Document:

Exhibit
10.7

 

BEST
BUY CO., INC.

LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT

Award Date: September 17, 2009

 

I.      The Award and the Plan. 
As of the Award Date set forth above and in the Award Notification
accompanying this Performance Award (the “Award Date”), Best Buy Co., Inc.
(“Best Buy”) grants to you (a) an option to purchase the number of Shares
of Best Buy common stock set forth in such Award Notification (the “Option”) at
the option price per Share set forth in such Award Notification; and/or (b) the
number of restricted Shares of Best Buy common stock (the “Restricted Shares”)
set forth in such Award Notification, all on the terms and conditions contained
in this Long-Term Incentive Program Award Agreement (this “Agreement”) and the
Best Buy Co., Inc. 2004 Omnibus Stock and Incentive Plan, as amended (the “Plan”).  Capitalized terms not defined in the body of
this Agreement are defined in the attached Addendum or in the Plan.  Except as otherwise stated, all references to
“Sections” or “Articles” refer to Sections or Articles of this Agreement.

 

II.   Terms of
Option Grant.  This Article II applies to you only if your Award Notification
includes the grant of an Option.

 

2.1      Duration, Vesting and
Exercisability of Option.  You may not exercise any portion
of the Option before the first anniversary of the Award Date; and the Option
expires on the last day of the 10-year period beginning on the Award Date (the “Expiration
Date”).  You may exercise the Option in
cumulative installments of 25% each, on and after each of the first four
anniversaries of the Award Date.  The
entire Option will vest earlier and become exercisable upon your Qualified
Retirement, Disability or death or if, within 12 months following a Change of
Control, your employment is terminated without Cause or you terminate your
employment for Good Reason, but only if your employment terminates in any such
case at a time when no member of the Company Group is entitled to terminate
your employment for Cause.  The Option
may only be exercised by you during your lifetime, and may not be assigned or
transferred other than by will or the laws of descent and distribution.

 

2.2      Exercise
and Tax Withholding.  The Option may
be exercised in whole or in part by written notice to Best Buy (through the Plan
administrator or other means as shall be specified by Best Buy from
time-to-time) stating the number of Shares to be purchased under the Option and
the method of payment.  The notice must
be accompanied by payment in full of the exercise price for all Shares
designated in the notice.  Payment of the
exercise price may be made by cash, check, delivery of previously owned Shares
having a Fair Market Value on the date of exercise that is equal to the
exercise price, or withholding of Shares that would otherwise be issued upon
such exercise having a Fair Market Value on the date of exercise that is equal
to the exercise price, or a combination thereof.  The Option is a Non-Qualified Stock Option
that is not eligible for treatment as a qualified or incentive stock option for
federal income tax purposes.  You are
liable for any federal and state income or other taxes applicable upon the
grant or exercise of the Option, your receipt of any dividends or other
distributions (whether cash, stock, or otherwise) paid on the underlying
Shares, or any disposition of the underlying Shares; and you acknowledge that
you should consult with your own tax advisor regarding the applicable tax
consequences.  Upon exercise of the
Option, Best Buy will withhold from the Shares that would otherwise be
delivered to you a number of Shares having a Fair Market Value equal to the
amount of all applicable taxes required by Best Buy to be withheld or collected
upon the exercise of the Option, unless your notice of exercise indicates your
desire to satisfy such withholding obligations through your payment to Best Buy
of cash or your delivery of previously acquired Shares, and such cash or Shares
are delivered to Best Buy promptly thereafter. 
You have no rights in the Shares subject to the Option until such Shares
are received by you upon exercise of the Option.

 

2.3      Limited
Exercise Rights after Retirement, Disability, Death or other Termination of
Employment.  Your employment
with the Company Group may be terminated by your employer at any time for any
reason (or no reason).  Subject to the
forfeiture provisions of Article IV and the exceptions in paragraph (d) of
this Section 2.3:

 

(a)        If your employment with the Company Group is
terminated by your employer without Cause, or if you resign or otherwise
voluntarily terminate your employment with the Company Group, you will have 60
days after the date of your termination to exercise the Option, to the extent
the Option had become vested as of your termination date.

 

 

(b)        Upon your Qualified Retirement
from the Company Group, you will have one year after the effective date of your
retirement to exercise the Option, to the extent the Option had become vested as of
your termination date.

