NCI BUILDING SYSTEMS, INC. 2003 LONG-TERM STOCK INCENTIVE PLAN

 

PERFORMANCE CASH AND SHARE AWARD AGREEMENT

 

NCI Building Systems, Inc., a Delaware corporation (the “Company”), hereby
grants to Grantee, effective as of the Grant Date, an award (the “Award”) equal
to a Target Amount (expressed in Dollars) subject to the terms and conditions
set forth in this Performance Cash and Share Award Agreement (this “Agreement”),
including Exhibit A hereto (“Exhibit A”) and in the Company’s 2003 Long-Term
Stock Incentive Plan (the “Plan”). Unless otherwise defined in this Agreement or
in Exhibit A, capitalized terms used in this Agreement shall have the meanings
assigned to them in the Plan and in the award letter that relates to this Award
(the “Award Letter”). Grantee acknowledges receipt of a copy of the Plan in
effect as of the date hereof, the terms and conditions of which are incorporated
herein by reference.

 

1.            Effect of the Plan. The Award granted to Grantee is subject to all
of the provisions of the Plan and of this Agreement and the related Award
Letter, together with all rules and determinations from time to time issued by
the Committee and by the Board pursuant to the Plan. The Company hereby reserves
the right to amend, modify, restate, supplement or terminate the Plan without
the consent of Grantee. This Award shall be subject, without further action by
the Company or Grantee, to any amendment, modification, restatement or
supplement to the Plan that is beneficial to, or increases the rights of,
Grantee. This Award shall not be subject to any amendment, modification,
restatement or supplement to the Plan that reduces or adversely affects the
rights and benefits available to Grantee hereunder.

 

2.            Grant of Award.

 

(a)            As set forth in the Award Letter, the Target Amount of the Award
is granted effective as of the Grant Date and has been denominated as a
hypothetical number of shares of Common Stock and a hypothetical amount of cash.
As set forth in the Award Letter and Exhibit A, the percentage of the Target
Amount which is earned and becomes vested on the Vesting Date (as defined in
Exhibit A) in accordance with the terms of the Award Letter and this Agreement
will entitle Grantee to receive from the Company on the Payment Date (as defined
in Exhibit A) (x) a number of shares of Common Stock (the “Award Shares”) and a
single lump sum cash payment (the “Cash Payment”). The number of the Award
Shares and the amount of the Cash Payment shall be determined based on
satisfaction of the performance objectives set forth in the Award Letter (the
“Performance Objectives”) during the Performance Period.

 

(b)            Grantee agrees that this Award shall be subject to all of the
terms and conditions set forth in this Agreement and the Plan, including, but
not limited to, the provisions relating to the earning, vesting and forfeiture
of the Award set forth in Section 4 of this Agreement and Exhibit A, and the
satisfaction of the Required Withholding as set forth in Section 9 of this
Agreement.

 

3.            Vesting Schedule; Service Requirements. Except as provided
otherwise in Section 4 of this Agreement in Exhibit A, the Award shall become
earned and vested only if Grantee’s continuing employment or consulting
relationship with the Company or any Subsidiary (“Continuous Service”) is not
terminated during the period commencing with the Grant Date and ending on the
applicable date on which the earned portion of the Target Amount is certified by
the Committee (which is referred to in Exhibit A as the “Vesting Date”). The
determination of the portion of the Award, if any, which becomes earned and
vested, the Vesting Date and the date on which the earned and vested portion of
the Award shall be paid shall each be determined in accordance with Exhibit A.

 

 

 

 

4.            Conditions of Forfeiture.

 

(a)            Upon any termination of Grantee’s Continuous Service (the
“Termination Date”):

 

(i)            by the Company for Cause (as hereinafter defined) or by Grantee’s
voluntary resignation before the Vesting Date (other than retirement after
reaching Normal Retirement Age), the entire Award as of the Termination Date,
whether earned or unearned, shall, without further action of any kind by the
Company or Grantee, be forfeited; or

 

(ii)            due to death or Disability or by the Company without Cause (each
a “Qualifying Termination”) or retirement after reaching Normal Retirement Age,
in each case before the Vesting Date, the portion of the Award that may or shall
become earned and vested, or may or shall be forfeited, shall be determined in
accordance with Exhibit A.

