Verint Systems Inc. Performance-Based Restricted Stock Unit Award Agreement (Executive)
This agreement is between Verint Systems Inc. and an executive employee, granting performance-based restricted stock units (RSUs) under the company’s stock incentive plan. The RSUs vest only if specific company performance goals, primarily revenue targets over set periods, are met. Vesting may also depend on the company’s compliance with SEC reporting and stock exchange listing requirements. Unvested RSUs are forfeited if not vested within ten years or if employment ends before vesting. Shares cannot be resold until registered with the SEC. The agreement outlines all terms and conditions for the award.
[Address]
Granted To: | [Name] [Social Security Number] | |
Grant Date: | [Date] | |
Target Number of Units Granted: | [Number] [(with the opportunity to earn up to [Number]2 additional Units)] | |
Price Per Unit: | $0.00 |
1 | Applicable to UK Grantees. | |
2 | Not to exceed 100% of the Target Number of Units (i.e., if the Target Number of Units is 100, the opportunity for additional Units may not exceed 100, for a grand total of 200). |
Vesting Schedule: | The Restricted Stock Units granted hereby shall vest on the dates set forth in the Agreement, upon the achievement [(the Vesting Dates)] of specified performance goals[; provided, however, that if either of the following events has not occurred when Restricted Stock Units would otherwise vest (upon the achievement of such performance goals), such Restricted Stock Units will not vest until the later of such events to occur: | |
[(1) the date the Company becomes current with its reporting obligations under the Securities Exchange Act of 1934, as amended; and] | ||
[(2) the date on which the Companys shares of common stock are listed on one or more established stock exchanges or national market systems, including without limitation The Nasdaq Global Market; and] | ||
[(3) the date the Company has sufficient available capacity under one or more of its existing equity plans or a new shareholder-approved equity incentive plan for all equity awards granted on the date of this award which remain outstanding at such time to vest in compliance with the Nasdaq restriction which provides that only legacy Witness employees and new Company hires since May 25, 2007 may receive awards under the Witness Systems, Inc. Amended & Restated Stock Incentive Plan assumed by the Company in connection with the merger with Witness.] | ||
Restrictions on Re-Sale: | Regardless of the vesting of your Award, in no event shall you be allowed to re-sell the shares underlying this grant of Restricted Stock Units until the Company has an effective registration statement under the Securities Act of 1933, as amended, relating to the shares desired to be sold. |
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Termination Date: | Notwithstanding any other provision of this Notice or of the related Performance-Based Restricted Stock Unit Award Agreement, if Restricted Stock Units have not vested by the tenth anniversary of the Date of Grant, such Restricted Stock Units shall be forfeited by Grantee as of such date. | |
[In addition, any unvested Restricted Stock Units shall be cancelled if your employment terminates prior to the vesting on such units as described above.] |
Verint Systems Inc. | ||||
By: | ||||
Name: | ||||
Title: |
Signature: | Date: | |||||||||
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1 | RESTRICTED STOCK UNITS; VESTING | |
1.1 | Grant of Performance-Based Restricted Stock Units. |
(a) | Subject to the terms of [the Plan and] [this Agreement,] the Company hereby grants to Grantee the targeted number of performance-based Restricted Stock Units indicated in the Notice of Grant (the Target Units), vesting of which depends upon the Companys performance during each Performance Period (defined below), as specified for each such Performance Period. |
(b) | Grantees right to receive all, any portion of, or more than the Target Units will be contingent upon the Companys achievement of specified levels of Revenue measured over the following periods (each, a Performance Period and, collectively, the Performance Periods): |
(i) | Payment of the first one-third of the Target Units (the [2009] Units) will be contingent upon the achievement of specified levels of Revenue during the period from [February 1, 2009 through January 31, 2010] (the [2009] Period); |
(ii) | Payment of the second one-third of the Target Units (the [2010] Units) will be contingent upon the achievement of specified levels of Revenue during the period from [February 1, 2010 through January 31, 2011] (the [2010] Period); and |
3 | Applicable to UK Grantees. |
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(iii) | Payment of the final one-third of the Target Units (the [2011] Units) will be contingent upon the achievement of specified levels of Revenue during the period from [February 1, 2011 through January 31, 2012] (the [2011] Period). |
(c) | The applicable Revenue definition and target, Threshold level, and Maximum level (as described below) for each Performance Period will be set by the Board or Committee prior to the conclusion of each such Performance Period, and to the extent practicable, within the first 90 days of each such Performance Period, and will be attached in a performance matrix (the Performance Matrix) as an exhibit to this Agreement. A sample Performance Matrix is set forth on Exhibit A hereto. | |
