SMITH INTERNATIONAL, INC. RESTRICTED STOCK UNIT AGREEMENT
EXHIBIT 10.9
Grantee: <Name>
Employee Number: <Employee Number>
Grant ID: <ID>
Grant Date: <GrantDate>
Grant Expiration (10-years from Grant Date): <ExpirationDate>
▇▇▇▇▇ ▇▇▇▇▇: $0.00
Grant
Type: Time-Based Restricted Stock Units
Total Restricted Stock Units: <Total Units>
| Vesting Date | Units | |||
<VestDate1> |
<Installment1> | |||
<VestDate2> |
<Installment2> | |||
<VestDate3> |
<Installment3> | |||
<VestDate4> |
<Installment4> | |||
Total |
<Total Units> | |||
▇▇▇▇▇ INTERNATIONAL, INC.
RESTRICTED STOCK UNIT AGREEMENT
RESTRICTED STOCK UNIT AGREEMENT
THIS
RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) is made and entered into by and
between ▇▇▇▇▇ International, Inc., a Delaware corporation (the “Company”) and the individual named
above, an individual and Employee of the Company or one of its Subsidiaries (“Grantee”), on the
issue date (or grant date) indicated above, subject to the terms and provisions of the ▇▇▇▇▇
International, Inc., Third Amended and Restated 1989 Long-Term Incentive Compensation Plan, as
amended from time to time (the “Plan”). The Plan is hereby incorporated herein in its entirety by
this reference. Capitalized terms not otherwise defined in this Agreement shall have the meaning
given to such terms in the Plan.
WHEREAS, Grantee is an Employee of the Company or one of its Subsidiaries, and in connection
therewith, the Company desires to grant to Grantee restricted stock units (“Units”), subject to the
terms and conditions of this Agreement and the Plan, with a view to increasing Grantee’s interest
in the Company’s success and growth; and
WHEREAS, Grantee desires to be the holder of such Units subject to the terms and conditions of
this Agreement;
NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
1. Grant of Units. Subject to the terms and conditions of this Agreement and the Plan, the
Company hereby grants to Grantee the number of units indicated above. On any date, the value of
each Unit shall be the Fair Market Value of one share of the Company’s Common Stock (“Share”),
$1.00 par value, as determined pursuant to the Plan. Each Unit represents an unsecured promise of
the Company to deliver Shares to Grantee pursuant to the terms and conditions of the Plan and this
Agreement. As a holder of Units, ▇▇▇▇▇▇▇ has only the rights of a general unsecured creditor of
the Company.
2. Transfer Restrictions. Grantee shall not sell, assign, transfer, exchange, pledge,
encumber, gift, devise, hypothecate or otherwise dispose of (collectively, “Transfer”) any Units
granted hereunder. Any purported Transfer of Units in breach of this Agreement shall be void and
ineffective, and shall not operate to Transfer any interest or title in the purported transferee.
3. Vesting and Payment of Units.
(a) Vesting Generally. ▇▇▇▇▇▇▇’s interest in the Units granted hereunder shall vest
in accordance with the schedule above, conditioned on Grantee’s continued employment with the
Company or one of its Subsidiaries as of each such vesting date (the “Vesting Date”), except as
provided in Section 4 hereof; provided, however, that within ninety (90) days after the
Units are granted, the Grantee must open a brokerage account with the brokerage firm or third-party
administrator designated by the Company to receive the Shares obtained pursuant to
Section 3(b), or such Units shall be forfeited and lapse without further notice.
Section 3(b), or such Units shall be forfeited and lapse without further notice.
(b) Settlement of Units. Subject to Section 6 hereof, the Company shall grant
to Grantee within thirty (30) days after each Vesting Date, or such other date upon which Units
become vested as provided in this Agreement, a number of Shares equal to the number of such vested
Units (provided Grantee has not terminated employment prior to such Vesting Date), unless otherwise
provided under Section 4 hereof. Each vested Unit shall thus be exchanged by the Company
for one Share, and such Unit shall be cancelled as of the effective time of such exchange as
reflected on the Company’s stock records. All Shares delivered to or on behalf of Grantee in
exchange for vested Units shall be free of any further vesting, transfer or other restrictions,
except as may otherwise be required by securities law or other applicable law as determined by the
Company.
(c) Dividends, Splits and Voting Rights. If the Company (i) declares a stock dividend
or makes a distribution on Common Stock in Shares, (ii) subdivides or reclassifies outstanding
Shares into a greater number of Shares or (iii) combines or reclassifies outstanding Shares into a
smaller number of Shares, then the number of Units granted under this Agreement shall be
proportionately increased or reduced, as applicable, so as to prevent the enlargement or dilution
of Grantee’s rights and duties hereunder. The determination of the Compensation and Benefits
Committee (the “Committee”) of the Company’s Board of Directors regarding such adjustments shall be
binding. Until such time as Shares are actually delivered to Grantee in exchange for vested Units
pursuant to Section 3(b) (above), Grantee shall have no voting, dividend or other ownership
rights in such Shares.
