Exhibit 10.18
XXXXXXX COMPANY
1999 STOCK INCENTIVE PLAN
Performance Share Agreement
| Name of Participant: X. Xxxxx Xxxxxxxxxxx |
| No. of Performance Shares: 20,000 |
Date of Grant: November 8, 2005
Effective Date: December 1, 2005 |
| Performance Measurement Dates: November 30, 2008, November 30, 2009 and November 30, 2010 |
| Grant Date Stock Price (GDSP): $44.55, which is the Fair Market Value of the Stock as of the date of grant |
This is a Performance Share Agreement (“Agreement”) between Xxxxxxx
Company, a Minnesota corporation (the “Company”), and the participant identified above (the “Participant”)
entered into as of the Date of Grant specified above.
Recitals
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WHEREAS, the Company maintains the Xxxxxxx Company 1999 Stock
Incentive Plan (the “Plan”); and |
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WHEREAS, pursuant to the Plan, the Compensation Committee of the
Board of Directors (the “Committee”) has the authority to determine the awards to be granted under the Plan; and
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WHEREAS, the Committee has determined that the Participant is
eligible to receive an award under the Plan in the form of a Performance Share Award (the “Performance Share Award”);
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NOW, THEREFORE, the Company hereby grants this Performance Share
Award to the Participant under the terms and conditions as follows: |
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Terms and Conditions*
| 1. |
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Issuance. The Participant is
granted the number of Performance Shares specified at the beginning of this Agreement. This Performance Share Award shall be
effective as of the Effective Date set forth above. If the Participant’s employment terminates prior to the Effective Date,
the Participant shall have no rights under this Performance Share Award. |
| 2. |
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Performance Conditions. The
Participant’s rights under this Performance Share Award shall vest and the Performance Shares shall be earned upon
achievement of the performance conditions as described below: |
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November 20, 2008 – if the Company’s Total Shareholder
Return (as defined below) measured as of November 30, 2008 is at least 40.61%, the Participant shall earn all 20,000 Performance
Shares under this Performance Share Award. |
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November 30, 2009 – if the objective specified for
November 30, 2008 is not met, but the Company’s Total Shareholder Return measured as of November 30, 2009 is at least
42.58%, the Participant shall earn 13,333 Performance Shares under this Performance Share Award. |
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November 30, 2010 – if the objectives specified for
November 30, 2008 and 2009 are not met, but the Company’s Total Shareholder Return measured as of November 30, 2010 is
at least 44.56%, the Participant shall earn 6,667 Performance Shares under this Performance Share Award. |
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For purposes of this Performance Share Award, “Total
Shareholder Return” (TSR) shall be measured as of a Performance Measurement Date in accordance with the following formula:
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| TSR = |
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(ASP – GDSP) + DP
GDSP |
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“ASP” or “Average Stock Price” shall mean the
highest average of the Fair Market Values of the Stock during any consecutive twenty business days during the three months
preceding the Performance Measurement Date (i.e. from the September 1 preceding the Performance Measurement Date to the
Performance Measurement Date). |
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“DP” or “Dividends Paid” shall mean the sum of
all regular and special cash dividends paid on the Stock during the period between the Effective Time and the Performance
Measurement Date. |
| _________________ |
| * |
Unless the context indicates otherwise, terms that
are not defined in this Agreement shall have the meaning set forth in the Plan as it currently exists or as it is amended in the
future. |
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| 3. |
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Settlement of the Performance Share
Award. Any Performance Shares earned pursuant to this Performance Share Award shall be settled by the
issuance to the Participant of the number of Shares equal to the number of Performance Shares earned. The Shares shall be issued
to the Participant on December 10 immediately following the Performance Measurement Date on which the Performance Shares are
earned, or as soon as administratively practicable thereafter but no later than December 31 following the Performance Measurement
Date on which the Performance Shares are earned. |
| 4. |
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Termination of Employment. If the
Participant’s employment with the Company terminates because of death, Disability or Retirement, the Participant shall be
entitled to a payment of Performance Shares on any Performance Measurement Date on which the related performance conditions have
been achieved, provided that the number of Performance Shares earned by the Participant shall be prorated for the portion of the
period from the Effective Date through such Performance Measurement Date during which the Participant was employed by the Company
