Document:

Exhibit 4.3

 

 

 

THE RULES OF THE ING FINANCIAL HOLDINGS 
 CORPORATION US LONG TERM SUSTAINABLE 
 PERFORMANCE PLAN

 

 

 

Adopted by the Executive Board of ING Groep NV

 

7 March 2011

 

 

Table of Contents

 

	
RULE 1:
    	
DEFINITIONS
    	
12
    
	
RULE 2:
    	
INTERPRETATION
    	
17
    
	
RULE 3:
    	
LAPSE OF   AWARDS
    	
18
    
	
RULE 4:
    	
AVAILABILITY   OF PLAN SHARES
    	
18
    
	
RULE 5:
    	
POWERS OF THE   EXECUTIVE BOARD
    	
18
    
	
RULE 6:
    	
PARTICIPATION   IN THE PLAN
    	
19
    
	
RULE 7:
    	
NON-TRANSFERABILITY   OF AWARDS
    	
19
    
	
RULE 8:
    	
VARIATION   OF CAPITAL AND ADJUSTMENT OF AWARDS
    	
20
    
	
RULE 9:
    	
AWARDS
    	
20
    
	
RULE 10:
    	
TERMINATION OF   EMPLOYMENT
    	
21
    
	
RULE 11:
    	
DISCRETIONARY   AUTHORITY
    	
22
    
	
RULE 12:
    	
RELEASE OF   PLAN SHARES / DEFERRED CASH
    	
23
    
	
RULE 13:
    	
CLAW-BACK
    	
23
    
	
RULE 14:
    	
CORPORATE   RESTRUCTURING
    	
23
    
	
RULE 15: 
    	
LOSS OF   OFFICE OR EMPLOYMENT
    	
25
    
	
RULE 16:
    	
PLAN SHARES
    	
25
    
	
RULE 17:
    	
PERSONAL   HEDGING
    	
26
    
	
RULE 18:
    	
TAX AND SOCIAL   SECURITY
    	
26
    
	
RULE 19: 
    	
REPORTING
    	
27
    
	
RULE 20:
    	
PLAN   AMENDMENTS AND TERMINATION
    	
27
    
	
RULE 21: 
    	
TERMINATION
    	
28
    
	
RULE 22:
    	
ADMINISTRATION
    	
28
    
	
RULE 23:
    	
DISPUTES
    	
29
    
	
RULE 24:
    	
CONFLICTS   WITH AGREEMENTS
    	
29
    
	
RULE 25:
    	
GOVERNING   LAW
    	
29
    

 

 

RULE 1:                                    DEFINITIONS

 

In the Rules of this Plan, unless the context otherwise requires, the following words and expressions shall have the meanings set out below:

 

	
Acquiring Company
    	
 
    	
any company which obtains Control of the   Company or substantially the whole of the business of the Company;
    
	
 
    	
 
    	
 
    
	
Acquiring Person
    	
 
    	
                                any   person, not being an Acquiring Company, who:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)   either alone or together with any person   acting in concert with him has obtained Control of the Company; or
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)   having Control of the Company, makes a   general offer to acquire the whole of the issued Ordinary Share Capital   (other than that which is already owned by him and/or by any person acting in   concert with him);
    
	
 
    	
 
    	
 
    
	
Adoption Date
    	
 
    	
the date on which this Plan is adopted by the   Executive Board;
    
	
 
    	
 
    	
 
    
	
Appropriate Period
    	
 
    	
in relation to an Acquiring Company or an   Acquiring Person, the period of six months beginning at the time the   Acquiring Company or Acquiring Person obtains Control of the Company;
    
	
 
    	
 
    	
 
    
	
ADRs
    	
 
    	
American Depository Receipts issued in   respect of issued and fully paid-up Ordinary Share Capital of the Company;
    
	
 
    	
 
    	
 
    
	
Articles of Association
    	
 
    	
the articles of association of the Company as   amended from time to time;
    
	
 
    	
 
    	
 
    
	
Award
    	
 
    	
the award of a Performance   Share (Unit), a Deferred Share (Unit), Deferred Cash or any other instrument   as specified in the LSPP Agreement;
    
	
 
    	
 
    	
 
    
	
BDRs
    	
 
    	
Bearer Depository Receipts issued in respect   of issued and fully paid-up Ordinary Share Capital of the Company;
    
	
 
    	
 
    	
 
    
	
Business Conditions
    	
 
    	
any situation, not being a Business   Divestiture or Partial Sale, in which the termination of a Participant’s   employment is caused by economic or
    

 

 

	
 
    	
 
    	
strategic considerations and is not based   primarily on the Participant’s individual performance;
    
	
 
    	
 
    	
 
    
	
Business Divestiture
    	
 
    	
the complete or partial transfer of a Group   Company in which the Employee is employed to a transferee that is not a   Group Company or a complete or partial initial public offering (IPO) of a   Group Company in which the Employee is employed. A partial transfer or IPO is   only considered a Business Divestiture if such transfer or IPO results in the   Company (directly or indirectly) owning less than 50.1% of the voting stock   in such transferred Group Company, where this Business Divestiture does not   form part of the Company’s normal course of business as determined by the   Executive Board;
    
	
 
    	
 
    	
 
    
	
CCRM
    	
 
    	
the function of the Company responsible for   corporate compliance and risk management or any function to which this task   is delegated to from time to time;
    
	
 
    	
 
    	
 
    
	
Cessation of Employment
    	
 
    	
the date on which the employment between the   Employee and the Group ends;
    
	
 
    	
 
    	
 
    
	
Closed Period
    	
 
    	
a period so designated by CCRM;
    
	
 
    	
 
    	
 
    
	
Company
    	
 
    	
ING Groep NV, having its registered seat at   Amsterdam, The Netherlands, registered with the Chamber of Commerce (Kamer van Koophandel) of Amsterdam under registration   number 33231073;
    
	
 
    	
 
    	
 
    
	
