Exhibit 10.1
FORM OF INDEXED DEFERRED SHARES AWARD AGREEMENT
This Indexed Deferred Shares Award Agreement, dated as of January 3,
2006, is made and entered into by and between Global Signal Inc., a Delaware
company (the "Company") and ________________ ("Employee") pursuant to the
Global Signal Inc. Omnibus Stock Incentive Plan (the "Plan").
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WHEREAS, the Company maintains the Plan for the benefit of selected
management employees, directors and Consultants of the Company or its parents
or subsidiaries; and
WHEREAS, the Company has established the Global Signal Inc. Omnibus
Stock Incentive Plan (the "Plan"), a copy of which may be obtained by written
or telephonic request to the Company's Secretary, and which Plan is made a part
hereof;
WHEREAS, the Employee is a valued and trusted employee of the Company
and the Company believes it to be in the best interests of the Company to
secure the future services of the Employee by providing the Employee with an
inducement to remain an employee of the Company or any of its affiliates or
subsidiaries and through the grant of Deferred Shares (as defined below) of
common stock, par value $0.01 per share, of the Company (the "Common Stock" or
"Shares"); and
WHEREAS, the Compensation Committee of the Board of Directors of the
Company has determined that the Employee be granted Deferred Shares subject to
the restrictions stated below and as hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1 DEFERRED SHARES
Section 1.1. Indexed Deferred Shares Award. On January 3, 2006, (the
"Date of Grant"), the Company hereby agrees to grant to Employee an Indexed
Deferred Shares Award representing the right to receive up to that number of
Shares equal to 150% of the "Deferred Shares," which Deferred Shares are set
forth on Schedule A (the "Award"). The Shares subject to the Award shall vest
and become payable in accordance with the provisions of Sections 1.2 and 1.3
below. Subject to Section 1.4, the Company shall issue a stock certificate to
Employee in respect of such Award as soon as reasonably practicable following
the vesting dates.
Section 1.2. Time Based Vesting Schedule. One third of the Shares
subject to the Award that are payable pursuant to the satisfaction of the
Performance Goals shall vest and become payable on December 31, 2008; one third
of the Shares subject to the Award that are payable pursuant to the
satisfaction of the Performance Goals shall vest and become payable on December
31, 2009; and one third of the Shares subject to the Award that are payable
pursuant to the satisfaction of the Performance Goals shall vest and become
payable on December 31, 2010.
Section 1.3. Performance Goals. The performance goals for purposes of
determining whether, and the extent to which, the Indexed Deferred Shares Award
shall be payable shall be based on the Company's annualized dividend declared
in respect of the fourth quarter of 2006, which shall be equal to the product
of four times the Company's per share regular cash dividend declared in respect
of the fourth quarter of 2006 (the "Q4 Dividend Run Rate"). Subject to Sections
1.2 and 1.5 below, upon determination of the Q4 Dividend Run Rate, Employee's
entitlement to the number of Shares subject to the Award shall be fixed and
nonforfeitable and shall not be conditioned upon the Company's future
performance.
(a) If the Company's Q4 Dividend Run Rate is less than or equal to
$2.20 per share, then 0% of the Deferred Shares shall be payable pursuant to
the Indexed Deferred Shares Award.
(b) If the Company's Q4 Dividend Run Rate is at least equal to $2.21
per share but less than $2.30 per share, then 75% of the Deferred Shares shall
be payable pursuant to the Indexed Deferred Shares Award.
(c) If the Company's Q4 Dividend Run Rate is at least equal to $2.30
per share but less than $2.41 per share, then 100% of the Deferred Shares shall
be payable pursuant to the Indexed Deferred Shares Award.
(d) If the Company's Q4 Dividend Run Rate is at least equal to $2.41
per share but less than $2.51 per share, then 125% of the Deferred Shares shall
be payable pursuant to the Indexed Deferred Shares Award.
(e) If the Company's Q4 Dividend Run Rate is equal to $2.51 per share
or greater, then 150% of the Deferred Shares shall be payable pursuant to the
Indexed Deferred Shares Award.
