Delaware | 1-4797 | 36-1258310 |
(State or other jurisdiction of incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) |
155 Harlem Avenue, Glenview, IL | 60025 | |
(Address of principal executive offices) | (Zip Code) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits | |
Exhibit Number | Exhibit Description | |
99.1 | Terms of Stock Option Grant pursuant to the Illinois Tool Works Inc. 2015 Long-Term Incentive Plan | |
99.2 | Terms of Restricted Stock Unit Grant pursuant to the Illinois Tool Works Inc. 2015 Long-Term Incentive Plan | |
99.3 | Terms of Performance Share Unit Grant pursuant to the Illinois Tool Works Inc. 2015 Long-Term Incentive Plan | |
99.4 | Terms of Performance Cash Grant pursuant to the Illinois Tool Works Inc. 2015 Long-Term Incentive Plan |
ILLINOIS TOOL WORKS INC. | |
Dated: February 8, 2017 | By: /s/ Randall J. Scheuneman |
Randall J. Scheuneman | |
Vice President & Chief Accounting Officer | |
Exhibit Number | Exhibit Description | |
99.1 | Terms of Stock Option Grant pursuant to the Illinois Tool Works Inc. 2015 Long-Term Incentive Plan | |
99.2 | Terms of Restricted Stock Unit Grant pursuant to the Illinois Tool Works Inc. 2015 Long-Term Incentive Plan | |
99.3 | Terms of Performance Share Unit Grant pursuant to the Illinois Tool Works Inc. 2015 Long-Term Incentive Plan | |
99.4 | Terms of Long-Term Incentive Cash Grant pursuant to the Illinois Tool Works Inc. 2015 Long-Term Incentive Plan |
(a) | In the event of a stock dividend, stock split, reverse stock split, share combination, recapitalization, reclassification or similar event affecting the capital structure of the Company, appropriate adjustment will be made in the number of shares subject to the option and in the option price per share. |
(b) | The option period shall be for 10 years from [GRANT DATE] (the “Grant Date”). Accordingly, no options under this grant may be exercised after the close of business in Chicago on [EXPIRATION DATE] (the “Expiration Date”). Except as otherwise provided in this option agreement or the Plan, no purchase of shares may be made under this option during the first year of the option period. During the second year of the option period, you shall have the right to purchase 25% of the total number of optioned shares, and in each of the next three years an additional 25% of the total number of shares optioned hereunder. Such rights to exercise shall be cumulative and may be exercised in any succeeding year of the option period up to the extent vested but not exercised in a previous year or years. On the Expiration Date, all rights under this agreement as to any shares covered by the option shall terminate. |
(c) | You shall have no voting, dividend or subscription rights except with respect to the shares which have been issued to you following your exercise of part or all of the option. Your rights under this option agreement may not be assigned or transferred other than as permitted by the Plan, and during your lifetime the option shall be exercisable only by you personally. |
(d) | If prior to the Expiration Date, your employment with the Company and its Subsidiaries and Affiliates (the “Company Group”) terminates by reason of death or Disability, your option shall be fully vested and exercisable until the Expiration Date. For purposes of this option agreement, the term “Disability” shall have the meaning set forth in the Plan; provided that if no such definition is contained in the Plan, the term “Disability” means permanent and total disability which is expected to prevent you from engaging in any substantial gainful activity for any prolonged period of time, as determined by the Company in its sole discretion. |
(e) | If you retire prior to the Expiration Date, and your option was granted within a year prior to your retirement, then 25% of your option shall become vested one year after the Grant Date; the remaining 75% shall be forfeited. If your option was granted more than a year prior to your retirement, then 100% of your option shall continue to vest in accordance with paragraph (b) above. The vested portion of your option is then exercisable not later than the Expiration Date. For purposes of this option agreement, retirement is defined as termination of employment with the Company Group at such time as: (i) the combination of your age and years of service is 70 or more, and (ii) you have reached age 55 or more with 5 or more years of service. The vesting provisions in this paragraph (e) are subject to your execution of a restrictive covenant within 30 days of your retirement date if requested by any member of the Company Group. |
(f) | Except as provided in paragraph (e), if your employment terminates for any reason other than death or Disability, your options that were vested prior to termination and not previously exercised may be exercised by you during the 90-day period commencing on the date of your termination but not later than the Expiration Date. If you die during this 90-day period, the exercise period will be extended to the earlier of two years from the date of death or the Expiration Date. |
(g) | Notwithstanding the foregoing, the Compensation Committee of the Board of Directors may, in its sole discretion, deem this option, whether vested or unvested, to be immediately forfeited if you compete with the Company Group, engage in gross misconduct or conduct that is against the business interests of the Company Group, or you divulge confidential information about the Company Group to other persons. |
(h) | The option is subject to the terms of the Plan. Any inconsistencies shall be resolved in favor of the Plan. Capitalized terms used but not otherwise defined in this option agreement shall have the meanings ascribed to them in the Plan. |
(i) | This option agreement and the provisions of the Plan are governed by, and subject to, the laws of the State of Illinois, United States of America, without regard to the conflict of law provisions. For purposes of litigating any dispute that arises under this option agreement or the Plan, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Illinois, agree that such litigation shall be conducted in the courts of Cook County, Illinois, or the federal courts for the United States for the Northern District of Illinois, where this grant is made and/or to be performed. |