1.2 | Vesting of Performance-Based Restricted Stock Units. |
(a) | Below Threshold. If upon conclusion of the relevant Performance Period, Revenue for that Performance Period falls below the Threshold level, as set forth in the applicable Performance Matrix, no Restricted Stock Units for that Performance Period shall become vested. |
(b) | Between Threshold and Target. If, upon conclusion of the relevant Performance Period, Revenue for that Performance Period equals or exceeds the Threshold level, but is less than the Target level, as set forth in the applicable Performance Matrix, a portion of the Target Units eligible for vesting during such Performance Period (of between the percentage specified on the Performance Matrix opposite the Threshold Revenue level and 100%) will vest based on where actual Revenues for such Performance Period fall between the Threshold level and the Target level. If the foregoing calculation would result in the vesting of a fraction of a Unit, the result of the calculation will be rounded down to the nearest whole Unit. |
(c) | Between Target and Maximum. If, upon the conclusion of the relevant Performance Period, Revenue for that Performance Period equals or exceeds the Target level, but is less than the Maximum level, as set forth in the applicable Performance Matrix, 100% of the Target Units for such Performance Period will become vested, plus, if the Notice of Grant indicates that units in excess of the Target Units are eligible to be earned, an additional number of Restricted Stock Units (of between 0% and the maximum percentage of the Target Units for such Performance Period specified on the Performance Matrix opposite the Maximum Revenue level) based on where actual Revenues for such Performance Period fall between the Target level and the Maximum level. If the foregoing calculation would result in the vesting of a fraction of a Unit, the result of the calculation will be rounded down to the nearest whole Unit. |
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(d) | Equals or Exceeds Maximum. If the Notice of Grant indicates that units in excess of the Target Units are eligible to be earned, and upon conclusion of the relevant Performance Period, Revenue for that Performance Period equals or exceeds the Maximum level, as set forth in the applicable Performance Matrix, the maximum percentage of the Target Units for such Performance Period specified on the Performance Matrix opposite the Maximum Revenue level shall become vested. |
(e) | [Change in Control. Upon the occurrence of a Change in Control (other than a Hostile Change in Control), the Committee may, in its sole discretion, elect to accelerate the vesting of all unvested Restricted Stock Units. In the event of a Hostile Change in Control, such accelerated vesting shall occur automatically upon the occurrence of such Hostile Change in Control. At any time before a Change in Control, the Committee may, without the consent of the Grantee (i) require the entity effecting the Change in Control or a parent or subsidiary of such entity to assume this Award or substitute an equivalent cash award therefor or (ii) terminate and cancel all outstanding Restricted Stock Units upon the Change in Control. In connection with any such termination and cancellation of outstanding Restricted Stock Units upon a Change in Control, the Committee may, in its discretion, cause the payment to the Grantee for each unvested Restricted Stock Unit equal to the Fair Market Value of the Common Stock on the date of the Change in Control. For the purposes of this Section, Restricted Stock Units under this Award shall be considered assumed if, following the closing of the Change in Control transaction, each Restricted Stock Unit confers the right to receive cash in an amount equal to the consideration (if such consideration was cash) or the fair market value of the consideration (if such consideration was stock, other securities, or property) received in such transaction by holders of Common Stock for each share of Common Stock held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock).] | |
(f) | Conditions; Forfeiture. |
(i) | Any Restricted Stock Units that do not become vested based on the foregoing provisions with respect to a given Performance Period will be automatically forfeited by Grantee without consideration. |
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(ii) | Except as otherwise provided herein, Grantees right to receive any of the Restricted Stock Units is contingent upon his or her remaining in the Continuous Service of the Company or a Subsidiary [or Affiliate]4 through the end of the relevant Performance Period. If Grantees Continuous Service terminates for any reason, all Restricted Stock Units which are then unvested shall [be forfeited by Grantee as of the date of termination, unless otherwise determined by the Committee in its sole discretion. In the event of any such forfeiture, all such forfeited Restricted Stock Units shall become the property of the Company.]/[, unless otherwise determined by the Board of Directors of the Company (the Board) or a committee thereof designated to administer the Award (the Committee) in its sole discretion, be cancelled and the Company shall thereupon have no further obligation thereunder.] For the avoidance of doubt, Grantee acknowledges and agrees that he or she has no expectation that any Restricted Stock Units will vest on the termination of his or her Continuous Service for any reason and that he or she will not be entitled to make a claim for any loss occasioned by such forfeiture as part of any claim for breach of his or her employment or service contract or otherwise. |
