RESTRICTED STOCK UNIT AWARD AGREEMENT
Exhibit 10.2
Full Name of Employee: Xxxx X. Xxxxxxxxx
No. of Performance Units (Restricted Stock Units) Granted: Date of Grant:
152,500
|
February 27, 2007 |
Vesting Schedule:
| No. of Restricted Stock Units Which | ||
| Vesting Date* | Become Vested | |
May 1, 2008 |
61,000 | |
May 1, 2009 |
30,500 | |
May 1, 2010 |
30,500 | |
May 1, 2011 |
30,500 |
| * | All Restricted Stock Units subject to this Agreement are subject to accelerated vesting as described in Section 3 below. |
THIS AGREEMENT is entered into and effective as of February 27, 2007 (the “Date of Grant”), by
and between Xxxx-Xxxxx Company (the “Company”) and you, Xxxx X. Xxxxxxxxx.
In accordance with a Letter Agreement between you and the Company dated March 16, 2006, as
amended by letter dated February 27, 2007, you are to receive an award of Performance Units
(referred to in this Agreement as “Restricted Stock Units”) on the terms and conditions contained
in this Agreement and the Xxxx Xxxxx Company 2000 Stock Incentive Plan, as amended (the “Plan”).
Each capitalized term used but not defined in this Agreement shall have the meaning assigned to
that term in the Plan.
The parties hereto agree as follows:
1. Grant of Restricted Stock Units. Subject to the terms and conditions of this Agreement
and the Plan, the Company hereby grants to you the number of Restricted Stock Units specified at
the beginning of this Agreement (the “Award”). The Restricted Stock Units subject to this Award
will be reflected in a book account (the “Account”) maintained by the Company, and will be settled
in shares of Common Stock.
2. Normal Vesting. Subject to Section 3, if you remain continuously employed by the
Company, then the Restricted Stock Units will vest in the numbers and on the dates specified in the
Vesting Schedule at the beginning of this Agreement. Upon the vesting of any Restricted Stock
Units, such Units will no longer be subject to forfeiture as provided in Section 5 and will be
settled as provided in Section 4.
3. Accelerated Vesting. Restricted Stock Units then outstanding will vest immediately and
in full upon (i) a Change in Control if you have been continuously employed by the Company through
the date immediately prior to the occurrence of the Change in Control, (ii) the
termination of your
employment with the Company due to death or Disability, (iii) the termination of your employment by
the Company without Cause, or (iv) your termination of your employment with the Company for Good
Reason.
4. Settlement of Vested Restricted Stock Units. On the date that is six months and one day
following your termination of employment with the Company for any reason (the “Settlement Date”),
each vested Restricted Stock Unit in your Account shall convert to one share of Common Stock which
shall be paid and delivered to you as soon as administratively practicable following the Settlement
Date, in full settlement of your Award of Restricted Stock Units. For purposes of such conversion,
the number of shares of Common Stock will be rounded to the nearest whole number, with any
fractional share of Common Stock less than 0.5 disregarded.
5. Forfeiture. If your employment with the Company ends for any reason other than those
specified in Section 3, all Restricted Stock Units then credited to your Account that have not
vested will be terminated and forfeited.
6. Dividends and Other Distributions.
6.1 Dividends Payable Other than in Common Stock. If the payment date for a dividend declared
by the Board and payable in cash or in property other than cash or Common Stock occurs prior to the
Settlement Date, you will be granted additional Restricted Stock Units
pursuant to this Section 6.1. As of such dividend payment date, you will have credited to your
Account that number of additional Restricted Stock Units determined according to the following
formula:
Dividend value per share x Number of Restricted Stock Units
Fair Market Value
For purposes of this formula:
| o | “Dividend value per share” means the amount of the cash dividend (or the per share value of any dividend payable in property other than cash) declared per share of Common Stock for the applicable payment date; | ||
| o | “Number of Restricted Stock Units” means the aggregate number of Restricted Stock Units credited to your Account as of the applicable dividend record date; and | ||
| o | “Fair Market Value” means the Fair Market Value of a share of Common Stock on the applicable dividend payment date. |
6.2 Dividends in Common Stock. If the payment date for a dividend declared by the Company’s
Board and payable in Common Stock occurs prior to the Settlement Date,
you will be granted additional Restricted Stock Units pursuant to this Section 6.2. As of such
dividend payment date, you will have credited to your Account that number of additional Restricted
Stock Units determined by multiplying the aggregate number of Restricted Stock Units credited to
your Account as of the applicable dividend record date by the number of shares of Common Stock
payable as a dividend on each outstanding share of Common Stock in connection with such dividend
declaration.
