Exhibit 10.15
INCENTIVE COMPENSATION AGREEMENT
THIS INCENTIVE COMPENSATION AGREEMENT ("Agreement"), is made and
entered into effective as of December 31, 2000, by and between XXXX & XXXXXX
COMPANY (the "Company"), and XXXXX XXXXXX (the "Employee").
RECITALS:
WHEREAS, the Company recognizes the value of the services
performed and to be performed by Employee and wishes to encourage his continued
employment;
WHEREAS, the Company wishes to provide the benefits described
herein to Employee; and
WHEREAS, Employee desires to accept such benefits as
consideration for his continuing performance of services for the Company;
NOW, THEREFORE, in consideration of the premises and of the
mutual promises herein contained, and intending to be legally bound hereby, the
Company and Employee agree as follows:
Section 1. Incentive Compensation.
(a) Continuous Employment through December 31, 2003. If
Employee remains in the continuous employment of the Company at all times from
the effective date of this Agreement through and including December 31, 2003,
the Company will credit to an account (the "Deferral Account") set up in
Employee's name under the Xxxx & Xxxxxx Executive Deferred Compensation Plan
(the "Plan"), not later than March 31, 2004, an amount (the "Mirror Cash
Payment") equal to the product of (i) the
Price Appreciation, multiplied by (ii) the Reference Shares. For purposes of
this Agreement, the "Price Appreciation" means the excess, if any, of (1) the
closing price per share of the Company's Common Stock, in consolidated reporting
for securities listed on the New York Stock Exchange, as reported in the Wall
Street Journal, on December 31, 2003 (or the immediately preceding trading day
if the shares are not traded on such day), over (2) $16.50 per share. The
"Reference Shares" means the product of (1) 406,250, multiplied by (2) the
Performance Percentage. The "Performance Percentage" shall mean the percentage
calculated in accordance with the following table based on the highest Stock
Price Target (as determined below) achieved with respect to the Company's Common
Stock at any time during the period beginning January 1, 2001, and ending
December 31, 2003:
Stock Price Performance
Target Percentage
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Less than $21.30 0%
$21.30 to $24.329 20%
$24.33 to $27.649 40%
$27.65 to $31.249 60%
$31.25 to $35.149 80%
$35.15 or higher 100%
For purposes of this Agreement, a "Stock Price Target" will be deemed to have
been achieved at a particular level only if the closing price per share of the
Company's Common Stock, in consolidated reporting for securities listed on the
New York Stock Exchange, is within the price range specified in the table above
for such level for not less than 60 trading days during any period of 90
consecutive trading days, as reported in the Wall Street Journal. The Company
and Employee agree that the first $3,000,000 of any Mirror Cash Payment
creditable to Employee's Deferral Account under this Agreement shall be
considered an
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award in recognition of completing the Company's divestiture of its Imaging
division. It is understood and agreed between the parties that in the event the
Imaging division is not disposed of by the Company on or before December 31,
2003, the amount of the Mirror Payment shall be reduced, but not below zero, by
$3,000,000.
(b) Termination of Employment prior to January 1, 2004. In
the event of Employee's termination of employment with the Company or any
subsidiary for any reason at any time after the effective date of this Agreement
and prior to January 1, 2004, Employee shall not be entitled to have any amounts
credited to his Deferral Account pursuant to this Agreement from and after the
effective time of any such termination of employment.
(c) Change of Control prior to January 1, 2004. In the event
of a Change of Control of the Company at any time after the effective date of
this Agreement but prior to January 1, 2004, provided Employee remains in the
continuous employment of the Company from the effective date of this Agreement
through and including the effective date of such Change of Control, the Company
will credit Employee's Deferral Account as of the effective date of such Change
of Control with an amount equal to the product of (i) the Price Appreciation,
multiplied by (i) the Reference Shares. For purposes of this Section 1(c),
"Change of Control" shall have the same meaning as set forth in Section 2(e) of
the Nonqualified Stock Option entered into between the Company and Employee
dated as of December 31, 2000 (the "Option Agreement"). In the event of such a
Change of Control, "Price Appreciation" shall have the same meaning as set forth
in Section 1(a) hereof, except that (A) the closing price of the Company's
Common Stock as of the consummation of such Change of Control shall be
substituted for the value as of December 31, 2003, and (B) the "Performance
Percentage" shall mean the higher of (x) the Performance Percentage
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determined based on the highest Stock Price Target achieved with respect to the
Company's Common Stock at any time during the period beginning on January 1,
2001, and ending on the effective date of the Change of Control, or (y) the
Performance Percentage determined as if the Stock Price Target was deemed to
have been reached at an amount equal to the fair market value of the aggregate
consideration paid with respect to a share of the Company's Common Stock in
connection with such Change of Control. In the event of a Change of Control of
the Company prior to January 1, 2004, this Section 1(c) shall be the exclusive
provision under this Agreement for determining the amount to be credited to
Employee's Deferral Account, it being understood that following such Change of
Control, no additional amounts shall be credited to Employee's Deferral Account
under any of the remaining provisions of this Section 1. In the event of a
Change of Control, in the absence of a deferral election under Section 10 of the
Plan, Employee shall be entitled to a lump sum payment of the amounts credited
to his Deferral Account under this Section 1(c) at the time and in the manner
provided in Section 10 of the Plan.
