UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 6, 2022
(Exact name of registrant as specified in its charter)
Delaware | 001-34521 | 20-1480589 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
150 North Riverside Plaza | ||
Chicago, IL | 60606 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (312) 750-1234
Former name or former address, if changed since last report: Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
Class A common stock, $0.01 par value | H | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(b) Director Resignation
On December 6, 2022, Pamela M. Nicholson resigned as a member of the Board of Directors (the “Board”) of Hyatt Hotels Corporation (the “Company”) and all other positions she held as a member of any committee of the Board. Ms. Nicholson’s resignation was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On December 8, 2022, the Board decreased the size of the Board from twelve to eleven members.
(e) 2023-2025 Special PSUs
On December 8, 2022, the Talent and Compensation Committee (the “Committee”) of the Board, in its capacity as Administrator of the Fourth Amended and Restated Hyatt Hotels Corporation Long-Term Incentive Plan, as amended, granted performance share units or “2023-2025 Special PSUs” pursuant to a Performance Share Unit Agreement approved by the Committee consistent with the form filed herewith as Exhibit 10.1 (the “2023-2025 PSU Agreement”) to Mark R. Vondrasek, the Company’s Chief Commercial Officer. The target and maximum number of 2023-2025 Special PSUs granted to Mr. Vondrasek is 18,011. The 2023-2025 Special PSUs are eligible to vest and be paid out in shares of Class A common stock, $0.01 par value per share, of the Company (the “Class A Common Stock”) at the end of a three-year performance period beginning on January 1, 2023 and ending on December 31, 2025 or earlier upon the occurrence of certain changes in control of the Company, if earned, based on achievement of certain pre-determined goals (as approved by the Committee prior to the grant of the 2023-2025 Special PSUs), and generally subject to the holder’s continued employment through the performance period or the earlier occurrence of an applicable change of control of the Company (except in the case of certain qualifying terminations of employment). If a performance goal is not achieved, then the 2023-2025 Special PSUs that could be earned based on attainment of such performance goal will be forfeited and will not vest. In addition, if a threshold goal is not achieved, then all of the 2023-2025 Special PSUs that could be earned will be forfeited and none will vest. Within 30 days after the determination of performance, the Company will deliver to the holder of the 2023-2025 Special PSUs a number of shares of Class A Common Stock of the Company equal to the number of 2023-2025 Special PSUs that vested.
The foregoing description of the grant of 2023-2025 Special PSUs is qualified in its entirety by reference to the terms of the form 2023-2025 Special PSU Agreement, which is filed herewith as Exhibit 10.1 and is incorporated by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
Document Description | |
10.1 | Form of 2023-2025 Special Performance Share Unit Agreement under the Fourth Amended and Restated Hyatt Hotels Corporation Long-Term Incentive Plan | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Hyatt Hotels Corporation | ||||||||
Date: December 9, 2022 | By: | /s/ Margaret C. Egan | ||||||
Name: | Margaret C. Egan | |||||||
Title: | Executive Vice President, General Counsel and Secretary |
Exhibit 10.1
HYATT HOTELS CORPORATION
Special 2023-2025 Performance Share Unit Award
The following sets forth the terms of your Hyatt Hotels Corporation Performance Share Unit (PSU) Award to you:
AWARD:
Target Number of PSUs: |
| |
Maximum Number of PSUs: |
100% of Target Number of PSUs | |
PSU Grant Identifier: |
December 8, 2022 (the Grant Date) |
PERFORMANCE CONDITIONS:
Performance Period: |
The Performance Period shall be the period commencing on January 1, 2023 and continuing through the first to occur of December 31, 2025 or, if earlier, upon the occurrence of a Change in Control that causes the Performance Period to end, as determined in accordance with the provisions contained under the heading Change in Control below. | |
Vesting of Award and Payment Date: |
The PSUs are earned (or not) based on achievement of the Performance Goals set forth in this Agreement and subject to the Participants continuous Service with the Company through the last day of the Performance Period (except as otherwise set forth in this Agreement). Except as otherwise provided in connection with a Change in Control, to the extent that the PSUs are earned and vest, shares of Common Stock underlying the earned PSUs shall be delivered to the Participant within thirty (30) days following the Determination Date (as defined below) (but in no event later than March 15th of the year following that in which the Performance Period ends). |
The Performance Share Unit Award that is described and made pursuant to this Special Performance Share Unit Award Agreement (this Award) is issued under the Fourth Amended and Restated Hyatt Hotels Corporation Long-Term Incentive Plan (as may be amended from time to time, the Plan). By electronically acknowledging and accepting this Award within 30 days after the date of the electronic mail notification to you of the grant of this Award (the Electronic Notification Date), you agree to be bound by the terms and conditions herein, the Plan, all conditions established by the Company in connection with awards issued under the Plan and all determinations of the Committee hereunder. In order to vest in the Award you must accept this Award within 30 days of the Electronic Notification Date. If you fail to accept this Award within 30 days of the Electronic Notification Date, the Award will be cancelled and forfeited.
