PERFORMANCE FOOD GROUP COMPANY Stock Appreciation Right Award Agreement
EXHIBIT 10.1
PERFORMANCE FOOD GROUP COMPANY
Stock Appreciation Right Award Agreement
Stock Appreciation Right Award Agreement
THIS STOCK APPRECIATION RIGHT AWARD AGREEMENT (this “Agreement”) is made and entered into
on ___ (the “Grant Date”), by and between Performance Food Group Company, a Tennessee
corporation (together with its Subsidiaries and Affiliates, the “Company”), and ___
(the “Grantee”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to
such terms in the Performance Food Group Company 2003 Equity Incentive Plan, as amended (the
“Plan”).
WHEREAS, the Company has adopted the Plan, which permits the issuance of stock appreciation
rights with respect to shares of the common stock, par value $.01 per share, of the Company (the
“Shares”); and
WHEREAS, pursuant to the Plan, the Committee has granted an award of a stock appreciation
right to the Grantee as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
1. Grant of Stock Appreciation Right.
(a) The Company grants as of the date of this Agreement to the Grantee, a Stock-Settled Stock
Appreciation Right (the “SSAR”) with respect to
___ Shares (the “Shares Granted”), at a xxxxx
xxxxx of $______ per Share (the “Xxxxx Xxxxx”), on the terms and conditions set forth in this
Agreement and subject to all provisions of the Plan. Upon exercising this SSAR, the Grantee shall
receive from the Company for each Share Granted that is being exercised, an amount (payable in the
form of Shares) determined by multiplying (i) the appreciated value of one Share calculated as the
Fair Market Value (as defined below) of one Share on the date of exercise minus the Xxxxx Xxxxx and
(ii) the number of Shares Granted as to which the SSAR is being exercised; provided, however that
in no event shall such appreciated value exceed $___ per Share based on the closing price of
the Shares on the Nasdaq Global Select Market or such other exchange as the Shares are then traded
on any day following the Vesting Period (the “Capped Value”) (such shares being the “Issued
Shares”). No fractional Share shall be distributed in settlement of the SSAR and any portion of the
SSAR which would be settled in a fractional Share shall be rounded
down to the next closest
whole share with no additional payment to be made in cash. The
Grantee, holder or beneficiary of the SSAR shall not have any of the rights of a shareholder with
respect to the Shares Granted until such person has become a holder of Issued Shares with respect
to such Shares Granted by the due exercise of the SSAR in accordance with this Agreement.
(b) In order to provide the Company with the opportunity to claim the benefit of any income
tax deduction which may be available to it upon the exercise of the SSAR or upon the attainment of
the Capped Value, and in order to comply with all applicable federal or state tax laws or
regulations, the Company may take such action as it deems appropriate to insure that,
if necessary, all applicable federal, state or other taxes are withheld or collected from the
Grantee upon the exercise of the SSAR or the attainment of the Capped Value.
2. Exercise of SSAR. The Grantee may exercise the SSAR beginning on the fourth
anniversary of the date of this Agreement provided that the Grantee has been an employee of the
Company at all times from the Grant Date to such fourth anniversary (such four-year period being
referred to as the “Vesting Period”). Notwithstanding the above, each outstanding SSAR shall vest
and become exercisable upon the occurrence of a Change in Control or Potential Change in Control
and shall be governed by the provisions of Section 13 of the Plan. In the event that the Grantee
dies, is Disabled or elects Normal Retirement (as defined below) before the expiration of the
Vesting Period, the SSAR shall vest as of the date of such death, disability or Normal Retirement,
as the case may be, on a pro rata basis with respect to the amount of the Vesting Period that has
elapsed, rounded to the nearest whole share. If Grantee elects Early Retirement (as defined below)
prior to the expiration of the Vesting Period, this SSAR shall vest as though Grantee had elected
Normal Retirement, provided that the Grantee’s Early Retirement is with the consent of the
Committee. “Early Retirement” means retirement, for purposes of the Plan with the express consent
of the Company at or before the time of such retirement, from active employment with the Company
prior to age 65, in accordance with any applicable early retirement policy of the Company then in
effect. “Normal Retirement” means retirement from active employment with the Company on or after
age 65. For purposes of this Agreement, “Disabled” means that the Grantee is permanently unable to
perform the essential duties of the Grantee’s occupation.
