HNI CORPORATION STOCK INCENTIVE PLAN FOR LEGACY KIMBALL EMPLOYEES PERFORMANCE UNIT AWARD AGREEMENT ([Year/Month] Grant)
EXHIBIT 10.33
HNI CORPORATION STOCK INCENTIVE PLAN FOR
([Year/Month] Grant)
[Name] (the “Employee”), congratulations on your selection as a Participant who will receive Performance Units under the HNI Corporation Stock Incentive Plan for Legacy Xxxxxxx Employees (the “Plan”). This Award Agreement provides a brief summary of the Employee’s rights under the Plan. Capitalized terms found but not defined in this Award Agreement are defined in the Plan.
The Plan, together with the Award Agreement, provides complete details of all of the Employee’s rights under the Plan and this Award Agreement, as well as all of the conditions and limitations affecting the Employee’s rights. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this Award Agreement.
1.GRANT OF PERFORMANCE UNITS
The Company hereby grants to the Employee a total of [number] Performance Units under this Award Agreement, subject to the terms and conditions set forth in this Award Agreement and the Plan (“Award”). Each Performance Unit represents the right to receive one (1) share (a “Share”) of Stock of the Company, subject to the eligibility, performance and other terms and conditions set forth in this Award Agreement and/or the Plan. The number of Performance Units granted above will function as a target (the “Target”), with the number of actual Performance Units, if any, ultimately earned under this Award Agreement to be determined in accordance with the terms of this Award Agreement and the Plan.
2.PERFORMANCE CYCLE
For purposes of this Award, the “Performance Cycle” is the 36-month period commencing [date] and ending [date].
3.SATISFACTION OF PERFORMANCE-BASED CONDITIONS
Subject to the eligibility conditions described in Section 4 of this Award Agreement, and the satisfaction of the performance conditions set forth in Section 5 of this Award Agreement, the Company intends to award Shares hereunder to the Employee as soon as administratively practical following the end of the Performance Cycle, but in no event later than 2½ months following the end of the Performance Cycle. Except as set forth in Section 4.C.(ii) and Section 7 of this Award Agreement, no Shares in settlement of the Performance Units shall be issued to the Employee prior to the end of the Performance Cycle.
4.ELIGIBILITY CONDITIONS
A.As soon as practical following the end of the Performance Cycle, the Committee shall determine whether and the extent to which the performance conditions set forth in Section 5 of this Award Agreement have been satisfied and the number of Performance Units, if any, earned by the Employee (the date of such determination by the Committee hereinafter referred to as the “Determination Date”), provided, however, that to receive Shares in settlement of the Performance Units determined by the Committee to have been earned, the Employee must have remained in Continuous Service from the date hereof through the last day of the Performance Cycle (the “Settlement Date”).
B.If the Employee ceases Continuous Service before the end of the Performance Cycle for any reason other than Disability, death or Retirement, the Employee will forfeit all rights with respect to any Performance Units under this Award Agreement.
C.Disability or Death. As permitted by Section 6(d)(ii) of the Plan, the following (and not the provisions of Section 6(d)(ii)(A) of the Plan) shall govern if the Employee ceases Continuous Service prior to the Settlement Date by reason of Disability or death: a prorated number of the Employee’s outstanding Performance Units shall become vested at the end of the Performance Cycle, which prorated number shall be determined by multiplying the number of Performance Units that are earned at the end of the Performance Cycle, based on the extent to which the performance conditions set forth in Section 5 are achieved, by a fraction, the numerator of which is the number of months in the Performance Cycle that occurred prior to such termination of Continuous Service, and the denominator of which is the total number of months in the Performance Cycle. For this purpose, the Employee will be credited with a month of employment during the
PSU Award Agreement, HNI Corporation Stock Incentive Plan for Legacy Xxxxxxx Employees
Performance Cycle only if the Employee is employed for at least 15 days during such month. Any Performance Units that do not become vested pursuant to this Section 4.C shall be forfeited. The Performance Units that become vested pursuant to this Section 4.C shall be issued to the Employee or his or her beneficiary or estate within 2½ months after the last day of the Performance Cycle. For purposes of this Award Agreement, and notwithstanding the terms of the Plan, the Employee will be considered “Disabled” or to have a “Disability” if the Employee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.
