Contract
THIS
DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933.
<<Letter
Date>>
CONFIDENTIAL
TO: <<Name>>
In the
meeting on <<Meeting Date>>, you were granted Performance Units
under the Steelcase Inc. Incentive Compensation Plan (the “Plan”), subject to
the terms and execution of this Award Agreement.
This
Award Agreement provides additional information regarding your Award and your
rights under the Plan. A copy of the Plan has already been provided to
you. If there is any inconsistency between this Award Agreement and
the Plan, the Plan controls. Capitalized terms used in this Award
Agreement are defined in the Plan, unless defined herein.
Overview of Your
Award
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1.
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Type of
Award: Performance Units as authorized under Article 9
of the Plan.
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2.
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Target Number of Performance
Units under this Award, as may be increased from time to time pursuant to
paragraph 9C below (the “Target Award”): <<#
of Performance Units>>
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3.
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Award Date: <<Award
Date>>
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4.
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Performance
Measure: Total Shareholder Return (“TSR”) during the
three-year Performance Period, as outlined in Article 12 of the
Plan. For purposes of this Award, TSR shall be expressed as a
compound annual growth rate.
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5.
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Performance
Period: The Performance Period for this Award begins on
the first day of the Company’s 2010 fiscal year and ends on the last day
of the Company’s 2012 fiscal
year.
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6.
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Number of Performance Units
Earned:
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A.
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Total Number of
Performance Units
Earned
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Except as
may be provided in paragraph 7 below, after completion of the Performance
Period, the total number of Performance Units will be earned and vested based
entirely on Relative TSR as of the last day of the Performance Period (the
“Total Award”). For purposes of the Total Award, TSR shall be
expressed as a compound annual growth rate and calculated as
follows:
TSR |
= |
( |
Ending Stock Price + Dividends
Paid
Beginning
Stock Price
|
) |
(1/3)
- 1 |
“Beginning
Stock Price” shall mean the average closing price as reported on the New York
Stock Exchange (or such other principal exchange as the Company’s Class A Common
Stock may be traded from time to time) of one (1) Share for the twenty (20)
trading days immediately prior to the first day of the Performance
Period. “Ending Stock Price” shall mean the average closing price as
reported on the New York Stock Exchange (or such other principal exchange as the
Company’s Class A Common Stock may be traded from time to time) of one (1) Share
for the last twenty (20) trading days of the Performance
Period. “Dividends Paid” shall include all dividends paid as
described in paragraph 9 of this Award Agreement.
______________
Initial
To
determine Relative TSR, a Peer Group of companies approved by the Committee will
be used. The Peer Group will be ranked from highest Total Shareholder
Return expressed as a compound annual growth rate to lowest Total Shareholder
Return expressed as a compound annual growth rate. The total number
of Performance Units earned and vested as of the last day of the Performance
Period based upon Relative TSR shall then be determined by comparing the
Company’s TSR expressed as a compound annual growth rate to the Peer Group and
based upon the following chart. Interpolation shall be used in the
event the Company’s percentile rank does not fall directly on one of the ranks
listed in the table below and in no event will the payout as a percent of the
Target Award exceed 200%.
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Relative
TSR
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Total
Number of Performance Units as a Percent of Target
Award
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|
90th
Percentile and above
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200%
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80th
Percentile
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175%
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70th
Percentile
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150%
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60th
Percentile
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125%
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50th
Percentile
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100%
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40th
Percentile
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75%
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30th
Percentile
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50%
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B.
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Minimum Number of
Performance Units Earned
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Notwithstanding
paragraph 6A above, and except as may be provided in paragraphs 7 and 9C below,
<<# = 25% of Target Award>> which is 25% of your Target Award,
rounded down to the nearest whole Share (the “Floor Award”), will become earned
and vested under this Agreement if you remain employed by the Company or an
Affiliate through the last day of the Performance Period whether or not any of
the performance criteria set forth in paragraph 6A above are met.
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C.
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TSR
Award
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Any
Performance Units in excess of the Floor Award shall be referred to as the “TSR
Award”.
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7.
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Death, Disability, Retirement
Eligibility, Termination without Cause or Change in Control
:
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A.
