EXHIBIT 10.23
SPECIMEN
PERFORMANCE SHARES AGREEMENT
THIS PERFORMANCE SHARES AGREEMENT is entered into as of _____________,
______, between ____________ (the "Recipient") and LITTELFUSE, INC., a Delaware
corporation (the "Corporation"), with reference to the following facts:
A. Pursuant to the 1993 Stock Plan for Employees and Directors of
Littelfuse, Inc. (the "Plan"), the Corporation is authorized to grant awards of
rights ("Restricted Units") to acquire shares of its Common Stock, $.01 par
value (the "Common Stock"), on a restricted basis as provided in the Plan to
officers, directors and employees of the Corporation or any Subsidiary as a
reward for past performance or as an incentive for future performance.
Capitalized terms used but not otherwise defined herein shall have the same
respective meanings as those terms have under the Plan.
B. The Corporation desires to grant Restricted Units to the Recipient.
NOW, THEREFORE, IN CONSIDERATION of the foregoing facts and other good and
valuable consideration, the parties hereto hereby agree as follows:
1. Grant of Restricted Units. The Corporation hereby grants to the
Recipient Restricted Units entitling the Recipient to acquire up to
________ shares of the Common Stock (hereinafter referred to as the
"Maximum Restricted Shares Amount"), subject in all respects to the
provisions of the Plan and the terms and conditions set forth herein.
2. Number of Restricted Shares Deemed Earned. (a) The number of
shares of the Common Stock which the Recipient shall be entitled to be
issued or paid for in cash pursuant to this Agreement shall be determined
pursuant to the following formula (hereinafter said shares shall be
referred to as the "Restricted Shares" and said number of shares resulting
from said formula shall be referred to as the "Earned Restricted Shares
Amount"):
(i) The Recipient shall be deemed to have earned no Restricted
Shares in the event that EBITDA Growth is less than ___% or Average
RONTA is less than ___%.
(ii) The Recipient shall be deemed to have earned ___% of the
Maximum Restricted Shares Amount if EBITDA Growth is equal to or
greater than ___% but less than ___%, and Average RONTA is equal to
or greater than ___% but less than ___%. For each full percentage
point above the EBITDA Growth minimum of ___%, the recipient will
earn an incremental ___% of the Maximum Restricted Shares Amount, up
to a maximum of an additional ___% of the Maximum Restricted Shares
Amount. Additionally, for each full percentage point above the
Average RONTA minimum of ___%, the recipient will earn an
incremental ___% of the Maximum Restricted Shares Amount up to a
maximum of an additional ___% of the Maximum Restricted Shares
Amount. Therefore, the Maximum Restricted Shares Amount is earned
only when EBITDA Growth is greater than ___% and Average RONTA is
greater than ___%. The chart attached hereto as Exhibit A
illustrates the application of the foregoing formula.
(b) As used herein, the term "EBITDA" shall mean the consolidated
net income of the Corporation for each of the _____, _____ and _____
fiscal years of the Corporation (hereinafter said three (3) year period is
referred to as the "Performance Period"); provided, however, that in
calculating said consolidated net income, no deductions shall be made for
any interest, taxes, depreciation or amortization.
(c) As used herein, the term "EBITDA Growth" shall mean the compound
annual growth rate in EBITDA from fiscal year _____ through fiscal year
_____ defined mathematically as follows (but expressed as a percentage):
EBITDA Growth = (fiscal year _____ EBITDA / fiscal year _____
EBITDA)1/3 - 1
(d) As used herein, the term "RONTA" shall mean the percentage
return on net tangible assets for the Corporation for each of the fiscal
years of the Corporation during the Performance Period, calculated for
each such fiscal year by dividing the consolidated net income of the
Corporation for such fiscal year by the average of the amounts of (x) the
total assets minus the total intangible assets minus the total current
liabilities of the Corporation at the beginning of such fiscal year and
(y) the total assets minus the total intangible assets minus the total
current liabilities of the Corporation at the end of such fiscal year;
provided, however, that current liabilities shall not include the current
portion of long term debt for purposes of this calculation.
