LIFEWAY FOODS, INC. |
ILLINOIS
|
000-17363
|
36-3442829
|
||
(State or other jurisdiction of
incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification No.)
|
||
6431 West Oakton St. Morton Grove, IL
|
60053
|
|||
(Address of principal executive offices)
|
(Zip code)
|
Votes For
|
Votes Withheld
|
Broker Non-Votes
|
|
Ludmila Smolyansky
|
10,663,302
|
181,972
|
1,360,994
|
Julie Smolyansky
|
10,741,879
|
103,395
|
1,360,994
|
Pol Sikar
|
9,860,746
|
984,528
|
1,360,994
|
Renzo Bernardi
|
10,685,667
|
159,607
|
1,360,994
|
Mariano Lozano
|
10,707,773
|
137,501
|
1,360,994
|
Paul Lee
|
9,777,157
|
1,068,117
|
1,360,994
|
Jason Scher
|
9,901,071
|
944,203
|
1,360,994
|
Votes For
|
Votes Against
|
Abstentions
|
Broker Non- Votes
|
|
To ratify the appointment of Mayer Hoffman McCann P.C. as our independent auditors for the next fiscal year.
|
12,117,108
|
88,167
|
993
|
0
|
Votes For
|
Votes Against
|
Abstentions
|
Broker Non- Votes
|
|
To approve the Lifeway Foods, Inc. 2015 Omnibus Incentive Plan (the “Plan”).
|
9,277,159
|
1,556,134
|
11,981
|
1,360,994
|
Exhibit
No.
|
Description of Exhibit
|
||
10.1
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Employment Agreement dated July 20, 2015 2015 with John Waldron
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10.2
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Lifeway Foods, Inc. 2015 Omnibus Incentive Plan
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10.3
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Form of Notice of Restricted Stock Unit Award
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10.4
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Form of Notice of Performance Unit Award
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10.5
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Form of Notice of Restricted Stock Award
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10.6
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Form of Notice of Non-Qualified Stock Option Award
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LIFEWAY FOODS, INC.
|
||||
Dated: December 17
, 2015
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By:
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/s/ Edward Smolyansky
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Name:
Edward Smolyansky
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Title: Chief Accounting Officer, Chief Operating Officer, Secretary, Treasurer
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Exhibit
No.
|
Description of Exhibit
|
||
10.1
|
Employment Agreement dated July 20, 2015 2015 with John Waldron
|
||
10.2
|
Lifeway Foods, Inc. 2015 Omnibus Incentive Plan
|
||
10.3
|
Form of Notice of Restricted Stock Unit Award
|
||
10.4
|
Form of Notice of Performance Unit Award
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||
10.5
|
Form of Notice of Restricted Stock Award
|
||
10.6
|
Form of Notice of Non-Qualified Stock Option Award
|
LIFEWAY FOODS, INC.
COMPANY
By:
/s/ Edward Smolyansky
Name:
Edward Smolyansky
Title:
Chief Operating Officer
|
|
EXECUTIVE
/s/ John Waldron
John Waldron
|
Article 1.
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Establishment, Purpose, and Duration
|
1
|
Article 2.
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Definitions
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1
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Article 3.
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Administration
|
8
|
Article 4.
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Shares Subject to this Plan and Maximum Awards
|
9
|
Article 5.
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Eligibility and Participation
|
10
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Article 6.
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Stock Options
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10
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Article 7.
|
Stock Appreciation Rights
|
12
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Article 8.
|
Restricted Stock and Restricted Stock Units
|
14
|
Article 9.
|
Performance Units/Performance Shares
|
15
|
Article 10.
|
Cash-Based Awards and Other Stock-Based Awards
|
16
|
Article 11.
|
Transferability of Awards
|
17
|
Article 12.
|
Performance Measures
|
17
|
Article 13.
