Exhibit 10.4
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EACH OF THE STOCK PLAN SUBCOMMITTEE OF THE COMPENSATION COMMITTEE AND THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF THE XXXXX XXXXXX COMPANIES
INC. RESERVES THE RIGHT TO CHANGE PROVISIONS OF THIS AGREEMENT TO COMPLY WITH
THE AMERICAN JOBS CREATION ACT OF 2004.
PERFORMANCE SHARE UNIT AWARD AGREEMENT
UNDER
THE XXXXX XXXXXX COMPANIES INC.
AMENDED AND RESTATED FISCAL 2002 SHARE INCENTIVE PLAN (THE "PLAN")
This PERFORMANCE SHARE UNIT AWARD AGREEMENT ("Agreement") provides for the
granting of performance share unit awards by The Xxxxx Xxxxxx Companies Inc., a
Delaware corporation (the "Company"), to the participant, an employee of the
Company or one of its subsidiaries (the "Participant"), of the Company's Class A
Common Stock, par value $0.01 (the "Shares"), on the terms and subject to the
conditions hereinafter provided. The name of the "Participant", the "Grant
Date", the aggregate number of Shares representing the Target Award, and the
Plan Achievement (as defined below) goals are stated in the attached "Notice of
Grant", and incorporated herein by reference. The other terms and conditions of
this Performance Share Unit Award are stated in this Agreement and in the Plan.
Terms not defined herein shall have the meaning set forth in the Plan (including
any amendments thereto).
1. AWARD GRANT. The Company hereby awards to the Participant a target award of
Performance Share Units in respect of the number of Shares set forth in the
Notice of Grant (the "Target Award"), representing a Stock Unit and
Performance-Based Award under the terms of the Plan.
2. RIGHT TO PAYMENT OF PERFORMANCE SHARE UNITS. It is understood that the
percentage of the Target Award earned and paid will be established by the
Committee based on the plan achievement (the "Plan Achievement") during the
period specified in the Notice of Grant (the "Award Period"). The Plan
Achievement shall be comprised of, and measured separately with respect to, the
following two components:
(a) Net Sales Cumulative Annual Growth Rate (which shall represent 50% of
the Target Award); and
(b) Earnings Per Share Cumulative Annual Growth Rate (which shall
represent 50% of the Target Award).
For purposes of this Performance Share Unit Award Agreement, "Net Sales" shall
have the meaning utilized by the Company in its consolidated financials in
accordance with generally accepted accounting principles as in effect on the
first day of the Award Period, excluding the impact of foreign currency
fluctuations and "Earnings Per Share" shall have the meaning "diluted earnings
per share" as utilized by the Company in its consolidated financials. Actual
payment of the Performance Share Units awarded will be determined for each
component in accordance with the table attached hereto as Schedule "A".
3. PAYMENT OF AWARDS. Payments made hereunder shall be equal in amount to the
number of Shares equivalent to the number of Performance Share Units earned and
payable to the Participant pursuant to paragraph 2 above. Except as otherwise
provided in paragraph 4 below, payments shall be made as soon as practicable
following the end of the Award Period, but in no event later than 2 and 1/2
months following the last day of the calendar year in which the Award Period
ends. The form of payout shall be in Shares. In addition, each Performance Share
Unit that becomes earned and payable pursuant to paragraph 2 above shall carry a
Dividend Equivalent Right, payable in cash at the same time as the payment of
Shares in accordance with this paragraph 3.
Upon the occurrence of a Change in Control, each Performance Share
Unit will become payable to the Participant with the total Shares to be paid
equal to the Target Award. Payments upon the occurrence of a Change in Control
shall be made as soon as practicable following the Change of Control, but in no
event later than two weeks after the Change in Control. If the Shares cease to
be outstanding immediately after the Change in Control (e.g., due to a merger
with and into another entity), then the consideration to be received per Share
shall equal the consideration paid to each stockholder per Share generally upon
such Change in Control.
4. TERMINATION OF EMPLOYMENT. In the event the Participant's employment
terminates during the Award Period, payouts will be as follows:
(a) Death. In the event of the Participant's death, the Performance Share
Units shall be paid as a pro rata Target Award for full months
employed during the Award Period (i.e., the proration of the Target
Award shall equal a fraction the numerator of which is the number of
full months of service completed in the Award Period through the
Participant's death and the denominator of which is the number of full
months in the Award Period), as soon as practicable following such
Participant's death.
(b) Retirement. In the event of the Employee's formal retirement under the
terms of The Xxxxx Xxxxxx Companies Retirement Growth Account Plan (or
an affiliate or a successor plan or program of similar purpose), the
Performance Share Unit Award shall continue through the Award Period
and the Participant shall be paid based on actual Plan Achievement, at
the same time as such awards are paid to active employees.
