PAXAR CORPORATION
Performance Share Agreement for 2006
Under the
Paxar 2000 Long-Term Performance and Incentive Plan
This Performance Share Agreement (the "Agreement"), is between Paxar Corporation
("Paxar" or the "Company") and ("you" or the "Executive").
This Agreement grants an award to you under the Paxar 2000 Long-Term Performance
and Incentive Plan (the "Plan") of Performance Shares ("shares") based on shares
of Paxar Common Stock. This award enables you to receive a future number of
shares from the Company in accordance with the terms and conditions of this
Agreement and the Plan.
1. Purpose. These shares have been granted by the Executive Development
and Compensation Committee of Paxar's Board of Directors (the
"Committee") for the purposes of (a) rewarding you for contributing to
the Company's success and (b) providing you with incentives to continue
to do so in the future as a valued member of the Paxar team.
2. Performance Period. The period commences January 1, 2006 and ends
December 31, 2008.
3. Performance Goals. (A) Earnings per share (EPS), as defined in 4 a.
below, during the Performance Period and (B) the average of the annual
return on invested capital (ROIC), as defined in 4 b. below, during the
Performance Period.
4 a. EPS. EPS is defined as adjusted net income (see below), divided by the
diluted weighted average shares outstanding for the period under
consideration as reported in the Company's financial statements.
b. ROIC. ROIC is defined as adjusted net income, divided by the sum of
long-term debt, minority interest, preferred stock and total common
equity, each as reported in the Company's financial statements.
c. Adjusted Net Income. Adjusted net income is defined, as reported in the
Company's financial statements, as net income adjusted for (i) material
one time charges related to restructuring and purchase accounting, (ii)
the purchase accounting impact of recording inventories at fair value,
and (iii) material changes in accounting policies (e.g., amortization
of goodwill, option expensing).
5. Payout Value. Payout value at end of the Performance Period will depend
on the number of shares earned and the value of the stock as of the
distribution date.
3-Year Cumulative EPS
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ROIC
Straight-line interpolation will be used to determine the percentage
of shares earned if the Company's performance falls between those
shown above.
6. Distribution. Distribution will occur following the completion
of the Performance Period and certification of the results by
the Executive Development & Compensation Committee. Payment
will be made in the form of shares.
7. Consequences of Termination of Employment.
(a) In the event of the Executive's termination of employment with
the Company prior to the end of the Performance Period, except
as set forth in (b), below, all the shares shall be forfeited
and the award shall be cancelled as of the date of such
termination.
(b) If the Executive's employment with the Company is terminated
for death or disability, or for retirement with the
Committee's approval, the number of shares covered by this
Agreement shall be prorated as the Committee, in its sole
discretion, deems appropriate, and paid at the conclusion of
the Performance Period.
8. Change in Control. Unless otherwise specified in an employment
contract, awards will be treated as defined below in the event of
a change in control:
a. Upon a change in control, the performance share opportunity will
convert into time-vesting restricted shares (or its equivalent),
with the number of shares dependent on the portion of the cycle
completed as described below:
(i) If more than 50% of performance cycle completed,
conversion occurs based on performance to date
(ii) If less than 50% of performance cycle completed,
conversion occurs based on target award opportunity
without consideration for performance
b. If the continuing entity is unwilling or unable to replace awards
with restricted stock (or its equivalent) or a qualifying
termination occurs, vesting will accelerate as described below:
(i) If more than 50% of performance cycle is completed
at the applicable date, the award accelerates in
full based on performance to date
(ii) If less than 50% of performance cycle is completed
at the applicable date, the target award opportunity
accelerates without consideration for performance to
date
c. For purposes of the above, a qualifying termination means
involuntary termination without cause or voluntary termination
with good reason within 18 months of the change in control date.
9. No Right to Employment or Other Benefits. Nothing contained in this
Agreement shall confer on the Executive any right to continue in
the employ of the Company or shall limit the Company's rights to
terminate the Executive at any time, provided, however, that nothing
in this Agreement shall affect any other contractual rights existing
between the Executive and the Company. Payments, if any, made under
this Agreement will not be included in the definition or calculation
of compensation for purposes of determining the amount of benefits for
the Executive under any other compensation or benefit plan of the
Company.
10. Miscellaneous. The Agreement (a) shall be binding upon and inure to
the benefit of any successor of the Company; (b) shall be governed by
the laws of the State of New York, and any applicable law of the
United States of America; and (c) may not be amended except in
writing. The Committee shall have the right to alter or amend this
Agreement from time to time, consistent with the purposes of the Plan
and in order to comply with any applicable law or regulation, without
the consent of the Executive; provided, however, that any change is
also applicable to similar Agreements with other Paxar Executives. In
the event of a conflict between this Agreement and the Plan, the Plan
shall govern.
Paxar Corporation
By:
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Title: President and CEO
Accepted and Agreed to:
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Executive