Exhibit 10.43.2
Form of Arthur J. Gallagher & Co.
Performance SHARE Unit GRANT Agreement
Participant |
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Grant Date |
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Number of Performance Share Units subject to this Performance Share Unit Award |
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Performance Period |
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Earned Performance Share Units | The number of Earned Performance Share Units subject to this Performance Share Unit Award shall be based on achievement of the Performance Measures during the Performance Period pursuant to Section 4 of this Agreement. |
Vesting Date | 100% of the Earned Performance Share Units shall vest on the third anniversary of the Grant Date, provided the Participant remains continuously employed by the Company through the Vesting Date. However, in the event of the Participant’s Retirement, the vesting of the Earned Performance Share Units will be governed by Section 5(b) of this Agreement. In the event of the Participant’s termination of employment due to death or Disability, the vesting of Performance Share Units will be governed by Section 5 of the attached Agreement. |
BY MY ELECTRONIC ELECTION TO ACCEPT THE TERMS AND CONDITIONS OF THIS GRANT OF PERFORMANCE SHARE UNITS (WHICH SERVES AS MY ELECTRONIC SIGNATURE OF THE AGREEMENT), I AGREE THAT MY PARTICIPATION IN THE PLAN IS GOVERNED BY THE PROVISIONS OF THE PLAN AND THE AGREEMENT. (INCLUDING THE DELAWARE CHOICE OF GOVERNING LAW AND ITS OTHER TERMS AND CONDITIONS AND THE ADDENDUM, IF ANY, FOR MY COUNTRY OF RESIDENCE). IF I FAIL TO ACCEPT THE TERMS AND CONDITIONS OF THIS AWARD WITHIN NINETY (90) DAYS OF THE GRANT DATE SET FORTH ABOVE, THE COMPANY MAY DETERMINE THAT THIS AWARD HAS BEEN FORFEITED.
PERFORMANCE SHARE UNIT GRANT AGREEMENT
This Performance Share Unit Grant Agreement (this “Agreement”), effective as of the Grant Date shown above, between Arthur J. Gallagher & Co., a Delaware corporation (the “Company”), and the Participant named above, sets forth the terms and conditions of a grant of a performance unit award (this “Performance Share Unit Award”) under the Arthur J. Gallagher & Co. 20[ ] Long-Term Incentive Plan (the “Plan”). This Performance Share Unit Award is subject to all of the terms and conditions set forth in the Plan and this Agreement. In the event of any conflict, the Plan will control over this Agreement.
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(a) The Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;
(b) This award of Performance Share Units is a one-time benefit and does not create any contractual or other right to receive future grants of Performance Share Units, benefits in lieu of Performance Share Units, or other Plan benefits in the future, even if Performance Share Units have been granted repeatedly in the past;
(c) All decisions with respect to future Performance Share Unit grants, if any, and their terms and conditions, will be made by the Company, in its sole discretion;
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(d) Nothing contained in this Agreement is intended to create or enlarge any other contractual obligations between the Company and the Participant;
(e) The Participant is voluntarily participating in the Plan;
(f) The future value of the Shares underlying the Performance Share Unit Award is unknown and cannot be predicted with certainty;
In addition, the following provisions apply if the Participant is providing services outside the United States:
(g) The Performance Share Unit Award and shares of Common Stock subject to the Performance Share Units are:
(i) extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or its subsidiaries, and are outside the scope of the Participant’s employment contract, if any;
(ii) not intended to replace any pension rights or compensation;
(iii) not part of the Participant’s normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits, or similar payments and in no event should they be considered as compensation for, or relating in any way to, past services for the Company or any of its subsidiaries;
(h) In consideration of the Performance Share Unit Award, no claim or entitlement to compensation or damages shall arise from the Performance Share Units resulting from Termination of Employment (for any reason whatsoever) and the Participant irrevocably releases the Company and its subsidiaries from any such claim that may arise; if any such claim is found by a court of competent jurisdiction to have arisen, then, by signing or electronically accepting this Agreement, the Participant shall be deemed irrevocably to have waived the Participant’s entitlement to pursue such claim;
(i) Neither the Company nor any of its subsidiaries shall be liable for any change in value of the Performance Share Unit Award, the amount realized upon settlement of the Performance Share Units or the amount realized upon a subsequent sale of any shares of Common Stock acquired upon settlement of the Performance Share Units, resulting from any fluctuation of the United States Dollar/local currency foreign exchange rate.
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(a) Regardless of any action the Company takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items legally due by the Participant is and remains the Participant’s responsibility and that the Company (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Share Unit Award, including the grant of the Performance Share Units, the vesting of the Performance Share Units, the subsequent sale of any shares of Common Stock acquired pursuant to the Performance Share Units and the receipt of any dividends or dividend equivalents; and (b) does not commit to structure the terms of the grant or any aspect of the Performance Share Units to reduce or eliminate the Participant’s liability for Tax-Related Items. Further, if the Participant becomes subject to taxation in more than one country between the grant date and the date of any relevant taxable or tax withholding event, as applicable, the Participant acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one country. For tax and withholding purposes and unless otherwise required under applicable law, the value of any shares of Common Stock issued shall be determined based on the closing stock price on the date of vesting regardless of when the Shares are actually credited to the Participant's account.