Section 2. Payments.
Employee's right to receive payment of any amounts credited to his
Deferral Account under Section 1 hereof shall be payable at the time or times,
in such manner, and subject to such conditions or restrictions, as are set forth
in the Plan. Notwithstanding anything to the contrary in this Agreement or in
the Plan, the Company and Employee may agree that in lieu of the credit to
Employee's Deferral Account under Section 1 hereof, the Company's obligations
hereunder may be satisfied by the delivery of shares of Company Common Stock, an
option to purchase shares of Common Stock, or a combination thereof, as may be
agreed to between the parties.
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Section 3. Miscellaneous.
(a) Entire Agreement; Amendment; Termination. This Agreement
contains the entire understanding and agreement between the parties with respect
to the subject matter hereof. This Agreement supersedes any and all other
agreements or understandings, either oral or written, among the parties hereto
with respect to the subject matter hereof. This Agreement cannot be amended,
modified or supplemented in any respect, except as otherwise expressly permitted
hereunder or by a subsequent written agreement entered into by both parties. No
waiver of any provision of this Agreement shall be valid unless it is in
writing.
(b) No Obligation. Nothing contained herein will be
construed to be a contract of employment for any term, nor as conferring upon
Employee the right to continue in the employ of the Company in his present
capacity, or in any other capacity. It is expressly understood by the parties
hereto that this Agreement relates exclusively to additional compensation for
Employee's services, which compensation is payable only as provided herein and
in the Plan, and is not intended to be an employment contract.
(c) No Assignment. No right or interest in Employee's
Deferral Account under this Agreement or under the Plan shall be assignable or
transferable, and no right or interest of Employee in this Agreement shall be
subject to any lien, obligation or liability of Employee.
(d) Invalid Provision. The invalidity or unenforceability of
any particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
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(e) Binding Effect. This Agreement shall be binding upon the
Company, Employee and their respective heirs, legal representatives, executors,
administrators, successors and assigns. Any rights given or duties imposed upon
the estate of Employee upon his death shall inure to the benefit of and be
binding upon the fiduciary of the decedent's estate in his fiduciary capacity.
(f) Governing Law. This Agreement and all actions taken in
connection herewith shall be governed and construed in accordance with the laws
of the State of Illinois (regardless of the law that might otherwise govern
under applicable principles of conflict of laws).
(g) Headings. The headings are intended only for convenience
in finding the subject matter and do not constitute part of the text of this
agreement and shall not be considered in the interpretation of this option.
(h) Saving Clause. If any provision(s) of this Agreement
shall be determined to be illegal or unenforceable, such determination shall in
no manner affect the legality or enforceability of any other provision hereof.
(i) Notices. All notices, requests, consents and other
communications shall be in writing and be deemed given when delivered
personally, by e-mail or facsimile transmission or when received if mailed by
first class registered or certified mail, postage prepaid. Notices to the
Company or the Employee shall be addressed to such address or addresses as may
have been furnished by such party in writing to the other.
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IN WITNESS WHEREOF, the Company has caused the execution hereof
by its duly authorized officer and Employee has agreed to the terms and
conditions of this option, all as of the date first above written.
XXXX & XXXXXX COMPANY
By
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Xxxxxxx Xxxxxxxxx
Chairman, Compensation Committee
Board of Directors
Xxxx & Xxxxxx Company
By
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Xxxxx Xxxxx-Xxxxxxxx
Vice President, Human Resources
EMPLOYEE
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Xxxxx Xxxxxx
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