(j) | You must follow the procedures for exercising options established by the Company from time to time. At the time of exercise, you must pay the option price using the payment methods established by the Company for all of the options being exercised and any applicable Tax-Related Items (as defined below) that are required to be withheld by the Company or your employer (the “Employer”) in connection with the exercise. |
(k) | You acknowledge that, regardless of any action taken by the Company or, if different, your employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company or the Employer in its discretion to be an appropriate charge to you even if legally applicable to the Company or the Employer as a result of your participation in the Plan (“Tax-Related Items”) is and remains your responsibility and may exceed the amount withheld (if any) by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the option, including, but not limited to, the grant, vesting or exercise of the option, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the option to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
(i) | withholding from your wages or other cash compensation paid to you by the Company, its Affiliates or Subsidiaries and/or the Employer; or |
(ii) | withholding from proceeds of the sale of shares acquired upon exercise of the option either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or |
(iii) | withholding in shares to be issued upon exercise of the option (notwithstanding the foregoing, if you are subject to the short-swing profit rules of Section 16(b) of the U.S. Securities Exchange Act of 1934, the Company and/or the Employer will satisfy the obligations with regard to all Tax-Related Items only by withholding in shares to be issued upon exercise of the option, unless such withholding method is not permissible under applicable law, in which case you may elect to satisfy the Tax-Related Items by one of the other methods identified above); or |
(l) | The provisions of this option agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. |
(m) | The option is subject to the requirements of (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (ii) similar rules under the laws of any other jurisdiction and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. |
(n) | You are not permitted to purchase or sell options on the Company’s common stock or engage in short sales of the Company’s common stock. In addition, if you are an executive officer or director, you acknowledge that you are not permitted to engage in trading puts, calls, straddles, equity swaps or other derivative securities that are directly linked to the Company’s common stock and are subject to any Company policies regarding stock trading, hedging and pledging Company common stock or other Company equity securities. For purposes of this paragraph, an “executive officer” means any officer classified by the Company as a reporting person under Section 16 of the U.S. Securities Exchange Act of 1934. |
(o) | The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. |
(p) | The Company reserves the right to impose other requirements on your participation in the Plan, on the option and on any shares purchased upon exercise of the option, to the extent the Company determines it is necessary |
(q) | Notwithstanding any provisions in this option agreement, the option shall be subject to the general terms and conditions set forth in Appendix A for Participants who reside outside the United States, as well as to any country-specific terms and conditions set forth in Appendix B for Participants who reside in any of the countries included in Appendix B. If you relocate outside the United States or between countries included in Appendix B, the additional terms and conditions in Appendices A and B, as applicable, will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendices A and B constitute part of this option agreement. |
(a) | Nature of Grant. In accepting the option, you acknowledge, understand and agree that: |
(i) | the Plan is established voluntarily by the Company, it is discretionary in nature, and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; |
(ii) | the grant of the option is exceptional, discretionary, voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past; |
(iii) | all decisions with respect to future option grants, if any, will be at the sole discretion of the Company; |
(iv) | your participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate your employment or service relationship (if any) at any time; |
(v) | you are voluntarily participating in the Plan; |
(vi) | the option and the shares subject to the option, and the income from and value of same, are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Employer, and are outside the scope of your employment or service contract, if any; |
(vii) | the option and the shares subject to the option, and the income from and value of same, are not intended to replace any pension rights or compensation; |
(viii) | the option and the shares subject to the option, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, pension or retirement or welfare benefits or similar mandatory payments; |
(ix) | unless otherwise agreed with the Company, the option and the shares subject to the option, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a Subsidiary or Affiliate; |
(x) | the option grant and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company or any Subsidiary or Affiliate; |
(xi) | the future value of the shares underlying the option is unknown, indeterminable and cannot be predicted with certainty; |
(xii) | if the underlying shares do not increase in value, the option will have no value; |
(xiii) | if you exercise the option and acquire shares, the value of such shares may increase or decrease in value, even below the option price; |
(xiv) | no claim or entitlement to compensation or damages shall arise from forfeiture of the option resulting from termination of your employment or other service relationship by the Company or the Employer (for any reason whatsoever, and whether or not in breach of local labor laws and whether or not later found to be invalid), and in consideration of the grant of the option to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company or the Employer and you irrevocably waive your ability, if any, to bring any such claim, and release the Company and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims; |
