Restricted Stock Unit Grant Notice and Agreement – Sara Lee Corp.
SARA LEE CORPORATION
2002 LONG-TERM INCENTIVE STOCK PLAN
PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT NOTICE
AND AGREEMENT
(Form for North American employees; form for other employees
substantially similar)
[INSERT PARTICIPANT NAME]
This Performance-Based Restricted Stock Unit (PSU) Grant Notice and
Agreement, made this November 4, 2011 (“Award Date”), by Sara Lee
Corporation, a Maryland corporation (“Company”), to you is evidence of an award
made under the Sara Lee Corporation 2002 Long-Term Incentive Stock Plan (“Plan”)
which is incorporated into this “Grant Notice and Agreement” by reference. A
copy of the Plan has been provided to you and is also available from the Sara
Lee Corporate Compensation Department.
1. Performance-Based Restricted Stock Unit Award. Subject to
the restrictions, limitations, terms and conditions specified in the Plan and
this Grant Notice and Agreement, the Company hereby awards to you as of the
Award Date:
Performance Stock Units (PSUs)
which are considered Stock Awards under the Plan (the “Award”). The vesting
of the Award is based both upon the Company153s performance during the period from
July 3, 2011 through June 30, 2012 (the “Performance Period”) and your continued
service with the Company or any of its subsidiaries (collectively the “Sara Lee
Companies”) from the Award Date through August 31, 2014 (the “Vesting Period”),
subject in each case to the terms and conditions set forth in paragraph 3, and
therefore the actual number of PSUs ultimately released, if any, shall be
determined as of the last day of the Vesting Period (the “PSU Vesting Date”).
Subject to paragraphs 2 and 11, the PSUs will be settled in shares of common
stock of the Company.
2. Anticipated Spin-Off. The Company currently anticipates
that prior to the PSU Vesting Date, it will complete a transaction to spin off
(the “Anticipated CoffeeCo Spin-Off”) its international beverage business
segment (“CoffeeCo”) separate from its North American business (“SLE 2.0”). If
the Anticipated CoffeeCo Spin-Off occurs before the PSU Vesting Date, then the
Award will be subject to adjustment in accordance with Article V of the Plan and
paragraph 11 of this Grant Notice and Agreement and the PSUs will be settled in
shares of SLE 2.0 common stock rather than shares of common stock of the
Company. Where context permits, references in this Grant Notice and Agreement to
the “Company” or the “Sara Lee Companies” will be to, and will include, “SLE
2.0” from and following the Anticipated CoffeeCo Spin-Off.
3. Vesting of the Award.
(a) Performance-Based Vesting. A number of PSUs subject to the Award
will become earned based on the Company153s fiscal year 2012 Consolidated
Operating Income (the “2012 Performance Goal”), in accordance with the
performance levels and payout percentages set forth in the table below (the
“Earned PSUs”), provided that the vesting of such Earned PSUs shall be
contingent on you remaining continuously employed with the Sara Lee Companies
through the PSU Vesting Date pursuant to subparagraph (b) below. For the
avoidance of doubt, your period of continuous employment for vesting purposes
excludes any severance period.
|
Threshold |
Target |
Maximum |
||||||||||
|
Company Consolidated Operating Income for fiscal year 2012 |
(1 |
) |
(1 |
) |
(1 |
) |
||||||
|
Number of PSUs earned based on actual Company Consolidated Operating Income |
25 |
% |
100 |
% |
150 |
% |
||||||
|
(1) |
The specific performance goals for the Consolidated Operating Income for |
Notwithstanding the foregoing or anything to the contrary in this Grant
Notice and Agreement or in the Plan, if the Anticipated CoffeeCo Spin-Off occurs
prior to the end of the Performance Period, the number of Earned PSUs will be
determined based on (i) actual performance of the 2012 Performance Goal through
the closing date of the Anticipated CoffeeCo Spin-Off for the portion of the
Company153s fiscal year 2012 that occurs prior to such closing date and (ii)
target performance for the portion of the 2012 fiscal year that has not yet
occurred as of the closing of the Anticipated CoffeeCo Spin-Off.