 

(b)            The amount of the Award, if any, that shall become earned and
vested upon a Change in Control shall be determined in accordance with Exhibit
A, provided, however, that, for the avoidance of doubt, clause (i) of the
definition of “Change in Control” set forth in the Plan shall not be deemed to
include an acquisition by a person which is inadvertent and/or otherwise not
entered into for the purpose of, and does not have the effect of, changing or
influencing the control of the Company.

 

(c)            For purposes of this Agreement, “Cause” shall have the meaning
ascribed to such term in Grantee’s current employment agreement with the Company
or any of its Subsidiaries (the “Employment Agreement”) or, if no such
Employment Agreement exists or if “Cause” is not defined in the Employment
Agreement, “Cause” means:

 

(i)            Grantee’s failure or inability for any reason to devote
substantially all of Grantee’s business time and effort to the performance of
Grantee’s duties and responsibilities to the Company and its Subsidiaries
(vacation time and absence due to sickness or disability being excepted
herefrom) and such failure or inability continues for a period of thirty (30)
days after written notice by the Company of the existence of such failure or
inability; provided, however, that only one such notice by the Company need be
sent and, if such failure re-occurs thereafter, no further notice and
opportunity to cure such failure shall be required;

 

(ii)            indictment for, or conviction of, or plea of nolo contendere to,
a felony, other than a felony involving the operation of a motor vehicle which
does not result in serious bodily harm to any person;

 

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(iii)            breach or failure by Grantee to perform any of Grantee’s
material restrictive covenants (including, by way of example only, prohibiting
confidentiality, competition or solicitation of customers or employees) that is
not cured within thirty (30) days after written notice by the Company of the
breach or failure to perform; provided, however, that only one such notice by
the Company need be sent and, if such failure re-occurs thereafter, no further
notice and opportunity to cure such failure shall be required;

 

(iv)            disregard or failure to use commercially reasonable efforts to
carry out the reasonable and lawful instructions of any employee to whom Grantee
reports or the Board of Directors of the Company, or a material violation of
policies established by the Company, with respect to the operation of its
business and affairs that continues for a period of thirty (30) days after
written notice by the Company of the existence of such violation, disregard or
failure; provided, however, that only one such notice by the Company need be
sent and, if such violation, disregard or failure re-occurs thereafter, no
further notice and opportunity to cure such violation, disregard or failure
shall be required;

 

(v)            an act committed by Grantee which (A) brings the Company or any
of its Subsidiaries into public disgrace, or (B) harms the business operations
of the Company or any of its Subsidiaries; provided, however, that the Board of
Directors of the Company must first provide to Grantee written notice clearly
and fully describing the particular acts or omissions which the Board reasonably
believes in good faith constitutes Cause under this subsection and an
opportunity, within thirty (30) days following Grantee’s receipt of such notice,
to meet in person with the Board of Directors to explain or defend the alleged
acts or omissions relied upon by the Board of Directors and, to the extent
practicable, to cure such acts or omissions;

 

(vi)            habitual insobriety or illegal use of controlled substances by
Grantee; or

 

(vii)            breach or failure by Grantee to comply in any material respect
with the Company’s Corporate Governance Guidelines, Code of Business Conduct and
Ethics or Employee Policy Manual (as the same may be amended, restated,
extended, supplemented or otherwise modified in writing from time to time in the
sole discretion of the Board of Directors of the Company) that is not cured
within thirty (30) days after written notice by the Company of the breach or
failure to perform; provided, however, that only one such notice by the Company
need be sent and, if such breach or failure reoccurs thereafter, no further
notice and opportunity to cure such breach or failure shall be required.

 

5.            Restriction of Transferability of Award; Restriction on
Transferability of Common Stock Issued under this Award.