Control
    	
 
    	
where any person or a group of persons acting in concert (for the   avoidance of doubt, other than the Stichting ING Aandelen) has acquired 50.1%   of the voting stock of the Company other than solely as a consequence of the   cancellation of BDRs or ADRs and such persons have received a declaration   from the regulatory authorities that there is no objection to their   exercising the voting rights attached to such stock or where any person or   group of persons acquires the right to appoint the majority of the Executive   Board;
    
	
 
    	
 
    	
 
    
	
Date of Award
    	
 
    	
the date on which an Award   is made to a Participant, which shall be the date as specified in the LSPP   Agreement;
    

 

 

	
Deferred Cash
    	
 
    	
a conditional right to receive payment in   the form of cash at the Vesting Date where such right may be conditional upon the attainment of any Performance Target;
    
	
 
    	
 
    	
 
    
	
Deferred Share
    	
 
    	
a conditional right to receive   a number of Plan Shares upon Vesting where such right may be conditional upon   the attainment of any Performance Target;
    
	
 
    	
 
    	
 
    
	
Deferred Share Factor
    	
 
    	
the factor that is calculated by   dividing (i) the period of employment during the Vesting Period in terms of   months; by (ii) the total Vesting Period, also in terms of months, rounded up   to the nearest whole number;
    
	
 
    	
 
    	
 
    
	
Employee
    	
 
    	
                                      either:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(i)    an employee of a Group Company who is not   a director of the Company as mentioned in articles 18 and 19 of the Articles   of Association; or
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(ii)   a director (other than a non-executive   director) of a Group Company other than the Company;
    
	
 
    	
 
    	
 
    
	
Executive Board
    	
 
    	
the board of directors of the Company, as   mentioned in the articles 18 and 19 of the Articles of Association;
    
	
 
    	
 
    	
 
    
	
Group
    	
 
    	
the Company and its Subsidiaries as amended   from time to time and the expression “member of the Group” shall be construed   in accordance with Dutch law;
    
	
 
    	
 
    	
 
    
	
Group Company
    	
 
    	
the Company and any company which is for the   time being a Subsidiary over which the Company has Control and which has been   nominated by the Executive Board for participation for the time being in this   Plan;
    
	
 
    	
 
    	
 
    
	
LSPP
    	
 
    	
this long term sustainable performance plan,   as amended from time to time;
    
	
 
    	
 
    	
 
    
	
LSPP  Agreement
    	
 
    	
the agreement in respect of an Award   effected to an Employee in accordance with Rule 9 or any other Award made   under the terms of this Plan;
    

 

 

	
LSPP Committee
    	
 
    	
such person or committee of persons and   successor person or committee of persons appointed by the Executive Board to   whom the Executive Board has delegated such of its powers in relation to this   Plan as it may determine and this definition should include any duly   appointed agent or delegate of the LSPP  Committee;
    
	
 
    	
 
    	
 
    
	
Open   Period
    	
 
    	
any   period so designated by CCRM;
    
	
 
    	
 
    	
 
    
	
Ordinary Share Capital
    	
 
    	
the issued and fully paid-up ordinary shares   in the capital of the Company, as mentioned in the Articles of Association;
    
	
 
    	
 
    	
 
    
	
Partial Sale
    	
 
    	
the partial sale of a Group Company in which   the Employee is employed to an entity or person that is not a Group Company.   Or a partial initial public offering (IPO) of a Group Company in which   Employee is employed. A partial sale or IPO is only considered a Partial Sale   if such transfer or IPO results in the Company (directly or indirectly)   owning less than 70% but more than 50% of the voting stock in such   transferred Group Company and does therefore not qualify as a Business   Divestiture;
    
	
 
    	
 
    	
 
    
	
Participant
    	
 
    	
an Employee to whom an Award has been made   under the terms of this Plan, or a former Employee who was an Employee at the   Date of Award;
    
	
 
    	
 
    	
 
    
	
Performance Incentive Zone
    	
 
    	
the predefined ranges used to determine the level of   vesting in the form of Performance Shares to Participants;
    
	
 
    	
 
    	
 
    
	
Performance Period
    	
 
    	
the period in which the Performance Target should be   attained and  which shall be specified in the LSPP agreement;
    
	
 
    	
 
    	
 
    
	
Performance Share
    	
 
    	
a right to receive Plan Shares at   the Vesting Date which right is conditional subject to the attainment of any   Performance Target imposed;
    
	
 
    	
 
    	
 
    
	
Performance Share Factor
    	
 
    	
the factor that is   calculated by dividing the period of employment during the Performance Period   in terms of months by the total Performance Period, also in terms of months,   rounded up to the nearest whole number;
    
	
 
    	
 
    	
 
    
	
Performance Target
    	
 
    	
the target or targets, set at the Date of   Award, that should be attained in order to determine the level of Plan   Shares and/or Deferred Cash to be Released subject to the Vesting of the   Awards;
    

 

 

	
Plan
    	
 
    	
the ING Long Term Sustainable Performance Plan,   otherwise known as LSPP, in its   present form or as from time to time amended in accordance with the   provisions hereof;
    
	
 
    	
 
    	
 
    
	
Plan Shares
    	
 
    	
BDRs, or ADRs or any other instruments in   respect thereof, as determined at the Date of Award by the Company and all   references to Plan Shares in this Plan shall be construed accordingly;
    
	
 
    	
 
    	
 
    
	
Record Date
    	
 
    	
the official date set by the Company,   preceding the date of Vesting of the Award, establishing the rights attaching   to the issued and fully paid-up ordinary shares in the capital of the   Company;
    
	
 
    	
 
    	
 
    
	
Redundancy
    	
 
    	
termination of a Participant’s employment   within the Group due to a reorganisation of the Group in such circumstances as the Executive   Board determines in its absolute discretion;
    
	
 
    	
 
    	
 
    
	
Release
    	
 
    	
the transfer (‘levering’) of Plan Shares or   the payment of Deferred Cash to a Participant and “Release” and “Released”   shall be construed and interpreted accordingly;
    