For purposes of this Grant Notice and Agreement, “Consolidated Operating
Income” means the Company153s Adjusted Operating Income from continuing operations
as disclosed in the Company153s earnings press releases and filings with the SEC,
as may be further adjusted by the Committee (as defined below) to (i) include or
exclude the results of businesses acquired and/or divested during the
measurement period, to the extent such results were included or excluded in the
Company153s annual operating plan, and/or (ii) prevent undue and/or unintended
gain or loss. Adjusted Operating Income is a non-GAAP financial measure that
adjusts operating income, as reported under U.S. GAAP, to exclude significant
items and select other charges and gains. Significant items are material items
that are not indicative of our core operating results and that are quantified
and identified in the Company153s publicly disclosed financial reports.
Significant items vary each year and may include items such as charges for exit
activities, impairment charges, tax costs and benefits resulting from the
disposition of a business, gains or losses on the sale of discontinued
operations and changes in tax valuation allowances.
(b) Service-Based Vesting. Provided that you have remained
continuously employed with the Sara Lee Companies through the PSU Vesting Date,
the Earned PSUs will vest and become payable to you on the PSU Vesting Date. The
PSUs are not transferable by you by means of sale, assignment, exchange, pledge,
or otherwise.
4. Acceptance of Terms and Conditions. By electronically
acknowledging and accepting the Award, you agree to be bound by the terms and
conditions contained in this Grant Notice and Agreement and the Plan and any and
all conditions established by the Company in connection with Awards issued under
the Plan, and understand that the Award neither confers any legal or equitable
right (other than those rights constituting the Award itself) against the
Company directly or indirectly, nor does it give rise to any cause of action at
law or in equity against the Company. In order to vest in the Award described in
this Grant Notice and Agreement, you must have accepted the Award.
5. Dividend Equivalents. Subject to the restrictions,
limitations and conditions as described in the Plan, dividend equivalents
payable on the PSUs will be accrued (in cash, without interest) on your behalf
at the time that dividends are otherwise paid to owners of the Company153s common
stock. Accrued dividend equivalents will be settled and paid at the same time as
the vested PSUs are settled pursuant to the terms of this Grant Notice and
Agreement.
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6. Distribution of the Award. If the distribution is subject
to tax withholding, such taxes will be settled by withholding cash and/or a
number of shares with a market value not less than the amount of such taxes. Any
cash from dividend equivalents remaining after withholding taxes are paid will
be paid in cash to you. The net number of shares of the Company, or shares of
SLE 2.0 following the closing of the Anticipated CoffeeCo Spin-off, to be
distributed will be delivered to your electronic stock plan account as soon as
practicable after the PSU Vesting Date. If withholding of taxes is not required,
none will be taken and the gross number of shares and dividend equivalents will
be distributed. You are personally responsible for the proper reporting and
payment of all taxes related to this distribution.
7. Election to Defer Distribution. If the distribution is
subject to U.S. tax law, you may elect to defer the distribution of all of the
PSUs. Such election must be received by the Company in the form required by the
Company no later than 30 days after the Award Date and is contingent upon the
Company153s allowing deferrals into the Sara Lee Corporation Executive Deferred
Compensation Plan (the “Deferred Compensation Plan”) at that time. The deferral,
if elected, will result in the transfer of the PSUs into the Deferred
Compensation Plan153s Stock Equivalent Fund in effect at the time the PSUs would
have otherwise been distributed. The Deferred Compensation Plan rules will
govern the administration of the Award beginning on the date the PSUs are
credited to the Deferred Compensation Plan.
8. Death, Total Disability or Retirement. If you cease
active employment (i.e., cease to be coded as active on the payroll system) with
the Sara Lee Companies, because of your death or because you become Totally
Disabled (as defined under the appropriate long term disability benefit plan, if
applicable), the Award will continue to vest and be distributed to you or your
estate at the same time as it is to other Participants pursuant to the terms of
paragraph 6. In the case of your attaining age 55 or older and if you have at
least 10 years of service with the Sara Lee Companies when your employment
terminates or, in the case of your attaining age 65, regardless of service, the
Award will continue to vest after your termination. These provisions apply only
to the Award under this Grant Notice and Agreement; other awards may have
different provisions.
