Form of Performance-Based Restricted Share Unit Award Agreement under Crane Co. 2018 Stock Incentive Plan

                        

                    

Dear <first_name> <last_name>:

I am pleased to advise you that the Management Organization & Compensation Committee of the Board of Directors of Crane Co., pursuant to the Company’s 2018 Stock Incentive Plan, has granted you a performance-based restricted share unit award (“Units”), entitling you to receive a number of shares of common stock of Crane Co. determined as set forth below in the event the applicable conditions on the award are satisfied. The key terms of your award are summarized below, but your award is subject to all of the terms and conditions set forth in the attached Annex A, Restricted Share Unit Award – Performance-Based Vesting, and the attached Annex B, Performance Vesting Conditions, each of which is incorporated herein by reference.

In conjunction with this award, you are required to sign a Confidentiality & Non-competition agreement, which you will receive in a separate email. Please sign, scan and return the Confidentiality & Non-competition agreement to ***@***.

If Crane Co. is not in receipt of your executed Confidentiality & Non-competition agreement and/or you have not accepted this grant online within 30 days of receipt of this letter, this grant will be null and void.

Your online acceptance of this grant and return of the Confidentiality & Non-competition agreement will constitute a binding agreement for the award set forth in this letter and subject to the terms and conditions set forth in Annex A and Annex B (Effective Date: <award_date>).

        

Very truly yours,

                            

Max H. Mitchell

President and Chief Executive Officer

    

DATED AS OF <award_date>

The Company hereby grants to the recipient of the letter of the President and/or Secretary of the Company (“Letter”) to which this Annex A is attached (“Employee” or “you”), and the Employee accepts, an award (the “Award”) of a number of Performance-Based Restricted Share Units (“Units”), which represent a contingent right to receive shares of Crane Co. common stock, par value $1.00 (“Crane Shares”). Annex B to the Letter sets forth certain performance-based vesting conditions applicable to this Award. The Letter, this Annex A and Annex B together constitute the restricted share unit award agreement between the parties (the “Agreement”).

The Award is granted under, and is subject to, the Crane Co. 2018 Stock Incentive Plan (the “Plan”). Unless otherwise defined herein, all capitalized terms have the meanings ascribed to them in the Plan. A Prospectus for the 2018 Stock Incentive Plan is attached to this Agreement as Annex C.

1. DEFINITIONS

For purposes of the Award, and for purposes of interpreting the terms of the Plan, the following terms shall have the following meanings:

“Competition” solely because the Employee beneficially owns less than 5% of the combined voting power of all issued and outstanding voting securities of a publicly held corporation.

2. RESTRICTIONS AND RIGHTS

(i)    In the event of the Employee’s death or Permanent Disability, the Award will become earned and payable to the Employee based on the actual performance determined after the end of the Performance Period without being pro-rated due to the termination of employment.

(ii)    In the event of the Employee’s Qualifying Retirement during the Performance Period, the Award will become earned and payable to the Employee based on the actual performance determined after the end of the Performance Period without being pro-rated due to the termination of employment; provided, however, that to the extent permissible under applicable law, if the Employee engages in Competition at any time before the end of the Performance Period, the Award will be forfeited.

(iii)    In the event of the Employee’s involuntary termination for Cause after the end of the Performance Period but before issuance of Crane Shares in accordance with Section 3(a) below, the Award will be forfeited.

    

        

The Restrictions on the Units shall automatically lapse:

        

Notwithstanding the foregoing or any other provision of this Award or the Plan to the contrary, if the Employee shall cease to be employed by the Company or by a Subsidiary by reason of a Qualifying Retirement during the Restriction Period, the Restrictions on the Units shall continue to lapse in accordance with the schedule set forth in this Section 2(c)(ii) as if the Employee’s employment had not terminated; provided, however, that to the extent permissible under applicable law, if the Employee engages in Competition at any time before the earlier of the events in Section 2(c)(ii)(A) or (B), then those Units as to which the Restrictions have not yet lapsed will be forfeited.

