LONG-TERM CASH BONUS AWARD AGREEMENT LONG-TERM INCENTIVE PLAN
Exhibit 10.2
XXXXXXX DENVER, INC.
LONG-TERM CASH BONUS AWARD AGREEMENT
LONG-TERM INCENTIVE PLAN
LONG-TERM INCENTIVE PLAN
THIS LONG-TERM CASH BONUS AWARD AGREEMENT (“Agreement”), made effective as of the Grant Date
(as defined in paragraph 1), by and between «FirstName» «LastName» (hereinafter the “Participant”)
and Xxxxxxx Denver, Inc. (hereinafter the “Company”);
WITNESSETH THAT:
WHEREAS, the Company maintains the Long-Term Incentive Plan (the “Plan”) and the Participant
has been selected by the committee administering the Plan (the “Committee”) to receive a Long-Term
Cash Bonus Award (“Award”) under the Plan:
NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as follows:
1. Benefits. Participant shall be eligible to receive any and all benefits to which he
is entitled to receive for the Long Term Cash Bonus Award under the terms and subject to the
conditions of the Plan, as amended from time to time, which terms and conditions are hereby made a
part hereof and are incorporated herein by reference. In the event of any inconsistency or conflict
between the terms of the Plan and those of this Award Agreement, the terms of the Plan shall
prevail. Terms which are not specifically defined herein shall have the meanings ascribed to them
in the Plan.
2. Terms of Award. The following terms used in this Agreement shall have the meanings
set forth below:
(a)
Grant Date. The “Grant Date” is <<Insert
Date>>.
(b) Performance Period. The “Performance Period” is the period beginning on the Grant
Date and ending on the third anniversary of the Grant Date.
(c) Base Salary Factor. The “Base Salary Factor” to be used in calculating the
Participant’s Award granted hereunder by application to the Participant’s Base Salary in effect as
of the end of the Performance Period, is «BonusTarget».
(d) Performance Targets. The “Performance Targets” which must be met by the end of the
Performance Period in order for the Participant to receive an Award hereunder are the following
percentage increases in the compound growth rate of earnings before taxes for the Company’s
industrial businesses (i.e., excluding petroleum products) (the “Earnings Growth Rate”):
| Threshold Performance | Target Performance | Maximum Performance | ||
| 4% | 8% | 12% |
(e) Payment Opportunity. The Participant’s “Payment Opportunity” is determined by the
extent to which the Performance Targets set forth in this paragraph 1(d) are met by the end of the
Performance Period in accordance with the following table:
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| Performance Target Achieved | Payment Opportunity | |||
Threshold Performance |
50 | % | ||
Target Performance |
100 | % | ||
Maximum Performance |
200 | % | ||
The Payment Opportunity for an Earnings Growth Rate occurring between stated Performance Targets at
the end of any Performance Period shall be determined through simple interpolation. An Earnings
Growth Rate below the Threshold Performance in any Performance Period will result in no Award
payment for that Performance Period.
(f) Date of Termination. The Participant’s “Date of Termination” shall be the first
day occurring on or after the Grant Date on which the Participant is no longer employed by the
Company or any Subsidiary or Affiliate of the Company, regardless of the reason for the termination
of employment; provided that a termination of employment shall not be deemed to occur by reason of
a transfer of the Participant between the Company and a Subsidiary or between two Subsidiaries. All
determinations regarding employment shall be made by the Committee.
(g) Target Performance. Target Performance means the Earnings Growth Rate Performance
Target for the Performance Period, the attainment of which is necessary for the payment of a 100%
Payment Opportunity.
(h) Threshold Performance. Threshold Performance means the Earnings Growth
Rate Performance Target for the Performance Period, the attainment of which is necessary for the
payment of a 50% Payment Opportunity and for the payment of any Award at the conclusion of a
Performance Period.
(i) Maximum Performance. Maximum Performance means the Earnings Growth Rate
Performance Target for the Performance Period, the attainment of which is necessary for the payment
of a 200% Payment Opportunity.
