Exhibit 10.11
Long-Term Stock Compensation Plan, Agreements and related
documents, effective for 1995, under which certain of the Company's
senior officers and bank presidents are eligible to receive shares
of Xxxxxxx Xxxxx, Inc. stock based upon their service to the
Company and Company performance.
55
XXXXXXX XXXXX, INC.
Long-Term Stock Compensation Plan
Grant Agreement
This Grant Agreement made on the date set forth below, by and between
Xxxxxxx Xxxxx, Inc., an Iowa Corporation (the "Company") and Xxxxxxx X.
Xxxxxx, an employee of the Company or a Subsidiary thereof (the "Grantee").
The Company desires to carry out the purpose of its Long-Term Stock
Compensation Plan by awarding Restricted Stock Grants and Incentive Stock
Grants to the Grantee pursuant to the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement and for good and valuable consideration, the Company and the
Employee have agreed, and do by this Agreement agree, as follows:
1. Terms. Those terms defined in the Xxxxxxx Xxxxx, Inc., Long-Term Stock
Compensation Plan or in the Administrative Rules adopted thereunder
shall have the same meaning when used in this Agreement.
2. Restricted Stock Grant. The Company by this Agreement irrevocably
awards the Grantee the rights to acquire 2,923 shares of the Company's
Stock pursuant to the terms of a Restricted Stock Grant, set forth in
the provisions of the Plan (a copy of which is attached hereto as
Exhibit A), the Administrative Rules adopted pursuant to the Plan (a
copy of which are attached hereto as Exhibit B), and the Resolution of
the Company's Board of Directors (a copy of which is attached hereto as
Exhibit C).
3. Incentive Stock Grant. The Company by this Agreement irrevocably awards
the Grantee the rights to acquire 5,429 shares of the Company's Stock
pursuant to the terms of a Incentive Stock Grant, set forth in the
provisions of the Plan (a copy of which is attached hereto as Exhibit
A), the Administrative Rules adopted pursuant to the Plan (a copy of
which are attached hereto as Exhibit B), the Resolution of the Company's
Board of Directors (a copy of which is attached hereto as Exhibit C) and
the Performance Criteria adopted by the Board (a copy of which is
attached hereto as Exhibit D).
4. Terms. All of the terms, conditions and provisions contained in the
Plan, Administrative Rules, Resolutions of the Board and Performance
Criteria set forth in Exhibits A, B, C, and D shall be incorporated
herein by this reference, and shall govern the provisions of awards set
forth in this Agreement.
5. Stock Legend. The Grantee hereby consents to the imposition of an
appropriate legend upon the Stock issued pursuant to the Grants. The
legend shall be in the form prescribed by the Company's legal counsel if
said counsel deems it necessary.
6. Notices. Any notices provided for under this Agreement shall be in
writing and shall be delivered in person to the party to be notified or
sent by certified mail. Notices sent to the Company shall be addressed
to Xxxxxxx Xxxxx, Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxx, 00000.
Notices sent to the Grantee shall be sent to the Grantee's address as it
appears in the Company's regular records.
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7. Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Grantee. No waiver, modification or
amendment of any of the terms of this Agreement shall be effective
unless set forth in a written agreement signed by the Company and the
Grantee.
In Witness Whereof, the parties have executed this Agreement on the 15th
day of February, 1995.
XXXXXXX XXXXX, INC.
By_____________________________________
Its____________________________________
COMPANY
_______________________________________
Xxxxxxx X. Xxxxxx
GRANTEE
57
XXXXXXX XXXXX, INC.
Long-Term Stock Compensation Plan
1. Purpose. The Long-Term Stock Compensation Plan (the "Plan") is intended
to advance the interests of Xxxxxxx Xxxxx, Inc. (the "Company"), it
shareholders, and its subsidiaries by providing financial incentives to key
management personnel and by encouraging and enabling selected officers and
other key employees upon whose judgment, initiative and effort the Company is
largely dependent for the successful conduct of its business, to acquire and
retain a proprietary interest in the Company by ownership of its stock.
2. Definitions.
2.1 "Board" means the Board of Directors of the Company.
