THE SHERWIN-WILLIAMS COMPANY (AMENDED AND RESTATED AS OF FEBRUARY 17, 2015) Restricted Stock Units Award Agreement
EXHIBIT 10(ee)
THE XXXXXXX-XXXXXXXX COMPANY
2006 EQUITY AND PERFORMANCE INCENTIVE PLAN
(AMENDED AND RESTATED AS OF FEBRUARY 17, 2015)
Grantee: ________________________________________ Date of Grant: __________________________
Date of Vesting: ________________________
Number of Time-Based Restricted Stock Units (“Time-Based RSUs”): _______________________________________
Target number of Performance-Based RSUs (“Target PRSUs”): _______________________________________
Total number of Restricted Stock Units (“Total RSUs”): _______________________________________
1.Grant of Restricted Stock Units. The Board of Directors (the “Board”) of The Xxxxxxx-Xxxxxxxx Company (the “Company”) or its delegate has granted to you (“Grantee”) the Restricted Stock Units awards (the “RSUs”) set forth above in accordance with the terms of this Restricted Stock Units Award Agreement (this “Agreement”) and the terms of The Xxxxxxx-Xxxxxxxx Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of February 17, 2015) (the “Plan”), the related Prospectus and any Prospectus Supplement, and such other rules and procedures as may be adopted by the Company. The Total RSUs consist of the Time-Based RSUs and Target PRSUs, as set forth above. Capitalized terms used herein without definition or other identification shall have the meanings assigned to them in the Plan.
2.Vesting of PRSUs and Time-Based RSUs.
(A) Vesting of Performance-Based RSUs. Subject to Sections 3 and 5 hereof, provided Grantee is continuously employed with the Company or a Subsidiary from the Date of Grant through the Date of Vesting, inclusive (the “Restriction Period”), in Grantee’s present position or in such other position, as the Board may determine entitles, Grantee to retain the rights under this grant (each such position being hereinafter referred to as a “Participating Position”), a percentage ranging from 0% to 200% of the Target PRSUs shall become nonforfeitable (“Vested,” “Vested PRSUs” or similar terms) in accordance with the relative level of achievement of the Management Objective set forth below (the “Vesting Percentage”) and shall be settled in accordance with the terms of Section 4 hereof. The determination of the Vesting Percentage shall be made after such time as the Board has obtained the information, made the decisions, and completed the calculations necessary to make such determination. The Vesting Percentage is based upon the Company’s Earnings Per Share (“Cumulative EPS”) during the three-year period ending on December 31 of the most recently completed fiscal year prior to the Date of Vesting (the “Measurement Period”), as determined in accordance with the following table:
Cumulative EPS | Vesting Percentage |
Equal to or greater than $ | 200% |
$ | 100% |
Less than $ | 0% |
When the Cumulative EPS results during the Measurement Period fall between the table values, straight-line mathematical interpolation will be used to determine the Vesting Percentage calculated to the nearest hundredth of a percentage. The manner in which the Board will determine Cumulative EPS during the Measurement Period is set forth on Exhibit A attached hereto.
(B) Vesting of Time-Based RSUs. Subject to Sections 3 and 5 hereof, provided Grantee is continuously employed with the Company or a Subsidiary in Grantee’s present position or in a different Participating Position during the Restriction Period, the Time-Based RSUs shall immediately Vest in full on the Date of Vesting.
3.Change of Control. Notwithstanding Section 2 above, in the event of a Change of Control, the Total RSUs shall Vest on fulfillment of the conditions specified in Section 12 of the Plan.
4.Settlement of RSUs.
(A) General. Subject to Sections 4(B) and 4(C), and as soon as administratively practicable following (but no later than thirty (30) days following) the Date of Vesting, the Company shall issue Grantee one share of Common Stock free and clear of any restrictions for each Vested PRSU and each Vested Time-Based RSU.