D.Retirement. As permitted by Section 6(d)(ii) of the Plan, the following (and not the provisions of Section 6(d)(ii)(A) of the Plan) shall govern if the Employee ceases Continuous Service prior to the Settlement Date but after the Retirement Eligible Date for a reason other than Cause, as defined below, a prorated number of the outstanding Performance Units shall become vested as of the end of the Performance Cycle. The prorated number shall be determined by multiplying the number of Performance Units that are earned at the end of the Performance Cycle, based on the extent to which the performance conditions set forth in Section 5 are achieved, by a fraction, the numerator of which is the number of months in the Performance Cycle that occurred prior to such termination of Continuous Service, and the denominator of which is the total number of months in the Performance Cycle. For this purpose, the Employee will be credited with a month of employment during the Performance Cycle only if you are employed for at least 15 days during such month. Any Performance Units that do not become vested pursuant to this Section 4.D shall be forfeited. The Performance Units that become vested pursuant to this Section 4.D shall be issued to the Employee within 2½ months after the last day of the Performance Cycle. For purposes herein, “Cause” shall have the meaning described in the Employee’s employment or severance agreement with the Company, or if no such agreements exists, then it shall mean the Employee’s:(i) repeated failure to perform a substantial part of the Employee’s duties and responsibilities; (ii) willful misconduct, illegal act, fraud or dishonesty; (iii) material violation of the rules of conduct of the Company or (iv) violation of the Employee’s duty of confidentiality and loyalty to the Company, which in each case shall be determined by the Company in its sole and absolute discretion. [Notwithstanding anything to the contrary in the Plan relating to Retirement, Retirement shall mean the Employee’s employment with the Company and its Subsidiaries and Affiliates terminates for a reason other than Cause after such Employee either (i) has attained age 65 or (ii) has attained age 55 and completed at least ten years of continuous service with the Company or a Subsidiary (which shall include any predecessor entity, including Xxxxxxx).
E.Notwithstanding anything to the contrary set forth in the Plan or this Award Agreement, the Employee shall forfeit any unvested Performance Units awarded hereunder in the event that he Employee breaches any of his or her employee and ancillary agreements, including without limitation, any confidentiality or non-solicitation obligation documented by agreement (collectively, “Employee Agreement”). In addition, for purposes herein, an Employee shall be deemed to have breached an Employee Agreement if the Employee seeks judicial intervention to limit or nullify the terms of such Employee Agreement.
F.In the event that Performance Units are earned by, and Shares are issued to, the Employee under this Award Agreement and within twelve (12) months after the issuance of such Shares to the Employee, (a) the Company identifies facts that result in, or, in the event of issuance of such Shares as a result of Retirement or Disability, would have resulted in, a termination for Cause, or (b) the Employee breaches an Employee Agreement, then, in addition to the forfeiture under Section 4.D. of this Award Agreement, the Employee agrees to repay the value of such Shares received under this Award Agreement within thirty (30) days of the date of written demand by the Company (“Clawback Amount”).
G.Awards and any compensation or benefits associated therewith shall also be subject to repayment or forfeiture as may be required to comply with (i) any applicable listing standards of a national securities exchange adopted in accordance with Section 10D of the Exchange Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder or Section 303A.14 of the NYSE Listed Company Manual; (ii) similar rules under the laws of any other jurisdiction; and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company
PSU Award Agreement, HNI Corporation Stock Incentive Plan for Legacy Xxxxxxx Employees
in its discretion to be applicable to a Participant and regardless of whether such rules or policies are adopted prior to or after the date of this Award. This Award Agreement may be unilaterally amended by the Committee to comply with any such compensation recovery policy, but the foregoing shall apply to this Award regardless of whether the Committee amends this Award.
5.PERFORMANCE CONDITIONS – DETERMINATION OF TOTAL NUMBER OF PERFORMANCE UNITS EARNED AND VESTED
Subject to the eligibility conditions in Section 4 of this Award Agreement (including continued employment), after completion of the Performance Cycle, the total number of earned Performance Units (rounded up or down to the nearest whole number) determined to be earned will be based entirely on the Company’s [PERFORMANCE GOAL] (as set forth below), as determined by the Committee as of the last day of the Performance Cycle.
