BAKER HUGHES INCORPORATED PERFORMANCE UNIT AWARD AGREEMENT Name Awardee
Exhibit 10.42
XXXXX XXXXXX INCORPORATED
PERFORMANCE UNIT AWARD AGREEMENT
Name
Awardee
Awardee
Date of Award: |
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Number of Performance Units Awarded:
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AWARD OF PERFORMANCE UNITS
The Compensation Committee (the “Committee”) of the Board of Directors of Xxxxx Xxxxxx
Incorporated, a Delaware corporation (the “Company”), pursuant to the Xxxxx Xxxxxx Incorporated
2002 Director & Officer Long-Term Incentive Plan (the “Plan”), hereby awards to you, the
above-named awardee, effective as of the Date of Award set forth above, that number of Performance
Units set forth above (each, a “Performance Unit”, and collectively, the “Performance Units”), on
the terms and conditions set forth in this Performance Unit Award Agreement (this “Agreement”).
Each Performance Unit provides you an opportunity to earn a cash payment based upon the
cumulative Xxxxx Value Added (as that term has been defined by the Committee) achieved by the
Company for the three-year period beginning January 1, ___, and ending December 31, ___(the
“Performance Period”) as compared with the Entry Level Xxxxx Value Added, Expected Value Xxxxx
Value Added and Over Achievement Xxxxx Value Added established by the Committee for the Performance
Period. The Committee may not increase the amount payable under this Agreement.
If the cumulative Xxxxx Value Added for the Performance Period is less than the Entry Level
Xxxxx Value Added and a Change in Control of the Company has not occurred on or before the last day
of the Performance Period, then the award pursuant to this Agreement shall lapse and be forfeited
as of December 31, ___.
The Committee’s determination of Xxxxx Value Added and the cumulative Xxxxx Value Added for
the Performance Period for purposes of this Agreement shall be binding upon all persons.
Any amount payable to you pursuant to this Agreement will be paid to you by the Employer on
March ___, ___, unless otherwise provided under the Terms and Conditions. Such payment will be
made to you in exchange for the Performance Units and thereafter you shall have no further rights
with respect to such Performance Units or the Agreement.
If a Change in Control of the Company occurs or your employment with the Company and
Affiliates terminates on or before the last day of the Performance Period, your rights to the
Performance Units and a payment under this Agreement will be determined as provided in the attached
Terms and Conditions of Award Agreements (dated January 23, 2008) (the “Terms and Conditions”).
The Performance Units that are awarded hereby to you shall be subject to the prohibitions and
restrictions set forth herein with respect to the sale or other disposition of such Performance
Units and the obligation to forfeit and surrender such Performance Units.
The Performance Units and your rights under this Agreement may not be sold, assigned, pledged,
exchanged, hypothecated or otherwise transferred, encumbered or disposed of (other than by will or
the applicable laws of descent and distribution). Any such attempted sale, assignment, pledge,
exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall
be void and the Company Group shall not be bound thereby.
Capitalized terms that are not defined herein shall have the meaning ascribed to such terms in
the Plan or the Terms and Conditions.
In accepting the award of Performance Units set forth in this Agreement you accept and agree
to be bound by all the terms and conditions of the Plan, this Agreement and the Terms and
Conditions.
| XXXXX XXXXXX INCORPORATED |
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| Xxxx X. Xxxxxx — Chairman & CEO | ||||
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XXXXX XXXXXX INCORPORATED
TERMS AND CONDITIONS
OF
PERFORMANCE UNIT AWARD AGREEMENTS
(January 23, 2008)
OF
PERFORMANCE UNIT AWARD AGREEMENTS
(January 23, 2008)
| 1. | CHANGE IN CONTROL/TERMINATION OF EMPLOYMENT. The following provisions will apply in the event a Change in Control of the Company occurs, or your employment with the Company and all Affiliates (collectively, the “Company Group”) terminates, before the last day of the Performance Period (as that term is defined in the Performance Unit Agreement awarded to you (the “Agreement”)). |
1.1 Termination Generally. If your employment with the Company Group terminates on
or before the last day of the Performance Period for any reason other than one of the
reasons described in Sections 1.2 through 1.5 below, all of your rights in the Agreement,
including all rights to the Performance Units granted to you, will lapse and be completely
forfeited on the date your employment terminates.
