Document:

EFH-2011.12.31- Exhibit 10(Z)

Exhibit 10(z)

[TO BE PLACED ON COMPANY LETTERHEAD]

_________________, 2010

[Name]
__________________
__________________
__________________
    
Re:    Retention Award
Dear ________________: 
This letter will confirm that you are eligible to receive a retention award from Energy Future Holdings Corp. (the “Company”) under the terms and conditions outlined in this letter and pursuant to the EFH Corp. Retention Award Plan (the “Retention Plan”).  Capitalized terms in this letter (your “Participation Agreement”) not herein defined shall have the meaning set forth in the Retention Plan. 
Amounts and Payment Dates.  The full amount of your potential retention award will equal [$] (the “Retention Award”).  Your Retention Award will be payable in two separate payments (each, a separate “Payment”), the first on September 28, 2012 (the “First Retention Payment”), and the second on September 30, 2014 (the “Second Retention Payment”).  Each Payment will be equal to the amount which results from a formula based upon one-half of your Retention Award and multiplied by a percentage that reflects the Company's financial performance during the applicable period to which your Payment relates (see formulas below), in each case subject to certain minimum and maximum levels.  Each Payment, if any, will be paid to you in a cash lump sum on the first regular pay date of the Company on or after the dates specified above (except as otherwise provided in this Participation Agreement), provided that you have remained continuously employed by the Company or one of its Affiliates through September 28, 2012 and September 30, 2014, as applicable.  
Formulas.  Your First Retention Payment and Second Retention Payment will be equal to the amounts which result from the applicable formulas below: 
First Retention Payment = ((.25 x Retention Award) x 2010 EBITDA Percentage) + 
((.25 x Retention Award) x 2011 EBITDA Percentage)

Second Retention Payment = ((.25 x Retention Award) x 2012 EBITDA Percentage) + 
((.25 x Retention Award) x 2013 EBITDA Percentage)

“EBITDA Percentage” for the applicable year shall be defined as a percentage equal to or between 50.0% and 100.0% that will be determined by the level of budgeted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) actually achieved for that year.  Each applicable year the Organization and 

Compensation Committee of the Company's board of directors or such other committee designated by the Company's board of directors will determine a threshold and target EBITDA budget amount for that year.  The achievement of the threshold EBITDA amount will result in an EBITDA Percentage of 50.0%, and the achievement of the target EBITDA amount will result in an EBITDA Percentage of 100.0%.  A straight line interpolation (rounding to the nearest 0.1%) will be used to determine EBITDA Percentages between threshold and target EBITDA; provided, however, that in no event shall the EBITDA Percentage be less than 50.0% or greater than 100.0%.  For example, if the threshold budgeted EBITDA amount for 2010 is determined to be $4 billion, and actual EBITDA for 2010 is $3.5 billion, the percentage that must be used for the 2010 EBITDA Percentage portion of the First Retention Payment formula above will be 50.0%.  
Death, Disability and Change in Control Terminations.  In the event that your employment with the Company is terminated due to your death, Disability (as defined in the Plan, and provided in Appendix A to this Participation Agreement for your convenience) or a Change in Control Termination (as defined in the Plan, and provided in Appendix A to this Participation Agreement for your convenience) prior to September 28, 2012, you will receive the First Retention Payment on the first regular pay date of the Company immediately following your termination of employment and you will have no right to receive the Second Retention Payment.   In the event that your employment with the Company is terminated due to your death, Disability or a Change in Control Termination following September 28, 2012, but prior to September 30, 2014, you will receive the Second Retention Payment on the first regular pay date of the Company immediately following your termination of employment.   Solely for purposes of calculating your First Retention Payment or Second Retention Payment, as applicable, in the event that your termination of employment due to your death, Disability or a Change in Control Termination occurs prior to a date when the actual EBITDA Percentage for any given year can be determined, the EBITDA Percentage for the applicable year(s) will be assumed to be 100.0%, but where actual EBITDA may be determined for that year, the EBITDA Percentage will be calculated using the actual EBITDA achieved for such year(s). 
All Other Terminations of Employment.  In the event that your employment with the Company is terminated for any reason other than your death, Disability, or a Change in Control Termination you will forfeit your right to receive any unpaid and unearned portion of your Retention Award.  
Transfer to an Affiliate.  You will not be deemed to have incurred a termination from employment upon any transfer of your services from the Company to an Affiliate of the Company; provided, however, that for purposes of the Plan, a transfer of your services from the Company to Oncor will be considered a termination of employment. 
Other Impact of a Change in Control.  In the event a Change in Control (as defined in the Plan, and provided in Appendix A to this Participation Agreement for your convenience) occurs prior to a date when the actual EBITDA Percentage for any given year can be determined, the EBITDA Percentage for such year and later years will be assumed to be 100.0% for purposes of the Retention Plan. Where actual EBITDA may be determined for the year in which a Change in Control occurs, the EBITDA Percentage for that year (and prior years) will be calculated using the actual EBITDA achieved for such year(s). In other words, the occurrence of a Change in Control will “lock in” the amount of your Retention Award for the year in which the Change in Control occurs and all subsequent years, if any, by using an EBITDA Percentage of 100.0%, but you will not receive a payment of your Retention Award solely due to the occurrence of a Change in Control and your Retention Award will remain forfeitable if your employment with the Company (and its Affiliates) terminates other than due to your death, Disability or a Change in Control Termination.  
Administration.  The Retention Plan and this Participation Award shall be administered by the Executive Vice President of Human Resources of the Company (the “EVP”).  All calculations and determinations made by the EVP with respect to this Participation Agreement and your Retention Award will 