 

(c)        If you die while employed by
the Company Group, the representative of your estate or your heirs will have
one year after the date of your death to exercise the Option, to the extent the Option had become
vested as of the date of your death.  If you become Disabled while employed with
the Company Group, you will have one year after the effective date of such
classification to exercise the Option, to the extent the Option had become vested as of
your termination date.

 

(d)        In no case, however, may the
Option be exercised after the Expiration Date. 
The Option may not be exercised following termination of your employment
with the Company Group for Cause, or if your employment terminated for any
reason at a time when any member of the Company Group was entitled to terminate
your employment for Cause.

 

III.  Terms
of Restricted Share Grant.  This Article III applies to you only if your Award Notification
includes a grant of Restricted Shares.

 

3.1      Restricted
Period.  Until your Restricted Shares
become vested as provided below, they are subject to the restrictions described
in Section 3.2 (the “Restrictions”) during the period (the “Restricted
Period”) beginning on the Award Date and ending four years from the Award Date,
subject to the provisions of Section 3.3. 
Except as otherwise provided in Section 3.3 and Article IV,
the Restrictions will lapse and the Restricted Shares will become transferable
and non-forfeitable in cumulative installments as follows:

 

	
  1st Anniversary
  of Award Date

  	
   

  	
  25

  	
  %

  
	
  2nd Anniversary
  of Award Date

  	
   

  	
  25

  	
  %

  
	
  3rd Anniversary
  of Award Date

  	
   

  	
  25

  	
  %

  
	
  4th Anniversary
  of Award Date

  	
   

  	
  25

  	
  %

  

 

Upon vesting of each 25% installment, the Restricted
Shares that have become vested will be delivered to you within 30 days, in the
form of either book-entry registration or a stock certificate.

 

3.2      Restrictions.  The Restricted Shares are subject to
forfeiture or recovery at any time pursuant to Article IV and, during the
Restricted Period, are also subject to the following Restrictions:

 

(a)        The Restricted Shares are
subject to forfeiture to Best Buy as provided in this Agreement and the Plan.

 

(b)        During the Restricted Period, you may not sell,
assign, pledge or otherwise transfer the Restricted Shares (or any interest in
or right to the Restricted Shares), other than by will or the laws of descent
and distribution, and any such attempted transfer will be void.

 

3.3      Effect
of Retirement, Disability, Death or other Termination of Employment.  Your employment with the Company Group may be
terminated by your employer at any time for any reason (or no reason).  Subject to the forfeiture provisions of Article IV
and the exception in paragraph (d) of this Section 3.3:

 

(a)        If your employment with the
Company Group is terminated by reason of your Qualified Retirement or death, or
you become Disabled before the fourth anniversary of the Award Date, the
Restrictions will lapse and Restricted Shares that are unvested as of the date
of termination will become non-forfeitable and transferable.

 

(b)        If, before the fourth
anniversary of the Award Date, and within 12 months following a Change in
Control, your employment with the Company Group is terminated by your employer
without Cause or you terminate your employment with the Company Group for Good
Reason, the restrictions will lapse and the Restricted Shares will become
non-forfeitable and transferable as of the date of such termination.

 

(c)        If your employment with the
Company Group is terminated before the fourth anniversary of the Award Date,
for any other reason, your rights to all unvested Restricted Shares will be
immediately and irrevocably forfeited.

 

(d)        If your employment with the
Company Group is terminated for any reason before the fourth anniversary of the
Award Date, at a time when any member of the Company Group is entitled to
terminate your 

 

2

 

employment
for Cause, your rights to all unvested Restricted Shares will be immediately
and irrevocably forfeited.

 

3.4      Limitation
of Rights Regarding Shares.  Until issuance of the Restricted Shares, you
will not have any rights of a shareholder with respect to the Restricted
Shares.  Upon issuance of the Restricted
Shares, you will, subject to the Restrictions and Article IV, have all of
the rights of a shareholder with respect to the Restricted Shares, unless and
until the Restricted Shares are forfeited or recovered by Best Buy under this
Agreement or the Plan, except that:

 

(a)        you will not have the right
to vote the Restricted Shares during the Restricted Period; and

 

(b)        any dividends or other
distributions (whether in cash, stock, or otherwise) paid on Restricted Shares
during the Restricted Period will be held by Best Buy until the end of the
Restricted Period for those Shares, at which time Best Buy will pay you all
such dividends and other distributions, less any applicable tax withholding
amounts payable with respect to the lapse of Restrictions or otherwise related
to the Restricted Shares.  However, if
any of the Restricted Shares are forfeited as described in Section 3.3 of
this Agreement, then all rights to any such payments that relate to the
forfeited Shares will also be forfeited.

