Exhibit 10.1
PAXAR CORPORATION
Performance Share Agreement for 2005
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 July 1, 2005 and ends December 31,
2007.
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) of the last two years of the Performance Period.
4a. 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 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.
2 1/2-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 includes 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