 

(a)            Grantee may not directly or indirectly sell, transfer, pledge,
exchange, hypothecate, or otherwise encumber or dispose of the Award or any
portion thereof, or any right or interest therein, by operation of law or
otherwise (including through hedging transactions). Any transfer of the Award in
violation of this Section 5 shall be void and of no force or effect.

 

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(b)            Except as may otherwise be permitted by the Board of Directors of
the Company or a committee thereof, Grantee may not directly or indirectly sell,
transfer, pledge, exchange, hypothecate, or otherwise encumber or dispose of any
portion of the Award Shares, or any right or interest therein, by operation of
law or otherwise (including through hedging transactions), until the earliest of
(1) six (6) months from the Vesting Date, (2) the date of Grantee’s Qualifying
Termination or retirement after reaching Normal Retirement Age, or (3) the date
of a Change in Control.

 

6.            Rights as a Stockholder. Until such time as Award Shares are
issued in payment for an earned and vested Award, Grantee shall not have the
rights of a stockholder with respect to the Award Shares, including the right to
vote or to receive any dividends, cash or stock (other than stock dividends
accounted for as a stock split), paid or delivered thereon, from and after the
date hereof; provided, however, that in the event that the Company pays any cash
dividend, the share portion of the Target Amount will accumulate cash dividend
equivalents. The dividend equivalents shall equal the dividends paid with
respect to the Common Stock during the Performance Period. The dividend
equivalents shall accumulate, without interest, and be paid in cash at the time
the Award Shares are delivered and/or shall be forfeited at the time the share
portion of the Target Amount is forfeited. For purposes of determining the
amount of dividend equivalents accumulated and to be paid with respect to the
Award Shares, the Award Shares which are payable shall be considered to have
been outstanding from the Grant Date. In the event of forfeiture of the Target
Amount (in whole or in part), Grantee shall have no further rights to dividend
equivalents with respect to such forfeited portion.

 

7.            Capital Adjustments and Corporate Events. If, from time to time
during the term of this Agreement, there is any capital adjustment affecting the
outstanding Common Stock as a class without the Company’s receipt of
consideration (including stock dividends accounted for as a stock split or other
non-cash dividends), the Common Stock portion of this Award (including, if
applicable, the Award Shares) shall be adjusted in accordance with the
provisions of Section 12 of the Plan. Any and all new, substituted or additional
securities to which Grantee may be entitled by reason of Grantee’s ownership of
this Award or of the Award Shares hereunder because of a capital adjustment
shall be immediately subject to the provisions of this Agreement.

 

8.            Refusal to Transfer. The Company shall not be required (i) to
transfer on its books any Award Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement or the Plan,
or (ii) to treat as owner of such Award Shares, or accord the right to vote or
pay or deliver dividends or other distributions to, any purchaser or other
transferee to whom or which Grantee shall have attempted to transfer such Award
Shares.

 

9.            Tax Matters. The Company’s obligation to pay the Cash Payment and
to deliver Award Shares to Grantee on the Payment Date shall be subject to the
satisfaction of all applicable federal, state and local income and employment
tax withholding requirements (the “Required Withholding”). With respect to the
Award Shares, unless Grantee has made arrangements with the Company for Grantee
to deliver to the Company cash, a check or other available funds for the full
amount of the Required Withholding by 5:00 P.M. Central Standard Time on the
date that the earned Award becomes vested, or by such date Grantee has not made
such other provision for the satisfaction of the Required Withholding in form
satisfactory to the Committee or Board, in its sole discretion, the Company
shall first withhold any cash payable for dividend equivalents and then Award
Shares payable. The amount of the Required Withholding and the number of Award
Shares to be withheld by the Company, if applicable, to satisfy Grantee’s
Required Withholding on the Award Shares, as well as the amount reflected on tax
reports filed by the Company, shall be based on the value of the shares
determined by using the last sales price of the Common Stock (as reported by the
New York Stock Exchange) on the date prior to the applicable Vesting Date. The
obligations of the Company under this Agreement shall be conditioned on such
satisfaction of the Required Withholding.

