SUN COUNTRY AIRLINES HOLDINGS, INC. PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT
Exhibit 10.1
2021 OMNIBUS INCENTIVE PLAN
THIS PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), is entered into effective as of [GRANT DATE] (the “Date of Grant”), by and between Sun Country Airlines Holdings, Inc., a Delaware corporation (the “Company”), and [NAME] (the “Participant”). Capitalized terms used in this Agreement and not otherwise defined herein have the meanings ascribed to such terms in the Sun Country Airlines Holdings, Inc. 2021 Omnibus Incentive Plan, as amended, restated or otherwise modified from time to time in accordance with its terms (the “Plan”).
WHEREAS, the Company has adopted the Plan, pursuant to which performance-based restricted stock units may be granted (the performance-based restricted stock units eligible to be earned under this Agreement, the “PRSUs”); and
WHEREAS, the Committee has determined that it is in the best interests of the Company and its stockholders to grant the PRSUs provided for herein to the Participant on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the promises and the covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
1.Grant of Performance-Based Restricted Stock Units.
(a)Grant. The Company hereby grants to the Participant a total number of [NUMBER] PRSUs (the “Target PRSUs”), on the terms and subject to the conditions set forth in this Agreement and as otherwise provided in the Plan. The PRSUs shall vest in accordance the Performance Matrix attached hereto as Exhibit A (the “Performance Matrix”) and the other terms and conditions of this Agreement. The Performance Matrix shall constitute a part of this Agreement. The PRSUs shall be credited to a separate book-entry account maintained for the Participant on the books of the Company.
(b)Incorporation by Reference. The provisions of the Plan are incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan. The Committee shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon the Participant and the Participant’s beneficiary in respect of any questions arising under the Plan or this Agreement. The Participant acknowledges that the Participant has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.
2.Vesting; Settlement.
(a)Subject to the Plan and the other terms of this Agreement, the PRSUs subject to this Agreement shall vest in accordance with the Performance Matrix.
(b)The PRSUs subject to this Agreement shall be settled in the manner set forth in the Performance Matrix.
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(c)In the event of a Change in Control where the PRSUs under this Agreement are not either (i) continued or assumed pursuant to Section 12(b)(i) of the Plan or (ii) substituted by the surviving corporation or its parent in accordance with Section 12(b)(ii) of the Plan, then upon such Change in Control the PRSUs shall become immediately vested upon such Change in Control, subject to the Participant’s continued employment or engagement of services with the Company through such Change in Control, with the number of PRSUs so vesting to be based on “target” level performance (provided, that, any PRSUs that constitute Eligible Units as of the Change in Control will become so vested regardless of whether the number of Eligible Units would exceed the “target” number of PRSUs for such Performance Year).
3.Dividend Equivalents. In the event of any issuance of a cash dividend on the shares of Common Stock (a “Dividend”), the Participant shall be credited, as of the payment date for such Dividend, with an amount (a “Dividend Equivalent”) equal to the product of (i) the number of PRSUs granted pursuant to this Agreement and outstanding as of the record date for such Dividend multiplied by (ii) the amount of the Dividend per share. The aggregate amount of the Dividend Equivalents (the “Distributable Amount”) shall be distributed to the Participant in connection with the settlement of the PRSUs either in cash or, at the discretion of the Committee, in a number of shares of Common Stock with a Fair Market Value (as determined on the Vesting Date) equal to the Distributable Amount. To the extent any PRSUs are forfeited prior to vesting, the corresponding Dividend Equivalents in respect thereof shall be forfeited immediately thereupon.
4.Termination of Employment or Services.
(a)If the Participant’s employment with, or engagement to provide services to, the Company or any of its Affiliates is terminated by the Company or its Affiliates for Cause, all vested and unvested PRSUs (including any Eligible Units, as defined in the Performance Matrix) shall be canceled immediately and the Participant shall not be entitled to receive any payments with respect thereto.
