¿Qué son las opciones de acciones de incentivos (ISOs)? Respuesta: Las ISO son una forma de opción de acciones que los empleadores pueden otorgar a los empleados. Una opción de compra de acciones es un derecho a comprar un número específico de acciones de la empresa a un precio determinado durante un cierto período de tiempo. ISOs también se conocen como opciones de acciones calificadas o estatutarias porque deben ajustarse a requisitos específicos bajo las leyes de impuestos para calificar para el tratamiento de impuestos preferencial. Los requisitos de la ley fiscal para ISOs incluyen: El precio de ejercicio - el precio que usted pagará por comprar las acciones - debe ser por lo menos igual al valor justo de mercado de acciones en la fecha de emisión de la opción Para recibir opciones, debe ser un Empleado de la empresa emisora La fecha de ejercicio no puede ser más de 10 años después de la concesión También pueden aplicarse reglas especiales si usted posee más del 10 por ciento de su stock de empleadores (por voto). Una vez que se le ha concedido una opción de compra de acciones, puede comprar el stock al precio de ejercicio incluso si el valor de la acción ha aumentado. Si elige ejercer una opción de compra de acciones, debe comprar la acción dentro del período de tiempo específico que se estableció cuando se adquirió o se le concedió la opción. Usted no está obligado a ejercer una opción de compra de acciones. Los empleadores ofrecen ISOs para recompensar el desempeño de los empleados, fomentar la longevidad con la empresa y dar a los empleados una participación en el éxito de la empresa. El otro tipo de opciones de acciones para empleados son opciones de acciones no calificadas, que reciben un tratamiento fiscal distinto al de las ISO. Sus opciones pueden estar sujetas a un calendario de consolidación desarrollado por la empresa. Opciones no invertidas no se puede ejercer hasta una fecha en el futuro, que a menudo está vinculado a su empleo continuo. La acción que usted recibe sobre el ejercicio de una opción también puede estar conforme a un horario de la consolidación. Suponiendo que una opción de compra de acciones cumpla con los requisitos de la ley fiscal para una ISO, el tratamiento fiscal preferencial estará disponible para la venta de la acción adquirida con el ejercicio de la ISO, pero sólo si la acción se mantiene durante un período mínimo de tenencia. El período de tenencia determina si una venta de las acciones que recibió a través del ejercicio de una ISO está sujeta a impuestos como ingreso ordinario o como ganancia o pérdida de capital. Para recibir un tratamiento de ganancia de capital a largo plazo, debe mantener las acciones que adquirió al momento de ejercer la opción durante al menos: Dos años a partir de la fecha en que se le otorgó la opción, y Al menos un año después de la fecha en que ejerció la opción Aquí para programar una consulta de cortesía Preparado por Broadridge Investor Comunicación Soluciones, Inc. Copyright 2015. Tenga una pregunta Compruebe el fondo de su profesional financiero en FINRAs BrokerCheck El contenido se desarrolla de las fuentes creídas para proporcionar la información exacta. La información contenida en este material no pretende ser un asesoramiento fiscal o legal. Consulte a profesionales legales o fiscales para obtener información específica sobre su situación individual. Parte de este material fue desarrollado y producido por FMG, LLC, para proporcionar información sobre un tema que puede ser de interés. FMG, LLC, no está afiliada con el representante nombrado, corredor de bolsa, empresa de asesoría de inversiones registrada en el estado o la SEC. Las opiniones expresadas y el material proporcionado son de carácter general y no deben considerarse como una solicitud de compra o venta de ningún valor. Copyright 2016 FMG Suite. Los servicios de asesoramiento se ofrecen a través de Frontier Financial Planning 38 Cap. Mgmt, Inc, o Diseños Financieros Creativos Asesores de Inversión Registrados. Todos los valores ofrecidos a través de Inversiones CFD. Un corredor / distribuidor registrado, Miembro FINRA 38 SIPC. 2704 South Goyer Road. Kokomo. IN 46902160 (800) 745-7776. Frontier Planificación Financiera 38 Cap. Mgmt. Inc. no es ni una subsidiaria ni controlada por las compañías de CFD. Contacto 322 impulsión del patio Hillsborough, NJ 08844 Enlaces rápidos 1.01. ENTRADA EN UN ACUERDO DEFINITIVO IMPORTANTE El 12 de diciembre de 2012, el Directorio de la Compañía aprobó cambios a los siguientes términos y condiciones aplicables a las subvenciones a los funcionarios ejecutivos de la Compañía bajo el Plan de Incentivos a Largo Plazo de la Sociedad Weyerhaeuser 2004: (a) 160160160160Términos y condiciones de compra (B) 160160160160Términos y Condiciones de Acciones Restringidas otorgadas bajo el Plan de Incentivos a Largo Plazo de la Sociedad Weyerhaeuser 2004 y (c) 160160160160Términos y Condiciones de Actuación Acciones otorgadas bajo el Plan de Incentivos a Largo Plazo de la Sociedad Weyerhaeuser 2004 . Los cambios entraron en vigor el 1 de enero de 2013. Se adjuntan copias de los documentos como Anexos 10.1, 10.2 y 10.3, a los cuales se hace referencia para una declaración completa de sus términos y provisiones. TEM1609.01 ESTADOS FINANCIEROS Y EXPOSICIONES 2004 TÉRMINOS Y CONDICIONES DE LA ADJUDICACIÓN DE OPCIÓN DE ACCIÓN DE OPCIÓN DE ACUERDO A LARGO PLAZO A LARGO PLAZO Según su Aviso de Subvención de Opción de Compra de Acciones (el Aviso 8220Grant8221) y estos Términos y Condiciones del Premio de Opción de Compra de Acciones, Weyerhaeuser Company le otorgó una Opción bajo su (El 8220Plan8221) para comprar el número de acciones comunes de la Compañía indicadas en su Aviso de Subvención (el 8220Shares8221) al precio de ejercicio indicado en su Aviso de Subvención (la Subvención). La Subvención se realizó a la fecha de la acción del Comité de Compensación autorizando la Subvención (la Fecha de la Subvención). Usted puede rechazar esta Subvención notificando a sharon. dusekweyerhaeuser 32 dentro de un mes de la Fecha de la Donación. En el caso de rechazar esta Subvención, no tendrá derecho a ningún premio, beneficio u otra compensación en su lugar. Los términos en mayúsculas no definidos explícitamente en este documento pero definidos en el Plan tienen las definiciones que se dan a dichos términos en el Plan. La Opción se le otorga como participante en el Plan y está sujeta a los términos y condiciones establecidos en el Plan. Además, la Opción tiene los siguientes términos y condiciones: 1. 160160160160 Vesting. 3232Sobre las disposiciones de la Sección 3, la Opción será adquirida y ejercitada durante un período de cuatro años. Ninguna parte de la Opción podrá ser ejercitada hasta el aniversario de un año de la Fecha de la Subvención. En el primer aniversario de la Fecha de la Subvención, 25 de la Opción serán adquiridos y ejercitables, con un adicional de 25 de la Opción adquiriendo y pudiendo ejercitarse en cada uno de los segundo, tercer y cuarto aniversarios de la Fecha de la Subvención, respectivamente. A partir del cuarto aniversario de la Fecha de Donación, 100 de la Opción serán adquiridos y ejercitables. 2. 160160160160 Plazo. 3232Las Opciones expirarán en la fecha especificada en su Aviso de Subvención, que es el décimo aniversario de la Fecha de la Subvención. Después de esa fecha, ya no podrá ejercer la Opción. Además, según lo establecido en la Sección 3, la Opción puede terminar antes del décimo aniversario de la Fecha de la Subvención si su empleo con la Compañía y todas las Compañías Relacionadas cesa por cualquier razón. La transferencia de empleo entre la Sociedad y sus filiales no se considera como terminación de empleo. Las opciones que no son adquiridas antes de su fecha de vencimiento se pierden y sin valor. 3. 160160160160 Terminación del Empleo Muerte Discapacidad Cambios en el control. En el caso de su terminación de empleo, fallecimiento o Incapacidad o un Cambio de Control, se aplicarán las siguientes fechas de caducidad y vencimiento. (A) 160160160160 Terminación del empleo a la edad de 62 años. Si usted termina su empleo a los 62 años de edad o más y si la cláusula (ii) del primer párrafo de la Sección 3 (g) no es aplicable, Siguiente calendario: i. 160160160160 Si su jubilación se produce en o después del aniversario de un año de la Fecha de la Subvención, su Opción seguirá adquiriendo de acuerdo con el programa de consolidación de beneficios descrito en la Sección 1 anterior y podrá ejercer cualquier parte de su Opción que haya adquirido El plazo restante de la subvención, hasta un máximo de 10 años según lo dispuesto en la Sección 2. ii. 160160160160 Si su jubilación se produce antes del primer aniversario de la Fecha de la Subvención, el número de Acciones para las cuales se puede ejercer la Opción será prorrateado basado en el número de meses trabajados después de la Fecha de la Subvención. El número se calculará multiplicando el número de acciones en su Aviso de Subvención por una fracción cuyo numerador es el número de meses trabajados después de la Fecha de la Subvención y cuyo denominador es 12. La porción restante de la Opción será perdida y No se emitirán ni se emitirán Acciones con respecto a la parte de la Opción que se haya perdido. La parte prorrateada de la Opción seguirá adquiriéndose de acuerdo con el programa de consolidación de beneficios descrito en la Sección 1 anterior y podrá ejercitar cualquier porción de su Opción que haya sido adquirida por el plazo restante de la subvención, hasta un máximo de 10 años según lo dispuesto en la Sección 2. (b) 160160160160 Terminación de Empleo debido a la Eliminación de Empleo. 3232Si su empleo se termina involuntariamente debido a la eliminación de su posición con la Compañía o cualquier Compañía Relacionada y si la cláusula (ii) en el primer párrafo de la Sección 3 (g) no es aplicable, su Opción continuará adquiriendo durante un año después Su terminación. El resto de la parte no adquirida de su Opción a partir del primer aniversario de su fecha de terminación se perderá y no se emitirá ninguna Acción o emitirá con respecto a dicha porción de la Opción. 3232 Usted podrá ejercer la parte adquirida de su Opción en un plazo máximo de tres años a partir de la fecha de terminación, o durante el período restante de la concesión si ese es un período más corto de tiempo. (C) 160160160160 Terminación del empleo por otras razones. 3232 Si su empleo es terminado antes de que su Opción se otorgue completamente bajo la Sección 1 y ninguna de las otras provisiones bajo la Sección 3 se aplique, cualquier porción de su Opción que no sea adquirida bajo la Sección 1 en la fecha de su terminación se perderá inmediatamente y no Ser emitida o emitible con respecto a la parte perdida de la Opción. Usted podrá ejercer cualquier porción de su Opción que haya sido adquirida a la fecha de su terminación por un máximo de 90 días a partir de la fecha de terminación, o durante el período restante de la concesión si ese es un período de tiempo más corto. (D) 160160160160 Terminación de Empleo por Causa. 