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EXHIBIT 10.2
ULTRAMAR DIAMOND SHAMROCK CORPORATION
INTERMEDIATE INCENTIVE AND PERFORMANCE-BASED
RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT (the "Agreement") is made, effective as of February 7,
2000 (hereinafter the "date of grant"), between Ultramar Diamond Shamrock
Corporation (the "Company") and ____________ (the "Participant").
R E C I T A L S
WHEREAS, the Company maintains the Ultramar Diamond Shamrock
Corporation Intermediate Incentive and Performance-Based Restricted Stock Plan
(the "Plan"), which is incorporated into and forms a part of this Agreement; and
WHEREAS, the Committee has determined that it would be in the best
interests of the Company and the stockholders to grant the Intermediate
Incentive Award, Performance-Based Restricted Stock Award and Excess
Performance-Based Stock Award provided for herein to the Participant pursuant to
the Plan, the LTIP (as to the Performance-Based Restricted Stock Award) and the
terms set forth herein.
NOW, THEREFORE, IT IS AGREED, in consideration of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
Section 1. Definitions. All capitalized terms not otherwise defined herein
shall have the same meanings as in the Plan. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Disability" shall mean the Participant's incapacity due to physical or
mental illness to substantially perform his duties on a full-time basis for six
consecutive months or for 180 days in any 210 consecutive day period.
"Retirement" shall mean a Participant's (i) early retirement (retirement
from active employment with the Company or a subsidiary in accordance with the
early retirement provisions of a pension plan maintained by the Company or such
subsidiary); or (ii) normal retirement (retirement from active employment with
the Company or a subsidiary in accordance with the normal retirement provisions
of a pension plan maintained by the Company or such subsidiary).
Section 2. Terms of Intermediate Incentive Award.
(a) Performance Period. The Performance Period is the period beginning
on January 1, 2000 and ending on December 31, 2002.
(b) ITI Target Payout. The ITI Target Payout for the Performance Period
is $_____________.
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(c) Maximum Amount of Intermediate Incentive Award. The maximum amount
of the Intermediate Incentive Award for the Performance Period is 200% of
the ITI Target Payout, as further described herein.
(d) Intermediate Award Performance Criteria. The level of Intermediate
Award Performance Criteria used to determine the portion of the ITI Target
Payout earned by the Participant is set forth on Schedule A attached hereto
and made part of this Agreement.
(e) Intermediate Incentive Award.
(i) Except as otherwise provided herein, if the Total Company
Performance Percentage (determined in accordance with the Year 2 Matrix
on Schedule A) for the second year in the Performance Period (i.e.,
2001) is zero percent (0%), the Participant shall receive an
Intermediate Incentive Award for the Performance Period equal to the
product of (A) ITI Target Payout, multiplied by (B) the Total Company
Performance Percentage (determined in accordance with the Year 3 Matrix
on Schedule A); provided, that, in no event shall the maximum
Intermediate Incentive Award payable to the Participant for the
Performance Period exceed two hundred percent (200%) of the ITI Target
Payout. Such payment shall be made in cash as soon as practicable
following the end of the third year in the Performance Period (i.e,
2002) and the Committee's determination of the applicable Total Company
Performance Percentage.
(ii) Except as otherwise provided herein, if the Total Company
Performance Percentage (determined in accordance with the Year 2 Matrix
on Schedule A) for the second Year in the Performance Period (i.e.,
2001) is greater than zero percent (0%), the Participant shall receive
an Intermediate Incentive Award in respect of the second Year in the
Performance Period equal to fifty percent (50%) of the product of (A)
the ITI Target Payout, multiplied by (B) the Total Company Performance
Percentage (determined in accordance with the Year 2 Matrix on Schedule
A); and the Participant shall receive an Intermediate Incentive Award
for the third Year in the Performance Period equal to the product of
(C) the ITI Target Payout, multiplied by (D) the Total Company
Performance Percentage (determined in accordance with the Year 3 Matrix
on Schedule A), minus the amount of the Intermediate Incentive Award
earned for the second Year in the Performance Period, but in no event
shall the Intermediate Incentive Award for the third Year in the
Performance Period be less than $0. The payment referenced in the first
clause of the preceding sentence shall be made in cash as soon as
practicable following the end of the second year in the Performance
Period (i.e, 2001) and the Committee's determination of the applicable
Total Company Performance Percentage, and the payment referenced in the
second clause of the preceding sentence shall be made in cash as soon
as practicable following the end of the third year in the Performance
Period (i.e, 2002) and the
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Committee's determination of the applicable Total Company Performance
Percentage.
