AWARD AGREEMENT WALGREEN CO. PERFORMANCE SHARE PROGRAM Contingent Award for the Fiscal Year Company Performance Period = Fiscal Years _________ CONFIDENTIAL
EXHIBIT 10.14
WALGREEN CO. PERFORMANCE
SHARE PROGRAM
Contingent Award for
the Fiscal
Year
Company Performance Period =
Fiscal Years _________
CONFIDENTIAL
Walgreen
Co. has adopted the Long-Term Performance Incentive Plan (the “Plan”), the
purpose of which is to afford Walgreen Co. and its subsidiaries (collectively,
the “Company”) additional means of securing and retaining key employees of
outstanding ability. To further this purpose, Walgreen Co. maintains
the Performance Share Program (the “Program”). Under the Program for
the performance period covering the ____________ fiscal years (the “Performance
Period”), Walgreen Co. is awarding «Initials» «LastName» a contingent
Performance Share grant of «NumberofSharesatTarget» shares. This
“target” number of shares is computed by multiplying your annual base salary by
the target award percentage for your salary grade level, and then dividing that
by $________, which is the Walgreen Co. stock price as of September 1,
________. This award is subject to all the terms and conditions of
the Plan and the Program and to the following conditions:
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1.
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The
amount of performance shares earned at the end of the Performance Period
will vary depending on the degree to which pre-tax FIFO earnings
performance goals are met. Pre-tax FIFO earnings means the
total fully-diluted FIFO earnings for the three fiscal years included in
the Performance Period, before costs of the Program. The goal for target
performance is set at pre-tax FIFO earnings of
$__________________. A threshold goal is set at pre-tax FIFO
earnings of $________________. The goal at which a maximum
award will be earned is set at pre-tax FIFO earnings of
$_______________.
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At the
target pre-tax
FIFO earnings level, 100% of the performance shares will be earned. A
threshold pre-tax FIFO earnings level will earn 50% of the performance
shares. Below this level of performance, no performance shares are
earned. Achievement of a maximum pre-tax FIFO earnings level or more
will earn 120% of the performance shares. Performance between minimum
and target, and between target and maximum, will earn performance shares on a
pro-rated basis between 50% and 100%, and 100% and 120%,
respectively.
The
amount earned will be calculated according to the following:
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Percent
of
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Performance
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=
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Contingent
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X
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Contingent
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Shares
Awarded
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Performance
Shares
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Performance
Shares Earned
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2.
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At
the end of fiscal year ___________, actual performance for the entire
Performance Period shall be reviewed, and the amount of the earned award
shall be determined based on this performance and communicated to
you.
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3.
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If
you terminate employment with the Company and all subsidiaries during the
Performance Period due to Retirement, Disability or death (in each case as
defined in the Plan), then the award earned by you at the end of the
Performance Period will be prorated to reflect the portion of the
Performance Period during which you remained employed by the
Company. Such prorated portion shall equal the number of
performance shares that would otherwise be earned, multiplied by a
fraction equal to the number of full months of the Performance Period
completed as of your retirement date, divided by 36. Any other
termination of employment during the Performance Period shall result in no
earned award.
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4.
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Each
earned performance share shall be converted to one share of Walgreen Co.
common stock (“Common Stock”). Subject to the requirements of
Paragraph 5 below, the Company shall transfer to you one share of Common
Stock for each earned performance share. At that time, the
Company may withhold shares otherwise transferable to you to the extent
necessary to satisfy withholding taxes in accordance with Paragraph 5
below and Section 13.1 of the Plan. You shall have no rights as
a stockholder with respect to the Common Stock awarded hereunder prior to
the date of issuance to you of a certificate or certificates for such
shares. Certificates for the shares of Common Stock shall be
issued and delivered to you, your legal representative, or a brokerage
account for your benefit, as the case may be, or the shares may be held in
book entry form. Performance shares payable under this
Agreement are intended to be exempt from Internal Revenue Code Section
409A under the exemption for short-term deferrals. Accordingly,
performance shares will be settled in Common Stock no later than the
15th
day of the third month following the end of the fiscal year of the Company
in which the performance shares are
realized.
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5.
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Whenever
an earned performance share award is realized, the Company or its agent
shall notify you of the related amount of tax that must be withheld under
applicable tax laws. Regardless of any action the Company takes
with respect to any or all income tax, social security, payroll tax,
payment on account or other tax-related withholding (“Tax”) that you are
required to bear pursuant to all applicable laws, such Tax is your
responsibility. Prior to receipt of any shares of Common Stock
that correspond to earned performance shares, you shall pay or make
adequate arrangements satisfactory to the Company to satisfy all tax
withholding obligations of the Company. In this regard, you
authorize the Company to withhold all applicable Tax from your wages or
other cash compensation paid to you by the
Company. Alternatively or in addition, the Company may withhold
a sufficient number of shares of Common Stock. Finally, you
agree to pay the Company any amount of any Tax that the Company may be
required to withhold as a result of your participation in the Plan that
cannot be satisfied by the means previously described. The
Company may refuse to deliver Common Stock if you fail to comply with your
obligations described in this
Paragraph.
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6.
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Notwithstanding
the remainder of this Award Agreement, if there is a Change in Control of
Walgreen Co. (as defined in the Plan) during the Performance Period, then
your earned award shall be equal your target number of performance shares,
and this award will be settled in cash (subject to required tax
withholdings) in accordance with Section 11.1 of the Plan and distributed
to you within 45 days of the effective date of the Change in
Control.
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7.
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This
Award Agreement and your rights hereunder are subject to all of the terms
and conditions of the Plan, as it may be amended from time to time, as
well as to such rules and regulations as the Compensation Committee of the
Board of Directors may adopt for administration of the Plan. It
is expressly understood that this Committee is authorized to administer,
construe and make all determinations necessary or appropriate for the
administration of the Plan and this Award Agreement, all of which shall be
binding upon you. Any inconsistency between this Award
Agreement and the Plan shall be resolved in favor of the
Plan.
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8.
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This
award is a private offer that may be accepted only by an individual who is
an employee of the Company and who satisfies the eligibility requirements
outlined in the Plan and the Committee’s administrative
procedures. If a Registration Statement under the Securities
Act of 1933, as amended, is not in effect with respect to the shares of
Common Stock to be issued pursuant to this Award Agreement, you hereby
represent that you are acquiring the shares of Common Stock for investment
and with no present intention of selling or transferring them and that you
will not sell or otherwise transfer the shares except in compliance with
all applicable securities laws and requirements of any stock exchange on
which the shares of Common Stock may then be
listed.
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9.
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In
the event of any change in the Common Stock of the Company, the provisions
of Section 10.2 of the Plan shall govern such that the number of
performance shares subject to this Award Agreement shall be equitably
adjusted by the Compensation Committee of the Board of
Directors.
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This
contingent grant was authorized by the Compensation Committee of the Board of
Directors on __________________
By
