Document:

exv10w1

 

Form 10-Q
Page 30

Exhibit 10.1

THE TIMBERLAND COMPANY

2009 EXECUTIVE LONG TERM INCENTIVE PROGRAM

(effective 1/1/09)

 

 

Form 10-Q
Page 31

THE TIMBERLAND COMPANY

2009 EXECUTIVE LONG TERM INCENTIVE PROGRAM

     This instrument sets forth the terms of The Timberland Company 2009 Executive Long Term
Incentive Program (capitalized terms used herein are used as defined in Section 2 hereof). The
Program is established under The Timberland Company 2007 Incentive Plan, and amounts paid under the
Program are generally intended to qualify as performance-based compensation under Section 162(m) of
the Internal Revenue Code.

     1. Purpose. The purpose of the Program is (a) to attract, retain and motivate key employees
of outstanding ability; and (b) to provide competitive incentive pay and capital accumulation
opportunities to certain key employees in exchange for their attainment of specified Performance
Goals.

     2. Definitions. The following terms shall have the following meanings unless the context
indicates otherwise.

	 	(a)	 	“Affiliate” shall mean any corporation or other entity that
stands in a relationship to the Company that would result in the Company and
such corporation or other entity being treated as one employer under Section
414(b) and Section 414(c) of the Code, except that in determining eligibility
for the grant of a stock option or other similar equity award by reason of
service for an Affiliate, Sections 414(b) and 414(c) of the Code shall be
applied by substituting “at least 50%” for “at least 80%” under Section
1563(a)(1), (2) and (3) of the Code and Treas. Regs. § 1.414(c)-2; provided,
that to the extent permitted under Section 409A of the Code, “at least 20%”
shall be used in lieu of “at least 50%”; and further provided, that the lower
ownership threshold described in this definition (50% or 20% as the case may be)
shall apply only if the same definition of affiliation is used consistently with
respect to all compensatory stock options or stock awards (whether under the
Plan or another plan). The Company may at any time by amendment provide that
different ownership thresholds (consistent with Section 409A of the Code) apply
but any such change shall not be effective for twelve (12) months.
	 
	 	(b)	 	“Award” shall mean an opportunity to earn, based on performance,
incentive pay in the form of PSUs and PVSOs.
	 
	 	(c)	 	“Award Payout” shall mean the number of PSUs and PVSOs earned by
a Participant as determined by the Committee.
	 
	 	(d)	 	“Board” shall mean the Board of Directors of The Timberland Company.
	 
	 	(e)	 	“Code” shall mean the Internal Revenue Code of 1986, as from time
to time amended.
	 
	 	(f)	 	“Committee” shall mean the Management Development and
Compensation Committee of the Board.
	 
	 	(g)	 	“Company” shall mean The Timberland Company.
	 
	 	(h)	 	“EBITDA” shall mean earnings before taxes, plus depreciation,
amortization, and interest expense, less interest income, adjusted to exclude
the following items: losses from discontinued operations, the cumulative effect
of changes in Generally Accepted Accounting Principles, any one-time charge or
dilution resulting from any acquisition or divestiture, extraordinary items of
loss or expense, and any other unusual or nonrecurring items of loss or expense

 

 

Form 10-Q
Page 32

	 	 	 	including restructuring charges. Any such adjustment shall be made only to the
extent the item is separately identified on the Consolidated Statement of
Income in the Company’s Annual Report on Form 10-K; the Notes to the
Consolidated Financial Statements; or in the Management Discussion & Analysis
section of the Company’s Annual Report on Form 10-K and is objectively
quantifiable in the Company’s accounting records as reviewed by the Company’s
independent auditors. The Committee may exercise discretion to include all or
part of an item of loss or expense.
	 
	 	(i)	 	“Participant” shall mean an employee of the Company or an
Affiliate who is designated by the Committee or a designee of the Committee to
receive an Award.
	 
	 	(j)	 	“Performance Goal” shall mean the threshold, budget, target or
maximum level of performance that must be attained to earn a specified level of
incentive pay.
	 
	 	(k)	 	“Performance Measure” shall mean EBITDA.
	 
	 	(l)	 	“Performance Period” shall mean the PSU Performance Period or the
PVSO Performance Period.
	 
	 	(m)	 	“Plan” shall mean The Timberland Company 2007 Incentive Plan.
	 
	 	(n)	 	“Program” shall mean The Timberland Company 2009 Executive Long
Term Incentive Program.
	 
	 	(o)	 	“PSU” shall mean an unfunded and unsecured promise to deliver one
share of Stock, subject to the conditions and restrictions described herein or
in an Award agreement.
	 
	 	(p)	 	“PSU Performance Period” shall mean the three-year period
commencing January 1, 2009, and shall be the measurement period during which the
attainment of the Performance Goal for PSUs shall be determined.
	 