6.3 Treatment of Additional Restricted Stock Units. Any additional Restricted Stock Units
granted under Sections 6.1 or 6.2 are subject to the terms and conditions of this Agreement and the
Plan, and specifically will vest and be settled, or forfeited, to the extent and at the time that
the underlying Restricted Stock Units to which such additional Restricted Stock Units relate are
subject to vesting, settlement or forfeiture hereunder.
6.4 Adjustments to Awards. If any reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock split, combination of shares, rights offering or divestiture
(including a
spin-off) or any other similar change in the corporate structure or shares of the Company
occurs, the Board, in order to prevent dilution or enlargement of your rights, will make
appropriate adjustment (which determination will be conclusive) in the number of Restricted Stock
Units credited to your Account and/or as to the number and kind of securities or other property
(including cash) subject to the Restricted Stock Units; provided, however, that any such securities
or other property distributable with respect to the Restricted Stock Units shall be, unless
otherwise determined by the Board, distributed to you in the manner described in Section 4 and
shall, together with the Restricted Stock Units, otherwise be subject to the provisions of Sections
3 and 5 and the other terms and conditions of this Agreement.
7. Beneficiary Designation.
You shall have the right, at any time, to designate any Person or Persons as beneficiary or
beneficiaries to receive your Restricted Stock Units upon your death. In the event of your death,
settlement of such Restricted Stock Units will be made to such beneficiary or beneficiaries. You
shall have the right to change your beneficiary designation at any time. Each beneficiary
designation shall become effective only when filed in writing with the Company during your life on
a form prescribed by or approved by the Company. If you fail to designate a beneficiary as
provided above, or if all designated beneficiaries die before you, then the beneficiary shall be
your estate.
8. Definitions. For purposes of this Agreement, the following terms shall have the
meanings indicated:
8.1
“Board” means the board of directors of the Parent Corporation duly qualified and acting
at the time in question.
8.2 “Cause” shall mean (i) your indictment for or conviction of (or a plea of guilty or nolo
contendere to) a felony or any crime involving moral turpitude, dishonesty, fraud, theft or
financial impropriety; or (ii) a determination by the Board that you have (A) willfully and
continuously failed to perform substantially your duties (other than any such failure resulting
from the your Disability or incapacity due to bodily injury or physical or mental illness), after a
written demand for substantial performance is delivered to you by the Board which specifically
identifies the manner in which the Board believes that you have not substantially performed your
duties, (B) engaged in illegal conduct, an act of dishonesty or gross misconduct in the cause of
your employment injurious to the Company, or (C) willfully violated a material requirement of the
Company’s code of conduct or your fiduciary duty to the Company. No act or failure to act on your
part shall be considered “willful” unless it is done, or omitted to be done, by your in bad faith
and without reasonable belief that your action or omission was in, or not opposed to, the best
interests of the Company. Notwithstanding the foregoing, the Company may not terminate your
employment for Cause unless and until (A) a determination that Cause exists is made and approved by
a majority of the Company’s Board, (B) you are given written notice of the Board meeting called to
make such determination, and (C) you and your legal counsel are given the opportunity to address
such meeting.
8.3 “Change in Control” means: (i) the sale, lease, exchange, or other transfer of all or
substantially all of the assets of the Parent Corporation (in one transaction or in a series of
related transactions) to a corporation that is not controlled by the Parent Corporation; (ii) the
approval by the stockholders of the Parent Corporation of any plan or proposal for the liquidation
or dissolution of the Parent Corporation; or
(iii) a change in control of a nature that would be
required to be reported (assuming such event has not been “previously reported”) in response to
Item 5.01 of the Current Report on Form 8-K, as in effect on the date hereof, pursuant to section
13 or 15(d) of the Exchange Act, whether or not the Parent Corporation is then subject to such
reporting requirement; provided that, without limitation, such a
Change in Control will be deemed to have occurred at such time as: (A) any Person is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of thirty percent (30%) or more of the combined voting power of the Parent
Corporation’s outstanding securities ordinarily having the right to vote at elections of directors,
or (B) individuals who constitute the Board on the date of this Agreement (the “Incumbent Board”)
cease for any reason to constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date of this Agreement whose election, or nomination for election, by
the Parent Corporation’s stockholders, was approved by a vote of at least a majority of the
directors comprising the Incumbent Board (either by a specific vote or by approval of the proxy
statement of the Parent Corporation in which such person is named as a nominee for director,
without objection to such nomination) will, for purposes of this clause (B), be deemed to be a
member of the Incumbent Board.
8.4
“Disability” shall (i) have the meaning defined under the Company’s then-current long-term
disability insurance plan, policy, program or contract as entitles you to payment of disability
benefits thereunder, or (ii) if there shall be no such plan, policy, program or contract, mean
permanent and total disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended (the “Code”).
