediately following
such Change in Control, unless such termination is (a) because of
the Employee's death or Retirement; (b) by the Company for Cause
or Disability; or (c) by the Employee other than for Good Reason
(as such capitalized terms are defined in this Paragraph 6).
(a) Disability; Retirement.
(i) The Employee's employment shall be deemed to have been
terminated by the Company due to Disability if, as a result of
the Employee's incapacity due to physical or mental illness, the
Employee shall have been absent from the Employee's duties with
the Company on a full-time basis for 6 consecutive months, and
within 30 days after written notice of termination in given, the
Employee shall not have returned to the full-time performance of
the Employee's duties.
(ii) Termination by the Company or the Employee of the
Employee's employment based on "Retirement" shall mean
termination in accordance with any retirement arrangement
established with the Employee's consent with respect to the
Employee.
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(b) Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate the Employee's employment
hereunder upon (i) the willful and continued failure by the
Employee to substantially perform the Employee's duties with the
Company (other than any such failure resulting from the
Employee's incapacity due to physical or mental illness, or any
such actual or anticipated failure resulting from the Employee's
termination for Good Reason), after a demand for substantial
performance is delivered to the Employee by the Board which
specifically identifies the manner in which the Board believes
that the Employee has not substantially performed the Employee's
duties; or (ii) the willful engaging by the Employee in gross
misconduct materially and demonstrably injurious to the Company.
For purposes of this paragraph, no act, or failure to act, on the
Employee's part shall be considered "willful" unless done, or
omitted to be done, by the Employee not in good faith and without
reasonable belief that the Employee's action or omission was in
the best interest of the Company. Notwithstanding the foregoing,
the Employee shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to the
Employee a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board called and held for the
purpose (after reasonable notice to the Employee and an
opportunity for the Employee, together with the Employee's
counsel, to be heard before the Board), finding that, in the
good-faith opinion of the Board, the Employee was guilty of
conduct set forth above in clause (i) or (ii) of the first
sentence of this paragraph and specifying the particulars thereof
in detail.
(c) Good Reason. For purposes of this Agreement, "Good
Reason" shall mean the occurrence of any of the following within
the 5-year period immediately after a Change in Control without
the Employee's express written consent:
(i) the assignment to the Employee of any duties
inconsistent with the Employee's status as a senior executive
officer of the Company or a substantial alteration in the nature
or status of the Employee's responsibilities from those in effect
immediately prior to a Change in Control of the Company;
(ii) a reduction by the Company in the Employee's annual
base salary as in effect on the date hereof or as the same may be
increased from time to time; or the failure by the Company to
increase such base salary during the calendar year in which a
Change in Control has occurred and each calendar year thereafter
by an amount which at least equals, on a percentage basis, the
mean average percentage increase in base salary for all officers
of the Company during the 2 full calendar years immediately
preceding a Change in Control of the Company (the "Annual Salary
-6-
Adjustment"), except for across-the-board salary reductions,
freezes, or reduced increases similarly affecting all executives
of any person in control of the Company;
(iii) a failure by the Company to continue the Company's
Executive Incentive Bonus Plan as the same may be modified from
time to time but substantially in the form presently in effect
(the "Plan"), or a failure by the Company to continue the
Employee as a participant in the Plan on at least the present
basis or to pay the Employee any annual installment of a previous
award under the Plan or any Deferred Distribution (as defined in
the Plan) awarded under the Plan;
(iv) the relocation of the Company's principal executive
offices to a location outside Rockford, Michigan, or the
Company's requiring the Employee to be based anywhere other than
the Employee's current location without the Employee's consent
except for required travel on the Company's business to an extent
substantially consistent with the Employee's present business
travel obligations, or, in the event the Employee consents to any
such relocation of the Company's principal executive offices, the
failure by the Company to pay (or reimburse the Employee for) all
reasonable moving expenses incurred by the Employee relating to a
change of the Employee's principal residence in connection with
such relocation and to indemnify the Employee against any loss
(defined as the difference between the actual sale price of such
residence and the higher of (A) the Employee's aggregate
investment in such residence or (B) the fair market value of such
residence as determined by a real estate appraiser designated by
the Employee and reasonably satisfactory to the Company) realized
in the sale of the Employee's principal residence in connection
with any such change of residence;
(v) the failure by the Company to continue to provide the
Employee with benefits substantially similar to those enjoyed by
the Employee under any benefit or compensation plan (including
but not limited to the Company's 1988 Stock Option Plan and
Deferred Compensation Plan), pension, life insurance, medical,
health, and accident or disability plan in which the Employee is
participating at the time of a Change in Control of the Company,
the taking of any action by the Company which would adversely
affect the Employee's participation in or materially reduce the
Employee's benefits under any of such plans or deprive the
Employee of any material fringe benefit enjoyed by the Employee
at the time of the Change in Control of the Company, or the
failure by the Company to provide the Employee with the number of
paid vacation days to which the Employee is then entitled on the
basis of years of service with the Company in accordance with the
Company's normal vacation policy in effect on the date hereof; or
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(vi) any purported termination of the Employee's employment
which is not effected pursuant to a Notice of Termination
satisfying the requirements of subparagraph (d) below (and, if
applicable, subparagraph (b) above); and for the purposes of this
Agreement, no such purported termination shall be effective. The
Employee's right to terminate the Employee's employment pursuant
to this subparagraph (c) shall not be affected by the Employee's
incapacity due to physical or mental illness.
