Exhibit 10.62
PERFORMANCE UNITS AGREEMENT
PERFORMANCE UNITS AGREEMENT (the "Agreement") made as of the _____ day
of _________, 1999 (the "Grant Date"), between MIM Corporation, a Delaware
corporation (the "Company"), and ____________________ (the "Awardee").
WHEREAS, the Company desires to afford the Awardee an opportunity to
participate in the growth of the Company as hereinafter provided, in accordance
with the provisions of the MIM Corporation 1996 Stock Incentive Plan, as amended
and restated effective December 1, 1998, a copy of which is attached (the
"Plan").
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration the legal sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:
1. GRANT OF PERFORMANCE UNITS. The Company hereby grants to the Awardee
as of the date hereof (the "Grant Date") an aggregate of _____________
Performance Units, the effectiveness of which grant shall be contingent in all
respects upon approval of the Plan by the shareholders of the Company on or
before December 31, 1999. The grant is in all respects limited and conditioned
as hereinafter provided, and is subject to the terms and conditions of the Plan
now in effect and as they may be amended from time to time (which terms and
conditions are and automatically shall be incorporated herein by reference and
made a part hereof and shall control in the event of any conflict with any other
terms of this Performance Units Agreement).
2. VESTING AND FORFEITURE. If the Awardee's Date of Termination does
not occur prior to December 31, 2001, the Performance Units shall vest as of
such date and shall be payable at the accrued value achieved for the year 2001
in accordance with the Performance Objective set forth in Exhibit 1, PROVIDED,
HOWEVER, that the accrued value of the Performance Units shall be zero if the
Company's Net After Tax Earnings are below the threshold amount for 2001. If the
Awardee's Date of Termination is prior to December 31, 2001, the Awardee shall
forfeit the Performance Units, except to the extent provided as follows:
(a) The Performance Units shall vest as of the Awardee's Date
of Termination if such termination occurs by reason of the Awardee's death,
Disability or Termination without Cause or for Good Reason and shall be payable
at the accrued value measured at the end of the fiscal year immediately
following such termination in accordance with Exhibit 1.
(b) The Performance Units shall vest as of the date of a
Change in Control if the Awardee's Employment is terminated within one year
following such Change in Control (provided such termination is a Termination
without Cause or for Good Reason). Such Performance Units shall be immediately
payable at the maximum target value set forth on Exhibit 1.
(c) If the Awardee is terminated at any time for Cause or if
the Awardee resigns at
any time without Good Reason, the Awardee shall forfeit all Performance Units
(whether vested or not).
3. PAYMENT OF PERFORMANCE UNITS. As soon as practicable after the
earliest to occur of (a) the Awardee's Date of Termination and (b) the date of a
Change in Control, the Committee shall certify in writing as to whether or not
the Performance Objectives have been satisfied. If the Committee certifies that
the Performance Objectives have been satisfied, or determines that the
Performance Units otherwise have vested, the Company shall pay to the Awardee
the amount determined under Section 2 in two equal installments, the first of
which shall be payable as soon as practicable following such certification or
determination and the second of which shall be payable within 60 days before or
after the first anniversary of the date of the first such payment.
Notwithstanding anything contained in this Agreement to the contrary, however,
in no event shall an Awardee receive payment in excess of $1,000,000 in respect
of Performance Units for any given year. Any amount earned by an Awardee in
excess of $1,000,000 shall be deferred and paid as soon as possible in any
subsequent year subject to the limitations provided in the penultimate sentence
of this Section.
4. TRANSFERS. Performance Units may not be sold, assigned, transferred,
pledged or otherwise encumbered.
5. DEFINITIONS. For purposes of this Agreement, the terms used in this
Agreement shall be defined as follows and be subject to the following:
(a) DATE OF TERMINATION. The Awardee's "Date of Termination"
shall be the first day occurring on or after the Grant Date on which the
Awardee's employment by the Company and its Subsidiaries and Affiliates is
terminated, regardless of the reason for the termination of Employment; provided
that a termination of Employment shall not be deemed to occur by reason of a
transfer of the Awardee between any of the Company and its Subsidiaries and
Affiliates; and further provided that the Awardee's Employment shall not be
considered terminated while the Awardee is on a leave of absence from the
Company or any Subsidiary or Affiliate approved by the Awardee's employer.