3232Si su empleo se rescinde por Causa, sin perjuicio de lo contrario aquí, incluyendo, pero no limitado a, Sección1603 (a), tanto las partes adquiridas como las no adquiridas de la Opción caducarán automáticamente en el momento en que la Compañía o Compañía Relacionada primero Le notifica de su terminación por Causa, a menos que el Comité determine lo contrario. Si su relación de empleo o servicio se suspende mientras se está investigando si usted será rescindido por Causa, todos sus derechos bajo la Opción, incluyendo el derecho de ejercer cualquier parte de la Opción, también serán suspendidos durante el período de investigación. En ningún caso, tal suspensión extenderá el plazo restante de la concesión, incluso si finalmente se determina que no será terminado por Causa. Si se descubre algún hecho que pudiera constituir una terminación por Causa después de la Terminación del Servicio, cualquier Opción que usted posea podrá ser terminada inmediatamente por el Comité. 8220Cause8221 significa: (i) incumplimiento deliberado y continuo de sus funciones sustancialmente con la Compañía o cualquier Compañía Relacionada después de que la Compañía o Compañía Relacionada le entregue una demanda escrita de desempeño sustancial especificando específicamente la manera en la cual usted no ha cumplido sustancialmente con sus obligaciones Ii) la convicción de un delito grave o (iii) la participación deliberada en conducta ilegal o mala conducta grave que sea material y demostrablemente perjudicial para la Compañía o cualquier Compañía Relacionada. (E) 160160160160 Terminación como resultado de la muerte del Participante. 3232Durante su vida, esta Opción puede ser ejercitada solamente por usted. Si usted muere mientras está trabajando activamente, su Opción es 100 automáticamente adquirida y su beneficiario o, si no hay un beneficiario nombrado, su representante personal puede ejercer la Opción en cualquier momento o de vez en cuando dentro de un máximo de tres años después de su fecha de Muerte, o durante el plazo restante de la beca si es un período de tiempo más corto. (F) 160160160160 Terminación de Empleo por Incapacidad. 3232Si su empleo es terminado como resultado de la Discapacidad mientras está activamente empleado, su Opción es 100 automáticamente adquirida. Usted podrá ejercer la Opción en un plazo máximo de tres años a partir de la fecha de terminación, o durante el plazo restante de la concesión si ese es un período de tiempo más corto. Como se define en el Plan de Jubilación de la Compañía para Empleados Asalariados, 8220Disabilidad8221 significa 8220a condición médica en la cual un Participante tiene derecho a beneficios de incapacidad total y permanente bajo la Ley del Seguro Social o juzgado totalmente y permanentemente incapacitado por el Comité Administrativo o cualquier persona o Delegado por el Comité Administrativo para tomar tales determinaciones.8221 La Opción debe ejercitarse dentro de los tres meses posteriores a la terminación del empleo por otros motivos que no sean muerte o Incapacidad y un año después de la terminación del empleo debido a Discapacidad para calificar para el tratamiento fiscal beneficioso Incentivo Opciones de alamcenaje. Es su responsabilidad estar al tanto de la fecha en que termina la Opción. (G) 160160160160 Cambio de control. 3232En caso de Cambio de Control, su Opción se convertirá inmediatamente en 100 ejercitables y permanecerá ejercible por el plazo restante de la concesión, hasta un máximo de 10 años, pero sólo si: (i) la Opción no se asume, se convierte O reemplazado por la entidad sucesora a la Compañía o (ii) dentro de los 24 meses naturales siguientes a la fecha de vigencia del Cambio de Control, su empleo es o bien terminado involuntariamente por la Compañía (término que incluye, para los propósitos de esta Sección 3 ), Cualquier Compañía Relacionada y cualquier otra entidad sucesora) que no sea por Causa (como se define arriba en la Sección 3 (d)) o voluntariamente terminada por usted por Buena Razón. 8220Good Reason8221 significa, sin su consentimiento expreso por escrito, la ocurrencia de uno o más de los siguientes eventos: i. 160160160160 una reducción material en su autoridad, deberes o responsabilidades existentes inmediatamente antes del Cambio de Control ii. 160160160160 dentro de los dos años siguientes a un Cambio de Control, la Compañía requiere que usted esté basado en un lugar que está por lo menos 50 millas más lejos de su residencia principal inmediatamente antes de un Cambio de Control que esa residencia desde la sede de la Compañía inmediatamente antes de un Cambio en Control, excepto los viajes requeridos en el negocio de Companys en una medida sustancialmente consistente con sus obligaciones comerciales a partir de la Fecha de la Subvención iii. 160160160160160160160160 una reducción material por parte de la Compañía de su salario base como en vigor inmediatamente antes del Cambio de Control iv. Sin embargo, que las reducciones en el nivel de cobertura de beneficios no se considerarán 8220Good Reason8221 si su cobertura general de beneficios es sustancialmente consistente con El nivel promedio de cobertura de beneficios de otros ejecutivos que tienen posiciones acordes con su posición en la compañía adquirente o v. 160160160160 una reducción material en su nivel de participación, incluyendo sus oportunidades de nivel objetivo, en cualquiera de las compañías de corto y / o Planes de compensación de incentivos a largo plazo en los que participe a partir de la Fecha de la Subvención (para este propósito se considerará que se ha producido una reducción material si las 8220 oportunidades de incentivos totales se han reducido en 10 o más) o un aumento significativo en la dificultad relativa de la Sin embargo, las reducciones en los niveles de participación o el aumento en la dificultad relativa de las medidas de pago no se considerarán como si se hubieran reducido el nivel de participación o la dificultad de las medidas en cada uno de esos programas Sigue siendo sustancialmente consistente con el nivel de participación o dificultad de las medidas de algunos o todos los demás ejecutivos que tienen posiciones acordes con su posición en la empresa adquirente. En ningún caso su renuncia será por Buena Razón a menos que: (A) se haya producido un evento establecido anteriormente y usted le notifique por escrito a la Compañía dentro de los 30 días posteriores a que tenga conocimiento de la ocurrencia o existencia de dicho evento, Identifica el evento que usted cree que constituye Buena Razón, y (B) la Compañía no corrige el evento así identificado en todos los aspectos materiales dentro de los 30 días posteriores a la recepción de dicha notificación. 4. 160160160160 Cumplimiento de la Ley de Valores. 3232No obstante cualquier otra provisión de esta donación, no podrá ejercer la Opción a menos que las Acciones emitibles al ejercicio estén registradas bajo la Ley de Valores o si la Compañía ha determinado que dicho ejercicio y emisión estarían exentos de los requisitos de registro de la Ley de Valores. El ejercicio de la Opción también debe cumplir con otras leyes y reglamentos aplicables que rigen la Opción, y usted no podrá ejercer la Opción si la Compañía determina que dicho ejercicio no estaría de acuerdo con dichas leyes y regulaciones. 5. 160160160160 Clasificación de opciones de acciones de incentivos. 32Si su Opción es designada como Opción de Compra de Incentivos en su Aviso de Subvención, toda o una porción de la Opción tiene la intención de calificar como Opción de Compra de Incentivos bajo la ley del impuesto sobre la renta federal. Sin embargo, la Compañía no representa ni garantiza que la Opción se califique como tal. Si la Opción ha sido designada como Opción de Compra de Acciones de Incentivo y el Valor de Mercado Justo agregado (determinado a la fecha de la concesión) de las acciones comunes sujeto a las partes de la Opción y todas las otras Opciones de Incentivos Durante cualquier año civil excede 100,000, cualquier porción en exceso será tratada como una Opción de Acción No Calificada, a menos que el Servicio de Rentas Internas cambie las reglas y regulaciones que rigen el límite de 100,000 para Opciones de Acciones de Incentivos. Además, una parte de la Opción puede ser tratada como una Opción de Acción No Calificada si ciertos eventos hacen que la opción de ejercitarse se acelere. 6. 160160160160 Aviso de Descargo de Disposición. 32Para la medida en que la Opción ha sido designada como Opción de Compra de Incentivos, para obtener ciertos beneficios tributarios otorgados a Opciones de Incentivos, debe mantener las Acciones emitidas al ejercicio de la Opción por dos años después de la Fecha de la Subvención y un año después de la fecha Del ejercicio. Si las acciones de acciones obtenidas en el ejercicio de una Opción de Compra de Acciones de Incentivos se ofrecen para pagar el precio de ejercicio de otra opción menos de un año después de la fecha de ejercicio de la Opción de Compra de Incentivos, la oferta será considerada una disposición descalificadora. Puede estar sujeto al impuesto mínimo alternativo en el momento del ejercicio. Usted debe obtener asesoramiento fiscal al ejercer la Opción y antes de la disposición de las Acciones. Al aceptar una Opción designada como Opción de Compra de Acciones de Incentivo, usted acuerda notificar a la Compañía con prontitud si usted dispone de cualquiera de las Acciones dentro de un año a partir de la fecha en que ejerce todo o parte de la Opción o dentro de dos años a partir de la Fecha de la Subvención. 7. 160160160160 Método de ejercicio. 3232 Usted podrá ejercer la Opción mediante notificación a la Sociedad oa una firma de corretaje designada o aprobada por la Sociedad, en forma y sustancia satisfactoria a la Compañía, la cual indicará su elección para ejercer la Opción y el número de Acciones para las cuales está ejercitando la opción. La notificación debe ir acompañada del pago completo del precio de ejercicio por el número de Acciones que está comprando. Usted puede hacer este pago en cualquier combinación de lo siguiente: (a) por dinero en efectivo (b) por cheque aceptable para la Compañía (c) por la oferta (ya sea de hecho o por medio de la certificación) de Acciones Comunes que haya poseído durante al menos seis meses (Si dicho período de tenencia es necesario para evitar un cargo a las ganancias de la Compañía) (d) 160 en la medida permitida por la ley, instruyendo a un corredor a entregar a la Compañía el pago total requerido de acuerdo con los procedimientos establecidos por la Compañía o ) Por cualquier otro método permitido por el Comité. 