(d) Notice of Termination. Any purported termination by
the Company or by the Employee pursuant to subparagraph (c) above
shall be communicated by written Notice of Termination to the
other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the
specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee's
employment under the provision so indicated.
(e) Date of Termination. "Date of Termination" shall mean
(i) if this Agreement is terminated for Disability, 30 days after
Notice of Termination is given (provided that the Employee shall
not have returned to the performance of the Employee's duties on
a full-time basis during such 30-day period); and (ii) if the
Employee's employment is terminated pursuant to subparagraph (b)
or (c) above, or for any other reason, the date specified in the
Notice of Termination (which in the case of a termination
pursuant to subparagraph (b) above shall not be more than 30
days, and in the case of a termination pursuant to subparagraph
(c) above shall not be more than 60 days, from the date such
Notice of Termination is given); provided that if within 30 days
after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall
be the date on which the dispute is finally determined, either by
mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order, or decree of a court of
competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected); and, provided
further, that the Date of Termination shall be extended by a
notice of dispute only if such notice is given in good faith and
the party giving such notice pursues the resolution of such
dispute with reasonable diligence.
8. Nonassignability. Except as permitted by this
Agreement, no rights of any kind under this Agreement shall be
transferable or assignable by the Employee, any designated
beneficiary, or any other person, or be subject to alienation,
encumbrance, garnishment, attachment, execution, or levy of any
kind, voluntary or involuntary.
-8-
9. Interpretation by Board of Directors. All questions of
interpretation, construction, or application arising under this
Agreement (except any such questions arising after a Change in
Control, as defined in Paragraph 6(b) hereof) shall be decided by
the Board of Directors of the Company, whose decision shall be
final and conclusive upon all persons.
10. Unsecured Obligation. The undertakings of the Company
hereunder constitute merely the unsecured promise of the Company
to make the payments as provided for herein from its general
assets. Nothing contained in this Agreement shall be construed
to require the Company to hold any property in trust for the
Employee, any designated beneficiary, or any other person, and
neither the Employee nor any designated beneficiary, nor any
other person shall have by reason of this Agreement, any rights,
title, or interest of any kind in or to any property or insurance
which the Company may elect in its exclusive discretion to carry
(or to discontinue from carrying) from time to time.
Notwithstanding the foregoing, if the Company shall, in its sole
discretion, establish a benefit trust which is subject to the
claims of existing and future general creditors of the Company,
payments of the Company's obligations hereunder may be made from
such trust, but the Company shall remain liable to the extent
payments are not so made.
11. Noncompetition. Notwithstanding any other provision of
this Agreement Employee shall not be entitled to and the Company
shall not be obligated for any payments hereunder and his
beneficiary or estate shall not be entitled to any death benefits
hereunder if at any time subsequent to the execution of this
Agreement and prior to the due date of any such installment, the
Employee has acquired 5 percent or more of the voting stock of or
interest in a competing business or has been employed as a
director, officer, employee, consultant, adviser, partner, or
owner of a competing business. A competing business shall be any
business which is substantially similar to the whole or any part
of the business conducted by the Company.
