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Exhibit 10(h)
STRATEGIC INCENTIVE GRANT
To: Date of Xxxxx:
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Unit:
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As a key employee of TRW Inc. ("TRW"), you are hereby granted the right (the
"Right") to receive _____ (or up to 200 percent thereof in certain
circumstances) performance units subject to the terms and conditions below. Each
performance unit will have a value equivalent to the value of one share of TRW
Common Stock. This performance unit right is granted to you pursuant to the 1994
TRW Long-Term Incentive Plan approved by the shareholders of TRW in April 1994.
TRW INC.
By:_________________________________________
Secretary
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TERMS AND CONDITIONS
1. THE RIGHT
This Right entitles you to receive performance units in the event that certain
improvements in return on assets employed ("ROAE") for TRW are achieved with
respect to the calendar years 1994 through 1997 (the "Performance Period").
2. PERFORMANCE CRITERIA
The definition of ROAE, for purposes of this Right, is set forth in Exhibit A.
The inclusion of the effects of acquisitions, divestitures and similar unusual
items in the calculation of ROAE shall be at the complete discretion of the
Compensation and Stock Option Committee of the Directors of TRW (the
"Committee").
A TRW matrix which consists of various ROAE figures for TRW for each year of the
Performance Period and percentage award levels related to each of those figures
is set forth in Exhibit B.
3. PAYMENT
Promptly following the availability of year-end financial information for TRW
for each year in the Performance Period, a firm of certified public accountants
chosen by TRW will certify to TRW the ROAE of TRW for each such year. That
number of performance units determined by multiplying the target grant listed on
Exhibit B by the applicable percentage shown next to the ROAE figure (pro rata
between ROAE figures shown) certified as described above for the applicable
calendar year will be issued to you as TRW Common Stock as soon as practicable
thereafter. In the event you are entitled to receive for any applicable calendar
year a number of units greater than that number of units determined by
multiplying the target percentage for such year times your target grant, you
will be paid the cash equivalent for such excess units unless the Committee
determines in its sole discretion to issue shares in lieu of cash. Such excess
units will be valued based on the average of the high and low sales prices of a
share of TRW Common on the New York Stock Exchange Composite Transactions
Listing on the day immediately prior to the date of payment. If you elect to
defer all or a portion of your performance unit payments they will be valued as
cash equivalents and paid out of the deferred compensation plan in cash in
accordance with the provisions of that plan.
4. TAXES
Upon any payment pursuant to this Right, TRW shall deduct any withholding or
other taxes due or withhold delivery of stock certificates issued until you make
arrangements satisfactory to TRW to pay any withholding, transfer or other taxes
due as a result of such issuance. You may elect, in accordance with applicable
regulations of the Committee, to pay a portion or all of the amount of required
withholding taxes in shares of TRW Common, either by delivering to TRW
previously held shares of TRW Common or by having shares of TRW Common withheld
from the shares issued to you hereunder.
5. SECURITIES LAWS
Shares of TRW Common shall not be issued hereunder if such issuance would
violate any Federal or state securities law. TRW will use its best efforts to
make such filings and initiate such proceedings as may be necessary to prevent
such violations unless the Directors of TRW determine, in their sole discretion,
that such filings or proceedings would result in undue expense or hardship for
TRW. TRW may place appropriate legends on the certificates for the shares issued
hereunder, give stop-transfer instructions to its transfer agents or take any
other action to achieve compliance with those laws in connection with any
issuance of shares hereunder or your resale of such shares.
6. TRANSFERABILITY
This Right is not transferable other than by will or the laws of descent and
distribution.
7. DEATH
In the event of your death, your estate or those so designated by will or the
laws of descent and distribution will be entitled to receive, at such times as
you would have received payment, such payment as would have been paid to you
hereunder if you had remained employed throughout the entire year in which your
death occurred and the following year of the Performance Period, if any.
8. TERMINATION OF EMPLOYMENT
This Right shall terminate on the date of your termination of employment and you
shall not be entitled to any additional payments hereunder except for any
payments with respect to calendar years prior to your termination. However, if
your employment is terminated during the last
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half of a calendar year, and if the Committee gives written consent on or
prior to the date on which payments are to be made pursuant to this Right with
respect to such year, you will be entitled to receive such payments as would
have been issued to you hereunder if you remained employed through the end of
the calendar year during which your employment terminated multiplied by the
fraction representing the number of months employed during such year.
9. DISABILITY
Notwithstanding the foregoing, if your termination of employment is due to
disability for a period of more than twelve months (as determined in accordance
with the TRW Long-Term Disability Plan), you will be entitled to receive such
payment as would have been issued to you hereunder if you had remained employed
for the entire year in which the disability occurred and the following year of
the Performance Period, if any.