In addition, and notwithstanding the foregoing or any other provision of this Award or the Plan to the contrary, in the event of the Employee’s Qualifying Termination within two years after the Change in Control, the Restrictions on the Units shall automatically lapse upon such Qualifying Termination; provided, however, that if the Employee is otherwise eligible for Qualifying Retirement at the time of such Qualifying Termination, the Restrictions shall instead lapse at the earlier of the events in Section 2(c)(ii)(A) or (B) above as if the Employee’s employment had not terminated but without regard to any requirement not to engage in Competition that would otherwise apply in connection with a Qualifying Retirement.    

 

3. ADMINISTRATION OF UNITS

Control, the applicable number of Crane Shares (subject to adjustment in connection with the Change in Control in accordance with Section 10 of the Plan) shall be issued on or as soon as administratively practicable (but not more than 45 days) after the applicable date the Restrictions lapse as provided in Section 2(c)(ii).

4. TERMINATION OF EMPLOYMENT

Except as otherwise provided for in Sections 2(b) and (c), the Employee’s termination of employment during the Performance Period (or the Restriction Period, if applicable) shall result in the forfeiture of all Units.

5. COVENANTS BY EMPLOYEE

6. NO COVENANT OF EMPLOYMENT

Neither the granting of any award of Units, nor the execution and delivery of any document evidencing such award, shall constitute, or be evidence of, any agreement or understanding, express or implied, on the part of the Company or its Subsidiaries to employ the Employee for any specific period.

7. ADMINISTRATION AND INTERPRETATION OF PLAN

AND AGREEMENT

In the event of any conflict between the terms herein and those of the Plan, the provisions of the Plan shall prevail.

The Committee shall have full authority and discretion, subject only to the terms of the Plan, to decide all matters relating to the administration or interpretation of the Plan and the Award thereunder, and all such action by the Committee shall be final, conclusive, and binding upon the Company and the Employee. The Committee shall have full authority and discretion to modify at any time the terms and conditions of the Award, the stock certificate legend(s) and any other instrument evidencing this Award, provided that no such modification shall increase the benefit under the Award beyond that which the Committee could have originally granted at the time of the Award, or shall impair the rights of the

Employee under the Award except in accordance with the Plan, or any applicable agreement or applicable law, or with consent of the Employee.

The Award is deemed to be issued in, and shall be governed by the laws of, the State of Delaware. There have been no representations to the Employee other than those contained herein.

This Agreement sets forth a complete understanding between the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements and understandings with respect thereto. Any modification, amendment or waiver to this Agreement will be effective only if it is in writing signed by the Company and the Employee. The failure of any party to enforce at any time any provision of this Agreement shall not be construed to be a waiver of that or any other provision of this Agreement.

The Company’s obligations under this Agreement shall be unfunded and unsecured, and no special or separate fund shall be established and no other segregation of assets shall be made. The rights of the Employee under this Agreement shall be no greater than those of a general unsecured creditor of the Company. In addition, the Units shall be subject to such restrictions as the Company may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which Crane Shares are then listed, any Company policy and any applicable federal or state securities law.

If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version differs from the English version, the English version shall control.

The Company reserves the right to impose other requirements on your participation in the Plan, on the Award and on any Crane Shares acquired under the Plan, to the extent that the Company determines it is necessary or advisable in order to comply with local laws or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

8. AMENDMENT

The terms of the Award shall be subject to the terms of the Plan as the Plan may be amended from time to time by the Board of Directors of the Company unless any Plan amendment by its terms or by its clear intent is inapplicable to the Award.

9. NOTICE

The Company may, in its sole discretion, decide to deliver any documents related to this Award or future Awards that may be granted under the Plan by electronic means or request the Employee’s consent to participate in the Plan by electronic means. The Employee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

Any notice which either party hereto may be required or permitted to give to the other shall be in writing and may be delivered personally, by intraoffice mail, by fax, by electronic mail or other electronic means, or via a postal service, postage prepaid, to such electronic mail or postal address and directed to

such person as the Company may notify the Employee from time to time; and to the Employee at the Employee’s electronic mail or postal address as shown on the records of the Company from time to time, or at such other electronic mail or postal address as the Employee, by notice to the Company, may designate in writing from time to time.

