DELL INC. Performance Based Stock Unit Agreement
Exhibit 10.6
DELL INC.
Performance Based Stock Unit Agreement
Performance Based Stock Unit Agreement
Recipient:
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Date of Grant: | |||
Identification No.:
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Performance Period: | |||
Employee No.:
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Target Units for the Performance Period: | |||
Dell Inc., a Delaware corporation (the “Company”), is pleased to grant you units representing the
right to receive shares of the Company’s common stock (the “Shares”), subject to the terms and
conditions described below. The target number of units that may be awarded to you (the “Target”)
is stated above. The number of units awarded to you (the “Units”) will be determined on the last
day of each Fiscal Year during the Performance Period. Each Unit represents the right to receive
one Share. As a material inducement to the Company to grant you this award, you agree to the
following terms and conditions. You agree that you are not otherwise entitled to this award, that
the Company is providing you this award in consideration for your promises and agreements below,
and that the Company would not grant you this award absent those promises and agreements.
1. Performance Based Units — The Target represents the number of Units you have the
opportunity to receive based on the Company’s attainment of its annual performance goals. A
portion of the Units will be awarded to you as soon as administratively feasible following each
Fiscal Year during the Performance Period; the actual number of Units you receive will range from
80% to 120% of one third of the Target Units for the Performance Period, which will be determined
by the Company in its sole discretion. You will be notified of the annual performance goals and
the number of Units awarded to you if those goals are attained through separate written
communications. Notwithstanding the preceding paragraph, if your employment is terminated during
the Performance Period by reason of your death or Permanent Disability (as defined below), the
number of units awarded to you will be the Target Units for the Performance Period.
2. Vesting —The Company will issue you one Share for each vested Unit to be delivered on the
vesting date or as soon as administratively practicable thereafter. The Units will vest, and you
will receive Shares, in accordance with the following schedule:
| Number of Units | Date | |
Notwithstanding the foregoing schedule, the Company, with the approval of the Chief Executive
Officer and upon written notice to you, may defer the vesting with respect to all or any portion of
the Units to any date that is not more than ten years after the Date of Grant stated above.
3. Expiration — If your Employment (as defined below) terminates for any reason other than your
death or “Permanent Disability” (as defined in the Plan described below), any Units that have not
vested as described above will expire at that time.
If your Employment is terminated by reason of your death or Permanent Disability, all Units will
vest immediately and automatically upon such termination of Employment.
As used herein, the term “Employment” means your regular full-time or part-time employment with the
Company or any of its Subsidiaries, and the term “Employer” means the Company (if you are employed
by the Company) or the Subsidiary of the Company that employs you.
4. Rights as a Stockholder — You will have no rights as a stockholder with respect to Shares that
may be received by you pursuant to this Agreement until those Shares are issued and registered in
your name on the books of the Company’s
transfer agent. You will have no rights to receive
dividend equivalent payments with respect to Shares that may be received by you pursuant to this
Agreement. Units granted to you will be satisfied wholly through the issuance and delivery of
Shares unless prohibited by applicable law.
5. Agreement With Respect to Taxes — You must pay any taxes that are required to be withheld by
the Company or your Employer. You may pay such amounts in cash or make other arrangements
satisfactory to the Company or your Employer for the payment of such amounts. You agree the
Company or your Employer, at its sole discretion and to the fullest extent permitted by law, shall
have the right to demand that you pay such amounts in cash, deduct such amounts from any payments
of any kind otherwise due to you, or withhold from Shares to which you would otherwise be entitled
the number of Shares having an aggregate market value at that time equal to the amount you owe. In
the event the Company, in its sole discretion, determines that your tax obligations will not be
satisfied under the methods described in this paragraph, you authorize the Company or the Company’s
Stock Plan Administrator, currently UBS Financial Services Inc., to sell a number of Shares that
are issued under the Units, which the Company determines as having at least the market value
sufficient to meet the tax withholding obligations plus additional Shares to account for rounding
and market fluctuations and pay such tax withholding to the Company. The shares may be sold as part
of a block trade with other participants and all participants receive an average price.
