EXHIBIT 10.6
FORM OF TANDEM LIMITED STOCK APPRECIATION RIGHT (TANDEM TO $150 OPTIONS)
UNDER THE REGISTRANT'S 1996 STOCK OPTION AND AWARD PLAN
TRANSAMERICA CORPORATION
TANDEM LIMITED STOCK APPRECIATION RIGHT AGREEMENT
In connection with the grant under the Transamerica
Corporation 1996 Stock Option and Award Plan (the "Plan") of a nonqualified
stock option to purchase shares of common stock of Transamerica Corporation
("Shares") at a purchase price per Share of $150.00 (the "Related Option"),
Transamerica Corporation (the "Company") hereby grants you, [NAME OF EMPLOYEE]
(the "Employee"), a tandem limited stock appreciation right (a "TLSAR") under
the Plan, to surrender all or part of the unexercised portion of the Related
Option in exchange for a payment from the Company pursuant to this TLSAR. The
date of this Agreement is [DATE] (the "Grant Date"). In general, the latest date
this TLSAR will expire is [DATE 10 YEARS FROM GRANT DATE] (the "Expiration
Date"). However, as provided in Appendix A (attached hereto), this TLSAR may
expire earlier than the Expiration Date. Subject to the provisions of Appendix A
and of the Plan, the principal features of this TLSAR are as follows:
Number of Shares to
Which this TLSAR Pertains: [NUMBER] Exercise Price per Share:
$_____
Scheduled Vesting Date: The date on which a Change of
Control occurs.
Event Triggering Termination of TLSAR Maximum Time to Exercise After
Triggering Event*
Termination of Employment (except as shown below) 3 months
Termination of Employment due to Disability 3 years
Termination of Employment due to Early or Normal
Retirement 5 years
Termination of Employment due to death 3 years
Change of Control 60 days
Failure of the Related Option to Vest None
Exercise of the Related Option None
* However, in no event may this TLSAR be exercised after the Expiration Date
(except in certain cases of the death of the Employee).
Your signature below indicates your agreement and
understanding that this TLSAR is subject to all of the terms and conditions
contained in Appendix A and the Plan. For example, important additional
information on vesting and termination of this TLSAR is contained in Paragraphs
4 through 6 of Appendix A. ACCORDINGLY, PLEASE BE SURE TO READ ALL OF APPENDIX
A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS TLSAR.
TRANSAMERICA CORPORATION EMPLOYEE
By______________________ ________________________
Title: [NAME]
APPENDIX A
TERMS AND CONDITIONS OF TANDEM LIMITED STOCK APPRECIATION RIGHTS
1. Grant of TLSAR. The Company hereby grants to the Employee
under the Plan, in connection with the grant of the Related Option, and as a
separate incentive in connection with his or her employment and not in lieu of
any salary or other compensation for his or her services, a TLSAR pertaining to
all or any part of an aggregate of [NUMBER] Shares, which TLSAR entitles the
Employee to surrender, on the terms and conditions set forth in this Agreement
and the Plan, all or part of the Related Option in exchange for a payment from
the Company in the amount determined under Paragraph 9 below.
2. Exercise Price. The exercise price per Share for this TLSAR
(the "Exercise Price") shall be $[NUMBER], which is equal to the Fair Market
Value per Share on the Grant Date.
3. Number of Shares. The number and class of Shares specified
in Paragraph 1 above, and/or the Exercise Price, are subject to adjustment by
the Committee in the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, split-up, Share
combination, distribution or other change in the corporate structure of the
Company affecting the Shares (an "Event"). Any such adjustment shall be made by
the Committee as constituted immediately prior to the applicable Event;
provided, however, that the number of Shares subject to this TLSAR always shall
be a whole number.