12. Discharge for Misconduct. Prior to any Change in
Control (as defined in Paragraph 6(b) hereof) but notwithstanding
any other provision of this Agreement, the Employee shall not be
entitled to any payments under this Agreement if he shall at any
time be discharged by the Company for dishonesty or commission of
a misdemeanor or felony injurious to the Company, or for any
action inimical and injurious to the interests of the Company.
-9-
13. Amendment. This Agreement may be amended from time to
time by a written document signed by both parties hereto.
14. Termination of Agreement by Company. This Agreement
may be terminated by the Company at any time prior to the
Employee's retirement or death, provided the Company
simultaneously terminates all similar supplemental deferred
compensation agreements with other employees similarly situated.
In the event this Agreement is so terminated, neither the
Employee nor any designated beneficiary or any other person shall
have any rights, interest, or cause of action hereunder unless:
(i) at the date of termination the Employee shall have met the
age and service requirements of Paragraph 2 for eligibility to
receive deferred compensation retirement payments, in which event
the Company's obligations hereunder shall continue in accordance
with the terms hereof to the extent of the Employee's accrued
vested benefit as of the date the Agreement is terminated; or
(ii) at the date of termination the Employee (or his beneficiary)
has already begun receiving benefits under Paragraph 2, 3, or 4,
in which case such benefits will continue based upon Employee's
age and service (where applicable) as of the date the Agreement
is terminated. Any such termination shall be upon at least 90
days' notice to the Employee. Notwithstanding the foregoing,
after the occurrence of any Change in Control (as defined in
Paragraph 6(b) hereof) this Agreement cannot be amended or
terminated by the Company without the written consent of the
Employee.
15. Subsidiary or Related Companies. For purposes of this
Deferred Compensation Agreement, the term "Company" shall include
and encompass any subsidiary or related company (i.e., in which
Wolverine owns or controls 50 percent or more of the outstanding
capital stock or equity interest) of Wolverine World Wide, Inc.
16. Benefit Inures to Heirs, Successors, or Assigns.
Except as above otherwise expressly stated, this Agreement shall
be binding upon the parties hereto, their heirs, executors,
administrators, successors, or assigns.
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IN WITNESS WHEREOF, the parties hereto have hereunto
set their hands and seals on the date hereinabove first
mentioned.
WOLVERINE WORLD WIDE, INC.
By s/ Geoffrey B. Bloom
Its Chief Executive Officer
"Company"
s/ Charles F. Morgo
Charles F. Morgo
"Employee"
-11-
Exhibit 10(y)
EMPLOYMENT AGREEMENT
THIS IS AN EMPLOYMENT AGREEMENT between WOLVERINE WORLD WIDE
CORPORATION (the "Company") and MR. CHARLES F. MORGO (the "Employee"),
effective April 21, 1994.
FACTUAL BACKGROUND
Employee is a long-term and highly valued executive employee of
the Company. Employee plans to retire, and Company and Employee have
reached the following transition arrangement. Therefore, in consideration
of their respective commitment as set forth below, the parties have agreed
as follows:
1. Term of Employment, Duties and Retirement Date. Employee
will remain in the employ of the Company in his present capacity,
performing his present duties and such other executive duties as Company
may reasonably assign him, through December 31, 1996 (unless the employment
is terminated earlier under paragraph 6 of this Agreement). Employee will
retire effective January 1, 1997.
2. Salary. Employee will be paid an annual salary in weekly
installments during the term of employment, as follows:
(a) Employee's present salary will continue for the balance
of 1994.
(b) Employee's annual salary for 1995 will be $100,000; if
Employee is requested to work more than 100 days during 1995, he
will be paid an additional $1,000 for each additional day worked.
(c) Employee's salary for 1996 will be $50,000; if Employee
is requested to work more than 50 days during 1996, he will be
paid an additional $1,200 for each additional day worked.
Employee will periodically advise Company as to how many days he has worked
and will notify the Company in writing when he has worked 100 days in 1995,
and when he has worked 50 days in 1996.
3. Bonus. Employee will continue to be eligible for
participation in the following bonus programs during the term of
employment:
(a) Employee will remain eligible to participate in the
Company's Executive Bonus Plan during the term of employment, at
his current 25% of compensation target percentage. Compensation
used in computing the bonus for each year will be all
compensation paid to Employee for that year under paragraph 2
above. Provided, however, that if compensation paid to Employee
under paragraph 2 for 1996 is less than $100,000, then
compensation used in computing the 1996 bonus will be $100,000.
