Document:

ex10_8.htm

EXHIBIT 10.8

 

 

ANNUAL INCENTIVE PLAN

2013 Plan Year

Guidelines

 

KIRBY CORPORATION

 

January 2013

 

  

  

  

 

TABLE OF CONTENTS

	
Introduction

	
2

	  	  
	
The Annual Incentive Plan

	
3

	  	  
	
Plan Objectives

	
3

	  	  
	
Performance Period

	
3

	  	  
	
Eligibility

	
3

	  	  
	
Individual Bonus Targets

	
4

	  	  
	
Bonus Pool

	
4

	  	  
	
Performance Goal; Maximum Awards

	
4

	  	  
	
Additional Performance Measures

	
5

	  	  
	
Business Group Designations and Weighting

	
5

	  	  
	
Performance Standards for Recommended Awards

	
6

	  	  
	
Example Calculation of Recommended Award

	
7

	  	  
	
Administration

	
8

 

  

1

  

 

Introduction

Kirby Corporation (the “Company”) established this 2013 Annual Incentive Plan (the “Plan”) to focus employees on identifying and achieving business strategies that will grow the business and lead to an increase in stockholder value.  The Plan is also intended to reward superior performance by employees and their contributions toward achieving Kirby’s objectives.  This program may be offered, in whole or in part, to wholly owned subsidiaries of the Company, at the Company’s discretion.

Certain aspects of this Plan are complex.  Although these guidelines establish rules for Plan operation, those rules may not work in all cases.  Therefore, the Compensation Committee of the Kirby Board of Directors shall have the discretionary authority to interpret these guidelines to insure that the awards are consistent with the Plan’s purposes and the Company’s interests.  All decisions by the Compensation Committee shall be final and binding.

Unless resolutions of the Compensation Committee expressly provide otherwise, awards granted under the Plan shall constitute performance awards granted under Article IV of the Kirby Corporation 2005 Stock and Incentive Plan (as amended from time to time, the “Stock Plan”), and as such, shall be subject to the terms and provisions of the Stock Plan that apply to such performance awards.

This Plan, or any part thereof, may be amended, modified, or terminated at any time, without prior notice, by written authorization of (i) the Compensation Committee or (ii) the Chief Executive Officer of the Company; provided that the Plan may not be amended or modified in a manner that would cause an award that is intended to satisfy the performance-based compensation exception under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), to fail to satisfy the exception.

 

  

2

  

 

The Annual Incentive Plan

Each award granted under the Plan is an award for total Company and designated Business Group performance.  Awards are generally based on achieving the Company Performance Goal as well as additional Company, Business Group and individual performance objectives.  Once the Performance Goal is reached, participants in the Plan become eligible for a bonus.  The Bonus Pool is calculated as provided in the Plan.  The Compensation Committee may decrease the Maximum Award to any participant based on the recommended award amounts determined as provided in the Plan and/or on individual performance.

Plan Objectives

The Plan has five key objectives:

	
  

	
·

	
Provide an annual incentive plan that drives performance toward objectives critical to creating stockholder value.

	
  

	
·

	
Offer competitive cash compensation opportunities to key Kirby employees.

	
  

	
·

	
Award outstanding achievement by employees who can directly affect Kirby’s results.

	
  

	
·

	
Assist Kirby in attracting and retaining high quality employees.

	
  

	
·

	
Reflect both quantitative and qualitative performance factors in actual bonus payouts.

Performance Period

Performance is measured on a calendar year basis for the Plan.  The Performance Period begins on January 1, 2013 and ends on December 31, 2013.

Eligibility

	
·

	
Generally, managerial employees in salary grades 15 and above, and Kirby Inland Marine Wheelhouse employees classified as Captain, Relief Captain or Pilot, are eligible for participation.  Selection for participation in the Plan is based upon each position’s ability to impact long-term financial results of the Company and designation by management.  Consequently, some employees in positions at salary grades 15 and above might not be included in the Plan, and some employees in positions below salary grade 15 might be included.