be final and binding on you and the Company. 
We are pleased to be able to offer this Retention Award to you and truly appreciate your dedication and commitment to the Company and its Affiliates.  We are excited about the future and look forward to our success together. 
A signature page and Appendix A follow this letter. 
  

Very Truly Yours,
ENERGY FUTURE HOLDINGS CORP.
____________________________________
Name:    ______________________________
Title:    ______________________________

ACCEPTED BY: 
____________________________
[Name]
____________________________
____________________________
[Address]

Appendix A
Definitions
“Affiliate” means with respect to any Person, any entity directly or indirectly controlling, controlled by or under common control with such Person; provided, however, that for purposes of the Plan, Oncor Electric Delivery Holdings Company LLC and each of its subsidiaries (collectively, “Oncor”) shall not be deemed an Affiliate of the Company. 
“Cause” means (i) if, in carrying out an Eligible Employee's duties to the Company, the Eligible Employee has engaged in conduct that constitutes (A) a breach of the Eligible Employee's fiduciary duties to the Company or its shareholders (including, without limitation, a breach or attempted breach of the restrictive covenants under any applicable Management Stockholder's Agreement entered into by and between that Eligible Employee and the Company), (B) gross neglect, or (C) gross misconduct resulting in material economic harm to the Company; or (ii) the Eligible Employee's conviction of, or entry of a plea of guilty or nolo contendere for, a felony or other crime involving moral turpitude
“Change in Control” means, in one or a series of related transactions, (i) the sale of all or substantially all of the consolidated assets or capital stock of the Company or Business Unit to a Person (or group of Persons acting in concert) who is not an Affiliate of any member of the Sponsor Group; (ii) a merger, recapitalization or other sale by the Company, any member of the Sponsor Group or their Affiliates, to a Person (or group of Persons acting in concert) of Common Stock that results in more than 50.0% of the Common Stock of the Company (or any resulting company after a merger) being held by a Person (or group of Persons acting in concert) that does not include any member of the Sponsor Group or any of their respective Affiliates; or (iii) a merger, recapitalization or other sale of Common Stock by the Company, any member of the Sponsor Group or their Affiliates, after which the Sponsor Group owns less than 20.0% of the Common Stock of, and has the ability to appoint less than a majority of the directors to the board of the Company (or any resulting company after a merger); and with respect to any of the events described in clauses (i) through (ii) above, such event results in any Person (or group of Persons acting in concert) gaining control of more seats on the board of directors than the Sponsor Group.  For purposes of this definition of a Change in Control, (a) a “Business Unit” shall mean a discreet business or activity performed by the Company or its subsidiaries that is treated, or accounted for, as a separate operating unit in which an Eligible Employee is employed; (b) “Common Stock” shall mean the common stock of the Company, which may be authorized but unissued, or issued and reacquired; and (c) the “Sponsor Group” shall mean Kohlberg Kravis Roberts & Co. L.P., TPG Capital, L.P. and Goldman, Sachs & Co. and their respective Affiliates. 
“Change in Control Termination” means a termination of an Eligible Employee's employment by the Company without Cause or a termination of employment by an Eligible Employee for Good Reason, in each case on or after the occurrence of a Change in Control. 
 “Disability” means “Disability” as defined in the then current long-term disability plan of the Company. 
“Good Reason” means the occurrence of any one or more of the following events without an Eligible Employee's express written consent: (i) a material reduction in the Eligible Employee's base salary (other than a general reduction in base salaries that affects all salaried employees of the Company proportionately); (ii) a transfer of the Eligible Employee's primary workplace by more than thirty-five (35) miles from the Eligible Employee's then current workplace; or (iii) a substantial and adverse change in the Eligible Employee's duties and responsibilities; provided, however, that in order for the Eligible Employee's 

termination due to a Good Reason event to be effective, the Eligible Employee must provide notice to the Company of the event alleged to constitute a Good Reason termination within ninety (90) days of the occurrence of such an event, and the Company shall be given the opportunity to remedy the alleged Good Reason termination event within thirty (30) days from the Company's receipt of the Eligible Employee's notice of the allegation, and the Eligible Employee must terminate his or her employment for Good Reason within thirty (30) days of the Company's failure to cure.
“Person” means “person,” as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended.exhibit_10-19.htm

Exhibit 10.19

 

RESTRICTED UNIT

STOCK BONUS AWARD

AGREEMENT

 

This instrument is issued as of the 15th day of February, 2012, by ONEOK, Inc., an Oklahoma corporation, (hereinafter referred to as “Corporation”), to «Officer_Name» (hereinafter referred to as “Grantee”), an employee of the Corporation or a division or subsidiary thereof, pursuant to the terms of the ONEOK, Inc. Long-Term Incentive Plan, as amended (hereinafter referred to as the “Plan”).

