(a) | Cash Severance. The cash severance payment shall be calculated as a multiple of the sum of (i) the Executive Officer’s annual base salary as in effect immediately before termination of employment, and (ii) (x) if the Executive Officer has received three full fiscal year annual cash bonuses at his or her seniority level as of immediately prior to the Qualifying Termination, the average of the actual annual cash bonuses paid to the Executive Officer under the applicable annual bonus plan for the three full fiscal years most recently completed prior to the Qualifying Termination (including for such purpose the amount of any annual bonus in respect of a completed fiscal year that remains unpaid as of the Qualifying Termination) or (y) if the Executive Officer has not received three full fiscal year annual cash bonuses at his or her seniority level as of immediately prior to the Qualifying Termination, his or her target annual cash bonus opportunity under the applicable bonus plan for the year of termination. |
(i) | For an Executive Officer whose highest title held within 90 days before termination was Chief Executive Officer, the multiple shall be two; and |
(ii) | For an Executive Officer whose highest title held within 90 days before termination was Executive 1, the multiple shall be 1.5. For avoidance of doubt the Executive 1 must also have been a Section 16 Officer or a Participating ELT Member; and |
(iii) | For an Executive Officer whose highest title held within 90 days before termination was Executive 2, the multiple shall be one. For avoidance of doubt the Executive 2 must also have been a Section 16 Officer or a Participating ELT Member. |
(b) | Pro-Rata Annual Bonus. The pro-rata annual bonus payment shall be equal to the product of (i) the number of days worked by the Executive Officer in the fiscal year in which termination occurs through the date of termination, divided by 365, multiplied by (ii) the Executive Officer’s annual cash bonus under the applicable bonus plan for the year of termination, determined based on actual performance on the applicable metrics, and to discretionary adjustments permitted under the applicable plan, as certified by the Committee following the end of the fiscal year. |
(c) | Long-Term Incentive Awards. |
(i) | Each separately-granted Award held by an Executive Officer at the time of his or her Qualifying Termination that vests solely based on service will receive pro-rata vesting based on the number of full months worked during the vesting period applicable to such Award. Pro-rata vesting, where applicable, shall be applied separately to each separately-granted Award in its entirety and thus shall take into account amounts previously vested. |
(ii) | Each separately-granted Award held by an Executive Officer at the time of his or her Qualifying Termination that vests solely based on performance will be deemed earned as of the end of the applicable performance period based on actual results as certified by the Committee, and subject to discretionary adjustments permitted under the applicable plan, if any, and will receive pro-rata vesting as described in the preceding sentence and application of the pro-rata vesting to the entire separately-granted Award, taking into account amounts, if any, previously vested. |
(iii) | Vesting for Awards not specifically addressed above, including Awards subject to both time-based and performance-based vesting, may be illustrated in Appendix A, as amended from time to time. Awards not specifically illustrated in Appendix A will be pro-rated by analogy to those illustrations. |
(iv) | Vested stock options (including those becoming vested pursuant to Paragraph 2(c)(i), (ii), or (iii)) may be exercised until one year after the later of (A) termination of employment or (B) if under the terms of the option, performance after termination of employment will be applied to determine the amount of pro ration, the first business day following the date the applicable performance is certified; but in any case no later than the applicable expiration date. |
(v) | Pro-rata vesting is based on the number of full calendar months worked during the vesting period applicable to such Award, counting the month of grant as one full month (i.e., January 15-March 31 is three months). |
(vi) | The provisions of this Paragraph 2(c) shall be deemed incorporated into the Award agreement for the applicable Award, except to the extent it would be deemed an amendment violating Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”) by accelerating payment or settlement of an Award, in which case the Award shall become vested as described above, but settlement shall not be accelerated, and settlement shall occur as initially provided in the Award agreement. If an Executive Officer ceases to be an Executive Officer (including, in the case of a Participating ELT Member, by ceasing to be a member of the Executive Leadership Team) prior to termination of employment, the provisions of this Paragraph 2(c) shall be deemed removed from the Award agreement for the applicable Award on the 91st day after the individual ceases to be an Executive Officer, without the need for consent of the grantee, except to the extent such removal would be deemed an amendment violating Section 409A, in which case the provisions of this Paragraph 2(c) shall remain in effect with respect to such Award. |