(b) Employee will also be eligible to participate in all
existing Three-Year Bonus Plans through the 1994 - 1996 plan, at
the target percentages already established for Employee under
those plans. Compensation used for the years 1995 and 1996 will
be as set forth in (a) above.
4. Restricted Stock. Company will grant Employee 4,500 shares
of restricted stock on the effective date of this Agreement, pursuant to a
Restricted Stock Agreement of even date herewith. The Restricted Stock
Agreement provides that 1,500 shares will vest January 1, 1995, 1,500
shares will vest January 1, 1996, and 1,500 shares will vest January 1,
1997. Employee understands and agrees that the Company will withhold
payroll taxes and contributions as required by law, upon vesting of
restricted shares. If Employee fails to provide services properly
requested under this Agreement, otherwise materially breaches this
Agreement, or is terminated for Cause under paragraph 6(d) of this
Agreement, all of the restricted stock granted pursuant to this paragraph,
and not yet vested as of the date of such refusal, breach or termination,
shall be forfeited.
5. Deferred Compensation. On the effective date of this
Agreement, Employee and the Company will enter into a Deferred Compensation
Agreement of even date herewith, increasing Employee's annual deferred
compensation benefit to $50,000 per year for 15 years beginning at age 60.
Upon execution of the attached Deferred Compensation Agreement, the former
Deferred Compensation Agreement dated October 11, 1989, will be cancelled
and terminated.
6. Termination of Employment. Employee's employment may be
terminated as follows:
(a) Employee's employment will terminate automatically by
retirement on January 1, 1997.
(b) Employee's employment will terminate automatically in
the event of Employee's death.
(c) The Company may elect to terminate Employee's
employment if he is unable to perform his duties for a period of
six (6) months due to disability.
(d) The Company may terminate Employee's employment for
cause if he engages in willful disobedience of reasonable job
related directives from the Company, breaches Section 7 of this
Agreement, or engages in misconduct injurious to the Company.
7. Non-Competition. Provided that the Company complies with
this Agreement, Employee agrees that for a period of 1 year after
termination of his Employment with the Company, he will not compete with
the Company directly or indirectly or perform any services (as an employee
or independent contractor, or in any other capacity) for any competitor of
the Company, defined as any person or company which makes or sells (or
-2-
plans to make or sell) footwear, or which makes or sells any other product
similar to any product manufactured or sold by the Company or being
developed by the Company. If this provision is ever found by a court of
competent jurisdiction to be unenforceable as written for any reason, it is
the intent of the parties that this provision should be deemed limited or
modified in such jurisdiction to the extent necessary to allow its
enforcement, subject only to any allowable appeal of such court decision.
This provision is in addition to, and does not affect, the non-competition
provision in the attached Deferred Compensation Agreement.
8. Amendment and Waiver. This Agreement may only be amended by
a written agreement signed by both parties. No waiver by either party of
any breach of this Agreement by the other party shall be deemed a waiver of
any prior or subsequent breach.
9. Governing Law. This Agreement is entered into in the State
of Michigan and will be governed by the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties have signed this Agreement as of
the date set forth above.
Witness: WOLVERINE WORLD WIDE, INC.
_________________________ By: s/ Geoffrey B. Bloom
Its: Chief Executive Officer
"Company"
_________________________ s/ Charles F. Morgo
Charles F. Morgo
"Employee"
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Exhibit 10(z)
Employee: Charles F. Morgo
Address: 3039 Manhattan Lane
Grand Rapids, Michigan 49506
Number of Shares: 4,500
Date of Award: April 21, 1994
Restricted Stock Number: 93R-41
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement ("Agreement") is made as of the
award date set forth above, between WOLVERINE WORLD WIDE, INC., a Delaware
corporation ("Wolverine"), and the employee named above ("Employee").
The Wolverine World Wide, Inc. 1993 Stock Incentive Plan (the
"Plan") is administered by the Compensation Committee of Wolverine's Board
of Directors (the "Committee"). The Committee has determined that Employee
is eligible to participate in the Plan. The Committee has awarded
restricted stock to Employee, subject to the terms and conditions contained
in this Agreement and in the Plan.
Employee acknowledges receipt of a copy of the Plan and accepts
this restricted stock award subject to all of the terms, conditions, and
provisions of this Agreement and the Plan.