Section 1.4. Income Tax Matters; Tax Witholding.
(a) Set forth below is a brief summary as of the Date of Grant of
certain United States federal tax consequences of the Indexed Deferred Shares
Award. THIS SUMMARY DOES NOT ADDRESS SPECIFIC STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES THAT MAY BE APPLICABLE TO THE EMPLOYEE. THE EMPLOYEE UNDERSTANDS
THAT THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE. For federal income tax purposes, Employee generally will
not have taxable income on the grant of the Indexed Deferred Shares Award.
Employee will recognize ordinary income at the time or times the Shares covered
by the Award vests in an amount equal to the Fair Market Value of such Shares
on each such date. The cash bonus set forth in Section 1.7.2 shall be treated
as wages paid to the Employee. The grant of the Indexed Deferred Shares Award
will not constitute "property" within the meaning of Section 83 of the Internal
Revenue Code of 1986, as amended (the "Code"), and as such Employee will not be
entitled to file an election under Section 83(b) of the Code.
(b) TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT REGULATIONS, WE
ADVISE YOU THAT, UNLESS OTHERWISE EXPRESSLY INDICATED, ANY FEDERAL TAX ADVICE
CONTAINED IN THIS INDEXED DEFERRED SHARES AWARD AGREEMENT WAS NOT INTENDED OR
WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF (I) AVOIDING
TAX-RELATED PENALTIES UNDER THE CODE OR (II) PROMOTING, MARKETING OR
RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED MATTERS ADDRESSED HEREIN.
(c) BY SIGNING THIS AGREEMENT, THE EMPLOYEE REPRESENTS THAT HE HAS
REVIEWED WITH HIS OWN TAX ADVISORS THE FEDERAL, STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES OF THE TRANSACTIONS CONTEMPLATED BY THIS INDEXED DEFERRED SHARES
AWARD AGREEMENT AND THAT HE IS RELYING SOLELY ON SUCH ADVISORS AND NOT ON ANY
STATEMENTS OR REPRESENTATIONS OF THE COMPANY OR ANY OF ITS AGENTS. EMPLOYEE
UNDERSTANDS AND AGREES THAT HE (AND NOT THE COMPANY) SHALL BE RESPONSIBLE FOR
ANY TAX LIABILITY THAT MAY ARISE AS A RESULT OF THE TRANSACTIONS CONTEMPLATED
BY THIS INDEXED DEFERRED SHARES AWARD AGREEMENT.
(d) Notwithstanding anything to the contrary, the payment of the Award
hereunder shall be conditioned upon Employee making adequate provision for
federal, state or other withholding obligations, if any, which may arise upon
the vesting of the Award.
Section 1.5. Forfeiture; Termination Without Cause. Except as
otherwise provided below, in the event of Employee's termination of employment
with the Company prior to December 31, 2010, for any reason (including by
reason of Employee's death or Disability), any then unvested portion of the
Indexed Deferred Shares Award and Employee's right to receive any then unvested
Shares pursuant to the Award shall be immediately and irrevocably forfeited. In
the event Employee becomes entitled to any Award as set forth below and the
Employee is a "specified employee" within the meaning of Section
409A(a)(2)(B)(1) of the Code, the payment of such Award shall be delayed in
accordance with the provisions of such section to the extent necessary or
appropriate to avoid adverse tax consequences under Section 409A of the Code.
