EXHIBIT 10.1
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ CORPORATION
LONG-TERM STOCK INCENTIVE PLAN
PERFORMANCE SHARE AWARD AGREEMENT
PERFORMANCE SHARE AWARD AGREEMENT (the "Agreement") dated as
of September 23, 2003, between ▇▇▇▇ Corporation (the "Company") and the
individual whose name appears on the signature page hereof (the "Participant"),
who is a key employee of the Company or an Affiliate. Any term capitalized
herein but not defined shall have the meaning set forth in the ▇▇▇▇ Corporation
Long-Term Stock Incentive Plan (the "Plan").
1. Grant. In accordance with the terms of the Plan, the
Company hereby grants to the Participant a Performance Share Award subject to
the terms and conditions set forth herein.
2. Performance Period. The Performance Period for this Award
shall be the three-year period commencing on January 1, 2003 and ending on
December 31, 2005.
3. Performance Measures. There shall be two performance
measures, Relative Return to Shareholders and Return on Invested Capital, as
both are defined below.
a. Relative Return to Shareholders: This performance measure
ranks the "Return to Shareholders" (as defined below) for the Company over the
Performance Period in relation to the Return to Shareholders for the
"Peer Group" (as defined below).
i. "Return to Shareholders" for each respective
company shall mean the quotient of (I) the sum of (a) the average closing price,
as reported on the exchange where the stock of the relevant company is traded,
for the five consecutive trading days preceding January 1, 2006 and (b) the
dividends declared during the period commencing on January 1, 2003 and ending on
December 31, 2005, divided by (II) the average closing price, as reported on the
exchange where the stock of the relevant company is traded, for the five
consecutive trading days preceding January 1, 2003.
ii. "Peer Group" shall include ▇▇▇▇▇ Meritor, ▇▇▇▇
Corp., Delphi, ▇▇▇▇▇ Corp., ▇▇▇▇▇▇▇ Controls, Inc., Magna International, Inc.,
and Visteon.
b. Return on Invested Capital: This performance measure is
the compounded improvement on the Company's return on Invested Capital as
reported to its shareholders for 2003, 2004, 2005 fiscal years.
4. Performance Goals.
a. Relative Return to Shareholders:
i. Threshold: The Company is ranked above the
42nd percentile.
ii. Target: The Company is ranked above the 57th
percentile.
iii. Superior: The Company is ranked above the
85th percentile.
b. Return on Invested Capital:
i. Threshold: 3% * per year average
ii. Target: 5% per year average
iii. Superior: 7% per year average
*If threshold payout is not achieved by meeting the
3% compounded annual growth, an opportunity exists to
earn threshold payout if the % change in ROIC when
compared to the Peer Group is above the 57th
percentile.
5. Performance Shares.
a. The number of Performance Shares earned by a
Participant with respect to each performance measure during the Performance
Period shall be determined under the following chart:
Performance Shares
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Performance At Relative Return to Shareholders Return on Invested Capitol
------------------------- ------------------------------- --------------------------
Threshold 1858 1858
Target 3716 3716
Superior 5574 5574
b. In the event that the Company's actual performance does not
meet threshold for that performance measure, Performance Shares shall not be
earned with respect to that performance measure.
c. If the Company's actual performance for a performance
measure is between "threshold" and "target," the Performance Shares earned shall
equal the Performance Shares for threshold plus the number of Performance Shares
determined under the following formula:
(TAS - TS) x AP - TP
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TAP - TP
TAS = The Performance Shares for target.
TS = The Performance Shares for threshold.
AP = The Company's actual performance.
TP = The threshold performance goal.
TAP = The target performance goal.
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d. If the Company's actual performance for a performance
measure is between "target"and "superior," the Performance Shares earned shall
equal the Performance Shares for target plus the number of Performance Shares
determined under the following formula:
(SS - TAS) x AP - TAP
----------
SP - TAP
SS = The Performance Shares for superior.
TAS = The Performance Shares for target.
AP = The Company's actual performance.
TAP = The target performance goal.
SP = The superior performance goal.
e. If the Company's actual performance for performance
measure exceeds "superior," the Performance Shares earned shall equal the
Performance Shares for superior.