	 	(q)	 	“PVSO” shall mean an option entitling the holder to acquire
shares of Stock upon payment of the applicable exercise price, subject to the
conditions and restrictions described herein or in an Award agreement.
	 
	 	(r)	 	“PVSO Performance Period” shall mean the one-year period
commencing January 1, 2009, and shall be the measurement period during which the
attainment of the Performance Goal for PVSOs shall be determined.
	 
	 	(s)	 	“Named Executive Officer” shall mean the Chief Executive Officer,
the Chief Financial Officer and the next three highest paid officers of the
Company on the last day of the taxable year, for purposes of the executive
compensation disclosure rules under the Securities Exchange Act of 1934.
	 
	 	(t)	 	“Stock” shall mean Class A Common Stock of the Company, par
value $.01 per share.

     3. Administration. The Program shall be administered by the Committee, in accordance with the
terms of the Plan. The Committee shall have sole and complete discretion with respect to the
exercise of all permissive powers and authority granted to the administrator under the Plan;
provided, however, the Committee may not exercise its discretion to increase the amount of
incentive pay that

 

 

Form 10-Q
Page 33

would otherwise be due a Named Executive Officer upon attainment of a
Performance Goal. All actions, determinations, and decisions of the Committee shall be final,
conclusive, and binding on all parties.

     4. Participation. Participants shall be as determined by the Committee or its designee.

     5. Awards. The type of Award and the number of Awards that can be earned under the Program
upon achievement of a Performance Goal shall be as determined by the Committee or its designee.
Each Award is expressed as a number of PSUs and PVSOs contingent upon the achievement of certain
Performance Goals and subject to certain restrictions set forth herein or in an Award agreement.
Awards may vary according to a Participant’s salary grade or position. Awards for a Named
Executive Officer shall not be changed or modified during a Performance Period to increase the
amount of incentive pay that would otherwise become payable.

     6. Performance Measures and Performance Goals. The Performance Measures and Performance Goals
shall be as determined by the Committee. Performance Goals for a Named Executive Officer shall not
be changed or modified during a Performance Period to increase the amount of incentive pay that
would otherwise become payable.

     7. Award Payout Calculation and Approval.

	 	(a)	 	Award Payouts shall be based on the degree to which a Performance
Goal is attained, with nothing payable upon attainment of the threshold-level
Performance Goal, 50% of the target-level Award payable upon attainment of the
budget-level Performance Goal, 100% of the target-level Award payable upon
attainment of the target-level Performance Goal and 200% of the target-level
Award payable upon attainment of the maximum-level Performance Goal. No Award
Payouts shall be made unless the threshold-level Performance Goal is surpassed.
Award Payouts shall be increased proportionately on a straight-line basis to the
extent the threshold, budget or target Performance Goals are surpassed. In no
event shall an Award Payout exceed the maximum-level Award.
	 
	 	(b)	 	The Company’s independent public accountants shall audit the
Company’s Award Payout calculations following the close of the Performance
Period.
	 
	 	(c)	 	The Committee shall approve or disapprove the Award Payouts for
all Participants following completion of the independent audit. The Committee
may reduce a Participant’s Award Payout (or the Award Payouts to all or some
Participants) if such modification would better serve the purpose of the Plan.

     8. Award Payment. For each PSU earned, as determined in accordance with Section 7 one share
of Stock shall be delivered to the Participant as soon as practicable and not later than March 31,
2012. For each PVSO earned, as determined in accordance with Section 7 the Participant’s right to
exercise the option shall begin to vest as soon as practicable in accordance with Section 9 and not
later than March 31, 2010.

     9. Vesting of PVSOs. PVSOs shall vest in three equal annual installments following the date
of Committee approval following the end of the PVSO Performance Period.

     10. Agreements. Each award of PSUs and each grant of PVSOs shall be evidenced by an Award
agreement, specifying restrictions on the transfer and vesting of such securities and including
such other terms, conditions and restrictions as the Committee shall determine.

     11. Employment. Except as otherwise determined by the Committee, to be eligible to receive an
Award Payout, a Participant must be employed by the Company or an Affiliate on the date

 

 

Form 10-Q
Page 34

such Award
Payout is made, in the case of PSUs, and the date vesting commences, in the case of PVSOs.
Receiving an Award or an Award Payout shall not give any Participant the right to be retained in
the employment of the Company or an Affiliate, or affect the right of the Company or an Affiliate
to discharge or discipline a Participant.

 

 

Form 10-Q
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IN WITNESS WHEREOF, The Timberland Company has caused this document to be executed by its duly
authorized officer effective as of the 1st day of January, 2009.

