Exhibit 99.2
Jones Lang LaSalle Incorporated
200 East Randolph Drive
Chicago, Illinois 60601
July 16, 2004
Mr. Colin Dyer
[Home Address]
Dear Colin:
On behalf of our Board of Directors, I am very pleased to confirm our offer of
employment to you as President and Chief Executive Officer of Jones Lang LaSalle
Incorporated (the Company). While you serve in that capacity, (i) the Company
will use its best efforts to cause you to be nominated for and elected to serve
as a member of our Board of Directors (the Board), (ii) you will be the Chair of
our Global Executive Committee (the GEC), our most senior internal management
committee, and (iii) you will be designated as one of our International
Directors, which constitutes our most senior group of executives.
Duties and Authority. You shall have such duties, responsibilities, power and
authority as are provided to the President and Chief Executive Officer under the
Company's By-Laws and as are typically associated with such position. You will
report solely and directly to the Board and all other executives of the Company
will, directly or indirectly, report to you.
During your employment, you shall devote your full time business efforts and
energies to the supervision and conduct of the business and affairs of the
Company and to the furtherance of its interests as directed by the Board.
Notwithstanding the foregoing, you may devote reasonable time to other
activities involving professional, charitable, community, educational, religious
and similar types of organizations, speaking engagements, membership on the
boards of directors of other organizations, and similar types of activities, to
the extent that such other activities do not, in the judgment of the Board,
inhibit or prohibit the performance of your duties under this letter, or
conflict in any material way with the business of the Company or any affiliate.
The Board recognizes that you are currently a member of the board of directors
of Northern Foods plc and agrees that you may continue to serve in that
capacity.
In addition, your service as an executive member of the Board would be subject
to our Corporate Governance Guidelines, a copy of which is attached as Annex A.
Place of Employment and Commencement Date. Your principal places of employment
shall be Chicago, Illinois and London, England, subject to business travel
consistent with the needs and demands of the Company. Your employment will
commence on September 7, 2004 (the Employment Commencement Date).
Base Salary. During your employment, the Company will compensate you with a base
salary (Base Salary) at the rate of US$750,000 per annum, payable semi-monthly
in
accordance with the Company's normal payroll schedule. The level of your Base
Salary will remain in effect through December 31, 2005, after which it shall be
subject to approval by the Compensation Committee of the Board (the Compensation
Committee) in accordance with the procedures it establishes from time to time
with respect to the establishment of executive compensation and based on your
individual performance, the financial performance of the Company and market
considerations generally, provided, however, that both your Base Salary and your
target Annual Bonus opportunity referred to below for 2006 and thereafter will
be no less than your Base Salary and target Annual Bonus opportunity for 2005.
Annual Bonus. During your employment, you shall be eligible to receive an annual
bonus (Annual Bonus) pursuant to the Company's annual bonus program. Your target
bonus for the remainder of the calendar year 2004 shall be US$250,000 and shall
be paid in no less than 100% of such amount by March 31, 2005 at the same time
as we generally pay bonuses. Your target bonus for calendar year 2005 shall be
US$750,000 payable by March 31, 2006 at the same time as we generally pay
bonuses. For calendar year 2006 and after, the Compensation Committee will
establish your annual target bonus amounts as set forth below.
Subject to the minimum guaranteed amount for 2004 set forth above, the annual
payment of your target bonus shall be subject to approval by the Compensation
Committee, and shall be paid, to the extent thereof, subject to year to year
variations. Factors included in considering your individual bonus awards
include, without limitation, your performance against specific objective and
subjective standards that will be developed between you and the Compensation
Committee in accordance with the Company's Individual Performance Management
Program (IPMP), subjective evaluation by the Compensation Committee and the
overall performance of the Company. A consideration of these factors may lead to
your receiving more than, or less than, your target bonus amounts.