2.2 "Stock" means the Company's $5.00 par value Common Stock or, in
the event that the Company issues a different class of stock with the same or
higher dividend and liquidation rights as the Company's $5.00 Common Stock
but with lesser voting rights, such stock.
2.3 "Date of Grant" means the date on which the Board authorizes a
grant under the Plan.
2.4 "Grant" means the right to acquire Common Stock and/or cash
awarded under the Plan (including both Incentive Stock Grants and Restricted
Stock Grants).
2.5 "Incentive Stock Grant" means a Grant of Stock pursuant to the
provisions of Section 6.2.
2.6 "Restricted Stock Grant" means a Grant of Stock pursuant to the
provisions of Section 6.1.
2.7 "Grantee" means a person to whom a Xxxxx has been awarded under
the Plan.
2.8 "Disability" or "Disabled" shall be as defined under the Company's
disability plan, if any, or under the Social Security Rules.
2.9 "Subsidiary" or "Subsidiaries" means a subsidiary corporation or
corporations of the Company as defined in Section 425 of the Internal Revenue
Code.
2.10 "Successor" means the legal representative of the estate of a
deceased Grantee or the person or persons who acquire the right to exercise
a Grant by bequest or inheritance or otherwise by reason of the death or
disability of any Grantee.
2.11 "Administrative Rules" means Rules adopted by a majority vote of
the Board to interpret the provisions of the Plan or to impose other terms,
conditions and restrictions on the Grant, issuance and transfer of Grants
and Stock issued pursuant to the award of Grants. Administrative Rules
shall, upon adoption, become part of this Plan as if originally stated
herein. The Rules adopted by the Board shall be passed by resolution and
kept at the Company's main office.
2.12 "Change in Control" shall mean a change in the ownership of 50% or
more of the Company's par Value $5.00 Common Stock as certified by the
Secretary of the Company.
2.13 "Performance Criteria" shall mean the criteria established by the
Board pursuant to Section 6.2.3 of the Plan.
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2.14 "Qualified Contingent Vesting Event" shall mean an event described
in Sections 6.2.4.2, 6.2.4.3, and 6.2.4.4.
3. Administration of Plan. The Plan shall be administered by the Board.
Grants to members of the Board may be granted only by a majority of the
disinterested members of the Board. The Board shall have full and final
authority in its discretion, subject to the provisions of the Plan, to
determine the individuals to whom and the time or times at which Grants shall
be made and the number of shares of Stock covered by each Grant; to determine
the Performance Criteria with respect to Incentive Stock Grants; to construe
and interpret the Plan; to determine the terms and provisions of the
respective Grant agreements and to make all other determinations and take all
other actions deemed necessary or advisable for the proper administration of
the Plan. All such actions and determinations shall be conclusively binding
for all purposes and upon all persons.
4. Stock Subject to Grant. The aggregate number of shares of the Company's
Stock which may be issued upon the exercise of Grants made under the Plan
shall not exceed 240,000, subject to adjustment under the provisions of
Section 11. The shares of Stock to be granted may be authorized but unissued
shares, shares issued and reacquired by the Company or shares bought on the
market for the purposes of the Plan. In the event any Grant shall, for any
reason, terminate or expire or be surrendered to the Company, the shares
subject to such Grant shall again be available to be awarded under the Plan.
5. Participants. Grants may be awarded under the Plan to officers,
directors and key employees of the Company or of any of its Subsidiaries.
6. Terms and Conditions of Grants. Any Grant under the Plan shall be
evidenced by an agreement executed by the Company and the applicable Grantee
and shall contain such terms and be in such form as the Board may from time
to time approve, subject to the following limitations and conditions:
6.1 Restricted Stock Grants.
6.1.1 Authorized Shares. The aggregate number of shares that
may be awarded to employees under the Plan pursuant to Restricted Stock
Grants shall not exceed 84,000 shares of Stock. In the event any
Restricted Stock Grant shall, for any reason, be forfeited, terminated,
expire or be surrendered to the Company, the shares subject to such
Restricted Stock Grant shall again be available to be awarded as a
Restricted Stock Grant under the Plan.