(B) Other Payment Events for Vested PRSUs. Notwithstanding Section 4(A), the Vested PRSUs shall be settled prior to the date set forth under Section 4(A) as follows:
(i) Death. To the extent that there are Vested PRSUs, the Company shall issue Grantee one share of Common Stock free and clear of any restrictions for each Vested PRSU within thirty (30) days of the date of Xxxxxxx’s death.
(ii) Disability. To the extent that there are Vested PRSUs, the Company shall issue Grantee one share of Common Stock free and clear of any restrictions for each Vested PRSU within thirty (30) days of the date on which Grantee becomes Disabled.
(iii) Change of Control. In the event of a Change of Control, Vested PRSUs shall be settled in accordance with Section 12 of the Plan. Notwithstanding any provision of this Agreement or the Plan to the contrary, if Section 409A of the Code applies to the payment and Grantee experiences a termination of employment after the Change of Control resulting in Vested PRSUs under Section 12 of the Plan, Grantee is entitled to receive settlement of any Vested PRSUs under Section 12 of the Plan on the date that would have otherwise applied pursuant to Sections 4(A), 4(B)(i) or 4(B)(ii) as though such Change of Control had not occurred. Notwithstanding any provision of this Agreement or the Plan to the contrary and to the extent required to comply with Section 409A, if any Target PRSU is Assumed, any outstanding Target PRSUs which at the time of the Change of Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be not Assumed and will be payable in accordance with Section 12(b) of the Plan.
(C) Other Payment Events for Time-Based RSUs. Notwithstanding Section 4(A), the Time-Based RSUs shall be settled prior to the date set forth under Section 4(A) as follows:
(i) Death. To the extent that the Time-Based RSUs are Vested, the Company shall issue Grantee one share of Common Stock free and clear of any restrictions for each Vested Time-Based RSU within thirty (30) days of the date of Xxxxxxx’s death.
(ii) Disability. To the extent that the Time-Based RSUs are Vested, the Company shall issue Grantee one share of Common Stock free and clear of any restrictions for each Vested Time-Based RSU within thirty (30) days of the date on which Grantee becomes Disabled (as hereinafter defined).
(iii) Change of Control. In the event of a Change of Control, Vested Time-Based RSUs shall be settled in accordance with Section 12 of the Plan. Notwithstanding any provision of this Agreement or the Plan to the contrary, if Section 409A of the Code applies to the payment and Grantee experiences a termination of employment after the Change of Control resulting in Time-Based RSUs becoming Vested under Section 12 of the Plan, Grantee is entitled to receive settlement of any Vested Time-Based RSUs under Section 12 of the Plan on the date that would have otherwise applied pursuant to Sections 4(A), 4(C)(i), or 4(C)(ii) as though such Change of Control had not occurred. Notwithstanding any provision of this Agreement or the Plan to the contrary and to the extent required to comply with Section 409A, if any Time-Based RSU is Assumed, any outstanding Time-Based RSUs which at the time of the Change of Control are not subject to a “substantial risk of forfeiture” (within the meaning of Section 409A of the Code) will be deemed to be not Assumed and will be payable in accordance with Section 12(b) of the Plan.
5.Termination of Rights to Total RSUs. Notwithstanding anything herein to the contrary:
(A) On the date Grantee ceases to be continuously employed in any Participating Position(s) at any time during the Restriction Period, the Total RSUs shall be forfeited and Grantee shall forfeit and lose all rights to the Total RSUs that are not Vested as of such date, except as otherwise provided below:
(i) In the event of the death of Grantee during the Restriction Period, (a) 100% of the Time-Based RSUs shall immediately Vest, and (b) the greater of (I) 100% of the Target PRSUs or (II) the Vesting Percentage of the Target PRSUs based on the actual Cumulative EPS measured as of the end of the last completed fiscal quarter preceding the date of Xxxxxxx’s death and the projected forecast of Cumulative EPS over the remaining Restriction Period, shall immediately be Vested.
