Performance Shares Agreement
Exhibit 99.1
This Performance Shares Agreement is entered into as of _________, between
_________ (the “Recipient”) and Littelfuse, Inc., a Delaware corporation (the
“Corporation”), with reference to the following facts:
A. Pursuant to the Littelfuse, Inc. Equity Incentive Compensation Plan (the “Plan”), the
Corporation is authorized to grant awards of rights (“Performance Shares”) to acquire shares of its
Common Stock, $.01 par value (the “Common Stock”), on a restricted basis as provided in the Plan to
officers and employees of the Corporation or any Subsidiary as an incentive for future performance.
B. The Corporation desires to grant Performance Shares to the Recipient.
C. The Compensation Committee of the Board of Directors of the Corporation has established
performance criteria to determine the number of Performance Shares that will vest and be converted
into Common Stock in accordance with, and subject to, the terms of the Plan, which performance
criteria are set forth in Exhibit A attached hereto and incorporated herein.
Now, Therefore, In Consideration of the foregoing facts and other good and valuable
consideration, the parties hereto hereby agree as follows:
1. Grant of Performance Shares. (a) The Corporation hereby grants to the Recipient an
Award of _________ Performance Shares (hereinafter referred to as the “Target
Performance Shares Amount”) , subject in all respects to the provisions of the Plan and the
terms and conditions set forth herein. Each Performance Share represents the right to earn
one (1) share of Common Stock, plus up to one (1) additional Performance Share, in
accordance with the formula described in Section 2.
(b) Plan and Committee. The construction of the terms of this Agreement shall be
controlled by the Plan, a copy of which has been made available to the Recipient and which
is hereby made a part hereof as though set forth herein verbatim, and the rights of the
Recipient are subject to modification and termination in certain events as provided in the
Plan. All words and phrases not otherwise defined herein shall have the meanings provided
in the Plan. The Committee’s interpretations of and determinations under any of the
provisions of the Plan or this Agreement shall be conclusive.
2. Number of Performance Shares Deemed Earned. (a) The number of Performance Shares
which the Recipient shall earn pursuant to this Agreement shall be determined pursuant to
the formula set forth in Exhibit A during the period of three (3) consecutive fiscal years
of the Corporation commencing with the fiscal year in which the Performance Shares are
granted (hereinafter said three (3) year period shall be referred to as the “Performance
Period”). If the Corporation achieves the performance target set forth in Exhibit A, the
Recipient shall earn a number of Performance Shares
equal to the Target Performance Shares
Amount. If the Corporation does not achieve the performance target, the Recipient may
nevertheless earn a number of Performance Shares equal to a
percentage of the Target Performance Shares Amount, as set forth in Exhibit A. If the
Corporation exceeds the performance target, the Recipient may be eligible to earn a number
of Performance Shares in addition to the Target Performance Shares Amount in accordance with
Exhibit A, provided that the total number of Performance Shares earned shall not exceed two
times the Target Performance Shares Amount. The number of earned Performance Shares
resulting from said formula shall be referred to as the “Earned Performance Shares Amount.”
Except as otherwise provided below, all Performance Shares that are not earned pursuant to
such formula shall be null and void and the Recipient shall not be entitled to any shares of
Common Stock or other payment with respect thereto.
(b) In the event that the Corporation or any Subsidiary shall be a party to any merger
or consolidation or acquisition of assets, shall sell all or substantially all of its assets
or enter into any other transaction which, in the good faith opinion of the Committee, will
have a material effect (either positive or negative) on the formula described in Exhibit A
or the ability of the Recipient to obtain the economic benefit contemplated by this
Agreement, the Committee shall appropriately and reasonably adjust the formula contained in
Exhibit A to provide the Recipient with substantially the same opportunity to obtain
substantially the same economic benefit that the Recipient would have if said transaction
had not been entered into, said adjustment to be evidenced in a writing delivered by the
Corporation to the Recipient.
(c) In the event that at anytime during the Performance Period, there shall occur any
changes in the outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, mergers, consolidations, combinations, exchanges of shares, separations,
reorganizations, liquidations and the like, the Committee shall appropriately and reasonably
adjust the Target Performance Shares Amount and the Earned Performance Shares Amount.
