THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. Performance Award Grant Agreement (Long-Term Incentive Compensation Program under the 2005 Stock Incentive Plan)
Exhibit 10.2
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
Performance Award Grant Agreement
(Long-Term Incentive Compensation Program under the 0000 Xxxxx Xxxxxxxxx Xxxx)
(Long-Term Incentive Compensation Program under the 0000 Xxxxx Xxxxxxxxx Xxxx)
Xxxxxx Xxxxxx Steel Corporation, a Delaware Corporation, herein called the Corporation, grants to
the undersigned employee of the employing company identified below (the “Grantee”) a Performance
Award representing the right to receive a specified number of shares of the common stock of the
Corporation (“Shares”) set forth below, which right, if payable, shall be paid in Shares:
Name of Grantee:
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PARTICIPANT NAME | |
Name of Employing Company |
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on Date Hereof:
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(the company recognized by the Corporation as employing the Grantee on the date hereof) | |
Target Number of Shares |
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Subject to Award:
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# SHARES | |
Maximum Number of Shares |
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Subject to Award:
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(two times the Target Number of Shares Subject to Award) | |
Performance Period
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The approximately three-year period identified by the Compensation Committee in writing at the time of Grant | |
Performance Goals
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(see Exhibit A, attached) | |
Date of This Award:
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GRANT DATE |
By my acceptance, I agree that the above-listed Performance Award is granted under and governed by
the terms and conditions of the Corporation’s 2005 Stock Incentive Plan (the “Plan”), the
Corporation’s Administrative Regulations for the Long-Term Incentive Compensation Program (the
“Administrative Regulations”), and the Grant Terms and Conditions contained herein (the
“Agreement”) including the special provisions for my country of residence, if any, attached hereto
as Exhibit B, as well as such amendments to the Plan and/or the Administrative Regulations as the
Compensation & Organization Committee, or its successor committee (the “Committee”), may adopt from
time to time.
United States Steel Corporation | Accepted as of the above date: ACCEPTANCE DATE | |||||||||
By
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By | PARTICIPANT ES | ||||||||
Terms and Conditions
1. Grant of Performance Award: The Performance Period for purposes of determining whether
the Performance Goal has been met shall be the approximately three-year period determined in
accordance with the Administrative Regulations by the Compensation Committee in writing at the time
of Grant. The Performance Goal for purposes of determining whether, and the extent to which, the
Performance Award will vest is set forth in Exhibit A to this Agreement. The Peer Group for
purposes of determining whether the Performance Goal has been achieved is the Peer Group identified
by the Compensation Committee in writing at the time of Grant. The Peer Group is subject to
adjustment as described in the Administrative Regulations and as the Committee, in its discretion,
may additionally set forth at the commencement of the Performance Period in accordance with Section
162(m) of the U.S. Internal Revenue Code. Exhibit A is incorporated by reference herein. Subject
to the Administrative Regulations and the provisions of this Agreement, the Performance Award shall
become payable, if vested, following the Committee’s determination and certification after the end
of the Performance Period, as to whether and the extent to which the Performance Goal has been
achieved; provided that the Committee retains negative discretion to reduce any and all Performance
Awards that would otherwise be payable as a result of performance measured against the Performance
Goals excepting Performance Awards paid by reason of a Change of Control. The Committee may not
increase the amount payable as a result of performance measured against the Performance Goals.
2. Payment of Award: If the Performance Award is payable, the Corporation shall cause a
stock certificate to be issued in the Grantee’s name, for no cash consideration, for the number of
shares of common stock of the Corporation determined by the Committee to be payable pursuant to
paragraph 1 hereof. Payment shall be made following the end of the Performance Period, and in no
event more than two and one-half months following the end of the calendar year in which the
Performance Period ends. In the event that any payment to a U.S. tax-payer with respect to a
Performance Award is considered to be based upon separation from service, and not compensation the
Grantee could receive without separating from service, then such amounts may not be paid until the
first business day of the seventh month following the date of the Grantee’s termination if the
Grantee is a “specified employee” under Section 409A of the Code upon his separation from service.
3. Transferability: The Grantee shall not sell, transfer, assign, pledge or otherwise
encumber or dispose of any portion of the Performance Award and the right to receive Shares, and
any attempt to sell, transfer, assign, pledge or encumber any portion of the Shares prior to the
payment, if at all, of a stock certificate in the name of the Grantee shall have no effect,
regardless of whether voluntary, involuntary, by operation of law or otherwise.