4. Vesting Schedule. The right to exercise this TLSAR will
vest as to 100% of the Shares subject to the TLSAR upon the occurrence of a
Change of Control, provided that vesting will occur only if the Employee remains
an Employee on the date of the Change of Control. In the event of the Employee's
Termination of Employment due to Early Retirement, Normal Retirement, Disability
or death, the right to exercise a portion of the Shares to which this TLSAR
pertains will vest on the date that such right otherwise would have vested, as
determined in the discretion of the Committee based on the time elapsed from the
Grant Date to the Termination of Employment and the vesting date.
5. Termination of TLSAR. In the event of the Employee's
Termination of Employment for any reason other than Early or Normal Retirement,
Disability or death, this TLSAR shall immediately terminate, provided that if
this TLSAR became vested prior to such Termination of Employment, the Employee
may, prior to the Expiration Date and subject to the last two sentences of this
Paragraph 5, exercise the TLSAR. In the event of the Employee's Termination of
Employment due to Disability, the Employee may, within three (3) years after the
date of such Termination, or prior to the Expiration Date, whichever shall first
occur, exercise this TLSAR (if then vested). In the event of the Employee's
Termination of Employment due to Early or Normal Retirement, the Employee may,
within five (5) years from the date of such Termination, or prior to the
Expiration Date, whichever shall first occur, exercise this TLSAR (if then
vested). In addition, this TLSAR shall terminate on the first to occur of the
following: (a) the first date on which the Related Option no longer may become
exercisable, (b) the last day of the period of sixty (60) consecutive days which
begins on the date of a Change of Control, or (c) upon exercise of the Related
Option (but only to the extent provided in the following sentence). For each
Share with respect to which the Related Option is exercised, the right to
exercise [NUMBER] of the Shares subject to this TLSAR shall immediately
terminate, provided that the number of Shares which so terminate shall be
rounded to the nearest whole number (or to such number as is appropriate to
ensure that the total number of Shares covered by this TLSAR does not exceed the
number specified in Paragraph 1 above).
6. Death of Employee. In the event that the Employee dies
prior to the expiration of this TLSAR in accordance with the provisions of
Paragraph 5 above, the Employee's designated beneficiary or beneficiaries, or if
no beneficiary survives the Employee, the administrator or executor of the
Employee's estate, nevertheless may, within three (3) years after the date of
death, exercise any vested but unexercised portion of the TLSAR, but only to the
extent that such right was transferred with respect to the Related Option. Any
such transferee must furnish the Company (a) written notice of his or her status
as a transferee of this TLSAR, (b) evidence satisfactory to the Company to
establish the validity of the transfer of this TLSAR and compliance with any
laws or regulations pertaining to such transfer, and (c) written acceptance of
the terms and conditions of this TLSAR as set forth in this Agreement.
7. Persons Eligible to Exercise TLSAR. This TLSAR shall be
exercisable during the Employee's lifetime only by the Employee. This TLSAR is
not transferable, except that the Employee may transfer this TLSAR (a) by a
valid beneficiary designation made in a form and manner acceptable to the
Committee, or (b) by will or the applicable laws of descent and distribution, in
which case this TLSAR shall be transferred to the same extent. Any such transfer
shall be effective only if the Related Option also is transferred to the same
transferee.
8. Notice of Exercise of TLSAR. This TLSAR may be exercised by
the person then entitled to do so as to any portion of the TLSAR which may then
be exercised by giving written notice of exercise to the Secretary of the
Company (or his or her designee) specifying the number of full Shares with
respect to which the TLSAR is to be exercised.
9. Payment of TLSAR Amount. Upon exercise of this TLSAR, the
Employee shall be entitled to receive payment from the Company in an amount (the
"TLSAR Amount") determined by multiplying:
(a) The amount by which the Change of Control Value
(as defined below) of a Share on the date of exercise exceeds the Exercise
Price, times
(b) The number of Shares with respect to which the
TLSAR is exercised.