(b)Except as otherwise provided for in the Performance Matrix, if the Participant’s employment with, or engagement to provide services to, the Company or any of its Affiliates terminates for any reason other than for Cause, all unvested PRSUs shall be canceled immediately and the Participant shall not be entitled to receive any payments with respect thereto, and any PRSUs that have vested in accordance with the terms of the Performance Matrix shall be settled in accordance with the terms of the Performance Matrix.
5.Rights as a Stockholder. The Participant shall not be deemed for any purpose to be the owner of any shares of Common Stock underlying the PRSUs unless, until and to the extent that (i) the Company shall have issued and delivered to the Participant the shares of Common Stock underlying the PRSUs and (ii) the Participant’s name shall have been entered as a stockholder of record with respect to such shares of Common Stock on the books of the Company. The Company shall cause the actions described in clauses (i) and (ii) of the preceding sentence to occur promptly following settlement as contemplated by this Agreement, subject to compliance with applicable laws.
6.Compliance with Legal Requirements.
(a)Generally. The granting and settlement of the PRSUs, and any other obligations of the Company under this Agreement, shall be subject to all applicable U.S. federal, state and local laws, rules and regulations, all applicable non-U.S. laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required. The Participant agrees to take all steps that the
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Committee or the Company determines are reasonably necessary to comply with all applicable provisions of U.S. federal and state securities law and non-U.S. securities law in exercising the Participant’s rights under this Agreement. Without limiting the generality of the foregoing, the Committee, in its sole discretion, may postpone the issuance or delivery of shares of Common Stock as the Committee may consider appropriate and may require the Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of shares of Common Stock in compliance with applicable laws, rules and regulations.
(b)Tax Withholding. Vesting and settlement of the PRSUs shall be subject to the Participant’s satisfying any applicable U.S. federal, state and local tax withholding obligations and non-U.S. tax withholding obligations. The Company has arranged for the Participant to satisfy such tax obligations by a broker-assisted cashless settlement mechanism, whereby the broker will sell shares of Common Stock otherwise deliverable upon the settlement of the PRSU and deliver promptly to the Company sufficient funds to satisfy the tax obligations. Notwithstanding the foregoing, the Company shall maintain the right to withhold from any amounts payable to the Participant in connection with the PRSUs or otherwise the amount of any required withholding taxes in respect of the PRSUs, their settlement or any payment or transfer of the PRSUs or under the Plan and to take any such other action as the Committee or the Company deem necessary to satisfy all obligations for the payment of such withholding taxes (up to the maximum permissible withholding amounts).
7.Clawback. Notwithstanding anything to the contrary contained herein, the Committee may cancel the PRSU award if the Participant, without the consent of the Company, has engaged in or engages in activity that is in conflict with or adverse to the interests of the Company or any Affiliate while employed by, serving as a director of, or otherwise providing services to the Company or any Subsidiary, including fraud or conduct contributing to any financial restatements or irregularities, or any violation of any of the covenants set forth on Exhibit B attached hereto or any other non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with the Company or any Subsidiary (after giving effect to any applicable cure period set forth therein), as determined by the Committee. In such event, the Participant will forfeit any compensation, gain or other value realized thereafter on the vesting or settlement of the PRSUs, the sale or other transfer of the PRSUs, or the sale of shares of Common Stock acquired in respect of the PRSUs (provided that the PRSUs vested during the 12-month period immediately prior to the Participant’s adverse activity), and must promptly repay such amounts to the Company. If the Participant receives any amount in excess of what the Participant should have received under the terms of the PRSUs for any reason (including without limitation by reason of a financial restatement, mistake in calculations or other administrative error), all as determined by the Committee, then the Participant shall promptly repay any such excess amount to the Company. To the extent required by applicable law or the rules and regulations of any securities exchange or inter-dealer quotation system on which the Common Stock is listed or quoted, or if so required pursuant to a written policy adopted by the Company, the PRSUs shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into this Agreement).
8.Restrictive Covenants.
(a)Without limiting any other non-competition, non-solicitation, non-disparagement or non-disclosure or other similar agreement to which the Participant may be a party, the Participant shall be subject to the confidentiality and restrictive covenants set forth on Exhibit B attached hereto, which Exhibit B is incorporated herein and forms part of this Agreement.