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Dividend Equivalents
|
20
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Article 14.
|
Beneficiary Designation
|
20
|
Article 15.
|
Rights of Participants
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20
|
Article 16.
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Change of Control
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21
|
Article 17.
|
Amendment, Modification, Suspension, and Termination
|
22
|
Article 18.
|
Withholding
|
23
|
Article 19.
|
Successors
|
23
|
Article 20.
|
General Provisions
|
23
|
2.1
|
“Affiliate”
shall mean any corporation or other entity (including, but not limited to, a partnership or a limited liability company), that is affiliated with the Company through stock or equity ownership or otherwise, and is designated as an Affiliate for purposes of this Plan by the Committee.
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2.2
|
“Annual Award Limit”
or
“Annual Award Limits”
have the meaning set forth in Section 4.1.
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2.3
|
“Award”
means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards,
or Other Stock-Based Awards, in each case subject to the terms of this Plan.
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2.4
|
“Award Agreement”
means either (i) a written agreement entered into by the Company and, if specified in the Agreement, the Participant, setting forth the terms and provisions applicable to an Award granted under this Plan, or (ii) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. The Committee may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant.
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2.5
|
“Beneficial Owner”
or
“Beneficial Ownership”
shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
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2.6
|
“Board”
or
“Board of Directors”
means the Board of Directors of the Company.
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2.7
|
“Cash-Based Award”
means an Award, denominated in cash, granted to a Participant as described in Article 10.
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2.8
|
“Cause”
means, unless otherwise specified in an Award Agreement or in an applicable employment agreement between the Company, or an Affiliate, and a Participant, with respect to any Participant, as determined by the Committee in its sole discretion:
|
(a)
|
Misconduct in the performance of Participant’s duties;
|
(b)
|
Willful failure to follow the lawful directives of the Board or any executive to which Participant reports;
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(c)
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Indictment for, conviction of, or entering into a plea of guilty or of nolo contendere to, a felony or any crime involving moral turpitude;
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(d)
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Participant’s failure to reasonably cooperate in any audit or investigation of the business or financial practices of the Company or any of its subsidiaries;
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(e)
|
Performance of any act of theft, embezzlement, fraud, dishonesty or misappropriation with respect to the Company or its affiliates;
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(f)
|
Material breach of any material agreement with the Company or its affiliates, or Participant’s material violation of the Company’s code of conduct or other written policy, which is not cured (if susceptible to cure) by Participant within thirty (30) days of written notice thereof from the Company;
|
|
(g)
|
Conduct causing the Company substantial public disgrace, disrepute or economic harm.
|
2.9
|
“Change of Control”
means the occurrence of any one of the following events with respect to the Company:
|
(a)
|
Any one person, or more than one person acting as a group, excluding Julie Smolyansky, Edward Smolyansky, Ludmila Smolyansky and members of their families, acquires ownership of stock (as determined under Section 318(a) of the Code) of the Company that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company; provided, however, that if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Control of the Company. This paragraph applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction.
|
(b)
|
Any one person, or more than one person acting as a group, excluding Julie Smolyansky, Edward Smolyansky, Ludmila Smolyansky and members of their families, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock (as determined under Section 318(a) of the Code) of the Company possessing 30 percent or more of the total voting power of the stock of the Company; provided, however, that if any one person or more than one person acting as a group, is considered to own 30 percent or more of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Control of the Company.
|
(c)
|
a majority of members of the Company’s Board of Directors (the “Incumbent Directors”) is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the Incumbent Directors, provided that no other Company is a majority shareholder of the Company.
|
(d)
|
any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition(s); provided, however, that a transfer of assets by the Company is not treated as a Change in Control if the assets are transferred to (A) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock; (B) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company; (C) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all outstanding stock of the Company; or (D) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in the previous subsection (C). For purposes of this paragraph, (1) gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets, and (2) a person’s status is determined immediately after the transfer of the assets.