 

  

3

  

 

	
·

	
In order to be eligible to receive an award, participants must be employed on the last day of the Performance Period, and on the date bonuses are actually paid for the Performance Period, unless their earlier termination is due to death, normal retirement1 or disability1. If a participant’s employment is terminated after the last day of the Performance Period, but prior to the date of payment, for any reason other than death, normal retirement1 or disability1, the bonus the participant may otherwise have received will be distributed among other  participants receiving annual incentive awards under the Plan.  A “covered employee” as defined for purposes of Section 162(m) (a “Covered Employee”) is not eligible for the reallocated amounts.

	
·

	
Participation in the Plan in one year does not guarantee participation in similar plans in future years.  Participants in the Plan or in similar plans in future years will be notified annually of their selection for participation.

Individual Bonus Targets

Each participant will be assigned a target bonus level defined as a percentage of base salary earned during the Performance Period.  This bonus target is based on competitive market practices, as well as the employee’s ability to impact long-term Company performance.  Market practices will be determined using data from either general industry, the marine transportation industry, or the diesel engine services industry, depending upon the individual position being considered.  The Company’s intent is that salary plus target annual bonus will  provide  competitive market compensation for target performance.

Bonus Pool

The aggregate bonus pool for the Performance Period (the “Bonus Pool”) will be equal to the sum of the recommended bonus amounts determined for each individual participant based on the achievement by the Company of the three additional performance measures as provided in the Plan.  The Company will be obligated to pay out the full amount of the Bonus Pool to eligible participants, subject to the discretion of the Compensation Committee with respect to the allocation of the Bonus Pool among individual participants.  The obligation of the Company to pay out the full amount of the Bonus Pool becomes fixed on the last day of the Performance Period.  The Compensation Committee may determine the amount of the bonus paid to any participant based on the additional performance measures described in the Plan or any other criteria the Compensation Committee deems appropriate in its discretion, provided that in no event will a bonus paid pursuant to the Plan exceed the Maximum Award for any Covered Employee.

Performance Goal; Maximum Awards

The performance goal (the “Performance Goal”) that must be attained in order for any Plan participants to receive a bonus under the Plan is the achievement by the Company of net earnings for 2013 (as shown in Kirby’s audited Consolidated Statement of Earnings for 2013) greater than $1,000,000.  If the Company achieves the Performance Goal, the maximum bonus that each participant may receive under the Plan will be equal to 200% of the individual bonus target established for such participant (for each participant, the “Maximum Award”).  The Compensation Committee in its discretion may reduce the bonus paid to any participant to an amount less than the Maximum Award.

1 Normal retirement or disability as defined for shore based employees in the Company’s Profit Sharing Plan, and as defined for wheelhouse employees in the Vessel Pension Plan

 

  

4

  

 

Additional Performance Measures

In addition to the Performance Goal, the additional performance measures under the plan are:

	
  

	
·

	
EBITDA

	
  

	
·

	
Return on Total Capital

	
  

	
·

	
Earnings per share

Annual performance targets will be established for each measure based on Kirby’s projected budget, and each of the performance measures will have equal weight in calculating the recommended bonus payout for each participant.

	
Measure

	  	
Weight

	  	  	  
	
n  EBITDA (Earnings Before Interest, Taxes,

     Depreciation and Amortization)

	  	
33-1/3 %

	  	  	  
	
n  Return on Total Capital (Earnings before interest and taxes divided by average beginning and ending stockholders’ equity plus long-term debt)

	  	
33-1/3 %

	  	  	  
	
n  Earnings per Share

	  	
33-1/3 %

	  	  	  
	  	  	
100 %

Business Group Designations and Weightings

The following business groups are designated for purposes of the Plan:

 

	
  

	
·

	
Kirby Inland Marine

	
  

	
·

	
Kirby Engine Systems

	
  

	
·

	
United Holdings

	
  

	
·

	
Kirby Offshore Marine

Kirby Ocean Transport Company and Osprey Line, LLC are considered part of the Kirby Inland Marine business group for purposes of the Plan.