 

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10.            Covenants of Grantee.

 

(a)            For the period beginning on the Grant Date through the fifth
anniversary of the Grant Date, Grantee shall not, directly or indirectly and
whether on Grantee’s own behalf or on behalf of any other person, partnership,
association, corporation or other entity, engage in or be an owner, director,
officer, employee, agent, consultant or other representative of or for, or lend
money or equipment to or otherwise support, any business that manufactures,
engineers, markets, sells or provides, within a 250-mile radius of any then
existing manufacturing facility of the Company and its subsidiaries and
affiliates, metal building systems or components (including, without limitation,
primary and secondary framing systems, roofing systems, end or side wall panels,
doors, windows or other metal components of a building structure), coated or
painted steel or metal coils, coil coating or painting services, or any other
products or services that are the same as or similar to those manufactured,
engineered, marketed, sold or provided by the Company or its subsidiaries and
affiliates during the Continuous Service of Grantee. Ownership by Grantee of
equity securities of the Company, or of equity securities in other publicly
owned companies constituting less than 1% of the voting securities in such
companies, shall be deemed not to be a breach of this covenant.

 

(b)            For the period beginning on the Grant Date through the fifth
anniversary of the Grant Date, Grantee shall not, directly or indirectly and
whether on Grantee’s own behalf or on behalf of any other person, partnership,
association, corporation or other entity, either (i) hire, seek to hire or
solicit the employment or service of any employee, agent or consultant of the
Company or its subsidiaries and affiliates, (ii) in any manner attempt to
influence or induce any employee, agent or consultant of the Company or its
Subsidiaries and affiliates to leave the employment or service of the Company or
its Subsidiaries and affiliates; (iii) use or disclose to any person,
partnership, association, corporation or other entity any information concerning
the names and addresses of any employees, agents or consultants of the Company
or its Subsidiaries and affiliates unless required by due process of law; or
(iv) call upon, solicit, divert or attempt to call upon, solicit or divert the
business of any customer, vendor or acquisition prospect of the Company or any
of its Subsidiaries or affiliates with whom Grantee dealt, directly or
indirectly, during Grantee’s engagement with the Company or its Subsidiaries or
affiliates.

 

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(c)            Prior to the vesting of any portion of the earned Award, for
purposes of the covenants made in this Section 10, the Company promises to
provide Grantee (as is necessary for Grantee’s position) with various trade
secrets and proprietary and confidential information consisting of, but not
limited to, processes, computer programs, compilations of information, records,
sales procedures, customer requirements, pricing techniques, customer lists,
methods of doing business and other confidential information (collectively
referred to as the “Trade Secrets”), which are owned by the Company and
regularly used in the operation of its business, but in connection with which
the Company takes precautions to prevent dissemination to persons other than
certain directors, officers and employees. Grantee acknowledges and agrees that
the Trade Secrets (a) are secret and not known in the industry or to the public;
(b) are entrusted to Grantee after being informed of their confidential and
secret status by the Company and because of the fiduciary position occupied by
Grantee with the Company; (c) have been developed by the Company for, and on
behalf of, the Company through substantial expenditures of time, effort and
money and are used in its business; (d) give the Company an advantage over
competitors who do not know or use the Trade Secrets; (e) are of such value and
nature as to make it reasonable and necessary to protect and preserve the
confidentiality and secrecy of the Trade Secrets; and (f) the Trade Secrets are
valuable, special and unique assets of the Company, the disclosure of which
could cause substantial injury and loss of profits and goodwill to the Company.
Grantee shall not use in any way or disclose any of the Trade Secrets, directly
or indirectly, during Grantee’s Continuous Service with the Company, or at any
time thereafter, except as required in the course of Grantee’s Continuous
Service with the Company. All files, records, documents, information, data and
similar items relating to the business of the Company, whether prepared by
Grantee or otherwise coming into Grantee’s possession, shall remain the
exclusive property of the Company and shall not be removed from the premises of
the Company under any circumstances without the prior written consent of the
Board of Directors of the Company (except in the ordinary course of business
during Grantee’s Continuous Service with the Company), and in any event shall be
promptly delivered to the Company upon termination of Grantee’s Continuous
Service for any reason. Grantee agrees that, upon Grantee’s receipt of any
subpoena, process or other request to produce or divulge, directly or
indirectly, any Trade Secrets to any entity, agency, tribunal or person, Grantee
shall timely notify and promptly hand deliver a copy of the subpoena, process or
other request to the Chairman of the Board and Chief Executive Officer of the
Company. For this purpose, Grantee irrevocably nominates and appoints the
Company (including any attorney retained by the Company), as Grantee’s true and
lawful attorney-in-fact, to act in Grantee’s name, place and stead to perform
any act that Grantee might perform to defend and protect against any disclosure
of any Trade Secrets.

