Document:

ex10-2.htm

FREEPORT-McMoRan COPPER & GOLD INC.

NOTICE OF GRANT OF

NONQUALIFIED STOCK OPTIONS AND

RESTRICTED STOCK UNITS

UNDER THE

2006 STOCK INCENTIVE PLAN

[Form for Non-Management and Advisory Director Grants]

Pursuant to the terms of the Freeport-McMoRan Copper & Gold Inc. Amended and Restated 2006 Stock Incentive Plan (the “Plan”), __________________________ (the “Director”), [a director/an advisory director] of Freeport-McMoRan Copper & Gold Inc. (the “Company”), was granted effective June 1, 20__ (the “Grant Date”), an option to purchase shares of the common stock of the Company (the “Common Stock”) and restricted stock units as hereinafter set forth.  Defined terms not otherwise defined herein shall have the meanings set forth in Section 2 of the Plan.

 

1. Subject to all the terms and conditions of the Plan, the Director, as a matter of separate inducement and agreement in connection with [his/her] services as a director or advisory director of the Company, and not in lieu of any salary or other compensation for the Director’s services, is granted, on the terms and conditions set forth in the Plan, the option to purchase from the Company all or any part of 10,000 shares of Common Stock (the “Option”) at an exercise price of $_____________ per share and 2,000 restricted stock units (“RSUs”).

 

2. Unless the exercisability of the Option or vesting of the RSUs is accelerated pursuant to the terms of the Plan or this Notice, and subject to any other terms of the Plan, the Option granted hereunder shall become exercisable and the RSUs shall vest in installments as follows:

 

	

 

 

Date

	

Number of Shares

Subject to the Option to

Become Exercisable

	

 

Number of RSUs

To Vest

	
 

June 1, 20__

	
 

2,500

	
 

500

	
June 1, 20__

	
2,500

	
500

	
June 1, 20__

	
2,500

	
500

	
June 1, 20__

	
2,500

	
500

The Option granted hereunder shall terminate on June 1, 20__ unless terminated earlier as provided in the Plan or this Notice, and any portion of the Option not exercised on or before such date or such earlier termination, whichever shall first occur, may not thereafter be exercised.

 

3. Additional Terms and Conditions of Options.

 

3.1 In order to exercise the Option, the holder of the Option shall give notice to the Company or its designee in the manner determined by the Company, specifying the

 

  

  

  

 

number of shares to be purchased and accompanied by payment in full of the aggregate exercise price thereof, as provided in the Plan.

 

3.2   (a) For purposes of this Section 3.2, if the Director continues to provide services to the Company or a subsidiary of the Company pursuant to a consulting or other arrangement, the Director will not “cease to be an Eligible Individual” until such time as the Director no longer provides such services.

 

(b) If the Director ceases to be an Eligible Individual for any reason other than death, disability or retirement from the Board, the Options granted hereunder shall terminate except that any Options, to the extent then exercisable, may be exercised by the holder thereof within three months after the Director ceases to be an Eligible Individual, but not later than the termination date of the Option.

 

(c) If the Director ceases to be an Eligible Individual by reason of the Director’s disability or retirement from the Board, the Options granted hereunder shall terminate except that any Options, to the extent then exercisable or exercisable within one year thereafter, may be exercised by the holder thereof within three years after the Director ceases to be an Eligible Individual, but not later than the termination date of the Option.

 

(d) If the Director dies while serving as an Eligible Individual, the Options granted hereunder shall terminate, except that any Options, to the extent exercisable by the holder thereof at the time of such death or exercisable within one year thereafter, may be exercised until the third anniversary of the date of such death, but not later than the termination date of the Option, by the holder thereof, the Director’s estate, or the person designated in the Director’s last will and testament, as appropriate.

 

(e) If the Director dies after ceasing to be an Eligible Individual, the Options granted hereunder shall terminate, except that any Options, to the extent still outstanding and exercisable by the holder thereof at the time of such death, may be exercised until the third anniversary of the date the Director ceased to be an Eligible Individual, but not later than the termination date of the Option, by the holder thereof, the Director’s estate, or the person designated in the Director’s last will and testament, as appropriate.

