On June 19, 2019, the Compensation Committee of the Board (the Committee) adopted a form of award agreement for performance stock units (PSUs, and such award agreement, the PSU Award Agreement) under the Companys 2018 Incentive Compensation Plan (2018 Plan) or
the Companys 2012 Incentive Compensation Plan (2012 Plan), based on the Committees review including consideration of feedback from the Committees independent compensation consultant and independent legal counsel. The PSU Award Agreement will be used as a part of the Companys equity incentive program for its executive officers and certain other key executives, with the first awards pursuant to the PSU Award Agreements expected to be made in June 2019. The PSU Award Agreement is generally based on the form of PSU award agreement previously used by the Company under the 2012 Plan, with the following key features:
Twenty-five percent (25%) of the PSUs will be subject to a Performance Goal (as defined in the PSU Award Agreement) based on the Companys Earnings Before Income Tax (EBIT) relative to a target EBIT during a one-year performance period;
Thirty-seven and a half percent (37.5%) of the PSUs will be subject to a Performance Goal based on the Companys Total Shareholder Return (as described in the PSU Award Agreement) relative to a pre-selected peer group of the Company during a three-year performance period;
Thirty-seven and a half percent (37.5%) of the PSUs will be subject to a Performance Goal based on the Companys cumulative EBIT relative to a target cumulative EBIT during a three-year performance period;
Awards are capped at 150% of target achievement, except that awards are capped at 100% of target achievement in the event that the Companys Total Shareholder Return is negative during the applicable performance period;
The awards generally vest, if at all, at the end of the applicable performance periods, subject to the recipients continued service through each applicable date;
In the event that the award recipients employment is terminated by the Company without Cause, by the recipient for Good Reason, or due to a Constructive Termination without Cause (as described in the PSU Award Agreement), a portion of the PSUs will vest on a prorated basis, based upon the period of the participants employment with the Company following the grant date, subject to the Committees certification of the achievement of applicable Performance Goals.
A copy of the form of PSU Award Agreement is attached hereto as Exhibit 10.1. The summary of the PSU Award Agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the attached form.