ROGERS CORPORATION 2009 LONG-TERM EQUITY COMPENSATION PLAN PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT
Exhibit
10.5
XXXXXX
CORPORATION
2009
LONG-TERM EQUITY COMPENSATION PLAN
Xxxxxx
Corporation (the “Company”) hereby grants to _______________ (the “Grantee”)
Restricted Stock Units under Section 8 of the Xxxxxx Corporation 2009 Long-Term
Equity Compensation Plan (the “Plan”). This Performance-Based
Restricted Stock Award Agreement (this “Agreement”) entitles the Grantee to
payment in the form of Shares following the attainment of the Performance
Objectives and employment requirements set forth below. The target
number of shares of (capital) common stock of the Company (the “Capital Stock”)
subject to this Agreement is _____ Shares (the
“Target Shares”), subject to adjustment under Section 2.3 of the
Plan. This Award is granted as of February __, 2009 (the “Grant
Date”), subject to approval of the Plan by the Company’s shareholders at the
2009 annual meeting (or any adjournment thereof). If the Plan is not
then approved by the Company’s shareholders, this Agreement and all rights to
receive Shares under it shall be void. Notwithstanding anything to
the contrary in this Agreement, in no event shall the Grantee be entitled to
Shares under this Agreement prior to the Plan being approved by the Company’s
shareholders.
1. Acceptance of
Award. The Grantee shall have no rights with respect to this
Agreement unless he or she shall have accepted this Agreement prior to the close
of business on June 30, 2009 by signing and delivering to the Company a copy of
this Agreement.
2. Issuance of
Shares.
(a) Subject
to Paragraph 6 below, the actual number of shares of Capital Stock to be issued
to the Grantee shall be determined based on the Weighted Average Performance
Achievement Percentage (as defined in Paragraph 2(b) below) during the Company’s
2009, 2010 and 2011 fiscal years (the “Performance Period”) using the following
table:
|
Weighted Average Performance
Achievement Percentage
|
Percentage of
Target Shares
|
||
|
Below
Threshold
|
Less
than 0%
|
None
|
|
|
Threshold
|
0%
|
0%
of Target Shares
|
|
|
Target
|
100%
|
100%
of Target Shares
|
|
|
Maximum
|
200%
or more
|
200%
of Target Shares
|
For
avoidance of doubt, no Shares shall be awarded for a Weighted Average
Performance Achievement Percentage of 0% or less, and no more than two times the
number of Target Shares shall be deliverable if the Weighted Average Performance
Achievement Percentage exceeds 200%.
1 of
8
(b) The
“Weighted Average Performance Achievement Percentage” for purposes of this table
shall be the average percentage for the Performance Objectives determined
pursuant to Schedule A to this Agreement. Straight-line interpolation
shall be used to determine the “Percentage of Target Shares” under the table set
forth in Paragraph 2(a) above if the Weighted Average Performance Achievement
Percentage is between Threshold and Target and between Target and
Maximum. For example, a 50% Weighted Average Performance Achievement
Percentage will result in delivery of 50% of the Target Shares. Any
partial Share shall be rounded up to the nearest whole Share.
3. Restrictions and
Conditions. If the Grantee’s employment with the Company and its
Affiliates is terminated for any reason, other than death, Disability or
Retirement, as such terms are set forth and defined in Schedule B hereto, prior
to the end of the Performance Period, the Grantee shall forfeit any and all
rights hereunder and no shares of Capital Stock shall be issued hereunder
regardless of actual performance during the Performance Period. If
the Grantee’s employment with the Company and its Affiliates is terminated due
to the Grantee’s death, Disability or Retirement prior to the end of the
Performance Period, the number of shares of Capital Stock determined pursuant to
Paragraph 2 to be issued to the Grantee shall be pro rated based on the number
of days that the Grantee was actively employed during the Performance Period,
rounded up to the nearest whole Share. For example, if the Grantee
was actively employed by the Company, one of its Affiliates or both, for 600
days during the Performance Period and then terminated employment due to
Retirement, then the Grantee shall receive 54.79% (600 days / (365 x 3) of the
number of shares of Capital Stock determined under Paragraph 2 based on the
performance achieved at the end of the Performance Period, rounded up to the
nearest whole Share.