(d) | Health Benefit Stipend. The health benefit stipend shall consist of the payment in a lump sum of an amount equal to the excess of 18 times one months’ COBRA premiums for continued group medical coverage at the rate in effect on the date of termination of employment (for the Executive Officer and his or her eligible dependents covered by the applicable HP group medical plan immediately prior to termination of employment) over 18 times the monthly amount payable by an active employee in the same plan as of the date of the Executive Officer’s termination of employment and with the same level of coverage. |
(e) | Earned But Unpaid Annual Bonus. In addition, the Executive Officer shall be entitled to any unpaid annual cash bonus in respect of a fiscal year that is complete as of the date of termination, which unpaid annual cash bonus shall be payable at the time contemplated by the applicable bonus plan but, subject to Paragraph 9, in no event later than the 75th day following the date of termination. |
(a) | Severance Benefits. (i) a cash severance payment (in the amount described in Paragraph 2 above), (ii) a pro-rata annual bonus payment equal to the product of (x) the number of days worked by the Executive Officer in the fiscal year in which termination occurs through the date of termination, divided by 365, multiplied by (y) the Executive Officer’s target annual cash bonus opportunity under the applicable bonus plan for the year of termination (with such amount determined without regard to any reduction in compensation entitling the Executive Officer to terminate his or her employment for Good Reason), (iii) a health benefit stipend (in the amount described in Paragraph 2 above); and (iv) vesting in accordance with sub-paragraph 3(b) of any then-outstanding Award granted after the Change in Control and any Replacement Award as defined in Paragraph 4(b), and settlement thereof in accordance with Paragraph 8. For purposes of this Paragraph 3, any amounts determined by reference to Paragraph 2 above shall be determined without regard |
(b) | Vesting. |
(i) | Any such Award or Replacement Award of Options or stock appreciation rights (“SARs”) not subject to Section 409A, to the extent subject to time-based vesting shall become 100% vested upon the Qualifying Termination and to the extent subject, in whole or in part to performance-based vesting, shall become 100% vested (with any portion of such award that is no longer subject to performance criteria as of the date of the Qualifying Termination to be earned based on actual levels of performance, and any portion of such award that remains subject to performance criteria as of the date of the Qualifying Termination to be deemed earned based on target levels of performance) and in either event shall remain exercisable for 1 year after the Qualifying Termination, but in no event after the stated expiration date of the Award or Replacement Award. |
(ii) | Any such Award or Replacement Award (other than Options or SARs, and whether or not subject to Section 409A) (A) that vests and is settled solely based on the performance of service will become 100% vested upon the Qualifying Termination; and (B) that vests in whole or in part based on performance, shall become 100% vested (with any portion of such award that is no longer subject to performance criteria as of the date of the Qualifying Termination to be earned based on actual levels of performance, and any portion of such award that remains subject to performance criteria as of the date of the Qualifying Termination to be deemed earned based on target levels of performance). |
(c) | Earned But Unpaid Annual Bonus. In addition, the Executive Officer shall be entitled to any unpaid annual cash bonus in respect of a fiscal year that is complete as of the date of termination, which unpaid annual cash bonus shall be payable at the time contemplated by the applicable bonus plan but, subject to Paragraph 9, in no event later than the 75th day following the date of termination. |
(a) | Immediate Vesting of Long-Term Incentive Awards that Are Not Assumed or Replaced. Notwithstanding any provision to the contrary under this Plan or any equity plan or LTIP maintained by HP, upon a Change in Control any then-outstanding Award held by an Executive Officer, other than a 409A Award, whether such Award is denominated and/or payable in equity securities of HP or denominated and/or payable in cash, shall be treated in accordance with sub-paragraph 4(a)(i), (ii), or (iii) below, except to the extent that another Award meeting the requirements of Paragraph 4(b) below (a “Replacement Award”) is provided to the Executive Officer to replace such Award (the “Replaced Award”). For avoidance of doubt, Replacement Awards shall not be treated as provided in this Paragraph 4(a). |