(f) Termination of Employment. If the Participant's employment with
the Company or any of its Affiliates terminates after the first quarter of
the second year of the Performance Period on account of the Participant's
Retirement, Disability or death, the Participant (or his estate or
Designated Beneficiary, if applicable) shall be entitled to a pro-rata
portion of the remaining Intermediate Incentive Award earned in accordance
with Section 2(e) of this Agreement, determined at the end of the
Performance Period, and based on the ratio of the number of whole calendar
months the Participant was employed during the Performance Period and the
total number of calendar months in the Performance Period through the end
of the year in which the Participant's employment with the Company
terminated. If the Participant's employment with the Company or any of its
Affiliates terminates under any other circumstances, any unpaid
Intermediate Incentive Award will be forfeited on the date of such
termination of employment; provided, however, the Committee may, in its
sole discretion, determine that the Participant will be entitled to receive
a pro-rata or other portion of the Intermediate Incentive Award.
(g) Change in Control. Notwithstanding any provision of this Agreement
to the contrary, if a Change in Control occurs during the Performance
Period, the Performance Period will be deemed to end on the effective date
of the Change in Control and the Participant shall be entitled to receive a
lump sum cash payment determined in accordance with the second paragraph of
Article V of the Plan.
Section 3. Performance-Based Restricted Stock Award.
(a) Performance Period. The Performance Period is the period beginning
on January 1, 2000 and ending on December 31, 2002.
(b) Target Restricted Stock Award. The Target Restricted Stock Award
for the Performance Period is __________ Restricted Shares.
(c) Restricted Stock Performance Criteria. The level of Restricted
Stock Performance Criteria used to determine the Restricted Stock Vesting
Percentage, and the Restricted Stock Vesting Percentage determined by the
attainment of the Restricted Stock Performance Criteria, is set forth on
Schedule B attached hereto and made part of this Agreement.
(d) Performance-Based Restrictive Stock Award. The Participant is
hereby granted a number of Restricted Shares equal to the Target Restricted
Stock Award pursuant to and subject to the terms and conditions of the
LTIP, this Agreement and the Plan. The purchase price to the Participant of
such Restricted Shares is zero. Any Restricted Shares which have not become
vested in accordance with such terms and conditions shall remain subject to
the restrictions on transferability described in Section 3(j) of this
Agreement, and the forfeiture conditions described in Section 3(f) and (g)
of this Agreement.
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(e) Vesting of Restricted Shares. For each of the three calendar years
in the Performance Period, the Participant shall become contingently vested
in a number of Restricted Shares equal to the product of (i) the Restricted
Stock Vesting Percentage for such year (determined by the TSR Percentage
Point Spread for such year in accordance with the "Total Shareholder Return
Incentive Scale" set forth on Schedule B), but not greater than 100%,
multiplied by (ii) one-third (1/3) of the Target Restricted Stock Award.
Other than as described in Section 3(f) below, such contingently vested
Restricted Shares shall become actually vested as of the last day of the
Performance Period, provided that the Participant remains actively employed
with the Company and its Affiliates through the last day of the Performance
Period.
In addition, at the end of the Performance Period the Participant shall
have the opportunity to become vested in those Restricted Shares which have
not become vested in accordance with the preceding paragraph, by applying
the following formula:
A = (B x C) - D
where:
A = the number of additional Restricted Shares vesting at the end of
the Performance Period in accordance with this paragraph, but not
less than zero or greater than the number of unvested Restricted
Shares at the end of the Performance Period.