4. Scheduled Payment
Date. Subject to Paragraph 6 below, the Company shall deliver
or cause to be delivered to the Grantee the number of earned and vested Shares,
if any, as certified by the Committee under Paragraph 2 and Paragraph 3 above,
on or before the Scheduled Payment Date in compliance with applicable
law. The Company shall determine in its sole discretion the manner of
delivering Shares under this Paragraph 4. For purposes of this
Agreement, the “Scheduled Payment Date” means the March 15th within the calendar
year immediately following the expiration of the Performance
Period.
5. Dividends. The
Grantee shall also be paid cash in an amount equal to (a) the dollar value of
cash dividends paid by the Company per share of Capital Stock during the period
starting on the Grant Date and ending on the date Shares are actually delivered
to the Grantee under the terms of this Agreement, multiplied by (b) the number
of Shares earned and vested under this Agreement. Any such dividends
shall be paid to the Grantee on the date Shares are actually delivered to the
Grantee under the terms of this Agreement.
2 of
8
6. Change in Control.
The Restricted Stock Units under this Agreement shall be considered to be earned
and vested upon a Change in Control that occurs before the end of the
Performance Period to the extent determined by the Committee in good faith under
Section 11.9(b) of the Plan; provided that the Grantee is then employed by the
Company or one of its Affiliates. In the event that Restricted Stock
Units become earned and vested under this Paragraph 6, payment shall be made
consistent with the terms of the Plan as soon as practicable (but in no event
more than five business days) following a Change in Control.
7. Tax Withholding. The
Grantee hereby agrees to make appropriate arrangements with the Company for such
income and employment tax withholding as may be required of the Company under
applicable United States federal, state, local or foreign law on account of the
Grantee’s rights under this Agreement. The Grantee may satisfy any
withholding obligation, in whole or in part, by electing (i) to make a payment
to the Company in cash, by check, electronic funds transfer or by other
instrument acceptable to the Company, (ii) to deliver to the Company a number of
already-owned shares of Capital Stock having a value not greater than the amount
required to be withheld (such number may be rounded up to the next whole share)
as may be permitted pursuant to written policies or rules adopted by
Compensation and Organization Committee of the Board of Directors of the Company
(the “Committee”) in effect at the time of exercise, or (iii) by any combination
of (i) and (ii). In addition, the Committee may also permit, in its
sole discretion and in accordance with such policies and rules as it deems
appropriate, the Grantee to have the Company withhold a number of shares which
would otherwise be issued pursuant to this Agreement having a value not greater
than the amount required to be withheld (such number may be rounded up to the
next whole share). The value of Shares to be withheld or delivered
(as may be permitted by the Committee) shall be based on the Fair Market Value
of a share of Capital Stock as of the date the amount of tax to be withheld is
to be determined. For avoidance of doubt, the Committee may change
its policies and rules for tax withholding in its sole discretion from time to
time for any reason.
8. The Plan. This
Agreement is subject in all respects to the terms, conditions, limitations and
definitions contained in the Plan. In the event of any discrepancy or
inconsistency between this Agreement and the Plan, the terms and conditions of
the Plan shall control. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified
herein.
9. No Obligation to Continue
Employment. Neither the Company nor any Affiliate is obligated by or as a
result of the Plan or this Agreement to continue the Grantee in
employment.
10. Notices. Notices
hereunder shall be mailed or delivered to the Company at its principal place of
business and shall be mailed or delivered to the Grantee at the address on file
with the Company or, in either case, at such other address as one party may
subsequently furnish to the other party in writing.