|
(a)
|
a “person” shall be as such term is defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
|
(b)
|
persons will be considered to be acting as a group if they are owners of a Company that enters into a merger, consolidation, purchase or acquisition of stock, or similar transaction with the Company. If a person, including an entity, owns stock in both Companies that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in the Company prior to the transaction giving rise to the Change in Control and not with respect to the ownership interest in the other Company. Persons will not be considered to be acting as a group solely because they purchase or own stock of the Company at the same time, or as a result of the same public offering.
|
2.10
|
“Code”
means the U.S. Internal Revenue Code of 1986, as amended from time to time. For purposes of this Plan, references to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.
|
2.11
|
“Committee”
means the Compensation Committee of the Board or a subcommittee thereof, or any other committee designated by the Board to administer this Plan. The members of the Committee shall (i) be appointed from time to time by and shall serve at the discretion of the Board, and (ii) shall consist of “outside directors” as defined in Section 162(m) of the Code and “non-employee directors” as defined in Section 16 of the Exchange Act. If the Committee does not exist or cannot function for any reason, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee.
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2.12
|
“Company” or “Corporation”
means Lifeway Foods, Inc., an Illinois corporation, and any successor thereto as provided in Article 19 herein.
|
2.13
|
“Covered Employee”
means any Employee who is or may become a “covered employee,” as defined in Code Section 162(m).
|
2.14
|
“Disability”
or
“Disabled”
means that an individual is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.
|
2.15
|
“Effective Date”
has the meaning set forth in Section 1.1.
|
2.16
|
“Employee”
means any individual performing services for the Company, an Affiliate, or a Subsidiary and designated as an employee of the Company, its Affiliates, and/or its Subsidiaries on the payroll records thereof. An Employee shall not include any individual during any period he or she is classified or treated by the Company, Affiliate, and/or Subsidiary as an independent contractor, a consultant, or any employee of an employment, consulting, or temporary agency or any other entity other than the Company, Affiliate, and/or Subsidiary, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as a common-law employee of the Company, Affiliate, and/or Subsidiary during such period.
|
2.17
|
“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
|
2.18
|
“Fair Market Value”
or
“FMV”
means, on any given date, the closing price of a Share as reported on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) composite tape on such date, or if Shares were not traded on NASDAQ on such day, then on the next preceding day that Shares were traded on NASDAQ; in the event Shares are traded only on an exchange other than NASDAQ, references herein to NASDAQ shall mean such other exchange.
|
2.19
|
“Full Value Award”
means an Award other than in the form of an ISO, NQSO, or SAR, and which is settled by the issuance of Shares.
|
2.20
|
“Good Reason”
means the occurrence of any of the following events, without the express written consent of Participant, unless such events are corrected in all material respects by the Company within thirty (30) days following written notification by Participant to the Company of the occurrence of one of the following: (i) a material diminution in Participant’s base salary, other than pursuant to across-the-board reductions affecting similarly situated employees of the Company; (ii) a material diminution in Participant’s duties, authorities or responsibilities contemplated hereunder (other than temporarily while physically or mentally incapacitated or as required by applicable law); (iii) the permanent relocation of Participant’s primary work location by more than fifty (50) miles from its then current location; or (iv) the Company materially breaches the terms of an employment agreement with Participant.
|
2.21
|
“Grant Date”
means the date an Award is granted to a Participant pursuant to the Plan.
|
2.22
|
“Grant Price”
means the price established at the time of grant of an SAR pursuant to Article 7, used to determine whether there is any payment due upon exercise of the SAR.
|
2.23
|
“Incentive Stock Option”
or
“ISO”
means an Option to purchase Shares granted under Article 6 to an Employee and that is designated as an Incentive Stock Option and that is intended to meet the requirements of Code Section 422, or any successor provision.
|
2.24
|
“Insider”
shall mean an individual who is, on the relevant date, an officer, or director of the Company, or a more than ten percent (10%) Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance with Section 16 of the Exchange Act.
