EXHIBIT 10.2.5
INCORPORATED TERMS
DATED AS OF JANUARY __, ___
TO
RESTRICTED STOCK AND
RESTRICTED STOCK UNIT AGREEMENT
The following are the "Incorporated Terms" referred to in the
instrument entitled "Restricted Stock and Restricted Stock Unit Agreement" which
refers to these Incorporated Terms and which has been signed by the Company and
the Employee (the "Base Instrument"). The Incorporated Terms and the Base
Instrument constitute a single agreement and that agreement consists of the Base
Instrument and the Incorporated Terms. The Incorporated Terms dovetail with the
Base Instrument; because the last paragraph of the Base Instrument is Paragraph
1, the Incorporated Terms begin with Paragraph 2.
2. Restrictions. (a) (i) Except as otherwise provided herein, the Base
Restricted Stock, the Matching Restricted Stock and the Time Vested Restricted
Stock may not be sold, transferred or otherwise alienated or hypothecated until,
in the case of the Base Restricted Stock, the date set forth after "Base
Restricted Stock Release Date" on the signature page; in the case of the
Matching Restricted Stock, the date set forth after "Matching Restricted Stock
Release Date" on the signature page; and in the case of the Time Vested
Restricted Stock, until the Release Date determined as follows. For each date
set forth after "Time Vested Restricted Stock Release Date" on the signature
page, divide the number of shares set forth after "Shares of Time Vested
Restricted Stock" by the sum of one and the difference between the latest year
set forth after "Time Vested Restricted Stock Release Date" on the signature
page and the earliest year set forth thereafter. The resulting quotient, rounded
down to the nearest whole share, is the number of shares of Restricted Stock
that shall be released from such restrictions on each date set forth after "Time
Vested Restricted Stock Release Date" and such date shall be the Release Date
for such shares (and only for such shares), except that if after "Goal" on the
signature page "Applicable" appears, then such date shall be a Release Date only
if the condition set forth after "Goal" applicable to such Release Date is
satisfied. As used in "Goal," "▇▇▇" means the quotient of dividing Net Income by
Average Equity. "Net Income" means the Company's net income, determined in
accordance with generally accepted accounting principles ("GAAP") adjusted to
exclude the after-tax effect of the items excluded in clauses (i) and (ii) of
the definition of EPS in Paragraph 2(c) of this Agreement. "Average Equity"
means the average of the Company's shareholders' equity determined in accordance
with GAAP computed by using shareholders' equity at each month-end in the year
for which Net Income is being determined.
(ii) The term "Release Date" shall be applied separately to the
Base Restricted Stock, the Matching Restricted Stock and the Time Vested
Restricted Stock as if the term "Release Date" were the term "Base Restricted
Stock Release Date," the term "Matching Restricted Stock Release Date," or the
term "Time Vested Restricted Stock Release Date," as the case may be, and such
application shall correspond to the application of the term "Restricted Stock"
as set forth in Paragraph 1(a) of the Base Instrument.
(b) The Release Date for Time Vested RSUs shall be the same as the
Release Date for the Time Vested Restricted Stock.
(c) The Release Date for Performance RSUs shall be determined as
follows. For each date set forth after "Performance RSUs Release Date" on the
signature page, multiply the number set forth after "Performance RSUs" on the
signature page by the quotient of dividing the EPS for the fiscal year of the
Company ended on the December 31 immediately preceding such date by the amount
set forth after "Target" on the signature page. The resulting product, rounded
down to the nearest whole RSU, is the number of Performance RSUs for which a
Release Date shall occur on the corresponding date set forth after "Performance
RSUs Release Date" and such date shall be the Release Date for such RSUs (and
only for such RSUs). "EPS" means the Company's diluted earnings per share,
determined in accordance with GAAP and adjusted to exclude the after-tax effect
of (i) realized gains and losses, and (ii) extraordinary items, except that
there shall not be excluded such gains, losses and items attributable to joint
ventures. If by any date set forth after "Performance" the Company has not
publicly announced its diluted earnings per share, such date shall be two
business days after such earnings are publicly announced.
