Exhibit 10.5
QUANTA CAPITAL HOLDINGS LTD.
FORM OF PERFORMANCE-BASED SHARE UNIT AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, Quanta Capital Holdings Ltd. (the "Company"), a Bermuda company,
hereby grants to ___________, an employee of [a subsidiary of] the Company on
the date hereof (the "Holder"), the right to receive common shares, $0.01 par
value per share, of the Company ("Shares"), at a future date upon the following
terms:
WHEREAS, the Holder has been granted the following award (the "Award") in
connection with his or her retention as an employee and as compensation for
services to be rendered; and the following terms reflect the Company's 2003 Long
Term Incentive Plan (the "Plan");
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows.
(a) Grant. The Holder is hereby granted ____________ performance-based
share units (the "Performance Shares") pursuant to the Plan, the terms of which
are incorporated herein by reference. The Performance Shares are granted as of
____________ (the "Date of Grant") and such grant is subject to the terms and
conditions herein and the terms and conditions of the applicable provisions of
the Plan, including Sections 5(e) and 5(f) of the Plan.
(b) Status of Shares. The Shares shall upon issue under this agreement
rank equally in all respects with the other Shares.
(c) No Rights as a Shareholder. The Holder shall not, by virtue
hereof, be entitled to any rights of a shareholder in the Company, either at law
or in equity until the Restrictions lapse and the Shares are issued as provided
herein.
(d) Lapse of Restrictions. On ____________, except as may otherwise be
provided herein and subject to the terms and conditions set forth in the Plan,
the Restrictions on transfer set forth in Paragraph (g) shall lapse, the Award
shall vest and a number of Shares will be issued as provided in the table below
provided that the Company achieves the average return on equity over the three
year period ending ____________provided in the table below, as calculated in
accordance with GAAP:
Average Return on Equity Number of Shares to be Issued
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Less than 12% 0
12% or more and less than 20% 50% of the number of Performance Shares granted
20% or more and less than 25% 100% of the number of Performance Shares granted
25% or more and less than 30% 200% of the number of Performance Shares granted
30% or more 300% of the number of Performance Shares granted
(e) Delivery of Shares. Promptly after ____________, the number of
Shares, as determined under Paragraph (e) above, that must be delivered,
provided that the Holder shall have complied with his or her tax obligations
under Paragraph (l) hereof, will be delivered by the Company to the Holder or
the Holder's personal representative in the form of a share certificate
representing a number of Shares equal to the number of Performance Shares vested
during the Performance Period, provided that the Committee may, in its
discretion, require (i) revisions to the performance measures under Paragraph
(e) hereof on the occurrence of a significant event as provided in Section
5(f)(iii) of the Plan; or (ii) that some or all of the vested Shares be retained
by the Company, and that the Holder receive a cash payment in lieu of the
delivery of such retained unrestricted Shares. The Shares may be delivered or
any lawful consideration.
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The Company shall not be required to issue fractional Shares
under this agreement. If any fractional interest in a Share would be deliverable
upon lapse of the Restrictions in whole or in part but for the provisions of
this paragraph, the Company, in lieu of delivering any such fractional share
therefor, shall pay a cash adjustment therefor in an amount equal to their Fair
Market Value (or if any Shares are not publicly traded, an amount equal to the
book value per share at the end of the most recent fiscal quarter) multiplied by
the fraction of the fractional share which would otherwise have been issued
hereunder. Anything to the contrary herein notwithstanding, the Company shall
not be obligated to issue any Shares hereunder if the issuance of such Shares
would violate the provision of any applicable law, in which event the Company
shall, as soon as practicable, take whatever action it reasonably can so that
such Shares may be issued without resulting in such violations of law. For
purposes hereof, Fair Market Value shall mean the mean between the high and low
selling prices per Share on the immediately preceding date (or, if the Shares
were not traded on that day, the next preceding day that the Shares were traded)
on the principal exchange on which the Shares are traded, as such prices are
officially quoted on such exchange.
(f) Adjustments for Recapitalization and Dividends. In the event that,
prior to ____________, any dividend in Shares, recapitalization, Share split,
reverse split, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other such change affects the number of Shares
represented by the Performance Shares such that they are increased or decreased
or changed into or exchanged for a different number or kind of shares, other
securities of the Company or of another corporation or other consideration, then
in order to maintain the proportionate interest of the Holder and preserve the
value of the Performance Shares, there shall automatically be substituted for
each Performance Share the number and kind of shares, other securities or other
consideration (including cash) into which each outstanding Share shall be
changed or for which each such Share shall be exchanged.
(g) Nontransferability. Prior to the lapse of Restrictions as provided
under Paragraph (e) of this agreement, this Award, or any interest therein, may
not be assigned or otherwise transferred, disposed of or encumbered by the
Holder, other than by will or by the laws of descent and distribution.