6.1.2 Restricted Stock Grants. Restricted Stock may be awarded
by the Board to participants of the Company chosen by the Board in its
sole discretion. The amount of each award shall be subject to the terms
and conditions set forth in an agreement between the Company and the
Grantee containing the terms and conditions of the award, which shall be
consistent with the provisions set forth in this Plan and the
Administrative Rules adopted by the Board. All Restricted Stock Grants
that do not vest pursuant to the provisions of Section 6.1.3 shall be
forfeited.
6.1.3 Vesting of Restricted Stock Grants. Restricted Stock
Grants shall vest with the Grantee following the Grantee's completion of
three (3) successive calendar years of employment with the Company or
any Subsidiary, with said years being specified by the Board. The
Restricted Stock Grants awarded to Grantees shall be considered vested
or forfeited on the January 1st following completion of the third
successive calendar year of employment with the Company or any
Subsidiary.
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6.1.4 Notwithstanding the foregoing:
6.1.5 Termination of Employment. Upon termination of a
Grantee's employment with the Company or with any of its Subsidiaries
for reasons other than death, disability, retirement after age 65 or
retirement before age 65 with Board approval, the Grantee's and the
Company's rights, duties and obligations under the Restricted Stock
Grant shall be terminated and the Restricted Stock Grants shall be
forfeited.
6.1.6 Death or Disability of Grantee. If a Grantee to whom a
Restricted Stock Grant shall have been awarded, shall die or become
disabled while the Grantee is employed by the Company or one or more of
its Subsidiaries, such Restricted Stock Grant shall thereupon be 100%
vested.
6.1.7 Retirement of Grantee. In the event that a Grantee to
whom a Restricted Stock Grant shall have been awarded shall retire upon
or after the age of 65, any Restricted Stock Grant held by such retired
Grantee shall thereupon be 100% vested. In the event Grantee retires
prior to age 65, with the approval of the Board in its sole discretion,
the Restricted Stock Grant will become (i) one-third (1/3) vested if the
retirement occurs after the completion of the first calendar year
specified by the Board but prior to the completion of the second
calendar year specified by the Board and (ii) 100% vested if the
retirement occurs after the completion of the second calendar year
specified by the Board. If the Grantee retires prior to the age of 65
without the approval of the Board, the provisions of Section 6.1.4.1
shall control.
6.1.8 Change in Control of the Company. In the event of a
Change in Control of the Company, the outstanding Restricted Stock
Grants shall thereupon be 100% vested, and, to the extent permitted by
law, the Grantees shall be permitted to participate in the sale or
merger resulting in the Change in Control.
6.1.9 Incentive Stock Grants.
6.1.10 Authorized Shares. The aggregate number of shares that
may be awarded to employees under the Plan pursuant to Incentive Stock
Grants shall not exceed 156,000 shares of Stock. In the event any
Incentive Stock Grant shall, for any reason, be forfeited, terminate or
expire or be surrendered to the Company, the shares subject to such
Incentive Stock Grant shall again be available to be awarded as a
Incentive Stock Grant under the Plan.
6.1.11 Incentive Stock Grants. Incentive Stock Grants may be
awarded by the Board to participants of the Company chosen by the Board
in its sole discretion. The amount of each award shall be subject to
the terms and conditions set forth in an agreement between the Company
and the Grantee containing the terms and conditions of the award, which
shall be consistent with the provisions set forth in this Plan and the
Administrative Rules adopted by the Board. All Incentive Stock Grants
that do not vest pursuant to the provisions of Section 6.2.3 shall be
forfeited.
6.1.12 Vesting of Incentive Stock Grants. Incentive Stock Grants
shall vest with the Grantee following: (a) the Grantee's completion of
three (3) successive calendar years of employment, with said years
specified by the Board; and (b) the Company achieving the Performance
Criteria specified by the Board on the Grant Date. The number of
shares vested pursuant to any Grant, if any, shall be determined
pursuant to the Performance Criteria set by the Board. The Stock
awarded pursuant to Incentive Stock Grant shall be considered vested or
forfeited on the January 1st following completion of the third
successive calendar year specified by the Board.
