BEARINGPOINT, INC. PERFORMANCE CASH AWARD AGREEMENT
Exhibit 10.8
BEARINGPOINT, INC.
PERFORMANCE CASH AWARD AGREEMENT
PERFORMANCE CASH AWARD AGREEMENT
THIS PERFORMANCE CASH AWARD AGREEMENT (this “Agreement”) evidences a grant of a performance
cash award (the “Cash Award”) made by BearingPoint, Inc., a Delaware corporation (the “Company”) to
the individual (the “Award Recipient”) named in the Award Notice of Performance Cash Award to which
this Agreement relates. The award has been granted pursuant to the BearingPoint, Inc. 2000
Long-Term Incentive Plan (the “Plan”). By signing the Award Notice, the Award Recipient: (a)
acknowledges receipt of and represents that the Award Recipient has read and is familiar with the
Award Notice, this Agreement and the Plan, (b) accepts the award subject to all of the terms and
conditions of the Award Notice, this Agreement and the Plan and (c) agrees to accept as binding,
conclusive and final all decisions or interpretations of the Compensation Committee (the
“Committee”) of the Board of Directors of the Company regarding any questions arising under the
Award Notice, this Agreement or the Plan. Unless otherwise defined herein, capitalized terms shall
have the meanings assigned to such terms in the Plan.
(a) Award. On the Grant Date, the Award Recipient shall receive, subject to the
provisions of this Agreement, a Cash Award in the amount set forth in the Award Notice. Each Cash
Award consists of a bookkeeping entry representing the right to receive cash on a date determined
in accordance with the Award Notice and this Agreement.
(b) Consideration. The Award Recipient is not required to make any monetary payment
as a condition to receiving cash issued upon settlement of the Cash Award, the consideration for
which shall be future services to be rendered to the Company or for its benefit.
(a) General. Except as provided in Section 5 and Section 7 of this Agreement, the
Award Recipient’s Cash Award shall become earned in whole or in part in accordance with the table
in Section 3(b) on December 31, 2009 and shall become vested if (i) the Award Recipient remains
continuously employed until the Settlement Date set forth in Section 4(a) and (ii) the performance
criteria (the “Performance Measures”) set forth in Section 3(a) hereof are satisfied.
(b) Other Forfeitures. Notwithstanding the general vesting provisions of Section 2(a),
the Award Recipient’s Cash Award shall be forfeited completely upon a finding by a committee
consisting of the Chairman of the Board, the chief executive officer of the Company and the general
counsel of the Company (the “Determination Committee”) upon a finding by the executive vice
president of the Company responsible for the Award Recipient’s business unit that the Award
Recipient has violated his duty of loyalty to the Company or otherwise breached the conditions of
his employment. No such forfeiture shall occur, however, until such time as the Award Recipient’s
appeal of the decision of the Determination Committee to the Managing
Director Compensation Committee (the “MDCC”) has been made and decided unfavorably by the MDCC or
the Award Recipient has decided not to pursue such an appeal. The following shall constitute such
a violation or breach, with each such term as hereinafter defined: the Award Recipient’s (i)
having a Conflict of Interest; (ii) disclosure of Proprietary Information; (iii) violation of the
Company’s anti-harassment policy; (iv) violation of the
Company’s non-competition requirements and
(v) violation of the Company’s non-solicitation rules.
For purposes of this Agreement the referenced terms are defined as follows:
“Conflict of Interest” means any direct or indirect interest in, connection with,
or benefit from any outside activities, particularly commercial or consulting
activities, which interest might in any way adversely affect the Company.
“Proprietary Information” means all business information or material disclosed to,
developed, or known by the Award Recipient as a consequence of his employment with
the Company and that pertains to the Company or its subsidiaries, affiliates,
predecessors or successors (collectively referred to herein as the “Company”), that
the Company treats as confidential and/or that is embodied in or relates to Works.
Proprietary Information includes the Company’s non-public discoveries, ideas,
inventions, concepts, software and related documentation, designs, drawings,
specifications, techniques, methodologies, models, data, source code, object code,
documentation, diagrams, flow charts, research, development, processes, training
materials, templates, procedures, “know-how,” tools, identities of clients and
prospective clients, client accounts or lists, web design needs, client advertising
needs and history, client reports, client proposals, research regarding prospective
clients, product information and reports, accounts, billing methods, pricing, data,
sources of supply, business methods, production or merchandising systems or plans,
marketing, sales and business strategies and plans, finances, operations, and
information regarding employees.