	
 
    	
 
    	
 
    
	
Retention Period
    	
 
    	
period in which   the disposition of any Plan Share acquired upon Vesting is not allowed, as   determined in the LSPP Agreement;
    
	
 
    	
 
    	
 
    
	
Rules
    	
 
    	
the rules for the time being   governing the Plan;
    
	
 
    	
 
    	
 
    
	
Stichting ING Aandelen
    	
 
    	
the foundation as incorporated in Amsterdam, in the   register of companies under nr. 41156637;
    
	
 
    	
 
    	
 
    
	
Stock Exchange
    	
 
    	
the stock exchange   of NYSE Euronext Amsterdam or any other recognised stock exchange where ING   is primarily listed as the case may be;
    
	
 
    	
 
    	
 
    
	
Subsidiary
    	
 
    	
a company which qualifies as a subsidiary,   in accordance with Article 2:24a of the Dutch Civil Code;
    

 

 

	
Supervisory Board
    	
 
    	
the board of Supervisory Board Directors of   the Company or a duly authorised committee thereof, as mentioned in article   24 of the Articles of Association;
    
	
 
    	
 
    	
 
    
	
Target Payout
    	
 
    	
a payment made to a Participant in   situations as defined in Rules 10.3 and 14.1, where the level of payment is not dependent on, or calculated by reference to, the attainment   of any Performance Target;
    
	
Total and Permanent
    	
 
    	
 
    
	
Disability
    	
 
    	
the mental or physical disability, whether   occupational or non-occupational in cause, which satisfies such definition   in: (i) any insurance policy or plan provided to the Participant by the   Company or a Group Company; or alternatively (ii) the Participant’s   applicable national legislation pertaining to persons with disability;
    
	
 
    	
 
    	
 
    
	
Unit
    	
 
    	
an award in the form of cash as specified in   the LSPP Agreement which will, however, resemble all other characteristics of   either a Performance Share and/or Deferred Share. In case a Unit is awarded,   the reference to a Performance Share and/or Deferred Share in the Rules and   LSPP Agreement should be read as Performance Share Unit and Deferred Share   Unit respectively;
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
the satisfaction of the requirements of the   terms of vesting of an Award, as specified in the LSPP Agreement as   appropriate, and “Vested” and “Vest” shall be construed accordingly;
    
	
 
    	
 
    	
 
    
	
Vesting Date
    	
 
    	
the date or dates on which an Award shall   Vest, as determined by the Executive Board and as specified in the LSPP  Agreement;   and
    
	
 
    	
 
    	
 
    
	
Vesting Period
    	
 
    	
the period or   periods in which the Plan Share or Deferred Cash is subject to continued   employment conditions and to which any Performance Target may be applicable.   Both shall be specified in the LSPP   Agreement;
    

 

RULE 2:                                    INTERPRETATION

 

Words or expressions used in the Plan shall where appropriate:

 

 

	
(i)
    	
 
    	
when denoting the masculine gender include   the feminine and vice versa;
    
	
(ii)
    	
 
    	
when denoting the singular include the   plural and vice versa;
    
	
(iii)
    	
 
    	
when referring to any enactment be construed   as a reference to that enactment as for the time being consolidated, amended,   re-enacted or replaced and shall include any regulations made there under;
    
	
(iv)
    	
 
    	
when referring to the Rules be taken to   refer to the Rules of this Plan;
    
	
(v)
    	
 
    	
when a period of time is specified and   starts from a given day or the day of an act or event, be calculated   exclusive of that day;
    
	
(vi)
    	
 
    	
be construed such that the headings and   sub-headings are for ease of reference only, and do not affect the   interpretation of any Rule;
    
	
(vii)
    	
 
    	
when referring to any enactment or regulations   under Dutch law be construed at the discretion of the Executive Board as a reference to other applicable laws or   regulations of any other country (or region of a country); and
    
	
(viii)
    	
 
    	
references to tax and/or social security   contributions and/or withholding taxes shall for the avoidance of doubt   include The Netherlands and any other jurisdiction to which an Employee to   whom an Award is made may be subject.
    

 

RULE 3:                                    LAPSE OF AWARDS

 

Where under any of the provisions of these Rules it is provided that an Award shall lapse, such lapsed Award shall cease to confer any rights whatsoever for the Participant notwithstanding any other provisions of these Rules.

 

 

RULE 4:                                    AVAILABILITY OF PLAN SHARES

 

The Company shall at all times keep available sufficient authorised and unissued Plan Shares or shall procure that sufficient Plan Shares are available for transfer to satisfy the Release to the full extent possible of all Plan Shares which have neither lapsed nor been fully Released taking account of any other obligations of the Company to procure the provision of Plan Shares.

 

 

RULE 5:                                    POWERS OF THE EXECUTIVE BOARD

 

5.1                                 The Plan shall be administered by the Executive Board. The Executive Board shall have such powers and authority delegated to it as set out in the Plan.

 

5.2                                 On behalf of the Company and where legally required in consultation with the Supervisory Board, the Executive Board shall have the exclusive authority and complete discretion to:

 

 

 

	
 
    	
(i)
    	
 
    	
decide, on an annual basis, whether or not   to effect an Award to Employees and decide what percentage of the Ordinary   Share Capital will be used to give effect to such annual Award;
    
	
 
    	
(ii)
    	
 
    	
select eligible Employees;
    
	
 
    	
(iii)
    	
 
    	
make an Award to Employees;
    
	
 
    	
(iv)
    	
 
    	
determine the format, terms and conditions   of any LSPP   Agreement;
    
	
 
    	
(v)
    	
 
    	
determine, for each Award effected, that the   Performance Target attaching to such an Award has been met;
    
	
 
    	
(vi)
    	
 
    	
construe and interpret the Plan, any  LSPP   Agreement and any other agreement or document executed pursuant to the Plan;
    
	
 
    	
(vii)
    	
 
    	
authorise any person to execute on behalf of   the Company, any instrument required to effectuate an Award; and
    
	
 
    	
(viii)
    	
 
    	
make all other determinations deemed   necessary or desirable for the administration of the Plan.
    