6. Leaves of Absence — If you take a leave of absence from active Employment that has been
approved by the Company or your Employer or is one to which you are legally entitled regardless of
such approval, the following provisions will apply:
A. Vesting During Leave — Notwithstanding the vesting schedule set forth above, no Units will vest
during a leave of absence other than an approved employee medical, FMLA or military leave.
Notwithstanding the preceding, vesting shall not be deferred for any approved leave of absence of
less than 30 days. The vesting that would have otherwise occurred during a leave of absence other
than an approved employee medical, FMLA or military leave will be deferred by the number of days
you are on a leave of absence. For example, if your Units are scheduled to vest on August 1, 2007
through August 1, 2011, and you are on a 40-day leave of absence, the dates on which the vesting
occurs will be deferred to September 10, 2007 through September 10, 2011.
B. Effect of Termination During Leave — If your Employment is terminated during the leave of
absence, the Units will expire or vest in accordance with the terms stated in Paragraph 3
(Expiration) above.
7. Return of Share Value — By accepting this award, you agree that if the Company determines that
you engaged in
“Conduct Detrimental to the Company” (as defined below) during your Employment or during the
one-year period following the termination of your Employment, you shall be required, upon demand,
to return to the Company, in the form of a cash payment, certain share value (“Returnable Share
Value”). For purposes of this provision, “Returnable Share Value” means a cash amount equal to the
gross value of the Shares that were issued to you pursuant to this Agreement during the two-year
period preceding the termination of your Employment, determined as of the date such Shares were
issued to you and using the Fair Market Value (as defined in the Plan) of Dell stock on that date.
You understand and agree that the repayment of the Returnable Share Value is in addition to and
separate from any other relief available to the Company due to your Conduct Detrimental to the
Company.
For purposes of this Agreement, you will be considered to have engaged in “Conduct Detrimental to
the Company” if:
(1) you engage in serious misconduct (whether or not such serious misconduct is discovered by the
Company prior to the termination of your Employment);
(2) you breach your obligations to the Company with respect to confidential and proprietary
information or trade secrets or breach any agreement between you and Dell relating to confidential
and proprietary information or trade secrets;
(3) you compete with the Company (as described below); or
(4) you solicit the Company’s employees (as described below).
For purposes of this provision, you shall be deemed to “compete” with the Company if you, directly
or indirectly:
| • | Are a principal, owner, officer, director, shareholder or other equity owner (other than a holder of less than 5% of the outstanding shares or other equity interests of a publicly traded company) of a Direct Competitor (as defined below); | |
| • | Are a partner or joint venture in any business or other enterprise or undertaking with a Direct Competitor; or | |
| • | Serve or perform work (including consulting or advisory services) for a Direct Competitor that is similar in a material way to the work you performed for the Company in the twelve months preceding the termination of your Employment. |
You understand and agree that this provision does not prohibit you from competing with the Company
but only requires repayment of Returnable Share Value in the event of such competition.
For purposes of this provision, you shall be deemed to “solicit the Company’s employees” if you,
directly or indirectly, solicit, recruit, advise, attempt to influence or otherwise induce or
persuade, directly or indirectly (including encouraging another person to influence, induce or
persuade), any person employed by the Company or any of its Subsidiaries to leave the employ of the
Company or any of its Subsidiaries (except for those actions that are within the scope of your
Employment that are taken on behalf of the Company or its Subsidiaries).
The term “Direct Competitor” means any entity, or other business concern that offers or plans to
offer products or services that are materially competitive with any of the products or services
being manufactured, offered, marketed, or are actively developed by Dell as of the date your
employment with Dell ends. By way of illustration, and not by limitation, at the time of
execution of this Agreement, the following companies are currently Direct Competitors:
Hewlett-Packard, Lenovo, IBM, Gateway, Apple, Acer, and CDW. You understand and agree that the
foregoing list of Direct Competitors represents a current list of Dell Direct Competitors as of the
date of execution of this Agreement and that other entities may become Direct Competitors in the
future.
