EXHIBIT 10A
GATX CORPORATION
2004 EQUITY INCENTIVE COMPENSATION PLAN
PERFORMANCE SHARE AGREEMENT
THIS AGREEMENT, entered into as of January 1, 2005, by and between the
Participant and GATX Corporation (the "Company");
WHEREAS, the Company maintains the GATX Corporation 2004 Equity Incentive
Compensation Plan (the "Plan"), which is incorporated into and forms a part of
this Agreement, and the Participant has been selected by the Compensation
Committee of the Board of Directors of the Company which has been charged with
the responsibility of administering the Plan (the "Committee") to receive
Performance Units under the Plan;
NOW, THEREFORE, IT IS AGREED, by and between the Company and the
Participant, as follows:
1. Terms of Award. The following terms used in this Agreement shall have the
meanings set forth in this paragraph 1:
The "Participant" is NAME.
The "Grant Date" is January 1, 2005.
The "Determination Date" is December 31, 2006.
The number of Performance Units granted under this Agreement is NUMBER.
Other terms used in this Agreement are defined pursuant to paragraph 12 or
elsewhere in this Agreement. Capitalized terms not defined herein shall
have the meaning ascribed thereto in the Plan.
2. Award. The Participant is hereby granted the number of Performance Units
set forth in paragraph 1, subject to the terms of the Plan and this
Agreement.
3. Vesting, Transfer and Forfeiture Subject to the terms hereof, if, for each
of the fiscal years during the period commencing on the Grant Date and
ending on the Determination Date (the "Performance Period"), the Company's
Total Gross Income less Gross Ownership Costs (as reported on the
Company's audited income statement for the Performance Period) is greater
than $325,000,000 (the "Threshold Goal"), then immediately following the
Committee's certification that the Threshold Goal has been achieved, the
Performance Units granted to a Participant shall be exchanged for shares
of Restricted Common Stock ("Restricted Stock") in the form of "Earned
Shares" and "Banked Shares" (as those terms are defined herein), the
number of which shall be determined by the extent to which the Performance
Goals set forth on Exhibit 1 have
been achieved during the Performance Period, and shall be calculated in
the manner set forth on Exhibit 2 and the immediately following paragraph.
If GATX fails to achieve a return on equity ("ROE") on a consolidated
basis of at least 12% for the fiscal year ending on the Determination
Date, the number of shares of Restricted Stock (calculated as set forth in
the immediately preceding paragraph) to which the Participant may become
entitled shall be reduced by a percentage (the "Reduction Percentage"), as
follows:
ROE Reduction Percentage
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11% - 11.99% 10%
10% - 10.99% 15%
Less than 10% 20%
The shares of Restricted Stock reduced pursuant to the immediately
preceding paragraph (the "Banked Shares") will be held by the Company for
up to two (2) years after the Determination Date. The remaining shares to
which the Participant is entitled (viz., the difference between the number
of shares calculated as set forth on Exhibit 2 and the number of Banked
Shares) shall hereinafter be referred to as the "Earned Shares".
(a) Except as provided in paragraph (c), if the Participant's Date of
Termination has not previously occurred, the Participant's Earned
Shares shall vest on the first anniversary of the Determination
Date, and shall be distributed as promptly thereafter as is
reasonably practical free and clear of all restrictions
(b) If as of the first anniversary of the Determination Date, the
Company achieves a ROE on a consolidated basis of at least ten
percent (10%) for the fiscal year ending on such date, fifty percent
(50%) of the Participant's Banked Shares shall vest, and shall be
distributed free and clear of all restrictions promptly thereafter.
If as of the first anniversary of the Determination Date, GATX does
not achieve a ROE on a consolidated basis of at least ten percent
(10%) for the fiscal year ending on such date, the Banked Shares
shall continue to be held by the Company, subject to the immediately
following sentence. If, as of the second anniversary of the
Determination Date, GATX achieves a ROE on a consolidated basis of
at least twelve percent (12%) for the fiscal year ending on such
date, all Banked Shares not previously distributed shall vest, and
shall be distributed free and clear of all restrictions promptly
thereafter. Any Banked Shares which do not vest as of the second
anniversary of the Determination Date shall be forfeited, and the
Participant shall cease to have any rights therein.