 

5.3           In consultation with the Supervisory Board, the Executive Board shall determine as soon as practicable after the Adoption Date if, how and to what extent any of its powers shall be delegated to the  LSPP Committee. The Executive Board shall provide the  LSPP Committee with written guidelines to this effect, notwithstanding the authority of the Executive Board to amend or withdraw any such delegation of powers at any time.

 

5.4           The Executive Board’s interpretation and construction of any provision of the Plan, of any Award effected under the Plan or of any LSPP  Agreement shall be final and binding on all persons claiming an interest in an Award effected under the Plan. The Executive Board shall not be liable for any action or determination made in good faith with respect to the Plan.

 

RULE 6:                                    PARTICIPATION IN THE PLAN

 

6.1           Eligible Employees may become Participants of the Plan.

 

6.2           The Executive Board shall have the absolute complete discretion to select Employees as Participants.

 

RULE 7:                                    NON-TRANSFERABILITY OF AWARDS

 

Save as provided in Rules 10.3 to 10.5, no Award nor any right there under (conditional or otherwise) nor Plan Shares Released subject to a Retention Period shall be capable of being transferred, assigned, charged, pledged or encumbered and any attempt to do so by a Participant will cause such Award to lapse with

 

 

immediate effect. In addition, a Participant’s rights under this Plan are not subject, in any manner, to alienation, sale, transfer, pledge, attachment or garnishment by creditors of the Participant or by the beneficiaries of the Participant.

 

RULE 8:                                    VARIATION OF CAPITAL AND ADJUSTMENT OF AWARDS

 

8.1           In the event of any capitalisation issue (other than a capitalisation issue in substitution for, or as an alternative to, a cash dividend) or rights issue or rights offer or any reduction, sub-division, consolidation or other variation of the capital of the Company affecting the number of BDRs and/or ADRs in issue (including any change in the currency in which Plan Shares are denominated), the number of Plan Shares comprised in any Award may be adjusted by the Company (including retrospective adjustments where appropriate) effective at the date of such capitalisation issue in such manner as the Company considers to be in its opinion fair and reasonable.

 

8.2           Notice of any adjustment shall be given to those Participants affected by such adjustment by the Company.

 

RULE 9:                                    AWARDS

 

9.1           Awards of Performance Shares, Deferred Shares, Deferred Cash and/or any other   instruments as determined by the Executive Board may be made at any time on or after the Adoption Date of this Plan.

 

9.2           Each Award shall be evidenced by a written LSPP  Agreement concluded between the Participant and the Company, setting forth further individual terms and conditions pertaining to such Award. LSPP  Agreements shall be available in each of the countries in which the Plan is operational and shall, together and concurrently with the Plan, govern the Award in accordance with local legal and regulatory requirements.

 

9.3           An  LSPP Agreement shall, to the extent applicable, specify:

 

(i)            the type of Award;

(ii)           the Date of Award;

(iii)          any consideration payable by a Participant for an Award made in his favour;

(iv)          the Performance Target and/or any conditions and limitations which may have been imposed in accordance with Rule 9.4;

(v)           the Performance Incentive Zone;

(vi)          the Vesting Date;

(vii)         the Release date(s);

(viii)        the Retention Period which may pose restrictions on the disposition of any Plan Shares acquired upon Vesting;

 

 

(ix)           submission by the Participant of such forms and documents as the Executive Board may reasonably require; and/or

(x)            procedures to facilitate the payment of withholding taxes in accordance with Rule 17; and/or

(xi)           all such other information as required by the terms of these Rules.

 

9.4           The Executive Board, when making an Award, may in its absolute discretion impose any Performance Target, being conditions and limitations (additional to any conditions and limitations contained in any other of these Rules) which must be satisfied prior to the Vesting of such Award, provided that such additional conditions and limitations shall be objective, specified at the Date of Award and set out in full in the LSPP  Agreement and, where applicable, in conformity with the remuneration policy as determined by the Supervisory Board.

 

9.5          Save as provided in Rules 10.3, 10.4, 10.5, 10.7, 14.1 and 14.3, an Award will Vest upon each Vesting Date stated in the  LSPP Agreement provided that, at the applicable Vesting Date any Performance Target, being additional conditions and limitations imposed on the Award in accordance with Rule 9.4 (and which have not been waived) have been fulfilled and the Participant is employed by the Group at the respective Vesting Date.

 

RULE 10:                                  TERMINATION OF EMPLOYMENT

 

10.1         Save as provided in Rule 10.2 to 10.4, if a Participant ceases to be employed within the Group, Awards that have not yet Vested shall lapse on the Cessation of Employment.

 

10.2         If a Participant ceases to be employed within the Group by reason of:

 

	
 
    	
(i)
    	
 
    	
injury or Total and   Permanent Disability (evidenced to the satisfaction of the Executive Board);   or
    
	
 
    	
(ii)
    	
 
    	
early retirement by   agreement of the Executive Board; or
    
	
 
    	
(iii)
    	
 
    	
by virtue of retirement on   reaching his normal retirement age as determined in the applicable retirement   benefit programme, statutory or otherwise
    

 

his Awards shall continue to Vest upon the Vesting Date provided and to the extent that any applicable Performance Target has been met according to the last performance measurement. The number of Performance Shares that has Vested is at the respective Vesting Date(s) multiplied by the Performance Share Factor(s). Deferred Shares and Deferred Cash are only multiplied by the Deferred Share Factor if explicitly stated in the LSPP Agreement.

 

10.3         If a Participant dies, his Awards shall be deemed to have Vested on the day of death, such that payment as a result of such Vesting is set at the Target Payout. The number of Performance Shares that has Vested is at the respective Vesting Date(s) multiplied by the Performance Share Factor(s).

