Lululemon 2013 Annual Report Download - page 84

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Participant one (1) Common Share for each Vested Performance Share determined in accordance with this Section 8.1. The vesting of
Performance Shares and settlement of the Award that was permissible solely by reason of this Section 8.1 shall be conditioned upon the
consummation of the Change in Control. Notwithstanding the foregoing, the Board may, in its discretion, determine that upon a Change in
Control, each Award outstanding immediately prior to the Change in Control shall be canceled in exchange for payment with respect to 100% of
the Target Number of Performance Shares subject to such Award in (a) cash, (b) stock of the Company or the Acquiror or (c) other property
which, in any such case, shall be in an amount having a Fair Market Value equal to the Fair Market Value of the consideration to be paid per
share of stock in the Change in Control for each such Performance Share (subject to any required tax withholding). Such payment shall be made
as soon as practicable following the Change in Control.
8.2 Termination After Change in Control. Notwithstanding anything in this Agreement to the contrary, if the Participant’
s
service with the Company ceases as a result of a Termination After Change in Control (as defined below), the Target Number of Performance
Shares shall become Vested Performance Shares and the Award shall be settled promptly following such event.
(a) “ Termination After Change in Control ”
shall mean either of the following events occurring within two (2)
years after a Change in Control:
(i) Termination by the Company (or its successor) of the Participant’
s service with the Company or such
successor without Cause; or
(ii) The Participant’
s resignation for Good Reason (as defined below) within ninety (90) days of the
Participant first becoming aware of the event constituting Good Reason provided the Participant has provided the Company (or its successor)
notice of such condition and the opportunity to cure the event.
Notwithstanding any provision herein to the contrary, Termination After Change in Control shall not include any termination of the Participant
’
s
service with the Company (or its successor) which (A) is for Cause; (B) is a result of the Participant’
s death or disability; (C) is a result of the
Participant’
s voluntary termination of such relationship other than for Good Reason; or (D) occurs prior to the effectiveness of a Change in
Control.
(b) “ Good Reason ” shall mean any one or more of the following:
(i) Without the Participant’s written consent, a material adverse change in the Participant’
s duties and
responsibilities as compared to the Participant’s duties and responsibilities immediately prior to the Change in Control;
(ii) Without the Participant’s written consent, the relocation of the Participant’
s principal place of service
to a location that is more than fifty (50) miles from the Participant’
s principal place of service immediately prior to the date of the Change in
Control, or the imposition of travel requirements substantially more demanding of the Participant than such travel requirements existing
immediately prior to the date of the Change in Control; or
(iii) Any failure by the Company (or its successor) to pay, or any material reduction by the Company of,
(A) the Participant’
s base salary in effect immediately prior to the date of the Change in Control (unless reductions comparable in amount and
duration are concurrently made for all other employees of the Company (or its successor) with responsibilities, organizational level and title
comparable to the Participant’s), or (B) the Participant’
s bonus compensation, if any, in effect immediately prior to the date of the Change in
Control (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned by the Participant).
8.3 Federal Excise Tax Under Section 4999 of the Code.
(d) Excess Parachute Payment.
In the event that any acceleration of vesting the Performance Shares and any other
payment or benefit received or to be received by the Participant would subject the Participant to any excise tax pursuant to Section 4999 of the
Code due to the characterization of such acceleration of vesting, payment or benefit as an “excess parachute payment”
under Section 280G of the
Code, the Participant may elect, in his or her sole discretion, to reduce the amount of any acceleration of vesting called for by this Agreement in
order to avoid such characterization.
(e) Determination by Independent Accountants.
To aid the Participant in making any election called for under
Section 8.2(a), no later than the date of the occurrence of any event that might reasonably be anticipated to result in an “
excess parachute
payment” to the Participant as described in Section 8.2(a) (an “ Event ” ), the Company shall request a