Exhibit 10.3
EACH OF THE STOCK PLAN SUBCOMMITTEE OF THE COMPENSATION COMMITTEE AND THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF THE XXXXX XXXXXX COMPANIES
INC. RESERVES THE RIGHT TO CHANGE PROVISIONS OF THIS AGREEMENT TO COMPLY WITH
THE AMERICAN JOBS CREATION ACT OF 2004.
PERFORMANCE SHARE UNIT AWARD AGREEMENT
UNDER
THE XXXXX XXXXXX COMPANIES INC.
FISCAL 2002 SHARE INCENTIVE PLAN (THE "PLAN")
This PERFORMANCE SHARE UNIT AWARD AGREEMENT ("Agreement") provides for the
granting of performance share unit awards by The Xxxxx Xxxxxx Companies Inc., a
Delaware corporation (the "Company"), to the participant, an employee of the
Company or one of its subsidiaries (the "Participant"), of the Company's Class A
Common Stock, par value $0.01 (the "Shares"), on the terms and subject to the
conditions hereinafter provided. The name of the "Participant", the "Grant
Date", the aggregate number of Shares representing the Target Award, and the
Plan Achievement (as defined below) goals are stated in the attached "Notice of
Grant", and incorporated herein by reference. The other terms and conditions of
this Performance Share Unit Award are stated in this Agreement and in the Plan.
Terms not defined herein shall have the meaning set forth in the Plan (including
any amendments thereto).
1. AWARD GRANT. The Company hereby awards to the Participant a target award of
Performance Share Units in respect of the number of Shares set forth in the
Notice of Grant (the "Target Award"), representing a Stock Unit and
Performance-Based Award under the terms of the Plan.
2. RIGHT TO PAYMENT OF PERFORMANCE SHARE UNITS. It is understood that the
percentage of the Target Award earned and paid will be established by the
Committee based on the plan achievement (the "Plan Achievement") during the
period specified in the Notice of Grant (the "Award Period"). The Plan
Achievement shall be comprised of, and measured separately with respect to, the
following two components:
(a) Net Sales Cumulative Annual Growth Rate (which shall represent
[--] of the Target Award); and
(b) Earnings Per Share Cumulative Annual Growth Rate (which shall
represent [--] of the Target Award).
For purposes of this Performance Share Unit Award Agreement, "Net Sales" shall
have the meaning utilized by the Company in its consolidated financials in
accordance with generally accepted accounting principles as in effect on the
first day of the Award Period, excluding the impact of foreign currency
fluctuations and "Earnings Per Share" shall have the meaning "diluted earnings
per share" as utilized by the Company in its consolidated financials. Actual
payment of the Performance Share Units awarded will be determined for each
component in accordance with the table attached hereto as Schedule "A".
3. PAYMENT OF AWARDS. Payments made hereunder shall be equal in amount to the
number of Shares equivalent to the number of Performance Share Units earned and
payable to the Participant pursuant to paragraph 2 above. Except as otherwise
provided in paragraph 4 below, payments shall be made as soon as practicable
following the end of the Award Period, but in no event later than 2 and 1/2
months following the last day of the calendar year in which the Award Period
ends. The form of payout shall be in Shares. In addition, each Performance Share
Unit that becomes earned and payable pursuant to paragraph 2 above shall carry a
Dividend Equivalent Right, payable in cash at the same time as the payment of
Shares in accordance with this paragraph 3.
Upon the occurrence of a Change in Control, each Performance Share Unit
will become payable to the Participant with the total Shares to be paid equal to
the Target Award. Payments upon the occurrence of a Change in Control shall be
made as soon as practicable following the Change of Control, but in no event
later than two weeks after the Change in Control. If the Shares cease to be
outstanding immediately after the Change in Control (e.g., due to a merger with
and into another entity), then the consideration to be received per Share shall
equal the consideration paid to each stockholder per Share generally upon such
Change in Control.
4. TERMINATION OF EMPLOYMENT. In the event the Participant's employment
terminates during the Award Period, payouts will be as follows:
(a) Death. In the event of the Participant's death, the Performance
Share Units shall be paid as a pro rata Target Award for full
months employed during the Award Period (i.e., the proration of
the Target Award shall equal a fraction the numerator of which is
the number of full months of service completed in the Award
Period through the Participant's death and the denominator of
which is the number of full months in the Award Period), as soon
as practicable following such Participant's death.
(b) Retirement. In the event of the Employee's formal retirement
under the terms of The Xxxxx Xxxxxx Companies Retirement Growth
Account Plan (or an affiliate or a successor plan or program of
similar purpose), the Performance Share Unit Award shall continue
through the Award Period and the Participant shall be paid based
on actual Plan Achievement, at the same time as such awards are
paid to active employees.