(i) | Outstanding Options and SARs. |
A. | Not a Corporate Transaction or Corporate Transaction in which HP Inc. is the Survivor. Upon a Change in Control that does not involve a Corporate Transaction or that does involve a Corporate Transaction in which HP Inc. is the surviving corporation, an Executive Officer’s then-outstanding Options and SARs that are not vested shall immediately become fully vested (and, to the extent applicable, any portion of such award that is no longer subject to performance criteria as of the date of the Change in Control shall be earned based on actual levels of performance, and any portion of such award that remains subject to performance criteria as of the date of the Change in Control shall be deemed earned based on target levels of performance) and, if the Executive Officer does not have a Qualifying Termination, shall remain exercisable for the exercise period described in Paragraph 2(c)(iv) above. |
B. | Corporate Transaction, HP Not the Survivor. Upon a Change in Control that involves a Corporate Transaction in which HP Inc. is not the surviving corporation, one of the following shall apply, as the Committee shall determine in its discretion; provided, however, that all Executive Officers shall be treated the same with respect to similar Awards: |
(I) | an Executive Officer’s then-outstanding Options and SARs shall become fully vested and shall be exercisable for such limited period of time prior to the Corporate Transaction as is deemed fair and equitable by the Committee and shall terminate at the effective time of the Corporate Transaction. For outstanding Options and SARs as to which vesting depends upon the satisfaction of one or more performance conditions, any portion of such awards that is no longer subject to performance criteria as of the date of the Change in Control shall be earned based on actual levels of performance, and any portion of such award that remains subject to performance criteria as of the date of the Change in Control shall be deemed earned based on target levels of performance. The Committee shall provide written notice of the limited period of accelerated exercisability of Options and SARs to all affected Executive Officers. The exercise of any Option or SAR whose exercisability is |
(II) | an Executive Officer’s Options and SARs shall become fully vested (and in the case of Options and SARs subject in whole or in part to performance-based vesting, any portion of such awards that is no longer subject to performance criteria as of the date of the Change in Control shall be earned based on actual levels of performance, and any portion of such awards that remains subject to performance criteria as of the date of the Change in Control shall be deemed earned based on target levels of performance) and such Options and SARs shall be cancelled in exchange for the payment of an amount of cash (less normal withholding taxes) equal to the excess of (A) the value, as determined by the Committee, of the consideration (including cash) received by the holder of a share of common stock of HP Inc. (“Share”) as a result of the Change in Control (or if HP Inc. shareholders do not receive any consideration as a result of the Change in Control, the fair market value, as determined by the Committee in its sole discretion, of a Share on the day immediately prior to the Change in Control) over (B) the exercise price of such Option or the grant price of the SAR, multiplied by the number of Shares subject to such Award. No payment shall be made to an Executive Officer for any Option or SAR if the exercise price or grant price for such Option or SAR exceeds the value, as determined by the Committee, of the consideration (including cash) received by the holder of a Share as a result of Change in Control that involves a Corporate Transaction (or if HP Inc. shareholders do not receive any consideration as a result of the Change in Control, the fair market value, as determined by the Committee in its sole discretion, of a Share on the day immediately prior to the Change in Control). |
(III) | Notwithstanding the foregoing, for any Options or SARs that are Replaceable 409A Awards, if the foregoing treatment would violate Section 409A, such Options and SARs shall become fully vested (with any portion of such awards that is no longer subject to performance criteria as of the date of the Change in Control deemed earned based on actual levels of performance, and any portion of such awards that remains subject to performance criteria as of the date of the Change in Control based on target levels of performance) and shall be converted, as of the date of the Change in Control, to a right to receive a cash payment on the required date of exercise, which payment shall be made on the required date of exercise under the terms of such Award as in effect prior to the Change in Control, equal to the amount described in Paragraph 4(a)(i)(B)(II) above. |
