Exhibit 10.16
COMPENSATION AND AWARD AGREEMENT
FISCAL YEAR ENDING SEPTEMBER 30, 1999
The Compensation Committee of the Board of Directors has reviewed and
approved the following compensation package which includes a grant of
Performance Units by the Committee of the Comdisco, Inc. 1995 Long-Term Stock
Ownership Incentive Plan (the "95 Plan").
1. BASE SALARY
Your annual base salary shall be $.
2. ANNUAL CASH INCENTIVE POOL
Comdisco will establish a cash incentive pool based on the following
earnings goals:
2% x Pre-Tax Earnings between Target 1 and Target 2, 7%
x Pre-Tax Earnings between Target 2 and Target 3
Your share of this incentive pool share be x%.
Pre-Tax Earnings will include any earnings or losses attributable to
extraordinary items.
As an example, if Comdisco has Pre-Tax Earnings of Target 3 in fiscal
1999 your annual cash incentive compensation would be $x.
3. ANNUAL STOCK OPTION INCENTIVE
If Comdisco achieves 1999 Pre-Tax Earnings of Target 3, you will
also be entitled to a stock option grant of XXX shares at the closing price on
September 30, 1999. These options would vest at the rate of 33.33% per year over
a three year term.
If the Pre-Tax Earnings achieved is less than Target 3, then the
number of shares granted will be based on the following:
Pre-Tax Earnings Percentage Grant Adjusted Grant
Target 3 100%
Target 2 80%
Target 1 60%
less than Target 1 0% -0-
4. LONG-TERM PERFORMANCE UNIT GRANT
The Committee of the 95 Plan hereby awards you with XXX Performance
Units.
a. Performance Objective and Performance Period
The Committee has set a target Performance Objective that Comdisco's
"Total Shareholder Return" (as defined below) be ranked at or above the 50th
percentile of the Total Shareholder Return of all companies contained in the S&P
500 for the period running from October 1, 1998 through September 30, 2001 (the
"Performance Period").
"Total Shareholder Return" is defined as the sum of the stock price
appreciation plus dividends (reinvested) through the Performance Period.
b. Determination of Performance Unit Value
The actual Performance Unit Value will be determined based upon
Comdisco's Total Shareholder Return over the Performance Period. The target
Performance Unit Value has been set at $500. The actual Performance Unit Value
will be determined by multiplying the target Performance Unit Value times the
Performance Percentage specified in the following table:
TSR % Rank in S&P 500 Performance x Target Unit = Actual Unit
% Value Value
------------------ ---------- ----------- ----------
below 50th 0% $500 $0
50th 100 500 500
55 150 500 750
60 200 500 1,000
65 260 500 1,300
70 320 500 1,600
75 390 500 1,950
80 460 500 2,300
85 530 500 2,650
90+ 600 500 3,000
c. Method of Distribution
Within 15 days of the date of this Agreement, you must decide upon one
of the following distribution methods by signing the Election Statement attached
hereto:
i. Cash Distribution - You may elect to have 100% of the actual
Performance Unit Value paid in cash (less applicable taxes).
ii. Restricted Stock - You may elect to have 100% of the actual
Performance Unit Value paid in the form of Restricted Stock.
In such event, the actual Performance Unit Value will be
multiplied by 120% and the product thereof will be used to
acquire Restricted Stock based on the closing price of
Comdisco's stock on September 30, 2000.
d. Restrictions
The Performance Unit Award is conditioned upon (i) your continuing as
an employee throughout the Performance Period and (ii) if you have elected to
receive Restricted Stock, your continuing as an employee for an additional one
year beyond the Performance Period. The effects of a termination of employment
within these periods are set forth in Section 14 of the 95 Plan.
e. Exercise of Performance Units
Performance Units may be exercised by delivery to the Secretary of
Comdisco of written notice of intent to exercise a specific number of
Performance Units.
f. Incorporation of 95 Plan Provisions
This award of Performance Units shall incorporate the terms and
conditions of the 95 Plan.
g. Acceptance
By execution of the attached Election Statement, you accept the terms
and conditions of this Performance Unit Grant.
5. CASH TO OPTION CONVERSION ALTERNATIVE.
Within 15 days of the date of this Agreement, you may elect to convert
cash compensation into stock options. You may elect to convert cash compensation
paid under Base Salary, Annual Cash Incentive and Long-Term Performance Units
into stock options on a one for two basis. You must elect to forego cash
compensation equally from the above three sources in $1,000 increments. For each
$1,000 foregone, you will receive stock options with an "option value" of
$2,000.
If you make this election, you will receive a stock option grant at the
closing price of Comdisco stock on the date the election notice is received. The
following example will illustrate this alternative.
September 29, 1998
- Election to forego $10,000 each from Salary, Annual
Cash Incentive and Performance Units
- Comdisco stock closes at $15.00
- $30,000 foregone x 2 = $60,000
- Option Value = $15.00/3 = $5.00
- $60,000/$5.00 = 12,000 options granted at $15.00
- Vests at 33 1/3% per year commencing 10/1/98
This agreement shall not be construed to give you any employment
rights.
Dated this _____ day of September, 1998.
On behalf of the Committee