4. Forfeiture.
(a) Termination Due to Death or Disability. If ▇▇▇▇▇▇▇’s employment with the Company
or one of its Subsidiaries is terminated due to death or Disability of Grantee, then, in either
such event, all outstanding Units hereunder shall become fully vested as of such termination date
and payable to Grantee in Shares within thirty (30) days after such date.
For purposes of this Section 4(a), “Disability” means, as determined by the Committee
in its discretion exercised in good faith, a physical or mental condition of Grantee that would
entitle Grantee to payment of disability income payments under the Company’s long-term disability
insurance policy or plan for employees, as then effective, if any; or in the event that Grantee is
not covered, for whatever reason, under the Company’s long-term disability insurance policy or
plan, “Disability” means a permanent and total disability as defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the “Code”). A determination of Disability may be made
by a physician selected or approved by the Committee and, in this respect, Grantee must submit to
any reasonable examination(s) required by such physician upon request in order to render an opinion
regarding whether there is a Disability.
(b) Termination Other than Death or Disability. If ▇▇▇▇▇▇▇’s employment with the
Company or one of its Subsidiaries is voluntarily or involuntarily terminated by the Company or one
of its Subsidiaries or Grantee for any reason other than due to death or Disability, then Grantee
shall immediately forfeit all Units which are not already vested as of such date. Upon the
forfeiture of any Units hereunder, Grantee shall cease to have any rights in connection with such
Units as of the date of such forfeiture. A transfer of employment by Grantee, without an
interruption of employment service, between or among the Company and any Subsidiary of the Company
shall not be considered a termination of employment for purposes of this Agreement.
5. ▇▇▇▇▇▇▇’s Representations. Notwithstanding any provision hereof to the contrary, ▇▇▇▇▇▇▇
hereby agrees and represents that Grantee will not acquire any Shares, and that the Company will
not be obligated to issue any Shares to Grantee hereunder, if the issuance of such Shares
constitutes a violation by Grantee or the Company of any law or regulation of any governmental
authority. Any determination in this regard that is made by the Committee, in good faith, shall be
final and binding. The rights and obligations of the Company and Grantee are subject to all
applicable laws and regulations.
6. Tax Withholding. To the extent that the receipt of Shares hereunder results in
compensation income to Grantee for local income tax purposes under applicable law, the Company, in
its complete discretion, is authorized to (a) withhold, at such time as determined by the Company,
from any cash or other remuneration (including withholding from delivery to Grantee a number of
Shares, based on the market value of such Shares, as of the applicable Vesting Date), or a
combination thereof, then or thereafter payable to Grantee, the sum that the Company requires
to meet its tax withholding obligations under applicable law or regulation (the “Withholding
Liability”); (b) require Grantee to pay an amount, at such time as the Company shall specify, equal
to the Withholding Liability in cash, by certified or cashier’s check payable to the Company, or in
any other form acceptable to the Company; or (c) cause a sale or sales of Shares on behalf of
Grantee pursuant to which all or a portion of the proceeds are paid to the Company to satisfy the
Withholding Liability and all remaining proceeds (if any) are delivered to Grantee, and ▇▇▇▇▇▇▇
agrees to take all such action as may be necessary or appropriate to effect such sales. Further,
the Company’s obligation to deliver vested Shares, or any stock certificate or certificates
representing vested Shares, to Grantee shall be subject to, and conditioned upon, payment of the
Withholding Liability.
7. Par Value Paid Consideration for Shares. In addition to the valuable services rendered by
Grantee for the Company, upon the issuance of any Shares after they become vested hereunder, to the
extent permitted by applicable law, a portion of the resulting compensation that is includible in
Grantee’s income for income tax purposes under applicable law shall represent consideration paid by
Grantee for such Shares in an amount equal to the aggregate par value of such vested Shares.
8. Miscellaneous.
(a) No Fractional Shares. All provisions of this Agreement concern whole Shares. If
the application of any provision hereunder would yield a fractional Share, such fractional Share
shall be rounded down to the next whole Share.