(iii) | A Grantees Continuous Service shall not be considered interrupted in the case of any approved leave of absence. An approved leave of absence shall include sick leave, military leave, or any other leave that is required by statute or promised by contract, by Company policy, or by other authorization of the Company. Any other leave of absence will be considered unauthorized and Grantees Continuous Service will be considered terminated for purposes of this Agreement at the start of such unauthorized leave. Notwithstanding the foregoing, unless Grantees right to return from an authorized leave is guaranteed by statute or by contract, if an approved leave of absence exceeds six (6) months in any single Performance Period, Grantee will forfeit all of the Restricted Stock Units that are or were eligible for vesting during such Performance Period, on the date such authorized leave exceeds six (6) months in duration; provided, however, that the Committee shall have discretion to waive the effect of the foregoing forfeiture provision or lengthen the six month period before a forfeiture occurs to the extent necessary to comply with applicable tax, labor, or other law or based on the particular facts and circumstances of the leave in question. |
(iv) | [Notwithstanding anything to the contrary contained herein, if either of the following events has not occurred on the date Restricted Stock Units would otherwise vest hereunder, such Restricted Stock Units will not vest until the later of such events to occur: (1) the date the Company becomes current with its reporting obligations under the Securities Exchange Act of 1934, as amended; and (2) the date on which the Companys Common Stock is listed on one or more established stock exchanges or national market systems, including without limitation The Nasdaq Global Market.] |
4 | Not applicable to UK Grantees. |
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[(iv) | Notwithstanding anything to the contrary contained herein, if any of the following events has not occurred on the date Restricted Stock Units would otherwise vest hereunder, such Restricted Stock Units will not vest until the latest of such events to occur: (1) the date the Company becomes current with its reporting obligations under the Securities Exchange Act of 1934, as amended; (2) the date on which the Companys Common Stock is listed on one or more established stock exchanges or national market systems, including without limitation The Nasdaq Global Market; and (3) the date the Company has sufficient available capacity under one or more of its existing equity plans or a new shareholder-approved equity incentive plan for all equity awards granted on the date of this award which remain outstanding at such time to vest in compliance with the Nasdaq restriction which provides that only legacy Witness employees and new Company hires since May 25, 2007 may receive awards under the Witness Systems, Inc. Amended & Restated Stock Incentive Plan assumed by the Company in connection with the merger with Witness.] |
(v) | [Notwithstanding anything to the contrary contained herein, the issuance of Shares (as defined below) upon the vesting of a Restricted Stock Unit shall be delayed in the event the Company reasonably anticipates that the issuance of such shares would constitute a violation of federal securities laws or other applicable law [or Nasdaq rule]. If the issuance of the Shares is delayed by the provisions of this paragraph, such issuance shall occur at the earliest date at which the Company reasonably anticipates issuing such shares will not cause a violation of federal securities laws or other applicable law [or Nasdaq rule]. For purposes of this paragraph, the issuance of Shares that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not considered a violation of applicable law.] |
(vi) | Notwithstanding any other provision of the Notice of Grant or of this Agreement, if Restricted Stock Units have not vested by the tenth anniversary of the Date of Grant, such Restricted Stock Units shall be forfeited by Grantee as of such date. In the event of any such forfeiture, all such forfeited Restricted Stock Units shall become the property of the Company. |
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(g) | Determination of Earned Award. Within 60 days following the Boards receipt of the Companys audited financial statements covering the relevant Performance Period, the Board or the Committee will determine (i) whether and to what extent the goals relating to Revenue have been satisfied for each Performance Period, (ii) the number of Restricted Stock Units that shall have become vested hereunder and (iii) whether all other conditions to receipt of the Shares have been met. The Board or Committees determination of the foregoing shall be final and binding on Grantee absent a showing of manifest error. Notwithstanding the any other provisions of this Agreement, no Restricted Stock Units for a given Performance Period shall vest until the Board or Committee has made the foregoing determinations for such Performance Period [(the date of such determination for each Performance Period a Vesting Date)]. In the case of the [2011] Period, such determination shall not be final until on or after the third anniversary of the Date of Grant. | |
