EXHIBIT 99.2
------------
XXXXXXXXX INTERNATIONAL INC.
DEFERRED STOCK UNIT AGREEMENT
THIS DEFERRED STOCK UNIT AGREEMENT (this "AGREEMENT") is made as of the
___ day of __________ (the "GRANT DATE") between XXXXXXXXX INTERNATIONAL INC., a
Delaware corporation (the "COMPANY"), and ______________ (the "PARTICIPANT").
WITNESSETH:
WHEREAS, the Compensation Committee of the Board of Directors of the
Company (the "COMMITTEE") has granted the Participant a Deferred Stock Unit
Award jointly under the Company's 1999 Stock Incentive Plan (the "PLAN") and the
Company's 2006 Long-Term Incentive Plan (the "LTIP").
NOW THEREFORE, the parties hereto agree as follows:
1. GRANT. The Company hereby grants to the Participant _________
Deferred Stock Units. Each "DEFERRED STOCK UNIT" shall entitle the Participant
to one share ("SHARE") of the Company's Class A Common Stock, par value $0.01
per share, on the vesting date, subject to the terms of the Plan, the LTIP, and
this Agreement. Unless the context clearly provides otherwise, the capitalized
terms in this Agreement shall have the meaning ascribed to such terms under the
Plan.
2. VESTING; TERMINATION OF EMPLOYMENT. The Deferred Stock Units
awarded under this Agreement shall vest and become nonforfeitable in accordance
with the following:
(a) Subject to the following provisions of this SECTION 2, the
Deferred Stock Units shall vest and become nonforfeitable with
respect to 25% of the Deferred Stock Units awarded hereunder
on each of the first, second, third, and fourth anniversaries
of the Grant Date, unless forfeited earlier under PARAGRAPH
(E) below.
(b) If the Participant's termination of employment occurs by
reason of death or permanent disability (as defined in Section
409A of the Code), any Deferred Stock Units that have not yet
vested shall vest and become nonforfeitable on the date of
such death or permanent disability.
(c) If the Participant's termination of employment occurs by
reason of "Retirement" (as defined below) from the Company or
one of its subsidiaries, any Deferred Stock Units that have
not yet vested shall vest and become nonforfeitable on such
termination of employment. "RETIREMENT" means the
Participant's termination of employment at or after having
attained the age of 59-1/2 and after having served as an
employee of the Company and/or one of its subsidiaries for at
least 5 continuous years.
(d) Unless forfeited earlier under PARAGRAPH (E) below, the
Deferred Stock Units shall vest and become nonforfeitable upon
a Change in Control. For purposes of this SECTION 2(D), a
"CHANGE IN CONTROL" shall mean the occurrence of any of the
following events:
(1) the acquisition after the date of this Agreement by
any "person" (as defined in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") (excluding for this purpose, (i)
the Company or any subsidiary of the Company or (ii)
any employee benefit plan of the Company or of any
subsidiary of the Company or any person or entity
organized, appointed or established by the Company
for or pursuant to the terms of any such plan which
acquires after the date of this Agreement beneficial
ownership of voting securities of the Company, or
(iii) RSM Xxxxxxx Inc. ("XXXXXXX"), in its capacity
(but solely in its capacity) as (x) interim receiver,
receiver and manager of the assets, undertakings and
properties of Ravelston Corporation Limited ("RCL")
and Ravelston Management Inc. ("RMI") pursuant to the
Receivership Order of the Ontario Superior Court of
Justice dated April 20, 2005, and (y) monitor of RCL
and RMI pursuant to the CCAA Initial Order of the
Ontario Superior Court of Justice dated April 20,
2005 (Xxxxxxx, in its capacities as interim receiver,
receiver, manager and monitor pursuant to the
foregoing orders of the Ontario Superior Court of
Justice, is referred to as the "RECEIVER"), and any
Person which as of April 20, 2005 was a direct or
indirect subsidiary of RCL or RMI (a "RAVELSTON
SUBSIDIARY"); provided, that each such Ravelston
Subsidiary shall only be deemed to be covered by this
clause (iii) for so long as (A) it is and remains a
Ravelston Subsidiary, (B) Xxxxxxx remains Receiver,
and (C) Xxxxxxx, in its capacity as Receiver,
beneficially owns no more voting securities of
Company than were beneficially owned by RCL and RMI
on April 20, 2005) of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the
combined voting power of the Company's then
outstanding securities; provided, however, that no
Change in Control will be deemed to have occurred as
a result of a change in ownership percentage
resulting solely from an acquisition of securities by
the Company; or
(2) Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxxx X. Paris, Xxxxxx X. Xxxxxx, Xxxxxxx X.X.