(d) Except as otherwise provided herein, RSUs may not be sold,
transferred or otherwise alienated or hypothecated regardless of the occurrence
of the Release Date.
3. Escrow. Shares of Restricted Stock shall be issued (in certificate
or electronic form, at the discretion of the Company) as soon as practicable in
the name of the Employee but shall be held in an escrow arrangement by the
transfer agent for the Stock, as escrow agent. Unless forfeited as provided
herein, Restricted Stock shall cease to be held in escrow and certificates for
such Stock shall be delivered to the Employee, or in the case of his death, to
his Beneficiary (as hereinafter defined) on the Release Date or upon any other
termination of the restrictions imposed by Paragraph 2 hereof.
4. Transfer After Release Date; Securities Law Restrictions; Holding
Period.
(a) Except as otherwise provided herein (including in Paragraph 4(b)
below), Restricted Stock shall become free of the restrictions of Paragraph 2
and be freely transferable by the Employee on the Release Date. Notwithstanding
the foregoing or anything to the contrary herein, the Employee agrees and
acknowledges with respect to any Restricted Stock and any Stock delivered in
settlement of RSUs that has not been registered under the Securities Act of
1933, as amended (the "Act") (i) he will not sell or otherwise dispose of such
Stock except pursuant to an effective registration statement under the Act and
any applicable state securities laws, or in a transaction which, in the opinion
of counsel for the Company, is exempt from such registration, and (ii) a legend
will be placed on the certificates or other evidence for the Restricted Stock
(or in the case of RSUs, any such Stock delivered in settlement) to such effect.
(b) If after "Holding Period" on the signature page "Applicable"
appears, then the Employee agrees that, during the Holding Period, the Employee
will not make a Sale of the Holding Period Shares. "Holding Period" means a
period beginning on the Release Date and ending on the earlier of (i) the first
anniversary of the Release Date and (ii) the first date on which the Employee is
no longer subject to the reporting requirements of Section 16(a) of the Act (as
such term is defined in the Annex). "Holding Period Shares" means a number of
shares of Stock that are released on such Release Date equal to the lesser of
(1) 25% of the aggregate number of shares of Restricted Stock that are released
on the Release Date and (2) 50% of the
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difference between (i) the aggregate number of shares of Restricted Stock that
are released on the Release Date and (ii) the aggregate number of shares that
are withheld to satisfy withholding tax requirements under Paragraph 10(b) of
this Agreement. "Sale" means a transfer for value, except that, (i) the transfer
to the Company of Holding Period Shares in payment of the exercise price of an
option granted to the Employee by the Company shall not be a Sale if there is no
Sale for the remainder of the Holding Period of a number of shares of Stock
received upon exercise of such option that are not less than the number of
Holding Period Shares so transferred in connection with such exercise, and (ii)
an involuntary transfer, including Holding Period Shares converted in a merger,
is not a Sale; it is understood that neither a pledge nor a gift, including to
an entity in which the Employee has an interest (provided that in the case of
such an entity, such entity does not make a Sale for the remainder of the
Holding Period), is a transfer for value.
(c) If after "Holding Period" on the signature page "Applicable"
appears, then the Employee agrees that, during the Holding Period (for purposes
of applying such definition to this Paragraph 4(c), Release Date means each date
on which the Option is exercised), the Employee will not make a Sale of the
Option Holding Period Shares. "Option Holding Period Shares" means a number of
shares of Stock acquired at each exercise of the Option equal to the lesser of
(1) 25% of the aggregate number of shares for which the Option is exercised, and
(2) 50% of the difference between (i) the aggregate number of shares for which
the Option is exercised and (ii) the aggregate number of shares that are
withheld from the shares delivered on such exercise to satisfy withholding tax
requirements applicable to such exercise. The Option is the option granted to
the Employee on January 28, 2004.
(d) Except as otherwise provided in the parenthetical in clause (ii)
of the definition of Sale, if a transfer that is not a Sale occurs, the Holding
Period for the shares involved in such transfer shall terminate at the time of
such transfer.