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(b)In the event that the Participant violates any of the restrictive covenants referred to in this Section 8, in addition to any other remedy that may be available at law or in equity, the PRSUs shall be automatically forfeited effective as of the date on which such violation first occurs. The foregoing rights and remedies are in addition to any other rights and remedies that may be available to the Company and shall not prevent (and the Participant shall not assert that they shall prevent) the Company from bringing one or more actions in any applicable jurisdiction to recover damages as a result of the Participant’s breach of such restrictive covenants.
9.Miscellaneous.
(a)Transferability. The PRSUs may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered (a “Transfer”) by the Participant other than by will or by the laws of descent and distribution, pursuant to a qualified domestic relations order or as otherwise permitted under Section 14(b) of the Plan. Any attempted Transfer of the PRSUs contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the PRSUs, shall be null and void and without effect.
(b)Waiver. Any right of the Company contained in this Agreement may be waived in writing by the Committee. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages. No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach.
(c)Section 409A. The PRSUs are intended to be exempt from, or compliant with, Section 409A of the Code. Notwithstanding the foregoing or any provision of the Plan or this Agreement, if any provision of the Plan or this Agreement contravenes Section 409A of the Code or could cause the Participant to incur any tax, interest or penalties under Section 409A of the Code, the Committee may, in its sole discretion and without the Participant’s consent, modify such provision to (i) comply with, or avoid being subject to, Section 409A of the Code, or to avoid the incurrence of taxes, interest and penalties under Section 409A of the Code, and/or (ii) maintain, to the maximum extent practicable, the original intent and economic benefit to the Participant of the applicable provision without materially increasing the cost to the Company or contravening the provisions of Section 409A of the Code. This Section 9(c) does not create an obligation on the part of the Company to modify the Plan or this Agreement and does not guarantee that the RSUs will not be subject to interest and penalties under Section 409A.
(d)General Assets. All amounts credited in respect of the PRSUs to the book-entry account under this Agreement shall continue for all purposes to be part of the general assets of the Company. The Participant’s interest in such account shall make the Participant only a general, unsecured creditor of the Company.
(e)Notices. Any notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax, pdf/email or overnight courier, or by postage-paid first-class mail. Notices sent by mail shall be deemed received three business days after mailing but in no event later than the date of actual receipt. Notices shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records, or if to the Company, to the attention of the General Counsel at the Company’s principal executive office.
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(f)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law.
(g)No Rights to Employment, Directorship or Service. Nothing contained in this Agreement shall be construed as giving the Participant any right to be retained, in any position, as an employee, consultant or director of the Company or any of its Affiliates or shall interfere with or restrict in any way the rights of the Company or any of its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge the Participant at any time for any reason whatsoever.
(h)Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to this Agreement, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional shares of Common Stock, or whether such fractional shares of Common Stock or any rights thereto shall be canceled, terminated or otherwise eliminated.
(i)Beneficiary. The Participant may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation.
(j)Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, and of the Participant and the beneficiaries, executors, administrators, heirs and successors of the Participant.
(k)Entire Agreement. This Agreement (including Exhibit A and Exhibit B attached hereto) and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto, other than any other non-competition, non-solicitation, non-disparagement or non-disclosure or other similar agreement to which the Participant may be a party, the covenants of which shall continue to apply to the Participant in addition to the covenants in Exhibit B hereto, in accordance with the terms of such agreement. No change, modification or waiver of any provision of this Agreement shall be valid unless the same be in writing and signed by the parties hereto, except for any changes permitted without consent under Section 11 or 13 of the Plan.
(l)Governing Law and Venue. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws thereof, or principles of conflicts of laws of any other jurisdiction that could cause the application of the laws of any jurisdiction other than the State of Delaware.