6. Timing and Form of Payout. Except as hereinafter provided,
after the end of the Performance Period, the Participant shall be entitled to
receive a number of shares of the Company's common stock, par value $.01 per
share ("Common Stock"), equal to his total number of Performance Shares
determined under Section 5. Delivery of such shares of Common Stock shall be
made as soon as administratively feasible after the Committee certifies the
actual performance of the Company during the Performance Period. Notwithstanding
the foregoing, any delivery of shares of Common Stock under this Section may be
deferred by the Participant with the Committee's consent; provided, that the
Participant's election to defer occurs prior to the expiration of the second
year of the Performance Period. Notwithstanding anything herein to the contrary,
the Committee may defer delivery of any shares of Common Stock to the
Participant under this Section if the delivery of such shares of Common Stock
would constitute compensation to the Participant that is not deductible by the
Company or an Affiliate due to the application of Code Section 162(m); provided,
that such shares of Common Stock deferred pursuant to this sentence shall be
delivered to the Participant on or before the January 15 of the first year in
which the Participant is no longer a "covered employee" of the Company (within
the meaning of Code Section 162(m) following the end of the Performance Period
or, if later, the deferred delivery date elected by the Participant in
accordance with the preceding sentence.
7. Termination of Employment Due to Death, Retirement, or
Disability. If a Participant ceases to be an employee prior to the end of the
Performance Period by reason of death, Retirement or Disability, the Participant
(or in the case of the Participant's death, the Participant's beneficiary) shall
be entitled to receive shares of Common Stock equal to the number of shares of
Common Stock the Participant would have been entitled to under Section 6 if he
or she had remained employed until the last day of the Performance Period
multiplied by a fraction, the numerator of which shall be the number of full
calendar months during the period of January 1, 2003 through the date of the
Participant's employment terminated and the denominator of which shall be
thirty-six. The delivery of such shares of Common Stock shall be made as soon as
administratively feasible after the end of the Performance Period, whether or
not the Participant had elected under Section 6 above to defer receipt of Common
Stock deliverable under this Award.
Any distribution made with respect to a Participant who has
died shall be paid to the beneficiary designated by the Participant pursuant to
Article 11 of the Plan to receive the Participant's shares of Common Stock under
this Award. If the Participant's beneficiary predeceases the Participant or no
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beneficiary has been designated, distribution of the Participant's shares of
Common Stock under this Award shall be made to the Participant's surviving
spouse and if none, to the Participant's estate.
8. Termination of Employment for Any Other Reason. Except as
provided in Section 7, the Participant must be an employee of the Company and/or
an Affiliate continuously from the date of this Award until the last day of the
Performance Period to be entitled to receive any shares of Common Stock with
respect to any Performance Shares he may have earned hereunder.
9. Assignment and Transfers. The rights and interests of the
Participant under this Award may not be assigned, encumbered or transferred
except, in the event of the death of the Participant, by will or the laws of
descent and distribution.
10. Withholding Tax. The Company and any Affiliate shall have
the right to retain shares of Common Stock that are distributable to the
Participant hereunder to the extent necessary to satisfy the minimum required
withholding taxes, whether federal or state, triggered by the distribution of
shares of Common Stock under this Award.
11. No Limitation on Rights of the Company. The grant of this
Award shall not in any way affect the right or power of the Company to make
adjustments, reclassification, or changes in its capital or business structure,
or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part
of its business or assets.
12. Plan and Agreement Not a Contract of Employment. Neither
the Plan nor this Agreement is a contract of employment, and no terms of
employment of the Participant shall be affected in any way by the Plan, this
Agreement or related instruments except as specifically provided therein.
Neither the establishment of the Plan nor this Agreement shall be construed as
conferring any legal rights upon the Participant for a continuation of
employment, nor shall it interfere with the right of the Company or any
Affiliate to discharge the Participant and to treat him or her without regard to
the effect that such treatment might have upon him or her as a Participant.
13. Participant to Have No Rights as a Stockholder. The
Participant shall not have any rights as a stockholder with respect to any
shares of Common Stock subject to this Award prior to the date on which he or
she is recorded as the holder of such shares of Common Stock on the records of
the Company.
14. Notice. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally, or
sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally or, if mailed, three days
after the date of deposit in the United States mail, in the case of the Company
to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and, in the case of the Participant, to its address set forth on the
signature page hereto or, in each case, to such other address as may be
designated in a notice given in accordance with this Section.
15. Governing Law. This Agreement shall be construed and
enforced in accordance with, and governed by, the laws of the State of Delaware,
determined without regard to its conflict of law rules.
16. Plan Document Controls. The rights herein granted are in
all respects subject to the provisions set forth in the Plan to the same extent
and with the same effect as if set forth fully herein. In the event that the
terms of this Agreement conflict with the terms of the Plan document, the Plan
document shall control.
[signature page follows]
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IN WITNESS WHEREOF, the Company and the Grantee have duly
executed this Agreement as of the date first written above.
▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its: Vice President, Secretary
and General Counsel
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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[Grantee's Signature]
Grantee's Name and Address
for notices hereunder:
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