(ii) | Outstanding Awards (other than Options and SARs) Subject Solely to Service-Based Vesting. Upon a Change in Control, an Executive Officer’s then- |
(iii) | Outstanding Awards (other than Options and SARs) Subject to Performance-Based Vesting. Upon a Change in Control, an Executive Officer’s then-outstanding Awards (other than Options and SARs) that are not vested and as to which vesting depends upon the satisfaction of one or more performance conditions (“Performance-based Awards”) shall become fully vested (with any portion of such awards that is no longer subject to performance criteria as of the date of the Change in Control earned based on actual levels of performance, and any portion of such awards that remains subject to performance criteria as of the date of the Change in Control deemed earned based on target levels of performance) and shall be settled in cash, Shares or a combination thereof, as determined by the Committee, within thirty (30) days following such Change in Control; provided that in the case of a Replaceable 409A Award, settlement shall be made at the time and in the form provided under the terms of such Award in effect prior to the Change in Control. |
(b) | Definition of Replacement Award. An Award shall meet the conditions of this Paragraph 4(b) (and hence qualify as a Replacement Award) if: (i) it is of the same type of instrument as the Replaced Award; (ii) it has an intrinsic value at least equal to the value of the Replaced Award; (iii) it relates to publicly traded equity securities of HP Inc. or its successor in the Change in Control or another entity that is affiliated with HP Inc. or its successor following the Change in Control; (iv) its terms and conditions comply with applicable regulations under Section 409A regarding substitutions and assumptions by reason of a corporate transaction; and (v) its other terms and conditions are not less favorable to the holder of the Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation or assumption of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Paragraph 4(b) are satisfied shall be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion. Notwithstanding the foregoing, the Committee may determine the value of Awards and Replacement Awards that are stock options by reference to either their intrinsic value or their fair value. |
(c) | Treatment of 409A Awards. This Paragraph 4(c) shall apply to 409A Awards (i.e., Awards subject to Section 409A when the applicable Change in Control is defined in Paragraph 6(d)). 409A Awards shall be treated, in the case of Options or SARs, as described in Paragraph 4(a)(i)(B)(I) or (II) (regardless of whether HP Inc. is the survivor). In the case of 409A Awards other than Options or SARs, such 409A Awards shall become fully vested (with any portion of such awards that is no longer subject to performance criteria as of the date of the Change in Control earned based on actual levels of performance, and any |
(a) | An Executive Officer will be deemed to have incurred a Qualifying Termination for purposes of this plan if he or she is involuntarily terminated, as determined by the Committee, other than for Cause while holding Executive Officer status or within 90 days after having held Executive Officer status. For purposes of this Plan, the term “Cause” shall mean an Executive Officer’s: |
(i) | Conviction of, or plea of guilty or nolo contendere to, a felony under federal law or the law of the state in which such action occurred; |
(ii) | Willful and deliberate failure in the performance of his or her duties in any material respect; |
(iii) | Willful misconduct that results in material harm to HP; or |
(iv) | Material violation of HP’s ethics and compliance program, code of conduct or other material policy of HP. |
(b) | For purposes of this plan, “Qualifying Termination” shall also include an Executive Officer’s voluntary termination of employment for “Good Reason” provided such termination occurs within 24 months after a Change in Control, where “Good Reason” means: |
(i) | a material reduction in the Executive Officer’s position, authority, duties or responsibilities relative to such position, authority, duties or responsibilities immediately prior to the Change in Control; |
(ii) | a material reduction in the position, authority, duties or responsibilities of the person to whom the Executive Officer is required to report relative to the position, authority, duties or responsibilities of the person to whom the Executive Officer is required to report immediately prior to the Change in Control (including, if applicable, a requirement that the Executive Officer report to an officer or employee instead of reporting to the Board); |
(iii) | a material reduction in the Executive Officer’s base salary or target bonus opportunity as in effect immediately prior to the Change in Control; |