8.5
“Good Reason” shall mean, without your express written consent, the occurrence of any of
the following events:
(i) an adverse change in your status or positions as President and Chief
Executive Officer of the Company (including as a result of a material diminution in your
duties or responsibilities) other than, if applicable, any such change directly attributable
to the fact that the Company is no longer publicly owned or the assignment to you of any
duties or responsibilities which, in your reasonable judgment, are inconsistent in any
material respect with your positions (including titles and reporting relationships),
authority, duties or responsibilities as contemplated by this Agreement, or any removal of
you from or any failure to reappoint or reelect you to such positions (except in connection
with the termination of your employment for Cause or Disability, as a result of your death
or by you other than for Good Reason);
(ii) any failure by the Company to comply with any of the material provisions
regarding your Base Salary, bonus, annual long-term incentive compensation, benefits and
perquisites, relocation, and other benefits and amounts payable to you under this Agreement;
(iii) your being required to relocate to a principal place of employment more
than sixty (60) miles from your principal place of employment with the Company as of the
Commencement Date;
(iv) the failure by the Company to elect or to reelect you as a director or
the removal of you from such position; or
(v) the failure of the Company to obtain an agreement from any successor to
all or substantially all of the assets or business of the Company to assume and agree to
perform this Agreement within fifteen (15) days after a merger, consolidation, sale or
similar transaction.
8.6
“Parent Corporation” means Xxxx-Xxxxx Company and any Successor.
8.7
“Person” means and includes any individual, corporation, partnership, trust, group,
association or other “person,” as such term is used in section 14(d) of the Exchange Act, other
than the Parent Corporation, a wholly-owned subsidiary of the Parent Corporation or any employee
benefit plan(s) sponsored by the Parent Corporation or a wholly-owned subsidiary of the Parent
Corporation.
8.8
“Successor” means any Person that succeeds to, or has the practical ability to control
(either immediately or with the passage of time), the Parent Corporation’s business directly, by
merger, consolidation or other form of business combination, or indirectly, by purchase of the
Parent Corporation’s voting securities, all or substantially all of its assets or otherwise.
9. Miscellaneous.
9.1 Employment with the Company. Any references in this Agreement to employment with or by
the Company shall be deemed to include employment with the Company or any parent or subsidiary
corporation thereof.
9.2 Compliance with Code Section 409A. The parties agree that the provisions of this
Agreement shall be interpreted in accordance with the provisions of Code Section 409A and the
regulations and other Department of Treasury or Internal Revenue Service interpretative guidance
issued thereunder (including such regulations and guidance issued after the date of this
Agreement). To the extent that any provision of this Agreement fails to satisfy the requirements
of Code Sections 409A(2), (3) and (4), the provision shall be applied in operation in a manner
that, in the good-faith opinion of the Company, brings the provision into compliance with those
requirements while preserving as closely as possible the original intent of the provision and the
value of the Agreement to you.
9.3 Relationship to Plan and Other Agreements. The Restricted Stock Units subject to this
Agreement have been granted under, and are subject to the terms of, the Plan. The provisions of
this Agreement will be interpreted so as to be consistent with the terms of the Plan, and any
ambiguities in this Agreement will be interpreted by reference to the Plan. If any provision of
this Agreement is in conflict with the terms of the Plan, the terms of the Plan will prevail. To
the extent any provision of any other agreement between the Company and you limits, qualifies or is
inconsistent with any provision of this Agreement, then for purposes of this Agreement, the
provision of this Agreement will control and such provision of such other agreement will be deemed
to have been superseded, as if such other agreement had been amended to the extent necessary to
accomplish such purpose.
9.4 Binding Effect. This Agreement will be binding upon the heirs, executors, administrators
and successors of the parties hereto.
9.5 Governing Law. This Agreement and all rights and obligations hereunder shall be construed
in accordance with the Plan and governed by the laws of the State of Minnesota, without regard to
conflicts of laws provisions. Any legal proceeding related to this Award or Agreement will be
brought in
an appropriate Minnesota court, and the parties hereto consent to the exclusive jurisdiction of the
court for this purpose.
9.6 Amendment and Waiver. Other than as provided in the Plan, this Agreement may be amended,
waived, modified or canceled only by a written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance.
The parties hereto have executed this Agreement effective the day and year first written
above.
| XXXX XXXXX COMPANY | EXECUTIVE: | |||||||
By:
|
/s/ Xxxxxx X. Xxxxxx | /s/ Xxxx X. Xxxxxxxxx | ||||||
| Executive Vice President, | ||||||||
| Chief Financial Officer & Treasurer | ||||||||
