Form of Agreement for Executive Officers

Exhibit 10.9

INCENTIVE AGREEMENT

FOR THE GRANT OF RESTRICTED STOCK UNITS

UNDER THE

INTERNATIONAL SHIPHOLDING CORPORATION 2011 STOCK INCENTIVE PLAN

 

 

 

This INCENTIVE AGREEMENT (this “Agreement”) is entered into as of [•] by and
between International Shipholding Corporation, a Delaware corporation (“ISH”),
and ________________ (the “Award Recipient”).

WHEREAS, ISH maintains the 2011 Stock Incentive Plan (the “Plan”), under which
the Compensation Committee of the Board of Directors of ISH (the “Committee”)
may, among other things, grant restricted stock units payable in shares of ISH’s
common stock, $1.00 par value per share (the “Common Stock”), to, among others,
key employees, officers, and directors of ISH or its subsidiaries (collectively,
the “Company”), subject to the Plan and such other terms, conditions, or
restrictions as it may deem appropriate; and

WHEREAS, pursuant to the Plan, the Committee has awarded to the Award Recipient
restricted stock units payable in shares of Common Stock on the terms and
conditions specified below.

NOW, THEREFORE, in consideration of these premises, the parties agree as
follows:

I.
Restricted Stock Units

1.1 Restricted Stock Units.  Subject to the terms, conditions, restrictions, and
performance criteria set forth in the Plan and in this Agreement, effective on
[•]  (the “Date of Grant”), ISH hereby grants to the Award Recipient an award of
[•] restricted stock units (the “Performance-Based RSUs”) under the Plan, which
shall vest based upon continued employment and the satisfaction of certain
specified performance criteria as provided in Sections 1.3 and 1.4 below.

1.2 Award Restrictions.  The Performance-Based RSUs may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, whether
voluntarily or involuntarily.  The Award Recipient shall have no rights,
including, but not limited to, voting and dividend rights, in the shares of
Common Stock underlying the Performance-Based RSUs unless and until such shares
are issued to the Award Recipient, or as otherwise provided in the Plan or this
Agreement.

1.3 Vesting of Absolute Performance-Based RSUs.  The vesting of _______ of the
Performance-Based RSUs (the “Absolute Performance-Based RSUs”) is subject to the
following terms and conditions:

(a) Performance-Based Vesting.  Upon vesting under the terms and conditions of
the Plan and this Agreement, each Absolute Performance-Based RSU represents the
right to

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receive from the Company a maximum of one-and-a-half shares of Common Stock,
free of any restrictions except as otherwise provided in the Plan or this
Agreement, and all amounts, securities, and property notionally credited to the
Award Recipient’s Account with respect to such Absolute Performance-Based RSU.

(b) Vesting Schedule.  Except as otherwise provided in Section 1.5, depending on
Company’s fiscal [•] earnings per share as measured against the targets
established in Section 1.3(b)(i) below (the “Absolute Measure”), the Absolute
Performance-Based RSUs shall vest and the Award Recipient shall be entitled to
receive a number of shares of Common Stock, determined in accordance with, and
subject to, the following terms and conditions:

(i) The number of Absolute Performance-Based RSUs granted under this Section 1.3
represents the target award.  The Award Recipient may receive a greater or
lesser number of shares of Common Stock under the Plan than the number of
Absolute Performance-Based RSUs granted under this Section 1.3, depending on the
Company’s performance as measured against the Absolute Measure, determined as
follows:

Performance Level

Company’s Fiscal [•] Earnings Per Share

Share Payout as a % of Absolute Performance-Based RSU Award

Maximum

≥ $ [•]

150% 

Target

$  [•]

100% 

Threshold

$  [•]

50% 

Below Threshold

< $ [•]

0% 

 

The number of shares vesting shall be prorated if the Company’s fiscal [•]
 earnings per share falls between the threshold and target or the target and the
maximum amounts.  At performance below the threshold performance level, all
Absolute Performance-Based RSUs will be forfeited. 

(ii) Prior to the vesting of any Absolute Performance-Based RSUs and the payout
of any shares of Common Stock under the Plan and this Agreement, the Committee
shall certify in writing, by resolution or otherwise, the Company’s performance
as measured against the Absolute Measure, whether and to what extent the
Absolute Performance-Based RSUs have vested, and how many shares of Common Stock
will be issuable to the Award Recipient as determined by Section 1.3(b)(i),
rounded to the nearest whole share. 

(iii) The Absolute Performance-Based RSUs shall vest and be paid out in the
number of shares, if any, as determined under this Section 1.3, on [•], provided
that the Award Recipient remains employed with the Company on such date. 