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6.1.13 Performance Criteria. The Performance Criteria shall be
set by the Board. The Performance Criteria shall be the same for each
Grantee receiving a Grant on a particular Grant Date, provided that the
Performance Criteria set with respect to a particular Grant Date may be
different from Performance Criteria set for prior or subsequent Grant
Dates. The Board shall determine the Performance Criteria prior to or
during the first year of the performance period specified by the Board.
6.1.14 Performance in Excess of 100% of Incentive Stock Grant.
The Board may establish Performance Criteria in amounts that exceed 100%
of the Performance Stock Granted to the Grantees. In the event that the
Performance Criteria set by the Board exceed 100% of the Stock to be
awarded by a Grant, any and all amounts in excess of 100% shall be paid
in cash to the Grantee based upon the Fair Market Value of the Stock on
the date Incentive Stock Grant Vests. For the purposes hereof, "Fair
Market Value" shall be as determined by the Board and such determination
shall be binding upon the Company and upon the Grantee. The Board may
make such determination: (i) in the case of Stock not then listed and
traded upon a recognized securities exchange, upon the basis of the mean
between the closing bid and asked quotations for such stock on the date
the Incentive Stock Grants vest (as reported by the Wall Street Journal
"NASDAQ Bid and Asked Quotations" National Market Listings or as
reported by NASDAQ if not reported in the Wall Street Journal) or in the
event that there shall be no bid or asked quotations on such date, then
upon the basis of the bid and asked quotations nearest preceding such
date, or (ii) in the case the Stock shall then be listed and traded upon
a recognized securities exchange, upon the basis of the mean between the
highest and lowest selling prices at which shares of Stock were traded
on such recognized securities exchange on the date the Incentive Stock
Grants vest, as reported in the Wall Street Journal or, if the Stock was
not traded on said date, the date nearest preceding such date, and (iii)
upon any other factors which the Board shall deem appropriate.
6.1.15 Notwithstanding the foregoing:
6.1.16 Termination of Employment. Upon termination of a
Xxxxxxx's employment with the Company or with any of its Subsidiaries
for reasons other than death, disability, retirement after age 65 or
retirement before age 65 with Board approval, the Grantee's and the
Company's rights, duties and obligations under the Incentive Stock Grant
shall be terminated and the Incentive Stock Grant shall be forfeited.
6.1.17 Death or Disability of Grantee. If a Grantee to whom an
Incentive Stock Grant shall have been awarded shall die or become
disabled while he shall be employed by the Company or one or more of its
Subsidiaries, such Incentive Stock Grant shall thereupon be vested in
accordance with the provisions of Section 6.2.5 and said death or
disability shall be deemed to be a Qualified Contingent Vesting Event.
6.1.18 Retirement of Grantee. In the event that a Grantee to
whom an Incentive Stock Grant shall have been awarded shall retire upon
or after the age of 65, such Incentive Stock Grant held by such retired
Grantee shall thereupon be vested in accordance with the provisions of
Section 6.2.5 and said retirement shall be deemed to be a Qualified
Contingent Vesting Event. In the event Grantee retires prior to age 65,
the Incentive Stock Grant may become vested in accordance with the
provisions of Section 6.2.5 upon the approval of the Board in its sole
discretion; and upon such approval by the Board said retirement shall be
deemed to be a Qualified Contingent Vesting Event. If the Grantee
retires prior to the age of 65 without the approval of the Board, the
provisions of Section 6.2.4.1 shall control.
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6.1.19 Change in Control of the Company. In the event of a
Change in Control of the Company, such Incentive Stock Grants shall
thereupon be vested in accordance with the provisions of Section 6.2.5,
and said Change in Control shall be deemed to be a Qualified Contingent
Vesting Event. Furthermore, to the extent permitted by law, the
Grantees shall be permitted to participate in the sale or merger
resulting in the Change in Control.
6.1.20 Contingent Vesting Rules. Pursuant to the provisions of
Sections 6.2.4.2, 6.2.4.3, and 6.2.4.4 the Incentive Stock Grants shall
vest upon the occurrence of a Qualified Contingent Vesting Event, in
accordance with the terms set forth below.