4. Change of Control: Notwithstanding any terms or conditions of the Plan or anything to
the contrary stated herein, and in lieu of application of Section 9 of the Plan, in the case of a
Change of Control (as defined in Section 4(F)(1) of the Administrative Regulations) of the
Corporation, (i) the Performance Period shall automatically end, (ii) the actual performance for
the abbreviated Performance Period shall be measured against the established Performance Goals,
without regard to the Committee’s negative discretion, the performance criteria shall be deemed
satisfied only to the extent the actual performance was achieved (the “Achieved Performance
Award”), and the balance of the Performance Award, if any, shall be forfeited, and (iii) the
Achieved Performance Award shall remain subject to forfeiture until the third anniversary of the
Grant of this Performance Award if the Grantee’s employment is terminated after the Change of
Control but before the third anniversary of the date of Grant; provided, however, notwithstanding
the first paragraph of Section 5, (i) if the Grantee’s employment is terminated, other than for
Cause or a voluntary termination in the absence of Good Reason, within 24 months following a Change
of Control, then the Achieved Performance Award shall not be forfeited upon such termination;
rather, the Achieved Performance Award shall vest immediately upon the termination, (ii) if the
Grantee’s employment is terminated by reason of death or Disability, then the Achieved Performance
Award shall not be forfeited upon such death or Disability; rather, the Achieved Performance Award
shall vest immediately upon the Grantee’s death during employment or termination of employment by
reason of Disability; and (iii) if the Grantee’s employment is terminated by reason of Retirement
or Termination with Consent, then a prorated portion of the Achieved Performance Award will vest,
based upon the number of complete months worked during the original Performance Period in relation
to the number of whole months in the original Performance Period and the remainder shall be
forfeited.
5. Termination of Employment: Unless otherwise determined by the Committee, (i) the
Performance Award is forfeited if the Grantee’s employment is terminated with the employing
company identified above or the Corporation, its Subsidiaries or affiliates (each an “Employing
Company”) during the Performance Period due to a Termination without Consent or Termination for
Cause, and (ii) a prorated value of the Performance Award will vest based upon (x) the number of
complete months worked by the Grantee during the Performance Period, in the event of a Grantee’s
termination of employment during the Performance Period by reason of Retirement or Termination
with Consent, or (y) the schedule contained within the Administrative Regulations, in the event of
a Grantee’s termination of employment during the Performance Period by reason of Death or
Disability, in any case to be calculated and delivered following the end of the relevant
Performance Period in accordance with paragraph 2 hereof, provided that the relevant Performance
Goal for the Performance Period is achieved and subject to the Committee’s negative discretion.
The remaining value of the Performance Award is forfeited immediately upon the Grantee’s
termination of employment without consideration or further action being required of the
Corporation or the Employing Company. Any and all forfeitures shall be evidenced by written
notice to the Grantee.
Notwithstanding the foregoing, if the Grantee’s employment is terminated following a Potential
Change of Control (as defined in Section 4 (F)(2) of the Administrative Regulations) other than for
Cause or a voluntary termination in the absence of Good Reason and, subsequently, a 409A Change of
Control (as defined in Section 6(E)(i) of the Administrative Regulations) occurs within 24 months
following such termination, then the Performance Award shall vest in accordance with paragraph 4
hereof, but without regard to the Grantee’s continued employment.
6. Vesting: Subject to Sections 4 and 5, the Grantee must continue as an active employee
of an Employing Company during the Performance Period and through the date on which the Committee
certifies whether the Performance Goal relating to the Performance Period has been achieved,
subject to the Employing Company’s right to terminate the Grantee’s employment at any time,
performing such duties consistent with his capabilities.
Except as provided in Section 5 of this Agreement, notwithstanding any other terms or conditions of
the Plan, the Administrative Regulations or this Agreement to the contrary, in the event of the
Grantee’s termination of employment (whether or not in breach of local labor laws), the Grantee’s
rights under this Agreement will terminate effective as of the date that the Grantee is no longer
actively employed by an Employing Company and will not be extended by any notice period mandated
under local law (e.g., active employment would not include a period of “garden leave” or similar
period pursuant to local law); the Committee shall have the exclusive discretion to determine when
the Grantee is no longer actively employed for purposes of the Performance Award.
7. Adjustments: The Target and Maximum number of Shares are subject to adjustment as
provided in Section 8 of the Plan. The Grantee shall be notified of such adjustment and such
adjustment shall be binding upon the Corporation and the Grantee.