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1.4 Vesting Terms of Relative Performance-Based RSUs.  The vesting of _______ of
the Performance-Based RSUs (the “Relative Performance-Based RSUs”) is subject to
the following terms and conditions:

(a) Performance-Based Vesting.  Upon vesting under the terms and conditions of
the Plan and this Agreement, each Relative Performance-Based RSU represents the
right to receive from the Company a maximum of one-and-a-half shares of Common
Stock, free of any restrictions except as otherwise provided in the Plan or this
Agreement, and all amounts, securities, and property notionally credited to the
Award Recipient’s Account with respect to such Relative Performance-Based RSU.

(b) Vesting Schedule.  Except as otherwise provided in Section 1.5, depending on
the [•]-year total stockholder return of ISH during the period from [•] to [•]
(the “Relative Performance Period”) as measured against peer performance over
the same period as specified further below, the Relative Performance-Based RSUs
shall vest and the Award Recipient shall be entitled to receive a number of
shares of Common Stock, determined in accordance with, and subject to, the
following terms and conditions: 

(i) The number of Relative Performance-Based RSUs granted under this Section 1.4
represents the target award.  At the end of the Relative Performance Period, the
Award Recipient may receive a greater or lesser number of shares of Common Stock
under the Plan than the number of Relative Performance-Based RSUs granted under
this Section 1.4, depending on ISH’s Total Stockholder Return (as defined in
Section 1.4(b)(iv)) ranked in terms of a percentile in relation to that of the
companies comprising the Russell 2000 Index (the “Index”), which shall be
determined as follows:

 

Performance Level

ISH’s Percentile Rank

Share Payout as a % of Relative Performance-Based RSU Award

Maximum

≥ 70th percentile

150% 

Target

60th percentile

100% 

Threshold

25th percentile

50% 

Below Threshold

< 25th percentile

0% 

 

The number of shares vesting shall be prorated if ISH’s TSR rank falls between
the threshold and target or the target and the maximum amounts.  At performance
below the threshold performance level, all Relative Performance-Based RSUs will
be forfeited. 

(ii) Prior to the vesting of any Relative Performance-Based RSUs and the payout
of any shares of Common Stock under the Plan and this Agreement, the Committee
shall certify in writing, by resolution or otherwise, ISH’s Total Stockholder
Return level achieved as compared to that of the Index, whether and to what
extent the Relative Performance-

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Based RSUs have vested, and how many shares of Common Stock are to be issued to
the Award Recipient as determined by Section 1.4(b)(i), rounded to the nearest
whole share. 

(iii) The Relative Performance-Based RSUs shall vest and be paid out in the
number of shares, if any, as determined under this Section 1.4, on [•], provided
that the Award Recipient remains employed with the Company on such date.

(iv) For purposes of this Agreement, “Total Stockholder Return” or “TSR” for ISH
and each company in the Index means stock price appreciation from the beginning
to the end of the Relative Performance Period, including dividends and
distributions made or declared (calculated based on the assumption that such
dividends or distributions are reinvested in the common stock of ISH or any
company in the Index) during the Relative Performance Period, expressed as a
percentage return, using the following formula:

TSR = (Ending Stock Price (including dividends paid)/Beginning Stock Price) – 1

where the “Ending Stock Price” is equal to the volume-weighted average closing
price of the relevant stock during the final month of the Relative Performance
Period, and the “Beginning Stock Price” is equal to the volume-weighted average
closing price of the relevant stock during the last calendar month prior to the
commencement of the Relative Performance Period.  The TSR of ISH or any company
in the Index shall be equitably adjusted to reflect any spin-off, stock split,
reverse stock split, stock dividend, recapitalization, or reclassification or
other similar change in the number of outstanding shares of common stock. 

1.5 Effect of a Change of Control and Certain Terminations. 

(a) Upon the earlier to occur of a Change of Control of ISH (as defined in the
Plan) or the date the Award Recipient’s employment terminates due to death or
disability within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended:

(i) any remaining outstanding and unvested Performance-Based RSUs shall
immediately vest and pay out at the target levels of shares specified in
Sections 1.3 and 1.4 above, without regard to the attainment of performance
targets; and

(ii) any amounts, securities, and property notionally credited to the Award
Recipient’s Account with respect to such vesting Performance-Based RSUs shall
vest and pay out in accordance with Section 2.1.

(b) In the event that the Award Recipient’s employment terminates due to
retirement on or after age 65:

(i) the Award Recipient shall retain the rights to all Performance-Based RSUs
granted under this Agreement, provided that the vesting and payout of such
Performance-Based RSUs shall nonetheless remain subject to the terms and
conditions of this Agreement, including the payment dates and the opportunity to
earn a greater or lesser number of shares of Common Stock as specified in
Sections 1.3 and 1.4; and

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(ii) any amounts, securities, and property notionally credited to the Award
Recipient’s Account with respect to such vesting Performance-Based RSUs shall
vest and pay out in accordance with Section 2.1.