For this purpose, the "Change of Control Value" of a Share shall mean the
greater of (i) the highest Fair Market Value of a Share during the period of 60
consecutive days which ends on the date of a Change of Control, or (ii) the
highest price per Share paid in the transaction which gives rise to the Change
of Control.
10. Form of Payment of TLSAR Amount. The TLSAR Amount shall be
paid in cash, unless the Committee determines that such payment (or portion
thereof) would cause a transaction which gives rise to the Change of Control to
be ineligible for pooling of interests accounting under APB No. 16, which
transaction (but for such payment) otherwise would have been eligible for such
accounting treatment, in which case the Committee may determine that the TLSAR
Amount shall be paid in Shares of equivalent value. Prior to any payment of the
TLSAR Amount, the Company shall deduct or withhold, or require the Employee to
remit to the Company, an amount sufficient to satisfy any withholding taxes
required to be withheld with respect to the payment.
11. No Rights of Stockholder. Neither the Employee (nor any
beneficiary) shall be or have any of the rights or privileges of a stockholder
of the Company in respect of any of the Shares issuable pursuant to the exercise
of this TLSAR, unless and until certificates representing such Shares shall have
been issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to the Employee (or beneficiary).
12. No Effect on Employment. The Employee's employment with
the Company and its Affiliates is on an at-will basis only. Accordingly, the
terms of the Employee's employment with the Company and its Affiliates shall be
determined from time to time by the Company or the Affiliate employing the
Employee (as the case may be), and the Company or the Affiliate shall have the
right, which is hereby expressly reserved, to terminate or change the terms of
the employment of the Employee at any time for any reason whatsoever, with or
without good cause. For purposes of this Agreement, the transfer of employment
of the Employee between the Company and any one of its Affiliates (or between
Affiliates) shall not be deemed a Termination of Employment.
13. Address for Notices. Any notice to be given to the Company
under the terms of this Agreement shall be addressed to the Company, in care of
its Secretary, at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other address as the Company may hereafter designate in writing.
14. TLSAR is Not Transferable. Except as otherwise provided in
Paragraphs 6 and 7 above, this TLSAR and the rights and privileges conferred
hereby may not be transferred, pledged, assigned or otherwise hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
sale under execution, attachment or similar process. Upon any attempt to
transfer, pledge, assign, hypothecate or otherwise dispose of this TLSAR, or of
any right or privilege conferred hereby, or upon any attempted sale under any
execution, attachment or similar process, this TLSAR and the rights and
privileges conferred hereby immediately shall become null and void.
15. Maximum Term of TLSAR. Notwithstanding any other provision
of this Agreement except Paragraph 6 above relating to the death of the Employee
(in which case the TLSAR is exercisable to the extent set forth therein), this
TLSAR is not exercisable after the Expiration Date.
16. Binding Agreement. This Agreement shall be binding upon
and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.
17. Conditions to Exercise. Exercise of this TLSAR will not be
permitted until arrangements (satisfactory to the Company) have been made by the
Employee for the payment of the amount of taxes required (as determined by the
Company) to be withheld by reason of such exercise.
18. Plan Governs. This Agreement is subject to all of the
terms and provisions of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Capitalized terms and phrases used and not
defined in this Agreement shall have the meaning set forth in the Plan.
19. Committee Authority. The Committee shall have all
discretion, power, and authority to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Employee, the Company and all other interested persons, and shall be
given the maximum deference permitted by law. No member of the Committee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.
20. Captions. The captions provided herein are for convenience
only and are not to serve as a basis for the interpretation or construction of
this Agreement.
21. Agreement Severable. In the event that any provision in
this Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.
22. Modifications to the Agreement. This Agreement constitutes
the entire understanding of the parties on the subjects covered. The Employee
expressly warrants that he or she is not executing this Agreement in reliance on
any promises, representations, or inducements other than those contained herein.
Modifications to this Agreement or the Plan can be made only in an express
written contract executed by a duly authorized officer of the Company.