(c) Notwithstanding the foregoing provisions of this paragraph 3, the
Participant's Performance Units shall be exchanged for shares
Restricted Stock and the Participant shall be vested therein, and
become owner thereof free and clear of all restrictions otherwise
imposed by this Agreement, as follows:
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(i) If the Participant's employment is involuntarily terminated by
the Company other than for Cause, not less than eighteen (18)
months following the Grant Date but on or prior to the first
anniversary of the Determination Date, he or she will be
entitled to a pro rata portion of his or her shares hereunder
equal in number to the product of the number of Earned Shares
to which the Participant becomes entitled or is entitled
pursuant to this paragraph 3, multiplied by a fraction (not
greater than one), the numerator of which is the number of
months the Participant is employed by the Company or its
subsidiaries during the period beginning on the Grant Date and
ending on the Date of Termination and the denominator of which
is the number of months in the Vesting Period. The Earned
Shares to which the Participant is entitled pursuant to this
subparagraph (i) shall be distributed to the Participant free
and clear of all restrictions as soon as practical following
the first anniversary of the Determination Date. If the
Participant's employment is involuntarily terminated by the
Company other than for Cause after the first anniversary of
the Determination Date, he or she shall have no rights to any
Banked Shares which are not then distributable, which shall be
forfeited.
(ii) If the Participant's Date of Termination occurs by reason of
the Participant's death, Retirement or Disability prior to the
Determination Date, he or she will be entitled to distribution
of a pro rata portion of his or her Restricted Stock free and
clear of all restrictions promptly following the Determination
Date, equal in number to the product of the number of Earned
Shares to which the Participant is entitled pursuant to this
paragraph 3, multiplied by a fraction (not greater than one),
the numerator of which is the number of months during the
period beginning on the Grant Date and ending on the date of
the Participant's death, Retirement or Disability and the
denominator of which is the number of months in the Vesting
Period. If the Participant's Date of Termination occurs by
reason of the Participant's death, Retirement or Disability
after the Determination Date, he or she shall have no rights
to any Banked Shares which are not distributable as of the
Date of Termination, which shall be forfeited. If a
Participant's Date of Termination occurs by reason of the
Participant's death, Retirement or Disability, as described in
the first sentence of this subparagraph (ii), the Committee
may, in its sole discretion, increase the number of Restricted
Stock to which the Participant is entitled.
(iii) The Participant shall become fully vested in any undistributed
shares upon a Change in Control that occurs at the Company
level, on or before the Participant's Date of Termination and
before the second anniversary of the Determination Date. If
the Change of Control occurs at the Company level on or prior
to the Determination Date, the number of shares of common
stock to which the Participant is entitled shall be calculated
as if the Company had achieved 100% performance against goal
and a twelve percent ROE in the year immediately preceding the
Determination Date,
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and shall be distributed to the Participant free and clear of
all restrictions as soon as practicable following the Change
of Control. If the Change of Control occurs at the Company
level after the Determination Date, any previously
undistributed Earned Shares and all Banked Shares shall be
distributed to the Participant free and clear of all
restrictions as soon as practicable following the Change of
Control.
(iv) If a Change of Control occurs at the level of a subsidiary or
operating segment of the Company as the latter is defined in
the Company's most recent Annual Report on Form 10-K
(hereinafter, a "Business Segment") with respect to a
Participant principally employed by the subsidiary or who
renders substantially all of his or her services to such
Business Segment, such Participant shall become vested in his
or her shares (prior to the Determination Date, on the
assumption that the Company achieved both one hundred percent
(100%) performance against goal and a twelve percent (12%) ROE
in the year immediately preceding the Determination Date), as
follows:
(A) If the Change of Control occurs during the first year of
the Vesting Period, the Participant shall be entitled to
receive common stock of the Company equal in number to
one-third (1/3) of his or her Performance Units.