8. 160160160160 Retención de Impuestos. Como condición para el ejercicio de cualquier porción de una Opción, usted deberá hacer los arreglos que la Compañía pueda requerir para satisfacer cualquier obligación de impuestos federales, estatales, locales o extranjeras que puedan surgir en conexión con dicho ejercicio. 9. 160160160160 Opción No es un contrato de empleo o de servicio. 3232Ninguna cosa del Plan o cualquier Premio otorgado bajo el Plan se considerará que constituye un contrato de trabajo o confiere o se considera que confiere cualquier derecho para que usted continúe en el empleo de, o para continuar cualquier otra relación con, la Compañía o cualquier Empresa o limitar de ninguna manera el derecho de la Compañía o cualquier Compañía Relacionada a terminar su empleo u otra relación en cualquier momento, con o sin Causa. 10. 160160160160 No hay derecho a daños. 3232No tendrá derecho a presentar una reclamación ni a recibir daños si se le exige que ejerza la parte adquirida de la Opción dentro de los tres años de la Terminación del Servicio o si alguna parte de la Opción se cancela o expira sin ejercer. La pérdida de beneficios existentes o potenciales en los Premios no constituirá un elemento de daños en caso de su Terminación de Servicio por cualquier motivo, incluso si la terminación viola una obligación de la Compañía o de una Compañía Relacionada con usted. 11. 160160160160 Efecto de encuadernación. 3232Los términos y condiciones de esta donación se harán en beneficio de los sucesores y cesionarios de la Compañía y serán vinculantes para usted y sus beneficiarios, herederos, ejecutores, administradores, sucesores y cesionarios. 12. 160160160160 Limitación de derechos No hay derecho a futuras donaciones Artículo extraordinario de compensación. 3232 (a) 160El Plan es de naturaleza discrecional y puede ser suspendido o terminado por la Compañía en cualquier momento. (B) La concesión de la Opción es un beneficio único que no crea ningún derecho contractual u otro derecho a recibir futuras concesiones de opciones, o beneficios en lugar de opciones. (C) 160Todas las determinaciones con respecto a cualquier donación futura, incluyendo, pero no limitado a, los tiempos en que se otorgarán las opciones, el número de acciones sujetas a cada opción, el precio de la opción y el momento o momentos en que cada opción Ser ejercitable, será a la sola discreción de la Compañía. (D) 160Tu participación en el Plan es voluntaria. (E) 160El valor de la Opción es una partida extraordinaria de compensación que está fuera del alcance de su contrato de trabajo, si lo hubiere. (F) 160La Opción no forma parte de la compensación normal o esperada con el propósito de calcular cualquier indemnización por despido, renuncia, despido, pagos de fin de servicio, bonos, indemnizaciones de larga duración, pensión o jubilación o pagos similares. (G) 160La adquisición de la Opción cesará con la Terminación del Servicio por cualquier motivo, salvo que de lo contrario se establezca explícitamente en el Plan, los términos y condiciones de esta concesión o de otra manera permitidos por el Comité. (H) 160El valor futuro de las Acciones subyacentes a la Opción es desconocido y no puede predecirse con certeza. (I) 160Si las Acciones subyacentes a la Opción no aumentan de valor, la Opción no tendrá valor. 13. 160160160160 Privacidad de datos de empleados. 3232 Al recibir este premio, usted: (a) autorizará a la Compañía y su empleador, si son diferentes, ya cualquier agente de la Compañía que administre el Plan o provea servicios de mantenimiento de registros del Plan, a revelar a la Compañía oa cualquiera de sus afiliadas cualquier información y datos Solicitudes de la Compañía para facilitar la concesión de la Opción y la administración del Plan (b) renunciar a cualquier derecho de privacidad de datos que usted pueda tener con respecto a dicha información y (c) autorizar a la Compañía ya sus agentes a almacenar y transmitir dicha información en Forma electrónica. 14. 160160160160 Sección 409A. 3232La Opción tiene la intención de estar exenta de los requisitos de la sección 409A del Código de Rentas Internas de Estados Unidos (8220Sección 409A8221) y debe ser interpretada, operada y administrada de manera consistente con tal intención. En la medida en que la Compañía determine que la Opción está sujeta a la Sección 409A y no cumple con los requisitos de la Sección 409A, la Compañía se reserva el derecho (sin ninguna obligación de hacerlo) de enmendar, reestructurar, cancelar o reemplazar la Opción Con el fin de hacer que la Opción no esté sujeta a la Sección 409A o para cumplir con las disposiciones aplicables de la Sección 409A. EX-10.2 3 ex102termsandconditionsofr. htm TERMINOS Y CONDICIONES DE EXHIBICIÓN PREMIOS DE BOLSA RESTRINGIDOS Ex. 10.2 Términos y Condiciones de la Acción Restringida otorgada bajo la Weyerhaeuser Company 2004 Plan de Incentivos a Largo Plazo 2004 PLAN DE INCENTIVOS A LARGO PLAZO TÉRMINOS Y CONDICIONES DE LA PRIMERA EMPRESA RESTRINGIDA 2013 Según nuestro Aviso de Subvención (la Notificación 8220Grant Notice8221) y Weyerhaeuser La Compañía le ha otorgado bajo su Plan de Incentivos a Largo Plazo de 2004 (el 8220Plan8221) el número de premios de acciones restringidas (8220Awards8221) indicado en su Aviso de Subvención al valor de mercado indicado en su Aviso de Subvención (la Subvención). La Subvención se realizó a la fecha de la acción del Comité de Compensación autorizando la Subvención (la Fecha de la Subvención). Usted puede rechazar esta Subvención notificando a sharon. dusekweyerhaeuser 32 dentro de un mes de la Fecha de la Donación. En el caso de rechazar esta Subvención, no tendrá derecho a ningún premio, beneficio u otra compensación en su lugar. Los términos mayúsculas no definidos explícitamente en este documento, pero definidos en el Plan, tienen las definiciones que se dan a dichos términos en el Plan. Los premios representan la promesa no financiada y no garantizada de la Compañía de emitir acciones de Acciones Comunes de la Compañía en una fecha futura, sujeto a los términos de este documento y el Plan. Usted no tiene derechos bajo los Premios que no sean los derechos de un acreedor general no garantizado de la Compañía. Además, los Premios tienen los siguientes términos y condiciones: 1. 160160160160 Vesting. Con sujeción a las disposiciones de la Sección 3, se aplicará el siguiente calendario de consolidación de derechos a los Premios. Los premios se otorgarán por un período de cuatro años. Ninguna parte de los Premios se otorgará hasta el primer aniversario de la Fecha de la Subvención. En el aniversario de un año de la Fecha de la Subvención, 25 de los Premios se otorgarán, con un adicional de 25 de los Premios que se otorgan en cada uno de los segundo, tercer y cuarto aniversarios de la Fecha de la Subvención, respectivamente. A partir del cuarto aniversario de la Fecha de Donación, 100 de los Premios serán otorgados. Los premios que no hayan sido adquiridos de conformidad con el párrafo anterior estarán sujetos al decomiso como se describe en la Sección 3. 2. 160160160160 Conversión de los Premios y Emisión de Acciones. Al otorgarse los Premios conforme a la Sección 1, se emitirá una acción ordinaria de la Compañía por cada Premio que se conceda en dicha fecha (el 8220Shares8221), sujeto a los términos del Plan y este documento. Posteriormente, la Compañía restará de las Acciones adquiridas el número total de Acciones necesarias para satisfacer cualquier Obligación de Retención de Impuestos requerida como se describe en la Sección 9 de este documento, y transferirá el saldo de las Acciones adquiridas a usted. No se emitirán acciones fraccionarias de Acciones Comunes bajo esta Subvención. Sin perjuicio de lo contrario, la entrega de las acciones adquiridas se realizará tan pronto como sea posible después de la fecha de adquisición especificada en la Sección 1, pero en todos los casos por una fecha que se encuentre dentro de los 30 días siguientes a dicha fecha. 3. 160160160160 Terminación del Empleo Muerte Discapacidad Cambios en el control. 3232En el caso de su terminación de empleo, fallecimiento o incapacidad o un cambio de control mientras los premios están pendientes, se aplicarán las siguientes disposiciones de consolidación y pago. Dentro de los 30 días siguientes a cada fecha de liberación aplicable que se especifica a continuación, se emitirá una Acción por cada Premio que está programado para su publicación en dicha fecha, sujeto a los términos del Plan y este documento y sujeto a cualquier Obligación de Retención de Impuestos, 9 del presente documento. (A) 160160160160 Terminación del Empleo a la edad de 62 años. Si usted termina su empleo a los 62 años de edad o más (dicha terminación se denomina 8220retirement8221) y si la cláusula (ii) del primer párrafo de la Sección 3 (f) Sus Premios serán entregados y liberados de acuerdo con el siguiente calendario: i. 160160160160 Si su jubilación se produce en o después del aniversario de un año de la Fecha de la Subvención, sus Premios continuarán adquiriendo y ser liberados como se provee en las Secciones 1 y 2 arriba. Ii. 160160160160 Si su jubilación se produce antes del aniversario de un año de la Fecha de la Subvención, el número de Premios será prorrateado basado en el número de meses trabajados después de la Fecha de la Subvención. El número de premios se calculará multiplicando el número original de premios indicado en el Aviso de Subvención por una fracción cuyo numerador es el número de meses trabajados después de la Fecha de la Subvención y cuyo denominador es 12. Los Premios restantes se perderán Y ninguna Acción será emitida o emitida con respecto a dicha porción perdida de los Premios. Los Premios prorrateados seguirán adquiriéndose de acuerdo con el programa de consolidación de beneficios descrito en la Sección 1 anterior y serán liberados como se indica en la Sección 2 anterior. (B) 160160160160 Terminación del empleo debido a la eliminación del empleo. 3232Si su empleo se termina involuntariamente debido a la eliminación de su posición con la Compañía o cualquier Compañía Relacionada y si la cláusula (ii) en el primer párrafo de la Sección 3 (f) no es aplicable, sus Premios continuarán adquiriendo durante un año después Su terminación y sus Premios adquiridos serán liberados como se provee en la Sección 2 arriba. El resto de la parte no adquirida de sus Premios a partir del primer aniversario de su fecha de terminación se perderá y ninguna Acción será emitida o emitida con respecto a dicha porción perdida de los Premios. (C) 160160160160 Terminación del empleo por otras razones. 