EXHIBIT 10(ii)
XXXXXX CORPORATION
2000 STOCK INCENTIVE PLAN
EXECUTIVE PERFORMANCE SHARE AWARD AGREEMENT
TERMS AND CONDITIONS
(AS OF 8/24/01)
1. PERFORMANCE SHARE AWARD - TERMS AND CONDITIONS. Under and subject to
the provisions of the Xxxxxx Corporation 2000 Stock Incentive Plan (as amended
from time to time the "Plan"), Xxxxxx Corporation (the "Corporation") has
granted to the Executive a Performance Share Award (the "Award") of such number
of shares of Common Stock, $1.00 par value, of the Corporation as set forth and
designated in writing by the Corporation to the Executive (the "Stock"). Such
Award is subject to the following Terms and Conditions (which together with the
Corporation's letter specifying the number of shares subject of the Award, the
Performance Period and the Exhibit related thereto is referred to as the
"Agreement"):
(a) For purposes of the Agreement, the "Performance Period"
shall be the Performance Period set forth and designated as such in
writing by the Corporation to the Executive.
(b) Upon the expiration of the Performance Period and
satisfaction of the applicable withholding obligations, the Corporation
shall at its option, cause such shares as to which the Executive is
entitled pursuant to Section 1(c) hereof either (i) to be issued by
delivery of a stock certificate in the name of the Executive or his or
her designee, and the certificate shall be released to the custody of
the Executive, or (ii) to be credited to an account for the benefit of
the Executive or his or her designee maintained by the Corporation's
stock transfer agent or its designee.
(c) (i) The Award shall be contingent upon the attainment
during the Performance Period of the goals exhibit delivered to the
Executive at the time of the making of the Award (the "Exhibit"). The
payout of the Award shall be determined upon the expiration of the
Performance Period in accordance with the Exhibit. The final payout
determination of the Award will be authorized by the Xxxxxx Board of
Directors, the Board Committee, or its designee.
(ii) If employment is commenced after July 15th of
the first fiscal year of the Performance Period (such commencement date
is referred to as the "Start Date"), the final payout to be made to the
Executive determined in accordance with the prior provisions of this
Section 1(c) shall be reduced by 1/36th for each month between July 1
of the first fiscal year of the Performance Period and the Start Date.
Only a Start Date prior to the 15th of a month shall be deemed
employment for a full month. Other than with respect to the final
payout, the pro-ration pursuant to this Section will not otherwise
impact the Award (e.g., the Executive will have full voting rights and
will be entitled to receive dividend equivalent payments and other
distributions with respect to all Award shares).
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(d) Subject to Section 7 hereof, during the Performance
Period, the Executive may exercise full voting rights with respect to
all shares of Stock subject of the Award and shall be entitled to
receive dividends and other distributions paid with respect to such
shares. Upon the expiration of the Performance Period, the Executive
may exercise voting rights and shall be entitled to receive dividends
and other distributions with respect to the number of shares to which
the Executive is entitled pursuant to Section 1(c) hereof.
(e) The number of shares subject of the Award is based upon
the assumption that the Executive shall continue to perform
substantially the same duties throughout the Performance Period, and
such number of shares may be reduced or increased by the Board of
Directors or the Board Committee or its designee without formal
amendment of this Agreement to reflect a change in duties during the
Performance Period.
2. TERMINATION OF EMPLOYMENT. Other than in the event of a "change in
control" covered in paragraph 5 herein, if the Executive ceases to be an
employee of the Corporation or of one of its Subsidiaries or Affiliates prior to
the expiration of the Performance Period: (i) for any reason other than death,
disability or retirement after age 55 with ten or more years full-time service,
all shares of Stock awarded to the Executive hereunder shall be forfeited; or
(ii) due to (a) death, (b) disability or (c) retirement after the Executive has
reached age 55 and has ten or more years of full-time service, the Executive
shall be eligible to receive a pro-rata proportion of the shares of Stock which
would have been issued to the Executive under the Award at the end of the
Performance Period determined in accordance with the provisions of Section 1(c)
hereof, such pro-rata proportion to be measured by a fraction of which the
numerator is the number of months of the Performance Period during which the
Executive's employment continued, and the denominator is the full number of
months of the Performance Period. For purposes of this Section 2, only
employment for 15 days or more of a month shall be deemed employment for a full
month.
3. TRANSFER OF EMPLOYMENT. If the Executive transfers employment from
one business unit of the Corporation or an Affiliate to another business unit or
Affiliate during a Performance Period, the Executive shall be eligible to
receive the number of shares of Stock determined by the Board of Directors or
the Board Committee based upon such factors as the Board of Directors or the
Board Committee, as the case may be, in its sole discretion may deem
appropriate.
4. PROHIBITION AGAINST TRANSFER. Until the expiration of the
Performance Period, the Award and the shares of Stock subject of the Award and
the rights granted under these Terms and Conditions and the Agreement are
nontransferable except to family members or trust by will or by the laws of
descent and distribution, provided that the Award and the shares of stock
subject of the Award may not be so transferred to family members or trust except
as permitted by applicable law or regulations. Without limiting the generality
of the foregoing except as aforesaid, the Award and such shares may not be sold,
exchanged, assigned, transferred, pledged, hypothecated or otherwise disposed of
until the expiration of the Performance Period, shall not be assignable by
operation of law, and shall not be subject to execution, attachment or similar
process. Any attempt to effect any of the foregoing shall be null and void and
without effect.