(B) If the Change of Control occurs during the second year
of the Vesting Period, the Participant shall be entitled
to receive common stock of the Company equal in number
to two-thirds (2/3) of his or her Performance Units.
(C) If a Change of Control occurs after the Determination
Date, such Participant shall be entitled to common stock
of the Company equal in number to the total of all
undistributed Earned Shares and all Banked Shares.
In each case distribution of shares free and clear of all
restrictions shall be made as soon as practicable following the
Change of Control.
(d) If the Participant's employment is terminated for Cause the
Participant shall forfeit all non-vested Performance Units, any
undistributed Earned Shares or Banked Shares and any rights under
this Agreement.
(e) Neither the Performance Units, Earned Shares or Banked Shares may be
sold, assigned, transferred, pledged or otherwise encumbered until
the shares of shares have been distributed to the Participant free
and clear of all restrictions.
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4. Voting Rights and Dividends. Notwithstanding anything to the contrary, the
Participant shall not be entitled to vote his or her Performance Units,
but from and after the Determination Date shall be entitled to vote all
Earned Shares.
Unless a Participant's Date of Termination has occurred for any reason
prior thereto, following the Determination Date an account shall be
established for the Participant, to which shall be credited dividend
equivalents equal to the product of (a) the sum of the Participant's
Earned Shares and Banked Shares and (b) the dividend declared on a single
share of the Company's Common Stock during the period beginning on the
Grant Date and ending on the Date of Determination. Unless a Participant's
Date of Termination shall have previously occurred, on each dividend
payment date thereafter during the period beginning on the Determination
Date, the Participant's account shall be credited with dividend
equivalents equal to the product of (x) the sum of the Participant's then
undistributed Earned Shares and Banked Shares and (y) the dividend
declared on a single share of the Company's Common Stock with respect to
the immediately preceding dividend record date. A Participant shall be
entitled to a distribution of an amount equal to the dividend equivalents
credited to his or her account and attributable to his or her Earned
Shares or Banked Shares if and when he or she is entitled to distribution
of such shares. The dividend equivalents attributable to forfeited Earned
or Banked Shares shall likewise be forfeited.
5. Withholding. The grant, vesting and distribution of benefits under this
Agreement are subject to withholding of all applicable taxes. Subject to
such rules and limitations as may be established by the Committee from
time to time, the Participant may satisfy his or her withholding
obligations through the surrender of shares of stock which the Participant
already owns, or to which the Participant is otherwise entitled under the
Plan; provided, however, that, except as otherwise provided by the
Committee, such shares may be used to satisfy not more than the Company's
minimum statutory withholding obligation (based on minimum statutory
withholding rates for Federal and state tax purposes, including payroll
taxes, that are applicable to such supplemental taxable income).
6. Heirs and Successors. This Agreement shall be binding upon, and inure to
the benefit of, the Company and its successors and assigns, and upon any
person acquiring, whether by merger, consolidation, purchase of assets or
otherwise, all or substantially all of the Company's assets and business.
If any rights of the Participant or benefits distributable to the
Participant under this Agreement have not been exercised or distributed,
respectively, at the time of the Participant's death, such rights shall be
exercisable by the Designated Beneficiary, and such benefits shall be
distributed to the Designated Beneficiary, in accordance with the
provisions of this Agreement and the Plan. If a deceased Participant fails
to designate a beneficiary, or if the Designated Beneficiary does not
survive the Participant, any rights that would have been exercisable by
the Participant and any benefits distributable to the Participant shall be
exercised by or distributed to the legal representative of the estate of
the Participant. If the Designated Beneficiary survives the Participant
but dies before the exercise of all rights or the complete distribution of
benefits under this Agreement, then any remaining rights and any remaining
benefit
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distribution shall be exercisable by or distributed to the legal
representative of the estate of the Designated Beneficiary.
7. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the
Committee shall have all powers with respect to this Agreement as it has
with respect to the Plan. Any interpretation of the Agreement by the
Committee and any decision made by it with respect to the Agreement shall
be final and binding on all persons.
8. Plan Governs. Notwithstanding anything in this Agreement to the contrary,
the terms of this Agreement shall be subject to the terms of the Plan, a
copy of which may be obtained by the Participant from the Director,
Compensation of the Company; and this Agreement is subject to all
interpretations, amendments, rules and regulations promulgated by the
Committee from time to time pursuant to the Plan.
9. Not An Employment Contract. The Award will not confer on the Participant
any right with respect to continuance of employment or other service with
the Company or any subsidiary, nor will it interfere in any way with any
right the Company or any subsidiary would otherwise have to terminate or
modify the terms of such Participant's employment or other service at any
time.
10. Notices. Any written notices provided for in this Agreement or the Plan
shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax or overnight courier, or by postage paid first
class mail. Notices sent by mail shall be deemed received three business
days after mailing but in no event later than the date of actual receipt.
Notices shall be directed, if to the Participant, at the Participant's
address indicated by the Company's records, or if to the Company, to the
attention of the Director, Compensation at the Company's principal
executive office.
11. Amendment. This Agreement may be amended in accordance with the provisions
of the Plan, and may otherwise be amended by written agreement of the
parties.
12. Definitions. For purposes of this Agreement, the terms used in this
Agreement shall be subject to the following:
Cause. The term "Cause" shall mean (i) the willful and continued failure
of the Participant to perform the Participant's duties with the Company or
one of its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), or (ii) the willful
engaging by the Participant in illegal conduct or gross misconduct in the
course of his or her discharge of duties for the Company. For purposes of
this provision, no act or failure to act, on the part of the Participant,
shall be considered "willful" unless it is done, or omitted to be done, by
the Participant in bad faith or without reasonable belief, that the
Participant's action or omission was in the best interests of the Company.
Change in Control. The term "Change in Control" shall have the meaning
ascribed to it in Section 5 of the Plan.
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Date of Termination. The term "Date of Termination" means the first day
occurring on or after the Grant Date on which the Participant is not
employed by the Company (or in the case of a non-employee member of the
Board of Directors of the Company, is not a member on the Board) or any
Subsidiary, regardless of the reason for the termination of employment;
provided that a termination of employment shall not be deemed to occur by
reason of a transfer of the Participant between the Company and a
subsidiary or between two subsidiaries; and further provided that the
Participant's employment shall not be considered terminated while the
Participant is on a leave of absence from the Company or a subsidiary
approved by the Participant's employer. If, as a result of a sale of
assets, merger or other transaction, (i) the Participant's employer ceases
to be a subsidiary (and the Participant's employer is or becomes an entity
that is separate from the Company), and the Participant is not, at any
time during the 30-day period following the transaction, employed by the
Company or an entity that is then a subsidiary, or (ii) the business
segment to which the Participants' responsibilities primarily relate
immediately prior thereto as the subject of a sale or other transaction
pursuant to which all or substantially all of the assets of such segment
are sold, then the occurrence of such transaction shall be treated as the
Participant's Date of Termination caused by the Participant being
discharged by the employer.
Disability. Except as otherwise provided by the Committee, the Participant
shall be considered to have a "Disability" during the period in which the
Participant is considered to be "disabled" as that term is defined in the
Company's long term disability plan.
Retirement. "Retirement" of the Participant means retirement on a
"Retirement Date," as that term is defined in the GATX Corporation
Non-Contributory Pension Plan for Salaried Employees (the "Pension Plan");
provided that if the Participant is not a participant in the Pension Plan,
the Retirement Date shall be the date determined by the Committee.
Vesting Period. The term "Vesting Period" means the period beginning on
the Grant Date and ending on the First Anniversary of the Determination
Date.
IN WITNESS WHEREOF, the Participant has executed this Agreement, and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the Grant Date.
Participant: ______________________________
GATX Corporation
By:
Its: President and CEO
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