FORM OF PERFORMANCE SHARE UNIT AWARD AGREEMENT
PERFORMANCE SHARE UNIT AWARD AGREEMENT
UNDER THE XXXXXX AUTOMOTIVE GROUP, INC.
2002 EQUITY INCENTIVE PLAN dated as of January 17, 2005,
between Xxxxxx Automotive Group, Inc. (the "Company"),
a Delaware corporation, and {NAME}.
This Performance Share Unit Award Agreement (the "Award
Agreement") sets forth the terms and conditions of a target award of {X}
performance compensation shares (the "Award") that are subject to the terms and
conditions specified herein ("Performance Awards") and that are granted to you
under the Xxxxxx Automotive Group, Inc. 2002 Equity Incentive Plan (the "Plan").
This Award provides you with the opportunity to earn, subject to the terms of
this Award Agreement, shares of the Company's common stock, $0.01 par value
("Share").
THIS AWARD IS SUBJECT TO ALL TERMS AND CONDITIONS OF THE PLAN AND THIS
AWARD AGREEMENT. BY SIGNING YOUR NAME BELOW, YOU WILL HAVE CONFIRMED YOUR
ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS AWARD AGREEMENT.
SECTION 1. Definitions. Capitalized terms used in this Award Agreement
that are not defined in this Award Agreement have the meanings as used or
defined in the Plan. As used in this Award Agreement, the following terms shall
have the meanings set forth below:
"Cause" shall have the meaning set forth in any employment agreement
then in effect between you, on the one hand, and the Company or any of its
Affiliates, on the other hand, or, if not defined in any such agreement, "Cause"
shall mean a finding by the Committee of any of the following: (a) your being
convicted of, or entering a plea of nolo contendere to, any crime that
constitutes a felony or involves moral turpitude, (b) your gross negligence or
serious misconduct (including, without limitation, any criminal, fraudulent or
dishonest conduct) that is injurious to the Company or any of its Affiliates,
(c) your material breach of your employment or service contract with the Company
or any of its Affiliates, (d) your wilful and continued failure to substantially
perform your duties with the Company and its Affiliates or (e) your material
breach of a material written policy of the Company, in each case (with respect
to clauses (b), (c), (d) and (e)) which is not corrected within 30 days after
written notice from the Company. The determination of the existence of Cause
shall be made by the Committee in good faith.
"Committee" shall mean the compensation committee of the Board, or
such other committee of the Board as may be designated by the Board to
administer the Plan.
"Determination Date" means the date, as determined by the Committee,
on which the Committee determines whether and to what extent the Performance
Goals with respect to the Award have been achieved; provided that such date
shall be no later than March 15, 2008.
"Performance Commencement Date" means January 1, 2005.
"Performance Cycle" means calendar years 2005 through 2007.
SECTION 2. (a) Performance-Based Right to Payment. The number of
Shares that shall be issued pursuant to the Award shall be determined based on
the Company's achievement of Performance Goals as set forth on Exhibit A. On the
Determination Date, the Committee in its sole discretion shall determine whether
and to what extent the Performance Goals as set forth on Exhibit A have been
attained. Except as otherwise provided in Section 4 of this Award Agreement, the
payment of Shares with respect to your Performance Awards is contingent on the
attainment of the Performance Goals as set forth on Exhibit A. Accordingly,
except as otherwise provided in Section 4 of this Award Agreement, you will not
become entitled to payment with respect to the Performance Awards subject to
this Award Agreement unless and until the Committee determines that the
Performance Goals set forth on Exhibit A have been attained. Upon such
determination by the Committee and subject to the provisions of the Plan and
this Award Agreement, you shall be entitled to payment of that portion of this
Award as corresponds to the Performance Goals attained (as determined by the
Committee in its sole discretion) as set forth on Exhibit A. Furthermore,
pursuant to Section 3 (except as otherwise provided therein) and except as
otherwise provided in Section 4 of this Award Agreement, in order to be entitled
to payment with respect to any Performance Awards, you must be employed by the
Company or an Affiliate on the Payment Date.
(b) Payment of Award. The Committee shall determine the date on which
payments pursuant to this Award Agreement shall be made (the "Payment Date");
provided that (i) the Payment Date shall not be any earlier than the
Determination Date and (ii) except as otherwise provided in Section 4(a)(ii) of
this Award Agreement, the Payment Date shall not be earlier than January 1,
2008, and not later than March 20, 2008. Except as otherwise provided in Section
4 of this Award Agreement, payments made pursuant to this Award Agreement shall
be payable in Shares.