(i)Dispute Resolution; Consent to Jurisdiction. All disputes between or among any Persons arising out of or in any way connected with the Plan, this Agreement or the PRSUs shall be solely and finally settled by the Committee, acting in good faith, the determination of which shall be final. Any matters not covered by the preceding sentence shall be solely and finally settled in accordance with the Plan, and the Participant and the Company consent to the personal jurisdiction of the United States federal and state courts sitting in Wilmington, Delaware, as the exclusive jurisdiction with respect to matters arising out of or related to the enforcement of the Committee’s determinations and resolution of matters, if any, related to the Plan or this Agreement not required to be resolved by the Committee. Each such Person hereby irrevocably consents to the service of process of any of the aforementioned courts in any such suit, action or
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proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the last known address of such Person, such service to become effective 10 days after such mailing.
(ii)Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement or the transactions contemplated (whether based on contract, tort or any other theory). Each party hereto (A) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (B) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this section.
(m)Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.
(n)Counterparts. This Agreement may be executed in one or more counterparts (including via facsimile and electronic image scan (pdf)), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.
(o)Electronic Signature and Delivery. This Agreement may be accepted by return signature or by electronic confirmation. By accepting this Agreement, the Participant consents to the electronic delivery of prospectuses, annual reports and other information required to be delivered by U.S. Securities and Exchange Commission rules (which consent may be revoked in writing by the Participant at any time upon three business days’ notice to the Company, in which case subsequent prospectuses, annual reports and other information will be delivered in hard copy to the Participant).
(p)Electronic Participation in Plan. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
(q)Business Day. If any vesting event under this Agreement falls on a weekend or a Company-observed holiday, then the applicable vesting date will occur on the next subsequent business day.
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IN WITNESS WHEREOF, this Performance-Based Restricted Stock Unit Award Agreement has been executed by the Company and the Participant as of the day first written above.
| SUN COUNTRY AIRLINES HOLDINGS, INC. | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
| PARTICIPANT | ||||||||
| [NAME] | ||||||||
Exhibit A
Performance Matrix
The “target” number of PRSUs eligible to vest and be earned under this Agreement in accordance with this Performance Matrix is [#] (the “Target PRSUs”). However, the Participant is eligible to earn between 0%-150% of the Target PRSUs based on the Company’s level of achievement of the performance factors described below. In no event shall the Participant be eligible to earn more than 150% of the Target PRSUs (the “Maximum PRSUs”) under this Agreement.
50% of the PRSUs (the “Earnings PRSUs”) will be eligible to vest and be earned based on the Company’s level of achievement of the Earnings Performance Factor (the target amount being the “Target Earnings PRSUs”), and 50% of the PRSUs (the “Margin PRSUs”) will be eligible to vest and be earned based on the Company’s level of achievement of the Margin Performance Factor (the target amount being the “Target Margin PRSUs”).
“Earnings Performance Factor” means Adjusted Earnings Per Share (EPS), plus dividends per Share.
“Good Reason” shall have the meaning set forth in the Participant’s employment agreement with the Company, if any, or in the absence of such employment agreement, shall mean any of the following events, unless otherwise consented to in writing by the Participant (a) a material diminution in the Participant’s annual base salary or target annual bonus opportunity (other than an across-the-board reduction of not more than 10% that impacts all similarly situated executives of the Company equally); (b) any material diminution in the Participant’s position, authority or responsibilities with the Company; or (c) the Company’s material breach of this Agreement or any other material compensatory agreement with the Participant. Notwithstanding the foregoing, a resignation will only qualify as being for “Good Reason” if, within 30 days following the initial existence of a condition listed above (or, if later, the time at which the Participant knew or reasonably should have known of its existence), the Participant provides notice to the Company of the existence of a supposedly qualifying condition and the related circumstances that cause it to qualify, and within 30 days after such notice, the Company does not remedy the condition and, within 30 days following the Company’s failure to remedy the condition, the Participant actually resigns from employment with the Company.
“Margin Performance Factor” means Pre-Tax Margin as compared to seven non-major U.S. airlines.1
“Performance Period” means January 1, 2024 - December 31, 2026.
“Performance Year” means each of the 2024, 2025 and 2026 calendar years.
