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EXHIBIT 10.4
THE DII GROUP, INC.
PERFORMANCE SHARE AGREEMENT
PURSUANT TO THE
1994 STOCK INCENTIVE PLAN
This Performance Share Agreement is made and entered into as of the Date
of Award specified herein, by and between THE DII GROUP, INC., a Delaware
corporation (the "Company") and Xxxxxx X. Xxxxxx (the "Grantee")
W I T N E S S E T H:
WHEREAS, the Company maintains the The DII Group, Inc. 1994 Stock
Incentive Plan (the "Plan") under which the Compensation Committee of the
Company's Board of Directors (the "Compensation Committee") may, among other
things, grant awards of performance shares in the form of shares of the
Company's Common Stock, $.01 par value per share ("Common Stock"), subject to
such terms, conditions and restrictions as the Compensation Committee may deem
appropriate; and
WHEREAS, pursuant to the Plan, the Compensation Committee has granted the
Grantee an award of performance shares conditioned upon the execution by the
Company and the Grantee of a Performance Share Agreement setting forth all the
terms, conditions and restrictions relating to the performance shares.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Award of Performance Shares. Pursuant to the terms of the Plan, the
Compensation Committee has granted to the Grantee a performance share award as
of January 1, 1997 (the "Date of Award"), covering 100,000 shares of Common
Stock (the "Performance Shares"), subject to the terms, conditions and
restrictions set forth in this Agreement. This Performance Share award is
subject to approval by the stockholders of the Company at the 1997 Annual
Meeting of Stockholders of an amendment to the Plan to permit issuances and
grants to an executive covering up to a maximum of 150,000 shares per annum.
2. Restrictions. Until a Performance Share vests, it may not be sold,
assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in
any manner whatsoever.
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3. Vesting of Performance Shares. Subject to accelerated vesting in
accordance with the provisions of Sections 4 and 5 hereof and subject to
forfeiture in accordance with the provisions of Section 6 hereof, the
Performance Shares shall vest one-quarter on the first anniversary of the Date
of Award, one-quarter on the second anniversary of the Date of Award,
one-quarter on the third anniversary of the Date of Award, and one-quarter on
the fourth anniversary of the Date of Award.
4. Acceleration of Vesting upon Death, Disability. If the employment of
the Grantee shall terminate by reason of the Grantee's death or Disability (as
hereinafter defined), all of the Performance Shares granted hereunder and not
previously vested hereunder shall vest in full upon such termination. For
purposes of this Agreement, Disability shall have the meaning set forth in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.
5. Acceleration of Vesting upon Change of Control. Upon a Change of
Control (as hereinafter defined), all Performance Shares granted hereunder
shall immediately vest in full. For purposes hereof, a Change of Control shall
be deemed to have taken place upon the occurrence of any of the following
events:
(i) any person (which shall mean and include any individual,
corporation, partnership, group, association or other "person", as such term is
used in Sections 13 and 14 of the Securities Exchange Act of 1934, as amended)
is, becomes, or has the right to become the beneficial owner, directly or
indirectly, of securities of the Company representing 20% or more of the shares
of Common Stock then outstanding, whether or not such person continues to be
the beneficial owner of securities representing 20% or more of the outstanding
shares of Common Stock; or
(ii) as the result of, or in connection with, any tender or exchange
offer, merger or other business combination, sale of assets or contested
election, any announcement of an intention to make any of the foregoing
transactions, or any combination of the foregoing transactions (a
"Transaction"), those persons who were directors of the Company before the
Transaction and were otherwise unaffiliated with any other party to the
Transaction shall cease to constitute a majority of the Board of Directors of
the Company or any successor to the Company (a "Change in the Board"); or
(iii) the stockholders of the Company approve any merger, consolidation,
reorganization, liquidation, dissolution, or sale of all or substantially all
of the Company's assets in which neither the Company nor a successor resulting
from a change in domicile or form of organization will survive as an
independent, publicly-owned corporation.
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Notwithstanding anything herein to the contrary, no Change of Control
shall be deemed to have occurred by virtue of any event which results in any of
the following:
(i) the acquisition, directly or indirectly, of 20% or more of the
outstanding shares of Common Stock by (A) the Grantee or a person including the
Grantee, (B) the Company, (C) a subsidiary of the Company, or (D) any employee
benefit plan of the Company or of a subsidiary, or any entity holding
securities of the Company recognized, appointed, or established by the Company
or by a subsidiary for or pursuant to the terms of such plan; or
(ii) a Change in the Board resulting from any Transaction in which the
Grantee or a person including the Grantee participates, directly or indirectly,
with any party to the Transaction other than the Company.
6. Forfeiture of Performance Shares. Except as otherwise provided in
Section 4 or 5 hereof, in the event the Grantee shall cease to be an employee
of the Company or any of its subsidiaries for any reason, or for no reason,
then, the then unvested portion of the award of Performance Shares shall be
forfeited, the Grantee shall have no further rights under this Agreement and
the Common Stock covered by the Performance Shares shall revert to the Company.