5. CHANGE IN CONTROL. (a) Upon a "change in control" of the Corporation
as defined in Section 11.1 of the Plan, the performance objectives shall be
conclusively deemed to have been
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attained. The Award shall be vested immediately prior to the occurrence of a
"change in control." The Award shall be paid to the Executive at the end of the
Performance Period, provided however: (i) in the event of death, disability,
retirement, or involuntary termination other than for Cause, the Award shall be
paid IN STOCK as soon as practicable; (ii) in the event of resignation or
termination for Cause, the Award shall be forfeited; and (iii) in the event of a
"change in the Corporation's capital structure," at the election of the
Executive, the Award shall be paid IN STOCK or converted and paid IN CASH. The
amount of the cash payment will be an amount equal to the number of shares
subject of the Award multiplied by the highest price per share paid in any
transaction reported on the New York Stock Exchange Composite Index: (x) during
the sixty (60) day period preceding and including the date of a "change in the
Corporation's capital structure;" or (y) during the sixty (60) day period
preceding and including the date of "change in control". An Award in Stock or
cash shall be paid as soon as practicable following a "change in the
Corporation's capital structure."
(b) For purposes hereof, a "change in the Corporation's
capital structure" shall be deemed to have occurred if:
(i) the Stock is no longer the only class of the
Corporation's common stock;
(ii) the Stock ceases to be, or is not readily,
tradable on an established securities market (in the United States)
within the meaning of Section 409 (l)(1) of the Internal Revenue Code
of 1986, as amended;
(iii) the Corporation issues warrants, convertible
debt, or any other security that is exercisable or convertible into
common stock, except for rights granted under the Plan; or
(iv) the ratio of total debt to total capitalization
exceeds 45 percent. Total debt is the total debt for borrowed money.
Total capitalization is consolidated total assets of the Corporation
less consolidated total liabilities of the Corporation.
(c) "Cause" shall mean (1) a material breach by the Executive
of the duties and responsibilities of the Executive (other than as a
result of incapacity due to physical or mental illness) which is (x)
demonstrably willful, continued and deliberate on the employee's part,
(y) committed in bad faith or without reasonable belief that such
breach is in the best interests of the Corporation and (z) not remedied
within fifteen (15) days after receipt of written notice from the
Corporation which specifically identifies the manner in which such
breach has occurred or (2) the Executive's conviction of, or plea of
NOLO CONTENDERE to, a felony involving willful misconduct which is
materially and demonstrably injurious to the Corporation. Any act, or
failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the
Corporation shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of the
Corporation. Cause shall not exist unless and until the Company has
delivered to Executive a copy of a resolution duly adopted by
three-quarters (3/4) of the entire Board
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at a meeting of the Board called and held for such purpose (after
thirty (30) days notice to Executive and an opportunity for Executive,
together with counsel, to be heard before the Board), finding that in
the good faith opinion of the Board an event set forth in clauses (1)
or (2) has occurred and specifying the particulars thereof in detail.
The Company must notify the Executive of any event constituting Cause
within ninety (90) days following the Company's knowledge of its
existence or such event shall not constitute Cause under these Terms
and Conditions.
6. MISCELLANEOUS. These Terms and Conditions and the Agreement (a)
shall be binding upon and inure to the benefit of any successor of the
Corporation, (b) shall be governed by the laws of the State of Delaware and any
applicable laws of the United States, and (c) except as permitted under Sections
3.2, 12 and 13.6 of the Plan, may not be amended without the written consent of
both the Corporation and the Executive. No contract or right of employment shall
be implied by these Terms and Conditions and the Agreement of which they form a
part. If the Award is assumed or a new award is substituted therefor in any
corporate reorganization (including, but not limited to, any transaction of the
type referred to in Section 424(a) of the Internal Revenue Code of 1986, as
amended), employment by such assuming or substituting corporation or by a parent
corporation or subsidiary thereof shall be considered for all purposes of the
Award to be employment by the Corporation.
7. SECURITIES LAW REQUIREMENTS. The Corporation shall not be required
to issue shares pursuant to the Award unless and until (a) such shares have been
duly listed upon each stock exchange on which the Corporation's Stock is then
registered; and (b) a registration statement under the Securities Act of 1933
with respect to such shares is then effective.
8. BOARD COMMITTEE. The Board Committee shall have authority, subject
to the express provisions of the Plan as in effect from time to time, to
construe these Terms and Conditions and the Agreement and the Plan, to
establish, amend and rescind rules and regulations relating to the Plan, and to
make all other determinations in the judgment of the Board Committee necessary
or desirable for the administration of the Plan. The Board Committee may correct
any defect or supply any omission or reconcile any inconsistency in these Terms
and Conditions and the Agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect, and it shall be the sole and final
judge of such expediency.
9. ADJUSTMENTS. Non-recurring losses or charges which are separately
identified and quantified in the Corporation's audited financial statements and
notes thereto including, but not limited to, extraordinary items, changes in tax
laws, changes in generally accepted accounting principles, impact of
discontinued operations, restructuring charges, restatement of prior period
financial results, shall be excluded from the calculation of performance results
for purposes of the Plan. However, the Board Committee can choose to include any
or all such non-recurring items as long as inclusion of each such item causes
the Award to be reduced.
10. INCORPORATION OF PLAN PROVISIONS. These Terms and Conditions and
the Agreement are made pursuant to the Plan, the provisions of which are hereby
incorporated by reference. Capitalized terms not otherwise defined herein shall
have the meanings set forth for such terms in
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the Plan. In the event of a conflict between the terms of these Terms and
Conditions and the Agreement and the Plan, the terms of the Plan shall govern.
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