(for purposes of prorating the number of Performance Shares earned by the Participant, the number of days between the Effective
Date and the date of termination of the Participant’s employment shall be divided by the number of days between the Effective
Date and the date of the Performance Measurement Date). If the Participant’s employment terminates in any manner other than
as provided above, this Performance Share Award shall terminate and the Participant shall have no right to receive any Performance
Shares hereunder. |
| 5. |
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Acceleration of Rights under Performance Share
Award. |
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Change in Control. In the event of a
Change in Control as defined in the Plan, then, without any action by the Committee, the Participant’s rights under this
Performance Share Award shall vest in full and the Performance Share Award shall be settled as if the Total Shareholder Return
objective for the next Measurement Date to occur following the Change in Control was achieved as of the date of the Change in
Control. |
| 6. |
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Limitation on Transfer. This
Performance Share Award may not be assigned or transferred other than by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act, or the
rules thereunder. |
| 7. |
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No Shareholder Rights Before
Issuance. The Participant shall have no rights of a shareholder of the Company with respect to any Shares
issuable under this Performance Share Award until the Shares, if any, are actually issued to him/her upon settlement of this
Performance Share Award. |
| 8. |
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Discretionary Adjustment. In the
event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, or extraordinary dividend or divestiture (including a spin-off), or any other change in
the corporate structure or Shares of the Company, the Committee (or if the Company does not survive any such transaction, a
comparable committee of the surviving corporation) may, without the consent of Participant, make such adjustment as it determines
in its discretion to be appropriate, as to the number and |
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kind of securities subject to and reserved under the Plan and, in
order to prevent dilution or enlargement of rights of the Participant, the number and kind of securities issuable upon settlement
of this Performance Share Award. |
| 9. |
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Interpretation of This
Agreement. All decisions and interpretations made by the Committee with regard to any question arising
hereunder or under the Plan shall be binding and conclusive upon the Company and the Participant. If there is any inconsistency
between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern. |
| 10. |
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Discontinuance of
Employment. This Agreement shall not give the Participant a right to continued employment with the
Company or any parent or subsidiary of the Company, and the Company or any such parent or subsidiary employing the Participant may
terminate his/her employment and otherwise deal with the Participant without regard to the effect it may have upon him/her under
this Agreement. |
| 11. |
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Tax Withholding. Delivery of
Shares upon settlement of this Performance Share Award shall be subject to any required withholding taxes. As a condition
precedent to receiving Shares upon settlement of this Performance Share Award, the Participant may be required to pay to the
Company, in accordance with the provisions of Section 12(d) of the Plan, an amount equal to the amount of any required
withholdings. |
| 12. |
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Performance Share Award Subject to Plan, Articles of
Incorporation and By-Laws. Participant acknowledges that this Performance Share Award is subject to the
Plan, the Articles of Incorporation, as amended from time to time, and the By-Laws, as amended from time to time, of the Company,
and any applicable federal or state laws, rules or regulations. |
| 13. |
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Obligation to Reserve Sufficient
Shares. The Company shall at all times during the term of this Performance Share Award reserve and keep
available a sufficient number of Shares to satisfy this Agreement. |
| 14. |
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Binding Effect. This Agreement
shall be binding in all respects on the heirs, representatives, successors and assigns of the Participant. |
| 15. |
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Choice of Law. This Agreement is
entered into under the laws of the State of Minnesota and shall be construed and interpreted thereunder (without regard to its
conflict of law principles). |
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IN WITNESS WHEREOF, the
Participant and the Company have executed this Agreement effective as of the 8th day of November, 2005.
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PARTICIPANT |
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/s/ X. Xxxxx Xxxxxxxxxxx
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X. Xxxxx Xxxxxxxxxxx |
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XXXXXXX COMPANY |
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By: |
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx |
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Its |
Vice President
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Date |
November 8, 2005
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