|
2.25
|
“Net Income”
means the consolidated net income for the Plan Year, as reported in the Company’s annual report to shareholders or as otherwise reported to shareholders.
|
2.26
|
“Nonqualified Stock Option”
or
“NQSO”
means an Option that is not intended to meet the requirements of Code Section 422, or that otherwise does not meet such requirements.
|
2.27
|
“Option”
means an Incentive Stock Option or a Nonqualified Stock Option, as described in Article 6.
|
2.28
|
“Option Price”
means the price at which a Share may be purchased by a Participant pursuant to an Option.
|
2.29
|
“Other Stock-Based Award”
means an equity-based or equity-related Award not otherwise described by the terms of this Plan, granted pursuant to Article 10.
|
2.30
|
“Participant”
means any eligible individual as set forth in Article 5 to whom an Award is granted.
|
2.31
|
“Performance-Based Compensation”
means compensation under an Award that is intended to satisfy the requirements of Code Section 162(m) for certain performance-based compensation paid to Covered Employees. Notwithstanding the foregoing, nothing in this Plan shall be construed to mean that an Award which does not satisfy the requirements for performance-based compensation under Code Section 162(m) does not constitute performance-based compensation for other purposes, including Code Section 409A.
|
2.32
|
“Performance Measures”
means measures as described in Article 12 on which the performance goals are based and which are approved by the Company’s shareholders pursuant to this Plan in order to qualify Awards as Performance-Based Compensation.
|
2.33
|
“Performance Period”
means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to an Award which period may not be less than one (1) year, or, if less than one (1) year, such period of time designated by the Committee so long as the Performance Measures for such period of time have been designated by the Committee before the earlier of (i) ninety (90) days after the beginning of the Performance Period, or (ii) the date as of which twenty-five percent (25%) of such period of time has elapsed.
|
2.34
|
“Performance Share”
means an Award under Article 9 herein and subject to the terms of this Plan, denominated in Shares, the value of which at the time it is payable is determined as a function of the extent to which corresponding performance criteria have been achieved.
|
2.35
|
“Performance Unit”
means an Award under Article 9 herein and subject to the terms of this Plan, denominated in units, the value of which at the time it is payable is determined as a function of the extent to which corresponding performance criteria have been achieved.
|
2.36
|
“Period of Restriction”
means the period when Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture (based on the passage of time, the achievement of performance goals, or upon the occurrence of other events as determined by the Committee, in its sole discretion), as provided in Article 8.
|
2.37
|
“Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.
|
2.38
|
“Plan”
means this Lifeway Foods, Inc. Omnibus
Incentive Plan.
|
2.39
|
“Plan Year”
means the calendar year.
|
2.40
|
“Restricted Stock
” means an Award granted to a Participant pursuant to Article 8.
|
2.41
|
“Restricted Stock Unit”
means an Award granted to a Participant pursuant to Article 8, except no Shares are actually awarded to the Participant on the Grant date.
|
2.42
|
“Share”
means a share of common stock of the Company.
|
2.43
|
“Stock Appreciation Right”
or “
SAR
” means an Award, designated as an SAR, pursuant to the terms of Article 7 herein.
|
2.44
|
“Subsidiary”
means any corporation or other entity, whether domestic or foreign, in which the Company has or obtains, directly or indirectly, a proprietary interest of more than fifty percent (50%) by reason of stock ownership or otherwise.
|
|
(a)
|
The maximum number of Shares available for issuance to Participants under this Plan, inclusive of Shares issued and Shares underlying outstanding awards granted on or after the Effective Date, is 3,500,000 Shares.
|
|
(b)
|
The maximum aggregate number of Shares subject to Options and SARs granted in any one (1) Plan Year to any one Participant shall be 2,500,000.
|
|
(c)
|
The maximum number of Shares subject to all Full Value Awards granted in any one (1) Plan Year to any one Participant shall be 2,500,000.
