EXHIBIT 10.2
DEFERRED SHARE AWARD NOTICE
THIS DEFERRED SHARE AWARD NOTICE ("Notice") is effective as of
October 1, 2002, (the "Date of Grant") by and between Interstate Bakeries
Corporation, a Delaware corporation ("IBC"), and Xxxxx X. Xxxxxxxx, an employee
of IBC (the "Grantee").
1. Deferred Share Award Notice
(a) The Grantee is hereby granted by IBC, subject to the terms and
conditions of the Plan and the terms and conditions of this Notice,
the right to receive in the future up to 150,000 shares (as may be
adjusted from time to time, the "Shares") of Common Stock (the
"Award").
(b) The number of Shares to which Grantee shall be entitled hereunder
shall be appropriately adjusted for any stock dividends, stock
splits, splits, reverse splits, combinations, recapitalizations and
the like affecting the Common Stock occurring after the Date of
Grant.
(c) In the event that (i) the Company declares a dividend on shares of
the Common Stock subsequent to the Date of Grant and (ii) the record
date for such dividend occurs prior to the Issue Date, then, with
respect to each such dividend, the number of Shares specified in
Section 1(a) above shall be increased by an amount equal to the
number obtained by dividing (x) the amount of the dividend to which
the Grantee would have been entitled (regardless of vesting) had he
actually owned the number of Shares of Common Stock specified in
Section 1(a) above (taking into account prior adjustments under this
Section 2) by (y) the per share Fair Market Value of the Common Stock
on the record date for such dividend. With respect to each such
dividend, the additional number of Shares calculated under the
preceding sentence shall be rounded to the nearest whole number.
(d) The Grantee's right to receive the Common Stock in the future (as set
forth below) would vest over three (3) years as follows:
(i) 1/3 of the Shares if the Grantee is employed by IBC on the
first anniversary of the Date of Grant;
(ii) An additional 1/3 of the Shares if the Grantee is employed by
IBC on the second anniversary of the Date of Grant; and
(iii)An additional 1/3 of the Shares if the Grantee is employed by
IBC on the third anniversary of the Date of Grant.
The Shares with respect to which rights shall have vested in Grantee
shall be issued to Grantee within one hundred eighty (180) days of
the termination of his employment for any reason (the "Issue Date").
2. Restrictions on Transfer
The Grantee shall not sell, transfer, assign, pledge, or encumber the
Award, except for transfer by will or the laws of descent and
distribution. Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of the Award, or to subject the Award to execution,
attachment or similar process, except as permitted herein, shall be void
and ineffective, shall give no right to any purported transferee, and may,
at the discretion of the Committee, result in the Award being forfeited.
3. Other Conditions
(a) If the Grantee dies before all of the rights subject to the Award
have vested and is employed by IBC or a Subsidiary of IBC at the time
of death, or if the Grantee dies within a period of three months
following the termination of his employment (but before the vesting
of rights under the Award), the vesting of the remaining rights will
be accelerated and the Shares related to such rights shall be issued
on the Issue Date to the estate of the Grantee, or to the persons who
shall have acquired the Award directly from the Grantee by bequest or
inheritance.
(b) In the event of the termination of the Grantee's employment because
of a "disability" (as defined in Section 22(e)(3) of the Code) of the
Grantee, then any rights under the Award not vested shall
automatically be vested and the Shares related to such rights shall
be issuable to Grantee on the Issue Date.
(c) Upon the occurrence of a Change of Control Event, the Award shall
fully vest and all of the Shares shall be issuable to the Grantee on
the Issue Date. At the time of issuance, if Grantee so elects, IBC
shall purchase the Shares subject to the Award at a purchase price
equal to the Fair Market Value of the Shares on the Issue Date.
Notwithstanding the foregoing, in the event that Grantee would
receive benefits under this Notice (or under any other plan, program
or policy that is sponsored by IBC) which would be treated as
"parachute payments" within the meaning of Section 280G(b)(2)(A) of
the Internal Revenue Code of 1986 (the "Section 280G payments"), then
the payments to which Grantee is entitled under this Notice shall be
reduced (but by the minimum possible amount) so that the Aggregate
present value of such Section 280G payments equals 2.99 times
Grantee's "base amount," as defined under Code Section 280G(b)(3);
provided, however, that these payment reduction provisions shall
apply only if IBC has made a good faith determination that the net
after-tax
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benefits to Grantee under this Notice (and all other plans, programs
or policies sponsored by IBC) would be greater as a result of such
reduction.
(d) If Grantee's employment is terminated on account of any act of
fraud, intentional misrepresentation, embezzlement,
misappropriation or conversion of assets, the Award shall be
cancelled pursuant to the Plan.
4. Miscellaneous
(a) The Committee may allow the Grantee to pay the amount of taxes
required by law to be withheld at any time with respect to the Award
(including, without limitation, with respect to the issuance of the
Shares) (i) in cash, or by check, bank draft or money order payable
to the order of IBC, or (ii) by allowing the Grantee to deliver to
IBC shares of Common Stock having a Fair Market Value, on the date of
payment, equal to the amount of such required withholding taxes. To
the extent the Grantee fails to satisfy the above withholding
obligation, IBC shall, to the extent permitted by law, have the right
to deduct from any payments of any kind otherwise due to the Grantee,
any such withholding taxes.
(b) The Grantee shall have no rights as a shareholder with respect to any
shares of Common Stock subject to the Award prior to the date of
issuance to him of a certificate for such shares.
(c) The Grantee agrees to be bound by all of the terms and provisions of
the Plan. The terms of the Plan as it presently exists, and as it may
hereafter be amended, are deemed incorporated herein by reference,
and any conflict between the terms of this Notice and the terms and
provisions of the Plan shall be resolved by the Committee, whose
determination shall be final and binding on all parties. In general,
and except as otherwise determined by the Committee, the provisions
of the Plan shall be deemed to supersede the provisions of this
Notice to the extent of any conflict between the Plan and this
Notice.
(d) Any notice hereunder to IBC shall be addressed to it at Interstate
Bakeries Corporation, Compensation Committee, 00 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, attention: Corporate
Secretary. Any notice hereunder to the Grantee shall be addressed to
him at the address set forth below, subject to the right of either
party at any time hereafter to designate in writing a different
address.
(e) The Committee may at any time unilaterally amend the terms and
conditions pertaining to the Award, provided, however that any such
amendment which is adverse to the Grantee shall require the Grantee's
written consent. Any other amendment of this Notice shall require a
written agreement executed by both parties.
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IN WITNESS WHEREOF, IBC has caused this Notice to be
executed by its duly authorized officer and the Grantee has executed this Notice
to be effective as of the Date of Grant.
INTERSTATE BAKERIES CORPORATION
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Vice President and General Counsel
ACCEPTED AND AGREED TO:
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
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