8. Transferability — The Units are not transferable except as described in this Paragraph, and
the provisions of
this Paragraph shall apply notwithstanding any other provision herein to the
contrary.
(a) The Units are transferable by will or the laws of descent and distribution.
(b) The Units may be transferred to (1) one or more “Family Members” (as defined below), (2)
a trust in which you or Family Members own more than 50% of the beneficial interests, (3) a
foundation in which you or Family Members control the management of assets or (4) any other entity
in which you or Family Members own more than 50% of the voting interests; provided, however, that
in any case, (A) the transfer is by way of gift or is otherwise a donative transfer or, in the
case of a transfer to an entity, the transfer is made in exchange for an interest in the entity
and (B) the transferee expressly acknowledges that the terms and provisions of this Agreement will
continue to apply to the Unit in the hands of the transferee. For purpose of this provision, the
term “Family Member” shall mean your spouse, former spouse, child, stepchild, grandchild, parent,
stepparent, grandparent, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law (including adoptive relationships) or any person
sharing your household (other than a tenant or employee). Notwithstanding the provisions of this
subparagraph (b), any transfer described herein must be made in compliance with such procedural
rules and regulations (including those pertaining to the timing of transfers) as are established
from time to time by the Committee.
(c) The Units may be transferred under a domestic relations order in settlement of marital
property rights.
9. Trading Restrictions —The Company may establish periods from time to time during which your
ability to engage in transactions involving the Company’s stock is subject to specified
restrictions (“ Restricted Periods”). Notwithstanding any other provisions herein, Units will not
vest, and Shares will not be issued, during an applicable Restricted Period and the applicable
period during which Units vest shall be extended until the end of such Restricted Period, unless
such vesting is specifically permitted by the Company (in its sole discretion). You may be subject
to a Restricted Period for any reason that the Company determines appropriate, including Restricted
Periods generally applicable to employees or groups of employees or Restricted Periods applicable
to you during an investigation of allegations of misconduct or Conduct Detrimental to the Company
by you.
10. Incorporation of Plan — This award is granted under the Company’s 2002 Long-Term Incentive
Plan (the “Plan”) and is governed by the terms of the Plan in addition to the terms and conditions
stated herein. All terms used herein with their initial letters capitalized shall have the
meanings given them in the Plan unless otherwise defined herein. A copy of the Plan is available
upon request from the Company’s Stock Option Administration Department. Shares of common stock
that are issued pursuant to this Agreement shall be made available from authorized but unissued
shares.
11. Prospectus — You may at any time obtain a copy of the prospectus related to the Dell common
stock underlying the Units by accessing the prospectus at
xxxx://xxxxxx.xx.xxxx.xxx/xxxxx/xxxxxxxxx.xxx. Additionally, you may request a copy of the prospectus free of charge from the Company by contacting Stock Option Administration in writing at Stock Option Administration, One Dell Way, Mail Stop 8038, Xxxxx Xxxx, Xxxxx 00000, (000) 000-0000 or e-mail Stock_Option_Administrator @xxxx.xxx.
xxxx://xxxxxx.xx.xxxx.xxx/xxxxx/xxxxxxxxx.xxx. Additionally, you may request a copy of the prospectus free of charge from the Company by contacting Stock Option Administration in writing at Stock Option Administration, One Dell Way, Mail Stop 8038, Xxxxx Xxxx, Xxxxx 00000, (000) 000-0000 or e-mail Stock_Option_Administrator @xxxx.xxx.
12. Notice — You agree that notices may be given to you in writing either at your home address as
shown in the records of the Company or your Employer, or by electronic transmission (including
e-mail or reference to a website or other URL) sent to you through the Company’s normal process for
communicating electronically with its employees.
