EXHIBIT 10.1
[ECHELON LOGO]
MEMORANDUM
DATE: AUGUST 18, 1999
TO: W. XXXXXXX XXXXXXX
FROM: XXXXX X. XXXXXXX
RE: EMPLOYMENT AGREEMENT - SUPPLEMENT
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To confirm the action of the Echelon International Corporation Board of
Directors and Compensation Committee, please note the following amendment to
your Employment Agreement dated November 20, 1996, amended and restated as of
September 18,1998:
TO EXHIBIT A, LTIP SECTION ADD THE FOLLOWING:
1999, 2000,2001 CYCLE YEARS
The following table sets forth the Cumulative Net Asset Value Per Share
for the Threshold, Target and Maximum awards. Under the Board approved
methodology, the Net Asset Value Per Share as of 01/01/99 was $34.85. The
Threshold level requires a cumulative 5% increase in Net Asset Value Per Share
for the three years ending 12/31/2001, the Target level requires a cumulative 9%
increase in Net Asset Value Per Share for the three years ending 12/31/2001, and
the Maximum level requires a cumulative 13% increase in Net Asset Value Per
Share for the three years ending 12/31/2001.
LTIP AWARDS FOR THE 1999 - 2001 CYCLE
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LTIP THRESHOLD TARGET MAXIMUM
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Assumes 9% 5% 9% 13%
CAP rate
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Net Asset Beginning of $ 34.85 $ 34.85 $ 34.85
Value Per period 01/01/99
Share
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Net Asset As of $ 40.34 $ 45.13 $ 50.29
Value Per 12/31/2001
Share
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The following table sets forth the incremental annual award correlating
to the Threshold, Target and Maximum LTIP Cumulative Net Asset Values and awards
associated with achieving such levels of cumulative net asset value per share:
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OPTIONS TO
PURCHASE NUMBER
DOLLAR VALUE OF OF SHARES OF
RESTRICTED STOCK COMMON STOCK
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THRESHOLD
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Cumulative Net Asset $40.34
Value Per Share
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LTIP Value $50,000.00 5,000
(% of Base Salary) (20%)
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TARGET
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Cumulative Net Asset $45.13
Value Per Share
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LTIP Value $100,000.00 10,000
(% of Base Salary) (40%)
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MAXIMUM
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Cumulative Net Asset $50.29
Value Per Share
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LTIP Value $150,000.00 15,000
(% of Base Salary) (60%)
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Of the total restricted stock values and number of options set forth
above, 60% of the applicable restricted stock values and number of options
(Threshold, Target and Maximum) shall be paid, if any, upon satisfaction of the
applicable Performance Goals (Threshold, Target or Maximum) and 40% of the total
applicable restricted stock values and number of options (Threshold, Target or
Maximum) shall be paid, if any, upon satisfaction of the applicable Net Asset
Value Per Share (Threshold, Target or Maximum) set forth above.
For purposes of administering the LTIP, during the 1999, 2000, 2001
three-year cycle, (i) all LTIP awards shall be paid in the form of restricted
shares and options; (ii) the number of restricted shares above shall be
determined by dividing the dollar value of the Maximum LTIP Value, $150,000, by
the closing price on April 19, 1999, ($19.9375); (iii) the restricted shares,
among other things, shall be subject to a risk of forfeiture if and to the
extent that the performance criteria set forth in this Exhibit A with respect to
the 1999, 2000, 2001 Cycle Years are not met; (iv) if actual cumulative Net
Asset Value Per Share for the three-year period ending December 31, 2001, does
not equal or exceed Threshold LTIP Net Asset Value Per Share for such period,
all restricted shares shall be forfeited, and no LTIP bonus will have been
earned; (v) if actual cumulative Net Asset Value Per Share for the three year
period ending December 31, 2001, exceeds Threshold LTIP Net Asset Value Per
Share, but is less than Target LTIP Net Asset Value Per Share, for such period,
or exceeds Target LTIP Net Asset Value Per Share, but is less than Maximum LTIP
Net Asset Value Per Share, for such period, the percentage of the LTIP
restricted shares as to which the risk of forfeiture shall lapse shall be
proportionately increased above the Threshold bonus amount or the Target Bonus
amount, as the case may be; and (vi) if cumulative Net Asset Value Per Share for
the three-year period ending December 31, 2001 equals or exceeds Maximum LTIP
Net Asset Value Per Share for such period, the risk
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of forfeiture shall lapse as to all restricted shares, but no additional shares
will be issuable under the LTIP regardless of the amount by which actual
cumulative net asset value per share for the three years ending December 31,
2001 exceeds such Maximum LTIP Net Asset Value Per Share (vii) the option
exercise price shall be the closing price on April 19, 1999, ($19.9375); and
(viii) the options shall be 100% vested as of the date of the satisfaction of
the applicable performance goal.
Please execute a copy of this memo and return it to me in the enclosed
envelope. Should you have any questions, please contact me.
# # #
Accepted and Acknowledged on _____________________{date}
By:__________________________________________________
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