|
|
(d)
|
With respect to Awards granted under the Plan that are (i) intended to satisfy the “performance-based” compensation exception contained in Section 162(m) of the Internal Revenue Code (“Section 162(m)”), and (ii) paid other than in Shares, the maximum amount payable to a Participant in any year is $20,000,000.
|
(a)
|
The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price; by
|
(b)
|
The number of Shares with respect to which the SAR is exercised.
|
(a)
|
Net earnings or Net Income (before or after taxes) and/or net earnings or net income of continuing operations;
|
(b)
|
Earnings per share (basic or diluted) and/or net earnings per share or net income per share of continuing operations;
|
(c)
|
Net sales or revenue growth (including, but not limited to, innovation as measured as a percentage of sales of new products);
|
(d)
|
Net operating profit;
|
(e)
|
Return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales, or revenue);
|
(f)
|
Cash flow (including, but not limited to, throughput, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment);
|
(g)
|
Earnings before or after taxes, interest, depreciation, and/or amortization;
|
|
(n)
|
Share price (including, but not limited to, growth measures and total shareholder return);
|
|
(q)
|
Operating efficiency;
|
|
(r)
|
Market share;
|
|
(s)
|
Customer satisfaction;
|
|
(t)
|
Working capital targets or any element thereof;
|
|
(u)
|
Economic value added or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital);
|
|
(v)
|
Health, safety and environmental performance;
|
|
(w)
|
Corporate social responsibility and/or diversity;
|
|
(x)
|
Strategic milestones (including, but not limited to, debt reduction, improvement of cost of debt, equity or capital, completion of projects, achievement of synergies or integration objectives, or improvements to credit rating, inventory turnover, weighted average cost of capital, implementation of significant new processes, productivity or production, product quality, and any combination of the foregoing);
|
|
(y)
|
Strategic sustainability metrics (including, but not limited to, corporate governance, consumer advocacy, enterprise risk management, employee development, and portfolio restructuring);
|
|
(z)
|
Gross, operating, stockholder equity, or net worth; and
|
(a)
|
The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, circumstances or events provided for under applicable securities laws, rules or statutes, termination of employment for Cause, termination of the Participant’s provision of services to the Company, Affiliate, and/or Subsidiary, violation of material Company, Affiliate, and/or Subsidiary policies, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company, its Affiliates, and/or its Subsidiaries.
|
(b)
|
If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the twelve (12) month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever just occurred) of the financial document embodying such financial reporting requirement.
|
(c)
|
The Company shall also comply with any required reimbursement or clawback rules issued in final form by the United States Securities and Exchange Commission or other applicable agency.
|
(a)
|
Obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and
|
(b)
|
Completion of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable.
|
(a)
|
Determine which Affiliates and Subsidiaries shall be covered by this Plan;
|
(b)
|
Determine which Employees outside the United States are eligible to participate in this Plan;
|
(c)
|
Modify the terms and conditions of any Award granted to Employees outside the United States to comply with applicable foreign laws;
|
(d)
|
Establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable. Any subplans and modifications to Plan terms and procedures established under this Section 20.9 by the Committee shall be attached to this Plan document as appendices; and
|
(e)
|
Take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.
|
1.
|
Grant Date
.
Pursuant to the Plan, the Company, on _________, 20__ (the “Grant Date”), granted Participant an incentive award (“Award”) in the form of _______
Restricted Stock Units
, subject to the terms and conditions of the Plan and subject to the terms and conditions set forth herein.
|
2.
|
Accounts
. Restricted Stock Units granted to Participant shall be credited to an account (the “Account”) established and maintained for Participant. A Participant’s Account shall be the record of Restricted Stock Units granted to the Participant under the Plan, is solely for accounting purposes and shall not require a segregation of any Company assets.
|
3.
|
Terms and Conditions
.