(b) DESIGNATED BENEFICIARY. The term "Designated Beneficiary"
shall mean the beneficiary or beneficiaries designated by the Awardee in a
writing filed with the Committee in such form and at such time as the Committee
shall require.
(c) DISABILITY. The term "Disability" shall have the meaning
provided in Section 22(e)(3) ---------- of the Code.
(d) NET AFTER TAX EARNINGS. The term "Net After Tax Earnings"
with respect to a year shall mean the consolidated net earnings of the Company
and its Subsidiaries after taxes, as reflected in the audited financial
statements of the Company and its Subsidiaries for the year in question.
(e) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. The term
"Termination
without Cause or for Good Reason" shall mean the termination of the Awardee's
Employment by the Company and its Subsidiaries and Affiliates for reasons other
than "Cause" or by the Awardee for "Good Reason," as such quoted terms are
defined in the Employment Agreement (the "Employment Agreement"), dated as of
March 1, 1999 between the Company and the Awardee
(f) PLAN DEFINITIONS. Except where the context clearly implies
or indicates the contrary, a word, term, or phrase used in the Plan shall have
the same meaning where used in this Agreement.
6. WITHHOLDING OF TAXES. Any obligation of the Company to make any
payment with respect to Performance Units shall be subject to applicable
federal, state and local withholding tax requirements. The Company shall have
the right to require recipients or their beneficiaries or legal representatives
to remit to the Company an amount sufficient to satisfy such withholding tax
requirements, or to deduct from all payments to be made hereunder amounts
sufficient to satisfy all such withholding tax requirements.
7. HEIRS AND SUCCESSORS. This Agreement shall be binding upon, and
inure to the benefit of, the Company and its successors and assigns, and upon
any person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business. If any
rights of the Awardee or benefits distributable to the Awardee under this
Agreement have not been distributed at the time of the Awardee's death, such
rights shall be distributed to the Designated Beneficiary, in accordance with
the provisions of this Agreement and the Plan. If a deceased Awardee fails to
designate a beneficiary, or if the Designated Beneficiary does not survive the
Awardee, any benefits distributable to the Awardee shall be distributed to the
legal representative of the estate of the Awardee. If a deceased Awardee
designates a beneficiary but the Designated Beneficiary dies before the complete
distribution of benefits to the Designated Beneficiary under this Agreement,
then any benefits distributable to the Designated Beneficiary shall be
distributed to the legal representative of the estate of the Designated
Beneficiary.
8. GOVERNING LAW. This Agreement shall be construed in accordance with,
and its interpretation shall be governed by applicable federal law, and
otherwise by the laws of the State of Delaware.
9. ADMINISTRATION. The authority to manage and control the operation
and administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has with
respect to the Plan. Any interpretation of this Agreement by the Committee and
any decision made by it with respect to this Agreement is final and binding.
10. ENTIRE AGREEMENT. This Agreement and the Employment Agreement
contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior contracts and other agreements to the
extent of any discrepancies or conflicts between this Agreement and the
Employment Agreement, the terms of the Employment shall govern.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officers thereunto duly authorized, and the Awardee has hereunto
set his hand and seal, all on the day and year first above written.
MIM CORPORATION
By
--------------------------
Name:
Title:
ACCEPTED AND AGREED TO:
------------------------------
Awardee
EXHIBIT 1
Performance Objectives
The performance threshold and goals shall be as follows:
BASE YEAR
THRESHOLD 1998 1999 2000 2001 2002
Net After Tax Earnings $8,000,000 $8,000,000 $14,400,000 $21,600,000 $30,000,000
Performance Unit Value $0.00 $1.00 $4.00 $10.00 $10.00
Below threshold, no unit values are accrued or earned
TARGET 1998 1999 2000 2001 2002
Net After Tax Earnings $8,000,000 $10,000,000 $18,000,000 $27,000,000 $37,500,000
Performance Unit Value $0.00 $2.00 $8.00 $25.00 $25.00
MAXIMUM 1998 1999 2000 2001 2002
Net After Tax Earnings $8,000,000 $12,000,000 $21,600,000 $32,000,000 $45,000,000
Performance Unit Value $0.00 $3.00 $10.00 $40.00 $40.00