(h) | Issuance of Shares. |
(i) | If and when the Restricted Stock Units vest in accordance with the terms of this Agreement without forfeiture, and upon the satisfaction of all other applicable conditions as to the Restricted Stock Units, one Share shall be issuable to Grantee for each Restricted Stock Unit that vests on such date, which Shares, except as otherwise provided herein or in the Notice of Grant, will be free of any Company-imposed transfer restrictions. |
(ii) | As soon as administratively practicable following the vesting of Restricted Stock Units in accordance with the terms of this Agreement [(but in no event later than March 15th of the year following the year in which such vesting occurs)], and subject to the satisfaction of all other applicable conditions and provisions hereunder, including, but not limited to, the payment by Grantee of all applicable withholding taxes, the Company shall issue the applicable Shares and, at its option, (a) deliver or cause to be delivered to Grantee a certificate or certificates for the applicable Shares or (b) transfer or arrange to have transferred the Shares to a brokerage account of Grantee designated by the Company. |
(iii) | [Subject to any other provision of this Agreement which would further delay the delivery of such Shares, the Shares underlying any portion of this Award which vests shall not be delivered to the Grantee until the earliest of the following events: (a) the date Grantees employment with the Company (or a Subsidiary or Affiliate) is terminated (by either party), (b) the date the Company has an effective registration statement under the Securities Act of 1933, as amended, covering the resale of such Shares, and (c) the date that the short-term deferral period under Section 409A of the Code expires with respect to such vested Shares. |
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(iv) | Notwithstanding anything to the contrary contained herein, the issuance of Shares (as defined below) upon the vesting of a Restricted Stock Unit shall be delayed in the event the Company reasonably anticipates that the issuance of such shares would constitute a violation of federal securities laws or other applicable law or Nasdaq rule. If the issuance of the Shares is delayed by the provisions of this paragraph, such issuance shall occur at the earliest date at which the Company reasonably anticipates issuing such shares will not cause a violation of federal securities laws or other applicable law or Nasdaq rule. For purposes of this paragraph, the issuance of Shares that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not considered a violation of applicable law. ] |
1.3 | Restrictions. |
(a) | Grantee shall not have any right in, to, or with respect to any of the Shares (including any voting rights or rights with respect to dividends paid on the Companys Common Stock) issuable under the Award unless and until the Award is settled by the issuance of such Shares to Grantee, whereupon the Grantee shall have all the rights of a shareholder with respect to such Shares. |
(b) | The Restricted Stock Units may not be transferred in any manner other than by will or by the laws of descent and distribution. Any attempt to dispose of Restricted Stock Units or any interest in the same in a manner contrary to the restrictions set forth in this Agreement shall be void and of no effect. |
(c) | Regardless of the vesting of your Award, in no event shall you be allowed to re-sell any shares of Common Stock underlying this grant of Restricted Stock Units (the Shares) until the Company has an effective registration statement under the Securities Act of 1933, as amended, relating to the shares desired to be sold. | |
1.4 | Tax; Withholding. |
(a) | The [Committee]/[Company] shall determine the amount of any withholding or other tax required by law to be withheld or paid by the Company or its Subsidiary with respect to any income recognized by Grantee with respect to the Restricted Stock Units or the [conversion thereof to Shares]/[issuance of Shares pursuant to the terms of the Restricted Stock Units]. |
(b) | Neither the Company nor any Subsidiary[, Affiliate]5 or agent makes any representation or undertaking regarding the treatment of any tax or withholding in connection with the grant or vesting of the Award or the subsequent sale of Shares subject to the Award. The Company and its Subsidiaries [and Affiliates]6 do not commit and are under no obligation to structure the Award to reduce or eliminate Grantees tax liability. |
5 | Not applicable to UK Grantees. | |
6 | Not applicable to UK Grantees. |