 

(d)            For the period beginning on the Grant Date through the fifth
anniversary of the Grant Date, Grantee shall not for any reason whatsoever
(whether or not related to this Agreement or the Award) institute any legal
proceedings against the Company, any of its subsidiaries, or any of its
officers, directors, agents or representatives.

 

(e)            (i)            The parties hereto intend all provisions of
subsections (a), (b), (c) and (d) of this Section 10 to be enforced to the
fullest extent permitted by law. Accordingly, should a court of competent
jurisdiction determine that the scope of any provision of subsections (a), (b),
(c) or (d) of this Section 10 is too broad to be enforced as written, the
parties intend that the court may reform the provision to such narrower scope as
it determines to be reasonable and enforceable, and, in the event the court
reforms Section 10(a) hereof, the Company may elect to either accept enforcement
of the provision as so modified or require the return of cash or shares as set
forth in Section 10(e)(ii). In addition, however, Grantee agrees that the
non-competition agreements, non-employment agreements, non-disclosure and no
litigation agreements set forth above each constitute separate agreements
independently supported by good and adequate consideration and shall survive
this Agreement. The existence of any claim or cause of action of Grantee against
the Company, except for a breach of this Agreement by the Company or its
subsidiaries, shall not constitute a defense to the enforcement by the Company
of the covenants and agreements of Grantee contained in the non-competition,
non-employment, non-disclosure and no litigation agreements.

 

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            (ii)            If in connection with the challenge by Grantee of
any provision of Section 10(a), any court of competent jurisdiction determines
that the non-competition agreement in Section 10(a) hereof is void or
unenforceable or modifies Section 10(a) and the Company declines to accept the
modification, Grantee agrees to return to the Company an amount equal to 80% of
the total value awarded Grantee under this Award, whether in the form of (A)
Common Stock owned by Grantee, (B) cash or other immediately available funds in
an amount equal to the Cash Payment and/or the then fair market value of the
applicable number of shares of Common Stock received by Grantee under this
Agreement determined by using the last sales price of the Common Stock (as
reported by the New York Stock Exchange) on the date such determination is made,
or (C) any combination of (A) and (B).

 

(f)            Grantee hereby agrees that a breach of any of the provisions of
this Section 10 would cause irreparable injury to the Company and its
Subsidiaries and affiliates, for which they would have no adequate remedy at
law. If Grantee breaches or threatens to breach any of the covenants set forth
in this Section 10, then without regard for any provision to the contrary,
including Section 13 hereof, the Company shall have the right to immediately
seek injunctive relief from a court having jurisdiction for any actual or
threatened breach of this Section 10 without necessity of complying with any
requirement as to the posting of a bond or other security (it being understood
that Grantee hereby waives any such requirement). Any such injunctive relief
shall be in addition to any other remedies to which the Company may be entitled
at law, in equity or otherwise. Grantee hereby agrees that upon receipt of
notice of the Company’s intent to seek injunctive relief, Grantee will not sell,
transfer, pledge, exchange, hypothecate, or otherwise encumber or dispose of any
of the Award Shares received under this Agreement, or any right or interest
therein, pending the final resolution of such injunctive relief proceeding. In
addition, Grantee shall, within ten (10) business days after it is ultimately
determined that Grantee has committed such a breach hereof, whether in an
injunctive proceeding brought under this Section 10(f) or pursuant to the
dispute resolution provisions of Section 13 hereof, either (i) redeliver to the
Company Award Shares received under this Agreement, if still owned by Grantee,
or (ii) reimburse the Company an amount equal to the then fair market value of
the Award Shares received under this Agreement determined by using the last
sales price of the Common Stock (as reported by the New York Stock Exchange) on
the date such determination is made; which amount shall be paid to the Company
in cash or other immediately available funds.