32Si su empleo se termina antes de que sus Premios sean totalmente otorgados bajo la Sección 1 y ninguna de las otras provisiones bajo la Sección 3 se aplique, cualquier Premio que no sea adquirido bajo la Sección 1 en la fecha de su terminación será inmediatamente confiscado y ninguna Acción será emitida o emitible Con respecto a la parte de los Premios perdida. (D) 160160160160 Terminación de Empleo por Causa. 3232Si su empleo es rescindido por Causa, no obstante cualquier cosa en contrario aquí, incluyendo, pero no limitado a, Sección 3 (a), cualquier premio pendiente será inmediatamente confiscado en el momento en que la Compañía o Compañía Relacionada le notifique primero de su terminación Por causa In addition, if your employment or service relationship is suspended pending an investigation of whether you will be terminated for Cause, payment of all outstanding Awards may be suspended during such period of investigation, but only to the extent permissible under Section 409A of the U. S. Internal Revenue Code (8220Section 409A8221) if applicable. If, at the conclusion of such investigation, your employment or service relationship is terminated for Cause, all outstanding Awards shall be immediately forfeited and you shall be required to promptly repay to the Company any Shares relating to such Awards that were previously paid to you during the period of investigation. If any facts that would constitute termination for Cause are discovered after your termination of service, any outstanding Awards may be immediately terminated by the Committee. 8220Cause8221 means: (i) willful and continued failure to perform substantially your duties with the Company or any Related Company after the Company or Related Company delivers to you written demand for substantial performance specifically identifying the manner in which you have not substantially performed your duties (ii)160conviction of a felony or (iii) willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company or any Related Company. (e) 160160160160 Death or Disability. 3232In the event of your death or Disability while actively employed, you will receive 100 of your Awards. Subject to Section 15, all Awards not already released pursuant to Section 2 above will be released as of the date of your death or Disability. In the event of your death, payment will be made to your estate. As defined by the Companys Retirement Plan for Salaried Employees, 8220Disability8221 means 8220a medical condition in which a Participant is either entitled to total and permanent disability benefits under the Social Security Act or judged to be totally and permanently disabled by the Administrative Committee or any person or committee delegated by the Administrative Committee to make such determinations.8221 (f) 160160160160 Change in Control. In the event of a Change in Control, your Awards will vest over the period set forth in Section 1 and be released at the time set forth in Section 2, subject to the provisions of Section 3, provided, however, that, subject to Section 15: (i) your then outstanding Awards will immediately fully vest and be released as of the date of the Change in Control in the event that the Awards are not assumed, converted or replaced by the successor entity to the Company, and (ii) your Awards will immediately fully vest and be released as of the date of your separation from service, provided that such separation from service occurs within 24 full calendar months following the effective date of the Change in Control and is either an involuntary separation by the Company (which term includes, for purposes of this Section 3(f), any Related Company and any successor entity) other than for Cause (as defined above in Section 3(d)) or a voluntary separation by you for Good Reason. 8220Good Reason8221 means, without your express written consent, the occurrence of any one or more of the following events: i.160160160160a material reduction in your authority, duties, or responsibilities existing immediately prior to the Change in Control ii.160160160160within two years following a Change in Control, the Companys requiring you to be based at a location that is at least 50 miles farther from your primary residence immediately prior to a Change in Control than is such residence from the Companys headquarters immediately prior to a Change in Control, except for required travel on the Companys business to an extent substantially consistent with your business obligations as of the Grant Date iii.160160160160a material reduction by the Company of your base salary as in effect immediately prior to the Change in Control iv.160160160160a material reduction in the benefits coverage in the aggregate provided to you immediately prior to the Change in Control provided, however, that reductions in the level of benefits coverage will not be deemed to be 8220Good Reason8221 if your overall benefits coverage is substantially consistent with the average level of benefits coverage of other executives who have positions commensurate with your position at the acquiring company or v.160160160160a material reduction in your level of participation, including your target-level opportunities, in any of the Companys short - and/or long-term incentive compensation plans in which you participate as of the Grant Date (for this purpose a material reduction shall be deemed to have occurred if the aggregate 8220incentive opportunities8221 are reduced by 10 or more) or a material increase in the relative difficulty of the measures used to determine the payouts under such plans provided, however, that reductions in the levels of participation or increase in relative difficulty of payout measures will not be deemed to be 8220Good Reason8221 if your reduced level of participation or difficulty of measures in each such program remains substantially consistent with the level of participation or difficulty of the measures of some or all other executives who have positions commensurate with your position at the acquiring company. 3232 In no event will your resignation be for Good Reason unless: (A) an event set forth above has occurred and you provide the Company with written notice thereof within 30 days after you have knowledge of the occurrence or existence of such event, which notice specifically identifies the event that you believe constitutes Good Reason, and (B) the Company fails to correct the event so identified in all material respects within 30 days after receipt of such notice. 4. 160160160160 Dividends. 3232Except as otherwise specifically provided in this document, you will not be entitled to any rights of a shareholder with respect to any outstanding Awards. Notwithstanding the foregoing, if the Company declares and pays dividends on Common Stock during the time period when Awards are outstanding, you will be credited with additional amounts for each Award equal to the dividend that would have been paid with respect to such Award if it had been an actual share of Common Stock, which amount shall remain subject to restrictions (and as determined by the Administrator may be reinvested in Awards) and shall vest and be paid concurrently with the vesting and payment of the Awards upon which such dividend equivalent amounts were paid. 5. 160160160160 No Rights as Shareholder until Vesting and Issuance of Shares. 3232You will not have any voting or any other rights as a shareholder of the Common Stock with respect to the outstanding Awards. Upon vesting of the Awards and issuance of shares of Common Stock, you will obtain full voting and other rights as a shareholder of the Company. 6. 160160160160 Securities Law Compliance. 3232Notwithstanding any other provision of this award document, you may not sell the Shares acquired upon vesting and issuance of the Awards unless such Shares are registered under the Securities Act of 1933, as amended (the 8220Securities Act8221), or, if such Shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such Shares must also comply with other applicable laws and regulations governing the Shares and you may not sell the Shares if the Company determines that such sale would not be in material compliance with such laws and regulations. 7. 160160160160 Non-Transferability of Awards. Notwithstanding any other provision of this award document, you may not sell, pledge, assign, hypothecate, transfer or dispose of your Awards in any manner prior to the distribution to you of shares of Company common stock in respect of such Awards. Awards shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, pursuant to Section 3(e), Shares may be issued to your estate in the event of your death. 8. 160160160160 Independent Tax Advice. Determining the actual tax consequences of receiving or disposing of the Awards and Shares may be complicated. These tax consequences will depend, in part, on your specific situation and also may depend on the resolution of currently uncertain tax law and other variables not within the control of the Company. You should consult a competent and independent tax advisor for a full understanding of the specific tax consequences to you of receiving or disposing of Awards and Shares. You are encouraged to consult with a competent tax advisor independent of the Company to obtain tax advice concerning the receipt, vesting or disposition of the Awards or Shares in light of your specific situation. 9. 160160160160 Taxes and Withholding. You are ultimately liable and responsible for all taxes owed in connection with the Awards, including federal, state, local, FICA, or foreign taxes of any kind required by law, regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Awards. The Company makes no representation or undertaking regarding the treatment of any tax withholding in connection with the Grant or vesting of the Awards or the subsequent sale of Shares issuable pursuant to the Awards. The Company does not commit and is under no obligation to structure the Awards to reduce or eliminate your tax liability. 32 When an event occurs in connection with the Awards (e. g. vesting) that the company determines results in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any social tax obligation (the 8220Tax Withholding Obligation8221), to the extent required by law, and to the extent permitted by Section 409A if applicable, the Company may retain without notice from Shares issuable under the Awards or from salary or other amounts payable to you, whole Shares or cash having a value sufficient to satisfy your Tax Withholding Obligation. The Company may refuse to issue any Shares to you until your Tax Withholding Obligation is satisfied. In accordance with the Plan, an extended delay in satisfying your Tax Withholding Obligation may cause a forfeiture of the Shares. 10. 