FORM] HOLLY CORPORATION PERFORMANCE UNIT AGREEMENT
Exhibit 10.1
This Performance Unit Agreement (the “Agreement”) is made and entered into by and between
XXXXX CORPORATION, a Delaware corporation (the “Company”), and (the
“Employee”). If the Employee presently is or subsequently becomes employed by a subsidiary of the
Company, the term “Company” shall be deemed to refer collectively to the Company and the subsidiary
or subsidiaries which employ the Employee. This Agreement is entered into as of the day of
, (the “Date of Grant”).
W I T N E S S E T H:
WHEREAS, the Company has adopted the XXXXX CORPORATION LONG-TERM INCENTIVE COMPENSATION PLAN
(the “Plan”) to attract, retain and motivate Employees, directors and consultants; and
WHEREAS, the Long-Term Compensation Committee (the “Committee”) believes that entering into
this Agreement with the Employee is consistent with the stated purposes for which the Plan was
adopted.
NOW, THEREFORE, in consideration of the services rendered by the Employee, it is agreed by and
between the Company and the Employee, as follows:
1. Grant. The Company hereby grants to the Employee as of the Date of Grant a
Performance Award (as defined in the Plan) of performance units (the “Performance
Units”), subject to the terms and conditions set forth in this Agreement. Depending on the
Company’s performance, the Employee may earn from percent (___%) to (___%) of the
Performance Units, based on the Company’s performance on the [ # ] measures set forth in
Section 2 over a designated performance period compared to the performance of a group of
peer companies selected by the Committee.
2. Performance Period and Measures. This Section sets forth the details of the
Performance Award for the “Performance Period” which begins on , and ends on
, . If employed by the Company on , , the Employee shall be entitled
to a payment in shares of the Company’s Common Stock par value $0.1 per share (the “Common
Stock”) as determined under this Section 2 and payable at the time indicated in Section 4 or
Section 3(b), as applicable.
(a) Performance Measures. The number of Performance Units earned for
the Performance Period is determined by comparing the Company’s performance on the [
# ] measures listed below over the Performance Period to the performance of the
“Peer Group” as defined in Section 2(b) over the Performance Period on the same [ #
] measures. The [ # ] performance measures are [ ],
all as defined in Section 2(d).
(b) Peer Group. The Peer Group consists of . If
a member of the Peer Group ceases to be a public
company during the Performance Period (whether by merger, consolidation,
liquidation or otherwise) or it fails to file financial statements with the
Securities and Exchange Commission in a timely manner, it shall be treated as if it
had not been a Peer Group member for the entire Performance Period.
(c) Shares Payable. The number of shares of Common Stock payable is
equal to the result of multiplying Performance Units by the “Peer Group Performance
Percentage,” which is the average of the percentile ranking of the Company’s
performance on the [ # ] performance measures over the Performance Period as
compared to the Peer Group’s performance on such performance measures over the
Performance Period multiplied by [ # ] . The average shall be determined by adding
the Company’s percentile ranking on each performance measure and dividing the sum
thereof by [ # ].
(d) Definitions. For purposes of this Section 2, [performance measures
to be defined]
Each of the performance measures set forth above shall exclude unusual or non-recurring items and
the cumulative effect of tax and accounting changes. In addition, the elements of each performance
measure shall be as identified in the Company’s financial statements, notes to the financial
statements, management’s discussion and analysis or other Company filing with the Securities and
Exchange Commission.