6.1.21 If a Qualified Contingent Vesting Event occurs prior to
the completion of the first year of the performance period specified by
the Board, all of the Incentive Stock Grants shall be forfeited and none
of the Incentive Stock Grants shall thereafter become vested in the
Grantee.
6.1.22 If a Qualified Contingent Vesting Event occurs after the
completion of the first year of the performance period specified by the
Board but prior to the completion of the second year of the performance
period specified by the Board, the Grantee shall be entitled to receive
one-third (1/3) of the Incentive Stock Grant that would vest if the
Performance Criteria was applied to the financial results of the Company
for the first fiscal year of the performance period. All other
Incentive Stock Grants not vested pursuant to the provisions of the
preceding sentence shall be forfeited.
6.1.23 If a Qualified Contingent Vesting Event occurs after the
completion of the second year of the performance period specified by the
Board, but prior to the completion of the third year of the performance
period specified by the Board, the Grantee shall be entitled to receive
100% of the Incentive Stock Grant that would vest if the Performance
Criteria was applied to the financial results of the Company for the
first and second fiscal years of the performance period. All other
Incentive Stock Grants not vested pursuant to the provisions of the
preceding sentence shall be forfeited.
7. Delivery of Stock. Stock and any cash payments (if applicable) to be
delivered to a Grantee pursuant to the vesting of a Grant, shall be delivered
to the Grantee within 90 days of the date the Grant vests. In the event that
a Grantee is unable to accept the Stock due to death, disability or
otherwise, the Stock and any cash payments (if applicable) shall be
delivered to the Grantee's Successor.
8. Fractional Shares. No factional shares of Stock shall be issued to any
participant pursuant to the terms of the Plan. The vesting of any Grant
shall be rounded to the nearest whole share. In the event that 50% or more
of a share shall vest pursuant to the terms of the Plan, the Participant
shall be vested with the next whole share; to the extent that less than 50%
of a share shall vest, the participant shall rounded down to the next whole
share and the percentage of the share shall be disregarded.
9. Shareholder Rights. Neither a Grantee nor his Successor shall have any
of the rights of a shareholder (including but not limited to voting or
dividend rights) of the Company until the Grants have vested and the stock
certificates evidencing the shares awarded by the Grants are properly
delivered to such Grantee or his Successor; provided, however, that the
Grantee shall be entitled to receive a cash payment (in the form of a bonus
or death benefit) from the Company equal to the amount of any dividends which
would have been payable on the Stock if the Stock had been issued to the
Grantee on the date the Grant vested.
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10. No Alteration of Employment Terms. The Grant to an eligible person does
not alter in any way the Company's or the relevant Subsidiary's existing
rights to terminate such person's employment at any time for any reason, nor
does it confer upon such person any rights or privileges except as
specifically provided for in the Plan.
11. Adjustments. In the event that the outstanding shares of Stock of the
Company are hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the Company or of
another corporation, by reason of a recapitalization, reclassification, stock
split-up, combination of shares, or dividend or other distribution payable in
capital stock, appropriate adjustment shall be made by the Board in the
number and kind of shares as to which Grants may be made under the Plan. In
addition, there shall be appropriate adjustments made in the number and kind
of shares of Stock as to which outstanding Grants shall be issued, to the end
that the proportionate interest of the holder of the Grant shall, to the
extent practicable, be maintained as before the occurrence of such event.
Such adjustment in outstanding Grants shall be made through a change in the
total number or kind of shares awarded in the Grant.
12. Restrictions on Issuing Shares. The issuance of Stock pursuant to the
vesting of a Grant shall be subject to the condition that, if at any time the
Company shall determine in its discretion that the satisfaction of
withholding tax or other withholding liabilities, or that the listing,
registration, or qualification of any shares otherwise deliverable upon such
exercise upon any securities exchange or under any state or federal law, or
that the consent or approval of any regulatory body, is necessary or
desirable as a condition of, or in connection with, the delivery of the Stock
pursuant thereto, then in any such event, such delivery shall be deferred
until such time as such withholding, listing, registration, qualification,
consent or approval shall have been effected or obtained free of any
conditions not acceptable to the Company.