 

(g)            By acceptance of this Agreement, Grantee agrees to cooperate
with, provide information to, and to participate in such exams and activities as
requested by, the Company, if the Company, in its sole discretion, elects to
obtain insurance or make other financial arrangements to fund or otherwise
assure or assist in the performance and satisfaction of the Company’s
obligations and liabilities under this Agreement.

 

11.            Entire Agreement; Governing Law. The Plan and this Agreement
constitute the entire agreement of the Company and Grantee (collectively, the
“Parties”) with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Parties with respect to
the subject matter hereof. If there is any inconsistency between the provisions
of this Agreement and of the Plan, the provisions of the Plan shall govern.
Nothing in the Plan and this Agreement (except as expressly provided therein or
herein) is intended to confer any rights or remedies on any person other than
the Parties. The Plan and this Agreement are to be construed in accordance with
and governed by the internal laws of the State of Texas, without giving effect
to any choice-of-law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of Texas to the rights
and duties of the Parties. Should any provision of the Plan or this Agreement
relating to the Cash Payment and/or Award Shares (excluding for this purpose the
provisions of Section 10(a), which is addressed in Section 10(e)) be determined
by a court of law to be illegal or unenforceable, such provision shall be
enforced to the fullest extent allowed by law and the other provisions shall
nevertheless remain effective and shall remain enforceable.

 

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12.            Interpretive Matters. Whenever required by the context, pronouns
and any variation thereof shall be deemed to refer to the masculine, feminine,
or neuter, and the singular shall include the plural, and vice versa. The term
“include” or “including” does not denote or imply any limitation. The captions
and headings used in this Agreement are inserted for convenience and shall not
be deemed a part of the Award or this Agreement for construction or
interpretation.

 

13.            Dispute Resolution. Except as provided in Section 10 hereof, the
provisions of this Section 13 shall be the exclusive means of resolving disputes
of the Parties (including any other persons claiming any rights or having any
obligations through the Company or Grantee) arising out of or relating to the
Plan and this Agreement. The Parties shall attempt in good faith to resolve any
disputes arising out of or relating to the Plan and this Agreement by
negotiation between individuals who have authority to settle the controversy.
Either Party may commence negotiations by delivering to the other Party a
written statement of the Party’s position and the name and title of the
individual who will represent the Party. Within thirty (30) days of the written
notification, the Parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to resolve the
dispute. If the dispute has not been resolved by negotiation within ninety (90)
days of the written notification of the dispute, either Party may file suit and
each Party agrees that any suit, action, or proceeding arising out of or
relating to the Plan or this Agreement shall be brought in the United States
District Court for the Southern District of Texas (or should such court lack
jurisdiction to hear such action, suit or proceeding, in a Texas state court in
Harris County, Texas) and that the Parties shall submit to the jurisdiction of
such court. The Parties irrevocably waive, to the fullest extent permitted by
law, any objection a Party may have to the laying of venue for any such suit,
action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY
RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR
PROCEEDING. If any one or more provisions of this Section 13 shall for any
reason be held invalid or unenforceable, it is the specific intent of the
Parties that such provisions shall be modified to the minimum extent necessary
to make it or its application valid and enforceable.