3. Manner of Exercise. The SSAR may be exercised in whole or in part at any time
within the period permitted hereunder for the exercise of the SSAR, with respect to whole Shares
only, by serving written notice of intent to exercise the SSAR delivered to the Company at its
principal office (or to the Company’s designated agent), stating the number of Shares Granted as to
which the SSAR is to be exercised, the person or persons in whose name the Issued Shares are to be
registered and each such person’s address and social security number. Such notice shall be in the
form of Exhibit A attached hereto or in such other form as the Company may hereafter
establish and shall not be effective until received by the Company and unless accompanied by
payment in full of cash equal to the required withholding taxes as set forth by Internal Revenue
Service and applicable state tax guidelines for the employer’s minimum statutory withholding (the
“Tax Payment”). The Tax Payment shall be made in cash or cash equivalents or in whole Shares held
by the Grantee valued at the Shares’ Fair Market Value on the date of exercise (or next succeeding
trading date if the date of exercise is not a trading date) or by a combination of such cash (or
cash equivalents) and Shares. Alternatively, the Company in its sole discretion and pursuant to
such procedures as it may specify from time to time, may withhold that number of Shares from the
Issued Shares as shall have a Fair Market Value on the date of exercise (or next succeeding trading
date if the date of exercise is not a trading date) equal to the Tax Payment. Subject to applicable
securities laws, the Grantee may also exercise the SSAR by delivering a notice of exercise of the
SSAR and by simultaneously selling the Issued Shares thereby acquired pursuant to a brokerage or
similar agreement approved in advance by proper officers of the Company, using the proceeds of such
sale as payment of the Tax Payment. For purposes of this Agreement, “Fair Market Value” means the
closing sales price of the Shares on the Nasdaq Stock Market’s Global Select Market or such other
market as the Shares are then traded. As soon as practicable after the receipt of the Grantee’s
written notice to exercise the SSAR (in whole or in part), the Company shall cause to be delivered
to the Grantee or his or her legal representative, as
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the case may be, one or more certificates for the Issued Shares due to the Grantee upon
exercise, less that number of Shares of the Issued Shares, if any, withheld by the Company for
payment of the Tax Payment. Notwithstanding anything to the contrary in this Section 3, in the
event that the Capped Value is achieved following the Vesting Period, the Grantee hereby agrees to
the automatic exercise of all vested SSARs under this Agreement at the close of business on such
date, such that all the SSARs which are vested under this Agreement at that time will be exercised
and the Issued Shares will be delivered to the Grantee following payment of the Tax Payment in
accordance with the provisions of this Section 3.
4. Termination of SSAR. The SSAR will expire ten years from the date of grant of the
SSAR (the “Term”) with respect to any then unexercised portion thereof, unless terminated earlier
as set forth below:
(a) Termination by Death. If the Grantee’s employment by the Company terminates by
reason of death, or if the Grantee dies within three months after termination of such employment
for any reason other than Cause, this SSAR may thereafter be exercised by the legal representative
of the estate or by the legatee of the Grantee under the will of the Grantee, for a period of one
year from the date of death or until the expiration of the Term of the SSAR, whichever period is
the shorter.
(b) Termination by Reason of Disability. If the Grantee’s employment by the Company
terminates by reason of Disability, this SSAR may thereafter be exercised by the Grantee or
personal representative or guardian of the Grantee, as applicable, for a period of three years from
the date of such termination of employment or until the expiration of the Term of the SSAR,
whichever period is the shorter.
(c) Termination by Retirement. If Grantee’s employment by the Company terminates by
reason of Early Retirement or Normal Retirement, this SSAR may thereafter be exercised by the
Grantee until the expiration of the Term of the SSAR.
(d) Termination for Cause or Voluntary Termination. If the Grantee’s employment by
the Company is voluntarily terminated or terminated for Cause, this SSAR shall terminate
immediately and become void and of no effect.
(e) Other Termination. If the Grantee’s employment by the Company is involuntarily
terminated for any reason other than for Cause, death, Disability or Normal Retirement or Early
Retirement, this SSAR may be exercised, to the extent the SSAR was exercisable at the time of such
termination, by the Grantee for a period of three months from the date of such termination of
employment or the expiration of the Term of the SSAR, whichever period is the shorter.
5. No Right to Continued Employment. The grant of the SSAR shall not be construed as
giving Grantee the right to be retained in the employ of the Company, and the Company may at any
time dismiss Grantee from employment, free from any liability or any claim under the Plan.
6. Adjustment to Shares Granted. The Committee shall make equitable and proportionate
adjustments in the terms and conditions of, and the criteria included in, this SSAR in recognition
of unusual or nonrecurring events (including, without limitation, the events described in Section
4.2 of the Plan) affecting the Company or the financial statements of the Company or of changes in
applicable laws, regulations, or accounting principles, in order to
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prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan.
7. Amendments to SSAR. Subject to the restrictions contained in Sections 6.2 and 14
of the Plan, the Committee may waive any conditions or rights under, amend any terms of, or alter,
suspend, discontinue, cancel or terminate, the SSAR, prospectively or retroactively; provided that
any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination
that would adversely affect the rights of the Grantee or any holder or beneficiary of the SSAR
shall not to that extent be effective without the consent of the Grantee, holder or beneficiary
affected.