 

 

10.4         If a Participant ceases to be employed within the Group by virtue of termination of employment by the Company or a Group Company due to Business Conditions (including, but not limited to, Redundancy) or a business divestiture that forms part of the Company’s normal course of business, his Awards shall be deemed to have Vested on the Cessation of Employment, subject and to the extent that any Performance Target imposed has been met according to the last performance measurement. The number of Performance Shares that has Vested is at the respective Vesting Date(s) multiplied by the Performance Share Factor(s).

 

10.5         If a Participant is given notice of termination of employment in circumstances involving fraud, gross negligence, wilful misconduct or any activity detrimental to the Group, to be determined by the Executive Board, all Awards (Vested and not Vested) shall lapse immediately on the date the notice of termination of employment is given to the Participant.

 

10.6        All Plan Shares that Vest based on Rules 10.2 to 10.4 shall be converted on the Vesting Date into a right to receive a cash amount equal to the opening price per BDR or ADR on the Stock Exchange on the Vesting Date, as reported by Bloomberg or any such other appropriate source, multiplied by the number of Vested Plan Shares. Any such payment shall be effected as soon as practicable following the Vesting Date.

 

10.7         Notwithstanding Rule 10.2 to 10.5, the Executive Board in its absolute discretion may decide that an Award shall lapse immediately, with no payment whatsoever being due to the Participant. The Supervisory Board may also consent to Vest any such Award in whole or in part to the extent as it may determine and considers reasonable.

 

10.8         Notwithstanding Rules 10.3 and 10.4, if a Participant dies or is given notice of termination of employment due to Redundancy and there has been no performance measurement of the Performance Target yet, the Awards will Vest such that payment as a result of such Vesting is set at the Target Payout.

 

10.9         For the avoidance of doubt, if an Employee is serving notice after having resigned on a voluntary basis, he will not be able to claim a settlement of his Awards other than described in this Rule 10 in case a corporate restructuring as described in Rule 14 occurs or is announced during this notice period.

 

RULE 11:                                  DISCRETIONARY AUTHORITY

 

The Supervisory Board has the authority to adjust the number of Plan Shares and/or the amount of Deferred Cash or cancel the Awards in whole or in part:

 

(i)            if Vesting shall limit the ability of the institution to maintain or restore a sound capital base in the long term and the amendments, variations or cancellation is in the interest of depositors, investors and other stakeholders; or

 

 

(ii)           in case of evidence of misbehaviour or serious error by the Participant (e.g. breach of code of conduct and other internal rules, especially concerning risks).

 

RULE 12:                                  RELEASE OF PLAN SHARES / DEFERRED CASH

 

Subject to Rules 18.2 to 18.5, Release of Plan Shares and/or Deferred Cash to the extent that this relates to a Vested Award shall be effected by the Company transferring the relevant Plan Shares and/or Deferred Cash amount, or procuring that the relevant Plan Shares and/or Deferred Cash shall be transferred (or issued as the case may be for Plan Shares) to the Participant as soon as practicable following the Vesting Date.

 

RULE 13:                                  CLAW-BACK

 

13.1         Notwithstanding the Rules of this Plan and the terms and conditions as specified in the LSPP Agreement, the Company shall have the right to reclaim any Plan Shares or Deferred Cash that has been Released to the Participant under this Plan in case he/she engages in conduct or performs acts which are considered as:

 

(i)            malfeasance;

(ii)           fraud; or

(iii)          specific conduct, alone or in concert with others, which has led to the material re-statement of the Company’s annual accounts and/or significant (reputational) harm to the Company.

 

13.2         In case, the Participant has sold (part of) his/her Plan Shares after Vesting, the Company reserves the right to claim from the Participant an amount in euro’s equal to the fair market value of the Plan Shares at the time of such sale. For this purpose, the fair market value is determined as the first trading price of a BDR or ADR on the Stock Exchange as reported by Bloomberg or any such other appropriate source on the date the Company makes such claim. If, on any such date no such price exists, the first trading price of a BDR or ADR on the Stock Exchange as reported by Bloomberg or any such other appropriate source on the nearest preceding day on which such a price exists, will be taken.

 

13.3         The Participant is obliged to repay this amount at first demand by the Company, such payment being made no later than 30 days after the first demand. Whether the Participant has engaged in such conduct or has performed such acts is determined at the discretion of the Supervisory Board.

 

RULE 14:                                  CORPORATE RESTRUCTURING

 

14.1         Subject to the Articles of Association, required approval of the General Meeting and any applicable laws, in the event of the Company’s dissolution, liquidation, sale of all or substantially all of its assets,

 

 

merger, split, consolidation or similar transaction, change in Control, Business Divestiture or share-for-share exchange, the Supervisory Board shall have the power to:

 

(i)         let the Awards Vest such that payment as a result of such Vesting is set at the Target Payout. The number of Plan Shares Vested is then, at the discretion of the Supervisory Board, multiplied by the Performance Share Factor for Performance Shares and multiplied by the Deferred Share Factor(s) for Deferred Shares and/or Deferred Cash, in case such Deferred Share Factor has been stated in the LSPP Agreement;

(ii)        provide for the exchange of each outstanding Performance Share, Deferred Share, Deferred Cash and any other Award as made from time to time for other securities or instruments and, as a result, make any necessary equitable adjustment in the number of securities or instruments; or

(iii)       take whatever other reasonable steps the Supervisory Board considers appropriate and equitable.

 

14.2         The Plan Shares and Deferred Cash Awarded shall be Released within the Appropriate Period as soon as the Supervisory Board has determined that the change of Control has occurred in line with the provisions of this Rule 14.2 and is satisfied that the applicable requirements of Rules 18.2 to 18.5 have been satisfied.

 

14.3         In the event of a Partial Sale, the Awards shall continue to Vest upon the Vesting Date provided and to the extent that the applicable Performance Target has been met. This number of Plan Shares Vested or Deferred Cash paid is then at the respective Vesting Date multiplied by the Performance Share Factor(s) for Performance Shares and multiplied by the Deferred Share Factor(s) for Deferred Shares and/or Deferred Cash, if any, as stated in the LSPP Agreement.

