EXHIBIT 10.16
XXXXXX INDUSTRIES, INC.
EXECUTIVE STOCK INCENTIVE AGREEMENT
This Agreement is made of the 11th day of February 2003 between Xxxxxx
Industries, Inc., an Ohio Corporation, having its principal place of business in
Houston, Texas (the "Company") and _________, an Executive of the Company
("Executive"). All capitalized terms used in this Agreement are as defined in
the Xxxxxx Industries, Inc. Amended and Restated Stock Incentive Plan (the
"Plan"), unless otherwise defined in this Agreement.
1. Restricted Stock Award. Pursuant to Section VIII of the Plan,
the Company hereby grants to the Executive, as of the date hereof, _______
restricted stock units ("Restricted Stock Units"), subject to the restrictions
set forth in this Agreement ("Restricted Stock Award"). Upon termination of the
restrictions related thereto, each Restricted Stock Unit shall be converted into
one Class A Common Share of Xxxxxx Industries, Ltd., par value $.01 per share
("Common Shares"). Except as provided in Paragraphs 4(b) and 7 of this
Agreement, restrictions shall lapse on the Restricted Stock Units on February
11, 2006, provided the Executive is actively employed by the Company on that
date. Except for Restricted Stock Units payable in cash pursuant to Paragraph 6,
the Company shall cause its parent, Xxxxxx Industries, Ltd., to issue a stock
certificate or book entry shares in the Executive's name for the designated
number of Common Shares effective on the date the restrictions lapse on the
Restricted Stock Units as provided herein.
2. Performance Shares
(a) Performance Period. For purposes of this Agreement, the
"Performance Period" shall be January 1, 2003 to December 31, 2004.
(b) Performance Share Grant. Pursuant to Section IX of the
Plan, the Company hereby grants to the Executive, as of the date hereof, an
Award of Performance Shares that may be earned based on the financial
performance of the Company during the Performance Period, subject to the
restrictions and conditions set forth in this Agreement ("Performance Share
Grant"). The Committee has established Performance Goals such that if the
Company achieves a cumulative annual growth rate of earnings per share ("EPS")
for the Performance Period of nine percent or greater over operating EPS for
2002 of $2.60, then the Executive will be issued Performance Shares in
accordance with the following chart:
Cumulative Fully Diluted EPS Performance
Performance Annual EPS Cumulative Total Over Shares That
Level Growth Rate Performance Period May Be Earned
----------- ----------- --------------------- -------------
Goal 9% $5.92 _______
Target 12% $6.17 _______
Maximum 15% $6.43 _______
The number of shares appearing under the heading "Performance Shares
That May Be Earned" shall constitute the number of the Company's Performance
Shares which may be earned by the Executive based upon achievement of the
Performance Goal levels established by the Committee during the Performance
Period (Goal, Target or Maximum). In the event the Company's actual cumulative
annual growth rate of EPS for the Performance Period exceeds the Goal level of
9% but is lower than the Maximum level of 15%, the number of Performance Shares
earned by the Executive shall be interpolated on a pro-rata basis. In the event
the Company's actual cumulative annual growth rate of EPS for the Performance
Period is below the Goal (9%) level, no Performance Shares will be earned. The
Maximum number of Performance Shares will be earned if the cumulative annual
growth rate of EPS is 15% or more during the Performance Period.
At the end of the Performance Period, the Committee shall determine the
level of achievement of the Performance Target and the Performance Shares, if
any, earned by the Executive. The Performance Shares earned by the Executive, if
any, shall then be subject to restrictions until February 11, 2006.
Except as provided under Paragraph 7 of this Agreement, restrictions
shall lapse on any Performance Shares earned by the Executive during the
Performance Period on February 11, 2006, provided the Executive is actively
employed by the Company on that date. Except for Performance Shares payable in
cash as provided in Paragraph 6, the Company shall cause its parent, Xxxxxx
Industries, Ltd., to issue a stock certificate or book entry shares in the
Executive's name for the Performance Shares earned by the Executive upon the
lapse of restrictions on those shares as provided herein.
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3. Dividends. Upon the lapse of restrictions on Restricted Stock
Units pursuant to Paragraph 1 and on earned Performance Shares, if any, pursuant
to Paragraph 2, the Company shall pay to the Executive in cash an amount equal
to the aggregate amount of cash dividends that the Executive would have received
had the Executive been the owner of record of Common Shares representing the
Restricted Stock Units and earned Performance Shares, if any, from the effective
date of this Agreement to February 11, 2006. Upon the lapse of restrictions on
Restricted Stock Units and on the Target level of Performance Shares in the
event of a Change in Control pursuant to Section 7, the Company shall pay to the
Executive in cash an amount equal to the cash dividends that the Executive would
have received had the Executive been the owner of record of Common Shares
representing the Restricted Stock Units and the Target level of Performance
Shares from the effective date of this Agreement to the date of the Change in
Control.
4. Restrictions and Limitations. The Executive hereby accepts the
Restricted Stock Award and the Performance Share Grant and agrees to the
following restrictions and conditions.