Notwithstanding the foregoing, this Award may be transferred by the Holder (for
no consideration) to members of his or her "immediate family," to a trust or
other entity established for the exclusive benefit of solely one or more members
of the Holder's "immediate family," or to a charitable organization qualified
for tax exemption under Code section 510(c)(3). Any Award held by the transferee
will continue to be subject to the same terms and conditions that were
applicable to this Award immediately prior to the transfer, except that this
Award will be transferable by the transferee only by will or the laws of descent
and distribution. For purposes hereof, "immediate family" means the Holder's
children stepchildren, grandchildren, parents, stepparents, grandparents,
spouse, siblings (including half brother and sisters), in laws, and
relationships arising because of legal adoption.
(h) Termination of Service.
(i) In the event that prior to ____________, the Holder ceases to
be an employee of the Company due to a termination of the Holder's
employment by the Company for Cause (as defined below) or for any other
reason, except due to the Holder's death or Permanent Disability (as
defined below), the Performance Shares shall be immediately forfeited.
(ii) For purposes of this agreement, service with any of the
Company's Subsidiaries (as defined in the Plan) shall be considered to be
service with the Company. In the event the Holder ceases to be an employee
of the Company due to the Holder's death or Permanent Disability, the
Restrictions relating to the Performance Shares shall immediately lapse.
For purposes hereof, "Cause" means (a) theft or embezzlement by the Holder
with respect to the Company or its subsidiaries; (b) malfeasance or gross
negligence in the performance of the Holder's duties; (c) the commission by
the Holder of any felony or any crime involving moral turpitude; (d)
willful or prolonged absence from work by the Holder (other than by reason
of disability due to physical or mental illness) or failure, neglect or
refusal by the Holder to perform his or her duties and responsibilities
without the same being corrected within ten (10)
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days after being given written notice thereof; (e) continued and habitual
use of alcohol by the Holder to an extent which materially impairs the
Holder's performance of his or her duties without the same being corrected
within ten (10) days after being given written notice thereof; or (f) the
Holder's use of illegal drugs without the same being corrected within ten
(10) days after being given written notice thereof. For purposes hereof,
"Permanent Disability" means those circumstances where the Holder is unable
to continue to perform the usual customary duties of his or her assigned
job for a period of six (6) months in any twelve (12) month period because
of physical, mental or emotional incapacity resulting from injury, sickness
or disease. Any questions as to the existence of a Permanent Disability
shall be determined by a qualified, independent physician selected by the
Company and approved by the Holder (which approval shall not be
unreasonably withheld). The determination of any such physician shall be
final and conclusive for all purposes of this agreement.
(i) Obligations as to Capital. The Company agrees that it will at all
times maintain authorized and unissued share capital sufficient to fulfill all
of its obligations under this agreement.
(j) Transfer of Shares. The Performance Shares, or any interest in
either, may be sold, assigned, pledged, hypothecated, encumbered, or transferred
or disposed of in any other manner, in whole or in part, only in compliance with
the terms, conditions and restrictions as set forth in the governing instruments
of the Company, applicable United States federal and state securities laws and
the terms and conditions hereof.
(k) Expenses of Issuance of Performance Shares. The issuance of stock
certificates representing the Shares in whole or in part, shall be without
charge to the Holder. The Company shall pay, and indemnify the Holder from and
against any issuance, stamp or documentary taxes (other than transfer taxes) or
charges imposed by any governmental body, agency or official (other than income
taxes) by reason of the resulting issuance of the Shares.
(l) Withholding. Prior to the issuance of Shares upon any lapse of
Restrictions or the receipt of an equivalent cash payment, the Holder shall pay
to the Company or make arrangements satisfactory to the Committee regarding
payment of any federal, state or local taxes of any kind required by law to be
withheld upon the lapse of Restrictions and the Company shall, to the extent
permitted or required by law, have the right to deduct from any payment of any
kind otherwise due to the Holder, federal, state and local taxes of any kind
required by law to be withheld upon the lapse of Restrictions.
(m) References. References herein to rights and obligations of the
Holder shall apply, where appropriate, to the Holder's legal representative or
estate without regard to whether specific reference to such legal representative
or estate is contained in a particular provision of this Award.
(n) Notices. Any notice required or permitted to be given under this
agreement shall be in writing and shall be deemed to have been given when
delivered personally or by courier, or sent by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the party concerned
at the address indicated below or to such changed address as such party may
subsequently by similar process give notice of:
If to the Company:
Quanta Capital Holdings Ltd.
0 Xxxxxxxx Xxxxxx
Xxxxxxxx XX 00 Xxxxxxx
Xxxx.: Secretary
If to the Holder:
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The last address delivered to the Company by the Holder in the manner
set forth herein.
(o) Governing Law. This agreement shall be governed by and construed
in accordance with the laws of New York, without giving effect to principles of
conflict of laws thereof.
(p) Entire Agreement. This agreement and the Plan constitute the
entire agreement among the parties relating to the subject matter hereof, and
any previous agreement or understanding among the parties with respect thereto
is superseded by this agreement and the Plan.
(q) Counterparts. This agreement may be executed in two counterparts,
each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of the
Date of Grant.
QUANTA CAPITAL HOLDINGS LTD.
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By:
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Name:
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Title:
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[name]
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