In calculating actual versus target performance against the additional performance measures, the recommended award for Business Group employees will be primarily based on Business Group performance, with a defined portion based on Company performance.  The award for Corporate employees will be based on total Kirby performance.  Specific weightings are defined in the following table.

 

  

5

  

	  
	
Calculation of Recommended Awards

	  	  	  	  
	  	
Incentive

Bonus Calculation %

	  	
Kirby (Company)

	  	
Business Group

	  	  	  	  
	
All Corporate Employees

	
100%

	  	
0%

	  	  	  	  
	
Business Group Employees

	
30%

	  	
70%

	  	  	  	  
	
Business Group Presidents (Kirby Inland Marine, Kirby Engine Systems, United Holdings, Kirby Offshore Marine)

	
50%

	  	
50%

	 	 	 	 
	Corporate Executive Vice President, Engine Systems	
30%

	 	
35%/35%*

	 	 	 	 
	
*For EVP, Engine systems, the weightings are 30% Company, 35% Kirby Engine Systems, 35% United Holdings

	  	  	  	  

Performance Standards for Recommended Awards

	
Performance 

Level

	
Definition

	
Relationship to 

Budget

	
% of Target 

Earned

	  	  	  	  
	
Threshold

	
Minimal acceptable 

performance for payout

	
80% of Budget

	
50%

	  	  	  	  
	
Target

	
Expected performance at a 

stretch level

	
100% of Budget

	
100%

	  	  	  	  
	
Maximum

	
Outstanding performance

	
120% of Budget

	
200%

	  	  	  	  

 

  

6

  

 

Example Calculation of Recommended Award

 

	  	
Performance Standards

	
Example Calculation

	
Performance 

Objectives

	
Below Threshold

	
Threshold

	
Target

	
Maximum

	
Assumed 

Actual 

Results (%

 Budget 

Achieved)

	
Percent 

of 

Target 

Award 

Earned

	
Objective 

Weight

	
Weighted 

Percent 

of Target 

Award 

Earned

	
Percent of Target 

Award Earned:

	
0%

	
50%

	
100%

	
200%

	  	  	  	  	  	  	  	  	  
	
EBITDA

(% Budget Achieved)

	
< 80%

	
80%

	
100%

	
120%

	
90%

	
75%

	
33-1/3%

	
25%

	  	  	  	  	  	  	  	  	  
	
Return on Total Capital (% Budget Achieved)

	
< 80%

	
80%

	
100%

	
120%

	
110%

	
150%

	
33-1/3%

	
50%

	  	  	  	  	  	  	  	  	  
	
Earnings per Share (% Budget Achieved)

	
< 80%

	
80%

	
100%

	
120%

	
100%

	
100%

	
33-1/3%

	
33.3%

	  	  	  	  	  	  	  	  	  
	  	  	
Recommended Award as a Percent of Target Award

	
108.3%

	
n

	
As shown in the table, actual performance on each objective results in a corresponding percent of target award earned.

	
n

	
The percents of target award earned for each objective are then multiplied by the weight for the objective, producing a weighted percent of target award earned for each objective.

	
n

	
The weighted percents of target award earned for all three additional performance measures are summed to produce a total percent of target award earned for purposes of calculating the recommended awards for a participant.

	
n

	
The Compensation Committee shall allocate the Bonus Pool among eligible participants.  In allocating the Bonus Pool, the Compensation Committee shall consider, but shall not be bound by, the recommended award for each participant.

	
n

	
The Compensation Committee has discretion to modify the additional performance measures or adjust the calculation of the recommended awards to adjust for acquisitions, divestures, and other material business events.

 

  

7

  

 

Administration

Award Payout

A participant’s final award is paid out in cash within 90 days following the end of the Company’s fiscal year, based on audited financials.  No payment shall be made to a participant who is a Covered Employee until the Compensation Committee certifies that the performance objectives that result in such payment have been achieved.

Eligibility Limitation

Unless otherwise provided for in the Plan, participants must be employed by the Company on the last day of the Performance Period, and on the date bonuses are actually paid for the Performance Period, in order to be eligible to receive a bonus award.