 

Notwithstanding the aforementioned, the Supervisory Board in its absolute discretion may consent to:

 

(i)            provide for the exchange of each outstanding Performance Share, Deferred Share, Deferred Cash and any other Award as awarded from time to time for other securities and, as a result, make any necessary equitable adjustment in the number of securities;

(ii)           take whatever other reasonable steps the Supervisory Board considers appropriate and equitable.

 

14.4         All adjustments and/or payments described in Rules 14.1 and 14.3 made by the Supervisory Board shall be reviewed and approved by an independent advisor. Such approval shall be conclusive and binding on all persons.

 

14.5         Except as expressly provided in this Rule 14, no Participant shall be afforded any rights by reason of any capital or corporate reorganisation of the Company.

 

 

14.6         Any Award made under the Plan shall not affect in any way the right or power of the Company or any Group Company to effectuate any capital or corporate reorganisation.

 

RULE 15:                                  LOSS OF OFFICE OR EMPLOYMENT

 

15.1         The Plan does not form part of the Participant’s employment agreement with the Company or any Group Company, and shall not be construed to give any Participant the right to remain in the employ of the Company or any Group Company.

 

15.2         An Award made under this Plan cannot be considered a guarantee to the Participant that the employment of the Participant with the Company or with any other Group Company will continue.

 

15.3         Any benefits derived by the Participant under this Plan shall not be taken into account for the purposes of determining the Participant’s contribution or entitlement to benefits under any pension arrangement or for the purposes of determining any other claim for compensation the Participant may have against the Company or against any other Group Company.

 

15.4         Where the employment of the Participant terminates for whatever reason, the Participant shall not be entitled to any compensation or damages including damages following unfair dismissal, any other form of breach of contract or any claim for compensation for the loss of employment insofar as such compensation or damages arise or may arise from the Participant ceasing to have rights under, or ceasing to be entitled to receive Awards, to receive cash under this Plan as a result of such termination. The Plan shall not at any time affect the rights of the Company or a Group Company to terminate such Participant’s status as an Employee, whether with or without cause.

 

15.5         Any Award made under this Plan shall not entitle or preclude the Participant from participating in another Award under the Plan or participation in any other plan operated by the Company or Group.

 

RULE 16:                                  PLAN SHARES

 

16.1         All transfers and all allotments of Plan Shares shall be subject to any necessary regulatory consents for the time being in force and it shall be the responsibility of the Company to comply with any requirements to be fulfilled in order to obtain or obviate the necessity for any such consent. If no regulatory consent is granted, the Award shall be null and void. The Participant shall in such a case not be entitled to any compensation.

 

 

16.2         Plan Shares transferred pursuant to the Plan will be transferred without the benefit of any rights (including shareholder rights) attaching thereto by reference to a Record Date preceding the date of Vesting in the case of Awards. Save as regards rights attaching to Plan Shares by reference to a Record Date prior to the date on which the Plan Shares are allotted and issued, Plan Shares Released shall be identical and rank pari passu in all respects with the shares in the same class then in issue.

 

RULE 17:                                  PERSONAL HEDGING

 

It is strictly forbidden for the Participant to enter into an insurance or hedging contract with any party with a stipulation that the Participant directly or indirectly by means of any related person in the event of a downward adjustment in and/or decreasing value of the Awards made under this Plan will be compensated by this party for the amounts by which the Participant’s variable remuneration has been reduced or decreased in value, in whole or in part.

 

RULE 18:                                  TAX AND SOCIAL SECURITY

 

18.1         All applicable personal tax and employee social security levies in respect of the implementation of the Plan shall be borne by the Participant.

 

18.2         It shall be a condition of the obligation of the Company, to issue or to procure the transfer of Plan Shares to a Participant and the Participant (or in the event of his death, his legal personal representatives (or, if appropriate, his designated beneficiary or beneficiaries and in the event of there being no designated beneficiary or beneficiaries, his estate) persons) shall permit the Company or any Group Company to account for an amount equal to any wage or income tax, employee’s social security contributions liability and any other liabilities for which the Company or a Group Company (as the case may be) has an obligation to withhold and account.

 

18.3         In order to meet its obligations, the Participant may permit the Company to sell, on behalf of the Participant, sufficient Plan Shares to meet the Participant’s liabilities under Rule 18.1 above. The Company or any Group Company as the case may be may retain from the sale proceeds an amount equal to such liability and any balance will be paid to the Participant.

 

18.4         Whenever Plan Shares are to be Released or issued under the Plan, the Company or any Group Company may require the Participant to remit to the Company or a Group Company an amount sufficient to satisfy all withholding tax requirements prior to the Release of the Plan Shares, including, but not limited to, the withholding of wage tax, income tax and social security contributions.

 

 

18.5         The Plan is governed by the applicable tax and social security legislation and regulations prevailing at the date of the adoption of the Plan by the Executive Board of the Company. If any tax and/or social security legislation or regulations are amended in the future and any tax or employee social security levies become payable, the costs and risks related thereto shall be borne by the Participant.

 

18.6         For the avoidance of doubt, the provisions of Rules 18.2 to 18.4 shall apply to a Participant’s liabilities that may arise on the Award, Vesting and/or Release of his Award in more than one jurisdiction.

 

18.7         Except as described in this Rule 18, any tax, employee’s social security contributions or similar liabilities arising out of the disposal of Plan Shares shall be solely the responsibility of the Participant.  Any payment made under the Plan shall not be pensionable and shall not be brought into account for the purposes of calculating or imputing any salary related benefits of the Participant.

 

RULE 19:                                  REPORTING

 

It shall be a condition of the obligation of the Company to issue or to procure the transfer of Plan Shares to Participants that such issue or transfer shall not take place until such time as the Company is satisfied that the Company or Group Company which employs the Participant is aware of, and will carry out, its reporting obligations in respect of the transfer or issue of Plan Shares where necessary.