3. Early Termination. In the event of separation from employment of the
Employee prior to , on account of an event described in this Section 3, the number
of Performance Units with respect to which payment after , is based shall be
determined as follows:
(a) (i) In the event that the Employee separates from employment for any reason
other than voluntary separation or Cause, as defined in Section 3(c)(vii), or (ii)
in the event of the Employee’s death, or (iii) in the event of the Employee’s total
and permanent disability as determined by the Committee in its sole discretion, or
(iv) in the event that the Employee shall retire after attaining normal retirement
age of 62 or after attaining an earlier retirement age approved by the Committee in
its sole discretion, the number of Performance Units that shall be earned by and
paid to the Employee or his beneficiary, in accordance with and at the time
specified in Section 4, shall be determined as follows: the Employee shall forfeit
a percentage of the Performance Units earned equal to the percentage that the number
of full months following the date of separation, death, disability or retirement to
, bears to . The Committee shall determine the number of Performance
Units earned and to be paid to the Employee or his beneficiary in accordance with
Section 2 as soon as administratively practicable after ___, ___. In its sole
discretion, the Committee may make a payment to the Employee assuming a Peer Group
Performance Percentage of up to ___ (___%) of the Performance Units instead of
the pro-rata number of Performance Units as determined pursuant to this Section
3(a). Unless the Committee determines otherwise, the Employee will
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have no right to any other Performance Units and those other Performance Units
granted under this Agreement will be forfeited. If the Employee separates from
employment prior to ___, ___due to voluntary separation or on account of Cause,
all Performance Units hereunder will be forfeited.
(b) In the event of a Special Involuntary Termination, as defined in Section
3(c)(vi), before ___, ___, no Performance Units shall be forfeited, and payment
with respect to ___ (___%) of the Performance Units shall be made as soon as
administratively practicable following the Special Involuntary Termination, but in
no event later than two and one-half months after the end of the calendar year in
which the Special Involuntary Termination occurs. Payment pursuant to this Section
3(b) is in lieu of payment pursuant to Section 3(a) and if the Employee receives
payment pursuant to this Section 3(b) the Employee will not be entitled to any
payment pursuant to Section 3(a).
(c) Definitions. For purposes of this Section 3,
(i) “Change in Control” shall mean:
A. Any “Person” (as defined in Section 3(c)(ii) below), other
than (1) the Company or any of its subsidiaries, (2) a trustee or
other fiduciary holding securities under an Employee benefit plan of
the Company or any of its “Affiliates” (as defined in Section 3(c)(v)
below), (3) an underwriter temporarily holding securities pursuant to
an offering of such securities, or (4) a corporation owned, directly
or indirectly, by the shareholders of the Company in substantially
the same proportions as their ownership of stock of the Company, is
or becomes the “Beneficial Owner” (as defined in Section 3(c)(iii)
below), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such person any
securities acquired directly from the Company or its Affiliates)
representing more than forty percent (40%) of the combined voting
power of the Company’s then outstanding securities, or more than
forty percent (40%) of the then outstanding common stock of the
Company, excluding any Person who becomes such a Beneficial Owner in
connection with a transaction described in Section 3(c)(i)(C)(I)
below.
B. The individuals who as of the Date of Grant constitute the
Board of Directors of the Company and any “New Director” (as defined
in Section 3(c)(iv) below) cease for any reason to constitute a
majority of the Board of Directors.
C. There is consummated a merger or consolidation of the Company
or any direct or indirect subsidiary of the Company with any other
corporation, except if:
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(I) the merger or consolidation results in the voting
securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof) at least sixty
percent (60%) of the combined voting power of the voting
securities of the Company or such surviving entity or any
parent thereof outstanding immediately after such merger or
consolidation; or
(II) the merger or consolidation is effected to
implement a recapitalization of the Company (or similar
transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or
its Affiliates other than in connection with the acquisition
by the Company or its Affiliates of a business) representing
more than forty percent (40%) of the combined voting power of
the Company’s then outstanding securities.
D. The shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of
all or substantially all of the Company’s assets to an entity at
least sixty percent (60%) of the combined voting power of the voting
securities of which is owned by the stockholders of the Company in
substantially the same proportions as their ownership of the Company
immediately prior to such sale.
(ii) “Person” shall have the meaning given in section 3(a)(9) of the
Securities Exchange Act of 1934 (the “1934 Act”) as modified and used in
sections 13(d) and 14(d) of the 1934 Act.