(xv) | unless otherwise provided in the option agreement, in the event of termination of your employment or other service relationship (for any reason whatsoever, whether or not in breach of local labor laws and whether or not later found to be invalid), your right to vest in the option under the Plan, if any, will terminate effective as of the date that you are no longer actively employed or rendering services and will not be extended by any notice period mandated under local law (e.g., active employment or service would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of your employment (for any reason whatsoever whether or not in breach of local labor laws and whether or not later found to be invalid), your right to exercise the option after termination of your employment or other service relationship, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law; the Committee shall have the exclusive discretion to determine when you are no longer actively employed or rendering services for purposes of your option grant (including whether you may still be considered to be providing services while on a leave of absence); and |
(xvi) | the Company Group shall not be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the options or of any amounts due to you pursuant to the settlement of the options or the subsequent sale of any shares acquired upon settlement. |
(b) | No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying shares. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. |
(c) | Data Privacy. You hereby voluntarily consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this option agreement and any other option grant materials by and among, as applicable, the Employer, the Company and its other Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. |
(d) | Language. If you have received this option agreement or any other document related to the option and/or the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control. |
(e) | Retirement. Notwithstanding paragraph (e) of the option agreement, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in your jurisdiction that would likely result in the favorable treatment applicable to the option pursuant to paragraph (e) being deemed unlawful and/or discriminatory, then the Company will not apply the favorable treatment at the time of your retirement, and the option will be treated as set forth in paragraph (f) of the option agreement. |
(f) | Waiver. You acknowledge that a waiver by the Company of a breach of any provision of this option agreement shall not operate or be construed as a waiver of any other provision of this option agreement, or of any subsequent breach by you or another Participant. |
(g) | Insider Trading/Market Abuse Laws. You acknowledge that you may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the United States, which may affect your ability to acquire or sell shares or rights to shares (e.g., options) under the Plan during such times you are considered to have “inside information” (as defined in the laws of applicable jurisdictions) regarding the Company. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions and should speak to your personal advisor on this matter. |
(h) | Foreign Asset/Account Reporting; Exchange Controls. Your country may have certain foreign asset and/or account reporting requirements and/or exchange controls which may affect your ability to acquire or hold shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of shares) in a brokerage or bank account outside your country. You |
(a) | In the event of a stock dividend, stock split, reverse stock split, share combination, recapitalization, reclassification or similar event affecting the capital structure of the Company, appropriate adjustment will be made in the number of shares subject to the RSU. |
(b) | Except as otherwise provided in this RSU agreement or the Plan, no portion of the RSU will vest prior to three years from [GRANT DATE] (the “Grant Date”). On [VESTING DATE] (the “Vesting Date”), 100% of the RSUs will become vested. Upon vesting, you will receive one share of Common Stock of the Company for each vested RSU. |
(c) | The Company shall credit to a bookkeeping account maintained on your behalf an amount equal to any cash dividends you would have received, if the shares subject to the RSU had been shares of Common Stock between the Grant Date and the Vesting Date (“Dividend Equivalents”). The amount credited to the bookkeeping account shall be reinvested in additional RSUs which shall be paid to you upon vesting of the RSU. If dividends are paid in shares of Common Stock instead of cash, the bookkeeping account will be credited with one additional RSU for each share of Common Stock that you would have received as a dividend, had the shares subject to the RSU been shares of Common Stock between the Grant Date and the Vesting Date. All such additional RSUs shall vest or be forfeited at the same time as the RSU. Except as provided herein, you shall have no voting, dividend or subscription rights except with respect to the shares which have been issued to you following the vesting of your RSUs. Your rights under this RSU agreement may not be assigned or transferred other than as permitted by the Plan. |
(d) | If, prior to the Vesting Date, your employment with the Company and its Subsidiaries and Affiliates (the “Company Group”) terminates by reason of death or Disability, your RSU shall be fully vested. For purposes of this RSU agreement, the term “Disability” shall have the meaning set forth in the Plan; provided that if no such definition is contained in the Plan, the term “Disability” means permanent and total disability which is expected to prevent you from engaging in any substantial gainful activity for any prolonged period of time, as determined by the Company in its sole discretion. |