 

3.5      Income
Taxes.  You are liable for any federal
and state income or other taxes applicable upon the lapse of the Restrictions
on any Restricted Shares, your receipt of any dividends or other distributions
(whether cash, stock, or otherwise) paid on the Restricted Shares, and your
subsequent disposition of any Restricted Shares that have become vested; and
you acknowledge that you should consult with your own tax advisor regarding the
applicable tax consequences.  Upon the
lapse of Restrictions on any Restricted Shares, Best Buy will withhold from
those Restricted Shares the number of Shares having a Fair Market Value equal
to the amount of all applicable taxes required by Best Buy to be withheld upon
the lapse of the Restrictions on those Restricted Shares.

 

IV.   Restrictive
Covenant and Forfeiture Remedies.  By accepting
this Award, you agree to the restrictions and agreements contained in Section 4.1
(the “Restrictive Covenant”), and also Section 4.4; and you agree that the
Restrictive Covenant and the forfeiture remedies described in Section 4.2
and 4.4 are reasonable and necessary to protect the legitimate interests of the
Company Group.

 

4.1      Confidentiality
Restrictive Covenant.  In consideration of the Award, you acknowledge
that the Company Group operates in a competitive environment and has a
substantial interest in protecting its Confidential Information, and you agree,
during your employment with the Company Group and thereafter, to maintain the
confidentiality of the Company Group’s Confidential Information and to use such
Confidential Information for the exclusive benefit of the Company Group.

 

4.2      Forfeiture for Violation of Restrictive Covenant. 
In consideration of the terms of the Award and in recognition of the
fact that you will receive Confidential Information during your employment with
the Company Group, you agree to be bound by the Restrictive Covenant set forth
in Section 4.1 and agree that, if you violate any provision of the
Restrictive Covenant, then, notwithstanding any other provision of this
Agreement, (a) any unvested portion of the Option, (b) all unvested
Restricted Shares (the “Forfeited Shares”), and (c) all unpaid dividends
or other distributions on such Forfeited Shares shall be forfeited and any
rights thereto shall become null and void.

 

4.3      Committee Discretion.  You may be
released from your Restrictive Covenant under this Article IV only if, and
to the extent that, the Committee (or its duly appointed agent) determines in
its sole discretion that such action is in the best interests of the Company
Group.

 

4.4      Impact of Restatement of
Financial Statements Upon Award.

 

(a)        Forfeiture
or Recovery of Award.  If any of
Best Buy’s financial statements are required to be restated as a result of any
errors, omissions or fraud in which you were involved, the Committee may (in
its sole discretion, but acting in good faith) direct that all or a portion of
the Award under this Agreement, with respect to any fiscal year of Best Buy for
which the financial results are negatively affected by such restatement, shall
be forfeited or recovered from you.  The
amount to be forfeited or recovered from you shall be the amount by which the value
of the Award under this Agreement exceeded the amount that would have been
payable to you had the financial statements been initially filed as restated,
or any greater or lesser amount (including, but not limited to, the entire
Award) that the Committee may determine. 
In no event shall the amount to be forfeited or recovered by Best Buy be
less than the amount required to be forfeited or recovered as a matter of
law.  The Committee shall determine
whether Best 

 

3

 

Buy
shall effect any such forfeiture or recovery (i) by seeking repayment from
you pursuant to this Article IV; (ii) by reducing (subject to
applicable law and the terms and conditions of the applicable plan, program or
arrangement) the amount that would otherwise be payable to you under this
Agreement and any other compensatory plan, program or arrangement maintained by
the Company Group; (iii) by
requiring that you forfeit all or any portion of the Option, the underlying
Shares and the Restricted Shares (either before or after the exercise of the
Option or the lapse of the Restrictions), in which case any rights thereto
shall become null and void, (iv) 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 to
you in accordance with the otherwise applicable compensation practices of the
Company Group, or (v) by any combination of the foregoing.