5. Termination of Employment Due to Death. If the Employee's
employment with the Company or any of its subsidiaries is terminated because of
death prior to the Release Date, (i) the restrictions of Paragraph 2 applicable
to the Restricted Stock shall terminate on the date of death and such Restricted
Stock shall be free of such restrictions and, except as otherwise provided in
Paragraph 4 hereof, freely transferable, and (ii) a Release Date shall be deemed
to have occurred for all RSUs.
6. Forfeiture of Restricted Stock. (a) If the Employee's employment
with the Company and all of its subsidiaries is terminated prior to the Release
Date for any reason (including without limitation, disability or termination by
the Company and all subsidiaries thereof, with or without cause) other than
death, all Restricted Stock and all RSUs shall be forfeited to the Company on
the date of such termination unless otherwise provided in subparagraph (b)
below, or unless the Management Development, Nominating and Governance Committee
of the Company's Board of Directors (the "Management Development Committee") or
other Committee of such Board administering the Plan (the Management Development
Committee or such other Committee is herein referred to as the "Committee")
determines, on such terms and conditions, if any, as the Committee may impose,
that all or a portion of the Restricted Stock and/or Stock deliverable on
settlement of RSUs shall be released to the Employee and the restrictions of
Paragraph 2 applicable thereto shall terminate. Absence of the
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Employee on leave approved by a duly elected officer of the Company, other than
the Employee, shall not be considered a termination of employment during the
period of such leave.
The Release Date for the Time Vested Restricted Stock (and any Time
Vested RSUs) and the Performance RSUs may occur on multiple dates, each of which
is a Release Date for the number of shares or RSUs determined as provided in
Paragraphs 2(a), (b) and (c). Hence, any forfeiture of Time Vested Restricted
Stock, Time Vested Restricted RSUs or Performance RSUs applies only to the
shares or RSUs for which a Release Date had not yet occurred on the date of
forfeiture. The preceding sentence has been included in this Agreement for the
purpose of avoiding any doubt that the result described in the preceding
sentence would occur; therefore, such result will occur under prior agreements
awarding Performance Restricted Stock to the Employee even though a comparable
provision is not included in such agreements.
(b) If the Employee's employment with the Company and all of its
subsidiaries terminates by reason of retirement after reaching age 62 and after
having been employed by the Company or any subsidiary thereof for an aggregate
period of at least seven years, such retirement shall not result in forfeiture
of any Time Vested RSUs or Performance RSUs (this provision does not apply to
the Base or Matching Restricted Stock nor does it apply to Time Vested
Restricted Stock not awarded as RSUs) if (1) the Employee's employment with the
Company or one of its subsidiaries continues for no less than one year after the
date of this Agreement, and (2) no later than the date on which employment
terminates, the Employee enters into an agreement with the Company (which
agreement shall be drafted by and acceptable to the Company) under which the
Employee agrees not to compete with the Company and its subsidiaries during a
period ending one year after the latest of the dates set forth after (i) "Time
Vested Restricted Stock Release Date" on the signature page, and (ii)
"Performance RSUs Release Date" on the signature page, and the Employee complies
with such agreement. If the Employee enters into such a non-competition
agreement and thereafter breaches the terms thereof, the RSUs shall be forfeited
and the Employee shall return to the Company any Stock awarded under this
Agreement that was delivered to the Employee after the date on which such
non-competition agreement was entered into. If the conditions in the second
preceding sentence are satisfied and the Employee complies with the terms of
such agreement, upon the Employee's death, the provisions of Paragraph 5 shall
apply as if the Employee's employment with the Company and its subsidiaries
terminated because of such death.
(c) Any shares of (i) Performance RSUs for which a Release Date has
not occurred by the latest date set forth after "Performance RSUs Release Date"
on the signature page (such date being subject to extension as contemplated in
the last sentence of Paragraph 2(c)) and (ii) Time Vested Restricted Stock for
which a Release Date does not occur because the condition set forth after "Goal"
on the signature page is not satisfied, shall be forfeited to the Company,
unless in the case of (i) and (ii) the Committee determines otherwise as
contemplated in subparagraph (a) above.