13. Suspension and/or Termination of Plan. The Board may at any time
suspend or terminate the Plan. Unless previously terminated by the Board, no
further Grants shall be awarded under the Plan after December 31, 1995. No
Grants may be awarded during any suspension or termination of the Plan. No
suspension or termination of the Plan shall, without a Grantee's consent,
alter or impair any of the rights or obligations under any Grant theretofore
awarded to such Grantee under the Plan.
14. Nontransferability of Grants. No Grant awarded under the Plan shall be
transferable otherwise than by bequest or by laws of descent and
distribution, and during the lifetime of the Grant only the Grantee or
Xxxxxxx's Successor may receive stock or cash from the Grant.
15. Effectiveness of the Plan. The Plan shall become effective only after
the Board shall, by the affirmative vote of a majority of its members, have
approved the Plan.
16. Time of Awarding Grants. Nothing contained in the Plan nor in any
resolution adopted or to be adopted by the Board of Directors or the
stockholders of the Company nor any action taken by the Board shall
constitute a Grant. A Grant shall take place only when a written Agreement
is duly executed by the Company and the Grantee to whom such Xxxxx shall be
awarded.
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ADMINISTRATIVE RULES
FOR XXXXXXX XXXXX, INC.
LONG-TERM STOCK COMPENSATION PLAN
1. Definitions. Those terms defined in the Plan shall have the same
meaning when used in these Rules.
2. Withholding Taxes. Prior to issuing any Stock pursuant to the terms of
a Grant, a Grantee shall be required to make adequate provisions for the
withholding of any and all applicable State, Federal and local taxes
(hereinafter "Withholding Taxes"). The manner in which Withholding Taxes
shall be remitted to the appropriate taxing authorities shall be by a cash
payment to the Company from the Grantee in an amount equal to the amount of
Withholding Taxes that must be remitted to the respective taxing authorities
unless the Grantee elects to pay the withholding taxes pursuant to an
alternative method described in either Section 2.1 or 2.2 hereof. After the
Grantee determines whether the alternative method will apply, the Board, in
its sole discretion, shall determine which alternative method is applied to
the particular Grantee.
2.1 Loan. The Grantee may obtain a loan from the Company or one of
the Company's subsidiaries in an amount equal to the amount of Withholding
Taxes that must be remitted to the respective taxing authorities. Any loan
to a Grantee must be made with interest payable at prime and the loan being
due and payable on December 31 of the year in which the withholding taxes are
due and payable. All loans made to a Grantee must comply with all federal
and applicable state banking laws. Nothing contained in this paragraph shall
require any subsidiary of the Company to make a loan to a Grantee.
2.2 Exchange of Stock. The Grantee may exchange the right to receive
a portion of the Stock issuable pursuant to a Grant for an amount of cash
equal in value to the amount of Withholding Taxes that must be remitted to
the respective taxing authorities based upon the Fair Market Value of the
Stock at the time of withholding.
3. Performance Criteria. The performance criteria established by the Board
shall have the following meanings and shall be interpreted in accordance with
the following rules.
3.1 "Average Annual Earnings Per Share Growth (EPS)" shall be
determined by dividing the sum of the "Annual Percentage Growth Rates in EPS"
for each of the years contained in the performance period by the total number
of years in the performance period.
3.2 "Annual Percentage Growth Rates in EPS" shall mean annual
percentage growth in the Company's Earnings Per Share (for consolidated
financial reporting purposes) after the effect of adjusting earnings for the
financial statement expense of Grants under the Plan pursuant to Generally
Accepted Accounting Principles.
3.3 "Earnings Per Share" shall be the primary earnings per share of
the Company for consolidated financial reporting purposes.
