Exhibit 10.1
NDS GROUP PLC
FORM OF PERFORMANCE-BASED CONDITIONAL AWARD AGREEMENT
By a deed dated [o] (the "Deed"), NDS Group plc (the "Company") granted on that
date a performance-based conditional award (the "Conditional Award") over
American Depositary Receipts ("ADRs") (each ADR representing one series A
ordinary share, par value US$0.01 per share, of the Company ("Series A Ordinary
Share")) to the individual named below as the participant. The mechanism to
calculate the value and the number of ADRs subject to this Conditional Award if
certain performance targets are met is set out in Section 1 ("Performance
Criteria; Determination of Value of Your Conditional Award and the Number of
ADRs Subject to Your Conditional Award") below. Details of the vesting of this
Conditional Award are set out in Section 2 ("Vesting Terms of Your Conditional
Award") below. The terms and conditions of this Conditional Award are set out in
this Performance-Based Conditional Award Agreement (the "Agreement") and in the
NDS 2006 Long-Term Incentive Plan, including any applicable sub-plan (the
"Plan"). Capitalized terms used below and not otherwise defined in this
Agreement have the meanings assigned to them in the Plan.
Name of participant: [o]
Performance Period: [o]
If for any reason you do not wish to receive the Conditional Award you are
able to disclaim it by contacting [o] at [o]. If you do not disclaim your
Conditional Award you will be taken to have accepted it, and therefore will be
bound by all of the terms and conditions of your Conditional Award as set forth
in this Agreement and the rules of the Plan in relation to it. You acknowledge
that you have carefully reviewed the Plan and this Agreement, and agree that in
the event of any conflict between the rules of the Plan and the terms and
conditions as set out in this Agreement, the rules of the Plan shall prevail.
This is not a stock certificate or a negotiable instrument.
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Signed for and on behalf of NDS Group plc
SECTION 1 - PERFORMANCE CRITERIA; DETERMINATION OF VALUE OF YOUR
CONDITIONAL AWARD AND THE NUMBER OF ADRs SUBJECT TO YOUR CONDITIONAL AWARD
Following the end of the Performance Period indicated above, the value of your
Conditional Award will be calculated by comparing (i) the actual operating
income of the Company for the fiscal year ending during the Performance Period
(based on the Company's audited consolidated financial statements for the fiscal
year ending during Performance Period) to (ii) the target operating income of
the Company for the fiscal year ending during the Performance Period. The
percentage to which the target operating income has been achieved will then be
used to determine the percentage of your annualized base salary as of [o] that
you may be entitled to receive, as indicated on the performance matrix ("the
"Performance Matrix") (a "Determined Conditional Award"). The Company will
determine whether it has achieved results between the levels indicated on the
Performance Matrix, as well as the U.S. dollar value of the ADRs subject to your
conditional award that will be awarded to you. The determination of the Company
will be binding.
Payment for any Determined Conditional Award shall be in the form of ADRs that
vest in accordance with the vesting terms indicated Section 2 ("Vesting Terms of
Your Conditional Award"). The number of ADRs that will be awarded to you in
satisfaction of a Determined Conditional Award will be determined by dividing
the U.S. dollar value of your Determined Conditional Award by the average of the
closing prices of the ADRs on The NASDAQ Stock Market for the 20-day trading
period ending on a date to be determined by the Board of Directors of the
Company (the "Board"), but which shall be no later than ten days after the
Company's earnings for the Performance Period are publicly released. The number
of ADRs awarded to you in satisfaction of your Determined Conditional Award
shall be rounded down to the nearest whole number so that no fractional ADRs
shall be awarded.
If your annualized base salary is denominated in a currency other than the U.S.
dollar, a U.S. dollar equivalent of your annualized base salary will be used to
calculate the number of ADRs subject to your Conditional Award. The U.S. dollar
equivalent of your annualized base salary will be calculated by multiplying (i)
your annualized base salary in effect on [o] by (ii) the average annual New York
Federal Reserve Bank noon buying rate for the fiscal year ended [o] for the
currency in which your base salary is paid.
Performance Goal Range: [o]% to [o]% on an index where 100% is equal to the
Company's target operating profit for the fiscal
year ending during the Performance Period.