 

1.  Restricted Unit Award.  This instrument and that certain Restricted Unit Stock Bonus Award and Agreement, dated February 15, 2012, a copy of which is attached hereto and incorporated herein by reference (the “Notice of Restricted Unit Stock Bonus Award and Agreement”) constitute evidence of the issuance and grant of a Stock Bonus Award (hereinafter referred to as "Award") to the Grantee by the Corporation under the Plan pursuant to which shares of the Corporation's Common Stock (hereinafter referred to as "Common Stock") shall be distributed in the future to the Grantee in lieu of, or as a supplement to, any other compensation that may have been earned by services rendered prior to the date the distribution is made, pursuant to and in accordance with the terms of this instrument under which the Corporation grants a Stock Bonus Award under the Plan that shall include and is to be awarded by the grant restricted stock units (hereinafter referred to a "Restricted Units) under the Plan in the amount of «No_of_Restricted_Units» Restricted Units that shall entitle the Grantee to receive shares of Common Stock  all subject to the terms, provisions, and conditions of this instrument (including, without limitation, the restrictions stated in paragraph 5, below) and of the Plan, which are incorporated herein by reference.  This instrument, when executed by the Grantee, together with the Notice of Restricted Unit Stock Bonus Award and Agreement constitute an agreement between the Corporation and the Grantee.  Notwithstanding the foregoing, should there be any inconsistency between the provisions of this instrument and the terms of the Award stated in the resolutions and records of the Board of Directors of the Corporation, or the Plan, the provisions of such resolutions and records and of the Plan shall control.  The grant of Restricted Units to the Grantee and the Grantee’s entitlement to receive and be issued shares of Common Stock shall be effective in the manner and to the extent provided in this instrument and the Plan as to all or any part of the shares of Common Stock subject to the grant from time to time during the period stated herein.

 

2.  Plan.  The Award is issued pursuant to the Plan, as approved by the Shareholders of the Corporation, which provides that a specific aggregate number of shares of Common Stock of the Corporation may be issued or transferred pursuant to Stock Incentives under the Plan.  The Plan specifies the authority of the Corporation, its Board of Directors, and a committee of the Board of Directors to select employees to be granted Stock Incentives.  The Executive Compensation Committee of the Board of Directors (hereinafter referred to as the “Committee”) is authorized to administer the Plan with respect to the Award and the grant of the Award made to the Grantee pursuant to the Plan.  Except where expressly stated or clearly indicated otherwise by the terms of this instrument, all terms, words and phrases used herein shall have the same meaning and effect as stated in the Plan.  The Grantee has been provided a complete copy of the Plan with this instrument.

 

  

  

  

3.  Grantee’s Agreement Concerning Award and Employment.  In consideration of the Corporation’s granting the Award as incentive compensation to Grantee pursuant to this instrument, the Grantee by acceptance thereof, and signing this instrument evidencing its terms, agrees to such terms and to continue to contribute and perform service in the employ of the Corporation (or a division or subsidiary thereof) at the direction, will and pleasure of the Corporation and the Board of Directors.  Provided, however, neither the foregoing agreement of the Grantee in this paragraph 3, nor any other provision in the Plan shall confer on the Grantee any right to continue in the employ of the Corporation (or a division or subsidiary thereof), or interfere in any way with the right of the Corporation (or such division or subsidiary) to terminate the Grantee’s employment at any time.

 

4.  Registration of Stock; Grantee’s Representation With Respect to Acquiring for Investment.  It is intended by the Corporation that the Plan and shares of Common Stock covered by the Award issued and granted to the Grantee referred to in paragraph 1, above, are to be registered under the Securities Act of 1933, as amended, prior to the date of the grant; provided, that in the event such registration is for any reason not made effective for such shares, the Grantee agrees, for the Grantee, and for the Grantee’s heirs and legal representatives by inheritance or bequest, that all shares acquired pursuant to the grant will be acquired for investment and not with a view to, or for sale or tender in connection with the distribution of any part thereof, including any transfer or distribution of such shares by the Grantee pursuant to the grant and this instrument or as otherwise allowed by the Plan.

 

5.  Restrictions; Restricted Period; Transfer of Common Stock to Grantee.  The issue and grant of the Award to the Grantee stated in paragraph 1, above, are subject to the following terms and conditions:

 

(a)  The ownership and transfer of the Restricted Units granted to the Grantee shall be restricted during the period beginning February 15, 2012, the date of the grant thereof (hereinafter referred to as “Grant Date”) and ending on February 15, 2015, (which period is hereinafter referred to as “Restricted Period”), as herein provided.