160160160160 Grant Not an Employment or Service Contract. Nothing in the Plan or any Award granted under the Plan will be deemed to constitute an employment contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate your employment or other relationship at any time, with or without cause. 11. 160160160160 No Right to Damages. You will have no right to bring a claim or to receive damages if any portion of the Grant is forfeited. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of your termination of service for any reason even if the termination is in violation of an obligation of the Company or a Related Company to you. 12. 160160160160 Binding Effect. The terms and conditions of this Grant will inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns. 13. 160160160160 Limitation on Rights No Right to Future Grants Extraordinary Item of Compensation. (a)160The Plan is discretionary in nature and may be suspended or terminated by the Company at any time. (b)160The Grant is a one-time benefit that does not create any contractual or other right to receive future grants of Awards. (c)160All determinations with respect to any such future grants, including, but not limited to, the times when grants will be made, the number of Awards subject to each grant, the grant price, and the time or times when each grant will be exercisable, will be at the sole discretion of the Company. (d)160Your participation in the Plan is voluntary. (e)160The value of the Grant is an extraordinary item of compensation that is outside the scope of your employment contract, if any. (f)160The Grant is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. (g)160Except as may otherwise be explicitly provided in the terms and conditions of this grant, the vesting of the Grant ceases upon your termination of employment for any reason and any unvested Awards will be forfeited. (h)160The future value of the Shares underlying the Grant is unknown and cannot be predicted with certainty. 14. 32 160160160160 Employee Data Privacy. By receiving this Grant, you: (a)160authorize the Company and your employer, if different, and any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan (b) waive any data privacy rights you may have with respect to such information and (c)160authorize the Company and its agents to store and transmit such information in electronic form. 15. 160160160160 Compliance with Section 409A. To the extent that the Company determines that the Awards are subject to Section 409A, these Terms and Conditions will be interpreted and administered in such a way as to comply with the applicable provisions of Section 409A to the maximum extent possible. In addition, if the Awards are subject to Section 409A: (i) no payment will be made on account of your Disability pursuant to Section 3(e) unless such Disability qualifies as a 8220disability8221 for purposes of Treas. Reg. 167 1.409A-3(i)(4) (or successor provisions), (ii) no payment will be made on account of a Change in Control pursuant to clause160(i) in the first paragraph of Section 3(f) unless such Change in Control qualifies as a 8220change in control event8221 for purposes of Treas. Reg. 167 1.409A-3(i)(5) (or successor provisions) and such payment is permissible under Section 409A, (iii) a 8220separation from service8221 for purposes of these Terms and Conditions will mean a 8220separation from service8221 as defined in Treas. Reg. 167 1.409A-1(h) (or successor provisions), and (iv) if you must be treated as a 8220specified employee8221 within the meaning of Section 409A, any payments made on account of your separation from service will be made at the time specified above in these Terms and Conditions or, if later, on the date that is six months and one day following the date of your separation from service. To the extent that the Company determines that the Awards are subject to Section 409A and fail to comply with the requirements of Section 409A, the Company reserves the right (without any obligation to do so) to amend, restructure, terminate or replace the Awards in order to cause the Awards to either not be subject to Section 409A or to comply with the applicable provisions of Section 409A. EX-10.3 4 ex103termsandconditionsofp. htm EXHIBIT TERMS AND CONDITIONS PERFORMANCE SHARE AWARDS Ex. 10.3 Terms and Conditions of Performance Shares awarded under the Weyerhaeuser Company 2004 Long Term Incentive Plan Subject to the provisions of Section 3, the following vesting schedule will apply to the Awards earned in accordance with the schedule above (the 8220earned Awards8221): The earned Awards will vest over a period of four years. No part of the earned Awards will vest until the two-year anniversary of the Grant Date. On the two-year anniversary of the Grant Date, 50 of the earned Awards will vest, with an additional 25 of the earned Awards vesting on each of the third and fourth anniversaries of the Grant Date, respectively. As of the fourth anniversary of the Grant Date, 100 of the earned Awards will be vested. 2. 160160160160 Conversion of Awards and Issuance of Shares. 3232Upon each vesting of Awards pursuant to Section 1, one share of Company Common Stock shall be issued for each earned Award that vests on such date (the 8220Shares8221), subject to the terms of the Plan and this document. Thereafter, the Company will subtract from the vested Shares the whole number of Shares necessary to satisfy any required Tax Withholding Obligations as described in Section 9 hereof, and transfer the balance of the vested Shares to you. No fractional shares of Common Stock shall be issued under this Grant. Notwithstanding anything to the contrary, the delivery of vested Shares shall occur as soon as practicable after the vesting date specified in Section 1, but in all events by a date which is within 30 days following such date. 3. 160160160160 Termination of Employment Death Disability Change in Control. 3232In the event of your termination of employment, death or Disability or a Change in Control while Awards are outstanding, the following vesting and payment provisions will apply. Within 30 days following each applicable release date specified below, one share of Company Common Stock will be issued for each earned Award that is scheduled for release on such date, subject to the terms of the Plan and this document, and subject to any Tax Withholding Obligations as described in Section 9 hereof. (a) 160160160160 Termination of Employment at Age 62. If you terminate employment at age 62 or older (such termination being referred to herein as 8220retirement8221), and if clause (ii)160in the second paragraph of Section 3(f) is not applicable, you will be entitled to receive all or a portion of your earned Awards as set forth below, to be released on the same dates as provided for in Sections 1 and 2. Specifically, the Awards will be released according to the following schedule: i. 160160160160 If your retirement occurs on or after the one-year anniversary of the Grant Date, you will receive 100 of the Awards actually earned as of the end of 2014. The Awards will vest and be released as provided in Sections 1 and 2 above. Ii. 160160160160 If retirement occurs before the one-year anniversary of the Grant Date, the number of Awards will be pro-rated based on the number of months worked after the Grant Date. The number of Awards you are entitled to receive will be calculated by multiplying the actual number of Awards earned as of the end of 2014 by a fraction the numerator of which is the number of months worked after the Grant Date and the denominator of which is 12. The remaining Awards will be forfeited and no Shares will be issued or issuable with respect to such forfeited portion of the Awards. The pro-rated Awards will continue to vest according to the vesting schedule described in Section 1 above and be released as provided in Section 2 above. (b) 160160160160 Termination of Employment Due to Job Elimination. 3232If your employment is involuntarily terminated due to the elimination of your position with the Company or any Related Company and if clause (ii) in the second paragraph of Section 3(f) is not applicable, your Awards will continue to vest for one year following your termination and your earned and vested Awards will be released as provided in Section 2 above. The remaining unvested portion of your Awards as of the one-year anniversary of your termination date will be forfeited and no Shares will be issued or issuable with respect to such forfeited portion of the Awards. (c) 160160160160 Termination of Employment for Other Reasons. 32If your employment is terminated before your Awards fully vest under Section 1 and none of the other provisions under Section 3 apply, any Awards that are not vested under Section 1 on the date of your termination are immediately forfeited and no Shares will be issued or issuable with respect to such forfeited portion of the Awards. (d) 160160160160 Termination of Employment for Cause. 3232If your employment is terminated for Cause, then notwithstanding anything to the contrary herein, including, but not limited to, Section 3(a), any outstanding Awards will be immediately forfeited at the time the Company or Related Company first notifies you of your termination for Cause. In addition, if your employment or service relationship is suspended pending an investigation of whether you will be terminated for Cause, payment of all outstanding Awards may be suspended during such period of investigation to the extent permissible under Section 409A of the U. S. Internal Revenue Code (8220Section 409A8221). If, at the conclusion of such investigation, your employment or service relationship is terminated for Cause, all outstanding Awards shall be immediately forfeited and you shall be required to promptly repay to the Company any Shares relating to such Awards that were previously paid to you during the period of investigation. If any facts that would constitute termination for Cause are discovered after your termination of service, any outstanding Awards may be immediately terminated by the Committee. 8220Cause8221 means: (i) willful and continued failure to perform substantially your duties with the Company or any Related Company after the Company or Related Company delivers to you written demand for substantial performance specifically identifying the manner in which you have not substantially performed your duties (ii)160conviction of a felony or (iii) willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company or any Related Company. (e) 160160160160 Death or Disability. 