3 of
8
11. Purchase Only for
Investment. To insure the Company’s compliance with the
Securities Act of 1933, as amended, the Grantee agrees for himself or herself,
the Grantee’s legal representatives and estate, or other persons who acquire the
rights under this Agreement upon his or her death, that Xxxxxx will be acquired
hereunder for investment purposes only and not with a view to their
distribution, as that term is used in the Securities Act of 1933, as amended,
unless in the opinion of counsel to the Company such distribution is in
compliance with or exempt from the registration and prospectus requirements of
that Act.
12. Governing
Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, United States of America.
13. Beneficiary
Designation. The Grantee hereby designates the following
person(s) as the Grantee’s Beneficiary(ies) to whom shall be transferred any
rights under this Agreement which survive the Grantee’s death. If the Grantee
names more than one primary beneficiary and one or more of such primary
beneficiaries die, the deceased primary beneficiary’s interest will be
apportioned among any surviving primary beneficiaries before any contingent
beneficiary receives any amount, unless the Grantee indicates otherwise in a
signed and dated additional page. The same rule shall apply within the category
of contingent beneficiaries. Unless the Grantee has specified otherwise herein,
any rights which survive the Grantee’s death will be divided equally among the
Grantee’s primary beneficiaries or contingent beneficiaries, as the case may
be.
|
PRIMARY
BENEFICIARY(IES)
|
|||
|
Name
|
%
|
Address
|
|
|
(a)
|
____________________________
|
__
|
_____________________________
|
|
(b)
|
____________________________
|
__
|
_____________________________
|
|
(c)
|
____________________________
|
__
|
_____________________________
|
|
CONTINGENT
BENEFICIARY(IES)
|
|||
|
Name
|
%
|
Address
|
|
|
(a)
|
____________________________
|
__
|
_____________________________
|
|
(b)
|
____________________________
|
__
|
_____________________________
|
|
(c)
|
____________________________
|
__
|
_____________________________
|
4 of
8
In the
absence of an effective beneficiary designation in accordance with the terms of
the Plan and this Agreement, the Grantee acknowledges that any rights under this
Agreement that survive the Grantee’s death shall be rights of his or her estate
notwithstanding any other agreements or documents (including the Grantee’s will)
to the contrary.
14. Section
409A. It is intended that this Award be exempt from Section
409A of the Code as a “short-term deferral” (as defined under Treasury
Regulation Section 1.409A-1(b)(4)).
XXXXXX
CORPORATION
By:
_____________________________
The
undersigned hereby acknowledges receipt of this Agreement and agrees to its
terms and conditions:
_________________________________
Grantee
5 of
8
SCHEDULE
A
Weighted Average Performance
Achievement Percentage
For
purposes of this Agreement, the “Weighted Average Performance Achievement
Percentage” equals (a) the sum of the applicable percentages for Net Sales
Growth, EPS Growth and Free Cash Flow Percentage, as each such Performance
Objective is defined in Schedule B, determined using the following table,
divided by (b) three:
2009
Performance Based Restricted Stock Plan Grant Metrics
|
Net
Sales Growth
|
|
Result
|
EPS
Growth
|
|
Result
|
Free
Cash Flow Percentage
|
|
Result
|
||
|
12%
|
300%
|
14%
|
300%
|
5%
|
300%
|
|||||
|
10%
|
200%
|
12%
|
200%
|
4%
|
200%
|
|||||
|
8%
|
100%
|
10%
|
100%
|
3%
|
100%
|
|||||
|
6%
|
50%
|
6%
|
50%
|
2.50%
|
50%
|
|||||
|
3%
|
25%
|
3%
|
25%
|
2.25%
|
25%
|
|||||
|
0%
|
0%
|
0%
|
0%
|
2%
|
0%
|
Straight-line
interpolation shall be used to determine the applicable percentage with respect
to Xxxxxx Corporation’s achievement of a Performance Objective designated above
when performance is between two stated levels in this table. For
example, if Net Sales Growth is 7%, the applicable percentage for this
Performance Objective to be used in determining the Weighted Average Performance
Achievement Percentage is 75% (50% + ((1% / (8% - 6%)) x 50%).