8. Interpretation and Amendments: This Grant and the issuance, vesting and delivery of
Shares are subject to, and shall be administered in accordance with, the provisions of the Plan and
the Administrative Regulations, as the same may be amended by the Committee from time to time,
provided that no amendment may,
without the consent of the Grantee, affect the rights of the Grantee under this Grant in a
materially adverse manner. For purposes of the foregoing sentence, an amendment that affects the
tax treatment of the Performance Award shall not be considered as affecting the Grantee’s rights in
a materially adverse manner. All capitalized terms not otherwise defined herein shall have the
meaning assigned to such terms in the Plan or the Administrative Regulations. In the event of a
conflict between the Plan and the Administrative Regulations, unless this Grant specifies
otherwise, the Plan shall control.
PERFORMANCE AWARD GRANT FORM – April 2009
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9. Compliance with Laws: The obligations of the Corporation and the rights of the Grantee
are subject to all applicable laws, rules and regulations including, without limitation, the U.S.
Securities Exchange Act of 1934, as amended; the U.S. Securities Act of 1933, as amended; the U.S.
Internal Revenue Code of 1986, as amended; and any other applicable laws. No Shares will be issued
or delivered to the Grantee under the Plan unless and until there has been compliance with such
applicable laws.
10. Acceptance of Grant: The Grant shall not be payable unless it is accepted by the
Grantee and notice of such acceptance is received by the Stock Plan Officer.
11. Withholding Taxes: Prior to the relevant taxable event, the Grantee shall pay or make
adequate arrangements satisfactory to the Corporation and/or the Employing Company to satisfy all
withholding obligations of the Corporation and/or the Employing Company. In this regard, the
Grantee shall pay any Tax-Related Items directly to the Corporation or the Employing Company in
cash upon request. In addition, the Grantee authorizes the Corporation and/or the Employing
Company, or their respective agents, at their discretion, to satisfy the obligations with regard
to all applicable Tax-Related Items by one or a combination of the following methods: (1)
withholding from Grantee’s wages or other cash compensation paid to Grantee by the Corporation
and/or the Employing Company; (2) withholding from proceeds of the sale of Shares issued upon
payment of the Performance Award either through a voluntary sale or through a mandatory sale
arranged by the Corporation (on the Grantee’s behalf pursuant to this authorization) through such
means as the Corporation may determine in its sole discretion (whether through a broker or
otherwise); or (3) withholding in Shares to be issued upon payment of the Performance Award.
To avoid negative accounting treatment, the Corporation may withhold or account for Tax-Related
Items by considering applicable minimum statutory withholding amounts or other applicable
withholding rates. If the Tax-Related Items are satisfied by withholding in Shares issuable upon
vesting of the Performance Award, for tax purposes, the Grantee is deemed to have been issued the
full number of Shares subject to the Performance Award, notwithstanding that a number of the Shares
are held back solely for the purpose of paying the Tax-Related Items. Finally, the Grantee shall
pay to the Corporation or the Employing Company any amount of Tax-Related Items due as a result of
any aspect of the Grantee’s participation in the Plan. The Grantee understands that no Shares or
proceeds from the sale of Shares shall be delivered to Grantee, notwithstanding the vesting of the
Performance Award, unless and until the Grantee shall have satisfied any obligation for Tax-Related
Items with respect thereto.
12. Nature of the Grant: Nothing herein shall be construed as giving Grantee any right to
be retained in the employ of an Employing Company or affect any right that the Employing Company
may have to terminate the employment of such Grantee. Further, by accepting this Performance
Award, the Grantee acknowledges that:
a) | the grant of the Performance Award is voluntary and occasional and does not create any contractual or other right to receive future Performance Awards, or benefits in lieu of Performance Awards, even if Performance Awards have been granted repeatedly in the past; | ||
b) | all decisions with respect to future Performance Award grants, if any, will be at the sole discretion of the Committee; | ||
c) | the Grantee is voluntarily participating in the Plan; | ||
d) | the Performance Award and the Shares subject to the Performance Award are extraordinary items which do not constitute compensation of any kind for services of any kind rendered to the Corporation or to the Employing Company, and which are outside the scope of the Grantee’s employment contract, if any; | ||
e) | the Performance Award and the Shares subject to the Performance Award are not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, dismissal, redundancy, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Corporation or the Employing Company or any Subsidiary or affiliate of the Corporation; | ||
f) | the Performance Award and the Shares subject to the Performance Award are not intended to replace any pension rights or compensation; | ||
g) | the grant of the Performance Award will not be interpreted to form an employment contract or relationship with the Corporation, the Employing Company or any Subsidiary or affiliate of the Corporation; | ||
h) | the future value of the Shares underlying the Performance Award is unknown and cannot be predicted with certainty; | ||
i) | in consideration of the grant of the Performance Award, no claim or entitlement to compensation or damages arises from forfeiture of the Performance Award resulting from termination of the Grantee’s employment by the Corporation or the Employing Company (for any reason whether or not in breach of applicable labor laws) and the Grantee irrevocably releases the Corporation and the Employing Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen then, by accepting this Performance Award, the Grantee shall be deemed irrevocably to have waived his or her entitlement to pursue such a claim; | ||
j) | it is the Grantee’s sole responsibility to investigate and comply with any applicable exchange control laws in connection with the issuance and delivery of Shares pursuant to the vesting of the Performance Award; | ||
k) | the Corporation and the Employing Company are not providing any tax, legal or financial advice, nor are the Corporation or the Employing Company making any recommendations regarding the Grantee’s participation in the Plan or the Grantee’s acquisition or sale of the Shares underlying the Performance Award; and | ||
l) | the Grantee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan. |
13. Data Privacy: The Grantee hereby explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of his or her personal data as
described in this document by and among, as applicable, any Employing Company and the Corporation
for the exclusive purpose of implementing, administering and managing the Grantee’s participation
in the Plan.