 

4. Additional Terms and Conditions of Restricted Stock Units.

 

4.1 Subject to the terms, conditions, and restrictions set forth herein, each RSU represents the right to automatically receive from the Company, on the respective scheduled vesting date for such RSU, one share (a “Share”) of Common Stock, free of any restrictions and all cash, securities and property credited to or deposited in the Director’s Dividend Equivalent Account (as defined in Section 4.3) with respect to such RSU.

 

4.2 Except as provided in Section 4.3, an RSU shall not entitle the Director to any incidents of ownership (including, without limitation, dividend and voting rights) (a) in any Share until the RSU shall vest and the Director shall be issued a Share to which such RSU relates nor (b) in any cash, securities or property credited to or deposited in a Dividend Equivalent Account related to such RSU until such RSU vests.

 

  

2

  

 

4.3 From and after the Grant Date of an RSU until the issuance of the Share payable in respect of such RSU, the Director shall be credited, as of the payment date therefor, with (a) the amount of any cash dividends and (b) the amount equal to the Fair Market Value of any Shares, securities, or other property distributed or distributable in respect of one share of Common Stock to which the Director would have been entitled had the Director been a record holder of one share of Common Stock at all times from the Grant Date to such issuance date (a “Property Distribution”).  All such credits shall be made notionally to a dividend equivalent account (a “Dividend Equivalent Account”) established for the Director with respect to all RSUs granted with the same vesting date.  All credits to a Dividend Equivalent Account for the Director shall be notionally increased by the Account Rate (as hereinafter defined), compounded quarterly, from and after the applicable date of credit until paid in accordance with the terms of the Plan and this Notice.  The “Account Rate” shall be the prime commercial lending rate announced from time to time by JPMorgan Chase Bank or by another major national bank headquartered in New York, New York designated by the Committee.  The Committee may, in its discretion, deposit in the Participant’s Dividend Equivalent Account the securities or property comprising any Property Distribution in lieu of crediting such Dividend Equivalent Account with the Fair Market Value thereof.  For purposes of this Notice, “Fair Market Value” of a share of Common Stock or any other security shall be the closing per share or security sale price on the Composite Tape for New York Stock Exchange-Listed Stocks on the date in question or, if there are no reported sales on such date, on the last preceding date on which any reported sale occurred.  If on the date in question the shares of Common Stock or other securities in question are not listed on such Composite Tape, the fair market value shall be the closing sale price on the New York Stock Exchange on such date or, if no sales occurred on such date, on the last previous day on which a sale on the New York Stock Exchange is reported.

 

4.4   (a)           Except as otherwise set forth in Section 4.4(b), all unvested RSUs, all amounts credited to the Director’s Dividend Equivalent Account with respect to such RSUs, and all securities and property comprising Property Distributions deposited in such Dividend Equivalent Account with respect to such RSUs shall immediately be forfeited on the date the Director ceases to be an Eligible Individual, unless the Director continues providing services to the Company pursuant to a consulting or other arrangement.

 

(b) If the Director ceases to be an Eligible Individual by reason of the Director’s death, retirement or disability (as defined in Section 4.4(d)), all unvested RSUs and all amounts credited to or property deposited in the Director’s Dividend Equivalent Account with respect to such RSUs shall vest as of the date the Director ceases to be an Eligible Individual.

 

(c) For purposes of this Section 4.4, if the Director continues to provide services to the Company or a subsidiary of the Company pursuant to a consulting or other arrangement, the Director will not “cease to be an Eligible Individual” until such time as the Director no longer provides such services.

 

(d) For purposes of this Section 4.4, a “disability” shall have occurred if the Director is (i) 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) 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 

 

  

3

  

 

income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Director’s employer.