(e) | If you retire prior to the Vesting Date, and your RSU was granted within a year prior to your retirement, then 25% of your RSU shall become vested, and if your RSU was granted more than a year prior to your retirement, then 100% of your RSU shall become vested 30 days after your retirement date provided you have executed and delivered by that date a restrictive covenant, if any, as may be requested by any member of the Company Group. For purposes of this RSU agreement, retirement is defined as termination of employment with the Company Group at such time as: (i) the combination of your age and years of service is 70 or more, and (ii) you have reached age 55 or more with 5 or more years of service. |
(f) | Except as provided in paragraph (e), if your employment terminates for any reason other than death or Disability prior to the Vesting Date, you will forfeit your RSUs. |
(g) | Notwithstanding the foregoing, the Compensation Committee of the Board of Directors may, in its sole discretion, deem this RSU grant, whether vested or unvested, to be immediately forfeited if you compete with the Company Group, engage in gross misconduct or conduct that is against the business interests of the Company Group, or you divulge confidential information about the Company Group to other persons. |
(h) | The RSU is subject to the terms of the Plan. Any inconsistencies shall be resolved in favor of the Plan. Capitalized terms used but not otherwise defined in this RSU agreement shall have the meanings ascribed to them in the Plan. |
(i) | This RSU agreement and the provisions of the Plan are governed by, and subject to, the laws of the State of Illinois, United States of America, without regard to the conflict of law provisions. For purposes of litigating any dispute that arises under this grant or the Plan, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Illinois, agree that such litigation shall be conducted in the courts of Cook County, Illinois, or the federal courts for the United States for the Northern District of Illinois, where this grant is made and/or to be performed. |
(j) | The RSUs granted hereunder are intended to be exempt from or compliant with Code Section 409A, and shall be interpreted, construed and operated to reflect this intent. |
(k) | You acknowledge that, regardless of any action taken by the Company or, if different, your employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company or the Employer in its discretion to be an appropriate charge to you even if legally applicable to the Company or the Employer as a result of your participation in the Plan (“Tax-Related Items”) is and remains your responsibility and may exceed the amount withheld (if any) by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSU, including, but not limited to, the grant, vesting or settlement of the RSU, the subsequent sale of shares acquired pursuant to such settlement and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSU to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
(i) | withholding from your wages or other cash compensation paid to you by the Company, its Affiliates or Subsidiaries and/or the Employer; or |
(ii) | withholding from proceeds of the sale of shares acquired upon settlement of the RSU either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or |
(iii) | withholding in shares to be issued upon settlement of the RSU (notwithstanding the foregoing, if you are subject to the short-swing profit rules of Section 16(b) of the U.S. Securities Exchange Act of 1934, the Company and/or the Employer will satisfy the obligations with regard to all Tax-Related Items only by withholding in shares to be issued upon settlement of the RSUs, unless such withholding method is not permissible under applicable law, in which case you may elect to satisfy the Tax-Related Items by one of the other methods identified above); or |
(l) | The provisions of this RSU agreement are severable, and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. |
(m) | The RSUs are subject to the requirements of (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (ii) similar rules under the laws of any other jurisdiction and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. |
(n) | You are not permitted to purchase or sell options on the Company’s common stock or engage in short sales of the Company’s common stock. In addition, if you are an executive officer or director, you acknowledge that you are not permitted to engage in trading puts, calls, straddles, equity swaps or other derivative securities that are directly linked to the Company’s common stock and are subject to any Company policies regarding stock trading, hedging and pledging Company common stock or other Company equity securities. For purposes of this paragraph, an “executive officer” means any officer classified by the Company as a reporting person under Section 16 of the U.S. Securities Exchange Act of 1934. |
(o) | The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. |
(p) | The Company reserves the right to impose other requirements on your participation in the Plan, on the RSUs and on any shares acquired under the Plan, to the extent the Company determines it is necessary or advisable |
(q) | Notwithstanding any provisions in this RSU agreement, the RSU shall be subject to the general terms and conditions set forth in Appendix A for Participants who reside outside the United States, as well as to any country-specific terms and conditions set forth in Appendix B for Participants who reside in any of the countries included in Appendix B. If you relocate outside the United States or between countries included in Appendix B, the additional terms and conditions in Appendices A and B, as applicable, will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendices A and B constitute part of this RSU agreement. |
(a) | In the event of a stock dividend, stock split, reverse stock split, share combination, recapitalization, reclassification or similar event affecting the capital structure of the Company, appropriate adjustment will be made in the number of shares subject to this PSU. |