(a) Forfeiture. Except as provided in (b) below or Paragraph
7, if the Executive's active employment with the Company terminates for any
reason prior to February 11, 2006, Restricted Stock Units granted pursuant to
Paragraph 1 and earned or unearned Performance Shares not yet vested under
Paragraph 2 shall be forfeited by the Executive.
(b) Termination Upon Death, Disability or Mandatory
Retirement. In the event of the Executive's death or permanent and total
disability under the Xxxxxx Industries, Inc. Salaried Employees Retirement Plan,
the Committee may, in its sole and absolute discretion, terminate the
restrictions on all or any part of the Restricted Stock Units pursuant to
Paragraph 1 on the date of Executive's death or disability and the Company shall
cause Xxxxxx Industries, Ltd. to issue Common Shares in the name of the
Executive (or his or her heirs or beneficiaries) for any such Restricted Stock
Units and issue a cash payment from the Company equal to the aggregate amount of
cash dividends that the Executive would have received had the Executive been the
owner of record of Common Shares representing such Restricted Stock Units from
the effective date of this Agreement until the date of Executive's death or
disability. In the event of the Executive's death, permanent and total
disability or retirement under the Xxxxxx Industries, Inc. Salaried Employees
Retirement Plan after the Performance Period, the Executive (or his or her heirs
or beneficiaries) shall receive the Performance Shares earned by the Executive
under this Agreement on the date
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restrictions on these shares would otherwise lapse and shall receive a cash
payment for dividends as described in Paragraph 3.
(c) Limitations on Transferability. The Executive shall not
sell, exchange, transfer, pledge, hypothecate or otherwise dispose of the
Restricted Stock Units or the Performance Share Grant prior to the lapse of
restrictions in accordance with Paragraphs 1 and 2 of this Agreement.
5. Tax. Upon the issuance of Common Shares to the Executive for
Restricted Stock Units or Performance Shares earned under this Agreement, the
Executive shall pay the Company any taxes required to be withheld by reason of
the receipt of compensation resulting from the issuance of such Common Shares.
In lieu thereof, the Company shall have the right to retain, or the Executive
may direct the Company to retain, a sufficient number of Common Shares to
satisfy the Company's withholding obligations, provided the value of the Common
Shares used to satisfy the withholding obligations does not exceed the minimum
required tax withholding for the transaction. The value of any Common Shares
used to satisfy the tax withholding requirement shall be determined by the
average of the high and the low trading prices of the Common Shares on the New
York Stock Exchange on the date the restrictions lapse (or if shares are not
traded on the Exchange on such date, then on the immediately preceding trading
date).
6. Election to Receive Cash for Shares. Subject to the conditions
set forth in this Paragraph 6, the Executive may request that up to 50% of the
value of the Restricted Stock Units or Performance Shares earned under this
Agreement, when and if restrictions lapse, be paid in cash in an amount equal to
the fair market value of such portion of the Restricted Stock Award or earned
Performance Shares. Such request shall be made by delivering to the Company at
the office of its Secretary, no later than thirty days before the date that the
restrictions lapse, a written notice setting forth that portion (expressed as a
percentage) of the Award of Grant on which restrictions shall lapse for which
the Executive desires to receive cash. For the purposes of this Paragraph 6, the
fair market value of the Restricted Stock Award and Performance Shares shall be
the average of the high and low trading prices of the Common Shares on the New
York Stock Exchange on the date on which the restrictions lapse (or if shares
are not traded on the Exchange on such date, then on the immediately preceding
trading date). The Committee shall consider the Executive's request and have
sole and absolute discretion to determine if and to what extent the request
shall be approved, giving consideration to the Executive's compliance with
applicable stock ownership guidelines and other factors as appropriate. To the
extent the Executive's request
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is not approved, the Executive shall receive the Restricted Stock Award and
Performance Shares in Common Shares.
7. Change in Control. In the event of a Change in Control, a)
restrictions on Restricted Stock Units shall immediately lapse and payment or
distribution of the Restricted Stock Units shall be governed by the terms of the
Plan; and b) the Performance Share Award shall be deemed earned at the Target
level, all restrictions on those Performance Shares shall immediately lapse and
distribution of the Target level of Performance Shares shall be governed by the
terms of the Plan.
8. Consideration. The parties agree that the consideration for
any issuance of Common Shares for Restricted Stock Units and Performance Share
Awards hereunder shall be past services by the Executive having a value not less
than the par value of such Common Shares.
9. Plan Incorporated. The Executive acknowledges receipt of a
copy of the Plan, which is incorporated by reference into this Agreement. The
Executive agrees that this Restricted Stock Award and Performance Share Grant
shall be subject to all of the terms and provisions of the Plan.
10. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under the Executive.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by an officer thereunto duly authorized, and the Executive has executed
this Agreement, all as of the date first above written.
XXXXXX INDUSTRIES, INC.
By: _________________________________
(name)
(title)
EXECUTIVE
By: _________________________________
(name)
(title)
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