 

5. Change of Control.

 

5.1 (a)           For purposes of this Notice, “Change of Control” means (capitalized terms not otherwise defined will have the meanings ascribed to them in paragraph (b) below):

 

(1) the acquisition by any Person together with all Affiliates of such Person, of Beneficial Ownership of the Threshold Percentage or more; provided, however, that for purposes of this Section 5.1(a)(1), the following will not constitute a Change of Control:

 

(A) any acquisition (other than a “Business Combination,” as defined below, that constitutes a Change of Control under Section 5.1(a)(3) hereof) of Common Stock directly from the Company,

 

(B) any acquisition of Common Stock by the Company or its subsidiaries,

 

(C) any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation or other entity controlled by the Company, or

 

(D) any acquisition of Common Stock pursuant to a Business Combination that does not constitute a Change of Control under Section 5.1(a)(3) hereof; or

 

(2) individuals who as of the effective date of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of this Agreement whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board, unless such individual’s initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or any other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or

 

(3) the consummation of a reorganization, merger or consolidation (including a merger or consolidation of the Company or any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, immediately following such Business Combination:

 

(A) the individuals and entities who were the Beneficial Owners of the Company Voting Stock immediately prior to such Business Combination have direct or indirect Beneficial Ownership of more than 50% of the then outstanding shares of common stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Company, and

 

  

4

  

 

(B) no Person together with all Affiliates of such Person (excluding the Company and any employee benefit plan or related trust of the Company or any subsidiary of the Company) Beneficially Owns 30% or more of the then outstanding shares of common stock of the Company or 30% or more of the combined voting power of the then outstanding voting securities of the Company, and

 

(C) at least a majority of the members of the board of directors of the Company were members of the Incumbent Board at the time of the execution of the initial agreement, and of the action of the Board, providing for such Business Combination; or

 

(4) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

 

(b) As used in this Section 5, the following terms have the meanings indicated:

 

(1) Affiliate:  “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another specified Person.

 

(2) Beneficial Owner:  “Beneficial Owner” (and variants thereof), with respect to a security, means a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (A) the power to vote, or direct the voting of, the security, and/or (B) the power to dispose of, or to direct the disposition of, the security.

 

(3) Company Voting Stock:  “Company Voting Stock” means any capital stock of the Company that is then entitled to vote for the election of directors.

 

(4) Majority Shares:  “Majority Shares” means the number of shares of Company Voting Stock that could elect a majority of the directors of the Company if all directors were to be elected at a single meeting.

 

(5) Person:  “Person” means a natural person or entity, and will also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including without limitation a partnership, limited partnership, joint venture or other joint undertaking) for the purpose of acquiring, holding, or disposing of a security, except that “Person” will not include an underwriter temporarily holding a security pursuant to an offering of the security.

 

(6) Threshold Percentage:  “Threshold Percentage” means 30% of all then outstanding Common Stock.

 

5.2 Upon a Change of Control, or immediately prior to the closing of a transaction that will result in a Change of Control if consummated, all outstanding Options granted pursuant to this Notice shall automatically become fully vested and exercisable.  If a Change of Control also qualifies as a change in the ownership of the Company, a change in the effective control of the Company or a change in the ownership of a substantial portion of the 

 

  

5

  

 

assets of the Company under Section 409A of the Internal Revenue Code and any related implementing regulations or guidance, then all outstanding RSUs shall become fully vested.

 

5.3 No later than 30 days after a Change of Control, the Committee, acting in its sole discretion without the consent or approval of any Participant (and notwithstanding any removal or attempted removal of some or all of the members thereof as directors or Committee members), may act to effect one or more of the alternatives listed below, which may vary among individual Participants and which may vary among Options and RSUs held by any individual Participant:

 

(a) require that all outstanding Options be exercised on or before a specified date (before or after such Change of Control) fixed by the Committee, after which specified date all unexercised Options and all rights of the Director thereunder shall terminate,

 

(b) make such equitable adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change of Control (provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary),

 