1. Award. Wolverine hereby awards to Employee shares of Wolverine's
common stock, $1 par value, set forth above, and subject to restrictions
imposed under this Agreement and the Plan (the "Restricted Stock").
2. Transferability. Until the restrictions lapse as set forth in
paragraph 3 below, the Plan provides that Restricted Stock granted under
this Agreement is generally not transferable by Employee except by will or
according to the laws of descent and distribution, and further provides
that all rights with respect to the Restricted Stock are exercisable during
Employee's lifetime only by Employee, Employee's guardian, or Employee's
legal representative. Wolverine shall place an appropriate legend upon any
certificate representing shares of Restricted Stock awarded under this
Agreement and may also issue appropriate stop transfer instructions to its
transfer agent with respect to such shares.
3. Lapsing of Restrictions. Except as otherwise provided in this
Agreement, the restrictions imposed on the Restricted Stock awarded
pursuant to this Agreement shall lapse as follows: restrictions on 1,500
shares of the Restricted Stock shall lapse on December 31, 1994;
restrictions on an additional 1,500 shares of the Restricted Stock shall
lapse on December 31, 1995; and restrictions on the remaining 1,500 shares
of the Restricted Stock shall lapse on December 31, 1996. The periods
during which Restricted Stock is subject to restrictions imposed by the
Plan and under this Agreement shall be known as "Restricted Periods."
4. Registration and Listing; Securities Laws.
(a) The Restricted Stock award under this Agreement is
conditional upon (i) the effective registration or exemption of
the Plan and the Restricted Stock granted thereunder under the
Securities Act of 1933 and applicable state or foreign securities
laws, and (ii) the effective listing of the stock on the New York
Stock Exchange and the Pacific Stock Exchange.
(b) Employee hereby represents and warrants that Employee
is acquiring the Restricted Stock awarded under this Agreement
for Employee's own account and investment and without any intent
to resell or distribute the Restricted Stock. Employee shall not
resell or distribute the Restricted Stock after any Restricted
Period except in compliance with such conditions as Wolverine may
reasonably specify to ensure compliance with federal and state
securities laws.
5. Termination of Employment or Officer Status. If Employee
terminates employment with Wolverine or any of its subsidiaries during any
Restricted Period for any reason other than Employee's death, disability,
or termination for cause, all Restricted Stock still subject to
restrictions at the date of such termination shall automatically be
forfeited and returned to Wolverine. In the event Employee terminates
employment with Wolverine because of death or disability during any
Restricted Period, the restrictions applicable to the total number of
shares of Restricted Stock originally granted shall terminate automatically
with respect to that number of shares (rounded to the nearest whole number)
equal to the total number of shares of Restricted Stock granted to Employee
multiplied by the number of full months that have lapsed since the date of
grant divided by the maximum number of full months of the Restricted
Period. All remaining shares shall be forfeited and returned to Wolverine.
If Employee is terminated for cause during any Restricted Period, Employee
shall have no further right to receive any Restricted Stock, and all
Restricted Stock still subject to restrictions at the date of such
termination shall automatically be forfeited and returned to Wolverine.
6. Employment by Wolverine. The award of Restricted Stock under
this Agreement shall not impose upon Wolverine or any subsidiary any
obligation to retain Employee in its employ for any given period or upon
any specific terms of employment. Wolverine or any subsidiary may at any
time dismiss Employee from employment, free from any liability or claim
under the Plan or this Agreement, unless otherwise expressly provided in
any written agreement with Employee.
7. Stockholder Rights. During the Restricted Period, Employee shall
have all voting, dividend, liquidation, and other rights with respect to
the Restricted Stock held of record by Employee as if Employee held
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unrestricted common stock; provided, however, that the unvested portion of
any Restricted Stock award shall be subject to any restrictions on
transferability or risks of forfeiture imposed pursuant to this Agreement
or the Plan. Any noncash dividends or distributions paid with respect to
shares of unvested Restricted Stock shall be subject to the same
restrictions as those relating to the Restricted Stock awarded under this
Agreement. After the restrictions applicable to the Restricted Stock
lapse, Employee shall have all stockholder rights, including the right to
transfer the shares, subject to such conditions as Wolverine may reasonably
specify to ensure compliance with federal and state securities laws.