(iv) | a material reduction in the Executive Officer’s target total direct compensation opportunity as in effect immediately prior to the Change in Control; |
(v) | receipt of notice by the Executive Officer with regard to the mandatory relocation (other than by mutual agreement) of the office at which the Executive Officer is to perform the majority of his or her duties following the Change in Control to a location more than 50 miles from the location at which the Executive Officer performed such duties prior to the Change in Control; or |
(vi) | the failure at any time of a successor to HP explicitly to assume and agree to be bound by this Plan. |
(c) | Notwithstanding anything in this Plan to the contrary, no act, omission or event shall constitute grounds for a voluntary termination due to “Good Reason” unless: |
(i) | The Executive Officer provides HP thirty (30) day advance written notice of his or her intent to termination employment for Good Reason which notice must describe the claimed act, omission or event giving rise to Good Reason (“Notice of Termination”); and |
(ii) | The Notice of Termination is given within ninety (90) days of Executive Officer’s first actual knowledge of such act, omission or event; |
(iii) | HP fails to cure such act, omission or event within the thirty (30) day period after receiving the Notice of Termination; and |
(iv) | The Executive Officer’s termination of employment for Good Reason actually occurs at the end of such 30-day cure period if the Good Reason is not cured. |
6. | Change in Control. A “Change in Control” means the first to occur of any of the following: |
(a) | A direct or indirect acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership of |
(b) | A change in the composition of the Board over a 12-month period such that the individuals who, as of the date of the beginning of the period (the “Effective Incumbency Date”), constitute the Board (the “Incumbent Board”) cease for any reason to constitute a majority of the Board; provided, however, that any individual who becomes a member of the Board subsequent to the Effective Incumbency Date, whose election, or nomination for election by HP Inc.’s stockholders, was approved by a vote of a majority of those individuals then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or |
(c) | The consummation of a Corporate Transaction; excluding, however, such a Corporate Transaction pursuant to which (i) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding HP Common Stock and Outstanding HP Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities of the surviving or acquiring entity resulting from such Corporate Transaction or a direct or indirect parent entity of the surviving or acquiring entity (including, without limitation, an entity which as a result of such transaction owns HP or all or substantially all of HP’s assets either directly or through one or more subsidiaries) in substantially the same proportions (as compared to each other) as their ownership, immediately prior to such Corporate Transaction, of the Outstanding HP Common Stock and Outstanding HP Voting Securities, as the case may be, (ii) no Person (other than HP, any wholly owned subsidiary, any employee benefit plan (or related trust)) sponsored or maintained by HP, any entity controlled by HP, such surviving or acquiring entity resulting from such Corporate Transaction or any entity controlled by such surviving or acquiring entity or a direct or indirect parent entity of the surviving or acquiring entity that, after giving effect to the Corporate Transaction, beneficially owns, directly or indirectly, 100% of the outstanding voting securities of the surviving or acquiring entity) will beneficially own, directly or indirectly, thirty percent (30%) or more of, respectively, the outstanding shares of common stock (or comparable equity interests) of the entity resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such entity except to the extent that such ownership existed |
(d) | A Change in Control is described in this Paragraph 6(d) only if it would also constitute a “change in ownership” of HP, a “change in effective control” of HP, or a “change in ownership of a substantial portion of assets” of HP under Section 409A. |
(a) | Cash severance benefits under Paragraph 2(a) shall be paid to an Executive Officer in installments as follows: 25% of such cash severance benefits shall be paid no later than the 75th day following the date of an Executive Officer’s Qualifying Termination, and then 25% of such cash severance benefit on the 6th, 12th and 18th month anniversary of the date of such Qualifying Termination. |
(b) | The pro-rata annual bonus under Paragraph 2(b) shall be paid at the time such bonuses are otherwise paid to participants in the applicable bonus plan; provided that if the Release Effective Date is after the date that the bonus would otherwise have been paid, such payment shall be made as soon as administratively practicable after the Release Effective Date, but in no event later than March 15 of the year following the year in which the bonus performance period ended. |