(c) Disability. In the event of the occurrence of the Participant's total
and permanent disability (as such status shall be determined under the
Company's long-term disability program), the Performance Share Unit
Award shall continue through the Award Period and the Participant
shall be paid a pro rata amount for full months employed during the
Award Period (with such proration methodology set forth in paragraph
4(a)) based on actual Plan Achievement, at the same time as such
awards are paid to active employees.
(d) Termination of Employment Without Cause. In the event the
Participant's employment is terminated at the instance of the Company
or relevant subsidiary without Cause (as defined below) on or prior to
the end of the first year of the Award Period, the Performance Share
Unit Award shall be forfeited. In the event of such termination after
the end of the first year of the Award Period, the Performance Share
Unit Award shall continue through the Award Period and the Participant
shall be paid a pro rata amount for months employed during the Award
Period (with such proration methodology set forth in paragraph 4(a))
based on actual Plan Achievement, at the same time as such awards are
paid to active employees.
(e) Termination of Employment By Employee. In the event the Participant
terminates his or her employment (e.g., by voluntary resigning),
except in the case of retirement which is subject to paragraph 4(b)
above, the Performance Award shall be forfeited.
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(f) Termination of Employment With Cause. In the event the Participant is
terminated for Cause, the Performance Share Unit Award shall be
forfeited. For purposes hereof, "Cause" shall have the meaning in any
employment agreement as in effect between the Participant and the
Company or any subsidiary and, in the absence of any such agreement,
shall mean any breach by the Participant of any of his or her material
obligations under any Company policy or procedure, including, without
limiting the generality, the Code of Conduct.
(g) Post Employment Conduct. Payout of any Performance Share Unit Award
after termination of employment shall be subject to satisfaction of
the conditions precedent that the Participant neither (i) competes
with, or takes employment with or renders services to a competitor of,
the Company, its subsidiaries or affiliates without the written
consent of the Company, nor (ii) conducts himself or herself in a
manner adversely affecting the Company.
In the event Participant's employment terminates following the expiration of the
Award Period but prior to payout, payout will be subject to the above.
5. NO RIGHTS OF STOCK OWNERSHIP. This grant of Performance Share Units will not
entitle Participant to any interest in or to any voting or other rights normally
attributable to Share ownership other than the Dividend Equivalent Rights
granted in accordance with paragraph 3 above.
6. WITHHOLDING. All payments or distributions of Shares covered by Performance
Share Unit Awards shall be net of any amounts required to be withheld pursuant
to applicable federal, national, state and local tax withholding requirements
imposed by each taxing authority having jurisdiction. The Company (or relevant
subsidiary) may require the Participant to remit to it an amount sufficient to
satisfy such tax withholding requirements prior to the delivery of any
certificates for such Shares. The Company (or relevant subsidiary) may, in its
discretion and subject to such rules as it may adopt (including any as may be
required to satisfy applicable tax and/or non-tax regulatory requirements),
permit the Participant to pay all or a portion of the federal, national, state
and local withholding taxes arising in connection with any Performance Share
Unit Award by electing to have the Company (or relevant subsidiary) withhold
Shares equal in Fair Market Value to the amount to be withheld, such tax
calculated at minimum statutory rates.
7. NONASSIGNABILITY. This award may not be assigned, pledged, or transferred
except, in the event of death, to a designated beneficiary or by will or by the
laws of descent and distribution. The foregoing restrictions shall not apply to
transfers pursuant to a court order, including, but not limited to, any domestic
relations order.
8. EFFECT UPON EMPLOYMENT. The Participant's right to continue to serve the
Company or any of its subsidiaries as an officer, employee, or otherwise, shall
not be enlarged or otherwise affected by the award hereunder.
9. NOTICES. Any notice required or permitted under this Performance Share Unit
Award Agreement shall be deemed to have been duly given if delivered, telecopied
or mailed, certified or registered mail, return receipt requested or by
internationally-recognized courier guaranteeing next day delivery (a) to the
Participant at such address as the Company (or relevant subsidiary) shall
maintain for the Participant per its personnel records or (b) to the Company,
attention Stock Plan Administration at its principal executive offices, which
are currently located at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000.
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10. DISCLOSURE AND USE OF INFORMATION. By signing and returning the attached
Notice of Grant, the Participant hereby expressly: (i) authorizes the Company
and any subsidiary, and any agent of the Company and/or any subsidiary
administering the Plan or providing Plan recordkeeping services, to disclose to
the Company or any of its subsidiaries such information and data as the Company
or any such subsidiary shall request in order to facilitate the grant and
administration of the stock options and/or the administration of the Plan; (ii)
waives any data privacy rights he or she may have with respect to such
information; and (iii) authorizes the Company and any subsidiary to store and
transmit such information in electronic form.
11. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to enforce at
any time any provision of this agreement shall in no manner be construed to be a
waiver of such provision or of any other provision hereof.
12. GOVERNING LAW. The Performance Share Unit Award Agreement shall be governed
by and construed according to the laws of the State of New York, applicable to
agreements made and performed in that state.
13. PARTIAL INVALIDITY. The invalidity or illegality of any provision herein
shall not be deemed to affect the validity of any other provision.
The Xxxxx Xxxxxx Companies Inc.
By:
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Executive Vice President,
Global Human Resources
SCHEDULE "A"
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For Net Sales Cumulative Annual Growth Rate:
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Component Plan Achievement Component Payout (Percentage of Target
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Award)
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High [*] [*]
[*] [*]
Low [*] [*]
For Net Earnings Per Share Cumulative Annual Growth Rate:
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Component Plan Achievement Component Payout (Percentage of Target
-------------------------- --------------------------------------
Award)
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High [*] [*]
[*] [*]
Low [*] [*]
Payout amount for levels of Plan Achievement between the high and low
achievement shall be interpolated on a straight line basis (rounded up to the
nearest integer). In no event shall the Participant receive a payout in excess
of 150% of the Target Award for any component. No payout shall be made in the
event of component Plan Achievement less than low achievement. Notwithstanding
anything to the contrary stated above, the Committee may reduce the payment
based on other factors at the discretion of the Committee unless a Change of
Control has occurred.
In measuring Plan Achievement, financial performance measures (e.g., "Earnings
Per Share" and "Net Sales") will be calculated without regard to the following:
* Changes in accounting principles (i.e., cumulative effect of GAAP
changes)
* Extraordinary items as defined in accordance with US GAAP or which are
the result of a change in the law or the Company's response thereto
* Income/loss from discontinued operations and income/loss on sale of
discontinued operations
* Non-recurring operating income/expenses (separately stated and
disclosed in the financial statements - e.g., restructuring charges,
legal settlement charges, goodwill write-off)
* Impairment of intangibles
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In calculating net sales during the Award Period, net sales in currencies other
than U.S. dollars shall be translated into U.S. dollars at the Company's budget
exchange rate at the beginning of the Award Period.
Earnings Per Share will be calculated based on the weighted average number of
Shares outstanding as of the measurement date and will be adjusted to eliminate
the effect of material changes in the number or type of outstanding Shares due
to events such as:
* Stock splits
* Stock dividends
* Recapitalizations
* Acquisitions involving stock of the Company
No adjustment will be made for the impact of stock repurchases under any plans
approved by the Board
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NOTICE OF GRANT
UNDER
THE XXXXX XXXXXX COMPANIES INC.
AMENDED AND RESTATED FISCAL 2002 SHARE INCENTIVE PLAN (THE "PLAN")
This is to confirm that you were awarded a grant of Performance Share Units at
the most recent meeting of the Stock Plan Subcommittee of the Compensation
Committee of the Board of Directors representing the right to receive shares of
Class A Common Stock of The Xxxxx Xxxxxx Companies Inc. (the "Shares"), subject
to the terms of the Plan and the Performance Share Unit Award Agreement. This
award was made in recognition of the significant contributions you have made as
a key employee of the Company, and to motivate you to achieve future successes
by aligning your interests more closely with those of our stockholders. This
Performance Share Unit Award is granted under and governed by the terms and
conditions of the Plan and the Performance Share Unit Award Agreement (the
"Agreement") attached hereto and made part hereof. Please read these documents
and keep them for future reference. The specific terms of your award are as
follows:
Participant: ((FIRST_NAME)) ((LAST_NAME))
SSN or Tax ID: ((SS))
Grant Date: [*]
Award Period: [*]
Type of Award: STOCK UNIT AND PERFORMANCE-BASED AWARD (REFERRED TO HEREIN AS A
"PERFORMANCE SHARE UNIT")
Target Award: [*] shares of Class A Common Stock. See Schedule "A" to the
Agreement for actual payouts depending upon level of performance.
Plan Achievement goal at 100% for Award Period:
Net Sales Cumulative Annual Growth Rate
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Earnings Per Share Cumulative Annual Growth Rate
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Questions regarding the award can be directed to Xxxxxx Xxxxx at (000) 000-0000
or Xxxxxxxx Xxxxxxxxxx at (000) 000-0000. If you wish to accept this grant,
PLEASE SIGN THIS NOTICE OF XXXXX AND RETURN IMMEDIATELY TO:
Compensation Department
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTENTION: XXXXXX XXXXX
The undersigned hereby accepts, and agrees to, all terms and provisions of the
Agreement, including those contained in this Notice of Grant.
By_________________________ Date__________
Enclosure:
Performance Share Unit Award Agreement
Summary Plan Description