It is the Company's policy to consider bonuses annually. To earn and be paid a
bonus, individuals must generally be employed by the Company on the date that
bonuses are paid. If you leave the firm voluntarily for any reason prior to the
date that bonuses are paid (other than in the case of Constructive Termination)
or if your employment is terminated for Cause, you will not be paid any part of
your bonus, pro rata or otherwise. Notwithstanding the foregoing, if you leave
the firm involuntarily for any reason other than Cause, or if you die or become
totally and permanently disabled, in any case prior to the fourth (4th)
anniversary of the Employment Commencement Date, you will be paid a pro rata
portion of your target Annual Bonus for the applicable year. Further information
about the payment of your bonus under other circumstances is set forth below
under "Condition of Employment and Severance Plan."
2004 Make-Whole Bonus Payment. In addition to the Annual Bonus payable in
respect of 2004 as set forth in the foregoing section, the Company shall pay you
a make-whole bonus amount (Make-Whole Bonus) to the extent that your actual
bonus paid by your current employer in respect of 2004 is less than your target
bonus at such employer, provided, however, that notwithstanding the foregoing,
in no event shall the Make-Whole Bonus exceed US$325,000 or be less than
US$75,000. The Make-Whole Bonus shall be paid to you within 30 days after you
provide the Company with a letter stating that your prior employer has
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determined your bonus for 2004 and indicating the difference between your target
bonus and your actual bonus from such employer.
Share Ownership Plan. As an officer of the Company, you will, beginning with
your Annual Bonus for 2004 (but not with respect to the Make-Whole Bonus),
participate in the firm's Share Ownership Plan (SOP), through which a percentage
of your Annual Bonus, if any, will be delivered to you in the form of deferred
Jones Lang LaSalle Common Stock and the amount of which will be increased by 25%
in terms of dollar value. Details of the SOP are attached to this letter as
Annex B. The SOP, which is subject to change on an annual basis, applies
uniformly to all officers of the Company, and the terms of the SOP will apply to
you in the same fashion that it applies to all International Directors on an
ongoing basis.
Restricted Stock. As of the Employment Commencement Date, you will be granted
Restricted Stock Units (RSUs) under our Amended and Restated Stock Award and
Incentive Plan (the SAIP) that represent 40,000 shares of the Company's Common
Stock. One-half of the total number of RSUs will vest on the third anniversary
of the Employment Commencement Date and one-half will vest on the fifth
anniversary.
In addition to the foregoing, if the Company has met its objectives for 2005 as
established by the Board, then the Company shall grant you RSUs under the SAIP
that represent no less than 20,000 shares of the Company's Common Stock promptly
after the Board has determined in its discretion during 2006 that such
objectives have been met. One-half of the total number of such RSUs, to the
extent thereof, would vest on January 1, 2008 and one-half will vest on January
1, 2010. For 2006 and thereafter, the Board or its Compensation Committee will
annually establish your RSU and/or other equity-based compensation award levels
based on your individual performance, the financial performance of the Company,
and market considerations generally.
All RSUs granted to you will be subject to the terms of the SAIP, and a specific
award agreement that will be given to you, the forms of both of which are
attached as Annex C. Notwithstanding any provisions in the SAIP, the SOP, other
plan documents or a specific award agreement to the contrary, the Company agrees
that all RSUs contemplated above and any other equity-based compensation awards
(including any deferred shares under the SOP) that remain unvested at such time
as your employment may be terminated by the Company without Cause (as defined
below under Condition of Employment and Severance Plan) shall automatically
become fully vested and any equity-based awards that may be granted to you in
the form of stock options or similar rights shall vest and remain exercisable
for the lesser of three years or the remaining full term of the option or
similar award.
International Director Long-Term Incentive Plan. As of the Employment
Commencement Date, you will be granted, retroactive to January 1, 2004, one unit
in the International Director Long-Term Incentive Plan. The materials describing
this Plan and the terms of your interest are attached as Annex D.