(c) | The health benefit stipend under Paragraph 2(d) shall be paid to an Executive Officer on the same date the Executive Officer is paid the first installment of his or her cash severance under Paragraph (a) above. |
(d) | Any Award entitled to pro rata vesting that would have otherwise become vested and been settled solely based on the performance of service will be settled, or in the case of an Award that is an option or SAR, accelerated vesting will occur, no later than the 75th day following the date of an Executive Officer’s Qualifying Termination. |
(e) | Any Award entitled to pro rata vesting that would otherwise have become vested and been settled, in whole or in part, based on performance for which the applicable performance period has not ended on or prior to the Executive Officer’s Qualifying Termination will be settled (or in the case of an Award of options or SAR, accelerated vesting will occur) at the time such Award is otherwise settled for (or vests) for other holders of such Awards; provided that if the Release Effective Date is after the date that the Award would otherwise have been settled, such settlement or vesting shall occur no later than the 75th day following the date of the Release Effective Date. |
(a) | Cash severance benefits, the pro-rata annual bonus, and the health benefit stipend under Paragraph 3(a) shall be paid to the Executive Officer in a lump sum no later than the 75th day following the Qualifying Termination. |
(b) | Any Award, including a Replacement Award (to the extent vested under Paragraph 3) shall be settled, or in the case of an option or SAR, accelerated vesting will occur, no later than the 75th day following the date of an Executive Officer’s Qualifying Termination. |
(a) | Accordingly, Payments not constituting nonqualified deferred compensation under Section 409A shall be reduced first, in this order but only to the extent that doing so avoids the Excise Tax (e.g., accelerated vesting or payment provisions in an Award will be ignored to the extent that such provisions would trigger the Excise Tax): |
(i) | Payment of the severance amounts under Paragraph 3 hereof to the extent such payments do not constitute deferred compensation under Section 409A. |
(ii) | Performance-based Awards, but excluding Performance-based Awards subject to Section 409A. |
(iii) | Service-based Awards, but excluding Service-based Awards subject to Section 409A. |
(iv) | Awards of Options and SARs under a HP LTIP. |
(b) | Then, if the foregoing reductions are insufficient, Payments constituting deferred compensation under Section 409A shall be reduced, in this order: |
(i) | Payment of the severance amounts under Paragraph 3 hereof to the extent such payments constitute deferred compensation under Section 409A. |
(ii) | Performance-based Awards subject to Section 409A. |
(iii) | Service-based Awards subject to Section 409A. |
1. | If, upon termination of the Executive Officer’s employment, neither share price component has been satisfied, none of the Stock Options vest, regardless of what portion of the service component has been satisfied. |
Termination of Employment | Number of Option Shares Vested |
6 months after the Grant Date | 2,000 PCSOs become vested: 6/36 x 12,000 = 2,000. |
12 months after the Grant Date | Zero (0) additional PCSOs become vested under the pro ration rules because the 4,000 PCSOs eligible to vest after 1 year if the 20% share price component was satisfied automatically became vested on the first anniversary of the Grant Date. |
15 months after the Grant Date | 1,000 additional PCSOs become vested: 15/36 x 12,000 = 5,000 minus the 4,000 that vested on the first anniversary of the Grant Date. |
18 months after the Grant Date | 2,000 additional PCSOs become vested: 18/36 x 12,000 = 6,000 minus the 4,000 that vested on the first anniversary of the grant date |
24 months after the Grant Date | Zero (0) additional PCSOs become vested because 24/36 x 12,000 = 8,000 minus the 8,000 that vested on the first and second anniversaries grant date (4,000 each anniversary). |
30 months after the Grant Date | 2,000 additional PCSOs become vested: 30/36 x 12,000 = 10,000 minus the 8,000 that vested on the first and second anniversaries of the grant date. |
Termination of Employment | Number of Option Shares Vested |
6 months after the Grant Date | Zero (0) PCSOs become vested: Neither share price component has been satisfied. |
12 months after the Grant Date | Zero (0) PCSOs become vested: Neither share price component has been satisfied. |
15 months after the Grant Date | 1,000 additional PCSOs become vested: 15/36 x 12,000 = 5,000 minus the 4,000 that vested upon the 20% share price component being met. |
18 months after the Grant Date | 2,000 additional PCSOs become vested: 18/36 x 12,000 = 6,000 minus the 4,000 already vested. |