(e) As used herein, the term "Average RONTA" shall mean the average
RONTA for each of the three fiscal years of the Corporation during the
Performance Period.
(f) To the extent applicable, all calculations of EBITDA and RONTA,
and the components thereof, shall be made in accordance with generally
accepted accounting principles consistently applied.
(g) In the event that the Corporation shall amend its financial
statements for any of its fiscal years _____, _____ or _____ at any time
after _____________, _____, and before _____________, _____, so that any
of the items used to calculate EBITDA or RONTA for any of those fiscal
years are materially changed, the Committee, in its discretion, may make
appropriate adjustments to the number of Restricted Shares deemed earned
pursuant to Section 2 hereof.
(h) In the event that the Corporation or any Subsidiary shall be a
party to any merger or consolidation or acquisition of assets, shall sell
all or substantially all of its
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assets or enter into any other transaction which, in the good faith
opinion of the Committee, will have a material effect (either positive or
negative) on EBITDA or RONTA during the Performance Period or the ability
of the Recipient to obtain the economic benefit contemplated by this
Agreement, the Committee shall appropriately and reasonably adjust the
formula contained in Section 2(a) to provide the Recipient with
substantially the same opportunity to obtain substantially the same
economic benefit that the Recipient would have if said transaction had not
been entered into, said adjustment to be evidenced in a writing delivered
by the Corporation to the Recipient.
(i) In the event that at anytime from and after the date hereof to
and including _____________, _____, there shall occur any changes in the
outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, mergers, consolidations, combinations, exchanges of
shares, separations, reorganizations, liquidations and the like, the
Committee shall appropriately and reasonably adjust the Maximum Restricted
Shares Amount, the Earned Restricted Shares Amount, the number of any
earned but unissued Restricted Shares and/or the amount of any earned but
unpaid Restricted Payments.
3. Issuance of Restricted Shares. In the event that the Recipient is
deemed to have earned any Restricted Shares pursuant to the provisions of
Section 2 hereof, a certificate or certificates representing that number
of shares of the Common Stock which is equal to one-half (1/2) of the
Earned Restricted Shares Amount shall be issued in the Recipient's name as
of _____________, _____, and as soon as reasonably practical after the
delivery by the Recipient to the Corporation of a stock power signed in
blank by the Recipient with respect to such Restricted Shares and in a
form which is acceptable to the Corporation which may be used by the
Corporation to cancel such Restricted Shares in accordance with the
provisions of the Plan and this Agreement. Upon issuance of the
certificate or certificates for such Restricted Shares, the Recipient
shall be a stockholder with respect to such Restricted Shares and shall
have all the rights of a stockholder with respect to such Restricted
Shares, including but not limited to, the right to vote such Restricted
Shares and to receive dividends and other distributions paid with respect
to such Restricted Shares. The certificate or certificates representing
such Restricted Shares, together with the executed stock power, shall be
held in custody by the Corporation or an agent therefor pursuant to the
provisions of the Plan for the account of the Recipient.
4. Payment of Cash in Lieu of Issuance of Restricted Shares. In the
event that the Recipient is deemed to have earned any Restricted Shares
pursuant to the provisions of Section 2 hereof, the Corporation shall pay
to the Recipient on each of _____________, _____, _____ and _____ an
amount in cash (in lieu of the issuance of Restricted Shares) equal to the
product of (i) one-sixth (1/6th) of the Earned Restricted Shares Amount
multiplied by (ii) the Market Price of the Common Stock on such date
(hereinafter referred to as a "Restricted Payment"). As used herein, the
term "Market Price" shall mean (x) if the Common Stock is Duly Listed, the
closing price of the Common Stock on the date in question as reported on
either a national securities exchange or on The Nasdaq Stock Market or, if
there were no sales on that date, on the next preceding day on which there
were sales or (y) if the Common Stock is not Duly
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Listed, the fair market value of the Common Stock on the date in question
as determined by the Committee in good faith.