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Fringe Benefits. In addition to your direct compensation, you will be entitled
to the benefits available generally to the Company's executive officers pursuant
to and subject to the terms of the Company programs under which such benefits
are offered, including the following:
o a total of 28 days annually for vacation, personal and sick leave;
o health and dental insurance;
o tax advantaged health care and transportation spending accounts;
o Company sponsored and supplemental life insurance;
o Company sponsored and supplemental disability and long-term care
insurance;
o reimbursement for the costs of relocating you and your family
generally in accordance with the Company's employee relocation
policy for Company-initiated moves for exempt full-time employees,
including reimbursement of all amounts relating to the remainder of
your apartment lease in Washington, D.C. (namely, either the
remaining rental payments or the amount required to be paid in
connection with its early termination);
o eligibility to participate in the 401(k) Savings and Retirement Plan
and to receive the Company's matching amounts thereunder;
o eligibility to participate in the Employee Stock Purchase Plan; and
o eligibility to participate in the Deferred Compensation Plan.
Details of these benefits are included in the firm's policies and benefits
summaries and plan descriptions, copies of which will be provided to you on or
before the Employment Commencement Date.
Expense Reimbursement. You will be authorized to incur reasonable expenses for
entertainment, traveling, meals, lodging, and similar items in promoting the
Company's business and for business communication costs, such as cellular phone
service, internet service, and a wireless e-mail device and service. The Company
will reimburse you for all reasonable expenses so incurred provided that such
expenses are incurred and accounted for in accordance with the policies and
procedures established by the Company.
Condition of Employment and Severance Plan. Employment by the Company is not for
a fixed period of time, and your employment will be "at will." This means that
either the firm or you may terminate your employment at any time, with or
without notice or cause and that the payment of Base Salary and Annual Bonus as
provided above remains contingent on the continuation of your employment. You
will, however, be eligible to participate as a member of the GEC in the Jones
Lang LaSalle Severance Pay Plan as amended and restated effective May 1, 2004, a
copy of which is attached as Annex E (the Severance Pay Plan). The Severance Pay
Plan specifically provides for the payment of severance and annual bonuses in
the event of a termination without Cause and in other events. Notwithstanding
the provisions of the Severance Pay Plan to the contrary or any changes in the
provisions of such Plan that would otherwise restrict your rights thereunder,
the following terms shall apply to you:
o The circumstances in which payment of severance is precluded under
the Severance Pay Plan shall be limited to terminations of
employment for the reasons described in clauses (a), (c), (d) and
(e) of Section 2.2 of the Severance Pay Plan, dealing with
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terminations for Cause, voluntary termination, and terminations by
reason of death or disability.
o If your employment is terminated on or prior to the fourth (4th)
anniversary of the Employment Commencement Date under circumstances
for which you would be eligible to receive severance, then the
amount of severance you will receive shall be two (2) years of Base
Salary and target Annual Bonus instead of one year and your actual
Annual Bonus for the year of termination shall be determined as
contemplated by the last paragraph under the heading "Annual Bonus"
above. If your employment is terminated after the fourth (4th)
anniversary of the Employment Commencement Date under circumstances
for which you would be eligible to receive severance, then the
amount of severance you will receive shall be one (1) year of Base
Salary and target Annual Bonus, and your actual Annual Bonus for the
year of termination shall be calculated as set forth in the
Severance Pay Plan.
o For purposes of this letter and the appendices to this letter,
including the Severance Pay Plan, "Cause" means (i) your commission
of a deliberate and premeditated act in bad faith against the
interests of the Company; (ii) your conviction of, or your entry of
a plea of nolo contendere to, any crime having as its predicate
element fraud, dishonesty or misappropriation involving the property
of the Company; (iii) your willful refusal or willful failure to
perform your duties as set forth herein; or (iv) your breach of any
material term of this letter or any other written agreement between
you and the Company. If the Company asserts that "Cause" exists, you
will be (I) notified in writing of the termination for Cause at
least 30 days before the effective date of such termination; (II)
provided a reasonable opportunity for you to be heard, with counsel,
before the Board regarding any disputed facts before the proposed
effective date of your termination for Cause; and (III) provided 30
days in which to correct the circumstances alleged to constitute
such Cause. The Board will make a final determination of whether
Cause exists following any hearing and opportunity to correct,
provided that a determination that Cause exists shall require an
affirmative vote of at least 2/3 of the non-employee and non-officer
members of the Board.
o For purposes of this letter and the appendices to this letter, a
Constructive Termination shall be treated as an involuntary
termination of your employment by the Company without Cause.