1
The following terms and conditions apply to the Performance Share Units granted pursuant to this Award.
2
The number of PSUs earned, if any, for the Performance Period shall be determined as follows: 50% of the Target Number of PSUs will be earned if the Direct Distribution Channel
Growth Goal is achieved and the Threshold Hyatt Compensation EBITDA Goal is attained for each calendar year that ends during the Performance period (including for clarity, calendar year 2025 if the Performance Period is not shortened by the
occurrence of a Change in Control); and 3
4
Retirement, Death or Disability. Notwithstanding any terms and
conditions of the Amended and Restated Retirement Policy Regarding Equity Vesting adopted by Hyatt Hotels Corporation (the Retirement Policy) to the contrary, in the event of the Participants Retirement (as defined in the
Retirement Policy), death or Disability (as defined below) prior to the end of the Performance Period, the Participant shall be eligible to earn PSUs on a pro rata basis determined by multiplying the number of PSUs that would have been earned
hereunder based on actual performance through the end of the Performance Period by a fraction, the numerator of which equals the number of full months of Service prior to such termination and the denominator of which equals thirty-six (36), and shares of Common Stock underlying the earned PSUs shall be delivered to the Participant (or the Participants estate) as set forth above under Vesting of Award and Payment Date.
As described below, PSUs are subject to cancellation and forfeiture for no consideration in the event the Participant engages in certain detrimental conduct (as defined below). For this purpose Disability shall mean
either (i) the Participant 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, (ii) the Participant is, 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,
receiving income replacement benefits for a period of not less than three months under the Companys long-term disability plan, and/or (iii) the Participant is determined to be totally disabled by the Social Security
Administration. 5
6
7
8
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE PERFORMANCE SHARE UNITS AWARDED PURSUANT TO THIS AGREEMENT MAY BE
EARNED ONLY BY CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED OR BEING GRANTED THIS AWARD) AND BY ACHIEVEMENT OF THE PERFORMANCE GOALS (AS DETERMINED AND CERTIFIED BY THE COMMITTEE) AND BY COMPLIANCE WITH
PARTICIPANTS VARIOUS OBLIGATIONS 9
UNDER THIS AGREEMENT. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE PLAN SHALL CONFER UPON PARTICIPANT ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH PARTICIPANTS RIGHT OR THE COMPANYS RIGHT TO TERMINATE PARTICIPANTS EMPLOYMENT AT ANY TIME, FOR ANY REASON OR NO REASON, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT
ADVANCE NOTICE EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW. 10
Loyalty Room Night Penetration means room nights stayed by active World of Hyatt members as a percentage of total rooms nights stayed. Growth year-over-year in Loyalty Room Night Penetration growth is to be
measured using Comparable System-Wide Hotels.
Performance Goal means each of the Direct Distribution Channel Growth Goal and the Loyalty Room Night Penetration Growth Goal (each as defined below).
