HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED AMENDED AND RESTATED 2002 STOCK OPTION AND INCENTIVE PLAN
Exhibit
10.1
XXXXXX
INTERNATIONAL INDUSTRIES, INCORPORATED
AMENDED
AND RESTATED 2002 STOCK OPTION AND INCENTIVE PLAN
FOR
OFFICERS AND KEY EMPLOYEES
THIS
NONQUALIFIED PERFORMANCE STOCK OPTION AGREEMENT (this "Agreement"), dated as of
___________, is entered into between XXXXXX INTERNATIONAL INDUSTRIES,
INCORPORATED, a Delaware corporation (the "Company"), and ____________________
("Optionee"). Capitalized terms used herein but not defined shall
have the meanings assigned to those terms in the Company's Amended and Restated
2002 Stock Option and Incentive Plan (the "Plan").
W I T N E
S S E T H:
A. Optionee
is an employee of the Company or a Subsidiary of the Company; and
B. The
material terms and conditions set forth in this Agreement have been authorized
by the Compensation and Option Committee of the Board (the
"Committee").
NOW,
THEREFORE, in consideration of these premises and the covenants and agreements
set forth in this Agreement, the Company and Optionee agree as
follows:
1. Grant of
Option. The Company hereby grants to Optionee, effective as of
the Date of Grant (as defined in Section 3), an option (the "Option") to
purchase ___ shares (the "Option Shares") of the Company's common stock, par
value $0.01 per share ("Common Shares"), at the price of $_________ per share
(the "Option Price"). This Agreement constitutes an “Evidence of
Award” under the Plan.
2. Type of
Option. The Option is intended to be a nonqualified stock
option and shall not be treated as an "incentive stock option" within the
meaning of Section 422 of the Code.
3. Date of
Grant. The effective date of the grant of this Option is
___________ (the “Date of Grant”).
4. Date of
Expiration. This Option shall expire on the ______ anniversary
of the Date of Grant (the “Date of Expiration”), unless earlier terminated under
Section 7(a).
5. Vesting of
Option.
(a) Except as
otherwise provided in this Agreement, the number of Option Shares that you will
be entitled to purchase (the “Earned Option Shares”) shall be the number of
shares indicated in Section 1 above, subject to adjustment based upon the
Company’s total stockholder return (the “Company TSR”) compared to the total
stockholder return of the Company’s peers (“Peer TSR”) over the three (3) year
period beginning on the Date of Grant and ending on the third anniversary of the
Date of Grant (the “Performance Period”). The peer group shall be comprised of
specific companies as designated by the Compensation Committee, in its sole
discretion with respect to the Performance Period, subject to adjustment
pursuant to Section 11 (the “Peer Group”). For purposes of calculating the
Company TSR and the Peer TSR, the applicable beginning and ending stock prices
for the Company and each member of the Peer Group shall be determined by
calculating the average of the per share closing prices, adjusted for splits, of
the Company’s Common Stock and the common stock of each member of the Peer Group
as reported by the applicable exchange markets for the 20 trading days ending on
___________ for the beginning prices and the 20 trading days ending on
___________ for the ending prices, each rounded to the fourth decimal point. At
the conclusion of the Performance Period, the Company’s TSR will be compared to
the Peer TSRs, and the Earned Option Shares will be determined as
follows:
(i)
If the Company’s TSR over
the Performance Period is negative, the Option shall be cancelled.
(ii) If
the Company's TSR is below the 50th percentile of the Peer TSRs, the Option
shall be cancelled.
(iii) If
the Company’s TSR ranks at the 50th percentile of the Peer TSRs, the Earned
Option Shares shall be equal to 33% of the Option Shares.
(iv) If
the Company’s TSR ranks at or above the 75th percentile of the Peer TSRs, the
Earned Option Shares shall be equal to 100% of the Option Shares.
(v) If
the Company's TSR ranks above the 50th percentile company in the Peer Group and
below the 75th percentile company in the Peer Group, the number of Option Shares
shall be determined by straight-line interpolation between 33% of the Option
Shares and 100% of the Option Shares based on the Company’s TSR relative to the
TSR of the 50th percentile company in the Peer Group and the 75th percentile
company in the Peer Group.