(b) | Except as otherwise provided in this PSU agreement or the Plan, no portion of the PSU will vest prior to three years from [GRANT DATE] (the “Grant Date”). On [VESTING DATE] (the “Vesting Date”), this PSU shall vest to the extent the Compensation Committee has certified that the performance goals established for this PSU have been met. Upon vesting, subject to paragraph (g) below, you will receive one share of Common Stock of the Company for each share subject to this PSU according to the level of achievement of the performance goals and payout scale established by the Compensation Committee for this grant. This PSU will be considered to be paid on the Vesting Date if the shares are issued within 60 days after the Vesting Date; provided, however, that the Compensation Committee has certified the level of achievement of the performance goals prior to the actual payment date. |
(c) | The Company shall credit to a bookkeeping account maintained on your behalf an amount equal to any cash dividends you would have received, if the shares subject to this PSU had been shares of Common Stock between the Grant Date and the Vesting Date (“Dividend Equivalents”). The amount credited to the bookkeeping account shall be reinvested in additional PSUs which shall be paid to you upon vesting of the PSU. If dividends are paid in shares of Common Stock instead of cash, the bookkeeping account will be credited with one additional PSU for each share of Common Stock that you would have received as a dividend, had the shares subject to this PSU been shares of Common Stock between the Grant Date and the Vesting Date. All such additional PSUs shall vest or be forfeited at the same time as this PSU. Except as provided herein, you shall have no voting, dividend or subscription rights except with respect to the shares which have been issued to you following the vesting of your PSUs. Your rights under this PSU agreement may not be assigned or transferred other than as permitted by the Plan. |
(d) | If, prior to the Vesting Date, your employment with the Company and its Subsidiaries and Affiliates (the “Company Group”) terminates by reason of death or Disability, this PSU grant shall vest on the Vesting Date to the full extent of the performance goal level of achievement certified by the Compensation Committee. For purposes of this PSU agreement, the term “Disability” shall have the meaning set forth in the Plan; provided that if no such definition is contained in the Plan, the term “Disability” means permanent and total disability which is expected to prevent you from engaging in any substantial gainful activity for any prolonged period of time, as determined by the Company in its sole discretion. |
(e) | If you retire prior to the Vesting Date, your PSU will become pro-rata vested on the Vesting Date for the portion of the performance period that you were employed and based on the performance achievement level certified by the Compensation Committee. For purposes of this PSU agreement, retirement is defined as termination of employment with the Company Group at such time as: (i) the combination of your age and years of service is 70 or more, and (ii) you have reached age 55 or more with 5 or more years of service. The vesting provisions in this paragraph (d) are subject to your execution of a restrictive covenant within 30 days after your retirement |
(f) | Except as provided in paragraph (e), if your employment terminates for any reason other than death or Disability prior to the Vesting Date, you will forfeit your PSUs. |
(g) | Notwithstanding the foregoing, the Compensation Committee of the Board of Directors may, in its sole discretion, deem this PSU grant, whether vested or unvested, to be immediately forfeited if you compete with the Company Group, engage in gross misconduct or conduct that is against the business interests of the Company Group, or you divulge confidential information about the Company Group to other persons. |
(h) | The PSU is subject to the terms of the Plan. Any inconsistencies shall be resolved in favor of the Plan. Capitalized terms used but not otherwise defined in this PSU agreement shall have the meanings ascribed to them in the Plan. |
(i) | This PSU agreement and the provisions of the Plan are governed by, and subject to, the laws of the State of Illinois, United States of America, without regard to the conflict of law provisions. For purposes of litigating any dispute that arises under this grant or the Plan, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Illinois, agree that such litigation shall be conducted in the courts of Cook County, Illinois, or the federal courts for the United States for the Northern District of Illinois, where this grant is made and/or to be performed. |
(j) | The PSUs granted hereunder are intended to be exempt from or compliant with Code Section 409A, and shall be interpreted, construed and operated to reflect this intent. |
(k) | You acknowledge that, regardless of any action taken by the Company or, if different, your employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company or the Employer in its discretion to be an appropriate charge to you even if legally applicable to the Company or the Employer as a result of your participation in the Plan (“Tax-Related Items”) is and remains your responsibility and may exceed the amount withheld (if any) by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PSU, including, but not limited to, the grant, vesting or settlement of the PSU, the subsequent sale of shares acquired pursuant to such settlement and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the PSU to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
(i) | withholding from your wages or other cash compensation paid to you by the Company, its Affiliates or Subsidiaries and/or the Employer; or |
(ii) | withholding from proceeds of the sale of shares acquired upon settlement of the PSU either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or |
(iii) | withholding in shares to be issued upon settlement of the PSU (notwithstanding the foregoing, if you are subject to the short-swing profit rules of Section 16(b) of the U.S. Securities Exchange Act of 1934, the Company and/or the Employer will satisfy the obligations with regard to all Tax-Related Items only by withholding in shares to be issued upon vesting/settlement of the PSU, unless such withholding method is not permissible under applicable law, in which case you may elect to satisfy the Tax-Related Items by one of the other methods identified above); or |
(iv) | any other method determined by the Company. |