 

(b)  The Restricted Units, or any Common Stock or cash to be paid or transferred to Grantee as a Stock Bonus Award under the Plan pursuant to the Award may not be sold, assigned, transferred, pledged, encumbered or otherwise disposed of by Grantee or any other person except as provided in this instrument and the Plan until the expiration of the Restricted Period.

 

(c)  The Grantee shall earn and become vested and entitled to the Restricted Units granted by this Award under paragraph 1, above, at the expiration of the Restricted Period.  Upon expiration of the Restricted Period, the Grantee shall be entitled to receive, and the Corporation shall issue to Grantee one (1) share of Common Stock for each Restricted Unit that becomes earned by and vested in the Grantee pursuant to the Award.  The Common Stock the Grantee becomes entitled to receive under the Award shall be paid, distributed, transferred and issued on the date of expiration of the Restricted Period, or as soon as practicable after such date as determined by the Committee, but in no event after the 15th day of the third month after such date.

 

-2-

  

  

(1)  The Grantee shall become vested in the Restricted Units granted to the Grantee hereunder and Common Stock paid and transferred pursuant to the Award free and clear of all restrictions imposed by the Award if the Grantee’s employment by the Corporation (or a division or Subsidiary thereof) does not terminate during the Restricted Period; provided, that the Grantee shall become partially vested in the Restricted Units and Common Stock payable pursuant to the Award and the restrictions imposed by the Award shall partially cease to apply in certain events to the extent described in paragraph 6(d), below.

 

(2)      If the Grantee’s employment with the Corporation (or a division or Subsidiary thereof) terminates prior to the end of the Restricted Period by reason of (i) the Grantee’s voluntary termination of the Grantee’s employment with the Corporation (or a division or Subsidiary), or (ii) the involuntary Termination for Cause by the Corporation of the Grantee’s employment with the Corporation (or a division or Subsidiary), the Grantee shall forfeit all the Grantee’s right, title or interest in the Restricted Units, and to any Common Stock payable or to be issued pursuant to the Award; and the Grantee shall forfeit such right, title and interest in the Restricted Units, and to any Common Stock payable or to be issued pursuant to the Award regardless of the reason for such termination of employment.  Any such termination of employment of the Grantee described in the preceding sentence shall not be deemed to occur by reason of transfer of employment of the Grantee by or between the Corporation and any division or Subsidiary of the Corporation.

 

(3)  The Grantee shall not be entitled to vote any shares of Common Stock that may be issued to the Grantee pursuant to the Award prior to the end of the Restricted Period and actual issuance of such Common Stock to the Grantee pursuant to the Award.

 

(4)  No dividends with respect to shares of Common Stock that may be issued to the Grantee under the Award shall accrue or become payable to the Grantee prior to the end of the Restricted Period and issuance of such Common Stock to Grantee pursuant to the Award.

 

6.  Transferability of Restricted Units, Cash or Common Stock; Termination of Employment.

 

(a)  Except as provided in subparagraph (b) of this paragraph 6, below, this instrument, the Grantee’s rights and obligations hereunder, and the Restricted Units granted hereunder shall not be transferable by the Grantee otherwise than by will or the laws of descent and distribution which apply to the Grantee’s estate.

 

(b)  Notwithstanding the foregoing, the Grantee may transfer any part or all of the Grantee’s rights in the Restricted Units to members of the Grantee’s immediate family, or to one or more trusts for the benefit of such immediate family members, or partnerships in which such immediate family members are the only partners if the Grantee does not receive any consideration for the transfer.  In the event of any such transfer, Restricted Units shall continue to be subject to the same terms and conditions otherwise applicable hereunder and under the Plan immediately prior to its transfer, except that such rights shall not be further transferable by the transferee inter vivos, except for transfer back to the original Grantee.  For any such transfer to be effective, the Grantee must provide prior written notice thereof to the Committee, unless 

 

-3-

  

  

 

otherwise authorized and approved by the Committee, in its sole discretion; and the Grantee shall furnish to the Committee such information as it may request with respect to the transferee and the terms and conditions of any such transfer.  For purposes of transfer of this grant under this subparagraph (b), “immediate family” shall mean the Grantee’s spouse, children and grandchildren.

 

(c)  Notwithstanding anything to the contrary expressed or implied herein (including without limitation, the restrictions stated in paragraph 5, above, applicable to the Restricted Units), all rights and interest of the Grantee in the Restricted Units shall become invalid and wholly terminated and forfeited upon (i) the Grantee’s voluntary termination of the Grantee’s employment with the Corporation (or a division or Subsidiary), or (ii) the involuntary Termination for Cause by the Corporation of the Grantee’s employment with the Corporation (or a division or Subsidiary).