[PERFORMANCE GOAL] Achievement % Applied to Award | [PERFORMANCE GOAL] Targets | ||||
| 200% (maximum achievement) | $[xxx]M | ||||
| 100% (target) | $[xxx]M | ||||
| 25% (minimum achievement) | $[xxx]M | ||||
6.SETTLEMENT OF THE AWARD AND DELIVERY OF SHARES
The number of earned Performance Units shall be determined by multiplying the number of Performance Units granted in Section 1 of this Award Agreement by the applicable percentage from the chart in Section 5 of this Award Agreement for the Performance Cycle (rounded up or down to the nearest whole number). Earned Performance Units shall be issued in Shares, as soon as administratively practicable after the Determination Date but in no event more than 2½ months following the last day of the Performance Cycle.
7.CHANGE IN CONTROL
Notwithstanding the foregoing provisions of this Award Agreement or the provisions of Section 12 of the Plan, in the event of a Change in Control during the Performance Cycle, the Performance Cycle for purposes of this Award Agreement shall be treated as ending on the earlier of the last date of the original Performance Cycle in Section 2 of this Award Agreement or the effective date of the Change in Control. In the event of a Change in Control, the number of Performance Units earned by the Employee shall equal the maximum number of Performance Units. Except as provided in Section 15 below or as otherwise agreed in connection with the Change in Control, the Shares corresponding to such earned Performance Units shall be issued within thirty (30) days following the effective date of the Change in Control.
8.SHARE CHANGES
If the Company shall at any time change the number of shares of its Stock without new consideration to the Company (such as by stock dividend or stock split), the total number of Shares subject to the Award Agreement hereunder shall be changed in proportion to the change in issued shares. If during the term of this Award Agreement the Stock of the Company shall be changed into another kind of securities of the Company or into cash, securities or evidences of indebtedness of another corporation, other property or any combination thereof, whether as a result of reorganization, sale, merger, consolidation, or other similar transaction, the Company shall cause adequate provision to be made whereby the Employee shall thereafter be entitled to receive under this Award Agreement, the cash, securities, evidences of indebtedness, other property or any combination thereof, the Employee would have been entitled to receive for Stock acquired through this Award Agreement immediately prior to the effective date of such transaction. If appropriate, the number of Shares of this Award Agreement following such reorganization, sale, merger, consolidation or other similar transaction may be adjusted, in each case in such equitable manner as the Committee may select.
9.TRANSFER
Neither this Award nor any right or interest of the Employee in any Award under the Plan may be assigned, encumbered, transferred or exchanged, voluntarily or involuntarily, otherwise than by will or the laws of descent and distribution. Notwithstanding the preceding paragraph, the Employee may transfer his or her Performance Units to one or more family members (as such term is defined in the General
PSU Award Agreement, HNI Corporation Stock Incentive Plan for Legacy Xxxxxxx Employees
Instructions to Form S-8, (or any successor to such instructions or such form) under the Securities Act of 1933, as amended) or to one or more trusts established solely for the benefit of one or more family members or to one or more partnerships in which the only partners are family members; provided, however, that (i) no such transfer shall be effective unless the Employee delivers reasonable prior notice thereof to the Company and such transfer is thereafter effected subject to the specific authorization of, and in accordance with any terms and conditions that shall have been made applicable thereto by, the Committee or the Board, (ii) any such transferee shall be subject to the same terms and conditions hereunder as the Employee is and (iii) such transfer cannot be made for value.
10.SHAREHOLDER RIGHTS; DIVIDEND EQUIVALENTS
Prior to the time that the Employee’s Performance Units vest and the Company has issued Shares relating to such Performance Units, the Employee will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Shares deliverable with respect to such Performance Units (including, without limitation, not having any voting rights). However, for any dividends declared and paid by the Company on its outstanding Shares, the same amount of dividends shall be credited to the Award (“Dividend Equivalents”), which Dividend Equivalents shall be subject to the same restrictions and risk of forfeiture as the Award as set forth above. The amount of such Dividend Equivalents shall be accumulated (“Accumulated Dividend Equivalents”) during the period commencing on the date of the Award and ending on the Vesting Date. Upon the delivery of Shares in accordance with Section 5 or Section 6 above, such amount of Accumulated Dividend Equivalents relating to the Shares that are delivered in accordance with Section 5 or Section 6 above shall be delivered in cash. From and after the date Shares are actually issued or delivered upon settlement of the Performance Units, the Employee will then have dividend rights with respect to those Shares.
11.TAXES AND WITHHOLDING
Issuance of the Award under this Award Agreement, under current applicable laws, will result in various federal and/or state taxes becoming due, including, but not limited to, income and social security. The Employee is responsible for the timely payment of these taxes, and provision will be made by the Company to satisfy these obligations by withholding of Shares having a Fair Market Value on the date the taxes are required to be withheld approximately equal to the minimum amount of federal, state and local taxes required to be withheld (but not to exceed the maximum individual statutory tax rate in each applicable jurisdiction). The value of the Shares withheld will be determined by using the appropriate method under applicable tax regulations.