“Works” means (i) any inventions, trade secrets, ideas or original works of
authorship that the Award Recipient conceives, develops, discovers or makes, in
whole or in part, during his employment with the Company and that relate to the
Company’s business or its actual or demonstrably anticipated research or
development; (ii) any inventions, trade secrets, ideas or original works of
authorship that the Award Recipient conceives, develops, discovers or makes in whole
or in part during or for a period of one year after his employment with the Company
and which are made through the use of any of the Company’s equipment, facilities,
supplies, trade secrets or time, or which result from any work that the Award
Recipient performs or performed for the Company; and (iii) any part or aspect of any
of the foregoing.
“Non-Competition” means while employed with the Company and for 24 months after his
termination or resignation, for whatever reason, directly or indirectly, on his own
behalf or on behalf of a Competitive Business (as specified in Exhibit A), in any
geographic area or market where he (or a direct report of his business unit)
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provided services to the Company during the preceding 12 months: (I) engages in or is
employed by or affiliated with a Competitive Business in which he performs the same
or similar duties or responsibilities or provides comparable services that he
performed or provided while employed with the Company; (II) offers to provide to any
client or prospective client similar services in the same line of business to those
which he conducted, provided or offered to provide while employed by the Company;
(III) renders advice or services to, or otherwise assists, any Competitive Business
in rendering advice or services similar to that advice or services offered or
provided by the Company through him or his business unit to any client or prospective
client; (IV) diverts or attempts to divert any client or prospective client from the
Company to a Competitive Business; (V) transacts any business with any client or
prospective client which, in any manner, would have, or is likely to have, an adverse
effect upon the Company’s existing or prospective business relationships; and/or (VI)
develops, acquires or maintains an ownership interest in a Competitive Business,
provided that an ownership interest of less than 5% of the outstanding capital stock
of a publicly traded Competitive Business shall not be a violation of this provision.
“Non-Solicitation” means either (I) during his employment with the Company and for a
period of 24 months after his termination or resignation, for whatever reason,
agreeing to take any action to, or do anything reasonably intended to, solicit any
client or prospective client on his own behalf or on behalf of a Competitive
Business or otherwise to influence or attempt to influence any client or prospective
client to cease or refrain from doing business, or reduce the client’s business,
with the Company. The term “solicit” includes any direct or indirect approach,
verbal or written, to a client or prospective client containing an offer,
announcement, request, petition, solicitation or other entreaty that asks, urges,
encourages, invites, moves or otherwise persuades a client or prospective client to
contact or respond to him or a Competitive Business for business purposes or (II)
while employed with the Company and for 24 months after his termination or
resignation, for whatever reason, attempting to hire, employ, solicit for employment
or attempting to hire (or assist a Competitive Business in doing so) any employee of
the Company or any former employee who left the Company within 12 months before or
after his termination or resignation. This prohibition applies to any direct or
indirect, written or verbal, contact for employment purposes and includes, but is
not limited to, notice of alternative job opportunities, responses to employee
inquiries, referrals to hiring managers or providing employee identity, contact,
performance or compensation information to a Competitive Business or its
representative. Impermissible solicitation also includes any direct or indirect
offer to engage or retain a Company employee or former employee as an employee,
agent, consultant, independent contractor or in any other capacity to perform
services for a person or entity other than the Company.
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(a) Growth in Consolidated Business Unit Contribution. No Cash Award shall be earned
unless the “Consolidated Business Unit Contribution” of the Company has grown by a compounded
average of at least 3% annually for the relevant Company fiscal year or years, ending on December
31 in accordance with the table in subsection (b). Growth in Consolidated Business Unit
Contribution (“Growth”) shall be determined beginning with fiscal year 2007 by reference to an
increase in the Consolidated Business Unit Contribution of the Company over the Company’s
Consolidated Business Unit Contribution for fiscal year 2006. “Consolidated Business Unit
Contribution” shall mean consolidated net revenue, less professional compensation, other costs of
service, and sales, general and administrative expense (excluding stock compensation expense, bonus
expense, interest expense and infrastructure expense). The Committee shall review and approve
annually each fiscal year’s Consolidated Business Unit Contribution of the Company, including any
such adjustments as the Committee shall deem necessary or appropriate to measure compound average
growth in Consolidated Business Unit Contribution on a comparable basis.