Performance Matrix*:
- ------------------------------------------- ------------------------------------
Determined Conditional
[Actual Operating Income as Award
Percentage of ]Target Operating as Percentage of
Income Annualized Base Salary
- ------------------------------------------- ------------------------------------
< [ ]% 0.0%
- ------------------------------------------- ------------------------------------
[ ] to [ ] % [o]% to [o]%
- ------------------------------------------- ------------------------------------
[ ] to [ ] % [o]% to [o]%
- ------------------------------------------- ------------------------------------
[ ] to [ ] % [o]%
- ------------------------------------------- ------------------------------------
[ ] to [ ] % [o]% to [o]%
- ------------------------------------------- ------------------------------------
[ ] to [ ] % [o]% to [o]%
- ------------------------------------------- ------------------------------------
> [ ] % [o]%
- ------------------------------------------- ------------------------------------
*If the Company's actual operating income for the Performance Period for the
Performance Period falls within a band that is outside of the shaded target
range, your Determined Conditional Award, as a percentage of your annualized
base salary will be determined proportionately within the corresponding band
(rounded to the nearest 0.5%).
The number of ADRs to be awarded to you in satisfaction of your Determined
Conditional Award will be confirmed to you in writing on or before [o].
In the event of any re-capitalization, re-organization, merger, acquisition,
divestiture, consolidation, spin-off, combination, liquidation, dissolution,
sale of assets or other similar corporate transaction or event, or any other
event or circumstance occurring which has the effect, as determined by the
Board, in its sole and absolute discretion, of distorting the operating income
of the Company as reported in the Company's audited consolidated financial
statements for the fiscal year ending during the Performance Period, including,
without limitation, changes in accounting standards, the Board may adjust or
modify, as determined by the Board in its sole and absolute discretion, the
Performance Goal Range and/or the Performance Matrix, to the extent necessary to
prevent reduction or enlargement of the Conditional Award attributable to such
transaction, circumstance or event. All such determinations of the Board shall
be conclusive and binding on all persons for all purposes.
SECTION 2 - VESTING TERMS OF YOUR CONDITIONAL AWARD
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Any Determined Conditional Award will vest, subject to your continued employment
with the Company, the rules of the Plan and the additional terms and conditions
set out below, as follows:
[o]
Each such date is referred to as a "Vesting Date".
ADDITIONAL TERMS AND CONDITIONS OF YOUR CONDITIONAL AWARD
Additional terms and conditions of this Conditional Award are set out below and
in the Plan (which is incorporated by reference).
Cessation of Employment This Conditional Award is awarded to you on
the condition that you remain employed by
the Company, any Participating Company or
any Associated Company. If you cease to be
in Employment for any reason after the date
of grant and before any Vesting Date, then
any unvested portion of your Conditional
Award will lapse and be forfeited
immediately unless the Board determines
otherwise.
Delivery of American Depositary Settlement of any vested portion of your
Receipts Determined Conditional Award shall be in
the form of ADRs where each ADR represents
one Series A Ordinary Share. As soon as is
reasonably practical following each Vesting
Date (but in any event within 30 days of
each Vesting Date), you will be entitled to
receive that number of ADRs over which your
Determined Conditional Award has vested (if
any). The ADRs payable under your
Determined Conditional Award shall be
evidenced in such manner as deemed
appropriate at the discretion of the Board.
Withholding Taxes You agree, as a condition of this
Conditional Award, that you will make
acceptable arrangements to pay any
withholding or other taxes or social
security contributions due as a result of
the grant or vesting of any portion of your
Determined Conditional Award or your
acquisition of ADRs relating to your
Determined Conditional Award. In the event
that the Company, any Participating Company
or any Associated Company or your employer
determines that any applicable federal,
state, local or foreign tax or withholding
payment or social security contribution is
required relating to your Conditional
Award, the Company, such Participating
Company or such Associated Company will
have the right to: (i) require that you
arrange to make such payments to the
Company, such Participating Company or such
Associated Company, (ii) withhold such
amounts from other payments due to you from
the Company, such Participating Company or
such Associated Company or (iii) allow for
the surrender of that number of ADRs
granted to you for any Determined
Conditional Award pursuant to the Deed with
a value equal to the withholding or other
taxes due (for this purpose, surrendered
ADRs will be valued using the closing price
of the ADR on the NASDAQ Stock Market on
the trading date immediately prior to the
Vesting Date or such other mechanism as
determined by your relevant tax authority).