(l) | The provisions of this PSU agreement are severable, and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. |
(m) | The PSUs are subject to the requirements of (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (ii) similar rules under the laws of any other jurisdiction and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. |
(n) | You are not permitted to purchase or sell options on the Company’s common stock or engage in short sales of the Company’s common stock. In addition, if you are an executive officer or director, you acknowledge that you are not permitted to engage in trading puts, calls, straddles, equity swaps or other derivative securities that are directly linked to the Company’s common stock and are subject to any Company policies regarding stock trading, hedging and pledging Company common stock or other Company equity securities. For purposes of this paragraph, an “executive officer” means any officer classified by the Company as a reporting person under Section 16 of the U.S. Securities Exchange Act of 1934. |
(o) | The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic |
(p) | The Company reserves the right to impose other requirements on your participation in the Plan, on the PSUs and on any shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
(q) | Notwithstanding any provisions in this PSU agreement, the PSU shall be subject to the general terms and conditions set forth in Appendix A for Participants who reside outside the United States, as well as to any country-specific terms and conditions set forth in Appendix B for Participants who reside in any of the countries included in Appendix B. If you relocate outside the United States or between countries included in Appendix B, the additional terms and conditions in Appendices A and B, as applicable, will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendices A and B constitute part of this PSU agreement. |
(i) | the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; |
(ii) | the grant of the PSU is exceptional, discretionary, voluntary and occasional and does not create any contractual or other right to receive future grants of PSUs, or benefits in lieu of PSUs, even if PSUs have been granted in the past; |
(iii) | all decisions with respect to future PSU grants, if any, will be at the sole discretion of the Company; |
(iv) | your participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate your employment or service relationship (if any) at any time; |
(v) | you are voluntarily participating in the Plan; |
(vi) | the PSU and the shares subject to the PSU, and the income from and value of same, are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Employer, and are outside the scope of your employment or service contract, if any; |
(vii) | the PSU and the shares subject to the PSU, and the income from and value of same, are not intended to replace any pension rights or compensation; |
(viii) | the PSU and the shares subject to the PSU, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, pension or retirement or welfare benefits or similar mandatory payments; |
(ix) | unless otherwise agreed with the Company, the PSU and the shares subject to the PSU, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a Subsidiary or Affiliate; |
(x) | the PSU grant and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company or any Subsidiary or Affiliate; |
(xi) | the future value of the underlying shares is unknown, indeterminable and cannot be predicted with certainty; |
(xii) | no claim or entitlement to compensation or damages shall arise from forfeiture of the PSU resulting from termination of your employment or other service relationship by the Company or the Employer (for any reason whatsoever, and whether or not in breach of local labor laws and whether or not later found to be invalid), and in consideration of the grant of the PSU to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company or the Employer and you irrevocably waive your ability, if any, to bring any such claim, and release the Company and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims; |
(xiii) | unless otherwise provided in the PSU agreement, in the event of termination of your employment or other service relationship (for any reason whatsoever, whether or not in breach of local labor laws and whether or not later found to be invalid), your right to vest in the PSU under the Plan, if any, will terminate effective as of the date that you are no longer actively employed or rendering services and will not be extended by any notice period mandated under local law (e.g., active employment or service would not include a period of “garden leave” or similar period pursuant to local law); the Committee shall have the exclusive discretion to determine when you are no longer actively employed or rendering services for purposes of your PSU grant (including whether you may still be considered to be providing services while on a leave of absence); and |
(xiv) | the Company Group shall not be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the PSU or of any amounts due to you pursuant to the settlement of the PSU or the subsequent sale of any shares acquired upon settlement. |
(b) | No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying shares. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. |
(c) | Data Privacy. You hereby voluntarily consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this PSU agreement and any other PSU grant materials by and among, as applicable, the Employer, the Company and its other Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. |
(d) | Language. If you have received this PSU agreement or any other document related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control. |
(e) | Retirement. Notwithstanding paragraph (e) of the PSU agreement, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in your jurisdiction that would likely result in the favorable treatment applicable to the PSU pursuant to paragraph (e) being deemed unlawful and/or discriminatory, then the Company will not apply the favorable treatment at the time of your retirement, and the PSU will be treated as set forth in paragraph (f) of the PSU agreement. |