Except as otherwise provided herein, the Restricted Stock Units shall remain nonvested and subject to substantial risk of forfeiture.
|
4.
|
Value of Units
. The value of each Restricted Stock Unit on any date shall be equal to the value of one share of the Company’s Common Stock on such date.
|
5.
|
Value of Stock
. For purposes of this Award, the value of the Company’s Common Stock is the Fair Market Value of the Stock (as defined in the Plan) on the relevant date.
|
6.
|
Vesting
.
Participant’s interest in 100% of the Restricted Stock Units shall become vested and non-forfeitable on the
______
anniversary of the Grant Date.
[ADJUST AS APPROPRIATE, VESTING MAY BE ON A 3-YEAR OR LONGER GRADED OR CLIFF SCHEDULE]
|
8.
|
Death or Disability
.
[Substitute applicable vesting for early termination.]
Anything in this Notice of Award to the contrary notwithstanding, if Participant dies or becomes Disabled while in the employ of the Company or an Affiliate and prior to the forfeiture of the Restricted Stock Units under paragraph 8, all Restricted Stock Units that are forfeitable shall become non-forfeitable as of the date of Participant’s death or Disability, as the case may be. For purposes of this Award, “Disabled” means a Participant’s permanent and total disability within the meaning of Section 22(e)(3) of the Code.
[ADJUST AS APPROPRIATE]
|
9.
|
Forfeiture
.
Subject to paragraph 18 hereof, all Restricted Stock Units that are forfeitable shall be forfeited if Participant’s employment with the Company or an Affiliate terminates for any reason except the Participant’s death or Disability.
[ADJUST AS APPROPRIATE]
|
10.
|
Time of Payment
. Payment of Participant’s Restricted Stock Units shall be made as soon as practicable after the Units have become non-forfeitable, but in no event later than March 15
th
of the calendar year after the year in which the Units become non-forfeitable.
|
11.
|
Form of Payment
. The vested Restricted Stock Units shall be paid in
[cash
OR
whole shares of the Company’s Common Stock]
.
|
12.
|
Death of Participant
. If Participant dies prior to the payment of his or her non-forfeitable Restricted Stock Units, such Units shall be paid to his or her Beneficiary. Participant shall have the right to designate a Beneficiary in accordance with procedures established under the Plan for such purpose. If Participant fails to designate a Beneficiary, or if at the time of the Participant’s death there is no surviving Beneficiary, any amounts payable will be paid to the Participant’s estate.
[ADJUST AS APPROPRIATE]
|
13.
|
Taxes
. The Company will withhold from the Award the number of shares of Common Stock necessary to satisfy Federal tax-withholding requirements and state and local tax-withholding requirements with respect to the state and locality designated by the Participant as their place of residence in the Company's system of record at the time the Award becomes taxable, except to the extent otherwise determined to be required by the Company, subject, however, to any special rules or provisions that may apply to Participants who are non-US employees (working inside or outside of the United States) or US employees working outside of the United States. It is the Participant's responsibility to properly report all income and remit all Federal, state, and local taxes that may be due to the relevant taxing authorities as the result of receiving this Award.
|
14.
|
No Right to Continued Employment
. Neither this Award nor the granting or vesting of Restricted Stock Units shall confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate the Participant’s employment at any time.
|
15.
|
Change in Capital Structure
.
In accordance with the terms of the Plan, the terms of this grant shall be adjusted as the Committee determines is equitable in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
|
16.
|
Governing Law
. This Award shall be governed by the laws of the State of Illinois and applicable Federal law. All disputes arising under this Award shall be adjudicated solely within the state or Federal courts located within the State of Illinois.
|
17.
|
Conflicts
. (a) In the event of any conflict between the provisions of the Plan as in effect on the Grant Date and the provisions of this Award, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Grant Date.
|
18.
|
Binding Effect
.