8. Withholding. Wolverine or one of its subsidiaries shall be
entitled to (a) withhold and deduct from Employee's future wages (or from
other amounts that may be due and owing to Employee from Wolverine or a
subsidiary), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all federal, state, and local
withholding and employment-related tax requirements attributable to the
Restricted Stock award under this Agreement, including, without limitation,
the award or vesting of, or payments of dividends with respect to, the
Restricted Stock; or (b) require Employee promptly to remit the amount of
such withholding to Wolverine or a subsidiary before taking any action with
respect to the Restricted Stock. Unless the Committee provides otherwise,
withholding may be satisfied by withholding common stock to be received or
by delivery to Wolverine or a subsidiary of previously owned common stock
of Wolverine.
9. Effective Date. This award of Restricted Stock shall be
effective as of the date first set forth above.
10. Amendment. This Agreement shall not be modified except in a
writing executed by the parties hereto.
11. Agreement Controls. The Plan is incorporated in this Agreement
by reference. Capitalized terms not defined in this Agreement shall have
those meanings provided in the Plan. In the event of any conflict between
the terms of this Agreement and the terms of the Plan, the provisions of
the Agreement shall control.
WOLVERINE WORLD WIDE, INC.
By s/ Geoffrey B. Bloom
Geoffrey B. Bloom, Chief Executive
Officer
s/ Charles F. Morgo
Charles F. Morgo
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Exhibit 10(aa)
WOLVERINE WORLD WIDE, INC.
1994 DIRECTORS' STOCK OPTION PLAN
SECTION 1
Establishment of Plan; Purpose of Plan
1.1 Establishment of Plan. The Company hereby establishes the 1994
DIRECTORS' STOCK OPTION PLAN (the "Plan") for its Non-Employee Directors.
The Plan permits the grant of Stock Options that are nonqualified stock
options.
1.2 Purpose of Plan. The purpose of the Plan is to advance the
interests of the Company and its stockholders by attracting and retaining
the services of experienced and knowledgeable Non-Employee Directors and to
provide additional incentive for such Non-Employee Directors to continue to
promote and work for the best interests of the Company and its stockholders
through continuing ownership of the Company's Common Stock.
SECTION 2
Definitions
The following words have the following meanings unless a
different meaning is plainly required by the context:
2.1 "Act" means the Securities Exchange Act of 1934, as amended.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
2.4 "Committee" means the Compensation Committee of the Board or such
other committee as the Board shall designate to administer the
Plan.
2.5 "Common Stock" means the Common Stock of the Company, par value
$1 per share.
2.6 "Company" means Wolverine World Wide, Inc., a Delaware
corporation, and its successors and assigns.
2.7 "Market Value" shall equal the mean of the highest and lowest
sales prices of shares of Common Stock on the New York Stock
Exchange (or any successor exchange that is the primary stock
exchange for trading of Common Stock) on the date of grant, or if
the New York Stock Exchange (or any such successor) is closed on
that date, the last preceding date on which the New York Stock
Exchange (or any such successor) was open for trading and on
which shares of Common Stock were traded.
2.8 "Non-Employee Directors" means directors of the Company who are
not also employees of the Company or any of its subsidiaries.
2.9 "Retirement" means the reaching of mandatory retirement age for a
director as established by the Board, which is currently 70 years
of age.
2.10 "Stock Option" means the right to purchase Common Stock at a
stated price for a specified period of time. For purposes of the
Plan, all Stock Options shall be nonqualified stock options.
SECTION 3
Administration
3.1 Power and Authority. The Committee shall administer the Plan,
shall have full power and authority to interpret the provisions of the Plan
and to supervise the administration of the Plan. All determinations,
interpretations, and selections made by the Committee regarding the Plan
shall be final and conclusive. The Committee shall hold its meetings at
such times and places as it deems advisable. Action may be taken by a
written instrument signed by a majority of the members of the Committee,
and any action so taken shall be fully as effective as if it had been taken
at a meeting duly called and held. The Committee shall make such rules and
regulations for the conduct of its business as it deems advisable. The
members of the Committee shall not be paid any additional fees for their
services.
3.2 Indemnification of Committee Members. Each person who is or has
been a member of the Committee shall be indemnified and held harmless by
the Company from and against any cost, liability, or expense imposed or
incurred in connection with such person's or the Committee's taking or
failing to take any action under the Plan. Each such person shall be
justified in relying on information furnished in connection with the Plan's
administration by any appropriate person or persons.
