GREAT LAKES DREDGE & DOCK CORPORATION CASH PERFORMANCE AWARD AGREEMENT
Exhibit 10.6
GREAT LAKES DREDGE & DOCK CORPORATION
CASH PERFORMANCE AWARD AGREEMENT
This CASH PERFORMANCE AWARD AGREEMENT (this “Agreement”) is made and entered into by and between Great Lakes Dredge & Dock Corporation, a Delaware corporation (the “Corporation”), and Xxxxxxxx X. Xxxxxx (the “Participant”), effective as of March 9, 2016 (the “Award Date”).
1.Award. The Corporation hereby grants to the Participant and the Participant hereby accepts an Award of $[_________] (the “Award”), subject to the terms and conditions set forth in this Agreement. This Award represents the Corporation’s unfunded and unsecured promise to pay the Participant the value of the Award on the date set forth in this Agreement. The Participant’s rights with respect to the Award are governed by this Agreement and the Participant has no rights with respect to the Award other than the rights of a general creditor of the Corporation.
2.Vesting.
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(a) |
The vesting of this Award shall be subject to the time-based vesting provisions set forth herein and the Company’s collection of the outstanding accounts receivable on the Suez Canal project in fiscal year 2016 in the amount of $21,200,940. If the Company fails to achieve the performance goal specified in this Section 2(a) on or prior to December 31, 2016, this Award shall be forfeited in its entirety and no payment shall be made with respect to this Award. |
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(b) |
Except as may be accelerated as set forth below, and except as may be accelerated as set forth in any employment or consulting agreement between the Participant and the Corporation or an Affiliated Entity, the Award shall vest on the third anniversary of the Award Date (the “Vest Date”) if the Participant is continuously employed by the Corporation or an Affiliated Entity through the Vest Date. |
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(c) |
Upon the Participant’s termination due to death or Disability (as defined below), to the extent not previously forfeited (including pursuant to Section 2(a)), the Award shall be fully vested. |
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(d) |
Upon the Participant’s termination due to Retirement (as defined below), to the extent not previously forfeited (including pursuant to Section 2(a)), the Award shall vest on the date of termination; provided however, if the Participant’s Termination due to Retirement occurs prior to December 31, 2016, then the portion of the Award that shall vest shall be prorated and determined based on the product of (A) the lesser of (i) the number of days served during 2016 plus 90, divided by 366, and (ii) one; times (B) Award value. Any portion of the Award that does not vest in accordance with the formula shall be forfeited. |
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(e) |
Upon a Change in Control (as defined in the Great Lakes Dredge & Dock Corporation 2007 Long-Term Incentive Plan (the “2007 Plan”)), the Compensation Committee of the Board of Directors of the Corporation (the “Committee”) may elect, in its sole discretion, to accelerate the vesting of the Award. No provision of this Agreement shall require the Committee to accelerate such vesting upon a Change in Control or any other event. |
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Affiliated Entity, the Payment Date shall be 60 days after the date of the Participant’s termination; provided, however, in the event the Participant satisfies the Rule of 75 at the time of such termination, the Payment Date shall be the regularly scheduled Vest Date. |
3.Definitions.
“Affiliated Entity” shall mean, with respect to any entity, any other entity directly or indirectly controlling, controlled by or under common control with such first entity. For these purposes, “control” (including the terms “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management policies of an entity by reason of ownership of voting securities, by contract or otherwise. A reference to an Affiliated Entity includes a reference to an affiliate.
“Disability” shall mean the Participant becoming unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve (12) months, within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”)
“Retirement” shall have the meaning set forth in any employment or consulting agreement between the Participant and the Corporation or an Affiliated Entity; provided, however, if (i) a uniform definition of Retirement is not used either within a single agreement or across multiple employment or consulting agreements between the Participant and the Corporation or an Affiliated Entity, (ii) there is no such agreement, or (iii) such agreement does not define Retirement, Retirement shall mean a Participant’s termination, other than for Cause (as defined in the 2007 Plan), which meets all of the following criteria.
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1. |
The sum of (x) the continuous full years of service by the Participant to the Corporation or an Affiliated Entity and (y) the attained age in full years of the Participant on the date of the Participant’s termination total no less than 75 (the “Rule of 75”). A leave of absence which is agreed to between the Corporation and the Participant in writing for medical reasons or for military service shall not constitute a break in Service for this purpose. For example, a Participant was born on June 27, 1963, and started full-time employment with the Corporation on July 1, 1990, and works continuously as an Employee until a termination on December 31, 2016. This Participant’s full years of Service are 26 years and his or her attained age on the date of termination is 53 years. The total is 79, so the Participant satisfies the Rule of 75. |
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2. |
The Participant signs a Restrictive Covenant Agreement in anticipation of his Retirement, if the Corporation requests that he do so, within the timeframe given to the Participant to sign by the Corporation. |
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3. |
The Participant gives his direct supervisor, or in the case of the Chief Executive Officer, the Board of Directors, at least two months’ prior notice of his Retirement, or if the Participant is an officer of the Corporation, three months’ prior notice of his Retirement. |
“Restrictive Covenant Agreement” shall mean an agreement between the Corporation or an Affiliated Entity and the Participant, in a form satisfactory to the Corporation or the Affiliated Entity, governing confidentiality, non-solicitation of customers and/or employees, non-competition and/or similar matters, which may be a free-standing agreement or contained in an employment, consulting or other written agreement, and which may be entered into subsequent to the date of this Agreement. In no event will any non-competition or non-solicitation provision contained within the Restrictive Covenant Agreement extend beyond the three-year anniversary of the Participant’s termination due to Retirement.