SECTION 3. Forfeiture of Performance Awards. Except as otherwise
provided in Section 4 of this Award Agreement, if your employment with the
Company and its Affiliates terminates prior to the Payment Date, your rights
with respect to any Performance Awards awarded to you pursuant to this Award
Agreement shall immediately terminate, and you will be entitled to no payments
or benefits with respect thereto, unless the Committee, as permitted pursuant to
the terms of the Plan, determines in its sole discretion otherwise (in which
case any payment to be made to you pursuant to this Award Agreement will be made
to you on the Payment Date).
SECTION 4. Change of Control. In the event of a Change of Control
after the date of this Award Agreement, the provisions of this Section 4 shall
apply.
(a) Timing of Payment. In the event of a Change of Control after the
date of this Award Agreement and prior to the Payment Date, to the extent your
rights with respect to Performance Awards have not previously been terminated in
connection with the termination of your employment with the Company and its
Affiliates prior to such Change of Control, payments made pursuant to this Award
Agreement:
(i) shall be paid on the Payment Date, provided you remain
continuously employed with the Company and its Affiliates through the
Payment Date;
(ii) shall be paid promptly following the date of your
termination of employment with the Company and its Affiliates if your
employment is involuntarily terminated (other than for Cause) by the
Company and its Affiliates following such Change of Control; or
(iii) shall be forfeited if your employment with the Company
and its Affiliates is terminated prior to the Payment Date for any
reason other than an involuntary termination described in the
preceding clause (ii).
(b) Form of Payment. If the Change of Control occurs prior to the
Payment Date, any amount to be paid under this Award Agreement shall be paid (at
such time as determined in accordance with paragraph (a) above) in equity
securities of the successor corporation (the " Acquiror Securities ") with the
number of such Acquiror Securities determined by calculating the number of
Shares earned under this Award Agreement (as determined in accordance with
paragraph (c) below) and converting such Shares on the same basis as the
conversion applicable to holders of Shares generally in connection with the
Change of Control; provided, however, that if the consideration received by
holders of Shares generally in connection with the Change of Control is not
solely Acquiror Securities, the Committee may, with the consent of the successor
corporation, provide that the amount to be paid under this Award Agreement will
be solely in the form of Acquiror Securities equal in fair market value to the
per Share consideration received by holders of Shares generally in connection
with the Change of Control. Notwithstanding the foregoing, the successor
corporation may elect, no later than 90 days following a Change of Control (but
in no event later than the scheduled payment date determined in accordance with
paragraph (a) above), to settle (at such time as determined in accordance with
paragraph (a) above) the Performance Awards in a lump-sum cash payment (in lieu
of settling such Performance Awards with Acquiror Securities) in an amount equal
to the product of (i) the number of Shares earned under this Award Agreement (as
determined in accordance with paragraph (c) below) and (ii) the fair market
value per Share at the time of the Change of Control, as determined by the
Committee in its sole discretion; provided, however, that, in the event the
consideration received by holders of Shares in connection with the Change of
Control is paid solely in cash, the successor corporation shall be deemed to
have made such election as of the time of such Change of Control.
(c) Determination of Performance Results. (i) If the Change of Control
occurs prior to the first anniversary of the Performance Commencement Date, the
Performance Goals set forth on Exhibit A shall be deemed to have been satisfied
at the target level.
(ii) If the Change of Control occurs on or following the first
anniversary of the Performance Commencement Date and prior to the third
anniversary of the Performance Commencement Date, immediately prior to the
Change of Control, the Committee in its sole discretion shall determine whether
and to what extent the Performance Goals as set forth on Exhibit A have been
attained as of such Change of Control. For purposes of this clause (ii), the
Committee shall determine the performance results for (A) any completed year in
the Performance Cycle and (B) any year in the Performance Cycle which is not
fully completed as of the Change of Control but in which at least six full
months have elapsed prior to the Change of Control (collectively, the "Completed
Years"). For any Completed Year that does not consist of a full twelve months,
the Committee in its sole discretion shall determine whether and to what extent
the Performance Goals as set forth on Exhibit A have been attained for such year
on an annualized basis.
(A) If there is only one Completed Year prior to the Change of
Control, the points achieved during the Completed Years shall be multiplied by
three for purposes of determining the level of achievement on the cumulative
three-year point scale set forth on Exhibit A.
(B) If there are only two Completed Years prior to the Change of
Control, the points achieved during the Completed Years shall be multiplied by
1.5 for purposes of determining the level of achievement on the cumulative
three-year point scale set forth on Exhibit A.
(C) If there are three Completed Years prior to the Change of Control,
the points achieved during the Completed Years shall be multiplied by 1.0 for
purposes of determining the level of achievement on the cumulative three-year
point scale set forth on Exhibit A.
