Exhibit 10.1
SNAP-ON
INCORPORATED
RESTRICTED STOCK UNIT
AGREEMENT
THIS RESTRICTED STOCK UNIT AGREEMENT
is granted by SNAP-ON INCORPORATED (the “Company”) to
each individual receiving and accepting the offer contained in the
Restricted Stock Unit Offer Letter (each such person being known as
a “Key Employee”) pursuant to the Company’s 2001
Incentive Stock and Awards Plan (the
“Plan”).
WHEREAS, the Company believes it to
be in the best interests of the Company, its subsidiaries and its
stockholders for its officers and other key employees to have an
incentive tied to the price of Common Stock of the Company in order
that they will have a greater incentive to work for and manage the
Company’s affairs in such a way that its shares may become
more valuable; and
WHEREAS, the Company has determined
to grant Key Employees Restricted Stock Units pursuant to the terms
of the Plan and this Agreement;
NOW, THEREFORE, in consideration of
the premises and of the services to be performed by the Key
Employee, the Company and the Key Employee hereby agree as
follows:
1.
Restricted Stock Units.
The Company
hereby awards to the Key Employee the number of restricted stock
units (the “Restricted Stock Units”) set forth in the
Restricted Stock Unit Offer Letter (the “Offer”) under
the column titled “Quantity Granted.” The
Restricted Stock Units granted under this Agreement are units that
will be reflected in a book account maintained by the Company until
they become vested or have been forfeited. This award is subject to
the terms and conditions of this Agreement and the Plan, including
the terms and conditions of the Plan applicable to Performance
Units.
2.
Restricted Period.
(a)
The Restricted
Stock Units are subject to vesting over a three-year period, which
is referred to as the “Restricted Period.” In the
first year of the Restricted Period, the Company’s
performance will be measured in accordance with Section 3 and
the number of Restricted Stock Units that are eligible for vesting
under Section 4 will be determined. The Restricted Stock Units
will become vested and earned if the Key Employee continues in
employment through the remainder of the Restricted Period or
terminates employment as described in Section 4(b). If
the Key Employee terminates employment during the Restricted Period
for any other reason, then Key Employee’s right to the
Restricted Stock Units will be forfeited on the date of such
termination of employment.
(b)
During the
Restricted Period, the Key Employee will not have any right to vote
the Restricted Stock Units. The Key Employee will not be
deemed a stockholder of the Company with respect to any of the
Restricted Stock Units. The Restricted
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Stock Units may
not be sold, assigned, transferred, pledged, encumbered or
otherwise disposed of prior to vesting.
(c)
After the
Restricted Period, the Key Employee shall receive a cash payment
from the Company equal to any cash dividends paid with respect to
the number of shares of Common Stock relating to the Restricted
Stock Units that are earned hereunder.
(d)
Within thirty
days after the Restricted Stock Units become vested and earned, the
Company shall issue the Key Employee one share of Common Stock for
each Restricted Stock Unit which becomes vested.
3.
Performance Condition for the
Restricted Stock Units.
The number of
Restricted Stock Units that are eligible for vesting under
Section 4 will be based upon the following performance
conditions:
(a)
The performance
condition for the Restricted Stock Units is dependent upon
performance relative to the specific performance goals, and for the
fiscal period, as shown on Exhibit 1 . The threshold,
target and maximum goals for each such performance measure are as
shown on Exhibit 1 , and the Restricted Stock Units
which become eligible for vesting will be determined in accordance
with the performance matrix attached hereto as
Exhibit 1 based on actual performance of the Company
relative to the goals subject to the terms attached hereto as
Exhibit 2 . As soon as practicable after the
Company’s financial statements such fiscal period are
available to the Committee, the Committee shall calculate the
Company’s performance data for such year in accordance with
the terms attached hereto as Exhibit 2 . The
Committee shall then plot such data on the performance matrix on
Exhibit 1 . The resulting position on the matrix
shall determine the percentage of the Restricted Stock Units that
will become eligible for vesting under Section 4. The Company
shall promptly communicate this information to the Key
Employee.
(b)
Unless the Key
Employee has previously forfeited such Restricted Stock Units, if
the position on the matrix reflects a percentage greater than zero,
then the number of Restricted Stock Units eligible for vesting
under Section 4 shall be equal to the product of such
percentage and the Grant Number. Upon the Committee’s
determination as provided above, the Key Employee will forfeit the
right to receive the remaining Restricted Stock Units. If the
position on the matrix reflects a percentage of zero, then all
Restricted Stock Units shall be forfeited.
(c)
If any
calculation would result in a fraction, any fraction of 0.5 or
greater will be rounded to one, and any fraction of less than 0.5
will be rounded to zero.
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4.
Employment Condition for the
Restricted Stock Units.
Subject to the
terms and conditions set forth herein,
(a)
Except as
provided in (b) below, the Key Employee will immediately
forfeit the right to receive Restricted Stock Units if the Key
Employee terminates employment with the Company and its
subsidiaries prior to the end of the Restricted Period.
(b)
Notwithstanding
the foregoing, in the case of termination of employment in the
second or third year of the Restricted Period as a result of death,
Disability (as defined below) or Retirement (as defined below), the
Key Employee (or Beneficiary) will become vested in the number of
Restricted Stock Units determined under Section 3 multiplied
by a fraction representing the portion of the three-year period
that elapsed before the termination of the Key Employee’s
employment.
(c)
Subject to any
rights of the Company under Section 5, the Key Employee will
become vested in the number of Restricted Stock Units determined
under Section 3 if the Key Employee continues in employment
with the Company or its subsidiaries through the end of the
Restricted Period. Absence of the Key Employee on leave
approved by a duly elected officer of the Company, other than the
Key Employee, shall not be considered a termination of employment
during the period of such leave.
(d)
Whether or not a
divestiture of a subsidiary, division or other business unit
(including through the formation of a joint venture) results in
termination of employment with the Company and its subsidiaries
will be at the discretion of the Committee, which discretion the
Committee may exercise on a case by case basis.
(e)
As used
herein,
(i)
“Disability”
means a medically-determinable physical or mental condition that is
expected to be permanent and that results in the Key Employee being
unable to perform one or more of the essential duties of the Key
Employee’s occupation or a reasonable alternative offered by
the Company or its subsidiaries, all as determined by the Committee
or any successor to such committee that administers the Awards Plan
(as the same may be amended).
(ii)
“Retirement”
means termination of employment from the Company and its
subsidiaries on or after satisfying the early or normal retirement
age and service conditions specified in the retirement policy or
retirement plan of the Company or one of its subsidiaries
applicable to such Key Employee as in effect at the time of such
termination.
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5.
Detrimental Activity.
(a)
Activity
During Employment . If, prior to
termination of the Key Employee’s employment with the Company
or during the one-year period following termination of the Key
Employee’s employment with the Company, the Company becomes
aware that, prior to termination, the Key Employee had engaged in
detrimental activity, then the Committee in its sole discretion,
for purposes of this Agreement, may characterize or recharacterize
termination of the Key Employee’s employment as a termination
to which thi
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