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(c) | Grantee shall be required to meet any applicable tax withholding obligation, whether United States federal, state, local or non-U.S., including any employment tax obligations or social security obligations (the Tax Withholding Obligation), [in accordance with the provisions of the Plan,] prior to any event in connection with the Award (e.g., vesting, [delivery...etc.]) that the Company determines may result in any Tax Withholding Obligation, and [subject to the Plan,] the Company reserves the right to determine the method or methods by which such Tax Withholding Obligations will be satisfied together with any associated timing or other details required to effectuate such method or methods. |
(d) | If[, pursuant to the Plan, Grantee wishes]/[the Company allows, the Grantee may, in order] to satisfy his or her minimum Tax Withholding Obligation, in whole or in part, (i) [by providing]/[provide] the Company with funds sufficient to enable the Company to pay such tax or (ii) [by requiring (subject to Committee disapproval as provided in the Plan)]/[request] that the Company retain or accept, or [by requesting]/[request] that the Company arrange for the sale by Grantee of, shares of its stock sufficient in value (as determined [under the Plan]/[by the Committee in its sole discretion]) to cover the amount of such tax. Grantee will provide written notice of the same, together with a wire transfer or certified check for such funds in the case of clause (i) above, to the Company or its designee in accordance with the timing and other terms of the Companys notice of election procedures to be separately provided to Grantee, prior to the applicable vesting date or other event in connection with the Award that the Company has advised Grantee may result in a Tax Withholding Obligation. [In addition, Grantee agrees, as a condition to its acceptance of the Award, and as a condition to its vesting, to satisfy any requirement of the Company or any Subsidiary that, prior to vesting of all or any part of the Award, Grantee enter into a joint election under section 431(1) of the UK Income Tax (Earnings and Pensions) Act 2003, the effect of which is that the Shares issued on vesting will be treated as if they were not restricted securities. | |
(e) | Tax Withholding Obligations shall include, without limitation: |
(i) | United Kingdom (UK) income tax; and | ||
(ii) | UK primary class 1 (employees) national insurance contributions.]7 |
(f) | Grantee is ultimately liable and responsible for all taxes owed by Grantee in connection with the Award, regardless of any action the Company or any of its Subsidiaries[, Affiliates]8 or agents takes with respect to any tax withholding obligations that arise in connection with the Award. Accordingly, Grantee agrees to pay to the Company or its relevant Subsidiary [or Affiliate]9 as soon as practicable, including through additional payroll withholding [(if permitted under applicable law),] any amount of [required] tax withholding that is not satisfied by any such action of the Company or its Subsidiary [or Affiliate]10. |
7 | Applicable to UK Grantees only. | |
8 | Not applicable to UK Grantees. | |
9 | Not applicable to UK Grantees. | |
10 | Not applicable to UK Grantees. |
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(g) | [The Committee shall be authorized, in its sole discretion, to establish such rules and procedures relating to the use of shares of Common Stock to satisfy tax withholding obligations as it deems necessary or appropriate to facilitate and promote the conformity of Grantees transactions under [the Plan and] this Agreement with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, if such Rule is applicable to transactions by Grantee.]11 | |
2 | [CERTAIN DEFINITIONS |
3 | REPRESENTATIONS OF GRANTEE |
4 | NOTICES |
330 South Service Road
Melville, NY ###-###-####
U.S.A.
(631)  ###-###-#### (phone)
(631)  ###-###-#### (fax)
Attn: Chief Legal Officer
11 | Keep this provision only for grants made to Accredited Investors under Reg. D. Delete it in grants made under the no sale theory. |
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5 | ASSIGNMENT; BINDING AGREEMENT |
6 | ENTIRE AGREEMENT; AMENDMENT |
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7 | GOVERNING LAW |
8 | SEVERABILITY |
9 | ONE-TIME GRANT; NO RIGHT TO CONTINUED SERVICE OR PARTICIPATION; EFFECT ON OTHER PLANS |
12 | Not applicable to UK Grantees. | |
13 | Not applicable to UK Grantees. | |
14 | Not applicable to UK Grantees. | |
15 | Applicable to UK Grantees. | |
16 | Not applicable to UK Grantees. | |
17 | Not applicable to UK Grantees. |
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10 | NO STRICT CONSTRUCTION |
11 | USE OF THE WORD GRANTEE |
12 | FURTHER ASSURANCES |
13 | AMENDMENT TO MEET THE REQUIREMENTS OF SECTION 409A |
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14 | ADJUSTMENTS UPON CHANGES IN CAPITALIZATION |
15 | CONSENT TO TRANSFER PERSONAL DATA |
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17
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Percent of 20[XX] | ||||
Revenue Achieved in 20[XX] Period | Units Vesting | |||
Threshold ([ ]% of 20[ ] Target Revenues) | [ ] | % | ||
Target (100% of 20[ ] Target Revenues) | 100 | % | ||
Maximum ([ ]% of 20[ ] Target Revenues) | [ ] | %18 |
18 | Not to exceed 200% (i.e., if the Target Number of Units is 100, the opportunity for additional Units may not exceed 100, for a grand total of 200 Units). If the Notice of Grant does not make additional units available for over-performance, replace this line of the table with Maximum: Not Applicable. |
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