 

(d)  Notwithstanding the foregoing provisions, in the event of termination of the Grantee’s employment with the Corporation (or a division or Subsidiary) during the Restricted Period by reason of (i) the involuntary termination of the Grantee’s employment with the Corporation (or a division or Subsidiary) other than a Termination for Cause (ii) the Retirement of the Grantee, (iii) the Total Disability of the Grantee, or (iv) the Grantee’s death while still employed by the Corporation (or a division or Subsidiary), then partial vesting shall be allowed as provided in this paragraph 6(d) and the Grantee shall become vested in and receive, in the event of any such involuntary termination of employment other than a Termination for Cause, Retirement or Total Disability, and the legatees, designated Beneficiary, personal representative or heirs of the Grantee shall be vested in and entitled to receive, in the event of the Grantee’s death, the percentage of the Restricted Units which is determined by dividing the number of full months which have elapsed under the Restricted Period at the time of such termination of employment by the number of full months in the Restricted Period.  The Grantee, or legatees, designated Beneficiary, personal representative or heirs of the Grantee, as applicable, shall be entitled to receive and the Corporation shall issue, to the Grantee, or such legatees, designated Beneficiary, personal representative or heirs, as applicable, one share of Common Stock for each vested Restricted Unit, which shall be issued, paid and transferred pursuant to the Award free and clear of all restrictions imposed by the Award on the date of expiration of the Restricted Period, or as soon as practicable thereafter as determined by the Committee, but in no event later than the 15th day of the third calendar month after the date of the expiration of the Restricted Period.

 

(e)  The Grantee may designate a Beneficiary to receive any rights of the Grantee which may become vested in the event of the death of the Grantee under procedures and in the form established by the Committee; and in the absence of such designation of a beneficiary, any such rights shall be deemed to be transferred to the estate of the Grantee.

 

(f)       For purposes of the Award and this instrument, an “involuntary termination” shall mean that the Corporation (or a division or Subsidiary) has ended the Grantee’s employment with the Corporation (or a division or Subsidiary) without the Grantee having an opportunity to continue employment with the Corporation (or a division or Subsidiary); an “involuntary Termination for Cause” of the Grantee’s employment with and by the Corporation (or a division or Subsidiary) shall mean that the Corporation (or a division or 

 

-4-

  

  

 

Subsidiary) has ended such employment by reason of (i) the Grantee’s conviction in a court of law of a felony, or any crime or offense involving misuse or misappropriation of money or property, (ii) the Grantee’s violation of any covenant, agreement or obligation not to disclose confidential information regarding the business of the Corporation (or a division or Subsidiary), (iii) any violation by the Grantee of any covenant not to compete with the Corporation (or a division or Subsidiary), (iv) any act of dishonesty by the Grantee which adversely effects the business of the Corporation (or a division or Subsidiary), (v) any willful or intentional act of the Grantee which adversely affects the business of, or reflects unfavorably on the reputation of the Corporation (or a division or Subsidiary), (vi) the Grantee’s use of alcohol or drugs which interferes with the Grantee’s performance of duties as an employee of the Corporation (or a division or Subsidiary), or (vii) the Grantee’s failure or refusal to perform the specific directives of the Corporation’s Board of Directors, or its officers which directives are consistent with the scope and nature of the Grantee’s duties and responsibilities with the existence and occurrence of all of such causes to be determined by the Corporation, in its sole discretion; provided, that nothing contained in the foregoing provisions of this paragraph shall be deemed to interfere in any way with the right of the Corporation (or a division or Subsidiary), which is hereby acknowledged, to terminate the Grantee’s employment at any time without cause; and “voluntary termination” shall mean that the Grantee had an opportunity to continue employment with the Corporation (or a division or Subsidiary), but did not do so.

 

        (g)      For purposes of the Award and this instrument, "Retirement" shall mean a voluntary termination of employment of the Grantee with the Corporation (or a division or Subsidiary) by the Grantee if at the time of such termination of employment the Grantee has both completed five (5) years of service with the Corporation (or a division or Subsidiary) and attained age fifty (50); and “Total Disability” shall mean that the Grantee is permanently and totally disabled and unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, and has established such disability to the extent and in the manner and form as may be required under the provisions of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (or corresponding section of any future federal tax code), and regulations thereunder.

 

7.  Deferral of Payment, Distribution and Transfer of Stock.

 

(a)  The payment, distribution and transfer of Restricted Units, Common Stock and cash of the Grantee becomes entitled to receive upon the Grantee's separation from service with the Corporation upon the Grantee's Retirement prior to the expiration of the Restricted Period under paragraph 6 (d), above, shall be paid, distributed and transferred to the Grantee in a single payment, distribution and transfer at the Specified Time of the Grantee's separation from service with the Corporation by such Retirement, as soon as practicable thereafter as determined by the Committee,  but in no event later than the 15th day of the third calendar month after date of such Retirement, and the Grantee shall not be permitted, directly or indirectly, to designate the time of payment, distribution and transfer or the taxable year in which it is to be made.  The Specified Time of payment, distribution and transfer of any other compensation that is deferred under this instrument or the Award shall be the date of expiration of the Restricted Period, or as soon as practicable thereafter as determined by the Committee, but in no event later than the 15th day of the third calendar month after the date of expiration of the Restricted Period, and the 

 

-5-

  

  

Grantee shall not be permitted, directly or indirectly, to designate the time of payment, distribution or transfer or the taxable year in which it is to be made.