(b) Table. The following percentages of the Cash Award shall be earned upon
attainment of Growth of at least 3% on a compounded average annual basis, by the end of the
relevant Company fiscal year or years as specified below.
| Fiscal Year(s) | 2007 | 2008 | 2009 | |||||||||
Compounded Average Annual Growth |
≥3 | % | ≥3 | % | N/A | |||||||
Incremental Percentage of Cash Award Earned |
50 | % | 50 | % | N/A | |||||||
| Fiscal Year(s) | 2007 | 2008 | 2008-2009 | |||||||||
Compounded Average Annual Growth |
≥3 | % | ≤3 | % | ≥3 | % | ||||||
Incremental Percentage of Cash Award Earned |
50 | % | 0 | 50 | % | |||||||
| Fiscal Year(s) | 2007 | 2007-2008 | 2009 | |||||||||
Compounded Average Annual Growth |
≤3 | % | ≥3 | % | N/A | |||||||
Incremental Percentage of Cash Award Earned |
0 | 100 | % | N/A | ||||||||
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| Fiscal Year(s) | 2007 | 2008 | 2008-2009 | |||||||||
Compounded Average Annual Growth |
≤3 | % | ≤3 | % | ≥3 | % | ||||||
Incremental Percentage of Cash Award Earned |
0 | 0 | 100 | % | ||||||||
To illustrate, assume (i) at the end of Company fiscal year 2007, annual growth was
more than 3%, (ii) at the end of Company fiscal year 2008, annual growth for fiscal years
2007 and 2008 on a compounded average basis was less than 3% and (iii) at the end of Company
fiscal year 2009, annual growth for Company fiscal years 2007, 2008 and 2009 on a compounded
average basis equaled or exceeded 3%. The Award Recipient would earn, subject to continued
employment requirements, (i) 50% of the Award at the end of fiscal year 2007, (ii) no part
of the Award for fiscal year 2008 and (iii) an additional 50% of the Award at the end of
fiscal 2009.
(a) Payment of Cash. Following a determination by the Committee that the Performance
Measures were satisfied during one or more fiscal years, the Company shall pay to the Award
Recipient, within 90 days of December 31, 2009 or such later date as may be reasonably required by
the Committee to confirm that the Performance Measures are satisfied (the “Settlement Date”), cash
equal to the percentage of the Cash Award that has vested; provided, however, except for
settlements by reason of Death, Disability, or Change in Control, that the Committee shall not
make a determination that the Performance Measures are satisfied until the audited financials of
the Company are available for a relevant fiscal year, each of 2007 through 2009. If settlement is
delayed because the Committee has not yet received all such audited financials, the Settlement
Date shall occur within 30 days of the date of the Committee’s determination.
(b) Restrictions on Cash Settlements. The payment of cash upon settlement of a Cash
Award shall be subject to and in compliance with all applicable requirements of federal, state or
foreign law and other law or regulations or any contract or other rule of law to which the Company
is subject. No cash may be paid hereunder if the payment of such cash, in the sole discretion of
the Company’s legal counsel, would constitute a violation of any applicable federal, state or
foreign securities laws or other law or any contract or other rule of law to which the Company is
subject. The inability of the Company to obtain from any regulatory body any
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authority deemed by the Company’s legal counsel to be required for the payment of cash subject to
the Cash Award shall relieve the Company of any liability whatsoever in respect of the failure to
pay such cash as to which such requisite authority shall not have been obtained. As a condition to
the settlement of a Cash Award, the Company may require the Award Recipient to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with any applicable
law or regulation or contract to which the Company is subject and to make any representation or
warranty with respect thereto as may be requested by the Company.
(a) Termination for Any Reason Prior to January 1, 2008. Upon the Award Recipient’s
termination for any reason prior to January 1, 2008, the right to earn the Cash Award shall be
automatically forfeited.
(i) Upon the Award Recipient’s termination by the Company other than for Cause after
December 31, 2007, the Award Recipient shall have the right to vest in a pro rata portion
of the Cash Award equal to the ratable portion of the amount to vest at the end of the
Performance Period, if the Performance Measures are achieved. If less than 100% of the Cash
Award had been earned prior to the year of termination, the Award Recipient shall receive
the portion of the Cash Award, if any, earned in the prior year or years plus a proportion
of the Cash Award that would be earned for the remainder of the Performance Period if the
Performance Measures are achieved, in the ratio that his completed months of service since
the later of (I) the beginning of the Performance Period and (II) the most recent fiscal
yearend when an amount was earned (counting the month of termination as a full month) bears
to the number of months between the date in clause (I) or (II), whichever is applicable,
and the next fiscal yearend when an amount is earned. To illustrate, if an Award Recipient
terminates in March 2008, and 50% of the Cash Award had been earned in 2007, he would
receive three-twelfths (25%) of the additional 50%, if the Performance Measure is met in
2008 and three-twenty-fourths (12.5%) of the additional 50%, if the Performance Measure is
met in 2009. Any such amounts earned shall be paid on the Settlement Date.