 

(b)        Right of
Set-Off.  By accepting this Agreement,
you consent to a deduction from any amounts any member of the Company Group
owes you from time to time (including amounts owed to you as wages or other
compensation, fringe benefits or vacation pay, as well as any other amounts
owed to you by any member of the Company Group), to the extent of the amounts
you owe any member of the Company Group under this Section 4.4.  Whether or not the Company Group elects to
make any set-off in whole or in part, if the Company Group does not recover by
means of set-off the full amount you owe, calculated as set forth above, you
agree to immediately pay the unpaid balance to Best Buy.

 

4.5      Partial Invalidity.  If any
portion of this Article IV is determined by any court of competent
jurisdiction to be unenforceable in any respect, it shall be interpreted to be
valid to the maximum extent for which it reasonably may be enforced, and
enforced as so interpreted, all as determined by such court in such
action.  You acknowledge the uncertainty
of the law in this respect and expressly stipulate that this Agreement is to be
given the construction that renders its provisions valid and enforceable to the
maximum extent (not exceeding its express terms) possible under applicable law.

 

V.    General Terms and Conditions.

 

5.1      Employment
and Terms of Plan.  This
Agreement does not guarantee your continued employment nor alter the right of
any member of the Company Group to terminate your employment at any time.  This Award is granted pursuant to the Plan
and is subject to its terms.  In the
event of any conflict between the provisions of this Agreement and the Plan,
the provisions of the Plan will govern.  By your acceptance of this Award,
you acknowledge receipt of a copy of the Prospectus for the Plan and your
agreement to the terms and conditions of the Plan and this Agreement.

 

5.2      Jurisdiction and Venue.  You and Best
Buy agree that the state and federal courts located in the State of Minnesota
shall have personal jurisdiction over the parties to this Agreement, and that
the sole venues to adjudicate any dispute arising under this Agreement shall be
the District Courts of Hennepin County, State of Minnesota and the United
States District Court for the District of Minnesota; and each party waives any
argument that any other forum would be more convenient or proper.

 

5.3      Costs of Enforcement.  In addition
to any other remedy to which any member of the Company Group is entitled under
this Agreement, you agree that the Company Group shall be entitled to recover
from you any attorney’s fees, costs or disbursements reasonably incurred by the
Company Group to enforce any provision of this Agreement, or to otherwise
defend itself from any claim brought by you or any of your beneficiaries
against any member of the Company Group under any provision of this Agreement.

 

 

BEST BUY CO., INC.

 

4

 

ADDENDUM TO

BEST
BUY CO., INC.

LONG-TERM INCENTIVE PROGRAM AWARD AGREEMENT

Award Date: September 17, 2009

 

Capitalized terms not defined in
the body of this Agreement are defined in the Plan or, if not defined therein,
will have the following meanings:

 

“Affiliate” is generally defined
in the Plan, but will mean, solely for purposes of the definitions of “Change
of Control” and “Person” in this Addendum, a company controlled directly or
indirectly by Best Buy, where “control” will mean the right, either directly or
indirectly, to elect a majority of the directors or other governing body
thereof without the consent or acquiescence of any third party.

 

“Beneficial Owner” will have the
meaning defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, or any successor provision.

 

“Cause” for termination of your
employment with the Company Group shall, for purposes of this Agreement, is
deemed to exist if you:

 

	
  (I)

  	
   

  	
  are convicted of or
  enter a plea of guilty or nolo contendere
  to: (a) a felony, (b) a crime of moral turpitude, dishonesty,
  breach of trust or unethical business conduct, or (c) any crime
  involving the business of the Company Group;

  
	
   

  	
   

  	
   

  
	
  (II)

  	
   

  	
  in the performance of
  your duties for the Company Group or otherwise to the detriment of the
  Company Group, engage in: (a) dishonesty that is harmful to the Company
  Group, monetarily or otherwise, (b) willful or gross misconduct,
  (c) willful or gross neglect, (d) fraud, (e) misappropriation,
  (f) embezzlement, or (g) theft;

  
	
   

  	
   

  	
   

  
	
  (III)

  	
   

  	
  willfully disobey the
  directions of the Board acting within the scope of its authority;

  
	
   

  	
   

  	
   

  
	
  (IV)

  	
   

  	
  willfully fail to
  comply with the policies and practices of the Company Group;

  
	
   

  	
   

  	
   

  
	
  (V)

  	
   

  	
  fail to devote
  substantially all of your business time and effort to the Company Group;

  
	
   

  	
   

  	
   

  
	
  (VI)