"Constructive Termination" means your voluntary termination of
employment following (i) a change in location of your principal
place of business by more than 75 miles without your consent; (ii)
the assignment to you of any duties inconsistent in any substantial
respect with your position, authority, or responsibilities as
contemplated by this letter or any other substantial adverse change
in such position, including title, authority, and responsibility;
(iii) any material breach by the Company of this letter or any other
agreement between you and the Company; or (iv) the failure of the
Company to require any purchaser of or successor to substantially
all of the assets of the Company or any enterprise with which or
into which the Company may be merged to assume the Company's
obligations under this letter. A Constructive Termination shall not
be deemed to have occurred unless you provide the Company with
written notice of the reason for such Constructive Termination and
afford the Company 30 days within which the Company may correct the
circumstances alleged to constitute the Constructive Termination.
5
Directors and Officers Insurance and By-Law Indemnification. You will be
entitled to coverage under the commercial insurance policies that the Company
maintains from time to time with respect to liability for the actions of our
Directors and Officers acting in such capacities. In addition, you will be
entitled to the indemnification provided under the Company's By-Laws in effect
on the date of this letter, a copy of which are attached as Annex F. During your
employment and following any termination of employment, such coverage and
indemnification will be at least as favorable to you as that provided to any
other new or continuing Company executive.
Code of Business Ethics and Other Corporate and Personnel Policies. The Company
strongly believes that compliance by its employees with all applicable laws and
ethical business practices is critical to its success. Accordingly, you will be
asked to become familiar with the firm's Code of Business Ethics, a copy of
which has been provided to you, and to certify that you will at all times act in
accordance with its provisions. Continuing compliance with the Code will be a
condition to continued employment with the Company. You also agree to become
familiar and comply with the Company's corporate and personnel policies. The
Code of Business Ethics and the corporate and personnel policies are all
maintained on the Company's intranet, known as Delphi, to which all employees
are given access. In order to facilitate your transition into your new position,
prior to the Employment Commencement Date the Company may provide you with
confidential information, Company equipment and access to its computer network
and in such event you agree to comply with the Company's policies (including the
applicable provisions of the Code of Business Ethics) with respect thereto.
No Restrictions. You represent and warrant to the Company that you are not bound
by any restrictive covenants, court orders, laws or regulations, and that you
have no prior or other obligations or commitments of any kind, that would in any
way prevent, restrict, hinder or interfere with your acceptance of continued
employment or the performance of all duties and services contemplated hereunder
to the fullest extent of your ability.
Public Disclosures. You understand that the Company will file this letter
publicly with the United States Securities and Exchange Commission as part of
its required disclosures as a public company. This letter may also be disclosed
as otherwise required by applicable laws or regulations. You also agree that the
Company may make such additional disclosures about you and your compensation
from time to time as and to the extent required by applicable laws and
regulations and that you will provide the Company with all necessary information
upon request.
Reimbursement for Legal, Tax and Other Expenses. The Company will reimburse you
for reasonable fees and out-of-pocket costs you incur for (1) legal and tax
advice in connection with the negotiation of this letter agreement and matters
relating hereto and (2) legal and other services in order to maintain your visa
for United States employment and obtain a permanent residence permit ("green
card") allowing your continued residence and employment within the United States
as well as similar services as needed for your immediate family.
6
In addition, during your employment with the Company (and for one year
thereafter) and in the event that you are required to file an income tax return
in a second country as the result of your employment by the Company, the Company
will reimburse you for up to US$10,000 annually for advice and assistance that
you obtain from an accounting firm of your selection with respect to the
preparation of tax returns and/or payment of taxes for such second country in
which you are required to file such return. Furthermore, in the event you are
required to file an income tax return in any third or more country as the result
of your employment by the Company, the Company will reimburse you for the cost
of the advice and assistance that you obtain from an accounting firm of your
selection with respect to the preparation of such tax return.