(ii) Upon the Award Recipient’s termination by reason of Disability, Retirement or
Death, the Award Recipient shall vest in a pro rata portion of the Cash Award. The pro rata
portion of the Cash Award shall be determined in the same manner as provided in Section
5(b)(i) above. Amounts vested as a result of Retirement shall be paid on the Settlement
Date. Amounts vested due to Death or Disability shall be paid within 30 days of the
Committee’s determination that the Performance Measures were achieved for the year of the
Award Recipient’s Death or Disability. “Retirement” shall mean retirement under the
Company’s Rule of 70 Retirement Policy, or, if required by law, under local law. An Award
Recipient currently is eligible to retire under the Company’s Rule of 70 Retirement Policy,
if the Award Recipient’s age plus “years of service” (as determined under the Company’s
401(k) Plan or any successor to such plan) equals or exceeds 70 as of the date of
retirement.
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(i) Upon the Award Recipient’s termination for Cause, as hereinafter defined, any Cash
Award that has not been earned, vested and settled in accordance with Section 4, shall be
forfeited automatically on the date of termination and any amounts already paid hereunder
to the Award Recipient shall be repaid to and subject to recovery by the Company.
(ii) For all purposes of this Agreement, “Cause” shall mean the occurrence, failure to
cause the occurrence or failure to cure after the occurrence (when a cure is permitted), as
the case may be, of any of the following circumstances after the Award Recipient’s receipt
of written notification from the General Counsel which includes a detailed description of
the claimed circumstance: (i) the Award Recipient’s embezzlement, misappropriation of
corporate funds, or the Award Recipient’s material acts of dishonesty; (ii) the Award
Recipient’s commission or conviction of any felony or of any misdemeanor involving moral
turpitude, or entry of a plea of guilty or nolo contendere to any felony or misdemeanor
involving moral turpitude; (iii) the Award Recipient’s engagement, without a reasonable
belief that his action was in the best interests of the Company, in any activity that could
harm the business or reputation of the Company in a material manner; (iv) the Award
Recipient’s willful failure to adhere to the Company’s material corporate codes, policies or
procedures that have been communicated to him; (v) the Award Recipient’s material breach of
any provision of the Managing Director Agreement entered into by the Award Recipient and the
Company to the extent applicable or (vi) the Award Recipient’s violation of any statutory or
common law duty or obligation to the Company, including, without limitation, the duty of
loyalty; provided, however, that in the case of subsections (iii), (iv), (v) and (vi), the
Company shall provide the Award Recipient with the opportunity to cure any Cause event
during the 15-day period after his receipt of written notice describing the Cause event;
provided, however, that a Cause event shall be considered to be cured only if all adverse
consequences of the Cause event have been fully remedied.
(d) Voluntary Termination for Reasons Other Than Disability or Retirement Prior to
Settlement. Upon the Award Recipient’s voluntary termination of employment for reasons other
than Disability or Retirement prior to the Settlement Date, any portion of the Cash Award
previously earned as well as the right to earn any portion of the Cash Award shall be
automatically forfeited.
(e) Non-Competition and Non-Solicitation. If the Award Recipient should violate the
Non-Competition or Non-Solicitation provisions of Section 2(b) hereof within a period of two years
following the Award Recipient’s termination of employment for any reason, any amounts remaining
payable to the Award Recipient under the Award Notice and this Agreement shall be forfeited. In
addition, any amounts already paid hereunder to the Award Recipient shall be repaid to and subject
to recovery by the Company.
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(a) In General. The Company shall withhold from any payment under Section 4 the
amount of any federal, state, local or foreign taxes required by law to be withheld with respect
to the settlement of the Cash Award.
(a) Plan Provisions. The provisions of Section 7.8(a)(i) and (ii) of the Plan shall
not apply to this Award.
(b) General.
(i) In the event of a Change in Control, any Cash Award that has been previously earned, but
not settled, shall be assumed by the acquiring or successor Person and settled in accordance with
Section 4 and Section 5. Upon a Change in Control, the Performance Measures shall be deemed fully
satisfied and the successor or acquiring company shall assume and settle in accordance with Section
4 and Section 5, the portion of the amount of the Cash Retention Award that could be earned at the
next scheduled date (December 31, 2007 or 2008, as the case may be) but not more than 50% of the
Cash Retention Award.
(ii) Notwithstanding the foregoing or any other provision of this Agreement or the Plan, in
the event of a Change in Control constituting a sale or transfer of all or substantially all of the
assets of the Company on a consolidated basis in any transaction or series of related transactions
to two or more unaffiliated Persons wherein the Company continues in existence after such Change in
Control and actively continues the conduct of its ongoing business, the Performance Measures shall
not be deemed fully satisfied, the Cash Retention Award shall remain outstanding on its original
terms and the Company shall remain responsible for the settlement of any vested portion of the Cash
Retention Award in accordance with the existing terms and conditions of the Cash Retention Award.