24 months after the Grant Date | Zero (0) additional PCSOs become vested: All of the 8,000 PCSOs eligible to vest on satisfaction of the 20% share price component became vested on the second anniversary of the grant date. |
30 months after the Grant Date | Zero (0) additional PCSOs become vested: All of the 8,000 PCSOs eligible to vest became vested on the second anniversary of the grant date. |
Termination of Employment | Number of Option Shares Vested |
6 months after the Grant Date | 2,000 PCSOs become vested: 6/36 x 12,000 shares = 2,000. |
12 months after the Grant Date | Zero (0) additional PCSOs become vested under the proration rules. 4,000 PCSOs automatically become vested on the first anniversary of the grant date because the 10% Tranche service and share price components were met. |
18 months after the Grant Date | 2,000 additional PCSOs become vested: 18/36 x 12,000 shares = 6,000 minus the 4,000 that vested on the first anniversary of the grant date. |
21 months after the Grant Date | 3,000 additional PCSOs become vested: 21/36 x 12,000 = 7,000, minus the 4,000 that vested on the first anniversary of the grant date. |
24 months after the Grant Date | Zero (0) additional PCSOs become vested under the proration rules. 4,000 PCSOs automatically become vested on the second anniversary of the grant date because the 20% service and share price components were met. (4,000 shares already vested on the first anniversary of the grant date.) |
30 months after the Grant Date | 2,000 additional PCSOs become vested: 30/36 x 12,000 = 10,000 minus the 8,000 that vested on the first and second anniversaries of the grant date. (4,000 on each anniversary.) |
Termination of Employment | Number of Option Shares Vested |
6 months after the Grant Date | Zero (0) PCSOs become vested: No share price component has been satisfied. |
12 months after the Grant Date | Zero (0) additional PCSOs become vested under the proration rules. 4,000 PCSOs automatically become vested on the first anniversary of the grant date because the 10% Tranche service and share price components were met. |
18 months after the Grant Date | Zero (0) additional PCSOs become vested because the 20% Tranche share price component has not been met. (4,000 PCSOs became vested on the first anniversary of the grant date.) |
21 months after the Grant Date | 3,000 additional PCSOs become vested: 21/36 x 12,000 = 7,000 minus the 4,000 that vested on the first anniversary of the grant date. |
24 months after the Grant Date | Zero (0) additional PCSOs become vested under the proration rules. 4,000 PCSOs automatically become vested on the second anniversary of the grant date because the 20% service and share price components were met. (4,000 shares already vested on the first anniversary of the grant date.) |
30 months after the Grant Date | No additional PCSOs become vested because the 30% Tranche share price component has not been met. |
Applicable Segment | Performance Period | Service Period |
Segment 1 | 2 years | 2 years |
Segment 2 | 3 years | 3 years |
Termination of Employment | Number of PARSUs Vested |
6 months after the beginning of the performance period | Segment 1: 25% of the PARSUs that would have been earned become vested (6/24) at the end of the 2-year performance period. Segment 2: 16.66% of the PARSUs that would have been earned become vested (6/36) at the end of the 3-year performance period. |
12 months after the beginning of the performance period | Segment 1: 50% of the PARSUs that would have been earned become vested (12/24) at the end of the 2-year performance period. Segment 2: 33.33% of the PARSUs that would have been earned become vested (12/36) at the end of the 3-year performance period. |
24 months after the beginning of the performance period | Segment 1: Zero (0) additional PARSUs become vested because the Segment 1 PARSUs earned became vested automatically at the end of the 2-year performance period. Segment 2: 66.67% of the PARSUs that would have been earned become vested (24/36) at the end of the 3-year performance period. |
30 months after the beginning of the performance period | Segment 1: Zero (0) additional PARSUs become vested because the Segment 1 PARSUs earned became vested automatically at the end of the 2-year performance period. Segment 2: 83.33% of the PARSUs that would have been earned become vested (30/36) at the end of the 3-year performance period. |
Termination of Employment | Number of Option Shares Vested |
6 months after the Grant Date | 2,000 PCSOs become vested: 6/36 x 12,000 shares =2,000. |
12 months after the Grant Date | Zero (0) additional PCSOs become vested under the proration rules. 4,000 PCSOs automatically became vested on the first anniversary of the grant date because the 10% Tranche service and share price components were met. |
18 months after the Grant Date | 2,000 additional PCSOs become vested: 18/36 x 12,000 shares = 6,000 minus the 4,000 that vested on the first anniversary of the grant date. |