(c) provide for mandatory conversion or exchange of some or all of the outstanding Options held by the Director as of a date, before or after such Change of Control, specified by the Committee, in which event such Options shall be deemed automatically cancelled and the Company shall pay, or cause to be paid, to the Director an amount of cash per share equal to the excess, if any, of the Change of Control Value of the shares subject to such Option, as defined and calculated below, over the per share exercise price of such Options or, in lieu of such cash payment, the issuance of Common Stock or securities of an acquiring entity having a Fair Market Value equal to such excess, or

 

(d) provide that thereafter, upon any exercise of an Option that entitles the holder to receive Common Stock, the holder shall be entitled to purchase or receive under such Option, in lieu of the number of shares of Common Stock then covered by such Option, the number and class of shares of stock or other securities or property (including, without limitation, cash) to which the holder would have been entitled pursuant to the terms of the agreement providing for the reorganization, share exchange, merger, consolidation or asset sale, if, immediately prior to such Change of Control, the holder had been the record owner of the number of shares of Common Stock then covered by such Option.

 

5.4 For the purposes of any conversions or exchanges under paragraph (c) of Section 5.3, the “Change of Control Value” shall equal the amount determined by whichever of the following items is applicable:

 

(a) the per share price to be paid to holders of Common Stock in any such merger, consolidation or other reorganization,

 

(b) the price per share offered to holders of Common Stock in any tender offer or exchange offer whereby a Change of Control takes place, or

 

(c) in all other events, the Fair Market Value of a share of Common Stock, as determined by the Committee as of the date determined by the Committee to be the date of conversion or exchange.

 

  

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5.5 In the event that the consideration offered to stockholders of the Company in any transaction described in this Section 5 consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered that is other than cash.

 

6. The Option and the RSUs granted hereunder are not transferable by the Director otherwise than by will or by the laws of descent and distribution.

 

7. All notices hereunder shall be in writing, and if to the Company, shall be delivered personally to the Secretary of the Company or mailed to its principal office, 333 North Central Avenue, Phoenix, Arizona 85004, addressed to the attention of the Secretary; and if to the Director, shall be delivered personally or mailed to the Director at the address on file with the Company.  Such addresses may be changed at any time by notice from one party to the other.

 

8. The terms of this Notice shall bind and inure to the benefit of the Director, the Company and the successors and assigns of the Company and, to the extent provided in the Plan and in this Notice, the legal representatives of the Director.

 

9. This Notice is subject to the provisions of the Plan.  The Plan may at any time be amended by the board of directors of the Company (the “Board”), and this Notice may at any time be amended by the Committee provided that no amendment to this Notice that materially impairs the benefits provided to the Director hereunder may be made without the Director’s consent.  Subject to any applicable provisions of the Company’s by-laws or of the Plan, any applicable determinations, orders, resolutions or other actions of the Committee shall be final, conclusive and binding on the Company and the holder of the Option and the RSUs granted hereunder.

 

FREEPORT-McMoRan COPPER & GOLD INC.

                    By:                                                                                    

  

7valspar102983_ex10-1.htm - Generated by SEC Publisher for SEC Filing

 

Exhibit 10.1

 

THE VALSPAR CORPORATION

KEY EMPLOYEE ANNUAL BONUS PLAN

 

(as amended through June 8, 2010)

 

PURPOSE:

The purpose of The Valspar Corporation Key Employee Annual Bonus
Plan (the “Plan”) is to more closely align the goals and motivation of management
with those of other Valspar shareholders and to provide key personnel with a
long-term capital appreciation opportunity. This purpose is accomplished by
providing cash bonuses based on performance; granting options to acquire
Valspar stock; and granting the opportunity to earn Restricted Stock and
Restricted Stock Units based on performance.  This amended and restated Plan is
effective for Fiscal Years ending after 2010.

 

DEFINITIONS:

Any capitalized terms used in this Plan, but not defined herein,
shall have the meanings set forth in the Omnibus Equity Plan.

 

“Cash Bonus Target Amount” shall mean the target bonus amount
established for a Participant for a particular Fiscal Year as set forth in
Section 2 below. 

 

“Earned Cash Bonus Amount” shall mean the amount of the actual
cash bonus earned for the Fiscal Year based on performance, as set forth in
Section 2 below.