The following example shall illustrate the definitions set forth above:
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During the years 1991, 1992, 1993 and 1994 the Company's Earnings Per
Share are $1.80, $2.10, $2.31 and $2.60 respectively. After adjustment
for the financial statement expense of Grants under the Plan, the
Company's earnings per share are $1.80, $1.90, $2.20 and $2.40 for 1991,
1992, 1993 and 1994 respectively. The Annual Percentage Growth Rate in
EPS for 1992 is computed by subtracting the 1991 adjusted earning per
share ($1.80) from the adjusted 1992 earning per share ($1.90) and
dividing that number by the 1991 adjusted earning per share ($1.80).
Therefore, the Annual Percentage Growth Rate in EPS for 1992 is 5.55%.
The Annual Percentage Growth Rate in EPS for 1993 and 1994 (computed in
the same manner) is 15.78% and 9.09% respectively. The Average Annual
Earning Per Share Growth for the years 1992, 1993 and 1994 is 10.13%
((5.55 + 15.78 + 9.09)/3)
4. Restricted Stock Grants - Vesting and Forfeiture Rules. The following
examples are intended to act as an illustration of the Board's intentions
with respect to Restrictive Stock Grant awards pursuant to the Plan. All of
the examples set forth below are based upon the following facts:
Employee X is granted a restricted stock Grant in 1992. The terms of
the Grant entitle the employee to receive 100 shares of Stock if the X
is employed with the Company or any Subsidiary on January 1, 1995.
4.1 Death or Disability. On June 15, 1992, Employee X becomes
disabled or dies. Employee X becomes fully vested in the 100 shares of
Stock.
4.2 Termination. On November 15, 1994, Employee X is terminated by
the Company. Because Employee X is not employed by the Company on January 1,
1995 and has not been continuously employed by Company the for three
consecutive years, none of the Restricted Stock Grants shall vest.
5. Incentive Stock Grants - Vesting and Forfeiture Rules. The following
examples are intended to act as an illustration of the Board's intentions
with respect to Incentive Stock Grants awarded pursuant to the Plan. All of
the examples set forth below are based upon the following facts:
Employee X is granted an Incentive Stock Grant in 1992. The terms of
the Grant entitle the employee to receive up to 100 shares of Stock if
(1) X is employed with the Company or any Subsidiary on January 1, 1995;
and (2) the Company meets or exceeds certain Performance Criteria. The
Performance Criteria adopted by the Board specify that if the Average
Earnings Per Share Growth of the Company's Stock is below 7.50% - none
of the Incentive Stock Grants will vest; if the Average Earnings Per
Share Growth of the Company's Stock is from 7.50% to 8.74% - 50% of the
Incentive Stock Grants will vest; if the Average Earnings Per Share
Growth of the Company's Stock is from 8.75% to 9.99% - 75% of the
Incentive Stock Grants will vest; if the Average Earnings Per Share
Growth of the Company's Stock is from 10.00% to 11.99% - 100% of the
Incentive Stock Grants will vest. The Company's Earnings Per Share
Growth for the years 1992, 1993 and 1994 are 10.00%, 9.25% and 7.25%
respectively.
5.1 Achievement of Company performance goals. Employee X continues to
work for the Company through January 1, 1995. The Average Earnings Per Share
is 8.83% ((10% + 9.25% + 7.25%)/3). Therefore, in January of 1995, Employee
X will have 75% of the Stock granted pursuant to the Incentive Stock Grant
vested. The number of shares that will be delivered to Employee X is
determined by multiplying the percentage of vested Incentive Stock Grants by
the total number of shares Granted in the Incentive Stock Grant (75% X 100
shares = 75 shares).
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5.2 Qualified Contingent Vesting Event - Year Two of the Performance
Period. Employee X continues to be employed by the Company through June 1,
1993, at which time a Qualified Contingent Vesting Event occurs. On June 1,
1993, the Company would apply the performance criteria to the financial
results of the Company for the first fiscal year - 1992. The Average Earning
Per Share as of December 31, 1992 would be 10% (10%/1). A 10% Average
Earnings Per Share will result in 100% of the Incentive Stock Grant vesting.