(f) | Waiver. You acknowledge that a waiver by the Company of a breach of any provision of this PSU agreement shall not operate or be construed as a waiver of any other provision of this PSU agreement, or of any subsequent breach by you or another Participant. |
(g) | Insider Trading/Market Abuse Laws. You acknowledge that you may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the United States, which may affect your ability to acquire or sell shares or rights to shares (e.g., PSU) under the Plan during such times you are considered to have “inside information” (as defined in the laws of applicable jurisdictions) regarding the Company. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions and should speak to your personal advisor on this matter. |
(h) | Foreign Asset/Account Reporting; Exchange Controls. Your country may have certain foreign asset and/or account reporting requirements and/or exchange controls which may affect your ability to acquire or hold shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or transactions to the tax or other authorities in your country. You also may be required to repatriate sale proceeds or other funds received as a result of your participation in the Plan to your country through a designated bank or broker and/or within a certain |
(a) | Except as otherwise provided in this P CASH agreement or the Plan, no portion of the P CASH award will vest prior to three years from [GRANT DATE] (the “Grant Date”). On [VESTING DATE] (the “Vesting Date”), the P CASH award will become vested to the extent of the performance achievement level certified by the Compensation Committee. Subject to paragraph (g) below, you will receive a cash award on the Vesting Date according to the level of achievement of the performance goals and payout scale established for this grant. A payment will be considered to be paid on the Vesting Date if it is paid within 60 days after the Vesting Date; provided, however, that the Compensation Committee has certified the level of achievement of the performance goal prior to the actual payment date. |
(b) | Your rights under this P CASH agreement may not be assigned or transferred other than as permitted by the Plan. |
(c) | If, prior to the Vesting Date, your employment with the Company and its Subsidiaries and Affiliates (the “Company Group”) terminates by reason of death or Disability, your P CASH grant shall become vested on the Vesting Date to the full extent of the performance achievement level certified by the Compensation Committee. For purposes of this P CASH agreement, the term “disability” shall have the meaning set forth in the Plan; provided that if no such definition is contained in the Plan, the term “Disability” means permanent and total disability which is expected to prevent you from engaging in any substantial gainful activity for any prolonged period of time, as determined by the Company in its sole discretion. |
(d) | If you retire prior to the Vesting Date, your P CASH grant will become pro-rata vested on the Vesting Date for the portion of the vesting period that you were employed and based on the performance achievement level certified by the Compensation Committee. For purposes of this P CASH agreement, retirement is defined as termination of employment with the Company Group at such time as: (i) the combination of your age and years of service is 70 or more, and (ii) you have reached age 55 or more with 5 or more years of service. The vesting provisions in this paragraph (d) are subject to your execution of a restrictive covenant within 30 days after your retirement date, but in no event later than the actual payment date under paragraph (a), if requested by any member of the Company Group. |
(e) | Except as provided in paragraph (d), if your employment terminates for any reason other than death or Disability prior to the Vesting Date, you will forfeit your P CASH grant. |
(f) | Notwithstanding the foregoing, the Compensation Committee of the Board of Directors may, in its sole discretion, deem this P CASH grant, whether vested or unvested, to be immediately forfeited if you compete with the Company Group, engage in gross misconduct or conduct that is against the business interests of the Company Group, or you divulge confidential information about the Company Group to other persons. |
(g) | The P CASH grant is subject to the terms of the Plan. Any inconsistencies shall be resolved in favor of the Plan. Capitalized terms used but not otherwise defined in this P CASH agreement shall have the meanings ascribed to them in the Plan. |
(h) | This P CASH agreement and the provisions of the Plan are governed by, and subject to the laws of the State of Illinois, United States of America, without regard to the conflict of law provisions. For purposes of litigating any dispute that arises under this grant or the Plan, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Illinois, agree that such litigation shall be conducted in the courts of Cook County, |
(i) | The P CASH grant is intended to be exempt from or compliant with Code Section 409A, and shall be interpreted, construed and operated to reflect this intent. |
(j) | You acknowledge that, regardless of any action taken by the Company or, if different, your employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company or the Employer in its discretion to be an appropriate charge to you even if legally applicable to the Company or the Employer as a result of your participation in the Plan (“Tax-Related Items”) is and remains your responsibility and may exceed the amount withheld (if any) by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the P CASH grant, including, but not limited to, the grant, vesting or payment of the P CASH grant; and (2) do not commit to and are under no obligation to structure the terms of the P CASH grant or any aspect of the P CASH grant to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. |
(k) | The provisions of this P CASH agreement are severable, and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable. |
(l) | The P CASH grant is subject to the requirements of (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (ii) similar rules under the laws of any other jurisdiction and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. |
(m) | The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company. |