1.2 Potential or Actual Change in Control.
(i) Termination Without Cause or for Good Reason in Connection With a Potential
Change in Control on or Before the Last Day of the Performance Period. If (a)
the Company Group terminates your employment without Cause on or before the last day
of the Performance Period prior to a Change in Control of the Company (whether or
not a Change in Control ever occurs) and such termination is at the request or
direction of a Person who has entered into an agreement with the Company the
consummation of which would constitute a Change in Control of the Company or is
otherwise in connection with or in anticipation of a Change in Control of the
Company (whether or not a Change in Control ever occurs) or (b) you terminate your
employment with the Company Group for Good Reason on or before the last day of the
Performance Period prior to a Change in Control of the Company (whether or not a
Change in Control ever occurs) and such termination or the circumstance or event
which constitutes Good Reason occurs at the request or direction of a Person who has
entered into an agreement with the Company the consummation of which would
constitute a Change in Control of the Company or is otherwise in connection with or
in anticipation of a Change in Control of the Company (whether or not a Change in
Control ever occurs), then the Company will pay to you in cash an amount determined
under the following formula in lieu of any other amounts under the Agreement:
(1) multiplied by (2) multiplied by (3) divided by (4)
where (1) is $100, (2) is the number of Performance Units that were awarded to you
under the Agreement, (3) is the number of days from (and including) the first day of
the Performance Period to (and including) the day before the date your employment
relationship with the Company Group terminates as described in this Section 1.2(i),
and (4) is the number of days during the Performance Period. Any amount payable to
you pursuant to this Section 1.2(i) will be paid by the
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Company to you ten (10) business days after the date of your Separation From Service
if you are not a Specified Employee or on the date that is six months following your
Separation From Service if you are a Specified Employee. Such payment will be made
to you in exchange for the Performance Units and thereafter you shall have no
further rights with respect to such Performance Units or the Agreement and the
Company Group will have no further obligations to you pursuant to the Performance
Units or the Agreement. For purposes of these Terms and Conditions, “Separation
From Service” has the meaning ascribed to that term in Section 409A and “Specified
Employee” means a person who is, as of the date of the person’s Separation From
Service, a “specified employee” within the meaning of Section 409A, taking into
account the elections made and procedures established in resolutions adopted by the
Administrative Committee of Xxxxx Xxxxxx. For purposes of these Terms and
Conditions, “Section 409A” means section 409A of the Internal Revenue Code of 1986,
as amended and the Department of Treasury rules and regulations issued thereunder.
(ii) Employment Not Terminated Before a Change in Control on or Before the Last
Day of the Performance Period. If a Change in Control of the Company occurs on
or before the last day of the Performance Period and your employment with the
Company Group does not terminate before the date the Change in Control of the
Company occurs, then the Company will pay to you in cash an amount determined under
the following formula in lieu of any other amounts under the Agreement:
(1) multiplied by (2) multiplied by (3) divided by (4)
where (1) is $100, (2) is the number of Performance Units that were awarded to you
under the Agreement, (3) is the number of days from (and including) the first day of
the Performance Period to (and including) the day before the date the Change in
Control of the Company occurs, and (4) is the number of days during the Performance
Period. Any amount payable to you pursuant to this Section 1.2(ii) will be paid by
the Company to you (a) ten (10) business days after the date the Change in Control
of the Company occurs if the Change in Control of the Company qualifies as a change
in the ownership or effective control of the corporation, or in the ownership of a
substantial portion of the assets of the corporation, within the meaning of Section
409A, or (b) on March 11, 2011, if the Change in Control of the Company does not so
qualify. Such payment will be made to you in exchange for the Performance Units and
thereafter you shall have no further rights with respect to such Performance Units
or the Agreement and the Company Group will have no further obligations to you
pursuant to the Performance Units or the Agreement.
1.3 Disability. Notwithstanding any other provision of the Agreement or these Terms
and Conditions to the contrary, if you become permanently disabled before the last day of
the Performance Period and while in the active employ of one or more members of the Company
Group, then the Employer will pay to you in cash an amount determined under the following
formula in lieu of any other amounts under the Agreement:
(1) multiplied by (2) multiplied by (3) divided by (4)
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where (1) is $100, (2) is the number of Performance Units that were awarded to you under the
Agreement, (3) is the number of days from (and including) the first day of the Performance
Period to (and including) the day you become permanently disabled, and (4) is the number of
days during the Performance Period. Any amount payable to you pursuant to this Section 1.3
will be paid by the Company to you ten (10) business days after the date you become
permanently disabled. Such payment will be made to you in exchange for the Performance
Units and thereafter you shall have no further rights with respect to such Performance Units
or the Agreement and the Company Group will have no further obligations to you pursuant to
the Performance Units or the Agreement. For purposes of this Section 1.3, you will be
“permanently disabled” if you (a) are unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not less than 12
months, or (b) are, by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period of not less
than three (3) months under an accident and health plan covering employees of the Company
Group.
1.4 Death. Notwithstanding any other provision of the Agreement or these Terms and
Conditions to the contrary, if you die before the last day of the Performance Period and
while in the active employ of one or more members of the Company Group, then the Employer
will pay to your estate in cash an amount determined under the following formula in lieu of
any other amounts under the Agreement:
(1) multiplied by (2) multiplied by (3) divided by (4)
where (1) is $100, (2) is the number of Performance Units that were awarded to you under the
Agreement, (3) is the number of days from (and including) the first day of the Performance
Period to (and including) the date of your death, and (4) is the number of days during the
Performance Period. Any amount payable to your estate pursuant to this Section 1.4 will be
paid to your estate by the Employer ten (10) business days after the date of your death.
Such payment will be made in exchange for the Performance Units and thereafter your estate
and heirs, executors, administrators shall have no further rights with respect to such
Performance Units or the Agreement and the Company Group will have no further obligations
pursuant to the Performance Units or the Agreement.