To the extent that you are subject to tax in any jurisdiction on the amount of
any expense reimbursement provided under this letter (such as reimbursement for
relocation, business, or legal expenses) and you are not entitled to benefit
from a corresponding tax deduction for such expense, the Company will make a
cash payment to you in an amount such that, after receiving the payment and
taking into account any taxes on such payment, you will be in the same financial
position as if the expense reimbursement had not been subject to tax in any
jurisdiction.
Protection Against Multiple Taxation. To the extent that, after taking into
account all national and local taxes owed in any jurisdiction and any credits,
exemptions, and other offsets under applicable tax law, your aggregate
compensation from the Company is subject to a greater amount of tax than it
would have been had you been subject to tax only in the United States, then the
Company will make a cash payment to you in an amount such that, after receiving
the payment and taking into account any taxes on such payment, you will be in
the same financial position as if you had been subject to tax in only the United
States. To the extent appropriate and not inconsistent with this letter, the
Company's Tax Equalization Policy, a copy of which has been provided to you,
shall apply to the preparation and payment of your income taxes. You agree to
permit the Company, at its own expense, to designate its own accounting firm to
participate in the preparation of your income tax returns for the purpose of
reasonably and legitimately minimizing the Company's excess tax reimbursement
costs to be paid to you.
Governing Law. This letter shall be governed by and interpreted in accordance
with the laws of the State of Illinois, United States, without regard to the
choice of law provisions thereof.
[signature page follows]
7
Acceptance. Please indicate your acceptance of this offer, and your agreement to
the terms and conditions set forth above, by signing the enclosed copy of this
letter and returning it to me. The offer set forth in this letter shall remain
in effect until the close of business on July 26, 2004.
We greatly look forward to welcoming you to the firm and are confident that our
shareholders, clients and employees will benefit from your leadership and that
our relationship with you will be mutually satisfying and rewarding.
Very truly yours,
JONES LANG LASALLE INCORPORATED
By: /s/ Stuart L. Scott
----------------------------------
Stuart L. Scott
Chairman of the Board of Directors
Accepted:
/s/ Colin Dyer
--------------
Colin Dyer
Date of Acceptance: 19 July 2004
8
ANNEXES
Annex Title
- ----- -----
A Corporate Governance Guidelines
B Share Ownership Plan (SOP)
C-1 Stock Award and Incentive Plan (SAIP)
C-2 Form of Award Agreement under SAIP
D International Director Long-Term Incentive Plan
E Severance Pay Plan
F By-Laws
9
Annex A
CORPORATE GOVERNANCE GUIDELINES
[Available on the Company's public website at www.joneslanglasalle.com]
10
Annex B
SHARE OWNERSHIP PLAN (SOP)
The Share Ownership Plan provides for a portion of the annual bonus to be
awarded in deferred shares of common stock of the Company. International,
Regional and National Director levels are eligible for participation in this
Plan. By providing this benefit to these Director levels, the Company recognizes
that this group of senior managers contributes so very much to our success--and
will ensure the effectiveness of our global platform going forward. It also
addresses one of our key aims in encouraging share ownership deeper into the
Company.
OBJECTIVES OF THE PLAN
1) Align a portion of the compensation of those most responsible for the results
of the Company with the interests of shareholders.
2) Reward people who make long-term contributions to the Company and encourage
retention through long-term wealth building incentives.
3) Reinforce the "one firm" mindset by encouraging employee ownership across
business units and regions
THE PLAN
For each annual bonus payment made while the Plan continues, the deferral
amounts will be:
International Directors 20%
Regional Directors 15%
National Directors 10%
The Company will contribute an additional "uplift" of 25% of the amount deferred
to provide a sizeable and predictable wealth building contribution and encourage
share ownership. We believe that this uplift is exceptional and makes this
program particularly attractive for our directors. For example, SOP shares
issued for plan year 1999 and 2000 appreciated 159% and 126% respectively when
they vested on July 1st of 2002 (appreciation figures include the uplift as well
as appreciation in stock price). Whilst there can be no guarantee that future
returns will be as good, and indeed could possibly be negative, we firmly
believe that the 25% does provide an excellent cushion for the potential
downside and a springboard for the upside.