 

“Earned Restricted Amount” shall mean the dollar amount resulting
from the percentage of the Restricted Target Amount earned by a Participant for
the Fiscal Year based on performance, as set forth in Section 3 below.

 

“Employee” shall mean each person who is an employee of Valspar or
any Subsidiary which term shall include both full and part-time employees but
shall not include independent contractors providing services to Valspar or its
Subsidiaries.

 

“Fiscal Year” shall mean the period corresponding with each of the
fiscal years of Valspar.

 

“LTI Target Value” shall mean the target long term incentive value
established by the Committee for each Participant for each Fiscal Year,
determined by the Committee as provided herein.

 

“Omnibus Equity Plan” shall mean the 2009 Omnibus Equity Plan of
Valspar.

 

“Participant” shall mean an Employee whom the Committee has
determined to permit to become a Participant, who remains a Participant
pursuant to the provisions of Section 1 of the Plan.

 

“Plan” shall mean The Valspar Corporation Key Employee Annual
Bonus Plan, as set forth herein and as amended from time to time.

 

“Plan Administrator” shall mean the person or persons designated
as such from time to time by the Committee. If no person is designated as the
Plan Administrator, the Plan Administrator shall be the Secretary of Valspar.

 

“Restricted Target Amount” shall mean the target dollar amount
established for a Participant for the award of Restricted Stock and Restricted
Stock Units for a particular Fiscal Year as set forth in Section 3 below.

 

“Share Value” means the average closing price of a share of Common
Stock on the New York Stock Exchange for the ten (10) trading days prior to the
date of an award of Restricted Stock or Restricted Stock Units.

 

“Termination for Cause” shall mean the termination of employment
with Valspar as a result of an illegal act, gross insubordination or willful
violation of a Valspar policy by an Employee.

 

“Valspar” shall mean The Valspar Corporation, a Delaware
corporation, with its principal offices in Minneapolis, Minnesota.

 

 

 

PLAN:

 

                1.             Participants:   Before the first day of each
Fiscal Year, the Committee shall determine the Employees who will be
Participants under the Plan for that Fiscal Year and the LTI Target Value for
each Participant. The Committee may also designate newly hired or promoted
Employees as Participants during the Fiscal Year. A Participant will cease
being a Participant upon the earlier of (i) his/her termination of employment
with Valspar for any reason or (ii) a determination by the Committee that
he/she shall no longer be a Participant. 

 

                2.             Cash Bonus Determination and
Amount:

 

                (a)           Each Participant will be eligible
for the opportunity to earn a cash incentive bonus for the Fiscal Year. The
amount of the cash bonus will be determined consistent with the provisions of
the Omnibus Equity Plan governing Performance Awards.

 

                (b)           The Cash Bonus Target Amount will be
calculated as a percentage of the Participant’s base salary earned in the
Fiscal Year. The Earned Cash Bonus Amount will be a percentage of the Cash
Bonus Target Amount, to be determined based on the performance of the
Participant and/or Valspar for such Fiscal Year.

 

                (c)           Notwithstanding the fact that the
Earned Cash Bonus Amount is not determined until after the end of each Fiscal
Year, a person who is a Participant on the last day of a Fiscal Year shall be
entitled to his/her Earned Cash Bonus Amount for such Fiscal Year, even if he
or she is not a Participant on the date the Earned Cash Bonus Amount is
determined, unless he or she was the subject of a Termination for Cause.

 

                3.             Restricted Stock and
Restricted Stock Units:

 

                (a)           Each Participant will be eligible to
earn an award of Restricted Stock and Restricted Stock Units (including
Dividend Equivalents) for each Fiscal Year, to be awarded during the first
fiscal quarter of the following Fiscal Year. Each Participant will be notified
of the number of shares of Restricted Stock and the number of Restricted Stock
Units awarded to him/her as soon as practicable after the date of the award.
Terms of the Restricted Stock and Restricted Stock Units are described in
Exhibit A.