  	
   

  	
  are adjudicated in any
  civil suit, or acknowledge in writing in any agreement or stipulation, to
  have committed any theft, embezzlement, fraud, or other intentional act of
  dishonesty involving any other person;

  
	
   

  	
   

  	
   

  
	
  (VII)

  	
   

  	
  are determined, in the
  sole judgment of the Board or any individual or individuals the Board
  authorizes to act on its behalf, to have engaged in a pattern of poor
  performance;

  
	
   

  	
   

  	
   

  
	
  (VIII)

  	
   

  	
  are determined, in the
  sole judgment of the Board or any individual or individuals the Board
  authorizes to act on its behalf, to have willfully engaged in conduct that is
  harmful to the Company Group, monetarily or otherwise;

  
	
   

  	
   

  	
   

  
	
  (VIII)

  	
   

  	
  breach any material
  provision of this Agreement (including but not limited to Section 4.1,
  concerning Confidential Information) or any other agreement between you and
  any member of the Company Group; or

  
	
   

  	
   

  	
   

  
	
  (IX)

  	
   

  	
  engage in any activity intended to benefit any
  entity at the expense of the Company Group or intended to benefit any
  competitor of the Company Group.

  

 

All determinations and other decisions relating to Cause (as defined
above) for termination of your employment shall be within the sole discretion
of the Board or any individual or individuals the Board authorizes to act on
its behalf; and shall be final, conclusive and binding upon you.  In the event that there exists Cause (as
defined above) for termination of your employment, the member of the Company
Group that employs you may terminate 

 

A-1

 

your employment and this Agreement immediately, upon written
notification of such termination for Cause, given to you by the Board or any
individual or individuals the Board authorizes to act on its behalf.

 

A “Change of Control” will be
deemed to have occurred solely for purposes of this Agreement, if the
conditions set forth in any one of the following paragraphs are satisfied after
the Award Date:

 

(I)            any
Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of Best Buy representing 50% or more of the combined voting power of
Best Buy’s then outstanding securities excluding, at the time of their original
acquisition, from the calculation of securities beneficially owned by such
Person, any securities acquired directly from Best Buy or its Affiliates or in
connection with a transaction described in clause (a) of paragraph III
below; or

 

(II)           individuals
who at the Award Date constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of Best Buy) whose appointment
or election by the Board or nomination for election by Best Buy’s shareholders
was approved or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the Award Date or
whose appointment, election or nomination for election was previously so
approved or recommended, cease for any reason to constitute a majority thereof;
or

 

(III)         there
is consummated a merger or consolidation of Best Buy or any Affiliate with any
other company, other than (a) a merger or consolidation which would result
in the voting securities of Best Buy outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of Best Buy or any Affiliate, at
least 50% of the combined voting power of the voting securities of Best Buy or
such surviving entity or parent thereof outstanding immediately after such
merger or consolidation, or (b) a merger or consolidation effected to
implement a recapitalization of Best Buy (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly or indirectly of securities
of Best Buy representing 50% or more of the combined voting power of Best Buy’s
then outstanding securities; or

 

(IV)         the
shareholders of Best Buy approve a plan of complete liquidation of Best Buy or
there is consummated an agreement for the sale or disposition by Best Buy of
all or substantially all Best Buy’s assets, other than a sale or disposition by
Best Buy of all or substantially all of Best Buy’s assets to an entity, at
least 50% of the combined voting power of the voting securities of which are
owned by shareholders of Best Buy in substantially the same proportions as
their ownership of Best Buy immediately before such sale; or

 

(V)           the Board
determines in its sole discretion that a change in control of Best Buy has
occurred.

 

(VI)         Notwithstanding
the foregoing, a “Change in Control” will not be deemed to have occurred by
virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the common stock
of Best Buy immediately before such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of Best Buy immediately
following such transaction or series of transactions.

 

“Company Group” will mean,
collectively, Best Buy and its Affiliates.