5. Restrictions. The Restricted Units awarded pursuant to this
Agreement and any Restricted Shares or Restricted Payments which may be
deemed to be earned or owing with respect thereto shall be subject to the
following terms and conditions (the "Restrictions"):
(i) the Recipient shall not be entitled to delivery of a
certificate representing the Restricted Shares until the
Restrictions pertaining thereto shall be terminated pursuant to
either Sections 6 or 7 hereof;
(ii) none of the Restricted Units may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of;
(iii) none of the Restricted Shares may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of until the
Restrictions pertaining thereto shall be terminated pursuant to
either Sections 6 or 7 hereof;
(iv) all of the Restricted Units shall be forfeited and
cancelled and all rights of the Recipient to such Restricted Units
and any Restricted Shares or Restricted Payments which may be deemed
to be earned or owing with respect thereto shall terminate without
further obligation on the part of the Corporation in the event that
the Recipient ceases to be an Employee for any reason prior to
_____________, _____, for any reason;
(v) all of the Restricted Shares which are issued pursuant to
Section 3 hereof shall be forfeited and cancelled and the Recipient
shall have no further rights whatsoever with respect thereto in the
event the Recipient ceases to be an Employee prior to _____________,
_____, for any reason other than a reason set forth in Section 7
hereof;
(vi) two-thirds (2/3rds) of any Restricted Shares which are
issued pursuant to Section 3 hereof shall be forfeited and cancelled
and the Recipient shall have no further rights whatsoever with
respect thereto in the event the Recipient ceases to be an Employee
prior to _____________, _____, for any reason other than a reason
described in Section 7 hereof;
(vii) one-third (1/3rd) of any Restricted Shares which are
issued pursuant to Section 3 hereof shall be forfeited and cancelled
and the Recipient shall have no further rights whatsoever with
respect thereto in the event the Recipient ceases to be an Employee
prior to _____________, _____, for any reason other than a reason
described in Section 7 hereof;
(viii) any right of the Recipient to receive any Restricted
Payments pursuant to Section 4 hereof shall be forfeited and
cancelled and the Recipient
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shall have no further rights whatsoever with respect thereto in the
event the Recipient ceases to be an Employee prior to the applicable
payment date for such Restricted Payment for any reason other than a
reason described in Section 7 hereof.
6. Vesting of Restricted Shares. The Restrictions respecting the
Restricted Shares issued pursuant to Section 3 hereof which have not
theretofore been forfeited and cancelled pursuant to Section 5 hereof
shall terminate with respect to one-third (1/3rd) of such Restricted
Shares on each of _____________, _____, _____________, _____ and
_____________, _____.
7. Termination of Restrictions upon Certain Events. The Restrictions
shall terminate with respect to all of the Restricted Shares and the
Restricted Payments which have not theretofore been forfeited and
cancelled pursuant to Section 5 hereof upon the first to occur of the
following events:
(i) the death of the Recipient;
(ii) the Total Disability of the Recipient;
(iii) the termination of the employment of the Recipient
pursuant to an Eligible Retirement; or
(iv) the occurrence of a Change in Control.
8. Issuance of Stock Certificate for Vested Restricted Shares. Upon
the termination of the Restrictions respecting any Restricted Shares
pursuant to Section 6 hereof, the Corporation shall promptly cause a stock
certificate representing such Restricted Shares to be delivered to the
Recipient, free and clear of all Restrictions.
9. Accelerated Delivery of Stock Certificate and Payment of
Restricted Payments. Upon the termination of the Restrictions respecting
any Restricted Shares pursuant to Section 7 hereof, the Corporation shall
promptly cause a stock certificate representing such Restricted Shares to
be delivered to the Recipient, free and clear of all Restrictions, and
shall promptly pay in cash an amount equal to the product of (i) 1/2 (if
such termination occurs on or prior to _____________, _____), 1/3 (if such
termination occurs after _____________, _____ and on or prior to
_____________, _____) or 1/6 (if such termination occurs after
_____________, _____) of the Earned Restricted Shares Amount multiplied by
(ii) the Market Price of the Common Stock on the date of such termination.