(d) If Restricted Stock is forfeited, the Employee hereby appoints the
Company, acting through any Vice President or more senior officer, as the
Employee's attorney-in-fact to transfer such forfeited Restricted Stock to the
Company.
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7. Beneficiary. (a) The person whose name appears on the signature
page hereof after the caption "Beneficiary" or any successor designated by the
Employee in accordance herewith (the person who is the Employee's Beneficiary at
the time of his death herein referred to as the "Beneficiary") shall be entitled
to receive the Restricted Stock to be released to the Beneficiary under
Paragraphs 3 and 5 as a result of the death of the Employee and the Stock to be
delivered in settlement of RSUs. The Employee may from time to time revoke or
change his Beneficiary without the consent of any prior Beneficiary by filing a
new designation with the Committee. The last such designation received by the
Committee shall be controlling; provided, however, that no designation, or
change or revocation thereof, shall be effective unless received by the
Committee prior to the Employee's death, and in no event shall any designation
be effective as of a date prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of an
Employee's death, or if no designated Beneficiary survives the Employee or if
such designation conflicts with law, upon the death of the Employee, the
Employee's estate shall be entitled to receive the Restricted Stock and the
Stock to be delivered in settlement of RSUs. If the Committee is in doubt as to
the right of any person to receive such Restricted Stock or Stock to be
delivered in settlement of RSUs, the Company may retain the same and any
distributions thereon, without liability for any interest thereon, until the
Committee determines the person entitled thereto, or the Company may deliver
such all of such property and any distributions thereon to any court of
appropriate jurisdiction and such delivery shall be a complete discharge of the
liability of the Company therefor.
8. Stock Legends. (a) In addition to any legends placed on
certificates for Restricted Stock, each certificate or other evidence for shares
of Restricted Stock shall bear the following legend:
"The sale or other transfer of these shares of stock, whether
voluntary, or by operation of law, is subject to certain restrictions
set forth in the MGIC Investment Corporation 2002 Stock Incentive Plan
and a Restricted Stock Agreement between MGIC Investment Corporation
and the registered owner hereof. A copy of such Plan and such
Agreement may be obtained from the Secretary of MGIC Investment
Corporation."
When the restrictions imposed by Paragraph 2 hereof terminate, the Employee
shall be entitled to have the foregoing legend removed from such Stock.
(b) If after "Holding Period" on the signature page "Applicable"
appears, at the option of the Company, an appropriate legend may be placed on
certificates for Stock noting the requirements to hold such Stock imposed by
Paragraphs 4(b) and (c) of this Agreement. When such requirements terminate, the
Employee shall be entitled to have the foregoing legend removed from such
certificates.
9. Voting Rights; Dividends and Other Distributions; Rights of RSUs.
(a) While the Restricted Stock is subject to restrictions under Paragraph 2 and
prior to any forfeiture thereof, the Employee may exercise full voting rights
for the Restricted Stock.
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(b) While the Restricted Stock is subject to the restrictions under
Paragraph 2 and prior to any forfeiture thereof, the Employee shall be entitled
to receive all dividends and other distributions paid with respect to the
Restricted Stock. If any such dividends or distributions are paid in Stock, such
shares shall be subject to the same restrictions as the shares of Restricted
Stock with respect to which they were paid, including the requirement that
Restricted Stock be held in escrow pursuant to Paragraph 3 hereof.
(c) Subject to the provisions of this Agreement, the Employee shall
have, with respect to the Restricted Stock, all other rights of holders of
Stock.