Special Circumstances

Listed below are guidelines addressing payment of awards upon termination and other events.  The Compensation Committee will have the sole authority to resolve disputes related to Plan administration.  Decisions made by the Compensation Committee will be final and binding on all participants.

New Employees.  New employees hired after the beginning of a Performance Period who are selected for participation in the Plan, will receive prorated awards for the then current Performance Period, subject to the Termination of Employment restrictions.

Termination of Employment.  If employment terminates before the end of the full Performance Period, or before the date bonuses are actually paid for the Performance Period, as a result of death, normal retirement2, or disability2, the participant (or the participant’s heirs) will be entitled to receive a prorated award at the end of the Performance Period, based upon actual performance and base wages earned while employed during the Performance Period.

If employment terminates prior to the last day of the Performance Period, or prior to the date bonuses are actually paid for the respective Performance Period, for any reason other then death, normal retirement2, or disability2, the participant will be ineligible to receive an award.

Transfer.  A participant who is transferred between business units of the Company will be entitled to receive a weighted award based upon the time spent at each of the units.  The weighted award is based on a recommended award calculated by adding (1) the participant’s prorated recommended award for time spent at the first business unit, to (2) the participant’s prorated recommended award for time spent at the second business unit3.

Promotions.  A participant who is promoted or reassigned during any Performance Period, and whose bonus target is subsequently increased or decreased, will be eligible to receive a weighted award.  The weighted award will be based on a recommended award calculated by adding (1) the prorated recommended award for service before the promotion or reassignment, to (2) the prorated recommended award for service after the promotion or reassignment3.

 

  

8

  

 

Compensation Committee

The Compensation Committee has the responsibility for the overall governance and administration of the Plan.  In fulfilling its duties, the Compensation Committee will be responsible for interpreting the Plan and will rely on these guidelines in making all determinations that are necessary or advisable for administration of the Plan.

In administering the Plan the Compensation Committee will, on an annual basis:

	 	
·

	
Approve the designation of Business Groups within the Company

 

	
  

	
·

	
Approve the Performance Goal

 

	
  

	
·

	
Approve the additional performance measures and the Threshold, Target and Maximum budget performance levels for all participants for purposes of calculating recommended awards

 

	
  

	
·

	
Approve linkage for participants to Company and Business Group performance

 

	
  

	
·

	
Approve the individual bonus targets for all participants whose salaries are at or above $100,000

 

	
  

	
·

	
Determine at its discretion reductions to the Maximum Awards for participants

 

	
  

	
·

	
Approve the final bonuses to be paid to all participants in the Plan

 

	
  

	
·

	
Certify whether the Performance Goal has been satisfied prior to payment of an award to a Covered Employee.

 

The Compensation Committee may deviate from the guidelines for the Plan, but in no event will a bonus paid pursuant to the Plan exceed the Maximum Award for any Covered Employee.  The Compensation Committee may decrease the bonus payable to any participant below the Maximum Award based on such objective or subjective criteria as the Compensation Committee deems appropriate in its discretion.  The total amount of the bonuses paid to participants pursuant to the Plan may not exceed the amount of the Bonus Pool.  The performance objectives of Covered Employees may only be adjusted as permitted under Section 162(m) or the regulations thereunder.

 

2 Normal retirement or disability as defined for shore based employees in the Company’s Profit Sharing Plan, and as defined for wheelhouse employees in the Vessel Pension Plan.

3 Company and Business Group performance factors are calculated using performance for the entire Performance Period.

 

  

9

  

 

Chief Executive Officer (“CEO”)

The CEO will have primary responsibility for recommending Plan guidelines to the Committee, and for carrying out the administrative duties associated with annual award calculations.  In addition, the Compensation Committee may delegate additional administrative duties to the CEO or any Company officer.  The CEO may make recommendations, subject to Compensation Committee approval, with respect to the award to any participant in the Plan .