B = the Restricted Stock Vesting Percentage based on the TSR Percentage
Point Spread for the entire Performance Period in accordance with
the "Total Shareholder Return Incentive Scale" set forth on
Schedule B (with no cap other than as set forth in Schedule B).
C = the number of Restricted Shares in the Target Restricted Stock
Award.
D = the number of Restricted Shares which would have become vested
during the Performance Period in accordance with the first
paragraph of this Section 3(e) if the 100% cap had not applied to
the Restricted Stock Vesting Percentage during the Performance
Period. For example, if one-third of the Participant's Restricted
Shares for 2001 was 200, and the Restricted Stock Vesting
Percentage would have been 120% but for the 100% cap, the
Participant will be deemed to have vested in 240 Restricted Shares
for that year for purposes of this clause.
(f) Termination of Employment. If the Participant's employment with
the Company and its Affiliates terminates during the Performance Period on
account of the Participant's Retirement, Disability or death, the
Participant (or his estate or Designated Beneficiary, if applicable) shall
actually vest in any Restricted Shares
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which are contingently vested in accordance with the first paragraph of
Section 3(e) as soon as practicable following the end of the calendar year
of such termination. In addition, if the Participant's employment is
terminated on account of Retirement, Disability or death after the first
quarter of a calendar year, the Participant (or his estate or Designated
Beneficiary, if applicable) shall become vested in a pro-rata portion of
the Restricted Shares which otherwise would become contingently vested in
accordance with the first paragraph of Section 3(e) of this Agreement for
such year, based on the ratio of the number of whole calendar months the
Participant was employed during such year to the total number of months in
such year (which is 12) (the "Termination Year Restricted Shares"). The
Termination Year Restricted Shares shall either (i) vest in accordance with
the first paragraph of Section 3(e) as soon as practicable following the
end of the calendar year of such termination, or (ii) to the extent such
vesting is not attained, forfeit and be returned to the Company as of the
last day of the calendar year of such termination. Any Restricted Shares
which are not (X) Termination Year Restricted Shares or (Y) contingently
vested in the case of a termination on account of Retirement, Disability or
death, shall forfeit and be returned to the Company on the date of the
Participant's termination of employment; provided, however, the Committee
may, in its sole discretion, determine that the Participant will become
vested in a pro-rata or other portion of the Restricted Shares upon his
termination of employment.
(g) Forfeiture of Restricted Shares at the End of the Performance
Period. If the Participant remains employed with the Company or an
Affiliate through the Performance Period, all Restricted Shares which have
not vested in accordance with Section 3(e) as of the last day of the
Performance Period shall be forfeited and returned to the Company as of
such day.
(h) Certificates. Certificates evidencing the Restricted Shares shall
be issued by the Company and shall be registered in the Participant's name
on the stock transfer books of the Company on or as soon as practicable
following the date hereof, but shall remain in the physical custody of the
Company or its designee at all times prior to the vesting of such
Restricted Shares, following which such certificates shall be delivered to
the Participant. Notwithstanding any provision of this Agreement to the
contrary, cash, rather than certificates, shall be issued for fractional
Shares.
(i) Legend on Certificates. The certificates representing the vested
Restricted Shares delivered to the Participant in accordance with Section
3(h) shall be subject to such stop transfer orders and other restrictions
as the Committee may deem advisable under the Plan, the LTIP or the rules,
regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares are listed, and any
applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions.
(j) Transferability. The Restricted Shares may not, at any time prior
to becoming vested hereunder, be assigned, alienated, pledged, attached,
sold or
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otherwise transferred or encumbered by the Participant and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any
Affiliate; provided that the designation of a Designated Beneficiary shall
not constitute an assignment, alienation, pledge, attachment, sale,
transfer or encumbrance.
(k) Securities Laws. Upon the vesting of any Restricted Shares, the
Participant will make or enter into such written representations,
warranties and agreements as the Committee may reasonably request in order
to comply with applicable securities laws or with this Agreement.