(d) RSUs represent only the right to receive as Stock, on the terms
provided herein (i) the number of shares indicated after "Time Vested Restricted
Stock" on the signature page and (ii) a number of shares equal to the number set
forth after "Performance RSUs" on the signature page. Except to the extent
forfeited as provided herein, on the RSU Settlement Date set forth on the
signature page or determined as provided thereon, RSUs shall be settled by the
issuance of shares of Stock and certificates for such Stock shall be delivered
to the Employee, or in the case of his death, to his Beneficiary. The Employee
with respect to RSUs shall have no rights as a holder of Stock, including the
right to vote or to receive dividends, until certificates for such Stock are
actually delivered in settlement of the RSUs. Notwithstanding the preceding
sentence, on each date on which the Company pays a dividend in cash on the
Stock, the Company shall make a payment in cash on the Time Vested RSUs that are
outstanding on the record date for such dividend equal to the dividend that
would have been paid on the number of shares indicated after "Shares of Time
Vested Restricted Stock" on the signature page had such shares been outstanding.
No equivalent payment shall be made on the Performance RSUs.
10. Tax Withholding. (a) It shall be a condition of the obligation of
the Company to release from escrow Restricted Stock to the Employee or the
Beneficiary or to deliver Stock in settlement of RSUs, and the Employee agrees,
that the Employee shall pay to the Company upon its demand, such amount as may
be requested by the Company for the purpose of satisfying its liability to
withhold federal, state, or local income or other taxes incurred by reason of
the award of the Restricted Stock or RSUs, as a result of the termination of the
restrictions on Restricted Stock hereunder or the delivery of Stock in
settlement of RSUs.
(b) If the Employee does not make an election under Section 83(b) of
the Internal Revenue Code of 1986, as amended, with respect to the Restricted
Stock awarded hereunder, and does not satisfy the withholding obligations prior
to the Tax Date (as defined below) by paying sufficient cash to the Company or
transferring ownership of a sufficient number of other shares of Stock to the
Company as provided in Paragraph 10(c), then the withholding tax requirements
arising from the termination of restrictions on the Restricted Stock or the
settlement of RSUs in Stock shall be satisfied through a withholding by the
Company of shares of Stock that would otherwise be delivered to the Employee. In
such event, the Company shall withhold that number of shares of Restricted Stock
otherwise deliverable to the Employee from escrow hereunder or that number of
shares of Stock that would otherwise be delivered in settlement of RSUs, in each
case, having a Fair Market Value (as such term is defined in the Plan) on the
day prior to the Tax Date equal to the amount required to be withheld as a
result of the termination of the restrictions on such Restricted Stock or as a
result of the settlement of RSUs in Stock. As used herein, "Tax Date" means the
date on which the Employee must include
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in his gross income for federal income tax purposes the fair market value of the
Restricted Stock, or Stock delivered in settlement of the RSUs, over the
purchase price therefor.
(c) If the Employee desires to use cash or other shares of Stock to
satisfy the withholding obligations set forth above, the Employee must: (i) make
an election to do so in writing on a form provided by the Company, (ii) deliver
such election form to the Company by the deadline specified by the Company, and
(iii) deliver to the company the required cash or other shares of Stock having a
Fair Market Value on the Tax Date (as defined above) equal to the amount
required to be withheld.
11. Adjustments in Event of Change in Stock or Fiscal Year. In the
event of any change in the outstanding shares of Stock ("capital adjustment")
for any reason, including but not limited to, any stock splits, stock dividend,
recapitalization, merger, consolidation, reorganization, combination or exchange
of shares or other similar event which, in the judgment of the Committee, could
distort the implementation of the award of Restricted Stock or the award of RSUs
or the realization of the objectives of such award, the Committee may make such
adjustments in the shares of Restricted Stock subject to this Agreement or in
the shares deliverable on settlement of RSUs, or in the terms, conditions or
restrictions of this Agreement, including the Target and the Goal set forth on
the signature page, as the Committee deems equitable, except that in the event
of any stock split, reverse stock split, stock dividend, combination or
reclassification of the Stock that occurs after the date of this Agreement, the
number of RSUs and the Target shall be adjusted in accordance with the
resolutions adopted by the Management Development Committee on January 24, 2007.
In addition, if the Company changes its fiscal year from a year ending December
31, the Committee may make such adjustments in the Performance RSUs Release Date
and the Target as the Committee deems equitable.