1 ALGT, ULCC, ALK, HA, JBLU, SAVE, and XXXX, subject to adjustment as a result of business combinations/consultants.
Vesting & Settlement of Earnings PRSUs
For each Performance Year, up to 1/3rd of the Earnings PRSUs shall become eligible to vest (subject to the other terms and conditions set forth herein) based on the Company’s actual level of achievement of the Earnings Performance Factor for such Performance Year, as compared to the threshold, target and maximum levels set forth below:
| Level of Achievement | Earnings Performance Factor Goal/Level | Percentage of Earnings PRSUs Eligible to be Earned for the Performance Year (as a percentage of 1/3rd of the Target Earnings PRSUs) | ||||||
| Below Threshold | Communicated separately | 0% | ||||||
| Threshold | Communicated separately | 50% | ||||||
| Target | Communicated separately | 100% | ||||||
| Maximum | Communicated separately | 150% | ||||||
If, upon conclusion of the applicable Performance Year, achievement of the Earnings Performance Factor goal exceeds a specified level shown in the table above, but is below the next specified level, the percentage of Earnings PRSUs earned and eligible to vest in respect of such Performance Year shall be linearly interpolated on a straight-line basis. No Earnings PRSUs shall be earned in respect of a Performance Year if the achievement of the Earnings Performance Factor goal for such Performance Year falls below the “Threshold” level established for that Performance Year.
Determination of Eligible Units. As soon as reasonably practicable following the completion of each Performance Year (but in no event later than 60 days thereafter), the Committee will determine (i) whether and to what extent the Earnings Performance Factor has been achieved for such Performance Year, and (ii) the number of Earnings PRSUs that are deemed earned in respect of such Performance Year based on the table above (the “Eligible Units”). The Eligible Units for each Performance Year will remain eligible to vest on the date on which the Committee determines the level of achievement of the Earnings Performance Factor for the 2026 Performance Year (such date, as applicable, the “Vesting Date”), subject to the Participant’s continuous employment with, or engagement to provide services to, the Company or any of its Affiliates through the Vesting Date. Any Earnings PRSUs that do not constitute Eligible Units as of the Vesting Date shall be canceled immediately and the Participant shall not be entitled to receive any payments with respect thereto.
Eligible Units that vest upon the Vesting Date shall be settled within 15 days following the Vesting Date (but in no event later than March 15, 2027) in an equivalent number of shares of Common Stock (such date, as applicable, the “Settlement Date”).
If the Participant’s employment with, or engagement to provide services to, the Company or any of its Affiliates terminates for any reason prior to the Vesting Date, all Earnings PRSUs granted under this Agreement (including any Eligible Units) shall be canceled immediately and the Participant shall not be entitled to receive any payments with respect thereto. Notwithstanding the foregoing, if the Participant’s employment with, or engagement to provide services to, the Company or any of its Affiliates terminates prior to the Vesting Date as a result of the Company’s termination of the Participant’s employment without Cause or the Participant resigns for Good Reason (as defined herein) (a “Qualifying Termination”), then the Participant will become vested in any Earnings PRSUs that constitute Eligible Units as of the date of such termination (in which case, such Eligible Units will be settled on the 30th day following the date of such termination, subject to the Participant’s execution of a release of claims on a form provided by the Company), and any Earnings PRSUs that do not constitute Eligible Units as of the date of the Qualifying Termination shall be canceled immediately. If there is a Change in Control where the Earnings PRSUs are either (i) continued or assumed pursuant to Section 12(b)(i) of the Plan or (ii) substituted by the surviving corporation or its parent in accordance with Section 12(b)(ii) of the Plan, and following such Change in Control there is a Qualifying Termination of Participant’s employment prior to the Vesting Date, then the Earnings PRSUs under this Agreement shall become fully vested upon such Qualifying Termination, assuming “target” level performance (provided, that, any PRSUs that constitute Eligible Units as of the Qualifying Termination will become so vested regardless of whether the number of Eligible Units would exceed the “target” number of PRSUs for such Performance Year), and all such vested Earnings PRSUs shall be settled on the 30th day following the date of such termination.