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Death or
Disability
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If you
die or become Disabled while an Employee after <<Award Date + 6
months>> during the Performance Period,
(i) your
Floor Award will become immediately fully vested; and
(ii) in
addition, your TSR Award will become immediately earned and vested in accordance
with the following schedule:
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·
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If
you die or become Disabled after <<Award Date + 6 months>>
through the last day of the Company’s 2010 fiscal year, an additional
<<shares>> Performance Units will become earned and
vested;
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|
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·
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If
you die or become Disabled between the first day of the Company’s 2010
fiscal year and the last day of the Company’s 2011 fiscal year, an
additional <<shares>> Performance Units will become earned and
vested;
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·
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If you die or become Disabled
between the first day of the Company’s 2010 fiscal year and the last day
of the Company’s 2012 fiscal year, an additional
<<shares>>Performance Units will become earned and
vested.
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A
“Disability” or “become Disabled” means that, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
months, you are unable to engage in any substantial gainful activity or are
receiving income replacement benefits under an accident and health plan covering
employees of the Company for a period of not less than three
months.
______________
Initial
2
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B.
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Retirement
Eligibility
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In the
event you become Retirement Eligible during the Performance Period,
(i) your
Floor Award will become immediately fully vested and the Company will issue you
corresponding Shares as soon as practicable following the last day of the
Performance Period (and not when you become Retirement Eligible or on your date
of Retirement), but in no event more than 90 days following the last day of the
Performance Period; and
(ii) you
will continue to be eligible to earn and vest your TSR Award in accordance with
paragraph 6 of this Award Agreement.
“Retirement
Eligible” means your age plus years of continuous service total 80 or more and
“Retirement” means your employment is terminated following becoming Retirement
Eligible.
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C.
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Termination without
Cause
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If you
are terminated without Cause by the Company or the Affiliate then employing you
(a “Termination without Cause”) during the Performance Period,
(i) your
Floor Award will become immediately fully vested; provided, that such
termination of employment constitutes a “separation from service” under Section
409A of the Code; and
(ii) in
addition, your TSR Award will be forfeited in its entirety.
The term
“Cause” means (1) your willful and continued failure to perform substantially
your duties with the Company or the Affiliate then employing you (other than any
such failure resulting from incapacity due to physical or mental illness), or
(2) your willful engaging in illegal conduct or gross misconduct that is
materially and demonstrably injurious to the Company; provided, that for
purposes of this definition, no act or failure to act, on your part, will be
considered “willful” unless it is done, or omitted to be done, by you in bad
faith or without reasonable belief that your action or omission was in the best
interests of the Company or the Affiliate then employing you.
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D.
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Change in
Control
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In the
event of a Change in Control after <the Award Date+ 6 months> during the
Performance Period,
(i) your
Floor Award will become immediately fully vested; and
(ii) you
will become immediately earned and vested in a pro-rata portion of your TSR
Award based on the Total Award being equal to the Target Award and based upon
the portion of the Performance Period which has elapsed prior to the Change in
Control.
Notwithstanding
anything to the contrary, if the Change in Control event does not constitute a
change in ownership or effective control of the Company or a change in ownership
of a substantial portion of the assets of the Company under Section 409A of the
Code, and if the Company determines your Floor Award constitutes deferred
compensation subject to Section 409A of the Code, then the Company will issue
you the Shares underlying your Floor Award as soon as practicable following the
last day of the Performance Period (and not upon the Change in Control), but in
no event more than 90 days following the last day of the Performance
Period.
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8.
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Payment
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A.
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Floor
Award
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Except as
may be provided in paragraphs 7B or 7D, your Floor Award will be paid to you in
Shares as soon as administratively practicable, but in no event later than 90
days following the date of vesting.
______________
Initial
3
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B.
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TSR
Award
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Your TSR
Award, if any, will be paid to you in Shares, rounded down to the nearest whole
Share, as soon as administratively practicable following the date of vesting,
but in no event later than 2 ½ months following the end of the calendar year in
which vesting occurs.
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C.