3232In the event of your death or Disability while actively employed, you will receive 100 of your Awards actually earned as of the end of 2014, determined pursuant to Section 1. If your death or Disability occurs before the second anniversary of the Grant Date, all such earned Awards will be released on the second anniversary of the Grant Date. If your death or Disability occurs on or after the second anniversary of the Grant Date, any remaining earned Awards not already released pursuant to Section 2 will be released as of the date of your death or Disability. In the event of your death, payment will be made to your estate. As defined by the Companys Retirement Plan for Salaried Employees, 8220Disability8221 means 8220a medical condition in which a Participant is either entitled to total and permanent disability benefits under the Social Security Act or judged to be totally and permanently disabled by the Administrative Committee or any person or committee delegated by the Administrative Committee to make such determinations8221, provided, that only a condition which qualifies as a 8220disability8221 for purposes of Treas. Reg. 167 1.409A-3(i)(4) (or any successor provision) will constitute a Disability for purposes of these Terms and Conditions. (f) 160160160160 Change in Control. In the event a Change in Control occurs before the end of the performance period specified in Section 1, the target performance level will be deemed to have been achieved and you will be deemed to have earned 100 of your Awards. Following a Change in Control, your earned Awards will vest over the period set forth in Section 1 and be released at the time set forth in Section 2, subject to the provisions of Section1603, provided, however, that: (i) your then outstanding earned Awards will immediately fully vest as of the effective date of the Change in Control in the event that the Awards are not assumed, converted or replaced by the successor entity to the Company, and, to the extent permissible under Section 409A, will be released as of such date if such Change in Control qualifies as a 8220change in control event8221 for purposes of Treas. Reg. 167 1.409A-3(i)(5) (or successor provisions) and (ii) your earned Awards will immediately fully vest and be released, subject to Section 15, as of the date of your separation from service (as defined in Treas. Reg. 167 1.409A-1(h) (or successor provisions)), provided that such separation from service occurs within 24 full calendar months following the effective date of the Change in Control, and is either an involuntary separation by the Company (which term includes, for purposes of this Section 3(f), any Related Company and any successor entity) other than for Cause (as defined above in Section 3(d)) or a voluntary separation by you for Good Reason. 8220Good Reason8221 means, without your express written consent, the occurrence of any one or more of the following events: i.160160160160a material reduction in your authority, duties, or responsibilities existing immediately prior to the Change in Control ii.160160160160within two years following a Change in Control, the Companys requiring you to be based at a location that is at least 50 miles farther from your primary residence immediately prior to a Change in Control than is such residence from the Companys headquarters immediately prior to a Change in Control, except for required travel on the Companys business to an extent substantially consistent with your business obligations as of the Grant Date iii.160160160160a material reduction by the Company of your base salary as in effect immediately prior to the Change in Control iv.160160160160a material reduction in the benefits coverage in the aggregate provided to you immediately prior to the Change in Control provided, however, that reductions in the level of benefits coverage will not be deemed to be 8220Good Reason8221 if your overall benefits coverage is substantially consistent with the average level of benefits coverage of other executives who have positions commensurate with your position at the acquiring company or v.160160160160a material reduction in your level of participation, including your target-level opportunities, in any of the Companys short - and/or long-term incentive compensation plans in which you participate as of the Grant Date (for this purpose a material reduction shall be deemed to have occurred if the aggregate 8220incentive opportunities8221 are reduced by 10 or more) or a material increase in the relative difficulty of the measures used to determine the payouts under such plans provided, however, that reductions in the levels of participation or increase in relative difficulty of payout measures will not be deemed to be 8220Good Reason8221 if your reduced level of participation or difficulty of measures in each such program remains substantially consistent with the level of participation or difficulty of the measures of some or all other executives who have positions commensurate with your position at the acquiring company. In no event will your resignation be for Good Reason unless: (A) an event set forth above has occurred and you provide the Company with written notice thereof within 30 days after you have knowledge of the occurrence or existence of such event, which notice specifically identifies the event that you believe constitutes Good Reason, and (B) the Company fails to correct the event so identified in all material respects within 30 days after receipt of such notice. 4. 160160160160 Dividends. 3232Except as otherwise specifically provided in this document, you will not be entitled to any rights of a shareholder with respect to any outstanding Awards. Notwithstanding the foregoing, if the Company declares and pays dividends on Common Stock during the time period when Awards are outstanding, you will be credited with additional amounts for each Award equal to the dividend that would have been paid with respect to such Award if it had been an actual share of Common Stock, which amount shall remain subject to restrictions (and as determined by the Administrator may be reinvested in Awards) and shall vest and be paid concurrently with the vesting and payment of the Awards upon which such dividend equivalent amounts were paid. 5. 160160160160 No Rights as Shareholder until Vesting and Issuance of Shares. You will not have any voting or any other rights as a shareholder of the Common Stock with respect to the outstanding Awards. Upon vesting of the Awards and issuance of shares of Common Stock, you will obtain full voting and other rights as a shareholder of the Company. 6. 160160160160 Securities Law Compliance. Notwithstanding any other provision of this award document, you may not sell the Shares acquired upon vesting and issuance of the Awards unless such Shares are registered under the Securities Act of 1933, as amended (the 8220Securities Act8221), or, if such Shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such Shares must also comply with other applicable laws and regulations governing the Shares and you may not sell the Shares if the Company determines that such sale would not be in material compliance with such laws and regulations. 7. 160160160160 Non-Transferability of Awards. Notwithstanding any other provision of this award document, you may not sell, pledge, assign, hypothecate, transfer or dispose of your Awards in any manner prior to the distribution to you of shares of Company common stock in respect of such Awards. Awards shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, pursuant to Section1603(e), Shares may be issued to your estate in the event of your death. 8. 160160160160 Independent Tax Advice. Determining the actual tax consequences of receiving or disposing of the Awards and Shares may be complicated. These tax consequences will depend, in part, on your specific situation and also may depend on the resolution of currently uncertain tax law and other variables not within the control of the Company. You should consult a competent and independent tax advisor for a full understanding of the specific tax consequences to you of receiving or disposing of Awards and Shares. You are encouraged to consult with a competent tax advisor independent of the Company to obtain tax advice concerning the receipt, vesting or disposition of the Awards or Shares in light of your specific situation. 9. 160160160160 Taxes and Withholding. You are ultimately liable and responsible for all taxes owed in connection with the Awards, including federal, state, local, FICA, or foreign taxes of any kind required by law, regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Awards. The Company makes no representation or undertaking regarding the treatment of any tax withholding in connection with the Grant or vesting of the Awards or the subsequent sale of Shares issuable pursuant to the Awards. The Company does not commit and is under no obligation to structure the Awards to reduce or eliminate your tax liability. 32 When an event occurs in connection with the Awards (e. g. vesting) that the Company determines results in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any social tax obligation (the 8220Tax Withholding Obligation8221), to the extent required by law, and to the extent permitted by Section 409A, the Company may retain without notice from Shares issuable under the Awards or from salary or other amounts payable to you, whole Shares or cash having a value sufficient to satisfy your Tax Withholding Obligation. The Company may refuse to issue any Shares to you until your Tax Withholding Obligation is satisfied. In accordance with the Plan, an extended delay in satisfying your Tax Withholding Obligation may cause a forfeiture of the Shares. 10. 160160160160 Grant Not an Employment or Service Contract. Nothing in the Plan or any Award granted under the Plan will be deemed to constitute an employment contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate your employment or other relationship at any time, with or without cause. 11. 160160160160 No Right to Damages. You will have no right to bring a claim or to receive damages if any portion of the Grant is forfeited. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of your termination of service for any reason even if the termination is in violation of an obligation of the Company or a Related Company to you. 12. 160160160160 Binding Effect. The terms and conditions of this Grant will inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns. 13. 