1.5 Retirement. Notwithstanding any other provision of the Agreement or these Terms
and Conditions to the contrary, if your employment with the Company Group terminates as a
result of your Retirement before the last day of the Performance Period, then the number of
Performance Units issued to you under the Agreement shall automatically be reduced (without
further action by you and/or the Company) on the date your employment relationship with the
Company Group terminates to that number of Performance Units determined under the following
formula (the “Retirement Adjusted Performance Units”):
(1) multiplied by (2) divided by (3)
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where (1) is the number of Performance Units that were originally awarded to you under the
Agreement, (2) is the number of days from (and including) the first day of the
Performance Period to (and including) the day before the date your employment relationship
with the Company Group terminates due to Retirement, and (3) is the number of days during
the Performance Period. The excess of the Performance Units that were originally awarded to
you under the Agreement over the Retirement Adjusted Performance Units shall be immediately
forfeited on the date of the termination of your employment relationship with the Company
Group due to Retirement. Any amount payable to you pursuant to this Section 1.5 will be
paid on March 11, 2011. For purposes of this Section 1.5, the term “Retirement” means the
voluntary termination of your employment relationship with the Company Group on or after the
date on which the sum of your age and years of service with the Company Group equals 65.
| 2. | PROHIBITED ACTIVITY. Notwithstanding any other provision of these Terms and Conditions or the Agreement, if you engage in a “Prohibited Activity,” as described below, while employed by one or more members of the Company Group, during the Performance Period or within two years after the date your employment with the Company Group terminates, then your right to receive payment under the Agreement, to the extent still outstanding at that time, shall be completely forfeited. A “Prohibited Activity” shall be deemed to have occurred, as determined by the Committee in its sole and absolute discretion, if you divulge any non-public, confidential or proprietary information of the Company or of its past, present or future affiliates (collectively, the “Xxxxx Xxxxxx Group”), but excluding information that (a) becomes generally available to the public other than as a result of your public use, disclosure, or fault, or (b) becomes available to you on a non-confidential basis after your employment termination date from a source other than a member of the Xxxxx Xxxxxx Group prior to the public use or disclosure by you, provided that such source is not bound by a confidentiality agreement or otherwise prohibited from transmitting the information by a contractual, legal or fiduciary obligation. |
| 3. | TAX WITHHOLDING. To the extent that the receipt of the Performance Units or any payment pursuant to the Agreement results in income, wages or other compensation to you for any income, employment or other tax purposes with respect to which the Company has a withholding obligation, you shall deliver to the Company at the time of such receipt or payment, as the case may be, such amount of money as the Company may require to meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the Company is authorized to withhold from any payment under the Agreement or from any cash or stock remuneration or other payment then or thereafter payable to you any tax required to be withheld by reason of such taxable income, wages or compensation. |
| 4. | NONTRANSFERABILITY. The Agreement is not transferable by you otherwise than by will or by the laws of descent and distribution. |
| 5. | CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The existence of the Performance Units shall not affect in any way the right or power of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity |
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| securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding. |
| 6. | PERFORMANCE UNITS DO NOT AWARD ANY RIGHTS OF A SHAREHOLDER. You shall not have the voting rights or any of the other rights, powers or privileges of a holder of the stock of the Company with respect to the Performance Units that are awarded hereby. |
| 7. | EMPLOYMENT RELATIONSHIP. For purposes of the Agreement, you shall be considered to be in the employment of the Company Group as long as you have an employment relationship with the Company Group. The Committee shall determine any questions as to whether and when there has been a termination of such employment relationship, and the cause of such termination, under the Plan and the Committee’s determination shall be final and binding on all persons. |
| 8. | NOT AN EMPLOYMENT AGREEMENT. The Agreement is not an employment agreement, and no provision of the Agreement shall be construed or interpreted to create an employment relationship between you and the Company or any Affiliate or guarantee the right to remain employed by the Company or any Affiliate for any specified term. |
| 9. | LIMIT OF LIABILITY. Under no circumstances will the Company or an Affiliate be liable for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan. |
| 10. | EMPLOYER LIABLE FOR PAYMENT. Except as specified in Section 1.2, the legal entity that is a member of the Company Group and that is classified by the Company Group as your employer (the “Employer”) is liable for the payment of any amounts that become due under the Agreement. |
| 11. | MISCELLANEOUS. The Agreement is awarded pursuant to and is subject to all of the provisions of the Plan, including amendments to the Plan, if any. In the event of a conflict between these Terms and Conditions and the Plan provisions, the Plan provisions will control. The term “you” and “your” refer to the Awardee named in the Agreement. Capitalized terms that are not defined herein shall have the meanings ascribed to such terms in the Plan or the Agreement |
| 12. | STOCKHOLDER APPROVAL. No compensation under performance unit awards granted in 2008 to persons who are “covered employees” within the meaning of section 162(m) of the Internal Revenue Code of 1986, as amended, will be paid unless the stockholders of the Company approve the material terms of the performance criteria for such performance unit awards. |
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