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Maximum
Payout
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Notwithstanding
any provision under this Award Agreement and in accordance with the terms of the
Plan, your maximum aggregate payout (determined as of the last day of the
Performance Period) in any one fiscal year will be equal to the value of two
hundred fifty thousand (250,000) Shares.
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9.
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Voting Rights and
Dividend-Equivalents:
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A.
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No Voting
Rights
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You are
not the owner of record of the Shares underlying your Performance Units until
the applicable Transfer Date (as defined in this paragraph) and accordingly, you
will have no voting rights on such Shares. In all cases, the date the
Shares are issued to you with respect to your Floor Award or TSR Award is
referred to as the “Transfer Date”.
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B.
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Cash
Dividend-Equivalents
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You will
receive a cash payment equal to any cash dividends that the Company declares and
pays on its Shares with respect to the number of Shares underlying your Target
Award. The Company shall pay such cash dividend-equivalents at such
time or times as it determines in its sole discretion; provided, the Company
shall pay any cash dividend-equivalent within the calendar year in which the
cash dividend is declared.
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C.
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Stock
Dividend-Equivalents
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You will
be entitled to be credited with dividend-equivalents in the form of Shares with
respect to the number of Shares underlying your Target Award, calculated as
follows: on each date that a stock dividend is paid by the Company while your
Performance Units are outstanding, your Target Award will be increased with an
additional number of Performance Units equal to the number of whole Shares that
would have been issued with respect to your Target Award had the Performance
Units been issued as Shares. The additional Performance Units
credited under this paragraph will be subject to the same terms and conditions
applicable to your Performance Units originally granted under this Award
Agreement, including, without limitation, for purposes of crediting additional
dividend-equivalents.
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10.
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Forfeiture of
Awards:
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All
unearned Performance Units will be forfeited upon a termination of your
employment during the Performance Period for any reason other than death,
Disability, Retirement or a Termination without Cause.
Any
Performance Units that do not vest as a result of the events under paragraphs 6
or 7 shall be forfeited immediately upon the occurrence of such
event.
Pursuant
to Article 15.4 of the Plan, if you engage in any Competition with the Company
(as defined in the Plan and determined by the Administrative Committee in its
discretion) you will immediately and permanently forfeit the right to receive
payment from this Award, whether or not vested. You must return to
the Company any gain resulting from this Award at any time within the
twelve-month period preceding the date you engaged in Competition with the
Company.
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11.
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Transfer: Performance
Units may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent
and distribution.
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______________
Initial
4
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12.
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Taxes: You may be required to pay to the Company or an
Affiliate and the Company and/or
Affiliate shall have the right and are
hereby authorized to withhold from any payment due or transfer made under
this Award
or from any compensation or other amount owing to you the amount (in
cash, Shares, other securities or other property) of any applicable withholding taxes in respect of
this Award
or any payment or transfer under or with respect to
this Award and to take such other action as may be necessary to satisfy all obligations for the payment of such withholding taxes.
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13.
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Administration: This Award
Agreement and your rights hereunder are subject to all the terms and
conditions of the Plan, as the same may be amended from time to time, as
well as to such rules and regulations as the Committee may adopt for
administration of the Plan. It is expressly understood that the
Committee or its designee is authorized to administer, construe, and make
all determinations necessary or appropriate to the administration of the
Plan and this Award Agreement, all of which will be binding upon the
Participant.
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14.
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Required Approvals: This Award
Agreement will be subject to all applicable laws, rules and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.
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15.
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Governing Law: To the
extent not preempted by federal law, this Award Agreement will be governed
by, and construed in accordance with, the laws of the State of Michigan,
USA.
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16.
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Amendment: This
Award Agreement may be amended or modified by the Committee as long as the
amendment or modification does not materially adversely affect your
Award. Notwithstanding anything to the contrary contained in
the Plan or in this Award Agreement, to the extent that the Company
determines that the Performance Units are subject to Section 409A of the
Code and fail to comply with the requirements of Section 409A of the Code,
the Company reserves the right to amend, restructure, terminate or replace
the Performance Units in order to cause the Performance Units to either
not be subject to Section 409A of the Code or to comply with the
applicable provisions of such
section.
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17.
