Cooper US, Inc. Executive Stock Incentive Agreement
Exhibit 10.1
Xxxxxx US, Inc.
Executive Stock Incentive Agreement
Executive Stock Incentive Agreement
This Agreement is made as of the 13th day of February 2006 between Xxxxxx US, Inc., a
Delaware corporation, having its principal place of business in Houston, Texas (the “Company”) and
, an Executive of the Company (“Executive”). All
capitalized terms used in this Agreement are as defined in the Xxxxxx Industries Stock Incentive
Plan (the “Plan”), unless otherwise defined in this Agreement.
1. Performance Share Award
(a) Performance Period. For purposes of this Agreement, the “Performance Period”
shall be January 1, 2006 to December 31, 2008.
(b) Performance Share Grant. Pursuant to Section IX of the Plan and subject to
Paragraph 7 of this Agreement, the Company hereby grants to the Executive, as of the date hereof,
an award of Performance Shares that may be earned based on the financial performance of the Company
during the Performance Period, subject to the restrictions and conditions set forth in this
Agreement (“Performance Share Grant”). The Committee has established Performance Goals such that
if the Company achieves a cumulative annual growth rate of earnings per share (“EPS”) for the
Performance Period of four (4) percent or greater, then the Executive will be issued Performance
Shares in accordance with the following chart:
| Fully Diluted EPS | ||||||||||||
| Annual EPS | Cumulative Total Over | Performance Shares | ||||||||||
| Performance Goal | Growth Rate | Performance Period | That May Be Earned | |||||||||
Threshold |
4 | % | $ | 13.37 | ||||||||
Good |
8 | % | $ | 14.45 | ||||||||
Target |
12 | % | $ | 15.57 | ||||||||
Maximum |
16 | % | $ | 16.75 | ||||||||
The number of shares appearing under the heading “Performance Shares That May Be Earned” shall
constitute the number of Performance Shares which may be earned by the Executive based upon
achievement of that specific Performance Goal as established by the
Committee based on cumulative EPS performance during the Performance Period (Threshold, Good,
Target or Maximum). In the event the Company’s actual annual growth rate of EPS for the
Performance Period exceeds the Threshold level of 4% but is lower than the Maximum level of 16%,
the number of Performance Shares earned by the Executive shall be determined by interpolation. In
the event the Company’s actual annual growth rate of EPS for the Performance Period is below the
Threshold (4%) level, no Performance Shares will be earned. The Maximum number of Performance
Shares will be earned if the annual growth rate of EPS equals or exceeds 16% during the Performance
Period.
At the end of the Performance Period, the Committee shall determine the Performance Goal
achieved and the number of Performance Shares, if any, earned by the Executive. Except for shares
withheld by the Company as provided in Paragraph 4 or shares the receipt of which has been deferred
as provided in Paragraph 5, the Company shall then cause its parent, Xxxxxx Industries, Ltd., to
issue a stock certificate or book entry shares in the Executive’s name for the number of shares of
Common Stock equal to the Performance Shares earned by the Executive upon lapse of the forfeiture
restrictions set forth in Paragraph 3(a). The Company shall then provide stock certificate or
book-entry shares to the Executive.
2. Dividends. Upon distribution of earned Performance Shares to Executive, the
Company shall pay to the Executive in cash an amount equal to the aggregate amount of cash
dividends that the Executive would have received had the Executive been the owner of record of all
such earned Performance Shares, including shares withheld as provided under Paragraph 4, if any,
from the effective date of this Agreement to the date of distribution.
3. Restrictions and Limitations. The Executive hereby accepts the Performance Share
Grant and agrees to the following restrictions and conditions.
(a) Forfeiture. Except as provided in (b) below, if the Executive’s active
employment with the Company terminates for any reason prior to the effective date upon which the
Committee determines the number of Performance Shares, if any, earned by the Executive, all earned
and unearned Performance Shares granted under this Agreement shall be forfeited by the Executive
and this Performance Share Grant shall be null and void.
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(b) Termination Upon Death or Disability. In the event of the Executive’s death or
permanent and total disability under the Xxxxxx Industries, Inc. Salaried Employees Retirement Plan
(or such other disability program or plan in which the Executive participates) on or after January
1, 2008, the Executive or his heirs or beneficiaries shall receive a pro-rata share of the
Performance Shares which would have been earned by the Executive under this Agreement had he or she
remained actively employed throughout the Performance Period. In determining the pro-rata
Performance Shares for which the Executive or his heirs or beneficiaries may be eligible, the
Company will multiply the total Performance Shares earned during the Performance Period by a
fraction the numerator of which is the months in the Performance Period during which Executive was
actively employed and the denominator is thirty-six (36). Any Performance Shares earned and
awarded under this provision shall be approved by the Committee and distributed at the conclusion
of the Performance Period.