Retention and Other Rights The grant of this Conditional Award does not
give you the right to be retained or
employed by the Company, any Participating
Company or any Associated Company in any
capacity. You waive all and any rights to
any compensation or damages in relation to
your Conditional Award or under the Plan in
consequence of the termination of your
office or Employment with the Company, any
Participating Company or any Associated
Company for any reason (including unlawful
termination of employment). The grant of
this Conditional Award is made on a fully
discretionary basis by the Company and is a
non-recurring benefit which does not give
you any right to participate in any future
grants of share incentive awards. The terms
of this Conditional Award are only
applicable to the Conditional Award granted
pursuant to the Deed. In addition, this
Conditional Award and the ADRs that may be
issued to you under this Conditional Award
are not and shall not be deemed a salary
for any purpose whatsoever, including in
connection with calculating severance
compensation or pension entitlement under
any applicable law.
Shareholder Rights You, or your estate or heirs, do not have
any of the rights of a shareholder of the
Company, including, without limitation, the
right to vote or to receive any dividends
declared or paid on the Series A Ordinary
Shares with respect to the Conditional
Award, unless and until ADRs have been
issued to you.
Transferability Your Conditional Award, and any ADRs awarded
but not vested, may not be transferred,
assigned or pledged, whether by operation
of law or otherwise.
Adjustments In the event of a stock split or a similar
change in the Company's shares, the number
of ADRs covered by this Conditional Award
will be adjusted (and rounded down to the
nearest whole number) in accordance with
the terms of the Plan.
Applicable Sub-Plan Under the terms of the Plan, the Company can
adopt additional sections of the rules of
the Plan applicable in any jurisdiction
under which the Conditional Awards may be
subject to additional and/or modified terms
and conditions, having regard to any
securities, exchange control taxation or
other applicable laws which may apply to
you or the Company. If applicable, please
review the information in the applicable
sub-plan and/or prospectus in conjunction
with this Agreement.
Data Privacy In order to administer the Plan, the Company
may process personal data about you. Such
data includes, but is not limited to, the
information provided in this Agreement or
other appropriate personal and financial
data about you, such as home address,
business addresses and other contact
information, payroll information and any
other information that might be deemed
appropriate by the Company to facilitate
the administration of the Plan. By
accepting this Conditional Award, you
consent to the collection, processing,
transmission (including to countries or
territories outside the European Economic
Area) and storage by the Company of any
such personal data which is necessary for
operating and administering the Plan.
Consent to Electronic Delivery The Company may choose to deliver certain
statutory materials relating to the Plan in
electronic form. By accepting this
Conditional Award you agree that the
Company may deliver any notices, or other
communications in connection with the Plan
to you in an electronic format. If at any
time you would prefer to receive paper
copies of these documents, as you are
entitled to receive, NDS would be pleased
to provide paper copies. Please contact [o]
or send an email to [o] to request paper
copies of these documents.
The Plan The text of the Plan is incorporated by
reference in this Agreement. This Agreement
and the Plan constitute the entire
understanding between you and the Company
regarding this Conditional Award. Any prior
agreements, commitments or negotiations
concerning this Conditional Award are
superseded. This Agreement should be read
in conjunction with the Plan. In the event
of any conflict between the rules of the
Plan and the terms and conditions as set
out in this Agreement, the rules of the
Plan shall prevail.
Confidentiality You acknowledge that you have read and
understand the Company's policies on
confidentiality as set forth in the News
Corporation Standards of Business Conduct
(which is applicable to employees of the
Company) and the NDS Group plc Insider
Trading and Confidentiality Policy
(collectively, the "Confidentiality
Policies") and hereby agree that during the
course of your Employment and any time
after your Employment is terminated, you
will continue to abide by the terms of the
Confidentiality Policies, including with
respect to any materials or information you
receive in connection with your Conditional
Award. The Board may, in its sole
discretion, determine that any breach of
the Confidentiality Policies will cause any
unvested portion of your Conditional Award
to lapse.
Acknowledgement Form By accepting this Conditional Award, you
agree to execute and complete the
Acknowledgement Form attached at the end of
this Agreement and return it to the Company
in a timely manner and, in any event, no
later than the deadline set forth in the
Acknowledgement Form. If you do not return
a properly executed and completed
Acknowledgement Form to the Company prior
to the first Vesting Date, the Company
reserves the right to withhold delivery of
the ADRs until such properly executed and
completed Acknowledgement Form is submitted
to the Company.
Severability The invalidity or non-enforceability of one
of more provisions contained in this
Agreement will not affect the validity or
enforceability of the other provisions
contained in this Agreement.
Governing Law The Deed and the terms and conditions
contained in this Agreement are governed by
and construed in accordance with the laws
of England, and you will submit to the
jurisdiction of the English courts in
relation to anything arising under the Plan
and / or in relation to your Conditional
Award. The Board may determine that the law
of another jurisdiction will apply to the
operation of the Plan outside the United
Kingdom.