Exhibit 10.45
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.
1999 LONG TERM INCENTIVE PLAN
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PERFORMANCE UNIT AGREEMENT
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DATE OF GRANT: FEBRUARY 5, 2003
W I T N E S S E T H:
1. Grant. Pursuant to the provisions of the 1999 Long Term Incentive Plan
(collectively, the "Plan"), X.X. Xxxxxxxx Tobacco Holdings, Inc. (the "Company")
on the above date has granted to
<> <> (THE "GRANTEE"),
subject to the terms and conditions which follow and the terms and conditions of
the Plan, a target of
<> PERFORMANCE UNITS.
A copy of the Plan is attached and made a part of this Agreement with the
same effect as if set forth in the Agreement itself. All capitalized terms used
in this Agreement shall have the meaning set forth in the Plan, unless otherwise
indicated.
2. Valuation of Performance Units. Each Performance Unit shall have an
initial value of $1,000 (the "Initial Grant Value"). The Compensation Committee
of the Company's Board of Directors (the "Compensation Committee") shall value
each Performance Unit at the end of 2003 using the performance measures set
forth in the grid attached as Exhibit A, but the Compensation Committee shall
have the discretion to reduce the resulting valuation (the "Payment Value"). The
Grantee agrees that the Performance Units granted hereunder are in lieu of an
award under the Company's Annual Incentive Award Plan for 2003.
3. Vesting. (a) The Performance Units shall vest on December 31, 2003, or
if earlier, upon the Grantee's death, Permanent Disability (as defined in the
Company's Long Term Disability Plan), or retirement under a retirement plan of
the Company or a subsidiary of the Company.
(b) Notwithstanding anything in Section 3(a) to the contrary, in the event
of the Grantee's involuntary Termination of Employment without Cause (as such
terms are defined in Section 5 of this Agreement), the number of Performance
Units which shall vest shall be equal to the product of (i) the original number
of Performance Units granted to the Grantee under this Agreement and (ii) a
fraction, the numerator of which shall be
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the number of whole or partial months between January 1, 2003 and the date of
the Grantee's Termination of Employment, and the denominator of which shall be
12.
(c) Notwithstanding anything in Section 3(a) to the contrary, in the event
of a Change of Control (as defined in the Plan), the number of Performance Units
which shall vest shall be equal to the product of (i) the original number of
Performance Units granted to the Grantee under this Agreement and (ii) a
fraction, the numerator of which shall be the number of whole or partial months
commencing on January 1, 2003 and ending on the date of the Change of Control,
and the denominator of which shall be 12. Such prorated award shall be paid as
soon as practicable after the Change of Control. The value of each Performance
Unit shall be equal to the greater of (x) the Initial Grant Value or (y) the
Target Value set forth on Exhibit A attached to this Agreement.
(d) Upon the Grantee's voluntary Termination of Employment or Termination
of Employment for Cause (as such terms are defined in Section 5 of this
Agreement) prior to the end of a Performance Period, all of the Grantee's
Performance Units shall be cancelled, except to the extent that at the time of
Termination of Employment, the Grantee has an employment or termination
agreement with the Company or one of its subsidiaries which includes
non-cancellation of some or all of the Performance Units.
4. Payment. (a) Payment of Performance Units shall be made only in Cash.
Except with respect to a Change of Control as described in Section 3(c) of this
Agreement, or except under such other circumstances as the Compensation
Committee deems appropriate, no payment shall be made to the Grantee prior to
the end of 2003. Except with respect to a Change of Control as described in
Section 3(c) of this Agreement, payment of Performance Units shall be made in
the amount of the Payment Value as soon as practicable following the close of
the Company books at the end of 2003.