10. WITHHOLDING TAXES

Regardless of any action the Company takes with respect to any or all income tax, payroll tax or other tax-related withholding (“Tax-Related Items”), the Employee acknowledges that the ultimate liability for all Tax-Related Items owed by the Employee is and remains the Employee’s responsibility and that the Company (i) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant or vesting of the Units and the subsequent sale of shares acquired upon vesting; and (ii) does not commit to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Employee’s liability for Tax-Related Items.

Prior to vesting of the Units, the Employee shall pay or make adequate arrangements satisfactory to the Company to satisfy all withholding obligations of the Company. In this regard, the Employee authorizes the Company to withhold all applicable Tax-Related Items legally payable by the Employee from the Employee’s wages or other cash compensation paid to the Employee by the Company or from proceeds of the sale of the shares. Alternatively, or in addition, to the extent permissible under applicable law, the Company may (i) sell or arrange for the sale of shares that the Employee acquires to meet the withholding obligation for Tax-Related Items, and/or (ii) withhold in shares, provided that the Company only withholds the amount of shares necessary to satisfy the minimum withholding amount. Finally, the Employee shall pay to the Company any amount of Tax-Related Items that the Company may be required to withhold as a result of the Employee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue and deliver shares in payment of any earned Units if the Employee fails to comply with the Employee’s obligations in connection with the Tax-Related Items as described in this Section 10.

11. COMPLIANCE WITH SECTION 409A

For purposes of this Award, and solely to the extent necessary or advisable to comply with any applicable requirements of Section 409A of the Code and the regulations thereunder, references to “termination of employment” shall be deemed to mean a “separation from service” as that term is defined under Treasury Reg. Section 409A-1(h). Notwithstanding any other provisions of this Agreement to the contrary, and solely to the extent necessary for compliance with Section 409A and not otherwise eligible for exclusion from the requirements of Section 409A, if the Employee becomes entitled to settlement of any Units in connection with the Employee’s termination of employment (other than due to death) and the Employee is deemed to be a “Specified Employee” (as defined under Section 409A of the Code) as of the date of such termination of employment, no settlement or other distribution required to be made to the Employee hereunder (including any payment of cash, any transfer of property and any provision of taxable benefits) shall be made earlier than the date that is six (6) months and one day following the date of the Employee’s termination of employment with the Company.

12. RECOVERY OF COMPENSATION IN CERTAIN CIRCUMSTANCES

Notwithstanding any other provision of this Agreement, if the Committee determines that the Company is required to restate its financial statements due to material noncompliance with any financial reporting requirement under the law, whether such noncompliance is the result of misconduct or other circumstances, the Employee shall be required to reimburse the Company for any amounts earned or payable with respect to this Award to the extent required by and otherwise in accordance with applicable law and any Company policies.

13. DATA PRIVACY

The Employee voluntarily acknowledges and consents to the collection, use, processing and transfer of personal information as described in this Section. The Employee is not obliged to consent to such collection, use, processing and transfer of personal information. However, failure to provide the consent may affect the Employee’s ability to participate in the Plan. The Company and its Affiliates hold certain personal information about the Employee, including the Employee’s name, home address, business segment and unit, PeopleSoft ID (if available), hire date, Social Security number or other National ID number, salary, job title, any shares of stock or directorships held in the Company and details of any shares of stock awarded, cancelled, purchased, vested, unvested or outstanding in the Employee’s favor, for the purpose of managing and administering the Plan (“Data”). The Company and its Affiliates will transfer Data among themselves as necessary for the purpose of implementation, administration and management of the Employee’s participation in the Plan, and the Company and its Affiliates may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area or elsewhere throughout the world in countries that may not provide an equivalent level of data protection to the laws in the Employee’s home country, such as the United States. The Employee authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Employee’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and the subsequent holding of Shares on the Employee’s behalf by a broker or other third party with whom the Employee may elect to deposit any Shares acquired pursuant to the Plan. The Employee may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect the Employee’s ability to participate in the Plan.