(d) Notwithstanding the foregoing, if the Recipient is a Named Executive Officer, the
Recipient shall not be entitled to any shares of Common Stock unless and until the Committee
has determined and certified that the targets set forth in Exhibit A have been satisfied, in
accordance with the requirements of Section 162(m) of the Internal Revenue Code of 1986 (the
“Code”).
3. Issuance of Shares of Common Stock. In the event that the Recipient is deemed to
have earned any Performance Shares pursuant to the provisions of Section 2 hereof, a number
of shares of Common Stock which is equal to the Earned Performance Shares Amount shall be
issued in the Recipient’s name as soon as practicable following the end of the Performance
Period, but in no event later than the following March 15. Upon issuance of such shares of
Common Stock, the Recipient shall be a stockholder with respect to such shares and shall
have all the rights of a stockholder with respect to such shares, including but not limited
to, the right to vote such shares, to receive dividends and other distributions paid with
respect to such shares, and to sell such shares (subject to Section 6 and applicable law).
-2-
4. Restrictions. The Performance Shares awarded pursuant to this Agreement and any shares of Common Stock which may be deemed to be earned or owing with respect thereto shall
be subject to the following terms and conditions:
(i) the Recipient shall not be entitled to delivery of the Common Stock until
the end of the Performance Period, except as otherwise provided in Section 5;
(ii) none of the Performance Shares may be sold, transferred, assigned, pledged
or otherwise encumbered or disposed of;
(iii) all of the Performance Shares shall be forfeited and cancelled and all
rights of the Recipient to such Performance Shares and any Common Stock which may be
deemed to be earned or owing with respect thereto shall terminate without further
obligation on the part of the Corporation in the event that the Recipient ceases to
be an Employee on or prior to the last day of the Performance Period, for any
reason, except as otherwise provided in Section 5;
(iv) Notwithstanding any other provision of this Section 4, or of Section 5,
upon the occurrence of any of the Forfeiture Events described in Section 11.4 of the
Plan, all rights to Performance Shares, whether or not previously vested, shall be
forfeited, and the Recipient may be required to repay the Award Amount, in
accordance with the provisions of Section 11.3 of the Plan.
5. Accelerated Vesting and Delivery of Performance Shares. The Performance Shares
shall vest in full, and the Recipient shall be entitled to receive the number of shares of
Common Stock set forth below, or cash payments in lieu thereof as soon as practicable
(except as otherwise provided in Section 5(iii) or 4(iv)) after the first to occur of the
following events prior to the end of the Performance Period:
(i) the death of the Recipient, in which event the Recipient’s beneficiary
shall receive a number of shares of Common Stock equal to the Target Performance
Shares Amount multiplied by a fraction, the numerator of which is the number of
whole months in the Performance Period that have elapsed prior to the date of death
and the denominator of which is the total number of months in the Performance
Period;
(ii) the termination of the Recipient’s employment by reason of Disability, in
which event the Recipient shall receive a number of shares of Common Stock equal to
the Target Performance Shares Amount multiplied by a fraction, the numerator of
which is the number of whole months in the Performance Period that have elapsed
prior to the termination of employment and the denominator of which is the total
number of months in the Performance Period;
-3-
(iii) the termination of the Recipient’s employment due to an Eligible
Retirement; in which event the Recipient shall be entitled to receive, following the
end of the Performance Period, the number of shares of Common Stock equal to the
Earned Performance Shares Amount in accordance with Section 3 multiplied by a
fraction, the numerator of which is the number of whole months in the Performance
Period that elapsed prior to the Recipient’s Eligible Retirement and the denominator
of which is the total number of months in the Performance Period; or
(iv) the occurrence of a Change in Control, in which event the Recipient shall
receive a number of shares of Common Stock equal to the Target Performance Shares
Amount.
Notwithstanding the foregoing, upon the occurrence of an event described in Section 5(i),
5(ii) or 5(iv), the Committee may, in its sole discretion, authorize the issuance of a
larger number of shares than provided in the applicable provision based upon the Recipient’s
and the Corporation’s performance through the date of the event, but in no event more than
two times the Target Performance Shares Amount.