10. Compliance with Law. No Restricted Shares shall be issued
pursuant to this Agreement unless said issuance is in compliance with
applicable federal and state tax and securities laws.
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10.1. Certificate Legends. The certificates for Restricted
Shares issued pursuant to this Agreement shall bear any legends
deemed necessary or appropriate by the Corporation.
10.2. Representations of the Recipient. At the request of the
Corporation, the Recipient will deliver to the Corporation such
signed representations as may be necessary, in the opinion of
counsel satisfactory to the Corporation, for compliance with
applicable federal and state securities laws.
10.3. Resale. In addition to the restrictions contained in the
Plan, the Recipient's ability to transfer Restricted Shares issued
pursuant to this Agreement or securities acquired in lieu thereof or
in exchange therefor may be restricted under federal or state
securities laws. The Recipient shall not resell or offer for resale
such Restricted Shares or securities unless they have been
registered or qualified for resale under all applicable federal and
state securities laws or an exemption from such registration or
qualification is available in the opinion of counsel satisfactory to
the Corporation.
11. Notice. Every notice or other communication relating to this
Agreement shall be in writing and shall be mailed or delivered to the
party for whom it is intended at such address as may from time to time be
designated by such party in a notice mailed or delivered to the other
party as herein provided; provided, however, that unless and until some
other address be so designated, all notices or communications by the
Recipient to the Corporation shall be mailed or delivered to the
Corporation to the attention of its Secretary at 800 E. Northwest Highway,
Des Plaines, Illinois 60016, and all notices or communications by the
Corporation to the Recipient may be given to the Recipient personally or
may be mailed to the Recipient at the most recent address which the
Recipient has provided in writing to the Corporation.
12. Tax Treatment. The Recipient acknowledges that the tax treatment
respecting the Restricted Shares issued pursuant to this Agreement or any
events or transactions with respect thereto may be dependent upon various
factors or events which are not determined by the Plan or this Agreement.
The Corporation makes no representations to the Recipient with respect to
and hereby disclaims all responsibility as to such tax treatment.
13. Withholding Taxes. The Corporation shall have the right to
deduct from the amount of any Restricted Payment an amount sufficient to
satisfy any federal, state or local withholding tax requirement. The
Corporation shall have the right to require the Recipient to remit to the
Corporation an amount sufficient to satisfy any federal, state or local
withholding tax requirement prior to the issuance or delivery of any
Restricted Shares to the Recipient. The Corporation will notify the
Recipient of the amount of the withholding tax which must be paid under
federal and, where applicable, state and local law. Upon receipt of such
notice, the Recipient shall promptly remit to the Corporation the amount
specified in such notice. No amounts of income received by the Recipient
pursuant to this Agreement shall be considered compensation for purposes
of any pension
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or retirement plan, insurance plan or any other employee benefit plan of
the Corporation or any subsidiary.
14. Effect on SERP. The Corporation and the Recipient agree that
neither the value of any shares of Common Stock issued, nor the amount of
any cash paid, to the Recipient pursuant to this Agreement shall be
included in the definition of "Compensation" under the Littelfuse, Inc.
Supplemental Executive Retirement Plan.
15. Change in Control. The Corporation and the Recipient agree that
Oaktree Capital Management, LLC and its affiliates shall be deemed to be
exempt from the provisions of subparagraph (d) of the definition of
"Change in Control" under the Plan.
IN WITNESS WHEREOF, the Corporation and the Recipient have executed this
Performance Shares Agreement effective as of the date first set forth above.
LITTELFUSE, INC. RECIPIENT:
By_________________________________ ____________________________
Its________________________________
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EXHIBIT A
over ___% ___% ___% ___% ___% ___%
>or=__<or=__% ___% ___% ___% ___% ___%
EBITDA >or=__<or=__% ___% ___% ___% ___% ___%
GROWTH >or=__<or=__% ___% ___% ___% ___% ___%
>or=__<or=__% ___% ___% ___% ___% ___%
>or=__<or=__% >or=__<or=__% >or=__<or=__% >or=__<or=__% over___%
AVERAGE RONTA