	 	 	 	 	 
	 	THE TIMBERLAND COMPANY

 	 
	 	By:  	/s/ Sidney W. Swartz
 	 
	 	 	Sidney W. Swartz 	 
	 	 	Chairmanexv10w2

 

Form 10-Q
Page 36

Exhibit 10.2

THE TIMBERLAND COMPANY

2009 EXECUTIVE LONG TERM INCENTIVE PROGRAM

PERFORMANCE STOCK UNIT AGREEMENT

     The Timberland Company, a Delaware corporation (the “Company”), hereby grants, effective as of
<<Date of Grant>>,                                          (the “Participant”)                            
              performance stock units
(“PSUs”), which PSUs if earned pursuant to the 2009 Executive Long Term Incentive Program (the
“2009 LTIP”) will be paid in the form of shares of the Company’s Class A Common Stock on the basis
of one share for each stock unit. The PSUs are subject to the terms and conditions of the 2007
Incentive Plan, the 2009 LTIP and the additional terms and conditions delivered herewith. Such
additional terms and conditions are incorporated by reference herein and made a part hereof.

     Subject to the terms and conditions of the 2007 Incentive Plan, the 2009 LTIP and the
additional terms and conditions delivered herewith, the PSUs shall be earned as follows:

	 	 	 
	                    

	 	PSUs upon achievement of a Performance Goal (as defined in the 2009 LTIP) as
determined

                           by the Committee (as defined in the 2009 LTIP)

	 	 	 	 	 	 	 
	 	 	THE TIMBERLAND COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	     
	 
	 	 	 	 	 	 
	 	 	ACKNOWLEDGED AND RECEIVED	 	 

	 	 	 	 	 	 	 	 	 
	Date:

     

	 	     
 

	 	     
	 	     
 

Participant’s Signature
	 	     

ADDITIONAL TERMS AND CONDITIONS OF AGREEMENT ARE ATTACHED HERETO

 

 

Form 10-Q
Page 37

PERFORMANCE STOCK UNIT AGREEMENT

ADDITIONAL TERMS AND CONDITIONS

     The <<Date of Grant>> Award of Performance Stock Units (“PSUs”) is made pursuant
to the 2009 Executive Long Term Incentive Program (the “2009 LTIP”) under the Company’s 2007
Incentive Plan (the “2007 Plan” and together with the 2009 LTIP, the “Plan Documents”). The Award
is subject to the restrictions and conditions set forth below and in such Plan Documents, which are
incorporated herein by reference with the same effect as if set forth herein in full. All terms
used herein shall have the same meaning as in the Plan Documents, except as otherwise expressly
provided.

          In consideration of the Company’s awarding PSUs, the Participant hereby agrees with the
Company as follows:

     1. The PSUs shall not be sold, transferred, pledged, assigned or otherwise encumbered or
disposed of except as provided below and in the Plan Documents. Once a stock certificate (or other
evidence of ownership) has been delivered to the Participant in payment of the PSUs pursuant to
Paragraph 2, the Participant will be free to sell the shares of Stock evidenced thereby, subject to
applicable requirements of federal and state securities laws.

     2. The performance period for determining the number of PSUs earned under the 2009 LTIP shall
commence on January 1, 2009 and end on December 31, 2011 (the “Performance Period”). Subject to
any acceleration or termination of the PSUs as set forth in the 2007 Plan, the PSUs shall be paid
in the form of Stock, to the extent the performance goals have been attained as set forth in the
2009 LTIP, provided that the Participant has been continuously employed with the Company through
the date on which an Award Payout is made.

     3. The Participant expressly acknowledges that the delivery of Stock in payment of the PSUs
will give rise to “wages” subject to withholding and agrees that his or her rights hereunder are
subject to him or her paying to the Company, by the delivery of shares of Stock acquired hereunder
(or by such other means as may be acceptable to the Administrator in its discretion), all taxes
required to be withheld in connection with such vesting.

     4. This Award of PSUs does not give the Participant any right to be retained in the employ of
the Company or any of its subsidiaries, nor any other right not expressly provided for herein or in
the Plan Documents.

     5. In order to manage and administer the plans under the Plan Documents, the Administrator
will need to process Participant’s personal data (electronically or otherwise), including but not
limited to communicating such data to the Company’s group of companies and any third party
administrator. By signing the Performance Stock Unit Agreement, the Participant acknowledges
receipt of this notification and acknowledges that he/she understands that he/she may object to
portions of the processing of his/her personal data. However, such objection may affect
participation in the 2009 LTIP and result in exclusion from participation in the 2009 LTIP.

     6. By executing the Performance Stock Unit Agreement, the Participant represents that he or
she accepts this Award of PSUs, agrees to the terms hereof, and acknowledges that he or she has
received a copy of the Plan Documents and is familiar with their terms and provisions.

     7. The Performance Stock Unit Agreement shall be governed by and construed in accordance with
the laws of the State of New Hampshire.

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