160160160160 Limitation on Rights No Right to Future Grants Extraordinary Item of Compensation. (a)160The Plan is discretionary in nature and may be suspended or terminated by the Company at any time. (b)160The Grant is a one-time benefit that does not create any contractual or other right to receive future grants of Awards. (c)160All determinations with respect to any such future grants, including, but not limited to, the times when grants will be made, the number of Awards subject to each grant, the grant price, and the time or times when each grant will be exercisable, will be at the sole discretion of the Company. (d)160Your participation in the Plan is voluntary. (e)160The value of the Grant is an extraordinary item of compensation that is outside the scope of your employment contract, if any. (f)160The Grant is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. (g)160Except as may otherwise be explicitly provided in the terms and conditions of this grant, the vesting of the Grant ceases upon your termination of employment for any reason and any unvested Awards will be forfeited. (h)160The future value of the Shares underlying the Grant is unknown and cannot be predicted with certainty. 14. 160160160160 Employee Data Privacy. By receiving this Grant, you: (a)160authorize the Company and your employer, if different, and any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan (b) waive any data privacy rights you may have with respect to such information and (c)160authorize the Company and its agents to store and transmit such information in electronic form. 15. 160160160160 Compliance with Section 409A. To the extent that the Company determines that the Awards are subject to Section 409A, these Terms and Conditions will be interpreted and administered in such a way as to comply with the applicable provisions of Section 409A to the maximum extent possible. In addition, if the Awards are subject to Section 409A and you must be treated as a 8220specified employee8221 within the meaning of Section 409A, any payments made on account of your separation from service for purposes of Section 409A will be made at the time specified above in these Terms and Conditions or, if later, on the date that is six months and one day following the date of your separation from service. To the extent that the Company determines that the Awards are subject to Section160409A and fail to comply with the requirements of Section 409A, the Company reserves the right (without any obligation to do so) to amend, restructure, terminate or replace the Awards in order to cause the Awards to either not be subject to Section 409A or to comply with the applicable provisions of Section 409A. Published on August 26th, 2011 by Alan L Sklover Gold without wisdom is but clay. 8211 Slovakian Proverb ACTUAL CASE HISTORY : Kathy was pleased. After 27 years as a Human Resources executive with a large textbook publisher, she had retired from full-time work about a year earlier, and had become a part-time HR Consultant. Over the years she had several times been awarded stock options by her employer. Because she had been with the company over 25 years, and because she was over 60 years of age, all of her stock options had vested. Over the years they had grown to represent a sizeable sum of money. Kathys stock options had been awarded to her under two different Company Stock Option Plans. One was established in 2000, and the other established in 2008. When she received each of her stock option grants, Kathy had been provided with copies of the Stock Option Plans, which she put in her financial files. But now Kathy was puzzled. In response to a recent inquiry she had made regarding her stock options, she had received a letter from a Third Party Administrator with a lot of confusing language. She came to us requesting a consultation to figure it all out. To prepare for Kathys consultation, we reviewed the Third Party Administrator letter, and the two Stock Option Plans. As we always do, at the start of the consultation we interviewed Kathy, and asked her many questions. It turned out we had bad news for Kathy. First, 30 of Kathys stock options had not been exercised before an applicable deadline in the first Stock Option Plan. Though the stock options had vested, under the Plans rules, they had to be exercised within 180 days of leaving employment. When Kathy came to us, it had already been 285 days since her last day of employment. Kathy thought that vesting meant all mine, to be enjoyed whenever she wanted. She did not know that while the stock options were, indeed, all hers, they had to be exercised or taken advantage of within a set period of time, or they would become no longer capable of being taken advantage of. Bottom line: they were lost. Second, another 40 of Kathys stock options had been forfeited, or taken back from her. Why Because the second Stock Option Plan provided that, if, during the one-year after separation from employment an employee engages in competitive conduct, that employee forfeits all further interests vested or not under the Plan. Bottom line: they were also lost. Frankly, we expected that Kathy, as a Human Resources professional, would have or should have known about the basic mechanisms of her long-term incentive compensation. Of course, such presumptions can be wrong quite often. Kathy was crestfallen, and with good reason. This was perhaps the most damaging event ever in her financial life. And at 61 years of age, it was especially troubling. LESSON TO LEARN : Over many years of counseling and representing executives in matters of their employment, compensation and severance, I have been surprised many times to find that my clients, though fully knowledgeable in their own industries and professions, had little knowledge of the details and intricacies of their compensation, and long-term incentive compensation. In a very general way, we divide employee compensation into three categories: (1) base salary, (2) short term incentive compensation, which is usually either in the form of commissions or bonus, and (3) long term incentive compensation (or LTIC), which is usually in the form of some kind of ownership interest in the company. The idea behind LTIC is to align the interests of the employees with the interests of the company and its other shareholders, and to incentivize employees to think about the companys long-term health and growth. The problems we see are not often derived from Human Resources failing to provide our clients with all necessary information about their LTIC. Nor are the problems derived from Benefits and Compensation failing to provide our clients with all necessary calculations. Instead, the problems we come upon most often arise from (a) clients not correctly comprehending the basic concepts of LTIC, and/or (b) clients failing to take into account the detailed risks and rewards of LTIC when navigating and negotiating their employment and career issues. As Kingman Brewster, former President of Yale University, once said, If you think education is expensive, try ignorance. WHAT YOU CAN DO : Educate yourself. First the basics later the complicated stuff. Lets take a few minutes to make sure you understand the basic concepts of long-term incentive compensation: 1. Equity Equity is a rather broad concept. It can be best understood as some kind of ownership interest in a company. Equity may take many different forms, and have many different names. Equity can also be certain or conditional in nature. The idea behind offering equity to employees either at the present moment, or possibly in the future is to incentivize employees to remain with the company (that is retention) for an extended period of time, and to think about their daily efforts as part of the companys long-term strategy (team building.) Some say equity grants to employees are meant primarily to encourage employees to think and act more as owners, and less as employees. There are an unlimited number of kinds of ownership interests that employers can offer employees. These would include the more common stock, restricted stock, and stock options, each of which will be discussed below. These would also include some uncommon forms of equity, with such names as phantom shares, success units, and Class B shares, derived from what are commonly referred to as share schemes. Incidentally, equity can be part of a corporation, a limited liability company, a partnership, or any other legal form in which business is conducted. However, it would not make sense to discuss equity in a not-for-profit enterprise. Equity can be granted in public companies (that is, companies whose shares are traded on open public markets) and privately held companies (that is, companies for which there is no open public market for their shares.) Granting equity, or promising to do so in the future, is especially popular among smaller and start-up companies, who cannot offer the same salaries that can be offered by larger, more established employers, but who seek to attract and retain the same high-quality employees. 2. The (Equity) Plan Almost without exception, when employees are granted long-term incentive compensation, there is prepared a formal Plan which sets down, in effect, all of the rules, regulations and procedures applicable to that share scheme. It is essential that you acquire a copy of the Plan, and read it carefully. Sometimes employers offer employees a Summary Plan Description (or SPD) of the Plan while helpful, the actual Plan, itself, contains all of the details that govern all matters related to the equity grant. 3. Stock Stock is the most common name given to equity in a company, and the form most people are familiar with. Those who own stock in a corporation have an ownership claim to a proportionate share of the corporations assets and profits. Generally, this ownership interest is subordinate to the claims of the companys creditors. Stock in a corporation is equivalent to membership units in a limited liability company (often called an LLC) or partnership units in a partnership or limited liability partnership (or LLP). Stock may be awarded to employees upon hiring (often called a hiring grant), upon certain events, such as achievement of company goals, or in order to encourage an employee to remain with the company (retention grants.) In general, the receipt of stock by an employee is considered taxable compensation to the extent that the stock is of higher value than the purchase price, if any. Sometimes, a hiring grant of stock is awarded to a new employee to replace the value of stock (or other equity) the new employee has lost by his or her leaving his or her former employer. (See forfeiture, below.) By law, there may be certain periods of time (called black out periods) during which employees cannot sell stock in their company, to make sure that inside information is not taken advantage of, either intentionally or accidentally. 