10. ADJUSTMENTS
The Committee shall make such adjustments in the number and kind of securities
issuable pursuant hereto as it may determine are equitably required to prevent
dilution or enlargement of your rights that would otherwise result from any
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of TRW, merger, consolidation, reorganization,
partial or complete liquidation or other corporate transaction or event having
an effect similar to any of the foregoing.
11. AMENDMENTS
In addition to the authority to make adjustments as provided in Section 10, the
Committee shall have the authority, until such time as a Change in Control as
defined in Section 12 occurs, to amend otherwise this grant provided that no
amendment shall contain terms and conditions inconsistent with the provisions of
the 1994 TRW Long-Term Incentive Plan. Notwithstanding the foregoing, if you
transfer positions or change responsibilities within TRW, the Committee may
amend this Right to reflect such changed circumstances; provided, however, that
any such amendment after a Change in Control occurs shall not reduce the value
of this Right to you.
12. CHANGE IN CONTROL
In the event of a Change in Control of TRW, this Right will remain in effect so
long as you continue to be employed by TRW. For purposes of this Right, the
definition of Change in Control is the same as the definition contained in
resolutions adopted by the Committee on July 26, 1989. Such resolutions, in
summary, provide that a Change in Control is a change occurring (a) by virtue of
TRW's merger, consolidation or reorganization into or with, or transfer of
assets to, another corporation or (b) by virtue of a change in the majority of
the Directors during any two-year period unless the election of each new
Director was approved by a two-thirds vote of the Directors in office at the
beginning of such period or (c) through the acquisition of shares representing
20 percent or more of the voting power of TRW or (d) through any other change in
control reported in any filing with the Securities and Exchange Commission,
excluding, however, the acquisition of shares, or any report of such
acquisition, by TRW, a subsidiary of TRW or a TRW-sponsored employee benefit
plan. The language in the resolutions controls over this summary language.
If a Change in Control occurs after June 30, 1994, you will be entitled to
receive any payment issuable to you but not yet issued with respect to the
calendar year preceding the Change in Control. In addition, with respect to
remaining years in the Performance Period, you will be entitled to receive
payment equal to the greater of (a) such number of units as shall be determined
by the Committee, prior to the Change in Control, to be appropriate and
consistent with this Right after taking into account prior performance, trends
in performance and anticipated future performance based on information available
at the time of the Committee's determination and (b) a minimum number of units
as follows:
The minimum number of units would be based on the 12-month ROAE for TRW
(calculated by determining the ROAE for TRW for the first 12 months of the
15-month period ending on the last day of the month immediately preceding
the month in which the Change in Control occurred). The number of units for
the year in which the Change in Control occurred would be determined by
applying such 12-month ROAE figure to the column of the TRW matrix relating
to the year in which the Change in Control occurred. The number of units
for each subsequent year of the Performance Period would be determined by
using, in that year's TRW matrix column, the ROAE appearing in the same row
(or, using an arithmetic interpolation, the same position between rows) of
the TRW matrix as was used to determine the payout for the year in which
the Change in Control occurred. For example, if the 12-month ROAE figure
were two rows below the target level on the TRW matrix for the calendar
year in which the Change in Control occurred, it would be assumed that the
ROAE for any additional years remaining in the Performance Period would be
two rows below the target level for those years. The aggregate number of
units payable with respect to the year of the Change in Control and
subsequent years in the Performance Period, determined as set forth above,
would be issued to you promptly following the Change in Control.
If you continue employment with TRW after the Change in Control, performance
units will be issued to you in accordance with this Right provided that the
number of units that you are entitled to receive with respect to a calendar year
will be reduced by the number of units previously issued to you with respect to
such year in accordance with the foregoing paragraph.
13. MISCELLANEOUS
This Right shall not be construed as giving you any right to continue in the
employ of TRW and is subject to the terms and conditions of the 1994 TRW
Long-Term Incentive Plan. Subject to the requirements and limitations in
Sections 10, 11 and 12 above, the Committee has authority to interpret and
construe any provision of this grant and any such interpretation and
construction shall be binding and conclusive. Except as provided in Section 12
above, no rights hereunder shall accrue to you with respect to any year in the
Performance Period until such year is completed and the ROAE for TRW for such
year has been certified to TRW as provided in Section 3 above. Thereafter your
rights will be limited to those expressly given by this Right. Any reference in
this grant to the Directors of TRW includes the Executive Committee of the
Directors.
14. ENTIRE AGREEMENT
This Right sets forth the entire understanding between you and TRW with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, whether oral or written, relating hereto.