9. Involuntary Termination, Voluntary Termination and Non-Severance
Event Termination. The following provisions apply only to the Award
granted under this Grant Notice and Agreement; other awards may have different
provisions
(a) Involuntary Termination. If your employment with the
Sara Lee Companies is terminated on or prior to the Anticipated CoffeeCo
Spin-Off and you are eligible to receive severance benefits under the Sara Lee
Corporation Severance Plan for Corporate Officers, the Severance Pay Plan, the
Severance Pay Plan for Executives, the Severance Pay Plan for Certain Events or
any other written severance plan of the Company (collectively, a “Severance
Event Termination”), you will be eligible to receive a prorated distribution
that is determined by multiplying the Earned PSUs covered by the Award by a
fraction, the numerator of which is the number of months of your active service
from Award Date through the date your employment terminates (not including the
severance period), and the denominator of which is the number of months from
Award Date through the PSU Vesting Date. Any shares underlying such prorated
PSUs will be distributed to you at the earlier of (i) the PSU Vesting Date or
(ii) the date the Anticipated CoffeeCo Spin-Off is completed.
In the event that the division, business unit or business segment of the
Company or, after the Anticipated CoffeeCo Spin-Off, SLE 2.0 to which at least
80% of your time is dedicated or from which you are on leave of absence is sold,
closed, spun off or otherwise divested and, as a result of such transaction,
your employment with the Sara Lee Companies or SLE 2.0 is terminated, all PSUs
will vest as of the closing date of the transaction and be distributed as soon
as practicable after the closing date of the transaction, unless otherwise
determined by the Company or SLE 2.0. This provision does not apply with respect
to the Anticipated CoffeeCo Spin-Off or any transaction that would be considered
a Change of Control as defined in Article X of the Plan.
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(b) Voluntary Termination and Non-Severance Event
Termination. If your employment terminates for reasons other than those
described above (i.e., you voluntarily terminate employment with the Sara Lee
Companies or your employment is terminated by the Sara Lee Companies and you are
not eligible for severance pay under any of the Company153s severance plans), then
the Award shall be canceled on the date your employment terminates.
10.
Non-Competition/Non-Solicitation/Confidentiality. As a
condition to your receipt of this Award, you must electronically accept a
Non-Competition, Non-Solicitation and Confidentiality Agreement. Please
carefully read the Non-Competition, Non-Solicitation and Confidentiality
Agreement in its entirety and feel free to have your lawyer review it prior to
accepting it.
11. Adjustment of the Award. In the event of any change in
the capital structure of the Company (including but not limited to a stock
dividend, stock split, reverse stock split, combination or exchange of
securities, merger, consolidation, recapitalization, spin-off, split off,
liquidation or other distribution of any or all of the assets of the Company to
stockholders, other than normal cash dividends) or any change in any rights
attendant to any class of authorized securities of the Company, which for the
avoidance of doubt, shall include the Anticipated CoffeeCo Spin-Off (an
“Adjustment Event”), the Compensation and Employee Benefits Committee of the
Company153s Board of Directors (the “Committee”) shall make proportionate
adjustments with respect to the number and class of securities subject to the
Award to reflect such Adjustment Event and to maintain the Award153s intrinsic and
fair value; provided, that the Committee shall retain discretion with respect to
how any such proportionate adjustments shall be made. The decision of the
Committee regarding any such adjustment shall be final, binding and conclusive.
12. Forfeiture/Adjustment. Notwithstanding anything
contained in this Grant Notice and Agreement to the contrary, you may forfeit
all or a portion of the Award and/or be required to repay the Company, or you
may be entitled to an increased Award, upon the occurrence of any of the
following events.