(l) Change in Control. Notwithstanding any provision of this Agreement
to the contrary, if a Change in Control occurs during the Performance
Period, the Performance Period will be deemed to end on the effective date
of the Change in Control and the Participant shall become vested in all
unvested Restricted Shares immediately prior to the Change in Control.
(m) Rights of a Stockholder. Except as otherwise provided in this
Agreement, the Participant shall have, with respect to all Restricted
Shares granted pursuant to this Agreement (whether or not vested), all of
the rights of a stockholder of the Company, including the right to vote the
Restricted Shares and to receive any cash dividends.
Section 4. Excess Performance-Based Stock Award. In the event the
Restricted Stock Vesting Percentage for any of the first, second or third
calendar year in the Performance Period exceeds one hundred percent (100%), the
Participant shall be entitled to receive an Excess Performance-Based Stock Award
in the form of a lump sum payment in respect of such calendar year, payable in
the form of either shares of Common Stock or cash equal to the fair market value
(as determined by the Committee) at the time of payment of a number of shares of
Common Stock, determined by multiplying one-third (1/3) of the Target Restricted
Stock Award by the excess of (i) the actual Restricted Stock Vesting Percentage
for the year, minus (ii) one hundred percent (100%). Such payment in respect of
all calendar years in the Performance Period shall be made as soon as
practicable after the end of the Performance Period. The terms and conditions of
the payment of an Excess Performance-Based Stock Award, including the conditions
under which it may be paid or forfeited upon termination of employment, shall be
as close as is practicable to those pursuant to which the Performance-Based
Restricted Stock Award becomes vested or forfeits in accordance with Section 3,
as determined in good faith by the Committee.
Section 5. No Right to Continued Employment. Neither the Plan nor this
Agreement shall be construed as giving the Participant the right to be retained
in the employ of the Company or any Affiliate. Further, the Company or an
Affiliate may at any time dismiss the Participant, free from any liability or
any claim under the Plan or this Agreement, except as otherwise expressly
provided herein.
Section 6. Withholding. The Participant agrees to make appropriate
arrangements with the Company for satisfaction of any applicable federal, state
or local
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income tax, withholding requirements or like requirements, including the payment
to the Company upon the vesting of the Restricted Shares (or such later date as
may be applicable under Section 83 of the Code), or other settlement in respect
of, the Restricted Shares of all such taxes and requirements and the Company
shall be authorized to take such action as may be necessary in the opinion of
the Company's counsel (including, without limitation, withholding vested
Restricted Shares or cash otherwise deliverable to Participant hereunder and/or
withholding amounts from any compensation or other amount owing from the Company
to the Participant) to satisfy all obligations for the payment of such taxes.
Section 7. Notices. Any notice necessary under this Agreement shall be
addressed to the Company in care of its Secretary at the principal executive
office of the Company and to the Participant at the address appearing in the
personnel records of the Company for such Participant or to either party at such
other address as either party hereto may hereafter designate in writing to the
other. Any such notice shall be deemed effective upon receipt thereof by the
addressee.
Section 8. Choice of Law. THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT
OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO IT PRINCIPLES OF CONFLICTS OF LAW, OR SUCH PRINCIPLES OF ANY OTHER
JURISDICTION WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF DELAWARE.
Section 9. Awards Subject to Plan, Etc. By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received and read a
copy of the Plan. The Intermediate Incentive Award, the Performance-Based
Restricted Stock Award and the Excess Performance-Based Stock Award are subject
to the Plan, and the Performance-Based Restricted Stock Award is further subject
to the LTIP. The terms and provisions of the Plan, and the LTIP to the extent
applicable, as each may be amended from time to time are hereby incorporated
herein by reference. In the event of a conflict between any term or provision
contained herein and a term or provision of the Plan or the LTIP, the applicable
terms and provisions of the Plan or the LTIP will govern and prevail.
Section 10. Signature in Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
ULTRAMAR DIAMOND SHAMROCK CORPORATION
By:
Title:
[Name of Participant]