(c) Disability. In the event of the occurrence of the Participant's
total and permanent disability (as such status shall be
determined under the Company's long-term disability program), the
Performance Share Unit Award shall continue through the Award
Period and the Participant shall be paid a pro rata amount for
full months employed during the Award Period (with such proration
methodology set forth in paragraph 4(a)) based on actual Plan
Achievement, at the same time as such awards are paid to active
employees.
(d) Termination of Employment Without Cause. In the event the
Participant's employment is terminated at the instance of the
Company or relevant subsidiary without Cause (as defined below)
on or prior to the end of the first year of the Award Period, the
Performance Share Unit Award shall be forfeited. In the event of
such termination after the end of the first year of the Award
Period, the Performance Share Unit Award shall continue through
the Award Period and the Participant shall be paid a pro rata
amount for months employed during the Award Period (with such
proration methodology set forth in paragraph 4(a)) based on
actual Plan Achievement, at the same time as such awards are paid
to active employees.
(e) Termination of Employment By Employee. In the event the
Participant terminates his or her employment (e.g., by voluntary
resigning), except in the case of retirement which is subject to
paragraph 4(b) above, the Performance Award shall be forfeited.
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(f) Termination of Employment With Cause. In the event the
Participant is terminated for Cause, the Performance Share Unit
Award shall be forfeited. For purposes hereof, "Cause" shall have
the meaning in any employment agreement as in effect between the
Participant and the Company or any subsidiary and, in the absence
of any such agreement, shall mean any breach by the Participant
of any of his or her material obligations under any Company
policy or procedure, including, without limiting the generality,
the Code of Conduct.
(g) Post Employment Conduct. Payout of any Performance Share Unit
Award after termination of employment shall be subject to
satisfaction of the conditions precedent that the Participant
neither (i) competes with, or takes employment with or renders
services to a competitor of, the Company, its subsidiaries or
affiliates without the written consent of the Company, nor (ii)
conducts himself or herself in a manner adversely affecting the
Company.
In the event Participant's employment terminates following the expiration of the
Award Period but prior to payout, payout will be subject to the above.
5. NO RIGHTS OF STOCK OWNERSHIP. This grant of Performance Share Units will not
entitle Participant to any interest in or to any voting or other rights normally
attributable to Share ownership other than the Dividend Equivalent Rights
granted in accordance with paragraph 3 above.
6. WITHHOLDING. All payments or distributions of Shares covered by Performance
Share Unit Awards shall be net of any amounts required to be withheld pursuant
to applicable federal, national, state and local tax withholding requirements
imposed by each taxing authority having jurisdiction. The Company (or relevant
subsidiary) may require the Participant to remit to it an amount sufficient to
satisfy such tax withholding requirements prior to the delivery of any
certificates for such Shares. The Company (or relevant subsidiary) may, in its
discretion and subject to such rules as it may adopt (including any as may be
required to satisfy applicable tax and/or non-tax regulatory requirements),
permit the Participant to pay all or a portion of the federal, national, state
and local withholding taxes arising in connection with any Performance Share
Unit Award by electing to have the Company (or relevant subsidiary) withhold
Shares equal in Fair Market Value to the amount to be withheld, such tax
calculated at minimum statutory rates.
7. NONASSIGNABILITY. This award may not be assigned, pledged, or transferred
except, in the event of death, to a designated beneficiary or by will or by the
laws of descent and distribution. The foregoing restrictions shall not apply to
transfers pursuant to a court order, including, but not limited to, any domestic
relations order.
8. EFFECT UPON EMPLOYMENT. The Participant's right to continue to serve the
Company or any of its subsidiaries as an officer, employee, or otherwise, shall
not be enlarged or otherwise affected by the award hereunder.
9. NOTICES. Any notice required or permitted under this Performance Share Unit
Award Agreement shall be deemed to have been duly given if delivered, telecopied
or mailed, certified or registered mail, return receipt requested or by
internationally-recognized courier guaranteeing next day delivery (a) to the
Participant at such address as the Company (or relevant subsidiary) shall
maintain for the Participant per its personnel records or (b) to the Company,
attention Stock Plan Administration at its principal executive offices, which
are currently located at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000.
10. DISCLOSURE AND USE OF INFORMATION. By signing and returning the attached
Notice of Grant, the Participant hereby expressly: (i) authorizes the Company
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and any subsidiary, and any agent of the Company and/or any subsidiary
administering the Plan or providing Plan recordkeeping services, to disclose to
the Company or any of its subsidiaries such information and data as the Company
or any such subsidiary shall request in order to facilitate the grant and
administration of the stock options and/or the administration of the Plan; (ii)
waives any data privacy rights he or she may have with respect to such
information; and (iii) authorizes the Company and any subsidiary to store and
transmit such information in electronic form.
11. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to enforce at
any time any provision of this agreement shall in no manner be construed to be a
waiver of such provision or of any other provision hereof.
12. GOVERNING LAW. The Performance Share Unit Award Agreement shall be governed
by and construed according to the laws of the State of New York, applicable to
agreements made and performed in that state.
13. PARTIAL INVALIDITY. The invalidity or illegality of any provision herein
shall not be deemed to affect the validity of any other provision.
The Xxxxx Xxxxxx Companies Inc.
By:
-------------------------------
Senior Vice President,
Global Human Resources
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SCHEDULE "A"
------------
For Net Sales Cumulative Annual Growth Rate:
--------------------------------------------
Component Payout
Component Plan Achievement (Percentage of Target Award)
-------------------------- ----------------------------
High [--] [--]
[--] [--]
Low [--] [--]
For Net Earnings Per Share Cumulative Annual Growth Rate:
---------------------------------------------------------
Component Payout
Component Plan Achievement (Percentage of Target Award)
-------------------------- ----------------------------
High [--] [--]
[--] [--]
Low [--] [--]
Payout amount for levels of Plan Achievement between the high and low
achievement shall be interpolated on a straight line basis (rounded up to the
nearest integer). In no event shall the Participant receive a payout in excess
of [--] of the Target Award for any component. No payout shall be made in the
event of component Plan Achievement less than low achievement. Notwithstanding
anything to the contrary stated above, the Committee may reduce the payment
based on other factors at the discretion of the Committee unless a Change of
Control has occurred.
In measuring Plan Achievement, financial performance measures (e.g., "Earnings
Per Share" and "Net Sales") will be calculated without regard to the following:
o Changes in accounting principles (i.e., cumulative effect of
GAAP changes)
o Extraordinary items as defined in accordance with US GAAP or
which are the result of a change in the law or the Company's
response thereto
o Income/loss from discontinued operations and income/loss on
sale of discontinued operations
o Non-recurring operating income/expenses (separately stated and
disclosed in the financial statements - e.g., restructuring
charges, legal settlement charges, goodwill write-off)
o Impairment of intangibles
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In calculating net sales during the Award Period, net sales in currencies other
than U.S. dollars shall be translated into U.S. dollars at the Company's budget
exchange rate at the beginning of the Award Period.
Earnings Per Share will be calculated based on the weighted average number of
Shares outstanding as of the measurement date and will be adjusted to eliminate
the effect of material changes in the number or type of outstanding Shares due
to events such as:
o Stock splits
o Stock dividends
o Recapitalizations
o Acquisitions involving stock of the Company
No adjustment will be made for the impact of stock repurchases under any plans
approved by the Board
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NOTICE OF GRANT
UNDER
THE XXXXX XXXXXX COMPANIES INC.
FISCAL 2002 SHARE INCENTIVE PLAN (THE "PLAN")
This is to confirm that you were awarded a grant of Performance Share Units at
the most recent meeting of the Stock Plan Subcommittee of the Compensation
Committee of the Board of Directors representing the right to receive shares of
Class A Common Stock of The Xxxxx Xxxxxx Companies Inc. (the "Shares"), subject
to the terms of the Plan and the Performance Share Unit Award Agreement. This
award was made in recognition of the significant contributions you have made as
a key employee of the Company, and to motivate you to achieve future successes
by aligning your interests more closely with those of our stockholders. This
Performance Share Unit Award is granted under and governed by the terms and
conditions of the Plan and the Performance Share Unit Award Agreement (the
"Agreement") attached hereto and made part hereof. Please read these documents
and keep them for future reference. The specific terms of your award are as
follows:
Participant: [[FIRST_NAME]] [[LAST_NAME]]
SSN or Tax ID: [[SS]]
Grant Date: DATE
Award Period: ______________ through ______________
Type of Award: STOCK UNIT AND PERFORMANCE-BASED AWARD (REFERRED TO HEREIN AS A
"PERFORMANCE SHARE UNIT")
Target Award: [__________] shares of Class A Common Stock. See Schedule "A" to
the Agreement for actual payouts depending upon level of performance.
Plan Achievement goal at 100% for Award Period:
Net Sales Cumulative Annual Growth Rate
---------------------------------------
[--]
Earnings Per Share Cumulative Annual Growth Rate
------------------------------------------------
[--]
Questions regarding the award can be directed to Xxxxxx Xxxxx at (000) 000-0000
or Xxxxxxxx Xxxxxxxxxx at (000) 000-0000. If you wish to accept this grant,
PLEASE SIGN THIS NOTICE OF XXXXX AND RETURN IMMEDIATELY TO:
Compensation Department
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION:
The undersigned hereby accepts, and agrees to, all terms and provisions of the
Agreement, including those contained in this Notice of Grant.
By_________________________ Date__________
Enclosure:
Performance Share Unit Award Agreement