(c) Except as otherwise expressly provided in this Section 1.5 or as otherwise
determined by the Committee in its sole discretion, termination of employment
shall result in forfeiture of all unvested Performance-Based RSUs. 

II.
Dividend Equivalents and the Issuance of Shares Upon Vesting

2.1 Restricted Stock Unit Account and Dividend Equivalents.  The Company shall
maintain an account (the “Account”) on its books in the name of the Award
Recipient.  Such Account shall reflect the number of Performance-Based RSUs
awarded to the Award Recipient, as such number may be adjusted under the terms
of the Plan and this Agreement, as well as any additional restricted stock units
or cash credited as a result of dividend equivalents, administered as follows:

(a) The Account shall be for recordkeeping purposes only, and no assets or other
amounts shall be set aside from the Company’s general assets with respect to
such Account. 

(b) If ISH declares a cash dividend payable any time between the Date of Grant
and the date immediately preceding the date the Performance-Based RSUs vest and
pay out under this Agreement (the “Vesting Period”), the Company shall credit
the Award Recipient’s Account with the amount of any cash that would have been
received as a dividend had the Award Recipient’s outstanding Performance-Based
RSUs been shares of Common Stock on the applicable record date for such cash
dividend.

(c) If dividends are declared and paid in the form of shares of Common Stock
rather than cash, then the Award Recipient’s Account will be credited with one
additional restricted stock unit for each share of Common Stock that would have
been received as a dividend had the Award Recipient’s outstanding
Performance-Based RSUs been shares of Common Stock on the applicable record date
for such stock dividend.

(d) All such cash and any additional restricted stock units credited via
dividend equivalents shall vest or be forfeited at the same time and on the same
terms as the Performance-Based RSUs to which they relate. 

(e) In addition, if, pursuant to Section 1.3(b)(i) or Section 1.4(b)(i), the
Award Recipient receives a number of shares of Common Stock in excess of the
number of Performance-Based RSUs granted under either such section (the
“Additional Shares”), the Award Recipient also shall be entitled to receive,
simultaneous with the issuance of the Additional Shares, all dividends and
distributions, whether payable in cash or Common Stock, that were payable during
the Vesting Period and that the Award Recipient would have received had he owned
the Additional Shares on the applicable record date for such dividend or
distribution. 

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2.2 Issuance of Shares of Common Stock.  As soon as practicable following the
date any Performance-Based RSUs vest under this Agreement, but no later than 30
days after such date, the number of shares of Common Stock to which the Award
Recipient is entitled under this Agreement, rounded to the next whole share,
shall be transferred to the Award Recipient or his nominee via book entry or,
upon the Award Recipient’s request, ISH shall cause a stock certificate to be
issued in the name of the Award Recipient or his nominee.  Upon issuance of such
shares, the Award Recipient is free to hold or dispose of such shares, subject
to applicable securities laws and any internal Company policy then in effect and
applicable to the Award Recipient, including, but not limited to, ISH’s Insider
Trading Policy and Executive Stock Ownership Guidelines.  Notwithstanding
anything in this Agreement to the contrary, no fractional shares shall be issued
in settlement of any Performance-Based RSUs granted hereunder.

2.3 Additional Conditions to Issuance of Shares.  Anything in this Agreement to
the contrary notwithstanding, if, at any time prior to the vesting or settlement
of the Performance-Based RSUs granted hereby, the Company further determines, in
its sole discretion, that the listing, registration, or qualification (or any
updating of any such document) of the shares of Common Stock issuable pursuant
hereto is necessary on any securities exchange or under any federal or state
securities or blue sky law, or that the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with the issuance of shares of Common Stock pursuant thereto, or the removal of
any restrictions imposed on such shares, such shares of Common Stock shall not
be issued, in whole or in part, or the restrictions thereon removed, unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.  The
Company agrees to use commercially reasonable efforts to issue all shares of
Common Stock issuable hereunder on the terms provided herein.

III.
Defined Terms

The definition of all capitalized terms used herein and not otherwise defined
herein shall be as provided in the Plan.

IV.
Recoupment Policy

This Award is subject to (1) any recoupment of compensation, or “clawback,”
policies that (a) the Company has in place as of the Date of Grant or (b) apply
to the Award Recipient under federal securities laws as in effect on the Date of
Grant and (2) any such policies that the Company may adopt in order to satisfy
the requirements of Section 954 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act and any resulting rules issued by the Securities and
Exchange Commission or the national securities exchange on which the Common
Stock trades.  All determinations regarding the applicability of these
provisions to this Award shall be in the discretion of the Committee.