(j)
Earnings Before Taxes. <<Insert Year>>
Long-Term Cash Bonus Award based on <<Insert Year>> EBT
for the Company’s industrial businesses (i.e., excluding
petroleum products) of $<<Insert EBT>>
(excluding amortization of goodwill).
3. Award. The Participant is hereby awarded a Long-Term Cash Bonus Award under the
Plan in an amount to be determined in accordance with the terms set forth in paragraph 2 above,
subject to the achievement of the Performance Targets set forth therein. The Committee shall
compute the specific amount of Long-Term Cash Bonus Award payable to the Participant hereunder by
applying the Base Salary Factor set forth above to the Participant’s Base Salary in effect as of
the end of the Performance Period and multiplying that product by the applicable payment
opportunity as of the end of the Performance Period in accordance with the following formula:
Payment Opportunity X (Base Salary Factor X Base Salary)
In the event the Award calculated in accordance with the provisions of paragraph 2 above exceeds
the maximum Award permissible under the terms of the Plan, then such Award shall automatically be
reduced to the maximum permitted under the terms of the Plan.
4. Payment. Unless the Participant’s Date of Termination occurs during the Performance
Period, then, as soon as practicable following the end of the Performance Period, but no later than
March 15th following the calendar year in which occurs the later of the time the legally
binding right to the
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payment arises or the time such right first ceases to be subject to a substantial risk of
forfeiture, the Participant shall be paid in a lump sum in either cash or Restricted Stock, at the
sole and absolute discretion of the Committee, an Award calculated in accordance with the terms and
methodology set forth in paragraph 2 hereof. In the event the Participant’s Date of Termination
occurs prior to the end of the Performance Period for any reason other than death, Disability, or
Retirement, the Award granted hereunder, if any, shall be forfeited as of the Date of Termination,
unless the Committee determines otherwise in its sole and absolute discretion. In the event the
Participant’s Date of Termination occurs prior to the end of the Performance Period due to the
Participant’s death, Disability, or Retirement, then the Participant shall receive a prorated
payment of the Award payable hereunder, if any, at the end of the Performance Period, but no later
than March 15th following the calendar year in which occurs the later of the time the
legally binding right to the payment arises or the time such right first ceases to be subject to a
substantial risk of forfeiture, based on the portion of the Performance Period elapsed as of the
Date of Termination and the achievement of the Performance Targets as of the end of the Performance
Period.
5. Assignment and Transfer. Participant shall not sell, transfer, assign, hypothecate,
pledge, grant a security interest in, or in any other way alienate any Award granted hereunder, or
any interest or right therein, except by will or the laws of descent and distribution, and any such
attempted transfer, assignment, hypothecation, pledge or grant of a security interest shall be null
and void and of no legal force or effect.
6. Acceleration of Payment Upon Change in Control. In the event of a Change in
Control, then the Participant shall receive a prorated payment of the Award payable hereunder, if
any, at the end of the Performance Period, but no later than March 15th following the
calendar year in which occurs the later of the time the legally binding right to the payment arises
or the time such right first ceases to be subject to a substantial risk of forfeiture, based on the
portion of the Performance Period elapsed as of the Date of Termination and the achievement of the
Performance Targets as of the end of the Performance Period..
7. Non-competition, Non-solicitation, and Non-disclosure. The Committee in its sole
discretion, may require the Participant to reimburse immediately, without consideration from the
Company, the sum total of the last Award made hereunder, and forfeit any Award earned but not paid
hereunder if any of the following events occur: (a) the Participant, as individual or as a partner,
employee, agent, advisor, consultant or in any other capacity of or to any person, firm,
corporation or other entity, directly or indirectly, carries on any business, or becomes involved
in any business activity, competitive with the Company or any subsidiary, in violation of the
Company’s Code of Ethics and Business Conduct (CP-10-002); (b) the Participant solicits or entices
any other employee of the Company or its affiliates to leave the Company or its affiliates to go to
work for any other business or organization which is in direct or indirect competition with the
Company or any of its affiliates, or request or advises a customer or client of the Company or its
affiliates to curtail or cancel such customer’s business relationship with the Company or its
affiliates; or (c) the Participant fails to abide by the contractual terms of the Employee
Non-disclosure Agreement and/or Invention Assignment Agreement, as applicable, which were executed
in accordance with the Company’s Security of Confidential and Proprietary Information Policy
(CP-10-013) during the Participant’s employment with the Company.