(b) No Effect on Employment or Service. ▇▇▇▇▇▇▇ acknowledges and agrees that the
vesting of the Units pursuant to Section 3 hereof is earned only by continuing as an
employee. ▇▇▇▇▇▇▇ further acknowledges and agrees that this Agreement, the transactions
contemplated hereunder and the vesting schedule set forth herein do not constitute an express or
implied promise of continued engagement as an employee for the vesting period, for any period, or
at all, and will not interfere with ▇▇▇▇▇▇▇’s right, or the Company’s or Subsidiary’s right, to
terminate ▇▇▇▇▇▇▇’s relationship as an employee at any time.
(c) Dispute Resolution. To the extent permitted by applicable law, any dispute or
controversy arising out of or relating to this Agreement, or any breach hereof, shall be resolved
by binding arbitration in accordance with (i) the Commercial Arbitration Rules (the “Rules”) of the
American Arbitration Association (“AAA”) before a single arbitrator (unless otherwise mutually
agreed by the parties) as selected pursuant to the Rules and (ii) the Federal Arbitration Act.
Judgment on any award rendered by the arbitrator may be entered in any court of competent
jurisdiction. The venue for any arbitration proceeding shall be in ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇▇ County,
Texas, except if otherwise mutually agreed by the parties. The fees of the AAA and the arbitrator
shall be split equally by the parties. All other costs and expenses, including attorneys’ fees,
relating to the resolution of any such dispute shall be borne by the party incurring such costs and
expenses.
(d) Tax Consultation. ▇▇▇▇▇▇▇ understands that he or she may suffer adverse tax
consequences as a result of the grant, vesting or settlement of the Units granted hereunder.
▇▇▇▇▇▇▇ represents that he or she has consulted with any tax consultants he or she deems advisable
in connection with the acquisition or disposition of the Units and that he or she is not relying on
the Company or Subsidiary for any tax advice.
(e) Nature of the Grant. In accepting this Agreement, ▇▇▇▇▇▇▇ acknowledges 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, unless otherwise provided
in the Plan and this Agreement;
(ii) the grant of the Units is voluntary and occasional and does not create any contractual or
other right to receive future awards of Units, or benefits in lieu of Units, even if Units have
been awarded repeatedly in the past;
(iii) all decisions with respect to future grants of Units, if any, will be at the sole
discretion of the Company;
(iv) Grantee’s participation in the Plan is voluntary;
(v) Units are an extraordinary item that do not constitute compensation of any kind for
services of any kind rendered to the Company or any Subsidiary, and Units are outside the scope of
Grantee’s employment contract, if any;
(vi) Units are not part of normal or expected compensation or salary for any purpose,
including, but not limited to, calculation of any severance, resignation, termination, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement benefits or similar
payments and in no event should be considered as compensation for, or relating in any way to, past
services for the Company or any Subsidiary;
(vii) the future value of the underlying Shares is unknown and cannot be predicted with
certainty;
(viii) the value of the Shares acquired upon settlement of the Units may increase or decrease
in value; and
(ix) in consideration of the grant of the Units, no claim or entitlement to compensation or
damages arises from termination of the Units or diminution in value of the Units or Shares acquired
upon settlement of the Units resulting from termination of Grantee’s employment by the Company or
any Subsidiary (for any reason whatsoever and whether or not in breach of local labor laws), and
Grantee irrevocably releases the Company and each Subsidiary from any such claim that may arise;
if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to
have arisen, then, by signing this Agreement, Grantee shall be deemed irrevocably to have waived
his or her entitlement to pursue such claim.
(f) Data Privacy Notice and Consent. Grantee hereby explicitly and unambiguously
consents to the collection, use and transfer, in electronic or other form, of his or her personal
data as described in this Agreement by and among, as applicable, the Company and its Subsidiaries
and other affiliates for the exclusive purpose of implementing, administering and managing
▇▇▇▇▇▇▇’s participation in the Plan.
Grantee understands that the Company and its Subsidiaries may hold certain personal
information about Grantee, including, but not limited to, ▇▇▇▇▇▇▇’s name, home address and
telephone number, date of birth, social insurance number or other identification number, salary,
nationality, job title, any shares of stock or directorships held in the Company and its
Subsidiaries, details of all Units or any other entitlement to Shares awarded, canceled, vested,
unvested or outstanding in Grantee’s favor, for the purpose of implementing, administering and
managing the Plan (“Data”).