The vesting schedule is 50% of the shares and premium vesting after eighteen
months, and the remaining 50% vesting after thirty months. Once vested, the
shares are owned by the individual, including any share price gains (or losses)
from the original allocation date. The individual is free to sell the shares if
he or she wishes to, although the hope and
11
intention is that individuals will accumulate a meaningful share ownership over
time. The pricing of the stock will be at the closing price on the first trading
day in each new year.
Following advice we have received from external tax authorities, we understand
that tax is generally not applied to the part of the annual bonus awarded in
deferred shares of the Company or to the 25% enhancement (or any subsequent
gains in the share price) until the deferred shares become vested. Thus, in
addition to the enhancement, a significant tax deferral benefit is afforded to
the executive. However, this tax treatment is in most cases, dependent on no
dividends being paid or voting rights held during the restricted period.
Conditions to vesting rights are that the individual must be employed with the
Company at the stipulated vesting dates. These conditions do not apply to those
retiring in the normal course of business, to the estates of those deceased, or
indeed to any who have been made redundant. Those who are dismissed for cause
will, however, forfeit.
FORFEITURE
Employees who voluntarily leave the firm prior to vesting dates will forfeit
their bonus deferrals and the firm contributions. It is important that this rule
is fully understood by everybody so as to prevent misunderstanding at a later
date.
OWNERSHIP GUIDELINES
Below are the stock ownership guidelines for our key leaders. We firmly believe
company owners make better leaders and managers.
Title Ownership Level
International Director Four times base salary in stock ownership
Regional Director Three times base salary in stock ownership
National Director Two times base salary in stock ownership
All the above should be calculated as value on January 1 each year.
Individuals with ownership levels that exceed guidelines may receive their full
bonus amounts in cash, at their discretion.
These guidelines are similar to other service firms in and out of our industry.
We have not established a time frame to achieve these ownership levels, but we
are providing a sizeable company contribution (25%) to deferred bonus amounts as
an incentive to achieve these levels.
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Annex C-1
STOCK AWARD AND INCENTIVE PLAN
[Incorporated by reference to Exhibit 10.4 of the Company's Annual Report
on Form 10-K for the year ended December 31, 2002]
13
Annex C-2
JONES LANG LASALLE INCORPORATED
FORM OF RESTRICTED STOCK UNIT AGREEMENT
(Under the Amended and Restated Stock Award and Incentive Plan)
THIS RESTRICTED STOCK UNIT GRANT ("Restricted Unit Grant"), dated as of
_________________ (the "Grant Date"), is granted by JONES LANG LASALLE
INCORPORATED (the "Company"), to [First_Name] [Surname], (the "Grantee") as
Restricted Stock Units pursuant to the Company's Amended and Restated Stock
Award and Incentive Plan (the "Plan"). The following table sets out the basic
information regarding this Restricted Unit Grant, and Appendix A sets out the
terms and conditions of this Restricted Unit Grant. This Restricted Unit Grant
is subject to such terms and conditions and to the further terms and conditions
contained in the Plan. For purposes of this Agreement, all capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the Plan.
By accepting this Restricted Unit Grant, Grantee accepts all such terms and
conditions.
- ----------------------------------------------------------------------------------
1. Number of shares of Stock with [M__Number_B_]
respect to which Grantee is
granted Restricted Stock Units
- ----------------------------------------------------------------------------------
2. Grant Price [PriceB]
- ----------------------------------------------------------------------------------
3. Time of vesting and issuing of This Restricted Unit Grant shall vest
Restricted Unit Grant and shares of Stock shall be issued as
to one-half (1/2) of the Restricted
Stock Units on each of:
(i) __________, (3rd anniversary); and
(ii) __________, (5th anniversary)
- ----------------------------------------------------------------------------------
4. Effect of termination of (i) Termination by Reason of Death,
employment on vesting Total and Permanent Disability, or
Special Circumstances - this
Restricted Unit Grant shall
continue to vest in accordance
with Item 3 above
(ii) Termination by Reason of
Retirement - this Restricted Unit
Grant shall become fully vested
and shares of Stock shall be
- ----------------------------------------------------------------------------------
14
- ----------------------------------------------------------------------------------
issueable the earlier of eighteen
months from the date of the
approved Retirement or in
accordance with Item 3 above.
