Exhibit 10.19
2017 OMNIBUS INCENTIVE PLAN OF DRIL-QUIP, INC.
2022 PERFORMANCE UNIT AWARD AGREEMENT
To: ________________________
You have been selected as a recipient of performance units (“Performance Units”) under the 2017 Omnibus Incentive Plan of Dril-Quip, Inc. (the “Plan”). This Award Agreement (“Agreement”) and the Plan together govern your rights and set forth all of the conditions and limitations affecting such rights. Terms used in this Agreement that are defined in the Plan will have the meanings ascribed to them in the Plan. If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the Plan’s terms will supersede and replace the conflicting terms of this Agreement.
Grant Date: October 28, 2022
Performance Period: October 1, 2022 through September 30, 2025
Vesting Date: October 28, 2025
Performance Units At Target: [●]
Performance Goal: Schedule I to this Agreement describes the manner in which the total number of Performance Units that vest hereunder will be calculated, with the total number of vested Performance Units based on the total shareholder return of the Company’s Common Stock as compared to the total shareholder return of the component companies on the VanEck OIH Index and the S&P 500 Index, as described in more detail on Schedule I (the “Performance Goal”).
Retirement
Notwithstanding any provision in this Agreement to the contrary, if you terminate your employment due to Retirement (as defined below), then, except as provided in the paragraph below or section 7 below, you will not forfeit your Performance Units as a result of your Retirement, and on the Vesting Date you will vest in the number of Performance Units determined by multiplying
(i) the number of Performance Units that would have vested as determined in accordance with the paragraph immediately above had your employment not terminated and (ii) a fraction, the numerator of which is the number of days that elapsed between the Grant Date and the date of your termination of employment due to Retirement and the denominator of which is 1095.
For purposes of this Agreement, “Retirement” means your voluntary termination of employment on or after the date when you are at least 55 years old and have at least five years of service (based on your employment with the Company and its Subsidiaries or predecessor companies); provided, however, that if the Committee determines, in its sole discretion, at any time prior to the Vesting Date that you have taken any action or actions that are detrimental or injurious to the Company or any of its Subsidiaries, then your termination of employment shall be treated as a voluntary termination and not Retirement and as a result your Performance Units shall be forfeited as of such determination date.
Death
Notwithstanding any provision in this Agreement to the contrary, if your employment terminates due to death, then on the date of your death you will vest in the number of Performance Units determined by multiplying (i) the number of Performance Units at Target and (ii) a fraction, the numerator of which is the number of days that elapsed between the Grant Date and the date of your termination of employment due to death and the denominator of which is 1095.
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Should a successor or acquirer (or any parent of such entity) fail to assume, replace or continue this Agreement following such Change of Control, such Performance Units shall become fully vested as of the date of the occurrence of such Change of Control and shall be paid in Common Stock or cash (based on the value of the Common Stock immediately prior to the Change of Control multiplied by the number of vested Performance Units), in the discretion of the Committee, no later than 10 business days after the date of the Change of Control; provided, however, that you have been in continuous employment with the Company or a Subsidiary at all times since the Grant Date. In the event that a successor or acquirer (or any parent of such entity) assumes, replaces or continues this Award following such Change of Control, such Performance Units shall remain outstanding and become fully vested on the earlier of (1) the Vesting Date; or (2) the date of your termination of employment by the Company without “Cause” or by you for “Good Reason”, in either case, during a “Change of Control Period” (which termination date shall otherwise be treated as the Vesting Date hereunder, including for purposes of Section 4 hereof).
For purposes of this Agreement, the following terms shall have the following meanings:
“Cause” shall have the meaning ascribed to such term in any written employment, services, severance or similar agreement between you and the Company, or, in the absence of any such agreement or use of such term in such agreement, shall mean (A) the commission of a felony or any other crime by you involving intentional and actual fraud, dishonesty or breach of trust; (B) willful misconduct or gross negligence with respect to your performance of your duties for the Company, including the duties set forth in any employment, services or similar agreement (other than such failure resulting from incapacity due to physical or mental illness or injury); (C) conduct by you bringing the Company or its affiliates into material public disgrace; or (D) material failure to perform duties of the office held by you as reasonably directed in writing by your supervisor (other than such failure resulting from incapacity due to physical or mental illness or injury).
“Change of Control Period” shall mean the period commencing on the occurrence of a Change of Control and ending on the second anniversary of such date.
“Good Reason” shall have the meaning ascribed to such term in any written employment, services, severance or similar agreement between you and the Company, or, in the absence of any such agreement or use of such term in such agreement, shall mean any of the following (without your written consent): (A) a material diminution in your position (including offices, titles and reporting requirements), authority, duties or responsibilities, including your failure to serve in the same office of any acquirer or successor entity or the parent of any acquirer or successor entity following a Change of Control; or (B) any material failure by the Company to comply with any of the provisions of any employment, services or similar agreement between you and the Company; or (C) the Company’s requiring you to be based at any office located more than 50 miles from your primary work location immediately prior to such Change of Control. Notwithstanding the foregoing, Good Reason shall cease to exist under this Award unless (i) within 60 days of your knowledge of the initial existence of the condition or conditions giving rise to Good Reason you provide written notice to the Company of the existence of such condition or conditions, (ii) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure Period”); (iii) if any such condition is not remedied within such Cure Period, you terminate employment within 10 business days following expiration of such Cure Period.
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[Signature Page Follows]
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| DRIL-QUIP, INC. |
By:
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The undersigned grantee acknowledges receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Award subject to all of the terms and provisions hereof and thereof.
GRANTEE
[NAME]
SCHEDULE I
2017 OMNIBUS INCENTIVE PLAN OF DRIL-QUIP, INC.
2022 PERFORMANCE UNIT AWARD AGREEMENT
Schedule I
Performance Ranking | Adjustment Factor | Negative TSR Adjustment Factor |
90th percentile or above | 200% | 150% |
70th percentile | 150% | 125% |
50th percentile (“Target”) | 100% | 100% |
30th percentile | 50% | 50% |
Below 30th percentile | 0% | 0% |
Schedule I