7. Change in Common Stock or Corporate Structure. In the event of any
stock dividend, stock split, combination or exchange of shares of Common Stock,
recapitalization or other change in the capital structure of the Company,
corporate separation or division (including, but not limited to, split-up,
spin-off or distribution to Company shareholders other than a normal cash
dividend), sale by the Company of all or a substantial portion of its assets,
rights offering, merger, consolidation, reorganization or partial or complete
liquidation, or any other corporate transaction or
event having an effect similar to any of the foregoing, the number of
Performance Shares subject to the award granted hereunder shall be equitably
and appropriately adjusted, as determined by the Compensation Committee in its
discretion. Any such adjustment made by the Compensation Committee shall be
conclusive and binding upon the Grantee, the Company and all other interested
persons.
8. Payment of Withholding Taxes. If the Company becomes obligated to
withhold an amount of any federal, state or local tax imposed as a result of
the issuance of the Performance Shares to the Grantee pursuant to this
Agreement or the vesting of Performance Shares hereunder, including without
limitation, any federal, state or other income tax, or any F.I.C.A., state
disability insurance tax or other employment tax (the date upon which the
Company becomes so obligated shall be referred to herein as the "Withholding
Date"), then the Grantee shall pay such amount (the "Withholding Liability") to
the Company on the Withholding Date in
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cash or by check payable to the Company. The Grantee hereby consents to the
Company withholding the full amount of the Withholding Liability from any
compensation or other amounts otherwise payable to the Grantee if the Grantee
does not pay the Withholding Liability to the Company on the Withholding Date,
and the Grantee agrees that the withholding and payment of any such amount by
the Company to the relevant taxing authority shall constitute full satisfaction
of the Company's obligation to pay such compensation or other amounts to the
Grantee. The Grantee shall be entitled to elect to have the Company withhold
from any vested Performance Shares to be delivered to the Grantee a sufficient
number of such shares to satisfy the Withholding Liability.
9. Stock Certificates. Upon the vesting of any part of the Performance
Shares (and subject to payment by the Grantee of the Withholding Liability
pursuant to Section 8 hereof), the Company shall cause a stock certificate
covering the appropriate number of shares registered on the Company's books in
the name of the Grantee to be delivered to the Grantee. All Performance Shares
which vest under this Agreement shall be fully paid and non-assessable.
10. Voting, Dividends. The Grantee shall have no rights as a stockholder
(including no rights to vote or receive dividends or distributions) with
respect to any Performance Shares until such Performance Shares vest in
accordance with the terms and provisions of this Agreement. Notwithstanding
the foregoing, the Grantee will be entitled to receive dividend equivalents
with respect to the Performance Shares as provided in this Section 10.
In the event of an ordinary cash dividend on the shares of Common Stock of
the Company the record date of which is prior to the vesting or forfeiture of
any Performance Shares, the Company shall allocate for the Grantee an amount
equal to the amount of such ordinary cash dividend multiplied by the number of
Performance Shares, and the Grantee shall become entitled to receive any such
amounts upon the vesting of the corresponding Performance Shares, provided that
any rights to receive such amounts shall be forfeited upon the forfeiture of
the corresponding Performance Shares.
11. Deferral. Grantee may elect to defer all or part of his Performance
Shares upon vesting, in accordance with the provisions of the Company's
Deferred Compensation Plan. Any such deferral shall be made in writing in
accordance with the provisions of the Deferred Compensation Plan. In cases of
deferral, shares otherwise issuable to Grantee shall be issued to the Trust
established pursuant to the Deferred Compensation Plan.
12. Employment Rights. Nothing in this Agreement shall be deemed to
confer on the Grantee the right to continue in the employ of the Company
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or any of its subsidiaries or affect the right of the Company to terminate the
employment of the Grantee at any time with or without cause.
13. Nontransferability. The rights of the Grantee with respect to the
Performance Shares may not be assigned or transferred, otherwise than by will
or the laws of descent and distribution.
14. Impact on Other Benefits. The value of the Performance Shares awarded
hereunder (either on the Date of Award or at the time of vesting) shall not be
includable as compensation or earnings for purposes of any other benefit plan
offered by the Company.
15. Interpretation. This Agreement and the Performance Shares awarded
hereunder are subject to all of the terms and provisions of the Plan. In the
event of any conflict or inconsistency between the terms and provisions of this
Agreement and the Plan, the terms and provisions of the Plan shall govern. The
Compensation Committee shall have the sole and complete authority and
discretion to decide any questions concerning the application, interpretation
or scope of any of the terms and conditions of this Agreement and the Plan, and
its decisions shall be binding and conclusive upon all interested parties.
16. Amendment. This Agreement shall be subject to the terms of the Plan,
as amended, except that the award of Performance Shares that is the subject of
this Agreement may not in any way be restricted or limited by any Plan
amendment or termination approved after the Date of Award without the Grantee's
written consent.
17. Force and Effect. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity or
unenforceability of any one provision shall have no effect on the continuing
force and effect of the remaining provisions.
18. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware.
19. Successors. This Agreement shall be binding upon and inure to the
benefit of the successors, assigns and heirs of the respective parties.
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20. Entire Agreement. This Agreement contains the entire understanding of
the parties and shall not be modified or amended except by written instrument
duly signed by the parties. No waiver by either party of any default under
this Agreement shall be deemed a waiver of any later default.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the Date of Award stated above.
THE DII GROUP, INC.
By:
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GRANTEE
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