The Grantee understands that the Employing Company and the Corporation hold certain personal
information about the Grantee, including, but not limited to, Grantee’s name, home address and
telephone number, date of birth, social insurance number or other identification number, salary,
nationality, job title, any Shares or directorships held in the Corporation, details of all
Performance Awards or any other entitlement to Shares awarded, canceled, vested, unvested or
outstanding in Grantee’s favor, as the Employing Company and/or the Corporation deems necessary for
the purpose of implementing, administering and managing the Plan (“Data”). The Grantee
acknowledges and understands that Data may be transferred to any broker as designated by the
Corporation and any third parties assisting in the implementation, administration and management of
the Plan, that these recipients may be located in the Grantee’s country or elsewhere (and outside
the European Economic Area), and that the recipient’s country may have different data privacy laws
and protections than the Grantee’s country. The Grantee understands that he or she may request a
list with the names and addresses of any potential recipients of the Data by contacting the
Grantee’s local human resources representative. The Grantee authorizes the recipients to receive,
possess, use, retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing the Grantee’s participation in the Plan, including any
requisite transfer of such Data as may be required to a broker or other third party with whom the
Grantee may elect to deposit any Shares acquired upon vesting of the Performance Award. The
Grantee understands that Data will be held only as long as is necessary to implement, administer
and manage the Grantee’s participation in the Plan. The Grantee understands that he or she may, at
any time, view Data, request additional information about the storage and processing of Data,
require any necessary amendments to Data or refuse or withdraw the consents herein, in any case
without cost, by contacting in writing his or her local human resources representative. The
Grantee understands, however, that refusing or withdrawing his or her consent may affect his or her
ability to realize benefits from the Performance Award or otherwise participate in the Plan. For
more information on the consequences of his or her refusal to consent or withdrawal of consent, the
Grantee understands that he or she may contact his or her local human resources representative.
14. Electronic Delivery: The Corporation may, in its sole discretion, decide to deliver any
documents related to current or future participation in the Plan by electronic means or request the
Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to
receive such documents by electronic delivery and agrees to participate in the Plan through any
on-line or electronic system established and maintained by the Corporation or another third party
designated by the Corporation.
15. Severability: In the event that any provision in this Agreement is held invalid or
unenforceable, such provision will be severable from, and such invalidity or unenforceability will
not be construed to have any effect on, the remaining provisions of this Agreement.
16. Language: If the Grantee has received this Agreement or any other document related to
the Plan translated into a language other than English and if the meaning of the translated version
is different than the English version, the English version will control.
17. Governing Law: This Agreement shall be construed and enforced in accordance with the
laws of the Commonwealth of Pennsylvania, without regard to the conflicts of laws thereof.
18. Headings: Headings of paragraphs and sections used in this Agreement are for
convenience only and are not part of this Agreement, and must not be used in construing it.