Subject to the limitations stated above and in the Plan, this Award shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of Participant and the successors of the Company.
|
19.
|
Change in Control
. Anything in this Notice of Award to the contrary notwithstanding, upon a Change in Control (as defined in the Plan) prior to the forfeiture of the Restricted Stock Units under paragraph 8, the Participant’s Restricted Stock Units shall be ______________________________.
[ADJUST AS APPROPRIATE]
|
20.
|
Clawback
. [INCLUDE AS APPROPRIATE]
|
1.
|
Grant Date
.
Pursuant to the Plan, the Company, on __________, 20__ (the “Grant Date”), granted Participant an Award (“Award”) in the form of __________ Performance Units (which number of Units is also referred to herein as the “Target Units”), subject to the terms and conditions of the Plan and subject to the terms and conditions set forth herein.
|
2.
|
Accounts
. Performance Units granted to Participant shall be credited to an account (the “Account”) established and maintained for Participant. The Account of Participant shall be the record of Performance Units granted to the Participant under the Plan, is solely for accounting purposes and shall not require a segregation of any Company assets.
|
3.
|
Terms and Conditions
.
No Award shall be earned and Participant’s interest in the Performance Units granted hereunder shall be forfeited, except to the extent that the following paragraphs are satisfied.
|
4.
|
Performance Criteria
.
Participant’s Performance Units shall be earned as soon as practicable after the end of the Measurement Period based on the following formula (to the nearest whole Performance Unit). Such Performance Units shall be subject to the terms and conditions set forth in the following paragraphs of this Notice of Award.
|
5.
|
Value of Units
. The value of each Performance Unit shall be equal to the value of one share of the Company’s common stock.
|
6.
|
Value of Stock
. For purposes of this Award, the value of the Company’s common stock is the Fair Market Value (as defined in the Plan) on the date any Performance Units become vested hereunder.
|
7.
|
Earned Awards
.
[
Substitute applicable timing for earning Awards
.] [As soon as practicable after the end of the Measurement Period, a determination shall be made by the Committee of the number of whole Performance Units that Participant has earned.]
The date as of which the Committee determines the number of Performance Units earned shall be the “Award Date.”
|
8.
|
Restrictions
.
Except as provided herein, the earned Performance Units shall remain unvested and forfeitable.
|
9.
|
Vesting
.
[
Substitute applicable timing for vesting of Awards
.]
Participant’s interest in ______ of the earned Performance Units shall become vested and non-forfeitable on the Award Date and will be paid as soon as practicable thereafter. The final ______ of the earned Performance Units shall become vested and non-forfeitable as of ______________.
[ADJUST AS APPROPRIATE]
|
10.
|
During the Measurement Period
. Anything in this Notice of Award to the contrary notwithstanding, (a) if a Participant separates from service for any reason during 2013, then the Participant’s Performance Units shall be forfeited; and (b) if a Participant separates from service during 2014 on account of death, permanent and total disability within the meaning of section 22(e)(3) of the Code (“Disability” or “Disabled”), Retirement (as defined in paragraph 14 hereof) or termination by the Company for any reason other than Cause, then, the Participant’s Performance Units
[shall be earned under paragraph 4 above as of the Award Date, based on and any remaining Performance Units as of the Award Date shall be forfeited]
. The number of Performance Units shall be determined by the Committee in its sole and absolute discretion within the limits provided in the Plan and the Performance Units shall be fully vested as of the Award Date, and payable pursuant to paragraphs 16-18 hereof.
[ADJUST AS APPROPRIATE]
|
11.
|
After the Measurement Period.
Anything in this Notice of Award to the contrary notwithstanding, if, after the Measurement Period ends, but prior to the Award Date, Participant dies, becomes Disabled or Retires while in the employ of the Company or an Affiliate or is terminated by the Company for any reason other than Cause, such Participant shall earn his Performance Units pursuant to paragraph 7 and such earned Units shall be fully vested as of the Award Date and payable pursuant to paragraphs 16-18 hereof.