12. Change in Control. If a "Change in Control of the Company" (as
defined in the Annex attached hereto) occurs, notwithstanding anything herein,
the restrictions of Paragraph 2 applicable to the Restricted Stock shall
terminate on the date of the Change in Control of the Company and a Release Date
shall be deemed to have occurred for all RSUs. The Employee agrees that such
Annex may be amended by the Company on one or more occasions without the consent
or approval of the Employee if in the determination of the Committee such
amendment is necessary or appropriate to conform the provisions of such Annex to
the IRS Notice (as defined in such Annex), any regulations issued by the IRS
under Section 409A of the Internal Revenue Code of 1986 (which was added by the
American Jobs Creation Act of 2004) or any position published by the IRS with
respect to such Section. The right of the Company to make such an amendment does
not depend on whether the Restricted Stock or RSUs are subject to such Section
but will enable the Company to have uniform provisions governing a change of
control among all agreements having such change of control provisions, including
those under which compensation is subject to such Section. Any such amendment
will become effective upon notice to the Employee. The Company will seek to give
the Employee notice of an amendment with reasonable promptness after the
Committee has approved the amendment.
13. Powers of Company Not Affected; No Right to Continued Employment.
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(a) The existence of the Restricted Stock or RSUs shall not affect in
any way the right or power of the Company or its stockholders to make or
authorize any combination, subdivision or reclassification of the Stock or any
reorganization, merger, consolidation, business combination, exchange of shares,
or other change in the Company's capital structure or its business, or any issue
of bonds, debentures or stock having rights or preferences equal, superior or
affecting the Restricted Stock or any Stock to be issued in settlement of RSUs
or, in both cases, the rights thereof, or dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise. The determination of the Committee as to any such adjustment shall be
conclusive and binding for all purposes of this Agreement.
(b) Nothing herein contained shall confer upon the Employee any right
to continue in the employment of the Company or any subsidiary or interfere with
or limit in any way the right of the Company or any subsidiary to terminate the
Employee's employment at any time, subject, however, to the provisions of any
agreement of employment between the Company or any subsidiary and the Employee.
The Employee acknowledges that a termination of his or her employment could
occur at a time before which the restrictions referred to in Paragraph 2 above
have lapsed, resulting in the forfeiture of the Restricted Stock and RSUs by the
Employee, unless otherwise provided herein. In such event, the Employee will not
be able to realize the value of the Restricted Stock or of the Stock that
underlies the RSUs nor will the Employee be entitled to any compensation on
account of such value.
14. Interpretation by Committee. The Employee agrees that any dispute
or disagreement which may arise in connection with this Agreement shall be
resolved by the Committee, in its sole discretion, and that any interpretation
by the Committee of the terms of this Agreement or the Plan and any
determination made by the Committee under this Agreement or the Plan may be made
in the sole discretion of the Committee and shall be final, binding, and
conclusive. Any such determination need not be uniform and may be made
differently among Employees awarded Restricted Stock and RSUs.
15. Clawback. If and to the extent the Committee deems it appropriate
for such payment to be made, each Covered Employee shall pay the Company an
amount equal to the Excess Compensation. "Covered Employee" means an Employee
who was a Section 16 Filer at an Affected Performance RSUs Release Date
regardless of whether such Employee ceased to be a Section Filer thereafter.
"Section 16 Filer" is a person who is required to file reports under Section
16(a) of the Act as such requirement to so file is in effect at each Affected
Performance RSUs Release Date. "Affected Performance RSUs Release Date" means
each Performance RSUs Release Date on which, had a financial restatement that
was made after such Performance RSUs Release Date been in effect at such
Performance RSUs Release Date, the number of shares of Stock settled on account
of Performance RSUs would have been lower. "Excess Compensation" means (i) the
difference between the Income that was recognized by the Covered Employee on an
Affected Performance RSUs Release Date and the Income that would have been
recognized had the financial restatement referred to in the definition of
Affected Performance RSUs Release Date then been in effect, except that such
difference will be deemed to be zero for each Affected Performance RSUs Release
Date prior to the date on which Covered Employee was a Section 16 Filer, plus
(ii) the value of any deduction to which the Covered Employee is entitled on
account of the payment to the Company required by this Paragraph 15.