Grantee understands that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these recipients may be located in
Grantee’s country or elsewhere, and that the recipients’ countries may have different data privacy
laws and protections than Grantee’s country. ▇▇▇▇▇▇▇ understands that he or she may request a list
with the names and addresses of any potential recipients of the Data by contacting his or her local
human resources representative. Grantee authorizes the recipients to receive, possess, use, retain
and transfer the Data, in electronic or other form, for the purposes of implementing, administering
and managing ▇▇▇▇▇▇▇’s participation in the Plan, including any requisite transfer of such Data as
may be required to a broker, escrow agent or other third party with whom the Shares received upon
settlement of the Units may be deposited. ▇▇▇▇▇▇▇ understands that Data will be held only as long
as is necessary to implement, administer and manage his or her participation in the Plan. Grantee
understands that he or she may, at any time, view Data, request additional information about the
storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the
consent herein, in any case without cost, by contacting in writing his or her local human resources
representative. ▇▇▇▇▇▇▇ understands, however, that refusal or withdrawal of consent may affect his
or her ability to participate in the Plan and, to the extent permitted by applicable law, may void
this Agreement. For more information on the consequences of his or her refusal to consent or
withdrawal of consent, ▇▇▇▇▇▇▇ understands that he or she may contact his or her local human
resources representative.
(g) Language. If Grantee has received this Agreement or any other document related to
the Plan translated into a language other than English and if the translated version is different
than the English version, the English version will control.
(h) Delivery of Documents and Notices. Any document relating to participating in the
Plan and/or notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Agreement provides for effectiveness only upon
actual receipt of such notice) upon personal delivery, by telegram, telex, telecopy or similar
facsimile means, electronic delivery, or upon deposit in the U.S. Post Office or foreign postal
service, by certified or registered mail, return receipt requested, with postage and fees prepaid,
addressed to the Company at its then-current main corporate address or by electronic mail to
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇, and to Grantee at his or her address indicated on the Company’s records, at
the e-mail address, if any, provided for Grantee by the Company or its Subsidiary, or at such other
address and number as a party has previously designated in writing from time to time to the other
party.
(i) Description of Electronic Delivery. The Plan documents, which may include but do not
necessarily include the Plan Prospectus, this Agreement and U.S. financial reports of the Company,
may be delivered to Grantee electronically. Such means of delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the internet site of a third
party involved in administering the Plan, the delivery of the document via electronic mail or such
other delivery determined at the Company’s discretion.
(ii) Consent to Electronic Delivery. ▇▇▇▇▇▇▇ acknowledges that ▇▇▇▇▇▇▇ has read this
Section 8(h) of this Agreement and consents to the electronic delivery of the Plan
documents. ▇▇▇▇▇▇▇ acknowledges that he or she may receive from the Company a paper copy of any
documents delivered electronically at no cost if Grantee contacts the Company by telephone, through
a postal service or electronic mail at ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇. ▇▇▇▇▇▇▇ further acknowledges that
Grantee will be provided with a paper copy of any documents delivered electronically if electronic
delivery fails; similarly, Grantee understands that Grantee must provide the Company or any
designated third party with a paper copy of any documents delivered electronically by Grantee if
electronic delivery fails. ▇▇▇▇▇▇▇ understands that ▇▇▇▇▇▇▇’s consent may be revoked or changed,
including any change in the electronic mail address to which documents are delivered (if Grantee
has provided an electronic mail address), at any time by notifying the Company of such revised or
revoked consent by telephone, postal service or electronic mail at ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇. Finally,
Grantee understands that he or she is not required to consent to electronic delivery but that, to
the extent permitted by applicable law, such refusal may affect ▇▇▇▇▇▇▇’s ability to participate in
the Plan.
(i) Amendment, Termination and Waiver. This Agreement may be amended, modified,
terminated or superseded only by written instrument executed by or on behalf of the Company and by
Grantee. Any waiver of the terms or conditions hereof shall be made only by a written instrument
executed and delivered by the party waiving compliance. Any waiver granted by the Company shall be
effective only if executed and delivered by a duly authorized executive officer of the Company
other than Grantee. The failure of any party at any time or times to require performance of any
provisions hereof shall in no manner affect the right to enforce the same. No waiver by any party
of any term or condition herein, or the breach thereof, in one or more instances shall be deemed to
be, or construed as, a further or continuing waiver of any such condition or breach or a waiver of
any other condition or the breach of any other term or condition.
(j) Governing Law and Severability. This Agreement shall be governed by the internal
laws, and not the laws of conflict, of the State of Texas. The invalidity of any provision of this
Agreement shall not affect any other provision of this Agreement, which shall remain in full force
and effect.
(k) Successors and Assigns. This Agreement shall bind, be enforceable by, and inure
to the benefit of, the Company and its successors and assigns, and Grantee and ▇▇▇▇▇▇▇’s permitted
assigns under the Plan in the event of death or Disability.
[Signature page follows]
IN WITNESS WHEREOF, this Restricted Stock Unit Agreement is approved, granted and executed as
of the date first written above.
| ▇▇▇▇▇ INTERNATIONAL, INC. | ||||
| By: | ||||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | Senior Vice President, Human Resources | |||