12.ADMINISTRATION
This Award Agreement and the Employee’s rights under it are subject to all terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. The parties acknowledge that the Committee or its designee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, in its sole discretion, all of which shall be binding on the Employee.
13.AMENDMENTS
In the event any new modifications or changes are made to existing laws or applicable stock exchange rules that render any or all of this Award Agreement illegal or unenforceable, this Award Agreement may be amended to the extent necessary in order to carry out the intention of the Award to the Employee. The Committee may amend this Award Agreement in other respects, without the Employee’s consent, if the amendment will not materially impair the Employee’s rights under this Award Agreement as in effect immediately before the amendment.
14.RESTRICTIONS ON SHARES
There will be no restrictions on the Shares of Stock issued to the Employee under this Award Agreement.
15.CODE SECTION 409A
The parties intend that the payments and benefits under the Plan and this Award Agreement comply with or be exempt from Code Section 409A, to the extent applicable, and accordingly, to the maximum extent permitted, the Plan and this Award Agreement shall be interpreted and administered to be in compliance therewith. Any payments described in this Award Agreement or the Plan that are due within the “short-term deferral period” as defined in Code Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. The terms and conditions of Section 17(g) of the Plan shall apply with respect to the Award.
PSU Award Agreement, HNI Corporation Stock Incentive Plan for Legacy Xxxxxxx Employees
16.QUALIFICATION OF RIGHTS
Neither this Award Agreement nor the existence of the Award shall be construed as giving the Employee any right (a) to be retained as an employee of the Company; or (b) as a shareholder with respect to the Shares of Stock earned pursuant to the Award until the certificates for the Stock have been issued and delivered to the Employee or a book entry has been recorded in the name of the Employee with the Company’s transfer agent.
17.GOVERNING LAW
This Award Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Award Agreement to the substantive law of another jurisdiction. Any action or proceeding seeking to enforce the terms of this Award Agreement or based on any right arising out of this Award Agreement must be brought in the appropriate court located in Dubois County, Indiana, or if jurisdiction will so permit, in the Federal District Court for the Southern District of Indiana located in Evansville, Indiana. The parties hereto consent to the jurisdiction and venue of said courts.
18.REPRESENTATIONS AND WARRANTIES
A.The Employee represents and warrants that he or she has received and reviewed the Plan.
B.The Company makes no representations or warranties as to the tax consequences of and benefits vested or payable under this Award, and in no event shall the Company be responsible or liable for any taxes, penalties or interest assessed against the Employee for any benefit or payment provided under this Award.
C.The Employee represents and warrants his/her understanding that the grant of the Performance Units by the Company is voluntary and does not create in the Employee any contractual or other right to receive future grants of Performance Units, or benefits in lieu of Performance Units in any circumstance. All decisions with respect to any future awards will be made in the sole discretion of the Company.
19.SUCCESSORS AND ASSIGNS
This Award Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties.
20.WAIVER
The failure of a party to insist upon strict adherence to any term of this Award Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Award Agreement.
21.TITLES
Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.
Please acknowledge your agreement to participate in the Plan and this Award Agreement, and to abide by all of the governing terms and provisions, by providing your digital signature on the Agreement to Participate. Please print a copy of the Agreement to Participate for your files.
Refer any questions regarding the grant of Performance Units to the Vice President, Member and Community Relations. Once again, congratulations on the receipt of this Award.
Sincerely,
Xxxx Xxxxxxxx
Chairman, President and Chief Executive Officer
HNI Corporation
PSU Award Agreement, HNI Corporation Stock Incentive Plan for Legacy Xxxxxxx Employees
HNI Corporation Stock Incentive Plan
For Legacy Xxxxxxx Employees:
For Legacy Xxxxxxx Employees:
Performance Unit Award
Agreement to Participate
By signing this Agreement to Participate, I acknowledge that I have read the Award Agreement and the Plan, and that I fully understand all of my rights thereunder, as well as all of the terms and conditions which may limit the vesting of the Performance Stock Units.
[Electronic Signature] [Date of Signature]
[Participant Name]
PSU Award Agreement, HNI Corporation Stock Incentive Plan for Legacy Xxxxxxx Employees