If the Cash Retention Award shall remain outstanding and remain the responsibility of the Company
after the occurrence of any such Change in Control and, as a result of such Change in Control, the
Company shall cease to own, immediately following such Change in Control, total assets equal to at
least 50% of the total assets of the Company immediately prior to the transaction that resulted in
such Change in Control, the Performance Measures shall be deemed fully satisfied and shall be
settled otherwise in accordance with the provisions of Section 7(b)(i).
8. No Employment Rights. The Award Recipient acknowledges that the Award Recipient’s
employment is “at will” and is for no specified term. Nothing in the Award Notice or this Agreement
shall confer upon the Award Recipient any right to continue in the employment of the Company or
interfere in any way with any right of the Company to terminate the Award Recipient’s employment at
any time.
9. Nontransferability of Cash Awards. Neither the Award Notice, this Agreement nor any of the
Cash Awards subject to this Agreement shall be subject in any manner to anticipation, alienation,
sale, exchange, transfer, assignment, pledge, encumbrance or garnishment by creditors of the Award
Recipient or the Award Recipient’s beneficiary, except transfer by will or by the laws of descent
and distribution. All rights with respect to the
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Agreement shall be exercisable during the Award Recipient’s lifetime only by the Award Recipient
or the Award Recipient’s guardian or legal representative.
10. Amendment. The Committee may amend the Award Notice or this Agreement at any time;
provided, however, that no such amendment may adversely affect the Award Recipient’s rights under
the Award Notice or this Agreement without the consent of the Award Recipient, except to the
extent such amendment is reasonably determined by the Committee, in its sole discretion, to be
necessary to comply with applicable law or to prevent a detrimental accounting impact. No
amendment or addition to the Award Notice or this Agreement shall be effective unless in writing.
11. Waivers; Exceptions. Any provision or requirement of the Award Notice or this Agreement
may be waived and any exception to the terms of this Agreement may be granted, in each case,
generally or specifically, in whole or in part, and subject to any conditions, by the Committee or
the Chief Executive Officer of the Company.
12. Administration
of the Award Notice and this Agreement. All questions of interpretation
concerning the Award Notice and this Agreement shall be determined by the Committee. All
determinations by the Committee shall be final and binding upon all persons having an interest in
the award.
13. Binding Effect. This Agreement and the Award Notice shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on transfer set forth
herein, be binding upon the Award Recipient and the Award Recipient’s heirs, executors,
administrators, guardians, legal representatives, successors and assigns.
14. Integrated Documents. The Award Notice, this Agreement and the Plan constitute the entire
understanding and agreement of the Award Recipient and the Company with respect to the subject
matter contained herein or therein and supersedes any prior agreements, understandings,
restrictions, representations or warranties among the Award Recipient and the Company with respect
to such subject matter other than those as set forth or provided for herein or therein. To the
extent contemplated herein or therein, the provisions of the Award Notice and the Agreement shall
survive any settlement of the award and shall remain in full force and effect.
15. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the state of Delaware, other than the conflict of laws principles thereof.
16. Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement. Except when otherwise
indicated by the context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.
17. Section 409A Compliance. The provisions of this Agreement may be modified, with the
approval of the Committee, to the extent necessary to comply with the requirements of section 409A
of the Code and the final regulations issued thereunder, so as to avoid adverse tax consequences to
the Award Recipient.
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EXHIBIT A
Competitive Businesses
( Includes Parent Companies, Subsidiaries, and Successor Entities )
( Includes Parent Companies, Subsidiaries, and Successor Entities )
| • | Accenture | |
| • | Answerthink | |
| • | Anteon | |
| • | Bain | |
| • | Xxxx Xxxxx | |
| • | Cambridge Technology Partners (CTP) | |
| • | Cap Gemini | |
| • | Computer Sciences Corp (CSC) | |
| • | Covansys | |
| • | Deloitte Consulting | |
| • | EDS | |
| • | Ernst & Young | |
| • | Fujitsu | |
| • | Hewlett-Packard | |
| • | IBM | |
| • | InfoSys | |
| • | KPMG LLP | |
| • | Lucent Technologies | |
| • | Maximus | |
| • | McKinsey | |
| • | Oracle | |
| • | Pricewaterhouse Coopers | |
| • | SAP | |
| • | Xxxxxx | |
| • | Tata | |
| • | Unisys | |
| • | US Web | |
| • | Wipro |
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