Xxxxx, Xxxxx X. Xxxxxxxx (collectively, "INCUMBENT
DIRECTORS") and any new directors whose election by
the Board of Directors or nomination by the Board of
Directors for election by the Company's stockholders
was approved by a vote of a least two-thirds (2/3) of
the directors then still in office who either are
Incumbent Directors or whose election or nomination
for election was previously so approved (such new
directors being referred to as "SUCCESSOR INCUMBENT
DIRECTORS") ceasing for any reason to constitute at
least a majority of the Board of Directors; or
(3) the adoption, enactment or effectiveness of any
action (including, without limitation, by resolution
or by amendment to the Company's charter or bylaws)
that materially limits or diminishes the power or
authority of the Company's board of directors or any
committee thereof, if such action has not been
approved by a vote of a least two-thirds (2/3) of the
directors then still in office who either are
Incumbent Directors or Successor Incumbent Directors;
or
(4) the consummation of, or the execution of a definitive
agreement the consummation of which would result in,
a reorganization, merger or consolidation, or sale or
other disposition of all or substantially all of the
assets of the Company (a "BUSINESS COMBINATION"), in
each case, unless, following such Business
Combination, all or substantially all of the
individuals and entities who were the beneficial
owners of outstanding voting securities of the
Company immediately prior to such Business
Combination beneficially own, directly or
2
indirectly, more than fifty percent (50%) of the
combined voting power of the then outstanding voting
securities entitled to vote generally in the election
of directors of the entity resulting from such
Business Combination (including, without limitation,
an entity which, as a result of such transaction,
owns the Company, or all or substantially all of the
Company's assets, either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to
such Business Combination, of the outstanding voting
securities of the Company; or
(5) the consummation of a complete liquidation or
dissolution of the Company;
PROVIDED, HOWEVER, that if the Participant is or will become
eligible for Retirement prior to the fourth anniversary of the
Grant Date, "Change of Control" with respect to the Deferred
Stock Units shall mean a change in the ownership or effective
control of the Company or in the ownership of a substantial
portion of the assets of the Company within the meaning of
Section 409A of the Code.
(e) Unless the Committee determines otherwise in its sole
discretion, if the Participant's employment with the Company
terminates for any reason not specified in PARAGRAPHS (A),
(B), or (C) next above, all Deferred Stock Units that have not
vested as of the date of such termination of employment shall
be permanently forfeited on such termination date, except as
provided in (i) Section 6(c)(x) of the LTIP or (ii) in any
written employment agreement between the Company and the
Participant that is in effect on the date of such termination.
Notwithstanding the foregoing provisions of this SECTION 2,
the provisions of any applicable written employment agreement
between the Company and the Participant shall govern the
vesting of the Participant's Deferred Stock Units, to the
extent inconsistent with the provisions hereof.
3. SETTLEMENT OF DEFERRED STOCK UNITS. Deferred Stock Units shall
be settled solely in Shares. As soon as practicable after each of the vesting
dates specified in SECTION 2 above, the Participant shall be transferred one
Share for each Deferred Stock Unit vesting on such date. However, in the case of
the vesting event specified in SECTIONS 2(C), if the Participant is or will
become eligible for Retirement prior to the fourth anniversary of the Grant Date
and is deemed to be a "specified employee" within the meaning of Section
409A(a)(2)(B)(i) of the Code, such transfer of Shares shall not be made earlier
than six (6) months after the date of the Participant's "separation from
service" (as defined in Section 409A of the Code and any Treasury Regulations
promulgated thereunder) or, if earlier, the Participant's date of death.
4. TAX WITHHOLDING. This Agreement is subject to all applicable
federal, state, and local withholding taxes. The Participant may pay such
withholding taxes in cash, in Shares having a Fair Market Value equal to the
amount of such taxes, by having the Company withhold Shares otherwise
transferable to the Participant, or in any combination thereof. To the extent
provided by the Committee, the Fair Market Value of Shares, or Shares that have
been held by the Participant less than six months that are tendered in payment
of withholding, cannot exceed the minimum tax withholding required by law. No
Shares shall be transferred to the Participant hereunder until such time as all
applicable withholding taxes have been satisfied.
5. RIGHTS NOT CONFERRED. Nothing contained in the Plan or in this
Agreement shall confer upon the Participant any right with respect to continued
employment by the Company or any affiliate or interfere in any way with the
right of the Company to terminate the employment of the Participant at any time.
The Participant shall have none of the rights of a stockholder with respect to
3
the Deferred Stock Units until such time, if any, that Shares are delivered to
the Participant in settlement thereof.
6. AGREEMENT NOT ASSIGNABLE. Neither the Participant nor any
Beneficiary may sell, assign, transfer, discount, pledge as collateral for a
loan, or otherwise anticipate any right to any payment or benefit under this
Agreement, other than by will or by the applicable laws of descent and
distribution.
7. ADJUSTMENTS. In the event of a merger, reorganization,
consolidation, recapitalization, stock dividend, stock split, spin-off,
combination, repurchase, or exchange of Shares or other securities of the
Company, or similar corporate transaction, the number and kinds of shares
subject to the Deferred Stock Units awarded hereunder shall be adjusted by the
Committee in such manner as it deems equitable to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under this Agreement; provided that any fractional Share resulting from such an
adjustment shall be rounded to the nearest whole number.
8. GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of Delaware, without regard to its
principles of conflict of laws.
9. CODE SECTION 409A. Notwithstanding any other provision of this
Agreement to the contrary, the Company may, but shall not be obligated to,
modify any provision of this Agreement if and to the extent that the Company
concludes such modification to be necessary or desirable to avoid the imposition
upon the Participant of the additional taxes imposed on certain non-qualified
deferred compensation arrangements pursuant to Section 409A of the Code. In
making any such modification, the Company's determination must be made in good
faith and upon prior written notice to the Participant, be based on advice of
counsel and be designed, in the Company's sole judgment, to fulfill as closely
as possible the Company's original commitment to the Participant under the
Agreement without regard to Section 409A without increasing the Company's costs
under the Agreement.
10. BINDING EFFECT. This Agreement shall be binding upon the
heirs, executors, administrators, and successors of the parties hereto.
[SIGNATURE PAGE FOLLOWS]
4
IN WITNESS WHEREOF, the parties hereto have caused this Deferred Stock
Unit Agreement to be executed as of the day and year first above written.
COMPANY:
XXXXXXXXX INTERNATIONAL INC.
By ____________________________________
Name:
Title:
PARTICIPANT:
_____________________________________
(Participant's Typed or Printed Name)
_____________________________________
(Participant's Signature)