(a) Subject in each case to Sections 1.5.2 and 1.5.3 below: (i) in the
event Employee's employment with the Company is terminated by the Company
without Cause prior to the declaration by the Company's Board of Directors of
its Q4 2006 regular cash dividend (the "Q4 Determination"), Employee shall be
entitled to an Award covering one third of the Deferred Shares in satisfaction
of the Indexed Deferred Shares Award and shall not be entitled to any other
Shares hereunder; (ii) in the event Employee's employment with the Company is
terminated by the Company without Cause on or after the Q4 Determination and
prior to December 31, 2008, Employee shall be entitled to an Award covering one
third of that number of shares determined under Section 1.3 and shall not be
entitled to any other Shares hereunder; (iii) in the event Employee's
employment with the Company is terminated by the Company without Cause on or
after December 31, 2008, and prior to December 31, 2009, Employee shall vest as
to an additional one third of that number of Shares determined under Section
1.3 such that Employee shall be entitled to an Award covering two thirds of
that number of Shares determined under Section 1.3 and shall not be entitled to
any other Shares hereunder; and (iv) in the event Employee's employment with
the Company is terminated by the Company without Cause on or after December 31,
2009, Employee shall vest as to an additional one third of that number of
Shares determined under Section 1.3 such that Employee shall be entitled to an
Award covering all the Deferred Shares in satisfaction of the Indexed Deferred
Shares Award.
(b) In the event Employee's employment with the Company is terminated
by the Company without Cause within twelve (12) months following a Change in
Control that occurs prior to the Q4 Determination, Employee shall be entitled
to an Award covering all the Deferred Shares in satisfaction of the Indexed
Deferred Shares Award.
(c) In the event Employee's employment with the Company is terminated
by the Company without Cause within twelve (12) months following a Change in
Control that occurs following the Q4 Determination, Employee shall be entitled
to an Award covering that number of Shares determined under Section 1.3
(regardless of whether the Award is vested or unvested pursuant to Section 1.1)
less the number of Shares already paid to Employee in satisfaction of the
Indexed Deferred Shares Award and shall not be entitled to any other Shares
hereunder.
Section 1.6. Restriction on Transfer. The Indexed Deferred Shares
Award, and the right to receive the Award, may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of or encumbered,
other than by will or the laws of descent and distribution, and no attempt to
transfer the Indexed Deferred Shares Award, and the right to receive the Award,
whether voluntary or involuntary, by operation of law or otherwise, shall vest
the transferee with any interest or right in or with respect to the Indexed
Deferred Shares Award or the Award.
Section 1.7. Employee Stockholder Rights; Special Bonus Payment.
(a) No Stockholder Rights. Nothing contained in this Indexed Deferred
Shares Award Agreement shall be construed as conferring upon Employee the right
to vote or to consent or to receive notice as a stockholder of the Company or
any other matters or any rights whatsoever as a stockholder of the Company
prior to the issuance of the Shares upon vesting of the Award.
(b) Special Bonus Payment. Subject to Employee's continued employment
with the Company as of each record date, (i) from the Date of Grant until the
Q4 Determination, Employee shall be entitled to receive a cash payment (less
applicable withholding) equal to the amount of any dividends paid with a record
date which falls on or after the Date of Grant on all Deferred Shares covered
by the Award; and (ii) on and after the Q4 Determination, Employee shall be
entitled to receive a cash payment (less applicable withholding) equal to the
amount of any dividends paid with a record date on or after the Q4
Determination on that number of Shares determined under Section 1.3 (regardless
whether the Award is vested or unvested pursuant to Section 2.1) less the
amount of any dividends paid on the number of Shares already paid to Employee
in satisfaction of the Indexed Deferred Shares Award.
ARTICLE 2 MISCELLANEOUS
Section 2.1. Modification and Waiver. This Indexed Deferred Shares
Award Agreement and any provision hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by each of the parties
hereto.
Section 2.2. Violation of Laws. The Company shall not be required to
deliver any Award until the requirements of any federal or state securities
laws, rules or regulations, federal or state tax laws, rules or regulations or
other laws or rules (including the rules of any securities exchange) as may be
determined by the Company to be applicable are satisfied.
Section 2.3. Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon delivery to the
Employee at his address then on file with the Company.