 

14.            Nature of Payments. Any and all grants or deliveries to Grantee
hereunder shall constitute special incentive payments to Grantee and shall not
be taken into account in computing the amount of salary or compensation of
Grantee for the purpose of determining any retirement, death or other benefits
under (a) any retirement, bonus, life insurance or other employee benefit plan
of the Company, or (b) any agreement between the Company and Grantee, except as
such plan or agreement shall otherwise expressly provide.

 

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15.            Amendment; Waiver. This Agreement may be amended or modified only
by means of a written document or documents signed by the Company and Grantee.
Any provision for the benefit of the Company contained in this Agreement may be
waived, either generally or in any particular instance, by the Board or by the
Committee. A waiver on one occasion shall not be deemed to be a waiver of the
same or any other breach on a future occasion.

 

16.            Notice. Any notice or other communication required or permitted
hereunder shall be given in writing and shall be deemed given, effective, and
received upon prepaid delivery in person or by courier or upon the earlier of
delivery or the third business day after deposit in the United States mail if
sent by certified mail, with postage and fees prepaid, addressed to the other
Party at the Company’s principal executive office or the address of Grantee in
the records and books of the Company, or to such other address as such Party may
designate in writing from time to time by notice to the other Party in
accordance with this Section 16.

 

BY ACCEPTING THIS AGREEMENT, GRANTEE ACKNOWLEDGES AND AGREES THAT THE
PERFORMANCE SHARE UNITS SUBJECT TO THIS AWARD SHALL BE EARNED, VEST AND AMOUNTS
WILL BE PAYABLE IF AT ALL, ONLY DURING THE PERIOD OF GRANTEE’S CONTINUOUS
SERVICE OR AS OTHERWISE PROVIDED IN THIS AGREEMENT (NOT THROUGH THE ACT OF BEING
GRANTED THE AWARD). GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
AGREEMENT OR THE PLAN SHALL CONFER UPON GRANTEE ANY RIGHT WITH RESPECT TO FUTURE
AWARDS OR CONTINUATION OF GRANTEE’S CONTINUOUS SERVICE. Grantee acknowledges
receipt of a copy of the Plan, represents that Grantee is familiar with the
terms and provisions thereof, and hereby accepts the Award subject to all of the
terms and provisions hereof and thereof. Grantee has reviewed this Agreement and
the Plan in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Agreement, and fully understands all provisions
of this Agreement and the Plan. Grantee hereby agrees that all disputes arising
out of or relating to this Agreement and the Plan shall be resolved in
accordance with Section 13 of this Agreement. Grantee further agrees to notify
the Company upon any change in the address for notice indicated in this
Agreement.

 

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Exhibit A to Performance Cash and Share Award Agreement

 

1.            Certification and Earned Amount

 

(a)            Certification of Achievement Relative to Performance Objectives:
Within sixty (60) days following the end of the Performance Period, the
Committee will certify the extent to which the Performance Objectives have been
achieved. Except as provided in Section 4 of Exhibit A, the date of such
certification is the “Vesting Date” for purposes of the Award.

 

(b)            Earned Portion of the Award. The Award will become earned as to
each of the Performance Objectives as follows:

 

(1)Performance below the “threshold” level of achievement shown in the Award
Letter will result in no portion of the Award being earned.

 

(2)Performance at “threshold” level of achievement shown in the Award Letter
will result in the Award becoming earned at the “threshold” payout percentage
level.

 

(3)Performance at “target” level of achievement shown in the Award Letter will
result in the Award becoming earned at the “target” payout percentage level.

 

(4)Performance at or above the “above target” level of achievement shown in the
Award Letter will result in the Award becoming earned at the “above target”
payout percentage level.

 

Payout above the “threshold” level but below the “target” level of achievement,
and above the “target” level but below the “above target” level of achievement,
will be calculated by the Committee by straight line interpolation by reference
to the applicable payout percentages. For avoidance of doubt, in no event may
the payout exceed the highest percentage specified in the Award Letter.