21 months after the Grant Date | 3,000 additional PCSOs become vested: 21/36 x 12,000 = 7,000 minus the 4,000 that vested on the first anniversary of the grant date. |
24 months after the Grant Date | Zero (0) additional PCSOs become vested under the proration rules. 4,000 PCSOs automatically became vested on the second anniversary of the grant date because the 20% Tranche service and share price components were met. (4,000 shares already vested on the first anniversary of the grant date.) |
30 months after the Grant Date | 2,000 additional PCSOs become vested: 30/36 x 12,000 = 10,000 minus the 8,000 that vested on the first and second anniversaries of the grant date. (4,000 on each anniversary.) |
Termination of Employment | Number of Option Shares Vested |
6 months after the Grant Date | Zero (0) PCSOs become vested: No share price component has been satisfied. |
12 months after the Grant Date | Zero (0) additional PCSOs become vested under the proration rules. 4,000 PCSOs automatically became vested on the first anniversary of the grant date because the 10% Tranche service and share price components were met. |
18 months after the Grant Date | Zero (0) additional PCSOs become vested because the 20% Tranche share price component has not been met. (4,000 PCSOs became vested on the first anniversary of the grant date.) |
21 months after the Grant Date | 3,000 additional PCSOs become vested: 21/36 x 12,000 = 7,000 minus the 4,000 already vested on the first anniversary of the grant date. |
24 months after the Grant Date | Zero (0) additional PCSOs become vested under the proration rules. 4,000 PCSOs automatically became vested on the second anniversary of the grant date because the 20% Tranche service and share price components were met. (An additional 4,000 PCSOs became vested on the first anniversary of the grant date.) |
30 months after the Grant Date | Zero (0) additional PCSOs become vested because the 30% Tranche share price component has not been met. |
Applicable Segment | Performance Period | Service Period |
Segment 1 | Year 1 EPS; 2-year TSR | 2 years |
Segment 2 | Years 2 and 3 EPS and 3-year TSR | 3 years |
Pro-ration of PARSUs With 2-Segment Performance/Service Periods | |
Performance-Adjusted RSUs | |
Termination of Employment | Number of PARSUs Vested |
6 months after the beginning of the performance period | Segment 1: 50% (6/12) of the Year 1 EPS shares and 25% (6/24) of the Segment 1 TSR shares that would have been earned become vested at the end of the 2-year performance period. Segment 2: 0% (0/12) of the Year 2 EPS shares, 0% (0/12) of the Year 3 EPS shares and 16.66% (6/36) of the Segment 2 TSR shares that would have been earned become vested at the end of the 3-year performance period. |
12 months after the beginning of the performance period | Segment 1: 100% (12/12) of the Year 1 EPS shares and 50% (12/24) of the Segment 1 TSR shares that would have been earned become vested at the end of the 2-year performance period. Segment 2: 0% (0/12) of the Year 2 EPS shares, 0% (0/12) of the Year 3 EPS shares and 33.33% (12/36) of the Segment 2 TSR shares that would have been earned become vested at the end of the 3-year performance period. |
24 months after the beginning of the performance period | Segment 1: 100% (12/12) of the Year 1 EPS shares and the Segment 1 TSR shares that would have been earned become vested at the end of the 2-year performance period. Segment 2: 100% of the Year 2 EPS shares that have been earned become vested at the end of the 3-year performance period, 0% (0/12) of the Year 3 EPS shares and 66.67% (24/36) of the Segment 2 TSR shares that would have been earned become vested at the end of the 3-year performance period. |
30 months after the beginning of the performance period | Segment 1: Zero (0) additional Year 1 EPS and Segment 1 TSR shares become vested because they became vested automatically at the end of the 2-year performance period. Segment 2: 100% (12/12) of the Year 2 EPS shares that have been earned become vested at the end of the 3-year performance period, 50% (6/12) of the Year 3 EPS shares and 83.33% (30/36) of the Segment 2 TSR shares that would have been earned become vested at the end of the 3-year performance period. |
Pro-ration of PARSUs With Single-Segment Performance/Service Periods | |
Performance-Adjusted RSUs | |
Termination of Employment | Number of PARSUs Vested |
6 months after the beginning of the performance period | 16.7% (6/36) of the shares that would have been earned become vested at the end of the 3-year performance period. |
12 months after the beginning of the performance period | 33.3%(12/36) of the shares that would have been earned become vested at the end of the 3-year performance period. |
24 months after the beginning of the performance period | 66.7% (24/36) of the shares that would have been earned become vested at the end of the 3-year performance period. |
30 months after the beginning of the performance period | 83.3% (30/36) of the shares that would have been earned become vested at the end of the 3-year performance period. |