EXHIBIT 99.4
FORM OF
LITTELFUSE, INC.
PERFORMANCE SHARES AGREEMENT
UNDER THE LITTELFUSE, INC. EQUITY INCENTIVE COMPENSATION PLAN
THIS PERFORMANCE SHARES AGREEMENT is entered into as of _______ __, 20__,
between _____________________ (the "Recipient") and LITTELFUSE, INC., a Delaware
corporation (the "Corporation"), with reference to the following facts:
A. Pursuant to the Littelfuse, Inc. Equity Incentive Compensation Plan (the
"Plan"), the Corporation is authorized to grant awards of rights ("Performance
Shares") to acquire shares of its Common Stock, $.01 par value (the "Common
Stock"), on a restricted basis as provided in the Plan to officers and employees
of the Corporation or any Subsidiary as an incentive for future performance.
B. The Corporation desires to grant Performance Shares 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 Performance Shares. (a) The Corporation hereby grants to
the Recipient an award of Performance Shares (the "Award") entitling the
Recipient to acquire up to _______ shares of the Common Stock (hereinafter
referred to as the "Maximum Performance Shares Amount"), subject in all
respects to the provisions of the Plan and the terms and conditions set
forth herein.
(b) Plan and Committee. The construction of the terms of this
Agreement shall be controlled by the Plan, a copy of which has been made
available to the Recipient, which is hereby made a part hereof as though
set forth herein verbatim, and the rights of the Recipient are subject to
modification and termination in certain events as provided in the Plan. All
words and phrases not otherwise defined herein shall have the meanings
provided in the Plan. The Committee's interpretations of and determinations
under any of the provisions of the Plan or this Agreement shall be
conclusive.
2. Number of Performance Shares Deemed Earned. (a) The number of
Performance Shares 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 (the number of Performance Shares resulting from said
formula shall be referred to as the "Earned Performance Shares Amount"):
(i) The Recipient shall be deemed to have earned no Performance
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 Performance 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 Performance Shares Amount, up to a maximum of an
additional __% of the Maximum Performance Shares Amount. Additionally,
for each full percentage point above the Average RONTA minimum of __%,
the recipient will earn an incremental __% of the Maximum Performance
Shares Amount up to a maximum of an additional __% of the Maximum
Performance Shares Amount. Therefore, the Maximum Performance 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 20__, 20__ and 20__ 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 20__ through fiscal year 20__
defined mathematically as follows (but expressed as a percentage):
EBITDA Growth = (fiscal year 20__ EBITDA / fiscal year 20__
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 20__, 20__ or 20__ at any time after
_______ __, 20__, and before _________ __, 20__, so that any of the items
used to calculate EBITDA or RONTA for
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any of those fiscal years are materially changed, the Committee, in its
discretion, may make appropriate adjustments to the number of Performance
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 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 __________ __, 20__, 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 Performance
Shares Amount, the Earned Performance Shares Amount, the number of any
earned but unissued Performance Shares and/or the amount of any earned but
unpaid Performance Payments.
(j) Notwithstanding the foregoing, if the Recipient is a Named
Executive Officer, the Recipient shall not be entitled to any Performance
Shares unless and until the Committee has determined and certified that the
targets set forth in Section 2(a) have been satisfied, in accordance with
the requirements of Section 162(m) of the Internal Revenue Code of 1986
(the "Code").
3. Issuance of Performance Shares. In the event that the Recipient is
deemed to have earned any Performance 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
Performance Shares Amount shall be issued in the Recipient's name on or
before ________ __, 20__, provided the Recipient has theretofore delivered
to the Corporation a stock power signed in blank by the Recipient with
respect to such Performance Shares and in a form which is acceptable to the
Corporation which may be used by the Corporation to cancel such Performance
Shares in accordance with the provisions of the Plan and this Agreement.
Upon issuance of the certificate or certificates for such Performance
Shares, the Recipient shall be a stockholder with respect to such
Performance Shares and, subject to the restrictions contained in Section 5
hereof, shall have all the rights of a stockholder with respect to such
Performance Shares, including but not limited to, the right to vote such
Performance Shares and to receive dividends and other distributions paid
with respect to such Performance Shares. The certificate or certificates
representing such Performance Shares, together with the executed stock
power, shall be held in custody by the
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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 Performance Shares. In the
event that the Recipient is deemed to have earned any Performance Shares
pursuant to the provisions of Section 2 hereof, the Corporation shall pay
to the Recipient on each of _________ __, 20__, 20__ and 20__, an amount in
cash (in lieu of the issuance of Performance Shares) equal to the product
of (i) one-sixth (1/6th) of the Earned Performance Shares Amount multiplied
by (ii) the Fair Market Value of the Common Stock on the payment date, as
defined in Section 2.14 of the Plan (hereinafter referred to as a
"Performance Payment").