(c) Limitations on Transferability. The Executive shall not sell, exchange,
transfer, pledge, hypothecate or otherwise dispose of this Performance Share Grant prior to the
conclusion of the Performance Period and distribution of earned Performance Shares in accordance
with Paragraph 1 of this Agreement.
4. Tax. Upon the issuance of Common Shares to the Executive for Performance Shares
earned under this Agreement, the Executive shall pay the Company any taxes required to be withheld
by reason of the receipt of compensation resulting from the issuance of such Common Shares. In
lieu thereof, the Company shall have the right to retain, or the Executive may direct the Company
to retain, a sufficient number of Common Shares to satisfy the Company’s withholding obligations,
provided the value of the Common Shares used to satisfy the withholding obligations does not exceed
the minimum required tax withholding for the transaction. The value of any Common Shares used to
satisfy the tax withholding requirement shall be determined by the average of the high and the low
trading prices of the Common Shares on the New York Stock Exchange on the date the restrictions
lapse (or if shares are not traded on the Exchange on such date, then on the immediately preceding
trading date).
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5. Election to Defer Shares. The Executive may elect to defer the issuance and
receipt of Common Shares for all or any portion of the Performance Shares earned under this
Agreement until either the Executive’s termination of employment with the Company or a calendar
year specified by the Executive. In such an event, the Company shall credit to an account
maintained on behalf of such Executive (the “Executive Deferred Account”) the shares deferred. The
Executive Deferred Account shall be credited with all dividends or other distributions that the
Executive would have received had he or she been the owner of record of such deferred shares during
the deferral period. Accrued dividends credited to the Executive Deferred Account shall bear
interest equal to the average quarterly prime rate of interest charged by X.X.Xxxxxx Xxxxx Bank.
Until the deferred shares are issued to the Executive, the Executive shall have no other rights as
a shareholder of Xxxxxx Industries, Ltd. with respect to such deferred shares.
The deferred shares shall be issued in a lump sum or in up to five (5) annual installments in
accordance with the deferral election of the Executive unless the Executive dies prior to issuance
of all of the deferred shares. Upon issuance of any or all of such deferred shares, the Company
also shall pay to the Executive in cash a pro rata portion of the accrued dividends and interest in
the Executive Deferred Account. If the Executive elects deferral until termination of employment,
the first installment shall be made in January of the year following such termination. If the
Executive elects deferral until a specified calendar year, the first installment or, if elected,
the entire amount deferred shall be made in January of such year. If the Executive dies prior to
issuance of all of the deferred shares or the payment of cash with respect thereto, all deferred
shares shall be issued and all cash payments shall be made in January of the year following the
Executive’s death to the Executive’s beneficiary or beneficiaries as such Executive may designate
in writing to the Company. A deferral election by an Executive hereunder must be made in writing
to the Company on or before March 31 of the year in which the Performance Period concludes, shall
specify the percentage of Performance Shares earned, if any, to be deferred and shall be
irrevocable.
6. Change in Control. In the event of a Change in Control, the Performance Share
Grant shall be deemed earned at the Target level, all restrictions on those Performance Shares
shall immediately lapse and distribution of the Target level of Performance Shares shall be
governed by the terms of the Plan.
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7. Consideration. The parties agree that the consideration for any issuance of Common
Shares for Performance Shares earned hereunder shall be past services by the Executive having a
value not less than the par value of such Common Shares.
8. Plan Incorporated. In order to be a participant in the Plan, the participant shall
execute the Executive Employment Agreement (the “Agreement”), incorporated herein by reference, in
which the participant agrees to the terms and conditions set forth in the Agreement. Participant’s
failure to execute the Agreement for any reason will render the participant ineligible to
participate in the Plan. The Executive acknowledges receipt of a copy of the Plan, which is
incorporated by reference into this Agreement. The Executive agrees that this Award shall be
subject to all of the terms and provisions of the Plan.
9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
any successors to the Company and all persons lawfully claiming under the Executive.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer
thereunto duly authorized, and the Executive has executed this Agreement, all as of the date first
above written.
| XXXXXX US, INC. |
||||
| By: | ||||
| Xxxxx X. Xxxxx | ||||
| Senior Vice President, Human Resources, & Chief Administrative Officer |
||||
| EXECUTIVE |
||||
| By: | ||||
| (name) | ||||
| (title) | ||||
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