SECTION 5. Grant Subject to Plan Provisions. This Award is made
pursuant to the Plan, the terms of which are incorporated herein by reference,
and in all respects shall be interpreted in accordance with the Plan. The grant
and terms of this Award are subject to the provisions of the Plan and to
interpretations, regulations and determinations concerning the Plan established
from time to time by the Committee in accordance with the provisions of the
Plan, including, but not limited to, provisions pertaining to (a) rights and
obligations with respect to withholding taxes, (b) the registration,
qualification or listing of the Company's shares, (c) capital or other changes
of the Company and (d) other requirements of applicable law. The Committee shall
have the authority to interpret and construe this Award pursuant to the terms of
the Plan, and its decisions shall be conclusive as to any questions arising
hereunder. This Award is granted pursuant to Section 6(e) of the Plan and shall
not be deemed a "Performance Compensation Award" for purposes of Section 6(g) of
the Plan. This Award, nevertheless, shall be subject to the terms of Section
6(g); provided, however, that actions otherwise required to be taken during the
first 90 days of the Performance Period may be taken following such 90-day
period for purposes of this Award. Notwithstanding the provisions of Section
6(g)(vi)(D) of the Plan, the Committee shall not exercise the use of negative
discretion authorized under Section 6(g)(vi)(D) of the Plan to reduce or
eliminate the amount of the Performance Award earned under the terms of this
Award Agreement (it being understood that the determination of the attainment of
the Performance Goals as set forth on Exhibit A shall be in the sole discretion
of the Committee and shall not be deemed to be a reduction or elimination of the
Performance Award for this purpose).
SECTION 6. No Rights as a Shareholder. You shall not have any rights
or privileges of a shareholder with respect to the Performance Awards subject to
this Award Agreement unless and until certificates representing Shares are
actually issued and delivered to you or your legal representative in settlement
of this Award.
SECTION 7. No Employment or Other Rights. The grant of this Award
shall not confer upon you any right to be retained as a director, officer or
employee of or to the Company or any of its Affiliates and shall not interfere
in any way with the right of the Company and its Affiliates to terminate your
employment or service at any time. The right of the Company and its Affiliates
to terminate at will your employment or service at any time for any reason, free
from any liability or any claim under the Plan or this Award Agreement, is
specifically reserved unless otherwise expressly provided in the Plan or in this
Award Agreement.
SECTION 8. Non-Transferability of Performance Awards. Your rights and
interests under this Award Agreement may not be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by you except, in the
event of your death, by will or by the laws of descent and distribution, and any
such purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate; provided that the designation of a beneficiary shall not constitute
an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.
SECTION 9. Successors and Assigns of the Company. The terms and
conditions of this Award Agreement shall be binding upon and shall inure to the
benefit of the Company and its successors and assigns.
SECTION 10. Taxes, Consents, Stop Transfer Orders and Legends. (a)
Taxes. The delivery of Shares pursuant to Section 2(b) (or any cash payment made
pursuant to Section 4) is conditioned on satisfaction of any applicable
withholding taxes in accordance with Section 9(d) of the Plan. You are solely
responsible and liable for the satisfaction of all taxes and penalties that may
arise in connection with this Award (including any taxes arising under Section
409A of the Code), and the Company shall not have any obligation to indemnify or
otherwise hold you harmless from any or all of such taxes. The Committee shall
have the discretion to unilaterally modify this Award in a manner (i) that it in
good faith believes conforms with the requirements of Section 409A of the Code
and (ii) for any distribution event that could be expected to violate Section
409A of the Code, in order to make the distribution only upon a "permissible
distribution event" within the meaning of Section 409A of the Code (as
determined by the Committee in good faith). The Committee shall have the sole
discretion to interpret the requirements of the Code, including Section 409A,
for purposes of the Plan and this Award.
(b) Consents. Your rights in respect of Performance Awards are
conditioned on the receipt to the full satisfaction of the Committee of (i) any
required consents that the Committee may determine to be necessary or advisable
(including, without limitation, your consenting to the Company's supplying to
any third party recordkeeper of the Plan such personal information as the
Committee deems advisable to administer the Plan) and (ii) your making or
entering into such written representations, warranties and agreements in
connection with the acquisition of any Shares pursuant to this Award as the
Committee may request in order to comply with applicable securities laws or this
Award.
(c) Stop Transfer Orders and Legends. All certificates for Shares or
other securities of the Company or any Affiliate delivered under the Plan
pursuant to this Award shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the SEC, any stock exchange upon which
such Shares or other securities are then listed, and any federal or state laws,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
SECTION 11. Committee Discretion. The Committee shall have full and
plenary discretion with respect to any actions to be taken or determinations to
be made in connection with this Award Agreement, and its determinations shall be
final, binding and conclusive.