(n) | The Company reserves the right to impose other requirements on your participation in the Plan, on the P CASH grant and on the cash payment, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. |
(o) | Notwithstanding any provisions in this P CASH agreement, the P CASH grant shall be subject to the general terms and conditions set forth in Appendix A for Participants who reside outside the United States, as well as to any country-specific terms and conditions set forth in Appendix B for Participants who reside in any of the countries included in Appendix B. Moreover, if you relocate outside the United States or between countries included in Appendix B, the additional terms and conditions in Appendix A and B, as applicable, will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendices A and B constitute part of this P CASH agreement. |
(a) | Nature of Grant. In accepting the grant, you acknowledge, understand and agree that: |
(i) | the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; |
(ii) | the P CASH grant is exceptional, discretionary, voluntary and occasional and does not create any contractual or other right to receive future P CASH grants, or benefits in lieu of P CASH grants, even if P CASH grants have been made in the past; |
(iii) | all decisions with respect to future P CASH grants, if any, will be at the sole discretion of the Company; |
(iv) | your participation in the Plan shall not create a right to further employment with the Employer and shall not interfere with the ability of the Employer to terminate your employment or service relationship (if any) at any time; |
(v) | you are voluntarily participating in the Plan; |
(vi) | the P CASH grant and the cash award subject to the P CASH grant, and the income from and value of same, are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Employer, and are outside the scope of your employment or service contract, if any; |
(vii) | the P CASH grant and the cash award subject to the P CASH grant, and the income from and value of same, are not intended to replace any pension rights or compensation; |
(viii) | the P CASH grant and the cash award subject to the P CASH grant, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, pension or retirement or welfare benefits or similar mandatory payments; |
(ix) | unless otherwise agreed with the Company, the P CASH grant and the cash award subject to the P CASH grant, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a Subsidiary or Affiliate; |
(x) | the P CASH grant and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company or any Subsidiary or Affiliate; |
(xi) | no claim or entitlement to compensation or damages shall arise from forfeiture of the P CASH grant resulting from termination of your employment or other service relationship by the Company or the Employer (for any reason whatsoever, and whether or not in breach of local labor laws and whether or not later found to be invalid), and in consideration of the P CASH grant to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company or the Employer and you irrevocably waive your ability, if any, to bring any such claim, and release the Company and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims; |
(xii) | unless otherwise provided in the P CASH agreement, in the event of termination of your employment or other service relationship (for any reason whatsoever, whether or not in breach of local labor laws and whether or not later found to be invalid), your right to vest in the P CASH grant under the Plan, if any, will terminate effective as of the date that you are no longer actively employed or rendering services and will not be extended by any notice period mandated under local law (e.g., active employment or service would not include a period of “garden leave” or similar period pursuant to local law); the Committee shall have the exclusive discretion to determine when you are no longer actively employed or rendering services for purposes of your P CASH grant (including whether you may still be considered to be providing services while on a leave of absence); and |
(xiii) | the Company Group shall not be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the cash award or of any amounts due to you at payout of the P CASH grant. |
(b) | No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. |
(c) | Data Privacy. You hereby voluntarily consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this P CASH agreement and any other P CASH grant materials by and among, as applicable, the Employer, the Company and its other Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. |
(d) | Language. If you have received this P CASH agreement or any other document related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control. |
(e) | Retirement. Notwithstanding paragraph (d) of the P CASH agreement, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in your jurisdiction that would likely result in the favorable treatment applicable to the P CASH grant pursuant to paragraph (d) being deemed unlawful and/or discriminatory, then the Company will not apply the favorable treatment at the time of your retirement, and the P CASH grant will be treated as set forth in paragraph (e) of the P CASH agreement. |
(f) | Waiver. You acknowledge that a waiver by the Company of a breach of any provision of this P CASH agreement shall not operate or be construed as a waiver of any other provision of this P CASH agreement, or of any subsequent breach by you or any other Participant. |
(g) | Foreign Asset/Account Reporting; Exchange Controls. Your country may have certain foreign asset and/or account reporting requirements and/or exchange controls which may affect your ability to acquire or hold cash received from participating in the Plan in a brokerage or bank account outside your country. You may be required to report such accounts, assets or transactions to the tax or other authorities in your country. You also may be required to repatriate funds received as a result of your participation in the Plan to your country through a designated bank or broker and/or within a certain time after receipt. You acknowledge that it is your responsibility to be compliant with such regulations, and you should consult your personal legal advisor for any details. |