6 of
8
SCHEDULE
B
Definitions
The
following terms shall have the meanings set forth below:
“Disability” means the
Grantee’s inability, due to physical or mental incapacity resulting from injury,
sickness or disease, for one hundred and eighty (180) days in any twelve-month
period to perform his or her duties.
“EPS Growth” means the
Company's compound annual growth rate in EPS during the Performance Period,
expressed as a percentage, as follows:
(Ending
Value for EPS /Beginning Value for EPS)^(1/3)) -1 x 100%
For
purposes of this definition:
|
(a)
|
“Ending
Value for EPS” means EPS for the Company’s 2011 fiscal
year,
|
|
(b)
|
“Beginning
Value for EPS” means the EPS for the Company’s 2008 fiscal year,
and
|
|
(c)
|
“EPS”
means, for a given fiscal year, the Company’s net income per share on a
fully diluted basis from continuing operations as reported on the
Company’s financial statements for that year in accordance with
GAAP.
|
Notwithstanding
the foregoing, in the event that there is a divestiture, acquisition or other
extraordinary event during any fiscal year within the Performance Period, the
Committee shall calculate EPS Growth in a manner so as to insure comparable
business unit sales are used to determine the Company’s compound annual growth
in EPS.
“Free Cash Flow
Percentage” means the Company’s average Free Cash Flow during the
Performance Period expressed as a percentage of Company’s Net Sales, which shall
be determined as follows:
((Year 1
Free Cash Flow/Year 1 Net Sales) + (Year 2 Free Cash Flow/Year 2 Net Sales) +
(Year 3 Free Cash Flow/Year 3 Net Sales)) / 3, where “Year 1” is 2009, “Year 2”
is 2010, and “Year 3” is 2011.
For
purposes of determining the Free Cash Flow Percentage, “Free Cash Flow” for a
given fiscal year shall be equal to:
Net
income
Plus: non-cash
impairment charges, depreciation and amortization
Less: capital
expenditures
7 of
8
Less (if
applicable): the increase, if any,
in net working capital (i.e., total current assets (excluding cash and cash
equivalents) minus current liabilities)
Plus (if
applicable): the decrease, if any,
in net working capital
as such
amounts are reported on the Company’s applicable audited financial statement in
accordance with GAAP.
“GAAP” means Generally
Accepted Accounting Principles.
“Net Sales Growth”
means the Company's compound annual growth rate in Net Sales during the
Performance Period, expressed as a percentage, as follows:
(Ending
Value for Net Sales /Beginning Value for Net Sales)^(1/3)) -1 x
100%
For
purposes of this Schedule B:
|
(a)
|
“Ending
Value for Net Sales” means the Net Sales for the Company’s 2011 fiscal
year,
|
|
(b)
|
“Beginning
Value for Net Sales” means the Net Sales for the Company’ 2008 fiscal
year, and
|
|
(c)
|
“Net
Sales” means, for a given fiscal year, the net sales reported on the
Company’s financial statements for that year in accordance with
GAAP.
|
Notwithstanding
the foregoing, in the event that there is a divestiture, acquisition or other
extraordinary event during any fiscal year within the Performance Period, the
Committee shall calculate Net Sales and Net Sales Growth in a manner so as to
insure comparable business unit sales are used to determine the Company’s
compound annual growth in Net Sales.
“Retirement” means
Termination of Service (as defined in the Plan) after the Grantee attains
fifty-five years of age and completes at least five years of vesting
service. For avoidance of doubt, it is not necessary to complete five
years of vesting service prior to attaining age fifty-five in order to qualify
for Retirement. For purposes of this Schedule B, “years of vesting
service” shall be determined in the same manner as provided for under the
Section 401(k) plan maintained by the Company as in effect on February 11,
2009.
8 of
8