4. RSU (An acronym for Restricted Stock Unit). RSUs are simply stock units that carry with them certain restrictions. They are generally acquired by means other than on an open market, such as a stock exchange. Examples of such restrictions may include (a) a limitation as to whom the stock can be sold, (b) a period of time before the stock can be sold, (c) the markets on which the stock may be sold, (d) restrictions set out in SEC regulations, among others. (Though not as common, RSUs may also have vesting restrictions.) As a general rule, RSUs are not registered with the SEC, and so cannot be sold on open markets. One restriction seen with increasing frequency is a requirement that the stock may only be sold back to the employer at a price determined by a formula. RSUs are being offered to employees with greater frequency, and may be granted outright, or sold at a discount. RSUs are commonly granted before or during corporate mergers and acquisitions, private placements, and during securities underwritings, such as prior to an initial public offering (IPO). When RSUs are given to an employee, the employee is typically prohibited from selling or otherwise disposing of stock for a defined period of time. Generally, with certain exceptions, the recipient of an RSU award may elect to treat the value of the RSU as taxable income either (a) when granted, or (b) when the restriction lapses. Generally, the fair market value of an RSU is not reduced as a result of the restriction, unless there is a permanent restriction upon the sale of the RSU. Have you been offered Employee-Ownership Interests Consider out Model Memo and Addendum Responding to an Offer of Employee Ownership from a New or Young Company .8221 A unique and sophisticated model to gain significant protections to both your employment and your equity. What To Say, and How to Say It. To get your copy just click here . Delivered by Email Instantly 5. Stock Option A stock option is simply a right, sometimes granted by an employer to an employee, to purchase a specified amount of stock (or other equity) at a certain price, during a certain time period. Stock Options are perhaps the most common form of long term incentive compensation offered to employees. They offer great versatility and flexibility to employers, and for employees can represent an opportunity to develop significant wealth with little investment. First, the employer generally sets a purchase price per share (the grant or strike price), which is often but not always discounted to the then-market price. Second, the employer generally sets a certain period of time before the employee can elect to make the purchase (called exercise of the option see below.) The hope is that, between the grant date and the exercise date, the price of the stock will increase, so that the employee can then buy low and sell high, and take the difference in those prices as profit. Of course, the price of the stock may not increase, and could even decrease. If the price of the stock is, for example, 10 per share, and the price the employee can pay for the shares is, for example, 15 per share, then this would be called under water options, which would be, at the moment, worthless. While under water, if time still remains for the employee to elect to purchase the stock, it is always possible that the share price will increase over the exercise or strike price, and in this way again become valuable. Third, so long as all terms of the stock option are complied with, the employee can decide if and when to (a) convert the options to stock by exercising the option, (b) sell the stock, and (c) retain the difference as profit. 6. Vesting Vesting is what happens when the employee becomes free to elect to take advantage of the stock option (or other form of equity.) For example, if a stock option grant says that 1/3 of the grant vests after one year, then on the one-year anniversary, 1/3 of the stock option grant vests and can thus be considered yours to take advantage of. Vesting may be viewed as removal of all conditions to ownership. Though many people think that vesting and non-forfeitable are synonymous, under the terms of many equity plans, there exist some circumstances in which employees can become de-vested, or divested of ownership of formerly vested equity. (See forfeiture, below.) Most commonly vesting takes place either (a) a set time after an option is granted, such as three years, or (b) a set time after an employee has worked for a company, such as 18 months. Some options may vest over time, such as 1/3 each year for three years. We call this serial vesting. The alternative is where options all vest at once, such as all options vesting 24 months after the stock option grant, which we refer to as cliff vesting. Leaving but Want Your Options Vested This is especially possible for those who are laid off without cause. We offer a Model Memo Requesting Vesting of Unvested Options When Laid Off. It shows you What to Say and How to Say It . To obtain a copy, just click here . Delivered by Email Instantly 7. Exercise Exercise of stock options generally refers to pulling the plug, flipping the switch or making the election to become an owner of vested equity. You exercise your options by whatever method is set down for doing so in the equity Plan, described above. Strict adherence to the exercise method is essential. Exercise of stock options must be during the Exercise Period, not before or after. Failure to exercise a stock option, or other election to take ownership of an equity grant, almost always results in that grant lapsing, or being lost forever. Sometimes an employer may grant employees the right to make a cashless exercise of stock options. What this means is this: suppose you have 10 stock options, each worth 20.00 to you, that is, a total of 200. And lets suppose the strike price for each stock option is 4, meaning that to exercise your stock options you need to pay 40. Instead of paying the 40 in cash, you can instead give up two of your stock options (worth 2 times 20, or a total of 40), and then keep the remaining 18 shares of stock, without having to come up with any of the strike price monies yourself. This is seen in perhaps 25 of stock option grants to employees. The last date upon which an employee can exercise his or her stock options (or election to take ownership of other equity) is called the expiration date. After the expiration date the stock option is no longer valid, and ceases to exist. 8. Accelerated Vesting This is simply vesting of equity at a faster rate than is originally anticipated. This is most commonly permitted in the event of a change in control of the company, or retirement from employment after a specified period of service to the employer. 9. Forfeiture Forfeiture is the loss of the equity, commonly due to the occurrence (or non-occurrence) of a specified condition or event. Depending on the rules of the Plan, even vested equity can be forfeited. The most common causes of forfeiture are (a) termination for cause, (b) violation of a non-competition agreement, and (c) violating some other rule, such as not providing the required resignation notice. Equity Plans often have many events of forfeiture. Some are quite clear some are not clear, but implied. Not paying attention to what acts, events or circumstances may lead to forfeiture is perhaps the most common, and most expensive, mistake that employees make regarding long-term incentive compensation. 10. Good Leaver or Bad Leaver When employees depart from their employers, how they do so often determines whether they (a) enjoy accelerated vesting, (b) continue to vest according to a pre-determined schedule, (c) lose all further vesting, or even (d) suffer forfeiture of unvested or even vested equity. Those who leave in the ways preferred by their employers are commonly referred to as Good Leavers, and are treated more advantageously in terms of equity. Those who leave in ways that are not preferred by their employers often suffer in terms of their equity as a result. One of the most valuable Checklists we offer on our Model Letters Blogsite section is our Model Equity and Benefit Inventory. This is designed to help you keep a record of your equity entitlements, important vesting and exercise dates, and treacherous forfeiture conditions. Its a great way to prevent your loss of a whole lot of money. If interested in obtaining a copy, simply click here . My experience counseling, strategizing and representing employees regarding their long-term incentive compensation can be summed up this way: The road to the gold mine is full of land mines. Dont presume that you will enjoy the benefits of long-term incentive compensation merely by remaining employed there are innumerable other precautions and measures you need to take. This is the way to start. SkloverWorkingWisdom emphasizes smart negotiating and navigating for yourself at work. Negotiation and navigation of work and career issues requires that you think out of the box, and avoid risks at every point in your career. Knowing ways to resolve disputes when they arise is a distinct advantage in navigating workplace life. Knowing ways to avoid disputes is even more advantageous. Learning the ins and outs of doing so is what we are here for. Now its up to you. Always be proactive. Always be creative. Always be persistent. Always be vigilant. And always do what you can to achieve for yourself, your family, and your career. Take all available steps to increase and secure employment rewards and eliminate or reduce employment risks. Thats what SkloverWorkingWisdom is all about. A note about our Actual Case Histories. In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual. Please Note. This Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale. 2011, Alan L. SkloverAll Rights Reserved. Commercial Use Prohibited. Share this: Heres a simple way to say Thanks More Positive Feedback Hello, Alan Sklover You have changed my life in ways neither you nor I could imagine. Three years ago, after becoming familiar with your blog, I called your office for a telephone consultation. I was being bullied by a new supervisor. He was threatening to place me on a Performance Improvement Plan after 9 years of stellar reviews and 3 promotions. It left me feeling emotionally wiped out, as I was anxious, not sleeping and not eating. Not only did you help me in a legal and negotiating sense to obtain a severance double what the company was offering, you counseled me to focus on the important things in life: my health and my family. I began taking better care of myself, bought an RV, and have been traveling the country intermittently with my family between consulting projects. The bonding and happiness of my family is indescribable, and while I now make slightly less money, I am more satisfied being out of the rat race. I have told other friends about your blogsite, and hope you can help them as much as you have helped me. Thank you, Danielle Towson, Maryland New Alan Sklovers Other Classic
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