PERFORMANCE AWARD GRANT FORM — April 2009
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[Exhibit A to the Performance Award grant form]
EXHIBIT A
Performance Goals* for Performance Period
Threshold | Target | Maximum | ||||||||
U. S. Steel TSR | 75th | |||||||||
Performance | Performance Relative | < 25th | 25th | 50th | Percentile or | |||||
Goal | to Peer Group | Percentile | Percentile | Percentile | Greater | |||||
Payment Levels | % of Target Shares Vested | 0% | 50% | 100% | 200% |
• | The Performance Goal for this Performance Award grant shall be the Target percentile determined by the Committee comparing United States Steel Corporation’s Total Shareholder Return to the Total Shareholder Returns of the Peer Group companies. The payout shall be calculated in accordance with the Administrative Regulations for the Long-Term Incentive Compensation Program under the 2005 Stock Incentive Plan (the “Administrative Regulations”). |
Notes:
• | Amounts for performance between the 25th and 50th and between the 50th and 75th percentiles will be interpolated. | ||
• | Total Shareholder Return (TSR) is calculated in accordance with the Administrative Regulations. | ||
• | Peer Group – As determined by the Compensation Committee at the time of grant. |
PERFORMANCE AWARD GRANT FORM — April 2009
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EXHIBIT B
Additional Terms and Conditions of the
United States Steel Corporation 2005 Stock Incentive Plan
Performance Award Grant Agreement
United States Steel Corporation 2005 Stock Incentive Plan
Performance Award Grant Agreement
TERMS AND CONDITIONS
This Exhibit B includes additional terms and conditions that govern the Performance Award granted
to the Grantee under the Plan if he or she resides in one of the countries listed below. Certain
capitalized terms used but not defined in this Exhibit B have the meanings set forth in the Plan,
the Administrative Regulations and/or the Agreement.
NOTIFICATIONS
This Exhibit B also includes information regarding exchange controls and certain other issues of
which the Grantee should be aware with respect to participation in the Plan. The information is
based on the laws in effect in the applicable countries as of April 2009. Such laws are often
complex and change frequently. As a result, the Corporation strongly recommends that the Grantee
not rely on the information in this Exhibit B as the only source of information relating to the
consequences of his or her participation in the Plan because the information may be out of date at
the time that the Grantee vests in the Performance Award or sells Shares acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the
Grantee’s particular situation, and the Corporation is not in a position to assure the Grantee of a
particular result. Accordingly, the Grantee is advised to seek appropriate professional advice as
to how the relevant laws in his or her country may apply to the Grantee’s situation.
Finally, if the Grantee is a citizen or resident of a country other than the one in which he or she
is currently working, the information contained herein may not be applicable.
CANADA
TERMS AND CONDITIONS
Performance Award Payable Only in Shares. Notwithstanding any discretion in the Plan or anything to
the contrary in the Agreement, the grant of the Performance Award does not provide any right for
the Grantee to receive a cash payment in settlement of the Performance Award and the Performance
Award is payable in Shares only.
Securities Law Commitment on Sale of Shares. As a condition of the grant of the Performance Award
and the issuance of any Shares upon vesting of the Performance Award, the Grantee undertakes to
only sell, trade or otherwise dispose of any Shares issued to the Grantee under the Plan in
accordance with applicable Canadian securities laws. Under current laws, this means that the
Grantee will need to sell any Shares issued under the Plan using the services of a broker or dealer
that is registered under Canadian provincial or territorial securities legislation. The Grantee
will not be permitted to sell, trade or otherwise dispose of his or her Shares through the
Company’s designated U.S. plan broker, Fidelity Investments, unless such sale, trade or disposal
can be executed in accordance with applicable securities laws. As legal requirements may be
subject to change, Grantees are encouraged to seek specific advice about their individual situation
before taking any action with respect to Shares issued to them under the Plan.
By accepting this Performance Award, the Grantee expressly agrees that he or she will consult with
a personal legal advisor to address any questions that may arise regarding compliance with this
requirement. The Grantee understands and agrees that he or she will be liable for any failure to
comply with the foregoing provision.
SERBIA
NOTIFICATIONS
Exchange Control Information. Pursuant to the Law on Foreign Exchange Transactions (effective July
27, 2006), Serbian residents may freely acquire Shares under the Plan, however, the National Bank
of Serbia requires reporting of the acquisition of such Shares, the value of the Shares at payment
and, on a quarterly basis, any changes in the value of the underlying Shares. The Grantee is
advised to consult with a personal legal advisor to determine his or her reporting obligations upon
the acquisition of Shares under the Plan. The Corporation reserves the right to require the
Grantee to report details of the sale of his or her Shares to the Corporation or to follow such
other procedures as may be established by the Corporation to comply with applicable exchange
control regulations.
SLOVAK REPUBLIC
There are no country-specific provisions.
PERFORMANCE AWARD GRANT FORM — April 2009
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