6. Compliance with Law. No shares of Common Stock shall be issued pursuant to this
Agreement unless said issuance is in compliance with applicable federal and state tax and
securities laws.
6.1. Certificate Legends. Any certificate for shares of Common Stock issued
pursuant to this Agreement shall bear any legends deemed necessary or appropriate by
the Corporation.
6.2. Representations of the Recipient. At the request of the Corporation, the
Recipient will deliver to the Corporation such signed representations as may be
necessary, in the opinion of counsel satisfactory to the Corporation, for compliance
with applicable federal and state securities laws.
6.3. Resale. In addition to the restrictions contained in the Plan, the
Recipient’s ability to transfer shares of Common Stock issued pursuant to this
Agreement or securities acquired in lieu thereof or in exchange therefor may be
restricted under federal or state securities laws. The Recipient shall not resell
or offer for resale such shares of Common Stock or securities unless they have been
registered or qualified for resale under all applicable federal and state securities
laws or an exemption from such registration or qualification is available in the
opinion of counsel satisfactory to the Corporation.
7. Notice. Every notice or other communication relating to this Agreement shall be in
writing and shall be mailed or delivered to the party for whom it is intended at such
address as may from time to time be designated by such party in a notice mailed or delivered
to the other party as herein provided; provided, however, that unless and until some other
address be so designated, all notices or communications by the Recipient to
-4-
the Corporation shall be mailed or delivered to the Corporation to the attention of its
Secretary at 000 X. Xxxxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxxxxx 00000, and all notices or
communications by the Corporation to the Recipient may be given to the Recipient personally
or may be mailed to the Recipient at the most recent address which the Recipient has
provided in writing to the Corporation.
8. Tax Treatment. The Recipient acknowledges that the tax treatment respecting the shares of Common Stock issued pursuant to this Agreement or any events or transactions with
respect thereto may be dependent upon various factors or events which are not determined by
the Plan or this Agreement. It is the intent of the Corporation that all Common Stock be
delivered, and all cash payments in lieu of shares of Common Stock be paid, not later than
the fifteenth day of the third month of the year following the year in which the Recipient’s
right thereto is no longer subject to a substantial risk of forfeiture, so that all
deferrals of compensation hereunder shall constitute short-term deferrals not subject to
Section 409A of the Code. Notwithstanding the foregoing, the Corporation makes no
representations to the Recipient with respect to and hereby disclaims all responsibility as
to such tax treatment.
9. Withholding Taxes. The Corporation shall subtract from the number of shares of
Common Stock issued to the Recipient a number of shares equal to the minimum statutory
amount of any federal, state or local withholding tax requirement divided by the Fair Market
Value of a share of Common Stock, and rounded to the next higher number of whole shares.
Such number of shares shall be treated as paid in cash pursuant to Section 9.4 of the Plan,
and the Corporation shall deposit the amount of required tax withholding and pay to the
Recipient the cash value of any fractional share. Notwithstanding the foregoing, the
Compensation Committee shall have the right to cause the Corporation to use any other
reasonable method of satisfying its tax withholding obligation, including without limitation
withholding taxes from other compensation owed to the Recipient or requiring the Recipient
to remit to the Corporation an amount sufficient to satisfy all or any portion of the
withholding tax obligation. In any event, all tax withholding requirements shall be
satisfied prior to the issuance or delivery of any shares of Common Stock to the Recipient.
10. Effect on Pension and Retirement Plans. The Corporation and the Recipient agree
that neither the value of any Performance Shares or shares of Common Stock issued, nor the
amount of any cash paid, to the Recipient pursuant to this Agreement shall be considered
compensation for purposes of any pension or retirement plan, insurance plan or any other
employee benefit plan of the Corporation or any subsidiary including, for avoidance of
doubt, the Littelfuse, Inc. Supplemental Executive Retirement Plan.
-5-
In Witness Whereof, the Corporation and the Recipient have executed this Performance
Shares Agreement effective as of the date first set forth above.
| Littelfuse, Inc. | Recipient: | |||||||
By
|
||||||||
Its |
||||||||
-6-
Exhibit A
PERFORMANCE CRITERIA
