Exhibit 10-D
DONALDSON COMPANY, INC.
Performance Award Agreement
This Agreement is made as of the _____ day of _____, 19___, between
Xxxxxxxxx Company, Inc., a Delaware corporation (the "Company") and
_________________________ (the "Participant") pursuant to the Xxxxxxxxx Company,
Inc. 1991 Master Stock Compensation Plan (the "Plan").
WITNESSETH:
WHEREAS, the Human Resources Committee of the Board of Directors of the Company
have decided to enter into agreements with key executives to provide for long
term performance awards, and
WHEREAS, the Plan contemplates that an award should be evidenced by a written
agreement, executed by the Company and the Participant, containing such
restrictions, terms and conditions as may be required by the Plan or the
Committee.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth
and of other good and valuable consideration, the Participant and the Company
hereby agree as follows:
1. Definitions. Participant acknowledges receipt of a copy of the Plan and
reference is made to the Plan for definition of certain terms used in this
Agreement.
(a) "Award Delivery Date" means a date no more than 60 days nor less than
45 days after the end of an Incentive Cycle or such earlier date as
hereinafter provided.
(b) "Incentive Cycle" is the three consecutive year period set forth in
the attached Exhibit A.
(c) "Award Split" means Award split between business/corporate Performance
Objectives for each Participant as determined by the Committee and set
forth in the attached Exhibit A.
(d) "Performance Objective" means the primary net earnings per share
resulting from the Return on Investment and Compound Sales Growth
determined by the Committee and set forth in Exhibit A.
(e) "Return on Investment" and "Sales" for purposes of this Plan shall
have the meaning and value set forth separately for each operating
group and corporate in the monthly operating reports published by the
Company's Accounting Department.
(f) "Vesting Date" shall be July 31, 19___.
2. Award. The Company hereby grants to the Participant an award (the "Award")
based on the number of shares of Common Stock of the Company as set forth in the
attached Exhibit A ("Performance Units") subject to the restrictions, terms and
conditions set forth below and in the Plan.
3. Award Delivery. Except as provided in Paragraphs 5 and 6 below, the Award
will be received only if the Performance Objectives set forth in Exhibit A have
been achieved by the end of the Incentive Cycle. The Award shall be calculated
by multiplying the Performance Units times a point, in an interpolation of the
Award Value Matrix, that coincides with the intersection of the respective
Performance Objectives' results. The Award shall be increased for Earnings Per
Share consistency as set forth in Exhibit A. If applicable, other Award
characteristics have also been referenced in Exhibit A. To avoid the necessity
of issuing fractional shares, fractional amounts will be applied to tax
withholding requirements.
4. Performance Objectives Alteration. The Performance Objectives may not be
changed. Provided, however, that in the event of an acquisition, disposition or
other change which, in the judgment of the Committee, may have a significant
effect on particular Performance Objectives, the Committee may adopt such
changes in the applicable Performance Objectives as it shall, in its sole
discretion, deem equitable and appropriate to achieve the purpose of the Plan.
5. Termination and Transfer.
(a) If the Plan is terminated or Participant ceases to be an employee by
reason of retirement (as defined in the Company's Employee Retirement
Plan), disability (as determined under the Company's Long Term
Disability Plan), or death prior to the Vesting Date, the Award earned
will be based on actual results compared to the Performance Objectives
at the end of the Incentive Cycle and multiplied by a fraction whose
numerator is the number of months completed in the cycle and
denominator is thirty-six with delivery on the Award Delivery Date.
(b) If Participant ceases to be an employee for any other reason than
stated in (a) above, participation in the Plan will cease and the
Award shall be immediately and irrevocably forfeited.
(c) If a participant transfers to an ineligible position, the Award earned
will be based on actual results compared to the Performance Objectives
at the end of the Incentive Cycle and multiplied by a fraction whose
numerator is the number of months completed in the cycle and
denominator is thirty-six with delivery on the Award Delivery Date.
6. Reorganization. In the event of a reorganization, merger or consolidation of
the Company with one or more Corporations in which the Company is not the
surviving Corporation or in the event a Change in Control shall have occurred,
the Performance Objectives shall be deemed to have been met for the period
ending, respectively, on a date prior to such reorganization, merger or
consolidation, as determined by the Committee or on the date on which the Change
in Control occurs and, the Award shall be calculated in the same manner as
provided under Section 5(a).
7. Miscellaneous.
(a) The rights and interest under this Agreement or the Plan may not be
assigned, pledged or transferred except by will or the laws of descent
and distribution.
(b) The Company shall have the right to deduct from all Awards any taxes
required by law to be withheld.
(c) Nothing in the Plan or in this Agreement shall be deemed to grant any
right of continued employment to Participant or to limit or waive any
rights of the Company to terminate such employment at any time, with
or without cause.
(d) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other
segregation of assets or assure delivery of the Award under this
Agreement. Any liability of the Company to Participant with respect to
the Award shall be based solely upon any contractual obligations of
this Agreement or that may be created by the Plan; no such obligation
shall be deemed to be secured by any pledge or any encumbrance on any
property of the Company.
(e) The Company, the Company's Board of Directors, the Committee, the
officers and other employees and agents of the Company shall be fully
protected in relying in good faith on the computations and reports
made pursuant to or in connection with the Plan by the Company's
accountants or independent public accountants.
(f) This Agreement is subject to the requirement that, if at any time the
Committee determines, in its sole discretion, that the consent or
approval of any governmental regulatory body is necessary or desirable
as a condition of, or in connection with, the Award or delivery of the
Award, no delivery shall be made unless such consent or approval has
been obtained free of any conditions not acceptable to the Committee.
(g) Participant may elect to defer receipt of the award delivery until
January of the year following the Award Delivery Date by executing an
Award Delivery Deferral form prior to the Vesting Date.
IN WITNESS WHEREOF, Donaldson and the Participant have duly executed
Exhibit A to this Agreement effective the day and year first above written.
EXHIBIT A
XXXXXXXXX COMPANY, INC.
INCENTIVE CYCLE: August 1, 19__ to July 31, 19__
PARTICIPANT: __________________________
PERFORMANCE UNITS: ________
PERFORMANCE OBJECTIVES: Compound Sales Return on
Growth Per Year Investment
Maximum ___________ __________
Corporate Target ___________ __________
Performance Threshold ___________ __________
Maximum ___________ __________
Group Target ___________ __________
Performance Threshold ___________ __________
AWARD SPLIT: Corporate _____% Group _____%
AWARD VALUE MATRIX:
COMPOUND Maximum 1.00 1.25 1.50
SALES GROWTH Target .75 1.00 1.25
Threshold .50 .75 1.00
Threshold Target Maximum
RETURN ON INVESTMENT
CONSISTENCY BONUS: If Earnings per Share increase by at least 5% each year of
the Incentive Cycle and the threshold Corporate Performance
Objectives are achieved, the Award value shall be increased
by 25%.
OTHER AWARD CHARACTERISTICS:
Accepted _____________, 19__.
PARTICIPANT XXXXXXXXX COMPANY, INC.
______________________ _______________________