SECTION 12. Confidentiality. You hereby agree to keep confidential,
and to not disclose to anyone, the existence and terms of this Award Agreement
(including the Performance Goals set forth on Exhibit A), except to your
immediate family and your financial and legal advisors, or as may be required by
law or ordered by a court with valid jurisdiction over such matter. You further
agree that any disclosure to your immediate family and your financial and legal
advisors will only be made after such individuals or entities acknowledge and
agree to maintain the confidentiality of this Award Agreement and its terms.
SECTION 13. Applicable Law. The validity, construction, interpretation
and effect of this Award Agreement shall be governed by and determined in
accordance with the laws of the State of Delaware without giving effect to the
conflict of laws provisions thereof.
SECTION 14. Notice. All notices, requests, demands and other
communications required or permitted to be given under the terms of this Award
Agreement shall be in writing and shall be deemed to have been duly given when
delivered by hand or overnight courier or three Business Days after they have
been mailed by U.S. registered mail, return receipt requested, postage prepaid,
addressed to the other party as set forth below:
If to the Company: Xxxxxx Automotive Group, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
If to you: At the then-current address shown on the
payroll of the Company
The Company and you may change the address to which notices under this Award
Agreement shall be sent by providing written notice to the other in the manner
specified above. Notwithstanding the above, the Company and its Affiliates may
provide notice to you by email or other electronic means to which you have
regular access.
SECTION 15. Headings. Headings are given to the Sections and
subsections of this Award Agreement solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to
the construction or interpretation of this Award Agreement, the Plan or any
provision thereof.
SECTION 16. Amendment of this Award Agreement. The Committee may waive
any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate this Award Agreement prospectively or
retroactively; provided, however, that any such waiver, amendment, alteration,
suspension, discontinuance, cancelation or termination that would materially and
adversely impair your rights under this Award Agreement shall not to that extent
be effective without your consent (it being understood, notwithstanding the
foregoing proviso, that this Award Agreement and Performance Awards shall be
subject to the provisions of Sections 6(g)(v) (including, without limitation, in
connection with adjustments to the number or identity of peer companies), 7(a)
and 7(c) (including, without limitation, in connection with adjustments to the
number or kinds of shares, security or other property subject to this Award
Agreement) of the Plan).
SECTION 17. Counterparts. This Award Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Award
Agreement as of the date first written above.
XXXXXX AUTOMOTIVE GROUP, INC.,
By
------------------------------------------
Name:
Title:
{NAME},
Exhibit A
Performance Goals with Respect to the Performance Awards for the
Performance Period from January 1, 2005 through December 31, 2007
Points
Achieved 0-4.5 5-6.5 7-8.5 9-10.5 11-13.5 14-15 15.5-16.5 17-18
% of
Standard 0% 40% 60% 80% 100% 125% 150% 180%
Award Target
Point Scoring
Metric Description Point Allocation Measurement
----------------- ------------------------------ -------------------------- -------------------------------
New Vehicle Percent increase in same-store Annually Sum of the points awarded in
Retail Revenue new vehicle retail revenue vs. each of the 3 years
Same Store other public consolidators Top 2 out of 6 = 1 point
----------------- ------------------------------ -------------------------- -------------------------------
Used Vehicle Percent increase in same-store Annually Sum of the points awarded in
Retail Revenue used vehicle retail revenue vs. each of the 3 years
Same Store other public consolidators Top 2 out of 6 = 1 point
----------------- ------------------------------ -------------------------- -------------------------------
Platform F&I PVR Percent growth in platform PVR Annually The greater of the sum of the
Same Store points awarded in each of the
Below 3% = 0 points 3 years OR points that would
4%-4.9% = .5 point have been awarded each year
Over 5% = 1.0 points based on compounded annual
growth over the 3 years
----------------- ------------------------------ -------------------------- -------------------------------
Fixed Operations Percent growth in same-store Annually The greater of the sum of the
Gross Profit fixed operations gross profit points awarded in each of the
SameStore Below 3% = 0 points 3 years OR points that would
3%-3.9% = .5 point have been awarded each year
4%-4.9% =1.0 point based on compounded annual
Over 5% = 1.5points growth over the 3 years
----------------- ------------------------------ -------------------------- -------------------------------
EPS Growth Year-over-year percentage Average Annual Growth Average annual growth of income
growth in EPS from continuing Rate Over 3 Years from continuing operations over
operations the three year period
Below 2.9% = -2 points
3-6.9% = 0 point
7.0-9.9% =1.5 points
10-12.5 % =3 points
>12.6% = 4.5 points