Threshold Hyatt Compensation EBITDA Goal is the minimum performance level that will result in a payout under the Hyatt Hotels Corporation Executive Incentive Plan and the Hyatt Hotels Corporation Corporate Annual
Incentive Plan with respect to any calendar year ending during the Performance Period (including for clarity, calendar year 2025 if the Performance Period is not shortened by the occurrence of a Change in Control), as determined by the Administrator
in its sole discretion.
Determination of Number of Earned Performance Share Units:
50% of the Target Number of PSUs will be earned if the Loyalty Room Night Penetration Growth Goal is achieved and the Threshold Hyatt Compensation EBITDA Goal is attained for each calendar year that ends during the Performance
period (including for clarity, calendar year 2025 if the Performance Period is not shortened by the occurrence of a Change in Control).
The Direct Distribution Channel Growth Goal will be achieved for purposes of this Award if there is an increase in distribution under the Direct Distribution Channel in each sequential calendar year during the
Performance Period such that distribution under the Direct Distribution Channel for the calendar year ending on December 31, 2025 is also overall greater than distribution under the Direct Distribution Channel for the calendar year ending on
December 31, 2022. For clarity, if there is not an increase in distribution under the Direct Distribution Channel over the prior calendar year for any year ending during the Performance Period (measuring as of the date of consummation of the
Change in Control for the final year of the Performance Period if the Performance Period ends on a Change in Control), then the Direct Distribution Channel Growth Goal will not be attained for purposes of this
Award.
The Loyalty Room Night Penetration Growth Goal will be achieved for purposes of this Award if there is an increase in Loyalty Room Night Penetration in each sequential calendar year during the Performance Period
such that Loyalty Room Night Penetration for the calendar year ending on December 31, 2025 is also overall greater than Loyalty Room Night penetration for the calendar year ending on December 31, 2022. For clarity, if there is not an
increase in Loyalty Room Night Penetration over the prior calendar year for any year ending during the Performance Period (measuring as of the date of consummation of the Change in Control for the final year of the Performance Period if the
Performance Period ends on a Change in Control), then the Loyalty Room Night Penetration Growth Goal will not be attained for purposes of this Award.
The Committee shall determine the number (if any) of PSUs that has been earned hereunder following the end of the Performance Period (such date of determination, the Determination Date). If the Threshold Hyatt
Compensation EBITDA Goal is attained for each calendar year ending during the Performance Period (including for clarity, calendar year 2025 if the Performance Period is not shortened by the occurrence of a Change in Control), then, for each
Performance Goal that is attained, as determined by the Administrator, fifty percent (50%) of the PSUs granted hereunder shall become earned and vested (up to a maximum vesting of one hundred percent (100%) of the PSUs granted hereunder). For
clarity,(i) if the Administrator determines on the Determination Date that a Performance Goal has not been attained, then all PSUs eligible to vest in respect of such Performance Goal shall be forfeited and canceled without payment on the
Determination Date, and (ii) in no event shall any PSUs vest or be earned hereunder if the Threshold Hyatt Compensation EBITDA Goal is not attained for any calendar year ending during the Performance Period (including for clarity, calendar year
2025 if the Performance Period is not shortened by the occurrence of a Change in Control), and all PSUs granted hereunder shall lapse and be forfeited upon the Administrators determination that the Threshold Hyatt Compensation EBITDA Goal has
not been attained for any such calendar year. Subject to Participants continuous Service through the last day of the Performance Period (except as otherwise provided herein), as of the Determination Date, Participant shall earn a number of
PSUs based on the Committees determination of performance with respect to the Performance Goals and the achievement of the Threshold Hyatt Compensation EBITDA Goal. In no event shall Participant earn a number of PSUs in excess of the Maximum
Number of PSUs indicated above. All PSUs that are not earned as of the Determination Date shall be forfeited.