 

(b)  The Specified Time of payment and form of payment specified in paragraph 6(a), above shall be considered as the irrevocable deferral election of the Corporation and the Grantee of the time and form of payment for purposes of the application to this instrument and the Award of the provisions of Section 409A of the Internal Revenue Code of 1986, as amended, and the provisions of this instrument related thereto.  No other election to defer compensation, or subsequent election or acceleration of the time and form of payment of compensation is intended or shall be allowed.

 

(c)  The Award shall be subject to such other rules and requirements as the Committee, in its sole discretion, may determine to be appropriate with respect to administration thereof and the restrictions made applicable to the Grantee and the Restricted Units during the Restricted Period.  This instrument and the rights and obligations of the parties involved, shall be subject to interpretation and construction by the Committee to the same extent and with the same effect as the Committee actions under pertinent provisions of the Plan.  The Grantee shall take all actions and execute and deliver all documents as may from time to time be requested by the Committee in connection with such restrictions and in furtherance hereof.  The Grantee agrees to pay to the Corporation any applicable federal, state, or local income, employment, social security, Medicare, or other withholding tax obligation arising in connection with the grant of the Award to the Grantee; and the Corporation shall have the right, without the Grantee’s prior approval or direction, to satisfy such withholding tax by withholding all or any part of the Common Stock that would otherwise be transferred and delivered to the Grantee, with any shares of Common Stock so withheld to be valued at the Fair Market Value (as defined in the Plan) on the date of such withholding. The Grantee, with the consent of the Corporation, may satisfy such withholding tax by delivery and transfer to the Corporation of shares of Common Stock previously owned by the Grantee, with any shares so delivered and transferred to be valued at the Fair Market Value on the date of such delivery.

 

(d)  The provisions of this instrument providing for the deferral of payment, distribution, transfer or issuance of Restricted Units, Common Stock or cash shall be applicable solely and exclusively to the Grantee and the Award Agreement and Award referred to herein, and shall not apply to any other stock incentive or other grant, award or transfer provided for or made under the Plan.

 

(e)  Notwithstanding anything otherwise provided under the Plan or in this instrument  the following requirements shall apply to this Award Agreement and the Award, to all elections or subsequent elections made by the Grantee, and to all distributions and payments made to the Grantee pursuant to this Award Agreement and Award:

 

(1)  Any compensation for services performed by the Grantee during a taxable year may be deferred  only if the election to defer such compensation by the Grantee or the Corporation is made not later than the close of the preceding taxable year or such other time as provided in Treasury Regulations under section 409A of the Internal Revenue Code of 1986, as amended ("Code"), but in all events any deferral of the payment, distribution, transfer or 

 

-6-

  

  

issuance of Restricted Units, Common Stock or cash pursuant to the Award and Award Agreement may be made only by an election that is made on or before the Election Date.

 

	 	(2)  	Any compensation deferred shall not be distributed earlier than:
	 	 	 	 	 	 
	 	 	 	(i) 	Separation from Service of the Grantee,
	 	 	 	 	 	 
	 	 	 	(ii)	the date the Grantee becomes Disabled,
	 	 	 	 	 	 
	 	 	 	(iii)	death of the Grantee,
	 	 	 	 	 	 
	 	 	 	(iv)	Specified Time (or pursuant to a Fixed Schedule) specified under the plan under which the compensation is deferred at the date of deferral of such compensation,
	 	 	 	 	 	 
	 	 	 	(v)	a Change in Ownership or Control, or
	 	 	 	 	 	 
	 	 	 	(vi)	the occurrence of Unforeseeable Emergency.

 

(3)  If the Grantee is a Specified Employee, no payment or distribution shall be made before the date which is six (6) months after the date of the Grantee's Separation from Service, or, if earlier, the date of death of the Grantee.

 

(4)  No acceleration of the time or schedule of any distribution or payment under the plan under which compensation is deferred shall be permitted or allowed, except to the extent provided in Treasury Regulations issued under Code section 409A.

 

(5)  This instrument shall not permit a subsequent election, unless authorized and agreed to in writing by the Corporation and Grantee; and if under the Plan or this instrument compensation is deferred or the Committee acting pursuant to the Plan, permits under any subsequent election by a Participant a delay in a payment or a change in the form of payment of compensation deferred under this Award Agreement and Award, such subsequent election shall not take effect until at least twelve (12) months after the date on which it is made.  In the case of a subsequent election related to a payment to be made upon Separation from Service of the Grantee, at a Specified Time or pursuant to a Fixed Schedule, or upon a Change in Ownership or Control, the first payment with respect to which such subsequent election is made shall be deferred for a period of not less than five (5) years from the date such payment would otherwise have been made; and any such subsequent election related to a payment at a Specified Time or pursuant to a Fixed Schedule may not be made less than twelve (12) months prior to the date of the first scheduled payment to which it relates.