(ii) In the event Grantee becomes Disabled, (a) 100% of the Time-Based RSUs shall immediately Vest, and (b) the greater of (I) 100% of the Target PRSUs or (II) the Vesting Percentage of the Target PRSUs based on the actual Cumulative EPS measured as of the end of the last completed fiscal quarter preceding the date on which Grantee becomes Disabled and the projected forecast of Cumulative EPS over the remaining Restriction Period, shall immediately be Vested. “Disabled” shall mean that Grantee (x) is 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 (y) is, 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 3 months under an accident and health plan covering employees of the Company.
(iii) In the event Xxxxxxx’s employment terminates as a result of Retirement, all rights of Grantee under this grant with respect to the Time-Based RSUs and the Target PRSUs shall continue as if Grantee had continued employment in a Participating Position, and the Vesting Percentage of the Target PRSUs will be determined as if Grantee had remained employed in a Participating Position throughout the Restriction Period. “Retirement” shall be defined as: (x) the attainment of age 65; (y) the attainment of age 55-59 with at least twenty (20) years of service with the Company or a Subsidiary; or (z) the attainment of age 60 or older and the Grantee’s combination of age and service with the Company or any Subsidiary equals at least 75.
(B) With respect to a Grantee that is a corporate officer and operating management, in the event Grantee is transferred from a Participating Position, the Board shall have the right to cancel Xxxxxxx’s rights hereunder, continue Xxxxxxx’s rights hereunder in full, or prorate the number of Total RSUs evidenced hereby for the portion of the Restriction Period completed as of the date of such transfer or as the Board may otherwise deem appropriate. In the event Xxxxxxx’s rights hereunder continue in full or the number of Total RSUs is prorated, the other requirements for Vesting will continue to apply, including that Grantee remain continuously employed by the Company or a Subsidiary through the Date of Vesting, subject to earlier Vesting pursuant to Sections 3 and 5(A). Any such Award will be settled in accordance with Section 4.
(C) In the event that Grantee knowingly or willfully engages in misconduct during the Restriction Period, which is materially harmful to the interests of the Company or a Subsidiary as determined by the Board, all rights of Grantee to the RSUs shall terminate.
6.Dividend Equivalents; Other Rights. From and after the Date of Grant and until the earlier of (A) the time when the RSUs Vest and are settled in accordance with Section 4 hereof or (B) the time when Grantee’s rights to the RSUs are forfeited in accordance with Section 5 hereof, on the date that the Company pays a cash dividend (if any) to holders of Common Stock generally, Grantee shall be entitled to a deferred cash payment equal to the value of the product of (x) the dollar amount of the cash dividend paid per share of Common Stock on such date and (y) the sum of (I) the full number of Time-Based RSUs and (II) 200% of the Target PRSUs; however, such dividend equivalents (if any) shall be paid in cash, and shall be subject to such other applicable terms and conditions (including payment or forfeitability) as the RSUs based on which the dividend equivalents were credited. The obligations of the Company hereunder will be merely that of an unfunded and unsecured promise of the Company to deliver shares of Common Stock in the future, and the rights of Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company hereunder.
7.No Shareholder/Voting Rights. Grantee will not be a shareholder of record and shall have no voting rights with respect to shares of Common Stock underlying an RSU prior to the Company’s issuance of such shares following the Date of Vesting or the otherwise applicable settlement date.
8.Transferability. During the Restriction Period, Grantee shall not be permitted to sell, transfer, pledge, encumber, assign or dispose of the RSUs.
9.Withholding Taxes. If the Company shall be required to withhold any federal, state, local or foreign tax in connection with the RSUs or the underlying shares of Common Stock, Grantee shall pay or make provision satisfactory to the Company for payment of all such taxes. Notwithstanding any other provision of this Agreement or the Plan, the Company shall not be obligated to guarantee any particular tax result for Grantee with respect to any payment provided to Grantee hereunder, and Grantee shall be responsible for any taxes imposed on Grantee with respect to any such payment.
10.No Right to Future Awards or Employment. The grant is a voluntary, discretionary bonus being made on a one-time basis and it does not constitute a commitment to make any future awards. The grant and any related payments made to Grantee will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. Nothing contained herein will confer upon Grantee any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate Grantee’s employment or other service at any time.
