PERFORMANCE SHARE GRANT AGREEMENT Amended and Restated 2001 Directors and Officers Long-Term Incentive Plan
EXHIBIT
10.25
PERFORMANCE
SHARE
GRANT
AGREEMENT
Amended
and Restated 2001 Directors and Officers Long-Term Incentive Plan
On
__________, 2009 (the “Date of Grant”), the Compensation Committee of the Board
of Directors (the “Committee”) of XxXxxxxxx International, Inc. (the “Company”)
selected you to receive a grant of Performance Shares under the Company’s
amended and restated 2001 Directors and Officers Long-Term Incentive Plan (the
“Plan”). The provisions of the Plan are incorporated herein by
reference. A copy of the Plan is attached for your
reference.
Performance
Shares
Performance Shares
Award. You have been awarded an initial grant (the “Initial
Grant”) of Performance Shares. This grant represents a right to
receive shares of common stock of the Company, calculated as described below,
provided the applicable performance measures and vesting requirements set forth
in this agreement have been satisfied. No shares are awarded or
issued to you on the Initial Grant Date.
Vesting
Requirements. Except as provided in the following paragraph,
Performance Shares do not provide you with any rights or interest therein until
they become vested on the third anniversary of the Date of Grant (the “Vesting
Date”), provided you are still employed by the Company or one of its
subsidiaries.
In the
event you terminate employment prior to the third anniversary of the Date of
Grant due to “Retirement,” 33% of the Initial Grant will continue to vest
provided your termination date is on or after the first anniversary of the Date
of Xxxxx, and 66% of the Initial Grant will continue to vest provided your
termination date is on or after the second anniversary of the Date of
Grant.
For this
purpose, the term “Retirement” means (a) voluntary termination of employment
after attaining age 60 and completing at least 10 years of service with the
Company or its subsidiaries, or (b) involuntary termination in connection with a
reduction in force.
In the
event your employment terminates by reason of your death or disability prior to
the third anniversary of the Date of Grant, 100% of the Initial Grant shall
continue to vest.
The
Committee may, in its sole discretion, provide for additional
vesting.
Forfeiture of Performance
Shares. Except as otherwise provided above, Performance Shares
which are not vested at your termination of employment for any reason shall,
coincident therewith, be forfeited.
In the
event that (a) you are convicted of (i) a felony or (ii) a misdemeanor involving
fraud, dishonesty or moral turpitude, or (b) you engage in conduct that
adversely affects or may reasonably be expected to adversely affect the business
reputation or economic interests of the Company, as determined in the sole
judgment of the Committee, then all Performance Shares and all rights or
benefits awarded to you under this grant of Performance Units are forfeited,
terminated and withdrawn immediately upon such conviction or notice of such
determination.
The
Committee shall have the right to suspend any and all rights or benefits awarded
to you hereunder pending its investigation and final determination with regard
to such matters.
Number of Performance
Shares. The number of Performance Shares of your Initial Grant
in which you will vest, if any, shall be determined based one-half on the
Cumulative Operating Income of the Company and one-half on the Company’s Total
Shareholder Return relative to the Total Shareholder Return of our Peer Group
(defined below), each over the Performance Measurement Period as illustrated in
the schedules set forth below. The “Performance Measurement Period”
means the period beginning on January 1, 2009 and ending on December 31,
2011. The maximum number of Performance Shares in which you can vest
is 200% of your Initial Grant.
Cumulative Operating
Income
The term
“Cumulative Operating Income” means the Company’s operating income determined in
accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for the
Performance Measurement Period. The Committee, in its discretion, may
adjust the GAAP results for unusual or non-recurring items. The
percentage of Performance Shares in your Initial Grant in which you will vest
based on this performance measure is determined based on the schedule set forth
below. Vested percentages between the amounts shown will be
calculated by linear interpolation.
Cumulative Operating
Income Vested
Percentage
$ ____
million 12.5%
$ ____
million 50%
$ ____
million
100%
The
vested percentage of the one half of the Performance Shares in your Initial
Grant that is based on Cumulative Operating Income will be zero if the
Cumulative Operating Income as of December 31, 2011 is below $____
million. In no event will the vested percentage of this portion of
your award be greater than 100%.
Relative Total Shareholder
Return
“Total
Shareholder Return” means A- B + C ,
where
B
A = the
average closing stock price for the 20 day period ending on December 31,
2011,
B = the
average closing stock price for the 20 day period ending on January 1, 2009,
and
C =
dividends paid during the period beginning on January 1, 2009 and ending on
December 31,
2011,
if any.