 

(6)  For purposes of the Plan, this instrument and the Award, and the entitlement to and time of payment of any compensation deferred under this instrument or the Award, the following terms and definitions shall apply:

 

(i)  "Change of Ownership or Control" means to the extent provided by Treasury Regulations issued under Code Section 409A, a change in the 

 

-7-

  

  

ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, which shall be if (i) a Person acquires more than 50% of the  Corporation’s stock; (ii) a Person acquires during a 12-month period at least 30% (or a higher percentage specified under the Plan) of the Corporation’s stock; (iii) a majority of the members of the Board of Directors of the Corporation are replaced during a 12-month period; or (iv) a  Person acquires during a 12-month period at least 40% of the gross fair market value of the Corporation’s assets.

 

(ii)  "Disabled" means that an individual (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii)  is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the individual's employer.

 

(iii)  "Fixed Schedule" means the distribution or payment of compensation deferred under this instrument and award in a fixed schedule of distributions or payments that are determined and fixed at the time the deferral of such compensation is first elected by the Grantee or the Corporation.

 

(iv)  "Specified Employee" means a key employee (as defined in Code section 416(i) without regard to paragraph (5) thereof) of the Corporation.

 

(v)  "Specified Time" means a specified date at which deferred compensation deferred by or for the Grantee pursuant to this instrument and Award is required to be distributed or paid and which is specified at the time of the election of deferral of such deferred compensation.

 

(vi)  “Unforeseeable Emergency” means a severe financial hardship to the participant resulting from an illness or accident of the participant, the participant's spouse, or a dependent (as defined in Code section 152(a)) of the participant, loss of the participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant. As determined under Treasury Regulations under Code section 409A, the amounts distributed with respect to an emergency shall not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the participant's assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

 

8.  Administration of Restricted Unit Award.  The grant of the Award shall be subject to such other rules and requirements as the Committee, in its sole discretion, may determine to be appropriate with respect to administration thereof and the restrictions made applicable to the Grantee and the Restricted Units during the Restricted Period.  This instrument and the rights and obligations of the parties involved, shall be subject to interpretation and construction by the 

 

-8-

  

  

Committee to the same extent and with the same effect as the Committee actions under pertinent provisions of the Plan.  The Grantee shall take all actions and execute and deliver all documents as may from time to time be requested by the Committee in connection with such restrictions and in furtherance hereof.  The Grantee agrees to pay to the Corporation any applicable federal, state, or local income, employment, social security, Medicare, or other withholding tax obligation arising in connection with the grant of the Award to the Grantee; and the Corporation shall have the right, without the Grantee’s prior approval or direction, to satisfy such withholding tax by withholding all or any part of the Common Stock that would otherwise be transferred and delivered to the Grantee, with any shares of Common Stock so withheld to be valued at the Fair Market Value (as defined in the Plan) on the date of such withholding. The Grantee, with the consent of the Corporation, may satisfy such withholding tax by delivery and transfer to the Corporation of shares of Common Stock previously owned by the Grantee, with any shares so delivered and transferred to be valued at the Fair Market Value on the date of such delivery.

 

9.  Adjustment Provisions.  It is understood that, prior to the expiration of the Restricted Period, certain changes in capitalization of the Corporation may occur.  It is, therefore, understood and agreed with respect to changes in capitalization that:

 

(a)  If a stock dividend is declared on the Common Stock of the Corporation, there shall be added to the number of Restricted Units described in paragraph 1 of this instrument, the number of Restricted Units which the Grantee would have been entitled to if the Grantee had been fully vested and the unrestricted owner of the number of Restricted Units then held under the Award granted, but not theretofore received without restriction; provided, however, that the additional Restricted Units shall be subject to all terms and provisions of this instrument (including, without limitation, the restrictions stated in paragraph 5, above), and in making such adjustments, no fractional Restricted Units shall be awarded, and the Grantee shall be entitled to receive only the number of full Restricted Units to which the Grantee may be entitled by reason of such adjustment at the adjusted grant price per share.

 

(b)  In the event of an increase in the outstanding shares of Common Stock of the Corporation, effectuated for the purpose of acquiring properties or securities of another corporation or business enterprise, there shall be no increase in the number of shares of Restricted Units which are the subject matter of the Award evidenced by this instrument as a result of such acquisition.

 

(c)  In the event of an increase or decrease in the number of outstanding shares of Common Stock of the Corporation through recapitalization, reclassification, stock split-ups, consolidation of shares, changes in par value and the like, an appropriate adjustment shall be made in the number of Restricted Units described in paragraph 1 of this instrument, by increasing or decreasing the number of Restricted Units, as may be required to enable the Grantee to acquire the same proportionate stockholdings as the grant of the Award would originally have provided.  Provided, however, that any additional Restricted Units shall be subject to all terms and provisions of this instrument (including, without limitation, the restrictions stated in paragraph 5, above), and that in making such adjustments, no fractional Restricted Units shall be awarded, and the Grantee shall be entitled to receive only the number of full Restricted Units to which the Grantee may be entitled by reason of such adjustment.