SECTION 4
Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in
subsection 4.2, a maximum of 80,000 shares of Common Stock shall be
available for Stock Options under the Plan. Such shares shall be
authorized and may be either unissued or treasury shares.
4.2 Adjustments. If the number of shares of Common Stock outstanding
changes on or after March 10, 1994, by reason of a stock dividend, stock
split, reverse stock split, recapitalization, merger, consolidation,
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combination, exchange of shares, or any other change in the corporate
structure or shares of the Company, the number and kind of securities
subject to and reserved under the Plan, including, without limitation, the
number of shares to be granted pursuant to subsection 5.1, together with
applicable exercise prices, shall be appropriately adjusted. No fractional
shares shall be issued pursuant to the Plan, and any fractional shares
resulting from adjustments shall be eliminated from the respective Stock
Options, with an appropriate cash adjustment for the value of any Stock
Options eliminated. If a Stock Option is canceled, surrendered, modified,
exchanged for a substitute Stock Option, or expires or terminates during
the term of the Plan but prior to the exercise or vesting of the Stock
Option in full, the shares subject to but not delivered under such Stock
Option shall be available for other Stock Options.
SECTION 5
Stock Options
5.1 Grant. Subject to adjustment as provided in subsection 4.2, a
Stock Option to purchase 750 shares of Common Stock shall be granted
automatically on the date of the 1994 Annual Meeting of Stockholders and
the date of each annual meeting thereafter to each director of the Company
who is, at the close of each such annual meeting, a Non-Employee Director.
In addition, each Non-Employee Director shall at the time of his or her
initial election or appointment be granted a Stock Option to purchase 3,000
shares of Common Stock. Stock Option grants to Non-Employee Directors
under this Plan are supplemental to and not in replacement of grants of
options under the Company's Directors Stock Option Plan, which was approved
by the stockholders in 1988 (the "1988 Plan"); provided, however, that the
number of shares awarded to a Non-Employee Director pursuant to a Stock
Option under this Plan shall be reduced by the number of shares awarded to
such Non-Employee Director on the same date pursuant to the 1988 Plan such
that no Non-Employee Director receives a combination of options under both
plans to purchase a number of shares that is greater than the number of
shares that would have been subject to Stock Options under this Plan alone
on the applicable date. Stock Options shall be subject to such terms and
conditions, consistent with the other provisions of the Plan, as may be
determined by the Committee in its sole discretion.
5.2 Stock Option Agreements. Stock Options shall be evidenced by
Stock Option agreements containing such terms and conditions, consistent
with the provisions of the Plan, as the Committee shall from time to time
determine. Each Stock Option agreement shall conclusively evidence, by the
Non-Employee Director's signature thereon, that it is the intent of the
Non-Employee Director to continue to serve as a director of the Company for
the remainder of his or her term during which the Stock Option was granted.
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5.3 Stock Option Price. The per share Stock Option price shall be
one hundred percent (100%) of the Market Value of the Common Stock on the
date of grant.
5.4 Medium and Time of Payment. The exercise price for each share
purchased pursuant to a Stock Option granted under the Plan shall be
payable in cash or in shares of Common Stock (including Common Stock to be
received upon a simultaneous exercise) or other consideration substantially
equivalent to cash. When appropriate arrangements are made with a broker
or other institution, payment may be made by a properly executed exercise
notice directing delivery of shares to a broker, together with irrevocable
instructions to the broker to deliver promptly to Wolverine the amount of
sale or loan proceeds to pay the exercise price.
5.5 Limits on Exercisability. Stock Options shall be exercisable for
a period not to exceed 10 years from the date of grant. At the time of the
exercise of a Stock Option, the holder of the Stock Option, if requested by
the Committee, must represent to the Company that the shares are being
acquired for investment and not with a view to the distribution thereof.
5.6 Restrictions on Transferability.
(a) General. No Stock Options granted under the Plan may
be sold, exchanged, transferred, pledged, assigned, or otherwise
alienated or hypothecated except by will or the laws of descent
and distribution. All Stock Options granted to a Non-Employee
Director shall be exercisable during the Non-Employee Director's
lifetime only by such Non-Employee Director or the legal
representative acting in the name of the Non-Employee Director.
(b) Other Restrictions. The Committee may impose other
restrictions on any shares of Common Stock acquired pursuant to
the exercise of a Stock Option under the Plan as the Committee
deems advisable, including, without limitation, restrictions
under applicable federal or state securities laws.
