EXHIBIT 10.3
THE X. X. XXXXXXX COMPANY
DEFERRED SHARES AGREEMENT
(FOR NON-U.S. TAXPAYERS)
WHEREAS, _________________ (the "Grantee") is an employee of The X. X.
Xxxxxxx Company, as Ohio corporation (the "Company"); and
WHEREAS, the execution of an agreement in the form hereof (this
"Agreement") has been authorized by a resolution of the Executive Compensation
Committee (the "Committee") of the Board of Directors of the Company, pursuant
to the Company's 1998 Equity and Performance Incentive Plan (as Amended and
Restated) (the "Plan"), as of _________________, (the "Date of Grant");
NOW, THEREFORE, the Company hereby grants to the Grantee
________________ Deferred Shares (as defined in the Plan) (the "Deferred
Shares"), effective as of the Date of Grant, subject to the terms and conditions
of the Plan and the following additional terms, conditions, limitations and
restrictions.
ARTICLE I
DEFINITIONS
All terms used herein with initial capital letters and not otherwise
defined herein that are defined in the Plan shall have the meanings assigned to
them in the Plan.
ARTICLE II
CERTAIN TERMS OF THE DEFERRED SHARES
1. Grant of Deferred Shares. The Deferred Shares covered by this
Agreement are granted to the Grantee effective on the Date of Grant and are
subject to and granted upon the terms, conditions and restrictions set forth in
this Agreement and in the Plan. The Deferred Shares shall become vested in
accordance with Section 3 hereof. Each Deferred Share shall represent one
hypothetical share of Common Stock, without par value of the Company (the
"Common Stock") and shall at all times be equal in value to one share of Common
Stock. The Deferred Shares will be credited to the Grantee in an account
established for the Grantee until payment in accordance with Section 4 hereof.
2. Restrictions on Transfer of Deferred Shares. Neither the
Deferred Shares granted hereby nor any interest therein or in the Common Stock
related thereto shall be transferable prior to payment other than by will or
pursuant to the laws of descent and distribution (or to a designated beneficiary
in the event of the Grantee's death).
3. Vesting of Deferred Shares.
(a) The Deferred Shares shall become vested as follows:
[INSERT VESTING SCHEDULE] (the "Vesting Date") if the Grantee shall have
remained in the continuous employ of the Company or a subsidiary during that
period. Any Deferred Shares not vested will be forfeited, except as provided in
Section 3(b) below, if the Grantee ceases to be continuously employed by the
Company prior to the Vesting Date.
(b) Notwithstanding the provisions of Section 3(a), all
of the Deferred Shares shall immediately become non-forfeitable (each, a
"Vesting Event") (i) if the Grantee dies or becomes permanently disabled while
in the employ of the Company or a Subsidiary during the [INSERT VESTING PERIOD]
period from the Date of Grant, (ii) if, at any time during the [INSERT VESTING
PERIOD] period from the Date of Grant, the Grantee is age 60 with at least ten
years of service with the Company, or (iii) if a Change in Control occurs during
the [INSERT VESTING PERIOD] period from the Date of Grant while the Grantee is
employed by the Company or a Subsidiary.
4. Issuance of the Common Stock.
(a) The Company will issue to the Grantee the Common
Stock underlying the vested Deferred Shares on the Vesting Date or, if earlier,
upon the occurrence of a Vesting Event.
(b) Except to the extent permitted by the Company and the
Plan, no Common Stock may be issued to the Grantee at a time earlier than
otherwise expressly provided in this Agreement.
(c) The Company's obligations to the Grantee with respect
to the Deferred Shares will be satisfied in full upon the issuance of shares of
Common Stock corresponding to such Deferred Shares.
5. Dividend, Voting and Other Rights.
(a) The Grantee shall have no rights of ownership in the
Deferred Shares and shall have no right to dividends and no right to vote
Deferred Shares until the date on which the Common Stock underlying the Deferred
Shares is transferred to the Grantee pursuant to Section 4 above.