 

                (b)           The amounts of the awards of
Restricted Stock and Restricted Stock Units to a Participant for any Fiscal
Year will be determined as follows:  (i) the Committee will identify specific
performance targets, with the Restricted Target Amount for the award equal to fifty
percent (50%) of the Participant’s LTI Target Value; (ii) performance targets
for the Restricted Target Amount may, but need not, be the same targets as
those used for the cash incentive bonus calculation described in
Section 2(b); (iii) the awards of Restricted Stock and Restricted
Stock Units (including Dividend Equivalents) will be considered Performance
Awards and will be determined consistent with the provisions of the Omnibus
Equity Plan governing Performance Awards; (iv) on or before the award date for
the Restricted Stock and Restricted Stock Units, the Committee will determine
the Participant’s Earned Restricted Amount for the Fiscal Year; (v) the number
of shares of Restricted Stock covered by the award will be one-half of the
Participant’s Earned Restricted Amount, divided by the Share Value; (vi) the
number of Restricted Stock Units covered by the award will be one-half of the
Participant’s Earned Restricted Amount, divided by the Share Value; and (vii)
the award will include Dividend Equivalents on the Restricted Stock Units,
payable quarterly, as described in Exhibit A.  Notwithstanding the foregoing,
the Committee may elect to change the proportions of the Earned Restricted
Amount represented by Restricted Stock and Restricted Stock Units for any
Participant for a Fiscal Year, to the extent permitted under Section 3(d)
or 3(e).

 

                (c)           A person who is a Participant on the
last day of a Fiscal Year and has a Retirement before the award date of the
Restricted Stock and Restricted Stock Units for the Fiscal Year will be
entitled to receive his or her awards of Restricted Stock and Restricted Stock Units during the first quarter
of the following Fiscal Year; and any awards of Restricted Stock Units shall
nevertheless be payable after the award date under the Retirement payment terms
described in Exhibit A.  In any other case, if a
Participant is no longer an Employee at the time of such award date, the
Participant shall not receive the awards of Restricted Stock and
Restricted Stock Units.

 

 

 

                (d)           At any time before the beginning of any Fiscal Year for which awards of Restricted Stock and Restricted Stock Units may be made to a Participant, the Committee may elect, in its sole discretion, to award the Participant’s Earned Restricted Amount for that Fiscal Year in the form of (i) 100% Restricted Stock, (ii) 100% Restricted Stock Units with accompanying Dividend Equivalents, or (iii) any combination of Restricted Stock and Restricted Stock Units (including Dividend Equivalents); provided that the aggregate Share Value of the Restricted Stock and Restricted Stock Units shall be equal to the Participant’s Earned Restricted Amount; and provided further that the Restricted Stock and the Restricted Stock Units will have the vesting and payment terms described in Exhibit A.

 

                (e)           At any time before the awards of Restricted Stock are made to a Participant for a Fiscal Year, the Committee may elect, in its sole discretion, to (1) award to the Participant cash in lieu of all or any portion of the Restricted Stock component of the Earned Restricted Amount or (2) otherwise change the form in which the Earned Restricted Amount will be paid, to the extent such a change is consistent with (or is exempt from) the requirements of Code Section 409A and the regulations promulgated thereunder.

 

                4.             Nonstatutory Stock Options:

 

                (a)           For each Fiscal Year, each Participant will be granted a nonstatutory stock option under the Omnibus Equity Plan. The number of shares of Common Stock included in the stock option for each Participant will be calculated so that the fair value of the stock option as determined by the Committee will be equal to fifty percent (50%) of the LTI Target Value for that Participant for that Fiscal Year.

 

                (b)           Each Participant will be notified of the number of shares subject to the stock option and the exercise price per share as soon as practicable after the date of the grant. Terms of the stock options are described in Exhibit A.