(iii) Voluntary Resignation or
Termination for Cause - the
portion of this Restricted Unit
Grant which has not already vested
in accordance with Item 3 above at
the time of such resignation or
termination shall not vest and
shares of Stock shall not be
issued, but shall be forfeited
(iv) Involuntary Termination without
Cause - this Restricted Unit Grant
shall become fully vested and
shares of Stock shall be issueable
promptly thereafter
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Company has caused the execution hereof by its duly
authorized officer and the Grantee has agreed to the terms and conditions of
this Restricted Stock Unit Grant.
JONES LANG LASALLE INCORPORATED
By: Stuart L. Scott
Chairman of the Board
Accepted by: __________________
(Grantee)
Date:__________________________
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APPENDIX A
JONES LANG LASALLE INCORPORATED
RESTRICTED STOCK UNITS AGREEMENT
TERMS AND CONDITIONS
1. DEFINITIONS
(i) "Cause" means failure to perform the Grantee's job
responsibilities in good faith, poor performance, falsification of
Company records, theft, failure to cooperate with an
investigation, use or distribution on the premises of the Company
or any of the Company's subsidiaries of illegal drugs, or
conviction of any crime against the Company, any of the Company's
subsidiaries or any of their employees.
(ii) "Data" means personal information about the Grantee, including the
Grantee's name, home address and telephone number, date of birth,
social security number or identification number, salary,
nationality, job title, any shares or directorships held in the
Company, details of all SOP Grants or any other entitlement to
shares awarded, canceled, exercised, vested, unvested or
outstanding in the Grantee's favor, for the purpose of managing
and administering the Plan.
(iii) "Retirement" means termination of employment by the Grantee (other
than by death or Total and Permanent Disability) under the terms
set forth or agreed to by the Board of Directors or the Committee,
in their sole discretion.
(iv) "Special Circumstances" means such circumstances as shall be
determined solely by the Board of Directors or the Committee.
(v) "Stock" means shares of the common stock, par value $0.01 per
share, of the Company.
(vi) "Total and Permanent Disability" means a disability qualifying the
Grantee to receive benefits under the applicable total and
permanent disability income plan provided by the Company or the
subsidiary of the Company which employs Grantee.
2. ACKNOWLEDGMENT AND WAIVER
By entering into this Restricted Stock Unit Agreement, the Grantee acknowledges
that:
(i) the Plan is discretionary in nature and may be amended, suspended
or terminated by the Company at any time and the Company, in its
discretion, shall have the power and authority to (a) determine
which (if any) individuals rendering services or employed outside
the United States are eligible to participate in the Plan; (b)
determine which non-United States-based operations (e.g.,
subsidiaries, branches, representative offices) participate in the
Plan; (c) modify the terms and conditions of any Restricted Unit
Grants
16
made to such eligible individuals, or with respect to such
non-United States-based operations; and (d) establish sub-plans,
modified exercise, payment and other terms and procedures to the
extent deemed necessary or desirable by the Company;
(ii) this Restricted Unit Grant is a one-time benefit which does not
create any contractual or other right to receive future grants of
Restricted Stock Units, or benefits in lieu of Restricted Stock
Units;
(iii) all determinations with respect to any such future grants,
including, but not limited to, the times when Restricted Unit
Grants shall be granted, the number of shares subject to each
Restricted Unit Grant, the grant price, and the time or times when
each Restricted Unit Grant shall be issueable, will be at the sole
discretion of the Company;
(iv) the Grantee's participation in the Plan shall not create a right
to further employment with the Grantee's employer and shall not
interfere with the ability of the Grantee's employer to terminate
the Grantee's employment relationship at any time with or without
cause;
(v) the Grantee's participation in the Plan is voluntary;
(vi) the value of this Restricted Unit Grant is an extraordinary item
of compensation which is outside the scope of the Grantee's
employment contract, if any, and is not part of normal or expected
compensation for purposes of calculating any severance,
resignation, redundancy, end of service payments, long-service
awards, or similar payments;
(vii) the future value of the underlying shares of Stock is unknown and
cannot be predicted with certainty and if the value of the
underlying Stock decreases in value, so will the value of this
Restricted Unit Grant;
(viii) this Restricted Unit Grant has been granted to the Grantee in the
Grantee's status as an employee of his or her employer, and can in
no event be understood or interpreted to mean that the Company is
the Grantee's employer or that the Grantee has an employment
relationship with the Company; provided, however, that this
provision shall not affect any Grantee who is actually employed by
the Company; and
(ix) the ultimate liability for any and all tax, social insurance and
any other payroll tax ("tax-related items") withholding and
reporting obligations are and remain the Grantee's responsibility
and liability and that the Company (i) makes no representations
nor undertakings regarding treatment of any tax-related items in
connection with any aspect of the Restricted Unit Grant, including
the grant, vesting or issuance of the Restricted Stock Units and
the subsequent sale of Stock acquired; and (ii) does not commit to
structure the terms of the grant or any aspect of this Restricted
Unit Grant to reduce or eliminate the Grantee's liability
regarding tax-related items.