14. ADDITIONAL ACKNOWLEDGEMENTS

By entering into this Agreement and accepting the Award evidenced hereby, you acknowledge and agree that:

(a)    the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, suspended or terminated by the Company at any time, as provided in the Plan and this Agreement;

(b)    the Award is voluntary and occasional and does not create any contractual or other right to receive future Awards under the Plan, or benefits in lieu of Awards, even if Awards have been awarded repeatedly in the past;

(c)    all decisions with respect to future Awards, if any, will be at the sole discretion of the Company;

(d)    your participation in the Plan shall not create a right to further employment with your actual employer (the “Employer”) and shall not interfere with the ability of the Employer to terminate your employment relationship at any time, with or without cause;

(e)    you are voluntarily participating in the Plan;

(f)    the Award is an extraordinary item, and any amounts received from the Award are outside the scope of your employment contract, if any;

(g)    the Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer or any subsidiary of the Company;

(h)    the Award is not intended to replace any pension rights or compensation;

(i)    in no event will the Award be interpreted to form an employment contract or relationship with the Company or any Subsidiary;

(j)    the future value of the Award is unknown and cannot be predicted with certainty;

(k)    if you receive Crane Shares upon settlement of the Award, the value of those shares may increase or decrease;

(l)    in consideration of the Award, no claim or entitlement to compensation or damages shall arise from the forfeiture, expiration or termination of the Award resulting from your termination of employment with the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim;

(m)    notwithstanding any terms or conditions of the Plan to the contrary, in the event of involuntary termination of your employment, your rights under the Award, if any, will terminate at the time and in accordance with the terms set forth in this Agreement and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of involuntary termination of employment (whether or not in breach of local labor laws), your rights under the Award after termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law; the Committee shall have the exclusive discretion to determine when you are no longer actively employed for purposes of the Award;

(n)    it is your sole responsibility to investigate and comply with any exchange control laws applicable to you in connection with the Award or its exercise; and

(o)    the Award and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, takeover or transfer of liability.

The Company hereby grants to the recipient of the letter of the President and/or Secretary of the Company (“Letter”) to which this Annex B is attached (“Employee”), and the Employee accepts, an award (the “Award”) of a number of Performance-Based Restricted Share Units (“Units”), which represent a contingent right to receive shares of Crane Co. common stock, par value $1.00 (“Crane Shares”). Annex A to the Letter sets forth certain additional terms and conditions to the Award. This Annex B to the Letter sets forth certain performance-based vesting conditions applicable to this Award, as referenced in Section 2(a) of Annex A. The Letter, Annex A and this Annex B together constitute the restricted share unit award agreement between the parties (the “Agreement”).

The Award is granted under, and is subject to, the Crane Co. 2018 Stock Incentive Plan (the “Plan”). Unless otherwise defined herein, all capitalized terms have the meanings ascribed to them in the Plan or as set forth in Annex A.

1. DEFINITIONS

For purposes of the Award, and for purposes of interpreting the terms of the Plan, the following terms shall have the following meanings:

2. PERFORMANCE-BASED VESTING SCHEDULE

Subject to the provisions of Section 3 below, the number of Units earned shall be based on the relative performance of the Company’s Total Shareholder Return compared to that of the companies that comprise the Comparator Group, based on the percentile performance of the Company against those Comparator Group companies over the Performance Period, as follows:

For performance between Threshold and Target or between Target and Maximum, the percentage of Units earned shall be interpolated on a straight line basis.

3. LIMITATIONS

Notwithstanding any provision herein to the contrary, the number of Units earned under this Award shall be subject to the following limitations:

4. DETERMINATIONS

All calculations and determinations under this Annex B, including without limitation (i) the determination of Total Shareholder Return for any company, (ii) the Company’s percentile ranking, (iii) the percentage of Units earned and (iv) the application of the limitations under Section 3, shall be made by the Committee in the exercise of its sole discretion, and all such calculations and determinations shall be final.