 

(c)            Payment Amount: Subject to Sections 2 and 4 of this Exhibit A,
the hypothetical share portion and the hypothetical cash portion of the Target
Amount shall each be multiplied by the weighted average of the payout percentage
levels for the Performance Objectives to determine the number of Award Shares
and the Cash Amount.

 

2.            Effect of Termination of Employment. The following provisions will
apply in the event of the termination of employment prior to the Vesting Date.

 

(a)            Termination for Any Reason Other Than Due to a Qualifying
Termination or Retirement after reaching Normal Retirement Age. In the event
that Grantee’s Continuous Service terminates for any reason other than a
Qualifying Termination or retirement after reaching Normal Retirement Age prior
to the Vesting Date, this Award shall terminate and will be forfeited and
cancelled without payment.

 

(b)            Termination Due to Death or Disability. In the event that
Grantee’s Continuous Service terminates due to Grantee’s Death or Disability
prior to the Vesting Date, the full earned amount of the Award determined in
accordance with Section 1(c) shall be paid as if Grantee had remained
continuously employed with the Company through the Vesting Date.

 

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(c)            Termination Without Cause. In the event Grantee’s Continuous
Service is terminated by the Company without Cause prior to the Vesting Date, a
pro-rated portion of the earned amount of the Award determined in accordance
with Section 1(c) shall be paid to Grantee. Such pro-rated portion shall be
determined by multiplying the product of (a) the earned amount of the Award
determined in accordance with Section 1(c) as if Grantee had remained
continuously employed with the Company through the Vesting Date, multiplied by
(b) a fraction, the numerator of which is the number of days elapsed in the
Performance Period through the Termination Date and the denominator of which is
1,095, provided, that if such fraction is less than ½ (one-half), then, unless
the Committee shall determine otherwise in its discretion, the Award shall
terminate and will be forfeited and cancelled without payment.

 

(d)            Termination Due to Retirement after reaching Normal Retirement
Age. In the event Grantee’s Continuous Service is terminated by Grantee due to
Grantee’s retirement after reaching Normal Retirement Age, in each case prior to
the Vesting Date, a pro-rated portion of the earned amount of the Award
determined in the same manner as provided in Section 2(c), but without regard to
the proviso contained therein.

 

(e)            Termination on or following the Vesting Date. For avoidance of
doubt, the termination of Grantee’s Continuous Service following the Vesting
Date and prior to the Payment Date, other than a termination for Cause, shall
have no effect on Grantee’s Award.

 

3.            Payment Date. Except as provided in Section 4, the Cash Amount
shall be paid, and the Award Shares shall be delivered, not later than fifteen
(15) days following the Vesting Date.

 

4.            Effect of Change in Control.

 

(a)            Prior to the Vesting Date; Current Employees. In the event of a
Change in Control prior to the Vesting Date (determined without regard to this
Section 4) and prior to Grantee’s termination of employment, (i) the Award will
be deemed earned at the “above target” payout percentage level, (ii) the Vesting
Date will be deemed to be the date of the Change in Control, and (iii) the
Payment Date will be not later than five (5) days following the date of the
Change in Control.

 

(b)            Prior to the Vesting Date; Former Employees. In the event of a
Change in Control prior to the Vesting Date (determined without regard to this
Section 4) and following Grantee’s Qualifying Termination or retirement after
reaching Normal Retirement Age, (i) the Award will be deemed earned at the
“above target” payout percentage level, (ii) the Vesting Date will be deemed to
be the date of the Change in Control, (iii) other than in the case of death or
Disability, the earned amount of the Award will be prorated as provided in
Section 2(c) (but disregarding the proviso in such Section) and (iv) the Payment
Date will be not later than five (5) days following the date of the Change in
Control.

 

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(c)            On or Following the Vesting Date. In the event of a Change in
Control on or following the Vesting Date but prior to the Payment Date, the
earned amount of the Performance Amount will be determined without regard to
this Section 4, but the Payment Date will be not later than five (5) days
following the date of the Change in Control.

 

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