Exhibit 10.6
XXXXXXX RIVER LABORATORIES INTERNATIONAL, INC.
2000 INCENTIVE PLAN
MID-TERM PERFORMANCE UNITS AGREEMENT
THIS MID-TERM PERFORMANCE UNITS AGREEMENT (the "Agreement") is made and
entered into as of April __, 2004, between Xxxxxxx River Laboratories
International, Inc., a Delaware corporation (the "Company") and _______________
(the "Employee") pursuant to the terms and conditions of the Xxxxxxx River
Laboratories International, Inc. 2000 Incentive Plan, as amended (the "Plan").
Capitalized terms not defined in this Agreement shall have the respective
meanings set forth in the Plan.
THE PARTIES AGREE AS FOLLOWS:
1. AWARD OF PERFORMANCE UNITS. Pursuant to the Plan, the Company hereby
awards to Employee ______ Performance Units, each corresponding to one share of
Company common stock (the "Stock") for purposes of determining the Employee's
award hereunder, subject to the terms and conditions set forth in this Agreement
and the Plan, and to adjustment as provided in Section 2 hereof. A copy of the
Plan has been delivered to the Employee. By signing below, the Employee agrees
to be bound by all the provisions of the Plan as well as this Agreement. Until
settled in accordance with the terms and conditions hereof, each Unit
constitutes an unsecured promise of the Company to pay the amounts contemplated
herein, and Employee as a holder of any Unit has only the rights of a general
unsecured creditor of the Company.
2. PERFORMANCE ADJUSTMENT; SETTLEMENT AND VESTING SCHEDULE.
(a) PERFORMANCE ADJUSTMENT. At the end of the Performance Period
(defined below), the number of Units granted hereunder shall be subject to
adjustment based upon an evaluation by the Compensation Committee of the
Company's Board of Directors (the "Committee") of the Company's performance
against specified 3-year performance objectives by reference to the matrix
attached hereto as EXHIBIT A. Subject to Section 5 hereof, performance shall be
evaluated during the 36-month period commencing January 1, 2004 and ending
December 31, 2006 (the "Performance Period"). The Committee shall determine the
Company's performance by reference to the performance matrix set forth in
EXHIBIT A during the Performance Period, and shall adjust the number of Units
awarded to Employee in accordance with such matrix. To the extent that any
adjustment would result in the award of a fractional share, the Employee shall
receive cash in lieu thereof in an amount equal to (i) the fractional percentage
of a share that would otherwise be awarded MULTIPLIED BY (ii) the then-current
Fair Market Value of one share of Stock.
(b) SETTLEMENT OF AWARDS. No later than sixty (60) days after the
conclusion of the Performance Period, the Committee shall determine the
appropriate adjustment to Employee's performance award. Unless otherwise
provided herein or in the Plan, following a determination by Committee of the
number of Units due an Employee at the conclusion of the Performance Period,
those Units shall be cancelled upon the delivery to Employee by the Company of
(i) 60% of the Units' aggregate value in restricted stock (subject to the terms
of the Company's standard form of restricted stock agreement and the vesting
conditions set forth in Section 2(c) below), and (ii) the remaining 40% of such
value in cash, based on the then-current Fair Market Value of the Stock.
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(c) VESTING OF RESTRICTED STOCK. Subject to Sections 4 and 5 hereof,
the terms of the Company's standard form of restricted stock agreement, and the
authority of the Committee in its discretion to provide for accelerated vesting,
50% of the shares of restricted stock delivered in settlement of an Employee's
performance Unit award (as adjusted) shall vest on each of the first and second
anniversaries of the last day of the Performance Period.
3. RESTRICTIONS. Except to the extent otherwise determined by the
Committee, no Units shall be assignable or otherwise transferable by Employee
other than by will or by the laws of descent and distribution. Unless otherwise
provided by the Committee, during the life of Employee any elections with
respect to a Unit may be made only by Employee or Employee's guardian or legal
representative. All restricted shares delivered in settlement of Unit awards
hereunder shall remain restricted and non-transferable until they vest in
accordance with the terms of this Agreement.
4. TERMINATION OF EMPLOYMENT.
(a) Except to the extent provided in Section 5 hereof, or in any
employment agreement or severance agreement between Employee and the Company
which, in each case, expressly references this Agreement and supercedes it, the
provisions of this Section 4 shall apply to the Units (or any restricted stock
related thereto) upon a termination of Employee's employment with the Company
for any reason.
(b) In the event of Employee's Termination for any reason other
than as provided in Section 5 below, all unvested Units held by the Employee
shall be immediately cancelled.
5. COVERED TRANSACTIONS. In the event of a Covered Transaction (as
defined below), all Units and shares of restricted stock shall vest, and shall
be settled in accordance with the terms of the Plan, subject to the authority of
the Administrator to provide for substitute or replacement Awards from, or the
assumption of Awards by, the acquiring or surviving entity or its affiliates on
such terms as the Administrator determines.
6. DEFINITIONS. For purposes of this Agreement, the following
definitions shall have the meanings attributable to them:
(a) "Covered Transaction" means any of (i) a consolidation or
merger in which the Company is not the surviving corporation or which results in
any individual, entity or group (within the meaning of section 13(d) of the
Securities Exchange Act of 1934) acquiring the beneficial ownership (within the
meaning of rule 13d-3 promulgated under the Exchange Act) directly or indirectly
of more than 50% of either the then outstanding shares of common stock of the
Company or the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors, (ii) a
sale or transfer of all or substantially all the Company's assets, or (iii) a
dissolution or liquidation of the Company.
(b) "Fair Market Value" means the closing sale price per share of
the Company's common stock reported on a consolidated basis for securities
listed on the principal stock exchange or market on which the common stock is
traded as of January 31st in the relevant year, or, if there is no sale on that
date, then on the last previous day on which a sale was reported.
7. WITHHOLDING TAX. Employee may be subject to withholding taxes as a
result of delivery of shares of common stock or payment of cash upon payment or
settlement of Units, or upon the vesting of any restricted shares. Unless the
Committee permits otherwise, Employee shall pay to the Company in cash, promptly
when the amount of such obligations become determinable, all
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applicable federal, state, local and foreign withholding taxes that the Company
in its discretion determines result from such payments. Unless the Committee
otherwise determines, and subject to such rules and procedures as the Committee
may establish, Employee may make an election to have settlement of Units
withheld by the Company upon settlement thereof or to tender shares of Stock to
the Company to pay the amount of tax that the Company in its discretion
determines to be required so to be withheld by the Company, subject to
satisfying any applicable requirements for compliance with Section 16(b) of the
Securities and Exchange Act of 1934, as amended. Any shares of Stock or other
securities so withheld or tendered will be valued as of the date they are
withheld or tendered, provided that Stock shall be valued at Fair Market Value
on such date. Unless otherwise permitted by the Committee, the value of shares
withheld or tendered may not exceed the required federal, state, local and
foreign withholding tax obligations as computed by the Company.
8. GOVERNING LAW. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, without regard to conflict of law principles.
9. CONFLICTS. In the event of any conflict of interpretation between
the terms and conditions of this Agreement and the terms and conditions
contained in the Plan, the Plan shall control. In the event of any conflict of
interpretation between the terms and conditions of this Agreement and the terms
and conditions of any Change in Control Agreement, the terms of the Change in
Control Agreement shall prevail.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXXX RIVER LABORATORIES INTERNATIONAL, INC.
By: _________________________________
Employee hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement and the Plan.
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Signature
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Print Name
Enclosures: Plan
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