13. No Right to Continued Employment — The granting of Units does not confer upon you any right to
expectation of employment by, or to continue in the employment of, your Employer.
14. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation — By
accepting this Agreement and the grant of the Units evidenced hereby, you expressly acknowledge
that (a) the Plan is discretionary in nature and may be suspended or terminated by the Company at
any time; (b) the grant of Units is a one-time benefit that does not create any contractual or
other right to receive future grants of Units, or benefits in lieu of Units; (c) all determinations
with respect to future grants, if any, including the grant date, the number of Units granted and
the vesting dates, will be at the sole discretion of the Company; (d) your participation in the
Plan is voluntary; (e) the value of the Units is an extraordinary item of compensation that is
outside the scope of your employment contract, if any, and nothing can or must automatically be
inferred from such employment contract or its consequences; (f) Units are not part of normal or
expected compensation for any purpose, and are not to be used for calculating any severance,
resignation, redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments, and you waive any claim on such basis; (g) the grant of an
equity interest in the Company gives rise to the Company’s need (on behalf of itself and its
stockholders) to protect itself from Conduct Detrimental to the Company, and your promises
described in Paragraph7 (Return of Share Value) above are designed to protect the Company and its
stockholders from Conduct Detrimental to the Company; (h) vesting of Units ceases upon termination
of Employment for any reason except as may otherwise be explicitly provided in the Plan document or
in this Agreement; (i) the future value of the Units is unknown and cannot be predicted with
certainty; and (j) you understand, acknowledge and agree that you will have no rights to
compensation or damages related to Units or Shares in consequence of the termination of your
Employment for any reason whatsoever and whether or not in breach of contract.
15. Data Privacy Consent — As a condition of the grant of the Units, you consent to the
collection, use and transfer of personal data as described in this paragraph. You understand that
the Company and its Subsidiaries hold certain personal information about you, including your name,
home address and telephone number, date of birth, social security number, salary, nationality, job
title, any ownership interests or directorships held in the Company or its Subsidiaries and details
of all Units, Shares, stock options or other equity awards awarded or
cancelled (“Data”). You further understand that the Company and its Subsidiaries will transfer Data among themselves as
necessary for the purposes of implementation, administration and management of your participation
in the Plan, and that the Company and any of its Subsidiaries may each further transfer Data to any
third parties assisting the Company in the implementation, administration and management of the
Plan. You understand that these recipients may be located in the European Economic Area or
elsewhere, such as the United States. You authorize them to receive, possess, use, retain and
transfer such Data as may be required for the administration of the Plan or the subsequent holding
of shares of common stock on your behalf, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan, including any requisite
transfer to a broker or other third party with whom you may elect to deposit any shares of common
stock acquired under the Plan. You understand that you may, at any time, view such Data or require
any necessary amendments to it.
16. Governing Law and Venue — This Agreement and the Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware, United States of America. The venue for any
and all disputes arising out of or in connection with this Agreement shall be Xxxxxxxxxx County,
Texas, United States of America, and the courts sitting exclusively in Xxxxxxxxxx County, Texas,
United States of America shall have exclusive jurisdiction to adjudicate such disputes. Each party
hereby expressly consents to the exercise of jurisdiction by such courts and hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do so, any objection
that it may now or hereafter have to such laying of venue (including the defense of inconvenient
forum).
17. Effect of Invalid Provisions — If any of the promises, terms or conditions set forth herein
are determined by a court of competent jurisdiction to be unenforceable, any Units that have not
vested as described above will expire at that time and you agree to return to the Company an amount
of cash equal to the Fair Market Value (as defined in the Plan) of all Shares theretofore issued to
you pursuant to this Agreement, determined as of the date such Shares were issued.
18. Acceptance of Terms and Conditions — This award will not be effective and you may not take
action with respect to the Units or the Shares until you have acknowledged and agreed to the terms
and conditions set forth herein in the manner prescribed by the Company.
| Awarded subject to the terms and conditions stated above: | ||||
| DELL INC. | ||||
By:
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