5.7 Termination of Directorship.
(a) General. If a Non-Employee Director ceases to be a
director of the Company for any reason other than the Non-
Employee Director's death, disability, or Retirement, the Non-
Employee Director may exercise his Stock Options only for a
period of three months after such termination of director status.
(b) Death. If a Non-Employee Director dies either while a
director of the Company or after the termination of his or her
directorship, the Stock Option issued to such Non-Employee
Director shall be exercisable by the personal representative of
such Non-Employee Director or other successor to the interest of
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the Non-Employee Director for one year after the Non-Employee
Director's death.
(c) Disability. If a Non-Employee Director ceases to be a
director of the Company due to the Non-Employee Director's
disability, the Non-Employee Director may exercise a Stock Option
for a period of one year following such termination of
directorship.
(d) Non-Employee Director Retirement. If a Non-Employee
Director reaches mandatory Retirement age for a director, any
Stock Option granted under the Plan may be exercised during the
remaining term of the Stock Option.
SECTION 6
General Provisions
6.1 No Rights to Awards. Except as otherwise provided in subsection
5.1, no Non-Employee Director or other person shall have any claim to be
granted any Stock Option under the Plan, and there is no obligation of
uniformity of treatment of Non-Employee Directors or holders or
beneficiaries of Stock Options under the Plan. To the extent consistent
with the Plan, the terms and conditions of Stock Options and the
determination of the Committee to grant a waiver or modification of any
Stock Option and the terms and conditions thereof need not be the same with
respect to each Non-Employee Director.
6.2 Compliance With Laws; Listing and Registration of Shares. All
Stock Options granted under the Plan (and all issuances of Common Stock or
other securities under the Plan) shall be subject to all applicable laws,
rules, and regulations, and to the requirement that if at any time the
Committee shall determine, in its discretion, that the listing,
registration, or qualification of the shares covered thereby upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as
a condition of, or in connection with, the grant of such Stock Option or
the issue or purchase of shares thereunder, such Stock Option may not be
exercised in whole or in part, or the restrictions on such Stock Option
shall not lapse, unless and until such listing, registration,
qualification, consent, or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee.
6.3 No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company from adopting or continuing in effect
other or additional compensation arrangements, including the grant of stock
options and other stock-based awards, and such arrangements may be either
generally applicable or applicable only in specific cases.
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6.4 No Right to Directorship. The grant of a Stock Option shall not
be construed as giving a Non-Employee Director the right to be retained as
a director of the Company. A Non-Employee Director may be removed from his
or her directorship in accordance with the Company's By-Laws, Certificate
of Incorporation, or applicable law, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any
written agreement with a Non-Employee Director.
6.5 Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined
in accordance with the laws of the State of Michigan and applicable federal
law.
6.6 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining provisions of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.
SECTION 7
Amendment
The Board may from time to time amend the Plan as it deems proper
and in the best interests of the Company; provided, however, that the Plan
may not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act, or
the rules thereunder; and provided further, that without stockholder
approval no such amendment shall be effective that would: (a) materially
increase either the benefits to Non-Employee Directors under the Plan or
the number of shares that may be issued under the Plan; (b) modify the
eligibility requirements for participation in the Plan; or (c) require
stockholder approval pursuant to Rule 16b-3 under the Act or the rules of
the New York Stock Exchange or any other exchange upon which the Company's
Common Stock is traded. In addition, no termination, amendment, or
modification of the Plan shall become effective with respect to any Stock
Option previously granted under the Plan without the prior written consent
of the Non-Employee Director holding such Stock Option, unless such
termination, amendment, or modification operates solely to the benefit of
the Non-Employee Director, except according to the terms of the Plan or the
Stock Option agreement.
SECTION 8
Effective Date and Duration of the Plan
This Plan shall take effect April 21, 1994, subject to approval
by the stockholders at the 1994 Annual Meeting of Stockholders or any
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adjournment thereof or at a Special Meeting of Stockholders. Stock Options
granted under the Plan shall not be exercisable prior to such stockholder
approval and shall expire if the stockholders do not approve the Plan at
the 1994 Annual Meeting of Stockholders or any adjournment thereof. The
Board may terminate the Plan at any time and, unless earlier terminated by
the Board, the Plan shall terminate on April 20, 2004. No Stock Option
shall be granted under the Plan after such date.
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