(iii) “Beneficial Owner” shall have the meaning provided in Rule 13d-3
under the 1934 Act.
(iv) “New Director” shall mean an individual whose election by the
Company’s Board of Directors or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the Date of
Grant or whose election or nomination for election was previously so
approved or recommended. However, “New Director” shall not include a
director whose initial assumption of office is in connection with an
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actual or threatened election contest, including but not limited to a
consent solicitation relating to the election of directors of the Company.
(v) “Affiliate” shall have the meaning set forth in Rule 12b-2
promulgated under section 12 of the 1934 Act.
(vi) “Special Involuntary Termination” shall mean the occurrence of (1)
or (2) within sixty (60) days prior to, or at any time after, a “Change in
Control” (as defined in Section 3(c)(i)), where (1) is termination of the
Employee’s employment with the Company by the Company for any reason other
than “Cause” (as defined in Section 3(c)(vii)) and (2) is a resignation by
the Employee from employment with the Company within ninety (90) days after
an “Adverse Change” (as defined in Section 3(c)(viii)) by the Company in the
terms of the Employee’s employment.
(vii) “Cause” shall mean:
A. An act or acts of dishonesty on the part of the Employee
constituting a felony or serious misdemeanor and resulting or
intended to result directly in gain or personal enrichment at the
expense of the Company;
X. Xxxxx or willful and wanton negligence in the performance of
the Employee’s material and substantial duties of employment with the
Company; or
C. Conviction of a felony involving moral turpitude.
The existence of Cause shall be determined by the Committee, in its
sole and absolute discretion.
(viii) “Adverse Change” shall mean (A) a change in the city in which
the Employee is required to work regularly, (B) a substantial increase in
travel requirements of employment, (C) a substantial reduction in duties of
the type previously performed by the Employee, or (D) a significant
reduction in compensation or benefits (other than bonuses and other
discretionary items of compensation) that does not apply generally to
Employees of the Company or its successor.
4. Payment of Performance Units. The number of shares of Common Stock payable
after ___, ___(or such earlier time as specified under Section 3(b)) shall be paid as
soon as reasonably practicable after ___, ___, but in no event later than two and
one-half months after the end of the calendar year in which the Performance Period closes
(or such earlier time as specified under Section 3(b)), in the amount determined in
accordance with Section 2, as adjusted by Section 3, if applicable. Such payment will be
subject to withholding for taxes and other applicable payroll adjustments. The
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Committee’s determination of the amount payable shall be binding upon the Employee and
his beneficiary or estate.
5. Adjustment in Number of Performance Units. The number of Performance Units
subject to this Agreement shall be adjusted to reflect stock dividends, stock splits or
other changes in the capital structure of the Company, all in accordance with the Plan. In
the event that the outstanding Shares (as defined in the Plan) of the Company are exchanged
for a different number or kind of shares or other securities, or if additional, new or
different shares are distributed with respect to the Shares (as defined in the Plan) through
merger, consolidation, or sale of all or substantially all of the assets of the Company,
there shall be substituted for the shares of Common Stock under the Performance Units
subject to this Agreement the appropriate number and kind of shares of new or replacement
securities as determined in the sole discretion of the Committee, subject to the terms and
provisions of the Plan.
6. .Delivery of Shares. No shares of Common Stock shall be delivered pursuant
to this Agreement until the approval of any governmental authority required in connection
with this Agreement, or the issuance of shares of Common Stock hereunder, has been received
by the Company.
7. Securities Act. The Company shall have the right, but not the obligation,
to cause the shares of Common Stock payable under this Agreement to be registered under the
appropriate rules and regulations of the Securities and Exchange Commission. The Company
shall not be required to deliver any shares of Common Stock hereunder if, in the opinion of
counsel for the Company, such delivery would violate the Securities Act of 1933 or any other
applicable federal or state securities laws or regulations.