Adjustments:
In addition, without limiting the foregoing, the Committee shall have the sole authority and discretion to adjust the achievement of the Performance Goals (including any individual component of the Performance Goals) by the Company
to reflect any items that it deems appropriate, including (but not limited to), items relating to any unusual or nonrecurring events or changes in applicable laws, accounting principles or business
conditions.
Settlement and Payment of PSUs:
Except as otherwise provided upon a Change in Control or the Participants death or Disability as set forth below, each PSU that is earned in accordance with the foregoing shall be settled by delivery of one share of Common
Stock delivered to the Participant within thirty (30) days following the Determination Date (and in no event later than March 15, of the year immediately following the year in which the Performance Period ends) (the Payment
Date), subject to tax withholding, as provided below.
Termination of Service:
Subject to the exceptions below, PSUs will only be eligible to vest and become earned and payable if the Participant remains in continuous Service with the Company from the Grant Date through the last day of the Performance Period.
Service for purposes of this Award shall mean employment as an Employee, or service to the Company as a Director or Consultant. Except as provided below, all unearned PSUs will be forfeited and cancelled for no consideration upon
the Participants Termination of Service (to the extent then outstanding). Notwithstanding the foregoing, PSUs will not be forfeited or cancelled in the following circumstances:
Change in Control:
In the event of a Change in Control occurring prior to December 31, 2025 and while PSUs remain outstanding hereunder, if (i) the Administrator determines in its sole discretion that the acquirer or successor entity will
not continue Hyatts loyalty program and e-commerce site through the end of calendar year 2025 in a manner substantially consistent with the existing program/site and/or that measurement of the
Performance Goals on their existing terms following the Change in Control will be impracticable and/or will cease to provide appropriate incentives following the Change in Control, and/or (ii) the acquirer or successor entity declines to assume
or to provide a replacement or substitute award for any unvested portion of this Award as contemplated by Section 12.2(e) of the Plan in connection with such Change in Control, in any such case(s), then, subject to the Participants continuous
Service until the date of such Change in Control (or earlier termination due to death, Disability or Retirement, in which case the above provisions shall control), the date of the Change in Control shall be the last day of the Performance Period,
and the number of PSUs earned hereunder will be determined as of immediately prior to the Change in Control, and, if the Threshold Hyatt Compensation EBITDA Goal has been attained for each calendar year ending during the Performance Period and prior
to such Change in Control (if any), will equal the total number of PSUs earned based on actual performance through the end of the calendar month immediately preceding the Change in Control, provided, that if such Change in Control occurs
within the first calendar year of the Performance Period, the number of earned PSUs shall be determined by comparing actual performance through the end of the calendar month immediately preceding the Change in Control to the corresponding month-end in the prior year. If the Change in Control occurs within the second calendar year of the Performance Period, the number of earned PSUs shall be determined by comparing actual performance through the end
of the calendar month immediately preceding the Change in Control to the corresponding month-end in each of the prior two years. If the Change in Control occurs within the third calendar year of the
Performance Period, the number of earned PSUs shall be determined by comparing actual performance through the end of the calendar month immediately preceding the Change in Control to the corresponding
month-end in each of the prior three years. Settlement of PSUs will be accomplished through the issuance of shares of Common Stock or cash, as the Committee may determine, and any earned PSUs (and the Dividend
Equivalents thereon) shall be settled upon or within fifteen (15) days after the Change in Control (which shall be deemed to be the Payment Date). Any PSUs not earned upon a Change in Control shall be forfeited and cancelled for no
consideration.
Rights of Ownership
The Participant shall not have any rights or privileges of a stockholder with respect to the PSUs subject to this Award or any shares of Common Stock underlying this Award unless and until shares of Common Stock are delivered in
respect hereof.