8. Limited Transferability. During the Grantee’s lifetime this SSAR can be exercised
only by the Grantee, except as otherwise provided in Section 4(a) above or in this Section 8. This
SSAR may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered
by Grantee other than (i) to a Permitted Transferee or (ii) by will or the laws of descent and
distribution. Any attempt to otherwise transfer this SSAR shall be void. No transfer of this SSAR
by the Grantee by will or by laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as the Committee may deem necessary or
appropriate to establish the validity of the transfer. Any transfer of this SSAR by the Grantee to
a Permitted Transferee must be for no consideration and, after the transfer, the Permitted
Transferee shall have the sole responsibility for determining whether and when to exercise the
SSAR. A Permitted Transferee may not transfer any such SSAR other than by will or the laws of
descent and distribution. For purposes of this Agreement, “Permitted Transferee” means the
Grantee’s Immediate Family, a Permitted Trust or a partnership of which the only partners are
members of the Grantee’s Immediate Family. For purposes of this Agreement, “Immediate Family”
means the Grantee’s children and grandchildren, including adopted children and grandchildren,
stepchildren, parents, stepparents, grandparents, spouse, siblings (including half brothers and
sisters), father-in-law, mother-in-law, daughters-in-law and sons-in-law. For purposes of this
Agreement, a “Permitted Trust” means a trust solely for the benefit of the Grantee or Grantee’s
Immediate Family.
9. Reservation of Shares. At all times during the term of this SSAR, the Company
shall use its best efforts to reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of this Agreement.
10. Plan Governs. The Grantee hereby acknowledges receipt of a copy of the Plan and
agrees to be bound by all the terms and provisions thereof. The terms of this Agreement are
governed by the terms of the Plan, and in the case of any inconsistency between the terms of this
Agreement and the terms of the Plan, the terms of the Plan shall govern.
11. Withholding Taxes. Regardless of any action the Company takes with respect to any
or all Tax Payments, the Grantee acknowledges that the ultimate liability for all Tax Payments
legally due by the Grantee is and remains the Grantee’s responsibility and that the Company (i)
makes no representations or undertakings regarding the grant, vesting or exercise of the SSAR, the
receipt of Issued Shares upon exercise of the SSAR, the subsequent sale of any Issued Shares
acquired at exercise and the receipt of any dividends; and (ii) does not commit to structure the
terms of the grant or any aspect of the SSAR to reduce or eliminate the Grantee’s liability for Tax
Payments. By accepting the SSAR, the Grantee acknowledges that (i) he or she
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understands that upon the grant, the attainment of the Capped Value or the exercise of the
SSAR, he or she may recognize adverse tax consequences, and (ii) he or she understands that the
Company may deduct or withhold, or require the Grantee to remit to the Company, an amount of Shares
held by the Grantee (including Shares that would have been Issued Shares if not so deducted or
withheld) sufficient to satisfy Federal, state, and local taxes (including the Grantee’s FICA
obligation) required by law to be withheld with respect to any exercise of the Grantee’s rights
under this Award. You are encouraged to consult with a qualified tax advisor concerning the SSAR.
In addition, the Grantee agrees that the SSAR shall be administered and settled as required for the
SSAR to be deemed not be deferred compensation subject to the provisions of Section 409A of the
Code as provided in Internal Revenue Service Notice 2005-1.
12. Severability. If any provision of this Agreement is, or becomes, or is deemed to
be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or the Award, or
would disqualify the Plan or Award under any laws deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee, materially altering
the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction,
Person or Award, and the remainder of the Plan and Award shall remain in full force and effect.
13. Notices. All notices required to be given under this SSAR shall be deemed to be
received if delivered or mailed as provided for herein to the parties at the following addresses,
or to such other address as either party may provide in writing from time to time.
To the Company:
|
Performance Food Group Company | |||
| 00000 Xxxx Xxxxx Xxxxxxx | ||||
| Xxxxxxxx, Xxxxxxxx 00000 | ||||
| Attn: Chief Financial Officer | ||||
To the Grantee: |
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14. Governing Law. The validity, construction and effect of this Agreement shall be
determined in accordance with the laws of the State of Tennessee without giving effect to conflicts
of laws principles.
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15. Resolution of Disputes. Any dispute or disagreement which may arise under, or as
a result of, or in any way related to, the interpretation, construction or application of this
Agreement shall be determined by the Committee. Any determination made hereunder shall be final,
binding and conclusive on the Grantee and the Company for all purposes.
16. Successors in Interest. This Agreement shall inure to the benefit of and be
binding upon any successor to the Company. This Agreement shall inure to the benefit of the
Grantee’s legal representative and assignees. All obligations imposed upon the Grantee and all
rights granted to the Company under this Agreement shall be binding upon the Grantee’s heirs,
executors, administrators, successors and assignees.
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IN WITNESS WHEREOF, the parties have caused this Stock Appreciation Right Agreement to be duly
executed effective as of the day and year first above written.
| PERFORMANCE FOOD GROUP COMPANY |
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| By: | ________________________ | |||
| Grantee: |
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| ________________________ | ||||
| Please Print | ||||
| Grantee: |
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| ________________________ | ||||
| Signature | ||||
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