 

RULE 20:                                  PLAN AMENDMENTS AND TERMINATION

 

20.1         Subject to Rule 20.3 and in consultation with the Supervisory Board, the Executive Board  may from time to time at its absolute discretion amend any of the Rules of the Plan.

 

20.2         In consultation with the Supervisory Board, the Executive Board shall have the power from time to time to make or vary regulations for the administration of this Plan and to amend the terms or impose further conditions on the Vesting or Release of Awards to take account of taxation, securities law or exchange control laws provided always that such regulations, terms and conditions do not conflict with the provisions of this Plan.

 

20.3         Save where requirements exist under statutory laws or obligations, no amendment, waiver or replacement to or of this Plan, any Rule or regulations for the administration of this Plan shall be made to the extent to which it would have a detrimental effect on any of the subsisting rights of Participants except with such consent on their part.

 

 

RULE 21:                                  TERMINATION

 

Notwithstanding the provisions contained in Rule 9.1 of this Plan, the Executive Board may at any time resolve that no further Awards be made to Participants under this Plan, and in such event no further Awards will be made but in all other respects the provisions of this Plan shall remain in full force and effect.

 

RULE 22:                                  ADMINISTRATION

 

22.1         Written notice of any amendment made in accordance with Rule 20 shall be given to those Participants affected by such amendment.

 

22.2         Any notice or other document required to be given hereunder to any Participant shall be delivered to him at his email address or such other address as may appear to the Executive Board to be appropriate or in any other format agreed in advance between the Participant and the person giving the notice on behalf of the Executive Board. Any notice or other document required to be given to the Company, a Group Company, the Executive Board or the Company shall be delivered in a format agreed in advance between the Participant and the person receiving the notice. Notices sent by post, unless received earlier, shall be deemed to have been given on the fifth day following the date of posting.

 

22.3         The Company may, at its absolute discretion, issue written guidance setting out the procedures whereby the Plan shall be operated.  If such written guidance is issued to any Group Company, that Group Company shall be obliged to act in accordance with that written guidance except that in the event of a conflict between any such written guidance and the Rules, the Rules will take precedence.

 

22.4         Participants shall be subject to and bound by the terms and conditions of the regulations concerning inside information, the [“Reglement inzake Voorwetenschap”]. Such rules may restrict the rights of the Participants under this Plan. Participants are expected to be familiar with the regulations concerning inside information and any other information, guidance and/or regulations issued by the Company or relevant government or regulatory bodies, and the Company shall incur no liability should the Participant act in breach of these rules.

 

 

RULE 23:                                  DISPUTES

 

The decision of the Executive Board in any dispute or question relating to any Award shall be final and conclusive subject to the terms of this Plan.

 

RULE 24:                                  CONFLICTS WITH AGREEMENTS

 

24.1         The provisions of a LSPP  Agreement shall govern and prevail in the event of any conflict with the Rules of the Plan. Any conflicting or inconsistent term of a LSPP  Agreement shall be interpreted and implemented by the Executive Board in a manner consistent with the Plan.

 

24.2         Where these Plan Rules or a LSPP Agreements are translated into any other language, the English language copy as adopted by the Executive Board will prevail in case of ambiguities or omissions in the translations.

 

RULE 25:                                  GOVERNING LAW

 

25.1         These Rules shall be governed by and shall be construed in accordance with the law of The Netherlands.

 

25.2         The Company, Group Companies and the Participants irrevocably submit, in respect of any suit, action or proceeding related to the interpretation or enforcement of the Plan, to the exclusive jurisdiction of the courts of Amsterdam.

 

***Exhibit 10.1

 

UNITED NATURAL FOODS, INC.
 AMENDED AND RESTATED
 2004 EQUITY INCENTIVE PLAN

 

PERFORMANCE SHARE AGREEMENT

 

This Performance Share Agreement (this “Agreement”) effective as of             ,       , between United Natural Foods, Inc. (the “Company”) and                        (the “Participant”), who is an employee of the Company, evidences the award of Performance Shares to the Participant under the United Natural Foods, Inc. Amended and Restated 2004 Equity Incentive Plan (the “Plan”).

 

In consideration of services rendered and agreed to be rendered, the Company makes this Award of Performance Shares to the Participant named in the first sentence of this Agreement.  This Agreement and the issuance or transfer of shares of the Company’s common stock are conditioned on the following terms:

 

1.                                      Definitions.

 

All capitalized terms that are not otherwise defined in this Agreement shall have the meanings set forth in the Plan.

 

(a)                                  Participant, solely for purposes of this Agreement, means the employee designated above.

 

(b)                                 Performance Criteria means the performance factors and requirements specified in Section 4 of this Agreement.

 

(c)                                  Performance Period means the period beginning on              ,       , and ending on              ,       .

 

(d)                                 Performance Share means the grant of a Share, which shall remain forfeitable at all times until the successful attainment of the Performance Criteria to the satisfaction of the Committee.

 

(e)                                  Unvested Performance Shares means Performance Shares granted pursuant to Section 2 of this Agreement as to which the Performance Criteria have not been satisfied under Section 4 of this Agreement.

 

2.                                      Grant of Performance Shares.

 

The Company hereby grants to the Participant, subject to the terms and conditions set forth in this Agreement and in the Plan,                  Performance Shares (subject to adjustment under Section 17 of the Plan)[, provided that, to the extent that the Participant vests in greater than one hundred percent (100%) of the Performance Shares (as provided in Section 4 of this Agreement), additional Performance Shares will be issued to the Participant.  For purposes of clarity and the avoidance of doubt, the actual number of Performance Shares earned shall be equal to                  times the applicable percentage set forth on Exhibit A, which may result in a

 

 

higher or lower number of Performance Shares than the                  targeted Performance Shares. The maximum number of Performance Shares that may be earned is subject to the limitation in Section 9(h) of the Plan].