Chief Financial Officer (“CFO”)

The CFO will be responsible for calculating performance under the Plan and recommending adjustments to the performance objectives.  In this capacity, the CFO will:

	
  

	
·

	
Provide annual reports to the Compensation Committee and the CEO on each Business Group’s performance at the end of the Company’s fiscal year

 

	
  

	
·

	
Maintain a financial information system that reports results on an estimated quarterly and annual basis

 

	
  

	
·

	
Coordinate with the Company’s auditors to properly recognize any accounting expense associated with awards under the Plan

 

	
  

	
·

	
Provide the VP of Human Resources with the performance results of each Business Group as well as overall Company performance

 

	
  

	
·

	
Calculate new Threshold, Target and Maximum performance objectives as required by the Plan for purposes of determining recommended awards

 

VP of Human Resources

The VP of Human Resources will have primary responsibility for the day-to-day administration of the Plan.  In this capacity, the VP of Human Resources will:

	
  

	
·

	
Develop and recommend Target Award Guidelines and eligible participants for each new Performance Period to the CEO for approval

 

	
  

	
·

	
Coordinate communications with participants, including materials to facilitate understanding the Plan’s objectives and goals

 

	
  

	
·

	
Provide quarterly performance updates to Plan participants

 

	
  

	
·

	
Calculate participants’ recommended awards, using the performance factors provided by the CFO

 

	
  

	
·

	
Process paperwork approving individual award payments

 

  

10

  

 

Business Group Presidents and Vice Presidents

Business Group Presidents and Vice Presidents will:

	
  

	
·

	
Recommend participants for each Performance Period

 

	
  

	
·

	
Coordinate with the CFO to determine any significant changes in business conditions for purposes of reviewing the Threshold, Target and Maximum performance objectives for purposes of calculating recommended awards

 

	
  

	
·

	
Insure that participants are informed of the actual award earned for each Performance Period

 

 

11ex10_1.htm

Exhibit 10.1

 

TREDEGAR CORPORATION

NOTICE OF STOCK UNIT AWARD

You have been granted the following Stock Unit Award by the Executive Compensation Committee of the Board of Directors of Tredegar Corporation (“Tredegar”):

	
Name of Participant:

	
[Name]

	  	  
	
Date of Grant:

	
[___________ __, 2013]

	  	  
	
Number of Stock Units:

	
[Number]

	  	  
	
Vesting:

	
The requirements for earning and vesting in the award are set forth in the attached Stock Unit Award Terms and Conditions.

	  	  
	
Expiration Date:

	
None.

	  	  
	
Transferability:

	
None; other than by will or the laws of descent and distribution as set forth in the attached Stock Unit Award Terms and Conditions.

In addition to the foregoing terms, your Stock Unit Award is subject to all of the terms and conditions contained in the attached Stock Unit Award Terms and Conditions which are incorporated in this Notice of Stock Unit Award by this reference.  If any provision of this Notice of Stock Unit Award is inconsistent with the aforementioned Stock Unit Award Terms and Conditions, the Stock Unit Award Terms and Conditions will control.

Please acknowledge your acceptance of this Stock Unit Award and the attached Stock Unit Award Terms and Conditions by signing and returning one copy of this Notice of Stock Award to Pat Thomas, Tredegar Corporation, 1100 Boulders Parkway, Richmond, Virginia, 23225.

	  	
TREDEGAR CORPORATION

	  	  	  
	  	
By:

	 
	 	 	 
	  	
 

	  	
Participant

	  	  	  
	  	
Date:

	  

  

  

  

TREDEGAR CORPORATION

STOCK UNIT AWARD TERMS AND CONDITIONS

THESE STOCK UNIT AWARD TERMS AND CONDITIONS (“Terms and Conditions”) effective as of the _____ of _______________, 2013, govern the Stock Unit Award made by Tredegar Corporation, a Virginia corporation (the “Company”), to the participant (the “Participant”) named in the Notice of Stock Unit Award to which these Terms and Conditions are attached (the “Grant Notice”), and are made in accordance with and subject to the provisions of the Company’s Amended and Restated 2004 Equity Incentive Plan (the “Plan”).  A copy of the Plan has been made available to Participant.  All terms used in these Terms and Conditions that are defined in the Plan have the same meaning given them in the Plan.