5. Restrictions. The Performance Shares awarded pursuant to this
Agreement and any Performance Shares or Performance 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 Performance Shares until the Restrictions
pertaining thereto shall be terminated pursuant to either Sections 6
or 7 hereof;
(ii) the Award may not be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of;
(iii) none of the Performance 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 Performance Shares shall be forfeited and
cancelled and all rights of the Recipient to such Performance Shares
and any Performance Shares or Performance 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
________ __, 20__;
(v) all of the Performance 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 ________ __,
20__, for any reason other than a reason set forth in Section 7
hereof;
(vi) two-thirds (2/3rds) of any Performance 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
________ __, 20__, for any reason other than a reason described in
Section 7 hereof;
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(vii) one-third (1/3rd) of any Performance 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
________ __, 20__, for any reason other than a reason described in
Section 7 hereof;
(viii) any right of the Recipient to receive any Performance
Payments pursuant to Section 4 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
the applicable payment date for such Performance Payment for any
reason other than a reason described in Section 7 hereof; and
(ix) Notwithstanding any other provision of this Section 5 or of
Section 6 or 7, upon the occurrence of any of the Forfeiture Events
described in Section 11.4 of the Plan, all rights to Performance
Shares and Performance Payments that have not yet vested shall be
forfeited, and the Recipient shall be required to repay the Award Gain
in accordance with the provisions of Section 11.3 of the Plan.
6. Vesting of Performance Shares. The Restrictions respecting the
Performance 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 Performance Shares on
each of ________ __, 20__, ________ __, 20__ and _______ __, 20__.
7. Termination of Restrictions upon Certain Events. The Restrictions
shall terminate with respect to all of the Performance Shares and the
Performance 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 Disability of the Recipient;
(iii) the dates specified in Section 6, notwithstanding the
Recipient's prior termination of employment, if the Recipient's
employment is terminated due to an Eligible Retirement; or
(iv) the occurrence of a Change in Control.
8. Issuance of Stock Certificate for Vested Performance Shares. Upon
the termination of the Restrictions respecting any Performance Shares
pursuant to Section 6 hereof, the Corporation shall within fifteen (15)
days thereafter cause a stock certificate representing such Performance
Shares to be delivered to the Recipient, free and clear of all
Restrictions.
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9. Accelerated Delivery of Stock Certificate and Payment of
Performance Payments. Upon the termination of the Restrictions respecting
any Performance Shares pursuant to Section 7 hereof, the Corporation shall
within fifteen (15) days thereafter cause a stock certificate representing
such Performance Shares to be delivered to the Recipient, free and clear of
all Restrictions, and shall within fifteen (15) days thereafter pay in cash
an amount equal to the product of (i) 1/2 (if such termination occurs on or
prior to ________ __, 20__), 1/3 (if such termination occurs after
_________ __, 20__, and on or prior to _________ __, 20__) or 1/6 (if such
termination occurs after ________ __, 20__) of the Earned Performance
Shares Amount multiplied by (ii) the Market Price of the Common Stock on
the date of such termination; provided, however, that if any such
Performance Shares or Performance Payment is deemed under Section 409A of
the Code to be compensation deferred under a nonqualified deferred
compensation plan, the Recipient is a "specified employee," as such term is
defined under such Section 409A, and the restrictions on the Performance
Shares are deemed to have been terminated as a result of a separation from
service (as such term is used in such Section 409A) then such stock
certificate shall not be delivered and such payment shall not be made to
the Recipient until the first business day following the six-month
anniversary of the date of such separation from service (or, if earlier,
the date of death of the Recipient).
10. Compliance with Law. No Performance Shares shall be issued
pursuant to this Agreement unless said issuance is in compliance with
applicable federal and state tax and securities laws.
10.1. Certificate Legends. The certificates for Performance 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 Performance 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 Performance 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
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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 East 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 Performance Shares issued and Performance Payments made
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 Performance 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 Performance 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 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.
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
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Its
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EXHIBIT A
over __% __% __% __% __% __%
>__< __% __% __% __% __% __%
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EBITDA >__< __% __% __% __% __% __%
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GROWTH >__< __% __% __% __% __% __%
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>__< __% __% __% __% __% __%
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>__< __% >__< __% >__< __% >__< __% over __%
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AVERAGE RONTA
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