8. Federal and State Taxes. The Employee may incur certain liabilities for
Federal, state or local taxes and the Company may be required by law to withhold such taxes
for payment to taxing authorities. Upon the determination by the Company of the amount of
taxes required to be withheld, if any, the Employee shall either pay to the Company, in cash
or by certified or cashier’s check, an amount equal to the taxes required to be withheld, or
the Employee shall authorize the Company to withhold from monies owing by the Company to the
Employee an amount equal to the federal, state or local taxes required to be withheld.
Authorization of the Employee to the Company to withhold taxes pursuant to this Section
shall be in form and content acceptable to the Committee. An authorization to withhold
taxes pursuant to this provision shall be irrevocable unless and until the tax liability of
the Employee has been fully paid. In the discretion of the Committee, the required taxes
may be withheld in kind from the shares of Common Stock payable under this Agreement. In
the event that the Employee fails to make arrangements that are acceptable to the Committee
for providing to the Company, at the time or times required, the amounts of federal, state
and local taxes required to be withheld with respect to the shares of Common Stock payable
to the Employee under this Agreement, the Company shall have the right to purchase at
current market price as determined by the Committee and/or to sell to one or more third
parties in either market or private transactions sufficient shares of Common Stock payable
under this Agreement
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to provide the funds needed for the Company to make the required tax payment or
payments.
9. Definitions; Copy of Plan. To the extent not specifically provided herein,
all terms used in this Agreement shall have the same meanings ascribed to them in the Plan.
By the execution of this Agreement, the Employee acknowledges receipt of a copy of the Plan.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under
any applicable law, then such provision will be deemed to be modified to the minimum extent
necessary to render it legal, valid and enforceable; and if such provision cannot be so
modified, then this Agreement will be construed as if not containing the provision held to
be invalid, and the rights and obligations of the parties will be construed and enforced
accordingly.
10. Administration. This Agreement shall at all times be subject to the terms
and conditions of the Plan. The Committee shall have sole and complete discretion with
respect to all matters reserved to it by the Plan and decisions of the majority of the
Committee with respect thereto and this Agreement shall be final and binding upon the
Employee and the Company. In the event of any conflict between the terms and conditions of
this Agreement and the Plan, the provisions of the Plan shall control.
11. No Right to Continued Employment. This Agreement shall not be construed to
confer upon the Employee any right to continue as an Employee of the Company and shall not
limit the right of the Company, in its sole discretion, to terminate the service of the
Employee at any time.
12. Governing Law. This Agreement shall be interpreted and administered under
the laws of the State of Texas, without giving effect to any conflict of laws provisions.
13. Amendments. This Agreement may be amended only by a written agreement
executed by the Company and the Employee. Any such amendment shall be made only upon the
mutual consent of the parties, which consent (of either party) may be withheld for any
reason.
14. No Liability for Good Faith Determinations. The Company and the members of
the Committee and the Board shall not be liable for any act, omission or determination taken
or made in good faith with respect to this Agreement or the Performance Units granted
hereunder.
15. No Guarantee of Interests. The Board and the Company do not guarantee the
Shares (as defined in the Plan) from loss or depreciation.
16. Nontransferability of Agreement. This Agreement and all rights under this
Agreement shall not be transferable by the Employee during his life other than by will or
pursuant to applicable laws of descent and distribution. Any rights and privileges of the
Employee in connection herewith shall not be transferred, assigned, pledged or hypothecated
by the Employee or by any other person or persons, in any way, whether by operation of law,
or otherwise, and shall not be subject to execution, attachment,
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garnishment or similar process. In the event of any such occurrence, this Agreement
shall automatically be terminated and shall thereafter be null and void. Notwithstanding the
foregoing, all or some of the Performance Units or rights under this Agreement may be
transferred to a spouse pursuant to a domestic relations order issued by a court of
competent jurisdiction
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers
thereunto duly authorized, and the Employee has set his hand effective as of the date and year
first above written.
| XXXXX CORPORATION | ||||||
| By: | ||||||
| Employee | ||||||
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