8. Unearned Awards. In the event the Company restates its financial results within 12
months of an Award made hereunder due to material non-compliance by the Company with any financial
reporting requirements of the federal securities laws, (as determined by the members of the
Compensation Committee and/or the Board who are “independent” under the Company’s corporate
governance guidelines), the Company may recover from the Participant, in such manner as the Company
deems appropriate under the circumstances, the difference between (x) the sum total of the Award
actually awarded to the Participant and (y) the amount of the Award such Participant would have
received had the Award been calculated based on the restated financial statements.
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9. Withholding. All payments and distributions under this Agreement are subject to
withholding of all applicable taxes.
10. Miscellaneous. This Agreement contains the entire agreement of the parties with
respect to its subject matter. This Agreement shall be binding upon and inure to the benefit of the
respective parties, the successors and assigns of the Company, and the heirs and personal
representatives of the Participant.
11. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without reference to its principles of conflict
of laws.
12. Heirs and Successors. This Agreement shall be binding upon, and inure to the
benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by
merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s
assets and business. If any rights exercisable by the Participant or benefits deliverable to the
Participant under this Agreement have not been exercised or delivered, respectively, at the time of
the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such
benefits shall be delivered to the Designated Beneficiary, in accordance with the provisions of
this Agreement and the Plan. The “Designated Beneficiary” shall be the beneficiary or beneficiaries
designated by the Participant in a writing filed with the Committee in such form and at such time
as the Committee shall require. If a deceased Participant fails to designate a beneficiary, or if
the Designated Beneficiary does not survive the Participant, any benefits distributable to the
Participant hereunder shall be distributed to the legal representative or the estate of the
Participant. If a deceased Participant designates a beneficiary but the Designated Beneficiary dies
before the complete distribution of benefits to the Designated Beneficiary under this Agreement,
then any benefits that would have been distributed to the Designated Beneficiary shall be
distributed to the legal representative or the estate of the Designated Beneficiary.
13. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the Committee shall have all
powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of the
Agreement by the Committee and any decision made by it with respect to the Agreement is final and
binding on all persons.
14. Interpretation and Savings Clause.
All terms and conditions of this Agreement
applicable to qualified performance-based compensation shall be construed to be in accordance
with the qualified performance-based compensation requirements of Section 162(m) of the Internal
Revenue Code, and any offending or non-compliant terms shall be amended, voided and/or reformed to
the extent necessary to comply with Section 162(m). Likewise, all terms and conditions of this
Agreement applicable to any non-qualified deferred compensation shall be construed to be in
accordance with the non-qualified deferred compensation requirements of Section 409A of the
Internal Revenue Code, including but not limited to its short term deferral exception, and any
offending or non-compliant terms shall be amended, voided and/or reformed to the extent necessary
to comply with Section 409A.
15. Not an Employment Contract. This Agreement will not confer on the Participant any
right with respect to continuance of employment or other service with the Company or any
Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would
otherwise have to terminate or modify the terms of such Participant’s employment or other service
at any time.
16. Amendment. This Agreement may be amended by written agreement of the Participant
and the Company, without the consent of any other person.
17. Entire Agreement. This Agreement sets forth the entire agreement, and supersedes
all other agreements and understandings, whether oral or written, by and between the parties
relating to the subject matter hereof.
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IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company has caused these
presents to be executed in its name and on its behalf, all as of the Grant Date.
| Xxxxxxx Denver, Inc. | ||||
| By: | ||||
| Title: | ||||
| Participant | ||||
| Signed: | ||||
| Date: | ||||
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