 

3.                                      Vesting.

 

(a)                                  To the extent that the Performance Criteria under Section 4 of this Agreement have been satisfied as of the last day of the Performance Period, the Participant shall vest in the number of Performance Shares awarded under this Agreement, as calculated in accordance with Section 4, and his rights to such vested  Performance Shares shall become nonforfeitable as of the last day of the Performance Period, subject to Section 6 below.  [Except as provided in Section 3 [(b) or (c)] below, to the extent that such Performance Criteria have not been satisfied as of the last day of the Performance Period, any Performance Shares awarded under this Agreement that do not vest, as calculated in accordance with Section 4, shall be canceled immediately without further obligation on the part of the Company.]  Prior to the lapse of any restrictions regarding the Performance Shares as provided herein, the Committee shall certify in writing (which may be set forth in the minutes of the Committee) the extent to which the Performance Criteria and all other material terms of this Agreement have been met.

 

(b)                                 [In the event the Participant dies or becomes disabled (within the meaning of Section 22(e) of the Code) before the end of the Performance Period, the Participant shall vest in the Performance Shares awarded under this Agreement and his rights to the Performance Shares shall become nonforfeitable as of the date of death or disability.]

 

(c)                                  [In the event the Participant’s employment with the Company or any of its Subsidiaries is terminated for any reason within twelve months after the Company obtains actual knowledge that a Change in Control has occurred, and before the Performance Shares have become vested under Section 3(a), the Participant shall vest in the                  Performance Shares granted under Section 2 of this Agreement [(and, for the avoidance of doubt, no additional Performance Shares in which the Participant may be entitled to vest in accordance with the Performance Criteria) and his rights to such vested Performance Shares shall become nonforfeitable as of the date on which his employment is terminated].]

 

4.                                      Performance Criteria.

 

[The Performance Criteria are set forth in Exhibit A to this Agreement.]

 

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5.                                      Lapse of Restrictions.

 

(a)                                  The Company shall issue to the Participant one Share for each Performance Share which has become vested with respect to the Performance Period pursuant to Section 3 of this Agreement.

 

(b)                                 If the Participant dies after vesting pursuant to Section 3 of this Agreement but before the Company issues any Shares as described in subsection (a), above, such issuance shall be made to the Participant’s Beneficiary according to the same schedule as described above.

 

6.                                      Termination of Employment.

 

[Except as provided in Section 3[(b) or (c)] above,] if the Participant’s employment with the Company terminates for any reason prior to the expiration of the Performance Period, all then-Unvested Performance Shares shall be canceled immediately without further obligation on the part of the Company.

 

7.                                      Withholding.

 

The Participant acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Participant or his Beneficiary, including but not limited to the Performance Shares, any federal, state or local taxes of any kind required by law to be withheld with respect to the grant to the Participant of the Performance Shares or payment to the Participant or his Beneficiary in accordance with Section 5 of this Agreement, and to require that the Company be paid the amount of any federal, state or local taxes required by law to be withheld.

 

8.                                      Amendment.

 

The Committee may in its sole discretion amend, modify or terminate this Agreement, including, but not limited to, an action substituting another Award of the same or a different type or changing the Performance Period, except to the extent such amendment would increase the amount of compensation that would otherwise be due upon attainment of the goal, within the meaning of Treas. Reg. § 1.162-27(e)(2)(iii)(A); provided, however, that except as otherwise provided in the Plan or in this Agreement or to the extent necessary to conform this Agreement to mandatory provisions of applicable federal or state laws, regulations or rulings, including but not limited to the provisions of Section 409A of the Code necessary to avoid tax penalties to the Participant, the Committee shall obtain the Participant’s consent before it amends this Agreement in a manner that materially adversely affects the Participant’s rights or benefits under this Agreement.  Except as otherwise provided in this Section 8 or in the Plan, this Agreement may not be amended or modified except by a written instrument executed by the parties hereto.

 

9.                                      Determinations by the Committee.

 

Determinations by the Committee shall be final, binding and conclusive with respect to the interpretation of the Plan and this Agreement.

 

3

 

10.                               Provisions of the Plan; Company Policies.

 

This grant is subject to the provisions of the Plan, which is incorporated into this Agreement by reference and a copy of which is furnished to the Participant with this Agreement (or which previously has been furnished to the Participant).  This Agreement, read together with the Plan, represents the entire understanding and agreement between the Company and the Participant, and shall supersede any prior agreement and understanding between the parties with respect to the matters contained herein. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties.  This Agreement, and any payment in Shares for the Performance Shares, shall be subject to any policy of the Company regarding the recoupment or clawback of compensation as in effect at the date of this Agreement.

 

11.                               Holding Period

 

[To the extent that any Shares are awarded hereunder, Participant agrees to hold such Shares and not dispose of them by sale or other voluntary disposition for a period of three (3) years from the date of vesting, unless such holding period is waived by the Committee in its sole discretion.  This Agreement shall not apply to any Shares that are withheld to satisfy income tax obligations of Participant hereunder.]

 

12.                               Notices and Payments.

 

Any notice required or permitted to be given to the Participant or his Beneficiary under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the United States mail with postage and fees prepaid.  Any notice or communication required or permitted to be given to the Company under this Agreement shall be in writing and shall be deemed effective only upon receipt by the Secretary of the Company at the Company’s principal office.

 

13.                               Waiver.

 

The waiver by the Company of any provision of this Agreement at any time or for any purpose shall not operate as or be construed to be a waiver of the same or any other provision of this Agreement at any subsequent time or for any other purpose.

 

14.                               Governing Law.

 

The validity and construction of this Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rules or principles that might otherwise refer construction or interpretation of any provision of this Agreement to the substantive law of another jurisdiction.

 

[Signature Page Follows]

 

4

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer of the Company, and the Participant has accepted and signed this Agreement, all on the day and year first mentioned above.

 

	
 
    	
UNITED   NATURAL FOODS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Participant
    
				

 

5

 

EXHIBIT A

 

PERFORMANCE CRITERIA

 

[To Be Determined.]

 

6

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