Dividend Equivalent Rights:
Each PSU granted hereunder is hereby granted in tandem with a corresponding Dividend Equivalent right that shall, while it remains outstanding, and to the extent that dividends are paid on Common Stock and subject to the terms set
forth below, entitle the Participant to a cash payment in the amount of any such dividend(s) paid by the Company in respect of a share of Common Stock. The Dividend Equivalent right shall remain outstanding from the Grant Date through the earlier to
occur of (a) the termination or forfeiture for any reason of the PSU to which such Dividend Equivalent right corresponds, or (b) the delivery to the Participant of the share of Common Stock (or other payment) in respect of the PSU to which
such Dividend Equivalent right corresponds (in any case, the PSU Termination Date). Each Dividend Equivalent right will entitle the Participant to a cash payment in the amount of any dividend(s) paid by the Company in respect of a
share of Common Stock to the extent that such dividend(s) are declared and have ex dividend date(s), in each case, that occur on or after the Grant Date and on or prior to the PSU Termination Date, payable upon the Payment Date in respect of
the PSU to which such Dividend Equivalent right corresponds; provided, that with respect to any dividends meeting such criteria that are paid after the PSU Termination Date, the applicable Dividend Equivalent payment will be made if and when
the Company pays the underlying dividend or, if later, on the Payment Date (but in no event later than March 15th of the year following the year in which the applicable ex dividend date
occurs). For the avoidance of doubt, (i) if a PSU is not ultimately earned hereunder, no Dividend Equivalent payments shall be made with respect to such unearned PSU, and (ii) in no event shall a Dividend Equivalent payment be made that
would result in the Participant receiving both the Dividend Equivalent payment (in respect of a dividend) and the actual dividend with respect to the same PSU and corresponding share of Common Stock. Dividend Equivalent rights and any amounts that
may become distributable in respect thereof shall be treated separately from the PSUs and the rights arising in connection therewith for purposes of the designation of time and form of payments required by Section 409A of the Code (together
with any Department of Treasury regulations and other interpretive guidance issued thereunder, Section 409A).
Tax Withholding:
Unless paid in cash by the Participant at the time of settlement, the Company will deduct or withhold from shares issuable upon settlement of the PSU a number of shares of Common Stock having a Share Value equal to the amount
sufficient to satisfy the statutory federal, state, foreign and local taxes and any employment, disability, social welfare or other legally required withholdings (subject to any applicable limitation(s) in the Plan). Notwithstanding anything to the
contrary herein, if the tax obligation arises during period in which the Participant is prohibited from trading under any policy of the Company or by reason of the Securities Exchange Act of 1934, as amended, then the tax withholding obligation
shall automatically be satisfied by the Company withholding shares of Common Stock.
The Participant is encouraged to consult with a tax advisor regarding the tax consequences of participation in the Plan and acceptance of this Award.
Transferability of PSUs:
PSUs may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated; provided that in the event of the Participants death, shares deliverable or amounts payable with respect to the PSUs shall be
delivered or paid, as applicable, to the Participants designated beneficiary. The Committee will advise Participants with respect to the procedures for naming and changing designated
beneficiaries.
Data Privacy:
By acceptance of this Award, the Participant acknowledges and consents to the collection, use, processing and transfer of personal data as described below and in accordance with the Hyatt Privacy Policy for Employees. The Company,
its affiliates and the Participants employer hold certain personal information, including the Participants name, home address and telephone number, date of birth, social security number or other employee tax identification number,
salary, nationality, job title, and any equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Participants favor, for the purpose of managing and administering the Plan
(Data). The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the United States, the European
Economic Area, or elsewhere. The Participant hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan,
including any requisite transfer of such Data as may be required for the administration of the Plan on behalf of the Participant to a third party with whom the Participant may have elected to have payment made pursuant to the Plan. The Participant
may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect the Participants ability to participate in the Plan and
receive the benefits intended by this Award.