(x) the terms and conditions of this Restricted Unit Grant shall be
governed by and construed in accordance with the laws of the State
of Illinois, USA, without taking into account any conflicts of
laws provisions.
17
3. NON-TRANSFERABILITY
This Restricted Unit Grant is non-transferable otherwise than by the laws of
descent and distribution on death.
4. ISSUANCE OF RESTRICTED STOCK UNITS/DIVIDENDS AND STOCK SPLITS
Subject to such rules as may be adopted by the Company and to the discretion of
the Company, this Restricted Unit Grant may be paid in an equal number of shares
of Stock or in cash in the amount of the fair market value of the Restricted
Stock Units based upon the closing price of Stock on the New York Stock Exchange
on the trading day immediately preceding the day on which the Restricted Stock
Units vest. Dividends, if any, paid with respect to Restricted Stock Units prior
to vesting will be reinvested in additional Restricted Stock Units having the
same vesting date, and additional Restricted Stock Units will be received by the
Grantee in the case of a Stock split or Stock dividend.
5. Data Privacy Consent
The Grantee consents to the collection, use and transfer of Data as described in
this paragraph. The Grantee understands that the Company and/or its Subsidiaries
will transfer Data amongst themselves as necessary for the purpose of
implementation, administration and management of the Grantee's participation in
the Plan or any other plan of the Company (through this Restricted Unit Grant
and any other award which may have been or be in the future granted under the
Plan or any such other plan), and that the Company and/or any of its
Subsidiaries may each further transfer Data to any third parties assisting the
Company in the implementation, administration and management of the Plan or any
other plan of the Company. The Grantee understands that these recipients may be
located in the European Economic Area, or elsewhere, such as the United States
or Canada. The Grantee authorizes them to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing the Grantee's participation in the Plan
or any other plan of the Company (through this Restricted Unit Grant and any
other award which may have been or be in the future granted under the Plan or
any such other plan), including any requisite transfer to a broker or other
third party with whom the Grantee may elect to deposit any Stock acquired upon
issuance of Stock in accordance with this Restricted Unit Grant or any other
award and such Data as may be required for the administration of the Plan or any
other plan of the Company and/or the subsequent holding of Stock on his or her
behalf. The Grantee understands that he or she may, at any time, view Data,
require any necessary amendments to it or withdraw the consents herein in
writing by contacting his or her local Human Resources representative.
Withdrawal of consent may, however, affect Grantee's ability to realize benefits
from this Restricted Unit Grant or other awards.
18
Annex D
INTERNATIONAL DIRECTOR LONG-TERM INCENTIVE PLAN
[Incorporated by reference to Exhibit 10.16 of the Company's
Annual Report on Form 10-K for the year ended December 31, 2002]
19
Annex E
SEVERANCE PAY PLAN
[Incorporated by reference to Exhibit 10.5 of the Company's Quarterly Report
on Form 10-Q for the quarterly period ended March 31, 2004]
20
Annex F
BY-LAWS OF THE COMPANY
[Incorporated by reference to Exhibit 3(u) of the Company's Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 2002]
21