1.           Grant of Stock Unit Award.  In accordance with the Plan, and effective as of the Date of Grant specified in the Grant Notice (the “Date of Grant”), the Company granted to the Participant, subject to the terms and conditions of the Plan and these Terms and Conditions, the number of Stock Units specified in the Grant Notice (the “Stock Units”).  The Participant will earn the Stock Units to the extent that the requirements of Section 2 are satisfied.  The Participant’s interest in the Stock Units that are earned in accordance with Section 2 will Vest, i.e., will become nonforfeitable, to the extent that the requirements of Section 3 are satisfied.  The Company will issue shares of Common Stock in accordance with Section 4 in settlement of the Stock Units, if any, that the Participant earns in accordance with Section 2 and that Vest in accordance with Section 3.

2.             Earning Stock Units.  This Section 2 determines the number of Stock Units that the Participant earns under these Terms and Conditions.

(a)           Threshold Performance.  The Participant will earn one-half of the Stock Units if the EPA for calendar year 2015 exceeds the EPA for calendar year 2012 by at least [$_______________] but less than $$_______________].

(b)           Target Performance.  The Participant will earn all of the Stock Units if the EPA for calendar year 2015 exceeds the EPA for calendar year 2012 by at least [$_______________].

(c)            Change in Control.  The Participant will earn all of the Stock Units if there is a Change in Control before January 1, 2016.

For the purposes of these Terms and Conditions, the EPA for each calendar year shall be determined by the Committee in accordance with the definition and procedures previously adopted by the Committee for purposes of the Company’s incentive awards.

3.             Vesting in Stock Units.  The Participant’s interest in the Stock Units that are earned in accordance with Section 2 shall Vest as provided in this Section 3.  For the avoidance of doubt, only Stock Units that are earned in accordance with Section 2 may Vest under this Section 3.

  

  

  

(a)            Continued Employment.  The Participant’s interest in all of the Stock Units that are earned in accordance with Section 2 shall Vest if the Participant’s employment with the Company and its Affiliates is continuous from the Date of Grant until the date shares of Common Stock are issued in settlement of the Stock Units.

(b)           Change in Control.  The Participant’s interest in all of the Stock Units that are earned in accordance with Section 2 shall Vest on the Control Change Date if the Participant’s employment with the Company and its Affiliates is continuous from the Date of Grant until the Control Change Date.

(c)           Death.  If the Participant dies after 2015, the Participant’s interest in all of the Stock Units that are earned in accordance with Section 2 shall Vest on the date of the Participant’s death if the Participant’s employment with the Company and its Affiliates is continuous from the Date of Grant until the Participant’s death.

4.             Settlement of Stock Units.  The Stock Units will be settled in accordance with this Section 4.

(a)            Committee Certification.  As soon as practicable after 2015 (but no later than March 15, 2016), the Committee will determine the number of Stock Units that are earned under the provisions of Section 2 and that Vest under the provisions of Section 3.  The Committee’s determination shall be set forth in writing, as part of the minutes of a meeting of the Committee, by unanimous consent or otherwise.  Notwithstanding the preceding sentences the Committee’s written determination shall not be required in the case of Stock Units that are earned and that Vest pursuant to the provisions of Section 2(c) and Section 3(b), respectively.

(b)           Issuance of Common Stock.  As soon as practicable after the Committee’s certification under subparagraph (a) (but no later than March 15, 2016), the Committee shall issue shares of Common Stock under the Plan in settlement of the Vested Stock Units earned by the Participant.  The number of shares of Common Stock issued shall equal the number of Stock Units earned by the Participant under the provisions of Section 2 and that Vest under the provisions of Section 3.  Notwithstanding the preceding sentences, shares of Common Stock shall be issued no later than the Control Change Date if the Stock Units are earned pursuant to the provisions of Section 2(c).

(c)            Registration, etc.  Shares of Common Stock issued in settlement of the Stock Units shall be registered in the name of the Participant on the stock transfer books of the Company and may be evidenced by one or more certificates.