 

                5.             Amendments: The Board of Directors of Valspar or the Committee may, at any time and without further action on the part of the shareholders of Valspar, terminate this Plan or make such amendments as it deems advisable and in the best interests of Valspar; provided, however, that no such termination or amendment shall, without the consent of the Participant, materially adversely affect or impair the right of the Participant with respect to an Earned Cash Bonus Amount or Earned Restricted Amount that the Participant has already earned or an award of Restricted Stock and Restricted Stock Units or a grant of a nonstatutory stock option or other benefits that the Participant has already received under the Plan; provided, further, that no such amendment shall accelerate or defer the time or schedule of the vesting or payment of the Restricted Stock, Restricted Stock Units, Dividend Equivalents or any other compensation that may be paid under this Plan, except to the extent such acceleration or deferral is permitted or complies with (or is exempt from) the requirements of Code Section 409A and the regulations promulgated thereunder.

 

 

 

 

 

 

 

	
EXHIBIT A

OFFICERS

	
Restricted Stock Terms and Conditions

	
Vesting/Forfeiture

	
Ÿ

	
The Restricted Stock vests on the third anniversary of the award date, or earlier upon death, Disability, Retirement* or Change in Control. The Restricted Stock will be forfeited if the Participant’s employment with Valspar terminates prior to vesting.

	
Retirement*

	
Ÿ

	
100% vested, subject to forfeiture or repayment if the Participant violates his or her three-year non-compete agreement before the Restricted Stock would normally have vested (the third anniversary of the award date).

	
Death and Disability 

	
Ÿ

	
100% vested

	
Change in Control 

	
Ÿ

	
100% vested

	
Restricted Stock Units (RSUs) Terms and Conditions

	
Rights Under RSUs and Dividend Equivalents

	
Ÿ

	
The RSUs represent the right to receive future cash payments equal to the fair market value of the equivalent number of shares of Common Stock on the vesting date. If the Participant remains employed on a dividend record date for Common Stock, Dividend Equivalents are paid in cash on the regular quarterly dividend payment dates, but no later than 60 days after that record date (unless payment is delayed for six months after a Retirement).

	
Vesting/Forfeiture

	
Ÿ

	
The RSUs vest on the third anniversary of the award date, or earlier upon death, Disability, Retirement* or Change in Control. The RSUs will be forfeited if the Participant’s employment with Valspar terminates prior to vesting.

	
Retirement*

	
Ÿ

	
100% vested*, subject to forfeiture or repayment if the Participant violates his or her three-year non-compete agreement before the award would normally have vested (the third anniversary of the award date).

	
Death and Disability 

	
Ÿ

	
100% vested

	
Change in Control 

	
Ÿ

	
100% vested

	
Payment of RSUs

	
Ÿ

	
RSUs are paid in cash on or within 30 days after vesting at the end of three years; within 60 days in the case of Death, Disability or Change in Control; and six months after Retirement*.

	
Stock Option Terms and Conditions

	
Option Term

	
Ÿ

	
10 years

	
Vesting

	
Ÿ

	
33 1/3% per year, fully exercisable three years after date of grant

	
Retirement*

	
Ÿ

	
100% vested

	
 

	
Ÿ

	
fully exercisable for remainder of option term, provided the Participant does not violate his or her non-compete agreement

	
Death and Disability 

	
Ÿ

	
100% vested

	
 

	
Ÿ

	
1 year to exercise, not to exceed original option term

	
Change in Control

	
Ÿ

	
100% vested for remainder of option term

	
Termination 

	
Ÿ

	
per cent vested at time of termination

	
 

	
Ÿ

	
30 days to exercise, not to exceed original option term

	
Termination For Cause

	
Ÿ

	
forfeit unexercised options

 

* Retirement is defined in Section 11.4 of the Omnibus Equity Plan as the termination of employment with the Company or a Subsidiary for any reason other than death, Disability or Termination for Cause at any time after the Participant has attained the age of 55 if the Participant has executed a three-year non-compete agreement.  The award agreement for RSUs for any Participant may include additional restrictions or requirements for a qualifying Retirement. If RSUs become vested upon a Retirement that qualifies under this Plan, the RSUs (and any interim Dividend Equivalents) are paid six months after the Retirement date; provided that the Retirement is a “separation from service” under Code Section 409A.

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