Section 2.4. No Right to Employment. Neither the Plan, the granting of
this Indexed Deferred Shares Award, this Indexed Deferred Shares Award
Agreement nor any other action taken pursuant to the Plan or this Indexed
Deferred Shares Award Agreement shall constitute or be evidence of any
agreement or understanding, express or implied, that the Employee has a right
to continue to provide services as an officer or employee of the Company or any
Parent, Subsidiary or affiliate of the Company for any period of time or at any
specific rate of compensation. Further, the Company may at any time dismiss the
Employee, free from any liability or any claim under the Plan or this Indexed
Deferred Shares Award Agreement, except as otherwise expressly provided herein.
Section 2.5. Entire Agreement. This Indexed Deferred Shares Award
Agreement and the Plan contain the entire understanding and agreement of the
parties concerning the subject matter hereof, and supersede all earlier
negotiations and understandings, whether written or oral, between the parties
with respect thereto. This Indexed Deferred Shares Award Agreement is made
under and subject to the provisions of the Plan, and all of the provisions of
the Plan are hereby incorporated by reference into this Agreement. In the event
of any conflict between the provisions of this Indexed Deferred Shares Award
Agreement and the provisions of the Plan, the provisions of the Plan shall
govern. By signing this Indexed Deferred Shares Award Agreement, the Employee
confirms that he has received a copy of the Plan and has had an opportunity to
review the contents thereof.
Section 2.6. Interpretation. Any dispute regarding the interpretation
of this Indexed Deferred Shares Award Agreement shall be submitted by Employee
or the Company to the Company's Board of Directors for review. The resolution
of such a dispute by the Company's Board of Directors shall be final and
binding on the Company and the Employee. Any capitalized words used herein that
are not otherwise defined shall have the meaning ascribed to those terms in the
Plan.
Section 2.7. Governing Law. This Indexed Deferred Shares Award
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware applicable to agreements wholly to be
executed and to be performed therein. If any one or more of the provisions of
this Indexed Deferred Shares Award Agreement shall be held to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 2.8. Non-Compete, Non-Solicitation and Confidentiality
Agreement. This Indexed Deferred Shares Award Agreement shall not be effective
unless Employee executes and delivers a Non-Compete, Non-Solicitation and
Confidentiality Agreement in the form attached as Exhibit 1.
Section 2.9. Dispute Resolution. Any dispute, claim, controversy or
claim arising out of, relating to or in connection with this Indexed Deferred
Shares Award Agreement, or the breach, termination or validity thereof, shall
be brought exclusively in any Federal or State court in the State of New York,
County of New York. Both parties hereto expressly and irrevocably submit to the
jurisdiction of said courts and irrevocably waive any objection which either of
them may now or hereafter have to the laying of venue of any action, suit or
proceeding arising out of or relating to this Indexed Deferred Shares Award
Agreement brought in such courts, irrevocably waive any claim that any such
action, suit or proceeding brought in any such court has been brought in an
inconvenient forum and further irrevocably waive the right to object, with
respect to such claim, action, suit or proceeding brought in any such court,
that such court does not have jurisdiction over such party. The parties hereto
hereby irrevocably consent to the service of process by registered mail,
postage prepaid, or by personal service within or without the State of New
York. Nothing contained herein shall affect the right to serve process in any
manner permitted by law.
Section 2.10. Binding Effect On Successors. The Company may assign any
of its rights under this Indexed Deferred Shares Award Agreement. This Indexed
Deferred Shares Award Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the Company. This Indexed Deferred Shares
Award Agreement shall be binding upon the Employee and Employee's heirs,
executors, administrators, legal representatives, successors and assigns.
Section 2.11. Headings. The headings in this Indexed Deferred Shares
Award Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
Section 2.12. Counterparts. This Indexed Deferred Shares Award
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties have caused this Indexed Deferred
Shares Award Agreement to be duly executed this 3rd day of January, 2006.
GLOBAL SIGNAL INC.,
a Delaware company
By:
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Name:
Title:
EMPLOYEE
By:
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Name:
Schedule A
Deferred Shares = Dollar Amount of Equity Award granted in December 2005
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$43.00 per share
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Exhibit 1
Non-Compete, Non-Solicitation and
Confidentiality Agreement