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Six-Month Delay of Payment: To
the extent required in order to avoid accelerated taxation and/or tax
penalties under Section 409A of the Code, amounts that would otherwise be
payable and benefits that would otherwise be provided pursuant to this
Award Agreement during the six-month period immediately following your
“separation from service” (as defined under Section 409A of the Code) will
instead be paid as soon as practicable following the first business day
after the date that is six months following your separation from service
(or death, if earlier), but in no event later than 30 days following such
date.
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By
signing this Award Agreement, you hereby acknowledge:
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(a)
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that
the Plan is discretionary in nature and may be suspended or terminated at
any time;
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(b)
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that
each grant of a Performance Unit is a one-time benefit which does not
create any contractual or other right to receive future grants of
Performance Units, or benefits in lieu of Performance
Units;
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(c)
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that
all determinations with respect to future grants, if any, including, but
not limited to, the times when the Performance Units will be granted, the
number of Shares subject to each grant, and the time or times when each
Share will vest, will be at the sole discretion of the Board of
Directors;
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(d)
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that
your participation in the Plan does not create a right to further
employment with your employer and will not interfere with the ability of
your employer to terminate your employment relationship at any time with
or without cause;
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(e)
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that
your participation in the Plan is
voluntary;
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(f)
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that
the value of the Performance Units is an extraordinary item of
compensation which is outside the scope of your employment contract, if
any;
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(g)
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that
the Performance Units are not part of normal and expected compensation for
purposes of calculating any severance, resignation, redundancy, end of
service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments;
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(h)
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that
the right to the grant ceases upon termination of employment for any
reason except as may otherwise be explicitly provided in the Plan or this
Award Agreement; and
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(i)
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that
the future value of the Performance Units is unknown and cannot be
predicted with certainty.
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By
signing this Award Agreement, and as a condition of the grant of the Performance
Units, you hereby consent to the collection, use and transfer of personal data
as described below. You understand that the Company and its
subsidiaries hold certain personal information about you, including, but not
limited to, your name, home address and telephone number, email address, date of
birth, social security number, salary, nationality, job title, any Shares of
stock or directorships held in the Company, details of all Performance Units or
other entitlement to Shares awarded, canceled, exercised, vested, unvested or
outstanding in your favor, for the purpose of managing and administering the
Plan (“Data”).
______________
Initial
5
You
further understand that the Company and/or its subsidiaries will transfer Data
amongst themselves as necessary for the purposes of implementation,
administration and management of your participation in the Plan, and that the
Company and/or its subsidiaries may each further transfer Data to any third
parties assisting the Company in the implementation, administration and
management of the Plan (“Data Recipients”). You understand that these
Data Recipients may be located in your country of residence or
elsewhere.
You
hereby authorize the Data Recipients to receive, possess, use, retain and
transfer Data in electronic or other form, for the purposes of implementing,
administering and managing your participation in the Plan, including any
transfer of such Data, as may be required for the administration of the Plan
and/or the subsequent holding of Shares on your behalf.
You
understand that you may, at any time, review the Data, require any necessary
amendments to it or withdraw the consent herein in writing by contacting the
Company. You further understand that withdrawing consent may affect
your ability to participate in the Plan and/or may affect your
Award.
If you
have any questions regarding your Award or this Award Agreement, or would like a
copy of the Plan, please contact Xxxx Xxxxxxxxx, Director, Compensation, at
(000) 000-0000.
Sincerely,
A
Xxxxx X.
Xxxxxxx
President
and CEO
Please
acknowledge your agreement to participate in the Plan and this Award Agreement,
and to abide by all of the governing terms and provisions, by signing the
following representation. Your signed representation must be returned
by << 30 days after letter date>> to:
Compensation
Department
(CH-2E-04)
Attn:
Xxxxxx Xxxxxx
PO Box
1967
Grand
Rapids, MI 49501-1967
Agreement to
Participate
By
signing a copy of this Award Agreement and returning it I acknowledge that I
have read the Plan, and that I fully understand all of my rights under the Plan,
as well as all of the terms and conditions that may limit my rights under this
Award Agreement.
Date:
____________________________________________
Participant:
_______________________________________
______________
Initial
6