[ADJUST AS APPROPRIATE]
|
12.
|
During the Vesting Period
. Anything in this Notice of Award to the contrary notwithstanding, if, after the Award Date, but prior to the forfeiture of the Performance Units under paragraph 13, Participant dies, becomes Disabled or Retires while in the employ of the Company or an Affiliate or is terminated by the Company for any reason other than Cause, then all earned Performance Units that are forfeitable shall become non-forfeitable as of the date of Participant’s death, Disability, Retirement or termination by the Company for any reason other than Cause, as the case may be, and shall be paid pursuant to paragraphs 16-18 hereof.
[ADJUST AS APPROPRIATE]
|
13.
|
Forfeiture
.
All Performance Units that are forfeitable shall be forfeited if Participant’s employment with the Company or an Affiliate terminates voluntarily or is terminated with Cause, except by reason of Participant’s death, Retirement, Disability, or his termination by the Company for any reason other than Cause.
[COMPLETE AS APPROPRIATE]
|
14.
|
Retirement
.
Retirement means, for purposes of this Award ________________________.
[ADJUST AS APPROPRIATE]
|
15.
|
Termination for Cause
.
The Committee shall have the authority to determine whether Participant’s termination from employment is for Cause or for any reason other than Cause.
|
16.
|
Time of Payment
. Payment of Participant’s Performance Units shall be made as soon as practicable after the Units have become non-forfeitable, but in no event later than March 15
th
of the calendar year after the year in which the Units become non-forfeitable.
|
17.
|
Form of Payment
. The vested Performance Units shall be paid in
[cash
OR
whole shares of the Company’s common stock].
|
18.
|
Death of Participant
. If Participant dies prior to the payment of his earned and vested Performance Units, an amount equal to the amount of the Participant’s non-forfeitable Performance Units shall be paid to his or her Beneficiary. Participant shall have the right to designate a Beneficiary on a form filed with the Committee. If Participant fails to designate a Beneficiary, or if at the time of the Participant’s death there is no surviving Beneficiary, any amounts payable will be paid to the Participant’s estate.
|
19.
|
Taxes
. The Company will withhold from the Award the
[amount
OR
number of shares of Common Stock]
necessary to satisfy Federal tax-withholding requirements and state and local tax-withholding requirements with respect to the state and locality designated by the Participant as their place of residence in the Company's system of record at the time the Award becomes taxable, subject, however, to any special rules or provisions that may apply to Participants who are non-US employees (working inside or outside of the United States) or US employees working outside of the United States. It is the Participant's responsibility to properly report all income and remit all Federal, state, and local taxes that may be due to the relevant taxing authorities as the result of receiving this Award.
|
20.
|
No Right to Continued Employment
.
Neither this Award nor the granting, earning or vesting of Performance Units shall confer upon Participant any right with respect to continuance of employment by the Company or an Affiliate, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate the Participant’s employment at any time.
|
21.
|
Change in Capital Structure
.
In accordance with the terms of the Plan, the terms of this grant shall be adjusted as the Committee determines is equitable in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
|
22.
|
Governing Law
. This Award shall be governed by the laws of the State of Illinois and applicable Federal law. All disputes arising under this Award shall be adjudicated solely within the state or federal courts located within the State of Illinois.
|
23.
|
Conflicts
. In the event of any conflict between the provisions of the Plan as in effect on the Grant Date and the provisions of this Award, the provisions of the Plan shall govern. All references herein to the Plan shall mean the Plan as in effect on the Grant Date.
|
24.
|
Binding Effect
.
Subject to the limitations stated above and in the Plan, this Award shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of Participant and the successors of the Company.
|
25.
|
Change in Control
. Anything in this Notice of Award to the contrary notwithstanding, upon a Change in Control (as defined in the Plan), the following rules shall apply:
|
25.
|
Clawback
. [
COMPLETE AS APPROPRIATE]
|