No Impact on Other Rights:
Participation in the Plan is voluntary. The value of the PSUs is an extraordinary item of compensation outside the scope of Participants normal employment and compensation rights, if any. As such, the PSUs are not part of
normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pensions or retirement benefits or similar payments unless specifically and otherwise provided
in the plans or agreements governing such compensation. The Plan is discretionary in nature and may be amended, cancelled, or terminated by the Company, in its sole discretion, at any time. The grant of PSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive any other grant of PSUs or other awards under the Plan in the future. Future grants, if any, will be at the sole discretion of the
Company, including, but not limited to, the timing of the grant, the form of award, number of shares of Common Stock subject to an award, vesting, and exercise provisions, as relevant.
Restrictive Covenants:
As a condition of this Award, to the extent Participant has not done so already, Participant agrees to execute and deliver the (i) Non-Competition Agreement, the (ii) Non-Solicitation & Non-Disparagement Agreement (iii) Confidentiality Agreement, and (iv) Invention Assignment Agreement in form and substance
acceptable to the Company, and Participant agrees to be bound by the terms of those agreements.
Effect of Detrimental Conduct:
In the event the Participant engages in detrimental conduct (as defined below), the Participant shall forfeit all unvested PSUs (and all shares of Common Stock underlying such PSUs) and all such awards shall be null and
void as of the date such detrimental conduct first occurs and the Participant shall not receive any consideration therefor.
Definition of Detrimental Conduct. The Participant will be deemed to have engaged in detrimental conduct if in the reasonable, good faith determination of the Committee, the Participant has engaged in conduct constituting
(1) a felony; (2) gross negligence or willful misconduct in the performance of Participants duties and responsibilities to the Company; (3) willful violation of a material Company policy, including, without limitation, any
policy relating to confidentiality, honesty, integrity and/or workplace behavior, which violation has resulted or may reasonably be expected to result in harm to the Company, its stockholders, directors, officers, employees or customers; (4)
improper internal or external disclosure or use of confidential information or material concerning the Company or any of its stockholders, directors, officers, or employees which use or disclosure has resulted or may reasonably be expected to result
in harm to the Company; (5) publicly disparaging the Company or any of its stockholders, directors, officers or employees; and/or (6) willful violation of any material agreements with the Company entered into by the Participant in connection
with or pursuant to the Plan.
Determination of Detrimental Conduct. Upon a reasonable, good faith determination by the Committee that detrimental conduct has occurred, the Committee shall give the Participant written notice, which shall specify the
conduct and the date of the conduct. Any dispute concerning the matters set forth in the notice shall be decided under the procedures in the Plan.
409A:
This Award is intended to comply with Section 409A or an available exemption therefrom. However, notwithstanding any other provision of the Plan or this Award, if at any time the Committee determines that the PSUs and/or
Dividend Equivalents (or any portion thereof) may not be compliant with or exempt from Section 409A, the Committee shall have the right in its sole discretion (without any obligation to do so or to indemnify or to be responsible for damages to
the Participant or any other person for failure to do so) to adopt such amendments to the Plan or this Award, or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions,
as the Committee determines are necessary or appropriate to provide for the PSUs and/or Dividend Equivalents to either be exempt from the application of Section 409A or comply with the requirements of Section 409A; provided, however, that
nothing herein shall create any obligation on the part of the Company to adopt any such amendment or take any other action.
Notwithstanding anything herein to the contrary, no payment hereunder shall be made to the Participant during the six (6)-month period following the Participants separation from service (within the meaning of
Section 409A) to the extent that the Company determines that paying such amounts at the time set forth herein would be a prohibited distribution under Section 409A(a)(2)(B)(i). If the payment of any such amounts is delayed as a result of the
previous sentence, then within thirty (30) days following the end of such six (6)-month period (or, if earlier, the Participants death), the Company shall pay the Participant the cumulative amounts that would have otherwise been payable
to the Participant during such period, without interest. For the avoidance of doubt, to the extent that any PSUs are nonqualified deferred compensation within the meaning of Section 409A, the settlement of PSUs hereunder upon a
Change in Control shall only occur to the extent that such Change in Control is also a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation
within the meaning of Section 409A(a)(2)(A)(v).