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"Income" means income determined for federal income tax purposes minus the
amount of federal, state and local income taxes and, to the extent applicable,
the employee portion of Social Security and Medicaid payroll taxes, payable on
account of such income. The amount of federal, state and local income taxes and
the value of any deduction contemplated by clause (ii) of the second preceding
sentence shall be computed by assuming that Income is taxed at the highest
marginal rate, with such rate for any state and local income taxes appropriately
adjusted to reflect the benefit of an itemized federal deduction for such taxes
(if in the case of local taxes, such taxes are eligible for such a deduction),
which adjustment shall be made by assuming that no reduction in such deduction
on account of the Covered Employee's adjusted gross income applies.
16. Miscellaneous. (a) This Agreement shall be governed and construed
in accordance with the laws of the State of Wisconsin applicable to contracts
made and to be performed therein between residents thereof.
(b) The waiver by the Company of any provision of this Agreement shall
not operate or be construed to be a subsequent waiver of the same provision or
waiver of any other provision hereof.
(c) The Restricted Stock and RSUs shall be deemed to have been awarded
pursuant to the Plan and is subject to the terms and conditions thereof. In the
event of any conflict between the terms hereof and the provisions of the Plan,
the terms and conditions of the Plan shall prevail. Any and all terms used
herein, unless specifically defined herein shall have the meaning ascribed to
them in the Plan. A copy of the Plan is available on request of the Employee
made in writing or by e-mail to the Company's Secretary.
(d) Any notice, filing or delivery hereunder or with respect to
Restricted Stock or RSUs shall be given to the Employee at either his usual work
location or his home address as indicated in the records of the Company, and
shall be given to the Committee or the Company at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Avenue,
Milwaukee 53202, Attention: Secretary. All such notices shall be given by first
class mail, postage pre-paid, or by personal delivery.
(e) This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and assigns and shall be binding upon and inure
to the benefit of the Employee, the Beneficiary and the personal
representative(s) and heirs of the Employee, except that the Employee may not
transfer any interest in any Restricted Stock prior to the release of the
restrictions imposed by Paragraph 2 nor may the Employee transfer any interest
in any RSUs.
(f) As a condition to the grant of the Restricted Stock and RSUs, the
Employee must execute an agreement not to compete in the form provided to the
Employee by the Company.
The end of Paragraph 16 is the end of the Incorporated Terms. The
remainder of the Agreement is contained in the Base Instrument.
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ANNEX
DEFINITION OF "CHANGE IN CONTROL OF THE COMPANY" AND RELATED TERMS
1 Change in Control of the Company. A "Change in Control of the Company"
shall be deemed to have occurred if an event set forth in any one of the
following paragraphs shall have occurred:
(i) any Person (other than (A) the Company or any of its subsidiaries,
(B) a trustee or other fiduciary holding securities under any employee
benefit plan of the Company or any of its subsidiaries, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities
or (D) a corporation owned, directly or indirectly, by the shareholders of
the Company in substantially the same proportions as their ownership of
stock in the Company ("Excluded Persons")) is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company (not including
in the securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates after July 22, 1999, pursuant
to express authorization by the Board of Directors of the Company (the
"Board") that refers to this exception) representing more than 50% of the
total fair market value of the stock of the Company or representing 50% or
more of the total voting power of the stock of the Company; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors of the Company then serving: (A)
individuals who, on July 22, 1999, constituted the Board and (B) any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of
the Company, as such terms are used in Rule 14a-11 of Regulation 14A under
the Act) whose appointment or election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at least a
majority of the directors then still in office who either were directors on
July 22, 1999, or whose initial appointment, election or nomination for
election as a director which occurred after July 22, 1999 was approved by
such vote of the directors then still in office at the time of such initial
appointment, election or nomination who were themselves either directors on
July 22, 1999 or initially appointed, elected or nominated by such majority
vote as described above ad infinitum (collectively the "Continuing
Directors"); provided, however, that individuals who are appointed to the
Board pursuant to or in accordance with the terms of an agreement relating
to a merger, consolidation, or share exchange involving the Company (or any