However, pursuant to Section 6.2.5.2. of the Plan, only one-third (1/3) of
the Incentive Stock Grants will vest if the Qualified Contingent Vesting
Event occurs during the second year of performance period. Therefore, the
number of shares that will be delivered to Employee X is determined by
multiplying the percentage of vested Incentive Stock Grants pursuant to
measurement via Performance Criteria by the total number of shares Granted in
the Incentive Stock Grant and by one-third (100% X 100 shares X 1/3 = 33
shares).
5.3 Qualified Contingent Vesting Event - Year Three of the
Performance Period. Employee X continues to be employed by the Company
through June 1, 1994, at which time a Qualified Contingent Vesting Event
occurs. On June 1, 1994, the Company would apply the performance criteria to
the financial results of the Company for the first and second fiscal years -
1992 and 1993. The Average Earning Per Share would be 9.625% ((10% +
9.25%)/2). A 9.625% Average Earnings Per Share will result in 75% of the
Incentive Stock Grant vesting. Pursuant to Section 6.2.5.3. of the Plan,
100% of the Incentive Stock Grants will vest if the Qualified Contingent
Vesting Event occurs during the third year of the performance period.
Therefore, the number of shares that will be delivered to Employee X is
determined by multiplying the percentage of vested Incentive Stock Grants
pursuant to measurement via Performance Criteria by the total number of
shares Granted in the Incentive Stock Grant (75% X 100 shares = 75 shares).
66
RESOLUTIONS ADOPTED
BY THE
XXXXXXX XXXXX, INC.
BOARD OF DIRECTORS
At a regular meeting of the Board of Directors of the Company the
following resolutions were unanimously adopted by the Board of Directors.
Resolved, that pursuant to the provisions of the Company's Long-Term
Stock Compensation Plan, the Board approves the awarding of Grants to the
employees of the Company upon the terms and conditions set forth below.
1. That Restricted Stock Grants are to be awarded to those employees
listed on Exhibit A attached hereto, in the amounts set forth in the
column titled "Restricted Shares". The Restricted Stock Grants shall be
subject to the terms and conditions set forth in the Plan. The Board
further specifies that the three successive calendar years of
employment, the completion of which the Restricted Stock Grants are
conditioned upon, are 1995, 1996 and 1997. All Grants shall vest or be
forfeited, pursuant to the provisions of the Plan, on or before January
1, 1998.
2. That Incentive Stock Grants are to be awarded to those employees
listed on Exhibit A attached hereto, in the amounts set forth in the
column titled "Performance Shares". The Incentive Stock Grants shall be
subject to the terms and conditions set forth in the Plan,
Administrative Rules and those set forth below.
a. The Board hereby specifies that the three successive calendar
years of employment (the "Performance Period"), the completion of
which the Incentive Stock Grants are conditioned upon, are 1995,
1996 and 1997. All Incentive Stock Grants shall vest or be
forfeited, pursuant to the provisions of the Plan, on or before
March 15, 1998.
b. The Board further specifies that the Performance Criteria that
the Company must achieve prior to the vesting of any of the
Incentive Stock Grants shall be as set forth on Exhibit B attached
hereto.
To the extent that a Xxxxx fails to vest, the shares shall be deemed to
be forfeited pursuant to the terms of the Plan.
Those terms defined in the Company's Long Term Stock Compensation Plan
or Rules adopted thereunder by the Board shall have the same meaning when
used in this Resolution.
67
EXHIBIT B
Average Annual Earnings
Per Share Growth over the Tiered Achievement
Three Year Performance Period Scale
Less than 7.5% . . . . . . . . . . . . . . . . . . . . . . . . 0% vested
7.50% to 8.74% . . . . . . . . . . . . . . . . . . . . . . . . 50% vested
8.75% to 9.99% . . . . . . . . . . . . . . . . . . . . . . . . 75% vested
10.00% to 11.99% . . . . . . . . . . . . . . . . . . . . . . . 100% vested
12.00% to 13.99% . . . . . . . . . . . . . . . . . . . . . . . 115% vested
14.00% to 15.99% . . . . . . . . . . . . . . . . . . . . . . . 130% vested
Greater than 16.00% . . . . . . . . . . . . . . . . . . . . . 150% vested
68