(a) Misconduct. If you engage in any activity contrary or
harmful to the interests of the Company, including but not limited to: (i)
competing, directly or indirectly (either as owner, employee or agent), with any
of the businesses of the Company, (ii) violating any Company policies, (iii)
soliciting any present or future employees or customers of the Company to
terminate such employment or business relationship(s) with the Company, (iv)
disclosing or misusing any confidential information regarding the Company, or
(v) participating in any activity not approved by the Board of Directors of the
Company which could reasonably be foreseen as contributing to or resulting in a
Change of Control of the Company (as defined in the Plan) (such activities to be
collectively referred to as “wrongful conduct”), then (A) the Award, to the
extent it remains restricted, shall terminate automatically on the date on which
you first engaged in such wrongful conduct, (B) if the wrongful conduct occurred
within six months of the PSU Vesting Date, you shall pay to the Company in cash
any financial gain you realized from the vesting of the PSU, and (C) if the
wrongful conduct occurred after the PSU has been deferred in the Deferred
Compensation Plan and prior to the deferred payment date, you shall forfeit the
deferred PSU and the Award shall terminate automatically on the date on which
you first engaged in such wrongful conduct. For purposes of this paragraph,
financial gain shall equal the fair market value of the shares of the Company
common stock on the PSU Vesting Date, multiplied by the number of PSUs actually
distributed pursuant to the Award, reduced by any taxes paid in countries other
than the United States which taxes are not otherwise eligible for refund from
the taxing authorities. By accepting this PSU, you consent to and authorize the
Company to deduct from any amounts payable by the Company to you, any amounts
you owe to the Company under this paragraph. This right of set-off is in
addition to any other remedies the Company may have against you for breach of
this Grant Notice and Agreement.
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(b) Restatement of Financial Results. This paragraph 12(b)
applies to you only if you are an “officer” of the Company, as defined in Rule
16a-1(f) under the Securities Exchange Act of 1934, at the time you received the
Award (“Officer Participant”). If you are an Officer Participant and you vest in
an Award (including if the distribution of an incentive award is deferred
pursuant to the Deferred Compensation Plan), which vesting was predicated upon
the Company achieving certain financial results (the “Original Amount”), and
within two years after the PSU Vesting Date the Company restates its financial
statements due to material noncompliance with financial reporting requirements
under the securities laws (such restated financial statements, the “Restated
Financials”), then the vested amount of the Award shall be recalculated based on
the Restated Financials (the “Adjusted Amount”). If the Original Amount is
greater than the Adjusted Amount, then on the date on which the Company files
the Restated Financials with the Securities and Exchange Commission (“SEC”), any
vested portion of the Award that has not yet been distributed automatically
shall be reduced by an amount equal to (i) the Original Amount, less (ii) the
Adjusted Amount. If the Adjusted Amount is greater than the Original Amount,
then on the date on which the Company files the Restated Financials with the
SEC, any vested amount that has not yet been distributed automatically shall be
increased by an amount equal to (A) the Adjusted Amount, less (B) the Original
Amount. If the incentive award already has been distributed then, as soon as
practicable after the date on which the Company files the Restated Financials
with the SEC, (x) you shall pay to the Company, in cash, any financial gain you
realized from the vesting of the incentive award that is attributable to the
excess of the Original Amount over the Adjusted Amount, if the Original Amount
is greater than the Adjusted Amount, or (y) the Company shall pay to you, in
cash, an amount equal to the excess of the Adjusted Amount over the Original
Amount, if the Adjusted Amount is greater than the Original Amount. No interest
will be due to or paid by the Company or you to the other with respect to any
such true up payment. If you elected to defer any portion of an incentive award
pursuant to the Deferred Compensation Plan and an adjustment under this
paragraph 12(b) is required before the deferral payment date, then your account
under the Deferred Compensation Plan shall be credited or charged so that the
deferred award equals the Adjusted Amount. The Committee may determine, in its
discretion and based on the circumstances leading to the Company153s filing of
Restated Financials with the SEC, that any recoupment or payment under this
paragraph 12(b) is not practical and may elect to forego the application of this
paragraph 12(b).
13. Rights as a Stockholder. You will have no rights as a
stockholder with respect to any PSUs until and unless you receive shares of the
Company following vesting of these PSUs.
14. Conformity with the Plan. The Award is intended to
conform in all respects with, and is subject to, all applicable provisions of
the Plan Any inconsistencies between this Grant Notice and Agreement and the
Plan shall be resolved in accordance with the terms of this Grant Notice and
Agreement.