(b) If the Participant’s country of residence (and/or the country of employment, if different) requires withholding of Tax-Related Items, the Company may withhold a portion of the Shares otherwise issuable upon vesting of the Performance Share Units (or a portion of any cash proceeds where the Performance Share Units are settled in cash or a forced sale is required) that have an aggregate Fair Market Value sufficient to pay the Tax-Related Items required to be withheld with respect to the Shares. For purposes of the foregoing, no fractional Shares will be withheld or issued pursuant to the grant of the Performance Share Units and the issuance of Shares hereunder. If the obligation for Tax-Related Items is satisfied by withholding Shares or a portion of any cash proceeds (where the Performance Share Units are settled in cash or a forced sale is required), for tax purposes, the Participant shall be deemed to have been issued the full number of Shares subject to the vested Performance Share Units, notwithstanding that a number of the Shares (or a portion of any cash proceeds) are withheld solely for the purpose of satisfying any withholding obligations for the Tax-Related Items due as a result of any aspect of the Participant’s participation in the Plan. Alternatively, the Company may, in its discretion, withhold any amount necessary to pay the Tax-Related Items from the Participant’s regular salary or other amounts payable to the Participant, with no withholding of Shares, or may require the Participant to submit payment equivalent to the Tax-Related Items required to be withheld with respect to the Shares by means of certified check, cashier’s check or wire
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transfer. In the event the withholding requirements are not satisfied, no Shares will be issued to the Participant (or the Participant’s estate) upon vesting of the Performance Share Units (or no cash payment will be made where the Performance Share Units are settled in cash or a forced sale is required) unless and until satisfactory arrangements (as determined by the Company in its sole discretion) have been made by the Participant with respect to the payment of any such Tax-Related Items. By accepting the Performance Share Units, the Participant expressly consents to the methods of withholding as provided hereunder and/or any other methods of withholding that the Company may adopted and are permitted under the Plan to meet the withholding and/or other requirements as provided under applicable laws, rules and regulations. All other Tax-Related Items related to the Performance Share Units and any Shares delivered in payment thereof shall be the Participant’s sole responsibility.
(c) To the extent the Company pays any Tax-Related Items that are the Participant’s responsibility (“Advanced Tax Payments”), the Company shall be entitled to recover such Advanced Tax Payments from the Participant in any manner that the Company determines appropriate in its sole discretion. For purposes of the foregoing, the manner of recovery of the Advanced Tax Payments shall include (but is not limited to) offsetting the Advanced Tax Payments against any and all amounts that may be otherwise owed to the Participant by the Company (including regular salary/wages, bonuses, incentive payments and Shares acquired by the Participant pursuant to any equity compensation plan that are otherwise held by the Company for the Participant’s benefit).
(d) The Company may, in the discretion of the Committee, provide for alternative arrangements to satisfy applicable tax withholding requirements in accordance with Section 6.5 of the Plan.
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The Company holds certain personal information about the Participant, including the Participant's name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all options or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan (“Data”). The Data may be provided by the Participant or collected, where lawful, from third parties, and the Company will process the Data for the sole and exclusive purpose of implementing, administering and managing the Participant's participation in the Plan. The Data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Participant's country of residence. Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for the Participant's participation.
The Company will transfer Data internally as necessary for the purpose of implementation, administration and management of the Participant's participation in the Plan, and the Company may further 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 European Economic Area, or elsewhere throughout the world, such as the United States. The Participant hereby authorizes (where required under applicable law) for them to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing the Participant's 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 on the Participant's
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behalf to a broker or other third party with whom the Participant may elect to deposit any Shares acquired pursuant to the Plan.
The Participant may, at any time, exercise their rights provided under applicable personal data protection laws, which may include the right to (a) obtain confirmation as to the existence of the Data, (b) verify the content, origin and accuracy of the Data, (c) request the integration, update, amendment, deletion, or blockage (for breach of applicable laws) of the Data, and (d) to oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Plan and the Participant's participation in the Plan. The Participant may seek to exercise these rights by contacting the Company's human resource department.
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then this Performance Share Unit Award, if unpaid at such time, and all other unpaid Performance Share Unit Awards held by the Participant shall terminate effective the date on which the Participant enters into such activity, unless terminated sooner by operation of another term or condition of this Agreement or the Plan, and any gain realized by the Participant with respect to the vesting of all or a portion of this or any other Performance Share Unit Awards shall be paid by the Participant to the Company, plus interest measured from the first date the Participant engaged in any of the prohibited activities set forth above at the highest rate allowable under Delaware law.
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By accepting this Performance Share Unit Award, the Participant consents to deductions from any amounts the Company owes the Participant from time to time (including amounts owed as wages or other compensation, fringe benefits or vacation pay, as well as any other amounts owed to the Participant by the Company) to the extent of the amounts the Participant owes the Company under Section 21(a) above. Whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount owed, calculated as set forth above, the Participant agrees to pay immediately the unpaid balance to the Company.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
ARTHUR J. GALLAGHER & CO.
By:______________________________
Walter D. Bay
Vice President, General Counsel and
Secretary
PARTICIPANT
[Signed Electronically]
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Performance SHARE Unit GRANT Agreement
Arthur J. Gallagher & Co.
SCHEDULE A
| Performance Goals | |||
Performance Measure | Weighting | Minimum | Target | Maximum |
Average Three-Year Adjusted EBITDAC per Share Growth | 100% | 4% | 9% | 14% |
For purposes of this Agreement, “Adjusted EBITDAC” shall be defined as earnings from continuing operations for the Company’s brokerage and risk management reporting segments before interest, taxes, depreciation, amortization and change in estimated acquisition earn-out payables; and further adjusted to exclude lease abandonment charges, severance and book gains, and normalized for the impact of foreign currency translation.
The target award is 100%, the minimum award is 50%, and the maximum award is 200%. To achieve the target award, Average Three-Year Adjusted EBITDAC Per Share Growth of 9% must be achieved, for the minimum award 4% must be achieved, and for the maximum award 14% must be achieved.
If the actual performance approved by the Compensation Committee falls between the percentages specified above, the number of Earned Performance Share Units under this Performance Share Unit Award will be calculated using straight-line interpolation, and will be rounded down to the nearest whole number of Performance Share Units.