(b) Notwithstanding
the provisions of Section 5(a) above, the Option shall become immediately
exercisable for the full number of Option Shares upon the occurrence of a Change
in Control (as defined below) on or before the end of the Performance
Period. A "Change in Control" means the occurrence of any of the
following events:
(i) the
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the combined
voting power of the then outstanding securities of the Company entitled to vote
generally in the election of directors (the "Voting Shares"); provided, however, that for purposes
of this Section 3(b)(i), the following acquisitions shall not constitute a
Change in Control: (A) any issuance of Voting Shares directly from the Company
that is approved by the Incumbent Board (as defined in Section 3(b)(ii), below),
(B) any acquisition by the Company or a Subsidiary of Voting Shares, (C) any
acquisition of Voting Shares by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Subsidiary or (D) any acquisition
of Voting Shares by any Person pursuant to a Business Combination that complies
with clauses (A), (B) and (C) of Section 3(b)(iii), below;
(ii) individuals
who, as of the date hereof, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided, however, that any individual
becoming a Director after the date hereof whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least
two-thirds of the Directors then constituting the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without objection to such nomination)
shall be deemed to have been a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest (within the meaning of Rule
14a-12 of the Exchange Act) with respect to the election or removal of Directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;
(iii) consummation
of a reorganization, merger or consolidation, a sale or other disposition of all
or substantially all of the assets of the Company or other transaction (each, a
"Business Combination"), unless, in each case, immediately following the
Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners of Voting Shares immediately prior to
the Business Combination beneficially own, directly or indirectly, more than 50%
of the combined voting power of the then outstanding Voting Shares of the entity
resulting from the Business Combination (including, without limitation, an
entity which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries), (B) no Person (other than the Company, such entity resulting from
the Business Combination, or any employee benefit plan (or related trust)
sponsored or maintained by the Company, any Subsidiary or such entity resulting
from the Business Combination) beneficially owns, directly or indirectly, 25% or
more of the combined voting power of the then outstanding Voting Shares of the
entity resulting from the Business Combination, and (C) at least a majority of
the members of the board of directors of the entity resulting from the Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for the Business
Combination; or
(iv) approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company, except pursuant to a Business Combination that complies with
clauses (A), (B) and (C) of Section 3(b)(iii) hereof.
(c) Notwithstanding
the provisions of Section 5(a) above, if prior to the end of the Performance
Period, (i) Optionee dies while in the employ of the Company or a Subsidiary,
then the Option shall become immediately exercisable for 50% of the number of
Option Shares and will remain exercisable in accordance with Section 7 below;
(ii) Optionee becomes permanently disabled while in the employ of the Company or
a Subsidiary, then the Option shall become exercisable at the end of the
Performance Period for the number of Option Shares Optionee would have been
entitled to exercise if the Optionee had remained an employee of the Company on
the date on which the Performance Period ends and (iii) Optionee retires while
in the employ of the Company or Subsidiary, then the Committee, in its sole
discretion, may determine that all or any portion of the Option shall become
immediately exercisable for the full number of Option Shares.
6. Manner of
Exercise.
(a) To the
extent the Option is exercisable in accordance with Section 5, the Option may be
exercised by Optionee at any time, or from time to time, in whole or in part on
or prior to the Termination Date; provided, however, that
Optionee must exercise the Option in multiples of 50 Option Shares unless fewer
than 50 Option Shares are available for purchase by Optionee under this
Agreement at the time of exercise.
(b) Optionee
shall exercise the Option by delivering a signed written notice to the Company,
which notice shall specify the number of Option Shares to be purchased and be
accompanied by payment in full of the Option Price and any required taxes (as
provided in the Plan) for the number of Option Shares specified for
purchase.
(c) Upon full
payment of the Option Price and any required taxes, and subject to the
applicable terms and conditions of the Plan and the terms and conditions of this
Agreement, the Company will cause certificates for the Option Shares purchased
hereunder to be delivered to Optionee.
7. Termination.
(a) The
Option shall terminate, to the extent not previously cancelled pursuant to
Section 5(a), on the earliest of the following dates (such date, the
“Termination Date”):
(i) the date
that Optionee’s employment with the Company terminates, for any reason other
than death or permanent disability; provided, however, that for
any termination that occurs on or after the end of the Performance Period, the
Committee may, in its sole discretion, allow Optionee up to 90 days from the
date of termination of employment to exercise the portion of the Option that had
vested on or prior to the termination of Optionee’s employment;
(ii) one year
after the death of Optionee, if Optionee dies while an employee of the Company
or a Subsidiary;
(iii) one year
after the later of (x) the date of permanent disability or (y) the end of the
Performance Period, if Optionee becomes permanently disabled while an employee
of the Company or a Subsidiary;
(iv) the date the Option is terminated
by the Committee under the circumstances described in Section 17(g) of the Plan;
or
(v) the Date of
Expiration.
(b) During
the 90 day period referred to in Section 7(a)(i) above and the one year periods
referred to in Sections 7(a)(ii) and 7(a)(iii) above, the Option may be
exercised only to the extent that at the time that Optionee ceases to be an
employee of the Company or a Subsidiary (or, in the case of permanent disability
during the Performance Period, at the end of the Performance Period), it is
exercisable pursuant to Section 5 hereof.
(c) For the
purposes of this Agreement, the continuous employment of Optionee with the
Company or a Subsidiary shall not be deemed to have been interrupted, and
Optionee shall not be deemed to have ceased to be an employee of the Company or
a Subsidiary, by reason of (i) the transfer of Optionee's employment among the
Company and its Subsidiaries, (ii) an approved leave of absence of not more than
90 days, or (iii) the period of any leave of absence required to be granted by
the Company under any law, rule, regulation or contract applicable to Optionee’s
employment with the Company or any Subsidiary.