(b) The obligations of the Company under this Agreement
will be merely that of an unfunded and unsecured promise of the Company to
deliver shares of Common Stock in the future, and the rights of the Grantee will
be no greater than that of an unsecured general creditor. No assets of the
Company will be held or set aside as security for the obligations of the Company
under this Agreement.
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ARTICLE III
GENERAL PROVISIONS
1. Adjustments. The number of shares of Common Stock issuable
pursuant to the Deferred Shares is subject to adjustment as provided in Section
10 of the Plan.
2. Compliance with Law. The Company shall make reasonable efforts
to comply with all applicable federal and state securities laws; provided,
however, notwithstanding any other provision of this Agreement, the Company
shall not be obligated to issue any shares of Common Stock pursuant to this
Agreement if the issuance thereof would result in a violation of any such law.
3. Compliance with Section 409A of the Code. To the extent that
the Grantee is or becomes subject to payment of U.S. tax, then appropriate
adjustments may be made if necessary to make the awards comply with Section 409A
of the Code. Reference to Section 409A of the Code will also include any
proposed, temporary or final regulations, or any other guidance, promulgated
with respect to such Section by the U.S. Department of the Treasury or the
Internal Revenue Service.
4. Withholding Taxes. To the extent that the Company or any
Subsidiary is required to withhold any federal, state, local or foreign tax in
connection with the Deferred Shares or the issuance of Common Shares pursuant to
this Agreement, and the amounts available to the Company or such Subsidiary are
insufficient, it shall be a condition to the issuance of such Common Shares that
the Grantee make arrangements satisfactory to the Company or such Subsidiary for
payment of the balance of such taxes required to be withheld. This tax
withholding obligation shall be satisfied by the Company withholding Common
Shares otherwise issuable pursuant to this award in order to satisfy the minimum
tax withholding amount permissible under the method that results in the least
amount withheld.
5. Continuous Employment. For purposes of this Agreement, the
continuous employment of the Grantee with the Company or a Subsidiary shall not
be deemed to have been interrupted, and the Grantee shall not be deemed to have
ceased to be an employee of the Company or Subsidiary, by reason of the (i)
transfer of his employment among the Company and its Subsidiaries or (ii) a
leave of absence approved by the Board or the Committee.
6. Right to Terminate Employment. No provision of this Agreement
shall limit in any way whatsoever any right that the Company or a Subsidiary may
otherwise have to terminate the employment of the Grantee at any time. Nothing
herein shall be deemed to create a contract or a right to employment with
respect to the Grantee.
7. Relation to Other Benefits. Any economic or other benefit to
the Grantee under this Agreement or the Plan shall not be taken into account in
determining any benefits to which the Grantee may be entitled under any
profit-sharing, retirement, or other benefit or compensation plan maintained by
the Company or a Subsidiary and shall not affect the amount of any life
insurance coverage available to any beneficiary under any life insurance plan
covering employees of the Company or a Subsidiary.
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8. Amendments. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment shall adversely affect the rights
of the Grantee under this Agreement without the Grantee's consent.
9. Severability. In the event that one or more of the provisions
of this Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
10. Relation to Plan. This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistency between the provisions
of this Agreement and the Plan, the Plan shall govern. The Board acting pursuant
to the Plan, as constituted from time to time, shall, except as expressly
provided otherwise herein, have the right to determine any questions which arise
in connection with the grant of the Deferred Shares.
11. Governing Law. This Agreement is made under, and shall be
construed in accordance with, the internal substantive laws of the State of
Ohio.
This Agreement is executed by the Company as of the ____ day of
___________.
THE X. X. XXXXXXX COMPANY
By:
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Name: M. Xxx Xxxxxx
Title: Vice President, General Counsel and
Secretary
The undersigned hereby acknowledges receipt of an executed original of
this Deferred Shares Agreement, together with a copy of the Plan and accepts the
award of Deferred Shares granted hereunder on the terms and conditions set forth
herein and in the Plan.
Date:
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Grantee
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