(d)           Vesting in Common Stock; Holding Requirement.  The Participant’s interest in the shares of Common Stock issued in settlement of the Stock Units shall be immediately vested.  If the Participant is subject to the Company’s Amended and Restated Executive Stock Ownership Policy (the “Policy”) and is not in compliance with the ownership requirements in the Policy, fifty percent of the Net Shares must be retained by the Participant, i.e., those shares cannot be transferred, until the earlier of (i) the date that the Participant is in compliance with the ownership requirements of the Policy, (ii) the date that the Participant is not subject to the Policy, (iii) a Control Change Date, (iv) the date of the Participant’s death or (v) the date of the Participant’s Normal Retirement.  For the purpose of this Agreement, “Net Shares” means the number of shares of Common Stock received in settlement of the Stock Units minus the number of shares, if any, surrendered by the Participant or retained by the Company to satisfy tax withholding obligations in accordance with Section 9.

  

-2-

  

5.             Forfeiture.  Stock Units that are not earned in accordance with Section 2 shall be forfeited.  Stock Units that are earned in accordance with Section 2 but that do not Vest in accordance with Section 3 shall be forfeited.

6.             Nontransferability.  The Stock Units are nontransferable.  The Participant, by will or by the laws of descent and distribution, may transfer the right to receive any Common Stock to be issued under Section 4(b) in the event of the Participant’s death after the date the Stock Units Vest and before the shares are issued.  Except as provided in Section 4(d) and subject to the requirements of the securities laws, shares of Common Stock issued in settlement of the Stock Units shall be transferable when issued.

7.             Shareholder Rights.  The Participant shall not have any rights as a shareholder of the Company with respect to the Stock Units.  Upon the issuance of shares of Common Stock in settlement of the Stock Units, the Participant shall have all of the rights of a shareholder of the Company with respect to those shares, including the right to vote the shares and to receive, free of all restrictions, all dividends on the shares.

8.             Recoupment Policy.  Participant acknowledges and agrees that the grant of this Stock Unit Award and the Participant’s rights in the Stock Units are subject to the terms and provisions of the Company’s Executive Incentive-Based Compensation Recoupment Policy as in effect on the Date of Grant (the “Policy”).  Participant also agrees that, notwithstanding any other provision of this Agreement, the Company is entitled to recover from the Participant all or part of any benefits or compensation received in connection with this Stock Unit Award and the Stock Units (net of any income or employment taxes paid by the Participant on account of the settlement of the Stock Units or the sale of Common Stock received in settlement of the Stock Units, after giving effect to any tax benefit available to the Participant on account of the recoupment), that are subject to recoupment under the Policy.  Participant acknowledges that a copy of the Policy has been made available to the Participant.

9.             Definitions.  The following definitions shall apply to these Terms and Conditions:

(a)            Control Change Date means the date on which a Change in Control (as defined below) occurs.  If a Change in Control occurs on account of a series of trans­actions, the Control Change Date is the date of the last of such transactions.

(b)            Change in Control means the occurrence of any of the following events:

  

-3-

  

 

(1)           any Person or group (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than a Person who is not an Acquiring Person), at any time becomes the Beneficial Owner of 50% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Voting Securi­ties”), other than (i) through an acquisition of Voting Securities directly from the Company, (ii) as a result of the Company’s repur­chase of Voting Secu­rities if, thereafter, such Benefi­cial Owner pur­chases no additional Voting Securities, or (iii) pur­suant to a Business Combina­tion (as defined below) that does not constitute a Change in Control pursuant to subparagraph 9(b)(3) below;

(2)           Continuing Directors cease to constitute a majority of the members of the Board other than pur­suant to a Business Combination that does not constitute a Change in Control pursuant to subparagraph 9(b)(3) below;

(3)           consummation of a reorganization, merger, share exchange or consoli­dation (a “Business Combination”), in each case, unless immedi­ately following such Business Combina­tion, (i) all or substantially all of the Persons who were the Beneficial Owners, respectively, of the Common Stock and Voting Securities outstanding imme­diately prior to such Business Combination Benefi­cially Own more than 80% of, respec­tively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securi­ties entitled to vote generally in the election of directors, as the case may be, of the corporation result­ing from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combina­tion, of the Common Stock and Voting Securities, as the case may be, (ii) no Person (other than a Person who is not an Acquiring Person) Beneficially Owns 50% or more of, respectively, the then outstanding shares of common stock of the cor­poration resulting from such Business combination or the combined voting power of the then outstanding voting securities of such corporation and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination are Continuing Directors; or