15. Interpretations. Any dispute, disagreement or question
which arises under, or as a result of, or in any way relates to the
interpretation, construction or application of the Plan or this Grant Notice and
Agreement will be determined and resolved by the Committee or its delegate. Such
determination or resolution by the Committee or its delegate will be final,
binding and conclusive for all purposes.
16. Employment Rights. Nothing in the Plan or this Grant
Notice and Agreement confers on you any right to continue in the employ of the
Sara Lee Companies or in any way affects the Sara Lee Companies153 right to
terminate your employment without prior notice any time for any reason.
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17. Consent to Transfer Personal Data. By accepting the
Award, you voluntarily acknowledge and consent to the collection, use,
processing and transfer of personal data as described in this paragraph. You are
not obliged to consent to such collection, use, processing and transfer of
personal data. The Sara Lee Companies hold certain personal information about
you, that may include your name, home address and telephone number, fax number,
email address, sex, beneficiary information, age, language skills, date of
birth, social security number or other employee identification number, job
title, employment or severance contract, current wage and benefit information,
tax-related information, plan or benefit enrollment forms and elections, option
or benefit statements, any shares of stock or directorships in the Company,
details of all options or any other entitlements to shares of stock awarded,
canceled, purchased, vested, unvested or outstanding in your favor, for the
purpose of managing and administering the Plan (“Data”). The Sara Lee Companies
will transfer Data amongst themselves as necessary for the purpose of
implementation, administration and management of your participation in the Plan,
and the Sara Lee Companies may further transfer Data to any third parties
assisting the Sara Lee Companies in the implementation, administration and
management of the Plan. These recipients may be located throughout the world,
including the United States. You authorize them to receive, possess, use, retain
and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data as may be required for the
administration of the Plan and/or the subsequent holding of shares of stock on
your behalf to a broker or other third party with whom you may elect to deposit
any shares of stock acquired pursuant to the Plan. You may, at any time, review
Data, require any necessary amendments to it or withdraw the consents herein in
writing by contacting the Company.
18. Miscellaneous.
(a) Modification. The Award is documented by the minutes of
the Committee and or as approved by the CEO for non-corporate officers, which
records are the final determinant of the number of PSUs granted and the
conditions of this grant. The Committee may amend or modify the Award in any
manner to the extent that the Committee would have had the authority under the
Plan initially to grant such PSUs, provided that no such amendment or
modification shall impair your rights under this Grant Notice and Agreement
without your consent. Except as in accordance with the two immediately preceding
sentences and paragraph 19, this Grant Notice and Agreement may be amended,
modified or supplemented only by an instrument in writing signed by both parties
hereto.
(b) Governing Law. All matters regarding or affecting the
relationship of the Company and its stockholders shall be governed by the
General Corporation Law of the State of Maryland. All other matters arising
under this Grant Notice and Agreement shall be governed by the internal laws of
the State of Illinois, including matters of validity, construction and
interpretation. You and the Company agree that all claims in respect of any
action or proceeding arising out of or relating to this Grant Notice and
Agreement shall be heard or determined in any state or federal court sitting in
Chicago, Illinois, and you agree to submit to the jurisdiction of such courts,
to bring all such actions or proceedings in such courts and to waive any defense
of inconvenient forum to such actions or proceedings. A final judgment in any
action or proceeding so brought shall be conclusive and may be enforced in any
manner provided by law.
(c) Successors and Assigns. Except as otherwise provided
herein, this Grant Notice and Agreement will bind and inure to the benefit of
the respective successors and permitted assigns of the parties hereto whether so
expressed or not.
(d) Severability. Whenever feasible, each provision of this
Grant Notice and Agreement will be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Grant Notice and
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Grant Notice and
Agreement.
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19. Amendment. Notwithstanding anything in the Plan or this
Grant Notice and Agreement to the contrary, the Award may be amended by the
Company without the consent of you, including but not limited to modifications
to any of the rights granted to you under the Award, at such time and in such
manner as the Company may consider necessary or desirable to reflect changes in
law.
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