(b) In the event of the death of a Grantee, any payment to which such
Grantee is entitled under the Plan shall be made to the beneficiary designated
by the Grantee to receive the proceeds of any noncontributory group life
insurance coverage provided for the Grantee by the Company or a subsidiary of
the Company ("Group Life Insurance Coverage"). If the Grantee has not designated
such beneficiary, or desires to designate a different beneficiary, the Grantee
may file with the Company a written designation of a beneficiary under the Plan,
which designation may be changed or revoked only by the Grantee, in writing. If
no designation of beneficiary has been made by a Grantee under the Group Life
Insurance Coverage or filed with the Company under the Plan, distribution upon
such Xxxxxxx's death shall be made in accordance with the provisions of the
Group Life Insurance Coverage. If a Grantee is no longer an employee of the
Company at the time of death, no longer has any Group Life Insurance Coverage
and has not filed a designation of beneficiary with the Company under the Plan,
distribution upon such Xxxxxxx's death shall be made to the Grantee's estate.
5. Termination of Employment. (a) For purposes of this Agreement, the term
"Termination of Employment" shall mean termination from active employment with
the Company or a subsidiary of the Company; it does not mean the termination of
pay and benefits at the end of a period of salary continuation (or other form of
severance pay or pay in lieu of salary).
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(b) For purposes of this Agreement, if the Grantee has an employment or
severance agreement, employment shall be deemed to have been terminated for
"Cause" only as such term is defined in the employment or severance agreement.
For purposes of this Agreement, if the Grantee does not have an employment or
severance agreement that defines the term "Cause," the Grantee's employment
shall be deemed to have been terminated for "Cause" if the Termination of
Employment results from the Grantee's: (i) criminal conduct; (ii) deliberate and
continual refusal to perform employment duties on substantially a full time
basis; (iii) deliberate and continual refusal to act in accordance with any
specific lawful instructions of an authorized officer or employee more senior
than the Grantee; or (iv) deliberate misconduct which could be materially
damaging to the Company or any of its business operations without a reasonable
good faith belief by the Grantee that such conduct was in the best interests of
the Company. A Termination of Employment shall not be deemed for Cause hereunder
unless the senior human resources executive of the Company shall confirm that
any such Termination of Employment is for Cause. Any voluntary Termination of
Employment by the Grantee in anticipation of an involuntary Termination of
Employment for Cause shall be deemed to be a Termination of Employment for
Cause.
6. Transferability. Other than as specifically provided in this Agreement
with regard to the death of the Grantee, this Agreement and any benefit provided
or accruing hereunder shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or change; and any
attempt to do so shall be void. No such benefit shall, prior to receipt thereof
by the Grantee, be in any manner liable for or subject to the debts, contracts,
liabilities, engagements or torts of the Grantee.
7. No Right to Employment. Neither the execution and delivery of this
Agreement nor the granting of the Performance Units evidenced by this Agreement
shall constitute any agreement or understanding, express or implied, on the part
of the Company or its subsidiaries to employ the Grantee for any specific period
or in any specific capacity or shall prevent the Company or its subsidiaries
from terminating the Grantee's employment at any time with or without Cause.
8. Change in Corporate Structure. In the event of any stock split,
spin-off, stock dividend, extraordinary cash dividend, stock combination or
reclassification, recapitalization or merger, Change of Control or similar
event, the Compensation Committee shall make such revisions to this Agreement as
it deems are equitably required. Any adjustment or revision made by the
Compensation Committee shall be final and binding on the Grantee, the Company
and all other interested persons; provided, however, that the Compensation
Committee may not make any such adjustments or revisions that are adverse to the
Grantee without the Grantee's written consent.
9. Application of Laws. The granting of Performance Units under this
Agreement shall be subject to all applicable laws, rules and regulations and to
such approvals of any governmental agencies as may be required.
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10. Notices. Any notices required to be given hereunder to the Company
shall be addressed to The Secretary, X.X. Xxxxxxxx Tobacco Holdings, Inc., Post
Office Box 2866, Winston-Salem, NC 27102-2866, and any notice required to be
given hereunder to the Grantee shall be sent to the Grantee's address as shown
on the records of the Company.