direct or indirect subsidiary of the Company) shall not be Continuing
Directors for purposes of this Agreement until after such individuals are
first nominated for election by a vote of at least a majority of the then
Continuing Directors and are thereafter elected as directors by the
shareholders of the Company at a meeting of shareholders held following
Annex - Page 1 of 4
consummation of such merger, consolidation, or share exchange; and,
provided further, that in the event the failure of any such persons
appointed to the Board to be Continuing Directors results in a Change in
Control of the Company, the subsequent qualification of such persons as
Continuing Directors shall not alter the fact that a Change in Control of
the Company occurred; or
(iii) a merger, consolidation or share exchange of the Company with
any other corporation is consummated or voting securities of the Company
are issued in connection with a merger, consolidation or share exchange of
the Company (or any direct or indirect subsidiary of the Company) pursuant
to applicable stock exchange requirements, other than (A) a merger,
consolidation or share exchange which would result in the voting securities
of the Company entitled to vote generally in the election of directors
outstanding immediately prior to such merger, consolidation or share
exchange continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any
parent thereof) at least 50% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
entitled to vote generally in the election of directors of such entity or
parent outstanding immediately after such merger, consolidation or share
exchange, or (B) a merger, consolidation or share exchange effected to
implement a recapitalization of the Company (or similar transaction) in
which no Person (other than an Excluded Person) is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its Affiliates after July
22, 1999, pursuant to express authorization by the Board that refers to
this exception) representing at least 50% of the combined voting power of
the Company's then outstanding voting securities entitled to vote generally
in the election of directors; or
(iv) the sale or disposition by the Company of all or substantially
all of the Company's assets (in one transaction or a series of related
transactions within any period of 24 consecutive months), other than a sale
or disposition by the Company of all or substantially all of the Company's
assets to an entity of which at least 75% of the combined voting power of
the voting securities entitled to vote generally in the election of
directors (or such lower percentage as is determined under the IRS Notice)
immediately after such sale are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to such
sale. It is understood that in no event shall a sale or disposition of
assets be considered to be a sale of substantially all of the assets unless
the assets sold or disposed of have a total gross fair market value of at
least 40% of the total gross fair market value of all of the Company's
assets immediately prior to such sale or disposition.
2 Related Definitions. For purposes of this Annex, the following terms,
when capitalized, shall have the following meanings:
Annex - Page 2 of 4
(i) Act. The term "Act" means the Securities Exchange Act of 1934, as
amended.
(ii) Affiliate and Associate. The terms "Affiliate" and "Associate"
shall have the respective meanings ascribed to such terms in Rule l2b-2 of
the General Rules and Regulations under the Act.
(iii) Beneficial Owner. A Person shall be deemed to be the "Beneficial
Owner" of any securities:
(a) which such Person or any of such Person's Affiliates or
Associates has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (A) securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, or (B) securities
issuable upon exercise of Rights issued pursuant to the terms of the
Company's Rights Agreement, dated as of July 22, 1999, between the
Company and ▇▇▇▇▇ Fargo Bank Minnesota, National Association (as
successor Rights Agent), as amended from time to time (or any
successor to such Rights Agreement), at any time before the issuance
of such securities;
(b) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
l3d-3 of the General Rules and Regulations under the Act), including
pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security under this Subsection 1 (c) as a
result of an agreement, arrangement or understanding to vote such
security if the agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations under the
Act and (B) is not also then reportable on a Schedule l3D under the
Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in Subsection 1(c) (ii) above) or disposing of any
voting securities of the Company.
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(iv) IRS Notice. The term "IRS Notice" shall mean the IRS Notice
2005-1, which was issued with respect to the American Jobs Creation Act of
2004.
(v) Person. The term "Person" shall mean any individual, firm,
partnership, corporation or other entity, including any successor (by
merger or otherwise) of such entity, or a group of any of the foregoing
acting in concert.
(vi) Stock. The term "stock" shall have the meaning contemplated by
the IRS Notice.
Annex - Page 4 of 4