4.Payment of Award. Within 30 days after the Payment Date (as defined below), a cash payment shall be delivered to the Participant. Subject to Section 14, the “Payment Date” shall be determined in accordance with the following:
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however, in the event the Participant satisfies the Rule of 75 at the time of a termination due to Disability, the Payment Date shall be the Vest Date; |
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(b) |
In the event of a Change in Control prior to March 9, 2019 in which the Committee elects to accelerate the vesting of the Award, the Payment Date shall be, to the extent permitted under Section 409A of the Code, the date that a Change in Control occurs, if such Change in Control meets the requirements of the definition of a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation contained in the regulations promulgated under Code Section 409A; and |
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(c) |
In the event that none of the events described in the foregoing clauses (a) or (b) occur prior to March 9, 2019 or to the extent Section 409A prohibits the settlement of the Award under clause (b) and except to the extent provided in the last sentence of Section 2(f), above, the Payment Date shall be the Vest Date (including in the case of a prior termination due to Retirement), but only to the extent the Award vests on such Vest Date. |
5.Tax Withholding. All payments under this Agreement are subject to withholding of all applicable taxes.
6.Restrictions on Transfer. The Award may not be transferred, alienated, assigned, pledged, hypothecated or encumbered, in any way, whether voluntarily or involuntarily or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceeding (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.
7.Administration. This Agreement shall be administered and may be definitively interpreted by the Committee, and the Participant agrees that the decisions of such Committee concerning administration and interpretation of this Agreement shall be final, binding and conclusive on all persons.
8.Notices. Any notice or other communication under this Agreement must be in writing and must be delivered personally, sent by certified, registered or express mail, or sent by overnight courier, at the sender’s expense. Notice will be deemed given (i) when delivered personally, or (ii) if mailed, three days after the date of deposit in the United States mail or (iii) if sent by overnight courier, on the regular business day following the date sent. Notice to the Participant should be sent to the address set forth on the Corporation’s records. Either party may change the address to which the other party must give notice under this Agreement by giving the other party written notice of this change in accordance with the procedures discussed in this Section 8.
9.Not An Employment Contract. This Award will not confer on the Participant any right with respect to continuance of employment with the Corporation or any Affiliated Entity, nor will it interfere in any way with any right the Corporation or any Affiliated Entity would otherwise have to terminate or modify the terms of such Participant’s employment at any time.
10.Unfunded Status of the Award. The Award is unfunded. The Corporation is not required to establish any special or separate fund or to make any other segregation of assets to assure the payment of the Award. With respect to the Award, the Participant shall have no rights greater than those of a general unsecured creditor of the Corporation.
11.Amendment. This Agreement may be amended by written agreement of the Participant and the Corporation without the consent of any other person.
12.Governing Law. This Agreement will be construed, administered and governed in all respects under and by the laws of the State of Delaware, without giving effect to its conflict of laws principles. If any provision of this Agreement will be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof will continue to be fully effective. The jurisdiction and venue for any disputes arising under, or any action brought to enforce (or otherwise relating to) this Agreement will be exclusively in the courts in the State of Illinois, County of Xxxx, including the Federal courts located therein (should Federal jurisdiction exist).
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13.Award Subject to Recoupment. The Award and any payment pursuant to the Award may be subject to forfeiture, recovery by the Corporation or other action pursuant to any clawback or recoupment policy which the Corporation may adopt from time to time, including without limitation any such policy which the Corporation may be required to adopt under Section 304 of the Xxxxxxxx-Xxxxx Act of 2002, the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.
14.Code Section 409A. This Agreement is intended to be a “nonqualified deferred compensation arrangement” that complies with the provisions of Code Section 409A and the regulations thereunder and this Agreement shall be interpreted and operated consistent with such intent. Accordingly, all provisions of this Agreement shall be construed in a manner consistent with avoiding taxes or penalties under Code Section 409A, including:
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(a) |
a termination shall not be deemed to have occurred for purposes of any provision of this Agreement providing for any payment or distribution upon or following a termination unless such termination is also a “separation from service” within the meaning of Code Section 409A and Treas. Reg. §1.409A-1(h) and, for purposes of any such provision of this Agreement, references therein to a “termination,” “termination of employment” or like terms shall mean “separation from service”; and |
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(b) |
if the Participant is a “specified employee” (as described in Treas. Reg. §1.409A-1(i), with such classification to be determined in accordance with the methodology established by the Corporation), any payment or distribution made under this Agreement pursuant to the Participant’s “separation from service” shall be made on the date that is six months following the Participant’s “separation from service” to the extent required by Code Section 409A and the interpretive guidance thereunder or, if earlier, the date of the Participant’s death. |
15.Counterparts; Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, or by combination of such means, shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties through electronic means or methods shall be deemed to be their original signatures for all purposes.
[Signature page to follow]
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IN WITNESS WHEREOF, this Agreement has been executed on behalf of the Corporation by its duly authorized officer, and by the Participant in acceptance of the above-mentioned Award, subject to the terms and conditions of this Agreement, all effective as of the day and year first above written.
CORPORATION:
GREAT LAKES DREDGE & DOCK CORPORATION,
a Delaware corporation
By:___/s/ Xxxxxxxx X. XxXxx _______________
Xxxxxxxx X. XxXxx
Interim Chief Legal Officer
PARTICIPANT:
/s/ Xxxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
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