11. Taxes. Any taxes required by federal, state or local laws to be
withheld by the Company in respect of the grant of Performance Units or payment
of the Payment Value hereunder shall be paid to the Company by the Grantee by
the time such taxes are required to be paid or deposited by the Company. The
Grantee hereby authorizes the necessary withholding by the Company to satisfy
such tax withholding obligations prior to delivery of the Payment Value.
12. Administration and Interpretation. In consideration of the grant of
Performance Units hereunder, the Grantee specifically agrees that the
Compensation Committee shall have the exclusive power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation
and application of the Plan and Agreement as are consistent therewith and to
interpret or revoke any such rules. All actions taken and all interpretation and
determinations made by the Compensation Committee shall be final, conclusive,
and binding upon the Grantee, the Company and all other interested persons. No
member of the Compensation Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Agreement. The Compensation Committee may delegate its interpretive
authority to an officer or officers of the Company.
13. Amendment. This Agreement is subject to the Plan, a copy of which is
attached. The Board of Directors may amend the Plan and the Compensation
Committee may amend this Agreement at any time and in any way, except that any
amendment of the Plan or this Agreement that would impair the Grantee's rights
under this Agreement may not be made without the Grantee's written consent.
14. Obligations of Grantee. (a) In consideration of the grant of
Performance Units hereunder, the Grantee, while both actively employed and in
the event of Grantee's Termination of Employment for any reason, specifically
agrees that within the term of this grant or within one year following the
payment of any amounts pursuant to the grant, if later: (i) the Grantee will
personally provide reasonable assistance and cooperation to the Company in
activities related to the prosecution or defense of any pending or future
lawsuits or claims involving the Company; (ii) the Grantee will promptly notify
the Company upon receipt of any requests from anyone other than an employee or
agent of the Company for information regarding the Company, or if the Grantee
becomes aware of any potential claim or proposed litigation against the Company;
(iii) the Grantee will refrain from providing any information related to any
claim or potential litigation against the Company to any non-Company
representatives without either the Company's written permission or being
required to provide information pursuant to legal process; (iv) the Grantee will
not disclose or misuse any confidential information or material concerning the
Company; and (v) the Grantee will not engage in any activity contrary or harmful
to the interests of the Company. In further consideration of the grant of
Performance Units hereunder, the Grantee specifically agrees that if required by
law to provide sworn testimony regarding any Company-related matter: the Grantee
will consult with and have Company designated legal counsel present for such
testimony (the Company will be
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responsible for the costs of such designated counsel); the Grantee will confine
his testimony to items about which the Grantee has knowledge rather than
speculation, unless otherwise directed by legal process; and the Grantee will
cooperate with the Company's attorneys to assist their efforts, especially on
matters the Grantee has been privy to, holding all privileged attorney-client
matters in strictest confidence.
(b) If the Company reasonably determines that the Grantee has materially
violated any of the Grantee's obligations under this Agreement, then this Grant
shall terminate, effective the date on which such violation began (unless
otherwise terminated sooner), and the Company may demand the return of any
amount paid to the Grantee hereunder and the Grantee hereby agrees to return
such amounts upon such demand. If after such demand the Grantee fails to return
such amounts, the Grantee acknowledges that the Company has the right to deduct
from any amounts the Company owes to the Grantee (including, but not limited to,
wages or other compensation), or to commence judicial proceedings against the
Grantee, to recover such amounts and any and all of its attorney's fees and
costs.
15. GOVERNING LAW. THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE
INTERPRETATION, VALIDITY AND PERFORMANCE OF THE TERMS OF THIS AGREEMENT,
REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF
LAWS.
IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the
Grantee have executed this Agreement as of the Date of Grant first above
written.
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.
By:
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Authorized Signatory
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Grantee
Xxxxxxx's Taxpayer Identification Number:
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Xxxxxxx's Home Address:
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