 

“Confidential Information” will
mean any and all information in whatever form, whether written, electronically
stored, orally transmitted or memorized pertaining to:  trade secrets; customer lists, records and
other information regarding customers; price lists and pricing policies,
financial plans, records, ledgers and information; purchase orders, agreements
and related data; business development plans; products and technologies;
product tests; manufacturing costs; product or service pricing; sales and
marketing plans; research and development plans; personnel and employment
records, files, data and policies (regardless of whether the information pertains
to you or other employees of the Company Group); tax or financial information;
business and sales methods and 

 

A-2

 

operations; business
correspondence, memoranda and other records; inventions, improvements and
discoveries; processes and methods; and business operations and related data
formulae; computer records and related data; know-how, research and
development; trademark, technology, technical information, copyrighted
material; and any other confidential or proprietary data and information which
you encounter during employment, all of which are held, possessed and/or owned
by the Company Group and all of which are used in the operations and business
of the Company Group.  Confidential
Information does not include information which is or becomes generally known
within the Company Group’s industry through no act or omission by you;
provided, however, that the compilation, manipulation or other exploitation of
generally known information may constitute Confidential Information.

 

“Disabled” will mean that you
either (a) have qualified for long term disability payments under the long
term disability plan of the Company Group member then employing you; or (b) are
unable to perform the essential functions of your position (with or without
reasonable accommodation) with any such Company Group member due to a physical
or mental impairment resulting from your illness, pregnancy (if you are a
woman) or injury, and such inability to perform continues for at least six consecutive
months.  If any such Company Group member
does not have a long term disability plan in effect at such time, you will be
deemed disabled for the purposes hereof if you would have qualified for long
term disability payments under Best Buy’s long term disability plan had you
then been an employee of Best Buy.

 

“Good Reason” will
mean the occurrence of any of the following events following a Change in
Control, except for the occurrence of such an event in connection with your
death, the termination of your employment with the Company Group by your
employer (or any successor company or affiliated entity then employing you for
Cause, or any termination of your employment for Disability:

 

(I)            the
assignment of employment duties or responsibilities that are not substantially
comparable or greater in responsibility and status to the employment duties and
responsibilities held by you immediately before the Change in Control;

 

(II)           a
material reduction in your base salary as in effect immediately before the Change
in Control; or

 

(III)         being
required to work in a location more than 50 miles from your office location
immediately before the Change in Control, except for requirements of temporary
travel on the Company Group’s business to an extent substantially consistent
with your business travel obligations immediately before the Change in Control.

 

“Person” is generally defined in
the Plan, but solely for purposes of the definition of “Change of Control” in
this Addendum, will have the meaning defined in Sections 3(a)(9) and 13(d) of
the Securities Exchange Act of 1934, as amended, except that such term will not
include (i) Best Buy or any of its Affiliates, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of Best Buy
or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the shareholders of Best Buy in
substantially the same proportions as their ownership of stock of Best Buy.

 

“Qualified Retirement” will mean
any termination of your employment with the Company Group that occurs on or
after your 60th birthday, at a time when no member of the Company Group is
entitled to discharge you for Cause, so long as you have served the Company
Group continuously for at least the three-year period immediately preceding
that termination.

 

A-3exhibit10-12_033110.htm

Exhibit 10.12

 

 

 

CFS Bancorp, Inc. 2010 Performance-based Cash Incentive Plan

 

The Compensation Committee of the Board of Directors (the “Committee”) approved a Performance-based Cash Incentive Plan (Cash Incentive Plan) for key employees including the Company’s named executive officers (NEOs).  The Cash Incentive Plan provides an opportunity for key employees to earn a cash bonus for 2010 based on the achievement of corporate, business unit, and/or individual performance objectives at threshold, target or maximum levels, as established by the Committee.

 

If the employee achieves the applicable performance objectives, the cash bonus earned is expected to be paid in February 2011.  In addition, to receive a bonus, the employee must be employed by CFS Bancorp, Inc. or Citizens Financial Bank, or a successor or assign, on the date the cash bonus is paid.  Notwithstanding the foregoing, if the Committee determines, in its sole discretion, that CFS Bancorp, Inc. is not profitable for fiscal year ending December 31, 2010, then no bonus will be paid.

 

The Compensation Committee will have full power and discretion to (a) select the employees who are eligible to receive cash bonuses under the Cash Incentive Plan, (b) determine the amounts of the bonuses to be paid, (c) determine whether the performance objectives have been achieved by any employee, and (d) construe and interpret this Plan.  Any payments under this Plan are subject to the Company’s Compensation Clawback Policy.

 

The Cash Incentive Plan may be amended, modified or terminated at any time in the discretion of the Compensation Committee.  Neither this Cash Incentive Plan nor a bonus opportunity under this Plan constitutes an agreement, understanding or commitment by CFS Bancorp, Inc. or Citizens Financial Bank for continued employment with respect to any employee.

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