The Total
Shareholder Return for the Company and for the Company’s “Peer Group” will be
calculated in accordance with the formula set forth above. For this
purpose, “Peer Group” means the companies in the custom peer group used in the
performance graph included in our annual report on Form-10K for the year ended
December 31, 2008. The Committee may adjust the composition of the
Peer Group to reflect extraordinary corporate events affecting individual
companies in the Peer Group, such as merger, acquisition, insolvency,
dissolution or the like.
The
percentage of Performance Shares in your Initial Grant in which you will vest
based on the Company’s Total Shareholder Return relative to the Total
Shareholder return of its proxy peer group is determined in accordance with the
schedule set fort below. Vested percentages between the amounts shown
will be calculated by linear interpolation.
MDR_Percentile_Rank Vested_Percentage
25th 12.5%
50th 50%
88th 100%
The
vested percentage of the one half of the Performance Shares in your Initial
Grant that is based on relative Total Shareholder Return will be zero if the
Company’s Total Shareholder Return ranks lower than the 25th
percentile relative to the proxy peer group. In no event will the
vested percentage of this portion of your award be greater than
100%.
Payment of Performance
Shares. Except as otherwise provided below in the section
entitled “Change in Control,” you (or your beneficiary, if applicable) will
receive one share of common stock of the Company for each Performance Share that
vests. Shares shall be distributed as soon as administratively practicable after
the Vesting Date.
Change in
Control
If a
Change in Control (as defined in the Plan) of the Company occurs, all
outstanding Performance Shares granted hereunder shall immediately
vest. The number of Performance Shares that vest in connection with a
Change in Control shall be the greater of (i) 100% of the Initial Grant or (ii)
the vested percentage determined in accordance with the schedules set forth
above, with a Vesting Date as of the date such Change in Control occurs and
based on (1) Cumulative Operating Income earned as of the end of the fiscal
quarter coincident with or immediately prior to the date the Change in Control
occurs and Adjusted Cumulative Operating Income targets with respect to one half
of the Initial Grant, and (2) relative Total Shareholder Return determined as
the date the Change in Control occurs with respect to the remaining one-half of
the Initial Grant. The Adjusted Cumulative Operating Income target
shall be determined by multiplying the targets set forth above by a fraction,
the numerator of which is the number of months from January 1, 2009 through the
end of the fiscal quarter coincident with or immediately prior to the date the
Change in Control occurs and the denominator of which is 36. Shares
of common stock of the Company shall be distributed within 90 days following the
date of the Change in Control.
Taxes
You will
realize income on the grant of Performance Shares in accordance with the tax
laws of the jurisdiction applicable to you. By acceptance of this
letter you agree that, upon vesting in the shares, any statutory minimum
required income or employment tax withholding will be satisfied by withholding
shares having an aggregate fair market value on the Vesting Date equal to the
amount of such required tax withholding. You may arrange to pay the
amount of any such
required
tax withholding in cash, in lieu of share withholding by contacting the
principal Human Resources officer of the Company, in writing, at least 60 days
prior to the Vesting Date.
Transferability
Performance
Shares granted hereunder are non-transferable other than by will or by the laws
of descent and distribution or pursuant to a qualified domestic relations
order.
Securities and Exchange
Commission Requirements
If you
are a Section 16 insider, this grant of Performance Shares is not reportable on
a Form 4 unless and until they become vested. At that time, the
number of Performance Shares ultimately awarded to you must be reported on a
Form 4 before the end of the second (2nd)
business day following the Vesting Date or your date of retirement, as
applicable. Please be aware that if you are going to reject the
grant, you should do so immediately after the Date of Xxxxx. Please
advise Xxxxx Xxxxx and Xxxxx Xxxx immediately by e-mail, fax or telephone if you
intend to reject this grant.
Those of
you covered by these requirements will have already been advised of your
status. Others may become Section 16 insiders at some future date, in
which case reporting will be required in the same manner noted
above.
Other
Information
Neither
the action of the Company in establishing the Plan, nor any action taken by it,
by the Committee or by your employer, nor any provision of the Plan or this
Agreement shall be construed as conferring upon you the right to be retained in
the employ of the Company, Inc. or any of its subsidiaries or
affiliates.