 

-9-

  

  

(d)  Except with respect to the time of payment of any compensation deferred under this instrument, to the extent Restricted Units are still restricted and not vested in Grantee at the time of a Change in Control with respect to the Corporation, then pursuant to the provisions of the Plan, they shall become fully vested and completely unrestricted and free and clear of any restrictions stated herein at that time; provided, that if such Change in Control occurs less than six (6) months after the date of the grant of Restricted Units to the Grantee, then Restricted Units shall become fully vested and completely unrestricted and free and clear of any restrictions stated herein at the time of such Change in Control only if the Grantee agrees in writing, if requested by the Corporation in writing, to remain in the employ of the Corporation or a division or subsidiary of the Corporation at least through the date which is six (6) months after the date the grant was made with substantially the same title, duties, authority, reporting relationships, and compensation as on the day immediately preceding the Change in Control.  The provisions of this subparagraph (d) shall be applied in addition to, and shall not reduce, modify, or change any other obligation or right of the Grantee otherwise provided for in paragraph 3, above, concerning the Grantee’s continued employment with the Corporation or the termination thereof.  If the Restricted Units become subject to this subparagraph (d), they shall become fully vested in the Grantee and nonforfeitable.  Such Restricted Units are subject to the provisions of the Plan authorizing the Corporation, or a committee of its Board of Directors, to provide in advance or at the time of a Change in Control for cash to be paid in settlement of the Restricted Units, all subject to such terms and conditions as the Corporation or the Committee, in its sole discretion, may determine and impose.  For purposes of this subparagraph (d), the term “Change in Control” shall have the same meaning as provided in the definition of that term stated in the Plan, including any amendments thereof which may be made from time to time in the future pursuant to the provisions of the Plan, with any amended definition of such term to apply to all events thereafter coming within the amended meaning.

 

10.  Required Grantee Repayment/Reduction Provision.  Notwithstanding anything in the  Plan, the Award or this instrument to the contrary, all or a portion of the Award made to the Grantee  under this instrument  is subject to being called for repayment to the Corporation or reduced in any situation where the Board of Directors of the Corporation or a Committee thereof determines that fraud, negligence, or intentional misconduct by the Grantee  was a contributing factor to the Corporation having to restate all or a portion of its financial statement(s). The Committee may determine whether the Corporation  shall effect any such repayment or reduction : (i) by seeking repayment from the Grantee , (ii) by reducing (subject to applicable law and the terms and conditions of the Plan or any other applicable plan, program, or arrangement) the amount that would otherwise be awarded or payable to the Grantee  under the Award, the Plan or any other compensatory plan, program, or arrangement maintained by the Corporation , (iii) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Corporation's  otherwise applicable compensation practices, or (iv) by any combination of the foregoing. The determination regarding the Grantee’s conduct, and repayment or reduction under this provision shall be within the sole discretion of the Committee and shall be final and binding on the Grantee and the Corporation. The Grantee, in consideration of the grant of the Award, and by the Grantee's execution of this instrument, acknowledges the Grantee's understanding of and agreement to this provision, and hereby agrees to make and allow an immediate and complete repayment or reduction in accordance with this provision in the 

 

-10-

  

  

event of a call for repayment or other action by the Corporation or Committee to effect its terms with respect to the Grantee, the Award and/or any other compensation described herein.

 

11.  Stock Reserved.  The Corporation shall at all times during the term of the Award reserve and keep available such number of shares of its Common Stock as will be sufficient to satisfy the Award issued and granted to Grantee and the terms stated in this instrument, and shall pay all original issue taxes, if any, on the transfer of the Common Stock to the Grantee and all other fees and expenses necessarily incurred by the Corporation in connection therewith.

 

12.  Rights of Shareholder.  Except as otherwise provided in this instrument, the Grantee shall have no rights as a shareholder of the Corporation in respect of the Restricted Units or Common Stock for which the Award is granted; and the Grantee shall not be considered or treated as a record owner of shares of Common Stock with respect to the Restricted Units until the Common Stock is issued to Grantee and no longer subject to any of the restrictions imposed under the Award indicated in this instrument, and Common Stock is actually issued and transferred to Grantee.

 

13.  Entire Agreement.  This instrument contains the entire terms of the Award, and may not be changed orally or other than by a written instrument issued and approved by the Corporation pursuant to the Plan.  This instrument supersedes any agreements or understandings that may have previously existed, and there are no other agreements or understandings, relating to its subject matter.

 

14.  Successors and Assigns.  The Award evidenced by this instrument shall inure to the benefit of and be binding upon the heirs, legatees, legal representatives, successors, and assigns of the parties hereto.

 

The Grantee hereby acknowledges receipt of this instrument, the Notice of Restricted Unit Award Agreement and a copy of the Plan, and accepts the Award under the terms and conditions stated in this instrument, subject to all terms and provisions of the Plan, by signing this instrument in duplicate originals, as of the date first stated above.

 

 

 

	 	 	 	 
	Date 	 	«Officer_Name»	 
	 	 	Grantee	 

 

                                                                       

 

 

 

 

 

 

 

 

-11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00199-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00199-of-00352.parquet"}]]