Vesting & Settlement of Margin PRSUs
The Margin PRSUs shall become eligible to vest (subject to the other terms and conditions set forth herein) based on the Company’s actual level of achievement of the Margin Performance Factor as compared to the threshold, target and maximum levels set forth below, as measured on a cumulative basis in respect of the full Performance Period, as set forth below:
| Level of Achievement | Margin Performance Factor Goal/Level | Percentage of Margin PRSUs Eligible to be Earned for the Performance Period (as a percentage of the Target Margin PRSUs) | ||||||
| Below Threshold | Communicated separately | 0% | ||||||
| Threshold | Communicated separately | 50% | ||||||
| Target | Communicated separately | 100% | ||||||
| Maximum | Communicated separately | 150% | ||||||
If, upon conclusion of the Performance Period, achievement of the Margin Performance Factor goal exceeds a specified level shown in the table above, but is below the next specified level, the percentage of Target Margin PRSUs earned shall be linearly interpolated on a straight-line basis. No Margin PRSUs shall be earned in respect of the Performance Period if the achievement of the Margin Performance Factor goal falls below the “Threshold” level.
Determination of Earned Margin PRSUs. As soon as reasonably practicable following the completion of the Performance Period (but in no event later than 60 days thereafter) (such date, as applicable, the “Determination Date”), the Committee will determine (i) whether and to what extent the Margin Performance Factor has been achieved for the Performance Period, and (ii) the number of Margin PRSUs that are deemed earned based on the table shown above (the “Earned Margin PRSUs”). The Earned Margin PRSUs will vest on Determination Date, subject to the Participant’s continuous employment with, or engagement to provide services to, the Company or any of its Affiliates through the Determination Date. Any Margin PRSUs that do not constitute Earned Margin PRSUs as of the Determination Date shall be canceled immediately and the Participant shall not be entitled to receive any payments with respect thereto.
Earned Margin PRSUs shall be settled within 15 days following the Determination Date in an equivalent number of shares of Common Stock.
If the Participant’s employment with, or engagement to provide services to, the Company or any of its Affiliates terminates for any reason prior to the Determination Date, all Margin PRSUs granted under this Agreement shall be canceled immediately and the Participant shall not be entitled to receive any payments with respect thereto. Notwithstanding the foregoing, if there is a Change in Control where the Margin PRSUs are either (i) continued or assumed pursuant to Section 12(b)(i) of the Plan or (ii) substituted by the surviving corporation or its parent in accordance with Section 12(b)(ii) of the Plan, and following such Change in Control there is a Qualifying Termination of Participant’s employment prior to the Determination Date, then the Margin PRSUs under this Agreement shall become fully vested upon such Qualifying Termination, assuming “target” level performance, and all such vested Margin PRSUs shall be settled on the 30th day following the date of such termination.
Exhibit B
Restrictive Covenants
By accepting the grant of the PRSUs hereunder, in addition to any other representations, warranties, and covenants set forth this Agreement, the Participant agrees to be subject to and comply with the following covenants.
1.Non-Disparagement. During the term of the Participant’s employment or service with the Company or any of its Affiliates and thereafter in perpetuity, the Participant shall not, directly or indirectly, knowingly disparage, criticize, or otherwise make derogatory statements regarding the Company or any of its Affiliates, successors, directors or officers. The foregoing shall not be violated by the Participant’s truthful responses to legal process or inquiry by a governmental authority. Neither the Agreement nor this Exhibit B limit any right Participant may have to file a charge under Title VII, ADEA, ADA, 42 USC Section 1981, the National Labor Relations Act, or any other civil rights statute, regulation, or ordinance; or to participate in an investigation or proceeding conducted by the EEOC, National Labor Relations Board, or other anti-discrimination or anti-retaliation agency; or to speak with a representative of any such agency.
