EXHIBIT 10.9
THE TIMBERLAND COMPANY
2004 LONG TERM INCENTIVE PROGRAM
FOR KENNETH P. PUCKER
(EFFECTIVE 1/1/04)
THE TIMBERLAND COMPANY
2004 LONG TERM INCENTIVE PROGRAM
FOR KENNETH P. PUCKER
This instrument sets forth the terms of The Timberland Company 2004 Long
Term Incentive Program for Kenneth P. Pucker. The Program is established under
The Timberland Company 1997 Incentive Plan, and amounts paid under the Program
are intended to qualify as performance-based compensation under Section 162(m)
of the Internal Revenue Code.
1. PURPOSE. The purpose of the Program is to provide competitive incentive
pay and capital accumulation opportunities to the Company's Executive Vice
President and Chief Operating Officer in exchange for his attainment of
specified Performance Goals, continued employment through March 31, 2007, and
agreement not to compete for a one year period following his termination of
employment.
2. DEFINITIONS. The following terms shall have the following meanings
unless the context indicates otherwise.
(a) "Affiliate" shall mean any corporation or other entity owning,
directly or indirectly, 50% or more of the outstanding Stock of the
Company, or in which the Company or any such corporation or other entity
owns, directly or indirectly, 50% or more of the outstanding capital stock
(determined by aggregate voting rights) or other voting interests.
(b) "Award" shall mean an opportunity to earn incentive pay, in the
form of Restricted Stock or cash, based on performance, as described in
Section 5.
(c) "Award Period" shall mean either the one or the three calendar
year periods commencing January 1, 2004, and shall be the measurement
period during which Goal attainment is determined.
(d) "Board" shall mean the Board of Directors of The Timberland
Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as from time
to time amended.
(f) "Committee" shall mean the Management Development and Compensation
Committee of the Board.
(g) "Company" shall mean The Timberland Company.
(h) "Participant" shall mean Kenneth P. Pucker.
(i) "Performance Goal" or "Goal" shall mean the financial objective
that must be met to earn incentive pay.
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(j) "Performance Measure" shall mean compound annual growth in
earnings per share ("EPS").
(k) "Plan" shall mean The Timberland Company 1997 Incentive Plan, as
amended.
(l) "Program" shall mean The Timberland Company 2004 Long Term
Incentive Program for Kenneth P. Pucker.
(m) "Restricted Stock" shall mean Stock subject to the restrictions
described in Section 8.
(n) "Stock" shall mean Class A Common Stock of the Company, par value
$.01 per share.
3. ADMINISTRATION. The Program shall be administered by the Committee, in
accordance with the terms of the Plan. The Committee shall have sole and
complete discretion with respect to the exercise of all permissive powers and
authority granted to the administrator under the Plan; provided, however, the
Committee may not exercise its discretion to increase the amount of incentive
pay that would be otherwise due the Participant upon attainment of a Performance
Goal. All actions, determinations, and decisions of the Committee shall be
final, conclusive, and binding on all parties.
4. PARTICIPATION. The Participant was designated by the Committee at its
meeting on March 2, 2004, to participate during both a one-year and a three-year
Award Period.
5. AWARDS. The Awards for the one-year and three-year Award Periods were
established by the Committee at its meeting on March 2, 2004. The Award for the
one-year period was expressed as a number of shares of Restricted Stock and then
converted to an equivalent target value (expressed in dollars) at the time of
grant. The Award for the three-year Award Period was expressed as an opportunity
to receive a cash bonus. Each Award is based on the attainment of a specific
Performance Goal described in Section 6. The Awards shall not be changed or
modified during an Award Period to increase the amount of incentive pay that
would otherwise become payable. (SCHEDULE A attached shows the Award for each
Award Period.)
6. PERFORMANCE MEASURES AND GOALS. The Performance Measures and Goals were
established by the Committee at its meeting on March 2, 2004. The Performance
Goals shall not be changed or modified during an Award Period to increase the
amount of incentive pay that would otherwise become payable. (SCHEDULE B
attached sets forth the Performance Measure and Goal for each Award Period.)
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7. AWARD PAYOUT CALCULATION.
(a) Award payouts shall be conditioned on attainment of the
Performance Goals. No payout shall be made unless the Goal is attained, and
a payout shall not be increased to the extent the Goal is surpassed.
(b) The Company's independent public accountants shall audit the
Company's Award calculations following the close of each Award Period.
(c) The Committee shall promptly approve or disapprove Award payouts
following completion of the independent audit. The Committee may exercise
"negative discretion" within the meaning of Code Section 162(m) to reduce
the cash bonus Award payout unless the fair market value of the Stock on
December 31, 2006, is less than $___ per share. The Committee may reduce an
Award payout to reflect extraordinary circumstances if such modification
would better serve the purpose of the Plan.
8. AWARD PAYMENT.
(a) Each Award payout shall be made as soon as practicable and not
later than March 31 following the close of the Award Period, subject to the
independent audit. To be eligible to receive a payout, the Participant must
be employed by the Company or an Affiliate on the payment date.
(b) The payout for the one-year Award Period shall be in the form of
Restricted Stock. The grant of Restricted Stock shall be evidenced by an
agreement, specifying that the shares shall vest, in full, on the second
anniversary of the grant date, and including a change-in control provision
and such other terms, conditions and restrictions as the Committee shall
determine.
(c) The Award payout for the three-year Award Period shall be in cash.
9. EMPLOYMENT
Receiving an Award or Award payout shall not give the Participant the right
to be retained in the employment of the Company or an Affiliate, or affect the
right of the Company or an Affiliate to discharge or discipline the Participant.
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THE TIMBERLAND COMPANY
2004 LONG TERM INCENTIVE PROGRAM
FOR KENNETH P. PUCKER
SCHEDULE A - AWARDS
One-Year Award Period
- --------------------------- ----------------------
GRANT YEAR 2005
- --------------------------- ----------------------
PROPOSED RESTRICTED STOCK SHARE TARGET:
GRANTS 100,000
- --------------------------- ----------------------
Three-Year Award Period
- ------------------------ ---------- ----------- ----------
PAYMENT YEAR 2005 2006 2007
- ------------------------ ---------- ----------- ----------
CASH BONUS $0 $0 $3.0MM
THE TIMBERLAND COMPANY
2004 LONG TERM INCENTIVE PROGRAM
FOR KENNETH P. PUCKER
SCHEDULE B - PERFORMANCE MEASURES AND GOALS
- ----------------- ------------- ------------- -------------------------------
AWARD PERIOD PERFORMANCE WTG FINANCIAL TARGET (GOAL)
MEASURE
- ----------------- ------------- ------------- -------------------------------
1/1/04 - 12/31/04 EPS 100% ___
1/1/04 - 12/31/06 EPS 100% ___