8. Share
Certificates. All certificates evidencing Option Shares
purchased pursuant hereto (and any certificates for Common Shares issued as
dividends on, in exchange of, or as replacements for, certificates evidencing
Option Shares which, in the opinion of counsel for the Company, are subject to
similar legal requirements) shall have endorsed thereon, before issuance, such
restrictive or other legends as the Company's counsel may deem necessary or
advisable. The Company and any transfer agent shall not be required
to register or record the transfer of any such shares unless and until the
Company or its transfer agent shall have received from Optionee's counsel an
opinion, in a form satisfactory to the Company, that any such transfer will not
be in violation of any applicable law, rule or regulation. Optionee
agrees not to sell, assign, pledge or otherwise dispose of any Option Shares or
any Common Shares that are subject to restrictions on transfer described in this
Section 8 without the Company first receiving such an opinion.
9. Transfer. The
Option may not be transferred by Optionee except by will or the laws of descent
and distribution and may not be exercised during the lifetime of Optionee except
by Optionee or Optionee's guardian or legal representative acting on behalf of
Optionee in a fiduciary capacity under state law and court
supervision.
10. Compliance with
Law. The Company shall make reasonable efforts to comply with
all applicable federal or state securities laws; provided, however, that
notwithstanding any other provision of this Agreement, the Option shall not be
exercisable if the exercise would result in a violation of any such
laws.
11. Adjustments.
(a) The
Committee’s ability to adjust Management Objectives in accordance with the term
of the Plan shall include the following:
(i) the
Committee may, in the exercise of its discretion in good faith and in a manner
consistent with the purposes of this Agreement, make such adjustments in
calculating the Company TSR or Peer TSR as it deems appropriate and equitable to
account for extraordinary or non-recurring events affecting the Company or any
member of the Peer Group;
(ii) the
Committee may, in the exercise of its discretion in good faith and in a manner
consistent with the purposes of this Agreement, make such adjustments as it
deems appropriate and equitable to account for extraordinary or non-recurring
events affecting the Company or any member of the Peer Group and
(iii) the
Committee may, in the exercise of its discretion in good faith and in a manner
consistent with the purpose of this Agreement, make such adjustments to the
status of any member of the Peer Group as it deems necessary or appropriate to
account for extraordinary or non-recurring events affecting such
member.
12. Employment
Rights. This Agreement shall not confer on Optionee any right
with respect to the continuance of employment or other service with the Company
or any Subsidiary. No provision of this Agreement shall limit in any
way whatsoever any right that the Company or a Subsidiary may otherwise have to
terminate the employment of Optionee at any time.
13. Communications. All
notices, demands and other communications required or permitted hereunder or
designated to be given with respect to the rights or interests covered by this
Agreement shall be deemed to have been properly given or delivered when
delivered personally or sent by certified or registered mail, return receipt
requested, U.S. mail or reputable overnight carrier with full postage prepaid
and addressed to the parties as follows:
If to the
Company,
at: 0000
Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Vice
President-Financial Operations
If to
Optionee,
at: Optionee's
address provided by Optionee on the last page
hereof
Either
the Company or Optionee may change the above designated address by written
notice to the other specifying such new address.
14. Interpretation. The
interpretation and construction of this Agreement by the Committee shall be
final and conclusive. No member of the Committee shall be liable for
any such action or determination made in good faith.
15. Amendment in
Writing. This Agreement may be amended as provided in the
Plan; provided, however, that all such amendments shall be in
writing.
16. Integration. The
Option is granted pursuant to the Plan. Notwithstanding anything in
this Agreement to the contrary, this Agreement is subject to all of the terms
and conditions of the Plan, a copy of which is available upon request and which
is incorporated herein by reference. As such, this Agreement and the
Plan embody the entire agreement and understanding of the Company and Optionee
and supersede any prior understandings or agreements, whether written or oral,
with respect to the Option.
17. Severance. In
the event that one or more of the provisions of this Agreement shall be
invalidated for any reason by a court of competent jurisdiction, any provision
so invalidated shall be deemed to be separable from the other provisions hereof
and the remaining provisions hereof shall continue to be valid and fully
enforceable.
18. Governing
Law. This Agreement is made under, and shall be construed in
accordance with, the laws of the State of Delaware.
19. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument.
The remainder of this page
intentionally left blank
IN WITNESS WHEREOF, this Agreement is
executed by a duly authorized representative of the Company on the day and year
first above written.
XXXXXX
INTERNATIONAL INDUSTRIES,
INCORPORATED
By: _______________________________________
Name: _____________________________________
Title:
______________________________________
The
undersigned Optionee hereby acknowledges receipt of an executed original of this
Agreement and accepts the Option subject to the applicable terms and conditions
of the Plan and the terms and conditions hereinabove set forth.
Date:
__________________________________ Optionee
__________________________
OPTIONEE: Please
complete/update the following information.
Name: ______________________________________
Home
Address:
______________________________________
______________________________________
Social
Security
Number: ______________________________________
Date of
Hire: ______________________________________
Subsidiary
or
Division: ______________________________________