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V.
Withholding Taxes

At any time that the Award Recipient is required to pay to the Company an amount
required to be withheld under the applicable employment and income tax laws in
connection with the vesting and payout of the Performance-Based RSUs, the Award
Recipient must deliver to ISH the amount of withholding required by law.  With
respect to any required income tax withholding, the Award Recipient shall have
the right to fully satisfy this tax withholding obligation by requesting ISH to
withhold, from the shares the Award Recipient otherwise would receive upon
vesting of the Performance-Based RSUs, that number of shares of Common Stock
having an aggregate value (as determined under the Plan) equal to the minimum
amount required to be withheld; provided, however, that to prevent the issuance
of fractional shares and the under-withholding of taxes, the Award Recipient
agrees that the number of shares withheld shall be rounded up to the next whole
number of shares.  The Committee does not have the right to disapprove of an
election by the Award Recipient to have shares withheld in satisfaction of the
withholding tax obligation.  With respect to applicable employment taxes, the
Award Recipient expressly agrees that unless he has delivered such amount to the
Company, the Company has the right to withhold such amount from any other
amounts payable to the Award Recipient by the Company. 

VI.
No Contract of Employment Intended

Nothing in this Agreement shall confer upon the Award Recipient any right to
continue in the employment of the Company, or to interfere in any way with the
right of the Company to terminate the Award Recipient’s employment relationship
with the Company at any time.

VII.
Binding Effect

This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, and successors.

VIII.
Inconsistent Provisions

The Performance-Based RSUs granted hereby are subject to the provisions of the
Plan, as in effect on the date hereof and as it may be amended.  In the event
any provision of this Agreement conflicts with such a provision of the Plan, the
Plan provision shall control, except with regard to the limitations on the
Committee’s discretion as provided in the second sentence of Section 12.1 of
this Agreement.  The Award Recipient acknowledges that a copy of the Plan and
the Plan prospectus was distributed to the Award Recipient and that the Award
Recipient was advised to review such documents prior to entering into this
Agreement.  The Award Recipient waives the right to claim that the provisions of
the Plan are not binding upon the Award Recipient and the Award Recipient’s
heirs, executors, administrators, legal representatives, and successors.

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IX.
Attorneys’ Fees and Expenses

Should any party to this Agreement retain counsel for the purpose of enforcing,
or preventing the breach of, any provision of this Agreement, including but not
limited to the institution of any action or proceeding in court (a) to enforce
any provision of this Agreement, (b) to obtain monetary or liquidated damages
for failure to perform under this Agreement, (c) for a declaration of such
parties’ rights or obligations with respect to this Agreement, or (d) for any
other judicial remedy, then the prevailing party shall be entitled to be
reimbursed by the losing party for all costs and expenses incurred thereby,
including, but not limited to, attorneys’ fees (including costs of appeal). 

X.
Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware.

XI.
Severability

If any term or provision of this Agreement, or the application thereof to any
person or circumstance, shall at any time or to any extent be invalid, illegal
or unenforceable in any respect as written, the Award Recipient and the Company
intend for any court construing this Agreement to modify or limit such provision
so as to render it valid and enforceable to the fullest extent allowed by
law.  Any such provision that is not susceptible of such reformation shall be
ignored so as to not affect any other term or provision hereof, and the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid,
illegal or unenforceable, shall not be affected thereby and each term and
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.

XII.
Amendment, Modification, and Termination; Entire Agreement

12.1 The Committee may amend, modify, or terminate any Performance-Based RSUs at
any time prior to vesting in any manner not inconsistent with the terms of the
Plan and this Agreement.  If some or all of the Performance-Based RSUs granted
under this Agreement are intended to qualify as performance-based compensation
under Section 162(m) of the Code, the Committee may not use its discretion to
increase the compensation payable to the Award Recipient hereunder in violation
of the “performance-based compensation” requirements of Section 162(m) of the
Code.  Notwithstanding the foregoing, no amendment, modification, or termination
may materially impair the rights of an Award Recipient hereunder without the
written consent of the Award Recipient.

12.2 The Plan and this Agreement contain the entire agreement between the
parties with respect to the subject matter contained herein.  Any oral or
written agreements, representations, warranties, written inducements, or other
communications with respect to the

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subject matter contained herein made prior to the execution of the Agreement
shall be void and ineffective for all purposes.

By signature below, the Award Recipient represents that he is familiar with the
terms and provisions of the Plan, and hereby accepts this Agreement subject to
all of those terms and provisions.  The Award Recipient has reviewed the Plan,
this Agreement, and the related prospectus in their entirety and fully
understands all provisions of each.  The Award Recipient agrees to accept as
binding, conclusive, and final all decisions or interpretations of the Committee
upon any questions arising under the Plan or this Agreement.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
as of the day and year first above written.

INTERNATIONAL SHIPHOLDING CORPORATION:

 

 

By:

Name:

Title:

 

AWARD RECIPIENT:

 

 

Name:

 

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