11.Nature of Grant. Grantee acknowledges that (A) the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty and (B) in consideration of the grant of the RSUs, no claim or entitlement to compensation or damages shall arise from termination of the RSUs or diminution in value of the shares received upon settlement including (without limitation) any claim or entitlement resulting from termination of Grantee’s active employment by the Company or a Subsidiary (for any reason whatsoever and whether or not in breach of local labor laws) and Grantee hereby releases the Company and its Subsidiaries 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 the RSUs and this Agreement, Grantee shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.
12.Severability. If any provision of this grant or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this grant and the application of such provision to any other person or circumstances shall not be affected, and the provisions so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.
13.Governing Law. This grant shall be governed by and construed with the internal substantive laws of the State of Ohio, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.
14.Application of The Xxxxxxx-Xxxxxxxx Company Executive Compensation Adjustment and Recapture Policy. Xxxxxxx acknowledges and agrees that the terms and conditions set forth in The Xxxxxxx-Xxxxxxxx Company Executive Compensation Adjustment and Recapture Policy (“Policy”) are incorporated in this Agreement by reference. To the extent the Policy is applicable to Grantee, it creates additional rights for the Company with respect to Xxxxxxx’s RSUs.
15.Data Privacy. Grantee explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Xxxxxxx’s personal data as described in this document by and among, as applicable, Xxxxxxx’s employer (“Employer”) and the Company and its Subsidiaries, for the exclusive purpose of implementing, administering and managing Xxxxxxx’s participation in the Plan. Grantee understands that Employer and the Company and its Subsidiaries hold (but only process or transfer to the extent required or permitted by local law) the following personal information about Grantee: Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all RSUs or any other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in Grantee’s favor, for the purpose of implementing, administering and managing the Plan (“Data”). Grantee understands that Data may be transferred to third parties assisting in the implementation, administration and management of the Plan, including Fidelity Stock Plan Service LLC, that these recipients may be located in Grantee’s country or elsewhere (including countries outside of the European Union or the European Economic Area, such as the United States of America), and that the recipient’s country may have different data privacy laws and protections than those that apply in Grantee’s country. Xxxxxxx understands that Xxxxxxx may request a list with the names and addresses of any potential recipients of the Data by contacting Xxxxxxx’s local human resources representative. Grantee authorizes these recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Xxxxxxx’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 Grantee may elect to deposit any shares acquired upon vesting or earning of the RSUs. Xxxxxxx understands that Data will be held only as long as is necessary to implement, administer and manage Xxxxxxx’s participation in the Plan and in accordance with local law. Grantee understands that Grantee 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 Xxxxxxx’s local human resources representative. Xxxxxxx understands, however, that refusing or withdrawing Xxxxxxx’s consent may affect Xxxxxxx’s ability to participate in the Plan. For more information on the consequences of Xxxxxxx’s refusal to
consent or withdrawal of consent, Xxxxxxx hereby understands that Grantee may contact his or her local human resources representative.
16.Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the RSUs and Xxxxxxx’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request Xxxxxxx’s consent to participate in the Plan by electronic means. Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
17.Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) do not apply to Grantee. This Agreement and the Plan shall be administered in a manner consistent with this intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service. If, at the time of Xxxxxxx’s separation from service (within the meaning of Section 409A of the Code), (A) Grantee shall be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (B) the Company shall make a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the settlement of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company shall not settle such amount on the otherwise scheduled settlement date but shall instead settle it, without interest, on the first business day of the month after such six-month period.
Exhibit A
Cumulative Earnings Per Share shall be equal to the sum of the Earnings Per Share (“EPS”) (less those items relating to extraordinary events or which result in a distortion of comparative results) for each fiscal year of the Company during the Measurement Period.
Example:
Year 1 EPS | $4.00 |
Year 2 EPS | $4.20 |
Year 3 EPS | $4.40 |
Cumulative EPS | $12.60 |
Cumulative EPS = $12.60