(4)           the shareholders of the Company approve a complete liquidation or dissolution of the Company or the consummation of a sale or other disposition of all or substan­tially all of the assets of the Company, in each case, unless immediately following such liquidation, dissolution, sale or other disposition, (i) more than 80% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then out­standing voting securities of such corporation entitled to vote generally in the election of directors is then Bene­fi­cially Owned by all or substantially all of the Persons who were the Beneficial Owners, respec­tively, of the Common Stock and Voting Securities outstanding immedi­ately prior to such sale or other disposition in substan­tially the same proportion as their ownership, immedi­ately prior to such sale or other disposition, of such Common Stock and Voting Securities, as the case may be, (ii) less than 20% of, respectively, the then out­standing shares of common stock of such corporation and the com­bined voting power of the then outstanding voting securi­ties of such corporation entitled to vote generally in the election of directors is then Beneficially Owned by any Person (other than any Person who is not an Acquiring Person), and (iii) at least a majority of the members of the board of directors of such corporation are Continuing Directors immedi­ately following such sale or disposition.

  

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For purposes of the definition of Change of Control, the terms Acquiring Person, Beneficial Owner, Company, Continuing Director, and Person shall have the same definitions given them in the Amended and Restate Rights Agreement between Tredegar Corporation and National City Bank, dated as of June 30, 2009, as amended.

(c)           Normal Retirement means the voluntary separation by the Participant from the employment of the Company or an Affiliate on or after the date the Participant has reached age sixty-five.

10.           Withholding.  The Participant shall pay the Company any amount of taxes as may be necessary in the opinion of the Company to satisfy tax withholding required under the laws of any country, state, province, city or other jurisdiction, including but not limited to income taxes, capital gains taxes, transfer taxes, and social security contributions.  In lieu thereof, the Company shall have the right to retain, from the shares of Common Stock to be issued under Section 4, the number of shares of Common Stock with Fair Market Value equal to the minimum amount required to be withheld.  In any event, the Company shall have the right to deduct from all amounts paid to a Participant in cash (whether under the Plan or otherwise) any taxes required to be withheld.

11.           No Right to Continued Employment.  The award of the Stock Units does not give Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate his or her employment at any time.

12.           Change in Capital Structure.  The number of Stock Units and the performance criteria in Section 2 shall be adjusted as the Committee determines is equitably required in the event the Company effects one or more stock dividends, stock split-ups subdivisions or consolidations of shares, other similar changes in capitalization or such other events as are described in the Plan or if the Company effects a significant sale or disposition of assets or operations on or before December 31, 2013, or if the Company completes a significant acquisition of assets or operations on or before December 31, 2013.  In consideration of receiving this Stock Unit Award, Participant also agrees that the terms and conditions of other outstanding Plan awards may be adjusted as the Committee determines is equitably required or appropriate in the event the Company, on or before December 31, 2013 effects or completes a change in capitalization or a transaction described in the preceding sentence.

 

  

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13.           Governing Law.  These Terms and Conditions and the Grant Notice shall be governed by the laws of the Commonwealth of Virginia.

14.           Conflicts.  In the event of any conflict between the provisions of the Plan as in effect on the Date of Grant and the provisions of these Terms and Conditions or the Grant Notice, the provisions of the Plan shall govern.  All references herein to the Plan shall mean the plan as in effect on the Date of Grant.

15.           Participant Bound by Plan.  Participant hereby acknowledges that a copy of the Plan has been made available to him or her and agrees to be bound by all the terms and provisions of the Plan.

16.           Binding Effect.  Subject to the limitations stated above and in the Plan, these Terms and Conditions and the Grant Notice shall be binding upon Participant and his or her successors in interest and the successors of the Company.

 

 

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