2.Non-Disclosure of Confidential Information; Return of Property. During the term of the Participant’s employment or service with the Company or any of its Affiliates and thereafter in perpetuity, the Participant shall maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for the Participant’s benefit or the benefit of any Person, any confidential or proprietary information or trade secrets of or relating to the Company or any of its Affiliates, including, without limitation, information with respect to the Company’s or any of its Affiliates’ operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, compensation paid to employees or other terms of employment, or deliver to any Person any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets; provided, that the Participant’s good faith performance of his or her duties and responsibilities for the Company and its Affiliates during employment or service shall not be deemed a breach of this Exhibit B. Upon the Participant’s termination of employment or service for any reason, the Participant shall promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning the Company’s or any of its Affiliates’ customers, business plans, marketing strategies, products or processes. The Participant may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest possible notice thereof, shall, as much in advance of the return date as possible, make available to the Company and its counsel the documents and other information sought and, if requested by the Company, shall reasonably assist such counsel in resisting or otherwise responding to such process.
3.Non-Solicitation. To the fullest extent permitted by applicable law, the Participant agrees that during the Participant’s employment or other service relationship with the Company or any of its Affiliates, and for the one (1) year period following the Participant’s termination of employment or service for any reason, the Participant will not, directly or indirectly, on Participant’s own behalf or on behalf of another (i) solicit, induce or attempt to solicit or
induce any officer, director or employee of the Company or any of its Affiliates with whom you had a direct business relationship or about whom you learned personnel information resulting from your employment with the Company to terminate their relationship with or leave the employ of the Company or any of its Affiliates, or in any way interfere with the relationship between Company or any of its Affiliates, on the one hand, and any such officer, director or employee thereof, on the other hand, (ii) hire (or other similar arrangement) any Person (in any capacity whether as an officer, director, employee or consultant) who is or at any time was an officer, director or employee of the Company or any of its Affiliates and with whom you had a direct business relationship or about whom you learned personnel information resulting from your employment with the Company until six (6) months after such individual’s relationship (whether as an officer, director or employee) with the Company or any of its Affiliates has ended, or (iii) induce or attempt to induce any customer, supplier, prospect, licensee or other business relation of the Company or any of its Affiliates with which you had a direct business relationship or about which you learned confidential information resulting from your employment with the Company to cease doing business with the Company or any of its Affiliates, or in any way interfere with the relationship between any such customer, supplier, prospect, licensee or business relation, on the one hand, and the Company or any of its Affiliates, on the other hand.
4.The Participant acknowledges and agrees that irreparable injury will result to the Company, and to its business, in the event of a breach by the Participant of any of the Participant’s covenants and commitments under this Agreement, including the covenants of confidentiality and non-solicitation. The Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages. The Participant acknowledges and agrees the non-solicitation provisions contained in this Agreement are expressly intended to benefit the Company (which includes all parents, subsidiaries and/or affiliated entities as third party beneficiaries) and its successors and assigns; and the Participant expressly authorizes the Company (including all third party beneficiaries) and its successors and assigns to enforce these provisions. In the event of any breach or violation by the Participant of any of the restrictive covenants in this Exhibit B, the time period of such covenant with respect to the Participant shall, to the fullest extent permitted by law, be tolled until such breach or violation is resolved.
5.The covenants in this Exhibit B are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. If any provision of this Exhibit B relating to the time period, scope, or geographic area of the restrictive covenants shall be declared by a court of competent jurisdiction or arbitrator to exceed the maximum time period, scope, or geographic area, as applicable, that such court or arbitrator deems reasonable and enforceable, then this Agreement shall automatically be considered to have been amended and revised to reflect such determination.
6.All of the covenants in this Exhibit B shall be construed as an agreement independent of any other provisions in Exhibit B, and the existence of any claim or cause of action the Participant may have against the Company (which includes all parents, subsidiaries and/or affiliated entities as third party beneficiaries), whether predicated on this Exhibit B or otherwise, shall not constitute a defense to the enforcement by the Company (which includes all parents, subsidiaries and/or affiliated entities as third party beneficiaries) of such covenants.
7.The Participant has carefully read and considered the provisions of this Exhibit B and, having done so, agrees that the restrictive covenants in this Exhibit B impose a fair and reasonable restraint on the Participant and are reasonably required to protect the interests of the
Company (which includes all parents, subsidiaries and/or affiliated entities as third party beneficiaries) and their respective officers, directors, employees, and equityholders.
